New Versus Old Economy Politics, by Sarah Miller

Why has the Democratic Party and what passes for the political left in the US failed so miserably to come up with a forward-looking response to their defeat last November by Donald Trump and his ragtag band of reactionary forces? A response that goes beyond the worthy but ultimately conservative call to “resist”? A response that addresses the root causes of the fear, depression and anger so evident in the white voters of the American heartland who put Trump in office — and to a degree also in the Black and Hispanic citizens who didn’t bother to turn up in convincing numbers at the polls to support Hillary?

The paralysis in policy conception starts with the Democrats’ refusal to accept an appropriate share of the blame for the failure of the existing political system to address the festering sores left behind as relative well paid, unionized jobs moved south and east through the late 20th Century in search of cheap, compliant labor. But this explanation ignores another critical aspect of our 21st Century situation: The globalized, homogenized “big everything” economy so many people are revolting against is itself fast disappearing. In its place is rising a world of robotic, more dispersed manufacturing and complex information systems, powered largely by sun and wind rather than coal and oil.

This transformation should be the starting point for anyone seeking a fairer, happier and more egalitarian America. What is needed is certainly not a return to the old pre-Trump system, even as it functioned under presidents Barack Obama and Bill Clinton. Simply resisting change won’t solve anything. Something new is coming whatever the politicians say or do, and what is desperately needed is a vision for how to make that new system better than the one it is replacing, not worse. Yet worse is what we may well get if the Silicon Valley libertarians are left to their own devices.

The coming new economy has many appealing aspects, particularly when it comes to the environment. It involves less shipping of goods across oceans, less heavy infrastructure, smaller-scale manufacturing closer to markets, and possibly even a less centralized banking and investment system. The impacts are already showing up in the numbers. International trade has barely kept pace with economic growth since the 2008 recession, instead of growing twice as fast as GDP, as it did from 1986 to 2000, according to a study published by the World Bank. Since oil prices collapsed in 2014, trade expansion has actually been lower than GDP growth even in volume terms, which adjust for the impact of the lower oil prices themselves.

This link to oil is not coincidental. Coal in the 19th century and oil in the 20th century were key structural supports for the colonialized and then globalized system in which sprawling factories took in raw materials from around the planet and sent goods back out to equally far-flung consumers. In the 21st Century, though, the fully globalized oil and gas industry, with its mammoth centralized producing facilities, supertankers and refineries, is facing extinction. Whether oil use peaks in three to four years, as the renewables’ optimists suggest, or in 20-30 years as fossil fuel proponents maintain, it is going away. Few in the oil business itself any longer seriously doubt that.

How can one assert such a fate for oil with confidence when a US president has just been elected who has vowed to resuscitate coal and shield oil and gas from outraged environmentalists? Because while oil and gas companies can barely break even at recent prices and are having to go after ever more complex resources, much more dispersed and localized solar and wind power — and the electric cars they will ultimately fuel — are getting cheaper and more effective with every passing day. Nor are they still the tiny component of the energy system that they are sometimes portrayed as being. In 2015, renewables — not including big dams — accounted for more than 10% of all electricity generated in the world and was the biggest source of new added capacity.

These fuels share many of the economic attributes of computers and other high-tech components of contemporary life that are similarly transforming the broader economy. Goods keep getting smaller, cheaper and more powerful, made by companies that employ ever fewer people. Already, books and magazines are read on electronic devises rather than printed on paper made in far-away mills and shipped out across the world. Within a few years, technologies of which today’s 3-D printing is a rudimentary precursor will likely allow the manufacturer of individualized goods near the consumer, with only a few basic materials moved long distances. Interest in locally farmed and minimally processed food is increasing. People are buying more from nearby artisans, and spending their vacations in other people’s homes booked online, rather than in big hotels.

This may sound idyllic, but it has a dark side. Unless steps are taken to shape it differently, the emerging system will need much less human labor, and what workers it does require will need skills that many people simply can’t attain, no matter how good the education system. So it carries the potential for even more income disparity and even less meaningful work for people accustomed to basing their self-esteem on their jobs. A few titans of technology could end up owning virtually everything, and while they may be more “liberal” in their attitudes on race, religion and sexual preferences than their neoliberal peers of yesteryear, they are if anything even less open to democratic control — otherwise known as regulation.

The immense financial support new economy leaders provide to the Democratic Party might help explain the near silence from today’s political establishment on what could or should be done to mitigate these negative impacts that are visibly approaching. Bernie Sanders and a few European politicians — perhaps most notably new French Socialist Party leader Benoit Harmon, who supports a guaranteed minimum income and a tax on job-reducing robotics — are beginning to put forward ideas on the critical questions tomorrow poses. However, they are so far being largely drowned out by the defensive politicians with bigger megaphones. Meanwhile, capitalism marches on to a new set of drummers — unimpeded.

 

Sarah Miller is a thinker, writer and editor with experience as a journalist in Brussels, Washington, London and New York. She now lives in Camden, Maine, and is active with the local philosophical society, annual Camden Conference on foreign policy issues, gardening and piano.

3 thoughts on “New Versus Old Economy Politics, by Sarah Miller

    1. Sarah Miller replied:

      “What are we to do” is certainly the right question, and part of the answer must surely be to demand that Democrat Party and other independent politicians start providing some specific, policy-oriented answers if they want our votes. It’s sadly clear from the joint Bernie Sanders-Tom Perez tour that began here in Portland, Maine, last week that the Democratic National Committee Perez now chairs isn’t yet thinking that way.

      The kind of Universal Minimum Income (UMI) now being espoused by clearer heads is one possible starting point for action related to the new economy. While such a payment would almost certainly start out at much too low a level to actually feed and house people, it could at least provide a base on which to start building a new, egalitarian income structure under democratic political control, rather than capitalist fiat. As I note in this piece, it could have additional climate change benefits if linked to a carbon tax.

      This would not preclude also joining UMI to a tax of some sort on robotics deployment, as advocated by French Socialist presidential candidate Benoit Hamon and tepidly endorsed as a futuristic goal even by Bill Gates. The aim of such a tax would be to at least create a level playing field between human employees — for whom corporations must pay social security and other taxes — and machines, which are more likely to win companies tax breaks than tax charges. It could also be redistributive in economic terms.

      More fundamentally, I see it as vital that more of us learn to think outside the box — or frame, as German philosopher Martin Heidegger termed it — created by conventional economic and political thinking. Maybe we want to welcome the “end of work” and focus our attention on how people can create lives that they find satisfying and enriching with minimal or no paid-labor. Or perhaps we should start thinking of artificial intelligence (AI) and robotics as technologies that humanity should strictly regulate or at times even ban, much as we already think of genetically modified organisms (GMO), whether they be soybeans or human embryos.

      I don’t have the answers. I don’t think anybody does yet. I do think we urgently need to be seeking them — hopefully from a humane and egalitarian perspective.

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