Wednesday, January 28, 2009

Industrial Revolution (1500-present)

After the collapse of the Hellenistic Era, such aristocracy as remained, i.e., the warlords of the Dark Ages and their heirs, had to rely on individuals to bring them rare stuff to use as status symbols. They needed these status symbols to certify that they were of higher status than the commoners.

The traders used the new technology of sailing ships to get rich. But they and the bankers (traders in money) might get rich in terms of money and things, but they were still "common", i.e., they had a class ceiling that kept them out of the elite establishment of "old money", i.e., the heirs of the warlords. In some places laws were actually passed to prevent them from displaying rare commodities that were recognized status symbols.

Calvin solved this problem by inventing a new aristocracy, "the Elect".

These were people certified by God, over the heads of the existing elite, and the upward mobility of this group marked the beginning of a new process toward a classless society. The certification of the Elect was done by God in a visible way: the Elect prospered. In other words Calvinism was a religion of upward mobility for the lower middle class to the establishment by virtue of the accumulation and display of money or purchased commodities.

Once that group of people were upwardly mobile they tried to change the criterion to having "old money", i.e., spending money the way the former establishment did, but the next accumulators of "new money" eventually replaced the "old money" by weight of numbers.

After the traders and bankers came the colonial planters. The traders had bartered the aboriginals for the resources of newly discovered countries, but the planters took the aboriginal land and, using aboriginal captives as slaves, exploited the aboriginal resources by single-crop farming. This was essentially strip-mining of the nutrients in the soil.

In the tropics this was done by absentee owners who were simply interested in cash returns, but in north america the colonials fought a war (The American Revolution) to establish political control over land that the aboriginals had not depleted. The Colonial Planters became the elite establishment of this new political region.

In the northern part of the United States mechanics brought over machines that could be operated by unskilled people who weren't as strong as the european textile craftsmen. They used water power, and, later, steam, to power their machines and used women and children as operators. They became rich and, in the American Civil War, broke the power of the Plantation owners by freeing the slaves and thus increasing the cost of labor. These northern industrialists became the elite establishment after that Civil War.

Around the turn of the century this elite built castles at Newport and married their daughters to impoverished European aristocrats, and left the running of their factories to the clerks and mechanics. These clerks and mechanics started calling themselves managers and engineers and turned the stock certificates from certificates of ownership and control into gambling chips traded in markets that could be manipulated.

These corporate bureaucrats manipulated the financial system until it was unstable enough to be an instrument for shaking loose the "old money" capitalists, and they became the elite establishment. They ran the economy into a depression as one of the tricks for taking power away from the industrialists; but this created an opportunity for the government bureaucrats to grab the power represented by government regulation.

By 1950 the bureaucracy had reached a level of control where Fortune magazine could proclaim that the "Managerial Revolution" had been won and real control rested with the bureaucratic elite. But that elite had developed in the form of two parts: the government bureaucrats represented by the Democratic Party and the corporate bureaucrats represented by the Republican Party. These two factions vied for control during the 20th century.

The government bureaucrats established themselves in the two world wars and the Great Depression. They found that it was possible to manipulate political power by offering programs that provided benefits to the lower strata and became a nominally Farmer-Labor party. They used that to stay the establishment from the 1930s to the 1970s.

By the 1970s the corporations had taken over the farms and labor had been controlled by big unions so that the government bureaucrats had no real political base dependent directly on them. The Democrats had started a war in Vietnam and had created more political tension than the electorate could stand.

Nixon won the next election and aside from a brief post-Watergate romance with Jimmy Carter, the corporate bureaucrats remained in power until 2008.

Clinton was in office for part of that time, but he wasn't really a government bureaucrat. In particular he did nothing that would woo his following toward government bureaucrats. It took his successor, George W. Bush, to become so personally unpopular by his ineptitude that the Democrats not only won, but they elected an African-American to be president.

The corporate bureaucrats under Roland Reagan had wooed a substantial fraction of the lower middle class of the government party (the so-called "Reagan Democrats") by implicitly raising the threat of diluting the spoils of upward mobility by extending it to people of color. The Bushes didn't have to be explicitly racist, but they did nothing to encourage upward mobility of people of color, so that the classically racist areas changed from Democratic to Republican. But George W. lost the respect of everyone except extreme racists and the uppermost levels of the money-based elite.

The financial industry had become so decadent during this period that it collapsed under the threat of an intelligent president who was not of their party and assured the election of Barack Obama. What they are doing now, after that election, is trying to pick up any scrap of money they can squirrel away. They know that when the full truth comes out it will be very difficult to avoid a complete collapse, but they still have a touching faith in any money they can hide under the bed.

There is nothing subtle about their greed: nothing they get will be enough, anything that benefits anyone but them is "wasted".

This leaves Barack Obama in a difficult position.

If he manages to restore some semblance of the status quo, the financial industry will simply run itself into collapse again because it has no incentive to do anything differently, and their status as "the Elite" depends on displaying money, not on running organizations efficiently.

If he simply lets the financial system collapse, he will cause suffering among large numbers of people who do not have "golden parachutes"; and it was their votes that elected him.

If he makes radical changes, like nationalizing the banks and major industries, he will still have to operate them through the bureaucracies that brought them to ruin because there aren't enough intelligent and non-ideological people who can be quickly trained to manage the technology.

Besides that, fixing the United States economy won't change the world situation unless we recognize the need for the next step in social evolution. We will not have a stable global economy until we establish the fact that all people are equal. If we limit upward mobility to one group characterized by language, skin color, or any such symptom of ethnicity we will still have the kind of violent jihadism we have now. And yet the way we define upward mobility is by an increase in the ability to waste resources.

There is no way we can have the population of the globe waste resources at the level that citizens of Western Civilization do now because there isn't that much stuff; yet we cannot ask Westerners to stop their conspicuous consumption as long as that represents a loss of status in their worldview. In fact even nominally left-of-center "experts" like Krugman believe we have to increase the level of production and sales irrespective of what kind of junk is bought and consumed or what effect it has on the ecology.

If we reduce our consumption levels to necessities, at a level that would be roughly considered the "poverty" level, i.e., just barely enough to survive, it would be relatively easy to let everyone in the world be equal. Once we did that, and everyone survived, then it would be easy to increase the consumption level to the maximum that would be sustainable.
But no administration would dare to deliberately adopt such a policy in a country that was administered by elected officials.

The best way to achieve that sort of effect would simply be to let the system collapse and rebuild it starting with the principle of global equality. The chaos and anarchy that would constitute the interregnum between the present unequal society and a postindustrial egalitarian society, would simply have to be accepted as the cost of rationalizing society.

I sincerely doubt that even Obama has the chutzpah to do that deliberately, so it will have to be done by accident. Obama should make a best effort to restore the present system, and put a lot of effort into convincing everyone that we are all equal. Then, when Obama has had his two terms and the Republicans get back in, and the economic system collapses because everyone will try to grab as much as possible as quickly as possible, we can go through the necessary therapeutic chaos and anarchy and believe it "just happened" so nobody is to blame.

After we have gotten over our "one-upmanship" and our hunger for status advantage over our neighbors by surviving the global collapse of civilization we will be in a better position to build a Utopia.

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