Time to Plan for the Worst: Seizing Depression as Progressive Correction

Anyone taking a crash course in market theory these days is seeing downside risks aplenty. Market theory uses the term “correction” to describe the general system of a down. But if these downside risks become reality, are progressive organizers ready? So far, market theory merely describes downsides for investors. The point is to put it to work for a more progressive correction.

Prior to the August recess of 2009, state actors might have done something to alleviate the crush rather than postpone it. Instead, our policy machinery has been spinning away in bubble land. As Mike Whitney sez, “It’s been two years since the crisis began and nothing … NOTHING has been done to fix the banking system.” A public ethic that is prepared to anticipate and seize opportunities for correction might do some good work in displacing the gaps that policy leadership won’t close.

Of course, we should pray to be wrong when we forecast a hurricane headed our way. But we should also get busy making preparations — both individually and socially. What would a progressive response to depression look like? Food, shelter, utilities, health care, education, and opportunities for productive labor — these are a few items to get us started. We certainly won’t be allowed to forget the challenge of peace.

A progressive approach might begin by imagining the correction of workable relationships not yet displaced, whether they are public, nonprofit, cooperative, or profit-seeking. This notion of relationship correction is developed as a first response against popular images of crisis that divide reality into so many warring units of self-preservation. Individualistic — and usually well-armed — imaginations have striking cultural power. They are certainly the kinds of ideas that count for ‘original intent’ in the USA.

Grassroots progressive planning can help to grow another kind of imagination, but it won’t be the dream of all things collectivized. Transforming all relationships from private to public is not the same thing as making the world productive, ethical, or just. Versus agendas for complete nationalization on the one hand or complete privatization on the other, therefore, a progressive agenda might prepare some realistic guidelines for crisis planning that are corrective, liberating, and respectful of the workable past.

Grocery stores and department stores can deliver goods to market. Soup kitchens and homeless shelters can meet basic needs. Schools — with their lunchrooms, classrooms, and gyms — help people to grow in many ways. Progressive planning can try to keep these institutions functioning together even as they are — all of them — corrected.

By rehearsing progressive responses in advance of crisis it may be possible to prevent excesses of panic and conflict that we are just beginning to see. As some forms of assets continue to implode and take productive capacities down with them — putting people into frightened and frightening moods — we might focus on assets that can be preserved, reconstructed, reorganized, and even extended nevertheless. Already some voices are talking of depression as re-education. We might think of a great depression as a great teacher and then throw ourselves into the learning and unlearning that great education requires.

Against the already growing conflicts between one-sided responses, I think progressive plans for depression might anticipate the blame game. One side is prepared to blame socialism. Another side will blame capitalist greed. Progressive reformers can perhaps strike a mediating position that looks for corrections both in the buildup and misuse of state power and in the pursuit of market growth. While some voices would have us learn the neglected value of personal responsibility, others will encourage nurturing communal interdependence. A progressive agenda might remind both sides how neither can speak the whole truth.

On questions of capital, I have been drawn to San Francisco economist Henry George because of the way he thinks about public and private coordination. He has a strong sense of public responsibility and a keen respect for entrepreneurial talent. A progressive approach to corrections in capital development would be neither public nor private en bloc. Our right to commons does not have to overturn our right to private properties — or vice versa.

Right wingers focus on workers’ dependence upon capital growth and earnings, while left wingers point out there can be no capital without labor first. A progressive agenda schooled in market theory might be able to transform these colliding interests into a more humane and more flexible economy. Capital is like seedcorn as right wingers claim, because capital contributes to next year’s harvest. But capital is also something very different from seedcorn, as left-wingers can demonstrate, because the collective organization typically demanded by capitalists prevents actual harvesters of seedcorn from calling it their own next year.

Perhaps the great opportunity of the correction challenge is to work out a more progressive approach to the relationship between capital and labor such that the seedcorn we all help to harvest throughout the work-day is treated as a resource worthy of intense public concern. This doesn’t necessarily mean that capital is taken out of private hands, but it does mean that private holders of returns on investment have real obligations to the social labor that makes all earnings possible.

It can’t hurt to deliberate progressive plans and principles for a coming correction. Even if the crisis never comes, the exercise will help us to discover how real peace can be fought for.

9 comments on this article so far ...

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  1. Jeff said on August 11th, 2009 at 4:27pm #

    Question to the author:

    The left, the right. What is the “common” ground? Is it not the “seedcorn” which truly “accomplishes” all the productive effort? Whom has the ultimate “ownership” of this “seedcorn”? Are you speaking of this “seedcorn” literally or figuratively? Correct me for I am wrong; did not the United States of America come to existence for the very reason for this article? Or, correct me for saying maybe BEFORE the inception of “THE UNITED STATES OF AMERICA” is actually what this article, in its’ summation, is actually about!

    Maybe the problem is the fact that a “CORPORATE AMERICA” was established in 1788. This would complicate the authors insights. We HAD all that the author speaks of. That was hijacked, (they did know if ‘da Vinci’ and his flying machine) when the founding fathers realized that the expense of fighting for what the author speaks was beyond “their”(founding fathers) ability to pay. There went the “dream”. There began the downward spiral.

    Most human beings only experience what is the “now”, easily molded by those which have knowledge of history. These lessons are much too complicated for the masses as the masses are concerned about achieving of what the author speaks, brought on by the very polar situations which always occur. Balance is out of the question when your financial neck is on the block.

    IMHO we have crossed a bridge which we burnt long ago, were able to traverse the divide only to come to the horrific realization we had no means for a bridge back.

    Since the beginning of the”last great” industrial “revolution” which began in about 1780, there was a so called “middle class” created. Check for yourself, but it seems uncanny that the boom and bust cycles are about an eighty year cycle of their own. During each cycle they ended with a “Great Depression” followed by what was perceived at that time, “A World War”.

    This world is too large(no pun intended), which will always allow the ability of what the author speaks of, to be usurped. We no longer have a “wild frontier” to which to escape and maybe even disappear. To do so in this day and age will most certainly lead to heresy and a burning at the stake!

    But then again, there is always “HOPE”.

  2. Tom Poe said on August 11th, 2009 at 9:50pm #

    We could do all that. But, then, we could just require any corporation formed, include a nonprofit division. Professor Yunus calls it, social entrepreneurship. By the way, the Grameen Bank did just fine these last two years, without a bailout.

  3. Deadbeat said on August 12th, 2009 at 3:27am #

    A progressive agenda schooled in market theory might be able to transform these colliding interests into a more humane and more flexible economy.

    It was tried and it was called “Liberalism”. It failed miserably.

  4. Max Shields said on August 12th, 2009 at 6:09am #

    A bit tepid for my taste, but I think there is some value to this suggestion by Mr. Moses.

    At this time, there will be no uprisings. We can nudge one another into some gradation of transition to reduce the shock of what is to come…and come it will…for Western nations it will be here and there because these nations control the world’s resources. Developing nations, will simply STOP dead. But it will then come down with a fury on the West. We can prepare ourselves through the recommendations above….which are relatively trivial…but can provide some means to a new beginning as opposed to a fascistic state which seems the alternative.

    This is not “liberalism”. We confuse market theory with corporatism and it’s just a bogus notion. Corporations are about maximizing profits, that requires control of as much of the world’s resources and the cheapest of labor sources. It’s trajectory, left to its drive, is monopoly which has nothing to do with markets. Market theory only plays a tangential role and mostly for corporate propaganda for those who believe in markets to thing that Corporations represent capitalism – which they really don’t.

    If we free ourselves for the short-sighted arc of our life we can see more clearly what is happening and whether we have a solvable problem (I don’t think we do if we want to continue Western life style and promote Western style development for “developing countries”) or whether the problem as such is not solvable and requires a whole new paradigm…that is growth is over; and contraction is the new world order…on a massive scale.

  5. Bob Matter said on August 12th, 2009 at 6:33am #

    “On questions of capital, I have been drawn to San Francisco economist Henry George because of the way he thinks about public and private coordination. He has a strong sense of public responsibility and a keen respect for entrepreneurial talent. A progressive approach to corrections in capital development would be neither public nor private en bloc. Our right to commons does not have to overturn our right to private properties — or vice versa.”

    We have no right to own property we did not create with our own labor. Hence, we have no right to own land and seek rent from it or benefit from its increase in value. Please re-read Progress and Poverty carefully.

  6. bozh said on August 12th, 2009 at 8:21am #

    max, with respect
    one doesn’t have to, but cld try a simplicity in explaining what is going on in US and elsewhere.
    the institutionalized and by laws-constitution-religion- protected overperson-underperson relationship is not gonna ?ever go away if it is left up to the overclass[es] to change the structure of such an interpersonal relationship and governance [laws, constitution, institutions].

    we can’t expect help from clergy since they base their right to lead the flock on an overmensch ideology. ? clergy appear part of the problem.
    Today’s ‘educators’, actors, singers, comedians, athletes, politicians, cia, fbi, city police, private and gov’t armies, judges appear overwhelmingly to be overclass as well.

    way out maybe found in, as u say, act locally; i.e., enlighten kids that their children and their children and themselves will ?forever remain an underclass.
    and they may act! They may boycott such reactionaries like clooney, pitt, et al.
    they may demand that singers also join them in their struggle for a better life and constitution-governance.
    boycotting middle class wld help as well. Appealing to cia, fbi, generals, et al also might help.tnx

    b99 had been harassing me for ab. 2 mo’s. He thinks, methinks, that by giving me ‘jewish’ evil, rage, supremacism, etc., i might leave DV.
    it aint gonna happen.
    in any case, editors shld give him a stiff warning that attacking personhood so assiduously as he does is a nono.

  7. Max Shields said on August 12th, 2009 at 10:10am #

    Bob Matter
    I agree that we do not “own” land or have the right to privatize and thereby “own” it.

    But I am very familiar with Henry George and P&P. Land has no inherent value except where “we” form communities and improve what rests on the land. Therefore, and logically, collecting rent on land which is valued on the basis of community investment is not only appropriate, it is the moral thing to do. Today, land is “owned/privatized” and speculated on, producing wealth for the few. I might add unearned wealth. We, the community at large, do not capture that value.

    It’s all about location, Bob. I understand that humans need to live within the life system, not as a “special species”. Rent on land, ensure proper use of land, density of city areas over sprawl which is expensive both in terms of finances to support far flang infrastructure, but most important to the trashing of the planet.

    Land rend helps to curb that. But it does much more.

    Suggest another reading of P&P if you think he is saying humans do not have a right to collect rent. That is in fact the very opposite of what he is saying.

  8. Greg Moses said on August 12th, 2009 at 10:29am #

    “The pen with which I am writing is justly mine” (P&P Bk VII, Ch 1, 334)

  9. Max Shields said on August 12th, 2009 at 1:27pm #

    Yes, which is why he deferentiated between earned and unearned income. It is irrifutable that he proposed a single (though this has changed in terms of what successors discuss as a practical split tax) rent on land which would pay for all social needs. Such a rent would recover the commons which is common to all. Privitization of the commons is the beginning of concentration of wealth and the creation of monopolies. George formulates a solution.

    Land is not exclusively terra firma, but all of the universe minus that which humans make. But what we make requires “land”. Nothing can happen for human communities and societies without land.

    That said, how we treat the land, as a commons we collectively value, or as privativized ownership is the difference between our corporate plutocrats and Henry George.