But while The Economist’s position is a welcome one, its radical centrism is not radical enough. When faced with an unsavory binary choice, one should look to change the landscape behind it to create new options. The Economist, however, is looking to the wrong choice.
Their proposed solution consists in policy proposals that adjust government efforts at tax reform and economic stimulus. But while many of these proposals are beneficially novel--though I can’t back them in condemning teachers’ unions full stop, nor in their opposition to “distortionary” labor laws--they still assume that our only option is to create state policies that will solve inequality. For all their innovation, The Economist is still depending on the state as it existed in the 20th century.
The fact of the matter is that the state cannot control the world as it once did. The economy has become unmistakably global, as everyone knows. But it is only now that the disjunction between state enforcement of economic policy and global economic actors has reached the point of absurdity. The lack of power within the European nations over the still-growing Euro-zone crisis has become central to the problem, the sheer fact of an inter-national currency and a powerful inter-national central bank (the ECB) making important decisions fueling the difficulties. Legal oddities show themselves as Shell, a Dutch company, is tried in the Netherlands for crimes in Africa. The UN has long been known to be ineffective in the most necessary moments with its non-binding resolutions and Secretary-General Ban Ki-moon is now pleading emptily as war rages in Syria. But these conflicts have taken new life as non-state actors lead the charge--Ansar al-Sharia killed American diplomats in Libya, the Muslim Brotherhood and Hamas have entered political roles while maintaining influence across borders, the World Bank and the IMF exert influence wherever possible. The heavy hand of government is increasingly ineffective as new kinds of actors enter the scene, the old borders limiting state options, but not new problems.
Of course, these questions are not simply political--they are also deeply philosophical. The Industrial Revolution, notably the invention of the steam engine, changed the very makeup of human experience as it opened up the possibility, for the very first time, of truly national and even global lives, the facts of time and space becoming far less imposing. Further innovation in air travel and digital communication has grown that power exponentially. The limits, motivations, and crucial needs that defined humans at the outset of the modern state have shifted. The nature of human existence is different than it was in 1900 or even 1950--not in its essential features, no, but in the way they become manifest in social and political actions.
Why, then, does The Economist assume that inequality must be addressed by state policies? Why is it assumed, as they claim, that some degree of inequality is needed to spur innovation? Even if such a claim was true before, the nature of social interaction has changed dramatically, and thus the drives behind those interactions with them. In The Economist’s attempt to affect change, it has assumed a static human nature--a human nature that we have watched change for decades. The sheer fact of these new global actors and non-state networks alone has the potential to create novel bonds that already spur innovation.
Which is, after all, the point. We must innovate--but like any true innovators, we must take stock of the needs apparent now. Those needs are dependent upon shifting global dynamics that are largely centered outside the state. Our solutions must follow suit. We can no longer condemn capitalism as the exploitation of the factory because the factory is no longer the center of our lives. We can no longer look to the enlightened masses for a solution because the masses have been reborn in spontaneous, interconnected crowds--crowds who are often ignorant because of an overabundance of information. Old methods--state programs, command directives, official sources--have lost their power. We must rethink our problems in the terms of the new century.
As the facts of social bonds change, so does the relation between equality and growth. Our choice is no longer between capitalism and communism--both are dead.* Obviously government will continue--and should continue--to play a large role in human endeavors, but it will not be the same role it held last century. Any ‘true progressivism’, to hold any sway in the long-term, must be sensitive to these facts. We must rethink politics at its very root.
*Okay, obviously capitalism isn’t dead, nor even really dying. But capitalism is only living on because it is killing off state capitalism. It's transferring power out of state institutions and into corporations and other private actors. If anything, capitalism survives as an economic system because it’s been better able to adapt to fracturing geopolitical actors than communism--a pure state theory. But how will domestic political structures take shape with increasingly global economic actors? That is what staunch right-wing state capitalists can’t sufficiently answer.
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