The Self-Destruction of the 1% by Chrystia Freeland, NYT Magazine
Oh, she has the right thesis. Categorizing states as more or less extractive is a logical framework, and it's almost obvious to say that those which are less so, countries which have more opportunities for wealth, are more egalitarian and will have more dynamic economies, whereas those in which only a small group is allowed to get paid, those will do worse. Freeland calls out America's plutocracy as (a) extant, thanks to the concentration of power that goes with the concentration of wealth (i.e., they get to advocate for their benefit much more effectively) and (b) not especially good for the rest of the country (our social mobility is worse than socialist Europe's), and it's good to see something like this break through into mainstream reading. About time, in fact. But it's a very frustrating article, and it cops out on arguing some of the major points. I wonder if she knows Tom Friedman.
1. In the light of population pressures, land overuse, climate change, and approaching resource pressures, I don't think "growth" is the success metric that the human race needs going forward. And I am highly ambivalent about growth when it comes to the economy of scale vs. the barbarity of scale. (I dunno, maybe you've read my blog?)
Clearly what Freeland is trying to do is present an impartial argument--that cornering wealth goes against the ultimate self-interest of the wealthy--and okay, it's true, kinda sorta, when taking a generalized view of the wealthy. For individual families, maybe their behavior is not so irrational as all that: even if a more egalitarian economy did create more expansion, the future wealthy might very well be other people. I am sure that it's fun to believe that you perch at the top of the pyramid by virtue of your sheer awesomeness, but who really wants to put it to the test?
It's a subjective argument that's trying to masquerade as an analytical one. (And isn't this always the case with economics?) But if you made a straight-up moral case for a better distribution of opportunity, then you're accused of being hopelessly naive or something.
2a. I can't speak to her history of Venice, but I'm given pause, remembering my Machiavelli, that there were no doubt corroborating factors that contributed to its decline among the other Italian city-states. They did fight each other pretty much constantly for a couple hundred years, and supported a variety of governmental models. The publication of the Golden Book was certainly repulsive (a moral case!), but did the Serrata lead to the relative decline of Venice (instead of just being evil on its own merits)? Maybe, but I do recall that ascending Florence was explicitly run by a banking cartel.
2b. I can speak a little bit more to American history, and this article has a gigantic flaming you-must-be-shitting-me moment at the very core of its argument.
In the early 19th century, the United States was one of the most egalitarian societies on the planet. “We have no paupers,” Thomas Jefferson boasted in an 1814 letter. “The great mass of our population is of laborers; our rich, who can live without labor, either manual or professional, being few, and of moderate wealth. Most of the laboring class possess property, cultivate their own lands, have families, and from the demand for their labor are enabled to exact from the rich and the competent such prices as enable them to be fed abundantly, clothed above mere decency, to labor moderately and raise their families.”
For Jefferson, this equality was at the heart of American exceptionalism: “Can any condition of society be more desirable than this?”Is she fucking serious? I mean, we understand that Mr. Jefferson was a man of his times, and we tend to excuse a great deal of his business life out of respect for the rational principles he argued in other spheres. But this is a bad time to go here.
It's true that the laboring class in 18th century Virginia were not paupers. They were in even worse shape. Jefferson, sadly, had a difficult time seeing them as part of "our" population.
2c. Freeland follows with "[t]that all changed with industrialization." Well, that and a bloody civil war.
By the time we get from the 1860s to Roosevelt's 1932, we not only had an industrial revolution, but also a new population, this one of immigrants, getting ground into the gears to serve it. FDR may have warned in 1932 against the robber barons (which Freeland says "America may have needed"), but like the world of the Medicis, I don't think there's a simple argument that they stoppered growth. The building of the railroads, for example, was not precisely competitive and entrepreneurial. I agree that epic inequality made the expansion rockier and nastier, and may have limited it eventually, with too much investment money trying to capitalize on not enough demand.
More to the point, between 1865 and 1932, the labor force was getting agitated about being so expendable. It fills up the literature of the day, and it led to revolutions worldwide. Ongoing labor unrest at a time when the costs of inequality were salient: that fire lit under FDR's ass went far toward getting the benefits and the opportunities spread around.
3. Also, it's not always good to entertain an opposing "reasonable" viewpoint just for the sake of doing so.
In his recent book on the white working class, the libertarian writer Charles Murray blames the hollowed-out middle for straying from the traditional family values and old-fashioned work ethic that he says prevail among the rich (whom he castigates, but only for allowing cultural relativism to prevail). There is some truth in [that argument].Old-fashioned work ethic and family values? Yeah, that must have been what kept the laboring class from getting ahead in Jefferson's time.
[Charles Murray is not a go-to person to cite as a thoughtful opponent. He's the creep who wrote The Bell Curve, that faux-intellectual justification for racism, which should be enough to remove the obligation to entertain any of his demographic arguments ever.]
It's too bad, because Freeland comes, I think, to the right conclusion. Inequality is wrong, and the current economic and political climate is making it worse. But she takes a full libertoonian account of history to get to that point. Even with my comic-book level of understanding, I'm kind of embarrassed to read this stuff.