Sunday, January 1, 2017

Late bloomers

At my dad’s service last month I was talking with an old family friend who in mid-life got a doctorate and has recently started teaching at a university.

“After the election, I noticed that my students were more comfortable with lying. If you catch them, they just say, ‘Oh yeah, right.’ There’s no shame, no compunction about lying. If lying serves their purposes, then it’s a fine thing to do.”

I suggested this was maybe the logical conclusion of our worship of markets.

Pretty early in my Hartwick career I ran into students expressing the idea that, “If the government is doing it, it’s bad.” It struck me that to some extent our culture’s mental horizons are limited by a set of ideological blinders oddly symmetrical with the ones the Soviet government fit for its people.

In the USSR, it was common knowledge that markets are inherently bad, inherently exploitative. And you didn’t find this attitude only in government propaganda that ordinary people shrugged off. The propaganda had worked, so that ordinary people believed it.

In the fall of 1988, while I was studying in Moscow, I had dinner with a family that hated it so much in the Soviet Union that they wanted to emigrate. Yet I had a conversation with the father of the family in which I explained the basic workings of a market, and his response was, “But isn’t that exploitation?”

I think a lot of Soviet citizens internalized at least part of the state ideology, the part that said that the only way to have a fair society was to squeeze markets out of as many situations as possible, so that the state, acting wisely and on behalf of the working class, could make sure that things were done properly.

Outside the USSR, plenty of people were not surprised when this turned out to be a disaster.

In the U.S. we’ve allowed a different idea to work its way deep into our bones, the idea that markets are a natural phenomenon, that “the economy” is made up of people acting in markets, and that government action is an artificial interference in the economy which needs to be kept to a minimum for everybody’s well-being.

It is an incredibly naïve view, ignoring some basic economics. Markets are very effective in certain ways and calamitous in others. Governments are clumsy in certain roles, but absolutely crucial in others.

For about 35 years we’ve been pursuing this ideology of market fundamentalism. We’ve proselytized for the idea that market outcomes are good because they come from markets. As a corollary of that faith, we’ve been hobbling government, both by depriving it of funds (relative to the size of the economy) and by undercutting its legitimacy in an ideological sense.

The resulting disaster has not been on the same scale as what happened in the USSR, but it hasn’t been pretty. There’s the stagnation of middle-class incomes, even while “the economy” as a whole gets richer. (See the charts here.)

There’s the decline in life expectancy for whites without a high-school diploma.

There’s the inability to grapple with the magnitude of climate change and what it means for us.

Outside the circles of neoliberals and conservative ideologues, not everyone has been surprised by these bad outcomes.

The genius of markets is that they convert our greed into a driver for good outcomes. That’s the essence of Adam Smith’s “invisible hand,” this force that takes our actions in pursuit of our own good and directs them toward the good of others.

But markets can only work this magic in some situations. For them to serve us well, we need to preserve some standard of judgment outside of markets, rather than deciding a priori that what markets do is good and right.

And for that standard of judgment to be worth applying, it needs to be something more than crass self-interest. It would be progress if we were to strive for enlightened self-interest, leavened by some genuine concern for the welfare of others.

I’ll offer two anecdotes about how far we are from such a standard, one about 10 years old, the other quite recent.

Sometime around 2006 I was teaching an economics class dealing with food. I told the story of how Guatemala had tried to reduce infant mortality by restricting the marketing of baby formula. The product has an important role where a mother simply can’t nurse, and while it’s not as good as breast-feeding, its effects are generally not drastic in countries where families have access to clean water and can afford an adequate amount of formula.

In places where clean water is a challenge, the use of formula exposes infants to infections they are particularly ill-equipped to fight, while depriving them of antibodies they would be getting from their mothers’ milk. And where families are too poor to be able to buy as much formula as their babies need, infants end up undernourished.

The Guatemalan government tried to reduce the problem by limiting the marketing of formula, including forbidding Gerber from putting their trademark pudgy, smiling baby on their products. The government didn’t make formula unavailable, it just tried to reduce the number of mothers who would opt for formula when it wasn’t required.

For years Gerber simply refused to comply with the law. After the World Trade Organization (WTO) was created, it threatened to use a challenge in that body to get its way. Guatemala relented and gave Gerber an exemption.

According to this source, the U.S. State Department came in on Gerber’s side. “Guatemala was threatened with withdrawal of Most Favoured Nation trading status for violating 'trademark' agreements.”

Apparently the U.S. didn’t actually have to intervene with the WTO, because Gerber’s threat of taking its case there was enough to get Guatemala to back down. Obviously, with the U.S. having earlier taken Gerber’s side, it was reasonable for Guatemala to assume we would again.

I told the story, and it turned out that a majority of the students thought the U.S. government was right to back Gerber. They felt it was our government’s job to act in defense of the profits of U.S. corporations, even at the expense of needless infant deaths in other countries.

The more recent anecdote came onto my radar yesterday, while Kate and I were listening to episode 71 of the podcast Mom and Dad are fighting. They interviewed Matthew Herrity, a high-school junior from Arlington, Virginia. He committed a very impressive act of journalism, objecting to a re-zoning plan that will increase segregation within the Arlington schools.

Listening to the interview as a whole and reading his original letter, it’s pretty clear that Mr. Herrity’s core motivation is the injustice of the plan. His experiences in a somewhat diverse school environment have given him insight into the situations of people far less fortunate than he, and he is concerned about how re-segregation will hurt those already at a disadvantage.

But his first point in the interview was that businesses really value potential employees who have learned to work in diverse environments. In other words, even if you don’t care about helping others, you should support diversity because it helps you (or your kids) get ahead.

Even when we act out of concern for the general well-being, we have learned to couch our arguments in terms of self-interest.

And given how a large portion of my students viewed the Gerber case, that may be a tactical necessity.

This is where our worship of markets has gotten us. In that perspective, the election of 2016 was hardly a freak event. It was more like a long-term trend coming at last to awful fruition—the logical conclusion, if you will, of a decades-long project of fostering illogic.

The plant Titan arum is a native of Sumatra. It can take up to seven years to produce a blossom, but once it does, it’s a doozy. “It's the largest flowering structure (inflorescence) on Earth, growing up to three metres tall.”

But the plant has another trait that accounts for its notoriety: “Due to its odor, which is like the smell of a rotting animal, the titan arum is characterized as a carrion flower, and is also known as the corpse flower.”

Donald Trump: the corpse flower of American democracy.

Best wishes for 2017.

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