Economist letter re big govermemt

January 29, 2010

The Economist
25 St. James St.
London SWIA IMG


I hope The Economist will reconsider its strong call to overcome those persuasive reasons to support the gaining strength of the “market failure school recited in “The Leviathon stirs again”, and reverse the trend to the “growing state” (January 23rd).
Surprisingly, the Leviathon omits the most important reason that determines the proper size and role of the state—the human needs created by the developing human mind.
Those needs, and the proper size and role of the state, present basic questions that are in a paralyzing state of conflict America. They have less relevance in Britain and even less in China.
The point is that in the West each civilization developed through a distinctive structure of the state that responded in its turn to the sequence of needs created by the developing human mind. The vision and purpose that brought it to its original unity and prosperity created the special interests that eventually dragged it down by exploiting for their own benefit the system they themselves created-- the priests in Egypt, the imperial warriors of Rome, the imperial colonizers of Britain. The corporate oligarchs of America had to be next, and the dire consequences, stating with the Great Depression, were to be expected. The policies of the state are constrained by the interests of large corporations and their wealthy owners in an unstable environment of growing inequality.
According to Abraham Maslow, the need for esteem was the driving vision of that American system–wealth and possessions acquired by hard work. The next stage is the need for mature "self-actualization" in a digitalized information age, which means a society freed by the
miracles of technology to concentrate on quality of life, based not only on the good physical infrastructure needed for wealth creation in the previous age but also on a social infrastructure of health care, child care, leisure time, and comfortable retirement, a society unachievable by the American people even by a party elected by a solid majority and controlling both the branches of the Congress. The important question elsewhere is what should the growing state bring with it.
To the developing human mind in Western Europe, good physical and social infrastructures are essential for profitable competitive global business, but not nearly as rewarding for private investment or as effective for creating jobs as investment in automated production, financial manipulation, and global business in emerging markets, unburdened by the costs of social infrastructure (like health care for employees in America).
So to make that work requires government funding for social infrastructure and other support for competitive business, like higher education and advanced innovation. The resulting higher profits support higher progressive tax rates, and good health and child care, paid parental leave and more leisure time lead to a more caring, healthy, and creative communities. Like it or not, the future is going to look like stake-holder capitalism and bigger government in the most advanced Western European countries.
These lessons of history, rejected in America, are already being heeded in Britain, accompanied by some discord from declining traditionalists. History tells us that Thomas Jefferson had it right when he called for laws and institutions to keep pace with the development of the human mind.

“The education of the human race, represented by the people of God, has advanced, like that of an individual, through certain epochs, or, as it were, ages, so that it might gradually rise from earthly to heavenly things, and from the visible to the invisible.
St Augustine, The City of God Book X.”







. Every past civilization has been brought to its knees by the special interests that brought it to its original unity and prosperity in response to the human needs created by the developing human mind. They dragged it down by exploiting for their own benefit the system they created - the priests in Egypt,
the imperial warriors of Rome, the imperial colonizers of Britain. The corporate oligarchs of America had to be next, and the dire consequences were to be expected.
But the important question is what comes next? According to Abraham Maslow, the need for esteem was the driving vision of the American system - wealth creation by acquisition. Next is the need for "self-actualization" in a digitalized information age. That means a society devoted to quality of life: an infrastructure of good health care, child care, leisure time, comfortable retirement. Production of goods must come from investment in automation and global business in emerging markets, unemcumbered by ·social benefits like health care for employees.
To make that work requires government funding for that social infrastructure and other support for competitive global business, stake-holder representation in corporate management, and higher marginal income tax rates. Like it or not, the future is going
to look like the advanced Western European nations of France, Sweden and Denmark, for instance. Thomas Jefferson had it right when he called for laws and institutions to keep pace with the development of the human mind.

Those ignored portents of disaster demanded a more activist government to create a sustainable post-industrial society and make American business structurally competitive on the global playing field, including post-industrial infrastructure with government-based universal health care as well as bridges and other industrial age infrastructure that had long been sadly neglected.
But laissez-faire is not a broken system; it is merely obsolete in a rich and digitalized part of the world that has passed it by, as Barack Obama clearly understands. Perhaps comprehension would be easier if we see the flow of history as growing-up toward a kind of maturity that makes the tired old labels of left and right give way to —as you rightly put it — “Not what you aim for, but how you do it”.
So its long past time to dismiss that bogey man of big government. This post industrial and post modern world demands more activist governments to create a sustainable post-industrial society and make American business structurally competitive on the global playing field, including post-industrial infrastructure with government-based universal health care as well as bridges and other industrial age infrastructure that had long been sadly neglected.
Perhaps all that would be easier to accept if we see the development of the human mind as growing-up toward a kind of maturity that makes the tired old labels of left and right give way to the pragmatism of do what works, or,— as you once rightly put it — “Not what you aim for, but how you do it”.