Carroll Quigley - Tragedy and Hope - A History of the World in Our Time

The basis for this strange, and virtually unique, situation is to be found in the large amount of unused productive capacity in the United States, even in our most productive years. In the second quarter of 1962, our productive system was running at a very high level of prosperity, yet it was functioning about 12 percent below capacity, which represented a loss of {73 billion annually. In this way, in the whole period from the beginning of 1953 to the middle of 1962, our productive system operated at $387 billion below capacity. Thus, if the system had operated near capacity, our defense effort over the nine years would have cost us almost nothing, in terms of loss of goods or capacity.

This unique character in the American economy rests on the fact that the utilization of resources follows flow lines in the economy that are not everywhere reflected by corresponding flow lines of claims on wealth (that is, money). In general, in our economy the lines of flow of claims on wealth are such that they provide a very large volume of savings and a rather large volume of investment, even when no one really wants new productive capacity; they also provide an inadequate flow of consumer purchasing power, in terms of the flows, or potential flows, of consumers’ goods; but they provide very limited, sharply scrutinized, and often misdirected flows of funds for the use of resources to fulfill the needs of the governmental sector of our trisectored economy. As a result, we have our economy of distorted resource-utilization patterns, with overinvestment in many areas, overstuffed consumers in one place and impoverished consumers in another place, a drastic undersupply of social services, and widespread social needs for which public funds are lacking. In the Soviet Union, money flows follow fairly well the flows of real goods and resources, but, as a result, pressures are directly on resources. These pressures mean that saving and investment conflict directly with consumption and government services (including defense), putting the government under severe direct strains, as the demands for higher standards of living cannot be satisfied except by curtailing investment, defense, space, or other government expenditures.

Many countries of the world, especially the backward ones, are worse off than the Soviet Union, because their efforts to increase consumers’ goods may well require investment based on savings that must be accumulated at the expense of consumption. In many areas, as we have seen in Asia, the Mediterranean, and Latin America, savings are accumulated by structural monetary flows, but there are no institutional flows toward investment, little incentive or motivation for investment, and the economy lags in all three sectors.

As a chief consequence of these conditions, the contrast between the “have” nations and the “have-not” nations will become even wider. This would be of little great importance to the rest of the world were it not that the peoples of the backward areas, riding the “crisis of rising expectations,” are increasingly unwilling to be ground down in poverty as their predecessors were. At the same time, the Superpower stalemate increases the abilities of these nations to be neutral, to exercise influence out of all relationship to their actual powers, and to act, sometimes, in an irresponsible fashion. These areas will be the chief sources of real trouble in the future, for clashes between the United States and the Soviet Union (or even Red China) are unlikely to arise from direct conflicts of interests, but may well arise from conflicts over neutrals.

These neutrals and other peoples of backward areas have acute problems. Solutions of these problems do exist, but the underdeveloped nations are unlikely to find them. As we have indicated elsewhere, their chief problems are three: (1) the relationship between population explosion and limited food supplies; (2) problems of political stability, especially the relationship between political aims and quite diverse weapons-control patterns; and (3) the problem of obtaining constructive rather than destructive patterns of outlook. The United States and the Soviet Union have a common interest in seeing that these problems find solutions. In general, these underdeveloped nations cannot follow American patterns, and are attracted to the Soviet system despite its heavy costs in loss of personal freedoms. We do not have either the knowledge or influence that would make it possible for us to direct their steps along more desirable routes such as that followed by Japan.

One development in political life during the next generation or so that will be difficult to document is concerned with the very nature of the modern sovereign state. Like so much of our cultural heritage from the seventeenth century, such as international law and puritanism, this may now be in the process of a change so profound as to modify its very nature. As understood in western Europe over the last three centuries, the state was the organization of sovereign power on a territorial basis. “Sovereign” meant that the state (or ruler) had supreme legal authority to do just about anything regarded as public, and this authority impinged directly on the subject (or citizen) without any intermediaries or buffer corporations, and did this in a dualistic power antithesis typical of the Greek two-valued logic that was applied to almost everything in the seventeenth century. As part of this sovereign system, it was assumed that rights of property and of permanent association were not natural or eternal, but flowed from grants of sovereign power. Thus property in land required the state’s recognition in the form of a document or deed, and no corporation could exist except at the charter of the sovereign or with his tacit consent. Moreover, all citizens on the territory were subject to the same sovereign power. The latter consisted, as it still largely does in our tradition, of a mixture of force (military), economic rewards, and ideological uniformity. This view of public authority is by no means universal in the world, and shows strong indications that it may be changing in the West. Corporations exist and have the earliest mark of divinity (immortality), and have become, as they were in the nonsovereign Middle Ages, refuges where individuals may function shielded from the reach of the sovereign state. The once almost universal equivalence between residence and citizenship may be weakening. If the ideological state continues to develop its likely characteristics, persons of different ideologies and thus of different allegiances may become intermingled on the same territory. The number of refugees and resident aliens is now increasing in most countries.

Moreover, the incorporation of such a wide variety of peoples with such diverse traditions into the United Nations is also contributing to this process. We have seen that traditional China did not exercise power on the vast majority of its subjects (the peasants) in terms of force, rewards, or even ideology, but did so by social pressures through the intermediary of the family and the gentry. Similarly in Africa, power has been quite different in its character than it was in the traditional European state, and was based rather on kinship, social reciprocity, and religion. When African natives met to settle political disputes in battle, this was not, as in Europe, a clash of military force to settle the issue; rather it was an opportunity for spiritual entities to indicate their decisions in the case. As soon as a few casualties appeared on one side, this was taken as an indication that the spirits concerned had made a decision adverse to that side, and, accordingly, the victims’ associates broke and ran, leaving the field to the other side. Like the medieval judicial trial by battle or by ordeal, this was not an effort to settle a dispute by force, but the attempt to give a spiritual entity an opportunity to reveal its decision.