‘Change, but no progress’
Highly recommend taking a look at George Packer’s piece about inequality and the social contract in Foreign Affairs. It’s free, but you have to register to see it. Worthwhile. I think I might have linked to this here before, but if so, it’s worth a second look. Excerpts:
The Iraq war was a kind of stress test applied to the American body politic. And every major system and organ failed the test: the executive and legislative branches, the military, the intelligence world, the for-profits, the nonprofits, the media. It turned out that we were not in good shape at all — without even realizing it. Americans just hadn’t tried anything this hard in around half a century. It is easy, and completely justified, to blame certain individuals for the Iraq tragedy. But over the years, I’ve become more concerned with failures that went beyond individuals, and beyond Iraq — concerned with the growing arteriosclerosis of American institutions. Iraq was not an exceptional case. It was a vivid symptom of a long-term trend, one that worsens year by year. The same ailments that led to the disastrous occupation were on full display in Washington this past summer, during the debt-ceiling debacle: ideological rigidity bordering on fanaticism, an indifference to facts, an inability to think beyond the short term, the dissolution of national interest into partisan advantage.
Packer invites his readers to compare their lives today with that of Americans in 1978. Things were far crappier then in many respects, he admits. “By contemporary standards, life in 1978 was inconvenient, constrained, and ugly,” he concedes, and none of us would willingly return to that year. And yet, for all the stagnation, Packer argues, things were better in an important way. American institutions were still fairly functional:
We can upgrade our iPhones, but we can’t fix our roads and bridges. We invented broadband, but we can’t extend it to 35 percent of the public. We can get 300 television channels on the iPad, but in the past decade 20 newspapers closed down all their foreign bureaus. We have touch-screen voting machines, but last year just 40 percent of registered voters turned out, and our political system is more polarized, more choked with its own bile, than at any time since the Civil War. There is nothing today like the personal destruction of the McCarthy era or the street fights of the 1960s. But in those periods, institutional forces still existed in politics, business, and the media that could hold the center together. It used to be called the establishment, and it no longer exists. Solving fundamental problems with a can-do practicality — the very thing the world used to associate with America, and that redeemed us from our vulgarity and arrogance — now seems beyond our reach.
Packer goes on to argue that it was in or around 1978 that the postwar consensus arrangement broke down amid the pessimism and frustration of the era:
What was that arrangement? It is sometimes called “the mixed economy”; the term I prefer is “middle-class democracy.” It was an unwritten social contract among labor, business, and government — between the elites and the masses. It guaranteed that the benefits of the economic growth following World War II were distributed more widely, and with more shared prosperity, than at any time in human history. In the 1970s, corporate executives earned 40 times as much as their lowest-paid employees. (By 2007, the ratio was over 400 to 1.) Labor law and government policy kept the balance of power between workers and owners on an even keel, leading to a virtuous circle of higher wages and more economic stimulus. The tax code restricted the amount of wealth that could be accumulated in private hands and passed on from one generation to the next, thereby preventing the formation of an inherited plutocracy. The regulatory agencies were strong enough to prevent the kind of speculative bubbles that now occur every five years or so: between the Great Depression and the Reagan era there was not a single systemwide financial crisis, which is why recessions during those decades were far milder than they have since become. Commercial banking was a stable, boring business. (In movies from the 1940s and 1950s, bankers are dull, solid pillars of the community.) Investment banking, cordoned off by the iron wall of the Glass-Steagall Act, was a closed world of private partnerships in which rich men carefully weighed their risks because they were playing with their own money. Partly as a result of this shared prosperity, political participation reached an all-time high during the postwar years (with the exception of those, such as black Americans in the South, who were still denied access to the ballot box).
At the same time, the country’s elites were playing a role that today is almost unrecognizable. They actually saw themselves as custodians of national institutions and interests. The heads of banks, corporations, universities, law firms, foundations, and media companies were neither more nor less venal, meretricious, and greedy than their counterparts today. But they rose to the top in a culture that put a brake on these traits and certainly did not glorify them.
I can’t do justice to the scope and insights of the article by quoting it here selectively, so I hope you’ll read it. Packer puts his finger on the unintended consequences of popular cultural upheaval from both the left and the right that undermined and even destroyed the authority of traditional elites. It had some good effects. But America’s post-2008 economic crash reveals the down side:
This is a story about the perverse effects of democratization. Getting rid of elites, or watching them surrender their moral authority, did not necessarily empower ordinary people. Once Walter Reuther of the United Auto Workers and Walter Wriston of Citicorp stopped sitting together on Commissions to Make the World a Better Place and started paying lobbyists to fight for their separate interests in Congress, the balance of power tilted heavily toward business. Thirty years later, who has done better by the government — the United Auto Workers or Citicorp?
Packer is careful not to blame the American public for “false consciousness” — that is, voting against their own interests by shifting to the Republicans and rejecting Jimmy Carter and the sclerotic Democratic Party, and the welfare state they represented. People really were sick and tired of it. (An aside: my wife and I were in the waiting room of the Ford dealership in my hometown, waiting for our minivan to be fixed, when we stopped to look at a display case of Ford memorabilia. There was a button, if memory serves, from the late ’70s, advertising a great Ford incentive to buyers: finance your new Ford at a low, low 14 percent! That was 1978.) More:
But that archetypal 1978 couple with the AMC Pacer was not voting to see its share of the economic pie drastically reduced over the next 30 years. They were not fed up with how little of the national income went to the top one percent or how unfairly progressive the tax code was. They did not want to dismantle government programs such as Social Security and Medicare, which had brought economic security to the middle class. They were not voting to weaken government itself, as long as it defended their interests. But for the next three decades, the dominant political faction pursued these goals as though they were what most Americans wanted. Organized money and the conservative movement seized that moment back in 1978 to begin a massive, generation-long transfer of wealth to the richest Americans. The transfer continued in good economic times and bad, under Democratic presidents and Republican, when Democrats controlled Congress and when Republicans did.
This is a key point, and one that resonates with me more than any of it, because it is part of the cultural revolution that has taken place too. And it comes from the left as well as the right. The loss of a sense of shame has — surprise! — created shamelessness:
But even more fundamental than public policy is the long-term transformation of the manners and morals of American elites — what they became willing to do that they would not have done, or even thought about doing, before. Political changes precipitated, and in turn were aided by, deeper changes in norms of responsibility and self-restraint. In 1978, it might have been economically feasible and perfectly legal for an executive to award himself a multimillion-dollar bonus while shedding 40 percent of his work force and requiring the survivors to take annual furloughs without pay. But no executive would have wanted the shame and outrage that would have followed — any more than an executive today would want to be quoted using a racial slur or photographed with a paid escort. These days, it is hard to open a newspaper without reading stories about grotesque overcompensation at the top and widespread hardship below. Getting rid of a taboo is easier than establishing one, and once a prohibition erodes, it can never be restored in quite the same way. As Leo Tolstoy wrote, “There are no conditions of life to which a man cannot get accustomed, especially if he sees them accepted by everyone around him.”
Read the whole thing. Really, it’s worth registering.
The Iraq war was a kind of stress test applied to the American body politic. And every major system and organ failed the test: the executive and legislative branches, the military, the intelligence world, the for-profits, the nonprofits, the media. It turned out that we were not in good shape at all — without even realizing it.
This statement, along with the rest of the vast scope of the article, is one of the reasons I think that Foreign Affairs is one of America’s finest journals. I really feel that the Iraq war– particularly the leadup to it– demonstrated a sort of civic breakdown.
The press wanted to be on the administration’s good side and was looking forward to some good stories, so the reporters by and large collaborated with the propaganda campaign (Judy Miller at the NYT being the quintessential example of this collaboration). The pundits wanted to scratch their chins and declare how the “serious” thing to do was go into Iraq, not like all those dirty hippies like Charles Pierce and Paul Krugman who dared point out that this was a bad idea. The legislative branch was looking for an opportunity to “look tough,” so they gave the president a blank check. The anti-war activist “establishment” was looking for an opportunity to have some big marches rather than engage in a useful kind of protest (note the contrast to OWS). Voters… well, voters wanted tax cuts and were willing to support whatever idiotic idea the administration had (invading Iraq, torture, etc.) if it would ensure that supporting the administration made them seem like they were “very serious people” that wanted to double down on their mistaken votes for Bush. Ironically, so many of those who went along with the whole mess are still taken seriously today: David Brooks and Tom Friedman are still on the NYT Op-Ed page. Jeffrey Goldberg of The New Republic still gets plenty of assignments. On the other hand, anti-Iraq war Phil Donahue, host of MSNBC’s highest rated show, lost his show and hasn’t been seen since. Charles Pierce was kicked off the LA Times Op-Ed page in favor of Jonah Goldberg and only recently reappeared as a blogger for Esquire.
Our public institutions failed. What was even worse, was the reaction to the failure– the reaction was for these institutions to apologize for themselves saying, “yes, we were wrong, but we were wrong in the right way, in the same way everyone else was wrong, so if you look at it that way, we didn’t make any mistakes at all!”
Life was great when 70% of the world was behind the bars of communist and socialist governments. The U.S. could pursue uncompetitive policies and they only had to worry about the Germans and the Japanese. Ah, the good old days!
Great essay Rod.
Contemporary “conservatives” extol Adam Smith’s “Invisible Hand” of self-interest in animating capitalism. But they neglect the Smith’s other invisible hand of Moral Sentiments required to sustain the Capitalist Model:
http://en.wikipedia.org/wiki/The_Theory_of_Moral_Sentiments
According to Smith, (and Packer), Crony Capitalism is the sound of one hand clapping. Conservatives though, hear the illusion of thunderous applause even when it claps against today’s Moral Nothing, while Liberals think that waving the Hand of Self-Interest at all is evil.
Of course the current Politico-Crony Construct is unsustainable. But the Elites that run the Leviathan Enterprise would rather play musical chairs with America. I.e., they’ll suck out as much lucre as they can from the System before its inevitable collapse. And when the music stops and the implosion does occur, they’ll walk away rich like mobsters existing a business bust-out that they themselves engineered.
But there was more corpratism then than there is now. Perhaps corpratism is less dangerous when strong cultural restraints are present. Also, corpratism (like attempts to plan an economy) loses effectiveness in relation to the growth and diversification of the number of goods and services present in an economy.
One is only baffled if one wishes to dissociate mind over manners and elevate progress to a historicist-imminentist religion (in protest against waiting patiently for God to effect change via a supernatural commercium of eternal rewards).
Proof?
Consider this recent statement of Rev Dr Peter Mullen, chaplain to six Livery Companies(*) of the City of London and substitute your own place of allegiance for proper affect:
“The [__] is godless. But then it is unthinkable that the [__] could build a common [__]an house while ignoring [__]’s identity. [__] is a historical, cultural and moral identity before it is a geographic, economic or political reality. It is an identity built on a set of values which Christianity played a part in moulding.”
http://blogs.telegraph.co.uk/news/petermullen/100121010/if-christianity-goes-so-does-europe/
__
* modern-day iterations of guilds, where the ccontrast in mottos from the earliest “Honor Deo”
http://en.wikipedia.org/wiki/Worshipful_Company_of_Mercers
to “Let’s Make Money”
http://en.wikipedia.org/wiki/Worshipful_Company_of_International_Bankers
of the latest tells you all you need to know about the corruption in comprehension of “free” enterprise by mercantilist practitioners in the intervening years. FYI to grasp the import of this gross misunderstanding fellow readers may benefit from the lessons of “The Ethics of Money Production” which tracks roughly the same time period of gradual acceptance of elite monetary debasement — considered deeply sinful by contemporary ecclesiastics such as Oresme — as the new normal)
One is only baffled if one wishes to dissociate mind over manners and elevate progress to a historicist-imminentist religion (in protest against waiting patiently for God to effect change via a supernatural commercium of eternal rewards).
Proof?
Consider this recent statement of Rev Dr Peter Mullen, chaplain to six Livery Companies(*) of the City of London and substitute your own place of allegiance for proper affect:
“The [__] is godless. But then it is unthinkable that the [__] could build a common [__]an house while ignoring [__]’s identity. [__] is a historical, cultural and moral identity before it is a geographic, economic or political reality. It is an identity built on a set of values which Christianity played a part in moulding.”
http://blogs.telegraph.co.uk/news/petermullen/100121010/if-christianity-goes-so-does-europe/
__
* modern-day iterations of guilds, where the ccontrast in mottos from the earliest “Honor Deo”
http://en.wikipedia.org/wiki/Worshipful_Company_of_Mercers
to “Let’s Make Money”
http://en.wikipedia.org/wiki/Worshipful_Company_of_International_Bankers
of the latest tells you all you need to know about the corruption in comprehension of “free” enterprise by mercantilist practitioners in the intervening years. FYI to grasp the import of this gross misunderstanding fellow readers may benefit from the lessons of “The Ethics of Money Production” which tracks roughly the same time period of gradual acceptance of elite monetary debasement — considered deeply sinful by contemporary ecclesiastics such as Oresme — as the new normal)
with Latin honor deo meaning something akin to the later adopted Jesuit corps d’esprit, AMDG ad majorem Dei gloriam ( to the greater glory of God)
glitch on first post, can be purged!
IMHO change-regress (ie decline & failure) must be philosophically accepted for life to be based in reality, no? FPR echoes similar meme riffing on an article published in the spring
“…a great deal depends on whether we do this in a mode of ignorance/prudence which tends towards slow muddling along, always aware of the risks of insane attempts of paradise-making, or whether we choose the anxious sentimentalism of mastery. Having very little control over fate, we can govern our own character and choose, in great hope, the limits of prudence, working faithfully to reduce needless suffering, but avoiding the madness and smallness of soul accompanying a choice of utter mastery.”
it is this very idea of “progress” that is so toxic
missing citation URL
http://www.frontporchrepublic.com/2011/11/small-souled-masters-of-the-universe/
Speaking for myself, I’d love to return to 1978. I was 9 years old, and did not have a care in the world.
While I usually agree with you, Rod, I don’t quite see what you find worthy in Packer’s article. It might have been excusable had it been written by an 18 year old, but anyone who was actually around in 1978 (and I was only 9!) knows that much of what he says simply isn’t true.
His basic thesis is flawed:
Perhaps he forgets that in the late 1970s the recommended “solution” to climate change was to melt the ice caps. Income and wage stagnation are irrelevant (as everyone admits when they realize they would not trade their 2011 levels of consumption for a 1978 income). And deteriorating infrastructure and declining news standards? That’s just clueless, as anyone who road on the highways or watched TV news in the 1970s should recognize.
Look at his silly examples: “passenger trains between Chicago and New York run barely faster than they did in 1950, and the country no longer seems capable, at least politically, of building faster ones.” Um, yeah, Mr. Packer, the reason is because people can now afford to fly (which is faster) cheaper than they could take a train in the 1950s.
What was voter turnout in 1978? 37.2 percent.
So the political system is more polarized now than after the Nixon debacle? Sure it is. And can anyone say, with a straight face, that Obama has been more poorly treated by the Right than Reagan was treated by the Left?
This is simply laughable. Packer seems to forget that the middle-class was much smaller than it was now and didn’t include nearly as many minorities. (The reality for most was more “Good Times” than “The Jeffersons”.)
As has been pointed out numerous times, corporate executives in the 1970s took their compensation in other forms. And inequality was more in your face. Remember the “key to the executive washroom”? Executive dining halls?
I could go on and on but I think it’s easy to see that Packer simply doesn’t know what he’s talking about.
Plus 1978 was in the 1976-1984 timeframe that marks the contemporary music’s zenith.
Mr. Carter, great line! After all who would revert himself to a 1978 personal income level just to spite the top 1% (those greedy jerks)?
Did anyone else notice Mr. Packer’s piece is essentially a book review for Jacob Hacker and Paul Pierson’s, Winner-Take-All Politics? Too bad, because it started out as an interesting discursion on collapsed institutional morality, but ended up a tired rehash of Progressive Party talking points.
Mr. Packer begins by describing how the middle class has made undeniable material progress since 1978 (no more AMC Pacers or coffee from a can). Great! Material progress amidst spiritual regression is an old and fascinating theme. Packer even hinted that our broken politics is an unintended consquence of early 1970′s political reforms. Great! Another old and fascinating theme: well-intentioned reforms worsening what they try to correct.
But then he runs out of ideas. Even as he concedes that, materially, the middle class is better off than before, he falls back on the old Marxist trope about the inequality of materiel distribution causing all the ills of society. A true Marxist would understand that the middle-class is as despicable as the aristocracy (Google Kulak), but we don’t take it that far, no, not in America.
I would love to see an analysis to the effect that extreme concentration of wealth and power is the inevitable result of societal levelling – that is, when layers of authority and responsibility are eradicated in the name of personal liberty. One example: after the destruction of the aristocracy in the French Revolution came the inevitable dictatorship of the Emperor Napolean.
To solve this problem, the Catholic Church calls on the principle of subsidiarity. And it would seem we have a good start in America, at least on paper, with our Township/City/County/State/Federal governmental structure. Yet, as soon as this is mentioned, we are bombarded with examples of local abuses of power. Living in the old confederacy, Rod, you know what I mean. But before we take that as the final word, let’s look into history for examples of the tragedies that come about when local authorities lose too much power relative to their imperial counterparts.
Joe Packer makes a point about voter turnout.
But not about executive compensation. Executives did receive compensation in ways other than salaries back in the 70s. They still do today. BOTH direct and indirect compensation is way, way up.
Giving up the executive washroom was a small price to pay in exchange for exponentially higher compensation.
Ooops. I meant Joe Carter.
I would object to the notion that the military failed in Iraq. The military acheived its objective (capture Baghdad; overthrow the Hussein regime) with a minimum of difficulty.
The US won the war handily– but we totally botched the peace. And that was the fault of our civilian leadership who played “Three Stooges” with a volatile nation’s fate, taking lemons and turning them into sewage.