American Decline


When we say the American Empire is in decline, what do we mean? Is it the decline of:

1) The U.S. economy (and consequently U.S. political power) in relation to and in competition with the other national economies, the regional groupings of economies (like the E.U.), and the aggregate world economy?, or the decline of

2) The industrial mode of economic organization of society?, or the decline of

3) The capitalist model now controlling the U.S. economy in its industrial mode (as opposed to, say, a socialist model whether of democratic form or of command form as in China)?, or the decline of

4) The competence of the economic managing elite, and the influence of white males as the demographic group devising and directing public policy, controlling the national economy and ensuring their demographic group is most favored in the distribution of national prosperity?, or the decline of

5) The standard of living, physical health and security, mental state and personal development of the majority of the members of the public?

We can abstract these five aspects of a national economy, respectively, as its:

1) power,

2) organization (as an industrial mechanism or as a social relations network),

3) purpose (capitalist or socialist),

4) leadership (ability and demographics), and

5) living conditions (the typical experience of daily life).

Clearly, any person’s view of the state of the economy will depend on which of these five aspects they most identify with; and any media account of the state of the economy will be crafted to resonant with the biases of the intended audience.

Economic Power

People in the corporate and political leadership classes will gauge the health of the economy on the basis of its power in relation to the international competition. The remora class of analysts, commentators, consultants and promoters, who base their livelihoods on the sale of information and “suggestions” to the executive classes, will also fabricate their interpretations of current events on the basis of the economy’s power.

Economic Organization

Critics of the industrial mode of economics will focus on the mismatch between the performance of our current economic machinery and the human and societal needs of the public, which is required to support this economy. Ivan Illich (1926-2002) wrote three books in the 1970s (Deschooling Society, Tools For Conviviality, and Medical Nemesis) arguing quite effectively that many of the institutions of the modern industrial state impede their own supposed purposes; he focused on education and medicine in particular.

For example, the educational “funnels” sought today so as to insert more knowledge more quickly into student minds are so burdensome (too much homework, “one-size-fits-all” regimentation, politically circumscribed curricula) that they work against the natural impulse to intellectual exploration by children and young adults, and rob them of the time to follow their natural inclinations toward discovering and learning at their own pace. Children are conditioned, programmed and trained to be passive receptacles rather than being nurtured to become self-directed learners and creators.

Another example of industrial mode counterproductively is the high-volume production of automobiles, which enables suburban sprawl. The unavoidable result is the clogging of increasing longer commute routes between suburban homes and city jobs. The losses to individuals in hours-per-day of living-time spent commuting, and the societal costs in air pollution and the national security liability of oil dependency, are all well known.

A “convivial” (Illich’s term) solution would be to group residential and work areas close together within smaller well-planned cities and towns linked by networks of intra-urban and inter-urban public transportation systems (trolley, bus, train). Such convivial towns and neighborhoods (structured around the natural scale of human interactions) would harken back to earlier times when every city block was not far from a park, and had a bakery, produce store, meat and fish store, druggist and newsstand along it or “just around the corner.”

The industrial mode requires that people serve the efficiency goals of a delivery system so it operates at its lowest cost per item moved. For example, the “big box” stores one must drive to, because they are beyond walking distance from home, and because no one can carry all the bulky items and large quantities one is required to purchase in order to get the array of supplies needed for home-life. How much easier stepping off a bus or trolley a block or two from home after work, and within half an hour buying one easily-carried grocery bag filled with all the supplies and fresh food needed for the next few days.

Another Illich concept is that of the “radical monopoly.” This occurs when a technical system or method appears to be most effective at meeting some common need, and as a consequence of its popularity makes alternatives so economically disfavored that the use of the dominant technology becomes effectively mandatory. This might be acceptable in the case where a more convenient technology replaces a less convenient one, such as personal computers replacing typewriters; but it might be detrimental when the radical monopoly consumes large amounts of energy and pollutes (which we could recast as “requires a wasteful consumption of environmental potential”). The automobile transportation required by suburbia is one such radical monopoly.

Another radical monopoly is western medicine in the form of a pharmacologically and technologically intense industrial mode of centralized medical practice. A convivial alternative would be to have doctors (and their clinics) distributed throughout the well-planned towns mentioned earlier, so that one lived on every block, and every resident would have their “personal physician” living within walking distance. Hospitals would still exist, but patients would most likely enter them as a planned visit arranged by their local doctor, rather than as the only option in an emergency. This latter health care system is used in Cuba.

People address the problems of their daily lives by applying a wide array of tools: hand tools, kitchen and food storage appliances, transport vehicles and transportation systems, electronic devices and electrical power networks, houses and housing systems, drugs and medical devices and health care systems, and many other technical entities from simple pocket knives to trans-national social, monetary, judicial and government systems. Illich called all such entities “tools.”

His central point was that “A convivial society should be designed to allow all its members the most autonomous action by means of tools least controlled by others.” Illich chose the term “convivial” to designate the opposite of “industrial productivity,” his concept of a society of autonomous and creative interaction between people, and between people and their environment, “where individual freedom was realized in personal interdependence.”

Tools that allow for many possible uses, as determined by the creativity of the user, and are not restricted to a narrow purpose by their designer, are convivial. Simple hand tools, like a hammer, are convivial tools. More complex examples are the telephone, in that the telephone company cannot restrict the nature of your conversations; and AC electrical power, in that the power company has no control over what you plug into an electrical outlet. In contrast, machines made for industrial productivity can only be used in a few ways, which is the intent of the designer so as to control and “own” the benefit of the tool’s use. The specialized machinery in any factory assembly line, big box stores, and “personal” computers with proprietary and purposely exclusive operating systems are examples of non-convivial tools. Non-convivial tools require humans to become their servants, who operate them in set ways to achieve unique purposes of benefit to the tool designer.

It is easy to see that centralized systems of supply (e.g., food) and service (e.g., medical) are industrial and non-convivial, they require people to “line up” and operate them in a set fashion (e.g., through inflexible bureaucracy, and customer service telephone holds), so the system providers can minimize their costs and maximize their returns. Conversely, decentralized systems of supply and service delivery — as we envisioned earlier in our hypothetical well-planned towns — would not operate at the lowest cost physically possible per item moved, but they would enable a much richer and freer living experience to the wide variety of people who were using and paying for these systems. This is conviviality.

Economic Purpose

An economy is a man-made procedural structure integrating the operation of the financial and commercial interactions engaged in by the members of its society. Every economy, however primitive and disorganized, or sophisticated and highly organized, is an artificial and intentional construction. It is built to a purpose by people, it is not an organism arising out of nature. So, no economy is based on natural and unbreakable laws. Every economy is a game, and is rigged. Just exactly how any particular economy is rigged is the purpose of politics.

Generally, economies are recognized to serve two purposes: capitalist and socialist. The capitalist purpose is the accumulation of private profit at general expense, and the socialist purpose is the support of varieties of social and humanitarian needs at general expense.

Most national economies today have some mixture of capitalist and socialist purposes, though usually the capitalism dominates. For both, the industrial mode is more popular. Capitalist big box stores aim to maximize the profits to the owners, while socialist big box stores aim to minimize the cost to the state for distributing the goods they dispense. Similarly for capitalist and socialist service dispensaries in the industrial mode (e.g., health care).

Both capitalist and socialist economic purposes can be organized in either the industrial or convivial mode. The socialist purpose industrial mode was forcefully promoted by Stalin. As Illich wrote:

“In 1931 Stalin translated ‘control over the means of production’ to mean the increase of productivity by new methods used to control the producer [the subject population]? Since then a socialist policy has been considered one which serves the industrially organized productivity of a socialist country. Stalin’s reinterpretation of Marxism has since then served as a form of blackmail against socialists and the left.”

Fifty-three percent of the U.S. federal budget is spent on pure Stalinism, known simply as the Pentagon, a non-convivial radical monopoly used for political intimidation.

Social Security is another example of a socialist purpose within an otherwise capitalist U.S. economy, that purpose being the dignified management of the transition from taxpaying productive life for old people to their taxpayer-supported maintenance and death. Another socialist purpose proposed for the capitalist-dominated U.S. economy, but so far rejected, is that of universal health care. Publicly funded education through college and child-care are similarly as-yet rejected socialist purposes (note that socialized child-care is a way to ease the strain of industrial mode employment of women; the convivial alternative is socializing the costs of mothers caring for their own children).

Realize that all of these socialist purposes can be addressed in either an industrial or a convivial way. Too often the choice between an industrial organization or a convivial one is ascribed to either a capitalist or socialist motivation (whether as a recommendation or criticism).

This author’s preference is for convivial socialism, probably because he lives in a capitalist-dominant industrial economy.

Economic Leadership

The leadership classes of the United States are disproportionately populated by white males, and also include attendant females and accepted minority individuals (tokens) who service the class-race ascendancy imperatives. The whys and wherefores of this are well known. The essential public responsibility of an economic leadership class is to be competent (and, it should go without saying, to be honest).

Economic Living Conditions

The conditions of daily life in the U.S. are noted and reported on by the journalists of ethnic minority and working class life. At this time there is an economic depression for the working class because of the collapse of the housing market and financial bubble of 2007 [The Emergency Economic Stabilization Act, which implemented the $700 billion emergency bank bailout Troubled Asset Relief Program (TARP), was signed into law on October 3, 2008], and because of the permanent loss of U.S. jobs outsourced to China and other minimum labor-cost economies.

The U.S. population has a capitalist utility as a market — a mass from which to extract cash and dump goods into — but this population is largely unnecessary as regards productivity (Pentagon industries excepted). Much cheaper foreign labor can produce the goods needed to absorb the retail cash from the U.S. market. How the U.S. population is supposed to get this retail cash in the first place does not seem to be a matter of concern for U.S. capitalism’s economic planners.

Food, energy consumption and entertainment, often in combined forms such as “fast food,” flashy oversized automobiles, giant plasma-screen home-theater systems and hand-held video-viewing telecommunications devices (telescreens aplenty), are popular retail goods. Like the soma and feelies of Aldous Huxley’s Brave New World, they serve the political purpose of pacifying the U.S. population so it conforms itself to the service of the capitalist industrial mode economy that profits from them. In rural communities in California’s Central Valley, Mexican-American children of farm-worker parents play with iPods in homes with dirt floors.

Decline And Expectation

The experience of economic decline is a matter of expectation. Investors in stocks, bonds, real estate and currencies might fear a decline of the U.S. economy when the productivity of foreign economies surges relative to that of the U.S. Changes of this type are the result of: continuing progress in less-developed nations, changes in labor and resource availability, the unexpected twists and turns of international politics, and the occasional influence of geophysical forces (e.g., natural disasters and climate effects).

Investors might also fear a “downturn” of their expectations if there is a serious possibility that sectors of the economy might be reorganized in a convivial fashion (meeting people’s needs instead of just extracting cash from them), or worst yet become nationalized.

However, if a working class family is now covered by an industrial mode national health care plan, it could easily experience better economic conditions even if the cost of the plan actually reduced the national gross domestic product, and the economy’s power relative to the international competition. That family would feel even richer if their health care were available through a convivial system of neighborhood-based physicians and clinics, even if the Wall Street Journal were to assure them that they were now living in an even weaker national economy. In reality, no wealth would be lost. Quite simply, the profit potential of investor fantasy in an industrialized mode capitalist economy would have been used to provide the people-centered national health care benefit. A potential wave of private profit, and chips for financial speculation, having been smoothed out into a rising tide of socialized benefit.

This is an evolving planet, and some can view changes in demographics as an economic decline. This is race-based thinking, something like tribalism; it is primitive, ignorant and very popular.

The fertility rate of whites is lower than that of nonwhites in the U.S., and the fertility rates of northern latitude and industrialized countries are lower than those of less-developed and tropical latitude countries. This is the glacially advancing demographic steamroller that flattened the apartheid regime of South Africa, will eventually inundate the Israeli colonial project in Palestine, and is darkening the complexion of North American and European life.

For some of the most insular and least cosmopolitan populations of white North Americans, the visible changes in the complexion of the leadership classes — still predominately white but now routinely mixed in with non-white personalities — is too jarring a reminder of their own social and economic stagnation, and they express their resentment over their own unacknowledged backwardness by a rejection of any society with nonwhite members of equal status. This in turn is voiced most honestly as simple racism (against Latinos, blacks and muslims in the U.S., and muslims and blacks in Europe), or disingenuously nuanced as anti-government sentiment, by which they mean opposition to the socialized purposes of the national economy because such socialized activity is by definition racially integrated. These are the Tea Party people.

These resentful whites, angry at the imagined loss of their assumed race-based socio-economic privileges rail about the illegal immigrants (a.k.a. Mexicans) “taking” jobs and “getting free government benefits” which they have to pay for through their taxes (this is usually just the overblown hyperbole of simple misers resenting taxation). Yet, they never seem perturbed that 53 cents of every tax dollar they hand the government goes straight to the Pentagon and funds the most wasteful and destructive subsidy on Earth, at a societal cost far beyond that actually created by undocumented immigrants.

But, these resentments grow out of fears born out of ignorance, and logical argument can do little to break through to the emotional engine driving this mindset. These people see loud, uncouth and very rich nonwhite people on their televisions; they see as their president a black man whose sophistication and intellectual attainments they will never match; in their towns and shopping malls they see Mexicans, walking in large family groups and chattering in an undecipherable lingo, and obviously spending money, where did they get it?

It all comes back to hammer the painful point home: “things aren’t as I expected, I’m not special, and they’re making me pay to have it this way.” This mindset sees national social and economic decay in the darkened complexion of the national demographic, and harrumphs about “taking the country back.” Tea Party politicians will try to actualize their faction’s guiding delusion by disabling as much of the socializing purpose of the national economy as will return the country to a more racially segregated and white-favored past, without the loss of subsidies popular with white people, like Medicare and the military. In this work of social regression they will be the useful idiots of the capitalist ownership class, for whom industrialization is profit, conviviality is taxation, and socialism is expropriation.

Decline? Yes Or No For Five Factors

1) Decline of economic power? Yes.

China and India combined hold 36% of the world population (2.49B of 6.89B). The 2010 GDP third quarter growth rate for India was 8.9% and for China 9.6%. These rates are representative of their respective economies during the last three years (though all economies experienced some dip near the 2008 U.S. banking collapse). The growth of U.S. GDP during the 2010 third quarter was 2.6%, and the average U.S. growth rate over the last 15 quarters was 0.49%. The U.S. population of 311.9M is 4.5% of the world total.

If we take the GDP (in 2009 $) of India, China, the U.S. and the World ($1.31T, $4.99T, $14.12T, $58.14T) and divide each by their respective population (1.155B, 1.331B, 0.312B, 6.893B) we arrive at a productivity per capita (GDP/#) of, respectively: $1134, $3749, $45,270, $8438. Note that we are assuming that every single person in the country (and World) is a “worker” who contributes to the GDP; hardly exact but usefully indicative.

We can compare the performance of two different economies by forming ratios from pairs of GDP/#, to arrive at:

— the number (at top of the resulting fraction) of U.S. workers that produce the same absolute output ($ amount) as

— the number (at bottom of the resulting fraction) of workers from India, China, the U.S. and the World, respectively,

— as: 1/40, 1/12, 1/1, 2/11.

So, the output of one averaged U.S. worker equals that of 40 averaged Indian workers (as defined here), or 12 averaged Chinese workers; and 2 averaged U.S. workers produce as much as 11 averaged World workers.

Performing the same exercise but this time comparing India, China, the U.S. and the World to the averaged World worker, we find, respectively (World/country): 2/15, 4/9, 11/2, 1/1. So, 2 averaged World workers produce as much as 15 averaged Indian workers, 4 World to 9 Chinese, 11 World to 2 U.S. (and 1/1 for World to World).

If we assume that the third quarter 2010 growth rates remain constant, then (by simple exponential extrapolation) the Chinese economy will match the total output of the U.S. economy in 15.8 years, at $21.2T (unchanging $).

By a similar extrapolation, India’s economy will match that of the U.S. in 39.9 years, at $39.4T. The estimated averaged Chinese “worker” productivity in 15.8 years will be one quarter that of the averaged U.S. worker then, and a similar calculation for Indian productivity at GDP parity yields 23% that of the U.S. in 39.9 years. (These calculations used national populations projected for 15.8 years and/or 39.9 years in the future; the projections were calculated using constant population growth rates of 1.3%, 0.5%, 0.9%, respectively, for India, China and the U.S.)

The sheer size of China’s population compared to that of the U.S. means that it must inevitably outpace the U.S. economy, as long as China’s productivity increases over time (and there is no revolutionary improvement in U.S. productivity). India follows the same trend but at less than half the pace.

2) Decline of economic organization? Neutral (yes and no).

The U.S. economy is as highly organized as it ever was, in its overwhelmingly dominant industrial mode. There has been no overall decline of organization, nor modal shift to conviviality (the no part).

However, there are significantly fewer industrial sectors today than existed three decades ago. The range of possible industrial production has diminished because of the permanent loss of major portions of the manufacturing base (the yes part).

In brief, civilian manufacturing industries have largely been “outsourced” to replace American labor with lower-cost foreign labor (primarily Chinese). Those portions of the domestic productivity base that have not been abandoned are strictly, even obsessively, organized along the industrial mode.

The haste, one might say panic, with which U.S. capitalist planners tossed domestic manufacturing labor overboard and walked away from domestic manufacturing physical plant suggests there has been little useful thought about the future economic impact of a swelling population of the permanently unemployed, and expanses of decaying industrial ruins (http://jalopnik.com/5110995/the-ruins-of-detroit-industry-five-former-factories).

The outsourcing gimmick has kept “the economy” (as experienced by U.S. capitalism’s management, ownership and investor classes) robust and competitive (factor #1). However, the detritus of mega-capitalist “open loop” schemes of wealth generation, in this case entire industries and their skilled domestic labor populations, is just too large a burden to dump onto the public for reabsorption and regeneration, without cost to the schemers. There will have to be “taxes” on future “earnings” to help pay for the reintegration of the jettisoned industrial capacity into a new type of all-are-included domestic economy.

The political conflict at hand is between capitalist exploiters and speculators, who wish to escape paying for the waste and societal damage of their schemes, and the working class taxpaying public (most of the people), which deserves receiving sizable payment for damages caused to the commonwealth, because the people of that public will do all the work of reprocessing abandoned industrial ruins and unemployed industrial workers into a new regrouped national community, with cleaned-up reusable sites, and revitalized neighbors, colleagues and co-workers.

3) Decline of capitalism and shift to socialism? No.

It would be wonderful, but circumstances have yet to decay to the point where they batter most Americans severely enough so they question their childhood indoctrination to capitalism (think Berlin or Tokyo, 1945).

Health care is the single issue that draws most interest to socialism in the U.S. today. The pressure for socialized medical care arises out of the stresses of the industrial mode of employment and service delivery.

I suspect that most Americans (U.S.) would lose interest in socialized medicine if they had access to a convivial capitalist health care system they could afford. An individual might state it this way: “If I have to be just one of the herd in some industrial medical system, then I’d rather it were government-run and taxpayer funded. At least then I wouldn’t have the added anxiety about paying for the indignity, nor even about being able to get it when I needed it. However, if I could get quick and easy access close to home anytime, and a professional to deal with the hospital for me when that was needed, I’d be happy to pay dues comparable to a swim club.”

4) Decline of economic leadership? Yes.

There has been an absolute decline in the competence of economic leadership, certainly since the days of John Maynard Keynes and John Kenneth Galbraith, and especially since the onset of the Reagan Administration (and Thatcherism in England), with its rabid Chicago School ideology (e.g., Milton Friedman’s “free market”).

The logical terminus of Reaganomics was the bank crash of 2008, though today’s economic managers remain witless before it, their minds still possessed by the free market cult. How can anyone think that the economic managers, ministers, experts and regulators, who collectively gave us the economic crisis of 2007 to the present, are competent? Unfortunately, neither these incompetents nor their Reaganomic mindset — which has eviscerated the American economy as a living experience, as opposed to an investment climate — have been swept off the scene so an authentic recovery and effective reforms can be started. Present U.S. fiscal policy is the equivalent of trying to blow air back into a burst balloon. Somewhere, Santayana’s ghost is laughing.

As described earlier, from a Tea Party perspective there has been a decline of the leadership elite by virtue of demographic titration. This is really a public health problem regarding epidemic mental illness.

5) Decline of the standard of living? Yes.

This is the great theft in the U.S. during the late 20th and early 21st centuries. A specific instance is the abandonment of the American skilled industrial laborer, but the overall scheme affects every working person: the socialization of vast speculative losses and the costs of capital flight from civic responsibilities.

As long as the political problem of reintegrating the U.S. economy, so it includes all workers in an equitable sharing of economic gains, remains unsolved, even unaddressed, then the standard of living will continue to decay, and with it prospects of long term profitability even for members of the elite economic classes.

“Big capital” uses its money to forestall any political engagement on this fundamental issue, and too much of the public accepts being distracted and pacified by high-tech trinkets, toys and endless entertainment streams, to focus on the work needed for their own education in reality, and the commitment needed to organize politically in the public interest.

When a quorum of the public wakes up (Yoo Hoo! Stop watching and believing TV!) and comes together to take action, the capital interests will be forced to negotiate for their survival, and that will make it possible to actually reform the economic machinery of the country, to re-rig the game in the public’s favor.


1, 2, 3, 4, 5, respectively: yes, neutral, no, yes, yes.

The economy-as-lived by Americans has declined steadily for three decades, and sharply after 2007. This economy is in a depression now, with no indication of imminent improvement. Further decline is inevitable unless an extensive recovery scheme is implemented (think non-militarized Keynes plus significant financial reforms plus large and permanent cuts in military spending).

The economy-for-investors, which hosts financial speculation, is growing slowly. However, it is a non-convivial shell game that excludes a large population of unemployed and underemployed people, except as members of a public dump used to absorb cast-off banking corporation liabilities and environmental damage. This is politically unsustainable in the long term. An economy that produces livelihoods for everyone is needed.

The long term solution to both problems is a reorganization and reorientation (a.k.a., ‘re-purposing’) of the U.S. economy, by dissolving and recombining the economy-as-lived and the economy-for-investors into a re-integrated whole. Of necessity, the result would have significantly more socialism and some more conviviality. A public that could accomplish this reform would understand that “lost” potential profits (which could have been had from the old economy-for-investors) would only have gone into risky and destabilizing gambling activities, and “lost” potential subsidies (like the excessive Pentagon favoritism in the old economy-as-lived) would only have gone into wasteful military adventurism and consumption. The new economy would produce living wealth.

How do we achieve this? Politics. Impossible? Remember, the barriers are all in our minds, collectively.

MANUEL GARCIA, Jr. is a retired physicist and develops ideas independently, his e-mail is mangogarcia@att.net

More articles by:

Manuel Garcia, Jr, once a physicist, is now a lazy househusband who writes out his analyses of physical or societal problems or interactions. He can be reached at mangogarcia@att.net

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