Friday, January 3, 2014

Lessons for the American Republic from the fall of the Roman Republic

The middle class in the Roman Republic were the yeoman farmers, freeholders who owned their own land, planted their own crops, and served in the Legions that ground their enemies down until by 140 B.C. the Mediterranean Sea was Mare Nostrum - Our Sea.  But something went catastrophically wrong, and ultimately doomed the Republic:
Two brothers, Tiberius and Gaius Gracchus, are traveling together through the Roman countryside on their way to the capital, talking and taking in the mild Italian spring. They see many things as they travel along the Via Apia— great Roman edifices and aqueducts, passing groups of Roman soldiers patrolling the roads, couriers carrying messages to and from distant cities, and rolling expanses of Italian land, fertile and inviting… yet seemingly empty of Romans. Derelict homes dot the landscape, punctuated by the occasional massive mansion surrounded by far less lavish, barracks-style buildings, housing for the slave gangs captured in wars with Spain, Africa and other nations. The slaves mill about the estates, planting and picking, but few Roman citizens are to be found. At most, Tiberius and Gaius glimpse an occasional Roman supervisor, a servant of some senator or patrician who has taken up residence and ownership of the vast Roman countryside. A dark quiet falls upon their chariot ride towards Rome.

When Tiberius and Gaius reach the capital, they find the missing Romans. Hundreds upon hundreds of Romans—landless, purposeless and unemployed. As they make their way through the city, the brothers see their fellow citizens hanging around taverns and bars, drinking and gambling, waiting dejectedly in the government-provided breadlines, or picking fights with Roman soldiers in the streets. The once productive and self-sufficient farmers or workers in small local communities are now displaced and draining the resources and vitality out of the cities and country.
The middle class has been the backbone of the American Republic, but here too something seems to be going very, very wrong:
The Financial Times, the day before Christmas, released a fairly stunning analysis of globalization by John Gapper. As Glenn Reynolds at Instapundit says, read the whole thing. In summary, the piece notes that the winners of Globalization are the top 10% of income earners in the West, and the poor in China and India. The loser are the White Western middle and working class, and the sub-Saharan poor.

First, the fairly stunning admission of the global transfer of wealth to elites in the West and elsewhere, and to a lesser extent Chinese and Indian peasants at the expense of the White middle and working class.
The pressures of inequality have been building in industrialised societies for two or more decades but the combination of the 2008-09 financial crisis and the inflated fortunes of the elite have reinforced them. The economic democracy of the mid-20th century is giving way to a distribution of wealth more like Edwardian or Victorian times.
“Straightforwardly, it’s about capital and labour,” says Tony Atkinson, centenary professor at the London School of Economics. “We are seeing all sorts of change that have benefited capital. That tends to equalise global wages, which means reducing them in rich countries.”
The tensions are exacerbated by inequality between generations. Postwar baby boomers enjoyed greater prosperity than their parents – steadily rising incomes, strong welfare states and defined benefit pensions.
Those born in the 1970s and 1980s have fewer benefits, face stagnating incomes in mid-career and must borrow more to buy expensive houses.

This makes extraordinary reading. And it pretty well makes a compelling argument for economic protectionism and strong nationalism. That all production of anything that is high-margin should be done inside the nation, at prevailing wages, by people of the nation, not outside it. That fundamentally the elites have failed to look out for anyone but themselves and so are owed nothing. And that nationalism is the only cure for what ails the West.
Economists (and libertarians) are quick to point out the benefits of free trade - that the rising tide raises all boats.  But as a libertarian who studied economics (among other things), the assumption is always that the costs to the economic losers will be redistributed in some form, so that those boats float upwards on the rising tide as well.  That new industries will offer better opportunities to the economic losers of globalization, so that the children of the middle class will remain middle class.

We're simply not seeing that.  And so while the libertarian theory is a shiny pretty one indeed, the cold hard reality of 30 years of theory shows the truth of the old adage: in theory, there's no difference between theory and practice; in practice, this is not true.

Now add in both political parties eager to introduce another 25 Million (nearly a net new 10%) to the citizenship lists, bidding labor costs down even more.  I think that most of the reason for the very low regard that the nation holds the government, political parties, and the intellectual class is explained by this one issue.  The middle class sees themselves being inexorably squeezed, and the prospects for their children evaporating.

We've see this sort of thing happen before in history, and it gets quite ugly, quite quickly.  The difference between the Roman days is that there were not 100 million firearms held by the Roman yeomanry.  The next decade will be interesting, as a series of economic shocks (mostly caused by horrible public policy) radicalizes the middle class in a way that is has not been for 150 years.  Then the political divisions were drawn along geographic lines; this time it will be across class lines.  Then, the northern states outnumbered the southern states by a factor of at least two to one; today, that ration will be reversed as the "Elite" and its lumpen proletariat dependents will be in the distinct minority.

Then, the political division destroyed the Whig party, with a radicalized Republican party coalescing from the debris of the old organization.  The Tea Party has already started this with the Republicans of today (the Tea Party is if nothing else the party of the middle class), and we can expect a similar fracturing in the Democratic Party.  Many of the hard left there despise the banksters (with good reason, it must be said), and the idea of Wall Street sucking the life blood from the middle class grates.  Once the GOP wins majority power in Washington for a short while, we will see the shattering of the Democrats.

How this ends is impossible to say.  But the idea that Hillary Clinton - the legacy of a political machine that drove globalization link no other - is the inevitable nominee seems to miss the grand sweep of the history of our day.  But the nation is primed for this preference cascade.

The Roman Republic descended into mob violence and the rule of strong men like Lucius Cornelius Sulla.  He (surprisingly) died in his bed, but his self-composed epitaph gives you all the flavor of that period:
No friend ever served me, and no enemy ever wronged me, whom I have not repaid in full.
We live in interesting times, my friends.


Chickenmom said...

When the pendulum swings the right way, it will be slowly because of all the dead weight hanging from it.
History always repeats - sometimes it takes the masses a while to remember that fact.

Rev. Paul said...

The masses rarely remember last year, much less the lessons of the more-distant past.

The next few years are going to be far different from the rosy picture painted by TPTB, and from what most Americans picture in their imaginations. "Life as it's always been" is fading rapidly.

Eagle said...

There are several different "class lines" that will find themselves in conflict. The "rich", "poor", and "middle class" conflict isn't the one that scares me. It's the conflict between the "producer class" and "consumer class" that frightens the heck out of me.

The "producers" - the farmers (even corporate farmers), ranchers, and the means of transport - may finally get tired of being overmanaged, overregulated, and overseen by Washington bureaucrats and reduce production accordingly. The result could be the progressive starvation of the "consumers" in urban areas and large cities.

Would "the government" stand by and let farmers stop production? Or would it step in and, using force of arms, COERCE farmers to produce? Would posse comitatus be suspended due to a "national emergency"?

G-d help us if that happens...

Six said...

You are on FIRE BP.

Unknown said...

How many Dems and pundits are paying attention to HRC's medical problems? She's had at least one pretty major incident (the fall that resulted in vision problems that lasted for at least a week). She's not young. G-d forbid anything terrible happens to her, but she's not young.

Chris said...

The problem with libertarian theory in this context (writing as a libertarian anarchist) is that the federal government, in cahoots with the Ivy League "richest 1%, has rigged the game in favor of the "connected" (read: ruling) class. In a free market, which this country has never had, free trade and open borders would be that rising tide.

But when some boats are always given first pick of the best mooring, always get priority for catching the tides, etc., those not in that group are hard pressed to keep up, much less advance their position. Burdensome regulations, which are absorbed by larger enterprises, will sink medium-sized businesses and prevent start-ups. (That being the point of most regs, anyway.) The banksters and Wall Street types get first dibs on the new money created by Quantitative Easing, thus benefiting from handling the un-inflated funny money before figuring some new bundled fund to foist upon a public that still believes that these bastards are somehow under a regulatory prohibition from selling crap in a sack.

I realize that libertarian ideals do not work in our imperfect world, but I will only stop trying to achieve them when I am dead. But I'm not doctrinaire enough to think that it will work when our overlords have the game set up to punish those not in a favored class.

bruce said...

the hardest thing for me is to stop wanting things as they should be and realize how they will be. However there is one genie that will never get back in the box and that is world trade, protectionism is dead.
That may not be the protectionism you mean but it is basically the same. And good riddance.
The middle class will come, it only needs a return to plain capitalism, uh=oh, there I go again, what should be and what will be.

Ken said...

The problem with libertarian theory in this context (writing as a libertarian anarchist) is that the federal government, in cahoots with the Ivy League "richest 1%, has rigged the game in favor of the "connected" (read: ruling) class. In a free market, which this country has never had, free trade and open borders would be that rising tide.

The other thing is that we are burdened with an explicitly inflationary monetary policy. Absent that, prices would likely fall (what was the cash price for a Model T in 1909, and what was it in 1927?). That is the missing element.