With the creation and expansion of an American middle-class in the 20th century, society took a leading economic role that forever changed our way of life. Unfortunately, society has no place in mainstream economic theories. Economics deals with individuals, not societies; with recessions, not depressions.
\nThe socio-economy (society and economy) of a certain time and place embodies both the shared purposes of life and the agreed-upon means for achieving them.
\nTo understand why we are in a depression today it is necessary to review America\u2019s not-too-distant history. The paradigm shift that ultimately created the Great Depression actually had its roots in the industrial revolution beginning around 1845. That\u2019s when the children of fiercely independent small farmers and business owners began to dream of building a world-powerful industrial colossus.
\nThose emerging nineteenth century Americans were totally the opposite of the shopaholics we see around us today. Typically working six ten-hour days a week for pitifully small wages, those patriotic ancestors of ours decided their manifest destiny was to work incredibly hard and pinch pennies so they could save and invest. They consumed little beyond the bare necessities of life and almost nothing on credit. They did so in order to build railroads, commercial farms, utility systems, mines, skyscrapers, tenements, trolley lines, shops, stores and much more.
\nAs the new paradigm spread, progress was swift. Chicago became the center of a vast industrial network and in only 60 years\u20141840 to 1900\u2014its population leaped from 4,500 to 1.7 million!
\nAfter 1900, however, we began to run out of opportunities for still more railroads and industrial development. Production began outstripping demand. Marxists confidently believed that over-production would bring the long-predicted demise of capitalism.
\nInstead, \u2018We the People\u2019 paradigm-shifted to a new variety of capitalism. We created a middle-class society devoted to fixing this shared problem. The social value of both buying on credit and owning more \u2018things\u2019 began being seen as having a positive social value\u2014very slowly.
\nThe prime cause of the Great Depression was the difficulty and length of time it took to counterbalance the 19th century\u2019s obsession with thrift and patriotic duty.
\nWe had to unlearn thrift and welcome the new life of wasteful abundance. The Great Depression was our learning time. Eventually, the new American consumers would spend us into full employment. In the meantime we sang \u201cBrother, can you spare a dime?\u201d
\nBy the end of World War II, Americans had finally learned how to buy, Buy, BUY. We became little kings in our very own suburban domains, and we created a time of widespread prosperity in the bargain.
\nThese socio-economic evolutions are difficult to track, though, because they always proceed simultaneously, yet on two opposing tracks. For example:
\n1) The Little King era was spawned at the peak of the industrial revolution, in about 1900, as a new socio-economy devoted to self-consuming America\u2019s increasingly excessive output at the end of the 19th century\u2019s industrial era. The social value of its prodigious appetite for consumption spending actually peaked in the 1960s; since then, its further excesses have been detrimental.
\n2) The new socio-economy, which we call \u201cResponsible Capitalism,\u201d likewise began in the \u201960s as an oppositional force to the Little King\u2019s decline into an excessive, unsustainable level of consumption. Its birth was documented in 1961 when incoming President Kennedy told the nation, \u201cask not what your country can do for you – ask what you can do for your country.\u201d Although most Americans studiously ignored his appeal, a tiny minority found the new President\u2019s call to service irresistible.
\nThe now-declining Little King era focused on \u201cWhat\u2019s in it for me?\u201d\u2014get it all now on credit and don\u2019t worry about the payments coming due. Today, the Little King scenario is becoming increasingly overpowered by Responsible Capitalism, the Kennedy-initiated paradigm of \u201cWhat\u2019s in it for us?\u201d\u2014gaining a higher level of satisfaction and happiness through assuring the welfare of others.
\nEven ownership of huge suburban mansions\u2014the flagship of our 20th century consumerism and the goal, pride and sacred icon of the Little King\u2019s socio-economy\u2014has increasingly lost its luster.
\nIn 2006, after continual rises since 1994, the unsustainable housing bubble finally burst. The subsequent mortgage foreclosures, lenders\u2019 losses, unemployment and other economic jolts of 2008 were all linked to that single event in 2006. Unlike recessions since World War II\u2014averaging eleven months\u2014the crisis since 2006 is already over four years old, with no end in sight.
\nThe bursting of the housing bubble in 2006 announced the certain departure of the Little King and parallel, fast-track rise of Responsible Capitalism\u2014a wholesale socio-economic shift\u2014the fourth we have documented since 1790. \u2018We the People\u2019 are once again inventing an entirely new societal way of being, a wholesale change in what is \u201ccool.\u201d Still, these socio-economic shifts always take more time that one might expect.
\nUltimately, expect billionaires to give ever-larger shares of their wealth to philanthropic causes. Expect the 20th century\u2019s concern for the middle class to be eclipsed by the 21st century\u2019s concern for the poor. Expect an increasingly rapid embrace of \u2018green\u2019 technology. Eventually\u2014imagine!\u2014expect a majority to vote for politicians who promise to raise our taxes to promote social welfare.
\nOur economic policy-makers have had little to do with the nation\u2019s success since 1945. Rather, it was due to our profligate and unsustainable levels of consumption. Today, however, we can take steps to make this transition occur faster and more smoothly.
\nWe need to enact policies that nurther the nobility of spirit that gives more than it takes. Applaud billionaires like Bill Gates who donate large portions of their wealth. Support the helpful volunteers who stream into disaster areas like New Orleans, Asia, Haiti and Africa. Insist upon a political and legislative will to fight climate change and environmental degradation.
\nWe\u2019re at the beginning of a revolutionary socio-economic change, one that will ultimately provide a sustainable, wholistic type of prosperity for America and the world. Only by recognizing what is occurring will we get there as quickly as possible.<\/p>\n","protected":false},"excerpt":{"rendered":"
The prime cause of the Great Depression was the difficulty and length of time it took to counterbalance the 19th century\u2019s obsession with thrift and patriotic duty. <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[1],"tags":[],"_links":{"self":[{"href":"http:\/\/www.socio-economics.com\/index.php?rest_route=\/wp\/v2\/posts\/298"}],"collection":[{"href":"http:\/\/www.socio-economics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.socio-economics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.socio-economics.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.socio-economics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=298"}],"version-history":[{"count":1,"href":"http:\/\/www.socio-economics.com\/index.php?rest_route=\/wp\/v2\/posts\/298\/revisions"}],"predecessor-version":[{"id":299,"href":"http:\/\/www.socio-economics.com\/index.php?rest_route=\/wp\/v2\/posts\/298\/revisions\/299"}],"wp:attachment":[{"href":"http:\/\/www.socio-economics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=298"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.socio-economics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=298"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.socio-economics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=298"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}