The Road to Catastrophe
Ernest Partridge, Co-Editor
The Crisis Papers
October 14, 2008
The economy of the United States, and by extension of the world, has
arrived at the present crisis after traveling along a road marked with
an abundance of warning signs. At this moment in time, it is rather easy
to recognize the folly that caused the present emergency. “Hindsight,”
as they say, “is 20/20.” However, in this case foresight was not blind.
A decade ago, an intelligent and unbiased observer could readily realize
that ongoing trends were unsustainable and thus could
forecast that sooner or later the ongoing economic circus would lead to
disaster. “Hubert Stein’s Law” predicted the outcome: “That which can
not go on forever, won’t.”
The American public has been led along this road to ruin by a set of
dogmas that are unsupported by the historical record, by empirical
by practical experience. Nevertheless, these dogmas have been promoted by
publications, by “think tanks,” and by a media, that have been lavishly
funded by enormously wealthy private individuals and corporations.
over the past forty years, following the resounding defeat of Barry
Goldwater’s conservatism in 1964, these promoters have accomplished
through repetition and propaganda what they could not accomplish
through reason and evidence: the support of a sizeable portion of the
American public, the media, the courts, the Congress, and the Executive
Branch of the U.S. government.
Below is an enumeration of three of these dogmas, which are generally
labeled as “conservative.” I prefer to call them “regressive,” since
they repudiate much of the economic and political wisdom acquired in the
past century, and embrace, instead, doctrines once believed to have been
decisively refuted by that wisdom.
Following that enumeration, I will list a few policy guidelines that
might lead us out of the crisis into which these dogmas have brought us.
Because I will examine a broad field of inquiry in a brief space, many
of my assertions might be properly criticized as oversimplified,
unsupported, and, dare I admit it, “dogmatic.” Fortunately, I have presented and
argued these points at greater length in numerous Crisis Papers essays
and in my book in progress, Conscience of a Progressive,
which can be
found online here, also in my
"Dim View of
Libertarianism." I will provide links to these sources in the
following text. (For a start,
here is a
list of twelve contrasting “elements” of the ideologies of the
regressive right and of the liberal left).
The concepts of “society” and “the public”
diminutive place in regressive ideology. In fact, in the minds
of many regressive libertarians, these concepts are simply myths. For
example, Margaret Thatcher proclaimed, “There is no such thing as
society – there are individuals and there are families.” And Ayn Rand:
“There is no such entity as 'the public' ... the public is merely a
number of individuals."
If “there is no such thing as society” or “the public,” it follows that
there is no such thing as “public goods” and “the public interest,”
apart from summation of private goods and interests. Accordingly, there
are no “victims of society.” The poor choose their condition; poverty is
the result of “laziness” or, as the religious right would put it, a
The regressive is convinced that if each individual confines one’s
concern to the pursuit of one’s private interests and the achievement of
one’s personal goals, the optimum satisfaction of all will be
accomplished, “as if by an invisible hand.” (Adam Smith). That which is
good for each, is good for all.
Accordingly, the functions of government should be confined to
the protection of individual “natural rights” to life, liberty, and
property.. Otherwise, the regressive insists, “you are on your own.”
Private initiative and private property
produce superior results to public institutions.
The liberal, on the other hand, insists that “society” and “the public”
are more than the sum of their individual, personal, components. As John
Rawls puts it, a society is: “a cooperative venture for mutual advantage
[which] makes possible a better life for all than any would have if each
were to live solely by his own efforts.” (A Theory of Justice, p. 4).
Thus there are “public goods” and “social values.” In numerous easily
identifiable cases, individual self-serving behavior results in social
harm, and conversely, individual sacrifice is required to accomplish
public goods. In brief,
is good for each may be bad for all, and that which is bad for each
may be good for all.
Regressives are convinced that “the wisdom of free
markets” will always produce superior results than would government
“[T]he free market allows more people to satisfy
more of their desires, and ultimately to enjoy a higher standard of
living than any other social system... We need simply to remember to
let the market process work in its apparent magic and not let the
government clumsily intervene in it so deeply that it grinds to a
halt." (Libertarianism, a Primer, p. 40, 185.)
And Milton and Rose Friedman:
"A free market [co-ordinates] the activity of
millions of people, each seeking his own interest, in such a way as
to make everyone better off... Economic order can emerge as the
unintended consequence of the actions of many people, each seeking
his own interest." (Free to Choose, pp 13-14).
theoretical core of regressive economic policy is based upon an
imaginary creature inhabiting a mythical environment.
The imaginary creature is “economic man” (homo economicus), a
pure egoist, motivated solely by the self-interested desire to maximize
his “utility" – a concept variously described as "want-" or "preference
satisfaction." This motivation is manifested and measured by "economic
man's" willingness-to-pay for these "satisfactions" in a “perfect”
That “perfect market” exhibits the following conditions: the
participants (all "economic men" of course) must be numerous and
completely informed, and their transactions must be voluntary, mutually
beneficial, open, without collusion, and their exchanges free of
transaction costs and externalities (such as pollution of others' air
Small wonder that this ideology does not fit
“real world” of individuals with moral, aesthetic, and sentimental
motives in addition to economic motives, facing markets that deceive and
withhold information, and engaged in transactions that seriously affect
non-consenting third-parties (i.e., “externalities” affecting
Moreover, this “neo-classical” economic theory (of “economic man” and
“perfect markets”) has not captivated most economists, some of whom are
fully cognizant of its limitations. Among them, the Nobel laureate,
"The economist . . . keeps the motivations of human
beings pure, simple and hard-headed, and not messed up by such
things as goodwill or moral sentiments... [T]here is ... something
quite extraordinary in the fact that economics has in fact evolved
in this way, characterizing human motivation in such spectacularly
narrow terms. One reason why this is extraordinary is that economics
is supposed to be concerned with real people. It is hard to believe
that real people could be completely unaffected by the reach of the
self-examination induced by the Socratic question, 'how should one
live?'" (On Ethics and Economics, Oxford: Blackwell, 1987, pp 1-2.)
The regressive’s disdain for government is buttressed by
a conviction that an ideal social order arises “spontaneously,” without
government initiative or regulation, out of voluntary human interaction.
As the libertarian, David Boaz writes:
... order in society arises spontaneously, out of
the actions of thousands or millions of individuals who coordinate
their actions with those of others in order to achieve their
purposes... The most important institutions in human society –
language, law, money and markets – all developed spontaneously,
without central direction. (Libertarianism: A Primer, p. 16).
While “spontaneous order” may be true of natural
languages, Boaz's claim that law, money and markets arise
"spontaneously" and thrive without deliberate governance, is
resoundingly refuted by both history and practical experience. In fact, few if any complex
place without rules and the active enforcement thereof. For
example, all team sports
require referees. Even markets operate under sets of rules, and
sanctions against those who violate these rules. And we are now,
to our profound regret, discovering what happens when markets are
allowed to function "spontaneously" without regulation.
No known civilized society has ever existed without some form of
government, some oppressive and others democratic and just. Few
municipalities are prepared to abolish fire and police departments,
merely because these civic institutions are less than perfect. If, as
Ronald Reagan complained, “government is not the solution, government is
the problem,” then the rational remedy is not necessarily less
government (albeit such remedies are occasionally in order). That remedy
might be found in improved government.
The Road Back
These three regressive dogmas -- social atomism, market
fundamentalism and spontaneous order --
several others that I have dealt with elsewhere, have led us to the
economic crisis now before us. An escape from this economic morass
begins with a repudiation of regressive ideology, which, happily, is now
That repudiation must be followed by a vigorous program of economic and
social renewal, highly unlikely under a McCain/Palin administration, but
just possible under the leadership of President Barack Obama.
Here are a few proposals:
An immediate restoration of personal liberties, a
diverse media, and the rule of law.
Investment in public education for responsible
citizenship, including the teaching at an early age of United States
and world history, the foundations of American democracy, and the
rights and responsibilities of citizenship. The public media should
be required (under the “public interest” clause of the Federal
Communications Act) to supplement these lessons.
Authentic free enterprise must be reinvigorated, and
the so-called “free enterprise” promoted by the regressives recognized as the
monopolistic and anti-competitive fraud that it is. Corporate
gigantism must be abolished through anti-trust legislation and
enforcement, which will reintroduce competition. The domestic
manufacturing base must be restored. If profit is to be privatized,
then so too must risk. No private corporation can be allowed to grow so
large that it might hold the national economy hostage. As Senator
Bernie Sanders puts it, “Too big to fail is too big to exist.”
“The profit motive” must be recognized as merely one
motive among many. In addition, careers dedicated to service to
others, and to the search for knowledge must be celebrated,
encouraged, and generously rewarded.
The nation’s wealth, privately acquired by the privileged few
through tax cuts and de-regulation, must be reacquired by the
national treasury through tax reform, and invested in public
institutions such as infrastructure, education, scientific research,
universal health care, transition to sustainable energy,
environmental restoration, etc.
The U.S. Military budget, now equal to that of the
rest of the entire world combined, must be cut, in half at least,
and the “Defense Department,” true to its name, must limit its
objectives to national defense thus restricting its capacity for
offensive warfare abroad. American imperialism, proudly
proclaimed by "The Project for the New American Century," must now
be officially repudiated.
Economic recovery policies, proven in the past in
The New Deal (FDR), The Fair Deal (Truman), The New Frontier
(Kennedy) and The Great Society (Johnson), must be reinstituted, but
adapted to present circumstances.
It should be noted that many of the above proposals –
for service careers, infrastructure repair, education, research and
development, expanded health care, alternative energy development, etc.
– would directly address the urgent economic problem of unemployment.
As recently as a month ago, such a program of economic restoration and
national renewal would have been flatly impossible, due to the
overwhelming political power of financial institutions and
mega-corporations, and the influence of the corporate media. But today,
with the stock market collapse, the acute and widespread economic
distress among all but the most wealthy Americans, and the consequent
political unrest and activism, we may have arrived at one of those
“hinges of history” which just might move the United States and the
world in a new and more hopeful direction.
We’ll begin to find an answer in three weeks, as the Americans go to the
If dirty tricks, lies, caging lists, and corrupt voting machines do
their worst and McCain/Palin prevail, then apres Bush, le deluge.
But if Barack Obama wins, the struggle continues as political pressure
must then be applied to his administration, forcefully and persistently.
President Obama, like FDR before him, might then be heard to say, “I agree
with your objectives, now go out and force me to enact them.”
Copyright 2008 by Ernest Partridge
Ernest Partridge's Internet Publications
Conscience of a Progressive:
Partridge's Scholarly Publications. (The Online Gadfly)
Dr. Ernest Partridge is a consultant, writer and lecturer in the field
of Environmental Ethics and Public Policy. He has taught Philosophy at
the University of California, and in Utah, Colorado and Wisconsin. He
publishes the website, "The Online
Gadfly" and co-edits the progressive website,
"The Crisis Papers".