Western Dirigiste Elites: The Creators of Western Political and Economic Dysfunction
A growing divide has been building for at least a decade between Western dirigiste elites and the peoples they purport to rule. This breach has become large enough to inspire numerous populist revolts that are nationalist in nature. The failure of Western elites resides in their ideas of social reality. An ideological gap between the elites and their opponents has made governments generally dysfunctional. How has this come to pass?
The Role of Society’s Elites
Almost by definition, a nation’s elites are the most influential influences on a nation’s affairs. Any particular elite (political, economic, academic, media, or entertainment) is a group of people with extraordinary influence in their fields on the ideas of others. Citizens absorbing and acting on these ideas then determine the country’s fundamental nature.
Over a period of time, the various interacting elites develop a common set of ideas that seem to most to be true. Not every individual in the elites necessarily accepts this majority-held ideology. A very brief review of history shows there are usually significant minorities disagreeing with the reigning ideologies. In medieval Europe, the reigning ideologies were centered on the preeminence of the Roman Catholic Church and the cultural inheritance from Greece and Rome.
Yet, coexisting Jews, Muslims, and dissenting intellectuals often offered counterpoints. At the end of the medieval period just before the Age of Enlightenment, Galileo Galllei (1564-1642) helped begin the intellectual challenge to the Catholic Church. Similarly, the Jewish intellectual Baruch Spinoza (1632-1677) offered a panentheistic view of God, challenging the Church’s classical theistic picture. This opposition also challenged the Church’s authority and power.
Nevertheless, if a country is socially stable, the ideology of the dominant elites is widely accepted by its people. As long as the elites can provide ideas to solve major social and economic problems, most people will remain content. Once those ideas begin to fail in a major way, the elites become susceptible to overthrow. That revolution might be violent or merely figurative. If the elites can not find a revision of their ideas to solve society’s greatest problems, they are liable to be thrown onto the trash heap of history.
Whether you live in Europe or North America, we are now in the midst of such a potentially revolutionary period. What are the commonly accepted ideas that are clashing with Reality?
Most Western Elites Are Dirigiste in Nature
Since the late nineteenth century in the U.S. and even earlier in Europe, the dominant elites have been dirigiste. Dirigisme is a large category of ideologies that includes all forms of socialism, as well as somewhat less totalitarian ideas of social organization. It includes progressivism in the United States as well as the highly controlling bureaucracies of the European Union.
The outstanding characteristic of all dirigiste ideologies is they fundamentally assume the state must direct the behavior of the economy. Because of the close connection between social well-being and economic health, this most basic assumption implies the government should be the primary tool for solving social problems as well.
Yet, all dirigiste ideologies possess the same deep-rooted flaw: They either do not recognize that all large social systems of interacting human beings are chaotic systems, or they do not understand the implications of that fact. A chaotic system is one in which small perturbations can grow and propagate in unexpected ways. I have written about the chaotic nature of social systems many times before. Among these essays, you might want to peruse:
- How Is the Weather Like a Country’s Economy?
- Chaotic Economies and Adam Smith’s Invisible Hand
- Central Planning for Chaotic Social Systems
- How to Solve Problems in Chaotic Social Systems
Since all large social systems (most especially the economy!) are chaotic, government officers and politicians can not understand all the implications of their programs and policies. Almost always, government programs will create unexpected and often unpleasant results. This happens so often it has been given the name of the Law of Unintended Consequences. Examples of bad consequences from government causes can be found in the following essays:
- The Causes of the Great Depression
- Why Did the Great Depression Last so Long?
- Causes of the 2007-2008 U.S. Financial Crisis
- Economic Effects of the Dodd-Frank Act
- Europe’s Challenge: Evolve or Die
- The Economic Decay of the West
For many decades, Western dirigiste governments have shackled their societies increasingly with a growing prison of regulations. In addition through taxation, they hobbled economic growth by depriving companies of the fuel for that growth: capital. At the same time, when they increased corporate taxes, they reduced the profit incentive to invest. When they increased individual taxes, they lessened individuals’ ability to demand goods and services. There can be no growth without increasing productive capacity. Yet growing productive capacity only comes through investments. Given all this, it is hardly surprising GDP growth rates in the West have been dwindling generally.
The proof of the previous paragraph can be seen in the time behavior of Western GDP growth rates. In particular, long-term secular growth rates can be extracted by plotting their ten-year moving averages. These are shown for major European nations and the United States in the three plots below. The averages were calculated for the years 1970 through 2016.
Data Source: The World Bank
Data Source: The World Bank
Data Source: The World Bank
All three of these plots show that — with the exception of the Republic of Ireland — the long-term secular growth rates have become alarmingly small. Indeed, if these trends continue, it will not be long before most of the West is in long-term secular recession.
Why the Populist Revolts?
History has not been kind to dirigiste assumptions and beliefs. Because dirigiste policies have reduced the well-being of many citizens, the electorates of most dirigiste countries have risen in electoral rebellion.
Economic problems are not the only inspirations for popular revolt. In addition, the multiculturalism embraced by the elites has resulted in a vast wave of immigrants, illegal and otherwise. Whether it is illegal immigration to the U.S. from Central America, Mexico, or South America, or the huge migration to Europe from the Middle East and North Africa, these population movements are creating social strains difficult to endure. In addition, increasing regulation of all aspects of human life is reducing the freedom we have to rule our own lives.
A potentially revolutionary environment has arisen in the West because of the major failures of the ideologies of dirigiste elites. Their view of social reality contradicts what we are actually experiencing. Immense social dissatisfaction and unrest have resulted. Yet, the elites’ response to the revolts against them almost universally has been to double down on their policies.
Attempted Creation of a New “Catholic” Orthodoxy?
If a politician is wise, defeat at the polls would inspire him or her to examine why the electorate has rejected his or her proposals. Yet, when the British electorate voted for exit from the European Community, many members of Parliament — including some Tory members — sought ways to “exit” while still retaining substantial ties to the EU. In the U.S., the election of Donald Trump and the prospect of his anti-progressive agenda have inspired “total resistance” to everything he tries to do. From the very beginning of his administration, a rapidly growing portion of the progressive elites has sought his impeachment and removal from office. And the progressive vitriol is not just directed toward Trump, but against all neoliberal Republicans as well. The Western dirigiste elites are desperately attempting to retain their authority in the face of growing populist revolts.
The position of modern dirigiste elites is very similar to that of the Roman Catholic Church at the beginning of the Age of Enlightenment. Many of the Church’s doctrines — from the divine right of kings, to the selling of indulgences and to the doctrine that the Earth was the center of the universe — became increasingly suspect. The result was an insurrection against the Church that resulted in the Reformation. In addition, the Age of Enlightenment arose, which resulted in the birth of classical liberalism and in the modern sciences of physics and chemistry. As a part of this revolution, the divine right of kings and the authority of the nobility over the common people also came under a growing attack.
The doctrines (dare I say catechism?) upon which modern-day dirigistes insist are somewhat different from the catechism of the medieval Catholic Church. Nevertheless, they increasingly demand their views be regarded as sacred. If you do not agree with their fundamental beliefs, then you are a heretic against everything that is decent. In the U.S. any disagreement against progressives’ fundamental beliefs must mean those who disagree are fascists, racists, xenophobes, misogynists, or something else equally nasty.
So, what is the new catechism to which dirigistes would require you to swear? You would be required to acknowledge the state must be the fundamental tool for solving all economic and social problems. Of course, the more problems governments attack, the more power they must accumulate to accomplish their goals. This accumulation of government power is what the Austrian economist and political philosopher Friedrich Hayek called the Road to Serfdom. In a review of Hayek’s 1944 book of the same name, the Mises Institute writes,
What F.A. Hayek saw, and what most all his contemporaries missed, was that every step away from the free market and toward government planning represented a compromise of human freedom generally and a step toward a form of dictatorship–and this is true in all times and places. He demonstrated this against every claim that government control was really only a means of increasing social well-being. Hayek said that government planning would make society less liveable, more brutal, more despotic. Socialism in all its forms is contrary to freedom.
Nazism, he wrote, is not different in kind from Communism. Further, he showed that the very forms of government that England and America were supposedly fighting abroad were being enacted at home, if under a different guise. Further steps down this road, he said, can only end in the abolition of effective liberty for everyone.
Yet, traveling down this road has led us only to growing economic, social, and political dysfunction. If Hayek is right (and historically he has been), then the road will also lead us to a tyrannical government that will take away our freedoms.
Do Populist Revolts Presage a New Reformation?
History tells us that when contradictions between a reigning ideology and observed reality accumulate, a revolution in our views of Reality generally follows. Historical observations on such ideological revolutions in the realm of science led to Thomas Kuhn’s iconic 1962 book The Structure of Scientific Revolutions. However, Kuhn’s historical observations are equally applicable to any field of social, economic, or political ideology.
What kind of ideological revolution could we expect from the failure of dirigiste ideology? I have tried to imagine the most probable transformation that might result. You can find my thoughts on this in the following posts.
However the substitute for present-day dirigisme is found, let us hope it does not lead us to even more dysfunction and reduced individual freedom.
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