Thursday, October 6, 2016

Not with a bang, but with a whimper II

Blogging is a peculiar activity. Being something quite personal, and undertaken by a variety of reasons I guess there are as many ways to go about it as there are bloggers. The way I personally “go about it” is choosing a topic I want to clarify, mulling about it for a few days (I tend to concentrate on issues when I go for a walk at lunchtime, something I’ve taken a liking for of late) and then forcing myself to put it down on paper (although there is no physical paper involved, as I normally write directly on the computer) and see how it evolves when words have actually to be chosen, and sentences crafted to express the ideas I have vaguely shaped previously. Once I’m done (or, frequently, when the word count has reached an inordinate amount) I typically find that many ideas have been left out, that some sentences that I had already thought almost word for word never made it to the page and that a lot of verbiage and sometimes of unnecessary chaff ended up there instead (but it is damn difficult to separate the chaff from the wheat in what one has written, as even the more unrelated circumlocutions may have a certain tone, a whiff or heartfelt expressiveness, of oratorical persuasiveness that makes it awfully difficult to just erase them in order to clean up the argument…) Sigh, it is my hope that by practicing, and then practicing some more I end up being better at it, but my regular readers may legitimately wonder if there has been some noticeable progress, or my prose keeps as mangled and baroque and circuitous as ever.

The reason of such tortured reflection is that when re-reading the post I published yesterday, that was originally to be about how the social structures we take for granted (from the well-stocked supermarket to the commitment of the police to the rule of law and judiciary review) may dissolve and disappear, and how to plan for it, ended up being a rant about the failures of current capitalism to maintain a rate of growth comparable to the one prevalent in the last two hundred years, and how in the West we have mainly squandered four decades already. As that argument is one I’ve already made a number of times, and am sufficiently convinced of it as to not need further proof and clarification, I’d like to come back to the original argument and explore the different possible paths of societal decay we can expect to unfold in the next decades, be it gradual or sudden.

Back to the slowly boiling frog

OK, so in my previous post I (in so many words) settled that gradual decline looks like our everyday life, because it has been happening since the 70’s, even when we went through a stupendous (apparent) period of unparalleled growth in the 90’s that was then mostly erased by the dot com bust in the early aughts and then by the Great Recession that settled in after 2008. That’s how long decline periods look like: there are temporary bumps and upward turns, which are relentlessly followed by deeper troughs and reversions to the overarching downward trajectory. I’m not saying that the world will never, ever see an economic expansion again (we may be seeing one right now, feeble as it looks like for the majority of the squeezed middle class), only that they will be, on average, briefer than the recessions they will be sandwiched in between, and that their benefits will be, as has been the case so far, enjoyed only by the dominant minority. Because that was the other half of my screed: the little growth that could be showed has been very unequally distributed, so for the majority it amounts to nothing.

I also hinted at the fact that we may have reached a tipping point, as people is widely beginning to realize that the promise of ever increasing riches in exchange for ever increasing toil will not be honored. Both salaried workers and independent professionals (unless they belong to the best paid 1%) in their mid-forties and fifties should have realized by now that their standard of living is pretty much similar to that of their parents, minus the kids. That is, after reaching an age in which there is not much more dazzling professional advancement to be expected, they have to accept that they are making give or take very much like what their parents made. Nominally it is surely sounds like much more, but once you start setting apart a retirement fund -a must, given how shaky Social Security looks all the world over-, you factor in the increased cost of health care and the diminishing support to be expected from the state and take into account inflation (much above the measured CPI in some significant sectors like the aforementioned health care and in most countries’ real state: it is not uncommon to find successful professionals wondering how their parents could afford to buy and hold on to several houses while they can barely afford one, typically smaller) they should realize they are by no means wealthier than their pops were, and as they expected to be (a rational expectation, given that their parents did become significantly wealthier than their own parents, and that they grew up hearing stories of how their future would be even brighter, surrounded by nanny robots and flying cars). But the real situation is even direr, as not only they have not been able to amass more wealth than their parents, but they should see that their parents managed to produce the same amount of wealth while at the same time leaving more descendants (that could personally take care of them in their old age and impersonally pay for their needs with taxes to fund Social Security). In the West’s dwindling populations, most people have more siblings than sons and daughters, so they should realize that the generation that came before not only managed to produce in their lifetime almost as much wealth as themselves, but could do so while also successfully replenishing the work force in a way they have not been able to emulate (they can think “geez, I only recently finished paying the mortgage of our house -either smaller or farther from the city center and requiring a longer commute than my parents’-, and still have much of the college expenses and skyrocketing tuition of my single kid in front of me, can’t even start to fathom how I would make ends meet if I had three or four of ‘em as mom and pop had!!!”).

Funnily enough, it is not the middle aged, well-adjusted people in high-paying jobs the ones who are realizing to what extent they have been swindled (but swindled by who? As a swindle needs a willing swindler, and the nefarious deed has been in this case performed by an impersonal dominant reason, by society being organized in a way that nobody consciously designed but in whose design everybody unwillingly acquiesced). It is the kids. The ones we burden with derisive labels (“Gen X’ers”, “Millennials”), and which we scold if they are not career-driven enough, if they don’t seem eager enough to jump in the rat race, to pursue the highest grades, to constantly improve their SAT scores, to strive to get in the best (and most expensive!) universities; if they choose to stay in their parents’ basement playing videogames until they are thirty and find out they are unemployable and “unmarriable” (but seem to be happy enough just hangin’ out with their buddies -physical or virtual). And their “dropping out” (a tragically outdated expression if there ever was one, that got worn out before its heyday came) suits the minority in power just fine, as they were going to be replaced by robots and AI all the same, so better if it can be done while they stay busy and contented lest they start questioning the dominant order and the justice and fairness of a social arrangement that has no use for them (not as producers, and, soon, not even as consumers) and no interest in giving them a public voice or responsibilities of any kind.

But it is between them where the first cracks will appear. The weakest link of any civilizational level transmission mechanism is its reliance on enlisting the newer cohorts in the implicit project of keeping the system alive, which has to be aimed precisely to the the young. If a social order fails at instilling its value hierarchy, its conception of what a good life consists in and its definition of socially sanctioned desires (that is, its whole dominant reason) in the newer generations it will fade away and disappear, as ours is exactly doing. How can we notice if that is the case, and the whole society is indeed failing in this critical task of transmitting the dominant reason on which it relies? Well, if it were indeed the case we could expect to see a growing number of kids a) not working b) not reproducing and at some point c) not acquiescing to the minority between them that insist in keeping the whole charade going. I think that b) is uncontroversial, and is what originally called to my attention that may be our super system/ best of all possible worlds/ we never had it so good so shut up and carry on may not be all that it was cranked up to be (if our social compact, value set and life circumstances were so wonderful, so efficient, so conducing to the maximum happiness to the maximum number, why would so many people vote with their gonads against its continuation?). What about a)? not long ago Tyler Cowen pointed in his excellent “Marginal Revolution” blog to a very interesting article by Justin Fox in Bloomberg (out of prison, out of work) that presented the following graph:

What we see is that instead of the declining participation rate of men in the workforce being a uniquely North American phenomenon, it is a widely extended one, affecting all advanced economies. The only “exceptional” thing about the American case is how they made it extra hard (and much less voluntary) to an unusually large number by the implementation of a demented prison policy that condemned almost three million citizens, a figure in which minorities were heavily overrepresented, to a status of permanent underclass with no job prospects (but as it also robbed them of the franchise they had no way to express and seek redress to their grievances through the normal political process, being perpetually “out of sight & out of mind”). We will extract a few interesting consequences of the American experience in a moment, but first I’d like to dwell for a minute in the implications of such trend. I think it can only be understood as another defining sign of the exhaustion of our civilizational model and the growing chasm between the dominant elites (who still preach the gospel of desiderative reason: “produce as much as you can, because the more you produce the more you will be able to consume, your position in the social hierarchy will be dictated exclusively by how much you can consume, and the improvement of such position is the only desire you are allowed to harbor”) and the masses that have stopped believing in it, for different reasons (they see the system as rigged, they see it doesn’t matter how hard they work, they never seem to enjoy the same status as the undeserving heirs of the elites, the expectation of perpetual struggle and perpetual reinvention seems just too much effort for such a meager reward…)

I can still remember reading with horror a report from my old employer about “the future of work” which blankly stated that the stable structure of the job market was leading towards the following stratification:

·         A third of the workforce would be permanently unemployed

·         A third of the workforce would be occasionally employed, without any security, for short periods and no stability whatsoever

·         A third of the workforce would be stably employed, with full protections and benefits

Not so off-the-mark, huh? And that was published in the roaring 90’s of the past century, in the middle of the longest economic expansion in USA history and with the labor market offering something as close to full employment as in any other moment of the Republic’s life! I hesitated to believe it back then, but now have to confess that we are almost there (the USA has more NILFs and less unemployment, the more welfarist European states have less NILFs and more unemployment… in both we have similar total numbers of prime working age people not working, be it by choice or not). And an interesting point is that automation and technological advance have nothing to do with it. Apple developing a pair of wireless earbuds or Google’s self-driving cars reaching 2 million miles (or rather, repeating the same trajectory of twenty miles one hundred thousand times, which is quite different) are responsible for exactly zero of that 30% of the potential labor force that is out of work, regardless of them being counted on the official unemployment statistics or not. As I’ve already noted a gazillion times, there is not much technological innovation truly going on (as opposed to “going on in the press releases of the tech companies that expect to benefit from gullible people, including clever analysts with high stakes in the game, believing the opposite”), so it is not innovation or creative destruction or excess regulation causing the dwindling fortunes of the salaried employees, but the sheer forces of demography and social model exhaustion.

The other interesting point is how the people who still manage to work, be it in a high-powered job or doing menial tasks occasionally, deal with the stark contrast between their life and that of the growing number that is apparently not working and not much the worse for it (thanks to a family support structure -the traditional moving back to their parents’ basement- that although fraying at the edges still manages to insulate many youngsters from the worst consequences of a social order that has no need for them). Their reaction is similar to what we have seen in civilizational crises during most of history’s “times of troubles”: tribalism and homogenization of the ingroup values by contrasting them with a demonized “other”. When you identify with a value set (or with a dominant reason, which is but another way of saying the same thing, as the former is part of the latter), a set from whose dominance you derive important benefits in terms of social prestige and appropriation of an outsized fraction of the total social product, and you see that set decomposing and being questioned from within, your first impulse is to “circle your wagons” and try to defend it accusing “people from outside” from its weakening. Brexit, anyone? Ascendant white nationalism (aka Trumpism) in the USA? Increasing popular support for right-wing extremist parties in France and Germany? Rejection of the peace deal between the Colombian government and the FARC? All of them are manifestations of a threatened elite pulling the strings to extend its own survival by stoking nationalist (to the point of chauvinism), classist and reactionary sentiments between the unenlightened masses.

And this is why the USA case is doubly exemplary. What we saw there in the 70s was how the ruling (white) majority imposed almost martial law on the more easily identifiable part of their internal proletariat (blacks and, increasingly, latinos) by disproportionally prosecuting their less socially oriented behavior (so the possession and consumption of drugs seen as mainly used by blacks, like crack, were much more heavily penalized than that of those associated with the white population, like cocaine and cannabis), reducing the “social safety net” seen as disproportionately favoring that internal proletariat (through Clinton’s welfare reform, aimed at what was seen by whites as mostly black beneficiaries: “welfare queens” and the like) and at the same time favoring their more consumption-oriented behavior by easing their access to credit (a preliminary step towards the reinstitution of debt peonage), although that last step was probably taken too far, as the increased risk of that additional credit, redistributed between all classes, almost brings the whole system (elites included) to their knees in the subprime crisis of 2008 (which, however, most elites escaped unscathed while the average -proletarian- taxpayer ended up paying the final bill).

So this is what we can expect in the rest of the world: more inequality, a growing fraction of the media devoting more time to the construction of an imagined common identity that only admits of a segment of the population (the one that monopolizes Toynbee’s “dominant minority”: whites in Europe, Canada, New Zealand & Australia, ethnic Japanese in Japan, Han in China, etc.) and the demonization of all the rest (ethnic minorities, immigrants, or anybody claiming to propose an “alternative” to Dominant Reason). Such demonization is an absolute requirement for the formation of a widely accepted narrative of endangerment and threat that will serve to keep on extracting every ounce of effort and commitment from those who buy it. You thought that politics were becoming polarized and demagogic? You ain’t seen nuthin’ yet…

Of course, such polarization and demagoguery will in the end fail to revitalize a moribund social system. It has never worked and it will not work now. It may stem the “tide of history” for a while, but only for a while. In the end a dying, exhausted system, incapable of any creative response to its external challenges (and man, do we have external challenges we do not seem able to rationally address: from Climate Change and antibiotic resistance to cheap fossil fuel exhaustion and loss of biodiversity), may choose the pace and speed of its demise, but not the fact that in the end it will be displaced by suppler, more successful competitors. A growingly repressive, growingly intransigent, growingly exclusionary majority may slow the speed at which its value system is consigned to the proverbial dustbin of history, but such efforts will not suddenly make it creative and attractive again. It will pointedly not make its kids want to reproduce happily again, as if the last forty years were just a bad dream. It will not call back to the labor force the excluded 30% (which are from the mostly excluded, demonized groups), or motivate the 30% in the “gig economy” (the new name of the “precariat”) to suddenly go back to college, obtain an advanced degree in a STEM discipline and start contributing to the “knowledge economy” and earning a six figure salary.

Unfortunately, a dying system in which a majority clings to power by increasingly oppressing one or many excluded minorities is by nature pretty unstable. Even more so in an international scenario where multiple sovereign polities face the same dilemmas, trying to benefit from a zero sum game, in which the oppressed minority of one nation is the dominant (and oppressing) majority of its neighbor. So beyond a certain point the “slow decline” scenario becomes more and more difficult to maintain, and we move in a “sudden crisis” scenario where some player (with or without a state power structure backing him) does something incredibly stupid (but unfortunately such stupidity is only apparent in retrospect) that sends the whole edifice tumbling down, typically causing unimaginable amounts of pain and suffering in the process. But that is already an alternative perspective that will need to be explored in a subsequent post. 

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