Sunday, January 12, 2014

On common-sense reform and why it's impossible

A recent article written by an author named Jesse Myerson at Rolling Stone entitled Five Economic Reforms Millennials Should Be Fighting For seems to have made certain parts of the blogosphere see red – literally. The article has generated denunciations that border on hysterical, pretty much boiling down to “It’s Communism, Communism, I tell you!!!”

Here are the proposals:

1. Guaranteed Work for Everybody
2. Social Security for All
3. Take Back The Land
4. Make Everything Owned by Everybody
5. A Public Bank in Every State

Matt Yglesias describes them this way:

1. Unconditional cash transfers rather than bureaucracy-intensive welfare programs
2. Make-work government jobs for the unemployed
3. Budget surpluses invested in private financial assets
4. A land-value tax to raise revenue
5. Some kind of scheme where a public bank would make subsidized loans

I find it surprising he’s omitted universal health care – unless he’s counting the Obamacare Frankenstein as universal health care. It seems like that should actually be job one, especially since it’s already the current system of every other advanced industrial democracy on the planet (and many that aren’t – Cuba, Costa Rica, etc.). I personally would also include a reduction in working hours, and guaranteed vacation time (again, something already guaranteed by almost every other advanced democracy in the world). I would also strongly push for free university education (again, already provided in many countries).

Which brings up another point – some of these ideas are hardly pie-in-the-sky, they have already been implemented in one form or another in various locations. The author has included a number of links in the article itself to examples both real and theoretical, and they are well worth reading. For example, for number 4 he mentions the Alaska Permanent Fund, and for number 5, he lists the public state bank in North Dakota. Number 3 is interesting, as it revives the now-forgotten (or suppressed?) ideas of Henry George. Number 1 is often called a Jobs Guarantee, and is often included along with ideas emanating from Neochartalism or Modern Monetary Theory. In fact, we've discussed a lot of these ideas on this site over the years.

So it hardly seems like these proposals are all that unworkable or extreme. What was extreme, however, was the reaction from the usual suspects. In fact, I've read more articles about the reaction to the article than discussing the actual ideas presented in the article itself. For example:
[... ] But conservatives went absolutely apeshit. So severe was the apoplexy that they failed to recognize that included in these ideas were a bunch of things conservatives like — replacing income taxes and replacing paternalistic welfare programs with cash transfers — and that already exist successfully in the non-communist world. It was amazing.

In their rendering, Myerson hadn’t sketched out a road to serfdom. He’d planned a massive frog-march to Siberia for our society.

Part of this was emotional affect. Myerson’s Twitter bio is satirically hashtagged #FULLCOMMUNISM. Combine that with the article’s hyperbolic framing and many conservatives reacted tribally.

Some of Myerson’s antagonists were smart enough to see past the cultural identity stuff but too weak-minded not to respond with shallow, reactionary nonsense. Sean Davis thinks Myerson’s ideas are discredited because they all appear in the USSR’s constitution (they don’t really). Even if you assume, for the sake of argument, that this rebuttal isn’t historically illiterate, you can’t get past the juvenile reasoning. Even if you assume Soviet leaders rigorously adhered to a constitution, Davis is making an inductive fallacy.

If he’d clicked on the link in his own piece, he’d have seen, right up top, that “women and men have equal rights in the USSR.”
The right’s latest freakout — and why they’re crying “communism”  (Salon)

The fanatical overreaction to these proposals is almost as interesting as the proposals themselves. To me, it really shows just how scared the elites are of losing their power – and of new ideas. What’s happened is that any rethinking of the current system in light of economic justice is shouted down by one word – “Communism!” Of course, people have no idea what communism actually was – the state owning all the means of production – something, you’ll notice, that the article does not advocate at all. But all this hysterical screaming about communism is telling. Since the fall of the Soviet Union, any attempt at discussing economic justice is seen as communism, and we live with the predictable results. Most of the reforms that made the middle-class lives we enjoy today possible were put in place to head off the threat of communism. Now that it's gone, they're taking away those reforms and privileges and taking us back to the Gilded Age - which they never wanted to leave in the first place.

Ironically, the implementation and subsequent failure of communism/Marxism around the world did more to set back worker rights in the long run than anything else in history! It allowed an entire school of economic though to be dismissed and eliminated! As the above piece puts it:
I don’t think the ongoing freakout over the Rolling Stone article is simply a reflection of cultural anxieties. It also reflects an effort to limit the scope of that debate, so that progressive ideas fall outside of the sphere of acceptability. A basic cash income wouldn’t destroy America, and actually enjoys the support of conservative heavyweights, now and in the past. But it isn’t exactly compatible with significant tax cuts for wealthy people. And it preserves the federal government’s role as the purveyor of public welfare. One way to marginalize ideas like that is to call them communism.
and Matt Yglesias:
...but leaving the provocative headlines aside these are all perfectly plausible ideas. And yet when I tweeted as much, my feed has been full for days of grass-roots conservatives talking about how communism was terrible. And communism was terrible! Terrible largely because it wasn't a make-work jobs program, it was a brutal system of coercion and violence. The worst thing you could possibly say about the Myerson Agenda is that this mix of policies might slow the rate of economic growth. That's always a concern with proposed economic reforms and the stuff of everyday political debate.

But it does an enormous disservice to the hundreds of millions of people who suffered enormously under communism (and to the tens of millions still living in North Korea or Cuba) to treat the whole thing as some kind of misguided social welfare scheme where handouts and onerous regulations slowed the economic growth rate.
Defining Communism Down (Slate) John Michael Greer made a similar point last year:
Marxism also has an advantage just now that no amount of money could buy it: the extraordinary campaign of unintended propaganda that the Republican party is currently carrying out on its behalf.  Right now, even the most moderate and revenue-neutral attempts to use the powers of government for the benefit of American citizens are being lambasted by the GOP as communism.  It’s an embarrassing admission of intellectual poverty—one gathers that the American right spent so long belaboring the Red Peril that it really has no idea what to say now that communism isn’t around any more—but it also guarantees a familiar kind of backlash. Fundamentalist churches that spend too much time denouncing Satanism, complete with lurid descriptions of Satanic living replete with wild parties and orgiastic sex, get that kind of backlash; that’s why they so often find that they’ve merely succeeded in making devil worship popular among local teens.

In the same way, if the Republicans succeed in rebranding, say, public assistance and food safety laws as Marxist, the most likely result of that campaign will be to convince a great many Americans of otherwise moderate political views that Marx might have had something going for him after all... 
David Graeber and Adam Curtis have both made the point that there is a relentless war going on against even imagining any kind of fundamental reforms to the current system. So the debate pretty much boils down to “what should we cut?” rather than “how can we improve human welfare and build a better society for all?” That latter question, you’ll note, used to be asked by most economists who truly believed capitalism would lead to better living standards in perpetuity, and from the vantage point of the post-war, post-Depression world, it looked like it might. Now, faced with declining wealth, health and living standards in the developed world, they no longer even ask questions like that anymore. Instead it becomes only, "how do we balance the budget?"

I guess, I'm left wondering, if you don't like the above proposals, what are your solutions? Because the powers that be seem to have nothing to offer besides the world of Average Is Over - a world of an overstressed, overworked, highly tracked and monitored 10-15 percent of wealthy people, and a demoralized, heavily monitored, indebted and imprisoned citizenry eking out a meager existence without any sort of economic security or meaningful work, anesthetized by cheap and ubiquitous computer games, smart phones and corn-based carbohydrates.

But by far the best response to the article was written by Dylan Matthews of the Washington Post. He essentially rewrote the article targeting it to Republican/Conservative readers and citing exclusively right-of-center pundits (Milton Friedman, Tyler Cowen, The American Enterprise Institute, etc.) in defense of essentially the exact same ideas!

Five conservative reforms millennials should be fighting for (Washington Post)

The result was as predicable as it was telling: the same right-wing people who had called these reforms to deal with our pressing problems and failing economy "FULL COMMUNISM" now agreed with everything that he proposed! Here's Ezra Klein:
Myerson frames his agenda as an effort to do away with unemployment, jobs, landlords, private capital ownership and Wall Street. Those last four, as you might expect, made conservatives' heads explode.

"If you’re a Millennial who loves bread lines, prison camps, forced famines, and abject human misery, then you’ll love the latest offering from Rolling Stone," wrote the Federalist's Sean Davis.

But the policies Myerson advocates are rather less radical. His agenda, at its core, calls for a work guarantee, a basic minimum income, a land-value tax, a sovereign wealth fund and a public banking option. As Dylan Matthews noticed, all these policies that Republicans were labeling as socialism have been endorsed by major conservatives. So he rewrote Myerson's piece from the conservative point of view, advocating all the same policies but changing  those cited as authorities and those blamed for the state of the economy.

All of a sudden, conservatives liked the article, and liberals -- well, liberals didn't really like Dylan anymore. And they told him so in pretty offensive terms. Two articles both advocating the exact same policies. But one of them thrilled liberals and infuriated conservatives. The other infuriated liberals and thrilled conservatives.
As Dave Weigel at Slate describes it:
Watch what he does—if you notice it, you're smarter than most of the people reading the headline then tweeting through blind rage. Where Myerson describes a nationalization of bonds as a quasi-communist reform, Matthews brands it as "having Social Security invest in the private sector." Where Myerson makes "public banks" sound like something out of the New Economic Plan, Matthews points out that "North Dakota has far more small business lending by its community banks than neighboring states, such as South Dakota or Montana, that lack a public bank."

The point is that none of the ideas are especially crazy. The outrage is one part economic thinking, 10 parts ideological retrenchment. Happy New Year!
And that, my friends, is why reform is impossible and we will not solve our problems. Here's Ezra Klein summing up the divide-and-conquer tribalism that guarantees we will remain a failing society:
In theory, the two parties represent distinct political philosophies, and those distinct political philosophies help shape their differing policy agendas. In recent years, there's been a lot of interesting work from psychologists arguing that the differences go even deeper than that: Democrats and Republicans intuitively respond to different underlying moral systems, and so their philosophies actually rest on something more fundamental than mere partisan affiliation.

The problem is that human beings are incredibly good at rationalizing their way to whatever conclusion their group wants them to reach. And most policies can be supported -- or opposed -- on many grounds. It's all about which parts people choose to emphasize. A conservative who emphasizes individual responsibility and loathes government coercion can find good reasons both to support and oppose the individual mandate. A liberal who believes both in security and civil liberties can decide to believe the FISA courts are an effective check on the NSA or totally insufficient. There are more than enough validators out there who're willing to arm a partisan with information for whatever conclusion they prefer. “Once group loyalties are engaged, you can’t change people’s minds by utterly refuting their arguments," political psychologist Jonathan Haidt once told me. "Thinking is mostly just rationalization, mostly just a search for supporting evidence.”

The beliefs that result aren't held cynically. They're held sincerely. And that's much more powerful. Even when people flip positions entirely, they believe they've done so because they've absorbed new evidence and changed their mind. What could be more honest than that? The fact that the transition aligned exactly with the changing interests of their party is just an interesting coincidence.

Worse, the world is complex, and very few of us can take the time to develop sound opinions on the vast range of issues that arise in Washington. Even if you're a health-care expert, the likelihood that you're also an expert on Chinese currency manipulation, and ethnic tensions in Syria, and prison policy, is pretty slim. So people end up relying on the authorities we trust, be they media figures, issue advocacy groups or politicians. But those validators aren't simply concerned with the truth. They're looking to get ratings, to fundraise, to maximize their influence, to get reelected, to retain standing among their peers. Their reasoning is motivated, too. But that's not how their followers see them.

The result is that much of politics takes the form of tribal fights that feel to the participants like high-minded policy debates. In that way, the only thing unusual about Dylan's piece was that the author knew what he was doing.
Similarly, Paul Krugman wrote:
Pew has a new report about changing views on evolution. The big takeaway is that a plurality of self-identified Republicans now believe that no evolution whatsoever has taken place since the day of creation... The move is big: an 11-point decline since 2009. ... Democrats are slightly more likely to believe in evolution than they were four years ago.
So what happened after 2009 that might be driving Republican views? The answer is obvious, of course: the election of a Democratic president
Wait — is the theory of evolution somehow related to Obama administration policy? Not that I’m aware of... The point, instead, is that Republicans are being driven to identify in all ways with their tribe — and the tribal belief system is dominated by anti-science fundamentalists. For some time now it has been impossible to be a good Republicans while believing in the reality of climate change; now it’s impossible to be a good Republican while believing in evolution.
And of course the same thing is happening in economics. As recently as 2004, the Economic Report of the President of a Republican administration could espouse a strongly Keynesian view..., the report — presumably written by Greg Mankiw — used the “s-word”, calling for “short-term stimulus”.

Given that intellectual framework, the reemergence of a 30s-type economic situation ... should have made many Republicans more Keynesian than before. Instead, at just the moment that demand-side economics became obviously critical, we saw Republicans — the rank and file, of course, but economists as well — declare their fealty to various forms of supply-side economics, whether Austrian or Lafferian or both. ... 
And look, this has to be about tribalism. All the evidence ... has pointed in a Keynesian direction; but Keynes-hatred (and hatred of other economists whose names begin with K) has become a tribal marker, part of what you have to say to be a good Republican.
Occasionally I hear from people who think that we will continue to enjoy advancing living standards once we get the necessary reforms in place to deal with automation, high energy prices, global warming and the like. But as the above shows, we may just remain paralyzed and at each others' throats forever as society breaks down around us, unable to undertake even common-sense reforms.

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1 comment:

  1. I take away a different message: no reform is possible at the moment because almost nobody has bothered to think carefully about what our problems actually are, what the ultimate causes are, and what targeted reforms can be made to address those causes. The key passage is this one: "Two articles both advocating the exact same policies. But one of them thrilled liberals and infuriated conservatives. The other infuriated liberals and thrilled conservatives."

    The Myerson piece wasn't a serious, original suggestion for reform based on rational investigation: it was just kicking the political football, either out of ignorance on the author's part, or a deliberate ploy to gain attention and notoriety. So it's entirely proper that it should give the commentariat something to write about for a few days and then fade off.

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