Monday, June 03, 2019

A Quiet Revolution Is Brewing

Politics as practiced in a bygone era of stability no longer offers any solutions to these profound disruptions.
I recently read a fascinating history of the social, political and economic context of the American Revolution: The Radicalism of the American Revolution by Gordon Wood.
What is particularly striking is the critical role played by rapid social changes in the mid-1700s. Conventional histories focus on the political context, but more important were the changes in family and social relations, and the social impact of the economy moving from quasi-feudal forms of patronage that were ultimately personal relationships to impersonal market forces.
It was these social changes that nurtured the revolutionary zeal of the average (non-elite) male citizen.
Boiled down to its essence, Americans came to appreciate the precariousness of their prosperity, and this led to a deep split in the populace. Between 30% and 40% of the populace remained loyal to the British Crown/King, and these Loyalists reckoned it a political and economic disaster to separate from the "Mother Country."
The majority felt the exact opposite: their prosperity and liberties were all too easily snatched away by a Parliament and/or a Monarch who had little to no regard for their prosperity or liberties.
The precariousness of the relatively widely distributed prosperity and political liberties drove average people into an all-or-nothing choice: there was no middle ground, and the bitterness of the divide was life-changing. Benjamin Franklin, for example, completely cut off his eldest son when the son remained a Loyalist, despite the decades of affectionate intimacy they'd shared.
Such prosperity and liberties that existed were reserved for Caucasian males, of course; women had the right to divorce and own property but no political suffrage, and slaves had no rights unless they were freed by their owners.
The social changes in the family and economy Wood describes are of especially keen interest, as they mirror the present era in so many ways. Parents in the 1760s were admonished to treat their children as individuals and to use reason rather than punishment. Parental authority was thus reduced from rigid authoritarianism to a much more nuanced and difficult process of nurturing and guidance--a process familiar to every parent today.
The economy was changing rapidly as well, as the lines of authority that were once personal became market-contractual. Where small farmers in the early 1700s sold their harvests to upper-class planters or merchants (i.e. the gentry), by mid-century Scottish trading houses were buying small farmers' harvests directly, requiring written contracts rather than personal trust.
Small farmers made more money, and the landed gentry lost power over the flow of goods.
This disruption of traditional authority stretched from the home to the marketplace and ultimately to the British Crown and Parliament, which saw the rebellious colonists as wayward children who deserved a good lashing to set them straight.
All of which brings us to the present, when once again profound social, political and economic forces are changing the nation in ways that are difficult to understand in real time. Traditional authority is weakening, and traditional markets are being disrupted, leaving most participants far more financially precarious than they were a few decades ago.
To take one important example: where owning a home once meant counting in slow and steady appreciation of home equity, in today's bubble-and-bust economy, timing is everything: poor timing can trigger the loss of one's down payment and equity, and to capture that equity requires selling at the top.
As I noted in recent blog posts, politics as practiced in a bygone era of stability no longer offers any solutions to these profound disruptions. Middle ground has vanished because there is no middle ground, and ideologies have become quasi-religious because they no longer offer any practical guidance to the economy that is still being transformed by the 4th Industrial Revolution.
Once again Americans are awakening to the precariousness of their prosperity and liberties, and traditional forms of belonging, loyalty and authority are unraveling. As the pie shrinks, the struggle to maintain one's own share at the expense of others becomes Darwinian, and so it's no surprise that finance and politics are increasingly becoming winner-take-all or winner-take-most zero-sum endeavors.
A quiet revolution is brewing as the old social, political and economic structures fail. The politics of compromise is giving way to the politics of borrowing whatever sums are needed to placate every elite and every constituency. This is the pathway to financial debauchery as the currency will be destroyed by the politics of expediency.
New social, political and economic structures will arise that are stable because they reflect new realities. "Politics as usual" failed in 1765 and it's failing now.
My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format.


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