What Will Reverse the Dangerous Trends in U.S. Society?

The above is a composite of several graphs occurring throughout Putnam’s book. The following is a sample of those graphs:I have added the y-axis labels to Putnam’s graph, to show that the high points on the graph are those with a high level of “we-ness” – of communitarian feeling and actions – and the low points are those with a high level of “I-ness,” of greater emphasis on individual-centered feeling and actions. The peak of we-ness and community occurred in the early 1960s; peaks of I-ness (shown in the graph as low points) occurred in two eras, one before the turn of the 20th century and one recently in the 21st century.

In the case of each of these graphs, although some are vaguely labeled, they were – I am convinced from reading the book – compiled through careful research based on solid data.

The remarkable thing about them is that they all exhibit the same I-we-I pattern, an individualism (selfishness) –> communitarian (fellow feeling) –> individualism (selfishness) progression over time.

This is not to say – despite the “communitarian / we” level being on the upper end of the y-axis – that communitarianism is necessarily better than individualism. There can, of course, be too much of either. But because the recent shift from communitarianism to individualism is linked to decline, there is a tendency to feel that this shift to individualism is lamentable.

The age of conformism

It was not necessarily lamentable when the cycle was at the peak of its upswing in the 1950s and early 1960s. A surge of rebellion against conformism was gathering in the country, especially among the young.

Conformism was the rule. When I was in high school it was assumed that a man would get a job for life with the same corporation and then retire at age 65, which was the life expectancy at the time. Men who worked for IBM had to wear white shirts. No other color was allowed.

Rebellion against this conformism took the form of books like The Organization Man and The Man in the Grey Flannel Suit. Among the young or marginally connected it took the form of the beat generation and the beginning of rock and roll music.

In 1960, at the age of 16, before my freshman year in college, I got a summer job in a warehouse requiring very strenuous work unloading, ripping open, and reloading crates of shoes for the minimum wage, which was one dollar an hour. I discovered that it was a union shop – something I didn’t understand – so part of my wage went to the Teamsters Union, an organization known to be corrupt and tied to organized crime.

Unions may have helped create fellow feeling and promoted solidarity, but they were also hard to get free of.

Putnam says that as the 1950s wore on, “concern that the balance had shifted too far toward ‘conformity’ and community standards began to spread, especially among intellectuals.”

Such was the case at an extremum of the I-we-I pendulum swing. Reaction to that ultimately caused, 50 years later, the pendulum to swing to the other extreme.

The upswing

The story of how it came to that point in the early 1960s forms most of the book. In the late 1800s and at the beginning of the 20th century, economic inequality was almost as great as it is now. Wealthy plutocrats like John D. Rockefeller, J. P. Morgan, and many other well-known names reigned supreme. It became known as the “Gilded Age.”

Reaction against the monopolistic trusts that those super-wealthy plutocrats owned gave rise to an era of progressivism, marked not only by calls for trust-busting but by the formation of benevolent societies, originating at the grass roots and then spreading nationwide. Progressivism became commonplace politically among politicians of both parties, Republicans at least as much as Democrats.

Putnam notes that:

…half of all the largest mass membership organizations in American history – the fifty-eight national voluntary organizations that ever enrolled at least 1 percent of the adult male or female population – were founded in the decades between 1870 and 1920.

… In an extraordinary burst of creativity, in less than a decade (1901–1910) most of the nationwide youth organizations that were to dominate the twentieth century were founded – the Boy Scouts and Girl Scouts, Campfire Girls, the 4-H, Boys Clubs and Girls Clubs, Big Brothers and Big Sisters.

We would probably not think of Herbert Hoover, the Republican president who reigned over the frothy stock market of the late 1920s, the crash of 1929, and the onset of the Great Depression of the 1930s as a progressive. He is thought (probably wrongly) to have been a believer in laissez-faire capitalism and to have refused to commit government to act to ease the Depression.

Yet he was as much a progressive as other politicians of his era. We are surprised to read in The Upswing that, “Hoover wanted what he called an ‘associative state,’ in which the government would encourage voluntary cooperation among corporations, consumers, workers, farmers, and small businessmen.”

Were Hoover and Republicans like him anti-government, maximize-shareholder-value-only conservatives like the modern type?

Not exactly.

Putnam implies that the Progressive era of Theodore Roosevelt and most other politicians of the early decades of the 20th century was spawned and incubated by the surge of communitarian organizations and projects that arose in the years around the century’s turn.

In later years – the 1930s, 1940s, 1950s, and 1960s – this coming together accelerated in the U.S. because of events that required action by a united nation and particularly by government: the Great Depression, World War II, the Cold War, and the Space Race. After the end of the 1960s, the communitarian, centripetal force that those events brought forth in the United States abated.

The Upswing does cover the swing toward individualism that occurred since that time, starting in the 1970s or perhaps the late 1960s. But this has also been covered in numerous other books and articles.

How to create a new upswing

It is much debated whether the United States is in a secular decline that will continue, with fluctuations along the way, for a few decades until it has gone the way of ancient Rome and colonial Spain, France, and Great Britain – or if it will recover and continue to be the great nation that it always has been.

In short, can the U.S. create a new upswing?

One nation has been on a strong upswing for 40 years: China. From an extremely poor peasant nation it has become a nation with 15,000 miles of supremely efficient high-speed rail, many thousands of miles of new roads, gleaming cities, scientific projects in space and the deep sea that are the envy of the United States, and numerous other developments. In these ways it almost resembles the United States of the 1950s and 1960s (including the pollution). And China is inherently communitarian, because of its Confucian heritage and Communist present.

China is also the world leader in automating finance. All financial transactions take place without the use of cash. A peasant squatting on the bank of a river selling oranges, when accepting payment, will show you a QR code printed on a piece of cardboard and you pay by exposing your smartphone app to it.

How did China get there?

In 1968, I was attending the final session of a two-semester graduate school course in partial differential equations. I had, frankly, not attended most of the classes because at the beginning I could see that, although the professor teaching the course was spirited, he was basically “writing a book on the blackboard.” I decided that I could read that book myself in my own time. (I wound up reading the class notes of a friend during a canoe trip and got a top grade on the final, higher even than my note-taking friend.)

There were at least a hundred students in the course. The final session was devoted to the professor handing back the final exams and their grades to the students, whose names he read in alphabetical order and then handed the exam back to each of them. He began by announcing, perhaps, “Abelson,” then perhaps “Adams” and so on until he reached the Cs. Then he announced “A. Chan,” then “B. Chan,” then “C. Chan” and so on.

It was only then that I realized how many Chinese were in the class, studying to be engineers and scientists.

To understand how China achieved so much, I look back to that class. I don’t know how many of those Chinese students went back to China or even came from China. But it was emblematic of what we know about how diligently China procured a strong technical education for hundreds of thousands and perhaps millions of its citizens.

Mission economy

I said at the beginning that two new books may point the way to how the United States can experience a new upswing. Those books are Mariana Mazzucato’s Mission Economy and Bill Gates’ How to Avoid a Climate Disaster.

Mission Economy’s subtitle is “A Moonshot Guide to Changing Capitalism.” Mazzucato uses the example of the 1960s U.S. mission to put a man on the moon as an example of the positive things that can happen when the nation embarks on a grand technological mission.

The proximate cause of that mission was U.S.’ fear that it was falling behind the Soviet Union in technology. The Soviets (the Union of Soviet Socialist Republics, or USSR) had scared the U.S. in 1957 by launching Sputnik, its globe-circling satellite, thus far outpacing the U.S. in the race for space.

As a reaction, the U.S. strongly increased its funding of science and technology. Then, on May 25, 1961, President John F. Kennedy announced the goal of sending a man to the moon by the end of the decade – a goal that, remarkably, was achieved. (Remember that, at the time, there were no miniature computers or microchips or almost any of the other technologies that could be used today.) The project eventually became known as the Apollo program.

It was, in retrospect, an arbitrary goal in the race to beat the Soviets at technology. But it worked. It helped to supercharge U.S. technology, thrilled a generation of Americans, and helped to tax the Soviets’ capacity to the point that its economy ultimately collapsed.

It was an exciting project. Mazzucato writes: “The average age in the mission control room was twenty-six. The appeal of working for a government agency was that it was not only purpose-driven but also explicitly welcomed risk-taking in the process. Far from being a boring bureaucracy, NASA was the most exciting possible place to be!”

It also spawned an enormous number of spinoffs that laid the groundwork for much of the high technology we use today and formed the basis for many of the huge corporations of the 21st century.

Mazzucato says, quite accurately: “Innovation and the commercialization of ideas do not happen because you want them to: they happen along the way to solving bigger problems. Apollo was an example of what can be done if the ambition is inspiring and concrete.”

She uses the moonshot as an example of what she believes America needs today – a new and revived version of a capitalist economy, driven by a mission in which the government would be at the center of what Herbert Hoover might have called an “associative state.”

As NASA did in the moonshot, the government would serve in the role of coordinator and seed funder for a network of cooperating corporations, consumers, workers, research institutions, and small businessmen. This would not necessarily be expensive for government – people might be surprised to know that Project Apollo cost only $28 billion from 1960-1973, or about $280 billion in today’s dollars.

The climate mission

What mission should we use to drive an upswing in the economy, and pride in America, the way NASA’s Project Apollo did?

Remember that the moonshot was an arbitrary mission, one designed to beat the Soviets in the game of space. We didn’t have to put a man on the moon. But as Mazzucato says, “Innovation and the commercialization of ideas … happen along the way to solving bigger problems. Apollo was an example of what can be done if the ambition is inspiring and concrete.” The Apollo Project served as the solution to a bigger problem – the problem of competing with the Soviets – even if it was a somewhat arbitrary solution.

What should the new mission be?

It could be many things. But the mission of reducing the emissions of carbon dioxide and other greenhouse gases is certainly a large and challenging project.

Some would argue that it is not a necessary mission or that its urgency has been overblown. Other goals, they might say, are more important, such as reducing global poverty.

But the moonshot was not a necessary mission either. There were people in the 1960s who thought it was a waste of money, that the money should have been applied to reducing poverty.

Yet it worked to inspire a nation, drive decades of technology innovation, and beat the Soviet Union at its game. One might even point to ways in which the technologies developed by the surge of innovation have helped to reduce poverty.

Ironically, the moonshot delivered the photos of the Earth taken by the Apollo 11 astronauts from the moon, and they were an important catalyst of global climate awareness.

If we have to choose a mission to reinvigorate the U.S. economy and inspire people – and perhaps even beat China in technology – the goal of reducing greenhouse gas emissions and thus stemming global warming and climate change is at least as good as any.

And it is something that we do need to do, sooner or later. And many of the projects that it entails are also projects we should be doing for other reasons, such as upgrading and expanding the U.S. electricity grid.

In carrying out the project, we would do well to follow the management advice of Professor Mazzucato in her book.

For the blueprint for what tasks need to be performed in that project, we could not do better than Bill Gates’ highly informative (titled to sell) book, How to Avoid a Climate Disaster. That book goes through the challenges posed by the goal of reducing carbon emissions, and the innovations that will be needed to address each challenge.

America does need a new upswing. It may already be in the making. To accelerate that upswing America needs a mission. The mission prescribed by Gates’ book is a good choice.

Economist and mathematician Michael Edesess is adjunct associate professor and visiting faculty at the Hong Kong University of Science and Technology, managing partner and special advisor at M1K LLC, and a research associate of the Edhec-Risk Institute. In 2007, he authored a book about the investment services industry titled The Big Investment Lie, published by Berrett-Koehler. His new book, The Three Simple Rules of Investing, co-authored with Kwok L. Tsui, Carol Fabbri and George Peacock, was published by Berrett-Koehler in June 2014.

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