Why Gridlock at the World Level?

FCA 11/6/10

A little learning is a dang’rous thing;

Drink deep, or taste not the Pierian spring.

There shallow draughts intoxicate the brain,

And drinking largely sobers us again.

Alexander Pope

As a citizen and an interested person I find myself wondering why the country seems in such dire straits: burst mortgage bubble, recession, high unemployment, partisan gridlock, nasty elections and so the following is my effort to answer the question why.

I believe that the problems we’re seeing now are of generally the same patterns humanity has always had, only the stage and props are different. I’ll set the table with a few paragraphs of context from prehistory and early history.

Start with Great Leap Forward 40,000 years ago and the emergence of the package of modern cultural universals. 10,000 years ago is the beginning of agriculture and domestication. Hierarchy in society and economy becomes much more pronounced. Elites emerge, income inequality is established and a nascent class struggle begins between employers and employees, haves and have-nots. Politics becomes a means for getting and holding power.

Accidents of geography grant certain groups by default access to more or less natural resources. Technology goes hand in hand in synergy with culture, social and economic advances, driving potential advantages when seized. Cultural innovations inevitably diffuse (globalization), no society can remain a closed bubble. Demographically those groups that embrace effective change and modernization thrive, those who cling to stasis fall by the wayside.

The above two paragraphs pretty much sum up a pattern that can be seen throughout history and leads right up to today. This patterns serves as a universal backdrop.  Our current problems while having their peculiar causes are essentially the same set of tensions seen in civilization ever since its inception.

Skipping to 1492, the Columbian Connection, extracted wealth, African slavery and native labor of the New World spurs the Rise of the West, the beginning of the hegemony of the West over the rest of the world. The business class (the bourgeoisie) amasses wealth and rises in power. The Enlightenment/ Age of Reason provides a philosophical basis to challenge divine right and aristocracy. The Age of Revolutions provides a philosophical basis for the bourgeoisie to supplant the aristocracy with new forms of democratic government. Rights are proclaimed for the new ruling class but not for women, slaves and people with no property. Adam Smith justifies free enterprise on a secular basis. Equality remains the salient unfinished business of the Enlightenment and the Age of Revolutions.

A global economy emerges out of mercantile colonialism. Quickening technology, advancing means of transportation along with the Industrial Revolution provides the tools for the West, particularly Great Britain, the Netherlands, France and the US to dominate all others and create economic hegemony with a more efficient colonialism and imperialism. The growth model/ expanding markets is the main paradigm, fostering a consumer culture and consumerism. Governments work in collusion with financial sectors to create monetary and trade policies that benefit both the state and industrial big business. Inflation, deflation burst bubbles, cycles of boom and bust become a characteristic of laissez faire capitalism and short-term monetary policy.

The Industrial Revolution brings incredible new efficiencies to the means of production. Craft industries fold before mass production. Technological change in agriculture (tractors replacing horses) is a direct cause of population movement from rural to urban. Family farms cannot compete with industrial agriculture. Growing tensions between labor and owners during The Gilded Age, 1875-1900, bring about the union movement,  advance of labor rights: 8 hour day, minimum wage, workplace safety, child labor laws.  Dickens and Upton Sinclair write Oliver Twist, Hard Times, The Jungle. The Progressive movement, T. Roosevelt, Woodrow Wilson is a direct populist/ moral response to concentration and abuse of power by big business. Later The New Deal and Great Society continue Progressive policies.

Skip to WW1 and the beginning of the dissolution of colonialism/ imperialism and the ascendancy of the United States. Colonial empires begin to dissolve. The world is partitioned into unsustainable “countries” (Iraq, Afghanistan, Israel) based on spheres of influence of WW1 winners. Nationalism combined with imperialism spawns WW2. The Cold War and anti-communist rhetoric bring fundamentalism (McCarthyism, John Birch Society) as an established public posture for conservatives.

 Civil rights advances bring long denied rights to American minority citizens and women. Reagan deregulates financial industry and big business beginning a trend of increasing income inequality. Anti-tax revolution of the 1980s, Propostion 13 in California, off shore tax shelters start to put permanent dent in government revenue. The US “wins” the Cold War and becomes the sole superpower.

Freedom of contract, i.e. economic freedom is retroactively elevated to the highest of all freedoms, over civil rights, political freedom etc. Wall Street Masters of the Universe game the system to reap huge profits while wealth accumulation by the middle and lower classes goes down.

Growing global economy, outsourcing, offshore tax havens, corporate flight begin to decouple industry from symbiotic relation with and protection of particular states. US loses edge in manufacturing and becomes service oriented economy. Financial industry becomes top form of merit-based compensation.

Skip to 2010 election, partisan gridlock defines politics in Washington. Ultra-rich anonymously fund major attack on Democrat incumbents resulting in historic turn to Republican control of House. Income inequality becomes much more pronounced in last 30 years as tax rates for ultra-rich go down substantially. Federal budget deficit becomes national campaign issue, result of large structural issues: two unpaid wars, recession/ burst mortgage bubble, rising Medicare and prescription costs.

The Chamber of Commerce, the Tea Party, Nativism, diminished value of education on one hand and elite education out of reach to masses on the other, bring a perfect storm and unholy alliance defending the employer class at all costs while red-voting peons are misled on “values issues” and constitutional/ Second Amendment hysteria. The result is gridlock and ineffective government in the face of huge structural problems. The economy is tanking; we’re getting deflation, no growth and people sold on the dominant growth paradigm can’t see outside the box.

Entitlement spending is a legitimate issue: bloated pensions and health care benefits are too much to pay for; people expect social security but the money is not there. Entities adapted to feeding on entitlement money (lawyers, insurance companies, hospitals) are like parasites that need to be fumigated too. At the same time an income defense industry has arisen to help the rich keep and consolidate wealth, read lawyers, accountants, investment houses etc. Yet with the burst mortgage bubble we now have a jobless recovery.  The upshot is that the US has lost its ass while former colonies are hungry, on the rise and in no mood to cut the former masters any slack. International corporations are revealed to be whores to the highest bidder.

The reason the growth model/ talk of “growing the economy” is so important is that you need zero pop growth to stop the need for ever-growing consumerism, if there is no economic growth and the population grows, then the pie just gets smaller for everyone. Sustainability can’t be reached by continually re-dividing the same pie. This is why austerity doesn’t do shit for the little guy.

One of the most fundamental things about all the above is the march of equality, of sex, gender, race, labor and immigrant’s equality and this stuff had to be fought for all along against an establishment that guards its position of power. Equality may not be justified in terms of Social Darwinism, nor by religion but intuitively it is right, logically it is right, morally it is right (most harm is on the lower end, the numbers are there, it is way less harm to have rich be less rich than for vast majority to be poor and suffer). Blacks, women, Mexicans are not second-class citizens, labor deserves to make a living and not be slaves, slavery is wrong, gross unequal distribution of wealth is wrong. The new movement that needs to happen, get the crazy profits out of the 1% and redistribute to the 99%. We are recapitulating the struggles of the Gilded Age now with the current exploitation of underdogs. 

So what we have in the end is a conflict among the hierarchy of society, in the US and in the world. It’s the small top against the large bottom; it’s the underdogs against the overlords; this is the fundamental issue and always has been. This is the big picture view of why our current internal politics are so dysfunctional, why China, India, Russia and Iran are coming at us hard. All the particulars are less important compared to developing an understanding of what we face now in the big picture. The pie is starting to shrink and there are more people wanting a piece of the action; you don’t need to be a rocket scientist to see trouble on the horizon. The pie is controlled by the 1% and they will not just roll over. What I see coming, The Rise and Fall of the Roman Empire updated to the US and the 21^st century. Things are going to get messy.