This is the second in a series of articles that will be published intermittently this month. This article summarizes what I believe were the most important ideas of 2003 in the world of politics and economics. The first article in the series covered the world of blogs & blogging, and future articles will cover business, the arts & sciences, and the environment.



wal-mart dilemma
I make no apologies for the fact that this list reflects my perspective on the political compass (-8.2, -8.0). Those with conservative or authoritarian views are welcome to make their own lists.

  1. Constitutional liberalism must precede democracy, if the democracy is going to endure – Fareed Zakaria makes this point in his best-seller The Future of Freedom. The ill-advised approach of imperialists throughout history, including the US today in Iraq, of trying to impose democracy before the institutions that nurture and sustain it have been introduced and taken root, is doomed to failure. The future of Iraq is inevitably division, civil war, and more totalitarianism, and only the Iraqis can, and will, decide when they’re ready for the bold experiment with democracy, on their own terms.
  2. The alternative to ‘free’ trade is ‘fair’ trade, not no trade – The work of economist Herman Daly shows that the ‘market’ is efficient at deciding how best to allocate scarce resources to producers, but incapable of governing the equally important tasks of ensuring distributive justice in the allocation of economic products, and the optimal scale of production of those economic products. Governments, representing the best interests of their people, must be free to intervene in markets to regulate these latter two attributes of an optimal trade system.
  3. A non-violent, global, connected, consensual politic has the power to withhold consent for war or tyranny – In his book The Unconquerable World, Jon Schell cites the success of Ghandi’s and King’s non-violent activism, and the peaceful disintegration of the Soviet bloc, to argue that popular refusal to obey an oppressive government, irrational law or unwarranted call to arms can undermine the mightiest of governments or tyrants bloodlessly, and bring about needed domestic and international reforms in politics, law, peace-keeping, and social and environmental programs and institutions.
  4. Terrorism is a reaction, not an action – The work of George Lakoff demonstrates that liberals and conservatives have fundamentally different worldviews that dictate, among other things, how they believe violence and disobedience to authority should be dealt with. The conservative ‘strict father’ worldview believes in might-makes-right authority, strict obedience, and severe punishment for disobedience. The liberal ‘nurturing parent’ worldview believes that people are basically good, that fairness should dictate policy, and that consensus and discussion are healthy. Where conservatives see terrorists as disobedient children who need to be disciplined, liberals see terrorism as a symptom of deprivation and desperation, and see the need to treat the underlying symptoms (poverty and oppression) to solve the problem.
  5. Our education system breeds a sense of helplessness, acquiescence, fear, guilt about poverty, and self-loathing – As the writings of John Taylor Gatto reveal, the education system is, despite the valiant and well-intentioned efforts of teachers, the means by which the vast majority of people today are subdued, dumbed-down, kept in line, and reduced to passive consumers instead of active citizens. Without reform of the education system, other political, economic and legal reforms will be ineffective.
  6. The search for endless productivity improvement is a race to the bottom – In its study of the success of Wal-Mart, Fast Company magazine showed how the company’s single-minded preoccupation with ever-lower prices at any cost was driving the North American economy to massive offshoring, the sacrifice of quality, and the bankrupting of some very good companies. The spiral has been called ‘the race to the bottom’ and I illustrate it in the diagram above that I call ‘The Wal-Mart Dilemma’. We need to strike a balance between low prices on the one hand, and the preservation of North American jobs and high product quality on the other. If we don’t, Wal-Mart will decide for us, and their choice is clear.

US income

  1. The American middle class is disappearing – Harvard Law Professor Elizabeth Warren’s new book The Two Income Trap shows that massive increases in costs of housing (especially in areas with prestige schools), health insurance, transportation and education have opened up a chasm between America’s ‘haves’ and ‘have nots’, most notably pushing middle-class parents to the verge of bankruptcy in huge numbers. What’s worse, the shame and stigma of bankruptcy is preventing the afflicted parents from seeking recourse against usurious lenders, or even talking openly about this growing, life-destroying problem. The resultant massive concentration of power and wealth in America (see chart above) has enormous implications for the country’s future.
  2. The next economy will support consumers holistically to solve their problems, not just sell them products – In her book The Support Economy, Shoshana Zuboff argues that what is needed is a new economic layer, a ‘re-intermediation’, between the producer and consumer, which consists of ‘federations’ of businesses and ‘advocates’ who work collaboratively to look after the busy consumer’s needs cradle-to-grave and deal with the multiple suppliers in the product/service delivery process. I confess I don’t share the author’s exuberance that such ‘support’ will be affordable by any except the rich elite, but so many people I respect loved this book and its ideas that I felt I had to include it.
  3. Our fixation with helplessness distorts our perceptions of risk and leads us to make dysfunctional decisions – In an article explaining our passion for SUVs and the dangerous feeling of invincibility they give us, Malcolm Gladwell explores the concept of Learned Helplessness — our perspective failure to realize that the risks posed to life and limb by forces outside our control are dwarfed by the factors we can control. And it’s in the media’s and politicians’ best interests to pander to this misperception — to get us focused on things like terrorism, Mad Cow and SARS that no one can really do anything about, distracting us from far greater but less sensational dangers we can, with money and effort, fix — things like air and water pollution, tainted food from corrupt and underregulated meat packers, drugs in sport and airplane cockpits, drunk drivers, kids with guns, corporate frauds, gerrymandering, and our fatally flawed education and prison systems and treatment of the mentally ill. Things that destroy hundreds of thousands of lives every year.
  4. US debt threatens global economic collapse – Even the US-dominated International Monetary Fund is now sounding the alarm that the massive and irresponsible debt built up in three short years by the Bush regime is the greatest threat to the global economy, and with it, our jobs and life savings, since the reckless conditions that precipitated the great depression.
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  1. Philip says:

    Interesting graph. Where would the Canadian or German middle class show up on that graph?Millions in income vs millions of people? US Median family income is a bit over $40,000 US 1994 dollars. I’m not sure what defines middle class but looking at the Chart produced by the US Government where Families are divided up into fifths the Middle Fifth had a family income of slightly over $60,000. A two income trap family most likely but fully 40% of US families had incomes HIGHER than that. 20% of US families had an income of over $160,000 a year. Maybe I am missing something. Money is not a real good sign of anything other than money. It is not necessarily an indicator of goodness or even quality of life. The middle class may be shrinking, first define middle class because I can see statistically that 60 Percent of Americans are at or above the median income level (the poor are really poor). The economy is in for a tough time but it ain’t the end of the world. We just got to get some real leadership back in the government. Oh and some realistic values instead of celebrating the bling bling. Americans are the worlds biggest whiners sometimes. On the way to making school and healthcare universal and free I would get rid of commercial TV. Consumerism is a disease.

  2. James Snell says:

    “The future of Iraq is inevitably division, civil war, and more totalitarianism, and only the Iraqis can, and will, decide when they’re ready for the bold experiment with democracy, on their own terms.”While I’m not disageeing with you on this point, keep in mind that following the American Revolution, the future of the U.S. was inevitabledivision, civil war, and more totalitarianism. It’s part of the process,no matter how the process gets started.”A non-violent, global, connected, consensual politic has the power to withhold consent for war or tyranny”Again, I’m not disagreeing, but just because the non-violent, global, connected,consensual politic withholds its consent for war it does not mean that the waris not justified.”Terrorism is a reaction, not an action”This is a blanket statement that cannot be completely justified. In many instances, this is true, but not in all cases. Some terrorism is an actionbred from hatred and intollerence of differing opinions. Environmental Terroristsfall into this category, as do hate crimes.”Our education system breeds a sense of helplessness, acquiescence, fear, guilt about poverty, and self-loathing”This I agree with, although I doubt you and I would agree on the solution ;-)”The next economy will support consumers holistically to solve their problems, not just sell them products”I don’t agree that this is the “next economy”. I believe that this is the traditional economy and that the current focus on just moving products is a recent trend that is failing miserably.

  3. catnmus says:

    What about the line from the upper left green box to the upper left red box? It seems to me there must be SOME way we got out of the bottom loop and into the top loop, for manufacturing and now for software development.

  4. Raging Bee says:

    “Terrorism is a reaction, not an action.”A reaction to what? It sounds like you are trying to absolve terrorists, and their supporters, from responsibility for their actions. Are you? Did wealthy heirs like Osama and middle-class professionals like Mohammed Atta have no choice but to do what they did?Terrorism is crime, pure and simple, not a “reaction” or a valid policy tool, and must be understood and fought as such. Whatever its stated objective, it erodes the very foundations of legitimate governance and concensus-building; it has irresponsibility and cowardice virtually built into it, and is less controllable and less accountable than even the most brutal army.Anyone who says that terrorism is an inevitable result of poverty, oppression, or whatever injustice is currently in the headlines, is willfully ignoring the billions of poor, oppressed people who do NOT resort to terrorism to solve their problems.There are good people out there risking their lives, their fortunes, and their sacred honor, fighting terrorism and dealing with its dreadful consequences. The very least we can do is scrap the old slogans and engage our minds.

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