This Wednesday reprint was first published on August 8, 2012. I've made some edits and added a brief introduction — Dave
Brad Delong's Question
The first Gilded Age during the late 19th century was a time of great wealth and income inequality. America is now in its second Gilded Age, which started about 32 years ago. In Why Next to No Political Reaction to the Second Gilded Age?, economist Brad Delong expresses his bewilderment about the fact that there have been no large political (populist, progressive) movements whose aim is to reverse America's grotesque social inequality and restore the middle class like there were in the 1890s and in the 1930s after the Roaring Twenties, which was the last time income and wealth inequality were as pronounced as they are now.
We haven’t had anything like those [historical progressive/populist movements] over the past thirty years.
And here I’m simply going to throw up my hands and say that I don't know why.
It’s a great mystery to me. As an economic historian I like to look at political economic patterns from the past and to say we should learn from these and generalize them and take them as providing some insight into the present and the future. In general, we economic historians are extraordinarily successful. There are lots of lessons to be drawn from the first age of globalization for the second. There are lots of lessons to be drawn from the high school-ization of America for the college-ization of America and for education elsewhere in the world. There are lots and lots of lessons to be drawn from the Great Depression for today.
But the political economy of Gilded Ages? Why the first Gilded age produces a Populist and a Progressive reaction and the second, so far, does not?
There I throw up my hands and say that my economic historian training betrays me. I have no clue as to what is going on here.
This is my response to Brad Delong's question, which I wrote a few months before he posed it.
The End Of History
I shall the explain the title of this essay in its conclusion. Keep that thought in mind.
I ran across an article at Jesse's Cafe Americain called Morris Berman On the Decline of Empire: 'Why America Failed'. It seems that Jesse (real name unknown to me) is unhappy with Berman's conclusion—why America failed, past tense. I recently read Berman's book, at least the interesting parts, and my own conclusion was that Berman is confused about a lot of things, although he is right about many aspects of American culture. For example, he does not seem to appreciate the depth and scope of the ecological predicament of humankind.
However, I must leave Berman for another day. Let's get back to Jesse.
To say that Morris Berman has a 'dark vision' to share is an understatement.
I think his view is legitimate, but only if you look at one somewhat narrow aspect of the American character, and ignore all the rest. It seems to be singularly focused to the point of distortion by a depressive fatalism.
Actually, I'm the fatalistic one. Berman looks like an optimist compared to me.
I have traveled all over the world. To my own view, people are on the whole much the same everywhere.
The primary difference is that some cultures tend to incent and reward certain characteristics and behaviours more others, and at different times. This creates a certain 'flavor' to that region or country.
Berman would likely agree with this view. Note Jesse's use of the words incent (as a verb) and reward. Those are economic terms, meaning that Jesse is talking about Homo economicus, who is allegedly rational in this regard.
The best example I have observed is the profound difference in the assumptions between the Japanese and American cultural views. But one can still find those sorts of differences in regions of a large country like America, despite the homogenizing effect of mass consumerism and entertainment. But alas, they are becoming less vibrant and distinctive.
My own view is quite a bit more in line with Thomas Hartmann.
Hartmann is a liberal talk show host and writer.
I do think that America 'went off the tracks' in the 1980s, and bought this 'greed is good' meme, which has been repeatedly reinforced by a well funded PR campaign.
And there was a kind of financial coup d'etat that is distorting American policy and character in profound ways even now. It is very apparent if you can somewhat remove yourself from it and then look at it from a 'distance.'..
Such minorities have taken over whole nations before, particularly when the people have become intellectually and emotionally exhausted, but only for a time, and only by the use of systemic violence and repression with which to maintain control and spread the contagion of their madness.
This period now seems very similar to other cyclical changes in the past in American history, that were followed by awakenings and changes in attitudes. One need only to compare the Gilded Age with what came after it, for example. And if I compare America today it seems more like modern China than the America of the 1960's.
It is important to understand that Jesse has articulated the hopes of Americans everywhere, regardless of political persuasion. He happens to be approaching the problem from a liberal perspective. In particular, he believes that we are in the Fallen part of normal cyclical change, and just as happened after the first Gilded Age, America will once again rise like a Phoenix from the ashes to re-attain some version of its former glory. I beg to differ.
How do we know what we think we know about the future? That is a deep question, and I've attempted to answer it many times on this blog, mostly to justify the "radical" statesments I make and to persuade you to take them seriously. I can not go down that road today, but I can list some specific reasons why I believe America is finished, or, as Morris Berman said, failed. When I say "finished" I mean—
- the middle class is kaput and will not be resurrected
- bankers always win
- the political system is hopelessly corrupt
- democracy will not reassert itself
- there will be no people's revolution
and the like. You get the idea. It might help to think about the crucial differences between the way Americans lived in the year 1912 and the way they live today in 2012, as I will explain in the text.
Here we go—
The main reasons why the middle class is dying (and won't be resurrected) are economic. For example, depressed wages are now a chacteristic feature of the American economic landscape, mostly due to 1) suppression of organized labor; and 2) globalization (corporitization) of the American economy. Now, we can add a third factor—a permanently weak labor market in a permanently depressed economy. You can not have a strong middle class without decent wages. Case closed, idiots like Paul Krugman notwithstanding. But I have walked this ground so many times before on DOTE that I will not waste my time rehashing it today. I want to get into some new material.
Jesse alludes to the "homogenizing effect of mass consumerism and entertainment" but does seem to fully appreciate its Awesome Power. A crucial difference between 1912 and 2012 is the existence now of a Mass Media which wields enormous influence on people's "thinking" in a way that was inconceivable one hundred years ago. Make no mistake about it, I am talking about sophisticated Mind Control, be it ever so subtle. Manipulators were psychological novices in 1912 before Edward Bernays and more modern persuasion techniques. Due to the great technological advances we've seen, these techniques can be applied on massive scales in such a way as to virtually ensure that revolution (caused by our great social inequality) is just about the last thing on people's minds. Would-be revolutionary Chris Hedges can not compete with the Kardashian sisters, who have just launched a new line of eye wear products according to the Hindustan Times of India. The old rules of one hundred (or fifty) years ago no longer apply.
Jesse alludes to "systemic violence and repression," but once again, he underestimates what's going on. The same technological advances which allow status quo messages to be imprinted on the masses have also created an enormous increase in the power and reach of the corporate state. I would think this goes without saying, but apparently I have to say it. If a group is planning an act of rebellion or protest, and unless they are keeping very quiet about it, the state will know about it a few hours or days after they do. Or if that group does succeed in carrying it out, agents of the state will find them quickly and easily. Modern surveillance techniques are extremely sophisticated and, if assiduously applied, very effective. There's nowhere to run, and there's nowhere to hide, as there was in 1912. This is not 18th century France or America. This is not Egypt, Libya or Syria. These "data-mining" techniques are simply another form of mass communications furtively piggy-backing on normal "consumer" discourse (see Facebook) and transactions (see Amazon). Not to mention cell phones. And if a few people do succeed in getting some minor revolt going, the state can deploy a variety of means to violently suppress it. A new labor movement would be crushed before it got off the ground. Technological advances allow the state to suppress uprisings in ways which were inconceivable a hundred years ago. And now we are going to have drones flying over head! Good luck with that. There is an inexorable human "logic" to all this which no amount of wishful thinking is going to fix.
America was not quite an Empire in 1912, though its leaders aspired to make it one. (The People were isolationist). But now America is a full-blown Empire in the modern sense, with a military or intelligence presence and an economic presence in virtually every country (and ocean) in the world. (If we don't have much of a presence in a country, that country is Russia, China or Iran, or is politically aligned with them—see Syria.) Americans can always be easily distracted by a new foreign enemy if need be, if they are conscious enough to notice the outside world at all (see the second bullet point above). If things get bad enough—one might have thought they already were—a new war will make for a lively, interminable discussion in the mass media which wipes from existence any other thought our contented citizens might have. As they always do, Americans will rally around the flag and that will be the end of it. Then they'll forget that there's a war going on and go back to keeping up with the Kardashians.
When Francis Fukuyama wrote a hopelessly naive book called The End Of History (and The Last Man) in 1992, he was referring to the triumph of Keynesian liberal capitalism over all other political systems. At last, it would be possible to put a McDonald's hamburger franchise on every corner in every country all over the world (even France). Ironically enough, that historically triumphant, political economic system blew itself up a mere 16 years later. But never mind, because that system did not go away because there is no serious alternative to it. Unlike socialism, which is now dead, there is no other ideology around which people can rally to achieve meaningful political change. What you see is what you are going to get, now and forever (which is not as long as some of you might think).
If you have this astonishing mass media, and the power of the state is greater than ever before in human history, and if the state is utterly corrupt, which it is, then there is no hope whatsoever for real social change. (That's why Occupy Wall Street was a will-o'-the-wisp.) America's historical situation is unique in the 21st century because of all that has gone before. The "cyclic" theory of social change Jesse puts forward is merely wishful thinking disguised as political theory. But I daresay most Americans, or at least the ones who still have functioning brains, subscribe to some version of it. They think things will get better. They have hope. We are not surprised.
A comparison with the progressive political period after the first Gilded Age or the Great Depression (up until about 1980) no longer applies. The elites who own almost all of the resources and have most of the money will have no problem hanging onto (and increasing) that wealth in the 21st century, at least for the time being. (Check back in 2030-2040 after the SHTF.) No countervailing force will arise to take it from them. The kleptocracy has gone global. In this narrow sense, this irreversible trend is the End of History. Fukuyama was right, though not in the way he intended because he saw liberal capitalism as representing humankind's best chance to achieve economic progress (through better technology) and promote human rights (through democratization). Just the opposite is occurring now, in the United States and in Europe.
Of course, in the larger, planetary sense, we are witnessing the beginning of the real End of History, which will be due to a warming climate, degraded oceans and all the rest, a process which will take several decades to play out. But that was not my subject today.