The Disease of Me and the Disease of You

Hi Anna,

I apologize for the long post.  I'm trying to assimilate Fromm's analysis of freedom with your post and with the current economic situation.  Please bear with me as my understanding of economics is very inadequate.

Fromm's dialectical historical process of freedom (from Wikipedia):

Fromm distinguishes between ‘freedom from’ (negative freedom) and ‘freedom to’ (positive freedom). The former refers to the process of becoming emancipated from the restrictions placed on humanity by other people or institutions. This has often been fought for historically but is not of much inherent value unless accompanied by a creative element, ‘freedom to’; the use of freedom to behave in ways which are constructive and respond to the genuine needs and wants of the free individual/society by creating a new system of social order. In the process of becoming emancipated from an overbearing authority/set of values, Fromm argues, we are often left with feelings of emptiness and anxiety (he likens this process to the individuation of infants in the normal course of child development) that will not abate until we use our ‘freedom to’ and develop some form of replacement of the old order. He characterises this as a dialectic historical process whereby the original situation is the thesis and the emancipation from it the antithesis. The synthesis is only reached when something has replaced the original order and provided humans with a new security. Fromm does not indicate that the new system will necessarily be an improvement.

America's dialectical historical process of regulation, deregulation, and back to regulation?

Source:

http://www.msnbc.msn.com/id/26315908/#29886298 (The Rachel Maddow Show, video)

My computer was so slow that I was able to type out a transcript.  I thought it would be handy to have on hand a transcript compare Fromm's version of freedom (above) with the American conception of  freedom, which appears very much to be confined to economic and material freedom. Not that that is bad in itself; yet is rather limiting, wouldn't you say?  The American Way.

Rachel Maddow:

While the country is unanimously focused on a single subject, maybe there's something that we're not factoring into the equaton of this petrified, run and hide economy.  Join me now on a trip on a time machine 1999, ten years ago.  The year the Gramm-Leach-Bliley act was born.  This bill was introduced by three Republicans that removed the Great Depression-era regulation that banks, investment banks, and insurance companies had to be separate.  This legislation cleared the way for all of these companies to be wrapped up into one.  Companies that were so big that they were not allowed to fail.  Democratic Senator Byron Dorgan saw it coming on May 6, 1999. . . .  and said, "This bill, will, in my judgment, raise the likelihood of future massive taxpayer bailouts." 

The NYT, November 1999, quoting Sen. Dorgan:

"I think we will look back in 10 years time and say, "We should not have done this!"  But we did, because we forgot the lessons of the past.  And that that which is true in the 1930s is also true in 2010." 

So here it is, 2009, and I'm thinking, at the time we were worried about Y2K?  Hmmph.  Joining us now, Cassandra.  I mean, Democratic Senator from North Dakota, Byron Dorgan.  Senator Dorgan, thank you for joining us. 

Mr. Dorgan:

Hi Rachel how are you. 

Rachel Maddow:

Great thank you.  You've been getting accolades in the blog world and now on this show for having been right in 1999 when you rang alarm bells over the deregulation.  At the time, when you were saying we're gonna look back in this in 10 years and say this was a big mess, did you really forsee that there would be a crisis this big?

Sen. Dorgan:

I'm not necessarily sure that I saw this big a crisis but I said at the time to the banks, "If you wanna gamble, go to Las Vegas." I mean, this was not about a crystal ball, it was just common sense at the time.  You know.  In the 1930s, we saw banks merge with real estate and security risks and the whole thing collapsed.  20s and 30s.  And so we put in place (I wasn't here) but we put in place laws like Glass-Steagall to prevent all of that and then in 1999, we were told that "That's all old fashioned.  Let's strip that away and allow all financial holding companies one stop financial shopping."  I thought that was nuts.  I thought, "How on Earth could we forget the lessons that were so important that we learned so well and with such pain about seven decades prior?"
 

Rachel Maddow:

10 years ago when Gramm-Leach-Bliley passed, and gutted that important Glass-Steagall law that you just described, Lawrence Summers was Treasury Secretary at the time and he said when that deregulation bill passed, it was a "historic legislation that would enable American companies to compete in the new economy."  Does it freak you out that he's one of the main guys trying to get us out of the mess that this deregulation caused?

Dorgan:

Well, I sat across the table from him at the White House two days ago.  You know, uh, there's a culture and the culture is, Wall Street knows best.  And there were only 8 of us in the U.S. senate that voted no? 

This was a huge deal to repeal the protections that were put in place after the Great Depression.  A huge deal.  This thing allowed these huge finiancial holding companies to bring significant risk into the banks, and you know they just ran hog wild and now, we're in a situation in 2009 where we've seen this financial crisis and collapse, massive taxpayer bailouts, you know.  Now the question is, how do we put this back together and get out of this deep hole?

Rachel Maddow:

That's exactly right.  And what's coming next is the discussion of not just how to rescue us but how to put the financial system together in a way that it doesn't happen again.  And that these lessons are learned.  I was struck in looking at the NYT coverage of Gramm-Leach-Bliley passing in 1999.  Phil Gramm of Texas who wrote that bill said, "We have a new century coming.  We have an opportunity to dominate that century the same way we dominated this century.  Glass came at a time when the thinking was that government was the answer.  In this era of economic prosperity, we've decided that FREEDOM is the answer." 

That was what he said in 1999 when this passed.  We know what the disastrous results of that were.  Who is going to lead the cause? I think of convincing the American people and really convincing Congress that we sort of need to believe sometimes that government is the answer.  There's a philosophical status of this legislation as well as just a strategic one.

Dorgan:

Well, and the other thing immediately after this legislation passed and stripped away all of those protections and allowed all the big banks to marry up and decide that they loved each other and wanted to get together and merge, immediately after that, GW Bush came to town as the new prez and he hired regulators who were willing to boast about being willfully blind.  They didn't want to regulate.  They said, "You know what?  There's a new day.   There's a new sheriff in town and the sheriff's not interested in watching what you do, and the result is, we saw all of these credit defaults and [?] and cdos and all these exotic financial instruments and these derivatives.

In 1996, I wrote the cover story for the Washington Monthly Magazine on the subject of derivitaves and pointed out that there were tens and trillions of dollars of derivatives out there.  The title of my cover story for the Washington Monthly Magazine was "Very Risky Business."  I had four different bills to try to regulate derivitaves and hedge funds.  I hope now perhaps most people will understand the Congress and I think the American people understand we need regulations.  Not a four letter word.  We need effective regulation. 

Maddox:

I have this kooky idea that people who were "right"  when everybody else was "wrong" and we did the wrong thing, the people who were right are the ones who should be allowed to decide what happens next time.  So could you like, sort of be in charge of figuring out what regulations we need the next time around, when this comes up in the senate?

Dorgan:

I'd be happy to but let me tell you what else we need.  We need a select committeee in the United States Senate with subpoena power that gives us the narrative of what happens so that everybody understands what happened.  We need a financial crimes prosecution task force down at the Justice Dept. right now working on these issues, and we need to restore a portion of the Glass-Steagall act to say that, "Banks, you're over here and riskier things are over here and we're not gonna bring it together again."  Never again.

To me, the dialectic between regulation and deregulation appears to be a process that is akin to Fromm's dialectic between 'freedom from' and 'freedom to' (or vice-versa, depending on the arbitrary starting point and one's conception of "freedom").  

Allowing for the fact that material freedom is a diminished form of freedom, would you say that this is a valid comparison, Anna?  And if so, which one is 'freedom to' or 'freedom from'--'regulation' or 'deregulation'?  And which way is next: full swing swing back to regulation, stay in deregulation mode, or some sort of synthesis?   

Jean Gebser writes that the dialectical process of thesis:antithesis is a mental-rational (orange and green) mode of thinking resulting ultimately in "synthesis."  As Fromm concludes, this is not necessarily a better solution from the previous solution (as "synthesis" is not true "integration"; but merely a synthesis).  So it seems that a truer form of freedom would be an integration of some sort based on an Integral framework.

And meanwhile, as the country is unanimously focused on a single subject, I'm still focused on climate change..