Harry Frankfurt’s Hand Grenade
I failed my test in Macroeconomics yesterday. I blame the instructors.
I was sitting with an economist discussing, among other
things, Harry Frankfurt’s new monograph, “On Inequality”. While veering among the hieroglyphics he
wrote on a white board, diminishing marginal utility, dollar stores in poor
neighborhoods, regulation of banks, values-based investing, and tax simplification
while maintaining progressivity, I asked what I thought was a reasonable
question “If you were King, what would you do?”
He didn’t like it, and he effectively turned it around on me. What would I do, if I were in charge? The answer I gave was logical, in light of my
rather sparse understanding of how the economy actually works, but it was dead
wrong. I said I would hire smart
people.
Suffice to say, I will not be called to Stockholm next
year. The reason why that answer is so
poor is because it turns its back on something I do know a fair
amount about—politics. In a democracy,
voters make the threshold decision—they choose the direction of economic
policy by electing the people to enact it. The “smart people” merely refine
and implement it. By metaphorically
throwing my hands up in the air, and essentially telling my friend “you know
better than I do, I trust you” I was not just admitting my lack of knowledge, I
was abrogating my basic responsibility to gain that knowledge. That was my failure.
Like any good student, I feel blame properly rests on the
shoulders of those who taught me—in this case, the politicians. And, if you will excuse the bad analogy,
politicians are clearly not economists.
What ambitious office-seekers (and office-holders) tend to be is tacticians and not theoreticians. Nuance
doesn’t sell, nor does a carefully crafted, specific set of policy
suggestions. So they grasp a handful of
certitudes, push them out there, mix in some hormones, and the battle is half
won.
On the angry social issues—things like immigration, guns,
privacy, gays, reproductive rights, race and religion—this works
brilliantly. It is altogether possible
to get a voter who has an emotional attachment to a particular topic to
completely ignore his own self-interest on other things. When the gut kicks in, the brain detaches
itself.
You cannot apply that approach to the economic challenges we
face. Right now, we have multi-decade
arc of a stalled middle and working class, just at the very time the full
weight of the Baby Boomer Generation lands on our two most important
entitlement programs, Social Security and Medicare. And we
have two political parties who are still locked into mid-20th Century
binary thinking.
Look at the debates. Watching
Bernie Sanders gave me flashbacks to my
childhood. He was like a favorite family
member who was a “hi-fi” enthusiast. He’d
wave his arms around, say, “listen to this Grundig—from my bedroom I can hear
the entire world—clear as a bell—who needs those tinny transistors?”
But, what’s the difference between Sanders and, say Jeb Bush
or any of the other Republican candidates?
Different pitch, of course, but substantively, Jeb is selling the same
Grundig—just with different music coming out. Dress them in period clothes (I
don't think Bernie would need a new wardrobe) and film in black and white and,
without a scorecard, you would think you were back in the Eisenhower Era. Both sides take the same basic approach--stale ideas without innovation, wrapped in a proto-morality to give it heft. It’s either greedy plutocrats getting ever
wealthier through favoritism, exploitation, and extraction, or “takers” who are
wooed with “free stuff.” That is the
limit of their vocabularies.
That is why Frankfurt’s little book, and his work, is so
important. He is not an economist, and
his grasp of economic concepts can be tenuous. He doesn’t offer specific
solutions, which can be maddening. What he does is some ways far more useful. By blasting away (that’s the correct phrase) at
some comfortable, reflexive frameworks, he provides us with a workable
vocabulary for discussion.
Frankfurt does not believe in equality for equality’s
sake. He rejects, rather ruthlessly,
any claim to moral superiority that a comfortable liberal might have in
talking about universal brotherhood, egalitarianism, etc. Economic equality is not, in its own right, a
morally compelling social value—in fact, to the extent that the focus is on
righting the perceived wrong of inequity it may draw away attention from more
fundamentally important questions. Even
other types of “equalities” such as opportunity, respect, rights,
consideration, concern, are dismissed by him, “My view is that none of these modes of equality is intrinsically
valuable…none has any underived moral wealth.”
It’s a scalding evaluation, so harsh that George Will
happily quotes him. But, you have to be
careful here not to overreact to what, at first blush, seems to be an apologia
for not merely the pursuit of unbridled wealth, but unbridled wealth that buys
unequal treatment. Because the other
side of the equation is equally unsparing.
Frankfurt, while rejecting egalitarianism, also says, “To focus on inequality, which is not in
itself morally objectionable, is to misconstrue the challenge we actually
face. Our basic focus should be on
reducing both poverty and excessive affluence.”
What Frankfurt wants is what he calls the “doctrine of
sufficiency”—that is, that everyone should have enough. As long as that is true, it is irrelevant that others have more.
And with those few words, Frankfurt demolishes the
thinking of every conventional politician out there. Massive income redistribution as a way of
promoting economic equality has no moral basis. Economic equality, on its own, is not virtuous
unless it arises through an impossible combination of equal talent, effort, and
opportunity. But “insufficiency” when we
have the means to do better, is a moral problem. Solving that problem is the task. Not to make every person rich, but that as many as possible can have enough as “needed for the kind of life a person would most sensibly and
appropriately seek for himself”.
Which brings back to point I started at—how I failed my
economics exam. I failed it because I
was unwilling to choose either the Democratic or Republican approach. Both seem to me demonstrably wrong. 80 years of social programs and 50 years of
the Great Society have helped ameliorate the hardest edge of poverty, but they
have not produced a sufficiently vibrant economy so that we could do without
them. And 35 years of trickle-down, coupled with globalization, have wildly enriched
a comparative few, while leaving the rest to muddle along as best they
can.
In short, neither approach has fostered what the Nobelist
Edmund Phelps called the “Good Economy”—one that has dynamism, a free flow of
capital for those willing to take productive risk, rewards for innovation, ease
of entry to participate at a level befitting your energy and talents, and as
its bedrock, the opportunity for meaningful, satisfying work.
Isn’t that what we all want?
A society that is more just because it strives not to make us equal, but
rather to provide the opportunity for sufficiency
for as many as possible, and a fair chance to choose our own path, and make our
own priorities?
We don't need our politicians picking winners and losers. What we need are policy choices that make the goal of sufficiency more attainable.
In the meantime, I have to call my economist friend and see
if he gives make-up exams. Next time I will bring Harry Frankfurt's Hand Grenade.
October 20th, 2015
Michael Liss (Moderate Moderator)
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