Interesting perspective. Thanks for sharing Michael.
On Thu, Nov 3, 2011 at 3:58 PM, MJ <[email protected]> wrote: > > *On Rebooting America > *by Gary North > > Niall Ferguson is my favorite Establishment analyst, because he is an > historian who understands a lot about free markets. He writes for the > literati. He starred in a PBS series that was worth viewing, and another is > scheduled in 2012. He teaches at Harvard University and the Harvard > Business School. > > He thinks America is running an empire, and he thinks it will not survive > much longer. As with all empires, it is going to run out of wealth to > support it. So, when he wrote a piece for the > <http://www.thedailybeast.com/newsweek/2011/10/30/niall-ferguson-how-american-civilization-can-avoid-collapse.print.html> > *Daily Beast*, > *Newsweek*<http://www.thedailybeast.com/newsweek/2011/10/30/niall-ferguson-how-american-civilization-can-avoid-collapse.print.html>, > I read it. > > He used the metaphor of computing to describe what has been good with the > West and what is no longer good. He says the West has had six "killer > apps." These are: competition, the scientific revolution, the rule of law > and representative government, modern medicine, the consumer society, the > work ethic. All of this is true, but are these features fundamental? Are > they, in the words of Karl Marx, more substructure or superstructure? I > think the latter. > > He avoids the crucial questions: (1) Why the West? (2) Why beginning in > 1800? Why not earlier? > > He uses the metaphor of the computer. But this analogy is strained. Why? > Because we can date the invention of the computer: the war years, 1943-45. > We know who did it: Mauchly, Eckert, and Von Neumann. We know their > motivation. We know the applications. > > We do not know exactly how or why Ferguson's six killer apps came into > existence. We do not know how they came together around 1800 to create a > new civilization. Why not earlier? We do not know what social, ethical, and > religious forces undergirded the six. They are not autonomous. They were > not designed by men. Computers were. > > He says that the USA and the West are no longer the centers of these six > features. > > Ask yourself: who's got the work ethic now? The average South Korean > works about 39 percent more hours per week than the average American. The > school year in South Korea is 220 days long, compared with 180 days here. > And you don't have to spend too long at any major U.S. university to know > which students really drive themselves: the Asians and Asian-Americans. > > Fair enough. But why is there this difference? What ideas or traditions > led to this? Why was Korea in 1945 not much more productive than sub-Sahara > Africa? Also, what led to the decline of the work ethic in the USA? Or was > there a major decline? I did not spend more than 180 days in high school in > the late 1950s. > > Don't tell me television did it. Television was as addictive in 1960 as it > is today. > > What about taxes? The top income tax brackets are lower today than in > 1960, thanks to Kennedy (70%) and Reagan (28%). They went back up a little > under Clinton, but nothing like Eisenhower's era (91%). > > Social Security taxes are up. Inflation prior to 2007 was up. Look also at > the increase in regulations. These have hampered the American economy. But > Americans still work hard. If they were taxed less, they would work harder, > but to think that a taxation policy change would radically re-shape > people's use of leisure time is naive. Good habits are easier to break than > re-learn. > > A programmer can re-program a computer. No one can reprogram a society. > Those who try are first called revolutionaries, then tyrants, and finally > failures. > > > *THE HEALTHY-CUSTOMER SOCIETY > > *Ferguson speaks of the consumer society as a killer app, and so it is. > It is a good thing for people to have more options. That is what liberty is > all about. It is also what economic growth is all about. The two are linked > at the hip. > > How do people get more choices? By being better served by producers and by > serving other customers. Producers save and organize and bear enormous > uncertainties in search of profit. They cannot earn a profit in a free > society in any way other than by serving consumers, meaning customers. The > customer is king. > > It is not that we live in a consumer society. It is that we live in a > customer society. We have the legal freedom to consume. We also have a > legal right to save. We can make investments today that we hope will bring > us even more wealth in the future. > > The consumer who is future-oriented chooses to consume less than he > produces. This is the key to economic growth. People defer consumption for > the sake of future consumption. > > But some people save in order to produce. They live to produce. Their > self-esteem is based on their production. They want to leave a legacy. They > do not work mainly to eat. They eat mainly to work. > > The customer society places economic authority in the hands of those who > produce and those who are the heirs or beneficiaries of producers. > Production creates its own consumption at some market-clearing price. > > > *MODERN MEDICINE > > *Modern medicine is great, but the big gains in life expectancy came > before 1912. People were richer. They bought screens for their windows and > screen doors. Water treatment in cities got better after 1860. In rural > areas, it was usually good. Most people lived on farms. > > > *LESS RULE OF LAW > > *This is disheartening news. > > The rule of law? For a real eye-opener, take a look at the latest World > Economic Forum (WEF) Executive Opinion Survey. On no fewer than 15 of 16 > different issues relating to property rights and governance, the United > States fares worse than Hong Kong. Indeed, the U.S. makes the global top 20 > in only one area: investor protection. On every other count, its reputation > is shockingly bad. The U.S. ranks 86th in the world for the costs imposed > on business by organized crime, 50th for public trust in the ethics of > politicians, 42nd for various forms of bribery, and 40th for standards of > auditing and financial reporting. > > Here, we are retrogressing. As Western civil governments get more > intrusive, the rule of law declines. Who can keep up with 70,000 pages of > the Federal Register each year? Only armies of costly lawyers. > > The increase in regulation is relentless. The law books are vastly thicker > today than in 1960. So are rules and regulation books, where bureaucrats > interpret and apply the laws of Congress. > > I am in favor of going back to 1960 in most areas of administrative law, > the laws enforced by bureaucracies. The areas where there has been > improvement, such as civil rights, are dwarfed by the dark shadow of the > Patriot Act. > > > *SOCIAL DISORDER > > *He does not exactly predict that the West will turn into Greece. > Possibly we can avoid the following, but maybe not. He puts question marks > at the end of each sentence. > > An upsurge in civil unrest and crime, as happened in the 1970s? A loss > of faith on the part of investors and a sudden Greek-style leap in > government borrowing costs? How about a spike of violence in the Middle > East, from Iraq to Afghanistan, as insurgents capitalize on our troop > withdrawals? Or a paralyzing cyberattack from the rising Asian superpower > we complacently underrate? > > Our problem is that we could turn into Greece. There is no immunity. The > same bad policies could easily produce similar results. > > Is there anything we can do to prevent such disasters? Social scientist > Charles Murray calls for a "civic great awakening" – a return to the > original values of the American republic. He's got a point. Far more than > in Europe, most Americans remain instinctively loyal to the killer > applications of Western ascendancy, from competition all the way through to > the work ethic. They know the country has the right software. They just > can't understand why it's running so damn slowly. > > There is a problem with this analysis. What evidence is there that any > civic awakening in America ever occurred apart from a religious awakening? > Civic awakenings are not autonomous. I know about the First Great Awakening > (1720-60). I know of the Second Great Awakening (1801-1840). I even know of > the Third Great Awakening (1858). > > There is another major problem: all three led to major political changes: > centralized politics in the wake of major wars. > > The social disruptions of 1965-70 led to greater centralization, and not > just in the United States. > > What we need to do is to delete the viruses that have crept into our > system: the anticompetitive quasi monopolies that blight everything from > banking to public education; the politically correct pseudosciences and > soft subjects that deflect good students away from hard science; the > lobbyists who subvert the rule of law for the sake of the special interests > they represent – to say nothing of our crazily dysfunctional system of > health care, our overleveraged personal finances, and our newfound > unemployment ethic. > > Correct. But who are "we," and how will "we" accomplish this? > > I know how: cut their budgets. Let the free market sort out winners and > losers. After all, this is the consumer/customer society. But the teachers > in the tax-funded schools will resist any such move. > > Do most Americans have a "newfound unemployment ethic"? I doubt it. > Getting a job and keeping it has been basic to the American way of life > throughout history. > > What we have are government regulations everywhere. We have a kind of > blind, deranged central economic planning by administrative law. We have > what Ludwig von Mises sixty-five years ago called "planned > chaos<http://mises.org/resources/2714> > ." > > > *THE "C" WORD > > *Ferguson escalates the rhetoric. I refuse to accept that Western > civilization is like some hopeless old version of Microsoft DOS, doomed to > freeze, then crash. I still cling to the hope that the United States is the > Mac to Europe's PC, and that if one part of the West can successfully > update and reboot itself, it's America. > > But the lesson of history is clear. Voters and politicians alike dare not > postpone the big reboot. Decline is not so gradual that our biggest > problems can simply be left to the next administration, or the one after > that. > If what we are risking is not decline but downright collapse, then the > time frame maybe even tighter than one election cycle. > > He speaks of collapse rather than decline. I prefer to speak of decline. > The division of labor still operates. The profit and loss system still > operates. Where these two social institutions operate, people are given > fair warning of trouble lying ahead. > > The squeezing of the free market by administrative law, monetary > inflation, and taxes is increasing in some areas of life. It is not > increasing in others. Where we need factories to produce, the various > American governments are indeed a threat to our productivity and therefore > our consumption. But where digits are concerned, the free market is in the > saddle. > > I believe that freedom of communication is far more important than low > taxes. The former can produce the latter if the defenders of liberty make > their case strong. > > The ability of people to circumvent the Establishment media today is > unprecedented in man's history. The World Wide Web is bringing down > governments. It is increasing the cost of exposing bad science and bad > government.It aids price competition. > > In short, the Web offers more choices: of ideas, goods, and services. This > is central to the changes that are going on today in the realm of ideas. We > should not discount these too heavily. > > I do not think this is the USSR in 1991. The United States is not a > tyranny on that scale. It is far richer. Its people are connected > digitally. The government can run, it can't hide. > > > *CONCLUSION > > *I have no doubt that the transition costs from the Keynesian > welfare-warfare state will be high. But I don't think a collapse is likely. > There is a free market. There is a private communications system. > > I look at the U.S. Postal Service and see the future of the Federal > government. "I have seen the future, and it is mostly junk mail." > > There will be attempts by the present Establishments to resist these > changes. But the reality of the digits. They are getting more influential, > and the Establishments control the older institutions that are threatened > by cheap communications. > > Decline for a time, yes. Comparative decline, Asia vs. the West. Yes. > Transition costs, yes. Trapped voting groups that relied too heavily on > government promises, surely. But a collapse is unlikely. The movement is > toward freer markets. The freer the market, the less likely a collapse. > Profit and loss signals enable us to adjust. > > For those who don't adjust in time, or don't adjust enough, there is bad > news ahead. The blind men who are passing laws are a threat. So are the > petty tyrants who enforce these laws. > > www.garynorth.com > > -- > Thanks for being part of "PoliticalForum" at Google Groups. > For options & help see http://groups.google.com/group/PoliticalForum > > * Visit our other community at http://www.PoliticalForum.com/ > * It's active and moderated. Register and vote in our polls. > * Read the latest breaking news, and more. > -- Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. Register and vote in our polls. * Read the latest breaking news, and more.
