The economics of Generation Hate

Picture an efficient frontier with labor’s share of GDP – including benefits, safety standards, whatever – on the Y-axis and GDP growth on the X-Axis.

The bottom right side of the curve we’ll call The Panama Canal Era. Something like 30,000 people died building the Panama Canal while making next to nothing in wages. This is indicative of late 19th Century economic and social policy policy that valued “things” and growth over the welfare of people. It was completely inhumane but by the standards of the time, generally acceptable. Confront TR with the human costs of the Canal, or the railroad barons using Chinese slave labor, the response would likely have been a smug smile and “Shit got done, didn’t it?”

This brutality extends into the political realm and thankfully exhausts itself in two world wars. Haunted by memories of mass slaughter, the pendulum swings upwards along our efficient frontier in an entirely welcome humanist direction – civil rights, Great Society, wealth redistribution, all that.

The fact that I chose an efficient frontier shape rather than a Laffer Curve model infers my personal beliefs but before anyone fires up the Outrage Machine, Im not going to guess where we are on the curve – a man’s got to know his limitations.

Where we are on this curve is, I think, the crux of the current economic debate. I suspect the vehemence and insoluble nature of the argument means we’re close to the inflexion point, with growth-related gains in sight in both directions.

The bigger problem is that we’re all narcissistic idiots currently motivated by hate.

“WTF, Interloper? Why did you make us endure that history lesson if this was your point?”

Because the move away from the economic dominance of “Things” has made the debate more subjective. When all a culture cares about are Things, social policy is frightfully easy – How do we get more and better things? The argument is over means, not ends. We have,  rightly and with the best intentions, added a far larger degree of complexity into political discourse.

Backtrack for a second. Let’s posit that the greatest social achievement of the 20th Century was empowerment – generally through media technology (remember that I think tv was the primary cause the social unrest of the 60s and 70s) – and politically for women and minorities.

It was inevitable that the combination of broad empowerment and complexity would create Generation Hate. Empowerment breeds narcissism, complexity breeds anxiety and fear. Bigger ego + fear = hate.

My slobbery adulation for The Last Psychiatrist derives from this more than anything else:


Splitting– reducing the other person to a binary abstraction of all good or all bad, is a primitive, or regressive, defense mechanism used when the emotional level and complexity is greater than a person’s capacity to interpret it.  For example, once your boyfriend cheats on you, he becomes a jerk, completely.  Even things he had done that were good– like give money to the poor– are reinterpreted in this light (“he only did that to get people to like him.”) Who splits?  Someone with a lot of unfocused rage and frustration, i.e. the “primitive” emotions.


Splitting says: Bush is all bad, period.  Nothing he does is good, and if it is good, it is from some malicious of selfish motivation, or an accident related to his incompetence to even be self-serving.  Similarly on the other side, liberals are weak, corruptible, treasonous.


So hatred of, say, liberals is thought to be independent of your preference for Bush, but in reality it is only because you hate liberals that you like Bush.  The hate comes first.


Sub in Krugman for Bush if it makes you happier but either way this excerpt encapsulates the current tenor of economic debate – primitive, narcissistic and unproductive.

“But my side is right!”. Whatever. The entire field of economics can’t even agree on first principles and, as Mark Thoma points out, all this posturing and certainty is based entirely on 40 years of data. Macroeconomists remind me of the 17th Century Royal Society. Working on mathematic proofs – 90% of which will be disproved eventually – then sipping claret during a live dog dissection after dinner.  Does anyone think even half of the current ECO 101 textbooks will survive the next 100 years of study?

I still think we’re living through a period that, over the course of human history, will turn out as important and transformational as The Reformation (and for the same media-related empowerment reasons – then it was mass literacy). It’ll work out for the better eventually, but likely after the hate burns out.

9 thoughts on “The economics of Generation Hate

  1. Mike Barker says:

    I think the greatest social achievement of the 20th century was the book, “The ‘G’ Factor” by Arthur Jensen that, once and for all, showed how and why some of us are successful and and some of us are not. The later book, “The Bell Curve” by Herrnstein and Murray, further stated the importance of IQ in understanding what causes society’s problems. While not presuming a cure, these brilliant men brought to light the problems and their causes with unflinching courage even though they faced considerable derision for not being sufficiently politically correct.

    • Allman R. Equal says:

      Bad science never helps but makes cautionary tales. Some people and some movements are not only wrong, but maliciously so, and for the same reasons perhaps the poster mentions.

      • Mike Barker says:

        Obviously, you have not read either book or if you have, did not quite “get” it. You might like to read it or read it again, slowly, so you can understand what these men are saying rather than assuming you know what they mean just by relying on what the popular press says about them or what you have heard from other “low information” individuals.

  2. David says:

    So the logic follows that Europe’s twice attempted suicide caused by “the will to power” or “things” in your terminology has caused it to reverse even harder than in say the United States which continued to have a lot of success going after “things” (by which I presume you mean everything from Starbucks to empire).

    It at least explains why Europe is the beacon of liberal values along with a deep wish to be left alone. I’ve long thought so but I am not a Hegelian so I doubt it is predictive.

    Interloper: Have you read the late Tony Judt’s Postwar: A History of Europe Since 1945? You might come to appreciate how much forgetting Europe has had to do in all its myriad of ways. Nietzsche reminds us that forgetting is an active “faculty of repression”. Maybe this generation you speak of needs to learn how to forget.

  3. kris says:

    It was a time when in ancient Greece, having only two slaves was considered being…..poor.
    Nowadays, even the poorest have many slaves in the form of washing machines, refrigerators, cars etc.

    What I’m trying to say is that ABUNDANT NON HUMAN ENERGY liberates humans from being enslaved.

    Theoretically, if for a moment all crude oil or gas, or nuclear energy is not available by magic, slavery will make a comeback since things will have to get done…eventually.

    It’s not difficult to understand that I think it’s self evident that climate change and peak oil are a hoax.

  4. Hi, what you call Generation Hate I refer to as Generation WTF. This generation did all of the right things, such as borrow money and go to university and acquire skills and education. They then sat upon the world to find their skills weren’t in demand, so they took jobs that required no degree to do. I met a kid in a grocery store making $12 an hour, he borrowed $80k to fund his education. Now I figure at some point the economy will turn around and people with such degrees will once again be in demand, but currently these people are pushing those with lesser educations out of jobs, so where do the high school graduates go who don’t have the funds to attend college?
    The grocery store owner and other shop owners benefit mightily from hiring college educated workers to do menial work, these people increase sales through being educated so can figure out how to market better the wares of the store, so the store owner wins, the kid wins sort of because at least he has a job and can make the minimum payments on his loan, the customer wins because of the caliber of the help, but the less educated or talented lose because there simply isn’t a place for them, in this current environment.
    Now Rogoff and Reinhart have written about what is to be done about many of these ailments, as have others, but there is a direct cost to society when its workers aren’t utilizing their full capabilities in the overall economy. So the negative effects are quantifiable. We are lacking in growth in many nations around the world, but a very important component is the lack of leadership in high places around the world. One doesn’t normally find so many incompetent leaders in government all over the world at the same time, but mathematically it’s possible and apparently I live in just such an age. Great post Interloper,bill

  5. […] Deep thoughts from the Interloper – The Economics of Generation Hate  (Interloping) […]

  6. Jonas says:

    Isn’t generation hate just due to the perception that the pie is shrinking? You can’t have win-win if you don’t think there’s more to be won. Then it’s all out of yourself and keeping other people down.

  7. Keith Rowley says:

    You pose some serious questions, but you also assume that we always learn from our mistakes – and I don’t believe this is true. Right now we are seeing the effects of the pendulum having swung so far from ‘things’ towards ‘people’ that we have forgotten the importance of making ‘things’ that we all must have, efficiently! Great column!

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