Is Capitalism Failing? The Von Kleise Manifesto (Part I) by David Blond

The Phoenix Year deals in a fictional way with today’s world. A world divided between countries – advanced (rich), emerging (growing fast, but unlikely to catch up anytime soon), and poor (falling further behind the other two groups). But within each country in each group there is a growing gap between the wealthiest and the poorest. Of course, the concept of a well off middle class is a relatively new phenomenon. In 1960 John Kenneth Galbraith, John F. Kennedy’s tutor at Harvard, published a ground breaking book with the provocative title “The Affluent Society” in which he pointed out that for the first time in history in the industrialized countries there were more people who could be considered middle class and wealthy relative to the number living in poverty. He also pointed out that poverty was a relative not an absolute measure of well-being. What was poor in the United States was sometimes considered to be wealthy in Africa.

The result of this shift changed the focus of government, at least in the short-term, added a new, controversial, but economically important role of government from protecting the rights of the wealthy to insuring the survival and improvement of the poorest members of society. In short the government entered the entirely new role of altruistic protector of the weak rather than defender of the rights and privileges of the richest and most powerful. To measure success – or failure – new measures were developed to assess what “poor” meant. Lyndon Johnson launched his “War on Poverty” following Kennedy’s efforts to raise the income levels of the Appalachian region (a mountainous string of mountains that ran from Virginia to West Virginia into Tennessee and Georgia). What came out of this were a series of new government programs collectively known as the Great Society Programs — Head Start, Cash Assistance, VISTA (domestic Peace Corp), Head Start, Federal government aid to education, Model Cities Program, Medicare, Medicaid, and a host of other initiatives designed to lift more poor out of poverty and into the middle classes. Even civil rights act passed by Lyndon Johnson was the critical political component to insure that these efforts, the most important set of social entitlements and programs since the New Deal, would remain in place through Democratic and Republican administrations that followed. Not all of these programs worked. Many of these efforts failed to change the economic landscape and the urban area continued to show decline. Poverty also was impacted all over the world by the globalization of trade. As jobs were exported out of the wealthy country to the emerging nations of Asia and Eastern Europe, the American Middle West suffered as rust belt cities became ghost towns of closed plants. Many formerly middle class workers fell into poverty. The very nature of these intrusive, central government programs, however, enraged some members of society in ways not anticipated. Many on the right, often elderly and beneficiaries of these programs themselves (Medicare, Medicaid, Social Security, Meals on Wheels, etc.) believe that the poor are poor because they are either lazy or being punished by God for some past misdeeds (1/4 of Americans believe the poor and unemployed are just lazy and happy to live off the dole).

The Phoenix Year is available now.