For the second time this year, the United States government has failed to solve a simple problem: how to provide basic services to the population while keeping the government solvent. Added to that is a complete absence of policy to restart the American economy, up to recently the most dynamic and inventive in the world.
What happened to our government?
One easy answer is that America has entered a period of terminal decline. With this assertion go the usual nostrums about the decrepitude of the West, the “Asian century” and the global power shift to China. But evidence supporting such simplistic explanations is absent.
First, America is not alone in this predicament. Both Europe and Japan suffer from a similar malaise. “Emerging” nations such as India and Brazil are also facing major difficulties. And the coming years will show whether the universally admired “Chinese model” can survive the havoc Chinese policy have visited on the rest of the globe and on China itself.
None of these nations lack resources, technology or creativity, yet each is rapidly getting bogged down in problems both internal and external. Neither multiple summits, nor changes in economic policy, nor financial manipulation appear capable to shake the growing political and economic inertia. Governments remain ineffective in the face of political opposition (as in the Middle East), corruption (Russia), massive social inequality (China) or complete political gridlock (USA).
Is government, as we know it, dying? Is the great experiment in industrialization, democracy and global communication bogged down in problems that appear eminently soluble, yet for which no working solution is forthcoming?
This situation is all the more surprising as it seemed we had the problem licked. The 20th century had been dominated by the ideological struggle between socialism and capitalism. But the establishment of hybrid systems, combining the seeming advantages of both approaches, appeared to succeed. For a generation we had both social provision and growing economies. Then it all went downhill.
The key question is whether the capitalist-socialist hybrid provides a stable balance, or only a temporary fix. The struggles of the last two centuries indicate that capitalism and socialism, as ideologies, are antithetical. The first is creative but exacerbates inequality; the second delivers social fairness, but coupled with low efficiency. Adding socialism (“big government”) to a capitalist society spreads the wealth but stifles creativity. Grafting capitalism on a socialist structure provides growth but destroys equality.
The mixture is unstable, resulting in the dilemma affecting both “ex-capitalist” America and “ex-Soviet” Russia: both societies are being stretched between business clamoring for greater freedom (and license) and the demands of the populace for government protection and largesse – and insurmountable deficits.
While this insoluble dichotomy was developing, a new condition has arisen, which is the fatal flaw of the hybrid structure: both capitalism and socialism lead to the concentration of political power and economic resources. Such concentration is deadly.
Once concentration reaches a certain point, it eliminates competition. The priority of those at the top becomes the maintenance of their dominant position. This excludes the creative and talented in favor of the incompetent and corrupt, creating a growing gap between the population and the elite. Resources are increasingly concentrated but their efficiency of use rapidly deteriorates.
While both government and economy drift, discontent and anger accumulate at the base. This is the disease that increasingly affects the world’s powers, from Washington to Beijing, from Delhi and Tokyo to Moscow and Brussels.
There are two ways out: reform and revolution. We know the dangers of the latter, so the only acceptable choice is reform. But what does that mean?
The tension between the two options is already playing out in the Middle East, where, for both historical and political reasons, excessive concentration has been endemic for a long time. But instability is spreading to other venues, because the problem is, and increasingly so, the same everywhere.
We in America are facing a seeming replay of our original Revolution: the struggle between the rights of the people and the ambitions of a global, imperial elite. Our Founding Fathers gave us the means to resolve this conflict – it is high time we start addressing the issue.