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Musings Report 2021-22 5-29-21 The Systemic Risk No One Sees
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For those who are new to the Musings reports: they're a glimpse into my notebook, the unfiltered swamp where I organize future themes, sort through the dozens of stories and links submitted by readers, refine my own research and start connecting dots which appear later in the blog or in my books. As always, I hope the Musings spark new appraisals and insights. Thank you for supporting the site and for inviting me into your circle of correspondents.
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Thank you stalwart contributors Les M. and welcome new patrons / subscribers Warren J., John M. and Jerry A. -- thank you very much!
The Systemic Risk No One Sees
My posts this week (links below) focused on the systemic financial risks created by current policies that have elevated moral hazard (risks can be taken without consequence) and speculation to levels so extreme that they threaten the stability of the entire financial system.
These risks are well known, though largely ignored in the current speculative frenzy.
But there is another systemic risk which few if any see: the collapse of social cohesion.
President Carter was prescient in his understanding that a nation's greatest strength is its social cohesion, a cohesion that America's unprecedented wealth / income / power inequalities has undermined. Consider this excerpt from his Farewell Address:
"Our common vision of a free and just society is our greatest source of cohesion at home and strength abroad, greater even than the bounty of our material blessings."
In other words, a nation's strength flows not just from its material wealth but from its social cohesion--a term for something that is intangible but very real, something that doesn't lend itself to quantification or tidy definitions.
Here is my definition: Social cohesion is the glue binding the social order; it is the willingness of the citizenry to sacrifice individual gains for the common good.
Social cohesion is the result of the citizenry sharing a common purpose and identity and working to achieve shared goals even at personal cost. Social cohesion arises from a national identity based on shared values and sacrifices.
To maintain social cohesion, opportunities must be open to all (the social contract of social mobility) and sacrifices must be shared by the entire citizenry. If the privileged elites evade their share of sacrifice, social cohesion is lost and the entire social order unravels.
The glue binding the privileged elites to shared sacrifice is civic virtue, a moral code that demands elites devote a greater share of their own resources to the public good in exchange for their political and financial power.
Though no one dares confess this publicly, America is now a moral cesspool. As a result, the moral legitimacy of the nation’s leadership has been lost. Every nook and cranny of institutionalized America is dominated by self-interest, and much of the economy is controlled by profiteering monopolies and cartels which wield far more political power than the citizenry.
Civic virtue has been lost. What remains is elite self-interest masquerading as civic virtue.
In his Farewell Address, President Carter explained that "The national interest is not always the sum of all our single or special interests. We are all Americans together, and we must not forget that the common good is our common interest and our individual responsibility."
Social cohesion, civic virtue and moral legitimacy are the foundation of every society, but they are especially important in composite states.
America is a composite state, composed of individuals holding a wide range of regional, ethnic, religious and class-based identities. The national identity is only one ingredient in a bubbling stew of local, state and regional identities, ethnic, cultural and religious identities, educational/alumni, professional and tradecraft identities, and elusive but consequential class-based identities.
Composite states are intrinsically trickier to rule, as there is no ethnic or cultural identity that unifies the populace. Lacking a national identity that supersedes all other identities, composite states must tread carefully to avoid fracturing into competing regional, ethnic or cultural identities.
Composite states must establish a purpose-based identity that is understood to demand shared sacrifice, especially in crisis. In the U.S., the national purpose has been redefined by the needs of the era, but never straying too far from these core unifying goals: defending the civil liberties of the citizenry from state interference, defending the nation from external aggressors, and serving the common good by limiting the power of special interests and privileged elites.
We've failed to limit the power of privileged elites, failed to demand greater sacrifices of the wealthy in exchange for power, and so the moral legitimacy of the regime has been lost. And with the ascendance of self-interest and the elite's abandonment of sacrifice, social cohesion has been lost.
This loss is reflected in the bitter partisanship, the increasingly Orwellian attempts to control the mainstream and social media narratives, the debauchery of "expertise" as dueling "experts" vie for control, the fraying of social discourse, the substitution of virtue-signaling for actual civic virtue, the institutionalization of white-collar crime (collusion, fraud, etc.), the increasing reliance on Bread and Circuses (stimulus, Universal Basic Income) as real opportunity dissipates, and the troubling rise in shootings, crime and random violence.
The unraveling of social cohesion has consequences. Once social cohesion unravels, the nation unravels.
What's the solution? At the national level, all that has been lost will have to be restored: civic virtue, moral legitimacy, the social contract of opportunity, shared sacrifice that falls most heavily on the wealthiest and most powerful, and a renewed national purpose.
Is such a restoration of moral legitimacy and shared purpose even possible? No one knows. If history is any guide, such a renewal is only possible after the empire of self-interest implodes.
So what do we do in the meantime? Nurture our own social cohesion by living purposefully and sharing sacrifices and bounties with those we trust and admire--those in the lifeboat we chose to join.
Highlights of the Blog
Posts:
Systemic Risks Abound 5/26/21
Fed to Treasury Dealers and Congress: We Can't Count On You, We're Taking Charge 5/24/21
Best Thing That Happened To Me This Week
Lunch with friends of 48 years--a wonderful meal of homegrown vegetables and conversation, both sorely missed in the Wilderness Years of burnout.
From Left Field
Reaching ‘Herd Immunity’ Is Unlikely in the U.S., Experts Now Believe (NYT.com) Widely circulating coronavirus variants and persistent hesitancy about vaccines will keep the goal out of reach.
The Seneca Collapse of Bombing: What Happened to the Mighty Western Military Machine?
How to Buy a Castle for $60--Some Strings Attached (WSJ.com)
Clean energy demand for critical minerals set to soar as the world pursues net zero goals (iea.org)
We Had the Vaccine the Whole Time (via John F.)
Foreword to Mark Spitznagel’s book Safe Haven (Nassim Taleb)
How California’s Cities Strangle the Permit Process
Rare da Vinci Drawing ‘Head of Bear’ Poised to Set a Record
‘Pro-worker’ Republicans are status-quo toadies cloaked as populists -- and so are 'pro-worker' Democrats....
This Is Exactly How Long Baking Staples Last
From Conquest To Affluence To Collapse | The 250 Year Empire Life Cycle (via Ron G.)
Earth and Humanity: Myth and Reality (2:52 hrs) Nate Hagens
"What goes too long unchanged destroys itself." Ursula K. Le Guin
Thanks for reading--
charles |
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