I’ve been struggling to find something useful to say about the horrible situation unfolding in Iraq, and Daniel Larison’s most recent post has finally enabled me to crystallize my small contribution.
I agree with him that maintaining a presence in Iraq would not have given us very much ability to shape events. The best evidence of that is the situation in Afghanistan, where our presence – augmented for several years – has done little to change the character of the Afghan government, or to prevent the reemergence of the Taliban once we began to reduce our commitment once again.
But we are responsible for the situation in Iraq. We are directly responsible in that we broke the existing arrangement of power and installed ourselves as the occupier. We are also indirectly responsible inasmuch as our overweening hegemonic influence in the region means that inaction is also a kind of action. So, because the Syrian civil war has not resolved, but expanded and become more violent and extreme, and because that civil war and Iraq’s are, with the rise of ISIS, effectively merging, to the extent that we may be “blamed” for not resolving that civil war, we may also be “blamed” indirectly for the deterioration in Iraq.
None of which means we should do something stupid and counter-productive, but it provides and genuine moral explanation for why we might feel obliged to do something.
ISIS may be likened to the Khmer Rouge, who might never have come to power in Cambodia had we not bombed that country as part of our failed effort to defeat North Vietnam. Then, of course, it was our old enemy, Vietnam, that kicked out the Khmer Rouge from Cambodia. Similarly, if ISIS is prevented from overrunning Iraq, it will probably be because of intervention by Iran.
People who think the world will swiftly get more peaceful if we mind our own business may well be just as wrong as the people who think that by sticking our nose into other people’s business we can force the world to be peaceful.
You know how some politicians you just can’t stand, even though they aren’t materially worse than their fellows? John Edwards was always one of those for me; back in 2004, my line about him was that he made me want to scratch his face.
Eric Cantor was another one, in my book, someone I just could not stand to listen to or see. He seemed to me to represent the worst aspects of both establishment and insurgent Republicanism.
And now he’s gone.
Scott Galupo may be right that Brat is going to be “another useless crank,” but we can always hope that he will be a useful crank, the kind who demands a wildly against-the-consensus look at this or that particular issue, as opposed to someone willing to destroy the institution if he doesn’t get his way. The House of Representatives is pretty big; there’s room for those who make the sausage and room for those who want to change the recipe – even radically. We’ve just had enough of folks whose idea of changing the recipe is adding e coli.
If Brat becomes a table-pounder on immigration, or NSA spying, or corporate welfare – he may make a useful contribution to shaping the debate, even if I don’t always agree with the direction. If he refuses to vote for any budget that doesn’t repeal Obamacare – not so much.
We’ll find out which kind of crank Brat is soon enough. Or maybe not – there is a general election, after all; we might instead find out what kind of crank Jack Trammell is.
I’m very sympathetic to Gracy Olmstead and Connor Friedersdorf in their arguments against getting rid of cash. I think the utopian arguments for a cashless society are kind of silly, and the privacy implications of getting rid of cash are arguably not trivial.
However: I also think the dystopian implications are kind of silly, and that by and large the privacy ship has sailed. Right now, all of our most important financial transactions are electronic; only criminal enterprises do any significant business in cash. And the examples that Friedersdorf and Olmstead use to prove the continued utility of cash frequently prove the opposite.
Already, you have to be a serious obsessive to avoid leaving an electronic footprint to be read by Big Data – that’s the lesson of Janet Vertesi’s story. ATMs and credit cards already make it trivially easy to spend more than you have in your wallet at any given moment. As for the utility of cash for the poor, 90% of African-American adults own a cell phone, as do 84% of those who earn less than $30k/yr; by contrast, over 20% of African-American households are unbanked, and an even higher percentage of low-earners. The existing financial infrastructure is abandoning the poor, making reliance on cash more and more expensive for them, even as mobile technology is penetrating more fully.
Getting rid of cash is not going to eliminate crime or the black market, and it’s not going to abolish recessions. Nor is the development of an effective electronic wallet going to suddenly put poor people on a level playing field with the wealthy in terms of the daily costs they face executing simple transactions. Rather, this is another one of those situations where we’ll have to keep moving just to stay in place.
These are reasons to hope that electronic alternatives to cash continue to develop, and make cash more and more obsolete. But that’s no reason to abolish cash entirely. The main reason to abolish cash entirely is a technical one, related to the economics of demographic decline.
In a world where we expect robust economic growth, interest rates will be positive, and the yield curve will be upward-sloping – that is to say, a lender who lends for 10 years gets a higher rate than a lender who lends for 1 year. If expectations for economic growth drop to low levels, or even to negative levels, then long-term rates drop as well.
Now, when demographic growth is positive, both real and nominal growth will generally be positive. But when demographic growth is negative, the only way real growth will be positive is if productivity growth is high enough to compensate for the “burden” of negative demographic growth. And this is rarely likely to be the case for countries on the technological frontier.
So for those countries experiencing demographic decline, the rational expectation is for real growth to be zero or negative over the long term. Which should translate into low or negative real interest rates. And, in the absence of high inflation expectations, low or negative nominal interest rates.
Which is where we run into a problem. Because, when long interest rates are low or negative, there’s no incentive to invest in longer-dated assets. It makes more sense to hoard cash. When that’s a cyclical event, we call it a recession.
What is cash? Cash can be thought of as a bearer bond with no maturity date and an interest rate of zero. In what we think of as a “normal” world of positive nominal interest rates, cash is a poor investment; almost anything else has a higher expected yield. But in a world of low or negative nominal long rates, cash will be a persistently attractive investment vehicle. Which is to say: investment in actual productive assets will be persistently unattractive. Which is a real problem for capitalism.
What’s the solution? One solution would be higher inflation expectations. This would drive nominal rates up, and make cash less attractive. But there are several problems with this solution. First of all, once inflation gets going, it may be hard to keep it from accelerating. This is emphatically not our problem today – we’re continually teetering on the edge of deflation – but if we’re imagining a world where we’re relying on inflation to keep us out of persistent recession, we’re also imagining a world in which we have to worry about an inflationary spiral.
But perhaps a bigger problem is: how do you engineer higher inflation expectations? The main mechanism central banks have is to purchase financial assets – which they have been doing, in very large volumes, without appreciably causing a rise in inflation. Now, maybe the problem is one of psychology – maybe they just need to say that they will keep buying assets of all kinds until inflation starts to tick up. But there’s a chicken-and-egg problem: expectations of institutional behavior don’t change easily. What fundamentally changes them is proof that they have changed. When Paul Volcker allowed unemployment to go through the roof to kill inflation, that proved that the Fed was genuinely serious about fighting inflation – and expectations changed, permanently. Expectations that the Fed is serious about creating inflation won’t become manifest until we actually get inflation, and the Fed declines to combat it.
Meanwhile, the zero-bound set by cash creates problems for the Fed in engineering actual inflation. The Fed can drive very short-term rates down by making short-term loans to financial intermediaries – injecting cash into the system. This should spur the expectation of higher economic activity, which in turn should spur higher long-term rates – an upward-sloping yield curve. Which is what you want to get out of a recession. But short-term rates can’t go below zero because they are competing with cash. So the Fed has had to make longer and longer-dated loans – this is “quantitative easing.” But QE is a paradoxical strategy, whereby the Fed has to buy long-dated assets in order to drive their price down. Is it surprising that it has had only middling success?
Get rid of cash, and the problem goes away. Nominal rates can now go below zero, because there is no competing instrument that carries a zero nominal interest rate. And if nominal short-rates can go below zero, then you can engineer an upward-sloping curve even if long rates are low or zero – reflecting low long-term growth expectations.
I want to stress: I’m not saying that central banks will be able to wish away recessions if cash were eliminated. I’m saying that central banks have a hard time fighting their way out of situations where long rates are close to zero. In a world of positive demographic growth, very low long-term rates are a sign of something seriously wrong. In a world of negative demographic growth, very low long-term rates will be normal. If we don’t want high unemployment to also be normal, we need better tools for fighting unemployment when long rates are very low. Which may mean that we need to get rid of cash.
Again, it’s not that we need to get rid of cash to usher in utopia. We may need to get rid of cash just to get back to adequate management of monetary policy. We may need to run faster just to stay in place.
The United States will not be the first country to go cashless; we’ll probably be among the last, along with the UK. Singapore will probably go first, and Japan will probably be the first large country to make the transition, for a variety of reasons – the advanced progress of demographic decline, lack of comfort with immigration as a stop-gap solution, comfort with technology, less concern about privacy, less attachment to the artifact of physical currency. So we’ll have time to observe how the transition goes elsewhere before contemplating it ourselves.
And we may not follow the same route. We may keep cash for a long time for sentimental reasons. But we are already living in a world in which cash means something very different than it did a generation ago. Reliance on cash is already not a practical way to protect privacy or to reduce our reliance on banks. So if we want a more decentralized future, we’ll likely have to think about achieving that within the context of cashlessness.
I want to strongly endorse everything Daniel Larison says in his post on the Democratic Party’s resilience, both this:
The Democratic Party has long been “a sprawling, ramshackle and heterogeneous arrangement,” but that hasn’t stopped it from winning the popular vote in five of the last six presidential elections. It cobbles together majorities by being “sprawling” and “heterogenous,” and doesn’t depend on a particular nominee to do this. The extremely narrow margin of Bush’s re-election in 2004 points to this. Democrats have a coalition of competing, sometimes opposing interest groups and constituencies, but then they usually don’t pretend to be anything other than that. One of the stranger conceits that many Republicans have about their party is that it is a so-called “real party”: it supposedly represents some coherent set of beliefs that makes it substantially different from being an “incoherent amalgam” of interest groups. Perhaps because Democrats don’t try to paper over the contradictions and tensions in their coalition as much, they are able to appeal to a wider variety of voters than their opponents.
I don’t see any likely challenger capable of depriving Clinton of the nomination, but the Democrats would almost certainly benefit from having one or more candidates make the attempt. Like Romney in the last Republican contest, Clinton appears dreadfully inevitable with built-in advantages in name recognition, fundraising, and support from party leaders, and unlike Romney her party’s voters genuinely seem to like her. Even so, if she faced no meaningful competition and no serious criticism while coasting to the nomination, it would very likely depress turnout in the general election and it would encourage complacency and a sense of entitlement in a Clinton crowd that is very susceptible to both.
I would add only one thing: not only would the Democrats benefit, but the country would benefit from a serious, if almost certainly futile, challenge to Clinton – specifically, on foreign policy issues.
Hillary Clinton is going to run as an extremely hawkish Democrat, because that’s who she actually is. This is not what the country needs, and probably not what the country wants, but it may well be what the country is going to get.
If Clinton runs essentially unopposed in the Democratic primary, and faces a mainstream Republican in the fall, voters will likely have a choice between two hawks. A candidate like Marco Rubio might actually enable Clinton to portray herself as a moderate centrist by comparison; a Jeb Bush will try to avoid foreign policy altogether for fear of reminding the country of his brother’s disastrous record. Rand Paul would be able to run to Clinton’s “left” on foreign policy, but (a) he’s unlikely to win the nomination, and (b) the Clinton-Paul contrast on economic policy would be so dramatic that it might devour everything else.
There’s good reason, therefore, for voters who favor a more restrained foreign policy to hope that Clinton faces at least token opposition in the primaries focused primarily on that issue. Then there would at least be one forum where the topic would be raised, and raised seriously, for Clinton to address. In the best-case scenario, such opposition would get more press attention than it deserved, which would force Clinton to make some kind of gesture to placate the doves in her coalition.
More generally, this forms part of my argument why voters concerned about a particular issue should always work both sides of the aisle, and not commit themselves to ideological identification with a particular party. Hawks certainly don’t – and doves shouldn’t either, not if they want to advance their cause.
One aspect of Ta-Nehisi Coates’s big article that I feel I gave short-shrift to was his argument about how white supremacy made capital accumulation difficult for African- Americans, and the consequences of this fact for the present-day distribution of capital. I want to come back to this point, prompted as well by a piece by David Frum that also was responding to Coates’s article.
Frum’s piece has a kitchen-sink quality to it – I get the sense that he had a strong negative reaction to the idea of reparations for slavery, and proceeded to marshall all the arguments he could think of against it. Inevitably, some arguments are better than others.
In the course of that stream of arguments, he makes a couple of claims that I think are important to push back on. To whit:
A reparations plan is likely to prove even more distorting [than affirmative action in the public sector].
If paid to individuals as an income stream, reparations would dis-incentivize work.
If paid to individuals as a lump sum, reparations would expose one of America’s least financially sophisticated populations to predatory practices that would make subprime lending seem socially responsible by contrast.
These statements make much stronger claims than I suspect Frum really wants to make.
Let’s take a look at the first statement: unearned income disincentivizes work. Why would that be the case? The usual argument against traditional welfare is that, because payments were predicated on not having an earned income, it effectively created a very high marginal tax rate on wages. That would indeed be expected to disincentivize work – profoundly. But an annuity income without strings attached would have no effect on the return to work. So why would it create a disincentive? It’s worth pointing out that Daniel Patrick Moynihan, Milton Friedman and Friedrich Hayek all advocated one version or another of a guaranteed minimum income. These are not individuals usually associated with blithe disregard for disincentives to work.
You would see a disincentive if the population in question has a target income, and, once that target income is achieved, prefers leisure to work. There’s a variety of evidence for this effect. For example, retired people who receive income from pensions and/or Social Security often do work, both for the additional income and because of the inherent satisfactions of labor, but they often prefer to work shorter hours, and more irregularly, than people of prime working age. Wealthy people of any age capable of maintaining a desired lifestyle without work may choose not to, or to work more irregularly, or in an occupation that is less-reliably remunerative. A high enough income from capital may make “mere” wage work look unappealing relative to either leisure or speculative ventures, because of the sheer number of hours of work it would take to have a meaningful lifestyle impact.
This line of argument leads logically to high taxes on unearned income – so that our most “productive” citizens don’t drop out of the labor force to live off interest and dividends. But for this disincentive to operate at the bottom of the income scale, the individuals in question would have to have very low target incomes, and limited interest in capital accumulation. Is that Frum’s contention?
Frum’s objection to a lump-sum distribution is also problematic. As Fredrik deBoer points out, a major obstacle to entrepreneurship is lack of startup capital. If one problem Frum identifies with affirmative action in the public sector is that it drew African Americans away from entrepreneurship, then it makes no sense to also criticize reparations for putting recipients in a position to take much more market risk than they would otherwise be able to do. On the contrary, you’d expect the argument that reparations would be preferable to affirmative action precisely because it makes true financial independence more possible.
Unless, of course, you believe that African Americans are much more likely to fail at entrepreneurship than Americans in general, whether because of an information disadvantage or a poor skills match or what-have-you.
I don’t intend to minimize Frum’s concerns. In certain ways, I share them – as I alluded to in my own response to Coates about not expecting reparations to close the socioeconomic gap between black and white in America. It may be that multi-generational poverty does lower your horizons in ways that make it difficult to plan to accumulating capital. It may be that there are distinct barriers to successful entrepreneurship in the African American community other than a relative lack of startup capital. There is certainly plenty of evidence that large windfalls are frequently squandered – the long list of athletes, actors, musicians and other highly gifted individuals who were successfully exploited to the point of being left bankrupt attests to the risks. But these concerns should be part of the discussion – not reasons to end it.
Coates’s argument for reparations can be read primarily from a moral perspective, as a backward-looking effort to achieve justice, which is how I read it initially. But it can also be read from a consequentialist perspective, as an argument for a variety of distributism. Read in that frame, the lengthy case that white supremacy has profoundly obstructed capital accumulation among African Americans is there largely to provide a moral justification for something one might want to do anyway because it would make for a more just and harmonious society: legislate a broader distribution of capital.
I wouldn’t want that argument held hostage to the other questions that bedevil reparations. Inasmuch as the reparations debate punctures some of the sanctimony around the existing distribution of property, well and good – but the question of the practicality of distributism is one that I think deserves its own attention. There are important arguments against distributism that have nothing to do with the sanctity of property rights – paternalistic arguments for providing economic assistance in a more structured and supervised fashion, economic arguments about the efficiency of concentrating capital, Harry Lime’s argument about cuckoo clocks – but these arguments already form part of the conventional wisdom of our time. Distributism runs counter to that wisdom, and has rarely received a full airing. It deserves one.
I’ve got a couple of additional thoughts on the ongoing discussion about reparations, which hopefully I’ll have time to get down on pixels today.
In the meantime, check out today’s “Room for Debate” at The New York Times for a continuation of said conversation involving yours truly.
Home news: my review of The Library of America’s new collection, Shakespeare in America, edited by James Shapiro, appears in the New York Times Book Review this weekend. It’s on-line now, though, here.
I finally got around to reading Ta-Nehisi Coates’s case for reparations on the plane down to New Orleans (where I am now, working on a film; blogging may be even more sporadic than usual this summer). I’ve been eager to do so since I heard about it, both because I admire Coates as a writer and because I have always felt the discourse around reparations to be somewhat odd, skipping past the actual case presented and advancing immediately to a meta-analysis of why someone would make such an argument. And that oddness has very much extended to the reception of the Coates’s piece.
Before diving into the case for reparations specifically, though, I need to make a somewhat theoretical digression into different ideas about justice.
When an injustice has been done, there are, speaking in very general terms, four possible models for response. The retributive justice model assumes that there is a single legitimate authority whose job it is to assess whether a crime – a violation of positive law – has been committed, and, if it has, to punish the violator with a punishment commensurate with the crime. The injured has no direct interest in the proceeding – their injury is merely evidence to prove that a transgression has occurred. This is, broadly speaking, the way we approach criminal law – although we often justify punishments with theories about communal defense or rehabilitation, these are add-ons to a system that is conceived, at a fundamental level, as retributive.
The civil law, by contrast, deals with tort liability. The single legitimate authority’s job is not to punish transgression, but to assess the degree of liability for harm and to determine adequate compensation. The injured has a direct interest in the proceeding, but submits to the authority’s determination of what is fair compensation, if any. You can have a civil law system without reference to statute, based entirely on common law, but you can’t have such a system without a judge, an independent authority who both parties are obliged to respect.
The above two models are generally understood to be improvements on a third, older model: the vendetta. Here, there is no authority, and so when an injustice is perpetrated those close to the injured – relatives and other allies – wreak harm on the malefactor and those close to him. Precisely because vendetta leads to an endless cycle of violence, models that posit an authority are generally seen as advances in civilization.
But the establishment of a binding independent authority is not the only alternative to endless vendetta. A fourth model, or, actually, collection of models, begins from a different place: from an understanding of justice as a sense of achieved fairness that can restore social peace. Rather than posit a single legitimate authority that can punish malefaction and/or assess due compensation, the job of the community – or of its designee – is to mediate between injurer and injured, to find the formula that satisfies both sides that justice has been done. This is a model of justice asserted to obtain in a variety of traditional societies; modern variants under this same rubric, I would argue, include restorative justice (in the context of domestic criminal law) and transitional justice (in international human rights contexts).
Where does the idea of reparations fall on this spectrum?
Well, if the model is retribution – punishing wrongdoers – then reparations are clearly a non-starter. The wrongdoers are dead, to start with. Then, there’s the little matter of the Civil War, which meted out quite a bit of punishment to the slave-owning portion of the country. The statute of limitations isn’t terribly relevant given that we’re not talking about crimes that violated a statute in the first place; nonetheless, we are ultimately talking about harms that were inflicted generations ago. Similar problems bedevil a tort approach.
But if the model is the last – of justice conceived as reconciliation between injured and the inflicter of injury within a single political community – then reparations are readily comprehensible. The goal, fundamentally, is not to assess liability in a precise way. It is to establish the general magnitude of the wrong, the manifest injustice thereof, and for that claim of injury to be satisfied so that both parties can put it behind them.
If you think about the analogy to Holocaust reparations, it’s clear that this is the model that makes the most sense, notwithstanding the meticulousness with which the harms of the Holocaust were calculated. Reparations were controversial in Israel precisely because they implied some degree of satisfaction, and precisely because they were offered by Germany rather than being imposed by an outside authority. If the United States Army had simply handed the territory of East Prussia to the Jewish people and said: here, this is yours, as compensation for the suffering inflicted upon your brethren by the Nazis, I doubt Begin or anyone else would have said: no, we’ll never take blood money. Because it wouldn’t be blood money – it would be recompense extracted by an authority in a position to impose judgment. Reparations, on the other hand, were an offer of compensation to end the formal claim. (I note, as an aside, that prior to World War II, “reparations” actually referred to the assets claimed by the victor in war to compensate for to cost of the conflict – see, for example, the reparations imposed on Germany after World War I. But the meanings of the word has changed.)
It’s not hard to imagine how a slavery reparations scheme would work. The United States government would assume the responsibility for reparations; slavery only persisted as an institution because it had the protection of law. Some formula would be negotiated to determine the total aggregate compensation due to former slaves – or, rather, their descendants – probably based on a combination of lost wages and pain and suffering. And then individual descendants of slaves would have to establish descent to make claims against that communal property, and some court process would be set up to adjudicate such claims. Depending on the formula, the aggregate numbers could be very large, but they could be calculated.
The social purpose of reparations would not be to restore a level playing field between blacks and whites, or to eliminate social or economic disparities, much less to eliminate invidious discrimination. The purpose would be to establish both the fact of manifest injustice and of adequate compensation for that injustice as mutually agreed upon between the descendants of former slaves and the government of the United States.
Why isn’t this self-evidently a good idea?
Nobody in their right mind disputes that slavery was a great evil. I’ve heard plenty of people argue that African Americans have been adequately compensated since the end of slavery, but it’s very easy to demolish such claims – and Coates does an excellent job of that in his article. (And, I should stress, that this is the real point of his voluminous articulation of the ways in which African-Americans have been disadvantaged in the years since the passage of the Thirteenth Amendment. If reparations are intended to compensate for all the ways in which African-Americans have been disadvantaged over the decades, then we’re dealing with a much more amorphous subject. So I understood Coates’s point in including so much material about the post-slavery years to be making the case that proper recompense for slavery itself has never been made, but that the injury has, rather, been more often compounded.)
The most common objections are that reparations would be looking backward rather than looking forward; that they would be logistically impossible to set up; and that it would be unfair to punish the living for the sins of the dead, particularly when the living may have no biological link with the dead. None of these objections strike me as very telling. Questions of justice are always backward looking, after all. The logistics of reparations get much simpler if the structure worked the way I described above – most important, there would be a clear incentive to limit the potential number of claimants, since we’d be talking about distributing a fixed-size pie. And there is nothing unjust about the United States as a communal entity making reparations for wrongs committed by that entity – indeed, reparations is far more obviously just on that score than the various hacks we apply to our purported meritocracy. You can’t justly opt out of the burdens of American citizenship any more than you can opt out of the benefits.
So why is it obviously not a self-evidently good idea?
Coates himself thinks that resistance to reparations has to do with denial of the sheer extent and power of white supremacy. There’s probably some truth to that, but I think the explanation is a bit more complicated.
First of all, as noted, the number could be very, very large. As such, it could represent a substantial change to the distribution of property generally. Such changes are never looked upon with equanimity by people who actually own property. Nor should they be – once you start questioning the existing distribution of property in a fundamental way, it’s never clear where it will end. In a deep sense, property rights as such depend upon a willful ignorance about the sordid way in which property is often acquired in the first place. That’s an ugly truth – but it’s still a truth.
And if the number were not extremely large, then the effort at reconciliation would backfire – reparations would be perceived not as justice but as an insult.
This applies doubly if the assumption going in is that reparations would merely be studied. A study that concluded that the descendants of former slaves were owed, say, $10 trillion in aggregate compensation, and which then stopped with a study, with no follow through – that would not lead to reconciliation, but to fury. You can call that fury just, but you can’t be surprised if there’s a lot of resistance to going down that path.
Second, while Coates undoubtedly thinks of slavery as a unique evil, particularly deserving of reparations, it’s not at all obvious that other groups would see it that way. Indeed, it strikes me as extremely likely that a host of other aggrieved groups would jump on the bandwagon and press their own cases, citing slavery reparations as a precedent. We can all, I hope, intuit that slavery was sui generis, but it is not so easy to articulate a legal rationale for denying the applicability of the precedent that slavery reparations would set. The history of equal protection jurisprudence, and of affirmative action, is instructive in this regard.
Moreover, I wonder whether Native American groups wouldn’t have a real point in arguing that slavery wasn’t the only monumental collective injustice perpetrated by the United States government.
Third, I suspect that many observers question whether reparations would actually bring about the desired reconciliation, at least on terms that many white Americans would recognize. Suppose, for example, that reparations did not lead to a sudden and substantial narrowing of the socioeconomic gap between white and black Americans. Suppose, instead, that the gap proved relatively intractable; that the assets distributed through reparations were substantially lost in a generation through some combination of poor management or predation. There is an awful lot of evidence that lottery winnings do not generally lead to lasting socioeconomic gains for the winners. Might that not be predictive of what would happen after reparations? And, if so, wouldn’t we wind up having the same conversations we have now as a society?
I should stress that I don’t view this as a dispositive point against reparations. If a particular segment of society suffered disproportionately from heart disease, we would find it completely normal and just for the healthier segment to subsidize the care of the less-healthy. Indeed, we would think so particularly if the disparity proved intractable. It’s not obvious, therefore, why the justice of the case for reparations should be affected by the reasonable suspicion that reparations would not eliminate, and might not even make that much of a dent in, the socioeconomic gap between black and white in America. But it’s clear that the point is very telling for many people who expect to be on the subsidizing end of things.
Finally, and from my perspective most-tellingly, the case for reparations presupposes an organized community of descendants of former slaves who can argue the case, and, most important, accept the settlement. Consider, again, the negotiation over reparations in the aftermath of the Holocaust. There was a Jewish State, and a variety of diaspora Jewish organizations, including organizations explicitly structured to speak for the survivors and for the families of victims. There is no comparable representation for the descendants of former slaves. If the social purpose of reparations is to effect reconciliation, each “side” must be in a position to accept the settlement. It’s not obvious that this is the case with respect to the descendants of American slaves. And it’s not obvious that black Americans would want to divide themselves between beneficiaries of such a settlement and those who have no proper claim.
I’ve made the argument before that much of what exercises Coates these days feels like it leads logically to black nationalism. Coates appears to me to be looking for an alternative to nationalism that would have a similarly cathartic effect, something that would transform America itself in a revolutionary manner. I’m very sympathetic to that particular search – it’s a reflection of Coates’s seriousness both about his sense of history and of his Americanness. But I’m not sure that such an alternative exists. Nationalism is, for better or worse, the principal way a community establishes a level of equal dignity vis a vis other communities – particularly another community that oppressed it in the past. There can be no reconciliation without first a sundering.
If you close the door to nationalism, you’re left looking for ways to make your existing nation – America – the kind of place with which you can wholly and unequivocally identify, notwithstanding all that you know about the past. But that path puts a great deal of psychic power into the hands of other Americans who don’t necessarily feel the urgency that you do. Outside the context of black nationalism, that’s the psychic risk of the reparations movement.
Is it a risk worth taking? I leave that to Coates to decide for himself.
I’m torn as to how to react.
On the one hand, I’m one of those people who feel the great problem with the EU is the democratic deficit – that it wants to evolve into something resembling a true government, but agglomerates power by stealth, without transparency, and won’t give any real power to representatives directly elected by the people.
On the other hand, it’s notable that the most dramatic votes for Euro-skepticism were from countries who are fundamentally opposed to remedying that democratic deficit – because they are more concerned about protecting their own national sovereignty. France thinks of Europe as a French-led union of states, and has historically opposed that vision to the German notion that the EU would evolve in the direction of a federation (modeled, naturally, on Germany itself). The UK, meanwhile, has always been ambivalent about the EU – understandably, since for three centuries the UK’s primary foreign policy objective was to prevent the emergence of a single, dominant power on the European continent.
According to The Economist, extreme Euroskeptic parties gained 63 seats in the European parliament as a result of these elections. Of those, 31 – 50% – were from France and the UK. By contrast, all of the states who have joined the EU since 1986 put together added only 9 extreme Euroskeptic seats. Germany’s Euroskeptic representation also increased – from zero to 7 seats – but that’s still only 7% of the German delegation. A far cry from France’s or the UK’s over 30% showing.
Solving Europe’s core structural problems might well make the EU more popular in Germany, and also more popular in Poland and Belgium and Spain. But those same reforms would probably make it even less popular in France and the UK, because they would necessitate a sacrifice of even more national sovereignty in exchange for reducing the democratic deficit.
Similarly, immigration pits the interests of National Front and UKIP voters against the interests of citizens of EU members like Poland and Romania that benefit from the free movement of labor.
So it’s probably wrong to see this election as a European referendum against Europe. If anything, the differential results feel like another bit of proof that there is not a single “Europe” to vote one way or another.
Tom Friedman takes aim at a basic mathematical concept when he declares that”average is over.” He then proceeds to demonstrate that he doesn’t understand how averages work.
I’ve been arguing for a while now that “average is over.” It has to be when every boss has cheaper, easier, faster access to software, automation, robots, cheap foreign labor and cheap foreign genius that can produce above-average so easily. Everyone needs to find their unique value-add, their “extra,” and be constantly re-engineering themselves if they want to obtain, or advance in, a decent job that can’t be digitized.
Consider this article published in The New York Times on April 23: “EASTON, N.Y. — Something strange is happening at farms in upstate New York. The cows are milking themselves. Desperate for reliable labor and buoyed by soaring prices, dairy operations across the state are charging into a brave new world of udder care: robotic milkers, which feed and milk cow after cow without the help of a single farmhand.”
Overnight, an average farmhand went from knowing how to milk a cow to having to learn how to program and operate the robotic cow-milker — to keep a job. That takes above-average skills.
Average cannot be over. The average can move, and any individual’s position on the distribution relative to the average can change. But there will always be an average. Friedman is like the living embodiment of that Garrison Keillor joke about the town where all the children are above average. Tom: if everyone learns how to program and operate the robotic cow-milker, that becomes an average skill, and whatever economic advantage accrued to that skill will disappear. If everyone actually had “their ‘extra,’” then it wouldn’t be an extra. The sentence “Everyone needs to find their unique value-added” might as well be the sentence “I do not know what the word ‘unique’ means.” You can tell individuals to get ahead and say screw the rest and blather on about unique value-added skill sets. But those everyones just don’t work, Tommie.
If you teach every kid to code, there’s no value in knowing how to code. If a college education becomes a universal public good, it’s great for democracy, for our communal intellectual and aesthetic fulfillment, and for the moral principle of equal opportunity to explore, think, and create. But it means there’s no more economic value in having a college education. Average may be over, Tom, but the three sigma rule sure isn’t, and so what are you gonna do about the 68% of people who are always going to be pretty close to average?
So: in the spirit of my last post, I will proceed to defend the indefensible Tom Friedman.
Here are some possible meanings to “average is over” that are not mathematical nonsense:
- While it will always be possible to calculate a variety of different “averages” for American wages, the colloquial meaning of “average” assumes that these numbers are similar. And they are decreasingly so. The mean, for example, may be rising, while the median may be falling – and the mode may be getting less and less meaningful as a number at all. All of which would mean that, as an analytical tool for talking about the health of the economy, the “average” wage is becoming less and less useful.
- America has an above-average per-capita income relative to the rest of the world. If we want to maintain that above-average income, we need to upgrade the skills of our workforce so that our workforce’s skills remain above-average relative to the rest of the world. Otherwise, the relatively-unskilled portion of our workforce will see its income degrade toward the global average. Which would be substantially below-average relative to the historic American experience.
- Unskilled or semi-skilled labor may be obsolescing on a global basis, as more and more tasks, not only in manufacturing, come to be automated. The “average” person in terms of cognitive ability has, for centuries, relied on readily-transferable but extremely limited skills to provide a limited livelihood, first as farm workers, then as industrial laborers, finally in a variety of low-level white- and pink-collar service jobs. Recent stages in this process have required meaningful cognitive advances simply to stay put and remain productively employable. In the future, nobody will remain productively employable without more specialized skills and the ability to acquire new specialized skills in a rapid timeframe. What will happen to those who don’t make the cut remains unspecified.
I don’t know for sure, of course, because Friedman speaks in buzzwords rather than in language intended to convey actual meaning, but it’s plausible that all three of the above meanings are floating around somewhere in his brain when he says “average is over.” And all three of those meanings are reasonably plausible.
But what they all point to, as deBoer’s piece is intended to point out, is the question of distribution. If “average is over” means that a smaller percentage of Americans have incomes close to the average – the bell curve is flattening, or the center of the curve is moving down as the right-hand tail gets longer and fatter – then that’s an important fact about our economy that demands explanation. And action.
What that action should be depends in part on our understanding of why it’s happening. If the main driver of stagnating median wages and rising inequality is the rise in the average skill level in China and India (the second meaning of “average is over”), then upgrading the average skills of the American workforce is a plausible response.
But if we’re going to ask the question in that form, it’s worth noting that some of the countries that have done a better job than America of moving up the value chain and keeping median wages up approach their workforces very differently than we do. Japan has a quasi-feudal corporate culture dominated by large conglomerates, with strong two-way loyalty and effective lifetime employment. Germany’s economic engine, on the other hand, is mid-sized firms, and the Rhenish model of capitalism gives workers an explicit seat at the table in the management of enterprises – as opposed to managing enterprises exclusively to maximize shareholder value. Finland couples a flexible labor market and relatively easy entrepreneurship with a very generous welfare state and effectively universal unionization. Canada’s boom has been driven substantially by natural resource wealth, but they also have a highly protected and regulated financial sector, and an immigration policy that, while it attracts more immigrants per-capita than the USA does, also focuses on attracting the most-skilled.
In other words, it’s all well and good to say “we have to upgrade our skills to stay ahead,” but we don’t have a political culture that presents a good way of pursuing that goal. We have a hard time talking about unionization, immigration, finance, etc. as relevant factors in determining the actual skill level of the American workforce, or the incentive structure that drives that skill level. We assume, instead, that upgrading skills is a matter of individual initiative, and that the state’s role, if any, is to facilitate that initiative, whether by reducing regulation or providing opportunities for retraining and the like.
And if automation is the driver – as Friedman’s example suggests – then upgrading skills may not be enough. In a utopian future where robots wind up doing most of the work, we simply won’t need that many people to manage the robots, or to design better robots. In that scenario, questions of ownership of the means of production once again become central, just as Marx predicted.
I’m skeptical of the last notion – that we’re simply going to make most humans obsolete – for reasons that deBoer would no doubt agree with (basically, that I think we’re nowhere near true artificial intelligence, and hence nowhere near the creation of robots that could truly replace the most essential human capacities). But the second proposition points in a variety of potential directions, not all of which are dreamt of in Friedman’s philosophy. So let’s take the opportunity to talk about that. Maybe Friedman will eventually even listen, and open up his mind a bit.