The New York Times recently carried an article on the goings-on at the National Ignition Facility at the Lawrence Livermore National Laboratory, where a project to generate energy via inertial confinement fusion (essentially, igniting a pellet of hydrogen fuel with a battery of lasers) was dedicated on Friday, May 22.
The renewed interest in fusion is a natural enough response to the concern with climate change weighing ever more heavily on us (a new report on the problem takes stock not only of the risks to the future, but the toll on human life and prosperity taken by climate change now) and the rise of oil prices (which, from 1998 to 2008, shot up about tenfold, until they hit $150 a barrel last July), which have given the fears that peak oil is nigh much more attention than they have enjoyed in a long time-as well as the headaches still associated with atomic fission.
Such concerns seem to have contributed to the long-delayed International Thermonuclear Experimental Reactor project getting back on track, at least for a while (with France selected as the host site last year). It has also extended to greater interest in less conventional approaches to fusion, such as the use of helium-3 as the fuel (the virtues of which field leader Gerald Kulcinski explains himself here) which, in turn, has created much excitement in certain circles about space development schemes to mine the stuff off the moon, a goal explicitly claimed by Russia, China and India.
There has even been renewed consideration of cold fusion (a field which has not recovered from the Fleischmann-Pons affair). This led to a second look by the Department of Energy at the phenomenon back in 2004 (the report on which you can read here), and more recently, caused a stir in March when U.S. Navy scientists (specifically with the Space and Naval Warfare Systems Research Center) reported new evidence for the phenomeon. (Those who would care to follow developments in this area can check out the Cold Fusion Times, which regularly posts links to news items relevant to the issue.)
So far, though, nothing really solid's come of the more intense activity in this area-by which I mean a proven basis for a commercially useful power plant that will banish the old saw about fusion always being forty years away (which we've been hearing for at least that long).
Still, that doesn't rule out a future breakthrough that could make a viable technological future a lot easier to picture, and even if it would be a mistake to unduly get one's hopes up, this may still be something worth watching.
Monday, June 1, 2009
The New French Base in the Gulf
This story first caught my eye because I thought I had misunderstood it-France opening a base in Abu Dhabi (part of the United Arab Emirates) in May this year.
That France is opening new overseas bases is by itself an oddity, not only in light of the country's limited military establishment (just under 260,000 regulars), and in particular, its limited power-projection capabilities, but also its policy ever since decolonization began in earnest in the wake of the Second World War. As noted in recent press reports, the new facility is the country's "first permanent overseas military installations outside its former colonies in Africa in fifty years," and "the first time that France has installed a military operation in a country where it has never been colonial master."
Why a French base, in this region, now?
There has been talk of "safeguarding the sea lanes" and "supporting allies," commonplaces that are awfully abstract when left at that. (Safeguard the sea lanes from what? Support which allies--against whom?)
There has been mention of the base supporting operations to combat piracy, but the truth is that the base is a thousand miles east of the "hot spot" off East Africa, and a rather longer sail than that around the southern end of the Arabian peninsula, in the wrong direction from the French homeland from a logistical standpoint. (Indeed, the bigger base France already has in Djibouti, which is already playing a role in facilitating an anti-piracy operation that does not seem about to drastically expand, makes such a facility in the UAE appear all the more insignificant to such an effort.)
The base would hardly be more useful to France's ongoing peacekeeping operation in Lebanon, for much the same reason. The support of French operations in Afghanistan would seem to be a more plausible purpose, but oddly enough this was not mentioned in the press reports I saw.
The New York Times cites unnamed analysts identifying the UAE's grant of a base to France as an "insurance policy" as the U.S. presence in Iraq winds down.
Mustafa Alani, an analyst with the Gulf Research Center in Dubai who has been widely quoted on this matter, has pointed to the significance of the base being in its "breaking the United States' long monopoly to the Gulf region"--concerns apparently connected to worry in the UAE about the stand-off over Iran's nuclear program dragging the country into war, as well as the broader power politics of the region--and the greater political "acceptability" of France in the region (in comparison with the U.S. and Britain).
Yet, both those views seem inconsistent with the practical limits of French military capability in a heavily armed region like the Gulf (in contrast, for instance, with places like Rwanda, the Ivory Coast and the Central African Republic), constraining its capacity to both provide insurance, and (especially in light of the tendency to exaggerate the Trans-Atlantic rift) some counterweight to the U.S. as some seem to hope.
Even in the 1980s France's confrontation with Libya over Chad put it in a very difficult position, despite its possession then of a rather more extensive array of military assets than it has today. Realistically, France can only participate in a major regional military action as a supporting player in a U.S.-led operation (something the base would of course assist in, and can reasonably be taken as a preparation for), or as part of the long envisaged but yet to be realized European force. Indeed, France's recent return to the NATO command structure from which Charles De Gaulle withdrew the country in the 1960s seemed to be an acknowledgment of such realities. (Of course, one could spin out a scenario in which the French base functions as a trip wire in the event of a confrontation between the UAE and Iran, with France's nuclear arsenal playing a deterrent function. This strikes me as wildly implausible techno-thriller stuff, but there's never a shortage of analysts eager to think in such terms.)
This leaves it more a matter of appearances and vague notions of "influence," instead of push-comes-to-shove realities. Examining the situation that way, the purpose of such ties seems to be to encourage sales of French arms (the French government is said to be pushing a multi-billion dollar arms sale to the UAE, perhaps all the more important given the trouble it has had scoring buyers for the Rafale) and French nuclear technology (the UAE is looking to build two plants, an area where the French, of course, also hope to do business-perhaps $40 billion worth of it in that deal) in the country and the region more broadly. The token military presence's bolstering of France's image as an independent regional actor can only help such dealmaking.
It could also be for the benefit of observers from outside the region, including domestic opinion in France itself, where the closer relationship to NATO is far from universally popular, inviting protest not only from the left (as in the Strasbourg protests), but from the Gaullist right as well. Yet, not everyone is mollified by this apparent concession to national sovereignty (and even grandeur), "centrist" politician Francois Bayrou notably criticizing the facility for the risk of entanglement in overseas conflict it introduces into France's strategic situation.
That France is opening new overseas bases is by itself an oddity, not only in light of the country's limited military establishment (just under 260,000 regulars), and in particular, its limited power-projection capabilities, but also its policy ever since decolonization began in earnest in the wake of the Second World War. As noted in recent press reports, the new facility is the country's "first permanent overseas military installations outside its former colonies in Africa in fifty years," and "the first time that France has installed a military operation in a country where it has never been colonial master."
Why a French base, in this region, now?
There has been talk of "safeguarding the sea lanes" and "supporting allies," commonplaces that are awfully abstract when left at that. (Safeguard the sea lanes from what? Support which allies--against whom?)
There has been mention of the base supporting operations to combat piracy, but the truth is that the base is a thousand miles east of the "hot spot" off East Africa, and a rather longer sail than that around the southern end of the Arabian peninsula, in the wrong direction from the French homeland from a logistical standpoint. (Indeed, the bigger base France already has in Djibouti, which is already playing a role in facilitating an anti-piracy operation that does not seem about to drastically expand, makes such a facility in the UAE appear all the more insignificant to such an effort.)
The base would hardly be more useful to France's ongoing peacekeeping operation in Lebanon, for much the same reason. The support of French operations in Afghanistan would seem to be a more plausible purpose, but oddly enough this was not mentioned in the press reports I saw.
The New York Times cites unnamed analysts identifying the UAE's grant of a base to France as an "insurance policy" as the U.S. presence in Iraq winds down.
Mustafa Alani, an analyst with the Gulf Research Center in Dubai who has been widely quoted on this matter, has pointed to the significance of the base being in its "breaking the United States' long monopoly to the Gulf region"--concerns apparently connected to worry in the UAE about the stand-off over Iran's nuclear program dragging the country into war, as well as the broader power politics of the region--and the greater political "acceptability" of France in the region (in comparison with the U.S. and Britain).
Yet, both those views seem inconsistent with the practical limits of French military capability in a heavily armed region like the Gulf (in contrast, for instance, with places like Rwanda, the Ivory Coast and the Central African Republic), constraining its capacity to both provide insurance, and (especially in light of the tendency to exaggerate the Trans-Atlantic rift) some counterweight to the U.S. as some seem to hope.
Even in the 1980s France's confrontation with Libya over Chad put it in a very difficult position, despite its possession then of a rather more extensive array of military assets than it has today. Realistically, France can only participate in a major regional military action as a supporting player in a U.S.-led operation (something the base would of course assist in, and can reasonably be taken as a preparation for), or as part of the long envisaged but yet to be realized European force. Indeed, France's recent return to the NATO command structure from which Charles De Gaulle withdrew the country in the 1960s seemed to be an acknowledgment of such realities. (Of course, one could spin out a scenario in which the French base functions as a trip wire in the event of a confrontation between the UAE and Iran, with France's nuclear arsenal playing a deterrent function. This strikes me as wildly implausible techno-thriller stuff, but there's never a shortage of analysts eager to think in such terms.)
This leaves it more a matter of appearances and vague notions of "influence," instead of push-comes-to-shove realities. Examining the situation that way, the purpose of such ties seems to be to encourage sales of French arms (the French government is said to be pushing a multi-billion dollar arms sale to the UAE, perhaps all the more important given the trouble it has had scoring buyers for the Rafale) and French nuclear technology (the UAE is looking to build two plants, an area where the French, of course, also hope to do business-perhaps $40 billion worth of it in that deal) in the country and the region more broadly. The token military presence's bolstering of France's image as an independent regional actor can only help such dealmaking.
It could also be for the benefit of observers from outside the region, including domestic opinion in France itself, where the closer relationship to NATO is far from universally popular, inviting protest not only from the left (as in the Strasbourg protests), but from the Gaullist right as well. Yet, not everyone is mollified by this apparent concession to national sovereignty (and even grandeur), "centrist" politician Francois Bayrou notably criticizing the facility for the risk of entanglement in overseas conflict it introduces into France's strategic situation.
On the Global Economic Mess
While it is grabbing fewer headlines, the global economy remains in the dumps (even by the low standards of growth of the post-1973 era), and I suspect it will do so for quite a while. The problem seems to be a structural one, simply that an economy fueled by easy lending and focused on speculation can't run very well or very far for very long. Unfortunately, that's what we've increasingly moved toward since the 1970s.
I laid out the description in detail in an article I published here on this blog, but here's a short(er) version. The raw deal labor has been getting these last three decades (like wages falling in relative or even absolute terms) translates into weak consumption, and/or unstable, debt-fueled consumption. This means a combination of high profits (because of that gap between wages and productivity), and a discouraging environment for the productive investment that is the true basis of meaningful economic growth.
Instead, investors put their money into speculative investments (purchases of assets for resale at higher prices rather than for income). Financialization prevails, complete with a search for quick profits from the pouring of money into the buying and selling of assets rather than the making of things. As this has played out, the financial sector has ended up dominant over non-financial corporations (NFCs), themselves treated as assets to be bought and sold for quick profits.
Apart from the money absorbed by this mergers and acquisitions game (which, in its forcing companies to expend critical resources sustaining stock prices and fighting takeovers, often on credit, in a manner reminiscent of feudal princes fighting over fiefs), this encourages a "short-termist" mentality. (Just think about how often you hear the expressions "last quarter," "this quarter" and "next quarter" on CNBC.) The evidence shows that short-termism means axing things like necessary maintenance, and corporate R & D, in favor of the "smooth earnings" that get CEOs their preposterous bonuses.
This is also inimical to robust economic growth, and the distorting and disrupting effects of the speculative bubbles into which they feed do not help.
As a result of these things-weak consumption, high debt, the channeling of investment into merger and acquisition games and speculative booms and busts, and an obsession with the short-term (and a particularly narrow view of it at that), you have a long-term pattern of slow growth and periodic crisis, the current one especially sharp.
To date, little substantive action on these aspects of the global economy seems forthcoming, governments instead tending to prefer corporate welfare and band-aids in the hope that the engine can be patched up enough for yet another go, instead of addressing structural issues. (The crackdown on banking secrecy, I have to admit, strikes me as a red herring.)
What might it look like?
Well, there would be an emphasis on getting consumption up. That means, among other things, money in people's pockets. There would be moves, too, to tame the Electronic Herd. (Indeed, the "pre-release" edition of the UN's World Economic Situation and Prospects 2009 acknowledges inadequate financial regulation-and "to a significant degree . . . the dismantling of firewalls within and across financial sectors over the past two decades" as a major cause of the crisis.)
In the U.S., there would need to be action on rebuilding the U.S.'s industrial base, and the long-neglected infrastructure-and on getting health care costs under control, given their extraordinary drag on the American economy (in return for mediocre results). (The stimulus could be a start, but just that.)
There would definitely be talk about labor-friendly changes, such as an increase in the minimum wage. (Just to get back to where it was pre-Reagan administration, it would need to be bumped up past $10 an hour.)
We'd also see talk about things like repealing the Gramm-Leach-Blilely Act, which predictably contributed to the mess we're all in.
And of course, if this is all to mean very much in the long run, the phrase "green economy" would have to be much more than an empty slogan, since we're long past the point where we could keep growing the economy by increasing global throughput. (After all, the energy to support all this consumption has to come from somewhere, and failing to stave off the already advancing climatic catastrophe would wreck the economy in ways we dare not imagine-from savaging crop yields and fisheries, to inundating vast tracts of prime real estate.)
Politically, however, all this seems unlikely. I hope that isn't the case, but so far there have been little basis for optimism besides wishful thinking.
In the end, we'll just have to see.
I laid out the description in detail in an article I published here on this blog, but here's a short(er) version. The raw deal labor has been getting these last three decades (like wages falling in relative or even absolute terms) translates into weak consumption, and/or unstable, debt-fueled consumption. This means a combination of high profits (because of that gap between wages and productivity), and a discouraging environment for the productive investment that is the true basis of meaningful economic growth.
Instead, investors put their money into speculative investments (purchases of assets for resale at higher prices rather than for income). Financialization prevails, complete with a search for quick profits from the pouring of money into the buying and selling of assets rather than the making of things. As this has played out, the financial sector has ended up dominant over non-financial corporations (NFCs), themselves treated as assets to be bought and sold for quick profits.
Apart from the money absorbed by this mergers and acquisitions game (which, in its forcing companies to expend critical resources sustaining stock prices and fighting takeovers, often on credit, in a manner reminiscent of feudal princes fighting over fiefs), this encourages a "short-termist" mentality. (Just think about how often you hear the expressions "last quarter," "this quarter" and "next quarter" on CNBC.) The evidence shows that short-termism means axing things like necessary maintenance, and corporate R & D, in favor of the "smooth earnings" that get CEOs their preposterous bonuses.
This is also inimical to robust economic growth, and the distorting and disrupting effects of the speculative bubbles into which they feed do not help.
As a result of these things-weak consumption, high debt, the channeling of investment into merger and acquisition games and speculative booms and busts, and an obsession with the short-term (and a particularly narrow view of it at that), you have a long-term pattern of slow growth and periodic crisis, the current one especially sharp.
To date, little substantive action on these aspects of the global economy seems forthcoming, governments instead tending to prefer corporate welfare and band-aids in the hope that the engine can be patched up enough for yet another go, instead of addressing structural issues. (The crackdown on banking secrecy, I have to admit, strikes me as a red herring.)
What might it look like?
Well, there would be an emphasis on getting consumption up. That means, among other things, money in people's pockets. There would be moves, too, to tame the Electronic Herd. (Indeed, the "pre-release" edition of the UN's World Economic Situation and Prospects 2009 acknowledges inadequate financial regulation-and "to a significant degree . . . the dismantling of firewalls within and across financial sectors over the past two decades" as a major cause of the crisis.)
In the U.S., there would need to be action on rebuilding the U.S.'s industrial base, and the long-neglected infrastructure-and on getting health care costs under control, given their extraordinary drag on the American economy (in return for mediocre results). (The stimulus could be a start, but just that.)
There would definitely be talk about labor-friendly changes, such as an increase in the minimum wage. (Just to get back to where it was pre-Reagan administration, it would need to be bumped up past $10 an hour.)
We'd also see talk about things like repealing the Gramm-Leach-Blilely Act, which predictably contributed to the mess we're all in.
And of course, if this is all to mean very much in the long run, the phrase "green economy" would have to be much more than an empty slogan, since we're long past the point where we could keep growing the economy by increasing global throughput. (After all, the energy to support all this consumption has to come from somewhere, and failing to stave off the already advancing climatic catastrophe would wreck the economy in ways we dare not imagine-from savaging crop yields and fisheries, to inundating vast tracts of prime real estate.)
Politically, however, all this seems unlikely. I hope that isn't the case, but so far there have been little basis for optimism besides wishful thinking.
In the end, we'll just have to see.
Saturday, May 30, 2009
Human Impact Report: Climate Change-The Anatomy of a Silent Crisis
On May 29 the Global Humanitarian Forum introduced a new report , "Human Impact Report: Climate Change-the Anatomy of a Silent Crisis" (available here in its entirety), highlighting not just the dangers climate change poses in the future, but the damage that is already happening as a result of this already rather advanced process. As the executive summary (which you can read here) notes, the study's findings are that
every year climate change leaves over 300,000 people dead, 325 million people seriously affected, and economic losses of US$125 billion. 4 billion people are vulnerable, and 500 million people are at extreme risk.Furthermore,
These already alarming figures may prove too conservative. Weather-related disasters alone cause significant economic losses. Over the past five years this toll has gone as high as $230 billion, with several years around a $100 billion and single year around $50 billion. Such disasters have increased in frequency and severity over the past 30 years in part due to climate change. Over and above these cost are impacts on health, water supply and other shocks not taken into account. Some would say that the worst years are not representative and they may not be. But scientists expect that years like these will be repeated more often in the near future.Additionally, the situation may significantly worsen within a matter of decades.
Within the next 20 years, one in ten of the world’s present population could be directly and seriously affected.This report-not at all unprecedented in its presentation of this data, reports on the subject having long noted effects in the world today-is a reminder that this is not some hypothetical future issue, but very much a problem in the here and now, and not a small or distant one, as the late Michael Crichton (whose reasoning on the issue was identical to that of a tobacco company exec arguing that medical science hasn't "proved" a link between smoking and cancer) and Bjorn Lomborg (that darling of D.C. think tanks) try to make it out to be in their dubious analyses-which, alas, reached a far larger audience than this report is ever likely to. Hoperfully, however, they will prove less influential when we look back at the big picture.
Already today, hundreds of thousands of lives are lost every year due to climate change. This will rise to roughly half a million in 20 years.
Friday, May 29, 2009
The Incredible, Shrinking GDP
Last week I offered a round-up of the economic news from around the world.
Today the news is buzzing with the latest numbers from the U.S..
This morning's news release from the Bureau of Economic Analysis shows that U.S. GDP fell at a 5.7 percent annualized rate during the first quarter of 2009.
A common refrain in the commentary is that this is not as bad as feared (indeed, the story at the Christian Science Monitor is headlined "U.S. Recession Eased in First Quarter"), since the fourth-quarter 2008 numbers showed a slightly sharper 6.3 percent rate of contraction, and preliminary estimates for Q12009 were in the 6.1 percent range. Additionally, as the coverage in Forbes notes, there is some hope among economists surveyed by Dow Jones newswires that the data will be revised downward further to a 5.5 percent rate of shrinkage.
Of course, the word that the news is slightly less bad than the awful picture earlier predicted leaves the news still awful-indeed, the second-biggest one-quarter drop in GDP in twenty-seven years (the first being in the previous quarter, of course) since the brutal recession of the early 1980s (itself, the deepest since the Great Depression in many ways). Additionally, it marks three consecutive quarters of shrinkage in U.S. GDP, a first since 1975, as the BBC noted in its report.
And it is worth examining the numbers more closely.
In the words of the Washington Post's blunt assessment, the data
Indeed, the BEA release notes "larger decreases in private inventory investment and in nonresidential structures" compared with the previous quarter.
It is also worth noting that one reason that the GDP numbers were "not as bad" as feared is a slight uptick in consumer spending (consumer durables-goods expected to last over three years-playing an important role), and the fact that imports (a subtraction in GDP) fell more rapidly than anticipated. (The unrevised number is 34.1 percent, "the largest decline since 1975.") The export numbers were a little better than anticipated, but at an updated rate of 28.7 percent, still showed their "largest decline since 1971."
Sharply reduced investment, nervous and tight-fisted managers, and the weakening of exports even below their "normal" trade deficit-inducing levels are all particularly bad signs (particularly from an employment standpoint), though plenty of analysts are betting on the leanness of inventories (and on government stimulus, not just in the U.S., but elsewhere, and perhaps China in particular) to produce a better second quarter 2009 (better in the sense of a smaller drop, at a rate of maybe just two percent of GDP per year) and a turnaround in the second half of the year.
If so, then the U.S. would be an exception to the general pattern, given the grim prognosis for Europe (EU officials expecting contraction to continue not just through 2009, but 2010 as well), and the severity of the situation in Japan (where the UN's relatively optimistic World Economic Situation and Prospects 2009 anticipates stagnation "at best" for the coming year).
At the very least, it should not be assumed that things can only get better.
Today the news is buzzing with the latest numbers from the U.S..
This morning's news release from the Bureau of Economic Analysis shows that U.S. GDP fell at a 5.7 percent annualized rate during the first quarter of 2009.
A common refrain in the commentary is that this is not as bad as feared (indeed, the story at the Christian Science Monitor is headlined "U.S. Recession Eased in First Quarter"), since the fourth-quarter 2008 numbers showed a slightly sharper 6.3 percent rate of contraction, and preliminary estimates for Q12009 were in the 6.1 percent range. Additionally, as the coverage in Forbes notes, there is some hope among economists surveyed by Dow Jones newswires that the data will be revised downward further to a 5.5 percent rate of shrinkage.
Of course, the word that the news is slightly less bad than the awful picture earlier predicted leaves the news still awful-indeed, the second-biggest one-quarter drop in GDP in twenty-seven years (the first being in the previous quarter, of course) since the brutal recession of the early 1980s (itself, the deepest since the Great Depression in many ways). Additionally, it marks three consecutive quarters of shrinkage in U.S. GDP, a first since 1975, as the BBC noted in its report.
And it is worth examining the numbers more closely.
In the words of the Washington Post's blunt assessment, the data
continued to show a near-collapse in business investment, with spending on equipment and software falling at a 33.5 percent annual rate, and investment in structures falling at a 42.3 percent rate. Those numbers continue, even after the revision, to support the idea that businesses are aggressively trimming their sales, unwilling to take any risk.Moreover, "Gross private domestic investment continued to be a major factor in Q1 GDP decline, plummeting 49.3%, the largest decline since 1975" according to Forbes.com. (Incidentally, it is this which has pushed up corporate profits, by about $42.6 billion, though by only a sixth of the $250 billion drop in Q42008. According to the Wall Street Journal, "Year-over-year, profits were down 22 percent.")
Indeed, the BEA release notes "larger decreases in private inventory investment and in nonresidential structures" compared with the previous quarter.
It is also worth noting that one reason that the GDP numbers were "not as bad" as feared is a slight uptick in consumer spending (consumer durables-goods expected to last over three years-playing an important role), and the fact that imports (a subtraction in GDP) fell more rapidly than anticipated. (The unrevised number is 34.1 percent, "the largest decline since 1975.") The export numbers were a little better than anticipated, but at an updated rate of 28.7 percent, still showed their "largest decline since 1971."
Sharply reduced investment, nervous and tight-fisted managers, and the weakening of exports even below their "normal" trade deficit-inducing levels are all particularly bad signs (particularly from an employment standpoint), though plenty of analysts are betting on the leanness of inventories (and on government stimulus, not just in the U.S., but elsewhere, and perhaps China in particular) to produce a better second quarter 2009 (better in the sense of a smaller drop, at a rate of maybe just two percent of GDP per year) and a turnaround in the second half of the year.
If so, then the U.S. would be an exception to the general pattern, given the grim prognosis for Europe (EU officials expecting contraction to continue not just through 2009, but 2010 as well), and the severity of the situation in Japan (where the UN's relatively optimistic World Economic Situation and Prospects 2009 anticipates stagnation "at best" for the coming year).
At the very least, it should not be assumed that things can only get better.
Monday, April 13, 2009
Setting The Boundary of Space?
A scientific team at the University of Calgary has reportedly pinpointed the edge of space at 73.21 miles up, this point marking the transition between Earth's atmosphere and the violent flows of charged particles in space.
These findings, of course, have considerable scientific value, where study of the atmosphere and its interaction with events beyond it is concerned. However, they may also turn out to have some political significance. The exact boundaries of space have never been exactly defined in international law, and as it turns out, they are higher than the lowest satellite orbits (the minimum perigee for which is about 60 miles).
On those grounds, could states claim (admittedly, in rare instances) that low-orbiting satellites are not in space at all, but inside their sovereign airspace? It's unlikely, but it cannot be ruled out, especially if states move to "territorialize" space the way they have the seas-an idea I speculated about in Astropolitics a few years ago. (You can find a copy of that article here on the blog.)
Thursday, January 22, 2009
Income in America, 1973-
As reported in the press (right now kicking around the 7.2 percent official unemployment rate), 2008 was a particularly bad year for American workers. Nonetheless, one can say that it is just one more bad year in a lengthening string of bad years.
The year 1973 is often seen as a turning point for the U.S. economy. Between that year, and 2006 (the last year to end before the current recession), per capita GDP went up from $6,521 in 1973 (about $29,600 after adjustment for inflation) to $44,073, a roughly 49 percent increase. What most people actually earned, however, seems to tell quite a different story.
Mean Income
When current dollar figures are adjusted using the Consumer Price Index (CPI), mean income rose ten percent for males, 64 percent for females in the 1973-2006 period.1 When considered as a proportion of per capita GDP, however, male mean income fell from 142 percent of per capita GDP to just 106 percent of it. For females, income went from 58 percent of per capita GDP to just 64 percent of it.
Median Income
A measure of the mean, however, has its limitations when covering such a wide range of figures as a survey of incomes produces, making the figures on median income well worth examining. As it turns out, this has not merely stagnated, but dropped. As of 2006, the median male income ($32,265 in current dollars) was actually 12 percent less than it was in 1973 ($36,578 in 2006 dollars, after adjustment using the Consumer Price Index, which suggests a higher inflation rate than that used in the Census's data sets).
Median female income did increase, by about 60 percent in real terms (to about $20,000 a year). However, when reconsidered relative to per capita GDP, median male income went from 124 percent of per capita GDP to 73 percent of it during those thirty-three years; while for women the increase was a mere 3 percent, from 42 percent of per capita GDP in 1973 to 45 percent of it in 2006.
The picture becomes particularly interesting when the total figures are broken down by the level of educational attainment. The available data does not indicate what happened during the 1970s and 1980s, but it does show what happened in the 1990s and 2000s. Males 25 years and over who have less than a bachelor's degree saw their median income stagnate in real terms after 1990. Those with some college and no degree, or an associate's degree, actually saw their income fall slightly by the end of the period.
Those who have attained four year degrees earned just 6 percent more in 2006 than they did in 1991-their median income falling from 167 percent of per capita GDP, to 139 percent in that same time frame.
By the same measure, women with college degrees also saw their income fall relative to per capita GDP, though to a more limited extent, from 64 percent to 60 percent of it.
The Minimum Wage
Not surprisingly, the lack of increase has been felt especially sharply at the bottom of the pay scale. In 1968, the minimum wage was $1.60. While it kept up with inflation through the 1970s, it was allowed to slip in the three decades since. Simply to recover the purchasing power it had forty years ago, it would need to be revised up to $10 today. To reflect the per capita GDP increase between 1968 and 2008, it would need to be in the range of $16. That is close to three times its present level, and more than twice what it will be when the recent increase takes effect in mid-2009.
Putting It All Together
In short, what the figures show is that the growth of income has not kept up with the reported growth of GDP (which is to say, it has fallen in relative terms). In fact, not only has it grown much more slowly in real terms, but for many-those earning minimum wage, or near to it; men closer to the lower than the higher end of the labor market in general-income actually fell. Women appear to have done better, but they still earn substantially less than men by just about every measure.
Readers should keep in mind that CPI is often thought to understate inflation, rather than overstate it, in which case the picture presented above may be optimistic. (That is especially the case with large expenses like housing, education, and health care, the prices of all of which have been going up faster than inflation; and it is worth noting that it does not account for the spikes in the prices of food and energy.)
Additionally, annual money income does not tell the whole story. The picture also includes longer working hours-20 percent more than in 1970, according to Fareed Zakaria (who actually has the gall to celebrate the fact)-which suggests that the gains have been more limited, the losses more severe than they appear at first glance.
And of course, when they lose their jobs, Americans have to do without new ones for a longer time. The period of unemployment averaged about 10 weeks in the 1970s, but that figure has since risen to 16.9 weeks. (Keep in mind that it has long been the practice of the Bureau of Labor Statistics to regard anything more than 15 weeks as "long-term" unemployment.)
They are not unrelated factors: the scarcity of jobs (always much worse than the official unemployment figures) and the greater insecurity that goes with it has exerted a downward pressure on wages.
I could go on, talking about the credentialing crisis, and the lengthening commutes (and lack of decent public transport to help out with them), and all the rest of it, and the price that these things exact from the people who have to put up with them, but if you have read this far, I am sure you have heard the story before, many, many times. The only part you have yet to see is a happy ending. For all the hopes surrounding the new administration, I am very doubtful that we will actually see that.
1 All data on reported income comes from the U.S. Census Bureau.
The year 1973 is often seen as a turning point for the U.S. economy. Between that year, and 2006 (the last year to end before the current recession), per capita GDP went up from $6,521 in 1973 (about $29,600 after adjustment for inflation) to $44,073, a roughly 49 percent increase. What most people actually earned, however, seems to tell quite a different story.
Mean Income
When current dollar figures are adjusted using the Consumer Price Index (CPI), mean income rose ten percent for males, 64 percent for females in the 1973-2006 period.1 When considered as a proportion of per capita GDP, however, male mean income fell from 142 percent of per capita GDP to just 106 percent of it. For females, income went from 58 percent of per capita GDP to just 64 percent of it.
Median Income
A measure of the mean, however, has its limitations when covering such a wide range of figures as a survey of incomes produces, making the figures on median income well worth examining. As it turns out, this has not merely stagnated, but dropped. As of 2006, the median male income ($32,265 in current dollars) was actually 12 percent less than it was in 1973 ($36,578 in 2006 dollars, after adjustment using the Consumer Price Index, which suggests a higher inflation rate than that used in the Census's data sets).
Median female income did increase, by about 60 percent in real terms (to about $20,000 a year). However, when reconsidered relative to per capita GDP, median male income went from 124 percent of per capita GDP to 73 percent of it during those thirty-three years; while for women the increase was a mere 3 percent, from 42 percent of per capita GDP in 1973 to 45 percent of it in 2006.
The picture becomes particularly interesting when the total figures are broken down by the level of educational attainment. The available data does not indicate what happened during the 1970s and 1980s, but it does show what happened in the 1990s and 2000s. Males 25 years and over who have less than a bachelor's degree saw their median income stagnate in real terms after 1990. Those with some college and no degree, or an associate's degree, actually saw their income fall slightly by the end of the period.
Those who have attained four year degrees earned just 6 percent more in 2006 than they did in 1991-their median income falling from 167 percent of per capita GDP, to 139 percent in that same time frame.
By the same measure, women with college degrees also saw their income fall relative to per capita GDP, though to a more limited extent, from 64 percent to 60 percent of it.
The Minimum Wage
Not surprisingly, the lack of increase has been felt especially sharply at the bottom of the pay scale. In 1968, the minimum wage was $1.60. While it kept up with inflation through the 1970s, it was allowed to slip in the three decades since. Simply to recover the purchasing power it had forty years ago, it would need to be revised up to $10 today. To reflect the per capita GDP increase between 1968 and 2008, it would need to be in the range of $16. That is close to three times its present level, and more than twice what it will be when the recent increase takes effect in mid-2009.
Putting It All Together
In short, what the figures show is that the growth of income has not kept up with the reported growth of GDP (which is to say, it has fallen in relative terms). In fact, not only has it grown much more slowly in real terms, but for many-those earning minimum wage, or near to it; men closer to the lower than the higher end of the labor market in general-income actually fell. Women appear to have done better, but they still earn substantially less than men by just about every measure.
Readers should keep in mind that CPI is often thought to understate inflation, rather than overstate it, in which case the picture presented above may be optimistic. (That is especially the case with large expenses like housing, education, and health care, the prices of all of which have been going up faster than inflation; and it is worth noting that it does not account for the spikes in the prices of food and energy.)
Additionally, annual money income does not tell the whole story. The picture also includes longer working hours-20 percent more than in 1970, according to Fareed Zakaria (who actually has the gall to celebrate the fact)-which suggests that the gains have been more limited, the losses more severe than they appear at first glance.
And of course, when they lose their jobs, Americans have to do without new ones for a longer time. The period of unemployment averaged about 10 weeks in the 1970s, but that figure has since risen to 16.9 weeks. (Keep in mind that it has long been the practice of the Bureau of Labor Statistics to regard anything more than 15 weeks as "long-term" unemployment.)
They are not unrelated factors: the scarcity of jobs (always much worse than the official unemployment figures) and the greater insecurity that goes with it has exerted a downward pressure on wages.
I could go on, talking about the credentialing crisis, and the lengthening commutes (and lack of decent public transport to help out with them), and all the rest of it, and the price that these things exact from the people who have to put up with them, but if you have read this far, I am sure you have heard the story before, many, many times. The only part you have yet to see is a happy ending. For all the hopes surrounding the new administration, I am very doubtful that we will actually see that.
1 All data on reported income comes from the U.S. Census Bureau.
Monday, January 19, 2009
The Theory of the Leisure Class: An Economic Study of Institutions, by Thorstein Veblen
New York: Viking, 1931, pp. 404.
Thorstein Veblen's The Theory of the Leisure Class: An Economic Study of Institutions identifies the origin of a leisure class as such in its distinguishing itself from its "inferiors" in its living by prowess in exploit rather than diligence. That prowess, which was once demonstrated by the hunter's trophies, later came to be demonstrated by conspicuous leisure (e.g., exemption from materially productive, "industrial," labor). Increasingly, it also came to be indicated by conspicuous consumption signifying wealth (on the grounds that only those who are wealthy, implicitly by virtue of their prowess, can afford to sustain such "pecuniary damage"). As a result, waste is a mark of the "pecuniary reputability" which is the proof of standing and mastery in societies with sharp, elaborate status schemes.
Along with that mastery goes what Veblen terms a "pecuniary" (acquisitive, predatory) ethos, epitomized by the aristocratic sportsman-warrior, in contrast with the "industrial" (productive, work-oriented) one more relevant to the practical operation and guidance of economic life in the advanced societies of his own time (the Western world, circa 1900), and it may safely be said, ours.
In demonstrating the continued presence and significance of the acquisitive mentality, he examines its manifestations in a broad gamut of cultural institutions, including the world of work, religion, education, sports, the operation of charitable foundations, and the place of women in society (his discussion of which reminds one how much contemporary feminism shies away from turning an economic lens on the objects of its criticism).
There are points at which I felt Veblen overreached. Leisure in itself is a significant good, a point not recognized in Veblen's study. While Veblen acknowledges that the motives are not always easily separable from one another (the purest conspicuous consumption is that of goods which do not even offer aesthetic satisfaction or physical comfort), material and aesthetic pleasure, hygiene and other such goods probably count for more than he allows, even at the more extreme end of financial extravagance, where a great deal of expenditure buys vanishingly small increments of these things. And though he admits the limits of his economic, material focus, it still may be that he is excessively utilitarian in his assessments (for instance, in his criticism of higher education).
On the whole, however, Veblen's theory has considerable explanatory power, shedding light on a wide range of phenomena. Reading his book I found myself thinking of the eagerness of so many businessmen to identify themselves with warriors and the warrior ethic (as with those who look to Sun Tzu as a guide); of what exactly is meant when people say that participation in team sports is a character-builder; of the differences between America and Europe in their respective outlooks on matters like war, peace, capitalism, socialism, welfare and religion (the latter a point to which Veblen devotes a number of pages in a discussion that seems surprisingly contemporary); of the role of the balance between these two mentalities in the rise and fall of great economic powers over history, in the ascendancy and decline of the Netherlands, Britain and (many argue) the United States today. I thought of how much of the mentality he describes fits in neatly with what has been written about the authoritarian personality by thinkers like Theodor Adorno.
I also thought of the political trends which have swept the world since the 1970s, particularly the economic ones: the worship of wealth and the mystical exaltation of "the market" (assumed as a matter of faith to inscrutably deliver the natural and optimal result); the (over)financialization of the global economy (especially the massive expenditure of energy and wealth on the staging and fending off of hostile takeovers, much like premodern princes spending bloody and treasure on squabbles over fiefs) and the tendency to dismiss the actual production of goods and services as the central function of an economy among celebrants of those developments; the more broadly conservative mood of politics, which has not been unrelated to the heightened prestige of economic elites, from the British monarchy to Donald Trump. Considering it all, it does not seem to me an exaggeration to say that the last several decades saw the resurgence of the leisure class, not only as a political power, but the esteem in which its values are held in the culture at large.
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Thorstein Veblen's The Theory of the Leisure Class: An Economic Study of Institutions identifies the origin of a leisure class as such in its distinguishing itself from its "inferiors" in its living by prowess in exploit rather than diligence. That prowess, which was once demonstrated by the hunter's trophies, later came to be demonstrated by conspicuous leisure (e.g., exemption from materially productive, "industrial," labor). Increasingly, it also came to be indicated by conspicuous consumption signifying wealth (on the grounds that only those who are wealthy, implicitly by virtue of their prowess, can afford to sustain such "pecuniary damage"). As a result, waste is a mark of the "pecuniary reputability" which is the proof of standing and mastery in societies with sharp, elaborate status schemes.
Along with that mastery goes what Veblen terms a "pecuniary" (acquisitive, predatory) ethos, epitomized by the aristocratic sportsman-warrior, in contrast with the "industrial" (productive, work-oriented) one more relevant to the practical operation and guidance of economic life in the advanced societies of his own time (the Western world, circa 1900), and it may safely be said, ours.
In demonstrating the continued presence and significance of the acquisitive mentality, he examines its manifestations in a broad gamut of cultural institutions, including the world of work, religion, education, sports, the operation of charitable foundations, and the place of women in society (his discussion of which reminds one how much contemporary feminism shies away from turning an economic lens on the objects of its criticism).
There are points at which I felt Veblen overreached. Leisure in itself is a significant good, a point not recognized in Veblen's study. While Veblen acknowledges that the motives are not always easily separable from one another (the purest conspicuous consumption is that of goods which do not even offer aesthetic satisfaction or physical comfort), material and aesthetic pleasure, hygiene and other such goods probably count for more than he allows, even at the more extreme end of financial extravagance, where a great deal of expenditure buys vanishingly small increments of these things. And though he admits the limits of his economic, material focus, it still may be that he is excessively utilitarian in his assessments (for instance, in his criticism of higher education).
On the whole, however, Veblen's theory has considerable explanatory power, shedding light on a wide range of phenomena. Reading his book I found myself thinking of the eagerness of so many businessmen to identify themselves with warriors and the warrior ethic (as with those who look to Sun Tzu as a guide); of what exactly is meant when people say that participation in team sports is a character-builder; of the differences between America and Europe in their respective outlooks on matters like war, peace, capitalism, socialism, welfare and religion (the latter a point to which Veblen devotes a number of pages in a discussion that seems surprisingly contemporary); of the role of the balance between these two mentalities in the rise and fall of great economic powers over history, in the ascendancy and decline of the Netherlands, Britain and (many argue) the United States today. I thought of how much of the mentality he describes fits in neatly with what has been written about the authoritarian personality by thinkers like Theodor Adorno.
I also thought of the political trends which have swept the world since the 1970s, particularly the economic ones: the worship of wealth and the mystical exaltation of "the market" (assumed as a matter of faith to inscrutably deliver the natural and optimal result); the (over)financialization of the global economy (especially the massive expenditure of energy and wealth on the staging and fending off of hostile takeovers, much like premodern princes spending bloody and treasure on squabbles over fiefs) and the tendency to dismiss the actual production of goods and services as the central function of an economy among celebrants of those developments; the more broadly conservative mood of politics, which has not been unrelated to the heightened prestige of economic elites, from the British monarchy to Donald Trump. Considering it all, it does not seem to me an exaggeration to say that the last several decades saw the resurgence of the leisure class, not only as a political power, but the esteem in which its values are held in the culture at large.
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Monday, January 5, 2009
Public Transportation and Energy Efficiency
Reconsidering the issue of how the world might cope with the contraction of oil supplies in the next two decades, I found myself thinking about the issue of public transport. It is often said that a trip on mass transit uses only half as much oil as a trip by car, and equally often, we see such figures challenged.
One set of numbers that has attracted attention is the Department of Energy's calculation in the Transportation Energy Data Book (specifically, Table 2.12 of the Data Book's 27th edition) that countrywide buses may actually use more British Thermal Units than trucks when measured on a passenger-mile basis, 4200 BTUs per passenger-mile compared with a bit under 4,000 for trucks, and 3,500 for cars.
The Data Book's authors are careful to warn readers against simplistic comparisons between one mode and another, and it is right to do so. Given that many more of those car-miles than bus-miles are on the highway, where vehicles generally get better mileage, it would seem that the above comparison is slanted in favor of cars and trucks. The mile-counting also fails to capture the fact that bus trips are much less likely to be door to door than car trips, their passengers walking a stretch of the distance uncounted in the above analysis (though one has to wonder whether that fully compensates for the extra distances traveled on the more convoluted bus routes). And bus drivers do not circle around endlessly looking for parking spots the way car drivers do, adding unnecessarily to their total mileage.
It is also worth noting that the use of BTUs overlooks important differences in energy forms, overall energy use and oil use two different matters. Buses generally run on diesel, not gasoline, which is about a third more efficient, and studies which look at the difference in oil use (and in particular, the gasoline that would have been used in the absence of public transport, like ICF International's Public Transportation and Petroleum Savings in the U.S.: Reducing Dependence on Oil) tend to produce a more favorable picture of public transport's impact. And despite all its problems, the rail component of American public transport is still more efficient than private car use (while having the additional virtue of being able to operate on electricity), so that when mass transit is taken as a whole, it does not fare so poorly.
The fact that studies in other countries often post better numbers is not irrelevant. Low ridership in the U.S. is a factor in this study (the Data Book assumes 8.8 passengers on a bus, on average, make of that what you will), but this goes only so far in explaining the issue. The Public Transport Users Association of Victoria, Australia, cites Australian Greenhouse Office figures showing that even lightly loaded buses (carrying just 10 passengers, only slightly more than in the American case) are three times as energy-efficient as private cars. (Indeed, one has to wonder what a more detailed examination would produce, and in particular, how New York and Boston stack up against the Sun Belt sprawl of Atlanta, Dallas, Los Angeles or Miami-where visiting New Yorkers are more than willing to lecture locals on the comparative shabbiness of their city's service.)
Additionally, when the energy cost of manufacturing cars, as opposed to buses and trains, is counted in, the resulting figures strongly favor the latter. The same may go for the public infrastructure necessary to support them, one assessment positing that public transport consumes just 1/16th as much infrastructure. Given the energy costs of so much construction, and the fact that asphalt production is itself a major oil consumer, this too holds out the prospect of considerable potential savings through greater investment in this area.
In the end, the data would seem to validate the claims for public transport's greater energy efficiency, and especially its oil efficiency. And assuming that the much-discussed stimulus package actually materializes, doesn't get whittled down to nearly nothing, and ends up actually containing a substantial component of infrastructure spending (none of these things is certain, and the last has a tendency to be overhyped, as seems to have been the case in Japan's stimulus packages during the 1990s), then mass transit will be an especially worthy area for such spending.
One set of numbers that has attracted attention is the Department of Energy's calculation in the Transportation Energy Data Book (specifically, Table 2.12 of the Data Book's 27th edition) that countrywide buses may actually use more British Thermal Units than trucks when measured on a passenger-mile basis, 4200 BTUs per passenger-mile compared with a bit under 4,000 for trucks, and 3,500 for cars.
The Data Book's authors are careful to warn readers against simplistic comparisons between one mode and another, and it is right to do so. Given that many more of those car-miles than bus-miles are on the highway, where vehicles generally get better mileage, it would seem that the above comparison is slanted in favor of cars and trucks. The mile-counting also fails to capture the fact that bus trips are much less likely to be door to door than car trips, their passengers walking a stretch of the distance uncounted in the above analysis (though one has to wonder whether that fully compensates for the extra distances traveled on the more convoluted bus routes). And bus drivers do not circle around endlessly looking for parking spots the way car drivers do, adding unnecessarily to their total mileage.
It is also worth noting that the use of BTUs overlooks important differences in energy forms, overall energy use and oil use two different matters. Buses generally run on diesel, not gasoline, which is about a third more efficient, and studies which look at the difference in oil use (and in particular, the gasoline that would have been used in the absence of public transport, like ICF International's Public Transportation and Petroleum Savings in the U.S.: Reducing Dependence on Oil) tend to produce a more favorable picture of public transport's impact. And despite all its problems, the rail component of American public transport is still more efficient than private car use (while having the additional virtue of being able to operate on electricity), so that when mass transit is taken as a whole, it does not fare so poorly.
The fact that studies in other countries often post better numbers is not irrelevant. Low ridership in the U.S. is a factor in this study (the Data Book assumes 8.8 passengers on a bus, on average, make of that what you will), but this goes only so far in explaining the issue. The Public Transport Users Association of Victoria, Australia, cites Australian Greenhouse Office figures showing that even lightly loaded buses (carrying just 10 passengers, only slightly more than in the American case) are three times as energy-efficient as private cars. (Indeed, one has to wonder what a more detailed examination would produce, and in particular, how New York and Boston stack up against the Sun Belt sprawl of Atlanta, Dallas, Los Angeles or Miami-where visiting New Yorkers are more than willing to lecture locals on the comparative shabbiness of their city's service.)
Additionally, when the energy cost of manufacturing cars, as opposed to buses and trains, is counted in, the resulting figures strongly favor the latter. The same may go for the public infrastructure necessary to support them, one assessment positing that public transport consumes just 1/16th as much infrastructure. Given the energy costs of so much construction, and the fact that asphalt production is itself a major oil consumer, this too holds out the prospect of considerable potential savings through greater investment in this area.
In the end, the data would seem to validate the claims for public transport's greater energy efficiency, and especially its oil efficiency. And assuming that the much-discussed stimulus package actually materializes, doesn't get whittled down to nearly nothing, and ends up actually containing a substantial component of infrastructure spending (none of these things is certain, and the last has a tendency to be overhyped, as seems to have been the case in Japan's stimulus packages during the 1990s), then mass transit will be an especially worthy area for such spending.
Societal Slack in World War II and Today
By Nader Elhefnawy
After the September 11th attacks, it became very fashionable to draw parallels between the present moment and World War II on a number of levels, not least of them, the prospect of the country mobilizing (to some degree) in similar fashion. Of course, the comparisons have become less frequent, with the passing of the "Greatest Generation" mania of the 1990s; an increasingly skeptical attitude toward the conflicts fought under the larger heading of the War on Terror; and the appearance of much more rigorous economic analysis of the situation, like Joseph Stiglitz's recent The Three Trillion Dollar War.
Nonetheless, with those claims ringing in my ears, I penned an article which ran in Parameters in 2004 which attempted to look at the comparison with a little more rigor. (The piece, "National Mobilization: An Option in Future Conflicts?" can be found by clicking here.) Given my recent revisiting of the question of societal slack, it seemed fitting to revisit this particular discussion as well, the last really total" war involving the major industrial powers being a particularly useful test of the capacity for mobilization of this kind.1
One may as well start with the sheer scale of the war effort. The total defense outlays by the U.S. government for the 1941-1946 period comes to about $3.75 trillion in 2008 dollars, with the budget peaking at nearly a trillion dollars a year in 1944 and 1945.2 Daunting a figure as that still is by today's standards, it represents more than twice the country's whole gross domestic product in 1940, when the mobilization began.
This extraordinary effort was only conceivable because of three factors:
* The comparatively low preexisting levels of taxation, spending and debt.
* The political feasibility of progressive taxation.
* The rapid growth of the U.S. economy during (and after) the war.
The low preexisting levels of spending and debt allowed the U.S. government great scope in raising more revenue, by enlarging taxation and borrowing additional funds. In 1940, Federal revenue was equal to 6.8 percent of GDP, while Federal debt came to $52 billion ($790 billion in 2008 dollars) 52 percent of Gross Domestic Product.3 During the war, taxes tripled to over 20 percent of GDP by 1944-45. Debt quadrupled to $260 billion ($3.16 trillion in 2008 dollars) by 1946.4
Progressive taxation was indispensable to that enlargement of taxation. The share of individual income tax in Federal receipts tripled between 1940 and 1944, from 13.6 to 45 percent (and from roughly 1 to 9.4 percent of GDP), with the highest bracket set at 91 percent. Additionally, corporate income tax swelled to a record 39.8 percent of receipts in 1943 (and from roughly 1 percent to about 7 percent of GDP between 1940 and 1944-45).
And of course, economic expansion was the base on which everything else was built. In 1940, American GDP was $101 billion (roughly $1.58 trillion in 2008 dollars) according to the Bureau of Economic Analysis. By 1945, it was $219 billion (or $2.7 trillion), an over 70 percent increase. It was that growth which permitted the U.S. government to take in so much more revenue (equal to 45 percent of 1940 GDP in the last year of the war), and spend so much (the $82 billion defense bill of 1945 being equivalent to a trillion of today's dollars, and roughly 63 percent of 1940 GDP).5
It also enabled the Federal government to bear a vastly expanded debt, about four times as large as at the war's start. Relative to GDP it was twice as big in 1946 as 1940-but just 121 percent of it after the growth of the interceding years.6 With the readjustment of the U.S. economy in the following years, the economy was about as large in 1950 as it had been at the end of the war, but from 1950-1973 it continued to grow rapidly, averaging 4.2 percent a year in real terms. As a result, the level of Federal debt to domestic product actually fell all the way through the 1970s, from its 1946 level to 32 percent in 1981.
A proportionate level of effort today would mean ramping up annual defense spending up to the area of $9 trillion, and $35 trillion for the whole period, supported by the raising of Federal revenues to $7 trillion a year, and the amassing of perhaps $30 trillion in Federal debt, all by 2014. Assuming a reason to attempt such an effort was to appear, does it seem plausible that this would work out?
My conclusion then, which I still stand by, is that it is very doubtful. The U.S. is in most respects a fiscally more constrained country than it was in the years before and after World War II. While the total share of Federal receipts in GDP has dipped somewhat due to the tax cuts after 2001, it is still at 18 percent. Gross Federal debt, which held roughly steady from 1948 to 1981 in real terms (hovering around $2.3 trillion in today's dollars), has since quadrupled, expanding markedly faster than GDP so that it is now equal to 68 percent of Gross Domestic Product, and the continuing deficits may be much worse than they look.7 Progressive taxation on the scale of the World War II era also seems more doubtful, even under emergency circumstances, as Christopher Hood observed in a recent article, "The Tax State in the Information Age."8
Additionally, while future economic growth is hard to predict under such altered circumstances, there are reasons to think it would not be so dramatic. One is that the U.S. economy is far less manufacturing-intensive, and much more service-oriented, meaning slower productivity growth, and overall growth, for the foreseeable future. Meanwhile, it may be that modern industrial bases, geared toward far greater efficiency than the plants of the 1940s were capable of achieving, may secure that efficiency at the price of flexibility. In the event of an emergency requiring a dramatic redirection of industrial output, all of this may imply a frustrating shortage of capacity-and perhaps, an experience more reminiscent of Britain's during the war than the U.S.'s.9
In short, while the U.S. is a much wealthier and more productive society today than it was in the 1940s (with more than five times the GDP of 1945, roughly nine times what it had in 1940), it may have relatively less slack. Those who would resort to the analogy should keep that difference in mind.
1 Slack includes, but is broader than, "mobilizable wealth" as discussed by John Mearsheimer, among others, as slack also includes in-built resilience. For a discussion of mobilizable wealth in international politics, see John J. Mearsheimer, The Tragedy of Great Power Politics (New York: W.W. Norton, 2001), pp. 62-65.
2 Budget of the U.S. Government Fiscal Year 2004 (Washington D.C.: Government Printing Office, 2003), Table 6.1, p. 109. Some might argue that the full cost of World War II did not end there, considering a range of expenses including the continuing occupations of Germany and Japan. However, the demobilization of U.S. forces was largely completed as of mid-1947, a year in which the defense budget was an eighth of its 1944-45 peak (when it ran nearly a trillion dollars a year, after adjustment for inflation). After that point, the immediate problems of the Cold War could be considered more relevant to defense planning.
3 Budget 2004, Table 1.3, pp. 25-26.
4 Budget 2004, Table 7.1, pp. 116-117.
5 In all, the defense bill came to a quarter of U.S. GDP for the years 1941-6.
6 The enlargement of the size of the government and its debt is even more dramatic if the war is seen as part of a larger crisis, beginning with the Great Depression of 1929. Total government spending went from 9.1 percent of GDP in 1929 to 14.7 percent in 1940, mostly as a result of the Federal government's share of GDP quadrupling from 1.6 percent in 1929 (prior to that time, state and local government were much larger) to 6.8 percent of it in 1940. Gross Federal debt also came close to quadrupling between 1929 and 1940 (from 16 to 52 percent of GDP, even after the economy, between 1936 and 1940, grew 20 percent above its 1929 level), before the war began. Combined with the quadrupling of the debt again in the war years, this resulted in the U.S. carrying fifteen times as much debt in 1946 as it had in 1929. (During the period as a whole, the economy expanded by a factor of two.)
7 Officially, the U.S. Federal deficit in 2006 was $248 billion, roughly two percent of GDP. However, when corporate-style accounting was brought to bear on the problem, the figure was in the area $1.3 trillion, closer to a staggering 9-10 percent. Dennis Cauchon, "Taxpayers on the Hook for $59 trillion," USA Today, May 28, 2007. Accessed at http://www.usatoday.com/news/washington/2007-05-28-federal-budget_N.htm. This is also without considering the likely overstatement of U.S. GDP as a result of inflated growth estimates, particularly during the last decade; and perhaps, other economic changes not adequately registered by GDP, like deindustrialization, the depreciation of infrastructure, and the enlargement of private debt. See Kevin Phillips, Bad Money: Reckless Finance, Failed Politics and the Global Crisis of American Capitalism (New York: Viking, 2008), pp. 85-88. According to the think tank Redefining Progress, which developed the Genuine Progress Indicator (GPI) as an alternative, U.S. per capita GPI has stayed roughly flat for the last three decades. See Dr. John Talberth, Clifford Cobb and Noah Slattery, The Genuine Progress Indicator 2006: A Tool for Sustainable Development (Oakland, CA: Redefining Progress, 2007). Accessed at http://www.rprogress.org/publications/2007/GPI%202006.pdf.
8 Christopher Hood, "The Tax State in the Information Age," in T.V. Paul, John A. Hall and G. John Ikenberry, eds., The Nation-State in Question (Princeton, N.J.: Princeton University, 2003), p. 217.
9 An interesting account of this can be found in Paul Kennedy, The Contradiction Between British Strategic Planning and Economic Requirements in the Era of the two World Wars (Washington D.C.: International Security Studies Program, Wilson Center, 1979). The essentials of his analysis can also be found in the latter chapters of his book The Rise and Fall of British Naval Mastery (London: Macmillan, 1983).
After the September 11th attacks, it became very fashionable to draw parallels between the present moment and World War II on a number of levels, not least of them, the prospect of the country mobilizing (to some degree) in similar fashion. Of course, the comparisons have become less frequent, with the passing of the "Greatest Generation" mania of the 1990s; an increasingly skeptical attitude toward the conflicts fought under the larger heading of the War on Terror; and the appearance of much more rigorous economic analysis of the situation, like Joseph Stiglitz's recent The Three Trillion Dollar War.
Nonetheless, with those claims ringing in my ears, I penned an article which ran in Parameters in 2004 which attempted to look at the comparison with a little more rigor. (The piece, "National Mobilization: An Option in Future Conflicts?" can be found by clicking here.) Given my recent revisiting of the question of societal slack, it seemed fitting to revisit this particular discussion as well, the last really total" war involving the major industrial powers being a particularly useful test of the capacity for mobilization of this kind.1
One may as well start with the sheer scale of the war effort. The total defense outlays by the U.S. government for the 1941-1946 period comes to about $3.75 trillion in 2008 dollars, with the budget peaking at nearly a trillion dollars a year in 1944 and 1945.2 Daunting a figure as that still is by today's standards, it represents more than twice the country's whole gross domestic product in 1940, when the mobilization began.
This extraordinary effort was only conceivable because of three factors:
* The comparatively low preexisting levels of taxation, spending and debt.
* The political feasibility of progressive taxation.
* The rapid growth of the U.S. economy during (and after) the war.
The low preexisting levels of spending and debt allowed the U.S. government great scope in raising more revenue, by enlarging taxation and borrowing additional funds. In 1940, Federal revenue was equal to 6.8 percent of GDP, while Federal debt came to $52 billion ($790 billion in 2008 dollars) 52 percent of Gross Domestic Product.3 During the war, taxes tripled to over 20 percent of GDP by 1944-45. Debt quadrupled to $260 billion ($3.16 trillion in 2008 dollars) by 1946.4
Progressive taxation was indispensable to that enlargement of taxation. The share of individual income tax in Federal receipts tripled between 1940 and 1944, from 13.6 to 45 percent (and from roughly 1 to 9.4 percent of GDP), with the highest bracket set at 91 percent. Additionally, corporate income tax swelled to a record 39.8 percent of receipts in 1943 (and from roughly 1 percent to about 7 percent of GDP between 1940 and 1944-45).
And of course, economic expansion was the base on which everything else was built. In 1940, American GDP was $101 billion (roughly $1.58 trillion in 2008 dollars) according to the Bureau of Economic Analysis. By 1945, it was $219 billion (or $2.7 trillion), an over 70 percent increase. It was that growth which permitted the U.S. government to take in so much more revenue (equal to 45 percent of 1940 GDP in the last year of the war), and spend so much (the $82 billion defense bill of 1945 being equivalent to a trillion of today's dollars, and roughly 63 percent of 1940 GDP).5
It also enabled the Federal government to bear a vastly expanded debt, about four times as large as at the war's start. Relative to GDP it was twice as big in 1946 as 1940-but just 121 percent of it after the growth of the interceding years.6 With the readjustment of the U.S. economy in the following years, the economy was about as large in 1950 as it had been at the end of the war, but from 1950-1973 it continued to grow rapidly, averaging 4.2 percent a year in real terms. As a result, the level of Federal debt to domestic product actually fell all the way through the 1970s, from its 1946 level to 32 percent in 1981.
A proportionate level of effort today would mean ramping up annual defense spending up to the area of $9 trillion, and $35 trillion for the whole period, supported by the raising of Federal revenues to $7 trillion a year, and the amassing of perhaps $30 trillion in Federal debt, all by 2014. Assuming a reason to attempt such an effort was to appear, does it seem plausible that this would work out?
My conclusion then, which I still stand by, is that it is very doubtful. The U.S. is in most respects a fiscally more constrained country than it was in the years before and after World War II. While the total share of Federal receipts in GDP has dipped somewhat due to the tax cuts after 2001, it is still at 18 percent. Gross Federal debt, which held roughly steady from 1948 to 1981 in real terms (hovering around $2.3 trillion in today's dollars), has since quadrupled, expanding markedly faster than GDP so that it is now equal to 68 percent of Gross Domestic Product, and the continuing deficits may be much worse than they look.7 Progressive taxation on the scale of the World War II era also seems more doubtful, even under emergency circumstances, as Christopher Hood observed in a recent article, "The Tax State in the Information Age."8
Additionally, while future economic growth is hard to predict under such altered circumstances, there are reasons to think it would not be so dramatic. One is that the U.S. economy is far less manufacturing-intensive, and much more service-oriented, meaning slower productivity growth, and overall growth, for the foreseeable future. Meanwhile, it may be that modern industrial bases, geared toward far greater efficiency than the plants of the 1940s were capable of achieving, may secure that efficiency at the price of flexibility. In the event of an emergency requiring a dramatic redirection of industrial output, all of this may imply a frustrating shortage of capacity-and perhaps, an experience more reminiscent of Britain's during the war than the U.S.'s.9
In short, while the U.S. is a much wealthier and more productive society today than it was in the 1940s (with more than five times the GDP of 1945, roughly nine times what it had in 1940), it may have relatively less slack. Those who would resort to the analogy should keep that difference in mind.
1 Slack includes, but is broader than, "mobilizable wealth" as discussed by John Mearsheimer, among others, as slack also includes in-built resilience. For a discussion of mobilizable wealth in international politics, see John J. Mearsheimer, The Tragedy of Great Power Politics (New York: W.W. Norton, 2001), pp. 62-65.
2 Budget of the U.S. Government Fiscal Year 2004 (Washington D.C.: Government Printing Office, 2003), Table 6.1, p. 109. Some might argue that the full cost of World War II did not end there, considering a range of expenses including the continuing occupations of Germany and Japan. However, the demobilization of U.S. forces was largely completed as of mid-1947, a year in which the defense budget was an eighth of its 1944-45 peak (when it ran nearly a trillion dollars a year, after adjustment for inflation). After that point, the immediate problems of the Cold War could be considered more relevant to defense planning.
3 Budget 2004, Table 1.3, pp. 25-26.
4 Budget 2004, Table 7.1, pp. 116-117.
5 In all, the defense bill came to a quarter of U.S. GDP for the years 1941-6.
6 The enlargement of the size of the government and its debt is even more dramatic if the war is seen as part of a larger crisis, beginning with the Great Depression of 1929. Total government spending went from 9.1 percent of GDP in 1929 to 14.7 percent in 1940, mostly as a result of the Federal government's share of GDP quadrupling from 1.6 percent in 1929 (prior to that time, state and local government were much larger) to 6.8 percent of it in 1940. Gross Federal debt also came close to quadrupling between 1929 and 1940 (from 16 to 52 percent of GDP, even after the economy, between 1936 and 1940, grew 20 percent above its 1929 level), before the war began. Combined with the quadrupling of the debt again in the war years, this resulted in the U.S. carrying fifteen times as much debt in 1946 as it had in 1929. (During the period as a whole, the economy expanded by a factor of two.)
7 Officially, the U.S. Federal deficit in 2006 was $248 billion, roughly two percent of GDP. However, when corporate-style accounting was brought to bear on the problem, the figure was in the area $1.3 trillion, closer to a staggering 9-10 percent. Dennis Cauchon, "Taxpayers on the Hook for $59 trillion," USA Today, May 28, 2007. Accessed at http://www.usatoday.com/news/washington/2007-05-28-federal-budget_N.htm. This is also without considering the likely overstatement of U.S. GDP as a result of inflated growth estimates, particularly during the last decade; and perhaps, other economic changes not adequately registered by GDP, like deindustrialization, the depreciation of infrastructure, and the enlargement of private debt. See Kevin Phillips, Bad Money: Reckless Finance, Failed Politics and the Global Crisis of American Capitalism (New York: Viking, 2008), pp. 85-88. According to the think tank Redefining Progress, which developed the Genuine Progress Indicator (GPI) as an alternative, U.S. per capita GPI has stayed roughly flat for the last three decades. See Dr. John Talberth, Clifford Cobb and Noah Slattery, The Genuine Progress Indicator 2006: A Tool for Sustainable Development (Oakland, CA: Redefining Progress, 2007). Accessed at http://www.rprogress.org/publications/2007/GPI%202006.pdf.
8 Christopher Hood, "The Tax State in the Information Age," in T.V. Paul, John A. Hall and G. John Ikenberry, eds., The Nation-State in Question (Princeton, N.J.: Princeton University, 2003), p. 217.
9 An interesting account of this can be found in Paul Kennedy, The Contradiction Between British Strategic Planning and Economic Requirements in the Era of the two World Wars (Washington D.C.: International Security Studies Program, Wilson Center, 1979). The essentials of his analysis can also be found in the latter chapters of his book The Rise and Fall of British Naval Mastery (London: Macmillan, 1983).
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