October 14, 2004


One of the key concepts of PNM is thinking about the connections between your main subject and "everything else". Here is a four way nexus of issues that have been percolating in my head for over a year.

1. PNM - Pentagon's New Map: There is a national security requirement to shrink and eventually eliminate the Gap. This can't be accomplished right away because...
2. GCS - Global Capital Shortage: One of the significant constraints on achieving the PNM goal of Gap elimination is there just isn't enough capital available to fund the projects necessary. Capital needs to flow from the Core to the Gap. This causes political problems in the Core in the form of...
3. RQS - Red Queen Society: Labor and rents drain out of the Core as the risk that has made projects in the Gap too much for most investors drain away by the peaceful (most common) or forced (more rare circumstance) adoption of Core rulesets, the net ROI taking into account risk premiums will starve Core workers of wage gains and Core landlords of rent demand.

Why site your paint stripping gun factory in the FRG when Romania is so close and is now safe enough that the wage gap makes it more profitable to do the work there? Core and especially Old Core workers must constantly improve just to stay in place, to avoid declining wages or outright unemployment. The less numerous but politically more influential economic class that earns money via rents are also losers in this process as business demand for their offerings continually declines. The only income class in the Core who gains are the capitalists which brings us to...
4. OS - Ownership Society: The capitalist class must expand to functional majority status in order to form a sustainable political base for the PNM's Gap elimination goal to become a reality over the long haul. If labor and land are constantly going to be facing new competitors, it is unrealistic to think that voters who fall exclusively into these categories will be willing to act against their economic interests consistently over a period of decades. At some point, the pain of new competition will slam on the brakes of further Core enlargement. But if the exclusively capitalist class, the coupon cutters and the entrepreneurs are joined by "part time capitalists", the voting dynamic changes. The effect is weaker in the landlord class as they've usually diversified long ago but the worker class will have an eye on their 401(k), IRA, HSA, privatized Social Security Pension account, etc. as well as their salary as an ownership society develops. Ownership changes attitudes and is also likely to change votes.

This shift in attitudes won't effect everybody who partakes of the ownership society. Party affiliation is very much cultural to a great many people. But the enlargement of the capitalist class will remove the inevitability of PNM's political defeat by allowing creative politicians to stitch together new coalitions and keep progress moving forward long after the Red Queen economy ticks off enough labor to form a connectivity backlash.

Posted by TMLutas at October 14, 2004 10:17 PM