THE BLOG
09/15/2014 09:37 am ET Updated Nov 15, 2014

Rebuild the Economy, Stupid!

Chris Ryan via Getty Images

There are those who can afford airline tickets and laptops, and those who can't. I'm talking about the 1% vs. the 99% -- the global 1%, that is. The funny thing is, just about everyone marching with pitchforks against the U.S. 1%, like me, belongs to the global 1%.

I want to talk about how concerned members of the global 1% think about the world's problems versus how the 99% do. Conscious one-percenters believe it all comes down to this: Too Much Stuff. This is not new. An American anti-stuff religion can be traced back through the environmentalism of Schumacher, transcendentalism of Thoreau and guilt-ridden anti-commercialism of the Puritans all the way back to the asceticism of medieval Christianity. In the Internet Era, it is represented by a YouTube video: Annie Leonard's "Story of Stuff."

The 99%, on the other hand, do not subscribe to the anti-Stuff religion (or YouTube channel). They want more stuff. They want what we, the global 1%, already take for granted: laptops to see the Internet, plane tickets to see the world, air conditioners for when it's 110 degrees in the shade, heaters for when it's 10 degrees in the sun, roofs for rain, and, at the very least, clean water, proper sanitation and antibiotics so their babies stop dying.

Though I'm a member of the global 1%, I want the 99% to get its stuff. And that means more industry to make it, ships and railroads to ship it, and big giant stores to distribute it.

My scandalous views on stuff and factories started creeping up on me when I lived in a community where mothers expected half their babies to die. The primary killer: creek water. Now, if you're a member of the global 1%, you probably know how humanity got access to clean water in the first place: Matt Damon brought it. Right? Well, no. The answer is actually a lot less...handsome? What actually happened was that, governments went around and built water systems. But before they did that, they had to build the industries and infrastructure to make that possible. And, yes, in most countries it really was the government -- simply because, just like in poor countries today, business did not see how to make a profit from it.

To simplify: How did we get clean water? Factories. Steel mills. Railroads. Industry -- big, giant industrial industry! To the global 1% today, however, that all sounds like a whole lotta carbon emissions.

Recently, a friend broke out in unrestrained laughter when I said the world needs more factories. To her, factories are right up there with land mines and child molesters on the list of things humanity has too many of. She said, "Convert the factories into some kind of community spaces -- art spaces!" This is in fact the consensus attitude toward factories among my friends in the global 1%. And not just my friends -- bona fide thought leaders too. In his Work of Nations, Robert Reich instructed America way back in 1991 to get rid of its factories. In the Internet era, Yochai Benkler told us in his Wealth of Networks that they were a thing of the past for the whole world.

Yet almost everything we wear, eat, ride, fly, use and live in is made in factories. As my friend laughed at my silly ideas about factories, her face was illuminated by the glow of her top-of-the-line MacBook Pro, produced across hundreds of global factories. The lid of the MacBook was adorned with political stickers, produced in factories. The wine we were drinking too: made in factories. As were our wine glasses, chairs, table and the building that was suspending us several stories above the streets of a poor country where we were having the conversation.

The global 1% consumes ridiculously more stuff per capita than the global 99%. And it is true: if everyone consumed like the 1% using today's technology, the planet would be toast. This leaves us two options:

1) The global 1% can scale its consumption back to the level of, say, a poor Bangladeshi farmer; or,

2) We can revamp the world's means of production to make it clean and efficient enough so that everyone can have laptops, plane tickets, health care, food, drinking water and the rest, without trashing the planet and boiling the oceans.

Among the one-percetner preachers of the anti-stuff religion, I've yet to meet any willing to live like the 99%. Once, I sat next to the Story of Stuff's Annie Leonard on a panel. In her video she throws away her iPod. I couldn't help but notice, though, that she was carrying an iPhone, iPad and MacBook Pro with her. (Maybe they were loaners -- I didn't have the nerve to ask.)

We, the global 1%, ain't going back. Therefore, unless you're some kind of fascist who believes in permanently blocking the rest of the world from getting the same stuff that you enjoy -- then you will agree that it is time to get to work on Option #2: Remaking and expanding global industry from top to bottom.

Here's some great news: Every single rich country in the world has already radically remade its economy -- most of them several times over. Thus, it has been proven that industrial makeovers are possible. Even though the purpose in the past was usually not environmental (though here and there recently it was) there's no reason that can't be the aim of future make-overs.

Each time these countries built or rebuilt their economies, the purpose was not profits for the 1% -- though sometimes the owners of capital made out like bandits. The purpose was to develop the national economy to (1) make the stuff that people desperately needed, and (2) provide the means of making a living to the people. That process -- these days called economic development -- was performed successfully by all types of governments: monarchies, liberal democracies, socialist, communist, fascist and every combination thereof.

The U.S. completely rebuilt and expanded its industry for World War II -- with the happy byproduct of rising wages for two generations afterwards. Western Europe, Japan and China rebuilt their economies right after WWII. For Japan and Germany it was about the fourth time in 100 years. Korea, Taiwan, Singapore, Vietnam and several other countries did it even more recently. China and a few other countries are doing it again right now. In Europe, this phenomenon goes back in the modern era all the way to Henry VII who arguably kick-started capitalism by ordering the creation of Britain's textile industry to compete against Holland's.

Each time, the country's leadership, usually with the support of its people, set up to build factories. Because they knew that's where stuff comes from. It never went smoothly (does anything go smoothly?), but whenever a nation's political and economic elite made industrialization their absolute first priority, they almost always succeeded. (Mind you, in every case where it was only the second or third priority, they almost always failed.)

In other words, intentionally rebuilding your economy is normal. Countries do it all the time. Even America.

It's time to do it again.

The problem is that over the past few generations, every idea that's needed to think clearly about how to rebuild an economy has been hunted down and killed. The hunters have come from both left and right: Milton Friedman, Ronald Reagan, F.A. Hayek, Margaret Thatcher, Ludwig Mises, Tony Blair, Bill Clinton, Robert Reich and Paul Krugman. The right wing of that group hunt with grave urgency, because they see it as their historic duty. The left of that group, however, just laughs at you -- a much more effective attack.

Even way back in the New Deal, most of these ideas had already been killed off. Most of FDR's kitchen cabinet was already against stuff and factories. They believed in building infrastructure (like electrification), but understood the cause of the Depression to be overproduction, and thus did not expect or work to see industry expand. It all became moot when WWII saved the American economy by forcing us to totally rebuild and massively expand industry. But after WWII -- and I know this sounds too wacky to be true -- corporations paid a bunch of PR firms to run a big campaign to kill off the ideas that had popped up again thanks to WWII and the Depression. They printed leaflets, printed books, endowed economics chairs, and paid actors (like Ronald Reagan) to give speeches and do TV specials. (Here's a comic book version of Hayek's Road to Serfdom commissioned by General Motors.)

America has come to the breaking point. Our ability to think our way to a solution is temporarily impaired thanks to the utterly devastating genocide of reasonable economic ideas by the neo-liberal revolution. So before we rebuild the economy, we've got a job ahead of us to rebuild some ideas.

We've got a downhill battle, though -- simply because real wages in the U.S. have been consistently falling for 40 years. This has never happened before here. In the past, over a decade or two most poor people saw more of their neighbors getting swept up into prosperity than getting spit back out into poverty. For the past generation and a half, the reverse has been true.

For the bottom 80% or so of American income-earners, this is either a serious prolonged crisis -- or at least feels like one. Remember what Milton Friedman said about crises:

"Only a crisis - actual or perceived - produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around."

The reason we're not getting positive change to match the severity of this crisis is that the ideas "lying around" are the same ones that produced the crisis.

Tune in next time, and we'll start resurrecting the lost ideas that can lead us forward.