Foreign Policy Options for the 21st Centuryby P. Zeihan
1. Cold War to 1980 AD > AS
|2. Neo Liberal Reset 1980- 2008 AS > AD||3) Reactions to Neo Liberalism|
|Full Employment Goal = Inflation, Debtors Paradise||
Business Responded to
Inflation Led to
Sustained Deflation has
3Pickett's R > G
and Back to Equilibrium
|Structural Causes||Structural Causes||Winners||Losers||Winners and Losers||
Historical Long Run?
Return on Capital Growth R > Growth rate of the Economy G. 90% of Income Gains Went to Top 1% and since 2012, most of this (70% of that 90%) went to Top 1/10 of 1%. Credit to consumers, business and governments expanded to equate AD with AS.
Restricted, Rigid Labor Markets
Central Government Strong
Central Bank Weak
Open Flexible Globalized Labor Markets
Government Less Economic Responsibility
Central Bank More Economic Responsibility
|Debtors: Can't or Wont Pay as Deflation Kills Wage Growth and Increases Real Debt Value||
Creditors lost as
Real Value Up
But Some Don't Pay
World's Very Poor and
Very, Very Rich Win
Vast Middle of Rich Western Nations are Stagnate
Wages Share All Time High
Corporate Profits All Time Low
Wages Share All Time Low
Corporate Profits All Time High
Populist Nationalist Parties
attracted voters with renationalization and anti-austerity policies
Center Left Parties in control
lost as lower wages and fighting more over less cartel politics blamed
capitalism and globalism
Center right parties in control blamed immigrants and globalism
Francis Fukuyama may yet prove to be right in predicting the end of history. But there is no doubt that he was premature. The idea that people have reached an "end point" of "ideological evolution and the universalization of Western liberal democracy as the final form of human government" quite obviously seems out-of-step with our political reality in 2018. It could still happen one day. But it surely hasn't happened yet.
Fukuyama knows this. However, to ensure that this is only a temporary setback — not a permanent blow — for his thesis, he has penned Identity: The Demand for Dignity and the Politics of Resentment.
Collapse of Soviet communism, Western liberal democracy and the free market had triumphed and history had reached its "end" — Humans had finally formed a political organization in harmony with their inner nature. Though nations still on the other side of history could certainly cause trouble for liberal democracies, they could not offer a serious alternative.
America and populist right wing "dietarian" movements all around Europe have jolted Fukuyama out of his Hegelian certitude. And so he has hurriedly written Identity: The Demand for Dignity and the Politics of Resentment, a book that goes back to the beginning of Western thought and retraces its evolution to see where it took a wrong turn.
What emerges from it, however, is not a new way forward but an old and beaten path of income redistribution and a national unity program. Basically, Fukuyama's solution is to redirect the ethnic identity politics of the left and the right into a renewed "creedal identity" that satisfies the natural human need for dignity and recognition that Hegel said was the main driver of history. Such a Big Government roadmap will actually work or make matters worse.
Hegel postulated that as human consciousness evolved so would human institutions or social organizations until all the internal contradictions of the psyche were resolved in a final rational polity. Hunter-gathering and tribal societies developed into slave-owning ones that morphed into monarchies or theocracies that finally modernized into liberal democratic polities.
So why are liberal democracies in trouble? Because, notes Fukuyama, they have ignored a core psychic need.
Plato and other ancient Greek philosophers believed that thymus, or pride, was as essential as desire and reason. And it craved satisfaction just like the others. But they also believed that this part was in tension with itself. On the one hand, individuals wanted equal recognition of the fundamental worth or inner dignity of human beings (isthmian). On the other hand, they also wanted to be recognized as better than everyone else (megalothymia). Megalothymia results in constant jockeying for power and domination in every facet of human life, especially politics.
Hegel's great insight was that recognition achieved through domination is self-defeating because people crave the recognition not of their inferiors (slaves) but superiors (masters). The minute they succeed in dominating someone, that person's recognition becomes worthless. The quest for recognition can thus only be satisfied in a society of equals. For Hegel, the quest for dignity and recognition — or identity politics, in our parlance — has been the ultimate driver of history, and will end in an egalitarian liberal democracy with a commitment to individual rights and justice.
Two developments have prevented liberal democracies from delivering on Hegel's utopia, as Fukuyama explains.
First, the rise of income inequality. Thanks to globalization and productivity growth between 1988 and 2008, the world has become immensely richer. However, the lion's share has gone into the pockets of the rich, hollowing out the middle class. Fukuyama does not claim that this growth has necessarily hurt anyone. To the contrary, he admits that those in the 20th to 70th percentile experienced bigger income increases than those in the 95th. However, the global population around the 80th percentile — which corresponds with the working middle class in the West — experienced only marginal gains. These trends were most pronounced in Britain and the United States, the two countries at the forefront of the "neoliberal revolution" that Margaret Thatcher and Ronald Reagan spearheaded.
Middle-class stagnation, in Fukuyama's telling, is more problematic from a thymotic standpoint than an economic standpoint because the real purpose of income, once you reach a certain point at least, isn't to feed material needs but positional ones. So even if the middle class in the West has suffered no absolute loss of income, the relative loss of status makes these people feel ignored and invisible.
The other factor is the rise of the wrong kind of dignity or identity politics.
Some identity politics seek to honor the inner "dignity" of individuals by extending basic state protections to all citizens irrespective of race, caste, creed, or religion. This is noble, but in practice has transmogrified into a "therapeutic state" whose main aim became to rescue what the French philosopher Jean Jacques Rousseau called the innate "goodness of man" from the corrupting demands and conventions of society. Self-actualization rather than social cohesion became the political project. As but one example: California formed a task force to "Promote Self-Esteem and Personal Social Responsibility." The 1990 manifesto could have been plucked out of the Esalen Institute. (Sample statement: "The point is not to become acceptable and worthy, but to acknowledge the worthiness that already exists.")
This type of identity politics has uncorked personal pathologies that religion had kept in check, particularly an unquenchable narcissism that social critic Christopher Lasch famously called out because it sought external social validation from the very society it constantly undermined.
Another kind of identity politics seeks the dignity of "collectives," essentially rejecting the idea of some generic inner dignity of individuals while disrespecting the sense that their particular racial, cultural, religious, linguistic, and other connections could satisfy the thymotic needs of marginalized groups. Fukuyama acknowledges that this sort of identity politics has done some good. After all, blacks couldn't launch their struggle to end the atrocities of the Jim Crow era without building black pride. Similarly, women couldn't dislodge engrained social "discrimination, prejudice, disrespect, and simple invisibility" without a feminist movement that celebrated womanhood.
But the advent of multiculturalism took things too far, Fukuyama believes. It encouraged an ever-proliferating panoply of micro-identities to seek not equal treatment from society but separation from it because, ostensibly, each group's "lived experience" of victimization — another concept borrowed from Rousseau, Fukuyama points out — was different and inaccessible to outsiders. Multiculturalism built silos instead of bridges with broader society.
Multiculturalism also prodded the left to abandon its traditional emphasis on economic inequality precisely when the dignity and status of the Western middle class was taking a beating from globalization. This left many ordinary people without a political home to voice their insecurities, paving the way for right-wing demagogues to launch their own brand of reactionary blood-and-soil identity politics — using the language and tactics of their leftist fellow travelers.
"That the demand for dignity should somehow disappear is neither possible nor desirable," notes Fukuyama.
This is a charmingly old-fashioned idea. There is much to like about it. But the Big Government roadmap that Fukuyama lays out is problematic to say the least.
Fukuyama admits that he has no use for limited government libertarianism and, in fact, believes that it was unfortunate that the right's critique of the unintended consequences of ambitious social programs unnerved the left. It's high time, he thinks, to stop being shy about using government to achieve national unity.
The Netherlands, for example, must end its age-old acceptance of "polarization," or letting different religious groups establish their own schools, newspapers, and political parties. It was one thing to go along with this arrangement when it meant buying social peace among Catholics, Protestants, and secularists. But it has ghettoized Muslim immigrants and prevented them from assimilating, claims Fukuyama.
This sounds good on its face. But America's relatively limited experiment with state-enforced busing to end segregation was a disaster. White families who didn't want their children to have to spend hours being transported to another school district put their kids in private or parochial schools or fled from inner cities to distant suburbs outside of the busing zone. All of this exacerbated segregation and racial tensions. But Fukuyama seems so determined to ignore the danger of unintended consequences that he doesn't entertain any downside to his proposal, much less question its feasibility.
In America, Fukuyama believes, the left needs to return to a class-based politics that unites various marginalized groups around pocketbook concerns. At the electoral level that means that Democrats should quit playing identity politics and nominate a younger version of Joe Biden who can connect with the working class, regardless of race, sex, or religion. At the programmatic level, it means a renewed embrace of redistribution programs on the scale of the New Deal and the Great Society. He also wants a "national service" program that replicates the military's stellar success in assimilating recruits of diverse backgrounds.
The primary point of returning to a redistributive politics is not so much to expand the social safety net as to even out envy-inducing social hierarchies. In other words, make the rich poorer and the poor richer to make the working class feel better about itself. That such policies would be fiscally unaffordable and economically deleterious, Fukuyama doesn't consider. But the bigger problem from his own standpoint is that giving government more control over more wealth is likely to deepen existing social fissures by triggering a fiercer race for the spoils, especially in the post-Trump era where whites are emboldened.
Fukuyama's call for national service is perhaps more innocuous, but it's hard to see how it'll accomplish much. The military is united around a clear mission — protecting the nation — that helps overcome other divides. What would be the unifying passion of national service? Digging sewers in poor neighborhoods might appeal to congenital do-gooders but it's not the kind of thing that brings people together like the enemy at the gate.
What's befuddling about Fukuyama's recommended agenda is that it ultimately departs from his own Hegelianism. Hegel, contra Marx, believed that ideas shaped the material — economic — world, not vice versa. That means that the political battle is ultimately an ideological battle. Victory depends on winning hearts and minds, not economic appeasement. If that's the case, Fukuyama would have been better off exposing what's false, contradictory, and self-negating about the new and pernicious identity politics of the left and right and leaving it at that.
Nevertheless, Fukuyama has written an intricate account of this peculiar phenomenon. It is a must-read for anyone interested in understanding our bewildering political times in a broader historical and philosophical context.
What's needed now is a renewed commitment to "e pluribus Unum," Fukuyama says.