Wednesday, March 30, 2016

How to Make America Great Again

In the current presidential election year Donald Trump is busily promising to Make America Great Again with an end immigration and bringig jobs home to the United States while Democrats are promising to jack up the minimum wage to $15 per hour.

Michael Tanner reminds us that none of that is going to help. Good old 1950s manufacturing jobs are going away not just because of China but because of automation. And also because American companies want to manufacture products closer to their foreign markets.

Tanner has another idea. We can’t reset the economy to the 1950s, but
What we can to is prepare for a vibrant new economic future. That means cutting taxes and regulations to boost entrepreneurship. It means breaking the stranglehold that the teachers’ unions have over our schools so that we can educate future workers for future jobs. It means embracing economic growth as a goal. And it means understanding that free trade contributes to that growth and ultimiately produces more winners than losers.
But, of course, when people feel they are losing, their first resort is government. And to the only thing that government knows, and that is force.

I am reading about an interlude of force in my ongoing tramp through Michael Mann and The Sources of Social Power. Right now we are in the middle of the rise of the British working class between 1815 and 1880, and specifically the Chartist movement.

I had always thought of the Chartist movement as purely a movement for political rights. But now I stand corrected. Instead, after Mann, I understand it as a response to a Perfect economic and political Storm.

This perfect storm included, first, the deflation after the Napoleonic Wars, as Britain paid off its war debt and returned the value of the inflated pound sterling back to its pre-war parity. Deflation always enrages wage workers and debtors, because the one thing that people hate is having their nominal wages reduced.

Second, Parliament repealed the old Poor Law that went back to the late 1500s, and made welfare much tougher and more shameful.

Third, the government moved against the traditional non-market privileges of artisans and city guilds so that these artisans were forced to compete with the market prices offered by a new generation of entrepreneurs.

Fourth, the textile industrial revolution was changing the terms of trade with economic and technical innovation, so any number of workers’ trades were getting severely affected.

Fifth, the 1832 Reform Bill extended the vote to the bourgeoisie but not the workers. Sixth, the government declared war on unions with laws against combinations in restraint of trade.

All in all, you can see why the artisans of Britain got a bit riled up back in the 1840s.

In the 1840s the government responded to Chartist agitation by using the army to break up demonstrations and insurrections, and since the newly franchised bourgeoisie sided with the old regime in defence of their property, the Chartist movement failed.

But the economic agenda of the Chartists got enacted in the end. Parliament enacted wage and hour laws, which restricted female and child labor and made the workplace much more male. It enacted safety and health legislation. It enacted government education. And eventually enacted privileges that allowed labor unions to represent workers and bargain with employers.

You can see that a wise and all-seeing government would have moderated with six-part storm. But that is easy to say after the fact. Nowadays we don’t believe in running surpluses to pay off the debt; we don’t believe in resumption at the old parity. No, instead we screw the creditors and the holders of inflated currency. So we have replaced one evil with another. We have restored the Poor Law, on steroids. We have regulated and twisted the labor market into pretzels. And we are now proposing to extend the vote to illegal immigrants.

And then we wonder why the economy is in the pits.

In The Sources of Social Power we are subjected to a panorama of power actors down the ages, manipulating and outflanking and blind-siding each other in the endless war of power. Of course Michael Mann is a right-on lefty. Not quite a Marxist, he can view the power politics of kings and barons with detachment. But he is definitely on the side of the workers when the Chartists are in the streets. It doesn’t seem to occur to him that maybe the answer to the question of life, the universe and everything is a little moderation in the deployment of social power, including his favorite little darlings du jour.

For Mann, the ideology and the deployment of the free market notions that have erupted in recent centuries are no different than the divide and conquer manipulations of the absolute monarchs. But it’s OK that the workers fill the streets and excite the social consciences of government university professors.

Back to the quote from Michael Tanner at the top. Notice what he is saying. Hey kids! Maybe the answer to our economic problems isn’t more regulation, higher minimum wages, and more government power but making it easier for entrepreneurs to start new companies and reducing the costly regulatory burdens on business. Maybe our education system should be prised out of the cold dead hands of the teachers’ unions. Maybe education shouldn’t be a mechanical government system at all.

In other words, maybe there in a place in this world for methods other than the sweet use of government force. Maybe there’s a way to help the low-paid other than telling their employers how much to pay them. Maybe there’s a better way to educate our children than send them to government child-custodial facilities staffed by lifer trusties.

There is nothing remarkable here. It is just considering the curious notion that the answer to many problems might not the clunking fist of more government power.

In my view the great event of the last 500 years is that we humans have discovered the wealth creating and directing concept we call the price system. But actually, it isn’t a system. It is what we have learned to call, from the relatively new chaos theory, an emergent phenomenon. It is like a biological organism like the human body. There is no boss in the human body, issuing orders throughout the body telling each cell what to do. The body is an emergent phenomenon communicating with itself in ways we barely understand, and the result is that it works. It enables humans to cooperate with each other peacefully, right across the wide world. But it starts with the same principle as the human body. Mostly, you just let the market, like the human body, just get on with it.

Is it possible that we could learn to understand our human society in the same way, or are we condemned forever to think of it as a system, ruled by the four IEMP social powers -- I should say social forces -- identified by Michael Mann: ideological, economic, military, and political?

I do hope not, because, as I like to say, System is Domination.

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