Wednesday, June 24, 2009

In the Flow of History

In 1946 George Keenan's long telegram from Moscow mapped out the policy of "Containment" and defined the nature of the Soviet threat in a way that America could structure long term strategic policies to address. Two years earlier, at the Bretton Woods conference, the armature of post war liberal finance was established between between Great Britain and the United States. Allied victory would secure their ability to impose this system on the Capitalist world and use it as an integral part of the military standoff shaping up with the U. S. S. R..

These events combined to end the territorial competition among States that had driven western politics since the collapse of the Holy Roman Empire. In that span, France, Britain, Sweden, Poland, Russia and Austria had competing territorially expansionist empires. The United States as well had embarked from its founding on a project of territorial expansion. With the peace following World War II this imperial competition transubstantiated from territorial to systemic form. It was Keenan's telegram that catalyzed this transformation and atomic power was the energy that drove the reaction.

Since before civilization first cohered around the nucleus of the written word the animating emotion of politics has been power. With the written word the institutionalization of power was given a previously unachievable stability. Power was given focus and direction by the institutions of the written word and it and those institutions have been wrestling with the limits of institutional constraints on power ever since.

Power crudely aggregates populations and, where successful imperial growth has occurred, institutions have integrated those populations into useful and productive geopolitical units that support the centralized power. At best, from the point of view of power, they give it a platform for further extension. It has been a hallmark of successfully growing powers that the decentralization of quotidian decision making yields a firmer base for the externally focused central power. The nature of this relationship between central authority and local decision making has been the primary focus of the evolving constitutional governments of the West.

The imperial competition of the sixteenth to twentieth centuries saw various political forms superimpose themselves over an array of economic forms and test the combined strengths thereof through trade and warfare. A competition that took root in the fertile soil of the expired Holy Roman Empire was among other things an intramural affair between Christian states. When this internal competition was faced with external pressure from the Huns or the Ottomans for instance, ranks were closed and alliances secured that sustained an otherwise fissiparous West.

With often crude brokering of the Pope the Western nations developed customs of war that tended to preserve the underlying populations of the contending polities. The exception was the Thirty Years War that through the idealism of religious zealotry disparaged the common Christianity of the contending states trying to exterminate or displace entire populations. Such idealistic barbarism vanished from Europe in that war's wake not returning for a quarter millennium until the genocidal wars of the twentieth century. With these exceptions then, the European competition was a constrained one. From that tradition of agreed constraints on the expression of power we have drawn the U. N. Charter, the Geneva Conventions and the Universal Rights of Man.

Like the Thirty Years War, World War II left a profoundly changed psychological landscape in its ashes. Not only had fifty million people been killed, but the victors emerged with the atomic power to annihilate all mankind. Our erstwhile ally in Russia sustained the outward appearance of historical territorial ambitions, but nuclear stalemate robbed the form of its substance. An apparent stasis in great power relations ensued, but behind this facade profound changes were taking place in the underlying economic organizations of the competing powers.

In the twenty years since the Soviet collapse the rich dynamics of the evolved Bretton Woods financial order has driven change so quickly it has been difficult to discern the newly developing power aggregating principles. The astringent of the current financial collapse has drawn for the first time clear outlines. Europe has internalized most deeply in economics the Rights of Man. America has stated them most clearly in politics, all but abandoning them in economics. Beginning in the Middle East and heading East from there are three new competing forms of power superimposed over economically functional populations.

The Iranian Theocracy is a prototype for the first. It entails an absolute central authority legitimized by divine right with a sort of managed plebiscite ritual of legitimacy. It has attempted to take the centralized form of an ecclesiastic hierarchy and set it over and just to the side of an educated modern industrial economy. Ironically this has resulted in a bizarre coalition between Imams and the ignorant who are at present pinching a liberal industrial society between them. As the educated and productive are murdered or repressed by the ideological and ignorant, the economic base, already tepid, will cool and decline. This self defeating relationship of power to economics has robbed one of the primary producers of the worlds most lucrative commodity, oil, of a viable domestic refining industry. Unless the relationship of power to economy is changed this kind of decay will propagate through the larger economy.

Variations on this arrangement obtain across the former Ottoman empire from Turkey in the west to the border of India. The roiling low level conflicts of the last seventy years in this region look like a slow motion reproduction of the Thirty Years War. The best hope here is some Islamic version of the Peace of Westphalia. But even this will not quite be enough to heal the schismatic sectarianism into which the former Ottoman empire has descended. An Islamic Glorious Revolution whereby Sunis, Shiites, Kurds, Armenians, Tajiks, Pashtuns etc learn to share political rights within common commercial and political systems will also be necessary. Domination, short of genocide, does not make the dominated dissappear and the cost of maintaining the relationship not only saps the dominant but also excludes the dominated in the larger economic base that sustains the system.

Next, moving East, India seems to be growing political and economic rights in parallel in an accelerated give and take between competing economic groups competing for political power. I don't know enough about the dynamics in India to make informed commentary except to point out that its political structures seem to be lagging its economic ones at the moment with the potential that economic change will outpace politics ability to distribute its benefits. This is a problem similar to the overwhelming of politics by economics that has recently devastated the United States economy.

China, Korea, Japan and the other Asian Tigers represent the third and only rising model. Here, broad freedoms are granted to economic actors who embody the priorities of the state. The larger these actors become the more bound they end up being to the state by the freedoms it has given them. It seems to be a kind of corporatism that gives the individual the right to change work, but not the kinds of freedoms our bill of rights proposes. Central planning directs regionally autonomous economic leadership that is empowered to express state aims. A broad prosperity based on mercantilism and bounded by both political and economic monopolies is now challenged be the collapse of export markets. Equally important for this model is that central power has centralized the wealth created in vast sovereign wealth funds and holdings of US Treasuries. The dictatorial relationship of the state to the economy does not require that the value added by labor be confiscated largely by the state, but that is precisely what has happened to a considerable extent in all of these countries. The result is that while the nations are wealthy, most of their population is poor and incapable of sustaining the economic demand required for State economic aims.

This array of contenders, now under the market pressures of a collapsed mercantilism are squaring off against the prostrate western models of the EU and the US. And while the EU is the wealthiest, it is the least powerful of the lot because its Union is an economic aggregation formed for economic reasons without the necessary political aggregation to give coherence to its motives. The EU is an economic, not a government model and doomed to the fate of the American Articles of Confederation at best. At worst, a disaggregation back into its constituent parts.

The US, by allowing the judicial fiat that money is protected free speech, has allowed its political system to be overwhelmed by its economic actors. At just the moment that the political apotheosis of universal suffrage was reached in practice as well as in law, the achievement was obviated by a court ruling that empowered money with free speech rights. While any one who cared to could now vote, only the well funded could participate fully. After three decades of this arrangement, a thousand tiny tiltings of the field have so favored the concentration of money that the twenty percent of the populous that isn't broke or bankrupt is a plutocracy now visibly dominating two if not all three branches of our government.

Some adaptation of any of these forms of political economy could be the next dominant model and which ever one achieves it will have done a single thing better than the others. That single thing will be the engagement its people the most effectively in common aims. A state that is not interested in the well being, engagement and productivity of all of its people will always be handicapped in competing with one that is. The dominance that the United States still holds is based on its institutional structure granting the greatest freedoms to individuals in economic competition and our governments relative prudence in guaranteeing the rewards. To the extent that such a regime holds, it precludes the prejudgment of where value will arise leaving open the greatest opportunity and possibility for improvement and then rewards the initiative to exploit opportunity where it arises.

But those freedoms alone are not enough. They are a foundation condition for wealth creation that Iran, India, China, Europe and America all embody in their own specific ways. Even in Iran entrepreneurs have been creating wealth for the last thirty years. To succeed a Civilization must believe in progress and value it enough make the public investments in the education, health and material well being of its population. In addition it must hold out the hope of positive change to focus popular motives toward the common good. These conditions were met by the United States of my childhood, but today there are too many well funded beneficiaries of government largess who say , "the market will give you what you deserve" all the while with their foot on the political scale tilting the market toward themselves.

The outlines of our future competitors are now clear. They are populous and increasingly wealthy. With the exception of the EU and India they are more authoritarian than we are. While their systems grant their citizens certain kinds of freedom that support state aims, they systematically deny citizens access and input to the political process that governs both society and economy. The last thirty years with the enfranchisement of cash by the Supreme Court in Buckley v Valeo our system has converged to a dangerous extent with these competing systems. While I can vote, I can not get my representatives attention. I have a formal political power that has been robbed of substance by money. In the Peoples Republic of China, what the Party wants the Party gets. In the United States, the Republic of Cash, what money wants money gets.

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