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Convergence: An old idea due for an overhaul

By Daniel M. Ryan
web posted December 14, 2009

There are some ideas generally accepted forty years ago that seem odd today. "Convergence theory," as originally stated, is one of them. Starting from a bipolar world headed by the U.S. and U.S.S.R. (link if needed), it was claimed that the United States and the Soviet Union were slowly becoming alike. According to the convergence model, the U.S.S.R. apparatchiks had to work in "market socialism" while U.S. leaders had to work in Big Government, to the point where both were reaching a happy medium – something like pre-Thatcher Britain. Both systems would have de facto market socialism, and the rhetorical battle of "capitalism versus communism" would slowly fade into rhetorical bluster. Had the convergence theorists been correct, we in the West would be yawning as our leaders bashed the still-powerful Soviet Union and tolerantly smirking as the Soviet leadership bashed "us." So would our likesakes, obversely, in the Soviet bloc. In some versions, convergence was a way station to a single world government.

Believe it or not, this theory had a consensus-level lock on the educated imagination forty-five years ago. Barry Goldwater, Sr. drew attention to his inimitable self by opining that the "convergence" would just be ships passing in the night, towards a free Russia and socialist America. Convergence theory shows up in the movie 2001: A Space Odyssey, in the collegiality between the Soviet and American scientists. One of the episodes of the original The Prisoner had Number 2 vaunting it to Number 6, who replied that he'd like to be the first man on the moon should the day come. Many an expert assumed it calmly, reasonably. Opponents of it were easy to peg as fanatics or nostalgics. I can tell you flat-out that anyone time-traveling from today to 1964, and delivering a factual report on today's world as a disguised prediction, would have been an all-out Cassandra. A serious bout of period-piece hunting will confirm it: a short-haired Mario Savio is the first of many surprises.

What's Old Is New Again

We all know that learning from the past is re-tooling the past. Someone aspiring to bring back the down-to-earth civility of the 1950s would be horrified at seeing Jim Crow laws in operation. Someone who wants 1960s-era moral liberalism would be shocked at what the "Playboy Philosophy" meant for women, and what environmentalists were thought of then. Someone who yearns for a return of the easygoing '70s would be astounded at what the denizens of that era thought about now-accepted governmental controls on sinful indulgences, or even parental controls on kids. Someone yearning for a return of the free-wheeling '80s would blanch at the sight of plain sleazebags being treated as lovable. Drawing from the past is very different from attempting to resurrect the past, which is why certain aspects of the past are abstracted from the entire environment.

A re-tooled convergence theory is in the same boat; it's not merely a matter of cutting out "U.S.S.R" and putting "PRC" in its place. The old convergence-theory world was one where big and well-regulated corporations were the sole innovators, and small business was a backwater for romantics and nonentities – a New Industrial State world. A new convergence theory has to put the entrepreneur, not the corpocracy and the New Class, at the centre.

Given that necessary overhaul, it's easy to see a convergence occurring between the People's Republic of China and the United States. Back in those same 1960s, the government owned everything in the PRC. Famines were recurrent. Private enterprise of any sort was outlawed. The PRC was on the cusp of the "Cultural Revolution," which would massacre millions. Aside from the fact that Mao was far more charismatic than Kim-Jong Il, it was a lot like the South Korea of today.

The United States, though not horrifying, was also strange. It was seriously believed that economic experts could "fine tune" the economy to avoid any further recessions. It was also seriously believed that a new Great Depression was about as likely as a Puritan takeover: both eras were believed to be part of the dead past. The above beliefs were very much part of the economic mainstream, of the consensus. Back then, a career in finance was still considered mildly disreputable except for legacies. In the business schools, from Harvard on down, the action was in becoming a management trainee for a progressive big corporation. Anyone at all interested in information technology believed he was headed for IBM, a university, or a backwater. The telephone company was seen as a natural monopoly. A white-picket fence suburb, where union men were proud homeowners, was seen as a hard-won social gain. If a worker, it was normal to be unionized. Outside of the "kook" circuit, conscription was a lot like a rite of passage except for "college punks."

The change in both nations – the thrust-force of convergence – was the rise of entrepreneurship, and the decline of economic collectivism. Today's "third way" is the Schumpeterian way. Both nations are moving towards entrepreneur-driven economies with ample welfare programs to satisfy, or quell, the relatively disadvantaged. To reprise part of the first paragraph: as of 2050, we in the West would be yawning at our political leaders castigating the PRC for lack of democracy and human rights, and tolerantly smirking while the PRC leadership mentions the West's self-indulgence. Our likesakes in the PRC would make jokes about our "Establishment Party" and yawn when their leadership castigates the wasteful West.

The Domestic Angle: Convergence At Home

Since I'm not exempt from the limits of forecasting, I'll freely stipulate that the above prediction is likely to appear odd around mid-century. It's almost certain that the world of the future will be quite different from my present imaginings. I note this because there's a domestic extension that's almost seductively plausible.

Old-style economic conservatives would find lots of evidence to convince themselves that the United States has gone to hell in a handbasket. So would old-style economic liberals. Welfare programs have expanded considerably, and a multigenerational welfare lifestyle is endemic. On the other hand, the distribution of wealth has magnified considerably and with little serious controversy. Both have gone hand in hand in a multi-decade trend with few interruptions.

The bottom 39% of income recipients paid no income taxes or were net recipients of income-tax money in 2007. Collectively, the top 1/10 th of 1% of income earners had about as much income as the bottom 150 million in 2005. The top 0.1% of income earners paid 20% of all income taxes in 2007. These facts, in isolation, generate recurrent outbursts of outrage. Put together, though, they seem to neutralize each other. Both disparities have grown since the 1980s, with little other than rhetorical smoke accompanying their growth. There seems to be an unspoken compromise in place. A widening distribution of wealth is fine with most low-income recipients, as long as their net benefits keep rolling in without interruption or complaint. Paying the lion's share of the income taxes is fine with most high-income recipients, as long as their income levels aren't messed with.

There's a real convergence of interests here, one not mentioned because it makes sense to neither liberal nor conservative. It ties in with an international convergence towards "social entrepreneurship," with a disproportionate tax load and comprehensive low-income benefit regime supplying the "social" component in our part of the world.

For that matter, it also gibes with two ships passing in the night… ESR

Daniel M. Ryan is currently watching The Gold Bubble.


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