20th_century_absurdities

A preternatural trust in government economic management:

The competition between capitalism and socialism was a feature of intellectual discourse and the ideological foundation of the Cold War. Capitalism is not an utopian system and does not promise utopian results. The economic freedom of capitalism provides a rich, creative, but messy brew which many intellectuals find disquieting. In their desire to find a better, kinder, more orderly way, they inevitably fall prey to concepts that would substitute government economic management for the management mechanisms of profit driven market directed capitalism.
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Events perversely refuse to conform to ideological expectations.

To sustain their ideology, they must turn a blind eye to the obvious inherent limitations of government management. This they often do with commendable wit and style, influencing the credulous, but ultimately suffering from the perverse refusal of events to conform to their ideological expectations.
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Profs. John Kenneth Galbraith and Lester C. Thurow have produced whole library shelves of advocacy books filled with incredible absurdities - all quickly disproved by the events of an unkind reality.

Delusions of grandeur:	But that is not all. Galbraith had delusions of grandeur for himself and his fellow academic intellectuals. ?
The academic and scientific community would unite and eventually wrest substantial economic control from shareholders in the capitalist nations, and from the government apparatchiks in the Soviet Union.	The propaganda myth created by Karl Marx is viewed quite favorably by Galbraith. He treated many of these quintessential absurdities as profound economic truths. His strongest criticism of Marx is that Communism is not the end of the line of economic evolution. ? Since the technocracy is dependent on educators and scientists for the training of additional technocrats and the provision of scientific advances, Galbraith expected the academic and scientific community to unite and eventually wrest substantial economic control from shareholders in the capitalist nations, and from the government apparatchiks in the Soviet Union. This development would thus provide a "convergence" on a command economy model in the further development of the two economic systems. ? The hand that grants the academic degree will rule the economic world! ?
	Of course, intellectual groups would continue - like other interest groups - to occasionally influence legislation of commercial significance. However, Galbraith's expectation that intellectual interests will displace shareholder interests as the controlling factor in corporate policy is yet another of his unfulfilled expectations - and a classic absurdity.

Government
"Industrial Policy:"

In the 1980s, MIT economics Prof. Lester C. Thurow, in a string of authoritative books, was driven by his ideological passions towards support for government "industrial policy." He expressed very favorable views of those industries nationalized or otherwise controlled by foreign governments that could thereby be directed to fulfill various societal needs.
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Thurow's obvious intent was to achieve by industrial policy many of the same results achieved by nationalization. The privatization movement must have come as a shock to Thurow. Here's a breathless example of his reasoning:

"[J]ust as an army can move only as fast as its slowest unit, so the economy can only be as good as its poorest motivated, least cooperative component."

Clearly, if Thurow were a general, his tactics would be as disastrous as his proposed economic policies.
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Unlike Galbraith, Thurow did accept market mechanisms - albeit suitably altered by all-knowing, all-wise government policies. His elaboration on the methods and content of his industrial policy program produced a string of classic absurdities. The pace of events by the end of the 20th century highlighted these absurdities with distressing rapidity.
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However, once again, the widespread acceptance of the "industrial policy" absurdity by a substantial number of supposedly knowledgeable people makes it a true classic.

The Conservative Revolution:

The ultimate outcome of conservative victories is hardly evidence of a conservative turn in government policy.

House Speaker Newt Gingrich was the most prominent of the purveyors of the late 20th century myth of the Conservative (or "Reagan") Revolution.
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That conservative forces had many policy and electoral victories in the last 20 years of the 20th century against the previously predominant liberal Democratic majority is not in question. Nor is there any question concerning the reason for those victories. However, the ultimate outcome of those victories is hardly evidence of a conservative turn in government policy.
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Conservative opposition has actually served to strengthen liberalism.

Conservative successes in the 1980s have provided the basis for the great prosperity that today funds an ever greater array of liberal government programs.

Twentieth century liberalism - even if by some other name - will continue to drive American political policies for the foreseeable future. Now that "liberal" is a dirty word - and politicians of both major political parties - like Presidents Clinton and Bush - carefully occupy centrist territory - it is time to acknowledge the tremendous victory of 20th century liberal ideals during the past 100 years. Assertions that "the era of big government is over" are certainly premature - and constitute nothing more than just another Clinton prevarication. The proclamation by Gingrich and other conservatives of a new conservative majority is an obviously absurd myth.
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The Democratic Party has, in fact, lost its half century status as the nation's majority party. The electorate has abandoned it in sufficient numbers to reduce it to approximate equality with its Republican rivals. This is its punishment for the multiple liberal sins that culminated in the 1970s. Opposition to these liberal sins have provided conservative political forces with their electoral and policy victories during the last 20 years of the 20th century.
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However, conservative opposition has actually served to strengthen liberalism by forcing the strengthening of liberal programs - the elimination or rollback of the weakest liberal initiatives - and by restraining the growth of liberal programs to levels that are not overly burdensome. Indeed, the conservative effort is like a labor of Sisyphus. Its successes in the 1980s have provided the basis for the great prosperity that today funds an ever greater array of liberal government programs.
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The U.S. electorate - like those of all other republics and democracies both before it and now - still favors politicians who promise to provide benefits from the public treasury. The electorate supports retrenchment only when liberal leadership clearly screws up, and liberal programs clearly fail. The only way the Republicans can cash in on their new electoral competitiveness with the Democrats is to make grand promises of their own.
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The conservative role:	Conservative opposition to 20th century liberal expansion of the domestic role of the Federal government has had several primary impacts. ?
	First, it has forced liberal forces to generate wide support for their measures - to make the political compromises essential for that support - and to sometimes more carefully delineate the objectives and boundaries of their initiatives. When conservative opposition has been weak, liberal programs have frequently been overdrawn or obviously impractical - leading to embarrassing failures and conservative political advantage. ?
	Second, it has facilitated reduction or elimination of those liberal initiatives that work so poorly that they lose public support. Examples include: The "energy crisis war" of the 1970s was eliminated so that market mechanisms could efficiently allocate energy resources and assure ample cheap energy supplies for the rest of the 20th century. The current cyclical surge in energy prices will similarly be easily handled by market mechanisms, unless inflationary monetary policies or administered prices are imposed on the economy. The federal welfare entitlement has been eliminated, and federal welfare programs have been scaled back and placed within state jurisdiction. This has permitted states to pursue a variety of flexible alternatives that have been far more successful than the centralized federal effort. Socialist and "industrial policy" initiatives have been checked and substantially scaled back by the destruction of their intellectual legitimacy. The disasters of European socialism have been avoided, and the burdens of "industrial policy" have been substantially limited. Although far from being eliminated, they have been substantially reduced by the conservative "privatization" and "deregulation" movements. Creative approaches for promoting some competition for markets previously dominated by monopoly utilities have enabled substitution of market disciplines for inefficient regulatory and administrative decision making. The Clinton administration, however, did see a substantial return to heavy-handed economic regulations, and our troubled health care system is probably heading for yet one more disastrous experiment with socialist and administrative decision making approaches. Keynesian policies - that were supposed to "obsolete" the business cycle but instead led to the stagflation and other double digit miseries of the 1970s - have been substantially modified. Renewed stress on a strong currency and reasonably balanced budgets provide the basic requirements for current prosperity.
	Thirdly, it has concentrated public opposition to judicial decisions that go beyond legitimate "interpretation" of the law - that amount to judicial "legislation" and judicial "amendment" of the Constitution. ? Judicial activism is thus not totally "undemocratic." Activist decisions that have substantial public approval become established - while decisions that the public comes to dislike - such as those that undermined the effectiveness of the criminal law - are ultimately themselves undermined or reversed. Those that the public simply doesn't care about become points of contest on a continuing litigation battle ground. ? Conservatives have succeeded in making judicial appointments a political issue. Contested judicial elections have become increasingly common where judicial elections are provided, and judicial nominations are increasingly a political issue nationwide. The courts will thus not be permitted to get too far out ahead of public opinion. ? The existence, however attenuated, of this political check on judicial activism is vital. As we have seen with the abortion rights controversy - when you remove contentious issues from determination by the ballot, there will inevitably be some who will resort to the bullet.
The size and expense of government at the state and local level has exploded in the last decade. Only the federal government makes its mistakes "from sea to shining sea." Conservative opposition to liberal programs does not gain traction until failure or gross wastefulness can be demonstrated - or until their cumulative burdens undermine economic prosperity.	Fourth, questions of federalism and tax rates have become the primary political battleground. ? The "big government" battle has been clearly lost. The conservative effort today has been reduced to limiting the growth of the federal government - rather than cutting it back. The conservative effort is to reduce taxes - or to at least prevent further tax increases - and to restrain the expansion of government to a rate that is less than that of the economy, so that government programs absorb a declining proportion of our growing gross national product. The conservative effort has frequently been reduced to the attempt to have liberal programs administered by state - rather than federal - government whenever practicable. There thus is at present little political restraint on the growth of state and local governments and their programs. As a result, the size and expense of government at the state and local level has exploded in the last decade, and most of the reduction at the federal level has been as a result of the end of the Cold War. And the Bush administration has proposed federal programs of its own. ? Thus, as a matter of political tactics, we currently see Democrats championing "fiscal conservatism" - but only as a stratagem for retaining as much tax revenues as possible for future federal programs. Also, we see Republicans championing a variety of government programs - but only as a stratagem to prevent enactment of those programs as "entitlements," and to limit federal participation to programs that the electorate has clearly indicated that it wants. ? The electorate clearly indicates that it wants a broad range of benefits and services from its governments. This is a democracy, after all, and what the electorate can be convinced that it wants, the electorate will get - whether it likes the results or not. Conservative opposition to liberal programs does not gain traction until failure or gross wastefulness can be demonstrated - or until their cumulative burdens undermine economic prosperity. ? Today, the results of this process can most dramatically be seen in the nation's largest cities. In both New York City and Los Angeles, successful Republican administrations have cleaned up much of the mess left by liberal predecessors. Now, the city electorates eagerly and overwhelming turn back to liberalism, in the hope of getting more goodies from City Hall. ?
State governments collectively are subject to greater disciplinary forces, and are more flexible, than the federal government. Only the federal government makes its mistakes "from sea to shining sea."	Success in funneling jurisdiction and funds to the states, and in restraining rates of federal growth, are no mere minor matters, however. Liberal social programs - despite the use of "investment" terminology - are economic burdens that can retard or even reverse economic growth. ? Within broad limits, state and local governments must, at least, compete with each other with respect to their effectiveness and efficiency. They are far more subject to budgetary disciplines. They do not have the power - and thus do not have the temptation - to pay for programs merely by expanding the money supply. ? Moreover, the states collectively are far more flexible in implementation of programs than the central authority of the federal government. Only the federal government makes its mistakes "from sea to shining sea."

Ideological scholarship:	As the pace of events continues to accelerate during the 21st century, events will deal with such advocacy scholarship with increasing brutality. Events will not be kind to those who sell their intellectual souls for a mess of ideological pottage. ?
	This is the FUTURECASTS list of 20th century economic policy myths that have been clearly demonstrated to be absurd by the course of events. Please e-mail any additions you might think worthy of this list.