About the dominant powers

The question of our times is bound with the question of the dominant power of the times just as the Roman times or the (British) colonial days. Post war generation was brought up in a cold war dominated by the American and the Russian hegemonies now larely confined to a unipolar one with just one dominant superpower. Is it likely to be going on? Or like all civilisations will this also come to an end? Here is an article by Morris Berman.

The Twilight of American Culture


COLLAPSE, OR TRANSFORMATION?

Sallust's description of Rome in 80 B.C.—a government controlled by wealth, a ruling-class numb to the repetitions of political scandal, a public diverted by chariot races and gladiatorial shows—stands as a fair summary of some of our own circumstances....
—Lewis Lapham,Waiting for the Barbarians

Before we can talk about the long road to cultural healing, then, we must begin by understanding the illness. But here we are confronted with a complicating factor, briefly alluded to in the Introduction: Decline comes inevitably to all civilizations. With the exception of hunter-gatherer societies that have not been interfered with by more complex ones (and there are no pristine hunter-gatherers left anymore, I fear), the pattern of birth, maturity, and decay would seem to be inescapable. Est ubi gloria nunc Babyloniae? Where is the glory of Babylonia now? Or that of ancient Egypt, China, India, Greece, Rome? Gone, all gone—that is the historical record. Why, then, should America escape this fate? If decay is built into the civilizational process itself, then talk of healing might be a bit out of place. Indeed, from an analytical standpoint, the problem is not that states collapse—for that is the rule—but that some manage to last as long as they do. To what purpose, then, my attempt to give the reader a cultural roadmap, or to suggest a way out, a creative response? If the historical record is clear on this point, there is no way out. We might just as well fiddle while New York and Los Angeles burn.
This is, of course, a formidable objection, one not easily dismissed. Nor do I believe that America is somehow so privileged as to constitute a historical exception (which belief would be a typically American kind of hubris). But three things do jump out of the historical record that are worth mentioning. First, the process of decay may be inevitable, but it is rarely linear. In its three thousand years, for example, Egypt suffered periods of complete political disintegration and foreign domination that sometimes lasted more than a century, and it then bounced back. While its ultimate decline was inevitable, and it was eventually absorbed into the Greco-Roman Empire, three millennia is not exactly an unimpressive showing; and most of those years were "up" (in terms of political coherence), while some of them were "down." So it might conceivably be argued that the United States is going through a bad patch, from which it might recover, at least for a time.
Second, if the classical model of collapse of empire is that of ancient Rome, we have to remember that its fall was, in terms of the larger world system, as much a transformation as it was a decline. Indeed, it was from the ruins of the Roman Empire that medieval European civilization emerged. While the parallels between the Roman case and the American one are not exact, the analogy does suggest some transformative possibilities. If, for example, we are indeed slated for another dark age, it may not have to last six hundred years this time around. This is precisely a case in which something like the monastic option, and the deliberate work of cultural preservation, might come into play.

Third, there is the issue already mentioned in the Introduction, and which I shall discuss later on in this chapter, as well: This is a very lively kind of decline. In this sense, possible hubris notwithstanding, something unprecedented might be happening. Europe's Dark Ages were truly dark—"singularly monochromatic," as the historian Peter Brown put it. Our own transformation is confusing, because of the "invisibility" factor discussed above. For those seduced by noise, toys, and technology, the current transformation to a global economy is nothing less than cultural efflorescence. For those who place their values elsewhere, there is the paradox that the very success of McWorld, the very transformation that it represents, is a darkness that is ultimately every bit as dark as the early Middle Ages, no matter what the surface appearances might indicate. Whether this will make recovery easier or more difficult remains to be seen.

My point, in other words, is that even if decline is historically inevitable, it is still a process that contains unexpected twists and turns. The sine curve may be descending, but there are loopholes in it nonetheless. Furthermore, the precedent of the monastic option suggests that there might be ways of ensuring that what is of value in this civilization can be preserved and handed down in the hope of generating cultural renewal at some later point. As for the individual reader poring over these pages, he or she doesn't have to be a statistic; there are choices to be made that move in directions opposite to the general tide of events. Before we discuss all that, however, we need to have a closer look at the larger process of civilizational decline, and the factors that come into play when a culture enters its twilight phase and begins to implode.

The concept of decline often involves organic metaphors, notions of birth, maturity, and senescence. This way of viewing civilization goes back to the eighteenth century (Giambattista Vico), and perhaps even to the ancient Greeks; but it came into common currency in the nineteenth century through the writings of the German Idealist school of philosophy. Hegel, for example, saw history as a kind of spiritual journey, in which Geist ("spirit") moved around the globe, generating the Renaissance in fifteenth-century Florence, and sowing the seeds of decay when it subsequently departed. Oswald Spengler, as already noted, thought in similar terms, arguing that a civilization was organized around a central ideal, or some sort of Platonic Idea, and that the process of civilization involved a stage of aging, during which the Idea hardened into pure form. Writing in the early twentieth century, Spengler believed that this process of formalism, or "classicism," as he called it, was happening to the West during his lifetime, and that it would be on the Western agenda for the next few centuries.


There is, perhaps, something intellectually satisfying about the organic approach. After all, humans die, so why not civilizations? It is, however, not really necessary to rely on organic metaphors (or mystical forces) as sources of explanation. As Joseph Tainter points out in The Collapse of Complex Societies, civilizations are anomalies. The whole statist configuration of hierarchy, specialization, and bureaucracy emerged fairly recently—about six thousand years ago—and has to be constantly reinforced and legitimized. It also requires an expanding material base and a constant mobilization of resources, and the trend is always toward higher levels of complexity. There is the processing of greater quantities of information and energy, the formation of larger settlements, increasing class differentiation and stratification, and the development of more complex technology. Collapse, which involves a progressive weakening of the political and administrative center, is the reversal of all this, and a recurrent feature of human societies. As the center weakens, there is no longer an "umbrella" to guarantee safety. The strong savage the weak, and there is no higher goal than survival. Literacy may be lost entirely, or decline so dramatically that a dark age is inevitable.
Thus collapse is built into the process of civilization itself, but this can be understood in purely rational or economic terms. When stress—for example, resource shortage—emerges in hunter-gatherer societies, the members of the tribe have an easy option, one that worked for hundreds of millennia: They move. The solution, in short, is horizontal (dispersion). But if you are sedentary, committed to staying in one place and depending on that place for your livelihood, you must "go vertical," that is, generate another level of hierarchical control to solve your problems—a process that never ends. The whole thing is cumulative. Taxes rarely go down; information processing gets denser. Standing armies get larger, not smaller, and bureaucracies grow rather than shrink. Elites want—and get—more and more of the pie, and so forth. What is unleashed is an unending spiral of increasing complexity and correspondingly higher costs. Finally, says Tainter, "investment in sociopolitical complexity as a problem-solving response often reaches a point of declining marginal returns." The "center of gravity" is too high; the benefits per unit of investment start to drop off. At this point—that of diminishing returns—collapse is not only inevitable; it actually becomes economical. Although the effects are not exactly pleasant, collapse finally becomes an economizing process, the best adaptation under the circumstances.
Tainter's argument, however, is not necessarily at odds with that the of German Idealists. For one thing, both he and Spengler agree that collapse is inherent to the process of civilization itself, and thus inevitable. But there is even deeper agreement than this, although it is implicit: Economic decline has an obvious "spiritual" component, which shows up as apathy and meaninglessness—what the French sociologist Emile Durkheim called "anomie," and which is the reality lurking beneath the facade of Spengler's classicism. In the classicist phase, the culture no longer believes in itself, so it typically undertakes phony or misguided wars (Vietnam, or the Gulf War of 1991, for example), or promotes its symbols and slogans all the more. As the organizational costs rise, yielding increasingly smaller benefits, so does the formalism, the pomp and circumstance. Just as the jaded crowds of ancient Rome zoned out on bread and circuses, Hollywood makes Rocky-type films, rerunning tired old formulas, but nevertheless, these are box-office hits. And gladiatorial extravaganzas, as well as the "Rambification" of culture, are sure signs of spiritual death.
If we can pull together the threads of this discussion so far, it would seem that four factors are present when a civilization collapses:

(a) Accelerating social and economic inequality
(b) Declining marginal returns with regard to investment in organizational solutions to socioeconomic problems
(c) Rapidly dropping levels of literacy, critical understanding, and general intellectual awareness
(d) Spiritual death—that is, Spengler's classicism: the emptying out of cultural content and the freezing (or repackaging) of it in formulas—kitsch, in short.

It is at this point that this scenario may strike the reader as hauntingly familiar, because these four conditions would seem to apply to the United States at the beginning of the twenty-first century. What reader of these pages is not aware that the gap between rich and poor has increasingly widened since the 1970s? That entitlements such as Social Security are under threat, or that we incarcerate more people per capita (565 per 100,000) than any other country in the world? That millions of our high school graduates can barely read or write, and that common words are now often misspelled on public signs? That community life has been reduced to shopping malls, and that most Americans grow old in isolation, zoning out in front of TV screens, and/or on antidepressant drugs? This is the nitty-gritty, daily reality that belies the glitz and glamour of the so-called New World Order.
In order to understand the reality of our situation, it will be necessary to flesh these four factors out in some detail. But—to skip ahead for a moment—it is, once again, not a simple case of civilizational collapse, but a more complex one of cultural transformation. Viewed from a certain perspective—that of Wall Street, Beverly Hills, the region contained within the Capital Beltway, and Redmond, Washington (home of Microsoft)—the transformation to the global society of the twenty-first century is a great success. In terms of late-empire developments, with the Soviet Union now a vestige of the past, it may even be adaptive, at least for another fifty or one hundred years. After all, if there is nobody around to offer a different definition of success, then perhaps there really isn't a problem. The meaning of collapse is in the eye of the beholder, n'est-ce pas?

Let us take a closer look at what the American transformation consists of. I shall begin with the data on social inequality, Item (a).

There was a time, not so long ago, when data on rich versus poor could only be found in left-wing journals. I remember how, as graduate students in the sixties, we would excitedly photocopy these articles and distribute them to our friends. Today, this is all just basic information, often obtainable from mainstream newspapers or the pages of journals such as Business Week and Fortune. In a 1995 article in The New Yorker, John Cassidy notes that between 1947 and 1973, while there was certainly a great disparity between rich and poor, actual incomes rose at the same rate for everyone. In that sense, the increase of income mapped across the five quintiles of society, and arranged on a graph, looked like a picket fence. But from 1973 to 1993, he says, it was only the highest quintile, the rich, that enjoyed a significant increase in wealth. The top 1 percent of the nation saw its income level grow 78 percent between 1977 and 1989, and Federal Reserve Board figures from 1989 reveal that this elite group owned 40 percent of the nation's wealth. By 1995, according to Robert Reich, the figure (excluding the value of homes) had risen to 47 percent—more than $4 trillion in assets—while the upper quintile owned 93 percent. The result is that America is no longer a middle-class society. "The picket fence," Cassidy remarks, "has been replaced by a small staircase, and some of the staircase is underground." The two lowest quintiles (bottom 40 percent) experienced a decline in income during the period from 1973 to 1993, whereas the top quintile saw a transfer of $275 billion per year from the middle class to the rich. In 1973, the typical CEO of a large company earned about forty times what a typical worker did; today, he earns from 190 to 419 times as much. Reich notes that Bill Gates' net worth in 1998—$46 billion—was larger than the combined net worth of the bottom 40 percent of American households. What the country has experienced, concludes Cassidy, is "an unprecedented redistribution of income toward the rich." In terms of wealth disparity, the United States leads all other major industrial nations.
MIT economist Paul Krugman refers to this trend as a "spiral of inequality," with economic lopsidedness increasing every year. As it gets increasingly difficult for most Americans to make a living, it also becomes increasingly easier for a select handful to make a killing. According to the Census Bureau, the bottom 20 percent of U.S. families in 1970 received 5.4 percent of the national income, while the top 5 percent received 15.6 percent. By 1994, the corresponding figures were 4.2 percent and 20.1 percent. All of this, says Krugman, signals a "seismic shift in the character of our society." It also indicates a shift in our values. In 1962, President Kennedy confronted the U.S. Steel Corporation over price increases and forced it to back down. Today, upper-echelon CEOs would be more likely to be invited to dinner at the White House.

As far as the White House goes, messages from it about the increasing prosperity of Americans have to be taken with several pounds of salt. "While the national economy has been growing," writes William Finnegan (Cold New World), "the economic prospects of most Americans have been dimming."

Yes, by 1999 the unemployment rate was the lowest it had been in twenty-five years, but during that same time period real hourly wages fell significantly, the median household income went down, and the national poverty rate rose. The number of low-wage jobs proliferated dramatically. The past twenty-five years, notes Finnegan, have produced "the first generation-long decline in the average worker's wages in American history. ... The middle class, defined by almost any measure, has been shrinking conspicuously for some time." Thus the White House boast that 70 percent of the workers who lost their jobs between 1993 and 1995 found new ones by early 1996 is hollow, for the great majority of that 70 percent found only part-time jobs or ones paying less than their previous wages. Since 1979, 43 million jobs have been erased in the United States.

We are, in short, drifting toward a situation such as exists in India, or Mexico, or Brazil, and nothing is being done to halt this. During the period from 1991 to 1994, for example, the number of Mexican billionaires went from two to twenty-eight. Ernesto Canales Santos, a corporate attorney who has represented many of these men, calls it "the Aztec pyramid model," much of which was made possible by U.S. investment, and which, in turn, had repercussions for our own lopsideness. Thus David Calleo (The Bankrupting of America) writes: "The advanced part of the [American] economy seems a more and more prosperous enclave, barricaded within a deteriorating nation. Rather than providing a model for the third world, the United States appears to be imitating it." "If anything," adds David Rieff of the World Policy Institute, "America, with its widening income gap, its vast, deepening divergences in everything from education to life expectancy between rich
and poor, is less democratic today ... than it was in 1950."

The effect of these trends, and of growing corporate hegemony, has been particularly devastating on children—not only in the United States, but in other parts of the world as well. Between 1979 and 1990, the number of American children living below the poverty line rose an astonishing 22 percent. A 1996 article entitled "India's Child Slaves," in the International Herald Tribune, notes that 15 million children in India work eleven to twelve hours daily in dangerous conditions, and are beaten if they try to escape. In the silk industry—financed by the World Bank—children as young as six and seven years of age are forced to plunge their hands into scalding water. To avoid starvation, many Indian families send their handicapped offspring to wealthy Arab nations to beg. Girls under ten are sold into prostitution, and India is hardly alone in this (Asian countries employ an estimated 1 million child prostitutes). Worldwide, according to the UN's International Labor Organization, 250 million children between the ages of five and fourteen are now employed across Asia, Africa, and Latin America, and this involves slavery, prostitution, and work in hazardous industries.


Events such as these do not happen in a vacuum. Involvement of the World Bank, and/or U.S. corporations, is part of the whole fabric of oppression. Global corporate hegemony, multinational and transnational in nature, means by definition that these events are linked by a web of interdependent markets, investments, and trade agreements. The wealth of America's top quintile is implicated not only in the poverty of South Central Los Angeles but also in the slums of Buenos Aires. In 1991, the Nike Corporation made $3 billion in profits, paying its factory workers in Indonesia—mostly poor, malnourished women—$1.03 a day, not enough for food and shelter. (Just do it!) By 1996, the 447 richest people on the planet had assets equal to that of the poorest 2.5 billion—52 percent of the world population. What do we think it means when we buy a new sweater and the label reads Made in the Philippines, or a transistor radio stamped Made in Korea? What do we imagine the social and economic reality is behind these seemingly neutral words? Or behind the cup of Colombian (Brazilian, Angolan, etc.) supremo that we drink every morning, or the cleverly crafted decaf latte with 2 percent milk that we enjoy on a sunny autumn afternoon in a chic café with our friends? We hardly need Ann Landers to tell us to "wake up and smell the coffee." The truth is that it is a bitter brew; that the affluence of the few is purchased at the misery of the many.

The argument that world inequality is structural is a major theme of what is known as world-systems analysis, which views the drama in terms of a distinction between core and periphery. Core countries are those in the privileged regions of the Northern Hemisphere such as the United States and Western Europe. It is in these regions that financial, technical, and productive (usually industrial) power is concentrated, power that is controlled by an elite. The periphery, on the other hand, contains the exploited regions that sell their resources and labor to the core without ever having access to the latter's wealth. The enrichment of the core is structurally dependent on the impoverishment of the periphery. Thus today, the Pacific periphery consists of Burma, Thailand, Malaysia, Indonesia, and the Philippines, whereas Europe's periphery is largely Africa, what the French economist Jacques Attali (in Millennium), calls "an economic black hole." In a future world of, say, 8 billion people by A.D. 2050 (a very conservative estimate, incidentally), Attali believes that 5 billion of these will, because of this structural inequality, be living right at the survival line, just managing to hang on. The twenty-first century, he writes, will be a Blade Runner world, "a world that has embraced a common ideology of consumerism but is bitterly divided between rich and poor." The latter, inhabiting the destitute peripheries, will be "boat people living on a planetary scale." But, he adds, this situation is highly volatile, because those in the periphery are increasingly aware that the prosperity of the core is purchased at their expense. They will, as a result, eventually rise up against the core in "a war unlike any seen in modern times."

Sociologist Christopher Chase-Dunn has pursued this theme in great detail in his book Global Formation. He shows that the core/periphery hierarchy is a structural feature of the world system, that is, it is an institution of socially structured inequality. Historically, going back to the Commercial Revolution of the sixteenth century and the plunder of the Americas, the exploitation of the periphery was crucially important to the emergence of industrial capitalism in the core, and the direct use of coercive force eventually evolved into institutionalized economic power based on "law" and private property. So a network of interdependent markets is the main glue of our global system, he says, bolstered, when necessary, by the military power of the core states. Thus, we read in American newspapers (Seattle Post-Intelligencer, 27 January 1997; originally reported in the Baltimore Sun in 1995) of a CIA training manual that decribes torture methods used in Honduras during the 1980s. This was part of President Reagan's effort to control leftist movements in Nicaragua and El Salvador; movements that were, like the subsequent uprisings in Mexico (Chiapas), fighting for local self-determination and against those market forces trying to grind them down into permanent peripheral status. Or consider the situation in Colombia, where according to the Human Rights Watch, CIA officials helped the government set up "killer networks" of paramilitary soldiers for the purpose of murdering suspected leftists, as well as supplying arms and money for this purpose.

No surprise here, of course; this is an old story in our relationship with Latin America. Nevertheless, writes Chase-Dunn, political coercion coming directly from the core has become less central to the structure of exploitation and domination, since the core can rely on local coercion—that is, authoritarian client states in the periphery to do its dirty work in exchange for economic aid to the elite in the periphery; and economic exploitation, organized through the production and sale of commodities, is a more efficient, "less dirty," means of control. (Add to this, in recent years, the role of the World Bank, the International Monetary Fund, NAFTA, GATT, the proposed Multilateral Agreement on Investment, and so on.)

In any case, the system is a nested one, with wheels within wheels. There are important inequalities between major areas of the globe, but also within specific regions. Thus the peripheral countries of Brazil and Nigeria play the role of core countries vis-à-vis nations peripheral to them. All of this, in turn, ricochets back onto the core sectors within the core countries. Exploitation of the periphery, and the threat of the flight of capital to the latter, has served to keep labor unions and socialist parties docile, preventing them from successfully challenging elite powers within the core.

All of this is part and parcel of the global economy. Thus, Federal Reserve Board Chairman Alan Greenspan, in congressional testimony given on 21 January 1997, said that "heightened job insecurity explains a significant part of the restraint on compensation [that is, wages] and the consequent muted price inflation." Typically, when employment increases, the Dow-Jones average falls. For the economic elite in the core, it pays to have an insecure labor force.

Both the penetration of a peripheral nation by foreign investment and the creation of debt dependence by means of foreign credit actually serve to damage that nation's economic development, and to increase inequality within that country. The net effect is the replacement of direct colonial control by neocolonial economic mechanisms. The structure of dependency, says Chase-Dunn, "provides support for elites in the periphery and keeps wages low relative to the income of elites." These elites, in fact, are linked "to the interest of the transnational corporations and the international economy," not to their own nations or people.
For the purposes of our own discussion, however, it is important to remember that this description also applies to peripheral areas within the United States, not just, say, to Guatemala. Month by month, more and more wealth is being transferred to fewer and fewer hands. In mid-1997, Republicans in Congress proposed a tax cut that was designed to give the upper quintile 87 percent of the tax savings over the next decade. Two years later the attempt was repeated when the House and Senate passed a compromise tax bill, which would give the richest quintile 79 percent of the tax savings, as well as pass billions of dollars in tax breaks on to multinational corporations. The process is inexorable; and although I would not predict a massive popular uprising within the United States—that is more likely to happen in peripheral regions outside the core countries—it is nevertheless true that this kind of inequality could eventually destroy the entire social fabric, as it nearly has already in the case of public schools and inner cities. It is also spiritually corrosive, demoralizing, and will do untold damage to this nation. In this regard, if one wants to make a comparison with ancient Rome, it is interesting to note that during the reign of Nero (A.D. 54-68) roughly two thousand men owned nearly all of the land between the Rhine and the Euphrates. The population was pretty much divided between the rich and all the rest, and the rich were very, very rich. Similarly, writes Kevin Phillips (in Arrogant Capital), what we are witnessing in the United States today is a broad transition "toward social and economic stratification, toward walled-in communities and hardening class structures, [and] toward political, business and financial elites that bail each other out...."
Why is this slide toward greater inequality occurring? Partly, it is because the concentration of wealth in fewer and fewer hands is itself part of the process of declining marginal returns. Every time a greater investment in complexity takes place, it is accompanied by a greater share of the pie for the elite. Hierarchy generates power; the greater the verticality, the greater the opportunity for the few to exploit the many, especially in times of debt and crisis. "As massive debt becomes a major national problem," writes Kevin Phillips, "it also becomes a major financial opportunity and vested interest." For a select few, in other words, national collapse is a good business opportunity! But ultimately, no one knows exactly why America has experienced such a shift in wealth, as John Cassidy admits. It seems to be due to a combination of factors: the rising volume of international trade, the spread of computer technology, the decline of labor unions, and the immigration of unskilled workers into the country. Yet all of these factors are controversial, and a truly unambiguous explanation escapes us. The best that any economist can say is that this is just how capitalism has developed (or in the case of Rome, perhaps it was just a function of the closing phase of empire). The only thing that can reverse this trend, besides a dramatic revitalization of labor unions, would be a very steep tax on the rich. In the mid-1990s, Robert Reich, who was then Secretary of Labor, floated this out as a possibility, and his suggestion was met with a deafening silence. There simply is no sympathy for such a solution, even among middle-class citizens for whom such a move would be an obvious benefit (largely because, I suspect, they individually believe that they alone will somehow beat the system and become rich themselves—sort of like winning the lottery). As a result, the progressive "Aztecization" of the country is a foregone conclusion.

Let us, then, turn to Item (b), the Tainter thesis as it applies to the American economy. If we focus on what is probably the major issue here, that of entitlements—principally Social Security and Medicare—we discover that this is, unfortunately, a very murky area. As far as entitlements go, the data and prognoses seem to change almost every month. Hence, by the time this book appears in print, my data will probably be obsolete. In addition, in this particular area, the data can vary significantly depending on the political agenda of the researcher. Position papers published by right-wing think tanks—the Cato Institute, the Heritage Foundation, the National Center for Policy Analysis—argue that the entitlement system is in a crisis situation and that a program such as Social Security needs to be phased out and/or totally overhauled. Hence, we have to be wary of the data here, because they are often a front for privatization—for example, replacing Social Security with private pensions along the lines of IRAs or 401(k) plans. At the other end of the spectrum, such as it exists in the United States, we have the Brookings Institution, which argues that the system needs only moderate adjustments to stay on track. So it is hard to decide which arguments are valid, given these competing claims, and the reader should be aware that I am not an economist, or any sort of expert in these matters. Let me take a shot at it, nonetheless.

In some ways, the best place to start is with the reports of the Social Security Administration (SSA) itself. According to the trustees' report of 30 March 1999, Social Security will become insolvent in 2034, and the Hospital Insurance part of Medicare will do so by 2015. The combined expenditures here are higher than the taxes and premiums collected to support them, and this situation will continue. Thus the cost of these, which is 7 percent of the Gross Domestic Product (GDP) today, will rise to 11.7 percent by 2030. By 2025, claims on the Social Security trust fund will be $86 billion, and by 2075, costs for Medicare will be 45 percent higher than the income available for it. These figures, moreover, are not based on a particularly pessimistic scenario. In fact, as early as 2014, other federal receipts will be needed to help pay benefits. Hence, comments a Congressional Research Service (CRS) report on the situation, "the long-range outlook ... leaves little to be sanguine about," and popular opinion reflects this. Less than 50 percent of the American people believe that Social Security will meet its long-term commitments, and in the group of those below age fifty-five, nearly two-thirds have little confidence that it will work for them.

Why is this the case? The answer is obvious: We are becoming an older nation. By 2025, the number of people sixty-five years and older will grow by 75 percent, whereas the number of workers supporting the system will grow by only 13 percent. The current ratio of workers to Social Security recipients is 3.4:1; by 2035, it will drop to 2:1. The "big three" entitlements—Social Security, Medicare, and Medicaid—will grow rapidly burdensome because the costs are directly linked to an aging population.

Turning to the reports of conservative organizations, such as those previously mentioned, the most pessimistic scenario of the SSA, they point out, is that by 2045 almost 53 percent of the total taxable payroll in the United States will be needed to fund Social Security and Medicare. Whereas in 1950, we had seventeen workers supporting each retiree, the number could drop to one in the next century. The revenue shortfall, they say, will be $232 billion by 2020. Life expectancy is increasing faster than previously predicted, while the fertility rate is falling faster than was previously thought. By 2050, the number of retirees will reach 80 million people. The entitlement system is not sustainable, and very little, short of privatization, can avert a major collapse.

Finally, the evaluation of Henry Aaron and Robert Reischauer of the Brookings Institution (Countdown to Reform) corroborates much of these data but maintains that the "Chicken Little" position is just plain wrong. Having until 2034, they say, does not amount to a crisis, and Social Security can be saved in its present form by enacting modest cuts in benefits, levying modest tax increases, and increasing the age of elibility for Social Security as well as taxing SS benefits like any other pension.

The problem, as the authors admit, is that public opinion polls reveal very little support for these policies, so the only solution is to phase them in slowly, thus triggering less opposition.

How much trouble are we really in, then? Are we, as Joseph Tainter maintains, rapidly reaching the point of diminishing returns, or is this unwarranted alarmism, as Aaron and Reischauer suggest? As I said, I am not an economist, but here is what I conclude from my research in this area:

1. The long-range outlook is not good, as the trustees' report of the SSA freely admits.
2. We are becoming an older population, the fertility rate is dropping, and we may well reach a situation toward the end of this century in which the ratio of worker to recipient is 1:1. This will indeed require drastic measures, but as the Brookings' authors note, Americans don't want higher taxes or lower benefits, even in the case of moderate measures, let alone draconian ones.
3. One thing everybody seems to agree on is that if we want to put a positive spin on these dates (2015 and 2034), and say that we've got time to spare, we must realize that a prime factor behind this "healthy" situation is the strong economic growth that has taken place in this country since 1995. It is this in particular that is giving the entitlement situation a boost, because such growth increases revenues (payroll taxes) flowing into both Social Security and Medicare. The only trouble is, capitalism operates in terms of ups and downs, and as the trustees' report candidly says, "we cannot prudently rely on economic growth." Nor can we reasonably project it indefinitely into the future. In short, a structural crunch does seem likely sometime in the twenty-first century.

This last point strikes me as the crucial issue. In Gray Dawn, Peter Peterson claims that the benefit outlays for Social Security, Medicare, Medicaid, and federal civilian and military pensions will exceed total federal revenues by 2030. Between 1980 and 1990, the national debt went from being 34 percent of the Gross National Product (GNP) to 59 percent of it. By 1996, the debt amounted to $5 trillion, and interest payments on this were eating up one-sixth of the national budget. I suspect that only continued economic growth can outflank this kind of debt and interest burden, and I just don't think we can count on this happening. The accuracy, then, of Tainter's thesis as it applies to America's economic future remains unclear. My own sense is that we shall be in serious trouble by mid-century.

Going beyond the Indian heart over mind

I had written an article for business standard and mailed it to the paper.

Earlier I had started an academic work for Prof. Rajen Gupta of MDI, Gurgaon but was unable to complete it. Later I felt the same is better less academic. Hope BS will publish it.

Going beyond the Indian ‘heart over mind’.

Sabnavis’ article on heart over mind (1st May 2009 BS) provoked further thoughts on the subject of ‘the Indian mind’. Surprisingly the word culture was used sparingly in the article. While we call shared values, beliefs and assumptions of a group of people as the culture of the group, it also means the typical ways in which we respond to things, situations, people, themselves and others. While the mind heart distinction is useful to analyse business processes, culture is more comprehensive in import.

Culture has been variously called the programming of the mind and the lens though which people tend to see. In gaining insights on the implications of culture on business practices, the conventional way of looking at a large country like India as a single cultural entity seems to be too generic. This is because the political entity that is India is largely a result of some historical antecedents and geographic reality. An examination of the cultural differences is an imperative due to a number of reasons. This article aims to point out certain observed nuances both behavioral and linguistic that are likely to yield insights into the differences across the Indian states/regions. While some arguments for looking at the different states or regions as culturally separate entities is put forth, it is hoped that similar nuances and thereby underlying cultural programming can be provoked from researchers and academics of other linguistic groups as well and thus overcome the inevitable limitation of few individuals knowing one or only a few languages and similar insights. While the development of culturally congruent management interventions is a supposed outcome of such thinking, it may also serve the larger interest of reducing stereotypes and prejudices among the Indian states.

The mind heart distinction is a useful way of looking at differences. Culture provides a much wider canvas to work and yield further fine tuning beyond the duality. In this sense it may also be possible to look at not just the Indian mind but also finer distinctions between the states or regions. Many with a certain degree of exposure to India would notice the subtle differences across the different states.

Culture is identified as having four elements; values, symbols, rituals and heroes and has been studied extensively by many. Differences in symbols, heroes and rituals are apparent across the many Indian states or regions. An example would be differences in dressing (symbols) festivals (rituals) and the conception of ideal men as in say, popular cinema or politics (heroes). The differences may not be as stark as when comparing ‘Indian culture’ in general with other cultures. Nevertheless values that are deeply embedded and are unobservable like the other three elements also are likely to show the same subtle differences given the vastness and heterogeneity of the country. An incisive study can reveal many subtle differences across Indian states in terms of values as well as symbols, rituals and heroes.

In the contiguous sense, culture can also be conceived as a bridge from the past to the present. In the same vein, culture is the meeting point for modernity as in business organization-technology structure with the behavioral-social evolutions from the past. The twin realities of the modern world are the ubiquitous nature of and dependence of society on organizations and the indispensability and evolution of technology. There is also a tentative postulate that societies may move to convergence in the modern techno-organizational mould as a result of globalisation.

This postulate is on the one hand in terms of a possible leveling of diversity into a bland uniformity across different cultures and on the other hand a specter of societies or parts of societies who miss the bus as to be marginalized. The suggestion that India is a single cultural entity needs to be examined against this backdrop. Is it really a single cultural entity? Wouldn’t it be more useful to think otherwise as a hypothesis to be tested? Is it not necessary that the cultural diversity be examined more scientifically so as to identify, preserve and nurture the diversity? Also since the value part of culture, changes less rapidly than the symbols, is it not proper to fit the organizational structure, systems, procedures and practices to the culture rather than the other way around? If the different states or parts of the country are culturally different, or if we gain subtler insights into the variations, then is it not necessary and desirable to design the fit to suit the different cultures? In any case, even if from an instrumental point of view, as in influencing the mind or the heart through advertisements as was the gist of the article by Sabnavis, wouldn’t it be further desirable to look at the subtle differences to yield further usable insights?


From a functional perspective it may be necessary to develop a congruence between the particular culture and the particular techno – organizational structure. Consciously or unconsciously this is at the heart of any change intervention. Since, as already suggested, culture is difficult to be ‘changed’ what seems to be appropriate is a change in the techno- organizational structure including say, designing an advertisement.

A prerequisite of developing a fit is an identification of culture as the collective way of a people. In this sense studying culture is useful for the organisation and conversely organisations can facilitate greater understanding on the cultural front. An organization as a humanly constructed, system is a very specific domain where because of the meeting of technology, organizational science and culture and in turn the very organizational resources, yields itself to an experimental crucible where studies involving culture can be effectively taken up. For instance, the study by Hofstede leveraged the advantage of a globe spanning organization, IBM to develop specific insights into national cultures.

India provides a vastness and linguistic-political demarcation that lends itself to such an examination. “India is arguably, the nation with the longest historical encounter with the dynamics of cultural plurality.” (1)


A potential area for research from the Indian point of view could be the cynical way in which a society or people approach things especially in the face of ideals or ways in which actions are to be taken. In terms of religious rituals it appears that the age old and laid down patterns are more or less adhered to. However, one suspicion is whether less developed societies such as India approach technology and the concomitant appropriate habits of discipline in a much callous manner than warranted by the very same technological sophistication and complexity. One could design a superhighway, but can it be assumed or assured that the society that uses it will follow the traffic rules as demanded by the increased sophistication of the highway?

This line of thinking has been expressed by thinkers though not placing the issue as one of culture. For instance C. K Prahalad in one of his speeches talks about dysfunctional behaviours associated with developing countries. “There is absolutely no reason for not having disciplined traffic, absolutely no reason for keeping our airports dirty, no reason for us not to be concerned about time. These have nothing to do with resources but sheer attitude of mind”. That the attitude of mind Prahalad mentions is in the collective sense and therefore by extension the reference is to culture as expressed in behaviour is obvious.

An observed nuance in this vein is the strict following of operational sequences by the more advanced west, while the Indian mind set allows for skipping many a step in the sequence as routine. Stories about obeying red light in spite of no traffic by the more system conscious west versus callous disregard for red light even in heavy traffic in the Indian roads are legion. In the face of the behavior required by the same technological imperative, the two societies behave in two different ways. This many a time in spite of the same training! The difference could be attributed to a certain different value orientation. What if we could study this apparent contradiction of strict religious behavior vis-a- vis the not so strict observance of technological imperatives and take a new approach in say, training programs and other business processes such as advertisements. It is conceptually only a matter of transferring the disciplined behavior from one domain to another. Also while the Indian system may be chaotic, recently it was also observed that the apparent chaotic ways of Indian traffic are actually a better way of using space and time! At no point in time was any space left unutilized in what is apparent as chaotic traffic. Can it therefore be identified as a certain value that may be places the individual judgment above rules and systems as is the parallel case of ‘zubaan’ versus contract which Sabnavis mentions in his article.


Though India is politically a single entity, the reason for its political unity is the historical antecedent of having been a British colony eventually united at the time of independence. The continuity and unity is also argued in terms of Hindu mythology that spans, overarches and influences all corners of the country. However, when a person is out of his home state he usually seeks affiliations not based on his religion but on the basis of his language! The linguistic affiliation is more powerful than the religious one. This indicates that language as a unifying force is more powerful and therefore an analysis of the different Indian states formed on linguistic lines is likely to yield many valuable insights. Moreover it is interesting to note that a person from the south to be able to communicate to another from a neighboring southern state will have to use either the northern language Hindi or English as a lingua franca. It may also be postulated that the languages belonging to the same linguistic family in its development may have retained some of the original value programming. Also it may be of interest to decipher what differed and what was retained in the process of splintering into different languages within the same family.

The conventional acceptance of India as a single unit is largely attributed to its colonial past. In terms of the cultural transference that trade and commerce facilitated, the coastal areas must have had a different dynamics from the hinterlands. Similarly while the interiors were cut off, the northeast for instance stood chances of contact with the south eastern countries as also with the Chinese. Thus had it not been for the political unification facilitated by the colonial past, the cultural diversity would have been much starker.

Language provides an insight into the inner programming of a cultural group. Take for instance the fact that the Eskimos have many different forms to denote ice. The geographic peculiarity of cold climate is at the bottom of this wide a facility in the language. However, compare the English ‘brother’ with the specific single word appellations, for instance in the southern Indian Dravidian language, Malayalam of ‘chettan’ to denote elder brother and ‘aniyan’ to denote younger brother. Hindi however has only one word ‘bhai’ to denote brother. What is at the bottom of this higher facility in some Indian languages and the lack of it in another? Can we discern some equivalent to the cold climate of the Eskimos that necessitated multiple terminologies for different types of ice in their language? Since no one person can be an expert in all the Indian languages, only a systematic study by experts from different linguistic groups can decipher the evolution and the possible explanation. Another example is the use of reverential expressions in Hindi like ‘aap’ to denote a respectful you and ‘thum’ and ‘thoo’ to denote reverence of lesser degrees. In the Malayalam language though such gradations are available, it is noteworthy that in normal day to day conversation the reverential form ‘thankal’ or ‘angu’ is rarely used and mostly in very formal occasions as in a speech. It may also be used in a dramatic performance involving the classics. Similarly Tamil also provides inbuilt facilities to denote respect as in ‘irukkara?’ ( reverential ‘Is he there?’) and ‘irukkutha?’ ( non reverential ‘Is he there?’). From here it is only an extrapolation away from the implications for instance for ‘power distance’ (one of the cultural dimensions) among the various linguistic groups.

The lack of facility available in Malayalam mentioned above is made up by intonations, body postures or a reverential avoiding of ‘you’ altogether. The point is, these are interesting pointers to the different programming which if delved into would provide a new direction to our insights on subtleties in culture. In any case thinking in these lines will be the beginnings of fine graining the existing tendency of looking at India as a single unit.

Similar is the case with certain body language peculiarities noticed in the north and the northeast where the giver as in the one who serves the food or the one who lights the lamp holding the giving or the lighting arm’s elbow reverentially with the other hand. The absence of this gesture among many others may look awkward or non reverential to the ones who practice this gesture. While the ritual is fairly perceivable, the values and the value differences underlying these rituals are more fundamental and less obvious.

In the Malayali ethos calling a stranger from behind with a whistle like ‘shhhh’ is considered very normal whereas across the border in Tamil Nadu the same would be considered insulting and a cause for quarrel even for an absolute stranger. To say the least, while these nuances pose several grounds for study from the cultural point of view, mere cross cultural awareness may generate greater understanding among the different states.

If underlying meanings do reveal the underlying cultural patterns, then comparison of equivalents in various languages can be used to understand them. Feedback patterns are a necessary feature in any language and therefore serve as equivalents for comparison. For example, the inner programming revealed in the English feedback pattern ‘OK’ and the Malayalam and Tamil “shari” are both indicative of correctness. However “barabar” or “barabar?” in Gujarati is indicative of equal ness or a restoration of an imbalance as in a business transaction where one pays for a perceived value for a commodity or service. One is tempted to extrapolate that the underlying metaphorical meaning is indicative of an entrepreneurial or trading ethos in the latter.

Organisational tools like HR interventions seek to modify behaviours to suit the purpose of the organization. Necessity of interventions leading to behaviours that drive initiatives such as strategy implementations, rather than mere putting in place of systems and procedures is an imperative for the next wave of impetus for the field of HR and organisational development. The obvious influence of culture, if not its determining effect on behaviour, point to the need for the study of the antecedent context at various levels of increasing specificity such as national, regional, class and professional so as to design interventions of greater effectiveness.

Culture in this context can be thought of as the context from which one comes from that stays with him/her and guides his/her behaviour. Insights from the host context are valuable in developing specific interventions of greater effectiveness suiting individuals. The individual gestalt of one’s personality can be visualized as being embossed on the template that is culture. One could also imagine multiple planar templates: national, regional, class and professional. While knowledge in national, class and professional culture are fairly progressive, the same cannot be said about regional cultures within a large country like India.

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