After the Future

The Post-American World (Updated)

I found the Fareed Zakaria interview with Charlie Rose very helpful:

Zakaria is hardly a  man of the left.  He supported the war, but now believes it was a horrible mistake. He's pro free trade. At some point when we have sane leadership, we can get into a deeper discussion of trade policy.  It's a critical subject, and it's not an either/or kind of thing. It's just that this administration has created so many other issues that outweigh trade policy in importance, that it seems hardly worth talking about. We have to worry first about unshredding the constitution, then we can worry about America's role in the world.

But Zakaria supports what I have believed from the beginning: that this obsession with Islamo-fascism is an absurd distraction and a huge waste of time, lives, and resources. It's a police problem, not a military one.  And while we're obsessed with our Moby Dick, the world moves on.

Our current mentality and the policies that follow from it is making us a joke and increasingly an irrelevancy. Zakaria's point is that the world wants us to lead, but if we can't, to get out of the way.  The world will find a way to do its thing without us.

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UPDATE: Zakaria's book is being discussed this week at TPM Cafe Book Club. I think that the one weakness that should emerge in Zakaria's analysis is his tone-deafness to wealth and power distribution upward.  Haven't read the book yet, but some things he has said suggest this is a problem for him.

Greenspan vs. Klein

Listen to Democracy Now interview of Alan Greenspan conducted by Amy Goodman and Naomi Klein, the author of the recently released book entitled The Shock Doctrine: The Rise of Disaster Capitalism. I've uploaded the podcast just below--the interview starts at about the ten-minute mark:

Download democracy_now_monday_september_24_2007.mp3

It interests me that Greenspan considers Bill Clinton a Republican, a point I've often made, and that he is aware of the bad stuff that's happening.  He recognizes that wealth in this country is stratifying with the rich getting richer and the poor getting poorer.  He recognizes that crony capitalism is a reality in the U.S. system, but insists that it isn't the dominant feature driving the American economy. For him this kind of thing is unfortunate collateral damage associated with the only system he thinks works--namely market capitalism. And he seems to think that the only alternative to it is state socialism. 

I was disappointed in Klein's questions and comments; she seemed more interested in a kind of "gotcha" game, trying to pin responsibility on Greenspan for his contributions to the mess we're in, and that kind of thing rarely works in this format.  The issues are too complex, and it's easy for anybody, especially someone like Greenspan, to slip off the hook, no matter how culpable he may be. And even if he is, who cares? But she rejected Greenspan's characterization of her as a socialist, defining herself rather as a proponent of a mixed economy, which is essentially what we've had here in the U.S. since the New Deal.

That's really the argument here.  It's not between radical laissez-faire capitalists and radical socialists, but between radical capitalists and mixed-economy conservatives. The people who want to preserve the New Deal compromise between free markets and government controls are the real conservatives, because they are trying to conserve institutions that have already been established and despite their flaws have proved themselves effective.  The fact that those who now defend the New Deal are considered leftists and that the radical capitalists are considered mainstream moderates shows how twisted our political discourse has become. The Clintons are right-of-center politicians.  When push comes to shove, they serve the interests of the economic and political elites who have taken over the levers of power on the national level before serving the needs of the broader electorate. The hatred they provoke from the radical right is a symptom of how irrational and deluded those people really are. When it comes to foreign and economic policy both the Clintons are a lot closer to Ronald Reagan than they are to, say, Ralph Nader or Dennis Kucinich.

And so it follows that I would identify myself as a mixed-economy conservative.  And for me the central organizing principle of a mixed economy is subsidiarity.  I'm a subsidiarist, and as such an opponent of any system which promotes top-downism as its dominant m.o. But a subidiarist expects government to step in when markets and local organizations can't solve serious problems, be they natural or financial disasters or the institutionalized suppression of rights. (Health care financing, it should be obvious, is such a disaster.)

Few people would disagree with that subsidiarist approach in principle, but I think that many have come to associate the New Deal with big government and the corruptions of pork-barrel politics. But Democrats and Republicans are equal-opportunity offenders when it comes to pork. And the whole problem with pork is a separate issue from the question whether the U.S. system ought to be a laissez-faire market economy, a top-down command economy, or a subsidiarist mixed economy.

Back to the Greenspan interview: I would have been more interested if the conversation got down to basic principles along these lines. Greenspan falls back onto the basic assumption that market capitalism is the only system that works effectively to create wealth.  So, for the sake of argument, let's assume he's right on that--that if the only problem is to create wealth, market capitalism is the best system to solve it.  But wouldn't he also have to admit that while it solves that problem, it creates other problems, perhaps more serious problems, not the least of which is the Schumpeterian destruction of traditional communities and the traditional values matrices that provide stability and ballast to any social system? Wouldn't he also have to admit that market capitalism has no inherent mechanism that insures a just distribution of wealth? And along those lines, would he not have to admit that market capitalism if left to work without interference inevitably leads to the systematic domination of the weak by the strong, particularly when the weak are uprooted, anomic, and disorganized as a result of the Schumpeterian dynamic alluded to above? 

In other words, would it be possible for him to admit that while capitalism creates material wealth, its effects in the cultural sphere are more destructive than creative? Could he admit that it's possible to imagine a healthy society in which wealth creation and getting rich isn't the most important thing?  Or that a democratic society might choose to organize itself according to different priorities. And if I could get him to agree on all these points, would it not follow that the only way to avoid the inevitable trend toward tyranny that his Libertarian principles lead to is a strong central government with the power to tax and regulate? Because what other power does the broader electorate have to protect its interests or to promote a democratically determined common good?

Now I've not made a detailed study of Alan Greenspan, and that's why I'd like to sit down and talk with him to find out how he really thinks.  (I'd like to sit down with the Thatcherite Andrew Sullivan and have the same conversation.) I do know Greenspan is fan of Ayn Rand, which suggests that he's a radical economic individualist in the Libertarian vein, and I feel safe in assuming he feels more comfortable with Milton Friedman's approach than he does Franklin Roosevelt's.  As I've written repeatedly, Libertarianism in the economic sphere is just another name for Social Darwinism. I would ask him if he would accept that characterization of his fundamental worldview. I would then ask him if he recognizes the ways in which Libertarianism creates the conditions for the flourishing of tyranny.  I'd ask him if he didn't think that the Libertarian program to remove government restraints on private parties pursuing their interests leads inevitably to the domination of the weak by the strong. If he would insist, as Libertarians often do, that he doesn't want that, I would try to make the case it doesn't matter what he wants; it's what follows inevitably from his premises. 

Libertarianism and Rand's Objectivism are third-rate philosophies adopted by people, in my experience, who don't really think things through and either don't accept the consequences of its basic assumptions--or don't care. And the people who support the Libertarian agenda, as for instance promoted by the Cato Institute, often have no idea of the liberty-squashing monster they are helping to create. Libertarians are like farmers who have a hungry-rabbit problem and so import hundreds of coyotes to take care of them.  That strategy solved the rabbit problem, but now they have a hungry-coyote problem, and they're not eating carrots and lettuce; they're eating the livestock.

If democracy worked the way it ought to, the government would be more responsive to the economic interests of the broader electorate rather than the interests of powerful minorities, but clearly that's not how it works, especially since the 1980s.  If things worked the way they should, one would expect the powerful to use their power to attempt to control both the government and media. And we should expect that a vigilant broader electorate would work hard, using government controls, to prevent the powerful from achieving their goals by using their power of numbers to vote people into office who represent their interests.  Or if, as often happens the system is unresponsive through the normal electoral channels, to organize the way, for instance, Solidarity in Poland and the Civil Rights Movement in this country organized. 

But we are in the our current predicament precisely because the powerful have behaved exactly as we would expect them to behave and because the broad electorate out of complacency has not done its part to stop them. Political victories for powerful special interests are an almost daily occurrence; victories for the broad public interest are few and far between.  It should not surprise us that this is so. The system is no longer responsive in any meaningful way to the public interest because the public has abdicated its responsibility to protect it. 

The broad electorate has been for the most part conned into trusting that the powerful are decent people who are doing their jobs as best they can.  They see people like me fomenting class warfare and demonizing  the rich. I'm doing no such thing.  I'm simply describing how the world works.  I don't see Greenspan and others like him as evil.  He's just a fallible, morally average, normally biased guy who's looking out for his interests and the interests of people in the elite circles of the political and economic spheres with whom he identifies. The system has worked well for him and others in his group, and he has little concern for those who are not in that group.

His motivations are really not that different from how most of us root for our home football or baseball teams.  There are exceptions, but most fans don't hate the other teams or wish them ill; they just don't care about them.  They care more about their team winning than the other team losing.  Humans care about the people with whom they identify, and the interests of everyone else are for the most part invisible or inconsequential to them. That's basic human nature. Hatred only arises when those outside one's identity group pose a threat to one's group's interests. That's when the demonizing dynamic kicks in, and with it the need for the more powerful group to eliminate the threat, no matter what the means, or how disproportionate the means to the real threat posed.

And so what I would like to ask Alan Greenspan, or those who think along the same lines he does, this questions: Do we agree on the basic elements that drive average, self- or group-interested behavior?  I assume we do.  If so, can we agree that the already wealthy and powerful have advantages in accumulating more wealth and power?  If so, can we agree that  they are more likely than not to use those advantages?  And if they are successful, shouldn't we expect that their success necessarily results in a stratified society in which the already powerful and wealthy  dominate the  political and economic system and rig it to work in such a way that insures their continued domination? 

Hasn't this been the story of human societies from time immemorial. If we allow this stratification to proceed, isn't it logical to assume that it leads inevitably to the destruction of democracy?  Isn't it logical to assume that if the government doesn't reflect the will of the people but rather the will of corporations and other economic and political elites, the American system morphs into a crony capitalist system in which government grows not smaller but bigger to serve the interests of these elite groups?  Isnt' that precisely what we're seeing as in the Medicare Prescription Drug Bill? If we are not a crony capitalist system like Indonesia now, isn't it clear that we're on the track to becoming something very much like it?  What does Greensapn think are the counterforces that will prevent our evolution in that direction?  Try to stand back from the politics of the Democrats or the Republicans.  This is not about political ideology; it's about common sense and seeing what's in front of your nose.

There is only one answer to the question about counterbalance, and that's a vigilant, aroused alliance of groups and individuals who are not in those elite circles, but who  organize themselves into a political force that counterbalances the interests of the elites. That's not socialism.  It's what the New Deal Democrats used to do, but they don't anymore. This alliance ought not to have in mind the goal that  government must run everything. Rather it's goal should be the maintenance of the mixed economy that has been the system in the U.S. and in the European social democracies since the 1930s. 

This alliance must fight to insure that the government be kept out of the hands of those who seek to transform it into a crony capitalist system.  They must use the tax code and other controls to keep these interests in line, and they have to work to exert similar controls on the emerging global system. Right now that simply is not our situation.  Because at the national level both Democrats and Republicans serve the interests of these elites and not the interests of the broader electorate.  These people in the political class tell the broader electorate what they want to hear, and then do what's in the interests of the elites. 

And so while it's clear what must be done if any kind of real democracy is to be preserved (or recovered) in America, it's also clear that there does not seem to be the will or the imagination in the broader electorate to do it.  And so the long-term trend is toward the historical norm, which is a stratified, authoritarian society. And that's the reason for my pessimism. I'm talking now about developments over the next ten to fifteen years.  It may not turn become quite the nightmare society that Orwell envisioned in 1984, but why shouldn't it? I don't see anything that can provide a robust resistance to the trends that seem inevitably to be leading in that direction.

Controlling the Narrative: Economics

"The field is getting much more empirical," he tells me matter-of-factly. (Christopher Hayes quoting economist Jesse Shapiro in "Hip Heterodoxy") 

You mean economics wasn't empirical before?  Would never have guessed.  Haye's article is worth a read, and the discussion of it at TPM Cafe is worth some time as well.  It's worth it to get some sense of where economics is at this point in time, but also in thinking about some basic issues in the sociology of o knowledge.  What people think with certainty to be true very often, perhaps even most often, has less to do with evidence than with underlying, mostly unconscious belief system.  This is an ongoing argument I've been making in post you can find here and here.  But I was struck how the so-called heterodox economists are making pretty much the same argument.  For instance this passage from Thomas Palley's response to the Haye's article:

...[G]ood intentions can still produce bad outcomes, and in economics the problem starts with what I term the “science myth.” Economists subscribe to a belief that they can access truth through mathematical modeling, econometrics, and now lab experiment. This meta-view implies only one point of view can be correct. However, the reality is the scientific method can never prove things as true: it can only falsify. Moreover, the complex nature of social reality means the facts (which are themselves the subject of debate) can often be consistent with different theories. That means a truly scientific economics has to accept the co-existence of other theories, including heterodox theories, because they cannot be rejected on scientific grounds.

The science myth is one pillar of exclusion. A second pillar is the sociology of knowledge, which concerns how social forces affect knowledge production. That sociology applies in economics, though economists live in a state of denial about this because the sociology of knowledge sits so uneasily with the science myth and the idea of truth.

Economic ideas have a profound influence on real world outcomes, which means powerful social interests will seek to control what gets accepted as knowledge. Furthermore, economists are themselves members of society and will therefore be influenced by what currently passes as knowledge. On top of that economists are motivated by their own economic self-interest, which means they are willing to produce knowledge that their customers want. - be they investment banks, business think-tanks, or the IMF and World Bank. Moreover, since cognitive dissonance makes it hard to produce knowledge you do not believe in, that willingness to produce easily merges into belief. Consequently, for all of these reasons, economists can be quite comfortable producing knowledge that supports the economic interests of the rich and powerful (see The Knowledge Police in Economics).

The science myth then provides a tight cover for this knowledge. Those who gate-keep the profession, letting some ideas in and excluding others, can do so with clear conscience. Indeed, because they subscribe to the science myth most economists are blithely unaware of their gatekeeping and resentful when it is pointed out. That is because rather than seeing themselves as gatekeepers. they see themselves as truth-keepers exercising appropriate quality standards. This is one lesson from the closing of the heterodox economics department at the University of Notre Dame and its replacement by an orthodox neo-classical economics department. Finally, it is doubly difficult to expose the science myth and its mind-closing effects because the general public also believes it.

None of this is a conspiracy theory. Instead, it just reflects the way the social world works – but that is something society should be aware of. Economists are ordinary people and subject to social influences and pressures that work to include some ideas and exclude others – but this is not a matter of truth vs. error.

This is as succinct a description why people who think they "know" the truth, really only believe it.  Now anybody who has read this blog over time knows that "believing" is not a bad word in my lexicon.  My argument is not that believing is inferior to knowing, but that we hardly know anything and that most of what we think we know is really only belief buttressed by social authorities, be they economic, cultural, or political.  Controlling the narrative means controlling what the social authorities deem to be "truth".  And as Palley points out, the social authorities have their own agendas, and often those agendas are not even something they are consciously aware of. 

So the challenge for us is not to develop criteria for proper knowing, but rather for proper believing.  Believing is "practical" and as such is empirical, provisional (always open to revision), common sense based, and suspicious of rigid orthodoxies and of the people who promote them.

More later.

Corporations & the Commonweal

William Greider has an interesting piece about retired IBM exec Ralph Gomory's ideas about multinational corporations and the public interest.  Gomory is a free-trade heretic, and he supports the common-sense idea that free trade is not a simple win-win as free-trade enthusiasts insist.  He has written a book entitled Global Trade and Conflicting National Interests--in collaboration with William Baumol, former president of the American Economic Association, that makes sophisticated arguments that might undermine the current Bob Rubin free-trade orthodoxy to which most Democrats currently genuflect. 

Read the whole article here, but I've exerpted some paragaphs to identify key elements to which Gomory points for finding a policy solution, namely insisting on balanced trade and enforcing it with caps:

Neither of Gomory's fundamental policy reforms--balancing trade or imposing discipline on US multinationals--can work without the other. Both have to be done more or less at once. If the government taxed US multinational behavior without also capping imports, the firms would just head out the door. "That won't work," Gomory explains, "because you will say to the companies, 'This is how we're going to measure you.' And the corporations will say, 'Oh, no, you're not. I'm going overseas. I'm going to make my product over there and I'll send it back into the United States.' But if you insist on balanced trade, then the amount that's shipped in has to equal the amount that's shipped out by companies. If no companies do that, then nothing can be shipped in either. If you balance trade, you are going to develop internal companies that work the way you want." Public investment in new technologies and industries, I would add, may not achieve much either, if there is no guarantee that the companies will locate their new production in the United States.

Essentially, Gomory proposes to alter the profit incentives of US multinationals. If the government adds rules of behavior and enforces them through the tax code, companies will be compelled to seek profit in a different way--by adhering to the national interest and terms set by the US government. Other nations do this in various ways. Only the United States imagines the national interest doesn't require it.

This principle that government can use regulation and the tax code to rein in corporations to promote the public interest was established in the U.S. during the New Deal, and renouncing this principle has been at the heart of the Libertarian/GOP program since at least 1980.  But if government isn't going to stand up to corporations who have no interest in the public interest, who will?

If some Libertarian happens to read this post and thinks that politicians should leave business alone, please make your case, and I'll be happy to argue it in the comments.  I realize that the issues are complex when it comes down to particulars, but to me it's utterly baffling that anybody could argue  as a matter of Libertarian principle that allowing corporations the freedom to do as they please without reference to the public interest serves the public interest.  Halliburton's recent announcement of plans to move its headquarters from Houston to Dubai is textbook, and it's nauseating.

But that's the way things work in corporate think these days.  Was it always that way?  It was in the late 19th century, but changed during the New Deal era from the thirties through the seventies, for which Gomory is nostalgic:

Gomory's vision of reformation actually goes beyond the trading system and America's economic deterioration. He wants to re-create an understanding of the corporation's obligations to society, the social perspective that flourished for a time in the last century but is now nearly extinct. The old idea was that the corporation is a trust, not only for shareholders but for the benefit of the country, the employees and the people who use the product. "That attitude was the attitude I grew up on in IBM," Gomory explains. "That's the way we thought--good for the country, good for the people, good for the shareholders--and I hope we will get back to it.... We should measure corporations by their impact on all their constituencies.

"So in my utopian dream, we decide what we want from the corporations and that's how they make a profit--by doing those things. Failing that, I would settle for the general realization of this divergence and let people argue it out."

Some older CEOs and board members at least listen to him sympathetically. "They have grandchildren," he says. "They wonder too what's going to happen to our grandchildren. You can't get a vote around the corporate board table about, Is this good for the grandchildren? But you can talk to them and they'll worry about it and say, Well, maybe we need to do something.

And if they don't, the American public should by insisting on these basic changes through the political process.  Am I optimistic that this will happen?  A lot depends on who Americans elect to congress and the presidency in '08. If we let the GOP back in, there's no hope.  If we elect Hillary, possibly educable, but I'm not optimistic.  Guys like Edwards and Obama--guardedly optimistic.  It will depend on what kind of congress they'll have to work with, and that will depend on Americans and  people in the MSM overcoming their thrall to the conventional wisdom that laissez-faire Libertarian policies regarding corporate behavior somehow benefit us all. 

Or even if polls showed that they were convinced, would they have the will to do anything about it? Will congress?  The next four of five years will indeed be critical for determining the kind of lives our grandchildren will have.

Safety in Complexity?

As has been seen, any group we choose to call the "middle class" is so large as to be of little analytical help. Nor do the huge majority who are not rich qualify as a class. Moreover, there remains a very well-paid tier of corporate executives between them and the truly rich. Yet, along with the increased concentration of wealth, we are seeing millions of Americans being laid off, settling for lower paying jobs, losing health coverage, and watching pensions evaporate. Economic inequality is increasing, just as the millions who are born and stay poor are not getting anything like a fair chance to improve their situation. Victims of outsourcing don't fit into a single class, nor do the people who suffer most from living in a society that is increasingly unequal and unjust. To see these trends as matters of class does not explain them. What is clear is that we have yet to see any convincing ways of reversing them.

This excerpt is taken from a NYRB article by Andrew Hacker.  The article itself talks about the difficulties of working with the word "class" in trying to understand our situation in the U.S., to wit:  it's complicated. In a way I find it reassuring that the situation is complex enough that it doesn't fall into some easy analysis.  The more complex things are, the more difficult to control, and so whatever my concerns about the aggregation of power into the hands of fewer and fewer people, the one thing that works in favor of the common good is the complexity and dynamism of the larger society. And clearly the America of 2006 is far more complex than the America of 1906, when a discussion of class would have been a more manageable topic. 

But for my purposes, whether class is the right word for it, the issue is power, not manners or even wealth.  I think it is possible to talk about a power elite in this country.  It's an elite that is created by a system, and so the personalities don't matter so much as the system.  The personalities serve the system and the system demands more control and more power, and the personalities do what they can to feed the system, and they in turn are rewarded with great wealth. 

In the end, it's the system that's the enemy, not the personalities.In the end, the system runs the people, even those in its highest positions.  No one is really in control.  For me a progressive politics is about getting human beings in control of the system rather than continuing to allow the system to dictate the rules.  Libertarianism is the ideology of those who think it's better to let the system do its thing with as little human interference as possible.  Libertarianism, therefore, is the ideology of accommodation.

Wealth matters, but power matters more.  And lots of wealthy people don't care about power.  They just use their wealth for their own high-priced bread and circuses. They don't concern me. They vote for their own interests, but their numbers are not significant enough to effect electoral outcomes.What bothers me is how those who serve the system have got hold of the primary information channels and have convinced people that their interests lie with accommodating themselves to the existing power sytem.   And so the fact of having money is itself insignificant.  The more important question is not who has money, but who controls certain essential fulcrums of power.  And I would like to suggest that in our society the two main fulcrums in the power system are energy and information. What else is it more important to consolidate control over?  Are there any other sectors in our political economy that are more important than these?  Maybe, but these two are what worry me the most right now. 

In premodern societies, land was the power fulcrum, and the more you had of it, the more powerful you were, and with that power came wealth. And politics was about acquiring more land, and in centralizing control of a given territory in a hierarchical system of land-based vassalage.  That was the system, and everyone, high and low, served it. The modern period is the story of the shift of the power fulcrum from land and territorial acquisition for their markets and resources to a system in which the fulcrum was increasingly mobile capital, and then from a state-centered mercantilist model to a private-sector- centered, laisser-faire capitalist model.  The key tensions in the modern period have been between stability and mobility on the one hand, and on the other, the central role of the state vs. the role of the market.   

This first part of this tension is represented by an inclination of mind that could be associated with Hamilton, Lincoln, and Keynes/FDR/LBJ--namely that the central government plays an important role in regulating the economy for the prosperity and well being of its citizens, and it has an interest in preserving a certain level of stability. You would think that this would be the conservative position, but it's associated with the misnomer Liberalism.

The second habit of mind that would be associated with Adam Smith, William McKinley/Mark Hanna, and Friedman/Thatcher/Reagan in which market mechanisms are allowed free rein. This is classic Liberalism, but in this country it's what we call conservatism.  This group promotes the social dynamics that more than any other destroy traditions and foster social instability.  It's the group that promotes  the forces of creative destruction, as Schumpeter called them, which is what the market left to itself unleashes for better or worse. 

It does indeed create wealth but at the same time it destroys traditional social structures and the stability associated with them.  How the second group got traditionalist conservatives to back their program is one of the great propaganda coups of modern times.  Perhaps the key to conservative support for this program is how it inevitably leads to oligarchy. Because really the terms 'conservative' and 'liberal' have become almost completely useless except as rough designations for right and left. 

What we have, really, is two groups--those inclined toward authoritarianism and oligarchy, and those inclined toward  democracy, civil rights, and the rule of law. To me that's the only distinction that matters, no matter what label we give them, and it's time for people to decide which side they're on.  And it should be clear that the whole system since 1980 is trending in the authoritarian direction: The market promotes chaos and the law of the jungle, and in that scenario private parties have the scope to accumulate enough power to dominate the system. I do not think of principled conservatives as consciously supporting the tendency toward a right-wing authoritarian or oligarchic forms of government, but that's what their support of the GOP agenda leads to. For me nothing could be clearer.

In any event, the main problem associated with the first FDR/LBJ group is a tendency for the central government to overstep its bounds and in interfering where it has no business.  I think there is a lot of valid conservative criticism of some of the social engineering projects associated with LBJ's New Society. But that's not what we have to worry about now. In the historical cycle since 1980, we've been dominated by the habit of mind of the second Reagan/Thatcher group, and we're seeing the problems associated with it come to fruition.

There are some early rumblings that the failures of the last six years have completely discredited this group. You'd think so, but I'm not so sure.  They are not going to go away, and the fundamental structural conditions remain that promote the agenda of the system.  The Democrats, insofar as they have lost the allegiance of so many working Americans, have been forced to ground themselves elsewhere, and this has driven them into the hands of Big Money.  This is what the DLC trend in the Democratic Party represents.  The DLC think they are being realistic, and the rest of us are naive idealists, but they've been coopted. They are surrendering to rather than fighting the forces that are destroying our democracy.  There are lots of practical reasons to hope the Dems take back congress in November, but their doing so hardly solves the more fundamental systemic problem, and they have no motivation to deal with it because it feeds them.

But back to the earlier theme about class.  This is the only important thing to remember about it:  it's not about the wealth; it's about the power system. The power system rewards those who feed it with wealth.   And the key fulcrums in the power system right now are communications media and energy.  There are other systems playing supporting roles, but those to areas are key.  We can discuss the fine points, but it's worrisome to see how much influence the energy sector has in shaping American policy, and it's worrisome to see the consolidation trends in the corporate media, which more and more serves the underlying agenda of of the power system.

But what do others think?  Is American society too complex to worry about the aggregation of power into the hands of a few?  Or is it possible to boil a complex situation down to a few key elements, like communications and energy?  I've state the thesis--anybody want to lay out the antithesis? The bottom line is that we all begin to get a better sense about what we're dealing with here.  If you don't understand the problem, you can't frame an effective solution.

Coffee and Sugar

Why do some societies stagnate and others develop?  It has a lot to do with the level to which elites dominate the system. And elites dominate the system because the basic economic infrastructure allows them to.  Let me draw an analogy from what has been traditionally described as the difference between progressive crops like coffee and rice and reactionary crops like sugar and cotton.  I came across this passage about Brazil in the period before World War I that makes my point.  It's from Harvard scholar Jeffry Friedan's Global Capitalism:

Brazil demonstrated the impact of different crops, for it contained both failed and successful regions.  Its northeastern agriculture was based on a large plantations growing cotton and sugar.  Landowners relied on formerly slave and informally tied labor to keep its estates running. Plantation owners worked hard to keep farm workers in their place, for without captive labor the plantations would collapse.  At the other extreme, in the southeast around Sao Paulo, a vibrant agricultural economy based on coffee was developing.  The constant demand was for more farmers, more labor, to open up new lands.  Many farms were small and many farmers worked for themselves; if they worked for others, they were paid decent wages and moved freely from employer to employer.  Here the wealthy repositioned themselves in the export sector, finance, and commerce. This Paulista elite, no less self-interested than the northeasterners, encouraged the opening of new farmland and the development of ever more profitable farms.  The northeast stagnated while the southeast boomed. p. 101.

Remind you of anything? The point is that where the system is dominated by elites, stagnation usually follows, where there is a dynamic, diverse groupd of economically independent actors, societies flourish.  Friedan goes on:

Th Brazilian experience recalls analogous regional differences in the United States. America's reactionary crops were the cotton, tobacco, and cane sugar of the South, while the progressive crops were the grain a cattle of the North and West.  As in Brazil, the former plantation areas remained backward and stagnant for decades, while the small family farm and ranch regions grew dramatically.  In fact the system of legal apartheid that reigned in the American South--with its social and political exclusion of the descendants of slaves, miserable educational system, hostility to labor recruiters, and underinvestment in transport and an impoverished, captive labor force in a region whose oligarchs were dependent upon a ready supply of cheap unskilled labor.  pp. 101-02.

What's interesting about reading Friedan's book is the perspective it gives you that helps you understand what was going on in the U.S, in this instance in the period between 1870 and 1914, as a part of a huge explosion in global trade.  And how the American South at that time had more in common with South American oligarchies than it did with the rest of the United States. 

This is a point I've made before in reference to Michael Lind's book Made in Texas, but the point bears making again. All societies tend toward oligarchy when the economic infrastructure allows for the dominance of the many by the few. The big swallow the small unless the small have means to organize and fight back with their power in numbers. And societies resistant to oligarchy usually comprise alert, knowledgeable, economically independent actors--small business people, family farms, professionals--who are self reliant and not dependent for their livelihoods on the Boss. That was the original vision the founders had for the American Republic, and it was a vision that came into violent conflict with the vision of the southern oligarchs, who if it were up to them would have run the country much as it was run in Northeastern Brazil, an area today still afflicted with wretched levels of poverty.

So the north won the war, but it wasn't long before the founders' vision was threatened from another quarter. This time from a new power developing in the industrial north. Apologists for the South rightly saw the irony: The Robber Barons were in many ways more brutal and avaricious than the southern planters, and the power that they amassed in the late 19th early 20th Century could have forced the country into the kind of crony capitalism typical of Indonesia and other parts of Asia where crony capitalism reigns. This natural tendency was checked by the trust busting of Teddy Roosevelt and later by the New Deal initiatives of his cousin Franklin Roosevelt. But now the Libertarian right has been doing all it can to dismantle the protections the Roosevelts gave us, and we really have no idea yet how naked and vulnerable we are becoming. We take for granted to the normalcy that the New Deal brought.  People could quibble about this or that program, and of course there were abuses. But for the most part it worked well in the interests of the majority of Americans, and it kept corporations in check to some degree. 

Now this is the challenge that I put to readers of this blog who tend to be small government Libertarians and who think I'm overstating the threat:  Prove that I'm wrong when I say that the structural changes our economy is currently undergoing are making us more like a "sugar" economy and less like  a "coffee" economy.  I realize that the American economy is complex, but prove this thesis wrong:  If there are not enough economically independent, self-reliant citizens to counterbalance the power of corporate giants, each of which operates as if it was a quasi-autonomous feudal duchy, how can we citizens stop the inevitable slide into neo-feudal form of peonage? Isn't that essentially the lot now of the employees at Wal-Mart?  Are we just expecting the corporations to be nice, and continue giving us our health care and maternity leave? Maybe some will, but see how long that kind of thing lasts when their competitors start cutting those kinds of benefits, and they argue they have to cut them to stay competitive. So here's the question: If things are going in one direction or the other, which one is it--the neo-plantation economy typified by Wal-Mart or a movement toward small, diverse, independent, self-reliant businesses? To me the answer is obvious.

You Libertarians who say you're against crony capitalism and corporate welfare, what power do your opinions have to stop the ineluctable movement toward on the one hand the Wal-Martization of the economy, and on the other greater degrees of cronyism and the corporate corruption of government?  You say that's not the Libertarianism you stand for, but who cares about your principled Libertarianism--it's toothless. The other guys who use Libertarian arguments as a cover to aggregate more wealth and influence are the ones with the power.

This is not some parlor debate; it's about who has the power and who doesn't. How can the government that governs best when it governs least fight back when it doesn't govern at all, when it has simply become the tool of corporate overclass?  This is the thing I want some Libertarian to explain to me:  Why do you believe the primary threat comes from government?  Isn't it obvious that the real threat comes from the corporate private sector and its domination of government?  And isn't the only solution for the People to take back the government and use it to protect their interests?  What other alternatives are there?  What other tool is there to protect our interests? 

Tell me, give me some reason to be optimistic--give me a Libertarian scenario in which there is a counterbalance this trend?  I want to know, really.  Prove me wrong. Maybe  I am. But if I'm not, then we have to talk about what needs to be done to create the counterbalance.  And for me, electing a Democratic congress later this year and Hillary in '08 are hardly the answer.

Update:  See this Atlantic Monthly article about how Wal-Mart might be a key player in the larger strategy to get a sane national health-care program.

Economics and Politics

I've always been somewhat awestruck by the stupefying inhumanity of economists who see the global economy as this perfect  system in which the abstract homo economicus, as if such a being existed in flesh and blood, rationally pursues what is in his economic best interest.  And how different nations do the same thing in a global division of labor in which if you were good at manufacturing but just so-so in agriculture, you develop your industrial capacity and let your agricultural production die.  Since you're good at manufacturing stuff, you can export  your finished goods to make the money you can now use to import cheaper food than can be produced domestically from countries who are better in agriculture.

For economists of this stripe the Good equals the Cheap.  And the great mortal sin is to erect trade barriers, tarriffs, that would protect industries, well, because that would be inefficient and causes consumers not to get the best price.  I know that tariffs can in some cases be a form of corporate welfare, and I know the kinds of problems that arise with trade wars, but to exclude the possibility of protecting some industries in principle defies common sense.  Sometimes there are other values besides getting the lowest prices that are more important.

We just accept it as inevitable that the market forces trump, for instance, the need to preserve cultural traditions and values.  What does it matter to theorists that  agriculture and the traditions and way of life of most of a nation's population get destroyed? The benefits of lower cost are so much more important. Hey, all those displaced, independent farmers having to find work in sweatshops, or if more ambitious, to emigrate to susbsistence wage jobs in more developed countries, are better off because the the prices they pay for the stuff they have to buy are  Wal-Mart cheap  That they have hardly any money to buy even cheap stuff with, well, that's just the way it goes.

So the idea that to be coservative means to be for a classic, laisser-faire economy is one of  the great oxymorons of our time.  For no greater force has the world ever seen which is destructive of traditional values and the traditional communities that nurture them than classical capitalism. The two ideas--capitalism and conservatism just don't go together in reality. 

The only thing that capitallism conserves is the privileges of the small percentage of the globe's superwealthy who have the resources to weather any of the destructive effects their system that rewards them so generously wreaks on everyone else.  Everyone else is vulnerable.  Everyone else is under threat now of having his job be outsourced in the flat world celebrated by overclass apologists like Thomas Friedman.  That's reality.  Get used to it, we are told.  Adapt or die. We are all replaceable in the Great System that cares only about lowering costs and increasing profits for those in the investor class. It's all perfectly rational if you look at it dispassionately from the economists lofty perch or from within the gated communities of the superwealthy.

Well, is it inevitable?  Must we all accept that the system is reality, and our job is only to find some way for ourself and our families to survive in it.  Or are there political solutions, ways in which people can organize themselves to make the system serve the needs of the many rather than the needs of the few?   

In John Gray's NYRB review of Suzanne Berger's How We Compete: What Companies Around the World Are Doing to Make It in Today's Global Economy, he writes:

Devoting a significant part of her analysis to the dilemmas surrounding outsourcing, Berger concludes that the threat of continuing job losses in the US is at least partly real. Many economists insist that as old jobs are lost, new technologies and industries will appear to replace them. Berger does not entirely reject this view, but suggests that the experience of those who have been laid off and cannot find jobs without accepting large reductions in pay may point to a trend that mainstream economics has missed: "After crying wolf so often, perhaps this time the pessimists about technological advance and employment have really spotted one." Outsourcing poses a real risk to employees; but Berger believes a "race to the bottom" can be avoided if companies accept that employing cheap labor is not the most effective way of responding to global competition. The activities that succeed over time are those that involve conditions —such as long-term working relations with customers and suppliers and specialized skills—which companies whose main asset is cheap labor cannot match. A company policy of forcing wages down is not a recipe for long-term corporate success.

Berger is clear that acting on their own, companies cannot make all the needed adjustments. Governments have a major part in creating an environment in which businesses can plan for the future, but how governments do this will depend on the type of capitalism they must deal with. As she acknowledges in a lucid discussion, capitalism comes in several varieties reflecting different cultural traditions and political systems. Within this wide variety two different kinds of market economy can be distinguished:

liberal market economies, like Britain's and the United States', in which allocation and coordination of resources takes place mainly through markets; and coordinated market economies, like Germany's and Japan's, in which negotiation, long-term relationships, and other nonmarket mechanisms are used to resolve the major issues.

The point is that the economics is not necessarily the war of all against all, as the  laisser faire Social Darwinists, now in their Libertarian incarnation, want us to believe. The goal of economics is not to achieve some theoretical lowest price possible, but to serve human needs.  Markets are half of what makes any economy work, but the market is not some sacrosanct theological principle that must at all costs be protected from political interference or regulation. Markets are not the whole story.  Politics is the other equally essential part of how any economy works, and we have to see Libertarian ideology for what it is--a justification for a system that serves the needs of the superwealthy. It's a political ideology that bends the economy to serve a particular narrow set of interests. That we accept it as a model for how the economy works is a political choice when other choices are possible. But don't expect lively debate about it in the Mainstream Media. Such a debate is simply not in its interests.

So the central question that should be debated is this: Which is the tail, which the dog--the economy or the politics?  If you think that letting the chips fall where they may as the invisible hand of the market does its thing, then you feel the economy is the dog, and politics the tail.  If you feel that the economy should be managed to serve human needs, then for you politics is the dog, and economics the tail.  I, for one, am in the latter group.  It's the distinction right now that I believe is at the heart of the difference between those who think of themselves as Libertarians or Progressives. 

And it's the split that defines the difference between traditional New Deal Democrats and  Democrats like Clinton, Bayh, Lieberman, and the rest of the Republican Lite gang at the Democratic Leadership Council. Perhaps the most disturbing thing about the Democrats since the 80s is how much of its leadership has been coopted by Libertarian thinking.  This is a big part of what makes our politics right now so confusing and ennervating.  The politics of lasiser-faire is no politics at all; it's a politics of letting the economic tail wag the poltical dog; it's a politics of having given up. 

Economies can be and should be managed, and they should be managed to meet the needs of the majority, not the elite minority. Because there is the danger that they might be managed poorly does not preclude the possibility that they could be managed well.  Germany and Japan are just one point in case.  The problem does not lie on the level of what is technically possible, but rather on the level of political will.

The tragedy is that in order for that will to develop, things will have to get very bad.  Maybe George Bush is on a mission from God.  To push this country to reductio ad absurdum of classical economic theory, so that it can finally be seen for what it is, with the result that we can finally move beyond it for good. 

The American Dream

America's imagination of itself is rather inflated with an ungrounded sense of its superiority.  One of the great myths of our time is that ours is a land of unique opportunity, that the American Dream is what makes living in the U.S. an amazing experience to be found nowhwere  else.  That was  more true  a hundred years ago, especially for so many of the immigrants who fled Europe for a better life in an economy that hadn't yet hit full stride, but it just isn't any more.  And since 1980 it has become ever less so with each passing decade thanks to the co-optation of American politics by the money elites and their political lackeys who seek to dismantle the New Deal:

Conventional wisdom among the globalist elite is that inequality is the price a society must pay for increasing social mobility, reflecting greater opportunity.  Thus, for example, the governing class never seems to tire of telling Americans how lucky they are compared with the citizens of Western Europe who are so protected from competition that they have no incentive to succeed.  Yet, although the United States has the highest level of income inequality among all advanced societies, a child born to poverty actually has a greater chance of moving up the class ladder in Western Europe and Canada than in the United States.  Economist Miles Corak, who analyzed dozens of studies on this point, told the Wall Street Journal in May 2005, "The U.S. and Britain appear to stand out as the least mobile societies among the rich countries studied." France and Germany, regularly ridiculed by the American elite for economic policies that supposedly discourage ambition, actually provide more room for mobility than does the United States.  Canada and the Scandinavian countries, home of high taxes and generous welfare, are, according to the numbers, even greater lands of individual opportunity. . . .

You can become a billionaire quicker in America, but your chances of living a longer, more secure life, with time for your family and friends, free from the anxiety of economic ruin if you get sick, and a higher-quality education for your children are much greater in Western Europe.  European workers have taken more of their productivity gains in leisure--primarily in longer holidays and shorter workweeks.  Over their lifetimes, Americans work an estimated 40 percent more hours than do workers in France, Germany, and Italy.  --Jeff Faux, Global Class War

No system is ideal, and I know that it's easy enough to find flaws in the Canadian and European systems, but ultimately it comes down to quality of life, and in most respects ours has evolved to become comparatively inferior, and getting worse.   And so we persist in this ridiculously distorted picture of our national greatness as if having the biggest military was the proof of it.  It's nutty. We mostly have no idea about the price we're paying.  There are layers upon layers of costs, and we are the poorer for it.  And after this fiasco  in the Middle East, we'll be paying for decades to come.

But maybe it's just time to redefine the American Dream.  It has become too much associated with becoming fabulously wealthy, and it's this idea that co-opts a lot of Americans into rejecting any concept of limits on one's avarice.  No restrictions should be put on people acquiring as much wealth as they feel they need, because theoretically ordinary Americans dreaming the American Dream delude themselves to think that in theory they or their children could some day be one of the superwealthy.  Any healthy society has to have ways to productively channel the ambitions of its citizens, but why is wealth the ultimate criterion?  It's pathological. Prosperity, yes.  As-much-as-you-can-get wealth, no.

We see the pathology at work in the ridiculous compensation given to CEOs and athletes.  How much is too much?  Well, actually, in this model, there should be no limit, and that's why athletes will jump from a winning team to a bad team for $25 million a year instead of $18 million a year, to take the example of Alex Rodriguez after the 2000 season.  I realize that seven million dollars is a lot of money, but the conventional wisdom is that anybody who was in A-Rod's position would have done the same thing, and it's hypocrisy to say otherwise. 

But why?  Because that's the culture we live in.  Greed is the motivator that trumps all others, and we just accept it as normal.  Staying to make a team on the brink of greatness even greater meant nothing.  His connection to the coaches, teammates, and the city that adored him  meant nothing.  It was not even a consideration to make a statement that loyalty and winning and being ridiculously well paid was more important than disloyalty, losing, but being even more ridiculously well-paid.  Is it just that he was a jerk?  No, because if he hadn't taken the deal, he would have been considered a fool by his peers and by his agent. "It's a business decision."  "I'm doing what's best for my family."  "I only have a few productive years."  What? to make more money in a year than 99% of the world will see in their lifetimes?

How is it that it has become acceptable to be bought so easily, to be so crudely, publically avaricious?  What has become of us that this is so? That we just accept it as normal?

So the popular American belief in this avaricious version of the American Dream is something that plays right into the hand of the overclass.  It preserves the structure of the hierarchy with all the advantages going to the people at the top.  But as Faux, and Kevin Phillips and so many others are at great pains to point out, it is a myth--very few people rise to positions in the overclass--the best most will achieve is simply to function as overclass lackeys.  But even if the myth were true, it's not a myth that leads to true national greatness.  It leads to what we have today--the rich and powerful doing as they please at the expense of everyone else.

My version of the American Dream is one that focuses not on greed but American decency, modesty, humor, magnanimity, and sobriety, that focuses not on market dynamics, but on public service that strives to build public wealth, that seeks to mitigate the cruelties of the market with a clear-headed compassion that  empowers the powerless, that helps the dependent to find their dignity as productive citizens, and  provides adequately for the health and education of all citizens, especially its children and elderly. 

This is not the America we live in, and if you think it's ok to live in such an America, you are living not any American Dream that is worth caring about, but in a self-absorbed Libertarian/Reaganite American Dreamworld, and you need very badly to be woken up.

Why Dubai Ports Rankles

From David Sirota:

Underneath the glut of stories about the now-failed proposal by a Dubai-owned company to buy major American ports was something that every 2008 Democratic presidential candidate would be well-advised to note. No, it wasn’t a new resurgence of “racism,” as many pundits in the corporate media claimed. After all, there was plenty of evidence showing that America’s national security apparatus had very concrete concerns about the deal. And no, it wasn’t merely that America wants better homeland security (although it is true—we do).

What the scandal showed was that Americans are sick and tired of “free” trade policies that prioritize corporate profits over all other economic and national security concerns. As workers’ wages stagnate, the U.S. trade deficit grows and more of our country’s assets are sold off to the highest foreign bidders, that concern is only going to become more prevalent in electoral politics.  Read more.

But does it matter if the Dems are as much coopted by the international overclass elites as the GOP is?

The Economy and the Beltway Courtiers

In case you haven't noticed, the economy is booming, but for whom is the boom booming? This from Fairness & Accuracy in Reporting:

As the New York Times put it (12/6/05), the economy “has improved in the past two years, though polls show that most people think it has gotten worse.” USA Today (12/5/05) had it that “despite positive economic numbers, polls show that many Americans believe the economy remains weak.” And the Los Angeles Times (12/6/05) referred matter-of-factly to economic “good news,” noting Bush’s concern that “voters give him little credit for the improving economy.”

Again and again, the majority of Americans’ understanding of their own economic situation was presented as somehow disconnected from reality, ascribed to “pessimism,” ignorance or irrationality. The Wall Street Journal (12/6/05), among others, suggested poll respondents’ negative assessments might be “spillover from concerns about the Iraq War,” as if the war rendered people incapable of noting whether or not they can pay their bills.

Conservative pundit George Will (ABC’s This Week, 12/4/05) blamed media coverage for the public’s failure to understand that “the economy is booming,” attributing this misapprehension to “Will’s two laws of economic journalism,” which mandate that “there’s no such thing as good news.” On Fox (Special Report, 12/2/05), Charles Krauthammer likewise cited the press, which “emphasizes the negative,” for the fact that the public didn’t appreciate the “incredible resilience of this economy,” which he called “a tribute to the tax cuts which kept our economy strong.”

Even the inclusion of significant countervailing data, like sluggish wage growth or escalating healthcare costs—data that demonstrate that Bush’s vision of an economic horizon “as bright as it’s been in a long time” (UPI, 12/2/05) is simply not the reality for most people—was insufficient to shift the story from one of essentially “good news.” The most outlets could manage was to say that such factors suggest “that recent gains in the economy do not apply across the board” (L.A. Times, 12/6/05), that many workers are not “fully participating in the economy’s gains” (Wall Street Journal, 12/6/05), or that “many economic benefits are not making their way to ordinary workers” (Washington Post, 12/6/05). But why these ordinary workers, representing the majority of households, should not be considered the arbiters of whether or not “the economy” is good is never explained.

Read more.

It's facetious, really. I love the Krauthammer quote. And why isn't the media doing a better job of brainwashing us into believing what the Beltway Courtier class wants us to believe. They just ain't doin' their job.

But maybe it has to do with having to pay the heat bill this winter, and how that was a budget breaker for lots of working Americans. Maybe it has to do with the big mortgage payments so homeowners are paying and how overstretched their credit is. Maybe it has to do with a feeling of the fragility of the jobs they hold wondering when the the next downsizing our wave our outsourcing will hit, so American businesses can talk about what strides they are making in productivity. Maybe it's the prevailing conventional wisdom that makes it ridiculous for them to expect any kind of significant salary improvements for that very reason.  Maybe it has to do with the sense of of an economy that is in itself up to its ears in debt and getting more an more into it as we burn billions every week in Iraq.  Maybe it's the sense of unease that you'd have to be living in a cave not to worry about the incompetence of our current leadership and the sense  that they have  more than two years to make things even worse.

Vanishing Middle

Under the current regime, we are regressing to 1929. Believe that this a conscious strategy goal of key factions within the GOP.  And we are allowing it because of the traditional values smokescreen that the architects of this plan are hiding behind. This from Tom Paine:

The share of national income going to wages and salaries is at the lowest level since 1929—the year that kicked off the Great Depression. The share going to after-tax corporate profits, which heavily benefit corporate executives and other wealthy Americans through increased dividends and capital gains, is at the highest level since 1929.

"In 2005, for the first time since the Great Depression, Americans borrowed more than they earned," Parade magazine reports in "What People Earn."

Fueled by obscene wage inequality and tax cuts, income and wealth are piling up at the very top. More and more jobs are keeping people in poverty instead of out of poverty. Middle-class households are a medical crisis, outsourced job or busted pension away from bankruptcy.

Contrary to myth, the United States is not becoming more competitive in the global economy by taking the low road. We are in record-breaking debt to other countries. We have a record trade deficit, hollowed-out manufacturing base and deteriorating research and development. The infrastructure built by earlier generations of taxpayers has eroded greatly, undermining the economy as well as health and safety.

Households have propped themselves up in the face of falling real wages by maxing out work hours, credit cards and home equity loans. This is not a sustainable course. The low road is like a "shortcut" that leads to a cliff.

We will not prosper in the 21st century global economy by relying on 1920s corporate greed, 1950s tax revenues, downwardly mobile wages and global-warming energy policies. We will not prosper relying on disinvestment in place of reinvestment. We can't succeed that way any more than farmers can "compete" by eating their seed corn. . . .

In the book How We Compete: What Companies Around the World Are Doing To Make It In Today's Global Economy, Suzanne Berger reports the findings of MIT's Industrial Performance Center study of more than 500 international companies. She observes, "Contrary to the widely held belief of many managers, we conclude that solutions that depend on driving down costs by reducing wages and social benefits—in advanced countries or in emerging economies—are always dead ends. . .

"Strategies based on exploiting low-wage labor end up in competitive jungles, where victories are vanishingly thin and each day brings a new competitor. . . As low-end firms that compete on price move from one overcrowded segment of the market to the next, there is virtually no chance of gaining any durable advantage. The activities that succeed over time are, in contrast, those that build on continuous learning and innovation."

Instead of pretending the problem is overpaid workers and accelerating offshoring, we need to shore up our economy from below and invest in smart, sustainable development. Raising the minimum wage is a vital step.

The high road is not only the better road, it is the only road for progress in the future. An America that doesn’t work for working people is not an America that works.

See other posts here and here I've put up on this topic.  The point is an obvious one, but one most Americans seem unable to embrace.  We define the American dream in the crudest materialistic terms as the freedom to become fabulously wealthy.  A few do, and hats off to them.  But that ideology sets the stage for the migration of power away from the 90% of us whose means are more moderate.  And we are sitting back and watching this, and the next thing you know we are living in Brazil, the rich living in their heavily gaurded gated communities, the working poor growing larger as people who have been solidly in the middle since the New Deal lose their grip there.

There will continue to be a group of professionals and small business owners in some specialized service industries who will continue to maintain their middle status, but everyone else is in a much more tenuous situation, and if the middle is not going to vanish, it's certainly not going to be who most of us are. 

Nothing is guaranteed, and I'm not for a society in which people are pampered from cradle to grave, but we are allowing a society to develop in which it's going to be increasingly desperate and ruthless.  We're allowing this because we've bought into the propaganda of a group of people whose ideology dates to the Social Darwinism of late nineteenth century. Most Americans would reject this  vision of America if it was something that presented itself for what it is.  But it has been hidden in rhetoric of lower taxes and getting government off our backs.  It plays to a resentment of some the more poorly designed entitlement programs of the New Society.  But most of all it has been their appeal to fear after 9/11.

But even so, they have been winning the battle of ideas because the Democrats, as the representatives of the New Deal compromise, became complacently arrogant. They have not fought back by proposing a coherent, robust alternative vision of a more humane American future.  The GOP has seized the opportunity  the feckless and disorganized Democrats have given them, and America pays the price. I am disgusted with the Democrats because their irresponsibility.  But I fear the GOP because  of the predatory ideology that is at the heart of their vision of America, no matter how they try tot disguise it with their political rhetoric. 

 

How Much Economic Freedom?

Forestwalker asks: "can you articulate how what you're advocating here in regard to the political and social/spiritual sphere is different than what libertarians advocate in regard to the economic sphere?" I think the question relates more to my 2/20 Religion and Politics post  more than to Subjects and Objects post where it appeared as a comment, so I'll attempt an answer here.

Libertarians believe that citizens should be given as much freedom to operate in the economic sphere as possible. In the three spheres as I talk about them, this kind of freedom is the guiding principle in the cultural sphere, not the economic sphere.

The guiding principle in the economic sphere is 'obligation'. We have an obligation to support ourselves, but we also have an obligation to the commonweal.  What precisely that means can be worked out in the political sphere, where those obligations can be spelled out in detail. 

This leaves room for flexibility depending on practical considerations. How much of a role should the market play?  How much of a role the state play? There are no absolutes here as there seem to be in the libertarian-style market theology. It's mainly a question of people trying to figure out what works best.

One's ideas about what works best are influenced by activity in the cultural sphere where ideals and values are explored and promoted. It makes a difference if the culture is dominated by a materialistic understanding of how the world works and what motivates human action or whether religious ideals shape the soul of the culture. It makes a difference if Ayn Rand is the national prophet or Karl Marx. A culture's values profoundly influence its ideas about what is good for the commonweal economically and in turn its politics. 

For me most of the persuasive work has to happen in the cultural sphere.  \People today feel overwhelmed by the economic complexity of the world system, and they are bankrupt of ideas about what to do or how to act in the political sphere, so the tail wags the dog, and we let it because we who know things are not right with the political and economic alignments in our society can propose no plausible, robust alternative. It's not for lack of ideas but for lack of control of the cultural institutions that determine what is plausible or not. Plausibility is in very large part shaped by what people believe is possible, which is an issue that needs to be clarified and discussed in the cultural sphere.

My own beliefs about what should happen in the economic sphere follow from some basic principles. First, each able-bodied man or woman has a responsibility to himself and to the larger community to support himself and to contribute to the common good in some way. People should be rewarded for their industry, and should be allowed to accumulate wealth, but there needs to be a wall separating the wealthy from having any more political power than any other citizen. It's probably undoable, but I would be interested in exploring some formula that would create some kind of tradeoff between economic influence and political influence. The more you have of the former, the less you have of the latter. You want to be rich, fine. We'll protect your rights in that regard. But stay out of politics.

I think freedom in the economic sphere is a practical value and by no means an absolute value. Freedom in the economic sphere when promoted as an absolute leads inevitably to concentrations of wealth and power and of the domination of the weak by the strong.

I think the principle of subsidiarity should operate on the level of markets, which means that people should be able to produce, buy, and sell as they please with as little interference from governments as possible. But when things get out of balance, such as when some people are too wealthy and others too poor, a democratic state should have the power to redress the balance when it serves a democratically determined common good. What balance means needs to be debated in the cultural sphere of values and ideals.

But this isn't a radical idea. It's the basic principle justifying trustbusting, state and federal regulation, WPA- and TVA-type projects, entitlements for the disabled, etc. Such policies are Libertarian heresy.

But this is pretty much the way things worked in this country since the New Deal. No one questioned the basic principles underlying the New Deal compromise until the rise of Ronald Reagan here and Thatcher in England. I am opposed in principle to Thatcherism and Reaganism, by whose principles there is simply no such thing as a common good. That isn't to say that I wouldn't agree with their complaints that the state sometimes overstepped its bounds. But those are practical considerations, not considerations of principle.   

Thatcherism and Reaganism were an extreme reaction that are unbalancing things now in the other direction, and that we allowed things to swing so far in their direction has put us in a very precarious spot. Because now the power has shifted dramatically to those with a lot of wealth, and they have expanded their influence from the economic sphere to the political sphere, and now they are using their economic and political power to dominate the cultural sphere through the mainstream media. And as a result, they determine what is plausible or not plausible; they determine what is thinkable and what not. Sure we're free to think what we want in the (for now) independent blogosphere, but we will be allowed to do so long as we're not a threat, and so far we're not one.  We're just bloviating for the most part, me included.

Shoring up the Radical Center

We're living in a transitional era on almost every level--economic, political, local, global, cultural, spiritual, and there are hundreds of analyses and critiques and programs for what must be done, but so long as no consensus emerges, a minority of economic elites with power is left unconstrained to game the system as they please. 

Our fragmentation in the cultural sphere is a perfect set up for the wealthy minority because they don't have to do much to keep us divided and conquered.  We're doing it to ourselves. We've bought into their self-justifying ideologies about taxes, deregulation, privatization, markets, and free trade because no consensus can be developed around a plausible, actionable alternative. 

It's not that the gamers are in control.  It's just that they recognize that the fewer the rules, the freer they are to maneuver to increase the odds that they'll stay winners. They don't care whether the rest of us lose or not; they only care about themselves, and they make decisions based on what it means to them to win in the short run.  It's everybody for himself, and if others lose, well, that's the way it works in the jungle known as the "real world": some eat; others get eaten.   

In the economic sphere we're clearly going through a drastic restructuring, and this is affecting people at the bottom and in the middle most dramatically.  The primary element driving this change is surplus labor generated by technology and off-shoring.  This works to the short-term advantage of the economic elites.  They want it to be a buyers' market.  It gives them more room to maneuver, and the result is the kind of corporate mentality you find at Wal-Mart--labor exploitation hiding behind a smiley face.

But there is a political dimension to all of this.  We're not helpless in the face of these structural changes.  I don't think government should try to prevent companies from doing what its managers feel is in their self interest, but I do think government can do some things to straighten the bargaining position of labor.  And that's to put more people to work building national infrastructure.  This was the basic principle behind the New Deal. And now rather than destroy the institutions that it established, as the Republicans are trying to do, we need to expand them. 

If we can pour billions down the drain in Iraq, we can find the same amount to build public wealth in this country. The New Deal is about things like the TVA, but we've come to associate it mainly with welfare entitlements and safety nets. Government can put people to work doing things that benefit the common good. It's not about make work--moving a pile of dirt from one side of the road to the other.  It's about building public national wealth.   

I'll have more to say about this as we go along. My thinking here is influenced by a number of people, none of whom I feel totally comfortable with and  I am not totally on board with their programs.  Michael Lind is one of them.  His book The Radical Center is in part the source of my self-description as a "radical centrist," but I think the way he defines the term is different from the way I do, and his policy proposals ofter strike me as a bit weird. But he's a guy worth reading, and his paean to the New Deal in Made in Texas and in some of the other things he's written have been important in my own thinking about what the GOP is doing to our political infrastructure.  James Kroeger's piece on "Make the American People Richer" is also something worth reading, but not something I completely endorse. I think his ideas about building "public" national wealth are barking up the right tree, and are a direct challenge to all those who have made a religion of privatization.

But how will a consensus alternative to the jungle mentality emerge? In the long run the most important changes have to occur in the cultural sphere.  Our thinking and values about economic and political organization have to be changed.  We need to have a shift in the consensus that values more of a compromise between the common good and individual freedom.  Right now things are tilted unhealthily toward the latter, and my fear is that like an alcoholic, we'll have to bottom out before there is any hope that we will find the will to redress the balance.

Two or three decades of slow national decline is not the kind of world I want my kid to have to live his life in.  I'd rather he be a part of building something worthwhile.  But it's up to our generation to lay the foundation.