| The Cycles of World Powers
The cyclic rise and fall of civilizations in an ancient story, as mentioned in my introduction. In the early 20th Century, Arnold Toynbee made the first attempt at a modern historica approach to this story, freed from the assumptions of deterministic decline, and open to the possibility of regeneration and renewal. The wave of criticism he encountered from historical specialists brought out a small band of defenders as well, perhaps the most prominent of whom was William H. McNeill, whose efforts in trying to bring greater consistency and systematicity to bear lead to some of the earliest work on environmental history. In 1987, naval historian Paul Kennedy published The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000, a book which-unlike Toynbee and others who followed him-made no attempt to describe the broad range of historical development, but instead focused narrowly on issues related to military power.
As Wikepedia summarized:
Kennedy argues that the strength of a Great Power can only be properly measured relative to other powers and he provides a straightforward and persuasively argued thesis: Great Power ascendency (over the long-term or in specific conflicts) correlates strongly to available resources and economic durability; military "over-stretch" and a concomitant relative decline is the consistent threat facing powers whose ambitions and security requirements are greater than their resource base can provide for (summarized on pages 438-439).
In 2002, Kevin Phillips published a book, Wealth and Democracy: A Political History of the American Rich, which included a comparison of America's trajectory as a world power with its three immediate predecessors as leading world power: Spain, Holland and Britain.
Some relevant passages of his book are online here, where he observes:
Leading economic powers are not made or unmade overnight. Each of the three that preceded the United States gained that status over roughly a half century, always amid a powerful convergence of commercial, political, geographic, and cultural forces.
Although the specifics of each were unique, the broad patterns of rise and fall had striking similarities. He writes successively about Spain:
Greater Spain became the world's most important political and economic force by the 1540s and 1550s. Shipments of gold and silver from the New World, only a trickle in the decades following Columbus's explorations, now arrived on a large enough scale to help bring on what scholars have called the "sixteenth-century price revolution." ....
Greater Spain was not displaced as Europe's leading power until the drain of the Thirty Years' War (1618-48) and the full-fledged emergence of an independent Holland.
Holland:
The United Provinces of the Netherlands, born of a late-sixteenth century revolt against Hapsburg authority, started their own extraordinary climb to commercial leadership while Spain's might was still in place. The engines of Dutch advance were maritime, commercial, and even religious. The expulsion of Protestants in 1585 from the Spanish Netherlands (later Belgium) sent so many bankers, merchants, and artisans fleeing to the Protestant north that in the words of one refugee, "Antwerp became Amsterdam." Mushrooming from 30,000 residents in 1580 to 105,000 in 1622 and 201,000 by 1662, Amsterdam replaced Antwerp as Europe's commercial capital.
.... By the 1700s, although Amsterdam remained Europe's great lending center, the Dutch elite had begun to shift their own investments to the next great economic power: Britain.
And Britain:
The precise timing of Britain's own emergence is a continuing debate. Defeat of the French in 1763 gave the British a huge global empire, to say nothing of diplomatic precedence over the representatives of King Louis. Besides launching the Industrial Revolution, Britain also controlled the world's largest navy and verged on replacing Holland as Europe's principal pool of investment capital. Defeat of Napoleon in 1815 made British industry, capital, and empire paramount. But after a mid-Victorian heyday, large portions of British manufacturing were becoming obsolescent by the early twentieth century even while finance and national wealth were still reaching a zenith. Two world wars completed Britain's decline and transferred global economic leadership to the United States.
And then reflects on the common patterns:
Even these short capsules preview some striking recurrences. The early decades of each emerging economic primacy-Greater Spain in the 1520s and 1530s, Holland in 1600 or 1615, late Georgian and regency Britain-were fat years for each nation's economic elite. But it was the subsequent heydays, the golden ages, that brought the flood tide of commercial opportunity, new markets, and wealth that produced the broadest benefit for the largest number. Thereafter, each nation's relative distribution of wealth and income would narrow. Stratification would set in.
....
Let us underscore this next point: What all three "golden ages" involved, first and foremost, was a wave of success that brought broad enough status and prosperity to set the generality of Spaniards, then Dutch and Britons, ahead of their peers elsewhere. At first God was Spanish, which the banners of the sixteenth-century galleons more or less proclaimed. To Holland's favored brede middenstand, the Almighty must have been a Dutch burgomaster. And on Delderfield's bustling mid-nineteenth-century Kentish plain southeast of London, God was an Englishman.
The equivalent heyday in the United States, as we have seen, spans the years from World War II to some point in the 1960s or the early 1970s- the "good years" following the Good War, the era of the Great Compression, when income growth was high and the distance between bottom and upper wage levels was at its narrowest.
The next stage for each leading power began to erode this relatively.
Furthermore, Phillips goes on to make three further points that are extremely important for us: - Each power experiences an unexpected shock at the height of it's powers that lets it know it is not invulnerable, after all. Vietnam was not an anomaly.
- Each power reacts the same way--a reactionary politics of denial sets in for a period of several decades, during which the elites do better than ever, while the larger masses see their fortunes either stagnate, or decline.
- Finallty, in each case, after several decades, an egalitarian reversal sets in.
Phillips writes:
... the popular reactions in mid-eighteenth-century Holland and early-twentieth-century Britain against opulent aristocratic and financial elites raise a different possibility: the emergence during the first third of the twenty-first century of a U.S. radicalism seeded by economic and political pessimism. We have seen how a portion of the Dutch people, seeking a return to lost values, mounted a "Patriot Revolution." Major elements of the British population, seething against wealth and unfairness, used the new Labor Party to build a British welfare state-worker and lower-middle-income circumstances improved markedly-around the much higher tax rates imposed by war and politics on the upper and upper middle classes.
In Globalization and History, economists Kevin O'Rourke and Jeffrey Williamson make the point that pre-1914 globalization came to an end when "a political backlash developed in response to the actual or perceived distributional effects of globalization." A gathering trend toward capital controls, immigration restraints, tariffs, and abandonment of the gold standard, together with democratic enfranchisement and the rise of the welfare state, operated to tilt economics toward "deglobalization" and increased emphasis on equality for some three to four decades after 1918. Inequality did reverse in the rich nations, and the two men suggest that such forces may be building again: "The record suggests that unless politicians worry about who gains and who loses, they may be forced by the electorate to stop efforts to strengthen global economy links, and perhaps even to dismantle them."
This last point stands in stark contrast with Obama's vapid echoing of the free trade conventional wisdom, "We can't stop globalization in its tracks." -- Cited in the very much worth reading survey comparison of Obama and Clinton on trade by OpenLeft commentator Robert Oak here.
History--as Phillips points out--not only says that we can stop globalization, we can reverse it. But even more to the point, we can intelligently reshape it to conform with humane, democratic, egalitarian values. But right now, the most vociferous advocate of "change" has surprisingly little to say about any of that.
Indeed, Obama's chief economic advisor, Ausan Goolsbee-a self-proclaimed "market centrist", would appear to be one who would regard Phillips as some kind of Marxist.
In an admiring column, conservative liar and thief George Will wrote:
Is Goolsbee dismayed about widening income inequality? Yes, but with a nuanced understanding. The stagnation of middle- and working-class incomes, and the anxiety that has generated, is, he says, a most pressing problem, but policymakers must be mindful about trying to address its root cause, which Goolsbee says is "radically increased returns to skill."
In 1980, people with college degrees made on average 30 percent more than those with only high school diplomas. That disparity has widened to 70 percent. In the same year, the average earnings of people with advanced degrees were 50 percent more than those with only high school diplomas; today, it is more than 100 percent.
In Goolsbee's world, apparently, there are no CEO's making four or five hundred times the wage of line workers-there are only more and less-skilled workers. And anything so vaguely macro as the sort of world-historical cycles Phillips discusses? They can only be Marxism in some kind of cheap disquise.
An article on Goolsbee in the Yale Daily News
Goolsbee's outlook on America's economic future reflects Obama's idealism and emphasis on bridging the two-party divide. Goolsbee said the policies he recommends address both the short- and long-term rejuvenation of the economy, in the hopes of providing a safety net while the country's economy rebuilds.
"If this income structure remains in place for 20 years, it implies a very different America and a very different American dream," he said.
For the first time in almost 100 years, Goolsbee said, productivity growth is not translating into wage increases for the majority of Americans.
"The top income levels have blown off the chart, but that's not the issue," he said. "The bottom 95 to 98 percent of income have been stagnant for the last six years. ... That is extremely disturbing."
The solution to this problem will ultimately be a new education plan that sends more Americans to college, he said.
Now, it's certainly true George Bush's economy has been terrible for all but the very top, with falling wages for the bottom 60 percent of households, and barely climbing income for the top 20%. However, this is merely an intensification of the dominant economic trends since 1974.
Indeed, from 1974 to 1992-the year before Bill Clinton took office, the GDP rose 70%, from $4,319 billion (in 2000 dollars) to $7,336 billion. Yet, over the same period of time, houshold incomes (CPS-based Table H-1) lagged dramatically for those at the 20th percintile (up 2%), 40th percentile (up 1%), 60th percentile (up 8%) and even 80th percentile (up 14%). A 14% increase is 1/5 the 70% growth in GDP.
There's no doubt that things were worse for those with less education, but touting education as the key is clearly just a distraction from the larger political and historical forces at work-forces that Phillips describes quite candidly, while Goolsbee baptizes Obama in denial.
Part 1, Cycles of American Political Systems, here. |
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