Generational Cycles

I was so taken in July by Robert Greene’s “Laws of Human Nature” that I devoted a long post to it – which excluded his commentary on a pattern of generational cycles to which a 15^th century Arab author first drew our attention.

Ibn Khaldun noted that human beings pass through generational patterns – specifically four.

-       The first-generation revolts against the old order, and brings fresh, new ideas.

-       The second generation, having been part of the generation that saw change, wants to establish some form of order.

-       Then the third generation appears, they are more pragmatic and less connected with the past. They are interested less in ideas and more in building things. People become materialistic and individualistic during this phase.

-       The fourth generation comes along and senses that society has lost its vitality – that its values are wrong. People become cynical, and this lays the foundation for the revolutionary generation to disrupt the status quo. And the cycle repeats.

Today I want to tell the story of how my generation basically destroyed the world -

If we apply the generational hypothesis to our own times, by starting with

-       the silent generation that experienced the Great Depression and the World War as children, we notice that they were cautious, embodying a spirit that embraces order and stability.

-       The baby boomers, who grew up in the 60’s saw their parents as being too conservative. They became more open, idealistic, and adventurous.

-       Then came Generation X, they were recovering from the chaos of the 70’s. This generation rebelled against their parent’s idealism and controversy, seeing the holes in their philosophy, they embraced individualistic values and self-reliance (if not downright greed – my comment).

-       Then the Millennials emerged, distrustful of the individualism of the past after witnessing the terrorism that took place in 9/11 and the financial disaster of 2008, and valued security and teamwork more.

Fifty years ago, graduates like me didn’t need inviting to get involved in politics - although 1968 was marked for me not by student protest but by getting elected to a town council. The older generation patently needed replacing, we thought, and we were the ones to do it. This was the period of the Penguin exposes of what was wrong with British society – and of a whole variety of Royal Commissions beavering away at reform of the various systems of trade unions, broadcasting, universities, industry etc

My first taste of real power was 1971 (as a committee chairman) although I was also holding down a position as an academic which gave me the opportunity to absorb the new thinking about political economy and public economics which was then being articulated in the States. Social science was still new then – and economists still few in number. We had, sadly, a certain arrogance about the new tools at our disposal and toward our elders…….Tony Crosland had been my hero – author of "The Future of Socialism" (which followed James Burnham in arguing that management rather than ownership was the issue) had been published in 1956....... 

And in the States, a new generation of politicians arrived in Washington in 1975 – “the Watergate Babes”….who considered those who had borne the Democrat’s flag for the previous decades as “old-fogies” who no longer deserved a place in power…..

An article in the Atlantic magazine recently gave a wonderful sense of the intellectual mood which was around then

In 1974, young liberals did not perceive financial power as a threat, having grown up in a world where banks and big business were largely kept under control. It was the government—through Vietnam, Nixon, and executive power—that organized the political spectrum. …. suspicion of finance as a part of liberalism had vanished.

The story starts with the newly-elected young Democrats targeting in 1975/76 one of the great stalwarts of the Democrat part, Wright Patman, who represented the proud tradition of American populism- 

The story of Patman’s ousting is part of the larger story of how the Democratic Party helped to create today’s shockingly disillusioned and sullen public, a large chunk of whom is now marching for Donald Trump……….
 In 1936, Wright Patman authored the Robinson-Patman Act, a pricing and antitrust law that prohibited price discrimination and manipulation, and that finally constrained the Walmart of its day from gobbling up the retail industry. He would go on to write the Bank Secrecy Act, which stops money-laundering; defend Glass-Steagall, which separates banks from securities dealers; write the Employment Act of 1946, which created the Council of Economic Advisors; and initiate the first investigation into the Nixon administration over Watergate.

Far from being the longwinded octogenarian the Watergate Babies saw, Patman’s career reads as downright passionate, often marked by a vitality you might see today in an Elizabeth Warren—as when, for example, he asked Fed Chairman Arthur Burns, “Can you give me any reason why you should not be in the penitentiary?” 

……..Patman was also the beneficiary of the acumen of one of the most influential American lawyers of the 20th century, Supreme Court Justice Louis Brandeis. In the 1930s, when Patman first arrived in Washington, he and Brandeis became friends. While on the Court, Brandeis even secretly wrote legislation about chain stores for Patman. Chain stores, like most attempts at monopoly, could concentrate wealth and power, block equality of opportunity, destroy smaller cities and towns, and turn “independent tradesmen into clerks.”

In 1933, Brandeis wrote that Americans should use their democracy to keep that power in check. Patman was the workers’ and farmers’ legislative hero; Brandeis, their judicial champion. ….Brandeis did for many New Dealers what he did for Patman, drafting legislation and essentially formalizing the populist social sentiment of the late 19th century into a rigorous set of legally actionable ideas. This philosophy then guided the 20th-century Democratic Party.

Brandeis’s basic contention, built up over a lifetime of lawyering from the Gilded Age onward, was that big business and democracy were rivals. “We may have democracy, or we may have wealth concentrated in the hands of a few,” he said, “but we can’t have both.” Economics, identity, and politics could not be divorced, because financial power—bankers and monopolists—threatened local communities and self-government.

This use of legal tools to constrain big business and protect democracy is known as anti-monopoly or pro-competition policy.…..

J.P. Morgan’s and John D. Rockefeller’s encroaching industrial monopolies were part of the Gilded Age elite that extorted farmers with sky-high interest rates, crushed workers seeking decent working conditions and good pay, and threatened small-business independence—which sparked a populist uprising of farmers, and, in parallel, sparked protest from miners and workers confronting newfound industrial behemoths. 

In the 20th century, Woodrow Wilson authored the Federal Trade Commission Act, the Federal Reserve Act, and the anti-merger Clayton Act, and, just before World War I intervened, he put Brandeis on the Supreme Court. Franklin Delano Roosevelt completed what Wilson could not, restructuring the banking system and launching antitrust investigations into “housing, construction, tire, newsprint, steel, potash, sulphur, retail, fertilizer, tobacco, shoe, and various agricultural industries.”

Modern liberals tend to confuse a broad social-welfare state and redistribution of resources in the form of tax-and-spend policies with the New Deal. In fact, the central tenet of New Deal competition policy was not big or small government; it was distrust of concentrations of power and conflicts of interest in the economy.

For decades, Patman had sought to hold financial power in check, investigating corporate monopolies, high interest rates, the Federal Reserve, and big banks. And the banking allies on the committee had had enough of Patman’s hostility to Wall Street.

Over the years, Patman had upset these members by blocking bank mergers and going after financial power. As famed muckraking columnist Drew Pearson put it: Patman “committed one cardinal sin as chairman. ... He wants to investigate the big bankers.” And so, it was the older bank allies who truly ensured that Patman would go down. In 1975, these bank-friendly Democrats spread the rumor that Patman was an autocratic chairman biased against junior congressmen. To new members eager to participate in policymaking, this was a searing indictment.

Not all on the left were swayed. Barbara Jordan, the renowned representative from Texas, spoke eloquently in Patman’s defense. Ralph Nader raged at the betrayal of a warrior against corporate power. And California’s Henry Waxman, one of the few populist Watergate Babies, broke with his class, puzzled by all the liberals who opposed Patman’s chairmanship. Still, Patman was crushed. Of the three chairmen who fell, Patman lost by the biggest margin. A week later, the bank-friendly members of the committee completed their takeover. Leonor Sullivan—a Missouri populist, the only woman on the Banking Committee, and the author of the Fair Credit Reporting Act—was removed from her position as the subcommittee chair in revenge for her support of Patman.

“A revolution has occurred,” noted The Washington Post.

Over the next 40 years, this Democratic generation fundamentally altered American politics. They restructured “campaign finance, party nominations, government transparency, and congressional organization.” They took on domestic violence, homophobia, discrimination against the disabled, and sexual harassment. They jettisoned many racially and culturally authoritarian traditions. They produced Bill Clinton’s presidency directly, and in many ways, they shaped President Barack Obama’s.                 
The result today is a paradox…… the destruction of the anti-monopoly and anti-bank tradition in the Democratic Party has also cleared the way for the greatest concentration of economic power in a century. 

“A revolution has occurred,” noted The Washington Post. 

Update; Just discovered this highly relevant book The Fourth Turning – an American prophecy – what the cycles of history tell us about america’s next rendezvous with destiny  by W Strauss and N Howe (1997)