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.