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In previous posts, I’ve considered the economic and political decentering of the nation-state, the unraveling of free-market orthodoxy in the face of the economic crisis of 2008, and my opinion that our political disarray of recent years emerged from these two factors.
You might fairly ask how I can talk about the decentering of the nation-state after a massive financial bailout and stimulus package, and in the face of major health care legislation. Not to mention the assertive international policy of the Bush years.
I’ll begin my answer by considering a characteristic that all of these phenomena share: That is, they all involve responses to the increasing ability of networked groups of non-state actors to cause disruption on a global scale.
We well understand how 9/11 depended on the ability of a non-state actor to take advantage of networking opportunities provided by new communications and transportation technologies. The neoconservative response, rightly or wrongly (and I still hold, rightly) constituted a serious response to this new reality: the reorganization of hostile societies, they argued, served as a means of policing wayward elements that the US could not control from a distance. Iraqi social patterns would benefit us if they enhanced the relative authority of the moderate, and hopefully growing, middle class: The neoconservative project ultimately depended on a very socially-oriented view of national defense. (Some, obviously, will disagree with the premise that we can alter foreign societies socially. Nonetheless, one would have difficulty disagreeing with the idea that the social constitution of foreign societies bears increasing relevance in an age of weapons of mass destruction, improved communications and transportation, etc.)
The financial crisis of 2008 bears strikingly similar traits to the “terrorism crisis of 2001” in that the networking of housing-purchase decisions across the country created a heretofore unknown interconnection between national housing values. Here again, enhanced communications technologies played a central role: Namely, they allowed financiers to organize nation-wide housing derivatives into unified products and allowed massive pools of capital, from international sources, to overwhelm traditional patterns of home financing. In finance, as in the case of international terrorism, the state confronts a vast web of transactions that it cannot successfully monitor or police. In the case of TARP, as in that of Iraq, middle class wealth and habits reveal themselves as the ballast of a volatile political economy: Specifically in the US case, the middle-class funded bailout of high-stakes financiers, after a crisis created by those same financiers as well as by uneducated homebuyers, suggests that ultimate financial stability does not derive from New York but from the well-being, and education, of the mass of American society.
The US government acted aggressively in Iraq and with regard to the financial crisis. In each case, however, the logic of the events precipitating these actions indicates that state power faces a lasting, and growing, challenge from the power of networks unattended until the moment of crisis. The nature of such networks should fascinate us even more than the loud words and deeds of a superpower.
Monday, February 08, 2010
Sunday, January 24, 2010
Google vs. China, and America vs. Itself
Google’s confrontation with China over the freedom of access to information may evoke feelings of both moral and commercial satisfaction for residents of the free market West: Google simultaneously stands in for our disdain for Chinese political repression and for that country’s shortsighted understanding of the economic value of free information flows.
Tom Friedman suggests that a Chinese internal struggle, between “Network China” and “Command China” defines this dispute and may indicate something about the future of that country.
However we may frame it, the conflict should evoke for us as much introspection as satisfaction: We, too, currently struggle themselves to come to terms with the concept of “economy as network”: “a world in which the focus of value creation is effective participation in knowledge flows, which are constantly being renewed.”
Those who stand at the margins of this transformation call forth libertarian slogans in order to evoke a feeling of defiant individualism. They do not understand the dynamic of an economic system that demands the nurturing of relationships and the renewal of knowledge and that suggests that individualism does not flourish in a social vacuum. The more pragmatic brand of economic individualism favored by Wall Street lost all credibility in late 2008, of course, when financiers acknowledged their own dependence on the broader American social network.
Misunderstandings about the changing nature of our economy clearly extend beyond the right-wing: Democrats evince characteristic eagerness to conflate moral and economic arguments as they address needed health and energy reform. They thereby demonstrate a lack of seriousness with regard to the limited role the American state can play in correcting an economy newly susceptible to international capital flows and increasing foreign competition: America must enhance its ability to compete internationally if it is to address its social challenges sustainably.
We, just like the Chinese, require a new relationship to government for 21st century success. The old metaphor of government as a command center, whether encouraged by old guard communist leaders or well-meaning American reformers, or whether opposed by libertarians, no longer suffices. Government at its best will act as a node that has the potential either to complement or to hinder the flourishing of both domestic and international relationships. Understanding this reality, rather than adhering to old nostrums, will give us the greater measure of moral and commercial clarity.
Tom Friedman suggests that a Chinese internal struggle, between “Network China” and “Command China” defines this dispute and may indicate something about the future of that country.
However we may frame it, the conflict should evoke for us as much introspection as satisfaction: We, too, currently struggle themselves to come to terms with the concept of “economy as network”: “a world in which the focus of value creation is effective participation in knowledge flows, which are constantly being renewed.”
Those who stand at the margins of this transformation call forth libertarian slogans in order to evoke a feeling of defiant individualism. They do not understand the dynamic of an economic system that demands the nurturing of relationships and the renewal of knowledge and that suggests that individualism does not flourish in a social vacuum. The more pragmatic brand of economic individualism favored by Wall Street lost all credibility in late 2008, of course, when financiers acknowledged their own dependence on the broader American social network.
Misunderstandings about the changing nature of our economy clearly extend beyond the right-wing: Democrats evince characteristic eagerness to conflate moral and economic arguments as they address needed health and energy reform. They thereby demonstrate a lack of seriousness with regard to the limited role the American state can play in correcting an economy newly susceptible to international capital flows and increasing foreign competition: America must enhance its ability to compete internationally if it is to address its social challenges sustainably.
We, just like the Chinese, require a new relationship to government for 21st century success. The old metaphor of government as a command center, whether encouraged by old guard communist leaders or well-meaning American reformers, or whether opposed by libertarians, no longer suffices. Government at its best will act as a node that has the potential either to complement or to hinder the flourishing of both domestic and international relationships. Understanding this reality, rather than adhering to old nostrums, will give us the greater measure of moral and commercial clarity.
Tuesday, December 22, 2009
Quick Thought
If it's unjust for women to pay more for health insurance than men, is it OK for men to pay more for life insurance than women do?
Monday, December 21, 2009
Economics, Morality, and Individualism
Max Weber explored how individualism and economic growth can be mutually supportive in a climate of public morality. That morality, I would argue, can shift with the times but must remain personally comprehensible and economically productive if it is to endure.
Changing economic circumstances, in fact, demand that we reexamine the public morality that, by its very normative nature, we tend not to consider in an active and persistent manner. Such re-examination necessarily bring turmoil, for the reason, just implied, that unexamined mores proliferate best.
Rapid information flows and globalized financial networks are among the factors that most destabilize our public morality today. That nation-state is both less relevant and more vital to our economic life: Its control over a particular economic environment is less absolute, but the necessity for its support of the growing international business of its people is increasingly essential.
It will not be easy to assimilate dynamics that implicitly undermine traditional political orthodoxies and that, accordingly, act as intellectual irritants. Such is the source of the appeal of ideological entrenchment.
Our concerns for individual liberty and social welfare are valid and valuable. The success (or failure) of the task of re-imagining our politics depends on our patience and intellectual courage.
Changing economic circumstances, in fact, demand that we reexamine the public morality that, by its very normative nature, we tend not to consider in an active and persistent manner. Such re-examination necessarily bring turmoil, for the reason, just implied, that unexamined mores proliferate best.
Rapid information flows and globalized financial networks are among the factors that most destabilize our public morality today. That nation-state is both less relevant and more vital to our economic life: Its control over a particular economic environment is less absolute, but the necessity for its support of the growing international business of its people is increasingly essential.
It will not be easy to assimilate dynamics that implicitly undermine traditional political orthodoxies and that, accordingly, act as intellectual irritants. Such is the source of the appeal of ideological entrenchment.
Our concerns for individual liberty and social welfare are valid and valuable. The success (or failure) of the task of re-imagining our politics depends on our patience and intellectual courage.
Wednesday, November 11, 2009
Markets and Saints
Markets and Saints
November 11, 2009 by Barak Epstein
Free marketeers receive a cool reception nowadays but neither is socialism making much of a comeback, unless you count its mention on signs at Tea Parties. It’s never easy to develop a coherent economic response to a crisis when old ideologies lose relevance. Pragmatism therefore demands that we employ the best tools of our current system to address its greatest ills; a young real estate advisory and consulting nonprofit I know is a case in point.
Real Estate Advisory and Development Services (READS) raises funds through arranging real estate deals for budding charter schools as well as through writing grants, the more traditional work of a nonprofit. The president, Brian Keenan, told me, “Folks ask for reduced rates for our services, which actually are about half the rate of a for-profit. I tell them, ‘Our time is valuable. We can discuss when payment is made but we are unwilling to reduce our fee.’”
Keenan is a former banker and doesn’t fear sounding too commercial for the more delicate sentiments of the world of do-gooders. At the same time, he readily admits that he began his company because his old boss told him that he was “spending too much time helping floundering nonprofits with their real estate problems.”
Keenan’s work is emblematic of a generation of nonprofits not imbued with the anticapitalism of the 1960’s, nor evincing the noblesse oblige of late-nineteenth and early-twentieth century reformers. The triumph of capitalism is implicit.
Firms such as Keenan’s aim to harness a bit of the tremendous accumulated capital in our country in order to catalyze the full economic participation of underutilized and undertrained social sectors.
The need and the opportunity are identical: Investing in socially marginalized children creates obvious value for the country entire but less obviously does so for particular, for-profit corporations. By leveraging the goodwill of socially-concerned citizens and, simultaneously, uncovering new profit streams, entrepreneurial-minded nonprofits demonstrate the latent productivity of large segments of the population and, eventually, attract further interest and investment.
Capitalism is excellent at providing opportunities to well-equipped and motivated entrepreneurs. It is less good at developing the talents, outlook, and networks of those who remained removed from its dynamics.
The wealth of our age gives us the luxury of seeking synergies between these two goals. Those who uncover such synergies have the potential to do good and to prosper.
November 11, 2009 by Barak Epstein
Free marketeers receive a cool reception nowadays but neither is socialism making much of a comeback, unless you count its mention on signs at Tea Parties. It’s never easy to develop a coherent economic response to a crisis when old ideologies lose relevance. Pragmatism therefore demands that we employ the best tools of our current system to address its greatest ills; a young real estate advisory and consulting nonprofit I know is a case in point.
Real Estate Advisory and Development Services (READS) raises funds through arranging real estate deals for budding charter schools as well as through writing grants, the more traditional work of a nonprofit. The president, Brian Keenan, told me, “Folks ask for reduced rates for our services, which actually are about half the rate of a for-profit. I tell them, ‘Our time is valuable. We can discuss when payment is made but we are unwilling to reduce our fee.’”
Keenan is a former banker and doesn’t fear sounding too commercial for the more delicate sentiments of the world of do-gooders. At the same time, he readily admits that he began his company because his old boss told him that he was “spending too much time helping floundering nonprofits with their real estate problems.”
Keenan’s work is emblematic of a generation of nonprofits not imbued with the anticapitalism of the 1960’s, nor evincing the noblesse oblige of late-nineteenth and early-twentieth century reformers. The triumph of capitalism is implicit.
Firms such as Keenan’s aim to harness a bit of the tremendous accumulated capital in our country in order to catalyze the full economic participation of underutilized and undertrained social sectors.
The need and the opportunity are identical: Investing in socially marginalized children creates obvious value for the country entire but less obviously does so for particular, for-profit corporations. By leveraging the goodwill of socially-concerned citizens and, simultaneously, uncovering new profit streams, entrepreneurial-minded nonprofits demonstrate the latent productivity of large segments of the population and, eventually, attract further interest and investment.
Capitalism is excellent at providing opportunities to well-equipped and motivated entrepreneurs. It is less good at developing the talents, outlook, and networks of those who remained removed from its dynamics.
The wealth of our age gives us the luxury of seeking synergies between these two goals. Those who uncover such synergies have the potential to do good and to prosper.
Thursday, October 15, 2009
Why Bush and Obama are Not as Different as You Think
Bush ignored the supposed inviolability of nation-states with his invasion of Iraq. Obama believes that we should “spread the wealth around” and is attempting to do so through health care reform, agitating to no end those who believe in the sacredness of individual property. How could these two phenomena be connected?
The nation-state system and the ideology of individualism are codependent in many ways. The illusion of the atomized individual sustained itself as long as global politics forced individualistic societies to bind together in the confrontation of collectivist and/or repressive regimes.
Bush correctly discerned that the system of international law not protect the country in an age of easy travel and transportable, highly destructive technology, and committed non-nation state actors. He undermined the preexisting global order in the face of a real security need.
Obama correctly discerns that, in the wake of the general acceptance of the economic power of individualism and in the absence of a viable ideological alternative (whether, as you would have it, due to Bush’s attack on radical Islam or due to its inherent nihilism), he must confront the social malaise that individualism sometimes creates. Struggle with communism, for instance, can no longer provide an individualistic halo for the reform of education, infrastructure, or social insurance.
The post-national world, emerging slowly for now, presents a new matrix for security decisions and new social challenges to individualistic democracies. Naturally, national governments are a crude tool for managing their own (again, perhaps very gradual) retreat into obsolescence. Nonetheless, it is inevitable, and at times, useful, that they attempt to do so. It is no surprise that confusion reigns in the meantime.
The nation-state system and the ideology of individualism are codependent in many ways. The illusion of the atomized individual sustained itself as long as global politics forced individualistic societies to bind together in the confrontation of collectivist and/or repressive regimes.
Bush correctly discerned that the system of international law not protect the country in an age of easy travel and transportable, highly destructive technology, and committed non-nation state actors. He undermined the preexisting global order in the face of a real security need.
Obama correctly discerns that, in the wake of the general acceptance of the economic power of individualism and in the absence of a viable ideological alternative (whether, as you would have it, due to Bush’s attack on radical Islam or due to its inherent nihilism), he must confront the social malaise that individualism sometimes creates. Struggle with communism, for instance, can no longer provide an individualistic halo for the reform of education, infrastructure, or social insurance.
The post-national world, emerging slowly for now, presents a new matrix for security decisions and new social challenges to individualistic democracies. Naturally, national governments are a crude tool for managing their own (again, perhaps very gradual) retreat into obsolescence. Nonetheless, it is inevitable, and at times, useful, that they attempt to do so. It is no surprise that confusion reigns in the meantime.
Monday, September 21, 2009
The End of the American Consensus
We weren't told how to behave that day after 9-11, we just knew. It was right; it was the opposite of what we feel today . . . Are you ready to be the person you were that day after 9-11, on 9-12?
-Glenn Beck, 3/13/09
Wherefore 9/11 nostalgia?
What kind of nostalgia does the memory of 9-12-01 provoke? Why would it be appealing?
The memory of unity, of confronting the world as a coherent American people is clearly part of such romanticism.
The current economic recession, the fear of terrorism, and intensified political partisanship (through the Bush and, now, the Obama years) heighten the appeal of a reassuring unity.
Whence our discord?
But the events themselves (terror attack, economic recession) do not explain all of our unease. Nor does partisanship explain all of our discord.
Rather, 9/11 and the financial meltdown forced us to recognize American vulnerability in new ways and to make decisions that undermined the ideological consensus, predicated on the integrity of nation-states and of markets, that constituted the bulwark of American political life from, at least, World War II until recent years.
Let’s look at the security and economic challenges of recent years to understand how they have punctured this American consensus.
The security challenge: 9/11 demonstrated the limitations of the nation-state system: We learned that the apparently mundane political goings-on in other nation-states are of vital security interest to us even when possess no large conventional army. In other words, we have to pay attention to foreign societies, not just foreign militaries. The Bush Administration’s argument for the Iraq war, love it or hate it, proposed a response to this facet of the security challenge. At the same time, the preemptive Iraq War directly undermined Americans’ faith in the stability and relevance of the international laws undergirding the nation-state system.
The economic challenge: The TARP bailout demonstrated the limitations of our corporate sector as well as our new economic vulnerability: Ultimately, the stabilization of that sector demanded the ‘public insurance’ of our tax dollars. Also, our debt and our trade imbalance demonstrated that the economic goings-on in other nation-states are of vital interest to us. Our large international debt limited our options to respond to the financial crisis and may have contributed (read more here here and here) to it in a number of ways.
In short, events have overwhelmed the ideology that underpinned American political thinking from the end of World War II until recent years: We now have less faith in the international system of nation-states as well as less faith in free market, corporate capitalism.
This ideological disorientation causes the malaise that Glenn Beck now exploits.
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