Archive for the ‘Republicans’ Tag
The “Job Creator” Myth
Filed under: emergent | Tags: bottom up, economy, job creators, Republicans, top down
Leave a Comment Quick – which came first: economies or wealthy elites?
I raised this question because some politicians have developed a passion for referring to the wealthy as “job creators” – inferring that the well-being of the economy is tied to the well-being of the wealthy elite. The House Republican Caucus has a whole section of their website devoted to “job creators.” House Speaker John Boehner claimed last fall that “job creators are on strike.“ There’s even a group of business leaders who have established something called the Job Creators Alliance.
Since the middle of 2011, it has become almost impossible to find a Republican who will say that someone is rich. As Jon Stewart noted at the time: “Republicans are no longer allowed to say that people are rich. You have to refer to them as ‘job creator.’”
The question begging to be asked in all of this is whether the wealthy are, in reality, “job creators.” Based on a look at the facts involved – including both relevant statistics and insights provided from modern science – I believe the answer to that question is NO.
In an article about Boehner’s “job creators are on strike” claim, the website Crooks and Liars offers an array of numbers that don’t support his claim. They point out:
On January 9, 2009, the Republican-friendly Wall Street Journal summed it up with an article titled simply, “Bush on Jobs: the Worst Track Record on Record.” (The Journal’s interactive table quantifies his staggering failure relative to every post-World War II president.) The meager one million jobs created under President Bush didn’t merely pale in comparison to the 23 million produced during Bill Clinton’s tenure. In September 2009, the Congressional Joint Economic Committee charted Bush’s job creation disaster, the worst since Hoover:
The reason Republicans claim the rich are “job creators” is that they believe in “trickle down economics.” According to Investopedia:
Proponents of this theory believe that when government helps companies, they will produce more and thereby hire more people and raise salaries. The people, in turn, will have more money to spend in the economy.
Basically, if you let those at the top of the economic pyramid have more, the benefits will “trickle down” to everyone else.
This reflects a classic mechanical, “top down” view of how things work. In such a world, those at the top of an organization – be it economic, social or political – “operate” the machinery of the organization. They make the decisions and call the shots. Those below them in the hierarchy follow their orders.
If those on top operate the machinery properly, they reap the benefits; those who follow orders are compensated as those on top see fit. If they don’t operate things properly, then (in theory) the organization replaces the operators. It’s all very controlled and orderly – especially for those in control at the top. At least that’s the way it should be according to the believers.
Unfortunately, after 30 years of trickle down economics, it’s pretty clear things don’t work that way. How could we be in our current economic mess if they did? (Anyone blaming the current mess solely on Obama and the Democrats is just not looking at the facts. See the above chart, in which job growth from Reagan forward has yet to equal that of Carter.)
So why don’t they work? It’s because they’re based on an outdated world view. Republicans and conservatives have been looking at things from the traditional paradigm of Newtonian physics, which presented us with the “mechanical universe.” According to this paradigm, the best way to understand things is mechanically: an organization can be structured according to distinct tasks, each making a discrete contribution to the larger task of generating value, with everything managed according to classic command and control principles.
This view of management, which was the basis for mass production, was very successful for industrial production in the 19th and 20th centuries. And from this perspective, it might make sense to focus on those at the top who are “operating” the machinery.
However, some have begun to recognize that the mechanical universe is an illusion. As Dr. Brad Cox noted in a 2004 presentation titled “Command and (Out of) Control – The Military Implications of Complexity Theory“:
The Newtonian paradigm was so compelling, so neat, so logical – in short, so “right” – that it saw and imposed regularities where none existed. For the sake of finding solvable problems, science simplified reality by assuming an idealized world. It connected the discontinuities and linearized the nonlinearities – in short, it simply ignored all the countless inconsistencies and surprises that make the world – and war – such a complex and interesting problem.
The evidence is unmistakable: the Newtonian paradigm no longer satisfactorily describes most of our world (if it ever did). Science is slowly coming to recognize that the world is not remotely an orderly, linear place after all.
The same thing is true in economics. As Richard Wagner noted back in 2003, in an article in Financial Advisor:
Trouble is, our money words tend to ground in old models, particularly 17th Century physics and 19th Century biology. They have yet to incorporate the integral visions of 20th Century quantum physics or ecology. The result: “machines” vs. “ecosystems.” Not wrong, but not necessarily helpful. Often harmful. Mechanistic metaphors induce linear thinking that doesn’t accurately reflect 21st Century money. And money is hard enough without dysfunctional underpinnings. Unfortunately, inappropriate metaphors contribute to misunderstandings and questionable actions.
If we want to get beyond “inappropriate metaphors” that lead to “misunderstandings and questionable actions,” we need to face the facts. Trickle down economics doesn’t work, those at the top of the economic scale are not “job creators,” and making the rich richer will not make the economy stronger. But where does that leave us?
We need to get to the bottom of this – literally.
One of the basic principles of complexity theory is called emergence. According to this principle, complex systems – be they biological, military, economic, etc. – develop from the bottom up. As Dr. Cox explains in talking about military battles:
Evolution moves from the simple to the complex. Healthy complex systems evolve by chunking together healthy simpler systems. Attempts to design large, highly complex organizations from the top down rarely work, if ever. This merely confirms what successful military organizations have long recognized: success starts at the small-unit level. Build strong, adaptable squads and sections first. Train and equip them well – which includes giving them ample time to train themselves (i.e., to evolve). Give them the very best leaders. Give those leaders the freedom and responsibility to lead (i.e., let them act as independent agents). Then chunk the teams and squads together into increasingly larger units.
What this means is that if you want to improve the economy and create jobs, you need to focus on the simplest element in the economy: the individual consumer. If they feel economically secure and have sufficient funds, they will buy products, which will stimulate production, which will lead to the need for more workers. As venture capitalist Nick Hanauer blogged in his post “Raise Taxes on the Rich to Reward True Job Creators“:
…I’ve never been a “job creator.” I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate.
That’s why I can say with confidence that rich people don’t create jobs, nor do businesses, large or small. What does lead to more employment is the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be.
From the perspective of emergence, this is easy to understand. It’s not just “quantum sense” – it’s common sense.
Say you have some money and a passion for baking. So you decide to open a bakery. If your cakes and pastries are a hit with your customers, they will come back to buy more and tell their friends about your shop. The end result? With more and more customers you prosper – eventually to the point you need help and hire others.
But what if your customers don’t like your shop? What if they think your cakes and pastries taste bad or are over-priced? What if your shop is not convenient or they just don’t like you? It doesn’t matter how much money you have. Unless you make the right changes, your shop is never going to prosper. At the least, you won’t be hiring others to help you. More likely you’ll be firing any help you have and sooner or later you’ll go out of business.
And if you’re the richest person in town and hardly anybody else has money for cakes and pastries? The end result will be the same. Without enough customers, your shop is doomed.
The essential point here is that an economy is a complex emergent phenomena. It starts out as something small and simple; only as it grows does it become more complex.
The earliest economies really were small and simple. Unlike market economies or even barter economies, they were “gift economies,” in which people gave things to each other – often without an expectation for immediate or future compensation. As economic anthropologist David Graeber described it:
…what would really happen, and this is what anthropologists observe when neighbors do engage in something like exchange with each other, if you want your neighbor’s cow, you’d say, “wow, nice cow” and he’d say “you like it? Take it!” – and now you owe him one. Quite often people don’t even engage in exchange at all – if they were real Iroquois or other Native Americans, for example, all such things would probably be allocated by women’s councils.
As societies grew larger and more complex, their economies gradually evolved into what we now call a market economy. However, we still can find examples of gift economies in modern life. These include free software like Mozilla and websites such as Wikipedia. In a sense this also true of science itself, in which discoveries are shared with others who are then free to build on them. The main benefit received by those doing the sharing is an enhanced reputation – a kind of variation of Graeber’s “you owe him one.”
So, getting back to my original question: which came first: economies or wealthy elites? As emergence teaches us, the answer is “economies.” While more or less wealthy elites may develop in an economy over time, they are not the primary force behind that economy’s growth. Most importantly, they are not the “job creators.”
If we truly want to be effective in promoting economic growth and creating jobs, we should use what we learn from emergence. Let’s stop giving special favors to the rich and powerful, and let’s start focusing on the well-being of the real job creators – the middle class consumer.
Keep the Change
Filed under: energy/flow, interconnected, uncertainty | Tags: change, conservatives, future, Newt Gingrich, presidential primaries, Republicans, Tea Party
Leave a Comment “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” – Charles Darwin
“So how’s that hopey, changey thing workin’ out for ya?” – Sarah Palin
It’s hard to believe that only four years ago the winning campaign for the American Presidency offered hope and the slogan “change you can believe in.” These days there is a sizable group whose attitude appears to be “keep the change to yourself – we want things the way they were.”
The Republican primary campaign currently seems to be most focused on who can best express the anger and resentment felt by the party faithful. After the South Carolina primary, the winner appears to be Newt Gingrich. As Howard Schweber observed in the Huffington Post:
…only Newt has captured the key emotive element that drives the Republican core this year: resentment. The hard right core of the Republican Party is filled with resentment, and they have found just the man to let us all know about it.
This raises questions. Why are these people so angry? What do they resent?
For much of the 2000′s, Republicans controlled the White House, Congress and (arguably) the Supreme Court. During that time they did all they could to give free reign to large corporations and the wealthy through tax cuts and deregulation. They worked to shift the balance of power firmly in favor of corporate management over the rights of workers, both in terms of work safety regulations and in terms of union power. They worked to discredit legitimate concerns about environmental degradation and climate change. They even distorted political debate to the point that even being called a liberal is a bad thing.
And yet the Republican base is still angry and resentful, saying things like “it’s time to take our country back.” From whom, exactly?
All this anger and resentment can be puzzling – if not infuriating – to those who disagree with conservative Republican ideas. And some of the results of Republican primaries can seem crazy for those out of that loop. I mean really, Newt Gingrich is the champion of family values and is a Washington outsider? Really???
But beneath all of the current drama, it’s important to realize that such behavior may be both natural and logical – once you look at the big picture.
The root of the problem is that our world has changed in fundamental ways. For the first time in human history, technology has brought all humans into close and immediate contact. It has also disrupted traditional channels of power and information.
This change has altered societies around the world in myriad ways. But such change has not been welcomed by many – especially those whose identity and values were firmly rooted in the previously established cultures. This reflects a basic but rarely considered fact: change happens differently for a culture than it does for the society of which that culture is a part.
Ideally, cultures by their nature offer enduring, lasting values. In this way they satisfy the human need for meaning and stability. In the chaos and confusion of life, we need to have a dependable framework that gives meaning to what is happening around us.
By the same token, healthy societies are continually changing. This is a reflection of changes in demographics, as well as the growth of knowledge and awareness that are a part of a dynamic society. In this way, societies satisfy the human need for freedom and creativity.
However, there is a basic conflict inherent in this dichotomy: cultural values cannot long endure unchanged within an evolving and changing society. Just as pressures build over time along fault lines until there’s an earthquake, over time pressures build up between culture and society until conflict erupts.
That is where we are now. The world has changed profoundly over the past 40+ years. We humans are much more interconnected, empowered and diverse than we used to be. This change has opened up vast arrays of opportunity for many people – especially those who were marginalized by the prevailing culture’s institutions and power structures. But it has also shaken to the foundations those institutions and structures. And such change is hard for some people to handle.
David E. Stannard discussed this issue in his book The Puritan Way of Death – A Study in Religion, Culture and Social Change. He observed:
Whereas certain individuals and certain cultures find adapting to change relatively easy, many others, for various reasons, do not. Their resistance, which may seem revolutionary because it tends so often to focus on overthrowing the new social orthodoxy, is in fact no more than an effort to forestall or at least postpone dealing with the changes taking place around them.
William O. Beeman, a professor of Anthropology at Brown University and author of “Fighting the Good Fight: Fundamentalism and Religious Revival,” also notes this varying response to change and talks about the responses of those who resist change:
In essence, all such movements are a natural consequence of human processes of cultural change. In every society on earth change proceeds at an uneven pace. Some society members embrace change with relish. Others find it oppressive and troubling. When people feel that change is being imposed on them, some will find it necessary to resist–sometimes violently. The dynamics of revitalization thus are tied to inter-group dynamics. When a group in society perceives itself as having its power and authority usurped in the course of social change, the group comes to blame both internal and external causes for its fall from power.
As far as internal issues are concerned, Beeman notes that decline is often associated with individual failings. “They accuse members of society of becoming weak and irresolute to the point where they let others oppress them.” Regarding external issues, Beeman says “…the group objectifies an Other, and identifies it as an oppressor. Usually the movement advocates resistance — sometimes violent — to that oppressor.”
Beeman also talks about the historical perspective of these movements:
All of these movements invariably create a dual myth. This myth links a supposed Golden Age in the past with a Utopian future. The past Golden Age is seen as a time when the members of the movement or those they identify with were strong, vital, and in control of the world. The Utopian future presages a time when movement members will return to that sense of group strength and wholeness.
This may sound a bit familiar to those who follow the news. Take Islamic extremism. Back in September 2001, David Plotz posted an article in Slate titled “What Does bin Laden Want?”
These extreme “Islamists,” as Bin Laden biographer Yossef Bodansky dubs them, hope to re-establish the Caliphate, the golden age of Muslim domination that followed the death of Muhammad. They regard the Taliban’s Afghanistan as a model for such Islamic rule.
Elsewhere, while we haven’t heard much about it in the United States, Israel is having problems with members of its ultra-Orthodox Haredi population. Among other things, this group has been pressuring other members of Israeli society regarding the segregation of women from men. In writing about this issue in Jewish Ideas Daily, Yehudah Mirsky refers to “…an imagined Haredi idyll in the shtetl that never was. “
Meanwhile, back here in the USA we have Newt Gingrich expounding on an “historic America.” This prompted one of his acolytes at the American Spectator – former Reagan aid Peter Ferrara – to invoke a “Golden Age” and to “objectify an Other” in claiming:
Gingrich is the only candidate remotely capable of carrying the flag for the true, original, historic America in this fundamental, existential battle for national survival. He so rightly identified the public mood in his South Carolina speech, saying, “The American people feel that they have elites who have been trying for a half-century to force us to quit being American and become some kind of other system.” He further identified the pending danger, “If Barack Obama can get re-elected after this disaster, just think how radical he would be in a second term.”
Obviously, there are many differences between Islamic extremists and conservative Republicans. But one thing they appear to share is a certain myopia about the source of today’s social change. This change isn’t the result of an invasion by infidels or a conspiracy by shadowy elites. Instead it’s a product of modern technology, with its concomitant interlinking of humanity. As Walter Truett Anderson observed in his book “Reality Isn’t What It Used to Be”:
The collapse of belief we have been witnessing throughout the twentieth century comes with globalism. The postmodern condition is not an artistic movement or a cultural fad or an intellectual theory — although it produces all of those and is in some ways defined by them. It is what inevitably happens as people everywhere begin to see that there are many beliefs, many kinds of belief, many ways of believing. Postmodernism is globalism; it is the half-discovered shape of the one unity that transcends all our differences.
There is an absurdity inherent in much of the resistance we see to modernity and its attendant social change: the resisters are frequently using the tools of modern technology to advocate resistance to its effects on society.
If resisters truly object to how the world has changed, they should live their lives in accordance with their supposed Golden Age – whether it’s the 12th century or the 1920s. They should at least have the integrity of groups like the Amish and do without televisions, telephones, computers, the internet and the like.
But as soon as they begin using modern technology they are co-opted by it. There is no logically consistent way you can protest modernity with a videotaped message, or claim to be an anti-government individualist while using communications technology that was developed by the government and that was created to link people together.
It is this inherent conflict between past values and present facts that inevitably dooms the aspirations of those who resist the social changes we are confronting today. As Stannard says regarding those resisting social change:
…such movements rarely enjoy long-range success. They result from an opposition of the needs of the emerging social structure with those of the existing group culture…and when such incongruity is not resolved by effective integration of the two competing elements, it has historically been the almost inevitable fate of the traditional culture to give way to the needs of the ongoing social structure.
Today’s changing world is unsettling to most of us; an unfortunate fact of life is that when you’re in the middle of an era of great change you’re unlikely to have much confidence in how things will turn out. We humans are not comfortable with such uncertainty.
In times like these, perhaps we can seek counsel and solace in the wise words of others who were confronted with similar times in the past. Consider, for example, the words of Thomas Carlyle:
Today is not yesterday: we ourselves change; how can our Works and Thoughts, if they are always to be the fittest, continue always the same? Change, indeed, is painful; yet ever needful; and if Memory have its force and worth, so also has Hope.
All Together Now
Filed under: interconnected, uncertainty | Tags: conservative, decoherence, Democrats, Occupy, Occupy Wall Street, opposites, progressive, Republicans, Tea Party
Leave a Comment We’re all in this together.
That’s not a popular thought these days.
These days we prefer to think of how we’re different: conservative, progressive, young, old, white, black, Republican, Democrat, Tea Partier, Occupier, Christian, Moslem, Jew, vegan, meat eater, Yankee fan, Red Sox fan, soccer mom, NASCAR dad, beer drinker, wine swiller, etc., etc.
We’re eager to proclaim our differences whenever we can – on the radio, TV, the web, email, and Facebook. For support, we gather together with those who share our values. After all, there’s strength in numbers. We feel embattled and oppressed by those who are different than us. To buck up our spirits for the fight we must fight against our enemies we tell ourselves:
We’re all in this together.
Against THEM.
You’ve got to watch out for THEM. You can’t trust THEM. THEY want to destroy the country. THEY want to destroy our way of life. You can’t believe the crap THEY pour out on the radio, TV, the web, email, and Facebook. THEY are wrong. THEY are liars. THEY don’t know what THEY are talking about. Or maybe THEY know exactly what THEY are doing, spreading lies, half-truths and propaganda to have THEIR way against US.
Sometimes it’s hard to tell what their tactics are. But one thing is clear: THEY are responsible for what’s wrong with today’s world.
WE had better watch out, WE had better be on our guard against THEM. WE had better use all the tools WE have available these days to fight back against THEM: radio, TV, the web, email, Facebook. WE have to be strong and stand together as one against THEM. And remember:
We’re all in this together.
In the fight against THEM.
WE are ready for this fight. THEY deserve whatever WE can do to them: THEY have it coming. The world would be a wonderful place, WE would have peace and happiness, if it wasn’t for THEM. Because THEY fight US, WE must fight THEM. WE have no choice. The world is a jungle because of THEM.
Sometimes it’s hard to imagine a better world, a world free of fear and hatred and conflict. Sometimes it seems hard to believe that THEY have enough power to ruin the world for US. Is that really possible? Can THEY really do that all on their own?
Or do they need US to help THEM create this jungle world? Is this a Fight to the Death? Or is it a Dance? We react to what they do; they react to our reaction; we react to their reaction; they react to our reaction; we react to their reaction… And so forth.
This raises a question: if their actions are in response to our actions, to what degree are we responsible for their actions? Conversely, to what degree do their actions determine our reactions? Do THEY have some influence over OUR actions?
This raises another question: what would THEY do if WE didn’t react? What if we just did our thing, followed our beliefs, went on our way, and ignored THEM? Would the Dance end, the music stop?
What would THEY do if WE weren’t there?
What would WE do if THEY weren’t there?
And what would the world be like if the music stopped and the Dance ended?
Another question: to what degree are WE defined by our opposition to THEM? To what degree are THEY defined by their opposition to US? Who would WE be without THEM? Who would THEY be without US?
In quantum physics, all things exist in a state of potentiality until they encounter something that forces them to be defined as THIS rather than THAT. Physicists have a term for this: decoherence.
Maybe that’s what is happening here: our beliefs exist in a state of potentiality until we encounter the beliefs of others. Confronted by those beliefs, we are forced to choose: do we agree or disagree? It is only in encountering the beliefs of others that we come to know more clearly what we believe.
Just as we can only know light when we’ve encountered darkness, we can only know who we are when we encounter others who are not us. We are inextricably linked to our opposite, as black is to white.
If that’s the case, then there’s only one possible conclusion:
We’re all in this together.
Politics As Sport
Filed under: quanta | Tags: Democrats, politics, Republicans, sports
Leave a Comment A coworker approached me this morning clutching his copy of the NY Post. He was beaming, gloating about Republican Scott Brown beating Democrat Martha Coakley in Massachusetts’ special election for the Senate seat vacated by Ted Kennedy’s death. While he’d never said a word when McCain and the Republicans were trounced in the 2008 elections, he was happy to talk about how the Republican Party was “coming back strong now.”
Interestingly, his manner and way of speaking were identical to office conversations about sports teams. While I’m not a baseball fan, I did enjoy it when the Red Sox beat the Yankees in 2004. Office Yankees fans didn’t have much to say back then, but after that there were times when Yankees successes were followed by similar office trash talk.
I’ve had the feeling for some time now that for at least some people the rivalry between Democrats and Republicans is very much like a sports rivalry – like that between Red Sox fans and Yankees fans. Instead of reasoned debate about important issues, we get mindless comments about teams and opponents. Check out these comments on today’s NY Post web site:
Regarding recent Yankees free agent signings -
HEY SON
01/19/2010 9:31 PM
BAHAHAHAHAHAHAHHAHAAAA THE BEST TEAM IN BASEBALL GOT BETTER !
THAT HAS GOT TO KILL YOU SON !
28 IN 20-10 !
Regarding the Massachusetts Senate race -
LEGION57
01/20/2010 5:00 PM
Hey osama obama- prex ZERO, YOU LOSE- ahhhhaaaahahahahahahahaaaaa
Yeah, I’m sure that’s the kind of debate the founding fathers envisioned back in 1776.
It’s not surprising that politics has been imbued with the same emotional fervor – and lack of reason – as sports. After all, that is how politics is now presented by the media. But as Jay Rosen said in his piece back in 2004:
I hope other journalists confronting the political puzzles of 2004 will read James, read Adam Nagourney and Jim VandeHei and hear their defiant cry: Horse Race Now! Horse Race Tomorrow! Horse Race Forever! And I hope other journalists will ask themselves: must this go on indefinitely?
Let’s hope not. Meanwhile, I think it would help if the Democrats actually developed some new Big Ideas that would guide them in governing and help voters understand their agenda. And it might be useful to view the events in Massachusetts with some perspective and humor. (As usual, Jon Stewart has been great.)
What’s The Big Idea?
Filed under: interconnected | Tags: "creative destruction", big idea, conservatives, Democrats, financial crisis, individualism, linked world, Republicans, technology
Leave a Comment Watching the way politicians are struggling to deal with the current economic mess, it’s hard to avoid facing an unpleasant fact. While Republicans continue to base their arguments on discredited Big Ideas like “free market individualism,” Democrats still lack alternative Big Ideas that might guide them through policy minefields. Unfortunately, this isn’t new: the American Prospect had a cover story on the subject – “What’s The Big Idea?” – back in 2004.
Even though the Democrats “won” the national elections in 2006 and 2008, at times they still come across as feckless when addressing major issues. An example of this was a recent News Hour interview with Democratic governors Granholm of Michigan and Ritter of Colorado, as well as Republican governor Sanford of South Carolina. Sanford based his opposition to a federal bailout of the Big 3 and of state governments on the usual free market arguments about people working hard, playing by the rules, and eventually being rewarded. (Somehow this apparently doesn’t apply to autoworkers.) Meanwhile, Granholm and Ritter’s argument seemed to be basically “we believe bad things will happen if a bailout of the Big 3 doesn’t happen.” Well, probably…but why?
As it happens, Robert Wright had an article in Slate back in November, 2001, titled “The Big Idea.” He contended that modern technology has brought us to a point at which we are all interlinked and interdependent. While making his case in the context of 9/11, this also can apply to our current economic crisis:
“The general principle is this. Technological evolution draws people into larger and larger non-zero-sum games that promise common benefit—win-win outcomes. But the ensuing integration can bring the threat of common peril, of lose-lose outcomes. Either way—win-win or lose-lose—the fortunes of people who live at great distances become more closely correlated. Increasingly, good foreign news (say, a Japanese economic rebound) is good domestic news, and bad foreign news (the spread of AIDS in Africa) is bad domestic news. And very often this correlation of fortunes—this non-zero-sumness—is an argument for more international cooperation.”
Albert-Laszlo Barabasi, in his book “Linked – How Everything Is Connected to Everything Else and What It Means For Business, Science and Everyday Life,” observes that today’s world is rife with networks. The auto industry would be just one example: the Big 3 depend on a common pool of parts suppliers, while those suppliers are dependent on the continuing business of the Big 3. A similar web of relationships exists between the Big 3 and their dealers around the country.
Barabasi notes that the most important parts of a network are those entities – or hubs – that have the most links to the rest of the network. However, such major hubs pose a significant risk: the collapse of just one or two can conceivably bring down a whole network. (Think of the Northeast Blackout of 2003, for example.)
As we’ve seen in the debate about bailing out the Big 3, conservative free market types generally discount arguments of interdependence. As Wright said in his article, “Interdependence theory has a reputation on the right for being a namby-pamby doctrine for naive lefties.” That’s why conservatives were happy to see Lehman Brothers fail back in September: it was “the creative destruction of the market” at work.
Unfortunately, as economists and business experts like George Soros have observed, the demise of Lehman Brothers led to the meltdown of the entire financial system. Such an outcome might be inconceivable from a classic free market perspective, but it is easily understandable from an interdependent network perspective. Cascading failures are an inherent risk in networks, as anyone connected to a power grid knows.
The free market individualism espoused by conservatives and Republicans is a myth. (If they were really such individualists, why would they need a Club for Growth?) The alternative to this myth is not collectivism or socialism; the alternative is a recognition that we live in an interconnected, interdependent world. In this world, there is no contradiction between being an individual and being part of a group. Like a computer on a network, we are both simultaneously. And like a computer on a network, we are only as secure as the weakest link in that network. The failure of others can very easily lead to our own failure.
Perhaps, in fully recognizing the interdependent nature of our world, we will have found a Big Idea that can guide us in dealing with issues like the current economic crisis.
