The World is Flattened. Again.
by David Atkins (“thereisnospoon”)
I’m going to riff on Thomas Friedman again today, not because The Moustache of Understanding is so important in and of himself, but because the key lie that underpins his philosophy is also the key lie that underpins both the conservative and what passes for center-left flavors of the Washington Consensus so dominant in Washington.
The lie has many facets, but at its core is the idea that the laws of the economy are the laws of nature, fixed and immutable. It follows from there that if the middle class is suffering, it must be because of a shift in the natural landscape, an evolution in the economic food chain with which individuals need to cope, but which cannot be solved by government intervention except at the margins.
I addressed that notion this morning, quoting Kevin Phillips at some length. But DougJ at Balloon Juice has a succinct refutation of this point as well:
Yes, it’s true that the middle-class is getting squeezed by huge global phenomena. Despite Friedman’s caveats about access, he sees most of them as essentially positive and inevitable—the world is flat, you know the drill.
The truth is, though, that people are rioting and such in the west because of the current economic crisis, and not much of the current crisis in the west was caused by globalization, except insofar as one considers the creation of the Euro a form of globalization. The United States is in a crisis caused by the collapse of the real estate market and certain segments of the financial world, combined with an ineffectual neo-Hooverist response to these collapses. The European is in a crisis having the same origins, only with an even more Hooverist response and a poorly-conceived currency system on top of it.
This isn’t the ignorant luddite protectionists battling enlightened elites; no, political elites fucked up and people are mad as a result. These fuck ups are not the inevitable result of neoliberal economic policies. You can support free trade without being a Hooverist, without thinking that American real estate prices would never fall.
I would take issue with DougJ’s separation of neoliberal policy from elitist greed. Also, I would point out that while the financial elites are indeed not that bright, they have also done very well for themselves, all things considered. Global elites have not just “fucked up.” They’ve also engineered the economy quite nicely to enrich themselves at our expense.
But his overall point is very well taken. The entire world, to some extent or another, has embarked on the path of what would loosely be called “free trade.” But only in America has it been done almost entirely at the expense of the domestic labor force.
Increasing trade throughout the European Union is not a bad thing. But the implementation of the Euro, as well as the austerity measures that followed the financial crash, were once again examples of poor planning and short-sightedness by the financial elites.
In other words, the economic crises that are causing shocks the world over were not inevitable natural phenomena of an immutable economic order. Neoliberalism itself bears much of the blame, but even the flaws of neoliberalism don’t account for the full story.
A lot of it is just rampant greed, poor planning and failure to learn from history.