Musings Report #5 2-1-14 What's Behind the Erosion of Community?

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I expect 2014 to be a signal year in a number of ways, and I am honored that we will be making the journey together.

What's Behind the Erosion of Community?

My primary goal for 2014 is to set forth a coherent conceptual foundation for the community-based economy that I see as the only viable, sustainable and humane alternative to centralized Cartel-Capitalism/Socialism. One headwind to this movement is the erosion of community that many of us have observed and discussed. To understand the challenges facing the community economy, we need some grasp of the forces that have been eroding community for decades. This past week I posted this essay: The Real State of the Union: The Erosion of Community

One of the key points made in the essay was described in The Strange Disappearance of Cooperation in America (submitted by correspondent Cheryl A.), in which the author proposes that social cooperation waxes and wanes with wealth inequality: as inequality rises, so too does polarization. People become less cooperative and socially engaged as polarization increases.

Two longtime correspondents made some observations that open several fruitful avenues of inquiry. Kevin K. wrote:

"You know I'm no defender of the Central State and Central Planning, but I don't think they are to blame for (most of) the lack of "community" we have today. I don't know the exact reason (TV and the Internet have something to do with it) but people in America just seem to get together less and less every year. It seems like this trend has accelerated in recent years (since Robert Putnam wrote Bowling Alone in 2000). As I'm pushing 50 I've been reading a lot more obituaries as more my peers parents pass on. Almost all the parents have a long list of clubs, associations, churches, and charities that they were actively involved with until they day they died, while few of their "own kids" are actively involved with any clubs, associations, churches, and charities at all.

I don't think "inequality" has as much to do with "polarization" as the changes in our culture that Charles Murray writes about in Coming Apart. When Warren Buffet comes in to talk to the "common man" over a Coke and a burger most people don't seem to have a problem with his wealth while there will often be "polarization" when a "new money" guy (worth less than a million) drives up in a leased Ferrari and talks down to the "common man".

Frank M. submitted these observations:

When I was growing up, almost all adults participated in civic organizations -- Elks, Lions, Grange, 4H, Rotary, student sports, hospital fund drives, veterans' groups of all sorts, Garden Club, Little Theater, book clubs, $5/month investment clubs, planning committees for fairs and parades and fireworks displays, and on, and on. The great majority of adults were active in not just one but several such organizations at any given moment.

Very little of that has survived. The animating concepts have not disappeared altogether, but they are ghostlike wisps of what used to be normal. Yes, there was pettiness and resentment. There was jealousy and gossip and cliquishness. But there was also a natural and robust commitment to life in that small-town community.

Rationalizing such commitment was unnecessary. In fact, even articulating it would have been pointless. No one would have understood the question. A sense of shared destiny was never stated explicitly, and any attempt to do so would probably have been considered weird. Things were just the way they were, and that was the way things were supposed to be.

In retrospect, that dynamic now seems to me a great deal more valuable and worthwhile than I could ever have grasped in my youth. And at least we *had* a middle class that was large enough and functional enough to qualify *as* a class.

In its place today is precisely what you describe: federal support checks and Wal-Mart jobs -- a witch's brew of government bribes and corporate bait-and-switch schemes.

Is rising inequality the root cause, or the drifting apart of civil society into divergent classes with very little social mixing or mutual understanding? Neither is entirely satisfactory, as communities with roughly the same level of inequality as existed in 1960 have seen a visible decline in social cohesive organizations, and the social classes described by Murray (one favors NASCAR & pickup trucks, has relatives in the military and is often unmarried, the other is married with two incomes, has little contact with the military, tends to attend church, drives a Prius, etc.) could be expected to form associations within their class. Yet social organizations (other than churches) are declining across the class spectrum.

The foundation of my view that the Central State money trough is a key driver is based on a study of incentives: people respond to the incentives of the present rather than ideals. The incentives to deal with the inherent hassles of social organizations have obviously deteriorated.

But clearly, non-financial incentives to participate have frayed as well. The erosion occurs not just in anonymous big cities but in stable small towns--for example, Hilo, Hawaii, which I know well. A few decades ago, the Buddhist temples in town left their front doors open 24/7. Now they lock them off hours due to theft. In the past, the idea that someone, even a marginal drifter, would steal from the temple did not exist because the risk did not exist.

Even more troubling, Buddhist temples in Hawaii are being abandoned by the young generations--many if not most of the participants are over 60 or even older.

Inequality and widening gaps between social classes do not adequately account for this erosion of civil society.

A number of other factors could be at work as well:

1. The explosion of choices in the mass media (mentioned by Kevin K.) now offers endless opportunities to form a bubble around oneself and one's life: if you only want to hear views that confirm your existing biases, it's now very easy to do so. Where seeing a movie once required going to the theater, now there are limitless options available at home.

This trend may also be eroding our contact with and tolerance of others' points of view. This hardening of ideological/class boundaries may partly result from lack of exposure to living, breathing people who believe different things than we do. Our collective reaction may be to avoid people who disagree with us, as we've lost the ability to function in diverse groups. In this view, the various classes and ethnic/religious groupings have less and less contact with those outside their circle, and this leads to a lack of understanding and interaction that is self-reinforcing.

2. The mobility demanded of labor. The mobility of labor in America--that workers can pull up stakes and move to better job opportunities--is often lauded as the key to the U.S. economy's flexibility and resilience. This is no doubt true, but that mobility absolutely eviscerates community: if you move every 2-3 years (as required of military personnel, Corporate America managers and many others), what's the motivation for engaging in local groups?

3. The demands of work in an economy in which labor is in surplus. I have commented before in Bifurcation Nation and Who Has Time? that there is not just a wealth/income/class divide, but there is an increasing divide between those who are working longer and harder (both high and lower income workers), and those who are retired, on state support or otherwise unemployed. The latter have plenty of free time, the former almost none. Yet those with abundant free time are rarely visibly engaged in community--they appear to while away their time watching TV (8 hours a day is still the norm, according to surveys), amusing themselves online, etc. Those with demanding jobs/commutes/family duties have little time or energy to participate in community activities except sporadically.

4. Social media offers a new mode of staying in touch with friends that doesn't require communal engagement. Though social media offers opportunities to create new networks of contacts, it also offers a simulacrum of community that cannot replace a real community. It can maintain existing friendships but its community-building potential is diffused.

Claiming social media is a primary cause has obvious limits, as the decline of community was already well underway long before most people had Internet access.

5. Gresham's social law. Gresham's law of money is "bad money drives out good money" as good money is hoarded and bad money is passed off as quickly as possible. There seems to be a social parallel, in which the unproductive--those seeking some niche of power, the verbosely strident, those seeking an audience for their own pet cause, etc.--drive out the productive members of a group. Those of you with experience in community groups will know what I refer to: a dearth of "regular people" who show up on time, get done what they committed to getting done, work well with others, seek to avoid needless conflict, etc., and a surplus of eccentrics, petty dictators, people in love with their own voice, etc. The productive soon leave and the group disbands.

Hierarchies such as churches and governments have ways of controlling these disruptive, marginally productive participants, but many organizations fail once these divisive people reach a relatively low tipping point. As an example, the Occupy Wall Street movement morphed from an idealistic movement to squalid homeless camps in many cities as the marginalized pushed out the most productive and committed participants.

Another possible factor is that as the government has taken more and more control of every aspect of life, those who want to get things done lobby the government or engage in political groups whose primary purpose is influencing government, effectively starving broader community groups of the sort of people that held such groups together.

6. The Yeats Effect: This line from Yeats' poem "The Second Coming" offers another dynamic: "The best lack all conviction, while the worst are full of passionate intensity." A great many people have no real convictions strong enough to cause them to act/participate. Life is good in a wealthy nation for most people and their focus is on pleasure, enjoyment, entertainment and socializing with friends. I do not mean to be judgmental; I would count myself in this group, as my most recent efforts to get something done in a community organization ran into Gresham's Social Law and the Yeats Effect.

7. Present Shock: I have written about Douglas Rushkoff's most recent book, Present Shock in which he makes the case for a fragmentation of the foundations of voluntary social organizations--time, history, context and our experience of formal organization beyond consumerism and the state. In this view, most people are simply too distracted to function in the manner demanded by voluntary social groups. All the essentially machinery of such organizations--taking minutes, following an agenda, listening to reports from subcommittees, etc.-- is either boring or unappealing to those addicted to distractions.

8. New ways of interacting/organizing work. Many middle-aged Corporate America managers have noted (and perhaps been frustrated by) the younger generation's reaction to authority and formal structures, which differs in some ways from previous generations. It may be that the classic formal community group is out of sync with the way young people live their lives, and bemoaning this may blind us to the possibility that new social groups will be organized and operated in new ways.

Clearly, the decline of what we might call traditional social organizations is complex. I think it is fair to look at the organizations and ask if they have failed to adapt to changing times and audiences; all organizations need to recruit new members as existing members move away, pass on, etc.

I still think the most effective approach is to identify incentives/disincentives and the rewards and costs of participating. For a variety of reasons, the rewards gained from participating in social organizations have slipped well below the costs (in time, energy, etc.) of membership/participation. People cannot be forced into activities that yield low returns to them as individuals, both financially and in non-financial rewards/benefits.

In this light, new social organizations may arise only out of financial necessity, i.e. when the social welfare state and corporate economy no longer function well enough to take care of everyone. Jeff W. sent in a fascinating story of just this trend developing in Greece, where the community-based economy is arising because the centralized Status Quo is no longer functioning and people have no other choice: After Crisis, Greeks Work to Promote ‘Social’ Economy.

Summary of the Blog This Past Week

Theft Is Deflationary--Especially the Crony-Capitalist/State Kind 1/31/14

In a Typhoon, Even Pigs Can Fly (for a while) 1/30/14

The Real State of the Union: The Erosion of Community 1/29/14

Want to Reduce Income/Wealth Inequality? Abolish the Engine of Inequality, the Federal Reserve 1/28/14

Should the Federal Reserve Stop the Dominoes From Falling? 1/27/14

Best Thing That Happened To Me This Week

I received two positive community-economy-related stories: After Crisis, Greeks Work to Promote ‘Social’ Economy from Jeff W. and California legalized selling home-made food and created over 1,200 local businesses from Lew G. Very positive developments are arising....

Market Musings

2014 is starting to remind me of 2008 in many ways. As cracks open in the Status Quo's credit bubbles, the central banks and governments are rushing to fill these widening cracks with yet more reassurances, promises, and monetary easing/deficit spending. These actions do not fix what's broken, but they paper over the widening gulf between reality and the official version of reality ("the recovery is strengthening") well enough to spark another rally in stocks, bonds, and various carry trades.

But eventually reality and all these markets sync up, despite the constant intervention and manipulation by central banks and governments. At that point, a cascade decline begins that conventional intervention cannot stop.

This time around, the only "nuclear option" left to central banks that would have any real effect would be to directly monetize risk assets: that is, create $1 trillion and buy all defaulted commercial real estate loans, create another $1 trillion and directly buy stocks en masse, create yet another $1 trillion to buy government debt, and so on.

The Federal Reserve balance sheet would have to double more or less over night from $4 trillion to $8 trillion to accomplish this "nuclear option," and the question that cannot yet be answered is: does the Fed have the political support necessary to undertake such an unprecedented monetization of all risk assets? I suspect the answer is currently assumed to be "of course," but the consensus is often proven wrong. This "nuclear option" is a one-way street: once a central bank props up credit/asset bubbles with direct ownership of all risk assets, there is no way to unload those assets back onto private markets. The central banks can only buy more or the enlarged bubble will pop despite their ownership stake. We'll just have to wait and see how long the gap between reality and the markets can be filled by hot air (reassurances) and central bank intervention.

Doug Nolan sums up the situation nicely (via U.Doran):

"As already noted, the bills are beginning to come due. Inflationism’s inevitable consequences have manifested to the point of being highly destabilizing. Late-cycle Credit excess has created enormous amounts of suspect debt and economic maladjustment. Worse yet, these days much of this debt trades in the marketplace. Likely huge quantities of potentially problematic securities are held by leveraged speculators."

Can this sort of systemic excess and manipulation end well? Not a chance.

From Left Field

Wade Davis: Dreams from endangered cultures - 22 min TED talk (via U. Doran)
Wade Davis is perhaps the most articulate and influential western advocate for the world's indigenous cultures. A National Geographic Explorer-in-Residence, he has been described as “a rare combination of scientist, scholar, poet and passionate defender of all of life’s diversity.” Trained in anthropology and botany at Harvard, he travels the globe to live alongside indigenous people, and document their cultural practices in books, photographs, and film.

Parched, California Cuts Off Tap to Agencies (via Joel M.) -- This could become an emerging "black swan" event that has pervasive, unplanned-for economic repercussions...

Severe Drought Has U.S. West Fearing Worst "With each parched sunrise, a sense of alarm is rising amid signs that this is a drought that comes along only every few centuries."

Western U.S. drought puts big strain on reservoirs (3 min CBS video) (via U. Doran)

The Tale of a House, and an Entire Market (via Joel M.) The history of 12204 Backus Drive in Bowie, Md., is in many ways the history of the American housing market over the last two decades.

2013 Review and 2014 Forecast - Part I: The Last Bubble, by Eric Janszen (via U. Doran)

In God we trust, maybe, but not each other (via Mark G.)

Real Disposable Income Plummets Most In 40 Years -- we got your recovery right here...

Find out if your state has Cottage Food laws that legalize the selling of homemade food

The 10 Commandments of Digital Exodus

Geeks for Monarchy: The Rise of the Neoreactionaries (via Richard M.)

New HD footage of Felix Baumgartner's incredible leap to Earth (8 min video) (via U. Doran) -- I am always shocked by how thin the breathable atmosphere of our planet really is...

If we don't believe in freedom of expression for people we despise, we don't believe in it at all. Noam Chomsky

Thanks for reading--

charles