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Crises of Empire … and some possible responses

This is a lecture that I offered at the Servant Leadership School/Festival Center in July of 2008 at a conference on Jubilee economics. I exlore briefly three previous Western empires and look for lessons for us in the waning years of the American empire.

Twenty-five years ago, when I first moved to DC and began practicing medicine at a small clinic not far from here, the depth of poverty and the societal callousness to it shocked me.

I’m embarrassed to say that it took me a while to see through our American emphasis on personal responsibility to realize that the major cause of this poverty was injustice.

 At about the same time, Walter Brueggemann and others were teaching me that the Bible not only identifies God with a preferential option for the poor but also “predicts total social, political, and economic collapse if [God’s] justice is not realized.”[1] In other words, if society doesn’t protect the poor, the nation will ultimately collapse. Given the state of America’s poor, that didn’t seem like good news for our society.

But it was the 1980s and the US still seemed at the height of its powers. Collapse was nowhere in sight. Lacking the faith to trust biblical insight without empirical evidence, I basically kept my suspicions to myself.

Well, twenty years later, here we are in a society falling apart and the prophets seem incredibly prescient. But is there an empirical connection between our refusal of the biblical shalom, on the one hand, and global warming, widespread hunger, people being losing their homes, on the other?

It’s pretty clear, actually.

In his book Wealth and Democracy, political scientist Kevin Phillips traces the economic, social and political history of the last four great Western empires: Spain, Holland, England, and the United States. He finds astonishing similarities in their trajectories from emerging power through a “Golden Age” of general prosperity and then to social decline.

I’d like to spend some time reviewing these trajectories. Given today’s subject, this may seem irrelevant, but stay with me. These trajectories not only show us a direct relationship between injustice and national decline but also give us clues about responding to our current dilemmas.

Spain

It takes time for great powers to rise and fall. Spain’s rise to prominence began when gold and silver started arriving from the Americas in the early 1500s. At first the benefits accrued only to royalty and the wealthy, but the empire consolidated its power and moved into a Golden Age by investing in manufacturing and commerce. This led to jobs and higher incomes for a broad swath of people, so inequality within the country fell.

By about 1600 there were some signs of developing weakness in manufacturing, but the biggest problem for Spain paradoxically was its wealth. All the gold and silver arriving from the New World inflated prices for everyday goods. Imported goods were relatively cheaper, leading to the decline of domestic manufacturing. Then the wealthy began to invest wherever their economic returns were highest: in banking and finance or investments in other countries rather than in Spain’s own manufacturing or commerce, which therefore declined. Wages fell and people lost their jobs. The rich just lived off their wealth while poverty and destitution spread.

The coup de grâce for Spain was the financial burden of the Thirty-Years War, which left the government weakened. Eventually, the feudal system returned as workers left their jobs and returned as peasants on large estates.

Holland

Holland was the next great power and followed a similar arc. It began while Spain was still strong and deported a large number of Protestants into Holland. This included so many bankers, merchants and artisans that Amsterdam became Europe’s commercial capital almost overnight. Again, this initially benefited only a wealthy elite, but the tiny Dutch nation soon had the world’s largest shipping fleet and lots of investment capital.

The Golden Age began as this capital was invested in advanced technology to develop energy and fuel in the form of wind and water, that is: sails, windmills, navigation, pumps, and so on. This technological edge built up the large textile, shipbuilding, fishing and specialized industries, employing people with wages two or three times higher than in neighboring countries. Prosperity spread and inequality declined.

But once again, the wealthy began taking their investments out of local manufacturing and shipping and into real estate, finance, and overseas investment, where they got better returns. Once again there were expensive military conflicts, which strained Dutch seafaring and economic strength to the breaking point. The wars meant higher taxes, which ultimately led to even further declines in manufacturing. The loss of jobs and increases in inequality and poverty eventually led to tax and food riots on the one hand and the wealthy living off of their investments and securities on the other. The days of the Dutch Empire were over.

England

Sometime after 1750, two successful wars with France and the beginning of the Industrial Revolution made English industry, capital, and empire predominant. Initially, again, only the wealthy benefited, primarily from trade with the colonies. But wealth was then invested in the Industrial Revolution, strengthening factories, railroads, canals, and trade with the colonies. Once again inequality declined. Just as Holland developed the technology to control wind and water, England’s rise to prominence rode coal technology for energy and fuel.

Note that “all three Golden Ages involved, first and foremost … a wave of success that brought broad enough status and prosperity to set [large masses] of Spaniards, then Dutch and Britons, ahead of their peers elsewhere.”[2]

Already, however, England’s wealthy had begun investing their capital not in English infrastructure but in other countries or in finance where returns were higher. Like Spain and Holland, this made England richer but weaker. Prices rose and imports became cheaper. Local industry declined as did wages. Soon inequality had risen to astonishing heights just before the First World War when the upper 1% controlled almost 70% of capital.

The first and second World Wars then drained the British treasury, leaving the country still intact but no longer a world power.

Before looking at where the US is in this picture, notice that the serious decline in each empire begins as the society disinvests in its poor and working class. In other words, we can read the Old Testament prophecies less as predictions of God’s “punishment” and more as simple recognition that a country that doesn’t take care of its poor eviscerates the strength of its society. There are natural consequences to national greed and selfishness.

United States

The rise of the United States begins in the 19th century with the building of the railroads, the rise of coal and oil, and the development of steel and other industries, but once again this benefited primarily a wealthy elite. Whereas Holland had wind and water and England had coal, the United States rode oil to prominence.

The Golden Age of the United States began with the end of the Second World War and lasted into the 1970s. It was characterized by a broad general productivity in agriculture, manufacturing, and technology. Wages rose to across the board. In the doubling of productivity from 1947 to 1979, the increase was spread evenly across the economic spectrum. Proportionately, the poor gained even more than the rich.

There are several reasons for this.

But once again, what some called the “age of greed” began about 1980. Unions were severely weakened; corporate tax rates declined; the income tax became less progressive. And just as in Spain, Holland, and England, excess wealth was invested more in “making money” than in broad productivity. Lower taxes meant smaller government investment in education and physical infrastructure. Increasingly, investments went into speculation: real estate, the stock market, international investment, and international finance. During the 1990s, large financial institutions went heavily into the credit market, loaning out huge sums of money through credit cards, sub-prime mortgages, and other much more complex financial instruments. Overall, the economy continued to grow, but now the increased productivity went mostly to the wealthy. Between 1979 and 2005, the income of the lowest quintile didn’t budge, and only in the upper quintile of income are there significant income gains. Quite inevitably, inequality has now increased to the highest levels since the Roaring 20s.

 

Without investment in the real market, the United States went from being the world’s largest creditor to being the world’s largest debtor. We now import in excess of two billion dollars a day more than we export meaning that we have to borrow that two billion dollars a day from other countries just to maintain our standard of living. At some point, the trust that those lenders have had in our ability to pay our loans back will falter, and it will be harder and harder to borrow that money. Or our debts could be used as an economic weapon against us. The US dollar has already lost almost half its value in relationship to the euro in the last six years, which is part of the reason gas and food are more expensive. Economically, we’re going to become a much poorer country, regardless of how well we respond to the coming crises.

There will undoubtedly be ups and downs, but what we’ve seen economically over the last several weeks is just the beginning.

And finally, just like the previous empires, we’re spending increasing billions of dollars on our military, trying to maintain our status as military superpower. Both Republicans and Democrats (yes, even Senator Obama) propose strengthening our military, spending more on it to remain the world’s only superpower.

If history is any guide, we can’t afford it.

Indeed, if history is any guide, we’re well into our decline as an empire. I suspect most of us here would rather shed the mantle of empire, anyway, but the important question is whether we can decline gently enough that the poor and middle class aren’t hurt.

Now one important question is: Is the decline that we’re seeing an inevitable part of an empire’s fall, or can we build a way of life that—in keeping with Jubilee economics—gives us enough but not too much?

Global warming and the end of cheap oil

Before getting to that question, we need to look at global warming and the end of cheap oil.

I’ve already mentioned that our economic rise has been dependent upon oil for energy and fuel, but we forget that oil also forms the basis for much else in our economy: plastics, fertilizers, pesticides, and lately computer chips, and much, much else. We’ve come to power on cheap oil.

It’s a little strange to think of it this way, but our dependency on oil and coal means that our rise to power has also been dependent on using up the world’s available carbon sinks. As most of you know, carbon sinks are places like the atmosphere and the oceans where the carbon from burning fossil fuels ends up. We’re now realizing that these carbon sinks are limited and that the developed world’s rise to affluence has already filled them up … leading to global warming.

Global warming occurs because the carbon dioxide in the atmosphere’s carbon sinks is already too high. The implication is that when America’s 5% of the world’s population uses 25% of the carbon sinks, we’re stealing the patrimony of the developing world. It’s actually worse than that since carbon dioxide stays in the atmosphere for about a century; so most of the CO2 now in the atmosphere has been put there by the developed countries over the last century as we’ve built up our standard of living. To make up for our previous overuse, from this point on we have to take much less than our proportionate share of the carbon sinks, to allow others to build their economies. Since standard of living and carbon emission are directly related, doing justice means significantly reducing our standard of living.

As I’m sure many of you are already aware, many global warming scientists are giving us less than ten years to bring down the level of atmospheric carbon dioxide because positive feedback loops may soon take the question out of human hands. Positive feedback loops are changes caused by global warming that then cause more global warming, leading to more of the original changes. For instance, sea ice reflects almost 90% of incoming sunlight back out into space without warming the earth; open ocean water, on the other hand, absorbs most of incoming sunlight, warming the water. As the water warms, sea ice melts … creating more open water which absorbs more sunlight, warming the earth further, which then melts the ice.

Several such positive feedback loops exist.

And so on.

So what needs to happen? The United States and other developed countries must share the carbon sinks by cutting back probably 90% of their CO2 emissions and work intensively with the underdeveloped world to end poverty and decrease the need for further carbon emissions. This’ll mean significant cuts in standard of living but are precisely Jubilee values.

Since our economy has been so utterly dependent upon oil, we also have to look at the issue of “peak oil flow.” “Peak oil” theory proposes that the rate of oil extraction out of the ground is roughly a bell-shaped curve. Notice that the plateau occurs when about half of all available oil has been extracted. There’s still lots left in the ground but the difficulties in locating it and in getting it out mean that the rate of extraction will then decline. In 1956, on the basis of his calculations, oil geologist Hubbert predicted that peak oil flow in the United States would occur between the late 1960s and the early 1970s. Most other experts scoffed, but the rate of US oil production topped out in 1970. There are now many oil experts using his calculations suggesting that the world’s peak oil flow will occur between 2005 and 2015.

With the worldwide demand for oil rising every year and peak oil flow either here or coming soon, we’ve probably seen only the beginning of the rise in oil prices. One of the reasons we don’t hear much about the end of cheap oil is that the shock to our economy is likely to be devastating. Competition for oil will mount, and the likelihood of military conflict is high. Once again, the issue of sharing will come to the fore: Will humanity find a just way to share a dwindling resource or will we fight each other for it. Human history isn’t very encouraging.

Responses

So, what can we learn from Spain, Holland, and England to help us deal with what’s coming? It seems to me that part of the decline of empires is inevitable. First of all, people in other countries aren’t sleeping. Foreigners emigrate to the empire, learn the technology, take it home, and learn to do it cheaper and better there. England learned seafaring from the Dutch, the US learned steel making from England, and India has learned high technology from the US.

Second, during the Golden Era, as general wages increase, it becomes relatively more expensive to manufacture things here and foreign imports become therefore relatively cheaper, leading to the off-shoring of manufacturing. People are laid off, and working-class wages decline.

Third, the energy and fuel sources on which the empire is based change. Coal replaced wind and water; oil replaced coal; and oil supply is going to be disrupted.

On the other hand, these previous empires also teach some alternatives.

Perhaps the most important is that the country needs to find ways to direct investment into basic agriculture, manufacturing, and commerce. This involves a combination of

In either case, the wealth of the country must be reinvested in the community itself.

A second lesson is that as countries become richer, wealth tends to be invested in speculation, so there’s a strong tendency to ignore human and physical infrastructure. US public school education, for instance, has deteriorated over the past generation and higher education has become unaffordable for all but the affluent, leading to shortages of technologically skilled workers. So, the society must invest in its human infrastructure: education, health care, basic welfare.

Now, it’s probably obvious that an economy controlled by large corporations isn’t going to respond to the lessons of the previous empires. Indeed, we need to be clear that the free market isn’t even theoretically capable of dealing with most of the coming crises. We can explore this more in our discussion, but laissez-faire capitalism has no realistic mechanism for preserving the commons. Nor, for practical purposes, can it care for the future or give the poor what they need to live with dignity.

So, what are the larger systemic solutions? We haven’t talked this morning about corporate control of politics and media, but it seems clear that there won’t be a real change in the system until there’s a fundamental shift in the level of democracy and a major decrease in inequality. And this won’t happen until there’s a shift in the ownership of the nation’s wealth to benefit the vast majority; that is, there must be some degree of socialization of the ownership of major industry.

This doesn’t necessarily mean traditional state-controlled socialism, which has also been incapable of solving many issues. But, as University of Maryland’s Professor Gar Alperovitz points out in his book America Beyond Capitalism, there are many different models for changes in the ownership of industry already working here. For example:

Alperovitz comments that we don’t lack for relevant models. The prime task will be to convince people that greater socialization of our economy will be beneficial. He suggests that as the thousands of examples across the country become more well known, they can become the nucleus of a movement to change ownership of the economy so that benefits accrue to everyone, not just the very wealthy. As opposed to proposals—which tend to elicit knee-jerk negative reactions—the actual projects are often well accepted within the local community.

My own sense is that as the country moves toward economic crisis, there will come a greater willingness to try some of these models on a broad scale.

“Well, maybe,” you say, “but those changes probably aren’t going to happen anytime soon. Besides, those are systemic changes; what can I do? What can we as faith communities do?”

I must admit that the question had stumped me for a long time, but a friend suggested a most obvious answer.

What’s significant about virtually all of the problems facing us is that they’re fundamentally moral problems. I didn’t mention this in my review, but Holland and England changed from protecting their infant industries to insisting on an international free market economy once they became strong. Similarly, in the last generation, the US has also pushed for a free-market economy based on self interest rather than on Jubilee economics. But there simply are no mechanisms within the free market for dealing with global warming, world hunger, peak oil, or the other coming crises. We have acquiesced to an economic system that guarantees increased inequality and not complained because we’ve done fairly well by it.

Biblical ethicist Daniel Maguire writes:

Every society is paralyzed to some degree … by the seduction of the status quo. We mistake the customary for the good; what is convenient for us we see as decent, or even noble. In fact, we instinctively defend the “deals” our comfort depends upon.[3]

I don’t think it’s simplistic to say that for us who are affluent, these “deals” revolve around the question of sharing. Are we willing to give up our privilege so that we can live with others in peace and in justice?

Our imperative as people of faith, it seems to me, is that we must give up that privilege. Our biblical faith is very clear. Why should it be so difficult to figure out what we’re supposed to do? Why are we still asking the question?

Yes, there are lots of specifics that need to be answered, but there are three straightforward categories of answers to the question of what to do.

First, our imperative as people of faith is to live radically simpler lives and then give our excess away. What do I mean by radically simpler lives? Well, I don’t know exactly, but almost all of us have a long way to go. Certainly it involves cutting our carbon emissions: traveling by foot, bike, or public transportation, drastically limiting air travel, sharing living space, becoming vegetarians, eating locally produced food. But it also involves coming together as communities to explore with each other how to further simplify.

And then share the excess with the world’s poor: share with the poor in our communities, join communities of people who need our material resources and give our stuff away. Give personally, give to organizations that will share your resources, or contribute to advocacy organizations that will work to share our national wealth with others.

Voluntary simplicity is the radical beginning. Without it we’ll find ourselves unable to work efficiently or with integrity for wider societal changes.

Second, educate our faith communities about the need for simplicity and sharing. The membership commitment of Church of the Saviour is not to give a tithe of our income but to give proportionately of our income, beginning with a tithe. Ten percent of our gross income is a minimum. Most of us could be sharing at much deeper levels, especially if we lived more simply. Our Scriptures and our tradition are so explicit about the dangers of wealth and the requirement to share that it’s really a question of basic faithfulness. Again, only when our faith communities have begun the process of radical simplification will we begin to be effective in educating others.

And, finally, begin to educate our society about the need to share. There are so many levels at which this can be done. Participate in advocacy organizations working to give the poor a larger slice of the pie; join in tax reform; work within the larger Church toward a radical simplicity; work to repair the criminal justice system; volunteer at Joseph’s House; the list is infinite. The question is How can I work so that American society begins to be more willing to share its resources with those that don’t have them.

Do I think this will work? That depends on what’s meant by the question:

But I remind myself of two things. First, we have no alternatives. If we who are rich don’t learn to share, we’re heading toward crises that will, at best, destabilize our civilization. At some point that will become clear, and, perhaps in our extremity, others will be willing to change, and all our preparatory work will be time well spent. Second, it’s at such times in history that God has used the puny efforts of a remnant to make the impossible happen. 

I want to be part of that remnant.

 

 

 

 


[1] Maguire, Daniel, A Moral Creed for All Christians, Fortress Press, Minneapolis, 2005, p 42

 

[2] Phillips, Kevin, Wealth and Democracy, Broadway Books, New York 2002, p 178

 

[3] Maguire, op cit, p 81.