Politics and economics

The Infamous Brad has an excellent analysis of the politics of Occupy Wall Street. (You should, of course, be following Brad carefully.) Brad is entirely correct as to the politics, but we always, I think, have to look at what underlies politics economics.

The 19th century was, in economic terms, the struggle of the bourgeois capitalist middle class against monarchical mercantile imperialist ruling class. All the apparently purely political struggles were about that underlying economic conflict. The only possible outcomes were that the bourgeoisie or the monarchists would win in the end; as we know, the bourgeoisie won. Marx would, I think, argue that because capitalism as was substantially more economically productive than monarchical mercantilism, the victory of the bourgeoisie was inevitable*.

*I don't want to get into a discussion of whether or not Marx was right, and about precisely what he meant by "inevitable".

Similarly, the struggle of the twentieth century was between the professional-managerial middle class and the capitalist ruling class. Even as far back as the middle of the nineteenth century (as Michal Perelman argues in Railroading Economics) the large-scale industries of the late nineteenth and twentieth centuries required not only dedicated professional management (business is too serious a matter to entrust to capitalists*) but also authoritative macroeconomic coordination, coordination that could be performed only by the state. The professional-managerial middle class revolution was ultimately successful after the Second Imperialist War, leading to the Great Moderation. Again, because the large-scale professional management and macroeconomic coordination were more productive than laissez faire capitalism (especially with the framework of Keynes General Theory), the victory of the professional-managerial middle class was, in a Marxian sense, inevitable.

*With apologies to Clemenceau

Until perhaps the beginning of the twenty-first century, there really hasn't been a substantive change in economic conditions that would underlie a political struggle. Therefore, there hasn't really been a truly transformative political struggle after the Second Imperialist War. Even the 1960s didn't create any fundamental transformation; at best it shook up the complacency of the professional-managerial now-ruling class, but its effects were social and largely superficial. (Which is not to say the effects were unimportant; the professional-managerial class really did need to lose the straight-laced, rigid conformist baggage it carried from its time as the middle class.)

A problem with the professional-managerial class is that it is not sufficiently ruthless. On its victory it did not destroy (or thoroughly marginalize) the capitalist class as the capitalists destroyed and marginalized the monarchists. After the bourgeois revolutions, the monarchs were either butchered or stripped of all their power; there is not a single king or queen in the West with even a shred of effective legal or political power. (Price Charles, for example, has been reduced to becoming an advocate for snicker homeopathy.) In contrast, the professional-managerial middle class left a crucial legal and political tool in the hands of the capitalists: the social construction of the means of production as private property which can be owned. (The communist revolutions, which were also professional-managerial class revolutions, made the opposite mistake: they failed to adopt the bourgeoisie's only truly valuable concept: transforming personal power into the power of offices.) The professional-managerial class does not by nature crave power. They are taught to be judicious, rational, to find the best solution, not the solution that preserves and enhances one's own power regardless of the consequences. They really do mean well.

(Which is not, of course, to say that the rule of the professional-managerial class is all rainbows and unicorns, as demonstrated by twentieth century neoliberal imperialism. The best that can be said of the professional-managerial class is that its slightly less murderous than its monarchist predecessors, preferring economic slavery to actual chattel slavery.)

But the capitalists were not willing to be contained, however gilded their cage. Owners of capital are conditioned to absolute self-interest. A capitalist grows his business not because of the social benefits of doing so, but to crush his rivals. A capitalist plays to win, and anything he can get away with, however he can get away with it, is fair game. Atlas Shrugged really sums up the thinking of the capitalist class: without the capitalists, the world will descend into anarchy and chaos. The irony is that Rand wrote Atlas Shrugged immediately after the greatest purely economic collapse in human history, which happened during the unquestioned rule of the capitalist class, and during the greatest economic expansion in human history, an expansion that occurred during the unquestioned rule of the professional-managerial class. The protagonists (I cannot call them heroes) are not laboring under the yoke of oppression; their complaint is rather that the power of the "exceptional" is not absolute. The antagonists are ridiculous caricatures not of the proletariat but of the professional-managerial class with their concepts of bureaucratic management and state macroeconomic coordination.

The Marxian puzzle is this: because they are clearly more economically productive than the capitalist class, the victory of the professional-managerial class ought to be inevitable, and yet never has there been a class so quickly defeated and demoralized by its own success. Without another economic model that can out-produce even laissez faire capitalism, the best that the Occupy Wall Street protests can do is restore power to the professional-managerial class. But the professional-managerial class has ceased to exist, leaving only isolated hold-outs such as Krugman and DeLong. The economically superior class has already been defeated by the economically inferior class. Marx may ultimately be wrong: economics does not "determine" (i.e. exert ineluctable selection pressure) politics. If so, what can we hope for?

The capitalist class has defeated and destroyed the professional-managerial class. There are obviously a lot of professionals, managers, bureaucrats, etc., and the capitalist class will continue to use them, but their very identity as a class has been just as thoroughly destroyed as has been the identity of the industrial proletariat as a class. Since the class does not exist — and the capitalist class is not so stupid as to easily allow them to restore their class consciousness — no political movement can restore them to power. Lacking any way to actually be successful, the protests will peter out. Even if the the state botches the job and pulls a Kent State, people will just get scared and go home. Political change happens not when things are the darkest, but when they have started to improve. It is only when they realistically hope for improvement that the people stand up with sufficient force and demand more. Things are going down, not up.

The alternative to protest for improvement is the absolute and total collapse of the ruling class. In Russia, the people revolted because the Tsarist state caused the utter destruction of the Russian nation in the First Imperialist War. In China, the people revolted because of the Imperial state caused the utter destruction of the Chinese nation by the Japanese invasion. So we can confidently predict that without the professional-managerial class, we will have a revolution in the United States only after the capitalist class causes the utter destruction of the American nation.

The most plausible cause of the destruction of the American nation is from the Christian Right. The capitalist class has built much of its pseudo-democratic political power on this base. The capitalist class simply cannot manage a 350 million person economy on its own; when they plunge the nation into a real depression, only the Christian Right will be able to operate without the capitalist class simply crushing them. The capitalist class can potentially fall to a Christian theocracy. But a theocracy will not only prove even more economically inept than the capitalists, they will also be more politically inept, and we will return to personal, rather than official state power, with all the banal corruption and self-serving of monarchism. What happens after that... I don't know.

Sigh... another rambling essay with no real thesis.