New Deal Order, Neoliberalism, Neofascism, Oligarchic Kleptocrism—which of these are live political-economic options for the future. This column draft is not (yet) where I want it to be, so I am...
I vote for Old Ox syndrome, as I've been suffering from that as I reflect on my life's work in U.S. agriculture. We'll continue to muddle with our imperfect and often out-of-balance systems, using progressive policies, whenever possible, to force our elites to give ground. We'll never defeat them, but can take comfort in the fact that the bastards won't win every battle.
The way forward is to become more aggressive in our actions and secure more small-donor dollars in an attempt to reach parity with the elite's deep pockets. Plus emulate the French and get a million people in the streets making life uncomfortable for the 1%.
The 4th direction seems to describe the US 2017-2020 and the UK 2019-now quite well, don't you think?
I think you're much too ready to fold on the 1st direction - social democracy. Your acceptance that because social democracy got trashed in the 1970s it has to be wrong is not just deeply pessimistic but not well-enough reasoned, imo. The reality is that Arab oil producers kneecapped the West's economy in the 70s and - as we saw again, though mercifully less, last year - response to a massive terms of trade loss is very messy. So everyone's pissed off at being made poorer and there's inflation and in the US the Japanese start making Detroit look stupid. So a few opportunists jump at the chance that they've been preparing for for years - to sell neoliberal snake oil. Because of course lower taxes on the rich and less regulation to protect society against what capitalism will do when left to its own devices is hugely valuable to potential oligarchs. They were surely the real driver behind neoliberalism's ascent - and clearly who kept neoliberalism going. By the 80s, decision-makers were no longer of the war generation - Ike, Mac, LBJ-ish, Healey - who recognized the moral imperative of a political economy that serves everyone's interest, not just the few. But now we've had 40+ years of seeing that this really leads to option 4. And the only people who like it are Trump, Putin, Musk, Bezos and Zuckerberg, maybe Dimon. Surely the rest of us can string 4 of them up on metaphorical lamp-posts and have a political economy that serves the many? If the trustbusters could overcome the immense power of the robber barons, are we too pusillanimous to pull off similar? Especially when we managed to elect a president who is making many moves in the direction of Option 1?
Gotta agree with some of the other commenters--there's a dance in the old dame yet. Social democracy became disreputable in the 1970's and 1980's. It is not yet in power, but is no longer disreputable. The Warren-Khan faction of the Democratic party is crafting a usable re-legitimating discourse for social democracy. Academia is somewhat ahead of the prestige press, but the latter will likely follow, and with it, the Overton Window. This is a task for decades, not years.
I think you're selling a return to social democracy short. Blood & soil authoritarianism simply isn't working at all, either in terms of results or popular acceptance.
Regarding potential future direction, I particularly enjoyed seeing the long 20th century through the lens of a Hegelian dialect between Hayek and Polanyi. Given that the goals of a capitalist system runs counter to social needs, the resulting conflict synthesized a sort of hybrid system, which is then further refined by future conflicts and has evolved into the liberal democracy that we have today. Ironically the one missing from this conversation who historically created his system from such a dialect is Karl Marx. The real-existing socialism which is represented by a quarter of the earth’s population, remained steeped in a 200 year old document which has not been evolved to any significant degree. Why did he ‘no show’ to the conversation? Was it predictable that he would be absent? My opinion is that it was predictable that he would be absent.
The proletariat revolution over the bourgeoise, as proposed by Marx, meant that the land and business owners contributed nothing to production of agriculture, goods, or services. As such, he deserved to be violently deposed. That the bourgeoise possessed the ability to organize labor, procure capital, manage risk, and steward resources, counted for no value at all. Given that real-existing socialist systems all have a centrally managed economy marked by misappropriation of resources is a testament to this misunderstanding of these abilities. By definition, the administrators of the system evolved from worker proletariat class, rather than business men, and therefore knew nothing of those skills to manage an economy. The more complex the economy, the more severe the misuse. One can only wonder about the contribution Marx could have made had he and his followers engaged Hayek. What could he tell them about the needs of the workers and how to meet those needs that Polanyi couldn’t consider. Deng Xiaoping came closest to explore those possibilities; but his time was cut short, and China has recentralized and renationalized its economy, damaging its potential to be the next superpower.
The United States since WWII has been obsessed with national security and global leadership putting significant resources into defense spending via fiscal policy as well as monetary inflation. Where would the US be had it pursued a more social agenda rather than a military one. Could Marx have made a contribution to the conversation? Could we have ranked higher on the Happiness Index than even Finland? One can compare to see where we fall short and perhaps find a clue for correction.
I think your choice of 2010 as tipping point is telling. Social Democracy (SD) was jettisoned in the 1970’s all to easily by many in the economics profession for the neoliberal agenda of class warfare. The emergence of fiat floating currencies, when Nixon took us off the gold exchange standard, was an inflection point that was wasted. With Carter’s buying into the deficit/ austerity myth, as a substitute liquidity constraint that gold previously provided, SD was handcuffed on the fiscal side resulting in politics of grievances as the only terrain left on which to compete. We still can overcome these constraints and choose to build on the possibilities that a fiat sovereign currency provided us in 1970s and can still do today.
I feel like you are discounting the role that technology has had in getting us here. Clearly the production line was the technology of Keynes' day and the Neo-libs thrived on the scaled globalization driven by the capabilities introduced to humanity by the Internet. The mobile revolution has connected everyone and allowed for the surveillance state to find its full potential, while Social Media has fed us the worst of our 'isms', (excluding humanism). We are clearly on the cusp of a new scientific revolution with data, simulation and AI. For me the question is where does that lead?
Pretending that the Oligarchic Kleptocracy has not in fact bought and paid for political power, I would opt for a "systems organization" perspective in which each economic entity was controlled by a "board" made up of representatives of 3 systems: owner/management, employees, and consumers, each group with equal power. The role of the government would be as "rule maker" and "referee" just as in professional sports. In a very real sense, this arrangement would be an implementation of a Free Market.
How much if any of the decline in TFP p.a. was due to Polanyian transfers? Or Polanyian restrictions on the size and speed of relative price changes occasioned by growth? And did the growth slow down and concomitant rise in inequality leave “losers” looking for scapegoats? Or the flip side, how much of the pushback against transfers and restrictions was generated by Hayekian resentment of slower growth? [Where is my flying car?]
Or did the gameplan of [that which cannot be named], the bridesmaids and groomsmen of the Keynes-blessed shotgun marriage, of gently removing the impediments to growth get hijacked by folks who just wanted to transfer income in the other direction, growth be damned?
Or is it all cultural, higher incomes => more risk aversion, vetocracy, NIMBYism? [I’ve been reading Brink Linsey.]
How much did the End of History loosen the discipline on the Right not to peruse upward income transfers, growth de damned and the Left to peruse downward income/status transfers, growth be damned? Can the rise of China and or the need to deal with ACC restore the discipline?
The first potential direction is the only way forward , but we need to go cold turkey on the crack cocaine of using debt and binge money printing to pay for what society actually can’t afford. Replacing reliance on too easy debt with genuine value from technological improvement is the challenge of the 2000s. Unfortunately the collective will to do this does not seem to be there .
I vote for Old Ox syndrome, as I've been suffering from that as I reflect on my life's work in U.S. agriculture. We'll continue to muddle with our imperfect and often out-of-balance systems, using progressive policies, whenever possible, to force our elites to give ground. We'll never defeat them, but can take comfort in the fact that the bastards won't win every battle.
The way forward is to become more aggressive in our actions and secure more small-donor dollars in an attempt to reach parity with the elite's deep pockets. Plus emulate the French and get a million people in the streets making life uncomfortable for the 1%.
And of course elect more "real" Democrats.
The 4th direction seems to describe the US 2017-2020 and the UK 2019-now quite well, don't you think?
I think you're much too ready to fold on the 1st direction - social democracy. Your acceptance that because social democracy got trashed in the 1970s it has to be wrong is not just deeply pessimistic but not well-enough reasoned, imo. The reality is that Arab oil producers kneecapped the West's economy in the 70s and - as we saw again, though mercifully less, last year - response to a massive terms of trade loss is very messy. So everyone's pissed off at being made poorer and there's inflation and in the US the Japanese start making Detroit look stupid. So a few opportunists jump at the chance that they've been preparing for for years - to sell neoliberal snake oil. Because of course lower taxes on the rich and less regulation to protect society against what capitalism will do when left to its own devices is hugely valuable to potential oligarchs. They were surely the real driver behind neoliberalism's ascent - and clearly who kept neoliberalism going. By the 80s, decision-makers were no longer of the war generation - Ike, Mac, LBJ-ish, Healey - who recognized the moral imperative of a political economy that serves everyone's interest, not just the few. But now we've had 40+ years of seeing that this really leads to option 4. And the only people who like it are Trump, Putin, Musk, Bezos and Zuckerberg, maybe Dimon. Surely the rest of us can string 4 of them up on metaphorical lamp-posts and have a political economy that serves the many? If the trustbusters could overcome the immense power of the robber barons, are we too pusillanimous to pull off similar? Especially when we managed to elect a president who is making many moves in the direction of Option 1?
Gotta agree with some of the other commenters--there's a dance in the old dame yet. Social democracy became disreputable in the 1970's and 1980's. It is not yet in power, but is no longer disreputable. The Warren-Khan faction of the Democratic party is crafting a usable re-legitimating discourse for social democracy. Academia is somewhat ahead of the prestige press, but the latter will likely follow, and with it, the Overton Window. This is a task for decades, not years.
I think you're selling a return to social democracy short. Blood & soil authoritarianism simply isn't working at all, either in terms of results or popular acceptance.
Old ox? Start an Old Ox Society!
Regarding potential future direction, I particularly enjoyed seeing the long 20th century through the lens of a Hegelian dialect between Hayek and Polanyi. Given that the goals of a capitalist system runs counter to social needs, the resulting conflict synthesized a sort of hybrid system, which is then further refined by future conflicts and has evolved into the liberal democracy that we have today. Ironically the one missing from this conversation who historically created his system from such a dialect is Karl Marx. The real-existing socialism which is represented by a quarter of the earth’s population, remained steeped in a 200 year old document which has not been evolved to any significant degree. Why did he ‘no show’ to the conversation? Was it predictable that he would be absent? My opinion is that it was predictable that he would be absent.
The proletariat revolution over the bourgeoise, as proposed by Marx, meant that the land and business owners contributed nothing to production of agriculture, goods, or services. As such, he deserved to be violently deposed. That the bourgeoise possessed the ability to organize labor, procure capital, manage risk, and steward resources, counted for no value at all. Given that real-existing socialist systems all have a centrally managed economy marked by misappropriation of resources is a testament to this misunderstanding of these abilities. By definition, the administrators of the system evolved from worker proletariat class, rather than business men, and therefore knew nothing of those skills to manage an economy. The more complex the economy, the more severe the misuse. One can only wonder about the contribution Marx could have made had he and his followers engaged Hayek. What could he tell them about the needs of the workers and how to meet those needs that Polanyi couldn’t consider. Deng Xiaoping came closest to explore those possibilities; but his time was cut short, and China has recentralized and renationalized its economy, damaging its potential to be the next superpower.
The United States since WWII has been obsessed with national security and global leadership putting significant resources into defense spending via fiscal policy as well as monetary inflation. Where would the US be had it pursued a more social agenda rather than a military one. Could Marx have made a contribution to the conversation? Could we have ranked higher on the Happiness Index than even Finland? One can compare to see where we fall short and perhaps find a clue for correction.
I think your choice of 2010 as tipping point is telling. Social Democracy (SD) was jettisoned in the 1970’s all to easily by many in the economics profession for the neoliberal agenda of class warfare. The emergence of fiat floating currencies, when Nixon took us off the gold exchange standard, was an inflection point that was wasted. With Carter’s buying into the deficit/ austerity myth, as a substitute liquidity constraint that gold previously provided, SD was handcuffed on the fiscal side resulting in politics of grievances as the only terrain left on which to compete. We still can overcome these constraints and choose to build on the possibilities that a fiat sovereign currency provided us in 1970s and can still do today.
I feel like you are discounting the role that technology has had in getting us here. Clearly the production line was the technology of Keynes' day and the Neo-libs thrived on the scaled globalization driven by the capabilities introduced to humanity by the Internet. The mobile revolution has connected everyone and allowed for the surveillance state to find its full potential, while Social Media has fed us the worst of our 'isms', (excluding humanism). We are clearly on the cusp of a new scientific revolution with data, simulation and AI. For me the question is where does that lead?
Pretending that the Oligarchic Kleptocracy has not in fact bought and paid for political power, I would opt for a "systems organization" perspective in which each economic entity was controlled by a "board" made up of representatives of 3 systems: owner/management, employees, and consumers, each group with equal power. The role of the government would be as "rule maker" and "referee" just as in professional sports. In a very real sense, this arrangement would be an implementation of a Free Market.
Thoughts:
How much if any of the decline in TFP p.a. was due to Polanyian transfers? Or Polanyian restrictions on the size and speed of relative price changes occasioned by growth? And did the growth slow down and concomitant rise in inequality leave “losers” looking for scapegoats? Or the flip side, how much of the pushback against transfers and restrictions was generated by Hayekian resentment of slower growth? [Where is my flying car?]
Or did the gameplan of [that which cannot be named], the bridesmaids and groomsmen of the Keynes-blessed shotgun marriage, of gently removing the impediments to growth get hijacked by folks who just wanted to transfer income in the other direction, growth be damned?
Or is it all cultural, higher incomes => more risk aversion, vetocracy, NIMBYism? [I’ve been reading Brink Linsey.]
How much did the End of History loosen the discipline on the Right not to peruse upward income transfers, growth de damned and the Left to peruse downward income/status transfers, growth be damned? Can the rise of China and or the need to deal with ACC restore the discipline?
The first potential direction is the only way forward , but we need to go cold turkey on the crack cocaine of using debt and binge money printing to pay for what society actually can’t afford. Replacing reliance on too easy debt with genuine value from technological improvement is the challenge of the 2000s. Unfortunately the collective will to do this does not seem to be there .
"Baking a sufficiently large economic pie that everyone could potentially have enough wood soon come within our grasp. "
I suspect you dictated this. Wood I be correct?