If There is No Bread, Let Them Eat Cake

Nearly everyone has heard or read that famous quote, generally attributed to Queen Marie-Antoinette of France.

True or false, the quote is so pithy that it has survived both controversy and the passage of time. By now it has become the most common expression of the indifference of rulers to the plight of their subjects or citizens.

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It might well be given new life in our current circumstances.

Our economic situation is not unlike that of late eighteenth century France. For a generation or so the income gap between the elites and the bulk of the population has been widening. Government debt is heading for an all-time high and budgets are out of control. Trust in government competence is falling and its ability to face growing challenges is in question.

Inaddition there is a developing dichotomy in economic perception: for the political and economic elites the present economic crisis has been taken care of, while for the mass of the population it only appears to be getting worse.

Are we, like Marie-Antoinette's France, headed for an upheaval? We asked that question nearly four months ago, but on much more limited grounds. At the time we simply put in doubt the government's ability to manage massive new programs such as cap-and-trade and national health care.

Now, in addition to the above, one can question not only the state's administrative abilities, but its understanding of, and dedication to, the interests and welfare of the population.

The strongest reasons for such doubts are provided by the government effortsto establish the financial sector. This is the very sector which first bankrupted itself through speculation on mortgages and other assets, and then proceeded to hobble the rest of the economy through speculation in commodities, including fuel and food.

Both the last and current administrations have rewarded these gigantic failures with multiple trillions in bailout programs and interest-free money, all funded by the taxpayer. In return the taxpayer got a few months of extended unemployment insurance.

If the economy is truly on the mend as advertised such use of public funds might be tolerated. If on the contrary it is not, there will be an increasingly negative perception of the government's role, with much anger and .resentment thrown in.

In the past, free marketcountries have appeased public anger by taking a page out of the socialist definition of the provident state: social safety nets, public health programs, public works, and subsidies of all kinds.

This was effective in a society that was mainly capitalist. But socialist mission creep ultimately leads to stifling inefficiency. We have now reached the point where the cost of additional statistic programs outweighs their benefits, and where further increases of the deficit threaten to collapse the entire structure.

This situation raises the possibility of a deadlocked, us-versus-them stand-off with potentially uncontrollable outcomes. To avoid this we must channel our energy into constructive rather than adversarial channels, and establish grounds for cooperation rather thanantagonism.

Fortunately there is ample opportunity for this.

In our book, we have designated energy supply as the key challenge of this century. This challenge does and will demand governmental action. But we do not need to wait for this to happen. The field of energy supply is so vast that immediate action is possible in many sectors and at every level.

Energy efficiency can be improved by individual and small-group action, be it conservation, information, communal food production or the purchase of efficient hardware. Collective understanding and organization vastly increases the impact of such initiatives. Each individual has only one vote and limited material means, but an organized group of individuals equals to market as well as a voting bloc.

Markets motivatedcorporations, and voting blocs move politicians. Corporations have technical talent as well as financial means. Politicians are open to demands from their base.

However, under current circumstances, both politicians and the heads of corporations are still followers rather than leaders. Action must begin at the grass roots. This is not unlike what happened at other key periods of American history such as the Revolutionary and pre-Civil War times.

In the end it will be up to all of us.

If There is No Bread, Let Them Eat Cake