A GOBBLING CONCERN

Here’s hoping everyone’s Thanksgiving was grand.  Really, isn’t Thanksgiving the best?  Family get-togethers (a joyful event for this blogger), a grand meal, no gift-giving (or more accurately, gift-buying) hassle, and even a parade (a spectacle this blogger attended as a child) marks the day.  What more can one ask for?  But now, it’s time to move on and, oh yes, prepare for the next holiday or two.

          And that next family-oriented day or days rely on economic conditions to be what one hopes for.  So, what better time to address the economy.  Of course, that’s a topic this civics-oriented blog looks at from time to time.  One writer this blogger depends on for this area of concern is William K. Tabb.[1]  The last posting citing Tabb is entitled “Are They Misdirected Moves?” and it appeared July 5, 2019.[2]  That posting ended with a foreshadowing that Tabb’s work would be revisited again and here is that next visit.

          Tabb points out that among the American electorate there seem to be two polar opinions concerning the role government plays in the economy.  One is that government meddling – or intrusion – can be best considered opportunities for disasters.  Government proves to be ineffective and surely incompetent.  The little good it might eke out is over-taken by the harm it produces.  Usually, that view is associated with conservative people and, in turn, with those citizens that identify themselves as Republicans.

          The others – the liberals or those associated with the Democratic Party – see market participants as being the “out-of-touch” or shortsighted people who engage in mindless herd behaviors.  They refer to the inevitable, resulting crises that spring up every so often causing serious harm not just to numbers of businesses, but to the lives of real people.  Of course, the most recent example was the 2008-09 financial crisis that turned into the Great Recession. 

They blame market believers for being too self-centered to realize macro forces that lead to the downturns.  Good times lead to over exuberance and over purchasing of investment assets – like stocks or real estate – often with borrowed money.  Result is the makings of bubbles which look like the ultimate solution to securing economic riches.  But bubbles burst.  Here’s Tabb’s description of the last crisis:

There is now a good deal of research that links rapid increase in credit creation in an economy with the likelihood of financial bubbles and busts.  When serious economic crises occur, government intervention on a significant scale is required, as [former FED Chairman] Greenspan was to acknowledge … This suggests the unenviable, but necessary, task of taking away the punch bowl when the party becomes too exuberant.[3]

Here’s a thought, Trump’s trade “war” with China is functioning as not currently taking away the bowl but inserting a leak.  And that leak might be discouraging the irrational exuberance alluded to above.  The closest indicator that might suggest a bubble in the stock market, for example, is or has been forming is stocks’ price to earnings ratio (p/e ratio) indicator.  In 2018 it was getting a bit high, but since then it has significantly dropped. 

Perhaps trade woes had something to do with that.  In any event, the economy presently seems strong without the usual concerning indicators – like inflation – causing much worry.[4]  This blogger is not aware of any significant concern for a forming bubble.  There is the concern among some over corporations borrowing too much money.  This seems to be encouraged by persisting low interest rates – as this blogger has asked before:  is this a bubble-like effect?

But this brings up an important distinction when considering economic issues and trends.  There are production issues and there are financing issues.  One refers to the production of wealth – hence, it being called production issues – and the other fuels production.  And leading Western economies, like the US, have become more centered on the financial end of the equation.  Tabb describes how that end has become dominant.

He writes:

Financialization has become the leading organizing logic of accumulation in Anglo-American-style economies and has had impacts elsewhere to a substantial degree.  In its shortening time horizons of production capital, it allows a redistribution of profits from the realm of production of actual goods and non-financial services to speculator profits and enlarges the sphere in which money is made from money.  Speculating on and manipulating the future value of financial assets implies consequences for citizens.  It increases uncertainty and risk with regard to decisions about financing consumer purchases, homes, education, retirement, and other quality-of-life decisions.[5]

And with those sobering thoughts, this blogger hopes the reader’s holiday goes on unperturbed.

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[1] William K. Tabb, The Restructuring of Capitalism in Our Time (New York, NY:  Columbia University Press, 2012).

[2] Robert Gutierrez, “Are They Misdirected Moves?”, Gravitas:  A Voice for Civics – a blog, July 5, 2019, accessed November 28, 2019, https://gravitascivics.blogspot.com/2019/07/are-they-misdirected-moves.html .

[3] William K. Tabb, The Restructuring of Capitalism in Our Time, 6 (Kindle edition).

[4] One should not make investment decisions based on what a blogger might opine – especially when the blogger writes about civics education issues.

[5] William K. Tabb, The Restructuring of Capitalism in Our Time, 10-11 (Kindle edition).

CONTACT, CONTACT

One instructional program on TV is PBS’s show called NOVA.  This writer can’t claim to be a regular watcher – to his detriment – but from time to time he happens upon one of their broadcasts that catches his interest.  This past week, one did; that episode is entitled “The Violence Paradox.”[1]  One element of the show reminded this blogger of the work of a prominent psychologist, Gordon Allport, and his famous book, The Nature of Prejudice. 

More specifically, the program, while not mentioning Allport or his work (at least this blogger does not recall it does), it did mention a theory that Allport’s work help formulate.  That theory is contact theory.  It was first introduced by government agents as a reaction to what promised to be a violent development; i.e., the desegregation of the armed forces during the Truman administration. 

The NOVA program set out not only to provide insight into the causes of violence, but how knowledge about violence has led to certain remedial programs and strategies.  It points out that overall levels of recorded violence have decreased.  This being the case during a time when the ability of humans to kill each other has increased – or “exploded” – with the technologies of weaponry such as the killing efficiency handheld arms and that of bombs, including nuclear weapons.  In that, the titled paradox exists.

          What this downward trend in actual violence and their related statistics – such as relating to homicides (a decrease of over 90%) – indicate, humans are doing somethings right.  What one of the program’s guest social scientists, cognitive psychologist Steven Pinker, urges:  people should find out what that is. 

It turns out that not all of that welcomed development emerges from what humans are doing; some have to do with physical evolutionary factors at work.  But for the sake of this posting, this blogger will skip that part of the story and encourage the reader to look up the program online.  What this blog highlights are those human efforts that relate to federation theory.

And that connection draws one back to contact theory.  Simply stated, contact theory postulates that if people of different groups intermingle – it helps if that occurs over common interests or in seeking common goals – people get to know one another.  Once they do, as in the military, then a lot of the baseless fears or misconceptions attached to the others can first be questioned and then mostly dismissed.  But that conclusion gets ahead of the story a bit. 

The first insight derived from applying contact theory is the realization that violence is contagious.  It can be contagious as incidences first might occur in isolation, but they happen in close proximity.  As people perceive these events, some are predisposed to seeing it as part of living.  Or it can be contagious from victimization of prior violence – one wants revenge for violence being inflicted on a relative, a friend, or a fellow gang member.  This naturally leads to a cycle of violence.

Either way, soon an epidemic of violence can erupt.  These phenomena are behavior patterns and are appropriate for social scientific analysis.  Contact theory was first developed in a purely scientific vein – trying to find out what is involved both psychologically and sociologically with outbreaks of violence.  But when social agents – police, social workers, and even educators – want to stem the incidence of violence, this notion of contagion can be helpful and applied to social settings where one sees or seriously suspects that such a contagion is possible.

Some urban areas have organized neighborhood efforts – one national group so organized to assist such efforts is Cure Violence International – that once a number of violent events are noted, street agents go out and start talking to neighborhood resident and seek out what is happening on the streets.  They proactively insert themselves when they see or are informed of a problem or potential problem brewing. 

The effort then has these street agents bringing the potential or actual belligerents to talk to each other.  In this, these agents are trained to implement what contact theory identifies what should be done.  Initially, people might not listen to each other.  They yell their grievance and express how they perceive that the other is responsible for the brouhaha.  They also might communicate they are not going to take it anymore.

 The neutral “peace” worker, though, does listen and tries to verbalize each side’s position in perhaps less angry or antagonistic language.  He/she evaluates how the angry people are behaving – pointing out, for example, that they are not listening to what the other is saying – and works through with appropriate words to get the two parties to at least agree that each is a person. 

Like him/herself, that other person only wants not to be bothered by whatever the concern is and to be respected.  Can’t the other agree that this can be possible for each?  Most often than not, it works out and the belligerents end up shaking hands.  This account oversimplifies the process, but in the main that is what the street agent tries to accomplish.

With significant numbers of these workers on the streets, the number of violent results has decreased in highly volatile, large urban areas.  The worker has worked at establishing a point of contact between the two he/she has identified as the potential violence inflict-or or violence victim.  But contact can be accomplished through various venues. 

The PBS program goes on to hypothesize that one historical development that helped masses of people “contacting” others in an imaginary way, was the expansion of literacy and the availability of the written word.  Therefore, the invention of the printing press and the eventual distribution of written material helped people realize how similar they were to others and encouraged an emotional disposition to feel empathy for others they did not know personally.  The written material allowed them to learn of other peoples’ challenges.

Another study looked at antagonism or lack of understanding between groups that historically have proven to be prone to a great deal of violence.  That would be between religious groups.  When one thinks today of religious violence, one tends to think of the violence in the Islamic lands.  There are others, for example, the violence in recent decades between Muslims and Hindus that characterizes the conflicts between Pakistan and India.  But the problems between the Shiites and Sunni Islamic sects attract most people’s attention today. 

Hidden can be the challenges that Christians face in those areas.  In Iraq an experiment put some to the ideas associated with contact theory to the test.  There, through an effort to mix Christians and Muslims together in soccer teams were tried to see if that contact led to more cordial and interactive results.  To a limited extent it did; perhaps if the experiment continues the effect can not only increase but also become more established.

The PBS show speaks of other developments.  For example, the expanding view of rights seems to have had quite an effect especially if rights are institutionalized.  Here, the US Bill of Rights and the subsequent UN’s Universal Declaration of Human Rights have had their effects globally to upgrade the general sense as to the importance of life and the liberty necessary to make life meaningful.

This blogger also thinks something that has affected humans’ view about violence and death resulting from violence has to do with the commonality of death.  This possible factor is not derived from contact theory, but this blogger feels it is worth considering.  It seems reasonable that if a people experience a regular dose of death among those who are about them, the perceived value of life would be affected. 

Killing someone doesn’t seem to have the same degree of tragedy generally if the victim stands a good chance of dying shortly from some disease or accident that characterized life in the years prior to modern medicine.  This blogger’s wife tells a family story of how a great uncle in the earlier years of the twentieth century died of a horse biting him on the cheek.  The uncle contracted tetanus – formerly known as lockjaw – and suffered his fate.  Events like that was fairly common.

In any event, the federalist angle to this review of violence and how to avoid it relate to federation theory’s bias toward encouraging contact.  This is augmented with the version of that construct this blog has called liberated federalism.  That version disavows parochial biases, but instead not only tolerates plurality, but encourages it.  Schools, through their curricular choices particularly with civics instruction, can play a very important role in promoting the lessons of contact theory if federation theory guides their curricular choices.

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[1] “The Violence Paradox,” S46/Ep22, NOVA, PBS, broadcast November 20, 2019, accessed November 24, 2019, https://www.thirteen.org/programs/nova/the-violence-paradox-gl0tal/ .