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Works and Days

Decline Is in the Mind

September 18th, 2010 - 4:18 pm

With a whimper not a bang

Juxtapose pictures of Frankfurt and Liverpool in 1945, and then again in 2010 (or for that matter Hiroshima and Detroit). Something seems awry. Perhaps one can see, even in these superficial images, that something other than military defeat more often erodes societies.

Of course, losing a war can end a civilization (ask the Carthaginians in the Third Punic War or the Aztecs in 1521). But then again, the chicken-and-egg question reappears: why are some civilizations more vulnerable to foreign occupation or more incapable of reacting to sudden catastrophe — such as the pyramidal Mycenaeans rather than the decentralized Greek city-states?

In three wars, Republican Rome managed to end sea faring Carthage — in part through the building ex nihilo of a bigger and better navy — and in a dynamic fashion not repeated 600 years later when 1 million-square-mile, 70 million-person imperial Rome — now top-heavy, pyramidal, highly taxed — could not keep out barbarians from across the Danube and Rhine.

At the end of the Second World War, the industrial centers of western and eastern Europe were flattened. Russia was wrecked. China and India were pre-capitalist. Germany and Japan themselves were in cinders.

The factories of the United Kingdom (despite the 1940 blitz and the later V-1 and V-2 attacks) were largely untouched, and the United States pristine. Both countries had incurred massive debt. Yet Britain in the late 1940s and 1950s socialized, increased vastly the public sector, and become the impoverished nation of the 1960s and 1970s. In contrast, America began to return to its entrepreneurial freedoms, and geared up to supply a wrecked world with industrial and commercial goods, paying down its massive debt through an expanding economy. We thrived; yet socialist Britain did not become a West Germany, Japan, or Singapore.

One can see that natural resources, while important, are not all determining. Oil-rich Venezuela and Mexico are a mess; resource-poor Japan and Switzerland are not. There are few economic refugees now fleeing Shanghai to Hong Kong as in the past; nor is East Germany any more unlike West Germany as North Korea still is in comparison to South Korea.

Planned vs. Free

Cultural tradition plays a role, of course. But more important still is the nature of politics and the economy. As a general rule, the more freedom of the individual and flexibility of markets — with lower taxes, less bureaucracy, constitutional government, more transparency, and the rule of law — the more likely a society is to create wealth and rebound from either war or natural disasters.

These truths transcend space and time, and they trump race and nationality, weather and climate, resources and geography. The notion that we are doomed and the Chinese fated to prosper is not written in stone. It is simply a matter of free will, theirs and ours. They must deal with a new era of coming suburban blues, worker discontent, unions, environmental discretion and regulation, an aging and shrinking population and greater personal appetites, social protest, and nonconformity — in the manner that industrializing Western nations did as well in the early twentieth century.

In our hands

We in turn can easily outdistance any country should we remain the most free, law-abiding, and economically open society as in our past. A race-gender-ethnic-blind meritocracy, equal application of the law, low taxes, small government, and a transparent political and legal system are at the heart of that renewal. America could within a decade become a creditor nation again, with a trade balance and budget surplus, drawing in the world’s talent and capital in a way not possible in the more inflexible or less meritocratic China, Japan, or Germany. Again that is our choice, not a superimposed destiny from someone else.

Unfortunately, we are mired — as in the case of many complex societies that become ever more top-heavy and bureaucratic, when salvation alone is found in becoming less so — in a new peasant notion of the limited good. Anything produced is seen to come at the expense of others. Absolute wealth is imaginary, relative wealth is not. We would rather be equal and unexceptional than collectively better off with a few more better off still.

Yet I, like most Americans I hope, don’t care whether Bill Gates lives in a mansion or Warren Buffet flies in a huge private plane or even that George Soros has billions to give away to progressive causes or that John Kerry has millions to spend on power boats and sailing ships. The system that created these excesses, if we even call them that, also ensured that my hot water — and the hot water in nearby rather poor Selma — is no cooler than theirs. My Honda and hundreds in town run as well as their imported limousines. Last time I went to the local Wal-Mart I counted 100 cell phones, and I doubt Al Gore’s gets any better reception. The better off may or may not “at a certain point … made enough money,” to quote the president, but I have no idea where that certain point is (or whether it includes vacations to Costa del Sol), only that once our technocracy starts determining it, there is a greater chance that my town will not have as hot water as the rich and Hondas that run as well as their luxury cars.

When the end comes

Study the collapse of complex societies, and rarely is the culprit the environment or the enemy across the border. To the extent that walls are torn down or rivers silted up or volcanic eruptions become societal-ending, all that hinges on the preexisting nature of a society — whether it is flexible and wealth-creating or inward, acrimonious, and wealth-redistributing. Chile will recover from a far stronger earthquake than the one that hit Haiti. (I fear Haiti will not recover easily, if at all.)

In 1521, a brutal Hernan Cortés could no more have taken Britain with his 1500 conquistadors than he rather quickly figured out how to destroy an empire of 4 million with that same number. The trick for the command economy of the Soviet Union was not just to repel a 3-million-man Nazi-led invasion, but to do so in a fashion that did not lose 20 million of its own, while creating a postwar sustainable prosperous order inside the USSR and at its periphery.

“Spread the wealth” and “redistributive change” only occur when the enterprising, gifted, lucky, or audacious among us feel that they have a good chance to gain something for themselves (and keep most of it), or to extend to others that something they earned — or more often both motives, self-interested and collective. Deny all that, shoot their bigger cow so to speak, or burn down their towering grain, and we will end up as peasants and serfs fighting over a shrinking pie.

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