Archive for August 3rd, 2009

The New Proud Tower

Barbara Tuchman’s book The Proud Tower examined Europe and the US at the end of the 19th and start of the 20th century.   In that work she describes western society at the end of a century of relative peace, prosperity and progress.  Europe dominated the globe, markets were growing and expanding, and people believed the future was bright.   This was the “proud tower” Tuchman referred to, a societal edifice that seemed sturdy and dynamic, but which would be decimated by two world wars and the Great Depression.

Europe went from dominance to poverty, communism and fascism were responses to both the crises that emerged and the internal contradictions the “proud tower” seemed impervious to —  a stark maldistribution of wealth, a crisis prone economy, and citizens who increasingly adopted ideologies and nationalism as a response to the decay of traditional values in social life.   The proud tower fell.

In 1945 the world emerged from war and depression.   The West, under the leadership of the United States, started to rebuild.  The US was relatively undamaged by World War II, and focused on expanding trade and cooperation within the West, while confronting the Soviet Union in the Cold War.   Colonialism vanished, but in its place economic relations with the third world remained generally exploitive: the West got raw materials and,  in recent years, cheap labor.  Rather than occupying and controlling these countries directly, support was given to dictators and corrupt leaders who would find it in their interest to adopt policies good for the West and western corporations.

A new tower was built.   From 1945 to 2008 it expanded.  At first, it was simply the increased productivity and dynamism brought about by expanded trade.  This period, lasting to the early seventies, was marked by American hegemony and a general sense that the US represented a benevolent and progressive force to guarantee global peace.   Vietnam started to crack that image, and with Watergate and the oil crises of the seventies, the US and the West suffered a deep crisis.

Yet that crisis was short lived.  Oil was still plentiful, countries had been following relatively sound economic policies, and the US emerged apparently as strong as ever.   Yet increasingly the system relied on growing debt, consumption of cheap foreign goods, and a rapidly increasing gap between the rich and the poor to keep up the appearance of stability.   Moreover, with the globalization of financial markets, unsustainable imbalances could be hidden or rationalized away for decades.  As long as things seemed to be going good, warnings were dismissed as mere ‘gloom and doom.’

This ‘new proud tower’ appeared in danger after the terror attacks against the World Trade Center in 2001.  Yet the response to the threat — cheapen credit and focus on maintaining economic growth — did more harm than the actual attack.   It set up a housing bubble that made it possible to keep up the illusion the financial system was operating effectively.   It created what seemed to be the best of all economic worlds — no inflation, low unemployment, cheap credit and large returns on investment.    Those embracing the sustainability of this “new economy” credited both the proliferation of technology and economic globalization for setting up long term economic growth and stability.

Society increasingly grew overtly materialist and consumption oriented.    Sure, many people still went to church and some had their new age philosophies, but even spirituality became marketed and treated as a consumable good.    Society became more focused on spectacle than reality.   While nearly a million were killed in Rwanda in 1994, the American public hardly noticed.  The big story involved allegations of murder against former football star OJ Simpson.   TV news became sensationalized and increasingly trivial.   It was about celebrities and drama.   And when there were wars, these were treated almost like movies — they had their own theme music, subplots, and story lines, but everyone assumed the US would win in the end.

Political debate was overtaken by people certain of what was right, building arguments to rationalize their point of view.   Talk radio appealed to passion, while pretending to offer analysis.   The other side was mocked, belittled and demonized, both in terms of ideology and as individuals.   Politics became a team sport, the citizens would become fans of the “left” or “right,” and look for arguments that simply supported their side.  Blogs continued this trend, with bloggers overtly choosing an ideological perspective or political side, and then aggressively promoting that (often with a cadre of readers who would actively belittle those who would comment against their particular blog’s perspective).   Life as spectacle, meaning from consumption, and a pace that worked against taking time out to reflect on just what was going on — that became the dominant culture in the new proud tower.

Meanwhile, as everyone immersed themselves in trivialities and shopping, public and private debt soured.   Oil consumption sky rocketed, even as it became clear to scientists that we are rapidly running out of oil, making our current economy unsustainable.   The pollution we create with all this fossil fuel burning is altering the climate, with possibly devastating consequences down the line.   We rely on oil and this way of life to survive — food and life’s necessities are transported large distances, increasingly from overseas.

But it gets worse.    One reason we could sustain the illusion of economic stability is came from the baby boomers, that post-war generation of ambitious and hard working consumers.   They been saving for retirement, contributing to social security and medicare, and paying taxes.   Yet they have started to retire.  Next year people born in 1945 will be 65, and every year more and more will cease paying into the system and start withdrawing from it.   It’s already common knowledge that the system won’t be able to handle it, it’ll eat up our budget within a decade.

Meanwhile, globalization has also meant that we are more vulnerable than ever to things that can’t be handled with just a big military.  Terrorism, oil crises, and the fact our currency remains stable only thanks to massive investments from China and the Mideast, all mean a minor crisis could trigger a massive collapse.   Third world populations are increasingly resenting western dominance.   Our tower is already wobbling.

Last time, the collapse of a social order meant war and depression.   It didn’t have to.  In 1913 Norman Angel came out with the book The Great Illusion, arguing that war in Europe was not possible because the economies were so linked that war could only bring disaster for all countries.   People could have recognized what he and others realized — they would be better off cooperating and trading.  Instead, petty squabbles and an inability to expand their thinking to match a century of change meant they stumbled into war.

We have to adjust our thinking to the reality of the 21st century.    I doubt that can save our “proud tower.”   I think the world as we’ve known it is going to fall.   The era of hyper-consumerism, cheap credit, life as spectacle and an ever growing economy is ending.   But this need not lead to war, depression, and societal chaos.   It’s up to us in see what needs to be done and adjust our thinking and behavior and instead of blaming others, take responsibility for our choices and work with others.