Paul Krugman is at the end of his rope:
What lies down this path? Here’s what I consider all too likely: Two years from now unemployment will still be extremely high, quite possibly higher than it is now. But instead of taking responsibility for fixing the situation, politicians and Fed officials alike will declare that high unemployment is structural, beyond their control. And as I said, over time these excuses may turn into a self-fulfilling prophecy, as the long-term unemployed lose their skills and their connections with the work force, and become unemployable.
I’d like to imagine that public outrage will prevent this outcome. But while Americans are indeed angry, their anger is unfocused. And so I worry that our governing elite, which just isn’t all that into the unemployed, will allow the jobs slump to go on and on and on.
Dr. Krugman and I differ on one key point: as an eternal optimist he sees a broken system in need of repair. I see a well oiled machine of class warfare.
The war on terror. The war on drugs. The war on Christmas? I think Hannity coined that, not too sure. The "grey wars" if you like, foggy crusades that neither side can win, nor has ever won, are turning into our favorite political pastime. There is one black-and-white war, however: the war between the rich and the poor. That's right, class war encompasses all of this, is the sine qua non for all these other wars, their raison de etre, the reason they are so opaque. Consider, without the fortuitous leaking of the pentagon papers, there would probably have been many more years of war in Vietnam. Even WITH the leak of the 90,000 documents posted on wikileaks, there will likely be 4 more years of American troop presence in Afghanistan. The questions are many about the nature of the class war. The inquiry has thus far been lacking, and the answers elusive. But we must try. As any child who's ever looked beneath rocks in a forest well knows, the most prying questions always reveal the juiciest nuggets of information.
This diary will ask how we got here, where and why the most formative moments occurred, and where we might thus reasonably hope to go from here. Before that we must say a little more about where "here" is. The most stifling problem with our politics is the binary pie fight. Thus the reversal of the 1917 Tillman act and subsequent legislation in the recent citizens united decision is portrayed as a big government vs. small government issue. The debate-missing happens in our own camp; it happens inter-camp. It certainly happens in academia, perhaps the main source of our modern political thought currents. According to [Columbia political scientist Wallace Stanley] Sayre's law, "In any dispute the intensity of feeling is inversely proportional to the value of the stakes at issue." The same could be said when people fall for marginal wedge issues and vote against their own economic self interests. But the debates in Academia are never binary, nor the issues wedges. They're always careful to remain trinary at least, and of some tangible utility to a legitimate common cause, regardless of the crass political context. How did they get this way, divorced as such both from the oversimplified national debates and from their original, collaborative ideals? And how did their already-prism-like, probablilistic heuristics get even further reduced to mere unintelligible grey scale in the national public discourse of American politics? What I argue for is a return to prism-spectrum modeling in our domestic political debates, and by the same coin a willingness to embrace dualistic or dialectic views more often amongst scholars and experts. This includes our readiness and willingness to discuss class warfare.
These are the two motivating questions that will drive this inquiry. The world is complex. I will rely on three important political scientists' discoveries to pinpoint the major moments in the transformation of the class warfare into the many-headed hydra that we have today. I can do that because this diary is anonymous and the stakes are low. The three main political science laws that pertain to the real war are the democratic peace theory, in which Michael Doyle (1983) and others have shown that no two mature democracies (defined as functioning democracies for more than three years) have ever fought a war against one another. As Jack Snyder put it, poking a bit of fun at Freud's triangle, "this is the closest thing to an iron law that we have in the social sciences." But why this might be is a question that is even more pressing when you consider that transitioning or young democracies are even more prone than dictatorships to fight wars against each other. Another problem is that five of the nine nuclear weapons states are mature democracies, and two sought weapons after the cold war in a unipolar, United States- dominated world. My basic argument is that the elite in the various mature democracies are playing for the same team, and they are the actors who decide whether we can withdraw from Afghanistan, for example. The causal mechanisms for this fact lie in our domestic politics. More on this later.
The second law I focus on is Duverger's law. D's law states that in a winner-takes-all system at the district level, seats in congress will be divided between the major parties, for host of reasons. D's law unearths the precise reason that we do not have any viable third parties in this country, save for a few. That these few local exceptions exist is usually a result of other strange electoral quirks, such as fusion voting, which eliminates the spoiler effect that third parties tend to have by allowing people to vote for a candidate on the party line of any party that has endorsed that candidate. The votes are tallied together after being counted separately by party, allowing the voter to vote their conscience rather than for the "lesser of two evils" and allowing the politician to see better where their support actually comes from. In 1896, you could have voted for William Jennings Bryan on either the Democrat, the Populist, or the Silver Republican ticket, and for this reason he was competitive against McKinley despite being rejected by the mainstream media of both the left and the right persuasion for his policies on bimetallism. We know the framers didn't have D's law in mind when they set up a presidential system, and yet, there are still interesting questions brought up by D's law. Why was fusion done away with, and how? Again the answer lies in electoral politics. Again, more later.
The third and final law I'd like to address is Karl Marx's economic law of the surplus value. Let's avoid the whole labor theory of value and simply define surplus value as "profit". The law states that the surplus value that is created has to be reinvested at a compounding 3% rate of profit innevitably for capitalism to survive. Indeed, the economy generally grows between 2-5% when you control for crises. These crises are becoming more and more common since 1970, when wages stagnated due to the collapse of the U.S. labor movement, the phenomenon of mass offshoring, the resulting stagnation of wages, and the attendant problem of effective demand. The effective demand problem is overcome by new credit markets that are essentially built to convert cheap money from China into loans that can be pawned off on unsuspecting and unfit borrowers. Eventually you end up in the situation we're in now. The main question with this "jobless recovery" is where is the effective demand supposed to some from, but the answer is apparently unclear at this point, as we continue to burn through the last of the stimulus. The answer of course has everything to do with Elizabeth Warren and her potential appointment to the Consumer Protection Agency.
I believe that these three moments are sufficient cases to illuminate the root causes of the problem, because as I said at the beginning, it's very simple. Because it is these anomalies that allow us to see order in the chaos, it is precisely these anomalies that we must study in order to understand the causal mechanisms at work in their creation. Let's start with the Democratic Peace. In the United States this theory has been used, unwittingly, by then-President Clinton to advance a crusading foreign policy that combined competing explanations for the peace in one self-competing foreign policy. This colluded with his signing of the Reagan-initiated WTO treaty and the stage was set for the current international socioeconomic regime. The results were stunning in their horror. The Somalia occupation of the early 1990's and the UN mission that followed left the country in the hands of the Islamic Courts and out of the hands of the transitional government there, and the Afghanistan "policy" right now is shaping up the same way. The WTO-required deregulation of our services markets led to the elimination of the Glass-Steagal act (Graham-Leach-Bliley) and the financial crisis which resulted in the worldwide loss of over 50 trillion dollars worth of assets. There is little peace in mature democracies foreign policy, even when they purportedly mean it.
Indeed, mature democracies are actually more war-like than non democracies, only just not toward each other. This debate might seem tangential (and it should in many ways), but it is right at the heart of the acedemic discourse on foreign policy right now, that between realists and other competing theories. Doyle is right to follow Kant and others in pointing to domestic political legislatures, electorates, media etc. as a pacifying force towards other democracies. No one gets much notice for mentioning, however, that these same domestic political forces are prone to capture by the monied interests that are most prevalent in the richest nations, which happen to all be, you guessed it, mature democracies. Only in mature democracies do you see the kind of corporate welfare that we've witnessed in the last three years, because only in America and a few other countries does there exist "too big to fail," coupled with a bipartite system. That these nations have used the mantle of democracy to pursue a policy of expanded market access is hardly a humanitarian mission nor a surprise, for it really is about increased control over economies at home and abroad. And the stout resistance in Somalia, Afghanistan, and Iraq is much less mystifying with that basic fact in mind. Finally, without looking upon these wars and free trade treaties as an ill-advised attempt by the mature democracies, especially the U.S., to expand our global trading empires and subsequent spheres of influence, there is certain to be more of the same contradictory, confused policy making in Washington like the current "policy" on Afghanistan, and more confused, fragmented, and ineffectual activism on the part of anti war advocates as well who are confused as anyone else by the lack of a clear policy from our government.
Nor is it a radical concept that states exist to pursue the economic interests of a privileged few. According to the late sociological historian Charles Tilly, modern states were founded in Europe on blood and the bargaining and the buying out of noble warlords in order to collect more taxes and maintain control over indigenous populations. The growth of armies was a pursuit of greed on the part of these landed few as technology would allow, and to the victors went the spoils. That same system remains largely intact, with the state's main role being, according to Weber, Tilly and others, the monopolization over the legitimized use of violence.
Once this country was firmly established as a two party quasi-democratic state with a strong institutionalized line between rich and poor, black and white, etc., there was little left for laborers to do but focus on economic issues, which was exactly what William Jennings Bryan went on to try to do in 1896. To understand the reason why there have never been any viable presidential candidates to defy either major party since then (and not coincidentally, outlawed fusion), just follow the money. According to Barbara Dudley, the Republicans, having taken control of the Federal Government, a plurality of state legislatures, etc., immediately undertook to outlaw fusion in every state. Their campaign was made easier by the fact that the democratic establishment was also somewhat undermined by fusion when Bryan was chosen. In New York, fusion was never banned, viewed as a valuable asset to fight corrupt monied interests in Tammany hall. Today there is a resurgence of fusion voting, which has been fought every inch of the way by legislators comparing this to the Italian system, and made more difficult by the secret ballot, which further hinders its return. It is an uphill battle, but fusion is the only viable way of getting around Duverger's law in this country, and it is vitally important that we do so given the corporate money in both parties.
Finally, the law of surplus value is what led to the credit crisis. The question would seem to be why they don't deal with it by investing in production and manufacturing. Would that this were so, trickle down economics might actually work, but instead, we see they would rather invest in asset values such as mortgage stew. In order to reinvest THAT enormous 6% or greater profit, the capitalists and bankers had to reinvest in even MORE mortgages, while at the same time creating some kind of effective demand for the product they were pedaling, namely defunct mortgages (liar loans). We all know how this turns out. Keep your eyes peeled for the next major bubble, because to my mind there is still no way to reinvest the surplus, and when a capitalist doesn't make a 3% or greater return on his investment, his head explodes and the whole system can quickly grind to a halt. This is perhaps the easiest case of a political economy law being a moment to observe the class warfare of our country in action.
There are others. But what does this mean going forward? To return to Professor Krugman's piece, I think that Americans need to stop viewing this political situation from anything but a Class Warfare perspective. He's right that we are disorganized and disoriented, even on the left this is the case as we argue about whether Obama is a corporate hack or not. It's our lack of an agreed upon frame of analysis that confuses us, and Professor Krugman seems unwilling to say outright what seems to be bugging him. I'm not sure how or why this could be, but I am ready for him and the rest of us to stand up to the rich and get some real initiatives rolling that will allow us to move away from their crippling influence. Without people like him though, telling it straight and true like it is, there is little chance of that orientation ever occuring, and our money will remain invested in major banks, whose loans will go to whomever or whatever they please, and our economy will continue to decline as it has been these past few years.