The Road to Catastrophe
Ernest Partridge
10/14/2008
The economy of the United States, and by extension of the world, has arrived at the present crisis after traveling along a road marked with an abundance of warning signs. At this moment in time, it is rather easy to recognize the folly that caused the present emergency. ※Hindsight,§ as they say, ※is 20/20.§ However, in this case foresight was not blind. A decade ago, an intelligent and unbiased observer could readily realize that ongoing trends were unsustainable and thus could forecast that sooner or later the ongoing economic circus would lead to disaster. ※Hubert Stein*s Law§ predicted the outcome: ※That which can not go on forever, won*t.§
The American public has been led along this road to ruin by a set of dogmas that are unsupported by the historical record, by empirical evidence, and by practical experience. Nevertheless, these dogmas have been promoted by publications, by ※think tanks,§ and by a media, that have been lavishly funded by enormously wealthy private individuals and corporations. And over the past forty years, following the resounding defeat of Barry Goldwater*s conservatism in 1964, these promoters have accomplished through repetition and propaganda what they could not accomplish through reason and evidence: the support of a sizeable portion of the American public, the media, the courts, the Congress, and the Executive Branch of the U.S. government.
Below is an enumeration of three of these dogmas, which are generally labeled as ※conservative.§ I prefer to call them ※regressive,§ since they repudiate much of the economic and political wisdom acquired in the past century, and embrace, instead, doctrines once believed to have been decisively refuted by that wisdom.
Following that enumeration, I will list a few policy guidelines that might lead us out of the crisis into which these dogmas have brought us.
Because I will examine a broad field of inquiry in a brief space, many of my assertions might be properly criticized as oversimplified, unsupported, and, dare I admit it, ※dogmatic.§ Fortunately, I have presented and argued these points at greater length in numerous Crisis Papers essays and in my book in progress, Conscience of a Progressive, which can be found online here. I will provide links to these sources in the following text. (For a start, here is a list of twelve contrasting ※elements§ of the ideologies of the regressive right and of the liberal left).
Social Atomism
The concepts of ※society§ and ※the public§ have a diminutive place in regressive ideology. In fact, in the minds of many regressive libertarians, these concepts are mere myths. For example, Margaret Thatcher proclaimed, ※There is no such thing as society 每 there are individuals and there are families.§ And Ayn Rand: ※There is no such entity as 'the public' ... the public is merely a number of individuals."
If ※there is no such thing as society§ or ※the public,§ it follows that there is no such thing as ※public goods§ and ※the public interest,§ apart from summation of private goods and interests. Accordingly, there are no ※victims of society.§ The poor choose their condition; poverty is the result of ※laziness§ or, as the religious right would put it, a ※sin.§
The regressive is convinced that if each individual confines one*s concern to the pursuit of one*s private interests and the achievement of one*s personal goals, the optimum satisfaction of all will be accomplished, ※as if by an invisible hand.§ (Adam Smith). That which is good for each, is good for all.
Accordingly, the functions of government should be confined to the protection of individual ※natural rights§ to life, liberty, and property.. Otherwise, the regressive insists, ※you are on your own.§ Private initiative and private property will always produce superior results to public institutions.
The liberal, on the other hand, insists that ※society§ and ※the public§ are more than the sum of their individual, personal, components. As John Rawls puts it, a society is: ※a cooperative venture for mutual advantage [which] makes possible a better life for all than any would have if each were to live solely by his own efforts.§ (A Theory of Justice, p. 4). Thus there are ※public goods§ and ※social values.§ In numerous easily identifiable cases, individual self-serving behavior results in social harm, and conversely, individual sacrifice is required to accomplish public goods. In brief, that which is good for each may be bad for all, and that which is bad for each may be good for all.
Market Absolutism
Regressives are convinced that ※the wisdom of free markets§ will always produce superior results than would government initiatives. As David Boaz writes:
※[T]he free market allows more people to satisfy more of their desires, and ultimately to enjoy a higher standard of living than any other social system... We need simply to remember to let the market process work in its apparent magic and not let the government clumsily intervene in it so deeply that it grinds to a halt." (Libertarianism, a Primer, p. 40, 185.)
And Milton and Rose Friedman:
"A free market [co-ordinates] the activity of millions of people, each seeking his own interest, in such a way as to make everyone better off... Economic order can emerge as the unintended consequence of the actions of many people, each seeking his own interest." (Free to Choose, pp 13-14).
The theoretical core of regressive economic policy is based upon an imaginary creature inhabiting a mythical environment.
The imaginary creature is ※economic man§ (homo economicus), a pure egoist, motivated solely by the self-interested desire to maximize his ※utility" 每 a concept variously described as "want-" or "preference satisfaction." This motivation is manifested and measured by "economic man's" willingness-to-pay for these "satisfactions" in a ※perfect§ market.
That ※perfect market§ exhibits the following conditions: the participants (all "economic men" of course) must be numerous and completely informed, and their transactions must be voluntary, mutually beneficial, open, without collusion, and their exchanges free of transaction costs and externalities (such as pollution of others' air and water).
Small wonder that this ideology does not fit the ※real world§ of individuals with moral, aesthetic, and sentimental motives in addition to economic motives, facing markets that deceive and withhold information, and engaged in transactions that seriously affect non-consenting third-parties (i.e., ※externalities§ affecting ※stakeholders§).
Moreover, this ※neo-classical§ economic theory (of ※economic man§ and ※perfect markets§) has not captivated most economists, some of whom are fully cognizant of its limitations. Among them, the Nobel laureate, Amartya Sen:
"The economist . . . keeps the motivations of human beings pure, simple and hard-headed, and not messed up by such things as goodwill or moral sentiments... [T]here is ... something quite extraordinary in the fact that economics has in fact evolved in this way, characterizing human motivation in such spectacularly narrow terms. One reason why this is extraordinary is that economics is supposed to be concerned with real people. It is hard to believe that real people could be completely unaffected by the reach of the self-examination induced by the Socratic question, 'how should one live?'" (On Ethics and Economics, Oxford: Blackwell, 1987, pp 1-2.)
Spontaneous Order
The regressive*s disdain for government is buttressed by a conviction that an ideal social order arises ※spontaneously,§ without government initiative or regulation, out of voluntary human interaction. As the libertarian, David Boaz writes:
... order in society arises spontaneously, out of the actions of thousands or millions of individuals who coordinate their actions with those of others in order to achieve their purposes... The most important institutions in human society 每 language, law, money and markets 每 all developed spontaneously, without central direction. (Libertarianism: A Primer, p. 16).
While ※spontaneous order§ may be true of natural languages, Boaz's claim that law, money and markets arise "spontaneously" and thrive without deliberate governance, is resoundingly refuted by both history and practical experience. In fact, few if any complex human activities can take place without rules and the active enforcement thereof. For example, all team sports require referees. Even markets operate under sets of rules, and sanctions against those who violate these rules. And we are now, to our profound regret, discovering what happens when markets are allowed to function "spontaneously" without regulation.
No known civilized society has ever existed without some form of government, some oppressive and others democratic and just. Few municipalities are prepared to abolish fire and police departments, merely because these civic institutions are less than perfect. If, as Ronald Reagan complained, ※government is not the solution, government is the problem,§ then the rational remedy is not necessarily less government (albeit such remedies are occasionally in order). That remedy might be found in improved government.
The Road Back
These three regressive dogmas -- social atomism, market absolutism and spontaneous order -- among several others that I have dealt with elsewhere, have led us to the economic crisis now before us. An escape from this economic morass begins with a repudiation of regressive ideology, which, happily, is now under way.
That repudiation must be followed by a vigorous program of economic and social renewal, highly unlikely under a McCain/Palin administration, but just possible under the leadership of President Barack Obama.
Here are a few proposals:
An immediate restoration of personal liberties, a diverse media, and the rule of law.
Investment in public education for responsible citizenship, including the teaching at an early age of United States and world history, the foundations of American democracy, and the rights and responsibilities of citizenship. The public media should be required (under the ※public interest§ clause of the Federal Communications Act) to supplement these lessons.
Authentic free enterprise must be reinvigorated, and the so-called ※free enterprise§ promoted by the regressives recognized as the monopolistic and anti-competitive fraud that it is. Corporate gigantism must be abolished through anti-trust legislation and enforcement, which will reintroduce competition. The domestic manufacturing base must be restored. If profit is to be privatized, then so too must risk. No private corporation can be allowed to grow so large that it might hold the national economy hostage. As Senator Bernie Sanders puts it, ※Too big to fail is too big to exist.§
※The profit motive§ must be recognized as merely one productive motive among many. In addition, careers dedicated to service to others, and to the search for knowledge must be celebrated, encouraged, and generously rewarded.
The nation*s wealth, privately acquired by the privileged few through tax cuts and de-regulation, must be reacquired by the national treasury through tax reform, and invested in public institutions such as infrastructure, education, scientific research, universal health care, transition to sustainable energy, environmental restoration, etc.
The U.S. Military budget, now equal to that of the rest of the entire world combined, must be cut, in half at least, and the ※Defense Department,§ true to its name, must limit its objectives to national defense thus restricting its capacity for offensive warfare abroad. American imperialism, proudly proclaimed by "The Project for the New American Century," must now be officially repudiated.
Economic recovery policies, proven in the past in The New Deal (FDR), The Fair Deal (Truman), The New Frontier (Kennedy) and The Great Society (Johnson), must be reinstituted, but adapted to present circumstances.
It should be noted that many of the above proposals 每 for service careers, infrastructure repair, education, research and development, expanded health care, alternative energy development, etc. 每 would directly address the urgent economic problem of unemployment.
As recently as a month ago, such a program of economic restoration and national renewal would have been flatly impossible, due to the overwhelming political power of financial institutions and mega-corporations, and the influence of the corporate media. But today, with the stock market collapse, the acute and widespread economic distress among all but the most wealthy Americans, and the consequent political unrest and activism, we may have arrived at one of those ※hinges of history§ which just might move the United States and the world in a new and more hopeful direction.
We*ll begin to find an answer in three weeks, as the Americans go to the polls.
If dirty tricks, lies, caging lists, and corrupt voting machines do their worst and McCain/Palin prevail, then apres Bush, le deluge.
But if Barack Obama wins, the struggle continues as political pressure must then be applied to his administration, forcefully and persistently. President Obama, like FDR before him, might then be heard to say, ※I agree with your objectives, now go out and force me to enact them.§
- posted on 10/20/2008
Consumer or Citizen?
By Ernest Partridge
October 7, 2003
Who made him dead to rapture and despair,
A thing that grieves not and that never hopes,
Stolid and stunned, a brother to the ox?
Who loosened and let down this brutal jaw?
Whose was the hand that slanted back this brow?
Whose breath blew out the light within this brain?
.. .
There is no shape more terrible than this
More tongued with cries against the world's blind greed
More filled with signs and portents for the soul
More packed with danger to the universe.
--Edwin Markham
The Man With a Hoe
If a nation expects to be ignorant and free, it expects what never was and never will be... The people cannot be safe without information.
--Thomas Jefferson
What is this country coming to?
Are we Americans regarded by our "leaders" as free and rational citizens of a functioning democracy, or merely as an aggregate of isolated and mindless consumers?
If we look for an answer to the media and to our political discourse, the indications are not encouraging. There we may find that those who are soliciting our votes and our political support act like hucksters delivering sales pitches to a "marketplace" of consumers, rather than honorable advocates offering discerning and responsible citizens well-formed arguments based upon confirmable evidence and logical inference.
The distinction between the consumer and the citizen is crucial to an understanding of the causes of the degradation of our political institutions. That distinction might also point the way toward a restoration of our democracy.
The model consumer is the perfect egoist 每 "economic man." He sees the world through "the mind's I" and is motivated by the desire to "maximize preference satisfaction" (to use the economists' jargon). "Values" are interpreted as "prices" 每 willingness to pay 每 and thus moral value (i.e., virtue and justice) is "factored out." Those with something to sell 每 be it a product, a service or a candidate 每 address the consumer with any device found to be effective: imagery, slogans, deception, fallacy, "spin," and even slander and outright lies, if one can get away with it. If need be, these devices include "junk science," as when the tobacco industry sets up "research institutes" to "prove" that smoking is not harmful, or when the fossil fuel industry concocts "scientific reports" to "prove" that global warming is a "myth." (See my "Remedial Economics for Regressives").
In contrast, the ideal citizen takes a "moral point of view," by perceiving himself or herself as one equal member among many engaged in cooperative activity for mutual advantage, i.e. a "community." The citizen, as a moral agent, acts not only from personal desire, but also from abstract principle, through which the citizen is enabled to recognize rights and responsibilities in oneself and in others, and just laws and political institutions in society. The moral point of view enables one to recognize excellence in individuals ("virtues") and in societies ("justice"). As we will elaborate below, these "moral values" are independent of economic values ("prices"). In political debate, the ideal citizen (like an "ideal" judge or juror) is unmoved by devious salesmanship and is persuaded by "the better case" 每 the clearer presentation of facts, the greater weight of evidence, and by the more coherent and consistent argument. (Prices vs. values, and "the moral point of view" are presented at length in Parts II and III of my "In Search of Sustainable Values").
In a nutshell, the governing impulse of the consumer is "I want." The governing impulse of the citizen is "we need."
In fact, every individual is a mixture, in varying proportions, of both a consumer and a citizen. Mark Sagoff expresses this point with great clarity and wit:
Last year I bribed a judge to fix a couple of traffic tickets, and was glad to do so because I saved my license. Yet, at election time, I helped to vote the corrupt judge out of office. I speed on the highway, yet I want the police to enforce laws against speeding... I send my dues to the Sierra Club to protect areas in Alaska I shall never visit... And of course, I applaud the endangered Species Act, although I have no earthly use for the Colorado Squawfish or the Indiana bat... I have an 'ecology now' sticker on a car that drips oil everywhere it's parked. (The Economy of the Earth, Cambridge, 1988, p. 52)
Sadly, it appears that the American public is behaving ever more as a marketplace of consumers, and ever less as a polity 每 a community of citizens. Surely our politics both reflects and promotes this trend, as rational discourse and argument is replaced by such marketing devices as imagery, slogans, and "spin."
Some cases in point:
Late in the Reagan administration, "60 Minutes" broadcast a segment dealing with the Reagan policies toward senior citizens 每 social security, medicare, etc. The script contained a devastating criticism of Reagan's broken promises and the failure of his administration to address the problems of the elderly. Over this text, the screen showed a smiling "Gipper" addressing various crowds and token "citizens." After the broadcast, Michael Deaver, Reagan's publicist, personally thanked the reporter, Leslie Stahl, for the "very favorable" portrayal of the President. Stahl was stunned 每 this was not the intended message. But as the media-savvy Deaver knew full well, verbal content counted for little 每 image was everything.
The supremacy of imagery and connotation (the tools of salesmanship) over evidence and logic, appears time and again in our political campaigns. In the 1984 election, polls disclosed that on almost every issue, the public preferred the Democratic to the Republican positions. Yet Reagan trounced Mondale. Likewise in the 2000 campaign: the public overwhelmingly preferred Gore's position on the issues to those of Bush. Moreover, during the debates, Gore clearly displayed a superior mastery of facts and policy, not to mention the English language. Yet the GOP "spin doctors" and the pundits successfully directed public attention away from issues and content and toward "drama criticism" 每 Gore's body language, and Bush's "likeability."
The GOP handlers had learned well the advertiser's rule: "Don't sell the steak, sell the sizzle!"
The triumph of salesmanship over substance in politics is exemplified by the use of polls and focus groups by campaign strategists. "Typical" voters are meticulously studied, not for their ideas or their responses to arguments, but for their gut reactions. "Real time" voter responses to campaign speeches are electronically collated and graphically displayed. "Low negative" words and phrases ("liberal") are then incorporated into attack ads, and "high positive" words ("compassionate") are put to use in slogans and speeches 每 hence "compassionate conservative." Fully formed ideas (which require full sentences) and still less arguments (which require paragraphs of coherently related sentences) have no place in this new science of "voter profiling."
With the voter reduced to a bundle of feelings and impulses 每 "preference maps" as the economists call it 每 there is little perceived need either by campaigners or the media, to deal with old-fashioned concepts such as issues, evidence, argument or logical cogency. As reasoned argument disappears from public discourse, the public loses interest in serious discussion of public issues. In turn, the media cut back on programming dealing with public issues. In what remains of "news" programs on the TV, images and personalities (e.g., Jon Benet, Monica, OJ, Condit/Chandra, Kobe) replace issues (social security, economic justice, civil liberties, campaign finance). Serious on-air discussion is derided as "talking heads." (By "talking heads" is meant such insignificant events as the Sermon on the Mount and the Gettysburg Address). "Entertainment" becomes the supreme commodity in the media 每 thence "info-tainment" and "edu-tainment."
In sum, we are being treated more and more as mere bundles of "gut preferences," by our political leaders, and by the oligarchy that selects, finances and thus "owns" these politicians. (By "oligarchy," I mean primarily individuals among that fortunate one-percent that owns 40% of the national wealth, virtually all of the mass media, and which is the recipient of half of George Bush's tax refund). And because we are treated by the oligarchs as "mere consumers," we are evolving, ever more toward that strange abstraction, "economic man" 每 perfect egoists striving for a maximum satisfaction of "felt preferences," bereft of dignity, autonomy, compassion, self-sacrifice. "Civil society" 每 a community of shared ideals 每 is being replaced by an aggregate of alienated individuals who "bowl alone" and retreat to the their private sanctuary in front of the TV. (See my "On Civic Friendship")
To the oligarchs, the ideal "citizen" (better, "resident") is a worker who produces wealth efficiently, consumes and wastes thoughtlessly and lavishly, and willingly turns over the product of his labor to the oligarchs. In addition, this ideal resident, while well-trained so as to increase productivity, will not be well-educated to think critically or creatively, for original and dissenting ideas may upset the efficiency of the marketplace. Instead, this individual will obediently acquire the tastes, political loyalties and consumer preferences as dictated by the oligarchs, and will not be distracted from his or her function as an ideal consumer by troublesome political ideals. These individuals in Marketplace America are not "created equal," rather they are valued in proportion to their wealth 每 and by extension enjoy political power in proportion to their capacity to finance politicians.
Thus American society is coming more and more to resemble a "corporate-nation," with the public at large as employees, the oligarchs as stockholders, and the politicians as corporation managers. America, Inc.
What?! You don't approve? Well, you'd better follow Ari Fleischer's advice and "watch what you say" if you are not to be condemned as an "enemy of freedom." So shaddup, get back to the hive and make more honey. The plutocratic drones are getting impatient.
This was not the sort of "citizen" envisioned by those who signed the Declaration of Independence in 1776 or who ratified the Constitution in 1787. On the contrary, the framers of our republic understood that the "life, liberty and pursuit of happiness" promised in the Declaration were not and are not simple commodities to be priced at the market, nor are the triad of political ideals proclaimed in the French revolution: "liberty, equality, fraternity." Furthermore, they did not conceive of the human being as a mere preference bundle, malleable into a shape desired by marketing geniuses. Instead, they affirmed that each infant and child deserved the care, nurture and companionship that might engender lifelong sense of compassion and of justice. And they believed that each individual is capable at birth of being educated to a condition of knowledge and critical intelligence sufficient to assume the personal responsibility of conducting one's own life, and the civic responsibility of participating in the governance of a free and democratic society.
We residents of "America, Inc." have drifted far from these ideals, and, as obedient consumers, we may be ill-equipped to reclaim them. Great ideas and principles do not lend themselves to the vivid images of the salesman. These political ideals are not captured by slogans extracted from focus groups, and they are often far removed from the "preference maps" of the economist. As we become more accustomed to images and slogans and more estranged from ideas and principles, the philosophical foundations of our republic decay and the content is drained from our civic covenants. The resulting detachment of theory and practice is alarming. "Equal justice under law" is carved over the entrance of the Supreme Court, within which sit five seditious political hacks who dispense unequal "justice." The words, "with liberty and justice for all" are uttered daily in schools and at public occasions by a citizenry that takes no notice and does not protest as those liberties and that justice are taken away under the excuse of "national emergency." "Government of the people, by the people, and for the people" is mocked in a stolen election, following which the electorate is urged by the illegitimate "winners" ( apparently successfully) to "get over it."
The road back to authentic democracy will be difficult, for the oligarchs will not willingly surrender their ill-gotten power and privilege. The means to that restoration are familiar enough: a reintroduction of civic education ("Civics" and History), both formal and informal (i.e., through the public media). The media conglomerations must be broken up, and the "Fairness Doctrine" restored, so that a variety of political opinions might be heard, and a broad range of political issues discussed. Today, nothing remains of the alleged "public ownership" of the broadcast spectrum save a pleasant fiction. Finally, thoroughgoing campaign reform must be enacted . (See "A Bribe by Any Other Name"). Much more can be said about the means to this "restoration" of democracy and citizens, but that will have to await another essay.
In sum, there are, I submit, two overarching questions that must be put to all American citizens, but most directly to the media and the oligarchs:
Are you bringing about the kind of country that you would wish for yourselves, your children and your posterity to live in?
If not, then what are you willing to do to prevent it?
These questions must be asked, again and again, until at long last we face the implications of what we are doing to ourselves and to our republic.
- posted on 10/20/2008
This is the most succinct analysis of the current crisis that I can remember seeing. The deregulation attributed to fostering the market collapse is the mere symptom. The real cause is the same driving force that made every politician competing with each other to demonize the evil of big government, which is this over 200-year-old corollary: free market can cure itself of the cancerous insatiable greed, despite the overwhelming evidences contervailing this othodox faith. It is no coincidence that the most militant believers of Adam Smith's version of laissez faire capitalism reside under the same tent as the religious nutcases, for they share the same propensity to suspend rational thinking and mindlessly follow an orthodoxy.
Maybe the author's optimism that Obama may become a transformational leader on a par with FDR is warranted. We are currently undergoing a seismic change in reevaluating our basic understanding of political-economic interactions. It is not merely a cliche to say that this is a paradigm shift. After all, even an ardent Neo con like Francis Fukuyama has forsaken this free for all capitalism.
The Road to Catastrophe
Ernest Partridge
10/14/2008
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