In discussing economics, or pretty much everything else for that matter, but particularly economics and how it relates to people getting what they deserve there are several hurdles. Those include the personal psychology of the individual, one’s knowledge of the formal study of the social science of economics ( note economics is a social science, not a highly rational and empirical based natural science), deeply ingrained beliefs ( a subset of the physiological difficulty) and the language we use to describe what we’re talking about. The last is reference to the problems explored by the philosophy of Ludwig Wittgenstein in his first work Tractatus Logico-Philosophicus (1921). Ludwig tried to find a language in which one could find an absolute truth. It may not be possible to have an absolute truth in language because there are so many variables. In economics so many pieces must come together to produce the end result, the result itself is either temporary or leads to the introduction of other variables. Imagine a large sports team with many coaches. Even old well-known plays deviate from the original conception because – in short – the players and coaches are human – they will not always use the exact same words, take the exact same steps during play, feel the exact same physical energy. In turn each of these even tiny deviations produces other deviations from the other players. They in turn may act differently depending on the weather or the reaction of the fans. The mathematics in economics is useful only so far as it crunches numbers, sums of transactions and has some predictive power in terms of probability. Great accomplishments, but frequently an outline, abet sometimes a very good one, though not written in granite. The stock markets themselves are a daily tacit admission that rationalism does not drive the markets. The larger picture of economic behavior in which the mathematics is a tool to provide insights, is not grounded in reality the way Pi or gravity are. One can get closer in a limiting set of variables with a good economist or better, the consensus of a group of economists. Though a team of economists is no match for deeply held beliefs of the masses. Like much of human progress – real progress like germ theory – not the invention of political systems such as communism or fascism. Both reactionary systems in response to injustices – some real, some imagined. Totalitarian monarchies gave rise to both – though one can make a very good case that fascism – and its legacy, conservatism and libertarianism are the modern incarnation of very structured authoritarian rule which defined old monarchies and the Holy Roman Empire. Communism was a radical reaction to totalitarianism which substituted its injustices for old ones. A long intro to this piece by Sam Harris, A New Year’s Resolution for the Rich
We now live in a country in which the bottom 40 percent (120 million people) owns just 0.3 percent of the wealth. Data of this kind make one feel that one is participating in a vast psychological experiment: Just how much inequality can free people endure?
[ ]…To make matters more difficult, Americans have made a religious fetish of something called “self-reliance.” Most seem to think that while a person may not be responsible for the opportunities he gets in life, each is entirely responsible for what he makes of these opportunities. This is, without question, a false view of the human condition. Consider the biography of any “self-made” American, from Benjamin Franklin on down, and you will find that his success was entirely dependent on background conditions that he did not make, and of which he was a mere beneficiary. There is not a person on earth who chose his genome, or the country of his birth, or the political and economic conditions that prevailed at moments crucial to his progress. Consequently, no one is responsible for his intelligence, range of talents, or ability to do productive work. If you have struggled to make the most of what Nature gave you, you must still admit that Nature also gave you the ability and inclination to struggle. How much credit do I deserve for not having Down syndrome or any other disorder that would make my current work impossible? None whatsoever. And yet devotees of self-reliance rail against those who would receive entitlements of various sorts–health care, education, etc.–while feeling unselfconsciously entitled to their relative good fortune. Yes, we must encourage people to work to the best of their abilities and discourage free riders wherever we can–but it seems only decent at this moment to admit how much luck is required to succeed at anything in this life. Those who have been especially lucky–the smart, well-connected, and rich–should count their blessings, and then share some of these blessings with the rest of society.
Harris does point out that education, determination and individual intelligence do play a role in achieving financial security. Yet only one of those things is somewhat set in stone, intelligence. Access to a good education from grades one through twelve and beyond are key. One also must have or have instilled in them as a skill set, not a personality feature as such – determination. The masses in the U.S. and the well off admit how much life circumstances and luck plays in how they “achieved” their success. Good luck with that for the reasons stated above and Harris’s highlighting the American myth of self-reliance. Like education it would benefit most people to strive for as much self-reliance as possible. Even in some near utopian conservative or libertarian state, everyone one becoming a John Galt or economic island unto to themselves is impossible. Unless you want to live like Jeremiah Johnson. While most our great scientists, engineers, writers, doctors, legal minds may have attended the best undergraduate and graduate schools – many of them relied on student loans and grants. The average medical school graduate accumulated over $150k in debt in 2009. As a society most of us see the clear benefits of investing in medical education of others – we pool our money, make the loans and grants available and guarantee the loans. Unfortunately we do not have the same clarity of vision when it comes to reeducating a 32 year who lost their job at a factory. They can eat cake or be self-reliant and pull themselves up by their broken boot straps. As we expect the doctors to pay back the pool so would we expect that from the factory worker or the waitress looking to improve her job skills. No free rides, but rather looking at the big picture in terms of economic and cultural returns. This change in national attitudes is not likely to change anytime soon. I can’t find the link now but a similar news story and the ensuing comments should not be hard to find. The link was to a story on some of the financial problems and unemployment which are plaguing some of our larger cities. Who is to blame for this? According to most of the commenters – unions, poor people, street crime high taxes, laziness. There is a mind-set there which is incapable of gathering the facts about unions and how they have created a better quality of life even for non-union workers in America over the last hundred years. It is not the fault of the wealthy – whose wealth could only be created by employees and workers who spend their wages on products and services. Imagine if capital and labor was a pie. American workers – the lower 60 percent are getting a bite out of every dollar in wealth created. The wealthy are walking off with the rest of the pie. Paradoxically who are the pie takers greatest defenders, a good portion of the working class wage slaves. The fans of Fox news and Glenn Beck. You want your fair share of the pie? You’re a Woodrow Wilson loving commie. Do not blame the people whose wealth was accumulated through the actual work of millions of Americans. Do not blame the defenders of the plutocracy in Washington who guide economic policy. Blame some worker who thinks she should get a pension if she puts in her 30 years. Do not blame corporate America for outsourcing good paying manufacturing jobs to China, India and South Korea. Blame that socialist Kenyan Muslim Maoist Barack Obama. And most of all do not look inward. Do not have a soul-searching epiphany. Do not leave the comfort zone of that dark cloud of ideological hog wash dispensed from the right-wing media every day. The majority of the public suddenly realize that luck and a multitude of things outside their control are fundamental determine factors in their lives and do something to even up the odds just a little. Not going to happen. We like our bogey men and myths more than Linus loved his blankey.