Friday, September 23, 2016

Thine Every Flaw

There’s a verse in America the Beautiful that I absolutely adore; it represents for me the very best traditions of my adopted country:
America! America!
God mend thine ev’ry flaw,
Confirm thy soul in self-control,
Thy liberty in law.
I’ve been thinking about these words a lot over the past year or so, as the election season has revealed just how divided and how lacking in common purpose we are as a nation.

It's glaringly obvious that international trade, migration, and technological progress have brought enormous benefits to many of us. Our handheld devices are more powerful than the computers that launched our first satellites into orbit. Our system of higher education remains a magnet for eager students from every corner of the world, in part because we have attracted and retained the finest research talent. We are on the verge of a revolution in transportation and urban form as driverless cars make their presence felt. Our cultural products—movies and music among them—continue to attract strong global demand. And our Olympic medal winners encompass many different identities, religions, and countries of origin.

But globalization and technological progress have also left in their wake economic devastation and social disintegration across large swathes of the country that were previously prosperous and stable. The kind of deprivation once confined to inner cities—and tolerated for decades by the rest of society—is now pervasive in once-thriving industrial areas. In his recent and acclaimed memoir, JD Vance laments the decline of Middletown, Ohio from a proud and bustling steel town to "a relic of American industrial glory," with abandoned shops and broken windows, derelict homes, druggies and dealers, and places to be avoided after dark.

Anne Case and Angus Deaton have reported a startling increase in midlife mortality among white Americans without a college degree, "largely accounted for by increasing death rates from drug and alcohol poisonings, suicide, and chronic liver diseases and cirrhosis." Stratification by sex reveals that this phenomenon has hit white working class women especially hard. Trends in criminal justice tell a similar story: the incarceration rate for white women has risen by a staggering fifty percent since 2000, while that for black women has fallen more than 30%. Similar, but much less striking trends are in evidence for males.

All this has led to what Dani Rodrik calls the politics of anger. In its American incarnation, this anger has lifted to the helm of a major political party a man who has apparent contempt for the greatest of our traditions: due process even for those accused of the most heinous crimes, the prohibition of cruel and unusual punishment, and freedom from discrimination on the basis of religion or race. He lacks the self-control for which the verse above pleads, and his appeal to liberty and law is opportunistic and entirely self-serving.

This has been too much for some in his own party to stomach. Meg Whitman, a Republican candidate for Governor of California as recently as 2010, has been actively campaigning for Hillary Clinton. And if unconfirmed reports are to be believed, former president George H.W. Bush intends to vote for her too.

But even if we manage to dodge this bullet in November, the conditions that have fueled Trump's rise will remain in place, and the anger will intensify rather than abate. Something has got to be done to prevent our social fabric from fraying further. But what?

Perhaps protectionist and exclusionary policies can provide some measure of short term relief, but much of the dislocation that results from globalization is also a consequence of technological progress, and giving up on the latter is a recipe for economic suicide. Targeted interventions that support retraining and transition to growing sectors of the economy have to be part of the solution, but these are piecemeal efforts with varying effectiveness and the potential for bureaucratic mismanagement.

An alternative approach is to target inequality and poverty directly, through cash transfer schemes such as a universal basic income or a negative income tax. But payments such as these are not contingent on the performance of the economy as a whole, and therefore provide no incentives for people to support policies that are beneficial in the aggregate but impose costs on them as individuals.

What we need is a distributive mechanism that allows for all to benefit when the country benefits. Debraj Ray has recently proposed something along these lines, a universal basic share. This is simply a share of nominal GDP,  the value of which will ebb and flow with the nation's aggregate income. Aside from some obvious advantages relative to a basic income, such as the absence of any need for indexation, this would give all citizens a stake in the prosperity of the country as a whole.

How might such a scheme be implemented? I have previously proposed the creation of individual accounts at the Federal Reserve for every citizen, including minors, which could be credited with the profits of open market operations. These profits are currently transferred to the Treasury. Any shortfall relative to the basic income share would then have to be made up by transfers from the Treasury to the Fed. One considerable benefit of such accounts is that they would do away with the need for deposit insurance, and would remove at a stroke the implicit subsidy that such insurance provides for proprietary trading at commercial banks. 

Policies of this kind already exist. For instance, the Alaska Permanent Fund collects and invests a portion of the revenue from mineral leases, and periodically distributes dividends to all qualified residents of the state.

The hope is that an initiative such as this can distribute more evenly the benefits from policies that raise aggregate incomes, whether through trade, migration, or technological progress. This ought to mitigate the political obstacles to the implementation of such policies. And perhaps the sense of common ownership will help bridge some of the deep divisions that have become so salient during this electoral season.

Through his rhetoric, Donald Trump has emboldened and empowered some of the most virulently racist and anti-Semitic elements in our society. Just take a look, for instance, at the messages received on twitter by the political theorist Danielle Allen, in response to her concerns about a Trump nomination. They are disheartening in the extreme.

But Trump has the support of about 40% of registered voters, which in my estimation is about 88 million people or 36% of the adult population. While many of them may hold views on some matters that are immensely distasteful and deeply hurtful to others, I think that JD Vance is right to point out that it is "difficult in the abstract to appreciate that those with morally objectionable viewpoints can still be good people." 

I have been an American for just six years, and it is far too soon for me write off so substantial a fraction of my fellow citizens. Call it the naive optimism of the newly naturalized if you like, but I really do think that we can get past this. With or without divine intervention, we can mend our individual and collective flaws.


  1. Frankly, I find it very, very easy to appreciate that people with objectionable views are still fundamentally good people; I'm not a believer in absolute evil. The necessary goal in encountering those with objectionable beliefs usually entails demonstrating to them that they're--in some way--mistaken about their own beliefs.

  2. I had a neighbour over to dinner last night and this very issue came up. He was proposing an outreach, through his church, to racists in the area. At first I thought he was joking.

    We ended up agreeing that one can identify evil without writing off the people doing it, I guess. But sequencing is really important here. The pressing issue right now is to defeat Trump.

    If that requires holding your tongue and pretending to be understanding through some rantings of uninformed swing voters, then do it. Sincerity is very important. If you can fake that we got it made.

    The actual outreach can be done after Trump is sent to the dustbin. Knock on my door and I will sponsor you two dollars and pat you on the back for doing it.

    But don't try so hard to be nice. Focus on protecting the most vulnerable, not the dumbest. And now is not the time for a moral philosophy debate over the nature of evil. You can prove how terribly clever you are after the election. For crissake focus!

    1. I wasn't advocating pretense of understanding, just making a case for actual compassion and reflection. Writing off tens of millions of people isn't just intrinsically wrong, it's also politically imprudent.

  3. Rajiv:

    I have a question for you. You seem to be proposing redistribution as a way to reduce the political and economic tension that is motivating support for irresponsible candidates such as Trump. But I'd guess that most Trump supporters are conservatives who would strongly oppose economic redistribution. So how does this work?

  4. "But Trump has the support of about 40% of registered voters, which in my estimation is about 88 million people or 36% of the adult population. While many of them may hold views on some matters that are immensely distasteful and deeply hurtful to others, I think that JD Vance is right to point out that it is "difficult in the abstract to appreciate that those with morally objectionable viewpoints can still be good people."

    It's a trait unfortunately missing among many researchers (at least those in the public eye) these days. As a layman, I genuinely appreciate the combination of empathy with a willingness to follow the evidence (as best as can be done) where it leads. For those of us without the skills to properly evaluate the endless stream of data and research coming at us (speaking for myself anyway) it helps to have people you can trust, intellectually.