STAFF NEWS & ANALYSIS
Health Care Bill Is End of U.S.?
By Staff News & Analysis - March 25, 2010

The passage of the health care law shows that the US empire is declining because it illustrates the fact that people expect the state to take care of them, David Murrin, the co-founder of Emergent Asset Management hedge fund manager, told CNBC. On Tuesday, US President Barack Obama signed into law health care legislation that expands health coverage for the poor, imposes new taxes on the rich and forbids insurance practices such as refusing coverage to those with pre-existing conditions. In their expansionary phase, empires force people to go out, seek risks and fend for themselves, Murrin said, reminding of the dismantling of the British empire after the war, when the National Health Service, which ensures universal health coverage in Britain, was created. "This (empire decline) is actually a dead-set course that societies get into and it will happen very quickly I'm afraid," he told "Squawk Box Europe. … As you start to build a system it becomes cohesive because of its success … the fractures in the American system I think are more apparent than ever," Murrin added. China's rise will be much faster than most people anticipate as the country's military prowess increases, he said. – CNBC

Dominant Social Theme: Tough talk about an empire's decline.

Free-Market Analysis: This is a standard neo-strategic analysis of how the world works. We have recently noticed more and more of these types of analyses, especially from those affiliated with the US military. We don't know what is being taught to recruits at any level, but we would bet they are being provided a standard "Rise and Fall" interpretation of history, replete with military geniuses and "leaders" who made various decisions that affected the course of empire (like "Barry" Barack Obama).

Here at the Bell, we are fortunate to have a very different view of how the world works and how empires begin and end. We believe that empires may start in modest circumstances; we even believe that empires do not constitute the apogee of a civilization but instead are precursors to its inevitable demise. The rise of a significant military industrial complex, for instance, is not a sign of health for empire, and chances are the decline of an empire has set in long before specific leveling legislation is enacted.

Here is the letter we would write to someone in the US military (especially) who might be in charge of teaching cadets about world history. It's a little long, but if he's a professor, then he's used to reading student reports (some of them longer than this, no doubt) and ought to forgive us a little for our prolixity.

Dear Professor:

Sneezing in the gloom of this library surrounding by ancient and recondite economic texts, we are grateful to take a break and write you this missive. We want to address certain concepts having to do with the inevitability of empire, its "greatness" and, above all, its creation. Certainly, you are well known in your field and have written books and articles on great battles through the ages. You have repeatedly explained how "great men" can change the course of history and explained how much history, as well, is to be seen through the rise and fall of empires. Thank you in advance, therefore, for considering another argument. And let us begin …

While we are not quite sure how it is you believe empires are acquired – perhaps as the result of conquest by warriors such as Alexander the Great – what is more certain is that you perceive the arc of empire to be first expansion, then consolidation and finally inevitable decline. It is for this reason, then, that you generally bemoan the eroding sense of morality and independence that mark (any) empire's younger days. We see it differently.

The paradigm we'd like to express is an economic one of Misesian "human action" and might be considered as an alternative to the great-man theory of warfare and statism. In our paradigm, one observes first of all an agglomeration of small settlements that share customs and the same language. As time goes on, these settlements (states) compete with each other, but are not repressive because if one state attempts an authoritarian regime, its brightest citizens will just pick up and move to another state. This is the way we believe that many successful cultures got their start – China (competing cultures), the Greeks (city states); Egyptians (upper and lower Nile nations); Rome (the seven hills and seven separate communities); Renaissance Italy (nation states); America (13 separate colonial settlements).

It is actually the competition between nation states and the ability of citizens to travel from one to another without disrupting their lives and families that builds civil society. As time goes on, consolidation often takes place and republics are formed from the disparate entities. These republics have enormous energy and build on great achievements in civil society that have taken place during the era of nation states. Eventually a third stage sets in, which is the transformation of republics into empires. At this point, one sees the creation of great monuments to the state and the other paraphernalia of state control.

It is this third stage or level, at which your analysis seems to begin. But you are ignoring the previous two incarnations of civilization – first, similar communities in close proximity to one another and, second, their evolution into a single republic. You may rightly assume that expansive empires take risks and contracting empires do not, but your emphasis on empire would seem to distort the arc of civilization, leaving out the first and most important two-thirds of the process.

It is an irony that the many programs on the History Channel (for example), in focusing on the "great" achievements of Egypt or Rome, tell the story not of republics but of empires – often the end result of a civilizing process, not its beginning. The great achievements of the Roman or Egyptian Empires – preserved in ruins and admired by many – may be seen as the last gasp of spent cultures. Therefore, the great monuments to individual rulers, the fantastic mausoleums, the endless boulevards and bumptious displays of state military power are to be seen as the final ruinous ejaculate of an exhausted civilization, not its glorious apogee.

Empires, oppressing their citizens, may use war as a diversionary or expansionist tactic. The great battles you admire, and the great men whose campaigns you catalog, may in fact be acting out of oppression and a determination to intimidate and destroy. Their wars are "a racket" as General Smedley Butler explained in his great, short book on the manipulatory elements of state aggression. Yes, isn't this information that you should be providing to cadets? Important information so that impressionable cadets do not get the unfortunate idea that the constant piling up of military might in the service of state authoritarianism is an expression of greatness.

Finally, we want to mention that insofar as the United States is concerned, the above paradigm seems perfectly adequate. The United States began as a series of disparate colonies that morphed into "these united States" and finally after the Civil War, the "United States." Indeed, the Civil War can be seen as the dividing line between republic and empire. Before the Civil War, a state was free to leave the union. Post Civil War, no state was free to leave, and the ultimate authority passed to the federal government with serious, even oppressive, consequences.

Seen from this point of view, much of the greatness of the United States may have arrived BEFORE the Civil War. Industrial might, the creativity of civil society, the intricate balance of public and private endeavors – much was generated during a time of relative freedom when people could, relatively speaking, come and go as they pleased (non Indians, anyway). By the 20th century, all that was finished. A Supreme Court defined the law of the land for hundreds of millions, Congress and the Executive Branch made laws for everyone to obey and increasingly, in the latter stages of this authoritarian construct, the laws created and upheld by the US federal government are used to create more dependence on Leviathan – in turn increasing federal power.

Your perspective about expansive versus contracting empires, when seen in terms of the United States, must inevitably focus on perhaps the past century or so. It was only after the Civil War that the US became overtly aggressive and began to fight other nations on a more regular basis – Spain and Mexico come to mind. Certainly there were Indian wars of expansion prior to the Civil War, but one could argue that protracted conflict was somewhat different than post-Civil War "Wars of Empire."

NOTED: Lipsky Says 'Acute' Debt Challenges Face Advanced Economies … Advanced economies face "acute" challenges in tackling high public debt, and unwinding existing stimulus measures will not come close to bringing deficits back to prudent levels, said John Lipsky (left), first deputy managing director of the International Monetary Fund. All G7 countries, except Canada and Germany, will have debt-to-GDP ratios close to or exceeding 100 percent by 2014, Lipsky said in a speech yesterday at the China Development Forum in Beijing. Already this year, the average ratio in advanced economies is expected to reach the levels seen in 1950, after World War II, he said. The government debt ratio in some emerging-market nations has also reached a "worrisome level," he said. – Bloomberg (Ed Note: Is it possible that Greece is a bellwether rather than an exception?)

After Thoughts

The greatness of the United States is not to be defined by its "expansionist" phase of empire, in our humble opinion. The United States (as an empire) did not "force" its citizens to take risks to achieve industrial or artistic greatness. Many great accomplishments of civil society (in industry, medicine and art) occurred while the US was still putatively a republic, and BEFORE the United States became an empire (if one grants the name). Post-empire achievements, unfortunately, according to the above scenario, may be seen as a last gasp before the inevitable authoritarianism of the state gradually erodes civil society and diminishes the possibilities and scope of human action.

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