State of the Union

Robot Employment Survival 101

Fear not the rise of the machines? That appears to be the advice given by MIT economist David H. Autor in a paper he recently presented at the Kansas City Fed’s symposium in Jackson Hole, Wyoming. Responding to a significant uptick in economists’ concern over the effects of automation on employment, including the “stunning” results of a poll suggesting “that a plurality of mainstream economists has accepted—at least tentatively—the proposition that a decade of technological advancement has made the median worker no better off, and possibly worse off,” Autor suggests that it will be a lot harder to automate us all away than many journalists and expert commentators have indicated.

Autor argues that “Polanyi’s paradox,” whereby “We can know more than we can tell…” saves us from the threat of total automation dislocation, because there will always be jobs that rely on a variety of particularly human skills and tasks, skills and tasks that we can’t entirely explain to ourselves, much less to a computer. As the philosopher Michael Polanyi himself put it, “The skill of a driver cannot be replaced by a thorough schooling in the theory of the motorcar; the knowledge I have of my own body differs altogether from the knowledge of its physiology.”

While jobs consisting almost entirely of routine tasks, i.e. those easily codified into rules that can then be automated, have been and will continue to be replaced by machine labor, then, there is according to Autor a natural buffer to keep many people employed (if not necessarily well paid). In fact, Autor sees a significant opportunity for computer-enhanced human labor, for “tasks that cannot be substituted by computerization are generally complemented by it.” The construction worker, in his example, has to manage too many variables in a fluid environment to be automated away. However, he can be given a backhoe to replace his shovel, enhancing the productivity of his labor while making backhoe-trained workers more valuable than the merely shovel-ready.

This is a blue-collar example of “skill-biased technical change,” more traditionally described by Autor’s fellow MIT professors (and techno-employment pessimists) Erik Brynjolfsson and Andrew McAfee:

Technologies like robotics, numerically controlled machines, computerized inventory control, and automatic transcription have been substituting for routine tasks, displacing those workers. Meanwhile other technologies like data visualization, analytics, high-speed communications, and rapid prototyping have augmented the contributions of more abstract and data-driven reasoning, increasing the value of those jobs.

Brynjolfsson and McAfee discuss in their book a polarization of the employment market, where high-skill abstract-task intensive jobs are increasingly well compensated, and well complemented by machine labor. Low-skill Polanyi paradox jobs, like janitorial work and home health care, are also insulated from being automated away, but as Autor describes it, they are too well-insulated to even benefit from automation complementing their labor. Because their jobs require only the minimal amount of human reasoning that any competent adult can provide, their wages are depressed by the large supply of interchangeable labor. Middle-skill jobs, however, are nearly wiped out in Brynjolfsson and McAfee’s analysis.

Here, too, Autor finds some reason for more optimism. Read More…

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Eric Holder Puts Corporate Dope on the Table

HBO
HBO

Yesterday, Attorney General Eric Holder announced the latest in a series of massive, multi-billion-dollar settlements extracted from Wall Street’s largest banks as punishment for their role in the subprime mortgage bubble and bust that played a role in collapsing the economy in 2008. Charlotte-based Bank of America, paying for the sins of its own lenders as well as those of investment firm Merrill Lynch and subprime specialist Countrywide (both of which it acquired during the 2008 crisis), will be paying a record $16.65 billion settlement, including an also-record $9.65 billion in cash. This follows last month’s Citigroup settlement of $7 billion (including a then-record $4 billion in cash), and last fall’s $13 billion JPMorgan Chase settlement.

The numbers are truly eye-popping, and the repeated use of “record” has a nice, satisfying ring to it. But, just before the latest BoA settlement was announced, William Cohen denounced the entire exercise as “fine theater with the obvious caveat that nothing even remotely close to justice had been served.” Far from being impressed by the sums involved, Cohen sees the settlements as hush money, paid by Wall Street executives eager to keep the details of their worst behaviors out of the public eye.

The American people are deprived of knowing precisely how bad things got inside these banks in the years leading up to the financial crisis, and the banks, knowing they will be saved the humiliation caused by the public airing of a trove of emails and documents, will no doubt soon be repeating their callous and indifferent behavior.

Instead of the truth, we get from the Justice Department a heavily negotiated and sanitized “statement of facts” about what supposedly went wrong. In the case of JPMorgan, the statement of facts was 21 pages but contained little of substance beyond the fact that an unidentified whistle-blower at the bank tried to alert her superiors to her belief that shoddy mortgages were being packaged and sold as securities. Her warnings went unheeded and the mortgages were packaged and sold all the same.

JPMorgan’s CEO and famed finance guru Jamie Dimon reportedly made a personal call in the lead-up to a federal lawsuit being filed in order to bump his settlement offer by, ultimately, $10 billion dollars, hoping “the meeting would avert the lawsuit, which threatened to spotlight the bank’s questionable mortgage practices before the financial crisis.” The $13 billion was, the Times reported, half of one year’s annual profits for the bank.

Indeed, the Times followed up yesterday to show how even Bank of America was getting off lighter than the numbers might make it seem at first blush. “At issue is how much of the cost of the $7 billion in ‘soft dollars,’ or help for borrowers, the bank will bear under the settlement,” the Times said, as writing down principal on loans may have already been factored into BoA’s plans, or they may not even own the loans anymore, having sold them off in the infamous mortgage-backed securities. The investors who bought the bad bonds “note that the government promotes the settlements as punishment for dumping faulty loans on investors, but it devises deals that saddle investors with some of the costs.”

And in a rather perverse function of intersecting laws,

The actual pain to the bank could also be significantly reduced by tax deductions. Tax analysts, for instance, estimate that Bank of America could derive $1.6 billion of tax savings on the $4.63 billion of payments to the states and some federal agencies under the settlement. Shares of Bank of America jumped 4 percent on Thursday, suggesting investors believe that the bank could take the settlement in stride.

Moreover, the Justice Department and states began to get creative in their negotiations with BoA, Read More…

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What Argentina’s Default Means for the Rest of Us

Argentina has defaulted eight times in its 200-year history, the latest coming on Thursday after a bizarre legal saga that left Argentine sovereign debt in the hands of a Manhattan federal district judge.

Judge Thomas Griesa ruled that Argentina could not make its next payment on restructured debt from its 2001 default—money that is already sitting in the New York bank in charge of mediating the payments—until including another set of bondholders in that exchange. That second set of bondholders, representing only seven percent of Argentina’s creditors, consists of hedge funds represented by Elliott Management’s NML Capital. The funds bought Argentine bonds as the country’s economy spiraled downwards, and they rejected the restructuring, holding out for the bonds’ full original value.

The Supreme Court refused to review Griesa’s decision, while also permitting bondholders to issue subpoenas in order to locate Argentine assets abroad. Argentina refused to pay, as negotiations failed and the country defaulted on its debt last Thursday at midnight. Argentina’s standing in international debt markets, not to mention its domestic economy, is so bad that very little has actually happened as a consequence.

Since its 2001 default, Argentina has been experiencing inflation, recession, and exclusion from international capital markets. None of that has changed, though it is slightly accelerating. Argentines, many of whom lost their savings 13 years ago, have long turned to the U.S. dollar as the under-the-table currency of choice, as Argentina’s own peso is worth less and less every year. Last week’s default is practically a laughing matter in the Argentine papers, perennially full of bad economic news. The ever-opportunistic administration of President Cristina Fernández de Kirchner has railed against American injustice rather than making any attempt to minimize the harm.

The case’s international ramifications are even less dramatic, despite concerns over the future of creditors’ rights in debt markets. Peter Eavis and Alexandra Stevenson suggested that “the Argentine dispute will make it much harder for indebted countries to cut their obligations to manageable levels,” since investors now have a greater incentive to demand better deals from countries in crisis. But Hung Tran suggests such worries may be overblown due to the very limited and particular nature of this dispute. In fact, the likeliest outcome is mainly an international study session. After seeing such a small economic problem threatened to cause such a large one in Argentina, countries will likely look to clean up and clarify pari passu clauses, the legal mandate for “equal treatment” in debt repayments that caused the Argentine problem in the first place.

To that end, Nobel laureate Joseph Stiglitz called for a global system of debt restructuring. Calling the hedge funds “vultures”—as the Argentine press has—Stiglitz said that the investors had no interests in the country other than to profit from its demise, and that should have consequences. Read More…

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Development of Non-Toxic 2016 GOP Agenda Continues Apace

The release of Rep. Paul Ryan’s anti-poverty “discussion draft” last week marks another milestone in a long, painstaking, and necessary project: the development of a non-toxic policy agenda on which the next Republican presidential nominee can run.

Zooming out, we see Republicans, like Tiktaalik, slowly transitioning out of the primordial soup of supply-side dogma. There was Rep. Dave Camp’s comprehensive tax reform proposal. It’s revenue neutral and maintains progressivity. Relatedly, Ryan takes care to insist his own proposal is “not a tax cut.” It’s true the conservative movement didn’t exactly leap for joy at Camp’s proposal—and there’s a myriad of reasons to doubt that the GOP could ever muster the courage to eliminate as many loopholes and deductions as it would take to reconcile the math of the Ryan budget.

But the larger point is this: a net tax reduction for the rich is now a radioactive position on the mainstream right.

Climbing down the income ladder, Ryan, in presenting his anti-poverty plan, with its devolution to states and consolidation of public assistance spending, noted that “this is not a budget-cutting exercise.” Yes, there’s the matter of reconciling these reforms with the harsh math of the Ryan budget. And the “accountability standards” to which states and local agencies would be held smells an awful lot to me like the anti-poverty version of No Child Left Behind.

But—and again—the larger point is this: a net reduction in spending on the poor and vulnerable is now a radioactive position on the mainstream right.

The recovery from “The 47 percent” and “You built that” will remain a tough slog over the next 18 months. However, the momentum is clearly in the direction of rational reform. The Tea Party era—in which “conservatism” for all practical purposes stood for an unholy alliance of plutocracy and Dixie revanchism—is clearly coming to a close.

Just how the all the manic energy of the last five years will be brought into the fold of a plausible governing agenda remains to be seen. The Room to Grow agenda represents the seedbed of ideas that might eventually become an appealing campaign platform. I like, in particular, Andrew Kelly’s ideas on higher-ed and job training, and Carrie Lukas’s emphasis on fiscal reforms that improve work-life balance.

Broadly speaking, the “reformocon” carriage is an interesting one, fraught with tension but full of possibility: that of the nontechnocratic wonk; of superintendence of the welfare state in a pro-market direction. Of bottom-up or middle-out reforms that issue from the top. The idea of a Medicare premium support system is qualitatively different than, say, Ronald Reagan’s original position on Medicare. But if the arrow is pointing in a rightward direction, can each faction of the right buy into it? Can you sell the idea of “reform” to people on a steady diet of Mark Levin, Ted Cruz, and Sarah Palin? Personally, I think the right would be better off it admitted—no, more than admitted—that “spontaneous order” does not and will not ever lead to a safety net or social insurance for the elderly.

But perhaps I worry too much. One of my themes in this space is the belief that the Tea Party was a cultural temper tantrum more than a granular programmatic shift. It may turn out that tea partiers can be lead to the water of an essentially neoconservative domestic agenda more easily than anyone currently imagines.


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Labor Union Brings Community Bookstore to Heel

Sex isn’t the only thing that will get New York City’s liberals hot and bothered.

Chris Doelib is an independent bookseller who owns a bookstore in the Morningside Heights neighborhood next to Columbia University. As the New York Times detailed in Sunday’s paper, Doelib self-identifies as “an extremely progressive liberal,” who “hung photographs of Gandhi and Martin Luther King Jr. above the cash registers … threw open his doors to local authors, provided a home for the Queer Book Club and created a weekly story time program for children (in English, Spanish and Mandarin).” Thus to many in the neighborhood, “he is a lanky warrior for the written word, celebrated for creating and sustaining an intellectual haven in the neighborhood for nearly two decades.”

Or he was, rather, until Doelib resisted attempts to unionize his store by firing several employees involved in the effort (saying they were management employees who illicitly voted in the union election).

Within a week, the Times reports,

…[m]ost of Mr. Doeblin’s remaining employees went on strike, picketing his two stores with the help of the union and its giant inflatable rats, and urging neighborhood residents to join in a boycott. The news spread on Twitter, in the local news media and on community email lists. Sales plunged.

The union in question, the Retail, Wholesale, and Department Store Union, brought giant inflatable rats to their picket lines as they rallied a neighborhood against an independent community book store that had supported so many of its cherished causes over the years. The Times story then contrasts an expected lengthy, drawn-out battle between management and labor with what was in actuality a clean and speedy resolution.

As it tells the story, “something happened as Mr. Doeblin watched his staff protest, as he was peppered with questions while walking to work and as he fielded hundreds of emails and phone calls at his stores.” It wasn’t that he feared for the solvency of his business, or was frightened at the scale of opposition pouring out of the community he had served for so many years. Instead, Doeblin ”started to wonder where he had gone wrong.” After some perfunctory self-examination, he “agreed to rehire the four fired supervisors, provided that they agreed to give up their titles and return to hourly status for now. He gave a severance package to the fifth person he had let go and has agreed to recognize the union.” All this within a day of the giant inflatable rats being deployed outside his store.

As James Poulos articulated in his “Conservative Case for Unions,” ”unions wind up being the only way industrial workers can bargain effectively with the massive corporations that employ them. Unions exist because, without them, the path is opened wide to crony collaboration between big government and big business.” Given the enormous scales at which billion-dollar companies and trillion-dollar governments operate, unions can serve a vital organizing role in connecting wage-labor workers at similarly large scales.

An independent community bookstore staffed largely by Columbia University students, however, is the furthest thing imaginable from the circumstances that legitimate union activity. Here, the hand of organized labor was brought in to signal noncompliance with one of the tenets of contemporary liberal norms, so that the offender might be brought back around. And so he was.


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Can Main Street Poach Talent From Wall Street?

James Fallows of The Atlantic has been touring the United States with his wife, stopping in small and mid-size cities to try and get a picture of what is actually working in American politics. He says they’ve found it in the nation’s mayors, who are exercising a strong hand of leadership to bring the best insights of urban planning and town development to their constituents, and revitalizing even economically stricken towns like former textile stalwart Greenville, South Carolina.

He recently got a response from a small-city Midwestern mayor currently on military duty in Afghanistan, who told him that “There has been lots of good buzz and coverage lately about cities and mayors, but a story still waiting to be told is the quality of people coming to work for them.” The young mayor went on to postulate that “The kind of people who might have gone to NASA in the 1960s, Wall Street in the 1980s, or Silicon Valley in the late 1990s are now, I think, more likely than ever to work in municipal government,” because it is increasingly becoming a place where people of talent and industry can get things done:

In recruiting talented professionals, we have been able to punch above the weight of a small city like ours, drawing people with international careers in architecture, government, consulting, and engineering to work for five-figure salaries in a small Midwestern city willing to try new things.

Is this a side-effect of federal dysfunction, that public-minded young professionals are far less attracted to the Hill as a place to make their mark and now look to the local level instead? Or something to do with the economy? I don’t know, but I think there is something to this untold story of the kinds of people newly drawn to local civic work.

I’d like to see some hard numbers before jumping all the way on the small city optimism bandwagon, but as Fallows remarks, “We have not yet been to his city, but what he says resembles what we have heard elsewhere,” where many of the people they encountered were driven by “the chance to make a difference, and be part of a success” (emphasis original).

I wonder, too, how much the utopian shine of Silicon Valley’s start-up culture might start to wear thin on practically minded people of talent, and how far Wall Street’s quantitative gymnastics might fall from the sort of meaningful work that can drive late nights for a purpose past the paycheck. Town renewal can be every bit as intellectually stimulating as credit-default swaps and big firm lawyering, with bookcases of accumulated zoning codes in need of a dramatic revamp customized to the needs of each place. That’s not even to mention the tremendous creativity and human capital needed to cultivate established interests while courting new businesses with, as Fallows puts it, “a conception of the town—people think we’re hicks, but we know we’ve developed something great—that depends on a series of specific achievements.”

So even if small cities and large towns can’t end up poaching quantitative whiz-kids from Wall Street, or steal blistering coders from Palo Alto, they may actually be able to do one better: attract great town managers.


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Religious Discrimination Found in the Workplace

One might think that having a stronger cultural bias toward religion would lead to less discrimination against religious affiliations. Two sociological studies, one of New England and one of the South, indicate that in the workplace, at least, that may not be true.

The first study, the survey of New England, measured employer response to fictitious resumes that had various religious affiliations (including a made-up “Wallonian” faith) and a control group that had no such affiliation listed. The second study was a simple replica of the first, performed in the South. Both studies found that including an overt religious affiliation caused a significant drop in follow-up contacts from prospective employers.

The original study was focused on New England because, in the authors’ own words, “New Englanders express the lowest levels of religiosity in the country,” and the “notoriously taciturn New Englanders are not typically prone to flamboyant displays of religious fervor.” The New England study was then replicated in the South, a region known instead for being strongly religious. (The introduction to the survey of the South calls it the “most devout,” in contrast to New England’s label of “least religious.”)

The results? In both studies, Muslims were by far the least likely applicants to receive a follow-up contact, receiving 38 percent fewer e-mails and 41 percent fewer phone calls than the control group in New England. In the South, the numbers were 38 and 54 percent, respectively.

The New England study found that Catholics, pagans, evangelicals, and atheists were again subject to discrimination, if considerably less than Muslims. Each group received roughly 27-29 percent fewer phone calls: close to the effect that religious affiliation itself had on contact returns. (The reaction against these minority groups, save evangelicals, was similar but more pronounced in the South.)

Even cultures that are highly religious—such as the South—will discriminate against expressed religious affiliation in entry-level hirings. From the conclusion of the study conducted in New England:

This suggests that the secularization has developed a normative aspect … prescribing when and where it is “acceptable” to express one’s religiousness. … As such, secularization implies not just independence from religion but normatively enforced separation from it — even to the point of religious discrimination.

The key to overcoming prejudice seems to lie, oddly enough, with Southern Jews. They were given even preferential treatment by employers, despite the fact that their culture is unfamiliar to the regnant strain of Protestantism. From the conclusion of the survey conducted in the South by Wallace, Wright, and Hyde:

While Jews are culturally different from evangelicals in many respects, Southern Jews have deep historical roots in the South and have more successfully assimilated into mainstream culture than Jews in other regions. … In short, Jews thrived in the South, not by brandishing their religious differences but by embracing key aspects of Southern evangelical culture.

American culture has indeed secularized and, as this study shows, become more wary of overt religious affiliation. The separation between public and private freedom of religion is more and more strictly defined. Many Christians chafe at the idea of such restriction. But perhaps, as the success of Southern Jews has demonstrated, the answer is not to “brandish religious differences” but, as Samuel Goldman describes in the latest issue of The American Conservative, to make peace, within limits, with the culture in which we live, for the sake of common harmony.


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Homelessness, Housing, and the Failures of the Regulatory Impulse

When it comes to homelessness, many communities’ first instinct is to regulate the problem away. Making certain aspects of life on the street illegal, the approach goes, will force the homeless into city programs—or into other cities. This regulatory approach, sometimes referred to as the municipal criminalization of homelessness, includes the seizures of homeless Americans’ private property through police sweeps, laws against panhandling, and restrictions (or even bans) on sharing food with the homeless in public. These measures end up wasting money through the overincarceration of the homeless for nonviolent crimes: according to the National Coalition for the Homeless, it costs up to three times as much to keep someone in jail for one night as it does to keep someone in a shelter.

But the approach, which only deals with the visibility of homelessness and not its root causes, is also fundamentally flawed in that it tends to manifest as merely a short-term bandage for a much more complex issue. The misguided strategy is exemplified by Honolulu mayor Kirk Caldwell’s “war on homelessness,” which has quickly devolved into a “war on the homeless” by seizing the property of the homeless, banning tents in public spaces, and drafting bills to authorize the police to harass anyone sleeping in public spaces. Though it is intended to improve the local economy by boosting tourism—and a booming local economy would be beneficial to the homeless population in the long run, to be sure—this regulatory approach provides no alternatives other than exodus for the homeless population. As Leah Libresco put it, “Hawaii, more than other states, shouldn’t just try to hide their homeless, since, as an island state, they can’t pull the trick other cities have used and hand out one-way bus tickets to shunt their homeless to another city.”

That same regulating impulse on the local level is also driving up housing costs in cities across the country, likely contributing to homelessness. Scott Beyer recently illustrated how housing policy intersects with homelessness in D.C., where the public health crisis at the decrepit General Hospital shelter is contrasted with housing prices that are rising along with regulations slowing development. “Collectively, writes Cato Institute economist Randal O’Toole, these ‘planning penalties’ add $135,000 to the costs per unit in D.C. Such expenses are paid upfront by businesses, but ultimately get passed onto consumers, making the idea of owning — or even renting — housing impossible for many residents,” Beyer says. He notes that the situation is not specific to D.C. but has spread to politically similar cities like New York, San Francisco, Portland, and Seattle.

Even affordable housing requirements, meant as a regulated solution to those inflated housing costs, are handled in the same wasteful way. Josh Barro recently detailed the issue of inclusionary zoning, an attempt to increase affordable housing in New York City by offering Manhattan developers the ability to build more luxury apartments if some are allocated to lower rent levels. But while perhaps politically necessary, the strategy underperforms. According to Barro, “Inclusionary zoning generates fewer affordable housing units than a cash equivalent because luxury apartments make for an expensive form of affordable housing.” Read More…

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David Brat’s Half-Cocked Theological-Economic Fusionism

Michael Tanner recently—but before the shocker primary in suburban Richmond—lamented that the tea party’s influence was waning because it had strayed from its core mission:

Sparked by outrage over the Wall Street bailouts, the original Tea Party was motivated by an opposition to Big Government. The motto of the Tea Party Patriots, one of the largest and most influential groups, was “fiscal responsibility, limited government, and free markets.” The Tea Party’s core issues were the skyrocketing national debt and opposition to Obamacare.

Social issues were not part of the platform. In fact, Jenny Beth Martin, leader of the Tea Party Patriots told the New York Times, “When people ask about [social issues], we say, ‘Go get involved in other organizations that already deal with social issues very well.’ We have to be diligent and stay on message.”

Tanner is one of an unfortunate many who took the tea party at face value. As I’ve been arguing for years, economic issues, for tea partiers, are inseparable from social ones. It’s the (largely) Protestant version of the seamless garment: capitalism is part of God’s blueprint for human society, just like traditional marriage and heteronormativity. Ironically echoing the atheist Ayn Rand, this worldview values capitalism not merely as an instrumental good, a man’s-estate-reliever, but as a moral imperative.

Research by David E. Campbell and Robert Putnam and long-form reporting by Jill Lepore have lent empirical weight to my intuition that the tea party is a religious movement by proxy. Ed Kilgore put it bluntly: “scratch a ‘fiscal conservative’ and you’ll find a culture-warrior of one sort or another right under the surface.”

Along comes David Brat, professor of economics and slayer of the dragon Rep. Eric Cantor, to bring the argument into sharp relief. The parsing of Brat’s academic writings and theological-economic beliefs has become a cottage industry. The Washington Post called Brat’s primary election an indication of a “rise in the crossroads of religion and economics.”

At first blush, Brat seems to draw from the tradition of thinkers like Wilhelm Roepke, who believed that, to properly function, markets depend on bourgeois virtues. As Brat once put it: “If markets are bad … that means people are bad.” There’s an interesting wrinkle to Brat’s fusionism, however. Where proponents of what can only loosely be called “Christian economics,” such as R.C. Sproul, Jr., tease out capitalist principles from the Bible, Brat teases out a biblical influence on secular economic writing. As Kevin Roose writes:

In one unpublished paper from 2005, “Adam Smith’s God: The End of Economics,” (Word doc here), which I accessed through a Google Scholar search, Brat makes the case that even though Adam Smith (the father of modern economics and author of The Wealth of Nations) is thought of as one of the great figures of the Enlightenment, his “invisible hand” theory should properly be seen in the context of Christian moral philosophy.

“In fact, [Smith’s] system really retains most of the fundamental features of the Judeo-Christian system,” Brat writes. “On paper he places Stoic reason above Christian revelation. But on the other hand, he chooses the Christian God over the Stoic God. And in the end, his choice of virtues and ends take a decidedly Christian turn.”

In a sense, Brat’s brand of Protestant-ethic revivalism completes a circle: now, not only can Christians find Adam Smith in the Bible, they can find the Bible in Adam Smith too!

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Reparations, Colonialism, and How to Engage an Argument

As conservatives respond en masse to Ta-Nehisi Coates’ recent cover story for The Atlantic on reparations, a similar, older exchange over liberal scholarship is returning to headlines.

The New York Times recently picked up on a month-old story from Brazil in which Uruguayan journalist Eduardo Galeano expressed distaste for his famed 1971 manifesto on the historical roots of the region’s contemporary poverty, Open Veins of Latin America. The book has become a classic in Latin American anti-colonialist academia, laying the blame for Latin American poverty squarely at the feet of the United States and its corporations. Open Veins enjoyed a brief burst of popularity in the U.S. in 2009, when then-president of Venezuela Hugo Chávez famously gifted a copy of the book to President Obama. As Adam Goodman noted at Tropics of Meta, contrary to the Times, Galeano did not “disavow” the historical viewpoint of his book, merely his “leaden” prose and inexperienced presentation. Yet Open Veins’s academic value has long since been relegated to historical conversation-starter, rather than policy inspiration. Marjorie Miller illustrated the changed value of the book in the L.A. Times in 2009:

Today, after the collapse of the Soviet Union and the economic failure of Cuba, Open Veins seems dated. The military governments of South and Central America have been replaced by independent, democratically elected leaders who do not take their cues from United Fruit or the United States. …

Yet almost 40 years after Galeano wrote Open Veins, Latin America is still beleaguered by a poverty and inequality born of the colonialism he described.

The trajectory of Open Veins is instructive, as Galeano’s work was received similarly to that of Coates: with liberal adulation and conservative skepticism. One of the main conservative criticisms of both Galeano and Coates’s work is that their presentations are unproductive calls to victimhood. Venezuelan columnist Ibsen Martínez characterized Galeano’s work as a “self-victimizing” that “debases the very theory of neocolonial dependence that Open Veins purports to sustain,” while The Federalist’s Rachel Lu accused Coates of depicting black Americans as “‘victims’ of history rather than its rightful inheritors.” To critics, this victim-focus led to Galeano and Coates’s failure to craft policy solutions to the cultural problems they highlighted.

In his own day, Galeano’s argument was countered by both the widespread Latin American experience of socialist failure and a well-articulated alternative historical viewpoint, exemplified by the work of conservative Venezuelan journalist Carlos Rangel and his own 1976 book, The Latin Americans. Rangel accepted Galeano’s structure, which compared the U.S. experience of colonization with the Latin American one, but corrected its content. Read More…

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