I noted yesterday on twitter that:
I find it interesting that both sides are calling the stalemated “super committee” a success for not folding. What about solving problems?
What about solving problems indeed.
So, now America gets to experience what true austerity measures, like the ones the EU is imposing on Greece, Spain and Italy in exchange for maintaining the EU (interesting exchange huh?) feels like. I don’t anticipate Americans will like it much more than the people in those European countries do.
But there’s a key difference here. These measures are being enforced from within, rather than a group of wealthier countries imposing them on countries that let the economic horse out of the barn. That means we could change it, if we only had the will.
But I suspect we won’t. This bad medicine will hurt the poor, hurt our unemployment situation, and most likely everything that goes along with that.
I’ve never understood how a country, that relies so heavily on consumption could be so focused on saving money for people who, by and large, already have everything they need (ie. aren’t consuming). From my perspective, it would seem to make more sense to ensure that money goes farther for those who don’t have everything they want so they’ll have more money to consume more.
I’m no economist, but that just makes sense to me.
So when thinking about policy solutions for the economic quagmire that we’ve found ourselves in, doubling down on the status quo seems to be a bit like trying to catch a whale with a Pocket Fisherman. In short, it just ain’t gonna work.
We’ve been locked in this misguided notion of the Adam Smith’s “Invisible Hand” of the marketplace for a very long time. Smith was commenting more on how commerce, in a pre-industrial revolution economy, will produce goods in high demand and distribute the excess of those goods to the needy out of self-interest.
How does Adam Smith’s largely agrarian idea of an “Invisible Hand” apply to our current scenario? In the 18th Century it was customary for producers, be they farmers, bakers, or other merchants, to produce as much as they could which in turn resulted in an excess. Dealing with that excess left two possibilities: give it away (or sell below market) or allow it to spoil.
Given those two scenarios, the natural conclusion is to ensure that it is productive in some way, which may mean giving it away.
While this may, or may not have worked in a pre-industrial revolution economy, and I certainly think that is debatable, in our current economy where “producers” are so disconnected from “consumers”, despite technology and all sorts of other mechanisms that would allow greater communication between the two, where does that surplus go?
Considering the prevalence of supply-chain management techniques and tightly managed inventories one has to question whether or not there really is any surplus, other than capital, which, under the current system flows almost exclusively to those who have ownership in the company (ie. stockholders).
In an economy where there are few excess goods due to the kind of inventory management if all that is left in excess is capital, then, following Smith’s idea of the Invisible Hand to its logical conclusion, those in possession of excess capital should find it in their self-interest to ensure that capital is as productive as possible for the economy as a whole, and as such, be willing to part with it.
But money doesn’t spoil like agricultural products or other like consumables that were dominant in Smith’s time. In fact, for most of the people who possess the majority of the money in our economy, that money doesn’t even exist in a physical form. It is a series of 1’s and 0’s that represent something in a global economy that, in all likelihood, cannot be held.
Which brings me back around, albeit via the long way, to our policy/marketing discussion.
Much like money in our highly mobile world is representational, meaning we don’t get paid in real dollars, but a representation of those dollars (checks, or auto-drafts that take the form of 1’s and 0’s) so is the formulation of policy.
Conservatives have held strong to this idea of policy that is tangible and easy to understand, “No new taxes”, end of discussion. This policy is not conditional and easy to digest, which is something all marketing should be. It is a tool to sway public opinion, but is it good policy?
Returning again to our Pocket Fisherman, the notion that possessing a tool that would allow one to fish at any time, with little preparation, is desirable because it plays on the values of convenience and impermanence in our society. But will the Pocket Fisherman actually work for catching fish? Possibly..
Is the Pocket Fisherman an effective enough tool to catch enough fish to actually feed someone before being torn apart or snatched from the hand of whomever wields it by some monster fish? Probably not, making its overall utility as a tool very low.
I don’t watch much professional fishing, but I’m pretty sure the Pocket Fisherman isn’t their tool of choice because it, by definition, reduces the possibility of successfully catching anything but a small to medium sized fish, which runs contrary to the whole idea of professional fishing.
By the same token, this idea that surplus capital should be left to the creators of the surplus is not only destructive to our economy, but also runs counter to one of the fundamental ideas put forth by Adam Smith, and conveniently left out by the likes of Milton Friedman and his ilk: that excess should be redistributed to those in need for the overall benefit to society.
This convenient omission is comical to me. It’s like another convenient omission that I hear over and over again.
Deuteronomy 15:11 “There will always be poor people in the land.”
This is used to justify the condition of poverty. I hear people say, “See, even the bible says there will always be poor.” But conveniently, a whole part of the quote is left out:
“Therefore I command you to be openhanded toward your brothers and toward the poor and needy in your land.”
Ahh marketing…
As much as marketing tries to make life simple, it just plain isn’t. As much as we yearn for life and the decisions of life to be simple, they aren’t. We all recognize that life is complicated, even though we may not be able to express the detail of why its complicated at any given time.
But marketing understands that. Because things are complicated we have an emotional desire for things to be simple, marketing plays on that emotion, fooling us into believing that it really is that simple. This sophistry has been a part of the human condition since before the Sophists. Now, its just more prevalent.
For whatever reason, we hold exception that our lives aren’t simple, but that other people’s lives, or the best policy solution somehow is. This contradiction is the essence of the human condition, and it holds us back from enacting solutions to problems that have vexed billions of people before us.
Marketing: simplifying everything by recognizing a need, seeking to fill that need, and proposing a simple solution that completely ignores reality.
If you want to understand why people are so dissatisfied with government, you need look no further than that interview I posted yesterday. If politics has become marketing, and nothing more, its no wonder we’re hungry for solutions.
The steady diet of nothing, that has been the last 40+ years of American policy has left us not only hungry, but weakened and backed into a corner.
There’s nothing more dangerous than a wounded animal. The American public has been deeply wounded over the past 40+ years. Whether or not we will strike out, or strike back a year from now is an open question. But we should recognize the perilous position we are in, and carefully consider what to do, before expending all of its energy striking out, only to miss the mark…which is what happened in 2010.
We can’t afford to miss the mark again by falling hook, line, and sinker for some magical mystical marketing ploy.
The marketers stand ready, Pocket Fishermen in hand. We can fall for it again, or we can fight back.
I hope we choose to fight this time.