Calling for an ‘Economic Convention’
to decide what the economy of this nation is to be
[While this author has developed a pertinent proposal, this isn’t about that.]
I propose calling an ‘Economic Convention’ in the U.S. Its purpose would be to delineate specifically what the economy in this nation is to be.
Even before the end of the War of Independence of what would become the United Sates of America, it was becoming widely felt — especially by people serving in the Continental Congress (as the extant supra-state governmental body was called at the time) — that a drastic improvement in the structure and functioning of government at the supra level was necessary. The Congress called for a Constitutional Convention, to be composed of people chosen by the legislatures of the states, to work out the details (1787). That body ended up ditching the Articles of Confederation that had established a weak supra-state geopolitical entity and formulating a proposal for a whole new geopolitical unit, the United States of America, delineated in a spanking new Constitution, which was adopted in 1789. For (inevitably) both good and ill, the U.S.A. was born.
At the time of the Constitutional Convention ‘the economy’ was just then becoming recognized as a societal process of its own kind. To be sure, there was money and there was an economy (a process of producing/acquiring goods/services), but it was only in the last half of the 1700’s that ‘the economy’ had emerged as a subject of study. The ‘Physiocrats’, as they were called (led by Francois Quesnay), in France were the first to make an attempt at a systematic study of it. (Modern) capitalism was just getting underway. Adam Smith’s most famous book was published in 1776. Karl Marx wasn’t even born until more than a quarter of a century after that.
Needless to say, much has changed regarding the economy and the views relating to it since then. Prior to the Great Depression (1929 until 1939), there were two great economic issues in this nation. The first was the existence of slavery (settled by the failed War of Secession) and the other was the form the currency should take — and, related to that, whether or not to have a central bank, which was ‘settled’ (for sixth time ) in 1913, with the establishment of the Federal Reserve System: we didn’t have a central bank, then we did, then we didn’t, etc. We do now have one, with our currency being ‘Federal Reserve Notes’ that are not ‘convertible’ (exchangeable for any metal, such as gold or silver). For the record, the first nation with a central bank was Sweden, established in 1668; England had established its central bank in 1694. By 1776 such a thing was hardly a, well, revolutionary idea, but our Constitution did not even venture that far into economic territory (probably because of the huge place of slavery in the economy, which the pro-slavery faction made into a ‘third rail’ in the Convention, a strictly forbidden topic of discussion, much less action). For all intents and purposes, Alexander Hamilton’s “Report on Manufactures” (1791) initiated systematic macroeconomic discourse within this nation.
Since the Depression(/World War II) we have been becoming economically unsettled as a nation in a more general, if — until recently — less portentous way. In conjunction with the ‘culture wars’, the fundamental goals of our nation as regards the economy have become a fissure in the seismic political discord that is threatening to render the nation asunder. That is why we need to call an Economic Convention.
Even if it were able to come to an agreed conclusion, the Convention would be an abject failure if it did nothing more than consider a choice between some degree of ‘Keynesianism’ and ‘neoliberalism’. The former is a combination of fiscal policy — federal taxes/spending — and monetary policy to optimize the performance of the economy: ‘maximum employment with acceptable inflation’ (formulated by John Maynard Keynes, of England, in The General Theory of Employment, Interest, and Money: 1936). It prevailed in this nation from the middle of the 1930’s into the middle of the 1960’s. The essence of neoliberalism is, ‘lower taxes on rich people and corporations, no matter what’ (formulated by no single person, as a reaction to Keynesianism). It has to be said that as of now neoliberalism is clearly prevailing: the only discernible point of our economy is to see how rich an individual might be able to become in it.
Marxist socialism is not the only possible alternative — nor are alternatives limited to that or the ‘European model’. (Neoliberals call that “socialism” but it is not, given that it does not challenge the existence of private property.) It is basically just Keynesianism with the goal of ameliorating the deleterious societal effects of excessive economic inequality.
There is a world of possibilities out there. The first task of the proposed Convention would have to be to search far and wide, high and low, inside every ‘box’ and out for the best possible approach to the economy. The ultimate task of the Convention would be a Constitution of the Economy for the nation.