Wednesday, February 13, 2013

Another Road: The Blue Elites Are Wrong (DP: superb review and analysis of how to go forward based on past)

Walter Russell Mead

The blue vision of the future, as I wrote in my last essay, is a bleak one in many respects. If the establishment liberals of our time are right in their future vision, most of the population will be economically surplus; globalization and automation will empower a creative class on Wall Street and in Hollywood and Silicon Valley. Most of the rest of the country will be stuck in low productivity, low wage jobs as manufacturing fades and is replaced by … nothing, unless you count government benefits and food stamps. The blues think that a redistributive and regulatory state (naturally enough administered by wise and well intentioned people such as themselves) can pump enough money from the growing parts of the economy onto the plebs and the proles in the post-industrial doldrums, providing at least a degree of middle class life to the sidelined majority.
The blue technocrats now influential in the national administration and in many of the country’s most important universities and foundations are reacting to real problems. In the last thirty years the transformation of the American economy has contributed to income polarization. The old industrial middle class, based on mass employment in unionized oligopolies, has been hollowed out, and no comparable source of stable high income employment has emerged. Large groups in America today are living on transfers from the profits of the healthy portions of the private sector recycled through government spending and subsidies. It is easy to see how rational people can conclude that the only hope of preserving mass prosperity in America comes from transfers and subsidies. If we add to this the belief that only a powerful and intrusive regulatory state can prevent destructive climate change, then the case for the blue utopia looks ironclad. To save the planet, save the middle class and provide American minorities and single mothers with the basic elements of an acceptable life, we must set up a far more powerful federal government than we have ever known, and give it sweeping powers over the production and distribution of wealth.
But what if this isn’t true? What if the shift from a late-stage industrial economy to an information economy has a different social effect? What if the information revolution continues and even accelerates the democratization of political, social and cultural life by empowering ordinary people? What if the information revolution, like the industrial revolution, ultimately leads to a radical improvement in the way ordinary people live and opens up vast new horizons of human potential and freedom?
Obviously nobody knows what the future holds, and anything anybody says about the social consequences of the information revolution is mostly conjecture; still, the elegantly paternalistic pessimism of our elites about the future of the masses seems both defeatist and overdone. The information revolution, one should never forget, may be disruptive but more fundamentally it is good news. Human productivity is rising dramatically. If the bad news is that fewer and fewer people will earn a living working in factories, the good news is that a smaller and smaller percentage of the time and energy of the human race must be devoted to the manufacture of the material objects we need for daily life. Just as it’s good news overall when agricultural productivity increases and the majority of the human race no longer has to spend its time providing food, it’s good news when we as a species can free ourselves from the drudgery and monotony of factory work.
The economic transformation is also good news for the greens, if they can open their minds wide enough to understand it. A post-industrial economy depends less on metal-bashing and stuff-moving than an industrial one and the information revolution means that developing countries can reach affluence without repeating the mistakes of the past. The implications for issues like climate change are staggering if the information revolution is pushing the advanced countries toward a lower carbon economy and opening a path to development for countries like India and China that doesn’t require them to retrace US and European history in the 20th century.
Thinking about how the transition to an information economy can be made to work and made to work especially for the middle class is the single most important political question before us today. It’s hard to think about the future in a time of rapid change, but fortunately history does give us some guidance that can help us see the opportunities and problems ahead a little more clearly.
The best guide we have for how things might go is inexact but useful: the industrial revolution. This huge transformation, still unfinished today in many parts of the world, is the only thing at all comparable to what we face now. If we look carefully at that history we can get some sense of what may lie ahead.
The industrial revolution actually consisted of several big changes that were related but that worked out in different ways. Most historians concentrate on the rise of the industrial economy, but that era also saw two other enormous shifts: the collapse of agricultural employment and a population boom as better medical knowledge and rising food supplies transformed the demographic picture. For Americans, the agricultural collapse had two consequences: it created a crisis in rural America and led to a series of migrations from the countryside to the city culminating in the Great Migration of African Americans into northern cities from World War I onwards, and it was responsible for the waves of European immigration from the Civil War to the imposition of strict immigrant quotas after World War I. The combination of the collapse of agricultural employment in the Atlantic world and the population boom helped drive 100 years of American history—and since World War II has played a leading role in Hispanic and Caribbean immigration to the United States.
The collapse of manufacturing and clerical employment, the disappearance of assembly lines and stenography pools, is not creating a social crisis as profound or long lasting as the collapse of agriculture, but it is the major source of the inequality and income stagnation that we see today. (In the United States, the consequences have been exacerbated by immigration caused in part by changes in agriculture south of our border.) The conventional picture of inexorably rising inequality assumes that new jobs won’t be created to take up the slack in the labor market as the old jobs dry up.
This was true at times during the industrial revolution and there were times when the resulting imbalances in the labor market drove wages and living standards down. There was a lot of talk at various points about the polarization of income, the growing inequality of society, and the danger of social revolution if these trends weren’t checked. In the end, though, in the advanced industrial economies the industrial revolution created enough manufacturing and clerical jobs to improve labor’s bargaining position and usher in a much more egalitarian and affluent era.
This didn’t happen all by itself. A whole set of major social changes was needed to prepare the way for the affluent industrial middle class societies of the last half of the twentieth century. Universal education both equipped the children and grandchildren of displaced farm workers and urban migrants with the skills needed for factory work and conditioned them socially to live in the more regimented, clock-driven urban world. The progressive state arose to provide services like education, public health, food and drug regulation and the many other needs that industrial, urban societies needed that pre-industrial societies did not. Finance, transport, medicine, consumer marketing: industry after industry was born or transformed during the greatest revolution in human affairs since the Neolithic Revolution and the arrival of farming.
The population as a whole had to move to a higher level of consciousness, education and awareness to make this transition. Formal education was a part of it, but for peasants to become workers and participants in modern society and politics many lessons had to be learned, much social capital had to be created, and much cultural change had to be embraced. The simple world of the village was replaced by the complicated urban and suburban landscape we know today; that transformation took time and work, and few observers in 1800 could have predicted how well educated, well traveled, seasoned, sophisticated and skilled the common people would become by 2013.
The task facing America today looks something like the task we faced after the Civil War. How do we manage the transition from a well-established political and social system to something more productive? Both then and now, many of the negative features of the transformation appeared first, while the benefits came slowly. The population boom and the agricultural transition drove millions into cities looking for work when there wasn’t yet enough factory employment. There were many people in the 19th century like our gentry liberals today who believed that the new world would pauperize the majority, and who thought that the elite had to band together to defend the values and practices of a vanishing past. Fortunately, history rolled right over them and Americans were ultimately able to build a society that was both more prosperous and more free than anything the pre-industrial world had ever seen.

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