[This is Chapter Twenty of Murphey’s book The Emerging Crisis of Economic Displacement

[This is Chapter Twenty of Murphey’s book The Emerging Crisis of Economic Displacement.]

Chapter Twenty

WHY A NEW PARADIGM IS NECESSARY

As work becomes displaced or marginalized, a crisis of legitimacy looms – albeit it is still just on the horizon – for the market economy and the entire philosophy of a classically liberal free society. Unless a new basis is found to justify the loyalty of the overwhelming majority of the population, the market system will be repudiated and something else will take its place, probably after extended chaos.

"Legitimacy" is necessary to any political system. This is especially so in the modern age. In earlier periods of history, the fact of legitimacy, which refers to the general acceptance of a social system, was largely a given: armies secured loyalty by force; or an overarching religious consensus stamped its imprimatur on a given social and political arrangement; or hoary tradition did the same. Often it was a combination of these. The modern age has been such, however, that none of these has commanded general assent, except where angry ideology has played a major role as a secular religion and has bound things together with the help of a totalitarian State. But in a modern free society there is no such glue. General assent is fashioned out of several things: rational deliberation, the self-interest of individuals and groups, acculturation, shared language and religion and historical myth, the continuity of "what already is," commonly experienced traumas that have served as "compact experiences," and such other social cements as will bind a population into considering itself "one people" centered around a certain order of society. Any set of ideas that is to prevail must do so in that context; any social philosophy that aspires to be the foundation for actual life, and not simply to exist on paper, must seek "legitimacy" as a fundamental element. This means that it must deserve acceptance, as millions of people see it.

Although it is said that the concept of legitimacy was examined most thoroughly by the German sociologist Max Weber a century ago, I find a useful definition in S. M. Lipset's book Political Man: "Legitimacy involves the capacity of the [political] system to engender and maintain the belief that the existing political institutions are the most appropriate ones for the society."[1] The Blackwell Encyclopaedia of Political Science says much the same: "The legitimacy of a rule rests upon a sense of obligation within a shared sense of what is appropriate or right."[2]

Legitimacy has another aspect, too; it is not only a matter of majority assent. If there is even a significant minority of people who are militantly non-acquiescent toward the prevailing system, such as has been true for generations in Ireland, there is a crisis of legitimacy (though to point this out doesn't suggest there is anything that can easily be done about it). If we keep this in mind, we see why the "multiculturalist" ideology that prevails within dominant opinion in the United States threatens a crisis of legitimacy through the "disuniting of America" (to use Arthur M. Schlesinger, Jr.'s, phrase in a book by that name). This is especially so as the ideology is reenforced by a massive immigration of peoples who don't share the common heritage and who are implored to retain much of their allegiance to the respective cultures from which they come. As we have seen, that immigration will become a flood as economic displacement occurs in the Third World.

Why is the general assent to a market system threatened as we go into the future? Because the impending displacement and polarization will falsify many of the factual, theoretical and moral underpinnings of classical liberalism, rendering that philosophy unsuited to serve the needs of a great many people, who will be desperate and enraged. Most especially, there are two clusters of ideas central to a market-centered free society that will no longer be true under the new conditions:

· The first involves a mixed issue of fact and theory. It is the premise that everybody is basically able to take care of himself. This assumption of human capability, combined with the expectation that the market "will indeed work" as the context for personal independence, is fundamental to "individualism" and is one of the things that stands out most about the vast gulf between the Left's perception of society and classical liberalism's.

The British economist Lord Robbins told how important the "workability" of the market is:

...however much you may believe in liberty for its own sake, you are unlikely, unless you are mentally unbalanced, to recommend liberty if there is reason to believe that liberty must necessarily involve chaos. Therefore, before the leaders of eighteenth- and nineteenth-century liberalism could recommend liberty in economic relations, it was necessary that there should exist a body of thought which showed, or which purported to show, that, if left uncontrolled save by due process of law, individual initiative in the economic sphere would not lead to economic disaster: that is to say, it was necessary to show that the interplay of spontaneous self-interest would harmonize with public good.[3]

In my book on classical liberalism I discussed at length what is called "the environmentalist assumption."[4] (This concept uses the word "environmentalist" in an earlier sense than we think of today when we speak of "the environment" as ecology.) The Left, I said, believes that the individual is molded and impinged upon compellingly by the context within which he lives ("his environment"), so that his setting is almost entirely responsible for what he becomes. If a person does badly economically, it is due to factors beyond his control; if he acts criminally, it is society's fault more than his own.

Classical liberalism has disagreed with this in three ways: First, it believes individuals bring considerable vitality to life, so that they are not simply plastic figures that are acted upon and molded. Second, it holds that a society should seek to create a setting – an "environment" for the individual – in which a "moral imperative" toward self-reliance becomes internalized within the individual in the form of self-discipline. This isn't something an individual does for himself, although he can contribute to it; the expectation is impressed on individuals by family, church, school and community. It is part of the person's "environment," to be sure, but is of a moral nature that serves not to negate but to reenforce self-sufficiency. And, third, classical liberalism believes that the other circumstances of life are not monolithic, especially in an advanced civilization, but offer the individual a variety of possible influences from which to choose. The saloon may be next door, but a library is just in the next block.

The point to note is that if a non-labor-intensive technology either creates vast unemployment or marginalizes work in a society deeply divided between the rich and the poor, the Left's perspective on the environmentalist assumption comes true, and that of classical liberal individualism is falsified. The implications are earth-shaking. The individual won't be able to take care of himself or his family – and not because of any failure on his own part that could be corrected by society's putting more emphasis on self-reliance. It won't be caused by anybody's failure, but by the very success of the technology. It is no wonder that Anthony Harrigan, a conservative thinker whose ideas resonate with a profound insight into life, felt moved to write me after he read my initial article on this in late 1996: "You have the full, albeit terrifying, vision of the grim reality we face with a near-workerless society. And I agree that the situation will cause the collapse of all our economic notions."[5]

· The second cluster of classical liberal ideas that will no longer hold true is normative: the rationale for property and earnings. Chapter 18 discussed this in detail. Now we should note its relation to legitimacy: that a vast polarization or displacement due to technology will cause the legitimacy of much property and earnings to evaporate. A century ago, Henry George raised the question of whether land and minerals should not be considered community property. Most supporters of limited government found it best to ignore that. But now the new technology extends the question much further, and challenges whether the extreme wealth created for some is really due to their contribution or is due instead (at least in major part) to the technological, global market system that they have merely stepped into.

Hundreds of millions, even billions, of people will deny the justice of such polarized wealth, and with good reason. Those who grow enormously rich from a hyper-technological economy, no matter how talented they are, will not themselves have created that enormously productive engine. It will have been created by countless people before them. For a few to plug into it for incredible wealth while others, dispossessed by the technology's drastically reduced need for labor, are able to earn little or nothing will be intolerable, both de facto and de jure. Much of the wealth going to those who are highly remunerated will be an "unearned increment" in Henry George's sense.

Again, the implications are staggering. It will deprive the system of its moral sanction. Success will no longer suggest a strong correlation with ability or virtue, which is what most people somewhat wrongly assume it does (and we are already sharply away from that even as this is written, as we see from the fortunes reaped by some of the most degenerate members of society). Nor will it correlate, except in part, with economic contribution. The breakdown of the contractual nexus as a core concept will mean that it will no longer be possible to say, as present market theory so resolutely does, that "the income must be considered earned, since it was received through voluntary contract." That has been a valuable generalization up to now and will continue to be for the near future, since the contractual frame of reference – the market for work – has been something that everyone could participate in. But it is a rationale that is rapidly evaporating.

Moreover, our normative system based on work will be gone. It is ingrained in us to rank people according to their economic success and by what profession or skill gives them stature. We are a credential-, career-oriented society. Competitiveness is not just a virtue, it is a necessity. Where will we be when all that is gone? Entirely new ways of thinking and of relating people to each other will necessarily develop. This will be a sea-change from the classical liberal ethos.

Classical liberalism has known that differences in outcome inevitably arise out of individual freedom. This sort of inequality has been just and valuable within a market society. But when the market, in a world of non-labor-intensive technology, no longer has a place for people who want and are able to work, the basic facts will have changed, the inequality will be of a different sort, and the rationale for it will have disappeared. In any restructured social system that has a competitive market as a central feature (which is something I very much want to continue even though most of the population will essentially be outside the productive economy), it will be necessary and justifiable to reward innovation, work and creative effort by those who are engaged in that market. These rewards will, however, be subject to limits; and these, too, will be necessary and justifiable.

The clusters of ideas just reviewed, one functional, the other normative, make up much of the content of classical liberalism. Even the ideas that might be considered outside these clusters are affected. Up to now, the ideal of "limited government," for example, has precluded support by American conservatives and libertarians for the redistributionism that has been so prominent a part of American life since the New Deal. We see now, though, that distribution-separated-from-work must of necessity become part of the mix that makes up a free society.

Much remains valuable, despite the undercutting, in classical liberal thought. Important elements remain essential to mitigate the dangers within the future system. Here are some features of that sort:

· One is the preference for "limited government." A comprehensive system of distribution will make obsolete the myriad programs of redistribution that exist today and can actually lessen rather than increase the intricacy and volume of governmental activity. Milton Friedman had this in mind when a few years ago he recommended a "negative income tax," a guaranteed floor under incomes – which he said should, if adopted, take the place of all other programs of governmental assistance. Once a system of general distribution is in place and its coercive potential is guarded against by safeguards as extensive as those now employed to protect against meltdown in nuclear reactors, it may even become possible to talk again in terms of a more constrained State in connection with government's other functions. Ironic as it may seem, socialist thought has long discussed this possibility; it is even what was involved in the "withering away of the State" that Marx talked about. As with all of this, the irony brings together classical liberals, libertarians and anti-statist socialists. Nothing in it necessarily runs against the grain for cultural conservatives, either, since many conservatives of this type look to the rich texture of life itself rather than to the State.

· Another is the importance of a dynamic competitive market, even though it won't supply the prime rationale for distribution. The market will be the engine of production and further innovation, and will offer a splendid vehicle for individual energy and creativity.

· "Bourgeois decency" and an ethical order will be even more important than they are today. Later I will discuss the issues of lifestyle and values that will be wide open under the new circumstances. Will humanity become a replica of Jonathan Swift's monstrous Yahoos, with rational, more elevated people finding it necessary to flee to enclaves? If the "alienation of the intellectual against the bourgeoisie" largely disappears in a new age where the market is not central to peoples' lives (and there is a possibility of the alienation's virtual disappearance, even though that is by no means certain), a consensus of thoughtful, sensitive and productive people may well form behind a desire for decency. (Remember that much of the stimulus for today's deviancy comes from the alienation's support for anything that is at odds with the predominant middle class.) This need not be a Puritan or bluenose sort of decency. There will be a great need to nurture all of the elements of acceptable life within a human community: manners, gentility, respect for others, honest dealings, self-cultivation, elevation, devotion to things that count.

· Intellectual humility is another. The mass distribution system will have adopted a collectivist mechanism. Does that mean that collectivism rather than individual liberty must result? Will people need to become marshalled under banners, marching in martial spirit to beating drums, or repeating sayings out of a "little red book"? Not if the intellectual humility inherent in classical liberalism has its way. In addition, much socialist thought, especially in the nineteenth century, saw pooling as a way to provide an underpinning for individual self-expression. (That was, for example, Edward Bellamy's ideal in his futuristic novel Looking Backward.) The conflict between, say, Caesar and Jefferson will still be with us, and it will cut across the old ideologies.

· Finally, private property will play a central role. The system of general distribution I propose will be based on using, not repudiating, private ownership. I haven't tried to dissimulate about the fact that this will use what is essentially a socialist mechanism, since it will involve an ongoing distribution of corporate shares through means other than the act of exchange. But, given the broad distribution of shares in index mutual funds, there is no reason the system of private property cannot remain central. Not just consumer property, but also "the means of production," can and should remain in private hands. I have already explained how this will need to be qualified by the concept of "unearned increment," which will change the private property system significantly but won't destroy it – unless the concept is applied for that purpose (an important caveat).

Earlier chapters have shown why classical liberalism has great value, and, at the same time, why its concepts must not be applied as a closed system that traps us mentally. Those points have been valid enough even under past conditions. My purpose in the present chapter has been to consider the impact of the crisis that will be produced by the near-workerless economy. Clearly, a society founded on the classical liberal underlay, as we have known it, will face a crisis of legitimacy.

It will surprise those who have not been alert to world changes that serious thinkers are discussing the prospect of revolution and chaos. Kevin Phillips writes that "in the United States and Europe alike, popular fear of downward mobility has been one of history's proven sources of political radicalism, both cultural and economic."[6] In 1996 Aaron Bernstein wrote in Business Week: "If America continues to stratify, ‘you'd expect our democratic identity to diminish,' says political science professor Carey McWilliams of Rutgers University. Some trapped at the bottom may explode with resentment. Others may succumb to apathy. Either way, all Americans will suffer."[7] These statements are actually too mild, since they don't look all the way to the immense displacement that's coming. Anthony Harrigan, whom I quoted above and who grasps the immensity of the changes, says "I have felt that we face a revolution in this country a decade hence – a real revolution – because of the shattered expectations of the American people. Certainly, if we move to a workless society, a desperate population will engage in revolution. Who can say what form it will take?"[8] Jeremy Rifkin predicts that if nothing is done "the growing gap between the haves and the have-nots will lead to social and political upheaval on a global scale."[9]

The beginning signs of this unrest exist already. In 1994 Business Week told how "under trees fringed with spring green, 50,000 students marched down a Paris boulevard ...chanting slogans demanding jobs...At a recent rock concert outside Rome, young Italians drowned out the music with chants of ‘We want jobs!'"[10] In a speech at the University of Colorado, Anthony Harrigan pointed to "a growing divide in Europe. The Financial Times," he continued, "says this is reflected in the vote on the Maastricht Treaty, with the professional middle class in favor and ‘two thirds of working people against it.' The glue that held together the center-right parties is dissolving...."[11] William Greider writes that "the symptoms of rebellion are already visible in many leading economies."[12] We have seen how, according to Business Week in 1998, "France's silent masses of unemployed have become a powerful political force," and feel "a broad sense of betrayal."[13] Also in 1998, the Associated Press reported that "thousands of Indonesians rampaged in at least eight towns..., burning shops, houses and cars...Mobs vented anger against Chinese traders they blame for the soaring prices and massive unemployment that followed a plunge in the value of the currency."[14]

And yet, in most places things are still not to the point of massive discontent. In the United States, the anxiety over downsizing has abated at least temporarily even as the layoffs increase. Why? Partly, of course, because the world is only a fraction of the way into global competitiveness and the new technology, and hence into displacement and polarization. But there are other factors that mask the reality: Steven Phillip Kramer, a professor of history at the National Defense College, says about Western Europe that "today's crisis is not generalized – many people are upwardly mobile. Unemployment is less than half the levels of the Great Depression."[15] Wallace C. Peterson points out how the high incomes of the top 40 percent of the population are enough to "keep the entire economy moving upward."[16] A key insight is expressed by Harrison and Bluestone when they say that "so long as the middle third can be mobilized to oppose the extension of the safety net to the bottom third, so long as they can be convinced to identify themselves with the new technocrats at the top, so long can conservative laissez-faire political-economic arrangements be sustained. But only for so long."[17]

Unless a consensus develops around a solution, a wide variety of angry ideologies will spring up as people try to understand, and then act to correct, their predicament. Patrick Buchanan has been much maligned for pointing to these issues, but he was on the mark when he said that "if the GOP [the Republican Party in the United States] stays with GATT and globalism, it will ride them down to political ruin."[18] (Buchanan was a "free trader" not long ago, but has seen the implications of worker displacement, and this has caused him to lead the way in changing his views.) Frederick Strobel warns that the polarization "could lead to the rise of new and unexpected personalities on the political scene, promising a quick fix to the problems of the day. Such ‘messiahs' can come in many forms with many different types of messages. Their ease of entry into the political sphere will be oiled by the confused state of the American electorate when it finds answers in neither the Republican nor the Democratic message."[19]

We already have a major example of this. In recent decades, many blacks in the United States have thrilled to messages repudiating "Eurocentric" civilization. As I mentioned before, I have recently been on panels with two "black activists" who radically denounced existing society. American conservatives such as myself have thought that this negativism results from poor leadership, the overall alienation of the intellectual subculture that lies behind "multiculturalist" ideology, and the attitudes generated by the Welfare State. All of these may contribute, but we should ask whether it is any coincidence that angry ideology followed so closely in the wake of the job displacement that millions of blacks suffered when the mechanical cotton picker was introduced after World War II. We have seen how millions of blacks migrated to the northern and western cities, only to find a diminishing number of industrial jobs. Michael Levin wrote in a recent book that "racial outcomes are currently viewed through a lens of guilt, and it's important to know whether the lens is distorting. One result of racial guilt feelings...is the idea that blacks deserve compensatory preferences...."[20] In the context of the ideology of "victimology," we can understand the claim for preferences, which are seen as necessary and morally right compensations, and we can just as easily understand conservatives' denial of the validity of that whole orientation. We have seen in this book, though, that the debate is in large part off the mark; the displacement of millions of blacks did occur, with predictable consequences in terms of social pathology and angry ideology. The ultimate question must be what a free society can do about massive displacement, both for blacks and for many millions of others. It is a question of theory and intense practicality about how such a society should be structured.

Angry ideologies will personalize the issues, picking villains, but at the same time the competitive global market and the labor-displacing technology will come to be seen as enemies. Laissez-faire ideas will become detestable. Answers will be sought for desperately, and those ideas won't provide them, just offering "more of the same." Free-market thinking will lose its legitimacy, both as to general acceptance and as to any intellectual or moral right to contend for acceptance.

In addition, the displacement of hundreds of millions, even billions, of people around the world will create irresistible pressures toward mass migration into the advanced economies, with the effects we discussed in Chapter 13.

If the world fills with desperate people, can anyone doubt but that wars of all sorts will result? It will be war of an especially dangerous sort, taking place in a world in which the means of nuclear, chemical and biological killing are proliferating rapidly. Terrorism, conducted with everything from machetes to anthrax, may easily eclipse direct warfare.

There is always the possibility that "legitimacy" will be gained by a totally different world response. Those who fall to the bottom may sink into torpor, acquiescing listlessly in the vast polarization. Though mentioned before, this is pertinent here.

The chances of this happening are remote. The peoples of the developed world have known a better life. It isn't conceivable that they will become willing to settle for the kind of life that is lived today in Lagos or the favelas of Rio de Janiero. More broadly, advanced communications, mass media, easy transport, and travel have opened up to people everywhere an awareness that a decent life is possible. They know what's possible and that misery isn't inevitable. They might have settled into apathy if they knew that there were no way such possibilities could be realized, but in a world of super-advanced technology, that won't be the case – and they will know it.

Secondly, a philosophy that would serve as apologist for such a polarization would be contemptible. The purpose of any social philosophy must be to address the needs of the vast majority, preferably all, of the people. This is a value judgment – and one I am anxious to make. It is one that all classical liberals, consistently with the overarching purposes of their philosophy, must make. My message in the past several chapters has been that it will be tragic if classical liberalism deteriorates into such an apology. Free market thinking has a distinct chance of doing this if those who are devoted to it hold fast to a closed system of deductive reasoning based on premises that soon will no longer apply.

ENDNOTES