The bankruptcy bill was written by and for credit card companies, and the industry's political muscle is the reason it seems unstoppable. But the bill also fits into the broader context of what Jacob Hacker, a political scientist at Yale, calls "risk privatization": a steady erosion of the protection the government provides against personal misfortune, even as ordinary families face ever-growing economic insecurity.Throughout most of human history self-insurance was the rule. If calamity fell, and it usually does, then financial and family assets were the main form of protection. Then came tribes, clans, feudal holdings, states and more. Each form of social organization had its own approach to risk mitigation, and its own set of trade-offs.
In the late 20th century a group of wealthy nations developed an approach that provided considerable personal freedom while also mitigating the harshness of life in a seemingly dispassionate universe. This approach has reached its most mature state in the Scandinavian nations, where there is a dynamic struggle between the limitations of human nature and the desire to help the weak.
America followed the European path from about 1945 through the 1970s. Since then we've taken a different approach. Now, in the era of the most radical presidency since Roosevelt, we seem to be moving to something that's a cross between feudalism and and 19th century England. It is an approach that may well optimize returns on investment, at the cost of creating a hereditary subclass of warriors and servants. Warren Buffet's "sharecroppers' society" or Krugman's "debt-peonage" society, or what I've called neo-Feudalism.
In all of its thousands of years of civilization, I wonder if China did something like this at least once. How did it turn out?
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