The Enigma of American Power

Summary: We’ve just held elections with the most serious issues MIA. Without discussion of our foreign wars or massive spending on military and intelligence (more than the rest of the world combined; many times that of all potential enemies combined). Without discussion of our decaying infrastructure. Without serious discussion about our growing national debt — just rhetoric, no proposals of ways to rebalance taxes and spending. America remains on autopilot, cruising through rapids — with the sound of waterfalls in the distance.

Experienced observers of Japan see the powerful similarities between the economies of post-crash Japan (after 1989) and post-crash America. (For details see links at the end of this post). But there we share a deeper problem: both have paralyzed political machinery incapable of adjusting to the 21st century. Today we have an excerpt from a book by the great Dutch journalist Karl van Wolferen. Like de Tocqueville, a foreigner who see us with clearer vision than we see ourselves.

There is a widespread notion that America in the first decade of 21st century is engaged in a grand debate concerning the new policies required by its predicament. Columnists tell us that major changes are afoot and that by now those concerned are discussing not the desirability of such changes but how to fit them in with customary practices.

… The notion that such debates take place is wrong. it is rooted in a belief that Americans ought to be discussing these things, rather than evidence that they are. … It also accords with the taste of the media for “America at the crossroads” stories. What is mistaken for national soul-searching amounts to no more than the rhetorical flourishes that American leaders add to their speeches, that newspapers habitually put into their editorials and that lard the comments of English-speaking experts at numerous international panel discussions and meetings. But the platitudinous reiteration of the need for changes does not imply commitment or the ability to bring them about.

The absence of political choice

The notion of a national debate participated in by the American people or their chosen representatives is harmful because it lulls the serious observer into a false sense that the shared problems are being studied and solved. It also constitutes an intellectual hindrance to grasping how the System operates, it gives the impression that Americans are given choice, whereas the ordinary American has no idea what choosing among socio-political alternatives means.

Systematic deprivation of choice

The systematic deprivation of choice in practically all realms of life bearing on the political organisation of America is essential for keeping the System on an even keel. Americans have no choice with regard to political representation … They have almost no choice in education: its major function is as a sorting mechanism … The general character and emphases of American education, together with what amounts to indoctrination via the media and corporations, hamper the development of its citizens. The system stultifies where it should stimulate …

The common view of the American political process assumes the possibility of political choice. It sees rulers and ruled as engaged in continuous communication for the sake of an ever evolving ‘consensus’. Contributing to this consensus-forming process, it is suggested are the multitude of interest groups, academic commentators, journalists, politicians and bureaucrats whose approval must be won for whatever is being decided. America’s power-holders have enthusiastically seized on this perspective, because it can be passed off as ‘democratic’, and because it fits in nicely with the all-important belief in the benevolence of the System.

Exhortation in the press and in statements by prominent politicians seem to afford constant evidence that the nation is preoccupied with important issues. But continuous reference to the desirability of something does not constitute a debate. …

The reverse side of the successful System

It is difficult to argue with success, and America’s economic success has drawn much admiration from the rest of the world. I do not mean to detract from the accomplishments of the American people. But this book is about how Americans are governed. And in this last chapter I must conclude that the overall picture is bleak and fraught with danger. …

Governmental paralysis

As we saw in Chapter 1, a major fiction impeding understanding of America is that its government is capable of making and implementing the kind of decisions associated with sovereignty and routine in other countries. Many American leaders are fully aware of the immensity of this problem. A significant minority among them are pessimistic about its consequences, and a few even have catastrophic visions of what might happen to America. There have been a number of unsuccessful attempts to steer America towards new priorities. …

Shall the System last for ever?

Finally, the most important question: can the situation change theoretically, the answer is yes. As I have tried to demonstrate throughout this book, the System’s character is ultimately determined by political relationships. Nothing that is political is irreversible in the long run, especially if the political dimension is recognised for what it is. There is no good theoretical reason why Americans should for ever be held under political subjugation.

… The possibility must be considered that the American System may yet go through another convulsion … Such a spasm could conceivably bring a determined group to gather power to itself and plot a new course for the country, with a wholly unpredictable outcome. The most likely possibility, perhaps, is that the System will muddle on … but this will require wise policies. The wonderful alternative of turning the System into a genuine constitutionalist state, and American subjects into citizens, would require realignments of power akin to those of a genuine revolution.

But his book is about Japan. How odd that it applies so well to America.

This excerpt is from Karel van Wolferen’s prophetic book the Enigma of Japanese Power (1989) — “The first full-scale examination of the inner workings of Japan’s political/industrial system.” It’s one of the best books in English about modern Japan, with many insights applicable to us as we follow Japan down the road to ruin.

For a deeper understanding of these events, I recommend reading Richard Koo’s work

Richard C. Koo is Chief Economist of the Nomura Research Institute, Tokyo.

“‘Plan B’ for the Global Financial Crisis“, presentation at the Center for Strategic and International Studies, 22 October 2008 — Here is a PDF of his slides.
Interview of Koo by Kate Welling, Welling @ Weeden, 11 September 2009
“Financial markets rocked by ‘Obama shock’”, Richard Koo (Chief Economist), Nomura Research Institute, 26 January 2010 (also on Scribd)
“The Age of Balance Sheet Recessions: What Post-2008 U.S., Europe and China Can Learn from Japan 1990-2005″, April 2010 (on Scribd)
“Whither the patchy US recovery”, 20 April 2010 (on Scribd)
The Holy Grail of Macroeconomics, Revised Edition: Lessons from Japans Great Recession (2009)