During my sophomore year in college, I took an independent studies course on the topic of revolution. I spent that year discussing the concept of revolution with my professor and reading numerous books on the topic. One point that struck me then, and still holds me today, is that a revolution can be more likely to happen when the middle class starts to join in the revolutionary sentiment. One cause of the French revolution was the rise and decline of the French middle class of the day. For decades the middle class - shopkeepers, trades people, emerging professional services - had gained in number and in relative wealth. Then, over twenty or so years prior to the start of the revolution the middle class stagnated and declined. The government was viewed as arrogant, greedy, ineffectual, and unconcerned with the plight of the poor and declining middle class. Parisian's were ripe for some form of change. All they needed was a catalyst to make it happen.

This example of one factor that can enable a revolution is based on group psychology, group identity, and basic human self interest. When psychological outlook shifts, significant change can happen. Change can be good, as in the case of the British colonies in America, or change can be bad, as in the Rein of Terror and ultimately Napoleon in France.

Revolutions can be major changes in a form or government, as in the French revolution, or smaller shifts in organization, operation, and overall direction. A revolution changes the way of life, and changes group identity, outlook, and dynamics. In this sense, the last forty years in the US have been a revolution. It was a takeover of business and government operations by extreme conservatism in business and in government operations, regulation, and policy. This revolution, full of ideas, theories, and principles espoused by the conservative revolutionaries, dominated the nation and spread, in part, to much of the world.

This revolution failed. It's theories on government, business, and individual behavior were simply wrong. The economic, social, and governmental chaos we find ourselves in today is a direct cause of the conservative revolution. The middle class in the US has been in decline for the entirety of my adult life. When people play by the rules, work hard, get an education, and try and build a career, still can't get ahead, the situation is ripe for a major change.

Something will change in this country. The danger is, and my concern is, whether this change will be positive or reactively negative. I keep looking for a change in psychology. A recognition that we fundamentally have structural problems in both business and government. It's not simply a lack of money, credit, or markets that somehow will resolve themselves over time and then everything will be back to business as usual. We have to change the way we operate in both business and government in order to fully recover from the crisis in which the world finds itself.

In my own state, California, and in my local county and city governments, I keep looking for a wider spread change in psychology. A recognition that what ever we've done in the past has not worked and we need to find some new solution for managing our government, operations, and services. Changing taxes, for example either by raising or cutting is not the long term solution. Policies like that didn't work in the past so why would we be foolish enough to think they'll work now?

In business, similarly, there is no recognition that anything fundamental has to change. Simply getting credit flowing and somehow stabilizing jobs will not solve the underlying structural problems that caused the current business debacle. Wall Street cheerleaders fantasize that the market will bottom out and start to raise in price again and all will be well. We've had three major bubbles and collapses in ten years, why would anyone think that absent of any structural change the market and business will be any better?

The fatal mistake that conservatives are making today, based on the election defeat and the Regan/Bush debacle, is that all they have to do to regain power is to be "better conservatives" by clinging to their ideology. This will surely lead to a negative counter revolution and severe social upheaval since the conservative revolution not only failed to achieve conservative goals but failed to improve the well being of the middle class and the nation as a whole. The fundamental problem with the conservative movement is that it does not benefit the middle class, nor does it benefit, sole practitioners, and very small businesses. Regardless of their stated words, conservative deeds, policies, and results created the actual middle class consequences in which opportunity, wealth, and quality of life have declined.

So here's the idea. Focus on the middle class. Solve the problems of the middle class. Raise the quality of life for the middle class. When the middle class is prosperous the nation and business will be prosperous. This idea is completely opposed to conservative ideology and opposite of the way we've conducted business and government over the last forty years, and especially the last 20.

This week I'm going to talk about how business and government need to structurally change from current practices to truly break out this the current cycle of a short term recovery followed by a return to failure a few years later. The answer to our problems and our solution resides in the middle class.

© 2009 R.D. Franke. All rights reserved.