Page 2 of 2 Economics can open to new realities
By Joe Costello
evolving our political economy. In fact, the fundamental principles of
republicanism and democracy share the biological necessities of distributed
order and robust feedback loops that create stability. Reinvigorating the
principles and practices foundational to the American republic will help move
forward the evolution of self-government for the 21st century.
Two pillars of the American system are "separation of powers" and "checks and
balances," both based on the idea of distributed power. Of course the elemental
component of self-government is the engaged, educated, and active citizen, not
centrally controlled but an independent active agent endowed with rights. The
fundamental rights of free speech, a free press, freedom to petition and
assemble are all viable and important elements to a
republican/democratic political feedback loop. Thus we can begin an American
reformation by reviving these principles and restoring them to their rightful
places in the foundation of our self-government.
It is also clear, more must be done than a simple restoration, we must also
evolve our political economy. We can look at three different essential elements
of 21st century political economy and see how creating networked distributed
order with effective feedback loops will help create the change we are in so
desperate need. The three are; energy, government and corporations.
There is no change more necessary for the United States than moving past its
19th and 20th century dependence on fossil fuels. The rise in the price of oil
to almost US$150 a barrel severely impacted the American economy, while the
continued spewing of fossil fuel emissions into the global environment wreaks
greater and greater destruction on the planets biological systems.
America must rebuild its energy infrastructure from the ground up, a this task
that will overwhelmingly be worked at the local level, with solutions designed
to fit the local environment. America's energy infrastructure must be retooled
from the ground-up and this starts with demand destruction.
The essential questions we must ask ourselves is how do we as individuals,
communities, businesses, and government cut the amount of energy we use. As
individuals, we must break our auto-centric habits and begin car-pooling,
walking, biking and using transit. We must redesign our communities so they are
more walkable, bike-able, and friendly to public transit. These are activities
that all must be undertaken at the individual and local levels.
Secondly, we must replace fossil fuels with other energy sources. Solar for one
will be more useful in distributed as opposed to traditional central generation
systems. Our electric system must be completely overhauled and made
intelligent, allowing a more efficient use of renewable fuels, distributed as
opposed to centralized generation, and intelligence in the system that allows
more efficient use of energy in our homes, offices, and public places. Our
centralized, information bare, limited feedback electric grid must be
transformed into another Internet - a distributed, intelligent, feedback filled
robust network.
In changing the American energy infrastructure we will fundamentally change
America's industrial infrastructure, and this is not simply a technological
process, it is also a tremendously political one. The Financial Times reports:
"A report by the American Society of Civil Engineers concludes that America's
infrastructure overall is close to 'failing' and deserves a grade of 'D'. It
estimates that an investment of $1.6 trillion will be needed to bring it up to
working order. According to the report, nearly 30% of the nation's 590,750
bridges are 'structurally deficient or functionally obsolete' and it will take
'$9.4 billion a year for 20 years to eliminate all bridge deficiencies'."
This would be just for maintaining the existing infrastructure, but what we
must do is not maintain, but transform the existing infrastructure. America's
present infrastructure is not simply technologically entrenched, but just as
importantly or maybe more importantly, it is politically entrenched. This
technological infrastructure has people, corporations, and governments all with
an invested interest in preserving the status quo, and they will work hard to
do so.
Transferrence, not "creation"
Even more importantly, much of the transformation of American infrastructure
will not be wealth-creating in our traditional industrial economy accounting.
Traditionally, wealth is created by transforming raw natural resource into
products. However, in the necessary transformation of American infrastructure,
we will need in many cases to recycle and transform existing infrastructure.
Wealth will not be created so much as transferred, for example, by taking 20
commuters out of their cars and placing them on buses or trains.
Next, we must reform the centralized industrial corporation. The centralization
of economic and political power from industrialization has been tremendous. The
rise of the industrial corporation from its beginning was seen as threat to the
distributed power of the republic. Stopping the growth of corporate power was
met with limited, though really no success in American history. We must begin a
corporate reformation based on distributed power. We can look for guidance to
the wisdom of the turn of the 19th and 20th century anti-trust movement,
particularly to Supreme Court Justice Louis Brandeis who stated:
Both
liberty and democracy are seriously threatened by the growth of big business.
Today the need is not so much for freedom from physical restraint as for
freedom from economic oppression. Already the displacement of the small
independent businessman by the huge corporation with its myriad of employees,
its absentee ownership, and its financier control, presents a grave danger to
our democracy. The social loss is great; and there is no economic gain.
Political liberty, then, is not enough; it must be attended by economic and
industrial liberty.
Brandeis was of course bringing to the 20th
century Thomas Jefferson's universal understanding that democracy was
inherently decentralized. Jefferson understood the self-sufficient yeoman
farmer was an essential element to 18th century American self-government.
However, the agrarian/merchant republic Jefferson helped found was born
simultaneously with the industrial era, and the two have had a fitful
coexistence.
Over time, many of the practices and principles of industrialization crushed
their democratic counterparts. Most notably, the industrial ideas of "economies
of scale" and "consolidation" destroyed small economic associations and
decentralized power, squashing democracy across the spectrum of our society
from production, to finance, to communication.
Today, the American economy is more centralized than at any time in our
history, thus it is also the least democratic. The concepts and practices of
"economies of scale" and "consolidation" can only be looked at as unambiguously
beneficial when one takes the political out of the economy. However, if you
looked at economics and politics as intricately entwined, made perfectly clear
to even the most near-sighted by our present financial crisis and the swinging
wide of our Treasury vaults for Wall Street, "economies of scale" and
"consolidation" are undemocratic.
Media consolidation has been destructive for the necessary feedback loops of
any healthy democratic system. It has placed the majority of news, and thus
political information, the life's blood of any system of self-government, into
the control of an ever increasingly small number. Such a concentration is
historically anathema to any democratic system. With our growing understanding
of biological systems and complexity, this centralization creates instability,
as seen in the current financial crisis. It is a tremendously insufficient
architecture for vital and necessary feedback.
We must not only open more channels and distribute power in communications, but
we must reform control of information itself. Open standards must be built into
all our technological and information processes. Our patent and copyright laws
are in desperate need of reform. They have been mutilated beyond both
recognition and the public good. Once again, one of the principles of the
republic's founding, a free and open press, that is the unencumbered
distribution of information necessary for self-government, must be revived,
strengthened, and evolved in all aspects of our political economy.
With any reform of self-government, corporate reform must go hand in hand. We
can start with Jefferson's simple principle of the necessity of
decentralization, brought forward by Brandeis, combined with our new knowledge
of complexity and feedback. "Break Them Up" can be the foundational rallying
cry for all corporate reform - "Too big to fail" must become "Too big to
exist."
Government away from the center
Finally, we must reform our government structures. America must begin
distributing power out of Washington DC. The wildest Federalist's dream could
never have imagined the concentration of power in today's Washington DC. Inside
DC, we watch an executive branch descending into ever greater power grabs and
increasingly attempting to place itself beyond the rule of law. Historically,
no republic ever collapses into chaos, it is overthrown by a strongman with the
compliant apathy of an effete disenfranchised citizenry.
The United States government must begin to evolve from a hierarchical
representative architecture to a more distributed network, directly democratic
system. Fortunately for the United States, this system is already in place. The
United States from its founding was in many ways a distributed system. The
checks and balances and separation of powers weren't simply inside the Federal
government between the executive, legislative, and judicial branches, but also
between federal, state, local governments, and finally and most importantly the
citizen.
The local and county governments of America exist and are functional, but they
have become increasingly powerless. Reforming America self-government means
bringing power to these institutions, then evolving them by connecting them
through a distributed network architecture.
There's no reason for local governments to go to state capitals or DC to work
amongst themselves, or plead for resources taken from them. They are the
established nodes of what can become a very robust distributed network. What
needs to be created are the connections. With these connections, local
governments can pass information, work together on economic development,
transform our energy infrastructure, and more effectively manage local and
regional environments.
Bringing power to local governments will also help make government power more
accessible to the citizen. The elemental force underneath all healthy system's
of self-government are the citizens themselves. The last half of the 20th
century has seen an almost complete disenfranchisement of the citizenry from
both politics and government. The centralization of political economy has been
at expense of the citizen.
Any reform must create greater roles for the citizenry in both politics and
government. America's citizenry is going to have reengage in a restored and
evolved democratic politics and republican government.
Of course, there is a giant paradox in this idea of the renewal of the local,
which is, it must be accomplished in many ways with Washington DC actively
removing power from itself and empowering city and county governments. Such
voluntary abdication of power has limited historical precedent, the most recent
having been Mikhail Gorbachev's Moscow. Nonetheless, if America is to restore
its republic, we will need to see the equivalent of an anti-president and
anti-congress. This will not come about without plenty of pressure from the
bottom.
So, if we look at our present financial crisis, as simply or even predominately
as a financial problem, we are missing the greater underlying forces. Yet to
this date, we see an inability to confront any of these issues. Instead, we see
a literally mad attempt to protect our habituated status quo.
Instead of facing up to our now decades-long drift into delusion that debt is
wealth, every dollar we now spend assures an even deeper hole from which we
will have to climb. Just as the Allies sought in the name of peace at the
conclusion of World War I to cripple Germany, thus creating future war, our
political and economic leadership in the name of financial well being, cripples
the future, fating us to insolvency.
New concepts, new foundations
The challenge America faces is substantial. Our political economy is built on a
sandy and false foundation reaching back not simply a half century, but over a
century and half. The notion of unlimited production and unlimited consumption
based on infinite resources, the foundation of industrial economics, crumbles
as the oil fields upon which it rests decline.
With this crumbling comes the collapse of many of the concepts and principles
of the industrial era, leading to increasing societal volatility.
We must reach into history for roots that are much deeper than industrial
society to help provide stability, and combine it with our present knowledge of
natural systems to help foster future healthy growth.
At its simplest and sublimest, civilization can be defined as humanity's
ability to incorporate the past and plan for the future. This isn't something
that can be measured on a quarterly basis; in fact, any society that tries to
measure success on such a time frame can rightly be considered uncivilized. The
changes laid out here will take years and generations.
Once again I'll turn to Mr Keynes, one of the finest minds of the 20th century,
and borrow his conclusion
The true voice of the new generation has not
yet spoken, and silent opinion is not yet formed. To the formation of the
general opinion of the future I dedicate this [essay].
Joe
Costello is a communication and energy consultant. He served as
communications director for Jerry Brown's 1992 presidential campaign and senior
advisor on Howard Dean's 2004 campaign.
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