BBC Doc: People’s Century, Ep 7, Breadline – The Great Depression, Fascism and Full Employment

Today I’m watching episode seven of People’s Century*, 1995, the amazing 26 part BBC series, 54 minutes each, that chronicles our entire 20th Century. I now realize it is likely to be the most impressive documentary series I’ve seen so far, so I’ve decided to selectively blog some of the insights it provides.

I hope that you will consider watching all 26 episodes for yourself at some point in your life, and showing it to and discussing it with your children. It is a singular experience. If it stays as good as it has been to date, I think it should be part of the core curriculum in every enlightened high school or college. The critical thing documentaries with this kind of scope in time (100 years), and breadth in subject (the whole world) provide is what computer scientist David Gelernter calls topsight, the ability to see and understand the whole of a system, from a vantage point that allows you to see an unusually large amount of it, in its essentials. People’s Century, at least the episodes I’ve seen so far, will give you unparalleled topsight into the nature of human life, the perennial opportunities and challenges of civilization, and our relentless and uplifting history of accelerating scientific, technical, and social complexification.

This episode is about the Great Depression. The greatest lesson I got from this is how simplistic and intransigent our capitalist governments of the time (Ramsay MacDonald in the UK, Herbert Hoover in the US) were, and how little they understood that only governments in modern market economies have the unique ability and responsibility to intervene in the business cycle, to make the inevitable bubbles shorter, and the inevitable crashes milder. Most importantly, their governments needed to save and spend countercyclically, as the economist John Maynard Keynes would eventually argue, as one of the foundational ideas of what we now call Keynesian economics.

In a depression, when no one in the business sector has money to spend (or is willing to spend, as with our big corps today), the government needs to keep shoes on everyones feet, keep the mines and the shipyards running, and do its best to create or subsidize jobs for the 20-40% of people who are forced out of work by the market system’s natural volatility, and by the increasingly rapid (yet increasingly short lived) waves of technological advance causing technological unemployment.  In a boom, the government needs to save while the businesses and consumers are spending more than they should, so the country won’t incur huge debts during the crash, by printing money none of us have. Our politicians since Hoover, with rare exception, don’t seem to have learned that second part of the cycle.

At least in this Great Recession many have unemployment insurance, health care, and we are seeing major fiscal interventions. In the US, the majority of our new weapons against unemployment truly can be traced back to the insights and convictions of Franklin Delano Roosevelt and his canny request in 1933 for and acquisition of executive powers to rival his powers under war, so that he could engage in a war on unemployment through his New Deal. Yet with all the advances we’ve made since the 1930’s, these films make clear how poor our policies remain relative to their potential.

It was fascinating to learn in the film that Sweden’s Social Democratic Government was actually the first of the advanced democracies to offer a New Deal style intervention against unemployment, not the US. Using major debt-incursion by the state, and serious public work projects for all, they’d largely recovered by 1934, while every other country was still in high unemployment. An American journalist, Marquis Childs, wrote Sweden: The Middle Way, in 1936. Roosevelt was excited by this book (see his quote at the book link), and sent a team to study Sweden’s cooperatives, businesses owned by their users for mutual benefit. I would love to know how much Roosevelt’s New Deal was influenced by the Swedish Social Democrats programs of intensive public intervention, which started when they came to majority power in 1932, a year before Roosevelt in the US. What is clear is that the Social Democrat’s Minister of Finance, Ernst Wigforss, is often credited with inventing and implementing Keynesian economics before Keynes.  Here’s a crazy Wikipedia quote: “John Kenneth Galbraith writes in his book A History of Economics: The Past as the Present, 1991, that it “would be more fair to say ‘The Swedish Economic Revolution’ than the ‘Keynesian revolution’ in economics, and that Wigforss was first in this transformation of thinking and practice about economy”. Yeah Sweden!

Another of the great ideas in the film was mentioned with respect to one of the megaconstruction projects, I believe it was the Tennessee Valley Authority. The worker noted that they’d had a chance to create three eight-hour shifts or four six-hour shifts to fill their 24-hour construction cycle, and went with the latter to maximize job creation. That’s a 25% sacrifice on the part of the eight hour workers who were instead paid for six hours a day. Imagine if we had a President bold enough to ask folks to voluntarily cut back, for a full year, the hours they are paid to work by 10-25%, in order to create more temporary (year-long) “training jobs” for all those presently out of work. The job-creating workers could spend the unpaid time on themselves or family, or they could use it to help train those getting the temporary training jobs. How many people (3% of us? More?) would gladly take turns, each year of a protracted depression, volunteering make such a sacrifice once they truly understood the hope, self-respect, and industry this action would stimulate for America? How many temporary new jobs could we create with such a scheme, and how soon would the economy grow enough for some of those jobs to become permanent? I don’t hear this kind of thinking from our administration today, and it is a major shame. Folks like that exist, and they should be given the ability to rise to the call, and their actions would shame or inspire a much larger fraction of Americans into helping out in less dramatic ways.

Have you heard of Oswald Mosley? I learned about him watching this episode.  Mosley created and led the British Union of Fascists 1932-40. The BUF flag is left. Look a bit like the Swastika? No surprise, Mosley was inspired by and friends with the Nazis. He left the UK parliament in 1930, when the do-nothing classical capitalist government of the time rejected his plan for any state intervention to create more employment. At the time, Hitler and Mussolini were promising full employment and state intervention in the Depression under Fascism in Germany and Italy. This promise of intervention, of at least doing something to get people employed, seems to have been the primary appeal at the time of the fascists to the common voter. The fascists, for all their unsettling extremism, were at least promising some kind of state intervention, when MacDonald (UK) and Hoover (US) were counseling “belt tightening” and had squat else to offer. This was a great failure of nerve and vision on the part of the capitalists.

The 1920’s was, if you think about it in historical context, the last gasp of the libertarians. Their policies became untenable from this point forward. As much as I appreciate their desire to bring fiscal responsibility to our very irresponsible modern governments, Ron Paul and his ilk today haven’t sufficiently learned the lessons of history. The more complex a social system gets, the more regulation, and the more intelligent regulation, it needs. The Great Depression made it clear we needed some kind of intervention, and fascism got its day because it at least offered serious intervention, when the capitalists were being the cold-hearted and short-sighted bastards they can so often be. Of course, as the lessons of the 1930’s and 40’s taught us, you have to be very careful who gets the keys to the house. I’m looking forward to seeing those in coming episodes.

To bring this post back to the present, I propose our current economic policies, and the messages of our governmental, corporate, and social leaders, fall far short of what history teaches us in at least four major ways:

1. We remain ignorant of defining, measuring, and managing technical productivity, the scientific, technological, and knowledge capital that is the real productivity base and foundation of every modern society. Technical productivity can be defined as all the elements and processes of a society that most directly drive its accelerating complexification, to the best of our current theories of machine and social intelligence. Gross domestic productivity is a very poor proxy for technical productivity. Entertainment, aesthetics, religion/philosophy, philanthropy, defense, and many other aspects of human commerce and activity, for all their many evolutionary benefits, simply do not have the same survival importance to modern society as a complex system as science or engineering, and never will. (If you doubt that large scale defense budgets are less important to society today than ever before, read Steven Pinker’s new masterpiece, The Better Angels of Our Nature: Why Violence Has Declined, 2011). Even the financial industry is also not of the same critical importance. Wall Street could vanish tomorrow and we’d rebuild our financial, credit, and monetary systems quickly, as long as Main Street had sufficient engineers and know how to run all the machines that modern society depends upon. In fact, sometimes debt forgiveness and starting over is the best thing for a financial system that has become too uncompetitive, too biased to reward the few players at the top. Evolution would argue that we need as much diversity and specialization of activity as possible to increase our wisdom and resilience, but development would argue that some products and services are much more important to social resilience and acceleration than others, and we need to recognize this, and do our best to support, subsidize, and advance the social, economic, scientific and technological policies that will accelerate technical productivity.

2. We need much smarter and more aggressive job-creation policies during a recession, some of which, like the job-training idea described above, don’t require extra spending, just some sacrifice, extra mental and physical effort, can-do spirit, and boldness from business, government, and media leaders. Corporations, the state, and the media can do a massive amount to combat unemployment in a recession without going to the unacceptable extremes of state socialism or fascism, methods of creating full employment that may work in the short run but are ultimately unsustainable.

3. This said, we also need to create consequences for spending money we don’t have. Countercyclical spending only works as intended if you’ve done countercyclical saving. Spending money you don’t have can only go on for so long, before the debt you create is worse than not spending. We need to know where that point is, and there need to be serious consequences, including the loss of political office and inability for reelection for those who cross it. We need to revise our governments rulesets so in the future, unless we are in a serious recession, politicians can only spend a bit over what they’ve saved. And if we are in a serious recession, there also need to be severe consequences to the politicians (loss of office, loss of ability to lobby after leaving office) and the wealthy and corporate leaders (new recession taxes imposed) who let us get there.

4. We need to address fifty years of growing corporate and social income and wealth divides. We have to recognize that the corporations and their lobbies fully captured the governments some time near the middle of the 20th century, as their wealth grew far faster than governments because of mass markets, connectivity, and globalization, and we need to take steps to getting corporations back under the control of democracies. Govt reform, tax policy reform, rich poor divides, far better regulation of the financial industry, and many related issues fall under this challenge.

Lots to do, but we can count on accelerating technical productivity delivering an ever more capable human civilization to empower our reform efforts as well. If accelerating complexification is a universal developmental process, as I think it is, then the acceleration will continue whether we grow wise enough to recognize and actively guide it, or not. It will continue whether we grow humble enough to recognize the laws of the universe seem to be doing most of the work, and we just need to stop getting in the way so much with our short term and selfish desires, or not.

*Finding People’s Century online isn’t easy at present. Episode 2, Killing Fields (WW I) is available free, if you have Amazon Prime, on Amazon Instant Video. A few more can be found online here. For now, to see all 26 you will have to go to the torrent or usenet sites (use an anonymizer of some type so your ISP doesn’t throttle your connection), or buy a VHS copy ($99 for the series) off Amazon or eBay. DVDs don’t appear to be available at any price. As I’ve written in How the Television Will be Revolutionized, until streaming or DVDs emerge that are reasonably priced (we all know what reasonable is), I have no qualms going to the internets for this, and heartily recommending others to do the same. Be a soldier in the war for affordable global access to quality educational video!

Objections? Additions? Omissions? Let me know. Hope you can find time to watch the series, it’s amazing.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: