I have had a think-tank director’s crush on Michael Lind, co-founder of the New America Foundation, since I read his four-part filleting of the US Senate in 1998. The man is a polymath with a golden tongue, as he amply demonstrates in his 2012 book Land of Promise: An Economic History of the United States. Better, he is an iconoclast, unsatisfied with any particular ideological presumptions. Not since reading Benjamin Friedman’s Moral Consequences of Economic Growth have I encountered an economic argument that so successfully forced me to examine my own comfortable assumptions.
Lind begins with a detailed retelling of the Jefferson-Hamilton debate over the role of the federal government in economic policy, a debate which at first seems like trivia for history buffs. (Review: Jefferson was the voice for smallness, for economic and political decentralization, against banks and industry and cities; Hamilton was the voice for a vigorous national economic policy, including a national bank, public investments in infrastructure, spending on science and research, and strong central coordination of industrial development.) Lind then shows the unbroken relevance of the debate by retracing American economic history up to the present, following these strands of ideology as they braid through and across the left-right spectrum. Jackson and Reagan = Jeffersonian; Roosevelts and Eisenhower = Hamiltonian. It’s an insightful undertaking, revealing the way Hamiltonian thought runs through both New Deal progressivism and neocon militarism and how Jeffersonian impulses characterize both libertarians and small-is-beautiful greens. He successfully adds another axis to the conventional mapping of American political history.
More original and important, however, is Lind’s economic assessment. He argues systematically that America’s economic success has almost always flowed from Hamiltonian policies, not from Jeffersonian decentralization. Indeed, he makes a case that much that’s wrong with US economic policy is caused by the polity’s susceptibility to Jeffersonian mythology about decentralization’s virtues. He writes, “What is good about the American economy is largely the result of the Hamiltonian developmental tradition, and what is bad about it is largely the result of the Jeffersonian producerist school.”
Lind argues for a bigness that includes not only much more regulation of corporations, especially financial ones, but also—controversially—larger corporations and more coordination among them. Whole sectors of a post-industrial economy—air travel, trucking and pipelines, telecommunications, financial services—ought to be considered more like utilities than like Adam Smith’s pin factories. They ought to be dominated, in Lind’s view, by giant organizations that are closely and intrusively regulated by democratic institutions. Those companies, in turn, ought to be large enough that labor unions can fruitfully organize the companies’ employees. With public support, those unions will be able to negotiate for a fairer share of capitalism’s rewards, narrowing the astronomical income and wealth gaps of recent decades. These negotiations will be easier on corporations, furthermore, because they will involve not individual companies but cartels of employers in each sector.
This package of prescriptions will sound at first like European- or East-Asian-style capitalism, and in some ways, it is. What’s intriguing about Lind’s argument, however, is that he marshals compelling evidence that this Hamiltonian model is, in fact, the root of the United States’ prosperity already. He uses free-marketeers’ economic scorecard to debunk their pablum about government being the problem. And although he didn’t convince everyone, he convinced me—a proud Jeffersonian of the Schumacher line—that I ought to be less sure of myself. Small may be beautiful, but big may be better.
That sounds like a nice economic system indeed. Though, these things may just sound less frightening to us Canadians, with our aggressive fondness for certain kinds of socialism, such as our medical system.
But I am still waiting to hear from a break-out economist (or urbanist, or labour activist) that talks about growth and the reality of a finite planet.
All wealth comes from nature, and then from the labour applied to the wealth of nature. Given our over-extraction of nature, it is obvious which direction our trajectory is heading.
We will end up as a smaller, more decentralized culture. The planet cannot physically support anything else. So how can we promote equality and justice in this decentralized future? I would prefer a different option to the divisive and discriminatory narratives that often are packaged with decentralization today.
I’m with you, Ruben – and not just because I’m Canadian! These celebrations of success and their implicit conclusions always ignore
sustainability issues, the reality of finite resources, the obvious limitations of population and worst of all, the artificial and totally undemocratic nature of the monetary systems which fuel population expansion and these debates. IF you haven’t yet read him I would recommend to you Manfred Max-Neef’s book, “Economics Unmasked” who may be the economist we have been waiting for. And I would certainly suggest you read him also, Allan!
I’ll stay with Schumacher thank you!
‘Economics
unmasked
‘
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Rubin… Part of the problem is seeing it as an either/or proposition. The way I see decentralization working is through a foundation in bioregionalism. If our governance and jurisprudence were guided by natural systems principles, then the framework would be networks of mutual support instead of hierarchies of control. The scale of the issue–local or global–determines the level of concern. Standards and regulations, research, protection of the commons (including the Internet) would be handled at the global or continental level, while defense, industry, social services would take place at the bioregional down to village level. With the necessary overlap, of course, such as in health, education, communication. Since nature has been working that way for billions of years, it might make sense for us to pay attention.
Ecological economics shows that a dynamic steady-state can be achieved in an economy that is both sustainable and technologically advanced. It needn’t be growth based. However, it must adhere to ecological carrying capacity limitations. That pretty much wipes out Industrialism and the financial industry as we know it, though. No more speculation, no more compound interest, no more elite hierarchies, no more nature as endless resource and bottomless pit for wastes. But it’s not the end of innovation–that’s what people do naturally. We’re intelligent and inquisitive, and it takes a 24×7 propaganda machine to crush that in the general population.
All of this is grounded in true sustainability, especially when we acknowledge that justice isn’t possible without sustainability, and without justice there will never be peace. In this manner, sustainability also provides the common goal to create multi-issue coalitions to build the critical mass necessary to transition to a sustainable future. And because becoming sustainable (defined in an ecologically sound and legally defensible manner) is really a social/community movement it builds on the emergent qualities of sustainability and thus contains as integral attributes ecological integrity, social justice, economic equity, and participatory democracy.