Fences & Neighbors: A Blast From The Past

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Robert Reich wrote this for the November 30, 1998 issue of the New Yorker magazine. He posted it to his blog today. It could not be more time appropriate.

Do Good Fences Make Good Neighbors?

It used to be that people who owned a lot of things could protect themselves and their things by erecting sturdy houses and, if necessary, putting a lock on the door. Today, it seems, that’s not enough. It’s estimated that three million American households live within gated communities – twenty thousand of them, often equipped with private security guards and electronic surveillance systems. Some years ago, the town of Rosemont, Illinois, erected a beige wrought-iron fence. Rosemont is a suburb of Chicago, with a population of four thousand, and it has one of the largest auxiliary police forces in the United States.

A wall is being erected around the nation, too – an outer perimeter, separating the United States from the Third World. So far, our national wall extends along only sixty-four miles of the nearly two-thousand-mile border with Mexico, but Congress has appropriated funds for lengthening it and also fortifying it.

The urge to erect walls seems to be growing, just as disparities in wealth are widening. Many of the Americans who reside within gates like Rosemont’s have become substantially wealthier during the past several years, whereas a great many Americans who live outside the gates have not. (One man, appropriately named Bill Gates, has a net worth roughly equaling the combined net worth of the least wealthy forty percent of American households.)

On a much larger scale, inhabitants of the planet who reside at latitudes north of the national wall are diverging economically from those who live south of it. The consequence is that at both perimeters – the town wall and the national wall – outsiders are more desperate to get in and insiders are more determined to keep them out. Yet the inconvenient fact is that increasingly, in the modern world, the value of what the insiders own and of the work they do depends on what occurs outside.

Half a world away from Rosemont are places whose currencies, denominated in bahts, ringgits, rupiahs, and won, began toppling more than a year ago, and seem to have come to rest only in the last several weeks at levels far below where they started. This has caused most of these countries’ citizens to become far poorer. An Indonesian who had worked for the equivalent of three dollars and thirty-three cents a day before the rupiah’s decent is now working for about one dollar and twelve cents. Efforts by the International Monetary Fund to build back the “confidence” of global investors in these nations by conditioning loans on the nation’s willingness to raise interest rates and cut their public spending have had the unfortunate side effect of propelling more of their citizens into ever more desperate poverty. After the tremors spread to Russia last summer, and it defaulted on its short-term loans, the worldwide anxiety grew, spreading all the way to Brazil, the largest economy in Latin America, with the widest gap between rich and poor. In return for its promise of austerity, Brazil is now set to receive an international line of credit totaling forty-one and a half billion dollars, designed to convince global investors that its currency will not lose its value, and that, therefore, there is no reason for them to take their money and run.

All this commotion has also diminished the economic security of quite a number of people who thought of themselves as safely walled in. …. Recent government data show that in the third quarter of 1998 the profits and investments of Americans companies shrank for the first time since the recession year of 1991. This is largely because their exports to Asia and Latin America have continued to drop, while cheap imports from these regions are undercutting their sales in the United States. In consequence, they have been laying off American workers at a higher pace, and creating new jobs at a slower pace, than at any time in recent years.

We do not know how many residents of Rosemont will lose their jobs or the value of their stock portfolios because of the continuing global crisis. No burglars will climb over the steel barrier now walling off the United States and then scale Rosemont’s beige wrought-iron fence, but some residents of Rosemont will lose a bundle nonetheless.

The major risks of modern live now move through or over walls, sometimes electronically, as with global investments, but occasionally by other means. A lethal influenza virus originating among a few Hong Kong chickens could find its way to Rosemont via a globe-trotting business executive. Drugs are flowing across the border as well, not because the walls are insufficiently think but because the people behind them are eager to buy. Something these is in capitalism that doesn’t love a wall.

So why do we feverishly build more walls when they offer us less and less protection? Perhaps it is because we feel so unprotected of late. Amid all the blather about taking more personal responsibility for this or that, there is a growing fear that random and terrible things can happen to us. Solid walls at least create the illusion of control over what we call our own, and control is something we seem to need more of these days, when almost anyone can be clobbered by a falling baht.

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