By the Way • March 26, 2015

Michael Lewis’s Age of Money

Michael Lewis is the great tale-spinner in the Second Gilded Age in America. He’s part muckraker, but part Mark Twain, too, for finding classic characters as good as the King and the Duke in Huckleberry ...

Michael Lewis is the great tale-spinner in the Second Gilded Age in America. He’s part muckraker, but part Mark Twain, too, for finding classic characters as good as the King and the Duke in Huckleberry Finn on Wall Street today: the good, the bad, the geeky, the banks and traders making billions mostly in the dark.

Like a great novelist, Lewis writes the moral ecology of the story.  Five years ago in The Big Short, after the meltdown of the subprime mortgage racket, the center of the story was a thick air of anger and doom – because near-autistic social misfits saw the problem, when the go-along greedy guys didn’t.  Only the mentally strange acted,  and they weren’t called heroes for being right.

Now Lewis has taken on another disease in the money system: Trading is a war of robots, a black box that almost none of the players get to see inside – too fast, too algorithmic, too fragmented, too automated, too layered for human understanding. He says the market at the heart of capitalism is still rigged and that it’s become a means of systematizing unfairness.

Meanwhile the eccentrics and iconoclasts are still not rewarded for their clear sight:

It’s a problem that people who speak truth to power get quickly classified as oddball rather than important. Maybe it’s always been that way. It’s a big problem in culture of elites, in the structure of institutions. On Wal Stret, elites have lack of sense of responsibility — or their responsibility is not to the larger society. They have responsibility to shareholders, to the bottom-line, to short-term results, etc. But there isn’t a sense of noblesse oblige. That got drained out of us, I think. They don’t have any sense that they’re lucky to be there. They think they deserved whatever they got.

May 1, 2014

The French Sensation

Capital is a giant, data-packed tome on income inequality covering three hundred years of history by the French economist Thomas Piketty. Is there a reason he’s getting the rock star treatment? Is it the symptoms that resonate so — our drift into oligarchy — or the cure — a progressive tax on wealth?
A Piketty Primer: "Capital" in 10 Graphs


Guest List


The hottest book everybody is talking about, that no one has read and no can get their hands on, is a giant, data-packed tome on income inequality covering three hundred years of history by the French economist Thomas Piketty. Is there a reason he’s getting the rock star treatment? Is it the symptoms that resonate (our drift into oligarchy), or is it the cure (a progressive tax on wealth)?


[soliloquy id="21608"]

A rock star?

For a French economist, sure: Capital in the 21st Century is expected to sell 200,000 copies in the first month. Both The New Yorker and New York have covered the book’s success and Piketty’s whirlwind tour of the States, which is surprising everyone. It’s being praised as a ‘watershed’ entry in economic thought by Paul Krugman, blogger Tyler Cowen, and Sen. Elizabeth Warren, whose own book, A Fighting Chance, was for a while runner-up to Piketty on Amazon’s bestseller list.

When asked about the book’s appeal, Warren told a crowd in Cambridge: “He’s got good historical data, and boy, what it shows is trickle down doesn’t work. Never did, doesn’t work… I just saved you 1,100 pages of reading.” The book shows more and less than that, but Warren should understand the book’s appeal. Piketty’s earlier research into income distribution helped provide the Occupy Wall Street protests with its rhetoric of 99% vs. 1%. He’s long been setting the conversation on the structure and the consequences of inequality; now he has announced himself. (Maybe if half the people who bought the book read it, there could be “Piketty clubs” the way there were once “Bellamy clubs”. Or maybe Capital could be the next Brief History of Time — millions of unread copies worldwide.)

A new Tocqueville?

Maybe. It seems strange that, months after our president abandoned the rhetoric of inequality, that Piketty, who left MIT years ago, has such a great resonance. In fact much of his book is about Britain and France, which have the deepest stores of tax data going back to the 18th century. But he does make insights, in the style of Tocqueville, into economic life today — for example, “wealth is so concentrated that a large segment of society is virtually unaware of its existence, so that some people imagine that it belongs to surreal or mysterious entities.” These aren’t necessarily unfamiliar truths, but they mean more coming from non-pundits. Arthur Goldhammer, Harvard professor and translator to both Tocqueville and Piketty, draws the comparison in The Daily Beast:

Because Tocqueville was such an assiduous researcher, who returned from his travels in the U.S. with trunkloads of documents filled with statistical data of all kinds, I have no doubt he would have found the data compiled by Thomas Piketty fascinating… He was not wedded to his preconceptions about American society; he came here with his eyes open and modified his opinions as he gathered information and talked with experts who knew more than he did about how the American political system and economy worked.


a Marxist?

Not really, though he’s been accused of that and worse. In the Wall Street Journal, Daniel Schuchman reads Piketty as a “bizarre ideological screed” in support of authoritarian, Communist government. Schuchman has supporters among the Amazon reviewers and in the New York Post. But  readers of the book will note that Piketty criticizes Marx for his “anecdotal” approach to economic data and disagrees with features of his picture of capitalism from the very beginning. In an uncharacteristically political interview with the Guardian, Piketty still hesitated to argue for outright socialism.  Piketty’s readers, and especially his non-readers on the American right, are conflating Marxist economics with critical thinking about the current capitalist economy, and that’s too bad.

But, as Matthew Yglesias writes a long, helpful ‘explainer’ at VoxCapital isn’t mainstream American economics, either. It bears its Marx-ish title for a reason: Piketty is worried about capitalism. From the book’s introduction, the book’s central claim is made in relation to Marx’s economic theory:

Modern economic growth and the diffusion of knowledge have made it possible to avoid the Marxist apocalypse but have not modified the deep structures of capital and inequality— or in any case not as much as one might have imagined in the optimistic decades following World War II.


a prophet of doom?

 Not according to Piketty himself, who sees himself as (almost) an optimist, according to an interview with Tim Fernholtz at Quartz. Three-quarters of the way into the book, Piketty launches into his solution to the problem of inequality: a progressive tax, coordinated globally, on wealth. He believes that a pro-tax, populist movement like the one that emerged in America in the early twentieth century could materialize and change the political realities. If not, there are problems, however: in the Guardian interview, Piketty argues that the other two roads out of the crisis are Russian-style oligarchy, which he considers “barbaric”, and inflation — a tax on the poor.


a savior?

As much as economists left and right have praised the book, there is far broader disagreement about Piketty’s proposed taxes. Tyler Cowen, economist behind Marginal Revolution, concluded in Foreign Affairs that “large wealth taxes do not mesh well with the norms and practices required by a successful and prosperous capitalist democracy. It is hard to find well-functioning societies based on anything other than strong legal, political, and institutional respect and support for their most successful citizens.”

And Paul Krugman, an ardent believer in Piketty and his book, still argued in the New York Review of Books that the prospects of such a tax aren’t good, when the Republican Party, on their way to more political success, “already emphasizes and celebrates capital rather than labor” even though we’re decades behind Europe’s regression into the patrimonial capitalism like that of Balzac and Austen.

Pick your Piketty, and tell us why in a voicemail or comment!

Podcast • April 29, 2014

A Piketty Primer: “Capital” in 10 Graphs

In the Piketty surge to the top of the best-seller list, there's a misleading polemic evolving (and not from people who have read the book, it turns out): it's been attacked on the right as a new call for communism and heralded on the left as proof that capitalism simply doesn't work. Here's my take on Piketty's arguments, in 10 figures from the book.

By Kunal Jasty

In the Piketty surge to the top of the best-seller list, there’s a misleading polemic evolving (and not from people who have read the book, it turns out):  it’s been attacked on the right as a new call for communism and heralded on the left as proof that capitalism simply doesn’t work. Here’s my take on Piketty’s arguments, in 10 figures from the book. 

1. A person’s income in the United States is comprised of labor income and capital income. Let’s look at labor income first. The top 10% of American earners currently receive 35% of all wages (labor income), while the top 1% receive 12%. Europe, and especially the Scandinavian countries, has far lower levels of labor income inequality.


 2. But both Europe and the United States have high levels of capital inequality, with the top 10% owning 60% of all capital in Europe and 70% of all capital in the United States. We’re not yet at European turn of the century levels, though, when the top 10% owned 90% of all capital, but we’re certainly heading in that direction.


3. When we combine labor income and income from capital, we get total income. 50% of total income goes to the top 10% in the United States, while 20% goes to the top 1%. In 2030, Piketty predicts that 60% of all income will go to the top 10% of Americans.


4.  In the United States, the top 1% are doing well because of extraordinarily high wages, which leads to rapid capital accumulation. Piketty calls these high-earners “supermanagers,” the financial and non-financial executives who set their own salaries.

Screen Shot 2014-04-29 at 10.46.24 AM

5. Taxes, combined with huge capital losses in WWI and WWII, resulted in a rate of return to capital (r) lower than the global growth of GDP (g) during the last century. Because r < g, income inequality decreased during the postwar period and stayed flat until 1980.

Screen Shot 2014-04-29 at 10.51.31 AM

6. But global economic growth is largely an effect of population growth, which can’t continue at current rates. If today’s growth rate continued at 1.1% per year, the world’s population would be over 26 billion by the year 2100.

Graph 5

7. And top marginal tax rates are still low, especially in the United States.

Income tax rates

8. With r < g, income inequality dropped dramatically in the United States during the postwar period. Now that r > g,  income inequality is on the rise once again.

Graph 1

9. So is the world capital/income ratio

Screen Shot 2014-04-29 at 10.59.37 AM

10. And who benefits most from capital income (in other terms, who receives the majority of their income from capital income rather than labor income)? Not the top 10% or 5%, but the top .1%!

l vs c2


Podcast • February 10, 2014

John Lanchester on London in the Age of Inequality

Economic inequality is still on our minds after last week’s show with MIT economist Daron Acemoglu and Rolling Stone editor Matt Taibbi. Here’s an interview we recorded with John Lanchester in 2012 after the publication ...

Economic inequality is still on our minds after last week’s show with MIT economist Daron Acemoglu and Rolling Stone editor Matt Taibbi. Here’s an interview we recorded with John Lanchester in 2012 after the publication of his novel Capital.

My sense of this period and of the decade or so ahead is that it’s going to be one with — if we’re not careful, and I see no signs of us being careful — the same theme dominating conversation and politics everywhere. And that will be about inequality. It’s a very striking thing that a society like China, which only had private property 10 minutes ago, had effectively — this is a very broad-brush thing to say, but — had effectively abolished inequality. You know, there was a tiny crust of elite, but in essense for ordinary people China was a complely equal state. That came at a very, very high price. They moved away from that to astonishing economic growth, growth of a sort that the world’s never seen, numerically — that number of people being raised out of poverty so fast, hundreds of millions of them. And in the process they in effect invented inequality. Talk to people in China: inequality is a huge issue for them in this coming decade, the gap between coast and the center, between cities and the country. China has on a huge scale winners and losers in a way it never did before. Same thing in India. Same thing in Latin America — lots of countries that went broke and then recovered, with a new class in charge. That’s usually what happens. Old middle classes largely got wiped out. You have a new class of economic winners. Obviously inequality is a huge issue here in the States. It’s a huge issue in Europe and in the U.K. — summed up by the Occupy movement’s thing about the “one percent.” We’re just noticing this thing — everyone’s noticing it at the same time. And yet the trends that are propelling that gap are continuing. One of the reasons I thought it was an interesting moment to write about London is that there’s a global thing taking place there. And I think the world doing the split is part of that.

John Lanchester with Chris Lydon in Boston, June 20, 2012

John Lanchester has written a sprawling neo-Dickensian novel CAPITAL about London in the age of funny money and the crash of 2008. He got the germ of it five years ago, noticing a parade of “florists, dog-walkers, pilates instructors” on his own once-modest street south of the Thames, being radically made-over for bankers and the blooming investment-services class — “manifestly symptomatic,” as he says, “of a boom that would turn into a bust.” Like Bleak House or Our Mutual Friend, CAPITAL has what the Brits call a “state of the nation” feel, delivered in the voice attributed to Dickens of the “special correspondent for posterity.” But of course he’s illuminating an affliction gone global by now, describing life as lived in New York, too, or Shanghai, or Boston for that matter. One moral that Lanchester has given his tale is: “We are not in this together,” inverting the Tory slogan. In conversation he adds a touch from the Gospel of Mark: “To them that hath shall be given.” I marvel at how casino capitalism and its costs come clearer, stranger, more ridiculous, more destructive, more outrageous in fiction than in fact – how the right novels can feel truer than the news.

John Lanchester is eminent also as a non-fiction economics correspondent, a main contributor over 25 years to the London Review of Books. He’s been steadfast against the fictions of market doctrine, and strong in his underlying judgment: “The financial system in its current condition poses an existential threat to Western democracy far exceeding any terrorist threat,” he wrote in the LRB last April. “We have at the moment this monstrous hybrid, state capitalism… This is a parody of economic order, in which the general public bears all the risks and the financial sector takes all the rewards – an extraordinarily pure form of what used to be called ‘socialism for the rich’. But ‘socialism for the rich’ was supposed to be a joke. The truth is that it is now genuinely the way the global economy is working.”

In conversation, John Lanchester is extending our thread on the late Tony Judt‘s parting shots in Ill Fares the Land:

Judt makes very important points, I think, about the tragic loss of belief in our ability to act collectively for the good. Let’s gang up, get together, figure out the thing we want to change for the better, and then go ahead and make that change. It seems entirely true when he says the younger generation has entirely lost that sense. I’m writing now about the Underground in London for the 150th anniversary of the Underground next year, the first underground trains. The Victorians were obviously very different from us in lots of respects, but one of the crucial things, I’ve come to think, was their morale. When they were building the Underground, they knew it would change the city forever, for generations to come, and they were certain they that that change was for the better. It was risky, and it was expensive, and it was difficult, and it was right on the edge of what was technologically possible, and they were inventing new techniqes to make the Underground as they did it. But they knew it was going to completely remake the city, and that was the whole point. And I was just thinking: what do we see around us that has that equivalent thing: that you know: we’re doing it and in a hundred years’ time they’ll be using it every day. In London, we’re using Victorian sewers, power networks, holes the Victorians dug. They actually made that world that we’re living in. And that confidence where you can make the world of the future — it’s very sad to have mislaid that, and I see no good reason why we feel we have. It’s just somehow that the frame of the debate has shifted, so that it’s all kind of managerial. You can tweak this and tweak that, but you can’t really change anything. And I wonder: who wrote that rule?

In London or the world, I’m wondering, what corresponds to the Underground, as an artistic or architectural monument of this time?

I think it’s in the rash of buildings trying to be iconic. A thing that’s very much of the moment is these buildings that are trying to be free standing, these buildings that are almost their own brand. Lorenzo Piano’s Shard. Or what’s known as the Gherkin, the Erotic Gherkin, a Norman Foster building which does look indeed like half a gherkin, half a penis, 40 stories high. It’s from the idea of Frank Gehry’s Guggenheim-Bilbao, which I think is a wonderful building. But I think it started a trend for the idea that the building is a sort of picture, an icon. It’s not much to with the place; it’s not much to do with anything. It sums itself up and is its own logo, in a way. And we’re seeing an awful lot of those, so I think that’s going to be this moment — the idea of a slightly self-contained, self-reflexive, anti-humanistic building because they look worse when you put people in and around them. They’re better without the humans. And when you interact with them you feel like one of those tiny model figures in an architect’s diagram, and you’re meant to. So there is an anti-humanistic aspect to those guys’ buildings, and I think that’s the kind of thing we’ll look back on and say: oh well, that sums up that period.

Podcast • May 21, 2012

James K. Galbraith: How Our Inequality Happened

  James K. Galbraith — out on the uneven playing field of American wealth and power — is pointing out the 30-year drift of tax policy and political power, all of it made possible by ...


James K. Galbraith — out on the uneven playing field of American wealth and power — is pointing out the 30-year drift of tax policy and political power, all of it made possible by the decontrol of campaign spending and the big-money capture of both major parties. Galbraith is an economic eminence in his own right by now at the University of Texas and on the left wing of the Democratic party, and the author most recently of Inequality and Instability.

Jamie Galbraith is also of course the son of the late Sun God of mid-century liberalism, the witty scourge of “private affluence and public squalor” as of innocent old 1958! Papa John Kenneth Galbraith‘s evergreen warning about The Affluent Society arrived in the post-Sputnik moment of the long postwar expansion not just of the US economy but of public investments in education, science and space. But even then Galbraith Sr. was worried about a widening gap between rich and poor as a risk to American stability — imagine it! — in what we remember as the rock-solid Eisenhower years.

I’m asking Jamie Galbraith to account for the split of the 1 percent and the 99 today. Shorter Galbraith: these things don’t develop by accident.

From the second World War up to the early 1980s we had a fairly balanced economic expansion in the United States. It had a very strong component of wage-led growth. After the 1980s all of that was gone, and we’ve basically expanded only on the strength of our credit markets — the strength of bank lending and the strength of stock market bubbles. And this has been wave after wave, which have now come to grief….

Let’s go back to the 1980s when we sharply reduced tax rates on upper-income people. Even in 1986 a tax reform that had some progressive aspects to it continued this process. What happened then? I think two things happened. One is that there was a very strong tax incentive to put your money in housing because mortgage interest remained deductible and no other form of interest did. So people who wanted to take out loans did so through housing; and people who got windfalls from the tax cuts also invested in mansion building, and there’s been a great deal of that ever since. A second thing is that when you reduce the tax rates on personal incomes, people who controlled corporations and controlled their own compensation as executives had a strong incentive that wasn’t there before to transfer income from the company to themselves; and so you had the executive compensation boom…

In the 1960s when we were young and into the early ’70s we had a strong momentum for building stronger, more egalitarian, more progressive social institutions. In the 1980s the initiative passed to the other side and for the last 25 or 30 years progressives have been very much on the defensive. Not that we have nothing to defend… As soon as this election is over, no matter who wins it, we are going to start hearing of a need for a bi-partisan compromise to cut Social Security benefits. This is as sure as anything I can tell you. And it will be presented as some kind of modest proposal to protect the fiscal solvency and so forth of the Social Security program. It’s utter nonsense. The purpose and effect of the cuts that are coming will be to reduce the living standard of the future elderly by very substantial amounts over time. If we allow this to happen, and in particular if we allow the Democratic Party to concede the necessity oif it happening, we’ll be committing a crime, really, against the future. We’ll be returning tomorrow’s elderly to a state of distress that they have to a very substantial extent been able to avoid…

What has happened is that our political structure is now entirely dependent upon small numbers of people with large amounts of money. That’s true of both parties. And the kinds of “countervailing forces,” to use one of my father’s phrases, are no longer nearly as strong as they were — trade unions and other kinds of civic organizations. That is a consequence of allowing inequality of wealth and power, in this case, to get out of hand. It should be at the top of any civic agenda.

James Galbraith with Chris Lydon in Boston, May 2012

Coming next: Vanessa Williamson‘s close encounter with the Tea Party grass roots. “Think of them as your Aunt Olive at Thanksgiving dinner,” she begins, prompting me to wonder: shouldn’t we see the Occupy mobs as the angry kids, literally, of those furious old tax rebels. Different wardrobes, in short, one breakdown?

Podcast • September 27, 2010

Robert Reich: Soak the rich for their own good

Robert Reich is the point man in economics of the “Democratic wing of the Democratic Party,” as Howard Dean used to say. That is, he’s been the burr under the saddle of the Wall Street ...

Robert Reich is the point man in economics of the “Democratic wing of the Democratic Party,” as Howard Dean used to say. That is, he’s been the burr under the saddle of the Wall Street wing that chased Reich, as Secretary of Labor, out of Bill Clinton’s Cabinet after the first term. Robert Rubin, imported from Goldman Sachs to reshape Clinton’s thinking and de-regulate finance, used to threaten to quit if Secretary Reich kept railing about “corporate welfare.” But it was Reich who left, and Rubin who stayed in the saddle, burr or no — who became Treasury Secretary and sponsored Larry Summers as his successor; the same Rubin who made Summers president of Harvard and then, after the meltdown, put his own and Wall Street’s stamp on the Obama era, too.

Reich’s new tract Aftershock, neatly coincidental with Larry Summer’s retirement from the White House, is a polite populist’s effort to seize a teachable moment in this season of anger. The disease in the economy and the public mood, he’s arguing, is not debt; it’s not even that we’re living beyond our means. It’s the 30-year trend to an obscene concentration of wealth — one percent of the population reaping more than 20 percent of the income — that has so diminished the means, so drained the purchasing power of the average American. Few politicians and policy wonks are as clear as Reich about the remedy to rebalance and build the whole economy: boost all incomes under $50,000 with direct supplements; and restore real taxes on the biggest earners with a marginal rate of, say, 55 percent. Today’s pattern of concentration, speculation, bust and stagnation recapitulates the crisis of the Great Depression, he’s saying. And it calls again for a Great Teacher:

What Obama needs to do is connect the dots. Americans don’t see the big picture. They don’t see the narrative. They don’t hear the story. They don’t understand that we’ve had three decades of flat wages, that almost a quarter of all income is now going to the top one percent. They don’t understand the connections between all of these issues and problems. They don’t see that there is a large tapestry here. A leader needs to weave that tapestry, show how one thing is related to another. We’ve not had a president who did that since Ronald Reagan. The tapestry he wove was the wrong tapestry; it bore no relation to reality. But at least he explained. He showed how “a” relates to “b” relates to “c”. He did connect the dots…

Robert Reich with Chris Lydon in Cambridge, September 24, 2010

Podcast • September 16, 2010

Arianna Huffington: who will change the conversation?

Arianna Huffington is the fair, smart, brassy embodiment of a new conversation trying to happen. At a sold-out book party at the Brattle Theatre in Cambridge, I am interrupting her pitch for Third World America ...

Arianna Huffington is the fair, smart, brassy embodiment of a new conversation trying to happen. At a sold-out book party at the Brattle Theatre in Cambridge, I am interrupting her pitch for Third World America to ask her, as queen of the media transformation: why does our public chatter in a campaign year sound so idiotic? So full of mis- and dis-information, so full of untethered rage?

We got into it by way of Edmund Burke, the 18th Century’s great conservative English Parliamentarian who put the worst malefactors of the British Empire (the Cheneys, Rumsfelds and Bushes of his time) on trial.

CL: You mention Burke… I didn’t realize we were on the same fan-page, but Edmund Burke is to me the missing voice in America today. He believed in empire, but in responsible empire — empire that cared as much for Indian people and Indian prosperity and Indian welfare as it cared for the English…

AH: America is in many ways acting like a declining empire. If you look at Afghanistan for example, only a declining empire with a perverse sense of priorities would be spending hundreds of billions of dollars conducting a war which is unwinnable, which is not in our national security interests … I quote Arnold Toynbee in the book, who said that empires more often die because they commit suicide rather than from murder. Imagine what would happen if that 2 billion dollars a week that we’re spending in Afghanistan were brought here to help rebuild the country and get jobs for people and rebuild our infrastructure. You mentioned Larry Summers and Robert Rubin. There’s no question that the fundamental mistake the Obama White House made was to appoint people whose view of the world was so Wall Street-centric to run economic policy. It was a little bit like having pre-Gallilean people, who believe that everything revolves around the earth, produce navigation maps. It wasn’t going to work, the ships were going to sink.

CL: I want to ask you the media question. Who are we going to believe to tell us this story? Who’s going to confirm in a kind of fundamental American narrative that we’re in the gravest risk of facing a kind of terminal imperial moment?

AH: Well, it’s not a Who. You see that is really what is different. That’s a very important question, because what is different is that we’re not waiting for some Walter Cronkite voice to tell us this is how it is. This is what is new and what is exciting: we all have to tell the story. We all have to tell the story of our time, and people are saying it online. So our job is to collect these thousands of stories and create a mosaic.

CL: I do want Walter Cronkite in a way to announce this. I still want the gods of my youth — Walter Lippmann, and James Reston, and page one of the New York Times — to confirm what we all know, but know in isolation. I’m still looking for a figure that’s vaguely authoritative, in touch with the historical narrative, with a base broader than one, who also can write commanding prose. I want someone not just to tell a story on a video screen, but to change the overall narrative. The overall narrative that people say is going to prevail in the elections this fall is that we’re taxed too much, that the government takes our money and throws it away, or that Obama’s a Muslim, or that some guy in the South wants to burn the Koran. We are awash in these basically idiotic narratives that are fundamentally out of touch.

AH: Chris, Chris, Chris, let me hold your hand. Get over it. There isn’t going to be a Walter Cronkite to tell us how it is.

CL: There is one, and his name is Glenn Beck —

AH: No, that’s the point. Glenn Beck and the Tea Party movement is responding to the incredible abuse of power by our establishments. Their response is potentially dangerous, but there is a lot of legitimate anger out there… If you scratch the surface of whatever the Tea Partiers are saying, underneath it is this incredible anger at the bailout. Right now, there are going to be two forces: the Tea Party response, which very often becomes anti-immigrant, anti-muslim, basically the scapegoating that we’ve seen throughout history. And then there can be a constructive response. Yes, the system is screwed up, we need to try and fix the system, while we’re fixing it we need to see what can we do in our own communities, in our own families, to turn things around. If we don’t do that, we are basically ceding the future to the forces of anger that are really creating these idiotic narratives to make sense of what has happened in their lives.

Arianna Huffington with Chris Lydon at the Brattle Theatre, Cambridge, September 13, 2010

Podcast • May 12, 2010

Amartya Sen: This Open-Ended "Year of India" (8)

Click to listen to Chris’s conversation with Amartya Sen (47 min, 21 mb mp3) Amartya Sen at home in Cambridge, before his hero John Rawls Amartya Sen, when I ask about this “Year of India,” ...

Click to listen to Chris’s conversation with Amartya Sen (47 min, 21 mb mp3)

Amartya Sen & John RawlsAmartya Sen at home in Cambridge, before his hero John Rawls

Amartya Sen, when I ask about this “Year of India,” quips that the biggest change in the “new” India is in our non-Indian heads. Meaning: that common wisdom has finally shaken off the British imperial canard that “old” India was a backward pre-industrial scene before the East India Company, in the 17th and 18th Centuries, rescued it for civilization and modernity.

India’s grandest eminence outside the subcontinent is satisfied that we’ve all absorbed the news that behind the modern Bangalore boom lie 3000 years of an “accounting culture” and India’s own imperial trading history. The name of Singapore, he notes, comes from the Sanskrit for “City of Lions.” So “all those people who say: the West is materialist and business-oriented, Indians are spiritualist and thought-oriented, are talking absolute nonsense.” Neither are those “new” Indian stakes in software and biotech all that new, or all that Indian. Many of the great Indian success stories were incubated in Silicon Valley, starting in the 1950s, and at MIT, where Nehru got the model of the endlessly fertile Indian Institutes of Technology. So Kipling is dead and buried; the twining of East and West, the meeting of the twain, is no surprise anymore. The unfolding story, in Amartya Sen’s telling, is Open India.

Part of the reflection of Open India is the willingness to accept that you don’t have to belong to the mainstream [80-plus percent Hindu] in order to be counted as a genuine Indian. As Rabindranath Tagore said in two quite famous statements: one, that anything that we admire, no matter its origin, instantly becomes ours. And the other, similarly, that any person who comes from abroad and is ready to live the kind of life that people lead in India is instantly accepted as being Indian. Because a lot of Indians are going everywhere in the world, and they’re traveling as a kind of modern Jew of the 20th century and 21st century, India doesn’t get enough credit for the fact is that there has been more immigration into India than almost any country in the world — for one thing, tens of millions of Bangladeshis. Even though people grumble about it… you don’t see the kind of hysteria about it that’s going on Europe, for example, or the United States. That anger may yet come, but it hasn’t been a part of traditional India at all. The fact is the boundaries are porous between India and abroad and it’s served India very well. I think India booming would not have happened but for the openness of the educational sector, of the high tech sector, and the big booms, the informational as well as biochemical and medical, have come very much from a dialectic interaction with the West.

Amartya Sen warned famously (five years ago) that India is at risk of becoming “half California, half Sub-Saharan Africa.” To me he says he was offering tabloid India a caution, not a prediction. In conversation these days, Amartya Sen sounds half Victorian gent, half liberal social critic, but not a worried man — not about India’s engagement with the United States in Afghanistan, for example; and not urgently concerned about the decline of the once sacrosanct “village India.” He doesn’t “miss” village India, he said, “because it’s not gone.” From his father’s house 100 miles from Calcutta, “I walk half a mile, and I’m in rural Bengal.”

The villages are not gone, but the tragedy isn’t so much that [village India] is changing and going, but it’s not changing and not going, in the sense that we want every village with schools, we want them with hospitals and primary health care institutions…. These things are not happening. So my grumble isn’t that the Indian villages are changing; my grumble is that it’s not changing fast enough. I have nothing against village life. I very much enjoy…getting on my bike and taking 15, 20 miles of bicycling through the rural areas. Absolutely wonderful! But I would like to see dispensaries, primary health care, schools there. And that’s not happening fast enough. That’s my grumble. And sometimes when I complain that India is becoming bifurcated between half California and half Sub-Saharan Africa, my complaint is that the line is unfortunately often rural and urban. It’s not just that, because there are a lot poor people in the urban areas as well, it’s a more complicated line, but the rural-urban division, that’s a very big division that we have to keep in mind.

Amartya Sen in conversation with Chris Lydon in Cambridge, May 7, 2010.

I thank him for an hour’s discursive gab with “an old fashioned Indian wiseman.”

“Shame on you,” he says, laughing. “Thank you.”

Did I get it wrong, I ask.

His last word: “You got it exactly right.”

Podcast • September 12, 2008

An American Exception, in Danger

Chuck Collins is an analyst and agitator around the grand canyon of inequality in American incomes and property. With Bill Gates Sr., the grandfather of Microsoft, so to speak, and father, till yesterday, of the ...

Chuck Collins is an analyst and agitator around the grand canyon of inequality in American incomes and property.

With Bill Gates Sr., the grandfather of Microsoft, so to speak, and father, till yesterday, of the richest man in the world, Chuck Collins wrote the book in favor of “death” taxes: Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes.

Our conversation with Chuck Collins picks up on James Q. Wilson’s view that Americans have no problem with extreme wealth as long as it’s earned — by Michael Jordan, as Wilson said, or Warren Buffett. The catch, as proud papa Gates is impelled to say, is that even the great entrepreneurial harvests are not exactly earned — certainly not earned alone:

What’s interesting about Bill Gates’ dad is: he grew up in working class Bremerton, Washington. His dad had a little furniture store. He fought in WWII, went to University of Washington and law school on the GI bill and then into law practice. He had a prosperous life. His son was fortunate, went to Harvard, almost graduated and was very successful. He would be the first person to tell you that as smart as his son is, he didn’t earn all that wealth alone. It was a function of growing up in a particular society that has a lot of common welath, a lot of public investment in research, and education, and infrastructure, and technology – and all the things we do together to make this a good soceity. So his view is: an inheritance tax is a righteous tax, a fully beautifully American tax. Which is to say: “Blessings on you, now that you’ve made all this money; but if you make this much money – over $5 million or $10 million or $50 million, you have an obligation to pay back the society that made your wealth possible… Bill Gates Sr. calls the estate tax the gratitude tax – it’s the tax you pay back as a person who’s prospered in this society so that other people can have the same opportunity.

Chuck Collins in conversation with Chris Lydon, September 9, 2008.

Our conversation is about American Exceptionalism again: about the civic DNA of the first middle-class society in the world, and evidence on all sides that we are in fact becoming Richistan (Robert Frank’s coinage) and its sullen suburbs. The rising culture (and fact) of inequality, Chuck Collins says, is one of the most important conversations America isn’t having. Comments please.