De Juvenal takes a quote from Rostovtzev's "Social and Economic History of the Roman Empire" (quoted on p. 190 of "On Power"). He may as well be talking about the bailouts, Wall Street and America's special interest economy, courtesy of Democrats and Republicans:
"The reforms of Diocletian and Constantine, by implementing a policy of systematic spoliation to the profit of the State, made all productive activity impossible. The reason is, not that there were no more large fortunes: on the countrary, their build-up was made easier. But the foundation of their build-up was now no longer creative energy, or the discovery and bringing into use new sources of wealth, or the improvement and development of husbandry, industry and commerce. It was, on the contrary, the cunning exploitation of a privileged position in the State, used to despoil peole and State alike. The officials, great and small, got rich by way of fraud and corruption."
De Juvenal remarks:
"All that can be said is that contemporaries get the feeling of progress right through the period in which the state is building up, a feeling comparable to the sense of well-being, which in an economic cycle accompanies the period of high prices. When the process nears its apogee, the more sensitive spirits are assailed by feelings of doubt and dizziness...
"Then the question is heard again whether the egalitarian society, which is the handiwork of the despotic state, is more or less advantageous to the mass of workers than a society of independent authorities..."
The irony about the United States is that in the 1880s and 1890s, before the establishment of the "Progressive" state, immigrants were flocking here at a rate of between 100,000 and over 500,000 per year, real wages were rising at more than 2% per year, and living standards of the common man had doubled in 40 years, between 1849 and 1889. More liberty was enjoyed than anywhere else in history and the savings rate of the average person was increasing rapidly.
In its place, led by the "Progressives" Theodore and Franklin Roosevelt and Woodrow Wilson and the establishment of the Federal Reserve Bank, Americans established a system whereby, since 1970, real wages have declined. In the past 10 years the number of years that the average person has needed to work to pay for a house with 100% of his untaxed wages has doubled from 3.6 years to 7.2 years. America went from a federal income tax of 10% in 1950 to a situation now where tax rates are so punitive that saving is all but impossible, where massive amounts of money are transferred to wealthy clients of the Democrats and Republicans via the Federal Reserve Bank's inflation (which subsidizes the stock and real estate markets at the expense of real wages), and the New York Times tells us that the only problem facing America is that taxes aren't high enough.
Showing posts with label de Jouvenal. Show all posts
Showing posts with label de Jouvenal. Show all posts
Friday, June 5, 2009
Sunday, May 31, 2009
The Coming Crisis of Legitimacy in American Government
Legitimacy refers to a concurrence of belief. In American government and politics, political legitimacy has been associated with the Constitution. The traditional American value system, Lockean liberalism, requires a limited state, and the Constitution reflects that value. There has always been debate among Americans as to how limited the state ought to be. Traditionally, special interests, to include the wealthy, manufacturing and banking interests, favored government intervention to further their goals. The working class, while poor, favored greater limits on government intervention to permit their acquisition of wealth. In the early twentieth century to the 1930s the model was modified. A strong element of social democracy was introduced. American social democracy was reconciled to Lockean liberalism in an uneasy balance. A social minimum or floor was established, as reflected in Social Security and Aid to Families with Dependent Children. Standards of professionalism were established in a wide range of fields. For example, with respect to the workplace, laws concerning health and safety, retirement plans, discrimination, and overtime were established. Although the late nineteenth century doctrines of free contract were overturned, a wide latitude for contracting remained. The social democratic laws did not interfere with a wide range of economic activity. Taxes were kept moderately low, at least in comparison with Europe. Where taxes were high, as with respect to inheritance, numerous loopholes were created.
This system is unstable because there is no dividing line between the principles of Lockean liberalism on which the system is based and the system of social democracy that was superimposed on it. To achieve balance Americans needed to constantly reformulate the principles of Lockean liberalism and social democracy. But to reformulate the balance, Americans must understand Lockean liberalism and social democracy. Yet, many Americans never bought into the social democratic system, and many never bought into Lockean liberalism. From the beginning some Federalists rejected principles of limited government. Europeans who immigrated here by the 20th century were unfamiliar with Lockean liberalism. The education system kept their descendants in the dark. On the one hand, Locke is not part of the education of American students today. He is ignored in the curriculum, and the education schools shun him. Therefore, there is no avenue by which many Americans can learn the foundation of one half of the equation.
On the other hand, the scale is heavily weighted toward social democracy. But the American system of business, innovation and progress depends on Lockean liberalism. Socialism and social democracy are incapable of generating progress, and there has been no progress of substance made in socialist or state-dominated countries. Sweden, for instance, grants prizes in innovation to others but itself has been responsible for little in the past century. In Japan, the most famous principles of business, lean manufacturing and total quality management, were created by Toyota's Taiichi Ohno and by the American consultant Edward I. Deming. The government policies in Japan, subsidies to banks, infrastructure, bailouts, and centralized planning have failed.
The educational system has been particularly aggressive in its rejection of Lockean liberalism. But no system of rights is based on logical necessity. The German university, the prototype of the American educational system, claimed to derive the necessity of social democracy from historical forces. Yet in America historical forces tended toward laissez-faire. But the adherents of the German historical school, such as John R. Commons, claimed to derive the necessity of social democracy from historical forces anyway.
Likewise, conservatives claimed to derive the precariously balanced system of Progressivism from tradition. Yet, there was no Progressive tradition. Indeed, there is no American political tradition. American government was created from scratch by colonists in the 17th and 18th centuries. The Declaration of Independence was a logical assertion of Lockean liberalism, and the Constitution imposed a Federalist superstructure. None of these institutions were derived from ancient tradition as in tribal and Roman Europe, the Middle East or Asia.
American conservatism can have meaning only to those who believe that social democracy is the future. To counterpoise "conservatism" to social democracy is to start by stating that you aim to lose the argument. Thus, the American conservative movement failed.
There is no logical coherence to social democracy. Social democracy depends on the mystical assumption that one must obey the state. Yet there is no moral necessity of obedience to social democracy any more than there is a moral necessity of unlimited laissez-faire. As de Jouvenal points out, democracy is attended with increasing levels of state compulsion to enforce the increasingly aggressive dictates of the democratic state. De Tocqueville called this the tyranny of the majority. Social democracy depends on mystical assertions of a "general will" which directly parallels the monarchical "divine will" of Filmer. Social democracy claims a moral foundation based on the logical necessity of risk aversion or minimizing the maximum possible loss, but there is no such logical necessity. Lockeans believe that progress depends on risk, and history has substantiated this opinion. Minimizing maximum loss is the philosophy of tribal cave men, not of free republicans. Yet the cave man theory of government is the one to which social democrats adhere. If many Americans have adopted the minimizing-maximum-loss value system it is because they have never been given a chance to learn what the American philosophy is.
Thus, American higher education has replaced the moral superstructure of Lockean liberalism with the moral superstructure of social democracy. Neither has foundation in logic, but the effects of both can be tested. Germany first adopted social democracy in the 1880s. The century following the adoption of social democracy in Europe and Progressivism in America was the ugliest and bloodiest in Germany's and the world's history. America's adoption of Progressivism in the 1890s led to its foray into imperialism. The adoption of the Federal Reserve Bank in 1913 was followed by the Great Depression of the 1930s.
The progress that liberalism, England and the United States had generated in the 19th century continued to unfold fifty or sixty years into the twentieth century so that the 19th century innovations of television and radio waves provided for continued innovation. But the rapid, universal innovation levels of the 19th century ended. By the 1970s real wages were declining, a result uncharacteristic of any prior period of American history, and firms had decided that the way to profit was by moving plants into low labor cost regions rather than through innovation. Although the personal computer and Internet were notable exceptions, in broad swathes of American industry innovation stalled. Today, once-proud American firms like GM beg for public money. Yet, in the historical context it would seem that innovation should be ever increasing in pace because new ideas generate yet additional ideas. Creativity experts have long observed that innovation begets innovation. That is the process of brainstorming. Thus, the failure of innovation in America suggests not the failure of capitalism, but the failure of social democracy.
The educational system has thus generated a belief system that is empirically unfounded and is likely to disrupt and disappoint most Americans' expectations. The increasing level of taxation since 1950; the transfer of wealth to established businesses and the wealthy via the Federal Reserve Bank and the recent bailouts; the increasing levels of regulation; and the unquenchable expansion of state power to reflect every moral or ethical fantasy of America's elite (so long as the fantasies do not disrupt the investment holdings of the Ochs Sulzbergers, Warren Buffett or George Soros) will all disappoint Americans, who have been told to expect improvement in living standards even though they have not been told how to achieve such improvement or what the system of government and economy is that creates such improvement.
The belief system that the educational system inculcates is mystical in nature. It claims a universal morality of state action; and it holds that the changing and often whimsical beliefs of university professors and newspaper editors morally require blind adherence. It sets up silly "saviors" such as Franklin Roosevelt and Barack Obama, whose divine right to exercise power; deprive Americans of traditionally defined rights and property; and to be believed is rigidly proclaimed as moral. Just as late medieval Europeans believed in a divine right of kings, American social democrats believe in a divine right of state power and the cult of the presidential savior.
An essential part of social democrat mysticism is the replacement of God by the state. Thus, just as a religious Catholic might have a picture of a Saint in their home, social democrats have a picture of their Divine Savior-President Barack Obama in their homes. Just as blasphemous language is contemned by the religious, so is language disrespectful of Savior-Divine President Barack Obama contemned by social democrats.
Thus, the inculcation of blind moral obedience to the state by the Progresssive-Republicans and social democrat-Democrats leads to an inherent instability in the legitimacy of American government. This is seen most clearly in the US Supreme Court. Through a series of judicial decisions the Supreme Court has arrogated the power to legislate. This is not provided by the Constitution. With respect to Dred Scott, in the 1850s, the Supreme Court held that it had the power to regulate contracts. This incursion into state power increased through the 19th century. While cases like Brown v. Board of Education may have had morally laudable results, the arrogation of power by the Supreme Court lacks legitimacy. It is not provided in the Constitution. Many Americans do not believe that the Supreme Court ought to function like a moral dictator. And many Americans do not share the Supreme Court's value system. The Supreme Court cannot function as an overseer of the nation's morals because a sizable percentage of Americans do not share the Supreme Court's values.
The reason again speaks to the failure of America's educational system to educate Americans as to Lockean liberalism. As a result, although I do not question the intelligence and sophistication of the members of the Court, the Court's value system reflects in large part the social democratic training that the Justices received in American schools and universities. Their values are elitist and do not reflect justice as most Americans define it. The court has become increasingly illegitimate. The same is true of other American institutions. Congress's approval ratings are very low, but no one seems to be able to say why. The bailout was opposed by the majority of Americans, and there was no real reason for it save crackpot Keynesian arguments in elitist, pissant newspapers and television stations, but Congress went with the elitist newspapers and television stations.
The end result of the increasing tyranny of social democracy and tyranny of elitist opinion over American values and rights is de-legitimacy of the US government. We live in a period of instability because Americans have refused to confront the failure of social democracy and Progressivism. They continue to accept that conservative insistence on Progressivism and elitist social democracy are the only two options. Yet, the economic policies that the nation has adopted will deprive Americans of the standard of living to which they have become accustomed. This failure will mark the end of the American state as we know it. If the nation were doing as well as it could, reflecting Lockean values to a large degree and striving to balance reason, tradition and innovation in public affairs, minor modifications would be possible. But the two Progressive/social democratic parties have followed an avenue that has led them to the side of a cliff. And the public is going to have to back up and push the two parties over the side.
This system is unstable because there is no dividing line between the principles of Lockean liberalism on which the system is based and the system of social democracy that was superimposed on it. To achieve balance Americans needed to constantly reformulate the principles of Lockean liberalism and social democracy. But to reformulate the balance, Americans must understand Lockean liberalism and social democracy. Yet, many Americans never bought into the social democratic system, and many never bought into Lockean liberalism. From the beginning some Federalists rejected principles of limited government. Europeans who immigrated here by the 20th century were unfamiliar with Lockean liberalism. The education system kept their descendants in the dark. On the one hand, Locke is not part of the education of American students today. He is ignored in the curriculum, and the education schools shun him. Therefore, there is no avenue by which many Americans can learn the foundation of one half of the equation.
On the other hand, the scale is heavily weighted toward social democracy. But the American system of business, innovation and progress depends on Lockean liberalism. Socialism and social democracy are incapable of generating progress, and there has been no progress of substance made in socialist or state-dominated countries. Sweden, for instance, grants prizes in innovation to others but itself has been responsible for little in the past century. In Japan, the most famous principles of business, lean manufacturing and total quality management, were created by Toyota's Taiichi Ohno and by the American consultant Edward I. Deming. The government policies in Japan, subsidies to banks, infrastructure, bailouts, and centralized planning have failed.
The educational system has been particularly aggressive in its rejection of Lockean liberalism. But no system of rights is based on logical necessity. The German university, the prototype of the American educational system, claimed to derive the necessity of social democracy from historical forces. Yet in America historical forces tended toward laissez-faire. But the adherents of the German historical school, such as John R. Commons, claimed to derive the necessity of social democracy from historical forces anyway.
Likewise, conservatives claimed to derive the precariously balanced system of Progressivism from tradition. Yet, there was no Progressive tradition. Indeed, there is no American political tradition. American government was created from scratch by colonists in the 17th and 18th centuries. The Declaration of Independence was a logical assertion of Lockean liberalism, and the Constitution imposed a Federalist superstructure. None of these institutions were derived from ancient tradition as in tribal and Roman Europe, the Middle East or Asia.
American conservatism can have meaning only to those who believe that social democracy is the future. To counterpoise "conservatism" to social democracy is to start by stating that you aim to lose the argument. Thus, the American conservative movement failed.
There is no logical coherence to social democracy. Social democracy depends on the mystical assumption that one must obey the state. Yet there is no moral necessity of obedience to social democracy any more than there is a moral necessity of unlimited laissez-faire. As de Jouvenal points out, democracy is attended with increasing levels of state compulsion to enforce the increasingly aggressive dictates of the democratic state. De Tocqueville called this the tyranny of the majority. Social democracy depends on mystical assertions of a "general will" which directly parallels the monarchical "divine will" of Filmer. Social democracy claims a moral foundation based on the logical necessity of risk aversion or minimizing the maximum possible loss, but there is no such logical necessity. Lockeans believe that progress depends on risk, and history has substantiated this opinion. Minimizing maximum loss is the philosophy of tribal cave men, not of free republicans. Yet the cave man theory of government is the one to which social democrats adhere. If many Americans have adopted the minimizing-maximum-loss value system it is because they have never been given a chance to learn what the American philosophy is.
Thus, American higher education has replaced the moral superstructure of Lockean liberalism with the moral superstructure of social democracy. Neither has foundation in logic, but the effects of both can be tested. Germany first adopted social democracy in the 1880s. The century following the adoption of social democracy in Europe and Progressivism in America was the ugliest and bloodiest in Germany's and the world's history. America's adoption of Progressivism in the 1890s led to its foray into imperialism. The adoption of the Federal Reserve Bank in 1913 was followed by the Great Depression of the 1930s.
The progress that liberalism, England and the United States had generated in the 19th century continued to unfold fifty or sixty years into the twentieth century so that the 19th century innovations of television and radio waves provided for continued innovation. But the rapid, universal innovation levels of the 19th century ended. By the 1970s real wages were declining, a result uncharacteristic of any prior period of American history, and firms had decided that the way to profit was by moving plants into low labor cost regions rather than through innovation. Although the personal computer and Internet were notable exceptions, in broad swathes of American industry innovation stalled. Today, once-proud American firms like GM beg for public money. Yet, in the historical context it would seem that innovation should be ever increasing in pace because new ideas generate yet additional ideas. Creativity experts have long observed that innovation begets innovation. That is the process of brainstorming. Thus, the failure of innovation in America suggests not the failure of capitalism, but the failure of social democracy.
The educational system has thus generated a belief system that is empirically unfounded and is likely to disrupt and disappoint most Americans' expectations. The increasing level of taxation since 1950; the transfer of wealth to established businesses and the wealthy via the Federal Reserve Bank and the recent bailouts; the increasing levels of regulation; and the unquenchable expansion of state power to reflect every moral or ethical fantasy of America's elite (so long as the fantasies do not disrupt the investment holdings of the Ochs Sulzbergers, Warren Buffett or George Soros) will all disappoint Americans, who have been told to expect improvement in living standards even though they have not been told how to achieve such improvement or what the system of government and economy is that creates such improvement.
The belief system that the educational system inculcates is mystical in nature. It claims a universal morality of state action; and it holds that the changing and often whimsical beliefs of university professors and newspaper editors morally require blind adherence. It sets up silly "saviors" such as Franklin Roosevelt and Barack Obama, whose divine right to exercise power; deprive Americans of traditionally defined rights and property; and to be believed is rigidly proclaimed as moral. Just as late medieval Europeans believed in a divine right of kings, American social democrats believe in a divine right of state power and the cult of the presidential savior.
An essential part of social democrat mysticism is the replacement of God by the state. Thus, just as a religious Catholic might have a picture of a Saint in their home, social democrats have a picture of their Divine Savior-President Barack Obama in their homes. Just as blasphemous language is contemned by the religious, so is language disrespectful of Savior-Divine President Barack Obama contemned by social democrats.
Thus, the inculcation of blind moral obedience to the state by the Progresssive-Republicans and social democrat-Democrats leads to an inherent instability in the legitimacy of American government. This is seen most clearly in the US Supreme Court. Through a series of judicial decisions the Supreme Court has arrogated the power to legislate. This is not provided by the Constitution. With respect to Dred Scott, in the 1850s, the Supreme Court held that it had the power to regulate contracts. This incursion into state power increased through the 19th century. While cases like Brown v. Board of Education may have had morally laudable results, the arrogation of power by the Supreme Court lacks legitimacy. It is not provided in the Constitution. Many Americans do not believe that the Supreme Court ought to function like a moral dictator. And many Americans do not share the Supreme Court's value system. The Supreme Court cannot function as an overseer of the nation's morals because a sizable percentage of Americans do not share the Supreme Court's values.
The reason again speaks to the failure of America's educational system to educate Americans as to Lockean liberalism. As a result, although I do not question the intelligence and sophistication of the members of the Court, the Court's value system reflects in large part the social democratic training that the Justices received in American schools and universities. Their values are elitist and do not reflect justice as most Americans define it. The court has become increasingly illegitimate. The same is true of other American institutions. Congress's approval ratings are very low, but no one seems to be able to say why. The bailout was opposed by the majority of Americans, and there was no real reason for it save crackpot Keynesian arguments in elitist, pissant newspapers and television stations, but Congress went with the elitist newspapers and television stations.
The end result of the increasing tyranny of social democracy and tyranny of elitist opinion over American values and rights is de-legitimacy of the US government. We live in a period of instability because Americans have refused to confront the failure of social democracy and Progressivism. They continue to accept that conservative insistence on Progressivism and elitist social democracy are the only two options. Yet, the economic policies that the nation has adopted will deprive Americans of the standard of living to which they have become accustomed. This failure will mark the end of the American state as we know it. If the nation were doing as well as it could, reflecting Lockean values to a large degree and striving to balance reason, tradition and innovation in public affairs, minor modifications would be possible. But the two Progressive/social democratic parties have followed an avenue that has led them to the side of a cliff. And the public is going to have to back up and push the two parties over the side.
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