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                                                                                      Wading Pool, London

                                                                                      Victoria and Albert Museum        

                                                                                      (on a hot summer day)

                                                                                      Click here to enlarge.

 

                              

                              

                                                    The Contours of Change

 

 

 

On a trip to Britain, we spoke with an university professor, obviously a very intelligent man with a considered political opinion. Here was our conversation:

 

What do you think of Brexit? (We expected him to say that it’s a terrible idea.)

 

“Two or three (out of ten) cars on our roads are Mercedes. The Germans are taking advantage of everyone. (We took that to mean that he was against large German trade surpluses and the deindustrialization of Britain.) Brussels now makes rules, and passes them down without our say-so.“

 

Isn’t Berexit a problem because it disrupts economic supply chains?  It is incredibly wasteful to start all over again. (This is economic rationality.)

 

The problem with the EU is political. We have lost our autonomy, and they have problems.” (Changing to another dimension.)

 

To move this conversation to the U.S., just replace Brexit” with “Trump” and EU with “immigrants.” In both the U.S. and England, the common concern on the political right is with national  boundaries, as they are threatened by the universal solvent of markets and perceived immigration. 1 We think the economic and political systems have to become more user friendly, before the nationalist reactions become much worse when adversity hits. This is a likely peak of the economic cycle.

 

We will first discuss the general political culture, as we have observed in the United State and Britain, and then U.S. institutions. It is the combination of culture and institutions which determines how easily a society can withstand social stress, whether imposed by the market system, as mainly in the U.S. and Britain; or by immigration, as mainly in Europe. It is culture that makes institutions operate

 

Culture

 

The political systems in the United States and England differ in detail, but the cultural issues involved are very similar. 

 

Britain is now culturally concerned with current political events. At the National Gallery, there is an exhibit titled, “Eden to Empire.” Thomas Cole (1801-1848) was an emigrant artist who then founded the bucolic Hudson School of American painting. After traveling through Europe and contemplating the Roman ruins, he painted five pictures, reflecting the successive development of a landscape from pastoral bliss to its descent into social dissension and chaos. In business, the creation of chaos and uncertainty (Fear, Uncertainty and Doubt) is but a competitive strategy; in politics, it can be highly problematic – as numerous revolutions around the world beginning with French Revolution of 1789 attest. As social order deteriorates, events have a way of spiraling out of control and then order is imposed from without…ending democracy.

 

At the Victoria and Albert Museum, there is an exhibit titled, “The Future Starts Here.” It poses questions like: “Are Cities for Everyone?  Is Edward Snowden A Hero or a Traitor? Does Democracy Still Work?” The last is a description of the political dilemmas facing both the United States and Britain (for some reason, it is very well-written), and we quote:

 

 

“In 2016, the unexpected results of the UK’s referendum on EU membership and the U.S. presidential election revealed the extent of modern divisions in politics. Many people do not see themselves represented by current governments, and in the last decade trust in the state has declined both in Europe and the US. Added to this, today’s most pressing issues and concerns – from mass migration to global warming - are not neatly contained within national borders.

 

The objects here document the limits of democracy today, but also present alternative systems designed to rebuild trust or divert power to citizens. They include new forms of collective decision-making, digital ways of giving a voice to public opinion and the application of new technologies to trans-national challenges. Will the future be defined by top-down governmental systems, or will it be shaped by the rising force of bottom-up citizen-led organizations?”

 

 

Both the U.S. and Britain have a common political culture; the statesman Edmund Burke (1729-1797) described it as “ordered liberty.” There are, however, delightful differences. In Britain, a greater emphasis is placed on order. In the U.S., that had in addition the Revolution of 1776, a greater emphasis is placed on liberty. But as the saying goes, “Liberty is not License.” We do not have a practical political sense of the timely possible, but here are some very general observations of the shape the future can take to avoid chaos. In her book, “Who Can You Trust?” Rachel Botsman of the University of Oxford lists three major prerequisites that lead people to trust and accept change; which she defines as, “A confident relationship with the unknown.” 1

 

1)    People have to understand what is being proposed. The future is best explained by the familiar.  The conservative Edmund Burke noted prudentially, “A state without the means of some change is without the means of its conservation.” 2

2)    There should be some real benefit, what’s in it for me? This is the viewpoint of a rational actor. But because politics also involves emotion, there is an irrational element that has to be addressed. The former NY governor, Mario Cuomo said you campaign in poetry, but govern in prose. Both are necessary.

3)    People do what others do. The crowd effect is certainly present in the financial markets, and is very present in U.S. politics. Those who are early adopters convince others. A grass roots political organization is therefore essential.

 

A way to look at all political theory in the 21st century is that political theories should provide solutions to problems. The key test is that the invoked theory should result in a solution that produces the intended result. As we have said, economics should be more context-specific like engineering. If you believe in market fundamentalism, e.g. the free movement of capital, what will create well-paying jobs for American workers? If you believe that a strident nationalism will “Make America great again,” how will unraveling the international system produce more security for all? If you base your support of Trump on the theory (using the term loosely) that he is a great deal maker, has he made any deals that are good for all parties. The NYT has an idea about that. (As of 7/8/18 N. Korea is becoming another Trump deal.) Trump is now trying to “improve” the economic deals with Canada and the EU; he is on his way to bust up those important relationships. Then came Helsinki, where on 7/16/18 he choked and failed to defend the detailed conclusions of his own government of Russian meddling in the 2016 elections, against Putin’s denials. It is necessary for a future U.S. president not to wallow in imagined grievances and fake facts, but to lead positively for the future.

 

 Institutions

 

To adapt to the future, the federal system of government has a large potential advantage; the states have been called the laboratories of democracy. A solution to present gridlock could clarify the tasks performed by Washington, the states and localities. There are tasks such as the defense, foreign relations, the financing of health care and dealing with (yes) climate change that are best handled from the center. Economic growth and education are better handled by the states and locally, as the economy adapts to specific conditions. There are many issues, such as exports and R&D, that are best handled cooperatively.  The development of a consensus regarding who does what could really be helpful; very limited government is not a solution that can organize the increasingly interdependent society of the future

 

Technology

 

Technological change has enabled a new model for social interaction, with its advantages and disadvantages. It vastly leverages the spread of ideas. Taking a not too random sample, readers of our website that we have met generally view our writings positively. Also at an airport stopover in Taipei, Taiwan we talked with some, who liked what we had written. We are essentially discussing Markets and Freedom; the latter has a universal appeal. But, like the markets, the freedom we write about isn’t a simple, “Freedom, we want it; let’s vote for it; and all will be fine.” We discuss a political freedom that is more subtle; evolving gradually out of social structure: developing from common experiences and a tolerant culture, requiring cooperation, aided by political reform, protected by institutions that recognize rights, and composed of an electorate that is open to change. All these factors, developing at different times, work together to produce liberal democracy.

 

If well considered democratic opinion isn’t to be inundated by the dross of, “rumor flying through the city network,” there has to be a improvement in both the editorial selection of news sources, that are reasonably grounded in reality, and an improvement in the abilities of people to critique what appears in the news, Twitter, Facebook and (even) on this site.

                          

As in finance, leverage can cut both ways.  The detailed 7/13/18 DOJ indictment of 12 Russians found that they had spent only around $95,000 in Bitcoin and other cybercurrencies to purchase the internet infrastructure to hack and disseminate information obtained from the 2016 Democratic National Committee and Clinton campaign servers.                  

 

How Things Happen

 

What will the increasingly interdependent society of the future look like?  It really depends on how we put technology to use. At the most elementary level, anything can be written and anything can be programmed. Programming is essentially writing.

 

The totalitarianisms of the 20th century were made possible by advances in technology, particularly the inventions of the radio and rapid transportation. In the 21st century, both the broad economic forces of untamed globalization and the misuse of big data threaten the individual and the smaller groups necessary for democracies to function; because these broad forces break both boundaries and social trust. To cite just one example, the FICO credit score. If that score remains a measure of your creditworthiness, then its use will be limited to just that. If that score is combined with information from other sources, such as the social media, into some sort of broad algorithm  (formula), then the stage is set for undreamed of authoritarian control. Reason alone can justify anything, except of course unreason. What reason also needs is ethics. It’s not possible to successfully address public matters without ethics, nota bene.2a

 

The challenge that artificial intelligence systems pose is less that they decide, but more that they implement the intentions of their designers. According to Professor Botsman, trust depends upon competence, reliability and, to substitute another term, intention. 3 A person’s intention has always been crucial to assessing responsibility in Anglo-American law - and should remain so in the future. Both systems therefore respect differences and independent voluntary groups, a major strength.

 

In the 7/3/18 NYT, Thomas Friedman discusses how, like many American cities, Lancaster, Pennsylvania renewed itself. Writing that the U.S. is, “a checkerboard of cities and communities – some that are forming what I call ‘complex adaptive coalitions’…are thriving from the bottom up, and others that can’t build such adaptive coalitions …are rapidly deteriorating.” In 1997, the city was a “crime-ridden ghost town at night where people were afraid to venture and when the county’s dominant employer, Armstrong World Industries,” a manufacturer of building products  was in trouble due to asbestos liabilities.  “Some of the leading citizens decided that ‘time was running out’…and that no cavalry was coming to save them – not from the state’s capital or the nation’s capital. They realized that the only way they could replace Armstrong and re-energize the downtown was not with another dominant company, but by throwing partisan politics out the window and forming a complex adaptive coalition in which business leaders, educators, philanthropists, social innovators and the local government would work together to unleash entrepreneurship and forge whatever compromises were necessary to fix the city.”

 

Says a convener of a foundation which serves as a forum where community leaders can discuss community issues, “The key to it all is trust….Politically we are all different and our experiences are different. You can only get progress where there is trust. People trust that we are not in it for personal agendas and not partisan agendas. We will often host elected officials, and they will throw out ideas and we will give them feedback. And they are not worried it will go out of this room.”

 

This article lists the major factors that made the renewal of Lancaster a success. Lancaster, located in the midst of Amish and Mennonite communities, is a natural tourist center; but there is a lot more to this story than that. In the following we quote from the article extensively:

 

1)    A ball park was originally planned for the suburbs; but a public-private coalition emerged to locate the stadium in the city.

2)    The foundation and other groups provided funds so public officials and the private sector could learn from the best experts in the world on how to lift their city. “I found the hunger for best practices profound.”

3)    A new mayor dedicated to long-term revitalization, obtained the support of businesses to invest in town, provide people a living wage and not damage the environment. It was a balance a lot of locals of all political stripes found appealing.

4)    Farsighted leaders at the local college, Franklin & Marshall, and Lancaster General Hospital decided to get together to redevelop the street that connected them. This created a new urban hub of restaurants, entertainment, and housing. Mr. Friedman crucially notes, “All successful complex adaptive coalitions have some kind of college or university in their towns.“ This stands to reason because universities are a source of new ideas and entrepreneurs.

5)    The Democratic mayor worked in partnership with the Republican state senator to establish a community reinvestment zone whose cash flow would pay off bonds needed to fund a new convention center, with a Marriott hotel attached

 

In 2018 Lancaster, Pennsylvania was named by Forbes one of the “10 Coolest U.S. Cities to Visit.” A coalition of concerned community leaders saved the city from terminal decline; technology was not involved but, “relationships - relationships born not of tribal solidarity but of putting aside tribal differences to do big hard things together in their collective interest.”  As Saxenian (1994) also notes about the Silicon Valley tech industry, the key to economic growth is problem-solving cooperation.

 

Both populism and distributed systems move potential social power downward, away from traditional authorities. But, as Professor Botsman also writes, “…a blanket hammering of institutional trust – a wholesale rejection of the media, the courts and intelligence services, the truth-defending organizations that underpin any democracy - threatens to create chaos 3a.…Distributed trust in itself can’t knock down the rise of extremist populist movements, dangerous policies introduced by radical political leaders or a divisive resurgence of nationalism. But driven democratically and rationally, and shaped and reshaped by people’s needs and innate preferences about how they want to do things, it can provide a path forward for businesses, governments, media and other key institutions. It gives them a means to redesign systems that put people first in ways that are more transparent, inclusive and accountable.” 4 In other words, the large systems of the future should be user-friendly, increase real choice and enable people to achieve their own goals more easily. Therefore, these systems should be reasonably designed to achieve the ethical goal of human flourishing.

 

 

 

1 Rachel Botsman; “Who Can You Trust?”; Public Affairs; New York, N.Y.; 2017; p.p. 67, 68, 78.

 

2 Edmund Burke; “Reflections on the Revolution in France”; Hackett Publishing Company; Indianapolis, Indiana; 1987; p. 19.

 

2a The ultimate political question is, why obey? Political legitimacy requires ethics, dictated either by traditional custom or by social process, such as winning fair elections. It follows that without ethics, there is no political legitimacy; and therefore no democratic political power. Politics in democratic societies is ultimately about both the common good and individual interests, properly understood.

 

This analysis leads to a third kind of political power – totalitarianism that emerges from despairing and atomized societies. Totalitarianism emerged in the early 20th century, was defeated, and could emerge again – without reforms to the existing system. Glimmerings of this are beginning to appear in the U.S. and in Europe.

                                                              

3 Botsman, p. 123.

 

3a Why does truth matter in a democracy, rather than in an autocracy? Truth matters because democracy is about persuasion *, rather than coercion. You can’t persuade anyone about the best way to do things if you don’t have a common basis in fact. Stating matters in the aggregate, a CNN correspondent wrote on 7/25/18, “Democracy depends on facts made available to citizens in a self-governing society.”

 

* We once asked, “Why is it bad to denigrate the competition?” The very wise answer, “Because that means you don’t have anything good to say about yourself.”

 

4 Botsman; p. 252.

 

__

 

We begin this essay noting, “In both the U.S. and England, the common concern on the political right is with national boundaries, as they are threatened by the universal solvent of markets and perceived immigration.”

 

This observation is generalizable to almost all the modern developed democracies. The Financial Crisis of 2008 and Climate Change continue to cause problems for everyone. According to a  2/11/17 Harvard Political Review article, “The Rise of the Far Right”:

 

“The astounding success of the far right over the past year, along with that of nationalist and populist movements are exacerbated by the combination of many factors that are causing bottomless insecurity: the economy, the cultural conflict over the refugee crisis, and political uncertainty. Whether the far right changes the political climate for the worse or the better, the fact remains that people are losing faith in their governments and are desperately seeking change. (Our note: Be careful what you wish for…) Many Europeans are disillusioned with the European Union and the conflict plays out between regions….the economic core is experiencing ethno-nationalistic populism while in the southern countries, left-wing populism is on the rise There are sentiments in both regions against each other and ‘there is massive polarization among the political elites. That polarization is not going to decline in the coming years.’ The core no longer wants to pay for the economic problems in the south, and southern European countries feel the core is enforcing austere policies upon them.

 

In reality, far right, nationalist and populist parties are not new to the European political scene. Although the political order across Europe is being challenged…‘the fortunes of the far right have come and gone over time. In principle, you can say it will blow over, but in the meantime, it is changing democratic discourse, which can have far reaching implications for the future.’”

 

A solution to the “massive polarization among political elites,” and a public losing faith in them are two basic principles:

 

1)    A roughly balanced trade between countries, possibly by reforming the WTO. The United States being a slight exception to this, to keep the international system going.

2)    A problem-solving attitude to correct presently large social imbalances, along many dimensions.

 

Isaiah Berlin addressed why it is most important to keep societies (in the case of democracies, dynamically) balanced:

 

“…one process that vitally affects the development of a society falls out of step with some other equally central process or cluster of processes. Injustice, oppression, misery do not seem, at any rate in recent history, to be sufficient to create conditions for revolt or drastic change. Men will suffer for centuries in societies whose structure is made stable by the accumulation and retention of all necessary power in the hands of one class. Ferment begins only when this order breaks down for some reason (the Marxist hypothesis of the influence of technological invention is illuminating) and a ‘contradiction’ arises, that is the development of one factor – say the possession of political authority or control by a ruling group – is no longer united to some other equally needed attribute, say economic position or capacity for administration (our notes). Then the equilibrium of the system is disturbed, and conflicts are set up, with corresponding opportunities to alter the distribution of power for those who seek to upset the status quo.” *

 

 

* Isaiah Berlin; “The Sense of Reality”; Farrar Straus and Giroux, New York; 1996; p.p. 253-254. A historical note: political gridlock preventing fiscal reform resulted in the French Revolution of 1789, causing great suffering and decades of social instability that changed the face of Europe.

 

 

 

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