FacebookTwitterGoogle+RedditEmail

On the Road to Ryan and Ruin

In the 132 years between 1797 and 1929, there was no effective regulation of U.S. economy. No federal agencies existed to control corruption, fraud and exploitation on the part of the business class. Even during the Civil War, economic management on a national level was minimal and war profiteering common. As a result the country experienced 33 major economic downturns which impacted roughly 60 of the years in question. These included 22 recessions, 4 depressions, and 7 economic “panics” (bank runs and failures).

Then came the Great Depression starting with the crash of the New York stock market in 1929. This soon became a worldwide affair which lasted until the onset of World War II. Millions were thrown out of work, agricultural production partially collapsed, and the fear of rebellion and revolution was palpable both in the U.S. and Europe.

It is to be noted that the way capitalism worked over these 132 years was a function of ideology. This was (and still is) the so-called free market ideology which taught that if the government was kept as small as possible (basically having responsibility for internal order, external defense, and the enforcement of contracts), the citizenry would have to pay very low taxes and be left alone to pursue their own prosperity. Thus, as the ideology goes, everyone would be free to maximize their own wealth and in doing so also maximize the wealth of the community as a whole.

The Great Depression was a real moment of truth for the capitalist West because it suggested to the open-minded that the free market ideology was seriously flawed. Free market practices had brought the economic system to the brink of collapse, and Russia’s newly triumphant communists represented serious competition. So the question that had to be answered was how best to modify the capitalist system so as to preserve the position of the ruling elite.

It was President Franklin Delano Roosevelt who came up with an answer, at least for the United States. Through a series of economic and social experiments he crafted the New Dealand promoted the notion of the welfare state. It should be emphasized that this was not socialism. In essence, the New Deal was capitalism with safety nets and subsidies. It meant that some entrepreneurs in areas such as agriculture, defense, and other businesses, actually got money from the government to produce their products. On the other end of the spectrum, government money was made available to keep the really poor people from starving and the unemployed solvent while they sought new employment. A national pension plan was devised in the form of social security, and bank deposits up to a certain amount were insured. In addition, new agencies were created to monitor business activities, particularly the stock market and the banks, to prevent the sort of activities that had brought on many of the economic downturns of the past. This was a major step away from the ideal of a wholly free market but most of the citizenry, with the Great Depression at their backs, understood the necessity of the New Deal. Of course, taxes would eventually have to go up to help pay for it all.

How Quickly We Forget

Essentially, Roosevelt and the New Deal saved capitalism from itself. Left to those, such as Herbert Hoover, who could not escape the paradigm of free market ideology, capitalism in the U.S. may well have followed much of Europe in succumbing to the revolutionary movements of the right or the left.

It has been 67 years since the end of WWII and during that time there have been 11 recessions impacting only 10 years of that timespan. Most of these recessions have been mild affairs compared to the 33 that came prior to the onset of the Great Depression, and the welfare safety net has helped the hardest hit to survive. However, since the 1980s, the U.S. economy has become more unstable and some of the downturns more severe.

What of the steadfast adherents to the free market ideology? It would have been nice for the world if the Great Depression had put an end to them all–but that was not to be. For those who can understand things only with the help of rigid and all inclusive paradigms, ideology is what makes sense of an otherwise chaotic world. Ideology is also what defines good and evil for such minds. So it stood to reason that many committed free marketeers would retreat into a temporary silence and wait for a time to reassert their beliefs.

It did not take long. In fact, counting from 1939 and the outbreak of the World War II (the event that finally marked the end of the Great Depression), it took only until 1980 or 41 years. That is two generations which is actually just about right. Unless purposefully passed on from one generation to the next, both skills and memories tend to dim and lose their meaning. So it has been with the memories of what unregulated capitalism cost the nation in the years before the New Deal.

Why did things change for the worse in 1980? That was the year Ronald Reagan, a B grade actor and man of little intelligence, surrounded by neoconservatives and free marketeer ideologues, was elected president. Working within the context of generational forgetfulness, he set us all on a path toward deregulation and a resurgence of the free market ideology. It is to be noted that the country’s most recent recession (2007-2009) has been the worst of the post war era and a direct result of prior deregulation.

We are still on that path and the living proof of this fact is that the Republican presidential candidate, Mitt Romney has just selected Congressman Paul Ryan as his running mate. Ryan is the Chairman of the Budget Committee in the Republican controlled House of Representatives, and author of a proposed federal budget that would slash social spending (and those safety nets) by some $3.3 trillion, ditch Medicare and Medicaid, while simultaneously cutting taxes for the wealthy. Ryan is no less than the reincarnation of a free marketeer who wants to recreate the circumstances that brought us all 33 major economic downturns crowned by the Great Depression. How quickly people forget.

Social Darwinism As Well

It was University of California Professor Robert Reich who recently explained what Paul Ryan in a position of real power would mean. “More than any other politician today, Paul Ryan exemplifies the Social Darwinism at the core of the today’s Republican Party.” And what is Social Darwinism? It is a belief in the necessity of a struggle for survival where only the “fittest” survive. Here is how William Graham Sumner, the 19th century’s leading American spokesman for this outlook, put it. “Civilization has a simple choice. It is either liberty, inequality, survival of the fittest or not-liberty, equality, survival of the unfittest. The former carries society forward and favors all its best members; the latter carries society downwards and favors all its worst members.” This is may well be Paul Ryan’s version of the struggle between good and evil. By the way, liberty here is defined as the freedom of individuals to pursue wealth in an unfettered way.

Following this ideology, a Mitt Romney and Paul Ryan presidency would most likely increase the pace of deregulation and destroy what is left of the country’s safety nets. It would ultimately devastate the middle class, greatly increase the ranks of the poor and unemployed, do away with union rights, and reserve prosperity for the upper class alone. All of this will be done in the name of the liberty. And, it will be guided by an ideological paradigm that has already been historically proven to be disastrous.

We can speculate about popular reaction to these policies as time goes on. There will probably be eventual protest in the streets. Those in power will respond with red-baiting tactics and repression against the protesting victims of their policies. Also, keep in mind that these ideologues will almost certainly bring us a new set of wars. And, as we already know, in wartime repression comes easier. If the electoral system works, those responsible should be cast out of office in four to eight years.

All in all it is a pretty grim picture. It was George Santayana (1863 to 1952), a philosopher with both Spanish and American roots who said that “those who cannot remember the past are condemned to repeat it.” We in the United States, so thoroughly attached to our local here and now, are certainly candidates for this fate.

Lawrence Davidson is professor of history at West Chester University in West Chester PA.

COMING IN SEPTEMBER

A Special Memorial Issue of CounterPunch

Featuring recollections of Alexander Cockburn from Jeffrey St. Clair, Peter Linebaugh, Paul Craig Roberts, Noam Chomsky, Mike Whitney, Doug Peacock, Perry Anderson, Becky Grant, Dennis Kucinich, Michael Neumann, Susannah Hecht, P. Sainath, Ben Tripp, Alison Weir, James Ridgeway, JoAnn Wypijewski, John Strausbaugh, Pierre Sprey, Carolyn Cooke, Conn Hallinan, James Wolcott, Laura Flanders, Ken Silverstein, Tariq Ali and many others …

Subscribe to CounterPunch Today to Reserve Your Copy


More articles by:

Lawrence Davidson is professor of history at West Chester University in West Chester, PA.

Weekend Edition
June 22, 2018
Friday - Sunday
Karl Grossman
Star Wars Redux: Trump’s Space Force
Andrew Levine
Strange Bedfellows
Jeffrey St. Clair
Intolerable Opinions in an Intolerant Time
Paul Street
None of Us are Free, One of Us is Chained
Edward Curtin
Slow Suicide and the Abandonment of the World
Celina Stien-della Croce
The ‘Soft Coup’ and the Attack on the Brazilian People 
James Bovard
Pro-War Media Deserve Slamming, Not Sainthood
Louisa Willcox
My Friend Margot Kidder: Sharing a Love of Dogs, the Wild, and Speaking Truth to Power
David Rosen
Trump’s War on Sex
Mir Alikhan
Trump, North Korea, and the Death of IR Theory
Christopher Jones
Neoliberalism, Pipelines, and Canadian Political Economy
Barbara Nimri Aziz
Why is Tariq Ramadan Imprisoned?
Robert Fantina
MAGA, Trump Style
Linn Washington Jr.
Justice System Abuses Mothers with No Apologies
Martha Rosenberg
Questions About a Popular Antibiotic Class
Ida Audeh
A Watershed Moment in Palestinian History: Interview with Jamal Juma’
Edward Hunt
The Afghan War is Killing More People Than Ever
Geoff Dutton
Electrocuting Oral Tradition
Don Fitz
When Cuban Polyclinics Were Born
Ramzy Baroud
End the Wars to Halt the Refugee Crisis
Ralph Nader
The Unsurpassed Power trip by an Insuperable Control Freak
Lara Merling
The Pain of Puerto Ricans is a Profit Source for Creditors
James Jordan
Struggle and Defiance at Colombia’s Feast of Pestilence
Tamara Pearson
Indifference to a Hellish World
Kathy Kelly
Hungering for Nuclear Disarmament
Jessicah Pierre
Celebrating the End of Slavery, With One Big Asterisk
Rohullah Naderi
The Ever-Shrinking Space for Hazara Ethnic Group
Binoy Kampmark
Leaving the UN Human Rights Council
Nomi Prins 
How Trump’s Trade Wars Could Lead to a Great Depression
Robert Fisk
Can Former Lebanese MP Mustafa Alloush Turn Even the Coldest of Middle Eastern Sceptics into an Optimist?
Franklin Lamb
Could “Tough Love” Salvage Lebanon?
George Ochenski
Why Wild Horse Island is Still Wild
Ann Garrison
Nikki Haley: Damn the UNHRC and the Rest of You Too
Jonah Raskin
What’s Hippie Food? A Culinary Quest for the Real Deal
Raouf Halaby
Give It Up, Ya Mahmoud
Brian Wakamo
We Subsidize the Wrong Kind of Agriculture
Patrick Higgins
Children in Cages Create Glimmers of the Moral Reserve
Patrick Bobilin
What Does Optimism Look Like Now?
Don Qaswa
A Reduction of Economic Warfare and Bombing Might Help 
Robin Carver
Why We Still Need Pride Parades
Jill Richardson
Immigrant Kids are Suffering From Trauma That Will Last for Years
Thomas Mountain
USA’s “Soft” Coup in Ethiopia?
Jim Hightower
Big Oil’s Man in Foreign Policy
Louis Proyect
Civilization and Its Absence
David Yearsley
Midsummer Music Even the Nazis Couldn’t Stamp Out
FacebookTwitterGoogle+RedditEmail