Otto von Bismark, the 19th century Iron Chancellor and architect of modern Germany, once remarked that “If you like law and sausages, you shouldn’t watch either being made.” One could observe that this is not quite correct; the process of stuffing offal into sausage skins is far less disgusting than that of stuffing bribes into legislators. Still, statute law will always be a matter of negotiations between those who have an interest in the bill at issue. Thus it has always been, and thus it will always be. In itself, this is not too bad; everybody should have a voice in drafting legislation, and compromise, while cumbersome, is likely to be better on the whole.

Democracy is supposed to solve the problem by giving everyone a voice in the process. And this would certainly be true, if we were speaking of a local assembly. But in a nation of 300 million plus, it can’t be true; the very size limits the number of voices that can be heard. Hence, a “place at the table” becomes a scarce commodity, and like all scarce commodities it has a market price, a price that prices the public out of the process; as the nation grows, the size of the legislative “table” shrinks; there aren’t enough places to go around, and the form of democracy is easily converted into the substance of oligarchy. But even at the local level, government must be guided by some notion of the common good, even when the parties are seeking their own interests. But as the cost of participation rises, this becomes less possible.

Think on this: A congressional race can easily cost $1,000,000 but the congressman is in office for only 730 days. That means he must raise $1,370 for each and every day he is in office, weekends, Christmas, Easter, and Flag Day included. And now consider that this office represents but 1/435th of ½ of 1/3rd of the Federal power. When you do math, enormous sums of money are involved, and there are limited sources for that kind of money. The money appears as a “donation,” but it is in fact a purchase, an investment, and the investors expect a decent return on their money. Or rather, an indecent return.

What kind of returns? Well, when the prize is the public purse, the rewards are unlimited, far higher than one could possibly achieve from making things or providing a service. Thus we read with no surprise Gretchen Morgenson’s column in the New York Times that the bill to extend unemployment benefits for another 20 weeks also includes a $33 billion dollar gift to businesses, especially the home builders, whose overbuilding is part and parcel of the current crises. These businesses will be allowed to offset their 2008/9 losses against profits going back to 2004, and hence receive huge refund checks from the Treasury. According to Ms. Morgenson, Pulte homes will reap $450 million, Hovanian $250 million, Standard Pacific $80 million, while a Beazar Homes will get a measly $50 million.

How much did it cost them to get these rewards? Gretchen counts their costs:

Securing this tax break was a top priority for home builders, lobbying records show. The Center for Responsive Politics reports that through Oct. 26 of this year, home builders paid $6 million to their lobbyists. Last year, the industry spent $8.2 million lobbying. Much of this year’s lobbying expenditures were focused on arguing for the tax loss carry-forward, documents show. Among individual companies, Lennar spent $240,000 lobbying while companies affiliated with Hovnanian Enterprises spent $222,000. Pulte Homes spent $210,000 this year. That’s some return on investment. After spending its $210,000, Pulte will receive $450 million in refunds. And Hovnanian, after spending its $222,000, will get as much as $275 million.

Again, none of this surprises us, no matter how much it may sicken us. But the raid on the public purse is not half as problematic as the disappearance of the common good in government. The whole purpose of government is to look towards the common good, however imperfectly; when governments lose this function, they gradually cease to function.

I had some hopes for Obama. Not so much for his politics—certainly not that—but for his fund-raising. He was able to raise enough on-line to make a credible candidacy. He was thus in a position to establish an independent force in American politics. But in the end, he accepted more corporate money than any of his rivals. In that success was his failure.

Obama will fail. Indeed, he has already failed. I believe he failed before he started, as soon as he became dependent on big money. The biggest sign of that failure was his appointment of Timothy Geithner to the Treasury. Geithner was President of the New York Federal Reserve Bank, and the person more than any other responsible for the AIG bailout, which was shameful. His is Big Money’s man in Washington, one of many such men.

The Health Care Bill is a perfect example of the process. Starting with decent motives, whether one agrees with them or not, it becomes merely a series of subsidies to established monopolies. Big Pharma is on board, of course. In exchange for removing any threat of public control of prices, they voluntarily agreed to lower their prices by $80 billion over ten years. But first they raised the prices by 9%. Obama was totally out-maneuvered by them. They will end up with a huge public subsidy. The AMA, the AARP, and most other big players are on board, all for the same reasons. The only holdout is the insurance industry. They will get on board once the public option disappears; they like the prospect of 30 million new customers supported by the government.

But the bill will not fix any of the problems because it does not address them. It is the current system, only more so, and with more public money going to an elite group. It will hasten the collapse of the health system. The same failures are evident in the bailouts and in the stimulus package. Even the administration’s best impulses make them look ridiculous, as with the effort to make the spending transparent by posting it on a website, along with bogus estimates of the number of jobs created.

There is no chance, I suspect, that things will get better in time for the 2010 elections, and by 2012 the Republican Party will give us another Bush, or Palin, or Cheney to rule. But none of them will rule anymore than Obama does. They will campaign to run the country, only to find upon victory that the country runs them, or rather that small slice of the country that controls the political funding. While this is profitable in the short run, it is disaster in the long, and the long is about to overtake the short; without some notion of the common good, the government collapses.

Von Bismark understood how laws were made, but being a good aristocrat, he retained some notions of the common good. After the revolutions of 1848, he understood that new terms would have to be negotiated between the classes, if Germany were to survive. Even though he was a monarchist and no supporter of democracy, nevertheless he accomplished great social reforms in the 1880’s, reforms that included health insurance, Accident insurance, and old-age pensions. In doing so, he laid the foundations of the modern European states. He gave the powers their due, simply because they were powerful. But for all his “blood and iron” talk, he did have a notion of the common good. He could actually govern.

We cannot. We have no real place at the table, a table that is itself shrinking, even as our debts grow. If you want to see the future of America, look at Europe of the 1920’s and 30’s.

26 COMMENTS

  1. I am often reminded that Rome abandoned democratic government and got themselves an Emperor. Most historians agree that this occurred because Rome controlled so much territory and so many people that the republic could not manage it – hence the need for an Emperor. For awhile that worked – they were lucky and had a string of competent emperors. But we all know how that ended up.

    Perhaps government by of and for thepeople can only be successful on a small scale?

  2. And this is why I think much of the FPR “project” as it were is downright quixotic. The ends sought are only possible through means which are completely antithetical to the ends in question. In the name of small government, we’re going to… dispense with representative government and reinstitute aristocratic rule?

    Don’t get me wrong: I won’t actually have much of a problem with that. I mean, it’s what we’ve got anyways, only now we have to pay lip service to the Mob and its interests, which takes away most of the benefits of aristocracy or oligarchy. But I can go this direction because I don’t think democracy is particularly important. Yet the site is swamped with talk of subsidiarity and restoration of individual freedoms and votes mattering, etc.

    Thus, if I were to sum up what seems to be the FPR project, I’d get the following:
    – Promote representative government by diluting representation.
    – Promote small-scale agriculture by eliminating the infrastructure which makes it possible.
    – Promote individual liberty by eliminating it for those who don’t want it (i.e., that choice shouldn’t be an option).
    – Promote organic communities by eliminating diversity and dissent.
    – Promote limited government by legislation and constitutional maneuvering.

    Does any one else see this? I can’t be the only one.

  3. Local control is a messy, messy business, as anyone in local government or who has gone to a public meeting on a contentious issue can attest. It seems that most of the people that show up to these gatherings are ill-informed, pay no attention to what is said, and feel very strongly about something utterly unrelated to the business at hand and who are quite happy to exceed their allotted time talking about it. But my observation of the process is that there is something cathartic about these meetings that allows people to have a stake in the matter and know that their voice is heard. Just being able to say their piece in a public forum and get their name inscribed in the official minutes seems to have some calming influence once out of the meeting and back in the community. To judge from the meetings themselves, it is a wonder that anything ever gets done or decided. But also, to judge from the meetings themselves, it is a wonder that most of the time we live peaceably together in the same community and generally get along.

    It may seem a waste of time to go to those local public meetings where a matter of local importance is being debated, but I suspect that the local governance we can still participate in functions as something of a safety valve against national frustration. What will happen when the measure of local control is so circumscribed as to become meaningless? I think Prof. Deneen is onto something in the questions he asks at the end of this post.

  4. It would seem to be a lot healthier for societies to recognize that private capitalism is ambivalent, that it offers both benefits and disbenefits. One of the factors causing the “capture of government” disbenefit by campaign contributions and under-the-table bribes is the pressure to remain competitive and stay in business. To do this obtaining monopolies, subsidies, tax breaks and tariff barriers from government all seems to be par for the course and we would be naïve to believe that businesses can ever be made virtuous enough not to seek them. However, whilst the issue of campaign contributions can be resolved by such methods as the use of blind trusts and public funding for electorate vouchers to be spent on the politician, or party, of your choice something different is required for dealing with under-the-table bribes from businesses. This something has to be increased transparency since this is a good disinfectant against wrong doing. The Sarbanes-Oxley Act requires that the Chief Executive Office and the Chief Financial Officer now sign company financial reports under threat of prosecution for failing to ensure legal compliance in the company’s money making activities. Additional transparency can be obtained with a “control lock” placed on the business by company workers obtaining evenly split control of the company between private capital and worker capital. Worker capital through trust control can then by law insist on their own independent auditors approving the financial report prior to the CEO and CFO signing that report. Indeed auditors representing non-worker private investors could also be required by law to have their own private audit prior to report signing. Of course, such audits cost money and one of the complaints against the Sarbanes-Oxley Act is that it has driven company registration to places like the UK where financial reporting is believed to be subject to a lighter touch by the financial authorities. After the Sub-Prime Financial Crash the reputation for honesty if not wisdom of American businessmen is so low in the world that to encourage global investment you might think the Sarbanes-Oxley Act worth its weight in gold! Undoubtedly there will be pressure in the coming years to make it less onerous just as banking regulation was weakened but the more inventive society is in developing and implementing transparency check mechanisms the better. If this means a company has to be registered in the United States to do business in the country then so be it. We can no longer afford the light touch with American capitalism, it is under-mining the country.

  5. Weasly Pilgrim, as one who has in the past attended local government meetings in some professional capacity, I can completely attest to this. The few people who do bother to show up tend to be massively ignorant and frequently downright uneducated. I wouldn’t want most of these people within a hundred paces of any decision-making process with any significance.

    It’s also worth pointing out that local politics in the United States has had a reputation for unbelievable corruption and massive incompetence for centuries, a reputation which is largely deserved. Yes, everyone knows there’s too much money in play in federal politics, and no one really disputes the idea that the political branches are largely captured by monied interests. But this pales in comparison to the outright graft that has gone on and to some extent continues apace in many local governments. And yes, everyone knows about Tammany Hall and Chicago continues to be notoriously corrupt.

    But it should not be forgotten that some of the more spectacular examples of local corruption are actually to be found in the plains states. The Dillon Rule, which construes municipal governments as creatures of state government such that their powers are limited to those expressly granted by their municipal charters, was announced by John Forrest Dillon on the Iowa Supreme Court in 1868. The rule was motivated by the truly ghastly corruption and fiscal irresponsibility exhibited by Iowan municipal officials as the railroads expanded across the West. Those who view local government as some kind of panacea, as a bulwark of virtue against the corruption of Washington, are forgetting their history.

    Furthermore, the “corruption” we see on the federal level, while unpleasant, is of a different kind from most corruption on local levels. Yes, federal legislators are influenced by campaign contributions. But in most cases, that money does not actually wind up in the legislator’s pocket. The few cases that it does tend to provoke scandal, i.e. William Jefferson, Charlie Rangel, and Ted Stevens. They don’t tend to involve envelopes full of cash. Which is what does happen on the local level. We may refer to what goes on in campaign finance as “bribes,” but we do so at least partially tongue-in-cheek, recognizing that while what goes on their is a problem and does create a conflict of interest, it is not the same thing as actually handing someone a wad of hundreds. The closest we’ve gotten to this in recent years was actually an outgrowth of local politics, i.e. the Blagojevich disaster. While no government is free from undue influence, the American federal system is remarkably corruption-free for a government of its size and power.

    Furthermore, the executive branch is almost entirely free of such charges. We may talk about “agency capture,” but no one seriously accuses federal bureaucrats of accepting bribes with any regularity. The same can not be said of local officials. Everyone knows stories about bribing the building inspector, because they happen a lot. But no one seems to have stories about bribing the EPA, FBI, or HUD.

    Devolving authority on local governments is not an obvious solution to most problems.

  6. Ryan,

    I think much of the FPR “project” as it were is downright quixotic. The ends sought are only possible through means which are completely antithetical to the ends in question. In the name of small government, we’re going to…dispense with representative government and reinstitute aristocratic rule? Don’t get me wrong: I won’t actually have much of a problem with that. I mean, it’s what we’ve got anyways, only now we have to pay lip service to the Mob and its interests, which takes away most of the benefits of aristocracy or oligarchy. But I can go this direction because I don’t think democracy is particularly important. Yet the site is swamped with talk of subsidiarity and restoration of individual freedoms and votes mattering, etc.

    I think many, if not most, of your particulars can be contested. (For example: “promote limited government by legislation and constitutional maneuvering”…what does that even mean? Are you claiming that anything truly “local” can’t be party to any kind of legislation?) However, your overall point is a strong one. There is, and perhaps always will be, a divide in how people concerned about “places” or “limits” approach their talk about such places and limits. One way of talking about it might be described, borrowing from Patrick, as an ethos, a set of principles to guide what one holds to be a good life. Any such “good” will necessarily partake of the aristocratic, a privileging of a morally understood “common good” over all sorts of various, and often bad, individual decisions. But there is also another way of talking about it, and that is a populist way, a way which emphasizes the practical and democratic achievement of said goods, whatever they may be. This way of talking isn’t aristocratic, and as such necessarily has to work with individuals and communities where they are, which means individuals and communities who want to secure for themselves the kinds of goods which will enable them to flourish in the midst of the liberal capitalist state. The ethos approach need not make any such compromises, because it is certain the liberal capitalist state must fall, and soon, and so what really matters is cultivating the (aristocratic!) virtues necessary to rebuild something different later on. But the populist approach has to make compromises, has to deal with the liberal state to empower individuals and communities where they are at. I’m not so sure there are too many ways for an FPR project to split the difference.

  7. Ryan,

    I’m not sure I’d be able to give you the specifics of an “FPR Project” beyond the shared sense by a number of people of different perspectives that America is broken, the basic problems are not being addressed through the current political system, and there is an essential need to strengthen local practices and places. Beyond that, I’d say there are quite a few differences among authors here about how to achieve such ends, and in many cases, a shared sense that the way to that end is not entirely clear. So, it’s rather unfair to accuse the entire “project” of inconsistency when – by the nature of the beast – we are far from being so univocal to be a “project” as you mean the term.

    That said – let me challenge a few particulars, at least from my own limited perspective.

    You wrote:
    “Thus, if I were to sum up what seems to be the FPR project, I’d get the following:
    “- Promote representative government by diluting representation.”
    I don’t see this. I, for one, would like on the one hand to decrease the ratio of representatives to represented (i.e., increase the number of representatives, as the Anti-federalists wished – thereby also having the salutary effect of gumming up the gummint). But, further, I think many here would like to see States assume many of the responsibilities for governance, thereby also decreasing the ratio and giving people more sense of control over their shared fates.

    “- Promote small-scale agriculture by eliminating the infrastructure which makes it possible.”
    What infrastructure is that? The governmental-industrial combine that has argued for decades “get Big or get out”? The current infrastructure is a major problem; many here (and I’d include myself) are seeking its fundamental alteration, if not outright elimination. There is no current “infrastructure” that promotes small-scale agriculture; it exists, and even in some places flourishes in spite of, not because of, the existing infrastructure.

    “- Promote individual liberty by eliminating it for those who don’t want it (i.e., that choice shouldn’t be an option).”
    Again, I don’t quite see your point here, but one major area of debate here is whether what is being defended is the rights of individuals or the rights of smaller groups to attain a greater degree of autonomy from the hegemonic and homongenizing forces of advanced capitalism and liberalism. I’m in the latter camp; others would likely fall in the former camp. So, I for one support more liberty of cultures, but this would doubtless lead to less individual “liberty” qua “autonomy” for people within those cultures. I’d also support some barriers to exit,though they should not be insurmountable; cultures need to be able to defend their boundaries. Others might disagree.

    “- Promote organic communities by eliminating diversity and dissent.”
    See above. I think there’s near unanimity here that we favor actual diversity, not the faux liberal version that would seek to make us all alike.

    “- Promote limited government by legislation and constitutional maneuvering.”
    I don’t see a contradiction here. Limited government can be at least outlined and defended through legislation and either rewriting or revitalizing parts of the Constitution. My own view is probably more radical than a number here, which is a belief that the Constitution was in fact all along a centralizing document aimed at fostering a society of self-seeking economic-oriented individuals governed by a relatively distant and “expert” set of rulers (again, I think the Anti-federalists got it right). Short of seeking “regime change,” there are parts of the Constitution that could be strengthened or rewritten (Caleb has made some good suggestions). I would like to see “Buckley v. Valeo” overruled (to address some of John M.’s excellent points here), though that would only be a start (that case held that campaign money is speech). The commerce clause jurisprudence should be substantially altered, allowing far greater local autonomy to diversely order State law. One could go on, but you get the gist.

    In sum, the “project” you speak of is really (at this point) a disposition seeking to articulate views and possible courses of action. It is not a “project” which has or asks writers here to sign a manifesto. That day may come, but right now, the best thing to do is make arguments and see where they lead.

  8. Russell, I can see how that point would be confusing. My bad.

    What I meant is that it seems contradictory to advocate for limited government… by having said government pass more laws, regardless of their content.

    What bugs me about the aristocratic trends I see here is that the old rallying cry that those in power should not have it is all too often simply a backhanded way of saying that the agitators are the ones that should have it. I get that vibe a lot around here: “Things would be so much better of only people like me ran the show!” You’ll forgive me for finding that ridiculously self-serving, not to mention condescending. And examples in front-page posts are far too common to enumerate. There’s an attachment to a particular expression of the Good Life which, the argument goes, can only be enjoyed under a particular material organization of society. Arguments for “virtue” can all too easily appear to be arguments for “doing things my way because I’m better,” and keeping those two consciously distinct is challenging, to put it mildly.

    Which is more than a little off-putting, I have to say. The fact that the speakers frequently don’t usually manifest any special insight into how things actually work or how we got where we are doesn’t help much.

  9. To get back to John’s essay, as interesting as some of this speculating about what FPR’s mission might be or whether it is consistent enough for progressives (who talk diversity, but show me one who wants it or will even tolerate it) might be, his point is rather more, well, pointed.

    To give a short reply, “Is America Ungovernable?”—yes. And the examples John gives are all valid and true. Every serious man since Aristotle has known that size matters. There is simply size and complexity beyond which the capacity and the virtue of human beings cannot go. How hard is it to “govern” a family? One dumb-ass during WWII said that “one can learn a lot about a national economy by having to run one.” Listening to our current emperor drone on in his utterly contentless speeches, and pondering that anyone–ANYONE–understands a 2000 page “law” should be enough to cut off the inevitable progressive babble about better and better planning. Walter Lippmann said it in 1938, for goodness sake, and he was hardly a reactionary.

    In search of a better life there is only one way we can go, and that’s small(er). The other way is toward Europe, and I think that one thing that may unite Porchers is that Europe is not the way to go.

    By the way, this was never intended to be a democracy. Like “liberal,” it’s a word we should rarely use.

  10. Great comments. Only have a limited amount of time, but two points:

    1. The very triviality of comments that councils get is proportional to the triviality of their powers. Cities have little control over their detinies, and so arguing about trivialities is all that is left.

    2. Yes Tammeny was corrupt, but it was itself a response to a different kind of corruption. It was a way of spreading the wealth to a largely hated and disenfranchised people. Problems, yes, but context also. It was better to handle the prejudice at this level that what happened after the civil rights movement became a national issue.

  11. Russell,
    Do you really like Europe, or do you like the Europe that the present age inherited and whose current residents have done so little to preserve. Almost all progressives coast along on the capital they have inherited, but it will run out.

    John,
    Don’t be so defensive of Tammany Hall! It produced Al Smith. Its enemies produced FDR.

  12. John Wilson – very astute point about ‘liking’ Europe. I like Europe – a lot – having lived there (Germany) over 10 years, but what I like about Europe has little to do with the way it’s governed (which are also my feelings about my home country), and I like even less where Europe is headed. And those feelings are shared by many Europeans I know, who feel as helpless as we do in the face of government and fear a reckoning in the not too distant future.

  13. If the only mandate for efficacy, dare I say legitimacy, under question is the exercise of legislative power, NO COMMENT (we’re in the doldrums since the mighter power lies in the unitary executive funded via Treasury’s fiscal alchemy)

    If the mandate for efficacy — or more particularly legitimacy — of exercising power is America’s fiduciary affairs, ie the custodial duty of the financial services sector of our economy to preserve from harm the treasure entrusted to them, then we’re already off the cliff in free fall. America’s property rights became ungovernable way back in 1913 when central banking came into mode. The high time preference of a warfaring public purse soon made the Fed an indispensable tool to the secret expropriation of the citizenry during two global conflicts. Traditional (of both the popular and artistocratic variety) low time preferences of savers, producers and contractors have been denied their due — the discount in value accrued over time from prudential non-disruptive creative industry, a tithe of which customarily has been applied to support non-productive exertion of a spiritual or charitable nature.

    The fear of dislocation in the social fabric from challenging deeply-cherished political assumptions (American dollars are safely held by our bankers) is actually worse than the thing feared – the social fabric is unravelling around us faster than we can pick up the stitches! Instead of yanking at loose ends, we need to stop the guys who are pulling the carpet from under us – the monetary policy makers behind closed doors.

    Only he who controls his property can exercise his free will democratically. We cannot speak of voluntary goodwill towards the commonwealth (ie the free consent of the governed) if the very constitutive wealth necessary is being expropriated by stealth by the governing class. The corruption begins with the currency my friends, and as Arnold Schwarznegger says “Kahlifawnia can’t print money, only the Feds can.” As bad as local schenanigans may seem, the truely egregious graft is instead the centralized theft of the very purchasing power of the defenseless dollars in your wallet, being diluted by pre-meditated inflation by our “betters” the Titans in Treasury, led by Redistributor in Chief Mr Bernanke.

    Audit — ney end — the Fed.

  14. John Médaille, I wouldn’t entirely agree that cities are only left with trivial powers. Beginning the last century, the trend has been towards increased home rule authority, especially in larger cities. The reason that so many municipal governments seem to be bogged down with trivialities is not because their powers are trivial as such. They all tend to have rather expansive police powers, a high degree of control over their school systems, almost exclusive authority over zoning and construction, etc. The difference is that in a town of 25,000 people, almost nothing is that big of a deal compared with a city of a million. Cities’ authority appears trivial not because the scope is small but because the scale is.

    I can’t bring myself to believe that you’re seriously making the argument that the corruption that characterized Boss Tweed’s New York is an improvement over the federal Civil Rights Act. The idea is simply incomprehensible to me. If that really is what you’re saying, you’re going to have to explain yourself, because that’s not anyone should be willing to accept just because you wave your hand.

  15. Man…is ungovernable. This is a simultaneous insult and compliment. It requires probity, restraint, humility and humility’s cousin: humor to devise a government suitable for such an essay in contradiction. We had it once but have roundly lost it….thinking we need something more than a Republic in order that our government can make us whole. Ho Ho Ho.

    I don’t know, when I walk past a mellow and buff building in the Cotswolds, admiring its Bath Stone or drink in the remarkable Tuscan countryside or eat a fine French meal in Paris prepared quixotically by an Aussie ex-pat on Avenue Felix Faure, I don’t wonder about their government, I wonder about the people and wish for them the continuing wisdom, health, and artfulness they express…along with only that government sufficient to encourage it.

  16. It is true that it is difficult to find a coherent philosophy from the posts on FPR but this is to be expected since it is merely a mirror to the thoughts of the nation which in the process of losing its faith in market fundamentalism currently finds itself deeply confused about many things. This is especially so I think in understanding the ambivalence, or dual nature, of both private enterprise and government and how inseparable and deeply interconnected they are. Private enterprise usually works well to provide excellent choice of innovative goods and services at competitive prices but the flip side of this is that it is amoral with regard to minimizing costs and pushing costs on to others, the environment and the existence of the welfare state are the immediately obvious examples of this. Government, on the other hand, is extremely useful and necessary in regulating private enterprise and mitigating its failures to adequately provide for its workers and provide the public goods that are not particularly profitable. The flip side of government revolves around Agency Theory where politicians and bureaucrats look after their own interests in preference to the electorate allowing in particular such dangers as the massive public and private debts the country is now burdened with. The other major negative side involves private enterprise “buying” government to further its amoral competitive drive to reduce costs as mentioned above but also to drive out competitors and maximize profits through the use of monopolies, subsidies and unfair trade agreements. This inability to recognize the inseparable interdependency of private enterprise and government, especially Federal government, is I believe the major stumbling block to developing a coherent political and economic philosophy of markets and government.
    A good example of a component of this stumbling block is global trade. The economics professor, Nobel prize winner, and former Vice-President and Chief Economist of the World Bank, Joseph Stiglitz, had a book published in 2007 called “Making Globalization Work.” On page 271 of that book he states that what advocates of trade liberalization seldom mention is that with global integration the wages of unskilled workers will over time become the same throughout the world. Stiglitz goes on to say that because of the size of populations in China and India these wages will converge on wage levels in those countries rather than the United States or Europe. What Stiglitz doesn’t say though is that researchers also believe a great many skilled jobs will also be leveled down (see the work of Alan Blinder, Frank Levy and Richard Murnane). China, for example, will soon produce more engineers and scientists with doctorates than the United States:-
    http://www.ieeeusa.org/policy/positions/competitiveness.pdf
    However, Stiglitz goes on to say on page 272 of his book with regard to the leveling down of wages in the United States:-
    “As businesses shut down and jobs are lost, real estate prices will fall, which will hurt most people in those areas, since their main asset is their home.”
    This statement conjures up the thought of starting out your adult life with a conventional thirty year mortgage on your home only to discover that as you progress through life the percentage of your salary devoted to repaying that mortgage actually increases rather than decreases. You cannot imagine that the financial institution that granted you the mortgage is going to reduce the repayments to reflect your declining wage! This makes the whole financial model for home ownership in this country extremely shaky. It also makes you realize that probably with the exception of a few Democrat politicians who oppose the current terms of trade liberalization the rest of the Democrats and Republicans and the financial industry don’t have much of a clue what they are doing with their support of the current global trade terms. Their economic philosophy seems based on a wing and a prayer! As I state in my previous post these trade terms have to move to bilateral partnering and thereby become non-zero-sum to ensure a fair deal for all. This change cannot be negotiated and monitored on a consistent and efficient basis across an economy by individual states it has to be initiated and coordinated by Federal government. Localism accordingly has its limitations in this example and reflection would indicate there are many more issues that are best tackled at Federal level. This is said not to attack the idea of localist and subsidiarity theory since I firmly believe in devolution of decision making wherever possible and appropriate, but there are such animals as horses for courses because ambivalence is a real factor of life!

  17. Heck, Ryan, I would tackle your challenge to John in a heartbeat. The “Civil Rights Act” of 1964 was completely unnecessary–all the legal and constitutional framework for what it supposedly did was all in place. What it actually accomplished was the largest transfer of power from states and localities in all of our national history. The potential for corruption is greater on the greater stages.

    And what makes you think that the political machines were particularly “corrupt?” Because some mugwump textbook says so? Millions of rural European immigrants were brought quite seamlessly into constitutional government by their “corruption.” If you want to lift the race card, try being a Sicilian Catholic in Boston in1905. Would you have written up a national Civil Rights for Italians Act?

    It was a political machine gone wacko, the one in South Chicago, funded by the feds largely through the inheritance of the New Deal and the CRA, that gave us our current administration. If you’re happy with that, then I guess you should be surprised and outraged by John’s perfectly reasonable comment.

  18. Is America ungovernable? The question reeks of manifest destiny. America may have been unique in Tocqueville’s time, but that America has been in collapse since at least when we allowed ourselves to be referred to as consumers in lieu of citizens. I like DW’s assertion that man is ungovernable.

    If we cannot fix representative democracy, then the rule of a monarch that strives for the common good would be preferable. At least for a time. Also to be preferred would be an anarchy of citizens that realize that their fortune is inherently tied to the fortunes of their neighbors. At least for a time.

    We need to realize that any institution will drift from its stated values through the passage of time. This is true for any form of government, any religion, any organization, and any ruling class. Some of these institutions are robust and drift more slowly than others. Some may have a method of self-correction that enhances tolerance. The longest lived have both traits. The well documented and spectacular failures of a small ruling elite that ignores the common good indicates that oligarchies are neither robust or failure tolerant.

    John, I really enjoyed the essay, and that picture makes my mouth water. Thanks.

  19. Should any one have any doubt about the necessity of improving democratic checks and balances on Federal government to prevent unnecessary war by oligarchic supported monarchs like King George W. Bush The Second and thereby help maintain a healthier economy they need look no further than the information emerging today from the British Chilcot enquiry into the Iraq war :-

    http://www.timesonline.co.uk/tol/news/politics/article6929604.ece

    http://www.reuters.com/article/topNews/idUSN2921527420080302?feedType=RSS&feedName=topNews&sp=true

    Here by the way is Condolezza Rice on Iraq pre 9/11:-
    http://www.sourcewatch.org/index.php?title=Condoleezza_Rice

  20. There is a large sewer drain that is sucking all wealth and power from we citizens to the elected oligarchy. Physically, the drain is located inside the Beltway. Undisturbed, we will become Venezuela. The current focus of the Beltway despots is not health care, or environment, or …. itself, but only an avenue to sucking up more money and power.

    We humans are all broken, beset by our weaknesses but trying fitfully to live morally and fruitfully. Long exposure to temptation wears us down to slow yielding and finally abandonment to the imagined fruits of our temptations. Once abandoned, we are again tempted to strongly defend and continue our destructive choice. Without correction/help from our friends and associates, we are doomed unless we are somehow not strongly tempted.

    Our elected despots are human, and I stipulate they were all driven by the most upright motives when they began. That was then, this is now. Temptation has taken it’s toll.

    Given the practicalities, there is no way we can recover our original “innocence”. The details of gerrymandering etc. would defeat any move to change things significantly. We are on the long ski jump, with only rocks at the bottom.

    Money is the life blood of our elected despots, even considering the 7/24 run of Treasury printing presses funding government now. One way to halt or slow things would be to stop or seriously delay tax payments to the Beltway. Put the money in escrow instead of the hands of the despots. There are ways to do this, and are less intensive than taking more direct action.

    That would create a crisis, and threaten the despots, who would be outraged. Oh well!

    MORE LATER

  21. It seems deeply pessimistic to me to say that man is ungovernable. True you have to work with what you’ve got but the human journey seems to me to be more one of slowly discovering what we’ve got, or more to the point what are natures are and what best suits our natures. In recent years we’ve started to discover through empirical observation and experimentation that we operate on a mix of self-concern and other-concern, we’re conditional cooperators and selfish altruists. Our dominative success as a species though has come primarily from putting social cohesion first and this is deeply hard-wired and will continue to predominate. Accordingly to live like this we develop norms to live by and adjust these when they seem to fail us. In the last thirty years because of the scaling up in size of businesses and government and the growth of a predator norm we call neoliberalism, or market fundamentalism, we have allowed ourselves to be increasingly dominated and unbalanced. This has delivered us Socialism for the Rich orchestrated especially by a nest of financial predators walled up in Wall Street who nearly collapsed the world economy through incompetence and greed. Now having realized our foolishness we are slowly developing a new norm that will be based more on our desire for social cohesion. This norm can be called mutualism and recognizes the need for a more communalistic approach to the design of the processes and institutions we rely on. We will increasingly become mutualizers and shun the form of ambivalent capitalism that allows the domination of free-loading predators. With the question of our survival on this planet before us the issue of mutuality also reinforces this move to the new norm. The new communication processes involving the use of the internet will aid the mutualizers decision making processes through internet voting. The new communalistic forms of business and public service ownership will do this too.

  22. “The American system is broken” does not mean that “democracy does not work”.

    Most Americans do not realize this, but the presidential majoritarian system is actually very rare amongst Western Democracies. Instead, a combination of parliamentarism and proportional representation, as practised in most continental European countries, provides a more robust and workable (as well as more broadly representative, and less plutocratic) model of democracy.

    American reformers would do well to read, learn, mark and inwardly digest the Constitutions of Spain or Germany.

  23. The point also that Phillip Blond is making with his individuative and associative framing of the ideological task ahead is that democracy needs to be pursued in non-state associations or “mutuals” as far as possible.

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