Apres moi, le deluge

George Friedman, Founder and CEO of Stratfor, is always worth reading for the same reason that, say, James Kilpatrick was: You might not have agreed with much that he wrote, but there were usually a few nuggets amidst the infuriation, and he wrote so amazingly well. In fact, in his later years, his columns on writing were all I remember.

Friedman has an important column today in Stratfor, The Crisis of the Middle Class and American Power. He opens with:

I received a great deal of feedback, with Europeans agreeing that this is the core problem and Americans arguing that the United States has the same problem, asserting that U.S. unemployment is twice as high as the government’s official unemployment rate. My counterargument is that unemployment in the United States is not a problem in the same sense that it is in Europe because it does not pose a geopolitical threat. The United States does not face political disintegration from unemployment, whatever the number is. Europe might.

And proceeds to argue most eloquently that the United States faces exactly that. This was also something Boyd worried about. For examples, here’s part of his discussion of the prerequisites for an insurrection:

Insurrection/revolution becomes ripe when many perceive an illegitimate inequality—that is, when the people see themselves as being exploited and oppressed for the undeserved enrichment and betterment of an elite few. (Patterns, 94)

I read Friedman as concluding — and I agree — that we’re nowhere near this stage. For that reason, a “vanguard” has not been able to emerge:

[Igniting the revolution] is accomplished when the vanguard is able to:

  • Fan discontent/misery of working class and masses and focus it as hatred toward existing system.
  • Cause vacillation/indecision among authorities so that they cannot come to grips with existing instability.
  • “Confuse other elements in society so that they don’t know exactly what is happening or where the movement is going.
  • Convince “proletariat class they have a function—the function of promoting revolution in order to secure the promised ideal society.” (Patterns 67)

Greece, for example, is not at this stage, and they are much worse off than we are. Marx, as Boyd would often note, had a pretty good diagnosis, but his solution was tested and turned out to be worse. But that doesn’t invalidate his analysis of causes.

Friedman concludes that we need luck:

It would seem to me that unless the United States gets lucky again, its global dominance is in jeopardy.

I disagree. As Fabius Maximus notes, we need to fix our OODA loops, that is, to come to some broad agreement (orientation) that we do have the problems Friedman lists and that we need to back away from the conditions that will lead to social disintegration. In our system, the primary responsibility for selling this need falls on the President.

As an aside, Friedman gets the part about “agility” completely wrong. “Re-engineering” as it was actually practiced became a cover for outsourcing overseas. Its complete purpose and how all those consultants made their money was simple cost cutting.  Outsourcing — making your supply chain more complex — has exactly the opposite effect. It kills agility. Charles Fishman has a great article that illustrates this point in last month’s Atlantic, “The Insourcing Boom.”

What is true is that lean practices combined with robotics (which finally seem to be working as they were promised a generation ago) will greatly decrease the need for human workers. Nobody knows what this will mean. A colleague of mine has a disturbing post on this point, and I can’t find anything wrong with his analysis. Fabius has also been running posts on this subject.

2 thoughts on “Apres moi, le deluge

  1. robb’s article from fall2011
    http://globalguerrillas.typepad.com/globalguerrillas/2011/10/journal-why-the-us-middle-class-is-broken.html
    graph originally from here … with additional … going back to 1913:
    http://www.nytimes.com/imagepages/2011/09/04/opinion/04reich-graphic.html
    from this article earlier in the fall of 2011
    http://www.nytimes.com/2011/09/04/opinion/sunday/jobs-will-follow-a-strengthening-of-the-middle-class.html

    there there is this Triumphant plutocracy; the story of American public life from 1870 to 1920
    http://archive.org/details/triumphantpluto00pettrich
    that sort of extends the theme back into the last half of the 1800s. also discusses the author’s battle in congress to permit census to collect information for calculating distribution of wealth; loc2015-19:

    The Committees of Congress, having the censuses of 1910 and 1920 in charge, refused to include in the census bills a clause requiring the enumerators to ascertain the distribution of wealth, because they, as representatives of the plutocracy, did not desire the facts to be known. The bulk of the American people have little or no wealth; the economic power of the United States is concentrated in the hands of the few, and the few are determined to keep the many in ignorance as long as they possibly can.

    … snip …

    and then to stray a little (somewhat Spinney’s “perpetual war”) log 6265-74:

    XXX. THE LEAGUE TO PERPETUATE WAR The war has just begun. I said that when the Armistice terms were published and when I read the Treaty and the League Covenant I felt more than evercon vinced of the justice of my conclusion. The Treaty of Versailles is merely an armistice—a suspension of hostilities, while the combatants get their wind. There is a war in every chapter of the Treaty and in every section of the League Covenant; war all over the world; war without end so long as the conditions endure which produce these documents.

    … snip …

  2. if you can stand it, Hively recently repeats the graph (from new york times)
    http://johnhively.wordpress.com/2012/12/28/reaganomics-destroyed-the-economy/

    and then table on compensation: Average CEO Pay Compared to Average Worker Pay By Nation
    http://johnhively.wordpress.com/2013/01/08/average-ceo-pay-compared-to-average-worker-pay-by-nation/

    the above has US at 475:1 … there were numerous reports as the economy was crashing that it was over 400:1 (compared to 10:1 to 20:1 in the rest of the world). Stiglitz mentions that in certain industries in spiked over 1000:1
    http://www.amazon.com/Freefall-America-Markets-Sinking-ebook/dp/B0035YDM9E

    including lots of discussion that US corporate executive compensation rules results in horribly skewing how corporations are run

    Who Stole The American Dream
    http://www.amazon.com/Who-Stole-American-Dream-ebook/dp/B007MEWAX2

    includes quotes by former IBM VP and president of IBM Research who went on to be head of MIT Sloan Institute … review on Amazon:

    This is a book full of surprises and revelations — the accidental beginnings of the 401(k) plan, with disastrous economic consequences for many; the major policy changes that began under Jimmy Carter; how the New Economy disrupted America’s engine of shared prosperity, the “virtuous circle” of growth, and how America lost the title of “Land of Opportunity.” Smith documents the transfer of $6 trillion in middle-class wealth from homeowners to banks even before the housing boom went bust, and how the U.S. policy tilt favoring the rich is stunting America’s economic growth.

    … snip …

    Somewhat same theme Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Presenet
    http://www.amazon.com/Age-Greed-Triumph-Finance-ebook/dp/B004DEPF6I

    The issue on 401k plans is also repeated in more detail in “Economists and the Powerful”:
    http://www.amazon.com/Economists-Powerful-Convenient-Distorted-ebook/dp/B009K44OW2

    but also talks about how leading economists were “captured” by wallstreet … also referencing “Inside Job”:
    http://en.wikipedia.org/wiki/Inside_Job_%28film%29

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