You’re Doing It Wrong

on March 1, 2010

There’s a new article at Washington Monthly, titled “Who Broke America’s Jobs Machine?” that I found quite interesting in itself — and even more interesting for the light it sheds on the visions. It indicates a major change of direction during Roosevelt’s New Deal, previously unknown to me, that appears to be directly related to the emergence of the holism vision in the late 1930’s.

Authors Barry C. Lynn and Phillip Longman argue that starting after World War II, the American economy served as a reliable job-creating machine, with innovative small businesses constantly providing new opportunities for employment and investment. This process was disrupted, however, when the Reagan administration allowed consolidation to take place in nearly all major industries, resulting by the 1990’s in the formation of monopolies and near-monopolies with no interest in innovation.

These corporate Goliaths, Lynn and Longman explain, feel no need to innovate because they find it easier to increase profits by jacking up prices or squeezing their suppliers. At the same time, their dominance inhibits the start-up of potential competitors, or else they buy them out before they can get established. The result is that the job market shrinks and investors have no place to put their money except into financial bubbles.

The entire article is well worth reading — but what really caught my eye was the authors’ discussion of how the pre-Reagan “jobs machine” came into existence.

In the late nineteenth century, men like John D. Rockefeller, Andrew Carnegie, and J. P. Morgan often defended themselves against antimonopoly activists with the argument that one giant vertically integrated company could deliver oil or steel more efficiently than could many firms in competition with one another. This “efficiency” argument appealed to a broad range of opinion, from European socialists to many American progressives. Even Theodore Roosevelt, despite his reputation as a “trust buster,” accepted the notion that competition was wasteful. He hewed instead to a philosophy of “corporatism,” which held that giant enterprises could best be managed through a mix of government and private power according to “scientific” principles to ensure their maximum utility to the public. …

Herbert Hoover was a fervent believer in corporatism, as were the New Dealers who succeeded him. When they brought their National Industrial Recovery Act to Congress in June 1933, one of the act’s central provisions called for suspension of America’s antitrust laws.

The modern era of antitrust enforcement began in 1935, when the Supreme Court declared the NIRA unconstitutional. In the aftermath of that decision, populists in Congress and the administration moved swiftly to take the New Deal in a radically different direction. Unlike the corporatists, the populists believed that the central goal of government in the political economy should be to protect the individual citizen and society as a whole from the consolidation of power by the few. … By 1937, Roosevelt officials were shaping a “second” New Deal centered largely around the engineering of competition among large companies.

This is fascinating to me for several reasons — one being how closely it corresponds to what I wrote last December about the changes during precisely that 1935-37 period, in an entry titled “The Rube Goldberg Principle.”

I noted there that “nineteenth century science had been characterized by a belief that there were natural laws governing every aspect of life, with human nature, human history, and human evolution all being controlled by inexorable cosmic principles.” It was the notion of all-embracing natural laws which convinced even progressives of that era that corporations could be operated according to “scientific” principles and made to run like finely-tuned machines.

This early 20th century attitude, I suggested, gradually gave way in the 1920’s and 30’s to the far more flexible concept of “a Rube Goldberg universe — one in which most of existence was governed not by law but by wild improvisation.” It was that improvisational ideal that inspired the most adventurous of the New Dealers.

I also observed that it was no coincidence the key term “ecosystem” was coined in 1935, since “an ecosystem might even be seen as the ultimate manifestation of the Rube Goldberg principle in action — a motley assortment of whatever life-forms happen to wander into the neighborhood, all of them learning together through trial and error and positive feedback loops how to live in ways that keep everyone happy and the whole system running smoothly.”

This kind of self-organizing neighborhood is precisely what was produced by Roosevelt’s anti-trust initiatives — a Rube Goldberg economy based on “trial and error and feedback loops,” in which interactions among the participants give rise to a system that works smoothly and effectively for the benefit of all its members.

So this article confirms a number of my own insights — which is always a nice bonus — but at the same time it undercuts some of my long-held assumptions about the sequence of events through which visions emerge.

Because visions develop on the margins of society during the period leading up to their countercultural phase, I’d always assumed they must be even more obscure prior to that — the stuff of art and philosophy and not of public policy. But the populists who fashioned Roosevelt’s second New Deal in 1935-37 were certainly as attuned as anyone to holism-touched-by-multiculturalism.

Holistic ideas would remain speculative but also solidly mainstream for the next several decades, and this did not change even when they became a major influence on the 60’s counterculture. I have previously pointed to Lyndon Johnson’s use of an early form of the “whole earth” metaphor in his 1965 inaugural address, and environmentalism became a national obsession by the early 1970’s, inspiring Nixon’s creation of the Environmental Protection Agency (1970) and the Endangered Species Act (1973).

It was only after the first oil price shock in 1973 that attitudes began to harden. When Jimmy Carter tried to set a good example in 1977 by turning down the White House thermostat and wearing a sweater, he was widely seen as caving in to negative expectations. Free market doctrines appeared to offer a far more robust answer to the specter of energy shortages and economic stagnation, and under Reagan, the tentative steps towards deregulation that had begun in the late 70’s were applied across the board.

Not only did Reagan begin dismantling the New Deal, he also turned away from environmentalism. When he announced his presidential candidacy in November 1979, he did not call for “a cleaner environment” like Nixon or wish to see “our natural beauty preserved” like Carter. Instead, he urged his audience, “Now let us work toward the goal of using the assets of this continent, its resources, technology, and foodstuffs in the most efficient ways possible.” As president, he tore out Carter’s solar panels, appointed an anti-environmentalist as Secretary of the Interior, and insisted that “trees cause more pollution than automobiles.”

But it wasn’t just Reagan. In the 1980’s, ecology was increasingly mocked and demonized as the stuff of wild-eyed tree-huggers (1982) and eco-terrorists (1987). This was the turning point at which holism began to be marginalized and turned into the guiding vision of the next counterculture.

And yet the picture isn’t quite that simple. There was also an element of holism in the ideology of the Reagan administration — but holism in a very specialized and limited form.

As Lynn and Longman point out, present-day free market ideology goes back to Milton Friedman’s Capitalism and Freedom (1962), which argued against placing restrictions of any kind on business. Like so many others in the early 60’s, Friedman believed that democracy had grown stifling and needed a fresh shot of chaos. But unlike the New Leftists, he interpreted democracy solely in terms of economic freedom and perceived any government intervention on behalf of individual rights as a threat to the efficiency of the market.

When the democracy-and-chaos partnership took shape in the late 70’s and early 80’s, it was Friedman’s ideas that infused it most strongly. But the budding partnership also depended upon a dash of holism to give it legitimacy — much as the science-and-democracy partnership of the 30’s had depended on chaos to justify its freewheeling and individualistic way of doing things.

The ultimate justification for the infallibility of the free market has been the notion that it is the epitomal self-organizing system — which is, of course, a holistic concept. But it is only business that is allowed to be self-organizing in this way, not workers or consumers. And what is entirely missing is any tolerance for multiculturalism — for a range of different groups within society, for non-economic interests, for any objectives except profit and power. And without that beacon of multiculturalism, holism becomes merely a convenience.

The long-term effect of the democracy-and-chaos partnership has been a great hollowing out of the democracy vision. Just as the reason vision was stripped of its transcendence and subordinated to science starting in the 1860’s, and the science vision was subordinated to social planning and consumerism in the 1930’s, so the democracy vision has been subordinated to the unrestrained free market since the 1970’s.

Instead of actual freedom for individuals, democracy-and-chaos has offered merely the similitude of “freedom of choice” — in the words of one particularly noxious fast food commercial that appeared in the bicentennial year of 1976. Freedom to choose among a multitude of brands all owned by a shrinking handful of giant corporations, and freedom to choose among the political candidates owned by those same corporations.

It’s normal for dominant partnerships to be on the conservative side — their primary function is, after all, to restabilize society after a period of creative turmoil. And yet I can’t help feeling that the democracy-and-chaos partnership has been narrower and more destructive of human values that it had any need to be — which makes the questions of how we got here and how we can get out of it all the more urgent.


A listing of all my posts on the cycle of visions can be found here.

A general overview of the areas of interest covered at this blog can be found here.

A chronological listing of all entries at this blog, with brief descriptions, can be found here.

A simple list of all the visions can be found here.

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