Ideology and the Evolution of Vital Institutions

* Article/Book: Ideology and the Evolution of Vital Institutions. A Synopsis. By Earl A. Thompson.

URL = http://www.dklevine.com/archive/jh_et.pdf

A very important interpretation of the evolution of institutions.

Context

It is important to have a concept of society and humanity that honors both the cooperative and the competitive impulse, the inner construction of nations, and their defense capacities against take over. This is the evolutionary point of view taken by this book and summary essay, applied to the welfare of nations and labor, with a view to have democracies that can defend themselves.

Discussion

Michel Bauwens:

This is from a differently ordered synopsis of a book with the same title.

I am largely paraphrasing the text here below.

"The major movements in social and economic history can be separated into

- those concerning the distribution of wealth, and

- those concerning the efficiency of the allocation of resources for a distribution of wealth." (p. 1)

The 1990s Clinton boom was marked by both an expansion of foreign trade and near full-employment, while real hourly wages fell, which constitutes an anomaly in 'modern' history.

This should be explained by an upwards shift in effective foreign labor supplies. This can be largely related to the IMF globalization policies which only became effective after the fall of the Soviet system.

The IMF attempted to:

1) remove barriers to foreign trade

2) increase middle classes at the expense of aid to the poorer sections of society

3) increase funds to combat crime and corruption

The combined effect was to significantly expand the world's literate and stable workforce.

The harsh IMF conditionalities, in the context of a contest to attract the masses in the Global South, would have been impossible before the fall of the Soviet system, which acted as an alternative attractor. The globalization regime imposes uniform tax rates so that states cannot effectively compete for people. After the end of the Cold War, higher productivity no longer led to higher incomes. This is a return to the situation that existed for five millenia under state regimes, until 1820!! It is only after the defeat of Napoleon had instilled fear in the European elites, that a 150-year expansion of wages began, through a five-fold increase from 1825 to 1975. The cost of these wars had signified that warfare had become to costly. This resulted in a nearly hundred-year long peace between European nations. "Western ruling classes began to steadily compete for ordinary people!" (p. 6).

By contrast, after the sudden radical decentralization of the 9-10th cy due to the invasions of the Normans, Saracens and Turks, the European ruling classes had reacted by initiating servitude, to bind the masses to the land. Serfdom declined in the Late Medieval/Early Modern period because of the emergence of people-trapping nation-states. "Thus there was, prior to the 1820s, an 'iron law' of wages." (p. 8). After-tax wages remained at subsistence levels for the centuries before 1820. After the defeat of Napoleon, immigration waves showed the historic increase in wages and income, motivating people to leave. But, "this golden age of populism and technological improvement is coming to an end ... If history is any guide, (this trend) will only end in basically subsistence standards of living for ordinary individuals." (p. 9) .. "The ongoing reductions in wage income will decrease inheritances until the the capita stock inherited will be insignificant." (p. 10). "The Post-Cold-War end to the competition of states for people, has spelled an end to the .. income floors." (p. 10).

A relative measure against this would be to create a world-institutional environment that renders fiscal independence to states. so that they can again effectively compete for ordinary people.