Thursday, February 12, 2009

A death and a birth

Published 11-13-2008 in The California Aggie

There are two prominent schools of thought in Western philosophy about individual choice and the government’s role. One champions freedom. This ideal indicates that through hard work, talent and motivation, an individual can ascend to the top of the social hierarchy, the master of his own destiny. Here, the government plays very little in the individual’s private life.

While the thought’s approach evolved over time — be it Darwinism, exceptionalism, capitalism — the fundamentals persisted. It forms the basis of modern conservative thought.

The second school emphasizes interdependence. Accordingly, we are social products, the consequence of a vast network of interrelated relationships. In this framework, the notion of fulfilling our ambitions by simply asserting our will isn’t that simple. There are constraints preventing us from doing that.

That constraint is the surroundings that shape us: society. In many ways, social upbringing predicts mobility. For instance, one living in certain conditions presumably often identifies with and adopts from his surrounding, such as mannerisms.

In turn, the individual reacts to the broader society with this internalized behavior. When he meets someone who radically differs, however, the very nature of the differences reduces opportunities for meaningful interaction. The cycle perpetuates, and his behavior locks him in that societal structure.

Thus, even before birth, individuals have their future directions predetermined by the communal constructs they will inhabit. For a large segment of this group, especially the impoverished, the lack of proper education is a hamper.

Some believe that the solution to this is through direct assistance. They advocate government programs to promote self-sufficiency. They also believe that upward mobility for this group doesn’t just lie in helping them, but in changing the overall system.

To them, the structure is flawed — a product of elite thought designed to maintain the preexisting social order. They advocate progressivism, populism, socialism, radicalism. The focus is on the collective.

For the past two decades, the first school of thought often prevailed, despite economic research suggesting the equally vital role of stable societal conditions and institutions, created through government presence (or absence in others). Critical to the first school’s success was its transformational leader — Reagan — who, through the power of his personality and message, fundamentally won over certain segments of the electorate.

In the last eight years, however, the governing party both deviated radically from, and practiced the extreme versions of, the conservative-Reagan principles. It provided tremendous tax breaks for corporations and the affluent and deregulated markets, all in faith of the invisible hand.

As a consequence, corporations thrived, especially at the very top tier. Union bargaining power weakened, executive pay skyrocketed, middle-class pay stagnated. To be a CEO in America at this time was a dream come true.

The problem wouldn’t have been so severe if corporations earned their profits well and distributed them appropriately. Instead, some, especially Wall Street financial companies, gambled massively. Sensing quick opportunism, they hedged bets in financial derivatives — a financial asset whose underlying value is dependent upon the performance of a different asset — leading to unchecked sales of subprime mortgages to borrowers with questionable credit histories.

Moreover, some companies, under pressure to meet industry expectations, inflated earnings (Enron). This led to distrust in corporate accountability. Companies ripped consumers. But the government, the arbiter of rules, disappeared too.

This entire situation is why Obama’s triumph is so interesting. Inheriting a massive Senate and House mandate, he holds the possibility to alter the direction of the nation for the next decade. Should he fulfill his promise and find the best solutions to the most pressing problems, he could realign the nation into a center-left paradigm.

The first school of thought is under assault and in peril. The second one could dominate the next few generations. It has finally earned its due.

Support the second school of thought to ZACH HAN at zklhan@ucdavis.edu