The benefits and burdens of social policy
The chapters of “Unequal Democracy” that are devoted to specific policies concern the Bush tax cuts, the estate tax, and the minimum wage. But Bartels does little in those chapters to illuminate how it is exactly that increased government revenue or a bump in the minimum wage would actually help. Again, what are the mechanisms? A trillion dollars in tax revenue certainly doesn’t help disadvantaged families in Chicago and Miami when the government squanders it dropping bombs on disadvantaged families in Iraq and Afghanistan. Is the problem really that there is too little money in the system to effectively finance programs that would really help the poor, or is the problem that the money that is in the system is captured and misspent by the various interest groups that make up both parties?
With respect to the minimum wage, Bartels argues that the consensus among economists that wage floors harm the poor has eroded somewhat. (But see Neumark and Wachser.) Yet in light of the far-from-entirely-eroded professional consensus, it would have been nice to see some evidence that the minimum wage actually helps. Instead, Bartels emphasizes that the issue has considerable “symbolic importance” because the erosion of the real value of the minimum wage “stands as a dramatic example of the American political system’s unresponsiveness to public sentiment.”
Wilkinson is right that spending can’t be all that social policy is about. (To paraphrase someone, No one ever fought for spending.)
But why do the “mechanisms” that make possible the “help” that policies such as the minimum wage aim to provide matter here? Wilkinson suggests that “mechanisms” help to identify the “actual” benefits that policies confer. Taxation may in fact (usually) embolden state capture by interest groups; minimum wage laws, likewise, may (usually) really harm the poor (and, presumably, benefit only, say, unions or Democrats). Yet, such “mechanisms,” even if true descriptions of some places and times (though I can’t make out why that would be the case for wage floors), could, I think, only help to show how policies have tended to be implemented. They wouldn’t—or at least I can’t see how they would—support the conclusion Wilkinson seems to want to draw—that a certain common view of what is possible (that tax revenue could be spent on redistribution and not on war, and that a minimum wage policy could be enacted that actually redistributed) could be discredited. (Describing the second as a “possibility” in fact strains my head, as there seems little, if any, question that minimum wage laws have helped poor people—though that is a topic for another post.)
There are, admittedly, good reasons to question whether the American government uses its resources well or makes good on its own policies. (See here, for example.) But I think we need to look elsewhere than “mechanisms” (or Wilkinson’s definition of that term) if we want to give them their due.
“Whether or not Egypt flowers into a model democracy, whether or not Egyptians tomorrow live more freely than Egyptians today, today they threw off a tyrant. The surge of overwhelming bliss that has overtaken Egyptians is the rare beautitude of democratic will. The hot blush of liberation, a dazzled sense of infinite possibility swelling millions of happy breasts is a precious thing of terrible, unfathomable beauty, and it won't come to these people again...Whatever the future holds, there will be disappointment, at best. But there is always disappointment. Today, there is joy.”—Will Wilkinson, Egypt’s Euphoria
Modern market societies — ownership societies — are the paradigm of interdependent, mutually advantageous cooperation, and are as far as can be imagined from the society of atomistic predators Obama invokes to stir the disdain of the fresh-faced graduates of Knox. Market societies — ownership societies — are wealthy because they rely on and reinforce a high level of social trust and norms of cooperation.
I’m generally a fan of Will Wilkinson, but the article from which this quote is taken is so full of holes it would serve better as a drain cover than a cri de coeur for market enthusiasts. It’s also clearly written for a particular audience (American Spectator’s readers). Wilkinson’s writing is usually more careful and nuanced than it was here.
The quote ascribed above is problematic because it is a collage of vague buzz words whose net effect is, inter alia, to misrepresent Obama’s actual position with respect to market-based solutions, which is far more centrist than Wilkinson implies. In fact, of all the things Obama has ever said, I think this is by far my favorite quotation:
Our predecessors understood that government could not, and should not, solve every problem. They understood that there are instances when the gains in security from government action are not worth the added constraints on our freedom. But they also understood that the danger of too much government is matched by the perils of too little; that without the leavening hand of wise policy, markets can crash, monopolies can stifle competition, the vulnerable can be exploited.
Wilkinson’s dialectic framework of “marketeer v. redistributionist” thus demonstrates laziness at best. It also betrays a complete failure to capture the nuanced nature of mixed economies; and the idea that “ownership societies” reinforce a high level of social trust and cooperation is betrayed by the shocking frequency and gravity of labor violence that defined late 19th and early 20th century America, when the government took a far less active role in regulating the marketplace. Far from making people trust each other more, the failure of government to intervene with the “leavening hand of wise policy” resulted in far more strife than occurs today in virtually any economic transaction.
Yet this is, in part, why Wilkinson’s appeal to vague ideals of “ownership” is so lacking: for all of the colorful phrasings that populate his prose, nowhere does he set meaningful goalposts for what his definition “ownership society” is. By neglecting to doing so, he can easily rely on it for the purpose of making rhetorical flourishes his readers will define for themselves. How much mileage any individual reader gets out of the phrase “ownership society” is going to change depending on your personal preference. It’s closer to rhetorical prestidigitation than a concrete ideological framework.
But what is perhaps most surprising to me about this article is just how unkempt it is. There are huge unaddressed objections that he’s smart enough to understand. Indeed, his skepticism of a “pattern of coercive government transfers” reminds me of Jim Henley’s exegesis on why he abandoned Libertarianism as a political philosophy:
I think my real *flip* was the Bush Administration’s social-security privatization proposal in 2005-6, and the enthusiastic advocacy for it by libertarians like my, well, young friend Will Wilkinson. As long as privatized social security was abstract, I was all for it. But when it became, seemingly, a real possibility, I looked at the law, and I looked at the Henley-family finances, and I knew fear. Real “maybe I won’t sleep; maybe I’ll just stare at the ceiling all night” terror. Somewhere in there, I recovered enough other-directedness to recall that we are very far from the worst-off household I know. And I realized that my stated beliefs were a sham. A luxury. I leapt, at least in my secret heart, into one of the available cups.
Nowhere in Wilkinson’s article do we see him address why modern 1st-world mixed economies are rife with redistribution programs. These “patterns of coercive government transfers” arise in advanced societies because the “immensely complex voluntary networks of interdependence and cooperation” that comprise a modern economy are complex enough to create systemic feedback loops wherein certain classes of citizens fall through the cracks, as the result of an even more complex panoply of economic incentives that don’t always resolve in neat, mutually beneficial relationships. When that happens, the government steps in to provide the service that voluntary transfers were incapable of adequately providing. Dan Drezner’s remarks from January complete the rebuttal:
Frequently, demand for government services emerges because of the perception that the private sector has fallen down on the job in that area. This means that the government has been tasked with doing the things that are difficult and unprofitable to do. It is precisely because these government outputs are often so hard to measure that [e.g.] Newt Gingrich’s claims about Six Sigma [were] pretty laughable. Even libertarians who want the government to reduce its operations drastically will acknowledge the political risks and costs of trying to execute this plan.
Those political risks exist because so many people rely on the “coercive transfers” that Wilkinson abhors. If he truly wants to understand why people continue to rely on and advocate for government transfers, perhaps he should ask Jon Henley why he feels that “coercive transfers” are a better guarantor of his family’s welfare than the “immensely complex voluntary networks of interdependence and cooperation” he refers to. He’ll probably discover that he’s on far more shaky ground than he once believed.
“If you were an evil genius determined to promote the idea that libertarianism is a morally dubious ideology of privilege poorly disguised as a doctrine of liberation, you'd be hard pressed to improve on Ron Paul.”— Wil Wilkinson, A Libertarian’s Lament: Why Ron Paul Is An Embarrassment To The Creed via The New Republic
David Brooks' Red and Blue Inequality
By Benjamin Landy
While it is heartening that income inequality is receiving increased attention in the press, conservative commentators are once again trying to reframe the debate as a referendum on the social habits of the poor. Earlier this week, Paul Krugman tore into fellow New York Times columnist David Brooks for his contention that income inequality is really two distinct phenomena: “Red Inequality,” which is the wage gap between those with and without college degrees among the bottom 99 percent of wage earners in the Heartland; and “Blue Inequality,” the result of a coastal coalition of ‘old boys club’ types, wielding outsized political influence and enjoying unjustly low tax rates. According to Brooks, it is a mistake to focus only on Blue Inequality when the “disorganized social fabric of the bottom 50 percent” (Brooks identifies lack of education, divorce, having children out of wedlock, smoking and obesity) is the real reason for enduring inequality. “Liberal arts majors like to express their disdain for the shallow business and finance majors who make all the money,” Brooks opines. “It is easier to talk about the inequality of stock options than it is to talk about inequalities of family structure, child rearing patterns and educational attainment.”
Krugman counters by pointing out that even the income share of the highest quintile—composed overwhelmingly of college graduates—has barely budged in thirty years, if you discount the bulk of that growth which comes from the top 1 percent. Everyone else, even families in the second highest quintile, have seen their share of income drop.
It is true, as Mr. Brooks claims, that the economic benefits of a college education have risen steadily over the past several decades. But that gap is dwarfed by the outsized gains at the very top of the income spectrum. While overall productivity has soared, average real after-tax income grew by just 18 percent for the bottom 20 percent of households since 1979. The top 1 percent saw their income grow by 275 percent. According to The Century Foundation’s Greg Anrig, those gains help explain the growing divide between more and less educated workers:
Both the gaps between the wealthiest Americans and everyone else, and between those with and without college educations, are national phenomena that are not dictated by geography as Brooks claims. More importantly, both aspects of rising inequality matter because they are inter-related. It’s because almost all of the income gains have been accruing to the top 1 percent that everyone else has experienced stagnant or declining compensation. In the past, when the highest earners weren’t running away from everyone else, there was enough income to share across the income spectrum that mitigated gaps among workers with differing educational levels.
Will Wilkinson is naive to ask what point there is to Krugman’s concern that the United States is becoming an oligarchy (“How does this help? To what question is this the answer?”). The issue is not whether “Blue” or “Red” inequality is more important, or whether that kind of delineation is even useful. The American people are currently being presented with two distinct visions for the future of the country: one in which the tax burden shifts from the rich to the poor, leading to less funding for social programs; and one in which taxes are raised on the rich to fund those programs that help lift the poor out of poverty and increase social mobility. The first solves neither Blue nor Red inequality; the second tackles both, by redistributing resources to stimulate the broadest social and economic benefits. The relationship between unprecedented growth at the top of the income spectrum and stagnation at the bottom requires a progressive, not regressive, solution.
I have the sense that my own experience reflects a significant shift in the zeitgeist. When I was “laid off” last summer, I immediately sought work, but I have become increasingly averse to the idea of once again becoming a permanent salaried or wage-earning employee. I suspect I’m not alone.
David Ellerman, one of my favourite challenging thinkers, argues that the employer-employee relationship is more like the master-slave relationship than we are inclined to believe. I know this sounds a little crazy, and I don’t entirely buy his argument. But take a look; he’s on to something. Philosophical questions of self-ownership and the alienability of labour aside, I am convinced that autonomy is profoundly important to most of us, and that the sort of self-rental involved in the employment relation is regularly experienced as a lamentable loss of autonomy, if not humiliating subjection. I think a lot of us would rather not work for somebody else. It’s not necessarily that we’re burgeoning entrepreneurs eager to start small businesses. It just sucks to have a boss.
I can feel an accusation of clueless bouginess coming on, but that part about “humiliating subjection” sounds about right to me.
“Ever since Jobs stepped down as Apple CEO, the video of his 2005 graduation address at Stanford has been in wide circulation and has been unavoidable since yesterday. It's a nice enough sermon. It's the usual litany of American banalities about being yourself and chasing your dreams and never ever ever settling for anything less than a universe bent and hammered into the shape dictated by your utterly unique authentic will. It's more or less the message the lithesome young contestants of "So You Think You Can Dance?" weekly impart to their fans in TV-land because they can't think of anything else to say. … As an undergrad I was an art major. Frankly, few of my fellow art majors were talented enough to make a living at it, even after four (or more!) years of training. Sure they loved art, but in the immortal words of Tina Turner, "What's love got to do with it?" "Find what you love and never settle for less" is an excellent recipe for frustration and poverty. "Reconcile yourself to the limits of your talent and temperament and find the most satisfactory compromise between what you love to do and what you need to do feed your children" is rather less stirring, but it's much better advice.”—
I love this argument, for the same reason I loved Will Wilkinson’s post about David Foster Wallace. I’m not ragging on Steve Jobs, the guy was obviously an incredible human being who accomplished orders of magnitude more than I’m likely to. But his advice, along with the standard, upper-middle class, liberal arts school “live your dreams” etc. sloganeering, seem like a sure fire way for most people to feel like a failure.
And totally unnecessarily and unwarrantedly too. If the average person’s models for how they should live life are the exceptional, then, by definiton, most people are going to find themselves wanting, and tiny steps from feeling like their life was a inauthentic failure.
In one way its great that I, along with most of my peers, grew up being told “you can be anything you want” and “reach for the stars” and “never give up.” It gives you (me) a sense of empowerment, and sometimes encourages me to change in ways that are painful in the short term, but maybe worthwhile in the long run.
But at the same time, I think this can be damaging and dooming too. The flip side of the thinking is that things like compromise, and unescapable-tedium, and satisfying-and-secure-if-also-sometimes-boring love are all failures, things that only people who aren’t crazy or brave or bold enough would settle for. And I think that a) few people could sustain a life of never compromising, loosing, or giving up, and that b) the world would be a horrible, social-status battle ground if more people actually succeeded at living that way.
I just turned 28 and I’m not confident that I’ve figured anything out well enough yet to give advice. But after spending the better part of the last 2-3 years feeling bummed and like a deep-failure, I think one actual, worthwhile thing I’ve learned is that its an awful strategy to take this kind of “always be yourself” mentality too seriously. It seems like it has to lead to you (ie me) thinking of your shortcomings and non-ambitious personal characteristics and moral failings, or character flaws, instead of, you know, just a preference.
Its good to applaud and admire Steve Jobs and those sorts of folks for doing incredible things that we all benefit from, but its wrong and terrible to beat yourself up for not being the same kind of person. And if I kept Will Wilkinson’s “Reconcile yourself to the limits of your talent and temperament and find the most satisfactory compromise between what you love to do and what you need to do feed your children” quote in my head more often, I think I’d make that mistake less often.
Geeze, let me get off that soap box for a second…