economics – NearcticTraveller

History of my Times

Grand Expectations: the United States, 1945-1974. The Oxford History of the United States. By James T. Patterson. Narrated by Robert Fass. Audible Edition. Originally published by Oxford University Press 1996.

Restless Giant: The United States from Watergate to Bush v. Gore. The Oxford History of the United States. By James T. Patterson. Narrated by Robert Fass. Audible Edition. Originally published by Oxford University Press 2005.

I’m a baby boomer. These two books encompass the period from just before I was born to the beginning of the Bush II era at the start of the new millennium. For the most part what I learned about from these books was not unfamiliar persons and events. At least from the early fifties on I was aware of the cultural trends and the major political events happening around me. Presidential elections, fears of “the bomb” and the Cuban Missile Crisis, rock ‘n’ roll, the Civil Rights Movement, the Great Society, Vietnam, hippies, Earth Day, Watergate, and more were the stuff of my growing up. My adult life was shaped by the environmental movement, and I experienced the hopes and disappointments of the Carter, Reagan, Bush I, and Clinton years. I was interviewed by Al Gore for a placement as a science fellow in his congressional office, and I saw him chairing hearings on the conduct of Reagan’s appointees to the EPA, where I has previously worked for a summer as a fellow.

Many aspects of this period are covered thoroughly and well in these two books: the postwar recovery and economic boom, the Cold War and red scare, the struggles over civil rights, the war on poverty, Vietnam, the environmental movement, Watergate and the numerous scandals that followed, mostly also called “…gate.” What I missed in these books that I felt was present in some of the earlier volumes of the Oxford history was the perspective that time gives. Events seem too fresh to me to assess their significance.

I personally feel that Nixon’s “Southern Strategy,” of courting conservative white voters in the Democrat-dominated South by subtle appeals to racial prejudice was one of the most important shifts, perhaps inevitable, given the history of the region, but still much to be regretted. Even more important, I think was Ronald Reagan’s ability to hold the loyalty of conservative whites, while simultaneously attacking the tax structure, labor rights and Federal programs that promoted and protected their economic well being. A mixture of anti-communism, dog whistle racism, anti-tax, anti-welfare talk, and feel good rhetoric about American exceptionalism counted for more than economic realities.

I know the Democratic Party failed again and again to protect many working Americans’ economic gains, especially under Clinton, who paid lip service to labor and the environment, but who never seemed to get around to doing anything concrete. All along the way, the changes being wrought in Federal programs and an increasingly pro-business Judiciary insured that inequality would rise rapidly after its near miraculous decline in the postwar years (see my post on Thomas Piketty’s Capital in the Twenty-First Century). Coming generations were not going to enjoy the continuing economic growth that had lifted so many people into the middle class and led to those “grand expectations,” from 1945 until the 1970s. Those hard realities fueled the growing, unfocused anger and fear that gives the final volume its title.

Fear, anger and the aging of the Baby Boom generation helped conservative candidates. There has been a sharp turn to the right in Congress, and Republicans have gained control in many state capitals. These gains have been cemented in place by increasingly sophisticated gerrymandering of state and federal election districts and systematic voter suppression, and coupled with the inherently unrepresentative character of the Senate and the Electoral College, have allowed absolute minorities of the electorate to control government at many levels since the 1980s.

I doubt whether the sequel to these volumes will be published in my lifetime, although it will have been another thirty-five years in 2035. Patterson does say a good bit at the end about the threat of terrorism directed at the United States. Still, very few people in January 2001 foresaw the impact of 9-11 or the global conflicts that it led us into. Nobody then, I think, foresaw the great recession of 2008, the rise of Donald Trump and the extremist right and our failure to deal with the clear danger of climate change. Nobody expected we’d be devastated by a pandemic in 2020. The hope that blossomed when the United States elected its first black President proved evanescent. When the next installment of the Oxford History of the United States comes out, if I’m here to read it, I’m not sure I’ll be able to bear it.

Trials by Want and Fire

Freedom from Fear: American People in Depression and War, 1932-1945 by David M. Kennedy. Oxford History of the United States. Oxford University Press. 1999.

I listened to the Audible edition.

Illustrations: Migrant mother by Dorothea Lange; US soldiers on the Baatan “death march.”

This volume begins in the midst of the crisis that arose from the political and economic issues left unsettled after World War One. The international scope of the forces that led to the Great Depression were clear, but almost impossible for the big economic powers to resolve. The gold standard hamstrung efforts to recover. Herbert Hoover, Republican President from 1929-1933, was a progressive by any standard, but fiscal conservatism doomed his efforts to stop the economic meltdown.

The depth of the Great Depression was far beyond anything in my lifetime. The patience of America’s poor and miserable farmers and unemployed workers was one of the most surprising aspects. Inadequacy of local relief or private charity was obvious to anyone who compared the amount of lost wages to the funds available for relief. Franklin D. Roosevelt came into a nation fearful and on the verge of collapse; in his famous “hundred days,” he managed to push through the critical reforms needed to save the banking system. Roosevelt, however, spurned international efforts to shore up global economy, refusing to lend American financial resources to countries in default on WWI debts. The continuation of the Depression in Europe probably contributed to the rise of Fascism.

The New Deal, as it took shape during the first few years of his presidency, was more about key social reforms – unemployment insurance, old age security, disability and the right to unionize than about getting economy going again. Roosevelt did not like deficit spending. The men (like Harry Hopkins and Harold Ickes) and women (like Eleanor Roosevelt and Frances Perkins, the first female cabinet member) who drove the effort were an amazing and diverse group of brilliant, quirky human beings. FDR’s hope for a lasting progressive coalition was dashed, because the Democrats were stuck with extremely conservative southerners as a big part of the party’s base. After a series of unfavorable rulings, Roosevelt tried to push through changes to the US Supreme Court, which was a big mistake. This, with increasing labor unrest and opposition from the southern “barons,” led to electoral defeats for “New Dealers.” No New Deal legislation passed after 1938, although Congress left the crucial social reforms in place.

Meanwhile in Europe, Africa and East Asia, war was already underway. Isolationist sentiment was so strong in America, however, that Roosevelt, who was becoming aware of the danger, could do little to prepare the United States or help the democracies resist fascism. Gradually, Congress allowed him to support England, especially the vital Atlantic convoys.

Americans favored China in its war with Japan, but did very little except apply mild economic pressure. Oil export controls against Japan were enforced more strongly than Roosevelt intended in summer of 1941, but he couldn’t back down once a virtual embargo had been imposed. Kennedy speculates that if Roosevelt had paid more attention to developments in the Pacific, the Japanese might have settled for modest concessions on China and an end to the embargo. Maybe a truly horrendous war, marked by vicious racial hate and massive civilian casulaties could have been avoided altogether. What would the consequences have been? Germany might have been defeated sooner and a better settlement achieved in Europe than the east-west partition and Cold War? Perhaps the bombings of Hiroshima and Nagasaki would not have given a demonstration of the power of nuclear weapons. Would that have made it easier or harder to prevent their spread?

It was lucky Germany and Italy chose to declare war on the U.S. right after Pearl Harbor, because Congress and the people might have been unwilling to declare war first, preferring the undeclared stalemate in the Atlantic and being full of lust to avenge the US on Japan. Roosevelt and Churchill soon agreed on a strategy of defeating Germany first, while holding Japan at bay. American military preparations went slowly, but the miraculously lucky defeat of Japan’s fleet in the Battle of Midway slowed their momentum and bought the time needed for American industry to begin pouring out war material. In Europe Roosevelt was caught in the struggle between Churchill, who was leery of a direct assault on northwest Europe, and Stalin, who demanded a second front to take the pressure off the Red Army. Two years of campaigning in North Africa and Italy, which Kennedy implies was of little value, preceded the Normandy landings.

In the chapter on the home front, he talks about the ways the war affected groups like Japanese Americans – they were unjustly interned, but that experience broke the grip of traditional ways and allowed succeeding generations to become successful in mainstream society. Roosevelt’s need to have the support of the powerful southern committee chairmen in Congress kept home from doing much for African Americans. Under pressure from A. Philip Randolph and the NAACP, he did produce the first anti-discrimination program since Reconstruction. This allowed many to get jobs outside the South and off the farm as well as beginning to open up the military. Far fewer women actually participated in the defense workforce than the image of Rosie the riveter suggests, and most willingly left after the war. Still, I wonder, didn’t many come to feel life as housewives was a bit dull, especially once the challenges of motherhood began to wear?

Another aspect of the home front was just how good most Americans had it, compared to the Depression and to so many millions in Europe, Asia and Africa. Although Roosevelt and the New Dealers were afraid the economy would slip back again once the war ended, in fact, just the opposite happened. The huge burst of productivity that underlay the enormous output of war material made between 1940 and 1945 just kept going, as postwar consumer bought cars, houses and new products made possible directly or indirectly by scientific and technological advances fueled by war. The GI Bill’s huge investment in education fueled still more productivity growth and upward mobility.

Kennedy concludes by pointing out that the boom years after 1945 represented an astonishing turnaround for a nation that just twelve years earlier many believed was headed for long term stagnation and even decline. This is an excellent historical overview of that critical period. There are many more interesting aspects, including much discussion of the way Hoover and Roosevelt supported in-depth studies of the state of the American people and the way the various artists’ and writers’ projects gave Americans new views of their country and themselves.

American Awakening

What Hath God Wrought: The Transformation of America, 1815-1848 by Daniel Walker Howe. Oxford History of the United States. Oxford 2007

Image: Camp Meeting by A. Rider and H. Bridport, circa 1829

I listened to the Audible edition. This volume in the Oxford History of the United States, subtitled “The Transformation of America,” describes the momentous changes that occurred between the end of the War of 1812 and the US victory in the Mexican War in 1848.

Howe, like the other authors in the series, covers a wide range of topics. The transformative changes occurred in many areas, from economics to religion. Among the most significant was the Second Great Awakening, the protestant religious revival that swept the country, especially after 1820. Howe emphasizes its millenarianism: the expectation of the end of the world as described in Revelation, according to some, but to others not the end but the complete transformation to a peaceful and just world, governed according to Protestant, democratic principles. The Great Awakening stimulated numerous communal experiments, most of which did not last very long, but which left their marks on both culture and geography. A development which particularly struck me was the rise of Mormonism. Howe depicts Joseph Smith with much more sympathy and respect than Sidney Blumenthal in A Self-Made Man, where he is described essentially as a charlatan and sexual predator. Howe calls the Book of Mormon an American epic, praising its literary qualities (I may have to check that for myself – my previous look into it left me feeling it was a parody of the King James Old Testament)

A second transformation was in political parties, which began to take on modern form. This started as early as around 1800, but with the decline of the Federalists after the War of 1812, James Monroe and others hoped that parties would wither away and usher in an Era of Good Feeling, and indeed, the period is sometimes called that. But it was not in fact nearly so copacetic. The split between Jeffersonian democratic republicans and their opponents, especially in New England, took shape in stronger organizations that formed around supporters of John Quincy Adams, heir to the Federalists, and Andrew Jackson, popular hero of the war of 1812. The Adams vs Jackson struggle occupied much of Adams’s presidency, and led to the failure of much of his agenda.

In fact, the first modern national political convention was not organized by either the Democrats or Whigs, as the parties came to be called, but by the splinter Anti-Masonic Party in 1831. Freemasonry, which many of the founders had belonged to, came to be seen as both anti-Christian and elitist, and the party enjoyed modest success among more democratic elements for a short while in the 1830s.

Jackson’s election in 1828 was driven by populist sentiments throughout the country, including distrust of political and financial elites and federal government power. Jackson himself was no great believer in democratic process, however. He used his power in ways that often undermined the rule of law. His successor, Martin Van Buren rode the wave of his popularity as well as employing his own immense political skills, but his presidency foundered on the rock of economic crisis, caused in large part by Jackson’s financial policies.

Hard times from 1837 to the early 1840s led to the success of the Whigs in putting William Henry Harrison, into office, whereupon he died and was succeeded by John Tyler. Harrison’s supporters had outmaneuvered Henry Clay’s to win him the nomination. Tyler, although chosen as vice president to mollify his friend, Clay, did not support many of the Whig party’s policy preferences, and his presidency had little success.

The election of 1844 was a turning point in US history, according to Howe. A dark horse candidate was selected – James K Polk. He narrowly defeated the Whig Henry Clay. Had the close election gone the other way, Howe thinks Clay might have prevented the Civil War. Instead “Little Hickory,” as Polk was known, went on to achieve his major goals: settling the Oregon question with Great Britain, annexing California and New Mexico as well as Texas from the Nueces River to the Rio Grande, lowering the tariff and creating a system of sub-treasuries. In terms of his own program, Howe thinks Polk was our most successful president.

These party and personal struggles revolved mostly around three or four big issues: banking, the tariff, internal improvements and expansion of territory and slavery. Jackson his supporters distrusted banking, especially the Bank of the United States. They wanted hard money, gold and silver, but there was a chronic shortage of these until California gold began to flow after 1850, so paper money was the only real option. Once he vetoed the renewal of the Bank’s charter, Jackson had to rely on private banks to hold and lend federal funds, without the close oversight that the Bank of the United States had provided. Since much of the lending supported the trade in cotton, a worldwide drop in prices triggered panic and the Hard Times that began after Jackson left office.

The debates over the tariff and internal improvements reflected the mostly sectional interests of manufacturing and commerce versus plantation agriculture. By the time Polk succeeded in lowering the tariff, it had ceased to be the divisive issue that almost tore the nation apart during the Nullification Crisis. Debates about internal improvements were more about who should pay than the old disagreement between Hamilton and Jefferson about a commercial versus an agrarian economy. National planning and financing, which Adams had hoped for and that Clay supported, were rejected. Jackson, who felt improvements were a state or private responsibility, vetoed several major proposals, but he allowed others and continued to support the work of the corps of Engineers, begun under Adams.

The expansion and slavery issue was the one that persisted beyond the period of this history and led to the Civil War. It began with the Indian removal crisis. This came to a head under Jackson, who condoned Georgia’s refusal to abide by treaties that allowed the Native Americans to remain in the southeast, while ceding much of their land. White racism was undoubtedly as much a factor as economic interest and helps account for Jackson’s failure to insure that the Creeks and other tribes had adequate provisions for their forced march to Indian Territory. There was nevertheless considerable support for the Native Americans among whites, including the US Supreme Court, whose decisions Jackson ignored. The moral outrage of his opponents became a source of partisan animosity.

Indian removal permitted the spread of cotton into the vast territory of Alabama and Mississippi, creating a renewed demand for slaves, reversing a trend that had begun in the eighteenth century and cementing the southern opposition to any form of emancipation. Texas, which split from Mexico in 1836, became the focal point of southern ambition to expand into new lands suitable for cotton and slavery. Whether to annex Texas thus became a point of contention between north and south. There was support from expansionist northern Democrats, despite their distaste for slavery, enough to help get Polk elected in 1844. Once Texas was added to the union, imperialism focused on Oregon, northern Mexico, especially New Mexico, and California.

The Mexican war was Polk’s ambition, strongly opposed by Whigs and memorably by Thoreau in his “On the duty of civil disobedience.” By deftly acceding to sharing Oregon with Britain, Polk insured that his imperial ambitions could move forward without interference from the greatest imperial power of the time, and he soon devised a pretext for war. It was his fortune and misfortune to have as capable military leaders, two Whig generals, Zachary Taylor and Winfield Scott. They overcame both the geography of Mexico and the stubborn resistance of its people. Mexico was left in such a helpless position militarily and financially, that it had no choice but to cede a vast chunk or its territory to the conquering United States.

Despite his success, Polk chose not to run in 1848, and as he had feared, one of his generals, Zachary Taylor was nominated by the Whigs and won.

The power of the United States was on display in the war, but it stemmed from the peaceful development of revolutionary means of transportation and communication. The building of canals, turnpikes and the railroads made it possible to have strong connections between producers and consumers of agricultural products and manufactured goods despite the distance. Likewise, the development of newspapers, the postal system and, in the 1840s, the telegraph, linked markets, facilitated political organization and brought citizens closer to one another. In this way, doubts that an extensive territory could be governed democratically began to fade. Manufacturing was especially facilitated and the economy began to grow more rapidly. An influx of immigrants both aided development of an urban working class but also deepened social divisions. This was even more rapid after 1848 and the failed revolutions in Europe. The Know Nothing Party would develop in response, and nativism has continued to shape our politics down to the present, with Trump’s Muslim ban and border wall. Then the religious suspicion was directed against Catholicism, now the target is Islam. The ethnic prejudice was against the Irish, now Hispanics.

Howe ends by pointing to a development that had little impact at the time, but which marked the beginning of one of America’s great contribution to human freedom. The 1848 Seneca Falls Convention marked the beginning of more than a century and a half (so far) of advocacy for equal rights for women. Beginning with the words,

“When, in the course of human events, it becomes necessary for one portion of the family of man to assume among the people of the earth a position different from that which they have hitherto occupied, but one to which the laws of nature and of nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes that impel them to such a course.

We hold these truths to be self-evident: that all men and women are created equal; that they are endowed by their Creator with certain inalienable rights; that among these are life, liberty, and the pursuit of happiness; that to secure these rights governments are instituted, deriving their powers from the consent of the governed,”

the convention’s declaration echoed Jefferson, identifying the cause as a continuation of the struggle that began in 1776. While almost nothing tangible resulted at the time, or indeed until much later, aside from important ongoing legal reforms, the idea of completing the work of liberation became a touchstone for causes, most notably abolition of slavery, but also temperance, education reform and more that reflected the millenarian hopes engendered by the Second Great Awakening. In Howe’s view then, the religious revival that began the period gave at the end a vision of a future that reasserted America’s role as a beacon of liberty. It might also be thought of a guide through the darkness that followed as sectional divisions hardened and civil war became essentially unavoidable.

Infant Nation

Empire of Liberty: A History of the Early Republic, 1789-1815, by Gordon S. Wood. Oxford History of the United States. Oxford University Press.

Image: George Washington statue by Horatio Greenough in the National Museum of American History

This volume in the Oxford History of the United States covers the period from the ratification of the Federal Constitution to the end of the War of 1812. Like The Republic for Which It Stands, which I wrote about awhile ago, this is another broad-based account of a crucial period in the development of our nation. The themes are the emergence of a strong central government, the early development of political parties and sectional divisions, the rapid growth of population, and above all, the struggle over the meaning of liberty in a post colonial society.

The major players, of course, are Washington, Adams, Jefferson, Madison, Hamilton, Jay, Marshall and Franklin. Wood, however, makes sure to feature the lesser actors, especially the anti-elitists, who formed the core of the early Jeffersonian Democratic-Republicans, in opposition to the aristocratic tendencies of so many of the founders. The democratic, egalitarian tendencies of the state legislatures were a major concern for the leaders of the new federal government, who found their volatile politics threatening to stable government. There were very different views among even these federalists as to how far the Constitution permitted the Federal government to regulate the laws and policies of individual states.

At the same time these issues were before Americans, in Europe the French Revolution and Napoleonic wars presented difficult challenges in foreign policy. American elites, much like the British elites, were appalled and frightened by the Jacobins and the Reign of Terror. Anti-elitists found the fall of the Ancien Regime inspiring and even adopted the symbols and style of the revolutionary French. The slave revolt in Haiti, likewise stoked fears of uprisings in the slave states, of which there were still many in the north as well as the south.

All these problems led many to doubt whether the new republic could survive without strong measures to keep social order. The Alien and Sedition Acts, passed by the Federalists under John Adams’s administration, were a manifestation of these fears. They deepened the divisions between the Federalists and the emerging Republicans. There was also a split over the financial practices of Alexander Hamilton, who favored legislation to facilitate commerce and banking. Jefferson hated the man and his policies, fearing that they promoted elitism, bordering on aristocracy, and threatened his vision of a nation dominated by independent farmers. The Federalists in turn saw Jefferson as a dangerous Jacobin. Ironically, Jefferson himself was one of the most aristocratic of the founders.

One of the themes that I found most interesting and which was new to me was the challenge faced in establishing the rule of law in the new republic. A key question was what role English Common Law, the complex collection of precedents developed by English judges, would play at both the state and federal level. Many Americans perceived this law as favoring the government, property holders and lawyers over ordinary citizens. In several state legislatures efforts began to develop a comprehensive set of statutes to replace the common law, so that judges would be bound by clear requirements and not by arcane principles known only to themselves. Meanwhile, the federal courts had to be established, and a struggle ensued over what the Congress’s power to impeach judges meant, in particular, whether the notion that they held office on good behavior meant that they could be removed if Congress judged their decisions were wrong. Several attempts were made to remove early judges for such reasons, before the question was settled more or less in favor of judicial independence. In particular the appointment of John Marshall as Chief Justice by the outgoing President, John Adams, a staunch Federalist, gave the Supreme Court an able champion and a great consensus builder. Since he served until 1835, his influence firmly established the judiciary as a coequal branch of government. Among other key decisions, the protection of the rights of contract and of corporations reinforced property rights at a time when popular sentiment was against the large land speculators who were flocking to the western territories. His decisions also established the principle that the federal courts could overturn state and federal laws that conflicted with the Constitution. Wood does an excellent job of explaining these developments.

During this period, slavery was gradually disappearing in the northern states, and even many southerners, notably Jefferson, expressed the view that it ought to eventually end altogether. Unfortunately, this period was only a sort of interlude before the conflict burst forth and became the most divisive issue in the country. The combination of increased cotton production and rapid westward expansion changed the growing slave population in states like Virginia from a potential liability into an asset. More and more men, women and children were sold and shipped west to work the new lands, especially after the war of 1812.

The developing republic also saw the emergence of religious, social and economic patterns that were clearly distinct from both the colonial past and monarchical Europe. Wood devotes several chapters to describing these changes and the men and women who influenced them.

Wood ends his account with the conclusion of the War of 1812, from which the young republic was lucky to escape with no more than the destruction of its barely started capital city. The poor leadership and organization of the army led to several debacles. Only significant victories by naval forces, not at sea, but on the lakes bordering Canada, stopped British invasions. The American victory at New Orleans, after the war had already been settled by treaty, was turned into a major triumph, both for the future President, Andrew Jackson, and for the United States. Wood describes the deepening confidence and sense of standing as a nation among nations that followed. What had begun as a frail experiment in republican government was now secure, confident and aware of its future potential.

Looking for the Logos of Lucre III: a new gospel of wealth?

Winners Take All: The Elite Charade of Changing the World by Anand Giridharadas. Knopf, 2018.

A timely book, especially in light of the recent announcement by Jeff Bezos of Amazon that he plans to raise wages for his lowest paid workers. It is a modern critique of the modern version of the Gospel of Wealth, enunciated by Andrew Carnegie, the steel magnate, in the 1890s. He argued that the rich could best disperse their large fortunes by philanthropy. In his case this included endowing Carnegie Libraries in many cities, along with Carnegie Hall, museums, universities, etc.

Today, we see many high tech and hedge fund billionaires and others among the super rich proposing to tackle poverty, disease, oppression and the like through philanthropic foundations. Giridharadas focuses his book on the people who operate this world of large scale largesse, many of whom come from the financial firms that enable the accumulation of these vast fortunes to begin with. People like Bill Clinton and his Clinton Global Initiative, the president of the Ford Foundation and a young woman from an elite university starting her career with a financial firm that emphasizes “doing well by doing good.” They form what Giridharadas calls “MarketWorld,” an elite network of global activities, ranging from Davos World Economic Forumto TED talks that bring the rich and powerful together with “Thought Leaders.” Together these people push market friendly solutions to global challenges, “win-win” solutions that are intended to substitute for political action.

Giridharadas questions the motivations of these people and in interviews that make up much of the book, shows that many of them have their own doubts. The big question is the same one asked of Carnegie: given that you made your fortune through ruthless business practices, holding wages at near starvation levels, and so on, why not give it back to the people you took advantage of? What good is a library to a man who has to work fourteen hours a day, six days a week to feed his family? Thus as one editorial asked Jeff Bezos: if you want to fight problems like poverty, why not start by paying Amazon workers a living wage? Maybe he got the message.

The problem is, it’s mostly about power. As Thomas Hobbes says in Levithan, Chapter XI, “I put for a general inclination of all mankind a perpetual and restless desire of power after power, that ceaseth only in death.” Wealth is power, and the desire to have the exercise of that power must be nearly irresistible. Carnegie was sure he knew better than his workers what would improve their lives. Likewise, the modern philanthropists of MarketWorld believe that they can do better than governments solving national or global problems. Given our present political situation, they may appear to be right. But consider: the present weakness, indecisiveness and corruption of government is in large part a product of the success of the wealthy in weakening government by starving it of revenue and shifting policy in favor of finance and the rich. They accomplished this by pouring some of their wealth in campaign coffers and lobbying. Reduced social welfare, crumbling infrastructure, unequal and costly education, stagnant minimum wage – all brought about at the behest of the rich and their tax cutting political friends in office. Along with the weakening of organized labor, it’s no wonder there are lots of social problems for MarketWorlders to propose win-win solutions for.

The privatization of education is a dream of the market types, and they are using their influence in government to make it come true. Because young people will be better off, or because it is a gigantic stream of revenue they can capture? What will this do to the democratic idea of public education, the transmission of not just basic skills but of a core of common values deemed essential to good citizenship in a republic? And what about the larger loss of democratic control of the policies and practices that affect our lives? Should plutocrats and their Thought Leader minions decide what the choices will be? Are solutions that are not marketable to be excluded? Look at the problems of delivering goods like healthcare in a for profit environment. Giridharadasand the people he talks to are clearly made uneasy by these questions.

Giridharadas has interesting thoughts on the people we used to call Public Intellectuals versus contemporary Thought Leaders: Public intellectuals, he says tended to focus on those who created the problems they discussed, the looked at issue from a political viewpoint and they often defined problems without speculating on solutions. Many could be described as gadflies or a kind of public conscience. They were generally found in academia, the public press or publishing.

Thought Leaders, Giridharadassays, don’t look at perpetrators, they see problems as personal, arising from individual shortcomings or disabilities, not as a result of public policies. They are expected to have a very big idea and to focus on “actionable solutions,” meaning those that can be incorporated in a business plan. They offer their proposals at TED talks, elite conferences or on the high paid speaker circuit. Their appeal is not to the socially and politically aware public, but to the elite, to whom they offer plans of action that they promise will have large effects and generate profit for the bottom line.

While I still think there are public intellectuals around, I agree that their influence, such as it was, has been overshadowed by these new thinkers, who serve MarketWorld. Political leaders now gravitate in the same direction, and the neglect of the concerns of those who live their lives in the everyday world has led us to the increasingly bitter political situation we find ourselves in.

People want leaders who are accountable to them, even if they don’t always do a good job of holding them to account. Elites who stand above politics, which they can influence with their money and the revolving door jobs they control, have failed to grasp this this. Philanthropy is fine, but when my concerns, interests and dignity are being taken away and I begin to feel more and more powerless, I am not going to feel happier for it. It’s time to reassert the basic notion that we are all in this together. It isn’t “your money,” when it took all of us working to make your success possible. And if your success is founded on decades of change in favor of the fortunate few, it’s even worse that you alone get to decide how to use it. As Giridharadas puts it at the end, “Where do we go from here?…somewhere other than where we have been going, led by people other than the people who have been leading us.”

Rising from the Ashes

Postwar: A History of Europe since 1945 by Tony Judt. Penguin Press, 2005.

I listened to the Audible version. The thing that struck me the most about this history was how different things looked from a European perspective. I’m a baby boomer, who grew up and entered adulthood in the period the book covers. In the United States, the history of postwar was about America and its friendly European allies, aka NATO, facing off against the dreaded countries behind the Iron Curtain, specifically Russia, aka USSR. We were good, believing in liberty and free enterprise; they were bad, being communists. The space race was the big story that captured my imagination, along with the parallel developments in strategic nuclear weapons, missiles, etc. As I became more politically aware, the Civil Rights movement and the War on Poverty also began to concern me, followed by the environment.

Europeans, I learned from Tony Judt’s painstakingly detailed account, had a lot more to worry about and a more complicated relationship to the communist countries, many of whom were of course European themselves. Rebuilding economies, preventing a resurgence of fascism, establishing better social and political relationships and dealing with restive colonial possessions all mattered as much as the menace of communist dictatorship during the period from the end of World War II to the collapse of the Soviet empire. Unlike the United States, where the Communist party was outlawed, Communist parties remained influential in many European countries outside Soviet control.

I will not attempt to summarize. This is a masterful account by a fine historian. I gained a whole new understanding of the complexities of European politics in that time, including the tumultuous late 1960’s, that throws light on what went on in the US in the same period. I am now largely in sympathy with his criticism of students’ and prominent intellectuals’ romance with third world revolutions, which I myself certainly felt in those days, even if I did not go much further than to canvass for Eugene McCarthy.

Some of the best chapters are on the events surrounding the breakup of the Soviet empire and the re-establishment of more or less democratic governments in the former satellite states. Judt gives a clear account of the causes and consequences of the tragedy of Yugoslavia. Likewise his account of how Spain, Portugal and Greece emerged from right wing dictatorships. He also covers the rise of anti-immigrant and racist sentiments, including the persistence of anti-Semitism. He does an excellent job of depicting the enormous diversity of Europe and Europeans, economic, social and cultural. The book makes clear how remarkable the achievement of European economic integration has been, as well as its limitations and the reasons for discontent with many of its features. This historical account makes it much easier for me to understand current events, like Brexit and the rise of ultra-nationalism.

There is much more: an enormous increase in affluence at most levels, changes in everyday domestic life, increasing travel and leisure and developments in popular and high culture. He discusses the changes in education, the rise of the welfare state and its dilemmas, the decline in birth rates and the decreasing influence of religion in many countries.

Overall, this is a great read for anyone wanting to understand more about the continent that gave us much of our American tradition and that constitutes one of our most important partners and rivals in the contemporary world.

Struggling for liberty, post Civil War

The Republic for Which It Stands, The United States during Reconstruction and the Gilded Age, 1865-1896, Oxford History of the United States by Richard White. Oxford University Press, 2017, 968 pages.

I listened to the Audible edition, ably read by Noah Michael Levine. This is another entry in Oxford’s multi-volume history, which includes James McPherson’s excellent Battle Cry of Freedom, The Civil War Era. The author casts the history of the last third of the nineteenth century as a struggle among competing definitions of freedom. He builds much of his narrative around the way in which the ideals articulated by Abraham Lincoln shaped the struggles of the period. Republicans were the party of free labor, seen as the key to every man being able to build and maintain a secure home for his family. Free labor, which was taken to mean freedom of contract between employers and employees, was often invoked to justify government inaction in the face of unfair and exploitative relations. The ideal of the home drove both the efforts to support freed slaves and to acculturate Native Americans to the values and religion of whites, whether they liked it or not. Similarly, the home was man’s castle, but too often, it was the woman’s prison.

In the aftermath of the Civil War, the future of millions of freed slaves was the most obvious problem facing the country. The efforts of the federal government to provide for these people and to protect them from the exploitation and violence they faced in the South were hampered by unwillingness to expropriate the lands of rebels, reluctance to maintain troops in the rebel states, and lack of resources to provide for the largely destitute freedmen. Racism contributed to northern indifference and southern resistance. On the other hand, the Republican Party saw the former slaves as a pool of potential votes. There was some success in the immediate aftermath of the war, but in the end, the “old barons,” the large landholders, were able to reestablish control in most of the South. The desire to put the freedmen to work and end their dependence on government provisions, forced most into labor or tenancy agreements that left them little better off than before emancipation.

Nevertheless they resisted the attempts to reduce them to something like their previous condition, and in some parts of the South, they were able to do so for awhile. As the old political order was reestablished, however, they were met with more and more violent repression. As the last federal troops left, the regime of Jim Crow was firmly established, cemented in place by disastrous Supreme Court rulings that allowed false promises of “separate but equal” to count for “the equal protection of the laws.” Despite the gains of the Civil Rights movement, generations later, the current Black Lives Matter campaign and the resistance it engenders show we remain short of the goal.

The other major issue was the future of the western states and territories, especially in the prairie and Great Plains. The Homestead Act and massive land grants to the railroads were intended to open up these regions to agriculture, as well as linking the Pacific Coast to the rest of the country. In the lands between the Mississippi River and the 100th meridian, this strategy was successful, leading to enormous demographic and economic growth. In the arid regions further west, it largely failed, as did efforts to remove the Plains Indians to reservations without bloodshed. Inconsistent policies and lack of understanding and respect for Native American cultures led to a string of broken treaties, wars and massacres by both sides. Railroads made the slaughter of the bison herds into a profitable business, and in the end the army forced the Indians into small reservations. [Ironically, the famous Buffalo Soldiers, black cavalry units including many Union Civil War veterans, were part of the forces deployed. According to one history I read, they suffered more violence at the hands of white townspeople in the communities they were protecting than from the Native Americans.]

In moving to the Gilded Age, White covers a vast array of developments, including the rapid rise of industry, especially steel and railroads, both for their economic importance and for their large role in the struggle for labor rights. He also details the conflict over monetary policy, especially as it split different interest groups and sections of the country and shaped the national political scene. He describes the rise of the temperance movement and the larger preoccupation with home and morality it was part of. White shows how all these developments were seen by the leading contemporary observers and activists. It is especially interesting to learn how the generation that had supported anti-slavery and free labor tried to understand the new realities that emerged with mass industrial employment, increasing immigration and rising wealth and consumption.

In thinking about all of these questions, it is impossible to miss the parallels to our era. We struggle with questions about rapid social and economic change, labor rights, the role of marriage and the family and immigration among others. One difference is that a populist insurgency has succeeded in electing its candidate President. So far though, there seems to be no stopping the momentum that is taking us back towards the economic inequality of the Gilded Age.

All in all, The Republic for Which It Stands is a detailed political, economic and social history that serves as a very readable (listenable) introduction to the periods it covers. There is a very extensive annotated bibliography. I’d like to try more volumes in this Oxford series.

Looking for the Logos of Lucre II: Bloodsucking Capitalists

Makers and Takers: How Wall Street Destroyed Main Street by Rana Foroohar. Crown Business. New York. 2016.

IMAGE: JP Morgan

Thomas Picketty’s Capital in the Twenty-first Century, depicts the rise of economic inequality in the developed world since the 1970s and warns of the increased political and economic instability this may cause. Rana Froohar’s account of the rise of finance in the United States during the same period shows in more detail how that instability has come about.

The book is billed as being written for the ordinary citizen, not the economically sophisticated, but you will find plenty of terms that are not explicitly defined, especially the bewildering variety of financial instruments – futures, swaps, etc. With that caveat, this is a quite readable book, with plenty of examples and sources to back up her points. What follows are some of the things I took away from my reading. They are not in the order she presents things, but instead in a rough chronology.

To begin with, the slowdown in economic growth and rise in inflation, beginning in the late sixties, set off a search for higher-return investments. Higher returns, though, come with higher risks. Savings and Loan institutions, for instance, had to pay higher rates to attract deposits, but that meant also investing those deposits in less secure assets than home mortgages and car loans. The result was a Savings and Loan crisis (1980-1996) that required a taxpayer bailout of over a hundred billion dollars.

Starting in about the 1980s, tax laws have encouraged borrowing and favored capital gains over earned income. Cuts in top rates also let the upper percentiles of the population accumulate more wealth. Furthermore, economic ideology shifted towards the view that corporations exist only to increase the value of stockholders’ shares as rapidly as possible. “Markets know best” became the stock answer to all questions of economic policy.

Bill Clinton and his Wall Street insider Treasury Secretaries succeeded in changing banking laws to remove the prohibition on commercial banks selling securities as well as making loans. Banks got bigger: some, “too big to fail.” From 1995-2000, the dot com bubble was a further indication of the greater instability in the financial system.

The rapid growth of mortgages on existing houses and the complicated, high risk securities that were based on them led to a still worse crash in 2008. Rather than reining in that kind of speculation, lawmakers and regulators did little to change the incentives that lay behind the debacle or punish those responsible, even when fraud may have occurred.

Our current situation is easy credit, lax regulation and an ideology that favors shareholders over all others in deciding how publicly traded companies are run. Rather than serving as a means to channel money towards productive investments, the financial system is creating more and more debt based on existing assets. Corporate buyouts, often involving huge amounts of borrowing, are one example.

Successful companies like Apple have lots of cash, but it is hoarded, especially in offshore banks, or plowed into financial investments like credit card lending, rather than into new plants, research and development or improving the condition of the workforce by raising wages and benefits. Boards of directors spend trillions on stock buybacks that help mainly wealthy shareholders, and the top executives, who are paid mostly with stock options.

The financial sector of the economy now receives almost a third of all corporate profits, triple its share as of the early 1990s. In return it delivers slow economic growth, flat wages and great risk of another crash. Most people have little or no retirement savings. What they do have is often in insecure, high fee investment funds that enrich their managers at the expense of their clients.

Thus, as Froohar explains, the financial sector, whose function was to enable money to flow into the hands of the productive in exchange for reasonable interest or dividends, has become an end in itself, growing larger at the expense of everyone else’s security and prosperity. The mutually beneficial fiduciary (trust based) relationship between society and bankers has been replaced by almost unrestricted exploitation of the economy and society by bankers. The popular discontent this leads to is evident all around us.

It seems to me, as an ecologist, rather than an economist, that the situation is like a beneficial symbiont mutating into a virulent parasite of its host. By taking more of the host’s resources and giving back less, the parasite can replicate faster, driving out the beneficial variety, but in the long run, the host population will become unstable and decline or even go extinct. That is unless the host evolves to resist the parasite.

The difference between the two scenarios is that while mutation and environmental changes are beyond the control of the players in the evolutionary game, the ethical, social and legal environment of business is subject to democratic process. The question is whether the majority can somehow prevent the wealthy from writing the rules to suit themselves. Donald Trump exploited popular discontent in his successful campaign against a candidate strongly identified with Wall Street. In office, however, his actions have been much more favorable to the extremely rich.

Could a leader like Bernie Sanders or Elizabeth Warren, with new legislators committed to change, begin to turn things around? Will it have to wait for schools of business and economics to begin teaching about fiduciary responsibility to society as a whole, not just stockholders? Like a host lucky enough to mutate so as to resist its new parasite, our society might once again, as in the New Deal era, fight off this disease before depression, violent revolution or fascism set in.

Discordant Visions

The Wizard and the Prophet : Two Remarkable Scientists and their Dueling Visions to Shape Tomorrow’s World by Charles C. Mann. New York : Alfred A. Knopf, 2018.

I listened to the Audible edition, which was read with a great effort to sound dramatic and to pronounce every foreign name or word with a perfect accent, both of which I found distracting.

What is the right term for the series of issues that came to public attention in the last half of the 20th century? That is, those that involved the increasing human population, economic growth and intensive exploitation of the natural world, climate change, pollution, etc? Collectively, they can be characterized as “environmental,” but to say this was the era of environmentalism doesn’t exactly fit. Many of those involved would reject the label, “environmentalist,” seeing themselves as biologists, economists, social scientists, or ecologists in the narrow, scientific sense. The older label, “conservationist,” would fit some, but not all those involved. I don’t have an answer to the problem of saying in a word what this book is about.

Mann tries to sum up the tensions and perplexities of this broad historical phenomenon by following the lives and careers of William Vogt and Norman Borlaug. The first was a conservationist in the old sense, involved with groups like Audubon and author of an influential book in the late 1940s, Road to Survival, a neo-Malthusian polemic on population growth exceeding the carrying capacity of the Earth. He was a major influence on Rachael Carson’s Silent Spring, the book often cited as the major impetus behind Earth Day 1970. The second was a midwestern born and educated plant breeder who developed wheat resistant to stem rust and then added further improvements that greatly increased yields. First in Mexico, then in other developing countries, supported by the Rockefeller Foundation, this work became the basis of the green revolution, and Borlaug received a Nobel prize.

Mann treats these contrasting stories as exemplars of the familiar dilemma: can science and technology allow us to keep expanding human demand, or do we need to reduce demand, primarily by stopping population growth and cutting our per capita consumption? He considers this in relation to four domains that he labels earth, air, fire and water, that is, food and agriculture, climate change, energy generation and water supply. For each he describes the “wizard,” approach – Borlaug – and the “prophet,” approach – Vogt. He takes us through technological solutions being developed by modern day wizards, and then tells us the views of modern day prophets, who say these solutions won’t work and who propose “greener,” more “sustainable” solutions of their own. At the end, he attempts a synthesis, but it is not clear whether there is a way to reconcile such starkly contrasted views. What I found interesting was not so much the contrast as the similarity between their conceptions of the way through the difficulties, or even catastrophes, they envisioned. Both saw the critical decisions as coming from the top, through national or international governing bodies, staffed by experts, although the experts in the two cases would be applying very different principles.

The trouble with this is that such solutions quickly lose sight of human values like equity and freedom. The green revolution greatly increased food supplies, but also largely destroyed small farmers’ lives and led to the growth of the developing world’s mega cities, with their sprawling shanty towns. Attempts to rein in growth often seem to place the heaviest burdens on the poorest people, while protecting the lifestyles of the already well off. At best, affluent folk get a steady bombardment of guilt-inducing environmental propaganda, along with promotions for exotic ecotourism destinations.

Economic liberalism and the global market economy have no use for restraint, so if there are limits to growth, it’s hard to see how the free market society can avoid hitting up against them. If there aren’t any limits, as many still insist, at least in the immediate future, does that mean we should continue to allow things to develop? In an earlier post, Climate Change, Equity and Security, I considered how a sustainable future might be possible, if more attention were given to equity in development, through the imposition of clear and simple limits (on speed, on emissions, etc.) to restrain the growth of inequity and waste, while leaving room for individual freedom and innovation. Likewise, efforts to constrain the growth of economic inequality could also ease some of the current threats to the global environment. Poverty seems to me to be a major driver of population growth, because it delays the demographic transition that rich countries have gone through.

People certainly need the vision, knowledge and advice of scientists like Borlaug and Vogt, but I’m not sure that they alone can offer solutions to the complicated collection of problems that result from human flourishing on Earth. The economic miracle of the green revolution, coupled with humanity’s incredible endurance, has enabled us to escape the catastrophe that Vogt foresaw, but it seems very clear to me that sooner or later we will exhaust nature’s resilience and human patience. Whether it is grain, meat, cars or human souls, more can’t always be better. We need to think more deeply about what we really need from the Earth and how, as free people, we can sustain our life together.

Despite the limitations of his either/or framework, Mann makes the stories of these two men interesting enough for a good read. You can enjoy those parts of the book, and skip the earth, air, fire and water, if you like.

Global Voyager

Maya Jasanoff. Dawn Watch. Joseph Conrad in a Global World. Penguin Press. 2017.

Jasanoff’s biography is both an appraisal of Conrad’s career as an author and the influences on his life and work of the rapid global expansion of commerce and imperial ambition in the second half of the nineteenth century. She describes his childhood in partitioned and occupied Poland, where his father was a idealistic revolutionary, exiled for much of his life. Conrad was inspired to go to sea at age sixteen after reading, among other works, the seafaring novels of James Fenimore Cooper, which I did not realize the author of Leatherstocking Tales had written. He eventually made his way to England, at that time the country most open to expatriates and the greatest maritime power.

Rising through the ranks of the merchant navy to become a licensed master, he voyaged across the globe, but mostly to Australia and Southeast Asia, mostly on sailing ships or the lesser steamers, rarely having the opportunity to serve on the better classes of fast passenger ships. When he began to write and publish his own stories, they were set in the locales familiar to him, aboard ships at sea or in the ports and backwater towns and villages of the great Asian archipelago. He focused on sailors and on the various exiles, dreamers of wealth or those escaping the past, who found their way into the remote places where they encountered indigenous rulers and other adventurers in constant conflict, much of it driven by the outside forces of expanding trade and European imperialism. His one trip on the Congo provided the framework for his most famous and controversial work, The Heart of Darkness. There he saw firsthand how the unbridled force of European greed brought out the savage potential of nearly everyone who became involved in the enterprise.

Conrad did not like to be thought of as a writer of sea stories, although he certainly wrote vivid and hair raising tales of the struggles of ships and crews, Typhoon being one of my personal favorites. He thought of himself as writing about the struggles of human beings, mostly, but not exclusively, men, caught up in the web of impersonal forces, both natural and societal that he saw driving the history of his times: oppression and the revolutionary impulse, personal ambition and political intrigue and the “material interests,” which he associated most powerfully with the United States.

Jasanoff does an excellent job of drawing out the threads that connect Conrad to our own day, arguing that more than any other author of his time, he saw and made his readers see the historical forces at work that we would now call “globalization.” Much has changed, as she is careful to describe from personal experience, both in material circumstances and our perspectives, but the seeds were present and can be perceived clearly in Conrad’s work. She herself, to gain first hand experience, made a river journey down the Congo, following the route of Conrad and his fictional Captain Marlowe, but she saw none of the darkness that they did, only poor but very enterprising people, making their way in a complex world, where bushmeat sellers from villages of bamboo houses buy toothpaste and batteries and watch satellite television showing European football matches. Some things she says, do not change much: the camaraderie of a long sea voyage (for her, on a giant container ship, following the long established route from Hong Kong to England) and the ravishing beauty of the dawn over a smooth sea.

Jasanoff sees Conrad as deeply pessimistic about human beings, carried along by winds and currents of history. Although we can master the literal forces of nature by our machines, we unleash consequences we cannot control, and the forces within ourselves are even less manageable. But, she says, Conrad does show us those times when however precariously, we can make choices that alter the course of ours and others’ lives. I find Conrad himself a clear case in point: in choosing to go to sea, the Polish boy, Konrad Korzeniowski became Joseph Conrad, master mariner and one of the greatest English novelists.