When experts and commentators talk about the "crisis of confidence" or "crisis of trust" in the markets, it can be read in different ways. One: it’s a nice way of saying, a la Phil Gramm, the recession is in our heads and if we just had some confidence happy days could return. Two, confidence and trust in the system have collapsed for reasons, including bankers not lending because they know companies will fail, and people in general no longer trusting the economic "House that Ronald Reagan (and Phil Gramm) Built."
It is most decidedly the latter. If nothing else, the Great Disruption we are now experiencing should discredit the "free market" theories that led us to this pass. We shall see. When the Depression hit, the world was awash with alternatives to capitalism, most of them bad, but also with an engaged electorate and a middle class that read. Now we have video games and social networking sites. The igno-geeks must be truly baffled as their future vanishes, even though they kill at Grand Theft Auto version whatever.
Where’s Cheney? As I write, George W. Bush is preparing to make another pitiful "statement" as markets plummet around the world. The veep is nowhere to be seen, running things as he did in Iraq. Perhaps he is preparing his defense fund, or place in a country with no extradition agreement. Meanwhile, Paulson and Bernanke are in change. Yet they represent the wisdom of the old order that is in crisis. They can’t fully comprehend what is happening, for it so goes against all their learned learning, all their orthodoxies. The Age of Greenspan is over.
Still, this is the time of maximum peril for the Obama camp.
For one thing, Obama has his share of University of Chicago advisers. Can they think anew, of a program of national renewal that includes, among other things, 21st century public works that put people to work, build infrastructure and give us something for our debt? More importantly, the forces behind Republican John Sidney McCain III will do anything to avoid losing power. Obama is a centrist, so most of them will do fine, albeit in a more balanced America. But they can’t take the chance. So election fraud is a gigantic issue. The attacks will escalate. Let us hope that America can avoid committing national suicide on Election Day. But this one is not in the bag, despite the manifest sins of the Republicans, the Party That Wrecked America.
As for the economy, the house of cards has collapsed. We will have to return to real things, not vapors such as derivatives and CEOs walking away with millions. It will be a huge test of national character.
People still don’t understand we are living in an age of discontinuity. The next 30 years won’t be a repeat of the past 30, not on energy, or the economy, or geopolitics — certainly not with the environment.
I hope you’re right about the “age of discontinuity.” We’ve needed one for a long time. Beginning with the Reagan years, I would say that what we need is a good, limited nuclear war.
Later, I hoped and prepared for Y2k to be the trigger event. Since nothing happened om 1/1/2000, most people think it was exaggerated. All it would have taken is one major bank or government hiccup to cause a panic (like this one).
We need some kind of slate-cleaning event. Something that makes a critical-mass of smart people re-evaluate everything they used to take on faith.
If this isn’t it, maybe the election will be.
Maybe the Veep is trying how to implement:
https://www.whitehouse.gov/news/releases/2007/05/20070509-12.html
Can’t wait to see what’s in the Continuity Annexes (if ever).
Mr. Talton wrote:
“If nothing else, the Great Disruption we are now experiencing should discredit the “free market” theories that led us to this pass. We shall see.”
Mundane evidence cannot discredit a religion, Mr. Talton. I doubt the world has ever seen a “free market”. The term presumes a condition of mercantilism in which capitalists operate without benefit of government influence or protection; yet capitalism and politics are forever intertwined. After all, capitalism was produced by feudalism; and the mercantilism which followed used, and was used by, governments, both domestically and in international competition. The only real question since then has been the details of this mutual influence: that the influence has existed cannot be sincerely doubted except by the naive.
“Capitalism” is a kind of popular delusion. It presumes the possibility of capital operating independently of a framework determined by governments — and that is patently absurd.
The real question for any economic system, as always, is the distribution of resources: who gets what, and how much, and how is this engineered and enforced?
Socialism is equally mythical, to this point. Certainly, none of the so-called real world political economies to obtain heretofore, are consistent with its fundamental principles.
And if that isn’t a clue, I don’t know what is: neither the existing system, nor its putative alternatives, have been correctly characterized or explored.
There’s something that I don’t understand: making the connection or leap from economy to ideology.
Mr. Talton speaks of “free market” theories being discredited.
In a recent Bill Moyer’s Journal, George Soros also spoke of market fundamentalism or the concept that free markets, left alone, will correct themselves. Mr. Soros also says this doesn’t work. He also speaks of too much credit, too much of the need to have more, more, more. Pessimism and optimism cannot sustain themselves.
https://www.pbs.org/moyers/journal/10102008/watch.html
Many worry that we are socializing our banking system. Mr. Soros goes onto suggest a new paradigm (yes, he’s selling a book) and says that Marxism, free market fundamentalism, fascism and communism are false ideologies.
Alright, but what I don’t understand, or never learned, is what comes first? The governmental, social or economic part of the ideologic equation?
Recommended reading would be most appreciated,
Joanna, I’m not sure I understand your question, “Which comes first?”. Are you speaking historically?
According to the usual model, mankind began as scattered bands of hunter-gatherers. Within such bands it is usually presumed that some sort of hierarchical order existed. They owned what they could carry. When two such groups came into contact, they could either cooperate and/or join, or else fight over such things as land use and hunting rights.
Eventually such societies became agriculturalized. Land was now the means of production (a Marxist term, but perfectly utile nonetheless); and to the extent that natural water sources were used for irrigation, ownership of water resources may also have been claimed. The ownership of such property could be communal, or its use could be controlled by leaders or elite social elements, whose claims might ultimately rely on the use of force.
It’s easy to see that if you have enforceable private ownership of the means of production, you don’t have to work: you own what others need to survive (e.g., arable land and the crops grown on it), and others must work according to the terms you set in order to acquire it, or else rise up against your authority. Obviously, nobody began with natural rights to owning vast tracts of land (bigger than they and their family could personally use), so these ownership claims had to be asserted and enforced by the use of private armies loyal to the “owner”. The non-owners had to work the land in order to get food to eat, and the owners took the lion’s share, distributing large portions to their private armies (to keep their loyalty by giving them an enhanced standard of living relative to the peons) while keeping sufficient unto themselves to have a better standard of living than anyone except more powerful owners. Other goods and services could also be obtained, either through such feudal arrangements or through barter with other owners. Since even the materials needed to build shelter (forest trees, stone quarries), as well as the land upon which they might be built, were subject to claims of ownership, these owner-overlords could coerce labor on terms to their liking, to the extent that they could avoid outright revolt, or successfully repress such revolts.
The existing social order was then formalized by rules (edicts, laws, etc.) which set boundaries for the general populace while attempting to justify the powers of the owners.
Competing owners had the choice of relying solely on force to enforce their claims, in which case a more or less constant state of warfare obtained, or they could create a system of laws (treaties, agreements, regional laws, etc.) to formalize the power structure and give themselves (and each other) breathing room. However, since formal arrangements ultimately devolved to the question of force — who could enforce their claims at the point of a sword — the use of force was still fairly common, whenever one side thought they could get away with it and were aggressive enough to try. Those who were more or less satisfied with what they had, remained local authorities. Those who wanted more struck out and attempted to consolidate power, some regionally, and others more broadly, attempting to establish kingdoms. Eventually, those managing to consolidate power as a kingdom warred with one another in attempting to establish an empire.
Superstition has long had a central role in the societies of primitive peoples, so anyone wanting to gain and/or maintain power quickly learned to ally themselves with the local medicine man, or, over time, the church or other formal religious structure. They acted as patrons to support these institutions, which in turn tended to support their patrons ideologically. I mention this, non sequitur, because as Joanna suggested, social, economic, and ideological forces, all pre-existing, coalesced to determine the dominant social structures.
These owners cum princes governed most aspects of daily life. When money came to govern trade, in the form of gold, silver, etc., their ownership of mines, and the terms of production (rates of production and distribution) governed the terms of trade. Control of labor was established by the use of guilds, whose leaders were ultimately beholden to those higher in the power structure.
Over time societies became larger and more complex, and individual owner-princes could not oversee everything personally. They had to govern the masses by establishing a class of gatekeepers — managers and technicians — who oversaw various aspects of the society in exchange for a slice of the proceeds: special material compensation, and in some cases limited ownership rights, thus giving them their own little fiefdoms (ultimately under higher rule) and cementing their loyalty to the system.
Since, presumably, rule of force was not an adequate moral justification for all or even many of those participating in the system as overseers, various ideological justifications evolved, as much to calm the consciences of the overseers as to obtain the placid obedience of the masses. Some of these ideological justifications involved religion, others involved tradition, and others still involved economic or political theory.
Now, it’s clear that such a society, buying off a gatekeeper class, is bound to create a society of “little owners”, since these gatekeepers will in the course of their activities accumulate capital as well as earn limited ownership priviledges, bestowed by the big owners using them to administer their possessions. After awhile, these “little owners” may organize among themselves and demand further rights, to be enshrined in law, and/or in fundamental changes to the system of government. Individually, they have no power capable of challenging the government, but collectively they may, since a point is reached in the evolution of the social structure where there cooperation is essential. No doubt you are familiar with the Magna Carta and similar historical precedents.
Essentially this is a step on the road to democracy. Of course, the “democratic” reforms involved at this stage are not broadly democratic: they involve giving more powers, autonomy, and voice in government to the “little owners”, not to the broader masses who have no property, no capital, and no private armies. Thus, democracy, whether among the ancient Greeks or among the medieval Europeans, or among American revolutionaries seeking independence from George III, begins as a movement among the “little owners” to take some portion of power from those at the top, e.g., the king.
The point is that since feudalism expands and perpetuates itself by means of a diffusion of economic power and resources, it invariably leads to a dilution of political power, resulting in a limited democracy, under which political power is no longer determined solely by royal lineage and grants, but now by land ownership and general economic power (wealth, control of vital resources, etc.). The laws, constitutions, etc. are changed to reflect this shift in power, while insuring (intially) that political power remains in the hands of the new class (whether or not continuing to be shared by a royal class). After all, if every man could vote — or so the theory went — it wouldn’t be long before the general populace, led by “levellers”, voted themselves ownership and wealth. It was thought that if landless adult male freemen gained equal political influence — much less indentured servants, women, and so forth — in short, the wealth producing majority — catastrophe would ensue.
At this point, “information management” becomes increasingly important to the ruling classes, not only due to the tendency noted above, but also because technology evolves things like printing presses, which make it easier for persons verging on rabble to spread their political ideas, and because literacy is increasing. Physical repression of limited political movements is feasible, but once a nation is awakened this becomes far less practical.
So, the tools of mass communication must remain in the hands of those with a class interest in maintaining the status quo (with limited reforms to co-opt opposition movements, when necessary). As it turns out, there is a perfectly natural way to do this, even after the right to publish is no longer linked to government imprimatur, because the ability to publish in a way that takes your message to great masses of people on a consistent basis continues to be tied to concentrated wealth, since wealth is necessary to buy ownership of mass media outlets, chains, and networks; and since the long term trend is for such ownership to become increasingly concentrated, as big fish eat little fish (commercially speaking), the long term trend serves the interests of a society’s ruling class.
Since the ruling class cannot govern without its gatekeeper class of managers and professional technicians, one of the primary functions of the mass media is to perpetuate the myths that assist the status quo to retain power; not only by directly conditioning the public at large, but by conditioning society’s gatekeepers. The latter MUST be provided with an ideological framework which justifies their cooperation. Most people do not wish to be cynical exploiters: but if they can be made to believe that the current system, however flawed, is in the best interests of the nation — meanwhile continuing to reward the gatekeepers with a higher than average standard of living — then the gatekeepers will embrace this ideology and flog it to the masses with the clear conscience of self-interested delusion.
Other organs of social control include the public schools, whose administrators, teachers, and school boards are similarly conditioned, and (though less so today) organized religion. A campaign finance system which is funded largely by wealthy individuals and corporations (who also own the mass media, and fund both parties of the de facto two-party system) completes the toolkit. (Well, there are a few more tools: encouraging pre-existing social and national divisions to discourage solidarity of political organization; restrictions on union organizing and activity, etc.; but this is already becoming a monograph.)
The absence of genuine progressive candidates and options — not their electability but their mere presence — speaks for itself as to the effectiveness of this system of social control. In addition, it has the added benefit of appearing to be democratic and free, most of the time, to most of the public.
The Internet is an interesting development in self-publishing, but its strength — that many ordinary persons can express their opinions thereby — also leads to its greatest weakness: amidst tens of millions of websites and blogs, discovering anything in particular, much less something worthwhile, much less something original and “thinking outside the box” to which we have been conditioned, is improbable.
How does one raise awareness of such resources when to do so requires political organization, whereas independent political organization, to be effective, requires funds, time, considerable dedication, and a channel for mass communications? It’s a chicken and egg problem.
And woe to anyone who manages to get that far, because once you are taken seriously as a competitor by the Establishment, its well-oiled propaganda machine swings into action. Any irresponsible actions or statements by anyone even remotely associated with your movement will be reported as representative of the whole; any scandal or impropriety will be magnified and multiplied in countless op-ed pieces and by talking heads in television and radio, until your name is Mud.
Emil, I believe you’ve saved me from what I envisioned as a great deal of reading in my effort to understand the differences between social, economic, governmental & ideological systems. You understood my question correctly.
One thing that had been confusing me was that the term “socialism” seems to be used by mainstream media to mean different things.
Thank you for your thorough reply.
Joanna, thanks very much, and I’m glad.
Yes, the term “socialism” is used by the media (and the broader public) in various ways. There is a great deal of antipathy to the term in the U.S., combined with a great deal of ignorance. For some it is synonymous with Bolshevism. For others it occurs when government involves itself in practically anything except delivery of the mail and the national defense. To confuse matters further, the few that call themselves “socialist” have widely varying ideas as to what constitutes proper implementation of this rather broad concept.
Socialism is simply a form of public ownership of the means (and fruits) of production. As far as I am concerned, the point of socialism is not to drag everyone down to the lowest common denominator, but rather to give those at the bottom a proper share of the wealth they produce — a taste of the good life and the genuine promise and opportunity to improve their standard of living as time goes by, while improving the living standards of the middle class somewhat more modestly. Note that standard of living includes not only a living wage, but some say in one’s own terms of employment: that labor should have a serious and significant stake in determining the conditions under which that labor is sold. When it comes to things like insurance and medical services, I simply can’t think of a rational argument against socialization. Socialism also means giving the broader public some say in the direction in which they wish to go: how research and investment should be directed, in broad terms, and so forth. Naturally, this implies an informed and energized public and not a brainwashed or apathetic public.
The idea that socialism means class warfare against the middle class is, as far as I am concerned, erroneous: the middle class contains the very professionals — educated, trained, and experienced persons — who are necessary to make socialism work, just as, indeed, they are necessary to make the current system of “capitalism” (really an inverted form of socialism) work. Only by bringing them on board can socialism ever be made to work. Nor is socialism about confiscating someone’s personal property. Since socialism is about public ownership of the means of production, not punishing those who are better off, socialists shouldn’t be concerned that somebody has two or three cars, an equal number of homes, and nice furniture. When national income is equitably shared, taking from those starting at the very top, to be distributed starting with those at the bottom, the median income will rise naturally. Police-state invasion of people’s private lives will do nothing but alienate the cream of society — not to mention everybody else, eventually — and doom the great experiment to failure. Nor does socialism mean seizing the corner barbershop and giving haircuts by committee decision, or seizing the neighborhood restaurant / sports bar and having the state dictate pizza recipes.
At the same time, just because the government nationalizes certain things doesn’t mean that socialism is operative: after all, fascism may also involve government control of major economic institutions. Years ago, Bertrand Gross penned a book called Friendly Fascism. The book was flawed in some of its immediate predictions, but was certainly interesting and remains worth reading. And I wonder how much of it applies to what is going on today.
Typo alert: that should read “Bertram” Gross, not Bertrand.