I am not American, but I do believe that the issue of being a responsible citizen is one that needs to be discussed in all democratic societies. Part of the issue, I believe, is the many layers of government and the complexities of their relationships. Often people are not even sure which level of government is responsible for what, and the answer to that is not always a simple one. There is also an increasing lack of transparency in government and people in government are often influenced by agencies other than that of the people who elected them. I think that some people have just ‘given up’, and one of the things that we all need to do is simplify the system, ensure transparency and accountability. Finally, can I just say that I have come to hate the term ‘critical thinking’. I find it is often used by one group of people to ‘flagellate’ another- insisting that ‘they’ are the critical thinkers and the group which disagrees with them is not.
An interesting article and I find myself both agreeing and disagreeing with it in parts.
It is absolutely true what we refer to as “the economy” is so complex and discussions about it so oblivious to the complexity that discussions about “the economy” fall into the basket of opinionology, heavily influenced by confirmation bias. One sees in “the economy” what one wants (or fears) to see.
However, there are policy decisions of government that have direct and predictable effects on the economy, mainly by adding to, or detracting from, the amount of money the bottom 80% has to spend day to day.
The consumer economy runs on exchanges of goods and services for money. Wage income is the biggest component of that, and when that wage income shrinks (absolutely due to lack of work—absent government support—or relatively due to prices rising faster than wage income increases) the consumer economy shrinks. People notice.
When the government adds income to people (who are unemployed or directly as was the case during COVID), the economy expands. In that respect at least the government can have an impact on “the economy” in a way the average person will perceive.
"However, there are policy decisions of government that have direct and predictable effects on the economy, mainly by adding to, or detracting from, the amount of money the bottom 80% has to spend day to day."
Nothing I said contradicts this. My general point is that the traditional socialist alternative was to use economic planning commissions, who would try to replace regular market mechanisms like wages and prices, with pre-planned production schedules, and then try to distribute those things based on perceived need, through surveying the public. The experiments at removing the market mechanism that socialist movements in the 20th century attempted, resulted in the complete collapse of economies. Including major famines. In China. In the Soviet Union, with the Ukrainian Holodomor.
Experiments with it in democratic countries in the West, with state-run industries and supply management led to stagnant economies, declining living standards. And these experiments are what gave rise to the neoliberal movement in the 1980s.
The Scandinavian model avoided these traps. Sweden and Norway are purely market economies, with a cradle-to-grave welfare state, high taxation, with low government consumption on that taxation, instead directed to direct transfer payments.
So I hold firm in my position that "markets are better than central planning". And Scandinavia, that many democratic socialists hold up as a example, actually make my point. And many socialists agree with me. There is a school of socialism known as "market socialism".
As a socialist and democrat, I disagree on the economics. The obvious counterexample is the period after 2008 when austerity policies proved disastrous.
But also, how should we deal with people who watched Trump's insurrection and voted for him anyway on the basis of "feels". If Dems turn them around on the same basis, they will switch back as soon as the economy turns down, bringing the Repubs back to complete the shift to dictatorship.
The only win worth having is a complete repudiation of Trump and the entire Republican party. Dispelling the narrative of economic competence is part of that, but running on affordability isn't (though of course fine when running for NYC mayor)
I'm not sure that I understand my intervention here to implicate matters of austerity. I am somewhat of a neo-Keynesian dispositionally, so I would have some amount of agreement with you, I think, about how to think of public expenditure and monetary policy during times of economic distress—although public account issues complicate this now.
The market mechanism as a superior model to planned production patterns is, I believe, beyond dispute. That being true does not imply that our economy should be 100% market driven. Interventions in terms of the regulation of negative externalities, the redistribution of wealth in pursuit of economic justice, the limiting of capital's political power are all things that are orthogonal to the general point.
Great piece, Mike, thank you. This is the kind of stuff that keeps me reading you even if I often think you are too pessimistic and sometimes overly abrasive. It puts the electorate's lack of critical thinking in a specific context that illuminates both its origins and effects in a way most commentary doesn't.
I think you arguably underrate the possibility of negative trends reversing themselves, and the possibility of a restoring a healthy society within a framework that looks more similar to where we started than many expect. I think that true cataclysm is both avoidable and unnecessary.
That's not a prediction as much as it's a hedge. The cataclysm COULD be larger than even you expect. Who am I to say? But I could be misreading you, and of course there are plenty of variables that can affect how "pessimistic" one sees that interpretation.
I would hope that the fact that I engage with your work is adequate evidence that I'm not "burying my head in the sand" or in active denial about everything.
At least you've provided a good illustration of the abrasiveness. 🙂
I would suggest that I have predicted the downfall of this fascist movement. Not its consolidation of power. Your caricature of my stance leads me to believe you have not read my views on the subject very carefully.
What you're doing right now? Being confrontational toward someone who gave you a compliment, and assuming the worst of them intellectually? As far as I can tell, that is pretty well representative of how you regard all of humanity. If that's not pessimism I don't know what is.
I am not assuming anything. You made a statement about my prediction towards "cataclysm" and characterized it as a pessimistic view. These words have precise meanings. I read them as charitably as I could, and came to the conclusion that they starkly misrepresent my general view on the long run. I have, in fact, written quite optimistic takes over the past weeks, interspersed with my narrations on current events. Like this piece, for instance. Published just yesterday: https://www.notesfromthecircus.com/p/the-first-domino
Well, I’m sorry for any inaccuracy or misrepresentation in my description of your outlook. I don’t think you’re understanding me much more precisely than I am understanding you. But in any case, you come across as having a dim view of humanity, and if you’re not trying to, you might consider looking into why instead of being peevish with people who engage with you.
I am not American, but I do believe that the issue of being a responsible citizen is one that needs to be discussed in all democratic societies. Part of the issue, I believe, is the many layers of government and the complexities of their relationships. Often people are not even sure which level of government is responsible for what, and the answer to that is not always a simple one. There is also an increasing lack of transparency in government and people in government are often influenced by agencies other than that of the people who elected them. I think that some people have just ‘given up’, and one of the things that we all need to do is simplify the system, ensure transparency and accountability. Finally, can I just say that I have come to hate the term ‘critical thinking’. I find it is often used by one group of people to ‘flagellate’ another- insisting that ‘they’ are the critical thinkers and the group which disagrees with them is not.
An interesting article and I find myself both agreeing and disagreeing with it in parts.
It is absolutely true what we refer to as “the economy” is so complex and discussions about it so oblivious to the complexity that discussions about “the economy” fall into the basket of opinionology, heavily influenced by confirmation bias. One sees in “the economy” what one wants (or fears) to see.
However, there are policy decisions of government that have direct and predictable effects on the economy, mainly by adding to, or detracting from, the amount of money the bottom 80% has to spend day to day.
The consumer economy runs on exchanges of goods and services for money. Wage income is the biggest component of that, and when that wage income shrinks (absolutely due to lack of work—absent government support—or relatively due to prices rising faster than wage income increases) the consumer economy shrinks. People notice.
When the government adds income to people (who are unemployed or directly as was the case during COVID), the economy expands. In that respect at least the government can have an impact on “the economy” in a way the average person will perceive.
"However, there are policy decisions of government that have direct and predictable effects on the economy, mainly by adding to, or detracting from, the amount of money the bottom 80% has to spend day to day."
Nothing I said contradicts this. My general point is that the traditional socialist alternative was to use economic planning commissions, who would try to replace regular market mechanisms like wages and prices, with pre-planned production schedules, and then try to distribute those things based on perceived need, through surveying the public. The experiments at removing the market mechanism that socialist movements in the 20th century attempted, resulted in the complete collapse of economies. Including major famines. In China. In the Soviet Union, with the Ukrainian Holodomor.
Experiments with it in democratic countries in the West, with state-run industries and supply management led to stagnant economies, declining living standards. And these experiments are what gave rise to the neoliberal movement in the 1980s.
The Scandinavian model avoided these traps. Sweden and Norway are purely market economies, with a cradle-to-grave welfare state, high taxation, with low government consumption on that taxation, instead directed to direct transfer payments.
So I hold firm in my position that "markets are better than central planning". And Scandinavia, that many democratic socialists hold up as a example, actually make my point. And many socialists agree with me. There is a school of socialism known as "market socialism".
As a socialist and democrat, I disagree on the economics. The obvious counterexample is the period after 2008 when austerity policies proved disastrous.
But also, how should we deal with people who watched Trump's insurrection and voted for him anyway on the basis of "feels". If Dems turn them around on the same basis, they will switch back as soon as the economy turns down, bringing the Repubs back to complete the shift to dictatorship.
The only win worth having is a complete repudiation of Trump and the entire Republican party. Dispelling the narrative of economic competence is part of that, but running on affordability isn't (though of course fine when running for NYC mayor)
I'm not sure that I understand my intervention here to implicate matters of austerity. I am somewhat of a neo-Keynesian dispositionally, so I would have some amount of agreement with you, I think, about how to think of public expenditure and monetary policy during times of economic distress—although public account issues complicate this now.
The market mechanism as a superior model to planned production patterns is, I believe, beyond dispute. That being true does not imply that our economy should be 100% market driven. Interventions in terms of the regulation of negative externalities, the redistribution of wealth in pursuit of economic justice, the limiting of capital's political power are all things that are orthogonal to the general point.
You might like my book, Economics in Two Lessons: Why Markets Work so Well and Why they can Fail so Badly
Great piece, Mike, thank you. This is the kind of stuff that keeps me reading you even if I often think you are too pessimistic and sometimes overly abrasive. It puts the electorate's lack of critical thinking in a specific context that illuminates both its origins and effects in a way most commentary doesn't.
Pessimistic? I take umbrage at the notion I am a pessimist. What words of mine have you perceived as pessimistic?
I think you arguably underrate the possibility of negative trends reversing themselves, and the possibility of a restoring a healthy society within a framework that looks more similar to where we started than many expect. I think that true cataclysm is both avoidable and unnecessary.
That's not a prediction as much as it's a hedge. The cataclysm COULD be larger than even you expect. Who am I to say? But I could be misreading you, and of course there are plenty of variables that can affect how "pessimistic" one sees that interpretation.
I would hope that the fact that I engage with your work is adequate evidence that I'm not "burying my head in the sand" or in active denial about everything.
At least you've provided a good illustration of the abrasiveness. 🙂
I would suggest that I have predicted the downfall of this fascist movement. Not its consolidation of power. Your caricature of my stance leads me to believe you have not read my views on the subject very carefully.
What you're doing right now? Being confrontational toward someone who gave you a compliment, and assuming the worst of them intellectually? As far as I can tell, that is pretty well representative of how you regard all of humanity. If that's not pessimism I don't know what is.
I am not assuming anything. You made a statement about my prediction towards "cataclysm" and characterized it as a pessimistic view. These words have precise meanings. I read them as charitably as I could, and came to the conclusion that they starkly misrepresent my general view on the long run. I have, in fact, written quite optimistic takes over the past weeks, interspersed with my narrations on current events. Like this piece, for instance. Published just yesterday: https://www.notesfromthecircus.com/p/the-first-domino
Well, I’m sorry for any inaccuracy or misrepresentation in my description of your outlook. I don’t think you’re understanding me much more precisely than I am understanding you. But in any case, you come across as having a dim view of humanity, and if you’re not trying to, you might consider looking into why instead of being peevish with people who engage with you.