Fri Jan 21st, 2011 at 12:29:28 PM EST
Cross-posted from Real Economics.
Freddie DeBoer's recent argument that "the blogosphere is a flagrantly anti-leftist space" initiated a useful discussion of the current political climate in the United States.
History teaches us, however, that the left, especially socialists and communists, are really not any better at creating and maintaining democratic governments for advanced industrial societies. Repression of human rights was a notorious feature of communist countries before the shattering events of 1989.
In the United States, the progressive movement of the late 1800s is the only political movement in American history that directly addressed and attacked the problem of who controls the creation and allocation of money and credit in the economy. The interesting aspect of this progressive movement, for our present purposes, is that it arose from among the most conservative elements of American society - the farmers. Through a process of self-education, American farmers shifted to a different part of the political schema, leaving us wondering today, What's the Matter With Kansas? It is this progressive movement that laid the foundation for the New Deal some four decades later. The best history of these agrarian origins of the progressive movement I know of is Lawrence Goodwyn's 1978 masterpiece, The Populist Moment: A Short History of the Agrarian Revolt in America.
Goodwyn has made a life's work of studying popular democratic uprisings and social movements, and in his Introduction he makes the startling and crucial observation that both capitalist and socialist economies have ended up with authoritarian-leaning political systems cancerously skewed to the advantage of an oligarchic or plutocratic elite. Here, I posted a large excerpt from Goodwyn's Introduction.
So today, we see that the social democratic governments of Europe are fully committed to the same austerity and economic assault on working people, that we see in the United States. So, how to explain the world-wide supremacy of "shock doctrine" economics (unfortunately called by professional economists "neo-liberal economics")? Steve Hynd's response to DeBoer explicitly addresses this problem as neo-liberal economics: The Liberal Blogosphere Is A Neoliberal Blogosphere, Unfortunately. It is important to think in these terms, since the policies of "shock doctrine" neo-liberal economics are engendering increasing hostility -- and feelings of powerlessness and alienation -- among subject populations, as those policies provide the catalyst for a rigid hardening of ever more severe inequalities in wealth and income and the consolidation of new oligarchies and plutocracies inherently hostile to the spirit of representative democratic government.
As I, and a few others, have argued before, using a left-right political spectrum to analyze political economy is fundamentally flawed. Stirling Newberry recently pointed out, Sarah Palin "is that creature that is constantly erased from historiography, and sociology, because it is inconvenient: the right wing socialist."
Many people were candidly confused by Newberry's implied schema; the best thing for them is to carefully read one of Newberry's classics, Three Polar Politics In Post-Petroleum America. Newberry explains that there are three loci in American politics today: Progressive, Moderate, and Confederate. However, as I argued at the time Lambert of CorrenteWire reposted it a year after it originally appeared, Newberry's three poles analysis can be strengthened by applying Thorstein Veblen's bi-polar schema of Producers versus Leisure Class, or, in the terminology I prefer, Producers versus [economic and financial] Predators. Jon Larson developed a graphic representation of Veblen's analysis in the 1980s. More recently, Larson has used new graphics software to refine his work, and presented it at his blog, Real Economics: Illustrating a class theory. (Please be sure to take the time to watch the short, 1980s video Larson has placed there.)
Veblen’s 1898 classic, The Theory of the Leisure Class is not easy reading, but Veblen offers much better insight into the nature and problems of class in modern industrial societies than does Marx. (Always keep in mind the miserable human rights record of Marxist societies). What I think is particularly important to understand at this point in history is what Veblen called pecuniary culture. I present below excerpts from Chapter Nine: "The Conservation of Archaic Traits." But I strongly urge people to read the entire chapter, if not the entire book. Read slowly and carefully -- Veblen is "thought-dense" – quite unlike contemporary writers we are more familiar with.
. . . modern economic institutions fall into two roughly distinct categories -- the pecuniary and the industrial. The like is true of employments. Under the former head are employments that have to do with ownership or acquisition; under the latter head, those that have to do with workmanship or production.
. . . These two classes of employment differ materially in respect of the aptitudes required for each; and the training which they give similarly follows two divergent lines. The discipline of the pecuniary employments acts to conserve and to cultivate certain of the predatory aptitudes and the predatory animus. . . Under the modern, peaceable system, it is of course the peaceable range of predatory habits and aptitudes that is chiefly fostered by a life of acquisition. That is to say, the pecuniary employments give proficiency in the general line of practices comprised under fraud, rather than in those that belong under the more archaic method of forcible seizure. [Emphasis mine.]
Earlier, Veblen explained that
In the early barbarian, or predatory stage proper, the test of fitness was prowess, in the naive sense of the word. To gain entrance to the class, the candidate had to he gifted with clannishness, massiveness, ferocity, unscrupulousness, and tenacity of purpose. These were the qualities that counted toward the accumulation and continued tenure of wealth. The economic basis of the leisure class, then as later, was the possession of wealth; but the methods of accumulating wealth, and the gifts required for holding it, have changed in some degree since the early days of the predatory culture. In consequence of the selective process the dominant traits of the early barbarian leisure class were bold aggression, an alert sense of status, and a free resort to fraud. The members of the class held their place by tenure of prowess. In the later barbarian culture society attained settled methods of acquisition and possession under the quasi-peaceable regime of status. Simple aggression and unrestrained violence in great measure gave place to shrewd practice and chicanery, as the best approved method of accumulating wealth.
Veblen then explains why and how the development of modern industrial societies required a weakening of the barbarian traits of ferocity, unscrupulousness, etc. in order to achieve an economic organization of complex interdependencies typical of an industrial enterprise based on increasing technical specialization. There is thus always a tension between the pecuniary culture and the industrial culture. Veblen elaborates these tensions more fully in some of his other books, such as his 1904 book, The Theory of the Business Enterprise. But, to return to Chapter Nine: "The Conservation of Archaic Traits."
. . . . The modern industry requires an impersonal, non-invidious interest in the work in hand. Without this the elaborate processes of industry would be impossible, and would, indeed, never have been conceived. This interest in work differentiates the workman from the criminal on the one hand, and from the captain of industry on the other. Since work must be done in order [for] the continued life of the community, there results a qualified selection favoring the spiritual aptitude for work, within a certain range of occupations.
But in the United States, since the election of Ronald Reagan brought to power the ideas of Milton Friedman, the financial system has come to predominate the entire economy. (How financiers took over old-line industrial companies and looted them, including raiding the pension funds of workers, is covered by Donald Bartlett and James Steele in their important series of articles in the Philadelphia Inquirer back in 1992, which were published as the book America: What Went Wrong. The link provides an extremely useful summary of the book, including excerpts and some graphics. I also highly recommend When the Machine Stopped: A Cautionary Tale from Industrial America by Max Holland, 1989, also released a few years later as From Industry to Alchemy: Burgmaster, a Machine Tool Company. Holland's father was a production machinist for Burgmaster, which used to be the largest machine tool maker west of the Mississippi, before it was bought up by one of the first industrial conglomerates, Houdaille, in the 1970s. But the real asset stripping of Burgmaster began when Houdaille was bought in a leverage buyout by Kohlberg Kravis and Roberts - an "investment firm" that is still around, practicing the black arts of "financial engineering" and wrecking the country as a consequence. KKR is the base of wealth for Henry Kravis, one of the top contributors to the Bush family's political operations.
This process of financialization went hand in glove with the process of de-industrialization: the financiers were making money – lots of it – by literally destroying in months, industrial companies that had taken years to build up. By the late 1980s, these financiers were being thought of as "captains of industry" even though they had no interest in actual industrial activity other than looting it. These were the great heroes of the new American economic landscape, but their financial schemes were actually slowly grinding down the working class and dismantling the industrial base. Hardly anyone was willing to admit the past three decades have been a colossal economic disaster until the big crash of 2008, and even now people prefer to talk about how the middle class is under attack, rather than facing the truth that the American working class has already been destroyed: a male in his thirties without a college education is doing worse economically, today, than his father did back in the 1970s and 1980s.
These new heroes of America, these financial parasites, are the people who had the money to give to the think tanks, and the colleges, and the universities; and both political parties. They are the people that had the money to buy, reorganize, and reorient society's various channels of communication, including most especially the news media. Small wonder that the world view of these financial parasites came to dominate American intellectual institutions. It was the process by which Veblen’s pecuniary culture rose to dominance:
. . . . These pecuniary employments, tending to conserve the predatory temperament, are the employments which have to do with ownership -- the immediate function of the leisure class proper -- and the subsidiary functions concerned with acquisition and accumulation. These cover the class of persons and that range of duties in the economic process which have to do with the ownership of enterprises engaged in competitive industry; especially those fundamental lines of economic management which are classed as financiering operations.
. . . . Freedom from scruple, from sympathy, honesty and regard for life, may, within fairly wide limits, be said to further the success of the individual in the pecuniary culture. The highly successful men of all times have commonly been of this type; except those whose success has not been scored in terms of either wealth or power. It is only within narrow limits, and then only in a Pickwickian sense, that honesty is the best policy.
. . . . The pecuniary struggle produces an underfed class, of large proportions. This underfeeding consists in a deficiency of the necessaries of life or of the necessaries of a decent expenditure. In either case the result is a closely enforced struggle for the means with which to meet the daily needs; whether it be the physical or the higher needs. The strain of self-assertion against odds takes up the whole energy of the individual; he bends his efforts to compass his own invidious ends alone, and becomes continually more narrowly self-seeking. The industrial traits in this way tend to obsolescence through disuse. Indirectly, therefore, by imposing a scheme of pecuniary decency and by withdrawing as much as may be of the means of life from the lower classes, the institution of a leisure class acts to conserve the pecuniary traits in the body of the population.