America's 4th Phase

The United States, I would argue, has had three distinct phases: Citizen America, Producer America, and Consumer America.

Conveniently for generational theories like the Strauss-Howe model, each seemed to live for about ninety years.

Citizen America (ca. 1750 – 1845)

European philosophers like Rousseau, Voltaire, Locke and Hume argued for rational government.

Citizen America allowed modern capitalism to flourish, but its culture was pre-capitalistic. Inspired by the Greeks and Romans, it held that public life was the highest virtue. […] Citizen America allowed modern capitalism to flourish, but its culture was pre-capitalistic. Inspired by the Greeks and Romans, it held that public life was the highest virtue.

The high point of Citizen America was around 1800, and the decline was obvious by the 1830s. Then came the Mexican War, the atrocious Dred Scott decision, and the Civil War. By this point, we were well into Producer America. The role of labor, and the social position of those who performed it, became the central question of our society

Producer America (ca. 1845 – 1940)

The Industrial Revolution came into full swing. Technology enabled people to work more. […] High immigration made for an overflowing pool of cheap wage labor. The state offered no checks against this. Smart workers realized that it was in their advantage to organize, although the legal status of unions wasn’t well-defined. It took a lot of fighting to get official legal recognition of the mere concept. Meanwhile, business corporations used violence to prevent labor from asserting itself.

[T]he consolidation of corporate power had only started. There were, for a fact that surprises most people, more American car companies in 1915 than there are today.

There was a maker culture much stronger than what exists now, but much of this was by necessity. One had to be skilled at repairing mechanical devices, or one would not have them, because they were expensive and most people were (by today’s standard) very poor. People in the northern states put trust in their neighbors, because of the severe winters.

In Producer America, people identified with their work and, increasingly, their social class. Laborers invented unions and white-collar skilled workers invented professional associations (which are unions by another name).

Producer America was poor, beset by political corruption, and financially brittle. We had a quarter-century-long depression at the end of the 19th century. We had frequent financial panics, much worse than those that exist today. […] One’s job was the only source of income, esteem, and hope for a person, and often a meager source for all of those.

The 1929 crash was a symptom of something that had been building for some time. What tanked the economy, in the late 1920s, was ill-managed prosperity. By 1920, we were very good at making food. […] By 1925, we had endemic rural poverty. Farmers who couldn’t afford the new technologies died out. Towns that served these farmers fell apart, too. By 1927, we were seeing weakness in industry. If farmers went out of business, the market for tractors went with them. Weakness in heavy industry was clear. 1929 wasn’t when the Depression started, but when it hit the cities and the richest people and it was recognized as a Depression. Producer America had broken down.

When we re-emerged, we found ourselves in an era of higher complexity. p…] Production of most good had become too complicated for individuals to participate: airplanes and computers require massive infrastructure and human capital. People could (and still do, in 2017) build their own motorcycles and cars, but they don’t stand a chance of selling them. There are far more stable jobs repairing the machines that large corporations make than there are in direct competition with them.

In the U.S., the most controversial change to follow from Producer America’s insolvency was the expanded role of the federal government. We needed it in the 1930s to dampen the damage done by runaway capitalism, and in the 1940s to fight the Second World War

Consumer America (ca. 1940 – 20??)

We generated enough wealth that people could work less and spend more. People began to identify with their purchases more than their jobs.

A fundamental problem with working for money follows. If your work has objective, legible value, someone will out-compete you at a cheaper price. […] On the other hand, if the work is intangible (which is not to say that it’s not valuable) then one is reliant on a matrix of cultural, social, and generational support, skills, and infrastructure. What does it take to get paid for intangible work? Sales. Most people do not enjoy selling. In fact, they hate it, especially when it is their own work they must sell. Most people would rather take standard office jobs for reliable mediocre pay than put up with the constant humiliation, volatility, interpersonal rejection, and sheer chaos of having to sell themselves on a day-by-day basis.

We learned in the 1930s not to hang one’s income on the price of a commodity. This is especially true now, as commodities become cheaper. Rather, a worker survives by making his work intangible. […] Management became the most coveted job, and it’s easy to see why.

In Consumer America, people seek social status through consumption, whether of college degrees or clothing or housing in fashionable places, because that’s how one gets a reliable income. Production is too dangerous a route to sustainable income, because one can always be outcompeted. One must, instead, demonstrate something that looks like superior taste, culture, or intelligence, and that is done through consumption.

The highest-ranking people in our societies are not elite producers, but elite consumers. The polished businessman suggests effortlessness in everything he does.

The most valued trait in our culture is called “celebrity”, which is a preternatural ability to consume attention. We’ve given up on the ability to evaluate what people produce, so we use their consumption as a proxy. We conflate price with value.

Breakdown

Labor seems to be at the center of each phase’s inevitable breakdown.

With Citizen America, the fatal flaw was slavery. Hamilton and Adams predicted that slavery would destroy the U.S., and it nearly did.

Producer America, to a large extent, couldn’t handle its own success. It would have seemed unfathomable that prosperity in agriculture would lead to a crippled economy and (overseas) to authoritarianism and war. Yet it did exactly that.

Consumer America seems to headed down a familiar path. What happened to food prices in the 1920s is happening to all human labor. The “sharing economy” is a reinvention of what the early 20th century called “hobos”: itinerant workers taking what work they could.

It’s hard to define a clear adversary. Some people attack “globalization”. The truth, however, is that foreign competition isn’t the greatest threat to American workers. […] The greater threat is technology. It’s often ignored, because it doesn’t have a face, and because we all recognize both its necessity and inevitability.

There’s a lot of “othering” at the heart of the resurgent nationalistic populism that we’re seeing in the world’s working classes. […] You can’t other the phone, a supercomputer by the standards of 30 years ago, that sits in your pocket. So, we tend to ignore the dangers presented by technology.

You can’t other the phone, a supercomputer by the standards of 30 years ago, that sits in your pocket. So, we tend to ignore the dangers presented by technology. […] It’s the increasing shift of power from employees to employers. Let’s take social media. I’ve been involved in hiring and I’ve seen people turned down for jobs or fired based on social media activity, sometimes quite anodyne.

I worry much more about about technology toward evil ends than I do about automation. With automation, we need to be smart as a society and put the dividends back into the common good. That’s a hard problem, but it’s easy in comparison. A permanent shift in the power relationship between employers and employees, in the wrong direction, could render us unstable, impoverish the masses, and leave the country prone to populist or even fascist revolt.

As I said, every job that provides direct salable value has a target on it, and most of those have been automated out of existence. Jobs that remain are in abstract work.

In an office, you have some people who run around and try to quantify the work of others: managers, HR executives, consultants, and the like who try to spot opportunities for cost-cutting. […] 99 times out of 100, any assets “liberated” by cutting these costs is put into executive coffers instead of forward-thinking investment. Most of these cost-cutting wizards are worthless, but they have a lot of power. People fear them. They will drive abstract laborers toward concrete measurements. They’ll take the creative process of programming and split it up into 4-hour units called “story points”. What you end up with is a civil war where most of one side– the workers, playing defense because even if they wanted to play offense, they wouldn’t have time on top of their (increasing, with each layoff) assigned work– has no idea what is going on, or even that they’re in a civil war at all.

When this happens, employees lose. Costs are externalized or transmuted into risk rather than removed, so shareholders get a bunch of under-documented risk dumped on them as organizations become more brittle and shorter-lived. It looks like stagnation, but it’s actually a hollowing-out.

Downfall

Not only the Great Depression, but the Second World War and the flirtations with extremism all over the world, all convinced the American elite to slow down and be happy with what it had. They elected to get richer somewhat slower than others in society. Noblesse oblige. Inequality went down, but so did their risk of imminent overthrow.

Upper-class people who remembered the tumultuous 1930s and ’40s recognized that social stability and cultural advancement were more important than personal enrichment. Their kids didn’t.

At some point, the American upper class desired to join the global elite.

We actually don’t have more recessions in this terrible new economy than we did in the old one. We have fewer, but they hit harder. In the old economy, you worried that recession might get you laid off. […] People find themselves out of relevant work for two or three years and are replaced, when the situation improves, with a mix of unskilled young workers and better software off the shelf. For the bottom 98 percent of the labor market, each recession is more severe and each recovery is more jobless.

We are getting to a dangerous point. Let’s talk about various possible future outcomes.

Worst: Catastrophe

Baseline: Renter America

To sum it up, it’s a worse version of Consumer America. Life goes on, but people have less control over where and how they live. People continue to need these short-ended power relationships called “jobs”, and spend more time on busy work or protecting position than actually doing anything. Meaningful, productive work becomes a coveted, scarce resource and one must engage in political intrigue in order to get it.

In Renter America, people live increasingly on their reputations (which are easily controllable by corporate interests) rather than their skills. Jobs get harder to find and easier to lose. Long-term unemployment, financed by credit, becomes the norm.

Renter America delivers mostly insult rather than injury. A few people die prematurely because they lack health insurance or work in dangerous jobs, but most people are afforded vaguely dissatisfying but semi-comfortable lives.

Better: Patriot America

In the 1960s, national governments were perceived as being in cahoots with the global corporate elite. To a large extent, they were. Companies weren’t as malignant as they are now. Back then, private companies invested in their people, paid well, didn’t try to avoid paying taxes at all costs, and seemed neither at odds with the needs of government nor the people.

Conflict with the global corporate elite is possible. To the surprise of some, I believe that national governments will be our allies when this happens. They don’t like tax-cheating, rule-breaking criminals any more than we do. National governments don’t get everything right, but they’ve been left as the sole adults in the room. Who funds basic research? The age of Bell Labs and Xeroc Parc ended a long time ago; short-term optimizers won.

Patriot America would be a more inclusive reprisal of Citizen America, in which the defeat of the global corporate elite becomes a point of national pride.

This variety of patriotism isn’t exclusionary. […] Local and national governments will have to work together with each other in order to defeat two major adversaries in the future. One is the environmental damage wrought by climate change. The other is the global corporate elite.

Patriotism is not an assertion of superiority over other nations. Intellectually, we all know that we aren’t superior because of where we were born. Rather, it’s an admission of one’s own limitations. No one can fix the world. It’s too big of a job. But people can work together to fix their communities, then their cities, and then their countries.

Destinations and Lessons

We ought to learn from the three previous incarnations of this country before we build the fourth. What worked, and what didn’t?

The virtue of Citizen America was its insistence on rational government. We now need a rational economy. Universal basic income is a start, but we also need meaningful work for people, and there is plenty of work that needs to be done. […] Patriotism shouldn’t be pride in what is, because intrinsic national superiority doesn’t exist […]. It should be pride in what one does to make one’s community (whether local, national, or global) better.

What Producer America got right, although it took a long time, was that it eventually put dignity into work. […] We need to learn from that, and get away from the culture in which people are shoehorned into bland roles that are often substantially below their levels of ability.

Finally, let’s talk about Consumer America. […] In the 1980s, we allowed bad leadership to come in. It wasn’t our political leadership that shat the bed, though. It was our corporate leadership. In order to get the next iteration of this country right, we first have to take stock of what previous generations got so wrong.

[W]e will need for the current global corporate elite to learn a hard lesson. We’ll have to replace them with something else.