Guest Thinkers Contemplate Culture War and the Hijacking of Capitalism

Continuing in a political vein... I'll hand over the floor to a few Large Minds - some of them pals - offering them a chance to lay some politically redolent thoughts on you.

== Two Successful Capitalists Decry The Hijacking of Capitalism ==

Let’s hear from two fellows who are unabashed capitalists and acolytes of Adam Smith... just like Warren Buffett and Bill Gates (and me!)... starting with one of the world’s top/respected pundits on technology industry, Mark Anderson, CEO of the Strategic News Service:

“For me, there is no more poignant example of the Bush 9.11 era, and the need to get beyond it now. Like two slides, I picture, first: an army of soldiers surrounding bin Laden in the mountains of Tora Bora, and then being ordered by Team Bush to wait until the locals can get there and participate, at which point the enemy has escaped.

 “I compare that slide to the story of this year: after a year in secret investigation and preparation, Team Obama finds a likely target compound in Pakistan, orders in Seal Team Six via stealth choppers, uses overwhelming force, and shoots to kill. DNA samples are taken to confirm ID, and the body is dumped ignominiously in the ocean, with no propaganda pics for the enemy, and no burial process or site to rally round.” What a difference.  And yet, which man is called a “wimp”?”

(I will soon put up an essay appraising the different ways that democrats and republicans use military might and wage war.  You’ll be astonished by how stark it is, like night and day. Almost like two different species.)

Another guest voice is venture capitalist Nick Hanauer, a solid member of the 1%, explains the problem of wealth disparity:

"There can never be enough superrich Americans to power a great economy. The annual earnings of people like me are hundreds, if not thousands, of times greater than those of the average American, but we don’t buy hundreds or thousands of times more stuff. My family owns three cars, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. ....I can’t buy enough of anything to make up for the fact that millions of unemployed and underemployed Americans can’t buy any new clothes or enjoy any meals out. Or to make up for the decreasing consumption of the tens of millions of middle-class families that are barely squeaking by, buried by spiraling costs and trapped by stagnant or declining wages. ... Rich businesspeople like me don’t create jobs. Middle-class consumers do, and when they thrive, U.S. businesses grow and profit. That’s why taxing the rich to pay for investments that benefit all is a great deal for both the middle class and the rich."

Now, this one-percenter is a hero.  I like him and agree with what he says.  But still, just among us chickens, the point he's trying to make is a bit more complicated than it appears.  Supply Siders do not expect 1%ers to help the economy by buying stuff (which is high velocity stimulation), but rather by investing in new “supply” systems like plants and equipment and factories and inventions.

The irony?  This is exactly what Hanauer and other venture capitalists are doing!  Indeed, I believe that what they do - (starting new companies that create new goods and services) - should be rewarded with very low capital gains taxes.  It is risky and does a lot of good. And does that make me a supply-sider?

The problem is that the Supply Side cult as a whole is wedged. It envisions ALL one-percenters to be risk-taking primary investors in new enterprises and new employment and new productivity, like Hanauer. Instead most are passive recipients of dividends and capital gains from established stocks, and beneficiaries of immense tax-breaks. They do not use increased income to create new productive enterprises, or jobs. They use it to get richer. Period.

This is catastrophic during a depression, when you want money to be high velocity, not clutched tight or sitting in a vast scrooge portfolio, but passed from dockworker to barber to dentist to grocery chain to janitor to gas station. Supply siders tout the he lowest-velocity use of money, rewarding the least economically useful activity, which has never ever ever done what the supply siders claim it would do.

== Why Culture War? ==

Yes, Phase Three of the American Civil War has been foisted on us by powerful, cynical men for their own political and economic gain.  But there have to be deeper things going on.  Psychological drives that those men cleverly exploit.

Our next guest, researcher and science fiction author Dr. Charles Gannon, has offered his own diagnosis of Culture War and why so many millions of our neighbors nod along with Glenn Beck, marching willingly to enlist in the Great Big War on Science... and on teachers, doctors, journalists, civil servants, and so on, biliously hating every American knowledge profession.

(Go ahead and ask your crazy uncle to name ONE major center of American intellect and knowledge that isn’t under attack by Fox and co. Make it a wager!)

Chuck Gannon suggests that in this modern, dizzying age, people respond to that most primal of all fears: fundamental loss of control.

"In short, people are realizing more and more that they know less and less about almost everything in their lives. How many people understand what is going on with the euro and how that's part of a much bigger picture? How many understand ANYthing about how their smartphone works--not what it does, but how it WORKS?  What are the ethics of cloning? Of copyright? Of no child left behind versus the death of rigor and excellence?

"Head in hand, they feel the grey matter between their hands threatening to explode. And they want relief. And  they have their eureka moment. "I know! I will adopt a stance! And so what if I can't figure out my own stance? I can BORROW one! 

"I will shop amongst the bazaar (bizarre) of demagogues and choose the one that says the things I like best. And the details--well, they're only details. Someone else will think about those--and besides, I'm fed up with details. (Secretly, where they can't even hear it: "all those details I don't understand make me feel stupid....")

"I suppose, at some level, it has ever been thus. However, I think the Tofflerian Waves and Culture Shocks geometrically amplify the discomfort. The distance between the haves and have nots is growing, yes--but I think the separation between the knows and know-nots is growing just as fast. It is not that they ARE stupid, but they feel that way. 

"And in a culture which panders to couch-potato passive consumption of media and goods, dumbs down the critical reasoning component of schools (and life), and in which an integrated view of "reality" moves further and further beyond the reach of even the most cognitively proactive folks, they hardly have the role-models or encouragement, or preparation to FIGHT through the tides of uncertainty in their lives and set sail upon the high seas of perpetual indefinitude that is the modern world."

Worth pondering.  Thoughts anyone?

== Call the GolgaFrincham B-Ark! ==

Our next guest, my cousin Jonathan Baskin, has some pretty cool insights into the pathetic world of Public Relations spin-doctoring.

“The public relations industry's trade association is running a campaign to come up with a new definition for PR. I can see the problem, since social media technologies have democratized the tweaking, spinning, and obfuscating of the truth that used to be the exclusive purview of PR professionals. In an age when anyone can be an expert on anything, every opinion is as valid as the next and no fact need go unchallenged, contradicted, or ignored. The mediascape has become a truth free zone. You’d think the PR people would have died and gone to heaven, but there’s no money to be made when nobody needs an intermediary to peddle access through those Pearly Gates.

"We’re all PR people now.”

== Good News? ==

In 2010 there were 34.3 births among every thousand girls between the ages of 15 and 19. That’s down 9 percent from 2009. And it’s the lowest number in nearly seven decades of reporting. The figure comes from a new report from the Centers for Disease Control and Prevention called Births: Preliminary Data for 2010. [Brady E. Hamilton, Joyce A. Martin and Stephanie J. Ventura] And it’s filled with interesting stats. For one, teen births have hit that record low. And that statistic includes more good news – birth rates are at record lows for all ethnic and racial groups, and even for younger teenagers.

The number of births to unmarried moms also declined. And pre-term births declined. The trend towards lower numbers is general - the birth rate fell overall by 3 percent. It’s also down for women in their twenties and thirties, according to a recent article in Scientific American.

So...let's see. In addition to all this good news... crime has plummeted. So has illegal immigration. (See below for details.)

The Soviets are gone and the terrifying muslim world is democratizing. Osama's dead.

Federal taxes consume less of the national income than at any time since 1950.

Tax rates are the lowest in 80 years.

So why are these the areas people scream about?  Instead of all the ways things have genuinely gone worse? Oops.  The long list of ways things went worse during the first part of this century.

== A Prediction I wish Never Came True.... Has ==

Shock! As retreat of Arctic sea ice releases deadly greenhouse gas.  There are truly vast amounts of hydrated methane ices on the ocean floors.  As temperatures rise, these will be released. And methane is far more powerful a greenhouse gas that CO2. Predicted in my novel EARTH.

== And finally... some political potpourri ==

* Said it before and I will keep saying it: I want a second “clock” set up next to the National Debt Clock, showing what our debt would have been by now, if the US government had been allowed to collect royalties, like a business, on its own inventions. Like the Internet, communications satellites, weather satellites, pharmaceuticals, microchips, weather forecasting, aeronautics and jet engines, and so on.... All were given to businesses and the world for free!

And that’s not a subsidy? Not socialism? Or better -- is it proof of the value of a mixed social contract, in which vigorous entrepreneuialism and competitive creativity have been fostered by a generally benign and responsive government? Do you doubt that the Alternative Debt Clock would be in the black and running backward?

If nothing else, it would graphically repudiate those now proclaiming that neither science nor government have any value.

* It's 1999. America rides high, making so much $$ off innovation we use WalMart to uplift a world middle class. Our Pax is unchallenged. A rich, scientific people. What mistakes would an enemy lure us into making, to change all that? Repeat Vietnam? Repeat our Civil War? Wreck our science and expert classes? How about all three? Read The True Cost of 9/11, by Joseph E. Stiglitz.

* See a vastly detailed and deeply disturbing article in Bloomberg about the Koch brothers -- getting richer with secret Iran sales. Seriously, read at least the first ten paragraphs or so.

* Think Adam Smith would have approved? Goldman-Sachs manipulates the world's aluminum supply AND makes money renting the storage space.

* Evidence for influence of the Saudi Royal House in American affairs has piled high, such as the way President George W. Bush openly spoke of having been “partly raised by” Prince Bandar bin Sultan and walks with him holding hands - a friendliness that showed whenAmericans were forbidden to fly for two days after 9/11, but every well-connected Saudi was rushed out of the U.S. and away from the reach of FBI interviewers, on luxury charters at taxpayer expense.

Lately, we’ve seen how Rupert Murdoch’s top partner at News Corp. and Fox is Prince Al-Waleed bin Talal, whose direct sway at Fox is not related in a recent article by Accuracy in Media.  But connect the dots.  The same media empire that is drumming up Culture War and spite toward all American scientific or intellectual castes... and the same one that pushed for the US to get mired in a decade of draining land wars in Asia. Hm.

* Wow, this was more interesting than I expected it to be. "On Debt, Democracy, and all that..." by Michael Hudson
 * “Mitt Romney and Newt Gingrich have promised to complete a nearly 1,950-mile fence to secure the U.S. border. Michele Bachmann wants a double fence. Ron Paul pledges to secure the nation's southern border by any means necessary, and Rick Perry says he can secure it without a fence — and do so within a year of taking office as president.”

Meanwhile, the actual rate of illegal immigration is plummeting.   Many sources, including the Pew Hispanic Center, agree that the number of illegal immigrants in the United States peaked at 12 million in 2007, but then dropped by almost 1 million through 2009, and has largely held steady since then at about 11.1 million. Border Patrol apprehensions of illegal immigrants have also fallen sharply. In fiscal year 2011, which ended Sept. 30, the Border Patrol captured 327,577 illegal immigrants on the southwestern border — the lowest total in four decades.

* President Obama recently gave a speech in Osawatomie, Kansas, the same place where, back in 1910, Theodore Roosevelt said: "We grudge no man a fortune in civil life if it is honorably obtained and well-used," Roosevelt said, but added: "We should permit it to be gained only so long as the gaining represents benefit to the community."

Describing what he called a "new Nationalism," Roosevelt said it "regards the executive power as the steward of public welfare. ...It demands of the judiciary that it shall be interested primarily in human welfare rather than in property, just as it demands that the representative body shall represent all the people rather than any one class or section of the people."

* And finally, from Scientific American: “The Horn of Africa is in the midst of its worst drought in 60 years: Crop failures have left up to 10 million at risk of famine; social order has broken down in Somalia, with thousands of refugees streaming into Kenya; British Aid alone is feeding 2.4 million people across the region. That's a taste of what's to come, say scientists mapping the impact of a warming planet on agriculture and civilization.”

"Class War" and the Lessons of History

One aspect of our re-ignited American Civil War is getting a lot of air-play. It is so-called “class war.”

That's the tag-line ordered up by Roger Ailes. The notion: that any talk of returning to 1990s tax rates - way back when the U.S. was healthy. wealthy, vibrantly entrepreneurial and world-competitive, generating millionaires at the fastest pace in human history - is somehow akin to Robespierre chopping heads in the French Revolution's reign of terror.

That parallel is actually rather thought-provoking! Indeed, can you hang with me for a few minutes? After setting the stage with some American history, I want to get back to the way things got out of hand during that earlier 1793 class war in France.  There are some really interesting aspects I'll bet you never knew.

But in fact, "class war" has always been with us. If you ever actually sit down to read what people wrote in times past - for example Adam Smith in Wealth of Nations, or even the Bible - then you know struggle and resentment between social castes was the normal state of human affairs for 6000 years, or much longer.  Seriously, randomly choose (or "roll-up") a decade and locale from across the last few millenia! Tell me who oppressed freedom and competitive markets in that time and place. I'll wait.

In fact, today's American perspective that there is no-such-thing as class - so blithely exploited by Fox - seems rather quirky and charmingly innocent.  Baby Boomers, especially, were raised under  unusual circumstances -- perhaps the only stretch of time in which a great nation experienced a (fairly) flat social order.

Now this calls for simplifying - so let's set aside the battles over racial and sexual equality, etc. - but squint with me here, for a minute.  It's fairly obvious that the period following the Second World War was (for white U.S. males) the least class-ridden of all time.  Disparities of wealth were at an all-time low and the middle class, flush with WWII savings, good wages and GI Bill-fostered competitiveness, experienced a generation of utter dominance over the American experience. A confident dominance that got woven into popular culture through TV and all other media.

= Pyramids and diamonds =

Instead of the classic human social pattern -- pyramid-shaped with a tiny, fierce nobility lording it over peasant multitudes -- ours was diamond-shaped with a well-off middle that actually outnumbered the poor! A miracle nobody in all the past ever foresaw. Except perhaps Smith. Certainly not Karl Marx! In fact, nothing so undermined the honey-seductive mantras of Marxism so much as the living example of the U.S. middle class. Which the whole world wanted to join.

And now the penultimate point (before getting back to 1793 France). Our post-WWII flattened-diamond pattern did not quash or undermine competitive capitalism!  Not at all. In fact, never before or since has there been such fecund, vigorous entrepreneurialism as during the flattest and most "level" social order the world ever saw.

Those who proclaim these two things - social flatness and vigorous market competitiveness - to be inherent opposites, in perpetual conflict, are simply fools or historical ignoramuses -- or outright liars. They are pushing the sick illogic of the zero sum game.  Indeed, Adam Smith himself contended, in both The Wealth of Nations and The Theory of Moral Sentiments, that a relatively flat social order -- combined with lots of opportunities for the poor to get education, so the total number of competitors is maximized -- can vastly increase the total number of people who get rich in the best way, by delivering innovative goods and services.

(Smith held less truck with inherited wealth or dividend-clipping "rents" - the kind of income with the very lowest tax rates, nowadays. In fact, Smith strongly implies that some kind of upper limit to the meaning of "rich" might be called for. But more on that another time.)

= A burden of proof on FDR-bashers =

The final pre-point I want to make here - before tooling off to France in 1789 - is more in the form of a question.  How did we get into a situation where Franklin Delano Roosevelt is portrayed as Satan incarnate?

Yes, yes.  I spend a lot of time around libertarians and I know that their current version is all about hating government.  No other agenda or priority.  See my earlier challenge (two postings back) daring libertarians and decent conservatives to consider taking on a positive goal instead of a purely negative one - fostering competitive enterprise and not just reflexively hating all civil servants, under all circumstances, all the time, while ignoring every other threat to freedom. That may by Ayn Rand, but it sure ain't Adam Smith.

If government is always and automatically evil, then yes, Franklin Roosevelt was the antichrist, because he sure expanded its reach.  If, on the other hand, you judge by outcomes... defeating Hitler, ending the Great Depression, starting the process of racial justice and - above all - engendering a society that both fostered vast amounts of competitive enterprise and kept the social order flat, then maybe we should consider cutting the man some slack.  (Wasn't he admired by the "greatest generation"?)  I'd like to see you -- or any ruler/leader across all of human time -- do better.

Sure, some of FDR's bureaucracy got cloying. Or else it got "captured" and stifled competition.  Democrats themselves axed many New Deal and Progressive agencies - the Interstate Commerce Commission, the Civil Aeronautics Board, for example, had to go!  Others needed trimming and so did the pre-1960 tax rates that JFK slashed.  Indeed, about half of the Reagan-era government prunings seem pretty much called for... a process culminating in the Clinton-Gingrich Welfare Reform, another time that the moderate-right had a strong point. And was listened-to.

But outcomes comparison is not kind to those who gutted Glass-Steagel and other bank regulations, opening the door to abuses that helped bring our Second Depression.  And since every single prediction ever made by Supply Side Economics proved wrong, well, we can understand why science and outcomes comparison are the Big Enemy, attacked by Fox 24 hours a day.  If facts are inconvenient, well, damn those who live and work with facts.

= Okay, back to France =

All the shouts about "class war" bring to mind images of rabid Jacobin mobs in 1793 hauling brave nobles and gentlemen to the guillotine. But if Rupert & co. really want us pondering that image, we owe it to ourselves to leaf back just a few pages to 1789, when the revolution began as a much more moderate thing, inspired by events across the ocean, in America.

France was broke.  Louis XVI and his ministers were incompetents who deliberately squelched commerce with internal tariffs and policies that crushed innovation. The church owned much of the productive land, tax-free. So did the feudal aristocracy. Top merchants and corporations managed to wrangle exemptions too. After years of quagmire wars, poor tax revenue, bank collapses and mismanagement, Louis needed more money to stave off bankruptcy and save the country. So he summoned the Estates General.

That was the rough French equivalent of the British Parliament, but with much less authority.  In fact, it had last met in 1614. But Louis was desperate. What he needed was for the first and second "estates" -- the clergy and  nobles -- to vote themselves a temporary levy and join the third estate (the people) in paying their fair share.

That's how it all started.  The country's leader asking oligarchs and aristocrats to pay the same rates as common folk, for a while, especially since they already owned damn near everything.  The answer given by the dukes and bishops and marquiseseses?  Heck no! We're the ones keeping it all together. The managers and investors and owners and job-makers. The government can damn well keep its mitts out of our pockets. It's our money, not the state's.

Now you can see where I'm going with this. So I won't spell out what happened next. (Though a little reading might be in order?  After the last assignment, to learn what the founder of modern market-capitalism, Adam Smith actually said. I promise surprises!) 

And no, I am not predicting tumbrels rolling through American streets, with billionaires holding their chins high as rabid mobs taunt them on their way to chopping blocks! 

What I am telling you is that "class war" has a whole lot more to it than they are telling you with their blithe, two-word nostrums, over at Fox.  As Warren Buffett said: "my side - the rich - have been winning class war for some time, and it won't end well." 

= The American Difference =

Across the sea, in America, a different experiment was being tried. The aristocracy over here -- like Washington and Jefferson -- certainly enjoyed being rich, and wanted opportunities to stay that way! But they also knew the frontier virtue satiability -- the notion that getting rich is great! Economic success can both entice and propel innovation, hard work, enterprise, competitive creativity and philanthropy. But that (as Adam Smith proclaimed in the miracle year 1776) there comes a point where enough is enough... and sometimes even too much.

Hold onto your seat, because I'm about to tell you something about Washington and the others that you never knew... that they were "levellers."

The founders started by banning primogeniture, so no family fortune could sit and accumulate, undivided, as a lordly demesne at the pyramid's peak. Instead, they would get divided among the large numbers of children that folks had then -- an intentional act of "social engineering" and outright "levelling" and don't you for a moment think otherwise!  They also seized the assets of the Tory lords and even neutral absentees and distributed them to the masses. And they made homesteading easy, with laws that favored Yeoman citizens. (All right, some of the lands they seized belonged to native American tribes - I never called these guys perfect, just smart, with a goal of not repeating the historical mistakes they loathed. Sure, they proceeded to make others.)

Never heard of these "levelling" acts by the founders? Heck, even liberals have forgotten them. Or they've become used to simply ceding Washington and Adam Smith to the blustering right, without even putting up a fight.  Stupid-lame liberals.

The point is that we never had the kind of violent class war that erupted in France, because our elites were smart enough to avoid it! After the primogeniture and distribution and land grant tricks started to fade along with the frontier, we entered a dangerous Gilded Age when the pyramid shape began re-emerging and Marx rubbed his hands over the growing urban proletariat....

...but even among the titans of the 1890s, there were men who could see. "I would rather leave my son a curse than the almighty dollar," quoth Andrew Carnegie, who was the Warren Buffett of his day.  Even a jerk like Henry Ford realized the essence -- that he benefited from a rising middle class that could afford to buy his cars.  And our agile nation came up with moderate solutions like anti-trust laws and progressive tax rates, that staunched class war without ruining capitalist enterprise.  That kept the goose alive, to keep laying golden eggs.

I've already discussed FDR. But now you can see the context of it all!  It is the context of the positive sum game. (Look it up!) The notion that we can get all the benefits of an enterprise-market system -- using the allure of wealth to reward innovators and vigorous competition -- while somehow preventing the toxic side effect of wealth... the poison called oligarchy.  The same poison that ruined markets and freedom in every culture other than ours, in every other era than ours.

= A wake-up call =

So what now? Well, for one thing, it's time to rouse yourself from propaganda hypnosis.  History repeats itself. And the last thing that the New Oligarchs want you to do is study history.

After a full generation of innocence, since the Second World War, in which we took for granted some highly unusual circumstances, we seem now to be plunging back toward the norm for human societies. And you - yes, you - need to start asking questions:

-- like what degree of wealth disparity would you find discomforting?  Today, unlike 1945 or 1980 or 1999, the top 400 U.S. families own more than the the bottom 50% of Americans. Please, please, please pause a minute and picture that in your mind.  If you can somehow manage to shrug that off, is there some level of disparity that would worry you?

When it's 75%? Or when it's 90%? Admit that there is some level that would make even you call yourself (and your country) the victim of class war. A struggle that's gone on (with a recent, slight break) for 6000 years.

-- or ask what it means when Fox says the top families do pay a lot of money in taxes, despite paying at very low rates.  Can you do the simple algebra in your head, divide and put in an equal sign and draw the obvious conclusion?  If they pay vast amounts, even at tiny rates... doesn't that mean they are getting most of the money in the first place?  And that's supposedly a reason for you to... shrug?

-- or ask who is financing the propaganda that you watch? When simplistic tag lines are ordered up at Fox News by Rupert Murdoch, Roger Ailes and Prince Waleed, and they are parroted within hours by every politician and talking head on the right, perhaps ask "is this the conservatism of Barry Goldwater and William F. Buckley, any longer?" Ponder: what do these New Lords get out of teaching you to hate every American elite of science, intellect or skill, along with your own freely elected government... while demanding that you ignore the one elite that threatens everything we love?  Theirs?

-- for the first time in American history, we went to war - a decade-long quagmire in Asia - and the rich refused to help pay for it. Isn't patriotism an issue all the time, and not just when you (or Glenn Beck) pick or choose?

More important: doesn't this start sounding a whole lot like what the nobles did on the east side of the Atlantic in 1789... and not at all like the smarter elites did in the west?

-- is history really so boring to you that you find it completely irrelevant? So much so that you'll ignore the patterns of 6,000 years?  If so, wow, FDR sure did make a different world for Baby Boomers to ignorantly take for granted.

But the Gen-Xers and Gen-Y and Millennials won't.  As I foresaw in EARTH, they are waking up.

So don't fret, Boomers. Your children will rescue America.  Not with violent class war... what are we, French? But with the kind of tweaking we saw from Washington and Lincoln and Carnegie and Teddy Roosevelt and FDR. (Three of them Republicans.) The kind that restores that flattened diamond... while continuing the miracle of competitive markets and freedom.

David Brin

http://www.davidbrin.com

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