June 8, 2018

The collapse of the First American Republic: The gradocracy

 In 2003 I suggested that the First American Republic was over. What follows is one of  a series of notes published during subsequent years on some of the factors that helped to end the First American Republic, and, as one of its results, put Donald Trump into power. 
 
Sam Smith - About sixty years ago, America was just a decade past the last war it would ever win. The length of the average work week was down significantly from the 1930s but real income had been soaring and would continue do so through the 1970s. We had a positive trade balance and the share of total income gained by the top 1% of the country was only around 8%, down from 24% in the 1930s.


As Jermie D. Cullip describes it:


"From 1950 to 1959, the total number of females employed increased by 18%. The standard of living during the fifties also steadily rose. Most people expected to own a car and a house, and believed that life for their children would be even better. . . The number of college students doubled. Getting a college education was no longer for the rich or elite


"The decade of the fifties was a decade of major breakthroughs in technology. James Watson and Francis Crick won the Nobel Prize for decoding the molecular structure of DNA. Tuberculosis had all but disappeared, and Jonas Salk's vaccine was wiping out polio in the United States. . .


"Over the decade the housing supply increased 27 percent . . . Growth in the economy also led to increasing popularity of other financial intermediaries. Life insurance companies flourished for the first half of the decade and a large number of new private firms entered the market to absorb the excesses of personal savings.


“Savings and Loan Association holdings of mortgage loans during the decade clearly demonstrate the boom in construction at this time. In 1950 $13.6 billion was held rising to $60.1 billion in 1960. Another important growth in the 1950s capital markets was in pension funds. This industry grew from $11 billion in 1950 to $44 billion in 1960.


"By mid-1955, the country had pulled out of the previous year's recession and gross national product was growing at a rate of 7.6 percent. The boom was so great that the budget for 1956 predicted a surplus of $4.1 billion. With the surges in production and the economy, the 1950s is often recognized as the decade that eliminated poverty for the great majority of Americans. Over the decade, GNP per capita almost doubled and the public welfare reacted accordingly as the cost of living index rose by just 1 percent and unemployment dropped to 4.1 percent'"

All in all not a bad decade to be in if you were running a business. So much so, in fact, that some began griping about it all in books like The Organization Man and plays like Death of a Salesman.


But here is the truly amazing part - given all we have been taught in recent years: America did it even as its universities were turning out less than 5,000 MBAs a year.


By 2005 these schools graduated 142,000 MBAs in one year.


There are plenty of worthy arguments to be made correlating the rise of business school culture with the decline of our economy and our country. A cursory examination of American business suggests that its major product has become wasted energy. And not just the physical sort Compute all the energy loss created by corporate lawyers, Washington lobbyists, marketing consultants, CEO benefits, advertising agencies, leadership seminars, human resource supervisors, strategic planners and industry conventions and it is amazing that this country has any manufacturing base at all. We have created an economy based not on actually doing anything, but on facilitating, supervising, planning, managing, analyzing, tax advising, marketing, consulting or defending in court what might be done if we had time to do it. The few remaining truly productive companies become immediate targets for another entropic activity, the leveraged buyout and the rise of the killer hedge fund.



And it was not just business school graduates that were the problem. In 2009, the Washingtonian Magazine estimated there were 80,000 lawyers in Washington.

The law has always been a favored profession for the Congress. Even Thomas Jefferson complained, “If the present Congress errs in too much talking, how can it be otherwise in a body to which the people send one hundred and fifty lawyers, whose trade it is to question everything, yield nothing, and talk by the hour? "

But the interesting thing about lawyers in Washington, is that the percent in Congress actually declined in recent years. Using the Washingtonian’s estimates, about a third of the attorneys are in the government bureaucracy and a large part of the other two thirds are paid to influence them.


In short, instead of having lawyers just writing laws, we have them administering government and lobbying those who do.


As for our presidents, while 40% in the past century have had law degrees, Barack Obama and William Howard Taft are bookends in the sense that they were far more into the law than almost all their colleagues, many of whom seem to have used the law as an early way station on their road to something important.


Taft was an assistant prosecutor, superior court judge, solicitor general and a federal court of appeals judge.


On the other hand, Gerald Ford opened a law firm and one year later was an ensign in the World War II Navy. Coolidge was a country lawyer. Bill Clinton had his eye on bigger things, serving as a law professor for just a year before running for Congress. FDR was in the state house within two years of his law degree

In fact, the commitment to law was so weak that Richard Nixon could declare that he was, in the words of Wikipedia, “the only modern president to have worked as a practicing attorney,” He had risen to full partner.


It was a given until recent times, that from a political point of view, understanding law or economics or business was a valuable asset but one that fell far behind social intelligence upon which successful politics relied. As my father, a lawyer who worked in the New Deal, would tell my buddies, “Go to law school, then do something else.” Roosevelt wasn’t as gracious towards the academic elites: “"I took economics courses in college for four years, and everything I was taught was wrong."

Obama thus represents a new era in American politics: the ultimate triumph of the gradocracy. Here is Wikipedia’s summary of his early career:

“In late 1988, Obama entered Harvard Law School. He was selected as an editor of the Harvard Law Review at the end of his first year and president of the journal in his second year. During his summers, he returned to Chicago, where he worked as an associate at the law firms of Sidley Austin in 1989 and Hopkins & Sutter in 1990. After graduating with a J.D. magna cum laude from Harvard in 1991, he returned to Chicago.


“In 1991, Obama accepted a two-year position as Visiting Law and Government Fellow at the University of Chicago Law School to work on his first book. He then taught at the University of Chicago Law School for twelve years—as a Lecturer from 1992 to 1996, and as a Senior Lecturer from 1996 to 2004—teaching constitutional law.


"In 1993, he joined Davis, Miner, Barnhill & Galland, a 13-attorney law firm specializing in civil rights litigation and neighborhood economic development, where he was an associate for three years from 1993 to 1996, then of counsel from 1996 to 2004. His law license became inactive in 2007.


Key to such a career is intense attention to process, regulations, the manipulation of language and data. Applied to politics, this means the human factor can start to bring up the rear. Politics is then no longer like music in which soul and skill are melded; instead it becomes another bureaucracy. Good evidence of this in the Obama years would be Obamacare, a two thousand page hard to decipher collection of virtue, uncertain results, payoffs to the health industry, and excessive paper work. A good politician of another time would have led with something that everyone understood, such as lowering the age of Medicare, and then adding on their favorite sweetheart deals.


Another example of gradocracy is what has happened to public education. A two hundred year old hallmark of American democracy is now being dismantled for a combination of corrupt profit and distorted theory. Data collection – i.e. standardized tests – has taken time previously used for history, civics, and other things that gave mere facts some context. And taken time away from sports or theater, things that forced one to apply skill and knowledge in a cooperative manner.


Theory – subject to no testing at all - has replaced empirical wisdom. And teachers have been reduced to minor bureaucrats dutifully fulfilling procedures of dubious or destructive value. Add to this the corrupt goals of the education industry that is driving the war on public education and you have one of the most profound examples of child abuse that we have known.


It is not that it is wrong to study or practice the law, economics, business or education. But to usurp other skills, behavior, empirical knowledge and types of wisdom makes no more sense than for a dentist to attempt to instruct an attorney on how to address the court because he’s an expert on teeth.


Finally, at times, it seems that there are no governments anymore, only budget offices. As the numerologists have risen in power, programs increasingly became transformed into line items. Numbers began serving as adjectives, ideas were reduced to figures and policy became a matter of where one placed the decimal point.


We have been taken over by legal lemmings, process perverts, and data drones.

But then, as Peter Hennessy Whitehall, former head of the British Civil Service put it: “The business of the civil service is the orderly management of decline.”

Earlier essays in this series
 

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Thomas Day said...

"Obamacare, a two thousand page hard to decipher collection of virtue, uncertain results, payoffs to the health industry, and excessive paper work. A good politician of another time would have led with something that everyone understood, such as lowering the age of Medicare, and then adding on their favorite sweetheart deals." I will always be entertained by the clueless opinions of people who have never accomplished anything measurable as to how easy it would be to do something significant if only someone else would do it.