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Living in a rich society

2013 December 20
by Ian Welsh

We, in the West, live in scarcity economies.  The key bottleneck resources are scarce, and the decision has been made to keep them scarce.  Our entire economic policy from about 1979 can be summarized as follows: ordinary people cannot be allowed to have a real raise which translates into spending on oil.

When Bush screwed up the second part of that, and oil went to 150, it was one of the major causes of the financial collapse.

In a rich society, like the one we had in the 60s and 70s, big projects get completed.  The interstate freeway system; the moon shot; the huge build-out of the university system.  Artists and musicians sprout everywhere, good jobs exist in abundance, it’s not hard to make a living, so you can do what you want most of the rest of the time, and you can tell your Boss to go screw himself if he treats you badly.  (Even in the mid eighties, I could do this.  I knew I’d be employed the next day, and I had no special skills, NONE.)

When you live in a scarcity society, it’s almost impossible to receive permission to do anything real, and you have to put up with how your boss treats you, unless you have a very in-demand skillset, because the next job isn’t a sure thing.  Infrastructure isn’t maintained, new institutions aren’t built, and every old institution tries to create a rental stream (thus the huge increases in tuition and the huge decreases in grants.)  You can’t build high-speed rail, heck you can’t even maintain the freeways properly.  Bridges start collapsing, and so on.

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This isn’t just about resource shortages.  A resource shortage may start the sequence, but it is the deliberate refusal to deal with the resource shortage which turns it from a challenge into an era, which turns a rich society into a scarcity society.

When America and the West turned away from Carter (as flawed as he was) and turned towards Reagan (a disciple of Thatcher), they made a choice not to deal with the oil bottleneck except through scarcity rationing.  The deliberate policy of the 80s and 90s all centered around NAIRU – the non accelerating inflation rate of unemployment.  The idea was that if the unemployment rate was too tight, wages would increase, spiking inflation.  So unemployment had to be kept high enough so that inflation would not occur.  This is one form of inflation – so-called wage push inflation.

So whenever ordinary people started to get raises higher than the rate of inflation, the Fed would say “this rate of unemployment is lower than the NAIRU” and crush the economy and wages.

This is because wages went to doing things which increased oil prices, and Fed wanted oil prices crushed and inflation in general crushed.

The unemployment rate is, thus, not a measure of how many people are out of work, it is a measure of how close the labor market is to being tight enough to allow ordinary people to get a raise that is higher than the inflation rate.

There are a bunch of concomitants to this policy, too many to go into, but just note that is part and parcel of creating the richest rich the world has ever seen and creating asset bubbles.  Money can only be created IF it won’t do anything that really matters, because anything that matters will cause oil prices to spike.

(It is also for this reason that despite all the problems fracking causes, your Lords and Masters will despoil as much of the country as necessary to continue to do so, it’s another way around the oil bottleneck.)

Note that there were other choices: massive investment in renewable energy; massive investment in energy conservation; massive investment in public transit, and a move from the suburbs back to the cities, with walkable cities.  In the 90s the move should have been to telecommuting.  A national income which pays people not to drive to work every day, insistent carpooling and so on, could have mitigated this problem extremely.  Call the early parts of this the “super analog future that never happened.”

If you do all those things, though, the rich don’t get insanely rich, and the middle class doesn’t get to run away from black people to the suburbs.  Americans voted for suburbia and against black people (and don’t tell me otherwise, I remember Reagan’s campaign, and it was based on racism).  The people who made those votes, the Reagan Democrats, mostly won their bet: their house prices went up, they didn’t have to live near people with melanin, and they retired wealthy and went to live in the south, where brown people wiped their butts.

But the price of this was the end of the rich society.  The end of a society where you could tell your boss to go screw himself.  And it was the end of a society in which big projects were regularly undertaken.  Oil is wonderful energy: it is highly dense and easily transportable, and lets you do what you want, where you want. Using oil to make plastics, to enable suburbia, to be incredibly wasteful, meant that all the big things could no longer be done.

The concomitant of this policy was the creation of the super-rich, and that meant the destruction of real Western democracy, as country after country found its politicians more and more controlled by the rich.  The rich do not want change unless they control the change.  Any change that already rich people can’t figure out how to control and monetize is not allowed.  The state is turned into a machine for giving money and preferments to the already rich and powerful, its oversight role is hollowed out and its taxation ability is scuppered.

The great projects of the past, even when done by private enterprise, were underwritten by government.  Poor governments (and yes, despite the trillions, the US government is poor) cannot engage in these huge projects.

With money printing and low interest rate borrowing monopolized by the financial sector, and within the financial sector,  by a rather small number of institutions, and with demanded rates of return at least in the teens, most new businesses and projects were not, and are not, viable, in the sense that they will not be funded.  Can you compete with the returns of the housing market pre 2007 (leveraged) or the leveraged returns of the stock market in the past 30 years, a stock market backed up by the Bernanke and Greenspan Puts (the knowledge that if the market goes down, the government will step in to make sure it goes back up?)

You can’t.  So money floods to the highest returns, which are financial paper returns, bubbling way off the surface of the economy, and instead of building a high speed rail system, or making every building in your country energy neutral, or going to Mars, or crashing solar technology much sooner and harder, or…. anything else you want, pretty much, you get financial bubbles and history’s richest rich.

Living in a rich society is different from living in a scarcity society. There is money to create big projects.  There is money to tell your boss where to go.  There are jobs.  Ordinary people have pricing power in a tight labor market and can get their share of productivity gains.

No society is rich in everything, there are always limitations.  But being rich, personally or as a society, is about freedom.  When you have money you can do what you want, when you want.

We could create a rich society again. It is possible.  The necessary technology is there.  What is not there are the social determinants.  As long as the public and private sphere are controlled by oligarchs, there will be no rich society.

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54 Responses
  1. Mary McCurnin permalink
    December 20, 2013

    For the first time in decades I have a real go to the office job. I have evaded this situation on purpose. I was an artist and a writer. I am a web developer. I am an old female web developer. I am still not the norm. I never expected to breach the norm in this way. I am attached to my boss. I am attached in the most unhealthy way. He pays me way less than I should receive but he is polite and generous with his personality. I can’t tell him to go fuck himself. I wouldn’t want to. I would love to tell him to pay me more but don’t think it will ever happen.

    I am on social security. After I make $15120 a year, I lose 50 cents for every dollar I make. After factoring in this equation right now I am working a 40 hour week for $1200 a month. It sucks living in America. But I am old but the people I work with aren’t. They are bright, articulate and desperate. It breaks my heart.

  2. Everythings Jake permalink
    December 21, 2013

    I hope you are not casting your book into posts, much as I love the posts.

  3. December 21, 2013

    Boom. I can get behind this post 100%. Great historical narrative weaving to the present.

    The only thing I would add is my take on telecommuting. I remember when it first started and employers were very limited in which employees got to do it but, as time went by I think a switch went off as they saw people working to and from work, during off hours and weekends.

    They realized that the strict “9-5” line that existed before was gone and that a good number of employees could be tethered to the company beyond the usual hours and they went all in. Of course they branded it as being more employee friendly and technology made it easier buy they are making out like bandits.

  4. December 21, 2013

    All capitalist societies are to some extent based on scarcity. During the golden age of capitalism (1948-1971), and to some extent afterward, much of the scarcity that would otherwise have been present in American society (and which was put on broad display in Arthur Miller’s play “Death of a Salesman”) was exported to other societies. If there was no scarcity in capitalist society, people would simply choose to live off of the land — why bother with bosses at all?

  5. Dan H permalink
    December 21, 2013

    “All capitalist societies are to some extent based on scarcity. During the golden age of capitalism (1948-1971), and to some extent afterward, much of the scarcity that would otherwise have been present in American society (and which was put on broad display in Arthur Miller’s play “Death of a Salesman”) was exported to other societies. If there was no scarcity in capitalist society, people would simply choose to live off of the land — why bother with bosses at all?”

    This is my problem with the glorification of “the great society” as well. Maybe Im just too jaded being only 25, but I cant believe that it ever actually existed. As Cass says, it was merely hidden beyond US borders. And this is the delusional BS that every American wants to get back, David Simon’s recent article being a great example. Yeah our notions on competition and society were less fierce than now, but they were still based in the same rotten trajectory. It took WWII decimating the competition to let the US leap “forward”. And the internet has torn down the veil as to the externalization of costs required for capitalism to ever appear to “work”. It was a farce.

  6. December 21, 2013

    I think we live in an age of incredible abundance with a system based on the allocation of scarce resources for the finding and distribution of scarce resources. I don’t think these two things are compatible long term.

    While I live in a major city, all around me I see more of everything than has ever existed in my memory. People have more clothes, tvs etc etc. and yet prices remain elevated. Abundance with pricing based on the false premise of scarcity.

    A reset is required, and in my view inevitable.

  7. Colin permalink
    December 21, 2013

    There’s no such word as “concomittent” — you must mean concomitant.

  8. Heather permalink
    December 21, 2013

    Okay.. so I’m trying to get this.. and I’m not an economist so bear with me..

    Basically if everyone got a really good raise and could choose any job (like I did in the 90s), then that translates into higher oil prices? That’s the part I don’t get. What’s the connection there?

    Is it just that when everyone’s wages go up, all prices for everything go up automatically? I could maybe see that with milk and eggs in American supermarkets, but oil on the international market seems farther removed, as the price of oil doesn’t just depend on a couple Middle Eastern countries looking at us and saying, “lookit them, they’re making more money, let’s raise the price of oil”. My understanding is how the price of oil is set is more complicated than that.

    But if you’re referring to that complicated process as the reason why we’re now in a scarce society, I still don’t get the link going that way either.

    I will say that I’ve been incredibly shocked at how much the American workplace has changed over the past 30 years. It was never a warm fuzzy place for sure, but there used to be a time when workers had power. Now that time is completely over.

    Thanks for reading, and I’d love an answer to my question.

  9. Pelham permalink
    December 21, 2013

    @ Heather

    Good question.

    My guess would be that the underlying concern is the fear that the wealthy have of any hint of inflation. And that fear — as well as the possibility of actual inflation — is greatly amplified by the supply of oil, which is inelastic.

    Thus if you have, say, an economy that’s 10 percent more broadly prosperous than the one we have now and oil consumption increased marginally, the price of oil might jump by 50 percent, thus driving down the value of the dollar by something close to 50 percent (the dollar being the sole currency with which the world can buy oil). Again, because the supply of oil available at any given time is fairly constant, or inelastic, small changes in demand translate into outsized price movements.

    So, in sum: Small increase in prosperity = small increase in oil consumption = big increase in oil price = big jump in inflation = a lot of unhappy rich folk.

  10. Ian Welsh permalink
    December 21, 2013

    People who get more money tend to do things that use oil: they go on a holiday, they buy a new care, or ATV, they buy a big house that requires more heating, they drive more.

    You have to remember the 70s and early 80s to get this fear: when OPEC spiked oil prices, inflation RAGED. I remember the price of chocolate bars going from 25 cents to a dollar in 3 or 4 years, I remember the price of comics going even higher (yup, I was a kid.) To get oil prices under control the Federal Reserve spiked interest rates through the roof, and ran a very tight dollar policy, and while it worked, it took years.

    When a rich person gets more money, most of that doesn’t (or didn’t) go into consumption. It goes back into buying more securities. It doesn’t spike the price of oil as much. When ordinary people get money, that does spike the price of oil. This is the basic theory of the 80s and 90s. When you get real wage increases in the late 90s, oil starts to rise. When in the 2000s the housing price boom makes people feel like they’re rich (and China comes on line) you see a complete loss of control of the price of oil.

    This isn’t all there is to it, but this is the theory that the world economy was run under from 79 through the 90s and when they stopped trying to control the price of oil in the 2000s it was one of the things that blew up the world economy.

    They now know that the world can tolerate high oil prices, but they know that it can’t tolerate oil prices somewhere around the 130 to 150 mark, so they are doing their best to make sure that doesn’t happen again.

    And that still means making sure you don’t get a raise. They have plenty of other reasons for not wanting to give you a raise, but this is one of them AND in the 80s and 90s it was very much the policy of central banks, especially the Fed. People are always fighting the last enemy, and the last enemy, to them, was rampant inflation caused by oil spikes and by their figuring, ultimately by ordinary people having too much money.

  11. Podargus permalink
    December 21, 2013

    “As long as the public and private spheres are controlled by oligarchs,there will be no rich society”.

    True to some extent,but all societies,even primitive ones,are controlled by a few people in authority.Sometimes they are benevolent and put the greater good to the fore. More often they are stupid,ignorant and arrogant,driven by greed and self interest.

    This situation is a part of human nature.I wouldn’t hold my breath waiting for that to change.
    What can change things is incremental improvements in our social systems. From little things,big things grow,sometimes,even,for the better.

    The fundamental reason why your system is screwed is the American fascination with private enterprise with the accompanying conservative,neoliberal ideologies. Even the people who are getting screwed comprehensively believe in this claptrap.
    Have you read “Deer Hunting With Jesus” and”Rainbow Pie” by Joe Bageant,one of your great American authors? Joe describes this very situation in a percipient and entertaining fashion.

    One of the incremental changes which is urgently needed is to get away from this mindless fear of deficit budgeting by your federal government who have sovereign rights over your currency.
    The US government can buy anything which is for sale in US dollars and they don’t have to go into debt to do it. The debt myth plays into the hands of your oligarchy. By all means tax the bejasus out of those vermin but that is in the interests of social equity,not government spending.

    This simple principle is one of the cardinal points of Modern Monetary Theory which is the only sensible way to run an economy with a sovereign,fiat currency.

    BTW,the nations in the European Monetary Union are not sovereign in their own currency and this is one of the main reasons why they are in so much trouble.

  12. EGrise permalink
    December 21, 2013


    That makes sense to me so far, but then why don’t the elites get behind fuel efficiency, alternative energy, etc. in order to alleviate some of the problems with oil prices?

  13. Ian Welsh permalink
    December 21, 2013

    Degree of control, by who and how accountable they are all matter. These are the richest rich the world has ever known, richer than the Gilded Age rich.

    That matters.

    In fact, many primitive societies are hopelessly egalitarian.

  14. Greg T permalink
    December 21, 2013

    So, Ian if I understand you correctly, movement to an egalitarian economy will REQUIRE declining fossil fuel use? Maintaining control of the oil bottleneck is fundamental for securing oligarchic control of the economy. On the one hand, demand must be kept down to stabilize the oil price, but undertaking projects that would shift control points to non-petroleum energy sources risks oligarchic control.

    Break the bottleneck, break the control.

    If your thesis is correct, this would require revolution. Or a major event ( like a war ) that would break the control points and force a realignment of power.

  15. S Brennan permalink
    December 21, 2013

    Just to be clear, we could live relatively oil free [say 10-15% of current consumption] with technologies already proven out…but…like the space program’s nuclear engine, these fully prototyped technologies were halted at the height of the oil crisis*.

    Take Jimmy Carter for example, he chooses the breeder reactor over the development of the then successful LFTR, the breeder then fails to deliver. Taxpayers get stuck with the bill…and a bill of goods. The right wing is just as glad to see “shit disturbing” nuclear off the table as the left. Reagan rips the solar panels off the White House and the days of austerity begin

    Again, we need to go electric, stop wasting time on batteries, inductive delivery in the roadway…yeah, socialist, but then so too is the roadway. This has to be done by BIG GOVERNMENT. Why? Because any private entity can be crushed by oil price manipulation. Oil market futures are dominated by oil industry manipulators…Eron was one of many.

    Of course the small anti science thinkers of “left”/right will have fit…what use technology & government together? So gross, Milton Friedman PROVED that can’t work…hey..hey..hey YOU…get away from the curtain.

    * that’s what we called it back then, nothing change except the “lefts” acceptance.

  16. Ian Welsh permalink
    December 21, 2013


    yes, pretty much.

  17. halfelfclericfighter permalink
    December 21, 2013

    I’ve found your writings helpful Ian but also depressing 😛

    More and more I feel like me and all the other lower/middle class people are viciously fighting over our position on a carefully managed ladder while the rich take control of all assets that have value.

    If this is true, then position on the ladder is nothing more than a distraction to keep us fighting amongst ourselves. The idea that working hard and being smart with your money can secure your retirement is just that – an illusion. Your best bet is you will be better off than everyone below you on the ladder. However, there is no guarantee where the top rung will be 20 years from now.

    So…how do we get off the ladder?

  18. David permalink
    December 21, 2013


    I have heard that the Chinese have proposed that some version
    of Keyne’s “basket of currencies” replace the US dollar for international trade.
    So it is no wonder that the American oligarchs oppose this because oil use will become much more expensive and in general they would not have as much control on the oil
    spigot. So when some politician whose name I forgot said something like
    “the American lifestyle is not up for negotiation”, what he is really saying that
    “the oligarchs control of oil is not up for negotiation”.

  19. S Brennan permalink
    December 22, 2013

    For the same dollars as 2 weeks of Quantitative Easing [QE], 1/6th the yearly budget of the National security apparatus, or 1/16th of TARP you could have this:

    Fun to watch.

    My apologies in advance to all the “do nothing” , “austerity works” and “it’s impossible” liberals.

  20. Ian Welsh permalink
    December 22, 2013

    halfcleric: yeah, the competition within the classes is far more vicious than between the classes. That’s one of the huge problems.

  21. Celsius 233 permalink
    December 22, 2013

    Ian Welsh;
    yeah, the competition within the classes is far more vicious than between the classes. That’s one of the huge problems.
    Yeah, nifty little trick for a diversion from the problem. And we fell for it.
    And, that’s precisely what make me so pessimistic.

  22. Dickson Yeo permalink
    December 22, 2013

    The “reset” is nigh. Why do you think there’s so much 1930s Fascist nostalgia right now in East Asia? A major melee would create a “Tabula Rasa” which would reproduce the post WWII economic golden age.

    It’s just that it would be made all soft and cuddly with a lot of cosmetic liberal initiatives, like counting the carbon emissions of incinerating the Asia Pacific boom towns (which would be more? With a drone or good old fashioned napalm?)

  23. Judith Rankin permalink
    December 22, 2013

    Greenspan has been promoting his book of “apology”. For the past forty years he was convinced that he did the right thing! Right. Shame on him and shame on us for giving him the platform to deliver this bit of news that is not be news to some of us.

  24. December 22, 2013

    The “rich society” of the ’60s and ’70s is something of an illusion which most people living through it well knew.

    There was relative material abundance, certainly, at least compared to the trials and struggles ordinary people endured through the entire history of the United States prior to the remarkable era of prosperity after World War II. There was so much abundance that young people could and many did live on the detritus of earlier eras.

    But it came with a price that seems to have been forgotten.

    The Big Projects — space program, interstate highways, urban renewal, and so forth — were initiated in the 1950′s as part of the realization of the Futurist “Wonderful World of Tomorrow” ideals that had been heavily promoted from the turn of the 20th Century through the Great Depression and all during World War II. These Big Projects, in a sense, were the reward to the masses for Victory, and they were all prepped and presaged well in advance of their realization. Of course the masses could have no reward that did not first and foremost benefit the elites.

    And having those rewards required a level of unity and regimentation of thought and action that was rigorously inculcated in the public throughout the period from about 1917 on. Blame Bernays if you want, but much more was going on that mere marketing. It was as thoroughgoing a transformation of American society as had ever been attempted.

    Americans of the period were building and living in a mirror image of the totalitarian systems and societies that were marketed and hot-and-cold-warred against as Our Greatest Enemies In All History (until the advent of the Current Terrorist Enemy).

    That was the essence of the price paid, but there were so many unanticipated consequences from it that Americans were ready to give it all up for the further illusions of the Reagan “liberation” doctrine.

    We live with that legacy now.

  25. December 22, 2013

    Che Pasa,

    Yeah we’re now living in the dying echos of the post WWII boom. What fascinates me is the marketing of it all which was brilliant. For example, incredibly successful re-branding of the working class to the middle class, the notion that certain things are “Our Way Of Life” and have always been such and so on.

  26. S Brennan permalink
    December 22, 2013

    To “Che”

    “The “rich society” of the ’60s and ’70s is something of an illusion which most people living through it well knew.”

    Bullshit, the abundance was provided by distributing the inventiveness and hard work of ordinary people through the agency of taxation of the uber-wealthy and government programs to secure education, fair wage, transportation, housing of workers/families and sustenance for the elderly. That’s the legacy of FDR, IKE, JFK & LBJ…not some mysterious mystical force. Externally, government policy at the time was to maintain a BALANCE of trade as a form of assistance to foreign governments on their knees…not to mention the Marshal program. The financial loans to dictators of the 3rd world as a form of colonization shenanigans don’t get their legs until the 1970’s.

    “the remarkable era of prosperity after World War II. There was so much abundance that”

    Agency please?

    “having those rewards required a level of unity and regimentation of thought and action”

    And what of it? Anybody who has worked at physical labor, played on a sports team*, been a junior at an engineering firm, worked at a nursing facility, raised a family, merged in heavy traffic…or lived in a hunter gatherer society…or any other experience….outside of living as a hermit or a rich man know this is the price of living in human groups. Get over it.

    “Americans of the period were building and living in a mirror image of the totalitarian systems”

    What bullshit, the USA has for all it’s faults never been a mirror image of the Soviet Union. If the Obama and the NSA get their way, it may become that, but not in the time period to which you refer. Through all of the cold war I experienced, loyalty to country and the trust of my government in me was the force that provided the “level of unity” required to defeat the Soviets.

    The “America has always been uniformly evil” crowd disgusts me with their Orwellian re-writes of history and message of helplessness. If you believe that to be true, why do you have to write at all, if it’s as hopeless as you portray? In fact, if it’s hopeless as you say, why can you write at all, surely homeland security forces would have scooped you up 30 years ago?

    What nihilistic bullshit

    *[and no, the rich man’s tennis & golf don’t count]

  27. VietnamVet permalink
    December 22, 2013

    These are an excellent series of posts on economics. I second the hope that a book comes of them.

    A Tsunami has hit the Western World. The Trans-National Elite and their Technocrats have established a non-elective governing superstructure in Europe and have bought out the politicians elsewhere. The Oligarchs have ceased to give a damn about the rabble. Hoarding their wealth is their only goal. Bubbles and obscene wars for God and profit fought by jihadists and mercenaries in the Middle East and Africa are their profit centers.

    The tragedy is that no one has clued in the people.

  28. Ian Welsh permalink
    December 22, 2013

    They gave it up because of racism and because liberals didn’t handle inflation.

  29. December 22, 2013

    Yep, the moment those working class heroes got a moment of comfort, they promptly slit their own throats the moment it got threatened or the net was widened.

  30. December 22, 2013

    the USA has for all it’s faults never been a mirror image of the Soviet Union

    It is to laugh. Even former Soviets, delighted to be in the USofA today, recognize the similarities — and they shudder. Those similarities were so strong in the ’50’s and early ’60’s that Soviet visitors were amazed that such unanimity and conformity was being accomplished “voluntarily” without the heavy hand of the KGB, etc. Little did they know…

    The level of enforced conformity and the rigors of required uber-patriotism during the era is now a matter of nostalgic reverie, isn’t it? A veritable Golden Age, wasn’t it?

    Sure it was.

    The simple point is that the Big Projects Ian references as touchstones of the “rich society” we (there’s that “we” again!) once had but no longer do came about — and could only have come about — under the kind of regimented, conformist, authoritarian regime we (“”) had then. And that society came out of a long period of extreme hardship and struggle for most Americans, regardless of whatever romantic illusions 0ne may hold to of a previous Golden Age.

    Even in the best of times, American society wasn’t a rich society for every one by any means.

    I for one very clearly remember the enormous dislocations caused by urban renewal projects and the creation of the Interstate highways. Family friends lived in Chavez Ravine. I grew up with people who were Red baited, persecuted, and otherwise hounded for being in any way “different.”

    I shake my head at people who think American authoritarianism today is somehow unprecedented and so overwhelmingly onerous. It’s not pleasant to be sure, but it is light compared to that which earlier generations endured.

    That doesn’t mean America has always been evil, or that it is so now, or that the situation is hopeless. Far from it. If we’re ever going to succeed at tackling the problems we face, however, we’d better come to a fuller understanding of how things got to be the way they are.

    Ian’s analysis helps in that endeavor; sometimes I may have a counter-point.

  31. December 22, 2013

    I really couldn’t say what prompts S Brennan’s comment that “The ‘America has always been uniformly evil’ crowd disgusts me with their Orwellian re-writes of history.” Is there some way to rewrite the 200,000 deaths caused by US conquest in the Philippines or the millions who died in US “insurgency suppression” in southern Vietnam or the mass murders committed by US proxies such as Yahya Khan or Suharto or Efrain Rios-Montt or the Somoza dynasty or the Shah of Iran or Augusto Pinochet or Mobutu of Zaire (or for that matter a number of others) that shows that America is any more “uniformly evil” than what’s already in the history books today?

  32. Celsius 233 permalink
    December 23, 2013

    @ Cassiodorus
    December 22, 2013
    Yes, it does give one pause, but just for a second.
    History is the slayer of all bullshit and self delusional fantasy, but only if it’s accurate.
    Your’s rings true.

  33. December 23, 2013

    They gave it up because of racism and because liberals didn’t handle inflation.

    Those are elements, but it’s more complicated than that.

    I doubt, for example, that most Americans thought they were giving up anything.

    They believed they’d get something from the marketing slogans they were being fed relentlessly. (“Morning in America!” feh) It wasn’t at all clear what they’d be losing, though some observers could see parts of what was to come quite starkly, especially if they’d been following Reagan and his team since their California gubernatorial incarnation. Strangely, much of that episode seemed to be forgotten once Reagan’s quest for the White House got underway in earnest.

    What Americans believed they’d get, most of all, was liberation from the Gloomy Gus reality they’d been living in. He was selling “liberation” in California in the ’60s; he would do the same nationally in the ’80s. “Liberation” is a very powerful political marketing tool.

    But “liberation” from what? Or from whom?

    Americans didn’t know, they just knew they wanted to be free from the increasingly ugly reality around them.

  34. Beleck3 permalink
    December 23, 2013

    American have been “sold” for so long. the selling of America is and has been a work in progress. for me at least, the Reagan Republican/”Government is the Problem”/ con was the best con i grew up aware of. the packaging/selling of the Con was artfully done. that selling out of Americans by the Corporate Republicans/Democrats, has been so artfully played upon willing Americans by the Elites/Madison Ave./PR firms. with the end result being this Mussolini like fascist corportocracy/inverted totalitarianism, an economic stranglehold, running America today. along with the NSA/Big Brother that Reagan’s doublespeak/lies enabled, to create the type of fascism, Business control of Government, that the Powell Memo envisioned. Corporate Control of Governments everywhere. oligarchy, fascism or whatever name most of us call the Elites that run things now.

    can we overcome/stop this vampire squid that is destroying the only place we have to live on, the Earth. I see lots of rage, but not directed at the vampire. divide and conquer seems to really work.

  35. Ian Welsh permalink
    December 23, 2013

    It’s always more complicated than I can write in 1,500 words, or 5K. But I was alive and watching Reagan’s campaign, and anyone who tells me it wasn’t heavily racist and mean is full of shit. I remember the Welfare Queen BS, I remember where he started his campaign. Part of it was morning in America, but the subtext was racism and fucking over poor people and anyone who believed otherwise was living in lala land.

    It was a mean campaign.

  36. Cjx hardy permalink
    December 23, 2013

    The demise of the second world with all its awful flaws still had a degree of balancing action to inhibit the Reagan types from a totally untrammelled drive to control and its presence emboldened the ordinary people’s champions. That is gone. Willie Brandt and Ted Heath’s rebalancing that could have replaced it and created a more altruistic world with economic reciprocity never happened and with Thatcher and Reagan’s calculated fronting of the battalions for the super rich a truly rich society such as you describe is a long way off. Perhaps Germany can start to let its people spend without fear and the poor of the BRICS can find their feet. But with the greatest military superpower ever scared to scratch the veneer of its false recovery and likely to react as any wounded animal if the ediface shows its crumbling these are globally dangerous times as the nihilists and the fervant children of Islam show a commitment that the remnants of Christendom can not match as those poor in wealth but rich in belief move from the south and East to drift and mingle North and West.

  37. S Brennan permalink
    December 24, 2013

    Yes Ian, it was a dirty campaign:

    “A Russian government report, which corroborated allegations that Ronald Reagan’s presidential campaign interfered with President Jimmy Carter’s Iran-hostage negotiations in 1980…

    The Russian report, which was dropped off at the U.S. Embassy in Moscow on Jan. 11, 1993, contradicted the task force’s findings – which were released two days later – of “no credible evidence” showing that Republicans contacted Iranian intermediaries behind President Carter’s back regarding 52 American hostages held by Iran’s Islamic revolutionary government.

    The Russian report also implicates other prominent Republicans in the Iranian contacts, including the late William Casey (who was Reagan’s campaign director in 1980), George H.W. Bush (who was Reagan’s vice presidential running mate), and Robert Gates, [yes he was Obama’s Defense Secretary”

  38. December 24, 2013

    Happy Holidays to All.

    Also, thank you Ian for another year of solid posts and providing us crumudgeons a place to contempalte them.


  39. S Brennan permalink
    December 24, 2013


    There’s a fifty year gap in your history of “America is always evil” narrative…pourquoi?

    Just for giggles let’s see what you conveniently left in the years between 1900 & 1953.

    In 1916, the US Congress promised the Philippine Islands independence;

    1917 Puerto Rico achieved territorial status, and its residents became U.S. citizens

    US Urges France and England to NOT impose usurious terms on Germany because it would lead to another war [good call huh?]

    The massive American Relief Expedition to Soviet Russia in the Famine of 1921.

    Lend lease Act enacted in early 1941, a year and a half after the outbreak of World War II, the vast majority of it’s “repayment” forgiven.

    North Korean forces invaded South Korea the United States defense of South Korea. Go to a Korean bar and tell the patrons that the US is bunch of assholes.

    The “Berlin Airlift,” lasted for more than a year and carried more than 2.3 million tons of cargo into West Berlin

    Also missing from your history is the entire cold war and the starvation of millions of people by Stalin & Mao and the Soviet colonization of Europe…which wasn’t very nice, considering we had just saved their collective ass.

    I am not justifying US overreaction to these “communist” assholes, whether it’s Mao efforts in Indonesia, or the Soviets in Viet Nam, Central & South America, but they were there…and they were an existential threat to the US…so it does follow the US would react. That being the case, perhaps your cherry picking of “history” might need a little broadening to damp down your conformational bias.

  40. December 24, 2013

    I’m not aware of anyone here claiming that Reagan’s campaigns were not mean, nor that the subtext wasn’t racist, but he wasn’t selling subtext, nor was he selling meanness, he was selling “liberation.”

    Liberation from onerous taxation, from regulation and bureaucracy, from social and economic responsibility, from civic duty, from the fear and gloom supposedly caused by liberal/progressive policies, and of course, he was selling liberation from the horror and terror of non-whites’ assertion of their own liberation from oppression by… gee, who might it have been and why might non-whites have thought they were oppressed?

    When liberals truly understand what Reagan was selling (and self-proclaimed conservatives continue to sell) and why it was — and remains — so effective, the liberal cause may actually revive.

  41. December 25, 2013

    A short response to “S Brennan” might be helpful to those keeping score.

    “There’s a fifty year gap in your history of ‘America is always evil’ narrative…pourquoi?”

    It’s not my historical narrative. I merely asked how it was that those who ascribed to the “America is always evil” narrative could be accused of rewriting history. I still await evidence that someone with a historical narrative like Noam Chomsky or William Blum is actually rewriting history.

    Given all that I suppose, then, that there might have been a period or two in American history in which white America took a break from its usual Monroe-Doctrine-motivated foreign policy adventures to oppress its own black and brown populations a bunch, although even the briefest of glances at the historical record will note the US role in keeping down significant portions of the Americas, e.g. Nicaragua, throughout the period between the US slaughter in the Philippines and the various post-war adventures:

    “The massive American Relief Expedition to Soviet Russia in the Famine of 1921.”

    I suppose that made up somehow for US participation in the Russian Civil War.

    We can certainly say that some things Americans have done have been good things while at the same time recognizing US foreign policy as fundamentally being guided by imperialism and crony capitalism.

    “Also missing from your history is the entire cold war and the starvation of millions of people by Stalin & Mao and the Soviet colonization of Europe…which wasn’t very nice, considering we had just saved their collective ass.”

    What this has to do with America’s role in historic mass slaughter is beyond me. A full accounting of history will of course reveal that the US is not its only malicious actor.

    “perhaps your cherry picking of ‘history'”

    “S Brennan”‘s original argument was that those who subscribe to the “America is always evil” narrative were rewriting history. Rewriting history would be something like what one used to see in certain textbooks of American history which claimed that the Europeans found the land empty of people when they came to the New World. Cherry-picking history, something all historical narratives do, is not the same as rewriting history.

    But let’s bring the tenor of debate up a bit. I tire quickly of the standard nationalist cheerleading version of history, by which the core nations are cast in the role of the good guys and the contender states are mere villains. As Kees van der Pijl argues (“Transnational Classes and International Relations,” “Global Rivalries from the Cold War to Iraq”), the development of the capitalist world-system produced two types of state-society complexes. The most important of these is the “Lockean heartland” of capitalist core states, in which a modicum of human rights is granted the public in the core of the world-system (thus the descriptor “Lockean,” a reference to John Locke, philosophy’s original expositor of business rights) for the sake of facilitating capitalist business. Capitalist business, in turn, proceeds in its merry way to conquer the peripheries of the world-system, thus to maximally exploit its natural and human resources (see “imperialism”). The other state-society complex to appear in capitalist history is that of the “contender states,” which typically employed authoritarian forced-march political economies to “catch up” in development with the “Lockean heartland.”

    The first important nation to be part of a “Lockean heartland” was, of course, England, and after World War II the lead core nation was the United States. The most famous “contender states” were states such as Napoleonic France, Germany under the Kaiser and under Hitler, the Soviet Union, and the People’s Republic of China. If you want to conduct a moral assessment of the various actors of the past three centuries of world history, you might consider that even though life in a contender state was indeed often nasty, brutish, and short, the contender states developed their brutally authoritarian characters as responses to the imperialism of the core states.

    This is why I do not sign off on the “yay core states, boo contender states” version of history — as nasty as the contender states were, their elites did what they did to stay “in the game” (often unnecessarily, of course, but still within the context of imperialism) and the game was itself conducted in brutal fashion by the sponsors of imperialism, of which the United States was one. We can even point to actors in the core states in 20th-century history who worked with the contender states — so for instance certain portion of Wall Street bankrolled Hitler, while Stalin’s Five-Year Plans were designed by American technicians working with Armand Hammer.

  42. Celsius 233 permalink
    December 25, 2013

    @ Cassiodorus
    December 25, 2013
    A short response to “S Brennan” might be helpful to those keeping score.
    “There’s a fifty year gap in your history of ‘America is always evil’ narrative…pourquoi?”
    It’s not my historical narrative. I merely asked how it was that those who ascribed to the “America is always evil” narrative could be accused of rewriting history. I still await evidence that someone with a historical narrative like Noam Chomsky or William Blum is actually rewriting history.
    Wow! That was quite a response and spot on I might add. Delving further into your post it is evident you have done your homework (or avocation?) and I can add nothing other than support. Thank you for your extraordinary patience…I can learn something from that alone…

    I no longer bother, because it proves a fruitless venture.

  43. Celsius 233 permalink
    December 25, 2013

    I no longer bother, because it proves a fruitless venture.
    That was a reference to the original subject/person of your response.
    Hopefully this addendum avoids confusion…

  44. Formerly T-Bear permalink
    December 25, 2013

    @ Cassiodorus December 25, 2013

    Please don’t overlook the motive for these unsustainable historical blatherings is to discredit all historical observations and the opinions that might be derived from the conclusions facts have to offer. This is purely an attempt of an ignorant wannabe to obfuscate and make useless what remaining connections there are to historical fact, many times used to promote some conspiracy theory they hold that fact erodes the substance of their beliefs. I find useful when encountering that particular nom-de-blog is to go into elide mode and pass over their ravings.

    In passing, it is appreciated seeing a non-adolescent (neither hormone nor cheetodust addled) based view towards history. History is far more spectacular than the cartoons drawn by duhmerican ignorance. For that, Thanks.

  45. December 25, 2013

    I suppose the best thing the US has ever done in foreign policy was the Marshall Plan — helping to rebuild the economies of western Europe — though in retrospect the Marshall Plan revealed the outer limits of the good that can be done in a capitalist society. When there’s an undertow of exploitation sucking the wealth out of society, one can still do good, within limits.

  46. Formerly T-Bear permalink
    December 26, 2013


    A FWIW: I no longer recall the source, may have been from New Yorker essay concerning the Marshall Plan was the observation that the aftermath of WW II allowed the flight of indigenous capital required for the investment in reconstruction. The Marshall Plan replaced (almost exactly) that fleeing local capital until that capital flight ended (as then did the Marshall Plan). The implication was that whomever invested in the reconstruction of Europe would enjoy the property rights of that investment and whatever profit the newly reconstructed industries would produce. If this is an accurate assessment, it would show in the length of the period the plan was in operation. IIRC the Marshal Plan was effectively over by 1950 or thereabouts [wikipedia informs: 4 years beginning 1948] and European capital resumed its role in investing in the indigenous economy. This also shows the massive increase in economic resourced generated by (basically unrestricted) governmental wartime spending that accrued and was available to the national economy of the US. I would hesitate to ascribe goodness to the Marshall Plan when opportunistic may be the better descriptive (except for propagandistic ends). Hope this isn’t rewriting history too much …

  47. Commited Coward permalink
    December 26, 2013

    @Ché Pasa
    December 22, 2013
    ‘It is to laugh. Even former Soviets, delighted to be in the USofA today, recognize the similarities — and they shudder. Those similarities were so strong in the ’50′s and early ’60′s that Soviet visitors were amazed that such unanimity and conformity was being accomplished “voluntarily” without the heavy hand of the KGB, etc. Little did they know…’

    Could you give a curious guy some citations, books, articles, etc.? This seems like a fascinating proposition. Thanks

  48. December 26, 2013

    Capitalism is the ideology of vampires — witness the numerous references to vampires in Marx. And, so, throughout capitalist history there have been numerous ideological attempts to beautify capitalism, analogous to the vampire’s self-justification of his or her lifestyle. Look! says the vampire to him or herself. Of course I’m concerned about the well-being of my hosts — if they died, where would I get my blood? The vampire can thus appear, to a limited extent, as a benevolent protector.

    The most effective capitalist ideology (of the “economics” subset) in capitalist history has been populist Keynesianism. The Keynesian argues that everyone benefits from a capitalist economy that has a healthy circulation. The vampire also argues that every vampire benefits from a host with excellent circulation, too, but let us move on. To a certain extent Keynesianism is true in this regard — as long as the political class views itself as the collective guardian of economic circulation, most everyone will have enough money to buy something, thus the masses can expect Keynesian policies to provide them with a decent standard of living in a world dominated by capitalists, with their exploitative practices. The Marshall Plan, as I understood it, conformed to that notion of benevolent protectorship within an overall context of vampire-like capitalist exploitation.

    The problem with Keynesianism, however, is that a global Keynesian economy will eventually generate a vast surplus of capital, including capital that is no longer capable of generating profits because it produces products which cannot (for one reason or another) be sold. There were too many vampires and the hosts fell ill. Historically, the core nations experienced this surplus in the 1970s, the period in which neoliberal economics was first in the ascendancy.

    After that, you see a new set of economic practices: runaway military spending through dollar hegemony, Ponzi schemes, asset bubbles, vast markets for collateralized debt obligations. The government became responsible for maintaining a high profit rate despite the progressive decline of global economic growth in each decade after 1973. Since outright theft was still illegal at the time, more sophisticated games had to be played in order to keep capital profitable. Eventually theft will be made legal, the better to steal and call it “commerce.”

  49. Formerly T-Bear permalink
    December 27, 2013


    In addition to the geo-political considerations forming from the beginning stages of what was to be the cold war era which required an economically strong Europe, the industrial design of US production required the economic recovery of Europe for an export market to consume its production capacity. Three years after the war (1948), statistics were showing no sign of such recovery. It is significant that the Marshall Plan enjoyed non-partisan support in Congress (R) for Executive (D) policy that lasted to the end of the Truman administration (1952).
    ~  ~  ~  ~  ~

    A point that amazes:
    Have noticed a phenomenon of recent times where in the process of description reference is made to some current entertainment event as the descriptive in communicating some ‘thought’ as if the experience of the entertainment were a universal experience common to all, and the inferences and conclusions that might be drawn from the experience were universally conforming to their intended effect. I find likewise the use of literature in the same manner to be disingenuous. I’m not sure that Mary Shelly’s Dracula was contemporaneous let alone known to Marx (and I shall not bother to look this up), I certainly don’t recall reading in Marx’s writing any such reference but that may be because of the editions or translations I’ve had available of an immense life-body of work.
    By using such devises in this manner, I haven’t a vampire before me to examine to see if the references are valid; it is one thing to place the subject of a thought into such comparison and quite another to reference one’s opinion to such comparison. One alternative would be to use reference to a leech instead, the leech’s life processes requiring sanguine extractions from some host to complete the process; the parallel is of economic production requiring consumption to complete the cycle, exactly the inverse of the consumption cycle, which is what Marx was basically on about (as I’ve read, interpreted and reached conclusions to base my opinions on).
    Unfortunately, when faced with this kind of presentation, response becomes problematic if not impossible to continue the exchange; the same condition applies when ideological (or religious/belief based) dogma is presented as sustaining an opinion; seldom is a argument for the same as a verification of some opinion, and requires both parties to assume and use unexamined facts, interpretations, conclusions, inferences and opinions that underlay some assertion. This is a killer of thoughtfulness let alone communication of idea. This presentation method is what invalidates neoliberalism’s presumptions to validity – unexamined opinions are used to validate assertions made. Furthering economic dialogue and understanding are thwarted by relying on the same methods.

    (This too is an opinion)

  50. December 27, 2013

    @ Commited Coward
    December 26, 2013

    I’ve personally interviewed former Soviet citizens who have told me as much. As happy as they are to be in the United States — and they mostly are — they are more and more uneasy about the authoritarian/totalitarian trend of American society and politics, which to them, of course, is obvious, but which to Americans may not seem so at all.

    Noam Chomsky has made a sub-career out of trenchant critiques of the American Empire and its willing handmaidens, including a subservient media that operates as the equivalent of a propaganda ministry. One of the chief responsibilities of this ersatz ministry is the inculcation of conformity of thought and belief in the general population.

    This was startlingly clear during what’s been called the Age of Conformity — the post WWII period from the late 40’s to the early ’60’s — when the media message was far more unified and uber-patriotic than it has been since the end of the Fairness Doctrine. Ironically so, given the corporate media consolidation since then.

    Extensive research shows that the conformity that was so apparent during the 1950’s, however, finds its origins in the intense propaganda campaign surrounding the American entry into WWI beginning around 1916 or 1917. (Coincidentally 1917 was the year of the Russian Revolution that would give rise to the Soviet Union.)

    The propaganda — or marketing (“Blame Bernays”) — in the United States was as intense as anything in the Soviet Union, but because most of it was generated in the US by the private sector, “voluntarily,” whereas Soviet propaganda came exclusively from the State, it was not as easy for Americans to recognize the propaganda they were living with as it was for Soviets. It was in some ways much easier for Soviets to disbelieve their propaganda than it was for Americans to disbelieve theirs.

    It’s an extensive topic.

  51. December 27, 2013

    Mary Shelley wrote “Frankenstein,” and Bram Stoker wrote “Dracula.” The lore of vampires came before Stoker. Nonetheless, from Chapter 10 of Capital:

    “Capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks. The time during which the labourer works, is the time during which the capitalist consumes the labour-power he has purchased of him.”

    Also, as a general scholarly work, Mark Neocleous’ essay is available online:

  52. Formerly T-Bear permalink
    December 27, 2013

    Damned Jackeens, cant tell ’em apart. Quite cleaver of you, picking up on a misspeak, ‘though missing the point altogether – when your cardinal points depend on fiction, navigation becomes improbable.

    Marx in that snippet is introducing his concept of commodified labour which is contractually exchanged for wages, segueing from observations on natural limits to the working day. Marx seems to be interjecting his negative opinion of the excesses demanded upon labour by the capital side of the contract given the drive to create surplus labour above the labour necessary to produce those contractual wages (that surplus labour pays for materials used, capital income (buildings, land and tools used) and profit (the income of the entrepreneur). Marx’s definition (by context) here of capital is likely in error – capital is unconsumed income, savings if you like in the multitudinous forms that can be taken, or tools used in economic production. But if all you see there is vampires, this conversation ends …

  53. December 27, 2013

    **cough** “Tools used in economic production” ARE dead labor. The finished product of the factory worker is also dead labor. But, more specifically, for Marx, capital is the relationship, captured in the metaphor of a vampire and a host, between the capitalist and the laborer. It works this way: the factory laborer works for the capitalist, who thereupon hires another set of laborers (“salespeople”) to realize his or her appropriation of the surplus as profit. Capital thereby sucks the labor out of the working class, vampire-style, to realize itself as profit. I fail to see any point here where Marx was “wrong.”

  54. Formerly T-Bear permalink
    December 27, 2013

    @ Cassiodorus

    This is “Conversation”, I think you want door 14, five doors down the hall on your right “Argument” , then again you might be better satisfied with door 15 across the hall “Contradiction”. Bless your little heart, have a nice day.

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