What comes next

February 1, 2012

Sam never emailed me this week, so instead of posting his message I thought I’d link a couple of interesting articles by Walter Russell Mead. First, The Once and Future Liberalism. (When he talks about the “blue social model” he’s referring to the liberal policies of so-called “blue states” like New York, Illinois, and California.)

The real crisis today in the United States is the accelerating collapse of blue government, not blue private industry, which is a phenomenon largely behind us. We are witnessing a multi-dimensional meltdown that affects our lives and politics in many ways. Three elements of the blue government meltdown in particular are worth mentioning.

The first is the government’s role in providing the benefits associated with the blue system. When we talk about “runaway entitlement programs”, we are talking about commitments by the government to provide retirement and other social benefits that originated as part of the blue system social contract. Workers could retire as early as 62 with a combination of Social Security and private pensions. These costs are now exploding according to the immutable logic of demographic and actuarial facts, and it is clear that the government can’t pay them into the future.

The second crisis is that the government is now the last “true blue” employer in the country. Federal, state and local governments are often staffed by lifetime civil servants whose jobs are protected by law and by some of the last truly powerful unions in the country. All the Reagan Administration and like-minded state governments ever managed to do was to slow the growth of government, not reduce it; government at all levels today accounts for a larger share of U.S. gross national product than it did in 1981 (and that was when government did a lot more in regulating the economy). It has become incredibly expensive for governments to do anything at all, and they are poorly equipped to respond nimbly to the fast-changing conditions of America today.

Quasi-governmental sectors of the economy (like the health and university industries) are also mainly blue: characterized by high wages, stable employment, cumbersome procedures, and powerful non-industrial (or “trade”) unions that “produce” only paper and process, imposing high transactional costs to the economy. The result is a governmental sector too unproductive, too unresponsive and too expensive to do what needs to be done at a reasonable cost. Government also retains the anti-consumer mentality of the old blue monopolies: If you don’t like the lousy services government provides, you can…move. This is why public schools are increasingly expensive and yet do not provide improved services. Education, health care, the legal system and government are four crucial economic sectors in which costs have been rising faster than inflation for much of the last generation.

Finally, culturally and intellectually, bureaucrats and politicians often remain blue. Despite the ebbing of the blue private sector, they think instinctively in the old ways, come up with blue solutions to non-blue problems (think the Obama Administration’s approach to health care costs), and often fail to grasp either the constraints or the opportunities of the new era.

The conclusion of the article is that we need a new kind of liberalism to meet the needs of the 21st century.

He’s much more positive about what he calls “Liberalism 4.0 and 4.1,” the liberalism of the 20th century, than I would have been. (Read the article to learn about Liberalism 1.0-3.0, which begin with the Glorious Revolution in England and go through post-Civil War America.) Despite defining liberalism as “seek[ing] a society in which individuals enjoy increasing liberty,” it seems to me that the liberalism of the 20th century was more about keeping the masses happy under the guidance of an intellectual elite. Even the good work 20th century liberals did in promoting racial equality was focused more on equalizing groups rather than liberating individuals from discrimination, which is why it hasn’t accomplished much since the 1960’s.

The second article is Beyond Blue Part One: The Crisis of the American Dream. In this one he begins talking what the new liberalism he called for in the first article might look like. One important point is that the current crisis is really an opportunity, and if we handle things right we can make a better society:

The similarity is this: the changes in the world economy may be destructive in terms of the old social model, but they are profoundly liberating and benign in and of themselves. The family farm wasn’t dying because capitalism had failed or a Malthusian crisis was driving the world to starvation. The family farm died of abundance; it died of the rapidly rising productivity that meant that fewer and fewer people had to work to produce the food on which humanity depended. The industrial and scientific revolutions of the 19th century made agriculture so much more productive, and brought so many of the world’s hitherto remote and inaccessible lands into productive contact with world centers of population, that old and outmoded methods of production could no longer be sustained.
The family farm didn’t die of thirst in a desert; it drowned in a sea of abundance. 125 years ago, Americans didn’t have to organize themselves to cope with poverty and the erosion of living standards; they had to organize themselves to capture and enjoy the vastly increased prosperity and freedom which new technology made possible.
This is exactly what is happening today. Revolutions in manufacturing and, above all, in communications and information technology create the potential for unprecedented abundance and a further liberation of humanity from meaningless and repetitive work. Our problem isn’t that the sources of prosperity have dried up in a long drought; our problem is that we don’t know how to swim. It is raining soup, and we are stuck holding a fork.

Anyway, both articles are worth reading.


2 Responses to “What comes next”

  1. Annette Says:

    “It is raining soup, and we are stuck holding a fork.” I like that! You always share insightful articles that I would never find on my own. Keep it up!

  2. Rachelle Says:

    Enjoyed these! Thanks!

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