Working-class whites are now the reigning champs of pessimism in America. No other group of working-class Americans — Black, Hispanic, or Asian — holds a more despairing, more dire outlook on the future of our country. ...
Working-class whites are now the reigning champs of pessimism in America. No other group of working-class Americans — Black, Hispanic, or Asian — holds a more despairing, more dire outlook on the future of our country. According to our guest J.D. Vance, only 44% of all working-class whites now believe that their children will be better off economically than themselves.
Donald Trump knows this. And while he may not be mobilizing “white working-class voters” as much as the punditry likes to think, much of his speech is directed at whites who are feeling disenfranchised, culturally alienated, and left behind as the coastal elite reap all the advantages of a rigged political system.
Arlie Hochschild has spent the last five years researching and writing her new book, Strangers In Their Own Land: Anger and Mourning on the American Right. Around Louisiana bayou country, she traces “deep stories” of whites who feel they’ve been screwed over. For them, Trump—and his rebuke of corruption, civility, multiculturalism, and (especially) feminism—looks a lot like “secular rapture,” she says.
This hour, three scenes from a divided country. From the oil patches of Louisiana to the Rustbelt of southwestern Michigan to the steel town of Ohio, we’re asking where it all comes from. Hochschild and Vance are joined by one other close watcher of rural America. Novelist Bonnie Jo Campbell, in the style of grotesque noir, tells us about the pressures of a changing world and primal existential need to feel necessary and important.
Photos: Sarah L. Voisin; Stacy Kranitz; University of California, Berkeley
To close out our series on work, produced in partnership with The Nation, we’re looking ahead to the big proposals and spiritual realignments that might spell a major change for working and middle-class people who ...
To close out our series on work, produced in partnership with The Nation, we’re looking ahead to the big proposals and spiritual realignments that might spell a major change for working and middle-class people who feel as though the recession never ended.
Look no further than this chart, produced by one of our big thinkers this week, the Bulgarian-American economist Pavlina Tcherneva.
Today even as the economy grows the gains are topsy-turvy. In the latest economic expansion (from 2009 to 2012), the incomes of the top 10% rose more than 100% while for bottom 90%, they actually sank. But we still see a steady-as-she-goes approach to economic policy in the White House and in the primary campaigns, for the most part, too.
When Franklin Roosevelt first conjured a “new deal” for American workers, he was still a candidate. It was June 1932, Roosevelt was accepting the nomination of the Democratic Party. The state of the union was dire. Just as we’re shifting to digital, gig-based, flexible work, Roosevelt was witnessing the collapse of the agricultural economy and its replacement by organized industrial work.
Roosevelt had a story to tell about the Depression. “Enormous corporate surpluses… the most stupendous in history” had failed to pay out to small actors in the American economy: not in higher wages, lower prices, or in dividends. Those profits didn’t go into innovation, either, but into speculation and idle investments. A massive financial bubble had built up — then burst.
The speech was long on specifics — massive public-works projects, the reduction of tariffs, debt relief — in service of “a more equitable opportunity to share in the distribution of national wealth.” (Some of Roosevelt’s fellow travelers in the Democratic Party went so far as to propose a second bill of rights around economic freedoms, including the right to honest work and to a fair wage. That never took hold.)
At the end, Roosevelt comes to his “true goal,” the spiritual underpinnings of the New Deal. It’s worth quoting at length:
What do the people of America want more than anything else? To my mind, they want two things: work, with all the moral and spiritual values that go with it; and with work, a reasonable measure of security — security for themselves and for their wives and children. Work and security — these are more than words. They are more than facts. They are the spiritual values, the true goal toward which our efforts of reconstruction should lead.
Our Republican leaders tell us economic laws — sacred, inviolable, unchangeable — cause panics which no one could prevent. But while they prate of economic laws, men and women are starving. We must lay hold of the fact that economic laws are not made by nature. They are made by human beings.
With two shows on the triumph and troubles of working people behind us, we wanted to think F.D.R. big, and to name a solution (or three) that might represent a new new deal, a platform in search of a candidate for working people.
The workers’ cooperative
Our leadoff guest was the alternative economist, historian and activist Gar Alperovitz. The story of the New Deal was the consummation of experiments tested the state level, and Alperovitz says that’s happening again. So the top-down changes happen last he reminds us — for now we have ferment at the local level in the form of cooperatives.
Look down a list of EU member nations’ public benefits, and you see — again and again — a recurring per-child benefit, varying in size from 30 dollars in Britain to more than 230 dollars in Germany. Canada, too, has what is called a “child benefit.” Our guest Matt Bruenig, policy expert and pundit at the Demos think tank, has writtenrepeatedly that an American version of the allowance — say, $300 per month, per child — could cut this country’s startlingly high rate of child poverty in half, and force a 15% reduction in adult poverty, too.
Bruenig is impatient with the knee-jerk criticism of the child allowance that it will incentivize having children. Anyway, we may need a few more kids!
Children cost about a thousand dollars a month; the benefit’s only 300 dollars a month. Doesn’t take a genius to know that’s a money-losing proposition. Beyond that we do have some studies from elsewhere in the world that tend to show that these benefits, maybe, increase fertility by 3 to 7 percent. That’s really not problematic, and if anything, given the age structure of our population and the declining fertility rates that we’ve had recently, a little bump in fertility could actually be a positive thing.
The basic income
The basic income’s substantially more ambitious: cash for every citizen just for breathing. But that hasn’t stopped Switzerland from considering just this kind of annual, universal grant. (And Alaska has distributed an annual check to all Alaskans since the 1970s — and even Sarah Palin loves it.)
After the recession, basic income seems to be gaining traction on the left and on the right, after a long period of discredit. In 1969 “minimum income” was a pet policy of the Nixon administration, supported by Sen. Daniel Patrick Moynihan in his poverty-fighting mode and by the conservative economist Milton Friedman (see above). Back then the minimum income passed the House of Representatives, then died as senators quibbled over how much it would pay out and whether it’d stop workers from working.
Dylan Matthews, a policy wonk and senior editor at Vox, asks us to take a second look. He concedes it would cost “real money” — hundreds of billions, even a trillion dollars — but it could conquer poverty, strengthen low-wage workers by providing a fallback alternative to bad jobs, and finally provide something like real freedom to every citizen of a wealth country.
Pavlina Tcherneva: A Job Guarantee
Finally, there’s the Job Guarantee, a fundamental change in the American attitude towards work. Right now, the jobless depend on the thin and patchy safety net of unemployment insurance. Our guest, the economist Pavlina Tcherneva, proposes turning unemployment offices into employment offices, so that when you fall out of the workforce, you fall into a socially useful job: rebuilding infrastructure, urban agriculture in a food desert, and caring for kids or the elderly. It’s a Works Progress Administration for the digital age, taking its cues from social entrepreneurs and community leaders about the projects they need most.
Tcherneva’s insight is that high unemployment and social neglect tend to combine in poor neighborhoods across this country. Meaning that “we have a coordination problem” — it’s proof that our unemployment regime, as it is, isn’t working.
Alissa Quart: More Civic Poetry
Alissa Quart wears two hats in these discussions: first, as a poverty reporter and the editor of the Economic Hardship Reporting Project (also home to Barbara Ehrenreich and Astra Taylor), and as a poet. Quart tells us that as a child of bohemian Greenwich Village, she has a heightened awareness of how the last four decades of high capitalism have changed life on the street. And she argues for more “civic poetry,” poetry about “the hard stuff of life: money, crime, gender, corporate excess, racial injustice.” Quart points to Claudia Rankine and Juliana Spahr, to Robin Clarke’s Lines The Quarry, a poem composed from workers’ comp data. An excerpt:
Here’s Quart’s argument, and a sample of her own poetry:
Sinking It All Into
They were afraid.
their favorite term.
If we were arriviste
we’d have arrived all ready.
They say, “Take comfort.”
Money cancels criticism.
If she were a he she’d be
indignant by now.
Her role, at this time:
an internal continuous
With one additional purchase,
you would have purchase.
With ability to purchase
you would be talking by now.
“Their Daily Bread”
Finally we return to the resonance of work. As Pope Francis departs, leaving a message of solidarity behind. As he spoke before a joint session of Congress, the pope addressed himself to our subjects in this series on work,
the many thousands of men and women who strive each day to do an honest day’s work, to bring home their daily bread, to save money and – one step at a time – to build a better life for their families. These are men and women who are not concerned simply with paying their taxes, but in their own quiet way sustain the life of society.
Thetheologian Harvey Cox was in our studio to address the figure of Francis, in hopes that his next encyclical comes on the subject of human labor and human love:
Working is part of being human. The person should be at the center of the economy, he says that all the time. Working is central to who we think we are, our worth as human beings, our making a contribution to the society. It’s just heartbreaking to the pope, and to many of us, that there are millions and millions of people all around who are yearning to work — and they don’t have jobs. As one of your guests already mentioned, 30 percent in Spain, 40% in Italy, 25% of black people living in America. They want to work not just to earn a salary… but because that’s the way you are a part of the human enterprise.
This concludes a three-part series on work in America today: from labor history to precarious work. Thanks for listening and reading along. If you like the series, please come and subscribe on iTunes or Stitcher, and send any questions, comments, or suggestions to our Open Source inbox.
The question we didn’t quite nail in this conversation was: how did the Lincoln Republicans blow the victory they’d won on the battlefield? Weren’t they bluffed, waited and in simple truth terrorized out of the ...
The question we didn’t quite nail in this conversation was: how did the Lincoln Republicans blow the victory they’d won on the battlefield? Weren’t they bluffed, waited and in simple truth terrorized out of the real emancipation they’d fought for? In Congress and the White House the Republicans held all the cards at the war’s close, yet their project of radical reconstruction failed utterly, and the mission of building an interracial democracy went aglimmering. Chris Devers, listening in, points to a starker verdict from Doug Muder on-line: that the Confederacy continued the war through 1877 to victory in unrefereed overtime.
What the Lincoln Republicans did win — despite opposition from President Andrew Johnson — was the near-radical Constitutional amendments, a sort of life-support system for the dream. The 13th Amendment abolished slavery, the 14th promised birthright citizenship and “equal protection of the laws,” and the 15th prohibited discrimination at the ballot box. Eric Foner said emphatically in our conversation that the 14th amendment (main platform of the Civil Rights movement of the 1950s and 60s) wouldn’t have a chance of passage in Congress today. The 15th amendment is being tested even now.
Heather Cox Richardson scored it provocatively: that the war victory and the lost reconstruction gave us the left-right divide that Americans have shouted across ever since:
The question of ‘for whom should the American government work’ is the fundamental question that we have grappled with since the very first day of Reconstruction…Should it be helping the “makers” by creating extraordinarily low taxes? Or should the federal government be helping as many people as possible to be able to rise into middle class, into a competency, into a place where they can feed their kids and move their own way up through society? …It’s a tension that speaks directly to what Lincoln was up to when he helped to form the Republican party, what the early Republicans were at work at in Reconstruction… when the weight shifts from a government that should work for everybody, giving everybody a say — African Americans, women, immigrants — to a government that reflects the needs and wants of a very few wealthy people.
Both our guests Eric Foner and Heather Cox Richardson want to shout it from the rooftops: the little-known history of Reconstruction is where the story of the Civil War gets really interesting. It’s the period when, as Drew Faust has said, Americans became modern. The federal government came into its own, bringing with it new institutions: absentee ballots, common currency, an income tax, new rails, and global trade. W.E.B. DuBois called Reconstruction black America’s “brief moment in the sun.” Two of history’s nine black U.S. Senators represented Mississippi briefly during the 1870s. Black empowerment during Reconstruction was incomplete and, ultimately, doomed by Klan violence and a national loss of nerve. But it birthed the ideas of inclusion, citizenship, and democracy that we’ve struggled to realize ever since.
Casey Stengel raised the question about baseball’s miserable Mets long ago: anybody here know how to play this game? It’s the question more and more of us ask about economists and some of them ask about one another.
The Dow is down 4 percent since the start of the month — the Nasdaq’s down 9% — and the financial wizards at the Times’s Upshot blog have concluded that slow growth may be the new normal. Investors everywhere are betting that financial regulators and policymakers have fired their last bullet — and have nothing left to do.
Casey Stengel raised the question about baseball’s miserable Mets long ago: anybody here know how to play this game? It’s the question more and more of us ask about economists and some of them ask about one another: how could the late great Milton Friedman have seen storm-proof clear sailing ahead, when in fact a housing bubble was about to burst all over us? How was it none of the masterminds in power saw the bank-and-insurance collapse coming in 2008? How are they still in power, in spite of that? No repentance, nothing like radical repairs for an economic regime that’s still running fevers, can’t put young college grads to work, isn’t investing in our own fundamentals. The New York Times writes at the end of a panicky week on Wall Street, “The party is over.”
We’re beginning a series on capitalism in the register of concern: if the ideas are bad all the way down, how can the economy be made good again? Are we finally facing the fact of global slowdown? And where do we go from here?
This week, we've asked lots of people two questions: What's the matter with college, and is it still worth it to go? The trends in American higher ed toward higher tuition, more debt, and away from public funding of higher ed. But what's life without a degree in the new economy? We've tried to reduce the story to the tale of the tape. What do the numbers tell us about the state of higher learning?
By Max Larkin
This week, we’ve asked lots of people whether it’s still worth it to go to college. Parents and students at the college fair said of course, while one college admissions counselor said maybe not. (He wasn’t willing to say it on the air.)
The trends in American higher ed go toward higher tuition, more debt, and away from state support. Still, what’s life without a degree in the new economy? What do the numbers tell us about the state of higher learning?
1. “College” means something different from what it meant a generation ago. More than 70% of the 21 million students are seeking degrees at public colleges and universities. Almost half of them attend two-year institutions like community colleges.
More people than ever are being educated past high school — but that education doesn’t look the way it did 50 years ago. (Source: The Almanac of Higher Education, 2013).
2. States began to cut public college and university budgets in 2008, and the cuts are deep. On average, states have cut $2,394 from funding per student at their institutions of higher education since 2008. That’s a drop of 26.7% over six years. During the same time period, tuition has risen on average $1,282 — an increase of 20%. So public colleges and universities are passing tighter budgets onto students and their families.
Consider the story of University of Massachusetts at Amherst, in two charts. The first shows the rate of annual state appropriations and the annual average price of tuition for all public higher education in-state.
As appropriations per student drop, UMass has filled the gap in funding by raising fees. Back in 1987, tuition payments represented just 2.3% of UMass’s annual revenue in 1987. Now that number has risen to 29%. Until a turnaround last year, a report from the State Higher Education Executive Officers observed the same trend in every state except North Dakota.
3. Student debt has surged. The total amount of student debt, having tripled between 2004 and 2012, is one of the economy’s unthinkably large numbers: $1.2 trillion. $1 trillion of that is federal government debt issued through Sallie Mae, meaning that the government profits from the interest and taxpayers are exposed to the default risk. The problem is especially pronounced in the for-profit private colleges, where almost all graduates borrow, and almost a quarter of them default on their loans within 3 years. (Source: College Board and Suzanne Mettler in The New York Times).
4. Still, college makes a difference. Despite the economic risks, the reward — the often-cited statistic that a bachelor’s degree is worth a million dollars over the course of a lifetime — has proven irresistible. The Pew Research Center found that the cost of not attending college is indeed rising. No degree means much higher rates of unemployment and poverty and lower lifetime salaries.
Is the good life possible without higher education? What do you see in the numbers? Leave a comment and be sure to listen tonight, May 8, at 9 ET on WBUR.
In the annals of Boston medicine two historic chapters in the last 50 years were the near conquest of sudden death by heart attack and (not unrelated) the rise of corporate, cathedral hospitals around the practice of heroic scientific medicine with a big arsenal of new drugs, surgical measures, bypasses, catheters and stents. Perhaps the core question is: where’s the better medicine that would make all of us all healthier, even without miracle surgery?
In the annals of Boston medicine two historic chapters in the last 50 years were the near conquest of sudden death by heart attack and (not unrelated) the rise of corporate, cathedral hospitals around the practice of heroic scientific medicine with a big arsenal of new drugs, surgical measures, bypasses, catheters and stents.
All this is the stuff of our guest Dr. Tom Lee’s biography of a giant cardiologist and an expanding industry in Boston. His book is Eugene Braunwald and the Rise of Modern Medicine, a complex and fascinating tale. Don Berwick – a doctor who’s running for governor — is covering the downsides all around this story: overtreatment for some, undertreatment for many, intrusions of finance and breakdowns in the humanity of doctoring, and of course gigantic expense.
We’re talking this hour about Boston’s bluest of blue-chip industries, medicine, in a prosperous maybe triumphant time that may also be the moment for rethinking and reform. Dr. Braunwald and Nobel Prize winner Bernard Lown make cameo appearances — drawn from longer podcast visits with each of them. Perhaps the core question is: where’s the better medicine that would make all of us all healthier, even without miracle surgery?
Elizabeth Warren's race for the Senate in Massachusetts looks like what Harold Macmillan had in mind with the famous quip — when asked what actually changes the direction of things: "Events, dear boy, events!"
Elizabeth Warren‘s race for the Senate in Massachusetts looks like what Harold Macmillan had in mind with the famous quip — when asked what actually changes the direction of things: “Events, dear boy, events!” If the lady law professor from Oklahoma and Harvard in her first run for office can re-take the lost “Kennedy” seat, it could mark a moment and place when the second Gilded Age was called to account by a one-issue candidate. If, on the other hand, the upset winner in 2010 of Ted Kennedy’s unfinished term, Republican Scott Brown, can win as a photographer’s model of suburban contentment, on likeability and slogans like “He’s for us,” the event will mark something else — unflappable composure, perhaps, or psychic numbing.
Elizabeth Warren has been the cutting edge of the Democratic Party on the “money issues” since Barack Obama took office, often resisting and goading him. She’s still hot as a pistol on YouTube — berating Timothy Geithner back in 2009 for pampering Goldman Sachs in the AIG bailout, explaining to Michael Moore why you can’t buy exploding toasters in the USA but exploding mortgages are okay. Her campaign is a lot cooler than that and can sound blandly repetitive on the theme of rebuilding the middle class. But the drift of her books, teaching and regulatory career is clear: public investment empowered American life, while abusive private power, specially since the 1970s, has bankrupted the American dream. She could hardly have imagined the drum-beat of summer scandals — the Barclay’s bust, LIBOR rate gaming, JPMorgan-Chase’s disappearing billions, the torrent of unattributed campaign money — that might be taken to reinforce her point.
We’re in conversation at the JFK Library overlooking Boston Harbor. Senator Brown declined the Library’s invitation to this session, but everybody’s left doors open to another. The notion was somewhere between campaign stop and an open seminar — maybe a park-bench conversation before 600 people on the state we’re in — and how the researcher of works like The Two-Income Trap: Why Middle-Class Parents are Going Broke sees it differently now on the main streets of Massachusetts. On the day we met she was celebrating the second birthday of the Consumer Finance Protection Bureau which she designed for the Obama administration — and where many friends, including Ralph Nader, expected the President to put here in charge. Instead the White House encouraged her to try out her ideas (and some of theirs) on the hustings.
Part of what makes the strange disorienting nature of our time is that the old institutions have been discredited but remain in power. The people who run them remain in power. There’s been the discrediting ...
Part of what makes the strange disorienting nature of our time is that the old institutions have been discredited but remain in power. The people who run them remain in power. There’s been the discrediting without the conceptual change, without the actual reforms on the ground, which is a bizarre interregnum to live through.
Chris Hayes with Chris Lydon at Rockefeller Center, July 9, 2012
Chris Hayes has done a 180 on Groucho Marx, who said he wouldn’t join a club that would have him as a member. Chris Hayes has rushed the media elite that he knows is sinking. He won’t save it alone, of course, but he’s a temptation or maybe a model for wary 30-somethings like himself, for people who’ve stopped listening to anyone in authority. A great deal of his book Twilight of the Elites and of our conversation is fixed on his own mixed emotions about being the “it” boy in a dubious game and a bad time — in the “fail decade,” as he calls the opening era of his adulthood. He seems to be writing and living out a warning to himself.
The cover story is that talk TV has a rising star in Chris Hayes, cast as Rachel Maddow’s kid brother, as learned and lively as she is. In a pretty sclerotic media scene full of people who got suckerered into selling the Iraq War, he’s the bright-eyed millenial kid from Brown (2001, philosophy major) and The Nation magazine who’s inspected the emperor’s new clothes and keeps talking about them. He harps on inequality as the story in 2012, plus unimaginable debt and an awful losing streak on the American scorecard. He says it all without wailing or gnashing his teeth and everybody thinks he’s a nice, cool guy. The multitudinous fans of “Up with Chris Hayes” on MSNBC are encouraged to call themselves “Uppers.”
The back story in Twilight is his judgment that the “meritocracy” that selects high-testing hard-working overachievers like him (like me in another generation) has been a big part of undoing the American Dream in the last 30 years or so. His “iron law of meritocracy” is that it becomes a smug elite that pulls up the ladder behind it, is socially isolated, prone to failure and inevitably corrupt. Not to mention that it becomes “a pathological way to live.”
This is increasingly a social set-up that’s fated to produce crisis, catastrophe, dysfunction, poor decision-making — and a lot of unhappy people. This is a model of ceaseless competition and what I call “fractal inequality,” in which there’s no top. The ladder always ascends ever upward, as if you’re in some M. C. Escher drawing that you climb rung by rung, only to see a new one come into view… It’s the way finance works, and finance dominates the American elite.
There’s a model of scarcity that’s fundamental to the conception of society as a meritocracy, which is this funnel that everything goes through. The idea is that not everybody can get into it: whether it’s schooling, jobs at the top firms, clerkships with the best judges… The model of scarcity produces anxiety and competition; and the whole way we think about where everything is headed is this model that there’s some small set of happy lives and fulfilling jobs. Whereas the social model should be: everybody’s who’s willing to work can have a fulfilling job and a happy life… That was the model of the auto workers’ treaty with Detroit. The vision was deeper than good wages. It was about who deserved a good life — and the idea that working people deserved a good life. We just don’t have that anymore. The meritocratic model is that you deserve a good life if you meet these elite criteria, if you find your way through all these funnels.
Chris Hayes with Chris Lydon at Rockefeller Center, July 9, 2012
Might Jon Stewart have smacked this guy — at least rolled his eyes — for all the hi-falutin’ stuff about the “dominant meritocratic ethos”? I wondered as I left his office: is Chris Hayes a little hung-up on himself and the vertigo of his own success? A little too smart about the cult of smartness at the top of the heap? Is he speaking truth to power, or talking his way through it? And: is it still okay to like this kid a lot for his “kind of naive earnestness”? For naming the four corners of his drive as “frustration, betrayal, disorientation and curiosity”? For his readiness to say, yes, what a “bizarre interregnum” it is we’re living through? Comments please.
Dan Ariely of Predictably Irrational fame, makes the arresting point that from the standpoint of fairness and equity in the distribution of wealth and power, the vast majority of Americans (90-plus percent) would prefer to ...
Dan Ariely of Predictably Irrational fame, makes the arresting point that from the standpoint of fairness and equity in the distribution of wealth and power, the vast majority of Americans (90-plus percent) would prefer to be living in Sweden. Which is to say: Mitt Romney’s scariest nightmare, “a European-style welfare state,” may be just the briar patch that most of us Bre’r Rabbits long for.
Dan Ariely is the Israeli-American psychologist, now at Duke, who has made a big name and career in the Dan Kahneman school of “behavioral economics.” The special Ariely gift is for surveys and social experiments that probe the gap between what we want and what we choose when we buy a house, pick a mate or vote for president. I’m bringing to the conversation my own probe for symptoms and causes behind Tony Judt‘s dying diagnosis, in Ill Fares the Land, that “something is profoundly wrong with the way we live today… We cannot go on living like this.”
Main roots of Judt’s and our own unease seem to pop right out of Dan Ariely’s experimental surveys — typically clever in their simplicity. First, when he asks his thousands of respondents to estimate the real division of wealth in the US, and then to propose an ideal distribution, we Americans confirm our sentimental attachment to a polite tilt of privilege. We cherish our mythic legacy of quasi-egalitarian social democracy, with no extreme concentrations of wealth or poverty. But what our answers really confirm is our delusion about the economy we live in now. The top 20 percent of the people in fact own 84 percent of the goods, and the bottom 40 percent of us, barely floating on a sea of debt, own less than half of one percent of the wealth of the nation. We live across roughly double the rich-poor gap measured in Germany, Japan and Denmark. By the standard “Gini coefficient” of wealth inequality, the US ranks with Turkestan and Tunisia, just a tad more equal than Chad and Sri Lanka.
The second key question in Ariely’s survey is even simpler; the answer is a slam dunk. Respondents were shown two pie charts — one with the actual American shares of wealth, in which 60 percent of the population nearly disappears with less than 5 percent ownership altogether; in the alternative, modeled on Sweden, the top 20 percent owns 36 percent of the wealth (almost double its claim by sheer numbers) and the bottom 20 percent owns 11 percent (about half its numerical share). In Dan Ariely’s study (with Michael Norton of the Harvard Business School), 92 percent of us Americans want to live Swedish-style instead. Women (93 percent in favor of the Swedish model) are a ever so slightly more egalitarian than men (90 percent for Sweden). But the results come out very nearly the same — Republicans and Democrats, richer and poorer, NPR listeners and readers of Forbes Magazine.
What we hear eternally in political chatter is Joe the Plumber’s dread of “spread the wealth” government, and Newt Gingrich’s alarm about “European Socialism.” And now the screech from Mitt Romney’s ex-Bain partner Edward Conard in the Times Magazine that we need bigger payoffs and “twice as many people” in the high-end investor class — in short, that we need a lot more inequality. But Dan Ariely’s evidence is that in the most steeply skewed social order in the industrialized world, we’re miserable about being skewered on the contradictions in a proud democracy that’s eroding fast at the foundations.
Dan Ariely brings, yes, the social-democratic biases of the Israeli left. He is imprinted unmistakably — body and soul — with the scars of severe burns he suffered as a teenager in a freak explosion: his face and most of his skin were remade over three excruciating years in hospital, all of the immeasurable expense covered by Israel’s socialized healthcare. Without it, as he told me, his family would have been bankrupted, his care might well have been curtailed.
The hope in Dan Ariely’s forecast for American politics and culture is for people who can hold out a while. How much do we need to change? I asked him:
A lot. I’m not a Biblical scholar, but after Moses came down from the mountain and saw the people of Israel celebrating the Golden Calf, God basically punished them by getting them to walk in the desert for 40 years, so that a generation would die. It might take a generation. That might be a reasonable time scale. The current generation that is running things might not be the right one. It might be that the generation that went to college during the financial crisis is the right generation — even if a lot of them are out of work. They’re thinking about what to do. They don’t have the Princeton-to-Wall Street path. They’re thinking of other things they might do with their lives, and because they don’t necessarily have jobs they are open to following their passions. My understanding is that volunteering is up. People are trying all kinds of things. There’s an increasing interest in graduate degrees — education is always counter-cyclical to the economy. This is a generation that saw the breakage of some ideologies of perfect capitalism, ready to revise their thinking. And they might be the right people to envision a new approach. The protests are a good signal. They’re a step in the right direction.
Daron Acemoglu pops up in his office at MIT with the big bold energy of the book that’s made him famous. Like Why Nations Fail, Professor Acemoglu is large-size and learned, young in spirit, digressive, reader-friendly and not at all shy about the after-argument around the epic account of economic inequality he wrote with political scientist James Robinson at Harvard.
The book is a theory of “development” wound through 500 years of mostly predatory colonial history. The argument can be made simple enough: that the mal-distribution of money and happiness in our polarized world is rooted not, for example, in the geography of foodstuffs (the Jared Diamond account in Guns, Germs and Steel), and not in the burdens of climate, bad soil and disease (a main line in Jeffrey Sachs’ The End of Poverty). No, no no… Acemoglu and Robinson affirm what feels intuitive anyway. The big difference in the world is between political arrangements designed and built to serve the many — or the few. It’s between state structures (usually resembling their dominant industries) that are purposefully maintained as “inclusive,” in the interest of pluralism, innovation and the common good; or “extractive,” for the benefit of an economic and power elite.
It’s the after-argument around Why Nations Fail that becomes the core of our conversation. I’m asking: isn’t a main warning in Why Nations Fail directed at the United States? Aren’t the scariest symptoms of “extractive” politics on our home turf, where the financial elite is throwing billions this year at both parties to block economic reform and taxes on itself? And shouldn’t we see a striking fit here with historian Tony Judt’s last judgment in Ill Fares the Land that an American “way of life” is on a cliff edge, desperately in need of a new public conversation?
On the broad questions Daron Acemoglu is both gravely worried and tentatively optimistic. What “really worries” him about the United States is that we’ve “already started the slide toward extractive institutions.” It’s not just the wealth inequality “that has soared over the last three or four decades.” It’s the eclipse of the myth and often the reality that Average Joes rule our politics. “That you cannot say today. Today the political system, I believe, is largely just listening to the very rich. The SuperPacs are the icing on the cake. It’s lobbying and campaign contributions — just the fact that whenever politicians want to get advice they turn to the very wealthy.” Citizens United and SuperPacs made a bad situation worse. “That’s where the slide becomes very serious,” he said.
And still, Acemoglu is optimistic because “we’ve been here before.” At the end of the 19th Century and the Gilded Age, when economic inequality was even higher than today, American politics was open enough to let Populist and Progressive movements take root in both parties, to enlist Teddy Roosevelt in the war against monopolists and “malefactors of great wealth,” to sustain a long reform era that delivered antitrust laws, direct election of Senators and voting rights for women. “That sort of thing was possible 100 years ago. The question is: is it possible today?”
The sharpest rejoinder is from Acemoglu’s close friend and MIT colleague Simon Johnson of Thirteen Bankers fame, the onetime IMF economist who described our problem as “state capture” by the financial industry, meaning we’re a banana republic owned by big money. “The Acemoglu-Robinson book is ultimately upbeat about the United States. We have built strong economic and political institutions, and these will prevail. I’m not so sanguine,” Johnson wrote in the New York Times recently. “I’m surveying the political landscape closely for anyone who can play the role of Teddy Roosevelt, using legal tools to break monopoly “trusts” and shifting the mainstream consensus decisively toward imposing constraints on the abuse of power by powerful individuals. So far, I see no one truly in the Roosevelt tradition with a realistic chance of election, while the rich become more powerful and the powerful become even richer.”
Professor Acemoglu concurred heartily with the Johnson diagnosis, then tossed the question back at us — that is, at all of us. “Is the system open enough to finally rally around somebody to stop the slide?”