The Radical Turn

On the Necessity of the Inconceivable to Engage the New Great Transformation

Most of us who have lived through the decades since World War II understand the advancements of the industrial age to be the essence of human progress. First, we lived in an energy-driven mechanical world involving a series of innovations and new “labor-saving” processes and products. We experienced all sorts of new jobs and professions as the industrial project continued. It called for new forms of work needed to produce new kinds of goods and services. Progress seemed the inevitable product of scientific discovery, technical innovation, invention, and production.

Progress and Conflict

At the same time, we felt an evolving series of threats, from the broadly defined “Cold War,” first expressed in the very hot war in Korea – referred to at the time as a United Nations sanctioned “police action” because war was never officially declared. Then there telegraph.co.uk_March-1965-helicop_1626547iwas the war in Vietnam, also never quite declared but an all-consuming national crisis of purpose and conscience. With the collapse of the Soviet Union came a brief euphoria associated with the belief that with just one “superpower” – a benevolent United States of America – would come peace. That turned out to be an illusion, based on the assumption that with the U.S. policing a world devoid of any other super power, a “peace dividend” would allow a shift to domestic priorities such as full employment, general economic growth, and pursuing the “good life.”

Well, that didn’t quite work out as imagined. Military spending continued to grow as concerns about managing “limited conflicts” and retaining global military dominance persisted. A variety of apparent “one-off” incursions, invasions, and interventions, in various parts of Latin America, Africa, and the Middle East, kept the U.S. military quite busy. So called “defense spending” did not slacken. Through the latter half of the twentieth century, we had over seven hundred fifty known bases in other nations, according to Chalmers Johnson, a renowned historian and former U.S. intelligence consultant. Johnson raised his concerns about the over-extension in his book, Blow Back.

The growing U.S. global interventionism certainly had its blow back in terms of rising resentments over both military and corporate incursions into many nations, focused mainly on gaining control over the resources needed to continue the economic growth that was the keystone in the U.S. economy. Particularly resented were the U.S. efforts to dominate and control the flow of oil in the world economy, and the continued propping up of kleptocratic regimes. The U.S., as the leading economic actor, required ever-growing quantities of oil. The vast oil fields in the U.S. had begun to decline and talk of “peak oil” grew.

Industrial Capital Transformed the World

There is, of course, much more to the story. That has to do with the continuing cultural illusions of global authority sustained by military-industrial elites, which resulted in both clandestine and overt efforts to control other nations. “Manifest Destiny” lived on by other names, even as the U.S. suffered the attacks of 9-11 and expanded its response to a global “war on terror,” with no boundaries and little success. Yet, one force drove the global struggles for power, the necessity for economic growth to perpetuate the accumulation of wealth.

Underlying it all, a great contradiction and looming crisis developed, at first hardly noticed, then widely denied, and continually misunderstood as the endless-growth economy and wars of choice persisted in the face of growing evidence of their absurdities and failure.

Polanyis Great Transformation_chart

Image credit: SlideShare

In 1944, Karl Polanyi published The Great Transformation. The book received little notice despite its profound implications for the trajectory of the industrial era. Polanyi’s deep research on the industrial revolution and its aftermath led him to conclude that a fundamental unresolved conflict had resulted from the requirements of industrial capital as it overpowered all other elements of society. He noted that various political administrations attempted to protect society from the damaging transformation of human life caused by the expansions of industrial capital. Such efforts included the English “poor laws,” and later the New Deal that responded to the crash and Great Depression of the 1930s in the U.S.

Polanyi did not find an ultimate solution to the “creative destruction” of industrial capital. Neither did the economists and politicians who ignored his warnings. Instead, the consequences have gradually emerged as the global crises of economics, ecology, and climate we all must now face.

The New Great Transformation

The clash between the now global system of economic growth and the damage it does to populations around the world as it enriches the few, is coming to a head. But the damage now reaches far beyond the direct suffering of excluded humans. Both the endless extractive plunder of the resources and living Earth systems we call ecologies, and the ever-growing systems of manufacture, transportation, consumption, and waste, have seriously destabilized ecological systems and climate systems around the world.

Neither the ecosystems upon which humans depend, nor the climate that allows global food production, can retain stability under the assault of the global industrial system. We have already reached an extreme turning point. Humanity and the living Earth systems upon which we depended for so long, have entered a New Great Transformation. We caused it and we have done little to control it. But we must.

The Radical Turn

Only by taking a Radical Turn in the ways humans live on the planet can we begin to control the extreme threats to our very existence we have caused. Yet we continue to see things like resource depletion and climate disruption within the framework of the failing utopian dreams of endless progress through technological innovation and economic growth. Instead, we need to apply what we know from the best science with the necessity of transforming human economies into ecological communities. That means massive reductions in energy consumption and waste.

We must both stop the earth plunder and achieve negative carbon emissions rapidly and restore the many ecological systems that we have damaged so severely. Those systems continue collapsing as nations debate who should take how much responsibility for achieving inadequate global warming targets. Yet, public discussions almost never involve how nations and communities can achieve the necessary radical reductions in ecological and climate destruction. Hardly ever are methods of ecosystem restoration discussed. The denial of the necessity of a Radical Turn in the organization of humanity on Earth continues.

What is Wrong with Economic Growth?

I read a report in Forbes Magazine on the sluggish character of the current recovery from the 2008 financial crash, which lamented its exceptionally weak economic growth. Apparently, we continue slogging along in the weakest recovery since 1949. Since the Great Recession technically ended in 2009, average GDP growth has averaged only 2.1%. In the September 13, 2016 issue, Forbes staff writer Rich Kalgaard reports that the current “expansion” is more constrained than any similar period since 1949. Why is this, and what is the meaning and importance of such a slow recovery?

0816_karlgaard-gdp-chart_1200

Kalgaard offers “three clues” as to why post-recession expansions have steadily gone downhill, if erratically, for over a half century. He blames the fact that “the rest of the world has caught up to the U.S.” He claims that the U.S. abandonment of the gold standard in 1971, is part of the problem. Finally, he offers that routine corporate allegation that “the explosion in federal regulation” has stifled economic growth. He is wrong on all three counts.

Such claims by any writer attached to Forbes should not surprise us. Explanations for economic woes from corporate utopian dreamers will always blame the federal government for poor performance of the economy. They will also project causes of slow growth onto some outside force – certainly never to corporate malfeasance or distortions of the “free markets” they worship. Never will the internal flawed logic of extractive capital or the phantom financialization of the economy come into question.

The Great Transformation

In 1944, Karl Polanyi exquisitely explained the origins and the utopian illusion of free market capitalism in his book The Great Transformation. That great transformation of human societies was what we call the industrial revolution. He also forecast the inevitable damage to society caused by the inherent flaws in the unregulated market system no longer embedded in society. The logic of its economic theory, which emerged as the intellectual justification for today’s global political economy, was deeply flawed.

Since the beginning of the industrial revolution, diverse societies have attempted to protect themselves from the damage done by market liberalism (the theory that if left to their own devices, markets will “self-regulate” and somehow produce the best result for society). The classical economists of the eighteenth century, such as Adam Smith, believed in two ideas that just never panned out in real economies.

First, they assumed that all human behavior is “rational.” That is, people will always act in economically rational ways, seeking their own best economic advantage in all their behavior. In fact, many exigencies and values in everyday life influence behavior. Economic advantage is just not the only important thing in life.

Second, the classical economists believed that markets would “regulate” themselves if allowed to do so, resulting in the best outcome for all. Adam Smith’s metaphor, the “invisible hand,” captured the essence of that belief.  Economic elites have both exploited and distorted it ever since. Due to the economic and political power of corporate and financial elites, the academic field of economics has retained those theories under the guise of pseudo-scientific analytics. All the while, “free-market” economies have failed to live up the theories of economists. Yet those theories continue to dominate economic thinking.

Utopian Dreams and Corporate Control

The theories that have controlled economics throughout the industrial era have held to these failed assumptions for centuries now, despite the overwhelming evidence against them. We now call such theories “neo-classical” economics, “neo-liberal” economics, or just plain “mainstream” economics. Despite their failings, the propaganda of the corporate media continues to glorify them as the scientific answer to all our economic problems. Corporations today routinely fight for regulations that favor their growing power, all the while claiming to seek less regulation of the markets they try to control. They never consider the social control of markets, for the benefit of society rather than for that of economic elites, as an option.

The consequences of the great transformation that subordinated society to its economic elites, as Polanyi predicted, continue to plague us today. Only this time the economic crisis converges with the climate crisis leading to global destabilization of access to resources, disrupted production and distribution of food, and escalating conflicts worldwide, all amplified by climate destabilization.

The utopian dream of endless economic growth may be the world’s greatest social illusion. However, it is also an imaginary vision that sustained itself in the centuries since the beginnings of the industrial revolution, despite repeatedly failing the test of time. Never have “free markets” operated without causing serious social damage. In each case, society has tried to protect itself from the excesses and destruction of speculative capital, with varying success.

Overcoming Illusion

In cases such as the poor laws in industrializing England or the New Deal responding to the economic and social collapse of the Great Depression, political responses protected the people from the damage caused by unregulated markets. In cases such as the communist revolutions in Russia and China, the abolishment of free markets led to their replacement by cumbersome command economies that ultimately resulted in a state capitalism unable to respond to the damage caused by its bureaucratic control of markets.

Corporatist attempts to explain the flaws of the market system, like Kalgaard’s, implicitly assume the success of a failure. Their blaming of government and outside forces disrupts any attempt to protect society from the failures of a market system in desperate need of overhaul. Promoters of the corporate economic status quo like Kalgaard demonize as “wasteful spending” or simply “socialism,” any political attempt to require the economy to serve human society rather than only itself. They are mere corollaries to the failed neo-liberal economic utopianism promoted by global power elites for their own shortsighted gain. Some serious re-thinking is in order.