This blog is about to begin a series of postings that will
engage in an exercise that it has avoided up to this point in its history. It is about to describe an instructional
planning effort in which the tenets of federation theory are applied to a
contemporary issue and demonstrate how the theory can be utilized. To begin this effort, it is useful to review
what is known about the issue that has been chosen. And to do that, it is helpful to provide some
context. This later aim is the purpose
of this posting.
To foreshadow
this overall effort, the reader should be aware that the final unit of study
will portray a bias toward historical research in both its researching of the
issue and in what the students will be asked to do in way of classroom inquiry. So, to put this issue in context, this
posting revisits a topic this blog has addressed before. The following account is taken from a
previous posting, “The Economic Face of It.”
In
a post financial crisis book, one dedicated to explaining what caused the
resulting recession [which began in 2008], William K. Tabb makes an interesting
observation. His use of the concept,
social structure of accumulation (SSA), places the importance of a prevailing
mental construct at the center of determining how an economy functions:
The
social structure accumulation (SSA) framework suggests that periods of growth
require a coherent set of mutually reinforcing institutions favorable to
capable accumulation. These involve the
creation of relatively lasting accommodations between contesting social forces,
including stable understandings between capital and labor, the United States
and the rest of the world, capital and the state, capitalists and other
capitalists, and citizens and their government.
Institutional stability provides conditions under which the behavior of
others, the meaning of events, and the likely outcome of actions can be
predicted over the relevant planning horizon with enough confidence to provide
consistent expectations, and so encourage investment and promote growth.[1]
In
short, economic actors, according to Tabb, need to be sufficiently on the same
page in both thought and action. This
can be viewed as reflecting a sufficiently unified mental economic image among
these actors. Short of that, economies
suffer from drift and progress is stymied.
There
has been a series of SSAs throughout the history of the US. Tabb’s analysis is focused on what he terms
the neoliberal SSA. It is based on a
general acceptance of a libertarian view of government’s legitimate role as
being highly limited in the economy.
Historically, it replaced the Keynesian SSA that dominated our economic
views from the 1930s through World War II and into the 1960s. That view legitimized a very strong role for
government and led to such policies as Social Security, Federal Deposit
Insurance Corporation, and a whole array of regulatory agencies to oversee the
economy. As the 1970s came and went with
their inflation and malaise associated with the post-Watergate years and the
administration of Jimmy Carter, that SSA fell into disfavor. Then there was the articulation of Ronald
Reagan along with his presidency.
Through the thrust of his policies, we have had the neoliberal view
guiding our economic activities up until the financial debacle of 2008. That span of years saw a high degree of
deregulation. Whether the Great
Recession has been enough to dislodge it, is still an open question, but I
think the upsurge of both Donald Trump and Bernie Sanders reflects a higher
sense of anger and anxiety among the American people – our collective
discontent. Those are the very emotions
that lead to a change in beliefs and actions.
With this backdrop, the issue of
foreign trade and its effects on employment opportunities should be
considered. In the next posting, the
year 1971 will be highlighted. It is
that year that certain disruptive conditions to the economy was beginning to be
recognized. Beginning with abandoning the
gold standard, what was being understood was that the Keynesian SSA was not
meeting the challenges of the changing economic conditions. It would take another ten years for that SSA
to be replaced with the Reaganomics SSA (Reagan took office in 1981).
Stay tuned.
[1] William K. Tabb,
The Restructuring of Capitalism in Our Time,
(New York, NY: Columbia University Press,
2012), 25.
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