A Crucial Element of Democracy

This is a blog by Robert Gutierrez ...
While often taken for granted, civics education plays a crucial role in a democracy like ours. This Blog is dedicated to enticing its readers into taking an active role in the formulation of the civics curriculum found in their local schools. In order to do this, the Blog is offering a newer way to look at civics education, a newer construct - liberated federalism or federation theory. Daniel Elazar defines federalism as "the mode of political organization that unites separate polities within an overarching political system by distributing power among general and constituent governments in a manner designed to protect the existence and authority of both." It depends on its citizens acting in certain ways which Elazar calls federalism's processes. Federation theory, as applied to civics curriculum, has a set of aims. They are:
*Teach a view of government as a supra federated institution of society in which collective interests of the commonwealth are protected and advanced.
*Teach the philosophical basis of government's role as guardian of the grand partnership of citizens at both levels of individuals and associations of political and social intercourse.
*Convey the need of government to engender levels of support promoting a general sense of obligation and duty toward agreed upon goals and processes aimed at advancing the common betterment.
*Establish and justify a political morality which includes a process to assess whether that morality meets the needs of changing times while holding true to federalist values.
*Emphasize the integrity of the individual both in terms of liberty and equity in which each citizen is a member of a compacted arrangement and whose role is legally, politically, and socially congruent with the spirit of the Bill of Rights.
*Find a balance between a respect for national expertise and an encouragement of local, unsophisticated participation in policy decision-making and implementation.
Your input, as to the content of this Blog, is encouraged through this Blog directly or the Blog's email address: gravitascivics@gmail.com .
NOTE: This blog has led to the publication of a book. The title of that book is TOWARD A FEDERATED NATION: IMPLEMENTING NATIONAL CIVICS STANDARDS and it is available through Amazon in both ebook and paperback versions.

Friday, February 21, 2020

TURNING POINT?


Despite of what one hears, especially from the right, of the dire consequences government interference in the economy can cause, one can easily judge that during this nation’s history, the American economy has been allowed to do its own thing.  The overall direction of the production, distribution, and consumption of the goods and services this nation enjoys is the product of American businesses making their decisions over such matters.  The general trends might have been influenced by governmental policy, but for most part, only on the periphery.
          But one can ask, in relation to this relationship between the private sector and government, what has been the projection over the years?  And what does that projection have to do with civics education?  This posting poses these questions and cites the work of Linda Yueh to help gain insight over these concerns.[1] She asks the hypothetical question:  what would the leading historical economists say about what is going on with the economies of world – especially those of the leading economic nations? 
Such a review obviously starts with Adam Smith and that review can possibly be the subject of a future posting, but here the focus is on the overall concerns of the current situation.  Smith is mentioned to bolster the claim this posting initially makes.  That is, that the state and direction of the economy is established – or should be established – by the private sector.  That would be in accordance with Smith’s economic theory.  He made popular the notion of laissez-faire economics – a “hands off” policy.
This belief in minimal government direction has led to an evolving progression which the path the economy has pursued.  That progression has been from agriculture to manufacturing/industrialization to deindustrialization/service-based economies.  That progression has met with various problems but currently what causes worry is stagnant wages in post-industrial nations.
Leading these nations are the two most minimal government-intrusion economies, that is the economies of Great Britain and the United States.  Yueh, in terms of how these two nations are dealing with this overall problem, writes,
Yet, that’s what post-industrial nations like Britain and the United States are attempting to do – roll back the deindustrialization process by encouraging manufacturing and reducing the share of national output accounted for by services.  This urge to rebalance the economy arose after the 2008 financial crisis which revealed the fragility of a large banking sector.[2]
This general concern and trend need some context.  To what extent are the economies of these nations in a post-industrial mode?  As currently structured, the economies of these nations are over three-quarters serviced-based (as determined by national output) and much of their economies rely on financial services to generate their output and income.
          Can one attribute this turn of becoming service-oriented based economies to policies that, in effect, limited the role of government?  Well, one can trace the turn to the 1980s when the two prominent champions of free markets were in power.  That would be Margaret Thatcher in the UK and Ronald Reagan in the US.  And the changes Thatcher and Reagan ushered in were a reaction to what existed at the beginning of their respective terms of office.
          And, in turn, that set of conditions was the product of a historical development.  The relevant history in the US, for example, began at the end of World War II.  Initially, in this period, the US enjoyed inordinate advantages given the destruction of that war on the industrial nations of Europe and other areas of the world.  Unscathed was the US which gave the American economy an unparalleled advantage.  The world found itself highly dependent on the manufactured goods coming from American factories.  But starting in the 1960s, US advantages were becoming a thing of the past.
          What happened?  Well, the heavily damaged countries got back on their feet and were then beginning to compete in industrial markets.  But there is more to the story and an important aspect of the developments happening during that time has to do with how the economy began to be viewed.
William K. Tabb provides and explains one element of what else was afoot.[3]  He points out that economic growth depends to a great degree on businesses having the ability to reasonably predict what is going to happen.  To do that, the economic sectors at a given time share what he calls a social structure of accumulation (SSA) perspective.  That view gives a nation’s policy makers a general model of how the economy is working.
Tabb claims the US economy, through its history, has experienced a series of SSAs.  During the time under consideration (1945-1968), the nation was under the influence of the Keynesian SSA.  That view was a product of the Great Depression and it basically legitimized a relatively strong government role within the economy – a far cry from Smith’s advice.  That mental construct provided rationales for institutionalized government programs – Social Security, Federal Deposit Insurance Corporation, and an array of regulatory agencies to oversee the economy. 
The prudence of this general approach began being questioned during the late 1960s and through the 1970s.  That decade was hit by rampant inflation and a lack of faith in the abilities of the Jimmy Carter Administration to meet the demands of that time.  To the perceived rescue, the nation turned to Reagan and he returned to a strategy more in line with Smith’s views.  So extensive was this shift that Tabb considers the change as one to a newer SSA, the neoliberal SSA.
The term neoliberal should not be confused with left of center liberals.  Instead, it is linked more with a libertarian view – which is highly anti-government in general.  As it would be applied to the economy, Reagan was successful in limiting government’s role in the economy.  Through the Reagan’s administration, the nation’s economy shifted to this neoliberal view and that bias held until the financial debacle known as the Great Recession of 2008. 
During its reign, that newer bias in policy led to a high degree of deregulation.  Many blame the 2008 debacle on a lack of regulation over the financial sector.  Of particular concern was the mortgage and banking industry.  The current question is:  did the Great Recession and its aftermath sufficiently discredit the neoliberal view?  That question is still an open one.  What is not in doubt is that there remains a problem. 
The acceptance of neoliberal view did not only predate the financial crisis, it also led to manufacturing businesses going abroad to cheaper-labor countries.  China stands out as one such country.  In turn, that led to a multitude of former factory workers in the US losing their jobs.  This and automation have created a disenfranchised segment of the American workforce. 
That is, to many the reason there has been sluggish growth and underemployment, especially those who can still remember better days, has been the deindustrialization of the economy.  Hands off led to this global economy with its newer supply sources of manufactured goods.
Now, this, in turn, has led to many benefits, but it imposed significant costs on these identified displaced workers.  In addition, those costs have been coupled – one might see a cause and effect – to more extreme politics.  There is now a president who identifies himself as a nationalist – a more extreme position of conservative politics.  There is also, as of this writing, the leading vote getter of the opposing party, a socialist. 
In the minds of many, something needs to change if there is any chance of regaining a more moderately based politics that existed before these imbalances took hold.  Here are Yueh’s comments on these factors,
The 2008 crisis revealed the downside to having an economy with a large financial services sector.  Banks had become complex and interconnected, and their business became harder to understand and to regulate.  Their responsibility for causing the worst recession in a century prompted calls from the public to regulate the banks more tightly in the US and UK.  The crash also led the American and British governments to want more manufacturing, thus they have sought to ‘rebalance’ the economy towards making things once again.[4]
So, are these the first signs of a new SSA development?  And, if that’s what is going on, is it congruent with efforts to find the way toward a period of reindustrialization?  Yueh, perhaps with that in mind, takes it upon herself to review what contributions prior giants in the field of economic study – like Smith and John Maynard Keynes – offer the current situation. 
This blog will share some of those ideas and add what it sees civics education can add to any resulting efforts, at least from the perspective of the classroom.  After all, as the current political drama the nation is experiencing indicates, these economic factors play a very energetic role in defining what the nation will be contesting in the political thicket at any given time.



[1] Linda Yueh, What Would the Great Economists Do?:  How Twelve Brilliant Minds Would Solve Today’s Biggest Problems (London, UK:  Penguin, 2019 (Kindle edition)).

[2] Ibid., 11-12 (Kindle edition).

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

[4] Linda Yueh, What Would the Great Economists Do?, 13 (Kindle edition).

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