Mark Blyth’s State of the Union

The people’s economist Mark Blyth is a perpetual fan favorite for Open Source listeners. The Brown University professor, who never left behind his working-class Scottish roots, brings a vernacular wisdom and wit to his deep analysis of inequality, austerity, and popular unrest. He also often sees what the rest of us tend to miss. In 2016, he predicted both of the year’s major upset victories: the American election of Donald J. Trump as well the British vote for Brexit. You can listen to our own shell-shocked phone call with Blyth just after the Brexit vote here:

For all the gritty and scandalous detail in both scenes, he’ll keep telling you: it’s a malady in the money system, a global tsunami of populist resentment that’s driving events.  And furthermore: at the start of 2018, that populism is still popular. Today, we couldn’t imagine a better guest to help us ring in this topsy-turvy new year.

So what’s the matter with the world today, according to Mark Blyth? He sees at least two major issues: class warfare and intergenerational struggle. The former problem is, in some ways, an old story—one which our party leaders have largely ignored for over the last three decades. The rhetoric of resurgent populism and nationalism are really just responses to deepening inequality in a rapidly globalizing world, as Blyth explains:

Has politics fundamentally changed because of Trump? No. Politics fundamentally changed because the people in charge basically ignored millions of Americans and what was happening to their standard of living their communities what was happening to the life chances and opportunities. [The people in charge] basically lived on the coasts and said to each other, “Gee isn’t everything swell?” And they got a really surprise when about 40 million of them said actually no we don’t like what you’re doing.  … meanwhile, our “elites”— whether it’s Tony Blair, whether it’s the Clintons, or whoever has the means thinks “everything’s great, the new global economy! We’re all doing fabulous!” But you’re only doing fabulous because you only talk to each other. You only live in half a dozen places and you all have tons of cash so if you travel internationally everybody’s like you. You’re not a nationalist, you don’t have a national or local identity, you’re rich enough to be a global cosmopolitan and you can enjoy all of the fruits of globalization, but not everybody else can. Put that all that together and it’s self-explanatory.

The second major issue Blyth lays out is the hoarding of wealth by those who grew up and entered the work force during the so-called “golden age” of economic prosperity in America. So, if you’re looking for someone to blame, Blyth says, blame the boomers:

They’re not  awful in the sense that they are awful people. They’re just following the incentives mean laid out to them in a free market system to accumulate as much assets as possible and leave it to their kids which means they hate inheritance taxes they want to pay a little marginal rates and they continually vote down things like bonds for schools bonds for subways Boston et cetera et cetera. So they’re acting in a completely understandable way which for them is individually rational but it’s just really crap for everybody else who come in behind them who can’t accumulate assets in the same way precisely because they’ve done that.

If you’re still eager to hear more from Mark, you can search the archives here on our site and find more than a dozen conversations with the scotsman stretching back to 2008. As always, make sure to drop us a note in the comments section below.

Guest List
Mark Blyth
Brown University economist and author of Austerity: The History of a Dangerous Idea.

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  • amyinnh

    Generic use of “The Boomers” to describe a small fraction of the population, the elite, is misleading.
    In the 1960s, the oldest of them were sent to Vietnam and would’ve been fiscally clocked (along with everyone else) in the early 1970s’ recession. In the 1980s they learned their employers can rip off their parents’ pensions
    and the feds would do nothing about it but direct them to put their savings/their future in the stock
    market, 401K, which would mainly fuel Wall St, to their own demise. Disoriented, they’d forgotten what their parents said, “Never put anything in the stock market you’re not prepared to lose.” With every recession, “the Boomers are going to retire!” and they’ve been first on the layoff list, in the late 1980s, 2001 and again in 2008. The youngest of “The Boomers” would’ve supposed to be retiring just about … 2008.
    “The Boomers” and the elite are two entirely different things. Missed the mark on this one, but it makes for a good story.

    • mmetta

      Excellent point! That was my thought too when I heard it yesterday.

    • TruthsRonin

      While generalized in part, the cycle he speaks of – that 30-year period in which the boomers responded to incentives at the expense of the social weal – was predominantly made up of baby boomers. And while many boomers are retiring, they are in still in Congress and devising policy. This “identity politics, however, is still a bit misguided. Blyth does not take account of the capitalist class’ efforts throughout US history to maximize their returns, minimize their costs, and impoverish everyone else. Giving him the benefit of the doubt, his focus on the boomers is to simplify the timeline without being overly pedantic and also giving a tongue-in-cheek snub for all the boomers’ generalizations of the millennials. I was disappointed to hear the Gen-Xers completely ignored.

      • amyinnh

        It is every bit as disingenuous to generically use “boomer” when it is elite as it is to generically use “white male privilege” when it is elite.
        And, quite a slap in the face. Boomers were sent to Vietnam, laid off in the 1970s, again in the late 1980s, wholesale offloaded from tech. in the 2001 bubble burst, hammered in 2008.
        I don’t give him the benefit of the doubt, but excuse his ignorance of the occurrences during that timeline, as a immigrant. The life of boomers has not been the cakewalk he paints, for anyone but elite.
        As for why millennial don’t vote, they do – Bernie certainly caught their attention. No, they aren’t coming out for “lesser of two evils”.

  • sidewalker

    I’m a big picture guy and so am more inclined to structural explanations. Yet one reason I love ROS is the way Chris in his humane narratives and conversations always reminds me to see the people in our crazy dramas. Still, sometimes I’m happy to tune in as I’m waking up on a Saturday morning in Tokyo and hear a structural thinker such as Mr. Blyth. His description of some of the key political economic post WWII shifts make a lot of sense, and yet I am left to wonder what he would say if he took a slightly longer view and placed the logic of capital within the greater logic of ecology.

    As I see it, humanity is still struggling with two seismic shifts related to our more fundamentally existential connection with energy that have caused local and global crisis for some time and yet we rarely talk about them. An energy regime change to fossil fuels has, first, led most of humanity to leave century old occupations involved with food production and, second, led us into urban and suburban built environments. Don’t these grand dramas deserve a lot more consideration?

    Furthermore, what economic theory, accepting valuation through market based realization, has failed to grasp, and what is missing from Mr. Blyth’s narrative, is the extraordinary role of energy, that makes it different than all other inputs. It’s calculated that one barrel of oil has the caloric content of 10 years of human physical labour. So how can it be valued at $20 at $50 or even $100 a barrel? Well, it has been and is it not this abundantly cheap caloric energy, this highly value adding input, that contributed greatly to the rise of the middle class and the welfare states? And hasn’t it been the rising extraction costs, and now the costs of climate change that also contributed greatly to shrinking profit margins, declining GDP and the active class warfare since the 70s we call neoliberalism?

    We haven’t really come to terms with all the temporal, spacial, environmental and social impacts of this energy regime change that began with coal and steam during the industrial revolution and moved to oil and gas in the 20th century and now we are at the start of a new energy regime change that will again disrupt everything. Ecology/Energy sustains all life, is life, and it directs our economies, even if market mechanisms often distort this. Isn’t energy driven change and crises, rather than Trump, the deep structural yet mostly unvoiced source of our angst?

  • Marco

    Loved that show listened to it while I was plowing snow in the wee hours. Mr Blyth was fascinating and entertaining.

  • jefe68

    I would also like to add to comment below that the generic use of baby boomers that also happen to about 1% of the population is misleading. That said I found Mr. Blyth’s take on the world we now find ourselves was pretty much spot on. I was wishing for more on how the millennial generation could possibly reshape the political landscape in the next decade. I do agree that the Democratic party is pretty much bankrupt with ideas and had long abandoned labor and minorities in favor of Wall Street and identity politics. On social programs and taxes I do think Mr Blyth left out an important issue, that the Republican party has been working to dismantle everything FDR put in place, namely the New Deal and later Johnson’ Great Society programs since their inceptions. People should not forget that Barry Goldwater’s ideology is now pretty much how the Republican party defines itself.

    • amyinnh

      “So unless you’re paying attention it’s easy to misinterpret what Blyth is saying.”
      With good reason, he keeps using the word “boomers”, and not elite boomers.
      Re: dismantling FDR, etc.
      They’re going further back than that, Glass-Steagall, which is why everything’s looking mighty 1928.

  • AC

    how have i never heard of this man?

    • TruthsRonin

      If you like Blyth, check out Michael Hudson: much more technical but understandable and intelligent.

  • A friend of Nassim Taleb, and yet, he speaks with certainty of North Korea…Black Swan?

    • TruthsRonin

      If you listen again, you’ll notice he does not say 100%; just highly unlikely given the various institutions and geopolitical interests of all those involved.

      • “given the various institutions and geopolitical interests”

        Precisely when a Black Swan would occur.

        What are the North Korean nuclear safeguards in place to prevent an individual act?

        By individual act I mean someone thinking their life sux and if they are going down, they are taking as many people as possible with them.

        Oh sh*t, that never happens…/s

  • Potter

    I am uncomfortable with Blyth’s broad brush use of the “boomers”. In defense I ask, “why not blame it on WW1 which led to WW2 which led to the boom? The comments below make good points. For me, Blyth is always a stretch since I don’t normally think the way he does, in the economic realm of this world. So I had to stop and re-learn and learn about stagflation, the virtuous cycle and so on while trying to understand how the cycles are spirals really (aren’t they?) encompassing an ever new world in which to deal while we look backward for explanations and the way forward.Thank goodness for the podcast medium with a reverse button.. he talks fast and his Scottish accent is thick. I am grateful. Good comments here! Hello Sidewalker! I have angst about Trump and it is connected to existential issues. We need awakened leadership desperately.

  • David

    Good podcast. A senior historian professor friend of mine in Denver made this salient comment: “Interesting that Blyth doesn’t mention the Vietnam War era’s guns-and-butter policies as a factor in the 1970s fateful inflation, blaming it instead on high employment rates. I think it’s because he doesn’t care about federal debt. Given how the right raises debt through military expenses and lowering taxes, then blames debt for the need to cut services, I can understand that predisposition. But wartime spending always causes inflation if either taxes don’t rise or some fiscal policy (like price controls) doesn’t hold down prices.He really does go after the boomers, but the mechanisms he describes only fits a small portion of that generation, those with the assets to purchase “debt instruments” as investments and the political and financial influences to make policy. Anyway, it was an interesting and thought-provoking listen.”

  • I agree that in this particular conversation, Blyth’s shorthand assessment of the role of baby boomers is glib and incomplete. I would bet though that it’s a concession to the limits of a relatively brief conversation. I’ve watched several of his videos and look forward to reading his Austerity book.