Monday, March 09, 2009
Six hundred years ago the merchant bankers of Venice sent their representatives around Europe and they duly reported back conditions, both financial and political, to their employers and to the State. Other banking networks, such as the Medici of Florence, quickly followed. The Pope had a built in intelligence network at his disposal. Jewish banking families, such as the later Rothschilds, worked with governments and had representatives across political borders, so the idea that political risk management is something new to consider or that it hasn't always been seen as tied to financial risk seems forced. Conspiracy theorists may well consume trees or electrons speculating on whether the Bank of England ran the government or vice a versa. If we keep this thread open long enough an Illuminati enthusiast is sure to come in. So what changed in the period just before the First World War that might have been repeated recently that would impair the abilities of financiers and governments to dispassionately collect and act on available information? Perhaps in both cases a certain level of moral enthusiasm was allowed to infect the judgements of a critical segment of people in a position of influence. In the period leading up to WW-I a second episode of Romanticism aroused people of all classes, but especially the upper middle classes. It expressed itself in a reinvigorated drive for Socialism, Nationalism and Pacifism. These movements not only caused the conditions that lead to the explosions of the 20th century but they might have deformed the ability of corporate Directors and government Ministers to act at critical junctures. After all it was their own children who were often entangled in these movements. These forces were not dispersed by the two world wars, in fact they were empowered and now have added to them an ancient resurrected movement in Islam and a newer offspring in Environmentalism. However for a period the apocalyptic threat of the Cold War focused government activity and permitted rational financial considerations to proceed largely uninterrupted. That restraint is now lifted and the energies of both finance and government have been blocked or dissipated in numerous directions that prevented a timely dissemination of the available information or delayed those who should have known better from acting in a more timely manner.
The secret is to convince the Democrats to do what FDR did, that worked. That does not mean vast armies of Obamajugend in rural CCC work camps, a new WPA, and a new National Recovery Act. Those, despite how nice the Appalachian Trial is, did not work. What did work was quadrupling the armed forces and cutting lots of steel to build hundreds of ships and thousands of tanks and planes. Cutting the domestic agencies down to FDR size and rebuilding the military would stimulate the economy.
The American political system as become more centralized, less flexible and more fragile over time. What was intended in the 18th century would have been far safer under the circumstances. The idea was that people would be organized into communities of up to 50,000 citizens each, that would be about the size of the ideal Aristotelian polis, with maybe 5,000 qualified tax paying or property owning voters. In that community each voter would know and select the following office holders:
1) Mayor or Selectman, in a Council type government
2) Sheriff or Marshal
3) Prosecutor, who was the communities intermediary to the State administrative authority
4) Judge, one for matters criminal, civil and probate.
5) Coroner, essential for determining inheritance claims and other legal issues
6) State Representative
Those offices were all selected annually and represent the span of control for effective local Democracy.
In addition there were biennial elections for Congress and Governor and some provision for an Upper House in the State Legislature. The State Legislatures selected the United States Senators and the Presidential Electors. Everybody was supposed to know who they were voting for. A failure at one location, even at the Federal level, would not bring down the system.
The problems are global and interconnectedness is a good thing on many levels. We need to both trade and bring in immigrants and collect intelligence on a global scale. The vulnerability comes not from the links but from the concentration of wealth and power at a few critical nodes. Our antique 18th century heritage could provide some robustness to respond to failures by a 0 in the Oval Office. The modern technology of the internet should make a more broadly and local based polity more feasible now than it was one hundred to seventy-five years ago when this centralization of authority accelerated.