Aren’t Democracy and Capitalism cute? Now choose which one you would sacrifice! (and do it fast!)

I hope after my latest cheerful posts about the looming end of the world as we know it (at least I’m not buying property in “the American Redoubt” with some safe storage for a few years’ worth of life necessities, even though I probably see the possibility of societal collapse as way more likely than many of the kindred spirits depicted in this article from the WaPo: Where survivalism meets normcore ) have not disheartened my loyal readers. To put in a better perspective my thoughts on the issue I want to devote today’s post to the analysis of which of the two features that more markedly distinguish our current socioeconomic system from the vast majority of what the human species has known in its roughly 100,000 years of history is likely to give way first and disappear from the landscape.

Those two features are, obviously, the ones I mentioned in the catchy title, democracy and capitalism, so we should first agree on what we mean when we say we (still!) live in a democratic, capitalist society:

·         One dupe, one vote: for a regime to be called democratic, we would expect the government to be elected by popular vote on a regularly scheduled basis, but furthermore, for such an election to be consequential we would also expect a free press (with multiple groups of different political leanings, least we end in a Berlusconi-style single party show where all the media with sizeable audiences ended up being property of the same guy which coincidentally won all the elections), an independent judiciary, and unimpeded access to the voting booth regardless of ethnicity, gender or class so every single citizen (I’m not going into the thorny debate of how much time should pass before legal residents are included in the citizenry and allowed to participate in the shaping of the collective destiny) has an equal say in the decisions that will shape their common future. Come to think about it, that leaves as truly democratic just about a bunch of countries in Northern Europe, and may be New Zealand, as almost any other country has either a judiciary grossly aligned with the main parties in power, or a press subdued to the extent of not having much independence, or places significant barriers to its poorer/ ethnically disadvantaged citizens.

Be it as it may, let’s assume democracy exists in a continuum, one extreme being so close to pure autocracy as to be almost indistinguishable (Putin’s Russia or Maduro’s Venezuela serve as examples of democracies so imperfect and corrupted that can barely be called so, even if they have periodic elections with multiple parties vying for the popular vote) and another one being the “most perfect” democracy where a well-educated, well-informed populace can truly choose between competing options after civilly debating and duly considering them, as exemplified by Denmark, Norway or Sweden.

I’ll just note that, as I expanded in another post (collectively deciding sucks ), It’s not like democracy has been winning many accolades of late. Democratic countries have been slower getting out of the economic abyss in which they were thrown by the Great Recession, and some of them are showing signs of a growing chasm (if not of outright divorce) between the ruling elites tasked with aggregating and translating into policy the preferences of the masses and the said masses, that in a number of instances seem to cantankerously and stubbornly refuse to follow the lead of their betters (see USA election circus, Spanish inability to form a government after two elections, likely going to a third one and Britain’s decision to leave the EU).

  -       One dupe, one sale: if Democracy comes in multiple forms and flavors, Capitalism nowadays is surprisingly monolithic: there is only one form it takes (I’ve variously called it “cybernetic” -stressing its reliance on the latest technology, although the term is somewhat out of fashion-, “postindustrial” -as it relies less in the production of large series of commodities and more in the generation of symbolic goods- and “desiderative” -according to the most salient feature of its dominant reason). Regardless of how we want to call that form, what distinguishes it from any other way of organizing the society (who produces what, and how the fruit of such production is distributed) is the following fact: everything everybody does is understood as a commodity. What is a commodity, you may ask? A product or service that can be and HAS to be exchanged in a market transaction. What, then is a market transaction? An exchange done with the purpose of acquiring the means to produce additional quantities of the product or service one gives away. So in our wonderful current system every single minute of our life is oriented towards the production of thingies that we can sell, and then apply the proceeds of such sale to produce even more similar thingies, in a never ending spiral of increasing production to support similarly increasing consumption, none of which can ever be done for the sake of its own enjoyment.

Of course, such imperative (producing for the market for the sake of being able to produce even more) is perfectly irrational. Not just not conductive to, but actively incompatible with, any minimal opportunity of human happiness and flourishing. But the system is not oriented towards ensuring the maximum happiness of those living under it (that nice sentence at the beginning of the Declaration of Independence about self-evident truths? Unashamed window dressing, if you ask my opinion, never meant seriously or truthfully), but towards having them produce as many material things as possible, their happiness, contentment or self-fulfillment be damned. Remember how it came to be (more details here: How desiderative reason came to dominate ): a bunch of warring societies got caught in an evolutionary arms race, where the ability to produce material goods ended up being the sole trait that got selected, as it alone ensured the societies manifesting it to a greater degree could obliterate their opponents and occupy all their ecological niche. Stephen Jay Gould famously said that “natural selection mills grind very slowly, but they grind exceedingly small”. Well, cultural evolution is much faster, and it grinds similarly small, producing societies so wondrously adapted to their purpose that the conscious design of an evil genius wouldn’t be able to outcompete them.

So before anyone tries to argue that things are not so bad, and we live times of miracle and wonder and freedom and plenty, even when nobody actually designed our societies to extract the absolute maximum productino capacity from every one of its members, that’s what they do to an unparalleled extent: We are expected to produce 24 hours a day, 7 day a week, 365 days a year. When people go on vacation, they are told in a million ways the ultimate end of such pause is to “recharge” so they come back to work with renewed energy. When they break for the weekend they are expected to rest the minimum necessary to perform even more ruthlessly and unsparingly the other five days. They may withdraw to their homely retreats to enjoy the company of their family, but more and more the family is seen as the support structure to help them recover better to be more productive at work. Leisure for leisure’s sake is something less and less understood, less and less promoted and less and less presented as desirable (as is the whole concept of a private sphere entirely alien to economic thinking, as explained by the whole hideous work of Gary Becker and recently revisited in a very civil exchange of opinions between Branko Milanovic and Diane Coyle: House work for sale? just great!, thanks to Pedro for the pointer). And again, no cunning cabal or secret council needed to explain the development of such dire state of affairs, just the blind evolution of social groups competing for limited resources and evolving and adapting to better do so, until they reach the ultimate level of adaptation, in which they exhibit the most advantageous trait to such an extent that it is not physically possible to go beyond it (you would need to truly transform human nature to have us collectively working our assess off more than we currently do, but just leave us a bit more time).

All well and good, you may say, but not overtly different to what has been going on in the planet for the last three hundred years (when our current dominant reason started taking shape, one element falling in place after another, until in WWII every piece adopted its current configuration). And both the political system (Democracy) and the economic organization (Capitalism) have been getting along just fine, each seemingly reinforcing the other to the extent that they were considered a single package (during the Cold War the CIA supposedly promoted both, but it’s difficult to determine which was in the driver’s seat and which was an adjunct). Has anything changed for them to become not just somewhat awkward partners, but may be even downright inimical? Yes indeed, and that’s what I’m about to explain.

Certainly, since our current compact started taking shape, the vast majority, when asked, has unambiguously supported it. People of any condition have actively voted for material enrichment, even when in a truly Faustian bargain it supposed surrendering more and more of their time and freedom to pursue an apparently irrational course (producing for production’s sake, for no other reason than they would then be able to produce even more) if by following such course they and their children would be materially better off. Both in the WSJ and in the NYT Deirdre McCloskey has been lately waxing rhapsodic about the “Great Enrichment” spearheaded by the West in the last two centuries, which she attributes to the liberation of their peoples to pursue their private interests (and we counter-attribute to their enslavement to pursue the production of more and more exchangeable commodities with the exclusion of any other possible life plan, conveniently shaping their desires so they thought they were being free when they actually weren't), and although pretty off the mark for an economic historian (such liberation happened in England not because of her laissez faire politics, but because she intervened much more actively in economic matters and regulated more heavily to benefit its budding industrialist class), she captures nicely the essentials of the bargain: people (the majority of people, enough of them to sway the government in a self-reinforcing cycle of ever more dominating desiderative reason) are happy to surrender their freedom and to submit to a punishing regime that condemns them to ever increasing amounts of toil in exchange for more private wealth.

What happens, then, when the system proves itself incapable of granting such increasing wealth? This week the USA Census Bureau released its yearly report on income, poverty and health insurance in the USA, and many economists (like Paul Krugman here: Progressive economics works! (keep on dreaming)) were ecstatic because the median income was finally rising, after untold years of barely budging. During all those years (that well antedate the Great Recession) all the fruits of economic growth and then some had been monopolized by a tiny minority (the infamous 1% in most advanced countries) thanks to the hollowing of the middle classes (and the unending sinking of the lower ones) catalyzed and accelerated by the advance of Globalization (that brought uncountable millions of cheap workers to directly compete with their Western counterparts in less and less regulated labor markets), and this much awaited rise in median incomes (by now confined just to the USA) is being celebrated as a harbinger of a more egalitarian, more enlightened era when, thanks to active government intervention the economy will finally lift all boats, and everybody’s fortune will at last improve.

May be. May be not (the interesting thing about the future, as Yogi Berra would have it, is that it has not yet come to pass, so anything could happen), but I’m not optimistic. That most recent uptick has not yet been enough to erase all the losses of the last years, so that median income is still below its highest point in the 90’s of last century. So that’s two decades not seeing any growth at all for most families. Probably much more than that for the lower half (I’d say that after the “great convergence” that saw wealth differentials shrink until the end of the 70’s, things have been either flat or downhill for at least half of us). That’s a whole generation that has been hearing, for all their adult life, that the future belonged to the committed. That they needed to continuously reinvent themselves to stay relevant in the “new economy”. That a safe, stable employment was a thing of the past (along with a collective “safety net” to prevent those with bad health or bad luck to utterly fall) but, in exchange, many more opportunities would abound for those willing to put the hours and make the effort.

Some opportunity. I dare to say that for almost 80% of the working age population, those have been empty promises, and they are approaching a moment in their life where they have to accept there is not much economic improvement in store for them (the most dynamic job market somehow is not so dynamic for those above 45 years old) and they may end up being less materially well-off than their parents (not to speak of “intellectually well-off”, as a life of almost exclusive focus on social betterment at work leaves one poorly prepared to do anything outside such work), with prospects than in many cases are truly dismal (better not check too frequently how your K401 or equivalent nest egg has been performing in a market with zero-bounded interest rates and essentially flat stock markets for as long as the eye can see). No surprise drug use is rampant in some sections of the American “precariat”, and that life expectancy is actually regressing between middle aged men with no college degree (things are even worse in Russia, and I dare say for similar reasons).

So there is a reason “this time is different”. Up until now capitalism has been able to successfully bribe the majority of the population with an ever increasing consumption level. It pushed for productivity gains that were more or less equitably distributed, but which always reached(some percentage of them, at least) most layers of the economic ladder (which incidentally allowed for enormous loads of crap iced with generous doses of intellectual dishonesty to pass as respectable wisdom, see “supply side economics”, “trickle-down economics” and the like). But a number of circumstances conspired to put an end to such productivity gains (whose denunciation has been a kind of mini-obsession for me, judging from the amount of posts I’ve devoted to it: No more progress, and No more civilization, and Progress? nope, just delusional, and State spending? it will take us nowhere, and Bill Gates? dead wrong, no progress, I tell you to point just to a few of them), and it is such failure of “the system” to withhold its side of the bargain which is leading, unsurprisingly, to increasing numbers of its citizens to start doing what in the 60’s was called “dropping out” (see the disheartening tendency of the labor force participation rate to stay flat and high regardless of the situation of “full employment” that should be drawing multitudes back in search of a job in the USA).

Not only are increasing numbers opting for a life entirely outside of the formal economy (see also the work of Erik Hurst, on how some perfectly fit young men just find more appealing to keep on playing videogames than to spend countless hours flipping burgers with zero real chances of ever advancing to a more rewarding occupation in a super-credentialized corporate world, who would know?), but for those that remain the “traditional”, “establishment” alternatives seem more and more like a bad joke. So the Brits vote themselves out of Europe, and 55 million Americans will vote in eight week for Donald Trump, an utterly shambolic candidate (but is he really that more shambolic than Hillary Clinton? Than Jill Stein? Than Gary Johnson? Are they not all of them peddling worn fantasies detached from any sliver of reality or even plausibility?) adored, beyond any semblance of rationality or plain ol’ respect for the law of non-contradiction, by Nazis and avowed racist (not “statistical”, “I end up unconsciously interacting more with whites” racists, but dyed-in-the-wool “send them back to Africa by force” racists, just to be clear).

Now any sober observer of our political and economic reality may object that this is just a transition phase. Healthy rates of growth will surely come back, and with them the faith in the ability of unfettered capitalism to “withhold its side of the bargain”, to fulfill its promise of ever increasing material wealth for the masses. And with such resumption of the normal course of economic development we will see those specters of old melt away, and people become reasonable again, respect their leaders, vote their establishment candidates and exile the peddlers of hate and exclusion to the fringe of the system, the realm of conspiracy theorists and Holocaust deniers and Moon landing doubters. Again, may be, but I’m sceptic myself (in many domains beyond economic optimism, which I see as utterly unwarranted). I’d rather prepare myself (and my loved ones) for an immediate future of growing crises, growing political disenchantment and extremism, growing conflict between classes that feel betrayed, that seek refuge and solace in the ones more similar to them, to the exclusion of anyone markedly different. The monopoly of violence by the state will be more and more difficult to maintain, and I see some enormous polities (starting with the very own USofA) as much more fragile than anybody realizes. Whoever wins this election there will have to preside over a polarized, rancorous and uncompromising half of the electorate that will question his (or her) legitimacy and in a growing number of cases will resort to their own private use of violence to settle the scores and the grievances they don’t recognize the state as being able to arbiter.

So again, practice with your guns, store ammo and learn to box…