A Flailing State

We’re somewhere between the legend and the facts of the U.S. economy. The legend, still in our heads, is it’s a rough-and-tumble democracy and a classless society.  Facts are: the top of the heap owns almost all the wealth and most of the politicians, and the top of the top – one percent – takes more and more of the income: almost 25 percent of the whole pot in Obama-time – it was less than ten percent in the seventies.

Legend is Americans don’t much like redistribution of income.  Facts say there’s been a steady upward redistribution of wealth and income over 40 years now. Legend is we’re in a slow recovery from the Great Recession of ’08.  Facts say it’s the high end getting the growth: “inequality has deepened,” the President said the other night: “upward mobility has stalled.”

We’re in the studio with Daron Acemoglu, the MIT economist and the co-author of Why Nations Fail. His argument is that the problem goes beyond soaring income inequality — to the eclipse of the myth that Average Joes rule our politics. Well into President Obama’s second term, deep in the doldrums of the status quo, he says the state of the union is “dangerous.”

Matt Taibbi from Rolling Stone joins us on the phone. He is by now a Diogenes on Wall Street. What I didn’t know was that he trained for his critical role in a ten-year stint in Yeltsin’s Russia, a world of back-room deals and a burgeoning oligarchy. He tells us, “A lot of things that I saw in the former Soviet Union, we’re starting to see here.”

Guest List
Daron Acemoglu
MIT economist, winner of the 2005 John Bates Clarks Medal, and author of the acclaimed book, Why Nations Fail.
Matt Taibbi
author and contributing editor for Rolling Stone, author of The Divide: American Injustice in the Age of the Wealth Gap and Griftopia.
Reading List
The Poverty and Inequality Report
Stanford University
an academic summary of “a broadly deteriorating poverty and inequality landscape".
The Problem with U.S. Inequality
Daron Acemoglu
Acemoglu discusses the relationship between economic inequality, political inequality, and future American prosperity.
17 Charts About Economic Inequality Obama Should Read
The New Republic
a set of illuminating (and beautiful) visuals of American inequality from The New Republic.
Matt Taibbi
Matt Taibbi's old perch at Rolling Stone, where he chastises financial deregulation, Libor rate-fixing scandals, and J.P. Morgan CEO Jamie Dimon (among others!)

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  • Robert W Peabody III

    Photo credit: Margaret Bourke-White—Time & Life Pictures/Getty Images
    “During the Great Ohio River Flood of 1937, men and women in Louisville, Kentucky, line up seeking food and clothing from a relief station, in front of a billboard proclaiming, “World’s Highest Standard of Living.””
    -Ben Cosgrove Editor of LIFE.com

    The image shows us that the world’s Highest Standard of Living can help those in a natural disaster?

    • Adam

      You’ve got a point that the origin of the photo is irrelevant to the topic, but that is also the point: the photo itself is a relevant depiction of needless starvation and suffering; the origin of the photo is irrelevant to the topic.
      If you’re arguing that the photo is misleading, that would be to argue that there have not been long lines of men seeking work at factories and waiting in long lines at soup kitchens simply because the people running the country chose to keep their millions in their banks rather than feed the people they caused to be starving.

  • Jerri Pries

    Chris, the symptoms you identify do exist in at least one someplace else. That place is Israel. The Israeli journalist, Ari Shavit, in his book, My Personal Land (2013), worries that they are, in fact, symptoms of a failed state.

  • Potter

    sorry that should be this

    @ Jerri Pries,

    I did not read that book though I have heard Ari Shavit being interviewed. I wish you would elaborate on that- maybe after the show is aired. I think Israel is in trouble for many reasons but I am not sure it’s the same as here, though it may be.

  • Floyd Wilkes

    What is the relationship, if any, between wealth and income inequality, on the one hand, and the deflationary pressures (i.e. decline in consumer demand) that have threaten the economic recovery for the previous 5 years?

    Is it reasonable to suppose that (40 years of) flat wage growth is the primary culprit undermining aggregate demand?

    • Warren Ross

      Another culprit is the sucking of money from the real economy by the finance sector.

  • mary

    Call in tonight everyone. We’ll be taking calls during the hour. 1-800-423-TALK.

  • Jerri Pries


    Of course, no two situations are ever exactly alike. For instance, Shavit’s explanation for the economic divide— if I have it right — is that it is the result of several factors unique to Israel:

    * the failure of the founders to address the problem of the indigenous population and the subsequent occupation of their lands (this is analogous, roughly anyway, to the failure of our founders to deal with the problem of slavery and present-day troubles associated with urban blight) — the Palestinians currently living in Israel are, in the words of the ante-bellum South Carolinian James Henry Hammond, the “mud-sill,’ an under-class that that does the jobs Israelis won’t do (ironically, Shavit even uses the same justification ante-bellum southerners did for slavery, that Palestinian lives are better than they would be elsewhere);

    * the emergence of a large population of second-class Jews as the negative reaction of North African Arabs to the 1948 war led more than one million ’oriental’ Jews to emigrate to Israel where they were not effectively assimilated; and

    • the rapidly growing population of the ultra-orthodox who, in Shavit’s opinion, produce nothing;

    * the high-tech boom, which created an elite class of wealthy technocrats.

    Shavit does not emphasize the disparity between the wealth of Israel and the poverty of its Islamic neighbors as a serious problem but the discerning reader will certainly take that away from the book.

    Like Israel itself, Shavit can be both admirable and frustrating. And it is precisely this complexity that makes him — and his country — so interesting. Perhaps an interview with him would be a worthwhile future show.

  • Susan

    Hi to Matt Taibbi!
    A lot to discuss on the program – but somewhere, perhaps more than lip service should be paid to the continuing wage gap in the U.S. between women and men doing similar work. One thing I have observed in the Boston area may contribute: those women who “take time off” or work part-time to raise children (as I did) may also be postponing or sidetracking advanced professional training – thus when women do re-enter the market, they are forever behind in the game because they don’t have the advanced degrees or certificates that would help them bridge the salary gap. How does this play out on the national and international scale?

  • rollotomasi

    We always hear the financial elites (and their political bedfellows) championing further deregulation and agreements such as the Trans-Pacific Partnership as a means to “boost their confidence” in order to spur further investing. It seems what they really are saying is that they want a financial environment that poses no business risk to them and maximal risk to everyone else involved in the transaction. Your thoughts on why almost no one calls these elites on what they are really after. Thanks for all you do.

  • Mary

    Isn’t this show supposed to be about inequality. Seems like it’s just about the rich. Haven’t heard a word about those on the bottom.

    • NJ

      Perhaps you missed the first five minutes where they went to a soup kitchen and interviewed people about food stamps?

  • Noah k

    This show was extremely disappointing. Chris Lydon seems unable to let go of his own populist vitriolic hatred of the financial industry, even when opposed by his own, quite liberal and pro-regulation guests. This seems to happen in nearly every one of his shows, and I’m disappointed that the creator of The Connection has fallen so far down the ladder or reason, intellectual rigor, and even a veneer of impartiality. We don’t need to give any more ammunition for those who consider NPR a socialist conspiracy; let’s get this guy off the air. On another note, if I hear him use a derivative of the term “erotic” in another show to create what I can only imagine he considers a jazz riff of intellectualism, I’m going to completely lose it.

    • Warren Ross

      I worked in insurance for a large company for 25 years and I must say I share much of Mr Lydon’s concerns. I thought, really, he was fairly mild in his condemnation of an industry that is condemned by its own actions

      • Noah K

        I’m not sure I heard many concerns from him at all; I heard real constructive concerns from his well-spoken guests, however, who were continually baited into attacking Wall Street as some evil monolith, and who to their credit avoided taking said bait. All I heard from him was that people in finance are “bad guys” and that we have “fetishized money”. This seems a pretty sophomoric view of free trade, and I for one am a middle class scientist who thinks that most in finance make way too much money for their level of talent, and that most markets are over-capitalized by our tax-incentivized retirement investment system.

        • Warren Ross

          I agree with you largely but I don’t know why anyone would complain about someone attacking Wall Street. There are many other sectors of the economy I would choose to defend but Wall Street isn’t one of them.

  • Warren Ross

    A message from Australia. Great programme today. I have read Matt Taibbi’s book and loved it. Randall Wray had it right. Financial innovation is almost always bad. It is about duping us: http://www.youtube.com/watch?v=LyJXczg9O3w&t=29m55s

    • Adam

      That’s a painful video to watch … such lumbering and mundane argumentation. In short, they’re fretting over the arcane financial “shenanigans” of the global banks and focusing just on the debt derivatives invented by some banks like Goldman Sachs — that kind of “innovation” was no innovation at all. Those instruments existed in simpler forms last century, but it was corruption at the core of the US Government that lead to the removal of the very regulations that constrained those forms of fraud. Simple as that: yes, fraud is almost always bad for the sucker taking the bait: ie. the consumer and the taxpayer.
      So I want to take back the word “innovation” from those people and say that releasing the viruses (virii) that “bring down the financial systems” is just bogus fear mongering and does nothing but suggest that the bankers really fear innovation as the thing that will liberate people from debt.
      I don’t mean the kind of innovation that created collateralized debt obligations or the conspiracy to sell debt to people who were certain to default, but the kind of innovation that would allow people to invest and trade on their own behalf without paying a dime to the big banks or Wall Street or the exchanges. When those parasites have their blood funnels removed from the veins of a nation and they starve and whither, then we make progress.

      • Warren Ross

        Randall Wray is doing a lot more than that. He is questioning the very role banks have in creating money and also challenging the dopey notion of a Federal Government’s fiscal limitations that has been a fraud played on the US public. I agree most of that video is cumbersome with the exception of Randall Wray which why I started it three quarters in. http://www.youtube.com/watch?v=0zEbo8PIPSc&t=5m8s

  • This Radio Open Source show was a mental pleasure.

    Some thoughts:

    1. listeners to the show/readers of these comments might enjoy the Kevin Phillips book “Bad Money” which is a kind of historian’s muckracking which depicts financialization now as cancerous to the system.

    2. In the nineteen thirties, both Left and Right critiqued what they called the “hypercapitalism” of their era (where financial speculation rules). It would be fascinating to have the author of “Lords Of Finance” compare these cycles of “hypercapitalism” as a historical phenomenon.
    In “Lords of Finance”, the German Finance Minister Schacht makes the exasperated comment that the world as a system has gone insane and that seems a bit apropos and echoic.

    3. Richard Freeman of Harvard uses elementary trade theory to ask a “glocal”
    question, in his paper of a few years back, “Are your wages set in Peking?”
    This is relevant to this ROS show.
    4. In an interview, the filmmaker Fritz Lang says that his “Dr. Mabuse” classics
    were not about Hitler but about “raffkes.” This word was Weimar slang for the predatory profiteers who seemed to dominate the Weimar economy. (as you can see in the famous paintings of Georg Grosz and Otto Dix.)

    4. There is an even deeper level of analyis of inequality megatrends offered
    by the Cambridge Forecast Group Blog at cambridgeforecast.wordpress.com:
    entry: cambridge forecast group update: additional perspective july 2013
    (look for this entry in “Recent Posts” on the right side of the screen)

    This discussion argues that the “traffic jam” beteen the West and the Third World with the latter looking for movement to increased convergence and
    the latter looking for hegemonial control acts like one pendulum intereacting with another pendulum, US domestic inequality as discussed by the panel of the show. Two pendulms interacting gives you “chaotic dynamics” and that’s why the world seems so jumpy, enervating and overwhelming and indeed, chaotic.
    Without a sense of the two processes interacting, you don’t have the deeper story.
    richard melson
    ps. the book mentioned by Chris in passing is “The second machine age” by two MIT Sloan School professors, which is sort of a “you ain’t seen nothing yet” techno-euphoria account of the future.

  • Jeff E.

    Prof Acemoglu at one point mentions the thesis of one of his students, a woman with a Chinese name, now ironically in biz school, who traced a negative correlation between the careers of graduating engineers and possibly the patents they create, versus the highs and lows of the financial industry — which when it booms, sucks them all into high-paying socially destructive jobs, thus reducing their patent-production (and value to the real economy & society). If I heard him right.

    I would LOVE a reference to that thesis. Or even better, a link.

    Great, great show.

    • Jeff E.

      Hey, Kunal! Thanks so much!

  • Potter

    How do we get out of this slide? Do we have the will- the leadership?

    We used to, not that long ago, boil it all down to campaign finance reform. Instead, we moved in the opposite direction with the “Citizens United” decision (money-is-speech, corporations-are-people).

    It was mentioned a few times: the failure of our public education system. This must also result in who we elect as well as job preparedness and innovation. This failure is also a higher education system that is not affordable when it should be fully or more subsidized.

    The audio clips of FDR are of of a time when, if a person who had work, most (mostly) could support a household. On the picture above, I notice there are mostly men in the line. After that, well after the war, women began to work. They needed to work. And even though the safety net institutions, the New Deal, were not fully operating, the culture at the time seems to have been more amenable to care for the poorest, not to blame them for their poverty. Tony Judt talks about this in his book “Ill Fares the Land”.

    I agree that blaming this current inequality all on “Wall Street” is too easy. But also “Wall Street” is not going to hold itself accountable nor ask for regulation of it’s casino aspect. Matt Taibbi was very strong about the good guys on Wall Street (not all wolves) being upset about how they are all being tarred and feathered for recklessness and dishonesty and addiction to oversized compensation. Even if the street was regulated, as it should be, the point has been made that ways around the regulations and new money making products/schemes will be invented (we are such a creative country!) Our government that has failed us in many ways lately also failed to hold this industry, the banks too, accountable for the great recession.

    Obama is not faultless either. See this just from today : Senator Elizabeth Warren

    To Obama: Stop Nominating So Many Corporatists

    I can’t help but blame a lot on the party that would sell itself as the party of family values, the party that reveres Ronald “it’s your money you should keep it” Reagan, the party of “read my lips” GHWBush, and the son Bush’s selling of a bogus “compassionate conservatism”. This is the party that is now against extending unemployment benefits to the long term unemployed and against raising the minimum wage, and against taxing the more well off, closing the loopholes in our tax system as Mr. Acemoglu suggests.

    We used know that those folks out there in the cold, if we were not there ourselves, were, so to speak, “there but for the grace of God go I”. That was the American Way, a religious and/or moral teaching, a culture that we are all in this together, that seems to have faded away or not transmitted or taken hold with some.

    Thanks for this show, the FDR clip, that amazing picture above.

  • Robert W Peabody III

    @ Adam
    A photo is a document. Its interpretation gives it context.
    The study or research of the document can help with its interpretation.
    The facts of its origin lead me to interpret the image in a…. um, let’s say, counterintuitive way.

    The use of that image raises questions about how governments, economies and societies are represented in the media.

    @ Jeff
    “now ironically in biz school”
    Looking at Miss Shu’s CV, I would have to say she is extremely bright. As a mathematics undergrad, she went into economics, not engineering or finance.
    That suggests that people make career choices for things other than money.
    Her study points out that bubbles and busts change the “long-term level
    of inventive human capital.”
    I would be willing to bet war, plagues, and other macro socio-economic factors also change the “long-term level of inventive human capital.”

  • Robert Zucchi

    Great contributions all around. Thank you one and all for taking up this topic.

    For some years I lived down the road from New Hampshire’s Mount Washington Hotel, whose environs are still as scenic (and as empty of townspeople) as in 1944, when it was the locus of the wartime Bretton Woods Conference. One winter I took some company there, and we stood miserably in the snow while one of us gave a gadarine account of the historic events. That sour spiel only turned our thoughts to the margaritas in the speakeasy-themed bar, but also put me in mind of the $15 a toss the privilege would exact…so I drove us back to restaurant row in North Conway instead, thinking–we still live in the shadow of what happened here, and it’s still important.

    Well before WWI an international commercial system was in place, managed by private business and finance capitalists with little interference from governments even in times of economic crisis, of which there was no shortage. This laissez faire system struck J. M. Keynes as having primed the industrial world for social upheaval and even the Great War itself, and he chastised the victors for mostly ignoring at Versailles the antebellum scourge of economic instability, and the post-bellum prospect for Europe of starvation and further economic ravages.

    A quarter-century later, after yet another World War, the conveners of the Bretton Woods Conference addressed for the first time in history the need for institutionalized supervisory bodies to oversee commercial relations among nations. The result was the International Monetary Fund and the future World Bank. The conveners, influenced by the American New Deal, also formally recognized the importance of full employment, and the provision to a nation’s citizens of a basic level of economic security, in order to forestall social unrest and the resulting turn to extremists of the far left (Russia 1917) or the far right (Germany 1933) for redress.

    The system established in embryo at Bretton Woods in 1944 facilitated recovery and then prosperity in the postwar industrial world. But as might be expected, given the cyclicality of man-made institutions, the system went into decline in the 1970s and is sputtering still today.

    “We spend all our money on wars.” “We’re ALWAYS at war.” (I’m obliged to the young women callers…or so they sounded…to call-in shows over the years for focusing my mind with a phrase or two on the generative causes of the great American turn-down.)

    I’m still dumbstruck by the fact that America accounts for nearly half of the world’s outlay on defense. Are the American people really in accord with this allocation of our resources? Or is our War Machine another of those issues, like the persistence of a fractious regionalism hostile to democracy, that we have self-censored out of consciousness? Of course an alliance of the democracies with a sharing of defense costs and manpower burdens would not last forever, just like everything else. But splashing out on industrial militarism on the present scale is economically unsupportable.

    “Capitalism is like cancer. Growth for its own sake.”

    Well, our economy has to grow, to accommodate population increase and to adjust to the inexorable rise in prices. I”m thinking, though, of the trajectory of a property I know about, a ranch-style house of 760 sq ft, built in 1958 with a dirt driveway and dirt basement floor and a floor furnace (all three later upgraded), and bought that year for $8,000. (Amounts not adjusted for inflation.) That property, well-maintained but not renovated, went on the market for $289k in 2004, and was sold for maybe 90% of that price. The young buyer made some improvements and later put it on the market for $325k. It finally sold in 2011 for $180k. For the first seller, the sale represented an inoculation against a diseased economy. For the second seller, the sale was infection by the diseased economy itself.

    We’re talking about shelter here, one of the ineluctable necessities of life. Inflation/deflation is a phenomenon for cosmologists to study; it should not be an irremediable feature of an economic system. I’m thinking too about the social pressure on Americans to own their own homes. Let’s stop pretending that inflation, or obligatory home ownership, is as natural as morning sunrise.

    “Working people seem to be ashamed of not being rich.”

    Some working people are thrilled to be brevetted to the middle class, a purely semantical promotion that costs politicians nothing. These workers sometimes then disdain the hoi polloi, to whose ranks they will surely return at the next recession. Workers of all incomes should re-invest that title with the pride it had before, and insist on the same respect from (especially) the right that the right reserves for the unborn.

    On a correlative subject, not only workers but “angries” of all classes are in hard times drawn to demagogues with a ready roster of scapegoats. Extremists are above all provocateurs, who channel public anger, first in utterance and then in deed, by assaulting social peace with vulgar prejudice and persecutions directed against the vulnerable. A related strategy is enacting into law the most drastic interpretation of a culture’s values. A populist thirst for vengeance may thus be assuaged, but citizens of a democracy who adopt schadenfreude as official policy just might not remain a free people.

    “Our tycoons don’t seem to like America very much.”

    Some of our multinationals and captains of industry regard their American nationality as a citizenship of convenience. Offshoring jobs and not repatriating profits from abroad to be taxed here may be rational business practice of a sort, but you can bet that the economic nationalism that is undiscoverable in them is very much in play in Germany or China. Charlie Wilson is supposed to have said that what is good for General Motors is good for America. The reverse is the greater truth. American business, for the sake of its employees and customers and country and itself, needs to take a remedial citizenship class.

  • Robert W Peabody III

    This Charlie Wilson?:
    “Wilson retired from Congress in October 1996 and became a lobbyist for Pakistan before retiring to Lufkin.”

    Agree, the tax code needs fixing.

    • Robert Zucchi

      No, Mr. Peabody, I was thinking of “Engine” Charlie Wilson (d. 1961), CEO of General Motors and then US Secretary of Defense under Eisenhower. In his confirmation hearing he made the controversial statement I gave in my post, but it seems he also added “and vice versa.” (He eventually gave up trying to convince people he’d at least intended to draw an equivalency between the giant car company and the country.) I should have hewed a little closer to the record with that passage.

  • Potter

    This is what should happen regarding education: kids who finish high school with fairly good grades (say B plus) should be given provisional full scholarships to college AND a stipend to live, incentive to finish with a degree. That would give kids incentive to finish high school too. It can be paid for by taxing the wealthiest and closing the loopholes… or whatever minds better than mine come up with.

    myr above link to Elizabeth Warren’s message to Obama Stop Nominating so Many Corporatist Judges

  • Robert W Peabody III

    Thanks for that correction – the other Charlie was a scoundrel.

    Finally listened to the podcast.
    What makes the human race exceptional is its centrifugal nature: we explore, create, invent, and evolve. The protesters should be lauded for their vigilance, but when the left and the right find common ground in capping the outward thought and action for a better tomorrow…..that is pretty scary.

    Regarding discussion of the robber barons: after the trust busting, new tax code, multiple wars, new deal and great society it was amusing to think they are still at it i.e. creating wealth.

    I think there should be a few requirements for a degree in economics. Such as, one year on a work crew (e.g. painting, construction, cleaning, landscaping) some basic physics, and lots of history.

  • Bill Manley

    Corporatism is the term you were looking for to describe a state taken over by Industry,
    or specifically Corporations. Eventually there will be no small business in america and
    working for a large corporation is the only option. A right wing form of Communism.

  • The financial sector doesn’t produce anything. Correct me if I am wrong, but it seems to me, that the only justification for profits by the financial sector is if it increases efficiency in the non-financial sector through more efficient allocation of capital.

    But if that were the case, the profits of the financial sector could never grow faster or larger than the profits of the non-financial sector.

    It seems that in today’s economy, the profits that are growing the fastest are the profits of the financial sector, and they greatly exceed the profits of every other sector!

    What basis is there for financial sector profits to be higher than every other sector, other than that the financial sector has monopoly control of access to money? If I had monopoly control of money transfers, and I whacked a charge onto each transaction, I could make a gigantic “profit” too, but it is purely exploitative and parasitic.

    What does the financial sector produce that justifies so much profit?

  • Julia

    If I rob a bank, I go to jail.
    lf the “bank” robs me, the executives get a bonus.

  • Robert W Peabody III

    “What does the financial sector produce that justifies so much profit?”

    2013 indexes:
    DJIA +26%
    S&P 500 +29%
    Russell 2000 +37%
    Nasdaq composite +38%

  • dave bernard

    PRI (WGBH, WBUR, WUMB, WFCR): Predictable, Repetitious, Ingenuous. Loved your show for years, but Man, move the text forward!

  • Potter

    We’ve been trying ineffectively since Teddy Roosevelt (1908) to even up the score between “constitutional liberalism” and democracy here. This is John Judis reviewing Fareed Zakaria’s book “The Future of Freedom” ( 2003 in “Foreign Affairs”). I hope this long quote adds to understanding- it did for me-why we have not been able to stop the slide towards inequality (less democracy). It’s troubling.

    I link the whole article below this:
    The problem of campaign finance reform goes back to the early twentieth century. The system of constitutional liberty, which protected property rights, had led to growing economic inequality. Political democracy was supposed to compensate for this by allowing each citizen an equal vote. But when large property owners began using their wealth to finance political campaigns, the growing inequality of the property system corrupted the democratic political system. Campaign finance reforms, beginning with Theodore Roosevelt’s 1908 measures, were intended to restore equality to the political system by protecting it from the property system.

    Something similar happened to the initiative and the referendum — Progressive Era efforts at democratization that Zakaria claims led to less democracy. These reforms were initially devised in response to corrupt business control of state legislatures. Americans, primarily in the Western states, used initiatives to regulate railroad freight rates, establish presidential primaries and the direct election of senators, give women the vote, and adopt workers’ compensation and the eight-hour workday. But beginning in the 1920s, businesses and the wealthy began using initiatives to promote their own, more conservative ends. Like the campaign-finance reform efforts, initiatives and referenda were undone largely by the superior power of business, which turned them away from the ends they were supposed to serve.

    American democracy did indeed originally flourish, as Zakaria argues in the first part of his book, on the basis of constitutional liberty. And in the opening decades of the nineteenth century, Americans assumed that the two would always complement each other: liberty of property would lead to the diffusion of small property holdings, which would in turn reinforce the foundations of political democracy. But it didn’t turn out that way. The yeoman farmer was replaced by the wage-earner, and the small manufacturer and craftsman by the large corporation. By the early twentieth century, the inequality of the property system was subverting political democracy, a situation that has led to a century of efforts to reverse the trend. Some of these reforms did overreach, but often they were simply infected, distorted, or overwhelmed by the very forces they were designed to counteract.

    The cycle of liberty and democracy in the United States has thus not been the one that Zakaria describes in the second half of his book. Constitutional liberty did lay the foundations for liberal democracy, but the unimpeded growth of free enterprise, based on liberty of property, has started to erode these foundations.
    (end quote)


  • mary

    Hey Dave,
    You’ve given us a new MO: to spend every hour of every day Moving the Text Forward. Couldn’t agree with you more about PRI-ism. Nudge us on and give some specifics!

  • Alan Pizzi

    Interesting development-
    Justice Department Sued Over $13 Billion JPMorgan Pact

  • Robert W Peabody III

    dave bernard says “PRI (WGBH, WBUR, WUMB, WFCR): Predictable, Repetitious, Ingenuous. Loved your show for years, but Man, move the text forward!”

    Yes. For example, the shows are about inequality are predictable in their plaintiveness, repetitious in their message, and naïve in their understanding.

    The naive part:
    The inequal-igists see the world as stable punctuated by change (an ancient perspective).
    They see humans as supra nature (don’t see inequality as a natural phenomena).
    They see inequality as part of a corrupt dynamic (don’t see inequality as a motivational factor).

    Nietzsche theorized that over time the subordinated always rise to power.
    Is that not true? Over time?

    None of which is to say that people should not protest against inequality – that is an integral part of the dynamic.
    An oblique view, however, should lead to better polemics….if polemics is what Dave considers ‘moving the text forward’.

  • Potter

    @ RW Peabody III – This seems like a meta-argument. Where’s the meat?
    The inequal-igists see the world as stable punctuated by change (an ancient perspective).
    Who? What I read is concern about the trajectory, that it’s gone too far, way too far and holy cow! gone on for too long with ineffective measures to calm it. So the question is how the devil can we deal with this because it is suicidal over time (which now seems short). “Over time” looked a lot different from Nietzsche POV probably than from here. Time moves differently today and it does not look like we have the time we think we have.This leads to the conclusion, perhaps late, that we should not be complacent about inequality, but rather worried and looking seriously at ways to mitigate it. That means, for one, controlling corporatism when those who can do so don’t have the incentive. I am trying to avoid saying we have a corrupt system, but there I said it.

    That means affordable (or better) subsidized education for all. I shout it.

    I don’t know of any other part of the natural world that is so concerned with morality and cultivates compassion as a virtue., but been getting off track onto greed, selfishness.

    The more we at least talk about inequality and it’s dangers, even if we repeat it without solutions, the better.

  • Noah K

    Potter – While I agree that at first blush parts of his argument read like postmodernist drivel, I think this is only due to the choice of language, rather than the meat of what he’s saying. I agree with him that you seem to take a very short view of history, and I go further to speculate that you may not be terribly aware of just how affluent even the poorest modern American socioeconomic groups are on a modern global scale, and certainly on a historical scale. In terms of access to caloric intake, heat, healthy environment, basic healthcare and information, there is absolutely no de-facto reason why even the poorest of Americans don’t have more opportunity than any king or president did 100 years ago. Inequality exists in America to be sure, but it feels a lot like an excuse for liberal social democracy, rather than an actual intractable problem requiring massive government intervention. I’m glad that you feel yourself clever enough to stand back and alter the trajectories you perceive in American democracy and markets, but I certainly don’t think that in a constitutional democracy this is a clear, fixable, pressing matter that requires intervention to prevent us crossing some point-of-no-return. You wanna change the world and prevent injustice, then advocate for gay marriage and other issues of negative civil rights, rather than trying to right an market-based economic ship with so little list. I shout it (an homage to your culturally peculiar cadence and idioms).

    • Potter

      In other words don’t mess with capitalism. We are losing our democracy. Of course there are the backward and sideward glances…it’s all relative. Tell that to the folks that were quoted in the first few minutes of the show. I “wanna” change that.

  • Robert W Peabody III

    @ Potter
    I’m trying to tease out what dave bernard was getting at, which I would have skipped over but Mary seems to think there is something there.
    The question is: what moves the text forward?

    The issue is not so much the predictability of RoS, which amounts to an audience expectation.
    Nor the repetitiveness, which allows one to string together several topics (for example, Wallace, Swartz and Lanchester) that perhap form an ineffable cultural totality.

    The issue the way RoS treats complex subjects, which seems to be necessitated by the 45-minute linear format.

    We could make a list of assertions that go unchallenged, such as:
    I think it was Lanchester who said one of the problems is the revolving door between Wall Street and Washington.
    Former Secretary of the Treasury Paulson, called in his banker brethren together and threatened to cut them off at the knees. Only he could have done that because he knew what a bunch of feckless idiots they are. Thankfully.
    Lanchester went on to say something like, “if only finance served us in the way we want it to.”
    A novelist is going to tell us how it should be and Chris didn’t ask what that was?

    Potter, I’m just guessing here – dave bernard should come by again and tell us what he meant by ingenuous.

    • Kunal Jasty

      We appreciate the constructive criticism! Hopefully tonight’s show will “move the text forward.” State-troopers turned armored-car robbers turned authors aren’t on NPR too often!

      • Potter

        @ Kunal Jasty- I don’t know if you meant to put a period on this discussion but I have an irresistible link to add to it

        [very wealthy venture capitalist] Tom Perkins suggested Thursday that only taxpayers should have the right to vote — and that wealthy Americans who pay more in taxes should get more votes.


        @ Peabody, point taken, but unless Dave Bernard fleshes it out himself, I’ll just say Lydon and McGrath have done their bit over the years to “move the text forward” as I understand the possible meaning of that phrase.

        • The Parrot

          The Citizens United decision was a quasi-full throated invitation of One Dollar, One Vote. It’s not simply that corporate power can instigate or insinuate itself through fungible assets, it’s that the fungible assets themselves impose a logic of its own (monetary systems at least suggest simple rules with complex self-organizing behavior). To quote Walter Wriston (again): Capital goes where it’s welcome and stays where it’s well treated. I’m glad to see Mr. Perkins taking the risk of stating what is absolutely obvious (and to my sensibilities, monstrous; though my sensibilities are irrelevant and superfluous).

          I will now speculate and play the Cassandra card in a ludicrous Samuel Beckett scenario: Once upon a time … if capitalism is allowed to continue, for which whole corporate entities will be ‘run by’ non-human intervention. Machine/bio intelligence will run organizations from board room to bottom operational details. Sounds nutty. But, this could be the next major step/inflection point that capitalism itself invites. It’s the ultimate ‘right-sizing’ moment. These entities will be self-sustaining, able to spin-off, acquire, merge, invest, manage, hedge, communicate cogently (with human and non-human entities), apply skills of deception (aka bluffing) etc. These corporate entities will continue to have personhood status, thus, their overseers will by fiat. That is not to say there won’t be human run entities, it’s just to acknowledge that machine/bio intelligences will reach the point of being wholly autonomous entities. The key is the yield; that is, these entities will high ROI for human and non-human investors alike. The financial exchanges are already operating beyond human dictates to some degree. The future will still need us, at least for a while. But, the descendants of Tom Perkins and his ilk will someday find themselves outsourced to another kind of armature for which we hang capitalism upon.

          How this will integrate into the human-side of institutional activity is up for grabs. Once the status of personhood can be granted to non-human entities, and their speech enabled by the monetary system, there is a wide variety of scenarios that can manifest. Constitutionally, “We the People” will be extended to a wider class of autonomous entities. Should be interesting. Luckily, it’ll probably be too far away for me to have to endure.

          BTW, I still stand by my drone predictions in another thread. This technology will have a role to play in the above scenario.

          • Robert W Peabody III

            The first thing non-human entities need is a philosophical/political movement to get equal rights.
            Here it is: Object-oriented ontology http://en.wikipedia.org/wiki/Object-oriented_ontology

          • The Parrot

            Thanks for the link Robert. I wouldn’t dispute this notion in principle. Seems prudent. However, the tech, scientific, bio, engineering, cognition, and robotics sectors won’t wait. Even more importantly, the market won’t wait. Not only will the market demand this general trend, it already does, and has been for some time. The neo-liberal push is always towards dehumanization of any particular arena for which profit can be squeezed; it’s a sure-fire way to maximize ROI. People are an inexhaustible sink for costs and expenditures. State political institutions will welcome such developments. Moreover, markets and various tech sectors tend not to work with a philosophical backstop or concern.

            It’s easy to contemplate downsizing the wage slave caste. That has been the trend. It’s awkward and far more novel to consider that at some point it will make sense to decapitate the top: boards, officers, C-level executives, middle management, traders, brokers, investors, deal-makers, etc. The org charts may become exceedingly flat. However, the corporate raison d’etre will hum right along. The beauty is that the investment imperative will demand it. Folks in these coveted positions will simply not keep up in smarts, speed, and volume of information and its management. Exposure will be total and acute. That’s what markets demand.

            The human touch is not as difficult to replace in these positions as we’ve been trained to think. The historical advantage will become tenuous. Yes, this stuff can be adapted to non-human entities. Teaching a dog to do the tango is hard, but doable. Imbuing that spirit of ‘wanting to teach a dog to do the tango,’ is a far more difficult and subtle shade of challenge. As development continues, the current jobs of prestige will go away for human occupation. Not everywhere, but enough to force a downward pressure on enterprise tasks for those we now consider masters-of-the-universe.

            These folks will go do something else; probably creating mischief of some sort or another, and calling it progress. Or, they’ll get plenty of yacht and tee time for themselves. Maybe they can go coach little league or teach at senior centers or run bake sales at their grand children’s schools. Tom Perkins, Donald Trump, Kevin O’Leary would be superb coaching little leaguers. One can only imagine the team ethos. It would probably make Adolph Rupp blush.

            Clearly, there are technical and social challenges to overcome. Solutions will certainly fizzle. The story of general AI is not a pretty story of inexorable progress. But, in spite of this, momentum continues. Add various approaches and disciplines into the mix, and the dynamic for change becomes even more probable.

            There is some liquidity sloshing in the R&D trough for such organizational structures to emerge. Not all is based in the states. I believe the U.S. has reduced general R&D funding by 25% over the last decade. (Can’t remember the source, so feel free to fact check it). Yet, another aspect of neo-liberal concern: myopia. Capital takes no prisoners. These structures may emerge in unpredictable places, where corporate power is not sovereign nor pandered to. An outcome from this shift may be that political and state structures consolidate even more power (reclaiming lost territory). They will be more than happy to assist in the removal of human legacy from such positions of power. As to state leadership. Those gigs cannot be so easily outsourced. They absolutely demand a human touch. Their investor class will probably still prefer to be ruled by a human element. But who knows? Maybe the Vatican will end up being the last Anglo-Euro-outpost staffed with human leadership?

            The integration into a philosophical, political, and legal realm will probably lag on such matters. They generally do when it comes to fanciful developments and flights-of-fancy which manifest themselves. It’s only in the last few years that we’ve come to realize that corporations do speak and converse with us. They use money for linguistic currency. Should continue to be interesting. Best regards …

  • Potter
  • nasir

    how is it that development pursued without state intervention..??