Category Archives: Politics & Economics

Externalities: Where the “Invisible Hand” Gets Cramps

progressAdam Smith, in his economic philosophy book The Wealth of Nations, penned a famous passage that reads as follows:

[E]very individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.

The first thing that a modern reader may notice about this passage is Smith’s assumption that an individual will prefer “the support of domestic to that of foreign industry,” which is observably not the case today. This may suggest that there is a flaw in the theory, and indeed there is.

Today, free-market advocates use the idea of the “invisible hand” to advocate leaving the market as free of government regulation as possible, asserting that it will inevitably regulate itself to the benefit of society, and that attempts by the government to shape it will inevitably produce a poorer result. This is taking the idea much further than Smith himself would have done. Smith recognized that for his “invisible hand” to operate, a structure of laws and government enforcement of contract obligations, property rights, and so on was required, but the idea that government is the foe of a free market rather than its enabler has become common currency on the economic right.

To what extent is Smith’s idea of an invisible hand directing self-interest to produce benign outcomes accurate? Under what circumstances does this in fact work? Under what circumstances does it fail to work?

Where The Invisible Hand Works

The mechanism behind Smith’s invisible hand idea is competition and the requirement that a business satisfy customers. This is what prevents a business from selling defective merchandise or charging exorbitant prices for it. If it does, a competitor will seize market share by offering a better product and/or charging a lower price. By seeking his own self-interest, a business owner will serve the interests of his customers as well, because the one is dependent on the other.

This does work to an extent. It clearly breaks down under monopoly conditions, where no effective competition exists. One finds that problem in the pharmaceutical industry, where customers are captive and patent law gives companies a monopoly over many of their products.

Aside from real competition, another necessity for the operation of the invisible hand is that the person making the decision to act owns both the benefits and the costs of that action. In the simple case of a company choosing to put in the time and effort to offer a good product for a good price, that’s so. The company will reap the benefit in increased sales and market share. (The consumer also benefits, but the company’s competitors do not.) The company also pays the cost by investing capital to improve its product, or by lowering per-transaction revenue by holding prices down.

As a technical term, we may say that the benefits and costs of the business decision are both internal to the business. The person making the decision pays those costs and reaps those benefits, and so the decision is informed by both.

But what happens when that’s not so?

External Costs

What happens when a decision by a business has consequences and costs that the business does not pay? For example, when a manufacturer dumps the wastes from the manufacturing process into the air, into a local river, or otherwise on public ground, the cost in the form of health consequences and other damaging effects of pollution is borne by the public.

A part of that cost is, in fact, borne by the business, in the sense that the business owner is part of the community and has to live in it, and its employees (or even its owner) may be impacted  by the negative public health effects of the pollution. But these costs don’t impact the business in particular. Most importantly, they don’t impact the business any more (or less) than they do its competitors. That being the case, the business has no incentive to reduce its pollution, since while that would slightly benefit the business itself, it would benefit the competition just as much, and hence provide no net gain.

There are many things that businesses do in pursuit of self-interest that are very much not to the public good. This includes trying to hold down wages, lobbying for government subsidies, collusion and price-fixing, allowing unsafe working environments, on and on. These things carry a cost far in excess of the benefits, lumping all of them together. But because the benefits are almost all realized by the business, but the costs are mostly paid by others, the business does them anyway — and that’s a perfectly rational, sound decision.

So there’s the first situation in which the invisible hand gets cramps. It doesn’t work when costs are externalized. Under those conditions, a business’ pursuit of self-interest will not accrue to the public good.

External Benefits

But costs aren’t the only thing that can be externalized. Sometimes benefits are external to the actor, too. In that situation, it’s not that a business will do something harmful, but that it will not do something needful. When the costs are internal but the benefits are mostly external, it makes no sense in terms of self-interest to take an action.

Let’s go back to the example of wages. A business pays wages to its employees because it has to. You can’t get people to work for nothing. Just won’t happen, sorry. Not usually, anyway. So the business pays the money (an internal cost) and gets the work done (an internal benefit).

But what about raising wages across the board? What about voluntarily deciding to pay its employees more? Obviously there’s a cost to that, but is there also a benefit?

Sure. Higher wages mean more consumer spending which generates more sales and boosts the economy. Everyone wins. But that’s exactly the problem. Everyone wins — a shared benefit — but the business foots the bill all by itself — a private cost. While the business will indeed benefit from raising its wages, so will its competitors, who will not be sharing in the cost (unless they also raise wages). Something that benefits you and your competitors equally, but that only you pay for, is not a net gain.

Externalized benefits cramp the invisible hand every bit as much as externalized costs. The same rule applies to things that we don’t expect a business to do, like defending the nation, enforcing the law, educating poor children, building highways, and so on. All of these things would benefit a business that took on the task. Invasion by a hostile power, public disorder, an ignorant workforce, and lack of infrastructure are all bad for business. But they’re equally bad for my business and my competitors’ businesses. It’s certainly in my self-interest for these things to be taken care of, but not for me alone to foot the bill for taking care of them. There’s no profit in that.

What It All Means

The invisible hand metaphor is in fact sometimes valid. But it’s not valid more often than it is. The invisible hand works without cramping up only in very limited circumstances and for very limited purposes. It works if and only if both costs and benefits are internal to the business or person making the decision. We can trust a business to make decisions in the public good wherever that holds true.

But where it doesn’t — and it doesn’t an awful lot of the time — something else, usually the government, must step in and either require the business to behave itself, or take on a task that business simply has no reason to do.

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Why Supply-Side Economics Is a Bust

politicsOf course, every liberal rejects supply-side economics, but most of us do that because we feel it’s unfair, hard-hearted, and generally nasty. Which it is. But if it worked — which it doesn’t — the fact that it’s unfair, hard-hearted, and generally nasty wouldn’t be reason enough to reject it.

“This is unfair” is a politically losing argument, if it gets framed as a question of fairness versus economic utility. If supply-side economics produced a more robust, faster-growing, richer economy, but one in which the benefits went disproportionately to the rich, most people would support it. Hell, I would support it. Why not? We can always implement welfare measures to help the poor, taking advantage of all the prosperity that throwing money at rich people is supposed to produce. If it really comes down to a choice between great riches for a few and povert for everyone, who wouldn’t choose to let the rich get richer?

Well, maybe someone who thinks with his heart instead of his head. And that’s the only reason I can think of why so many liberals let the argument be framed in exactly that way. Because if they were thinking with their heads (and if they understood economics, which unfortunately most people of all political persuasions don’t), they would see that the biggest and strongest criticism applicable to supply-side economics isn’t that it’s unfair, but that it doesn’t work.

It doesn’t work. It doesn’t produce prosperity. It dampens it down. It produces sluggish economic performance and an unstable economy likely to break down under financial stresses that a healthier economy would shrug off.

The supply-side promise is that most people will get a smaller piece of a bigger pie. But the reality is that under supply-side policies, most people get a smaller slice of a smaller pie. It’s not a question of prosperity versus fairness. It’s one of prosperity and fairness — or neither.

What Is Supply-Side Economics?

The term “supply-side” is meant to draw a distinction with Keynesian economics, which emphasizes the problem of consumer demand. A Keynesian approach is to keep wages high and income broadly distributed, so as to maintain strong demand for goods and services, which strengthens sales economy-wide and prompts increased investment in enterprises that create more jobs. More jobs means more demand which means more investment and more jobs — and so on.

The downside of this is that it argues that wealth should not be allowed to concentrate too much. We can afford to have some people be richer than others, but not by so much that demand becomes depressed. It argues for such policies as a progressive tax system, high spending on public works and services, and measures to encourage unions, restrict immigration, and discourage outsourcing. This creates an incentive in some quarters to find a competing theory that allows people to become rich without restriction.

Supply-side economics is that theory. It argues that the limiting factor on investment isn’t consumer demand but capital formation and rate of return. If the rich are allowed to keep more of what their investments earn for them, they’ll have more money to invest and a bigger incentive to invest it. Hence the rationale for doing exactly the opposite of what Keynesian economics calls for in almost every situation. Instead of keeping wages high, keep them low to maximize corporate profits. Instead of a graduated tax system, have a flat one, or even one that taxes the rich hardly at all, while resting the bulk of revenue generation for the government on the middle class. This, we were told, would result in more investment and, over time, a better standard of living for everyone. There’s a surface plausibility to all this, which is why so many people bought into it whose immediate interests weren’t being served.

By now we should be aware that the promise hasn’t been met. We’ve seen real wages drop for most people, and the economy has been both slower-growing and far less stable than it was before supply-side policies were implemented in the 1980s. So we can see that it’s not working, but without understanding why it’s not working — why, in fact, it was predicted not to work long ago — there’s a tendency to screen out the data and go on believing what we think should be true, rather than what we can see is true.

It’s Not Whether They Can, But Whether They Will

The reason why supply-side economics doesn’t work is because the question is not, and has never been, whether rich people can invest in wealth-creating, job-creating ventures. It’s whether or not they will.

What I mean by a wealth-creating venture is one that produces goods or services (or both) for sale on the market. An investor with a sum of money to invest may do so by building a company, or by buying stock in a company, or otherwise funding the expansion of business to create wealth. Alternatively, he can invest in financial instruments that make money by lending money to others, or by gambling (essentially) on doing so.

Wealth creation has the potential to provide a higher return in the long run, but financial instruments are likely to pay off faster. More importantly, wealth creation pays off only if and when the goods and services produced are sold to customers. If that doesn’t happen, the investment won’t pay off well, and may end up being lost altogether.

Faced with slack consumer demand, investors are less likely to invest in wealth creation and more likely to invest in financial instruments and gambling, which produce few to no jobs and have little or no “trickle down” effect.

In a situation like that, putting more money in the hands of investors doesn’t help; it just gives them more money to gamble with. Allowing investors to keep a higher percentage of their returns doesn’t help, either, when the desired type of investment isn’t likely to produce any returns at all. Worse, it encourages investments with a quick payoff, while higher taxes encourage investments with a longer payoff term, spreading the profits out over multiple years and thus taxing them at a lower rate.

With higher demand for the goods and services that investment in wealth creation produces, more such investment will occur. This, not increasing available capital, is how to boost economic growth.

Where Does Demand Come From?

At first glance, it might not seem important how widely money is spread around. As long as someone has it, someone will spend it, right?

Not necessarily. While the very rich do spend more on consumption than poorer people do, the difference is nowhere near proportional to the difference in income. There are only so many fancy suits of clothes, second and third and fourth homes, luxury cars, and so on that any one consumer needs or even wants. Desire to consume is not infinite, and it is quite possible for one’s means to exceed one’s desires.

The more money a person makes, the lower a portion of that money is spent on consumption and the more of it is saved and invested. A million dollars will be used to buy a lot more goods and services if it is shared among twenty people who have $50,000 each than if it is held by a single millionaire.

Consumer demand is a combination of desire to buy and ability to buy. Too much concentration of wealth results in a few people whose ability exceeds their desire, and a lot of people whose desires exceed their ability. By spreading the wealth around from those who have too much to those who have too little, demand will be increased, and this will boost investment in wealth creation — just as Keynesian theory predicts.

It’s Not a Trade-Off

What this means is that supply-side economics is not just unfair, but also economically unsound. It isn’t just unfair, it also depresses economic growth and produces economic instability. It’s an idea that serves only one purpose: the desire of plutocrats to rip off the rest of us.

It’s a bill of goods that we should never have bought. If we reverse course and undo the entire line of thought that began with the Reagan years in the United States, we will have an economy that performs better and is fairer for most people.

So don’t believe anyone who suggests you have to choose between the two. You can have both.

Or you can have neither.

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Thoughts About Race and Racism

9809020_sRace issues surface in America periodically, and they are doing so once more at this time, as they did in the 1860s and again in the 1960s. It happens when something changes, so that a situation that could once be ignored no longer can be, and when something that could not be changed suddenly can. The industrial revolution reduced the economic value of slavery and allowed the moral arguments for its abolition — which had always been cogent — to prevail. The prosperity of the 1960s made the glaring fact that non-whites didn’t share in it impossible to gloss over.

Today, we are seeing a similar result from the widespread availability of cameras and instant communication through the Internet. Racially-based police violence, once something that could be ignored, is being caught on video and made evident to anyone not determined to shut his eyes to it. Awareness of racial discrepancies in law enforcement leads logically and naturally to awareness of similar discrepancy in the courts, and to the fact that it still occurs in employment.

But I’m not going to talk much about the Black Lives Matter [Too] movement (addition of the last word is for clarity as to what the slogan actually means), or about the problem of racial discrimination in our society that still exists more than 50 years after the passage of the Civil Rights Act. The correct position on these matters — “correct” here meaning “in accord with observable fact” — is quite obvious and does not need restating by me. Yes, racially-based police brutality is a problem, over and above the general problem of police misbehavior. Yes, deep-seated racial attitudes affect employment and economic success or failure in life, and the only thing that the Civil Rights Act effectively prevents is overt, blatant, and deliberate racial discrimination; a lot of the discrimination isn’t even conscious on the part of those committing it.

All of that’s a no-brainer except for those who have no brains, or whose brains are short-circuited by self-serving delusions. And others are saying it. No one needs me to parrot them.

What I’m going to do instead is to address another side of the matter: the roots of racism, what it actually is, and what can be done about it. In the process, I’m also going to address a couple of irrational and poorly-conceived ideas running about among progressives on the matter of race. To some, that will make me sound like a right-winger, which is too bad. But these things need to be said, and there’s no better time to say them than now.

The Roots of Racism

The roots of racism lie in the concept of race itself. This is the idea that people can be meaningfully categorized based on superficial physical characteristics. There is, of course, no scientific basis for the idea of race at all; that people of European ancestry have, for example, lighter skin or straighter hair than people of African ancestry is true only as an average. There are so-called “white” people whose skin is darker than some so-called “black” people at the margins of that characteristic for both population groups. There is no basis for defining such categories.

Where the idea of race becomes not just unscientific but actually pernicious is when it leads people to identify with a particular race, and feel a kinship with others similarly categorized, while seeing those outside that group as “others.” From this starting point, all the evils of racism, historical and current, flow. Why did cash-crop planters in America see Africans as a source of forced labor? Because they were “others,” and not “us.” Why do white employers still give preferential treatment to white job applicants? Because they identify themselves as white people, and so have an impulse to prefer other white people as employees.

Ultimately, the solution to racism is to eliminate race itself as a concept and an identifier. Until we manage that, all solutions will be no better than stopgaps.

Now to deal with a couple of poorly-thought-out concepts circulating on the left, before going into possible long-range solutions.

“White Privilege”

To begin the process of offending those who basically agree with me: there is no such thing as “white privilege.” That’s an unfortunate and misleading way to refer to the fact that white people have it easier in this culture than non-whites. That’s a fact, all right, but it doesn’t mean whites are privileged (barring a few of them, all rich ones), it means non-whites are denied their rights. Courteous and professional treatment by police, a fair trial and equal protection under the law, and a merit-based consideration for employment without racial discrimination, these are not privileges. They are rights. Calling this state of affairs “white privilege” logically implies that the problem is that white people are treated too well. No. The problem is that non-whites are treated too poorly. Everyone should be treated the way white people are treated. That’s not privileged. It’s normal, and it’s fair. And it’s perfectly feasible to treat everyone that way.

One could argue that “white privilege” and “non-white denial of rights” mean the same thing insofar as both imply that one artificial category of people is treated better than all other categories, but the connotations are different, and those of “white privilege” aren’t useful. It’s no better for white people to feel guilty about being white, than for them to feel self-satisfied about it. What they need to do is to stop seeing themselves as “white people” at all — and to stop seeing others as either white or not. And for others to stop seeing white people’s whiteness as well,  or their own non-whiteness.

“Only Whites Can Be Racist”

There’s a pernicious idea floating around among progressive circles that racism is a synonym for systematic racially-based oppression, which it’s not; the latter is a result of the former, not a synonym for it. One consequence of tying racism to race-based oppression is a tendency to give a free pass to racist attitudes on the part of non-whites, who are not in a position to impose systematic racial oppression on others (at least not culture-wide).

That such attitudes exist is painfully obvious. (If you need hard polling evidence, try this article from the Pew Research Institute.) Racism among non-whites isn’t just directed against whites, either — one could perhaps dismiss or excuse that on the basis of reaction to white racism (not that that has any more than a superficial validity) — but also against other groups of non-whites. It shares space in the mental pathology sphere with antisemitism and other types of religious bigotry, and with the gender bias that is ubiquitous in all societies, and with homophobia.

Again: the root of racism lies in the categorizing of people into racial groups at all, and in the identification of oneself as a member of one such group and of others as belonging to another. Racism is an us versus them attitude based on race. It is by no means unique to people who see themselves as white, and it is an evil to be fought wherever it appears, and whomever it is directed against.

Racism that feeds into the power structure and results in systematic discrimination obviously does more harm than similar attitudes that do not, but they are the same attitudes nonetheless. Moreover, racial balances are in transition. White people have been a majority in the United States since before the country’s founding, but the size of that majority is declining, and whites will no longer be a majority in a few more decades. A history of being the victims of oppression does not prevent a group from becoming oppressors if the power balance should shift — a glance at the way Israel treats the Palestinians should suffice to dispel that illusion.

Racism In Decline

Racism is actually in decline in this country, despite the headlines and the new attention being given to racial problems. It’s in decline over generations as well as over time. Pew has a good study on Millennial attitudes on race, showing that members of this generation are dramatically more likely to have friends of a different race and to approve of interracial dating and marriage than older people.

Why this should be is an open question, but my theory is that it stems from the cultural and political changes of the 1960s, the last time that racial issues received concentrated focus, as they are again today. This period of turmoil resulted in legal changes and in a steep drop in the cultural acceptance of overt racism. While the difference this made in the attitudes of people alive at the time may have been limited, the impact on generations that grew up after the transition and had no memory of the way things were before has been profound.

Supporting this idea is the fact that Millennial attitudes on race do not represent a sharp shift from those of Generation X. Millennials are marginally less racist than Xers, but the difference between Xers and Boomers is dramatic, while that between Boomers and the Silent generation is, like that between Millennials and Xers, more marginal. Among non-Hispanic whites, the percentage surveyed who supported interracial marriage was 88% for those 18-29 years of age, 75% (13 points of difference) for those 30-49, and 52% (23 points of difference) for those 50-64.

Generation X is the first generation to grow up mostly after 1964, although older Xers do have memories from the time of turmoil itself, which was far from completed in that year.

What this should tell us is that legal and cultural changes, by altering the way we do business and the way we talk about race issues, produce dramatic changes in the mindset of generations that grow up under the new paradigm compared to those who grew up under the old. (We can expect a similar decline in homophobia in new generations that will grow up around married gay couples and see homosexuality as no big deal.)

Racism, in short, is declining. It’s by no means gone, but it’s going, and will continue to decline as older people are replaced by younger generations. The current focus on racial issues is likely to accelerate that process.

Long-Term Solution

There’s no way to get rid of racism instantly. Over the long term, the only way to do that is to get rid of race. While this is not going to happen quickly in society as a whole, each of us can make it happen for ourselves as individuals.

We need to recognize the lack of any scientific basis for the idea of race. We need, based on that awareness, to stop thinking of ourselves in racial terms. That is the first step towards not thinking of others in racial terms. If you think you’re a white person, or a black person, or an Asian, or a Hispanic — you’re mistaken (insofar as those are racial and not cultural identifiers).

You are not a white person. You are not a black person. You are not a racial Asian. There is no such thing as any of these. There is such a thing as a Hispanic culture, but no such thing as a Hispanic race, and the same applies to Asia — culture is real, race is not. (As for so-called white and black people, how many of either category in the United States identify with any of the cultures of Europe or Africa, aside from actual immigrants? I was even recently told by an African-American that a mutual acquaintance from Nigeria was “not black” — a recognition that the man’s culture was foreign, and he was not part of the African-American subculture with its roots in slavery, and so a tacit recognition that race is not real, while culture is.)

Is it easy to do this? I suspect it’s a lot easier for younger people, who may tend to forget about race most of the time anyway. It’s harder, but by no means impossible, for those of us more advanced in years. It’s a mental discipline and the development of mental habits, like any other habit of thought. It takes practice and it takes time and effort, but it can be done, and to suggest that it can’t is to give up on solving the problem of race. Because that change in mind-set, that elimination of race altogether from the way we think, is the only thing that will work in the long run.

In the really long run, what is most likely to happen as a result of global mixing is that future generations will all be a blend of so-called “racial” characteristics. Our descendants will visibly reflect the biological reality that we are all one species, and race is a fiction.

In the meantime, we can and should learn to recognize this reality in our minds, and see past the superficial differences of race that are in fact no more meaningful than the difference between blond and brunette.

 

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The American South (Part III)

22927636_sLike the election of 1860, that of 2008 provoked an over-the-top reaction from the Confederacy. So far, it hasn’t been nearly as bloody, and let’s hope that endures. But it’s presented its own set of problems.

The obvious reason why the 2008 election provoked that reaction is racial. That year, the United States elected an African-American president. He is characterized by his detractors as many things that he isn’t, including some that I wish he were (a socialist, for example). He’s actually a moderate Democrat much in the Bill Clinton mold, but to hear his foes on the right talk, he’s the second coming of Che Guevara.

Understanding why Barack Obama provokes this reaction is important. It’s not so much that the president is a black man as the fact that a black man could be elected president, and what that means about how the country is changing. We’re past the time when substantial numbers of white people sincerely believed in racial stereotypes, and Obama’s intelligence and ability are obvious. But when I was a boy, a black man of his abilities (or any abilities) could not possibly have been elected president. Today, he can and was. What that means is that the United States is not the same place into which I was born. It has changed — much for the better, in my opinion, but the Confederacy disagrees.

As discussed in the previous two sections, the Confederacy is an authoritarian subculture within the culture of the United States and opposed to its basic ideals. (I’m calling it that because “the South” is misleading for reasons that will shortly become clear. I’m referring to a cultural reality in using that term, not to the historical Confederate States which, of course, no longer exist, and did not include all of cultural Confederacy when they did. Maryland and Kentucky are, or at least were at one time, both part of the cultural Confederacy although neither state seceded. What’s more, Virginia and Florida, which were part of the historical Confederacy, seem to have left the cultural Confederacy.) It is a holdover, a last relic of the feudal/agrarian pattern that once prevailed in civilized societies everywhere. Founded on the growing of cash crops by forced labor, it is a culture that is antithetical to anything that could be called “freedom,” “democracy,” or “equality,” and those three concepts are central tenets of the defining values of the United States. (Which is not, of course, to suggest that the United States has a perfect record of living up to them; such is clearly not the case. But the Union believes in them. The Confederacy does not.) In its politics (consistently a one-party state, formerly Democratic, today Republican), in its religion (overwhelmingly Evangelical Christian), in its economics (brutally anti-labor and characterized by extreme social stratification), the Confederacy remains at odds with everything America is supposed to stand for.

That’s been the case for literal centuries. But there’s one new fact about the Confederacy that is provoking a surge in activism today, like a desperate attempt to hold back the tide of change, and to destroy the United States as most people think of it before it’s too late to do so.

The Confederacy is dying. And it knows it.

Urbanization, Mobility and the Internet: The Triple Kiss of Death

Three things are destroying the Confederate subculture. These are the increasing urbanization of the South, the migration into it of people who grew up outside of it, and the vast increase in idea exchange provided by the Internet.

In 1860, the urbanization of the South (measured as the percentage of the people who live in urban areas) was under ten percent. Even as late as 1950, it was still under 50%. It has always lagged behind the national urbanization percentage, and still does, but as of the 2010 census, the South was over 75% urban — barely behind the Midwest. A generation of Southerners have grown up in an environment where the values and attitudes of the Confederacy make no sense and cannot be defended. Young white Southerners very naturally don’t buy into those values and attitudes. They have become Americans, not Confederates, adopting the values of the Union (which are themselves evolving, but that’s nothing new). In addition to urbanization, much of the South has finally industrialized, which means the realities confronting people are those of capitalism, not feudalism, and so are the political issues that matter. With industrialization has come prosperity for much (although not all) of the South, and with prosperity has come a set of foreign attitudes.

At the same time, the ethnic mix of the Southern population is changing and becoming more diverse. In 1860, virtually everyone who lived in the South was a white person of British or German ancestry, a slave or free person of African ancestry, or a Native American, and almost all of them were born in the South and grew up in the South. That’s no longer true. In 1980, an estimated 20 percent of the Southern population overall was born elsewhere, and that trend has accelerated. This varies widely by state. More than half of Floridians were born outside of Florida, while less than ten percent of residents of Louisiana and Mississippi were born outside those states. When someone moves to the South from outside the Confederacy, these days it’s usually for economic reasons, and the outsider brings modern values and attitudes along with the luggage. The percentage of Hispanics and people of Asian ancestry living in the South is also on the way up. None of these people buy into the Confederacy, either. (Distorting the political picture is that most immigrants are non-citizens and so not eligible to vote. However, they still interact with young white Southerners and this results in cultural change.)

Finally, the Internet brings foreign ideas into the South even faster than modern mobility is bringing new people. While this also permits the entrenched Confederates to build informational lacunas and echo chambers, any Southerner with a shred of curiosity can find information about all kinds of things that, in earlier times, would have been less accessible. This presents a challenge to the cultural values and religious beliefs that form the corpus of the Confederacy.

These changes are reflected in national elections. In 2008, Obama won the states of Virginia, North Carolina, and Florida. He won Virginia and Florida again in 2012. He won Maryland both years, but Maryland ceased to be part of the Confederacy a long time ago. Virginia and Florida represent the leading edge of the change. It is inconceivable that a state remaining part of the cultural Confederacy could vote for a black president, and so it’s reasonable to assert that both of these states have now left the Confederacy and are, in the meaning used in this series of posts, no longer Southern. The Carolinas and Georgia will follow. Texas will take longer, but that will happen, too, as Texas continues to urbanize and as its large Hispanic population acquires citizenship. Mississippi, Alabama, and Louisiana will be the final stronghold of the Confederacy, most likely. Their assimilation could take as long as another lifetime, but by themselves, they can’t sustain the Confederacy against foreign pressure.

None of this is unknown to Confederates. Like the election of Barack Obama, other signs point to the Confederacy’s decline. And it’s fighting back. As in the 1860s, the inevitability of defeat does not deter the quixotic attempt to win, or protect America from the damage they may do in trying.

The Last Gamble

The Confederacy is dying, but it’s not quite dead yet. The hold that it has over the Republican Party at the national level allows it to exert influence over public policy — not enough to reshape the national government, let alone the national culture, to its own values, but enough to paralyze the government and prevent progress towards a more advanced, humane, and responsible Union.

Marxian analysis is again useful here. The United States, an advanced capitalist country, should be having a debate between capitalism and socialism. The question of whether we should have an industrial economy, with all of the government involvement that always must go along with that, should have been settled long ago. In one sense, it was — we do have such an economy, and ought now to be engaged in trying to humanize it and debating whether that economy and the wealth it produces properly belongs to an elite class of rich capitalists or to the people in general. But because of the Confederacy, we can’t have that debate yet. Instead, we must deal with a faction that remains committed to values and an approach to government appropriate to a nation of farmers, not one of industrialists, wildly out of touch with modern reality, and consequently nihilistic and destructive.

At this juncture, the Confederates — who are the driving force behind the Tea Party movement and, increasingly, the dominant core of the Republican Party — aren’t interested in enacting a governing agenda. Their agenda is to destroy, not to govern. What they want is to wipe the United States out of existence. In fact, this isn’t even secret. References to “starving the beast” and “drowning the government in a bathtub” show what the goal is. The glee with which Republicans in Congress have brought the United States to the brink of default and caused government shutdowns further reveals the Confederate agenda. These people know very well that the United States is a foreign country that is conquering the South culturally, and that this process has been aided by the federal government at times, from the forcible desegregation of the schools to the encouragement of modern-day capetbagging. Their ancestors tried to fight the United States militarily and lost; today’s generation is trying to demolish the country from within the government instead. The United States is the enemy to them, every bit as much as it was in the 1860s.

And as in the 1860s, the only way to deal with this situation is by acknowledging it. The Confederates regard the United States as their enemy, and so, as an American, I must regard them as my enemy, too. We must all do that. Whatever their legal status, the presence of almost the entire Republican membership of Congress — certainly most, if not all, of those from the South — should be regarded as morally illegitimate. There can be no compromise. They must be defeated. It’s that simple. It’s that cut and dried.

The Confederacy is dying, and that reality will be reflected in the next few elections. In the meantime, we must hold to a minimum the damage that the beast can do in its death throes. It’s too late to prevent this latest phase of the American Civil War.

All we can do is to ensure that, once again, the Union wins it.

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The American South (Part II)

22927636_sThe 1860 election was an oddity, similar in key aspects to the 1912 election, but with far grimmer consequences. That year, the Republican Party ran its second presidential candidate, Abraham Lincoln. Lincoln was, for a Republican, moderate on the issue of slavery. He opposed it, but proposed no actions against it except a pledge that all new states created under his watch would be free states.

Despite this, his candidacy provoked fury in the South. He would probably have lost the election with a respectable showing, as John C. Frémont had in 1856, except that the Democratic Party split in two that year, with two nominating conventions presenting two candidates for the White House. This happened when Southern delegates walked out of the Democratic National Convention — twice — over a refusal to adopt a plank that would have forcibly extended slavery into territories where the inhabitants voted against it. Eventually, the pro-slavery Democrats held their own convention and nominated their own candidate.

It’s been suggested that the fissure in the party was deliberately intended to throw the election to Lincoln, in the hope of provoking secession. Certainly the demand that slavery be extended where it wasn’t wanted was a radical proposal and violated the concept of popular sovereignty, of democracy itself, and the ideals on which the United States was ostensibly founded, but then, so did slavery and so does the entire authoritarian culture of the South. Whether this conspiracy theory is correct or not, the outcome is clear enough. Lincoln won a majority of the Electoral College with a plurality but not a majority of the popular vote.

While the 1860 election resembled the 1912 election in this respect, it more closely resembles the 2008 election in its aftermath, but again, the consequences were far more dire. Between Lincoln’s election and his inauguration, seven Southern states seceded from the United States. These states came together and formed the Confederate States of America, adopting a constitution almost identical to that of the United States, but with three significant changes, two of which showed the nature of Southern society. One of these changes was to protect slavery from interference by either the Confederate government or any state government. A second was a change to  Article I, Section 8 of the U.S. Constitution which enumerates the powers of Congress. In the U.S. Constitution, that clause reads in pertinent part:

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States . . . To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

The Confederate Constitution altered this to read:

The Congress shall have power To lay and collect taxes, duties, imposts, and excises for revenue, necessary to pay the debts, provide for the common defense, and carry on the Government of the Confederate States; but no bounties shall be granted from the Treasury; nor shall any duties or taxes on importations from foreign nations be laid to promote or foster any branch of industry . . . To regulate commerce with foreign nations, and among the several States, and with the Indian tribes; but neither this, nor any other clause contained in the Constitution, shall ever be construed to delegate the power to Congress to appropriate money for any internal improvement intended to facilitate commerce; except for the purpose of furnishing lights, beacons, and buoys, and other aids to navigation upon the coasts, and the improvement of harbors and the removing of obstructions in river navigation;

In this change we see reflected the fact that the South held to the paradigm of agrarian civilization (minus monarchy and hereditary nobility, but I would say only because the United States forbade both and the South had become used to that situation). All government efforts to spur industrialization were forbidden, except those that facilitated the moving of cash crops to market.

(The third significant difference between the two was that the Confederate Constitution limited the president to a single six-year term.)

The Civil War

While the secession of the South is understandable given the economic and political realities, a much greater mystery is presented by the attack on Fort Sumter. Lincoln would have faced popular opposition to using force to restore the Union otherwise. Why provoke a war that, given the realities of manpower and industrial capacity, the Confederacy was almost sure to lose? Again one is tempted to conspiracy hypotheses, but in fact the action may be adequately explained by hot-headed stupidity and that’s more likely what happened. Foreign countries have sometimes made this mistake about American character, misunderstanding the swiftness with which opposition to war can turn to fervent support after the nation is attacked. The South had no excuse, but made the same error — which once again points up how foreign that region of the country is to the rest of the United States.

After the attack on Fort Sumter, Lincoln summoned and federalized the militias of the loyal states and planned an invasion of the South to restore the Union. This action provoked the secession of four more states and began the most gruesome war in U.S. history. The final death toll from the war was more than 600,000 on both sides, meaning that America lost at least twice as many people in the Civil War as in World War II, from a much smaller population base. The Confederacy did surprisingly well, likely because the military tradition of the Southern quasi-aristocrats meant that the best military leadership of the United States was Southern and joined the rebellion, but in the end, inevitably, the Union won.

During the war, with the Southern Senators and Representatives absent, Congress passed measures promoting industrialization that had been blocked by the South up to then. The building of the trans-continental railroad, the creation of a new national banking system, the Morrill Tariff, and the Homestead Act all emerged during this time. Again we see that the conflict between the South and the rest of the nation was one between an agrarian economy and an industrial capitalist economy, with slavery the fulcrum of the conflict and the moral flash point.

Reconstruction

After the war, the United States added three hugely important amendments to the Constitution. The 13th Amendment abolished slavery. The 14th Amendment guaranteed equal protection under the law regardless of race, defined all persons born or naturalized here as U.S. citizens, and extended the protections of the Bill of Rights to cover actions by state governments. The 15th Amendment guaranteed the right to vote regardless of race or “previous condition of servitude.” These amendments together with the government’s reconstruction policies sought nothing less than the eradication of the South as a separate culture and its assimilation to the rest of the United States.

It was an ambitious goal that could not succeed, or not within a reasonable time frame. In the end, the Southern elite adjusted to their loss of the war and implemented laws and economic structures that preserved the authoritarian, racially stratified culture of the South despite the end of slavery. The former slaves were kept bound to forced labor by economic arrangements amounting to a kind of serfdom. Their right to vote was curtailed by a mix of Byzantine restrictive laws and clandestine terror.

One thing needs to be clearly understood. The Civil War was fought over slavery, but if the North-South conflict had only been about slavery, it would have ended with the passage of the 13th Amendment outlawing the practice. Having lost the war and lost the slaves, the planter interests would have faded away and the South would have become just like the rest of America. That didn’t happen. Slavery was a large part of what created the authoritarian culture of the Confederacy, but it exists independently of that institution and encompasses much more.

Slavery as such was gone. The hold of the South on the federal government was also gone. The industrialization of the country outside the South proceeded at a rapid pace. By the end of the 19th century, the United States had become a first-tier economic power. The South, however, languished behind, as the entrenched planter interests maintained their grip on power and preserved, as best they could, the agrarian character of the South. While in the 20th century the United States for the most part entered the classic dispute between capitalist and socialist ideas and between owners and the working class, the South stayed stuck in a pre-capitalist condition and acted as a drag weight on the nation’s evolution.

The South and 20th Century Politics

The Democratic Party remained the party of the South after the Civil War, which cost it dearly in power over the national government. Between the presidential election of 1868, won by Republican Ulysses S. Grant, and that of 1928, won by Republican Herbert Hoover, Democrats won the White House exactly four times. Grover Cleveland, a Northern Democrat (from New York) who was indistinguishable from conservative Republicans apart from the party label, won a razor-thin victory in 1884 against a weak GOP candidate, lost his reelection bid in 1888, and barely won a second term in 1892. Woodrow Wilson was the beneficiary of the 1912 election anomaly mentioned above; that year, it was the Republicans who split, with former president Theodore Roosevelt running on a third-party ticket against both Wilson and the GOP nominee, President W.H. Taft. With Roosevelt and Taft splitting the Republican vote, Wilson was able to win an Electoral College majority on a popular vote plurality. He won reelection in 1916 on an implied promise to keep America out of World War I, a promise he did not keep.

Through all this time, the South used its limited influence over Congress to protect its culture and institutions from federal encroachment and prevent effective enforcement of the 14th and 15th Amendments in the South.

The Great Depression began a process that would change all of that. The Depression was capitalism’s great failure and fostered a move towards socialism. Because the Republicans at that time were committed to capitalism and unable to make the necessary changes, it fell to the Democrats to seize the political opportunity, which happened of course under the leadership of Franklin Roosevelt. Roosevelt put together a new political coalition capable of winning national elections, something Democrats had been denied for decades. That coalition included labor, women, and minorities — as well as the white South. As with many political alliances, this one featured strange bedfellows.

The alliance held together through the Depression and World War II, but began to come apart after the war. President Truman’s executive order desegregating the armed services in 1948 started the ungluing. The passage of the Civil Rights Act in 1964 in a Democratic Congress and its signature by a Democratic president (from the South, no less) finalized it. The South was up for grabs after that. But in order to grab it, the Republican Party had to adopt positions that violated its founding principles and the stance for racial equality that had defined the party from inception.

It did. And that brings us to the position we are in today, with the neo-Confederates having swallowed the Party of Lincoln in one of the most ironic hostile takeovers in history. The Confederacy is using that power in an attempt to demolish the United States government from within.

Next week: The American South (Part III), about the approaching demographic demise of the Confederacy as a separate subculture, and its desperate attempt to take the United States with it to oblivion.

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The American South (Part I)

22927636_sThe United States has a reputation abroad for being a nation of ignorant, backwards loonies who advocate policies the rest of the advanced nations abandoned decades ago. We are, say foreigners, Christian fundamentalists who trust corporations much more than we should, are quick to resort to military force in answer to international conflicts where diplomacy, persuasion, and economic force would be more appropriate, and crass commercial absolutists who kow-tow at the altar of rich people.

There’s some truth to all of this, I must confess. But that truth is localized. It isn’t really true of Americans in general, but it is true — all of it — about one region of the country, roughly contiguous with the eleven states that seceded from the United States in 1861 and were forcibly reincorporated in it in 1865.

Few Americans understand just how different the South is culturally and politically from the rest of America. (Or used to be, and still is to some degree. There are signs that this is changing as the South becomes more urban and more racially diverse.) It doesn’t come down to any one simple characteristic, positive or negative. It’s not that the South is racist (although in large measure it is). It’s not that the South is religious (although it is). It’s not that the South is Republican (in fact, for most of its history, it wasn’t). It does go back to the institution of slavery as the cause of much of this, but it precedes that, and the lasting effects of slavery cover a lot more ground than race relations.

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.”

Those words were written by a Virginian and a slave-owning planter, but he was a very complicated man with a compartmentalized and conflicted mind. Jefferson believed many things intellectually that he did not live. In that passage, he captured the central ideology that defines most of America. But it does not define the American South. In the South (although again, this is changing), all men are not created equal. Rich men are better than poor men, white men are better than non-white men, and all men are better than women. Also, Christians are better than non-Christians and Protestants are better than Catholics. Since all are not created equal, certainly government doesn’t exist to protect their equal rights.

The next passage in the Declaration, however, meets full agreement in the South:

“That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”

Oh, yes. Certainly the South agrees that when a government fails to deliver the goods, it’s the right of the people — or anyway, of the better people — to alter or abolish it, and that’s what they’ve been trying to do ever since they lost control over it in the mid 19th century. The aim of the neo-Confederate subculture, which exercises increasing control over the Republican Party today, is to destroy the United States.

A look at the history of the American South reveals how this peculiar culture-within-a-culture developed and evolved over the several centuries of its existence.

Colonial Founding

The United States, or what would become that, was founded as a group of English colonies on the Atlantic coast of North America, but that didn’t happen as a result of any coherent and consistent British policy and as a consequence the colonies were not all of a piece. Roughly speaking, the English colonies inside what is now the United States may be divided into three groups.

New England was settled mainly by Puritans in the early to middle 17th century. These people, in American historical mythos, left England in search of “religious freedom.” Actually, they left because England had too much religious freedom for their taste and they wanted to establish a theocracy, which proved impossible in the mother country. While their co-believers back home were chopping off a king’s head and briefly overthrowing the monarchy, the Puritans in America established colonies as religious experiments. Over time and generations, New England lost this Puritan character but retained a distrust of monarchical authority that would prove significant in the late 18th century.

The Mid-Atlantic region was originally settled not by the English but by the Dutch. It was a lucrative commercial settlement that was absorbed by the British in the mid-17th century and retained that commercial character into modern times. It’s no accident that Wall Street is in New York City.

The Southern colonies (Maryland, Virginia, North Carolina, South Carolina, and Georgia) were, unlike the other two sections, founded by the British crown as royal colonies. Four of them (all except Virginia) were founded under the name “province” rather than “colony.” Royal charters gave privileged status to particular English nobles, so that this region of the country felt more impact from the British ruling class than the other two.

The South was established deliberately to compete with other European powers for land and wealth. Its climate and soil proved suitable for growing cash crops (tobacco, sugar, and, later on, cotton) and the entire rationale for establishing the colonies was to grow valuable commodities and enrich the English nobility and the British government. In short, it was an exploitative enterprise from the beginning, unlike New England or the Mid-Atlantic.

Growing cash crops requires a lot of labor, which in the old agrarian paradigm meant forced labor. The growers tried enslaving Native Americans for the purpose, but that proved difficult as escape was too easy. White indentured servants (temporary slaves) proved a workable approach for a while, but eventually the expedient of enslaving Africans was adopted. This was ideal from the planters’ perspective, if less so for the unfortunate Africans. These were proto-civilized people who knew how to grow crops, and they were far from their homelands or any sympathetic society, and visibly different from the local population, which made escape difficult.

Even before African slavery began, the South acquired one of its distinctive characteristics as a result of its founding enterprise. It was authoritarian, as a culture founded on forced labor must be. The idea of freedom as most Americans think of it, and indeed as the plain meaning of the word suggests, is foreign to the original culture of the South, for which freedom meant failure of the entire reason the colonies existed.

Religion was one method used to enforce order. Of course, the South was not (and is not) uniquely religious or especially more so than the rest of America. But the type of religious belief prevailing in the South was different from what was found elsewhere, and still is. As a tool for the enforcement of order and social stratification, Southern Christianity was and is more authoritarian and less inclined to challenge the wealthy elite than forms of the religion found in other parts of the country. One finds in some cases, such as the Baptists, distinctive denominations, one for the South and the other for outside it. The Evangelical denominations are almost all Southern in origin.

The culture of the South, then, was from the beginning authoritarian, and as African slavery became entrenched, that authoritarianism took racial form. It was never entirely racial, however. Class and gender distinctions have also been and remain very important in Southern culture. Reform that addresses racism itself, while important, does not go to the heart of the matter, which is the authoritarian character of the culture.

The South in the Early United States

During the War of Independence, British strategy recognized the distinctive (and more loyal) character of the South and employed it in an attempt to retain power in the colonies. The strategy ultimately failed, but in fact the South was more fiercely divided between loyalists and rebels than other parts of the country.

After the war, the failure of the original U.S. government led to the drafting of the Constitution. We can see the economic and political disputes between the South and the rest of the country in passages of that document, from the infamous “three-fifths of a person” clause to the prohibition on ending the slave trade before 1808 to the structure of Congress itself, for which the conflict between the relatively populous Southern states and relatively underpopulated New England led to the two-chamber compromise that exists today.

Because of that population difference, the South dominated the United States government during the period after the Constitution’s founding. The political conflict ran along classic Marxist lines between the feudal/agrarian South and the industrial capitalist North, as it increasingly became. A capitalist economy produces more wealth than an agrarian one, and supports a larger population despite the superiority of Southern climate and soil (particularly when the Northern capitalist culture absorbed the splendid wheat lands of the Midwest as the nation expanded westward). The political balance in Congress began to tip against the South as the first half of the 19th century ran its course. Moral opposition to slavery as an institution arose. The South attempted to expand slavery, and authoritarian Southern culture with it, westward, and succeeded to a degree, but on balance the mainstream American culture was winning that race. The Mexican-American War, which incorporated California as a free state and opened the way to a continental empire, accelerated that process.

The development of most of the Western territories as non-Southern states would eventually mean that Southern dominance of Congress would break. While Congress lacked the authority to outlaw slavery as such, it could have used its power to tax and to regulate commerce to make the institution unprofitable. Eventually, the magic proportion of three-quarters of the states might come to oppose slavery as new free states were added, and that would allow a Constitutional amendment outlawing slavery.

The dominant political party in these years was the Democratic Party, which primarily served the slave-owning Southern constituency. The capitalist interests were represented by first the Federalist Party and then the Whig Party. In the 1850s, former Whigs came together joining their commercial and industrial interests with an opposition to slavery and founded the new Republican Party. For the first time, a major party in American politics made the abolition of slavery a central plank of its platform. (Given the current neo-Confederate dominance of the party, that history is ironic to say the least. But it’s true.)

The writing was on the wall. The planter interests in the South, facing eventual loss of the political game, decided to upend the board. That was the first time that, faced with loss of control over the federal government, the South decided to destroy it. It would not be the last time.

Next week: The American South (Part II) dealing with the Civil War and its aftermath.

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