The Decline of America
Anusar Farooqi (‘Policy Tensor’) has provided an excellent discussion1 of how the decline of America come about and what can(?) be done to reverse it - and why Trump does not have the answers.
He does not discuss who have been responsible for the decline or whether it could have been omitted.
In my mind there is one culprit: liberalism.
Let me explain:
The Law of The Market Society
Liberalism potently exploits egoism - calling for individual freedom (of enterprise) and forgetting the importance of collective values and equality of rights and endowments.
Over time growth excels at the costs of increasing inequality. This if the law of the market society.
Not paying attention to this gradual rise of inequality is liberalism’s blindness.
How can a society go on with such a blindness
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for so many year?
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with so devasting consequences?
Breeding Fascism
In the end it created a monster - the monster of Donald Trump.
But this is not the first time. Liberalism has created monsters before: fascism and Mussolini, nazism and Hitler and a lot of other smaller ones.
So we knew the story: liberalism over time breeds fascism. Trump is just the new brand for an old story.
Are the powerholders under a liberal era just blind or do they see and welcome the emerging fascism?
Is it fascism that emerges as a ‘solution’ to the problems liberal capitalism itself creates?
Trump will only make things worse
Certainly a lot of Americans now thinks Trump is a solution - as italians thought Mussolini was their solution and germans thought Hitler was.
Farooqi rejetcs Trumps policy and thinks is will rather create additional problems. In the end neither fascism or nazism provided anything else than fake solutions - and catastrophes.
Governments can accelerate liberalism (technology)
But Farooqi stays on within liberalism - his alternative is rather more of the same although by governement action - not laissez faire.
His reasoning is briefly like this:
Much of the withering of the middle class is an effect of the technology information ‘revolution’. Managers can now control production processes with it-tools without the need for a stratum of middlemen - and also with fewer workers.
Figure: Hollowing out The Middle - Change in job growth by job quality. US 1990-2010
The problem with liberalism is that is sees technological change as an exogenous force - market and society just has to adapt.
However, this does not need to be so - ’technology is endogenous to our institutional arrangements’ as Farooqi puts it. Government can support some lines of technology and suppress others. ‘A carefully-designed technology policy ought to be one of the pillars of open-ended American developmentalism’.
Farooqi calls for a ‘forced pace of the automation of all routine tasks’ - reducing the numbers of deskilled jobs. Why? ‘Human workers are great bundles of skill. Using them as automata is a poor use of their human capital.’ This opens for reallocation of human capital towards more productive activities. ‘Automation does not cause aggregate job losses. Rather, automation reconfigures what tasks are bundled together as jobs, increasing their creative content, reducing drudgery, and making them more rewarding for workers.’
It should be said that Farooqi’s context is the China-US confrontation. His main worry is Trump’s protectionism. Rather he still thinks the US can anew outperform China, if only the government steps in and give liberalism an extra push.
There are two pillars of accelerated liberalism: upskilling the workforce and keep trade open.
It will be an long-term effort - aiming at reskilling one hundred million Americans over the next decade, ‘constantly refining our strategy to upgrade the skill-set of the American populace — for it is human capital that is the true font of productivity’.
In trade the US cannot prevent China from catching-up. The only chance is for the US to ‘run harder itself’.
Rethinking Liberalism
Can this accelerated liberalism on government support really save us from the breeding fascism?
I do not think so.
Number one: Somehow we are already ‘overskilled’ - it shows in the shrinking wage premium of college education. There is no way for the whole majority to upskill into the 1%. Capitalism only gets more and more concentrated.
Number two: Keeping trade open will only increase the process of capital concentration. Liberalism has lost the globalization game due to it’s blindness.
Today the setting is different: There are other values than entrepreneurial freedom and profit maximization. Liberalism has to take the back seat. We need governments that aim for the collective health of the planet and scale down economic activity for humankind to survive it’s own productivity.
The breeding fascism has to be countered by redesigning society for equality and collectivity, not economic growth.