“You write your own ticket!”
Allow me to write a bit on a passage from a book. It doesn’t matter if you haven’t read it. It’s not critical reading (although I see it has just recently been reprinted). The book is Harold E. Stearns’ “The Street I Know”. He’s reminiscing about New York City before World War I and a time period he places between 1884 to 1914:
It was still the era of optimism and hope, that is hope in an orderly, democratic, peaceable progress towards a richer civilization… At bottom, too, we still believed that if a man went without anything- particularly the necessities of life- such as food and proper clothing- it was because he was perverse, simply because he didn’t want to work. There was a living wage for everybody, even the dullest; for those above that level of intelligence, there was- well, almost anything you wanted to make it. Economically, so to speak, it was the firm conviction of most Americans that you wrote your own ticket. Happy days! Happy days!
Stearns is writing in 1935, during the Depression and after years of personal poverty in Paris, so there’s no doubt some serious romanticizing going on, and yet what a fantastical image that is! It reads like something out of Utopian fiction or a corny 1940s Hollywood movie. The era he’s describing, the Gilded Age in America and contemporary with the Belle Époque in Europe, is one we tend to be more critical about today, along with our generally critical stance towards most periods before our own; we picture it as a time of great inequality, for instance, forgetting that, for average workers, real wages increased dramatically in this time, so what he’s describing likely was perceived as the norm. It was a time too of fairly rapid industrialization and Stearns is very critical of that elsewhere in the book, but let’s take him at somewhat face value.
My Grandfather used to say that America is a country where “you write your own ticket” and he was absolutely sincere. He lived a bit later: a child during the Depression, in the Navy for World War II and starting family life in the 1950s. And certainly, he did write his own ticket; even without a college education, he progressed from the Navy to government work and then started a real estate firm with his wife that did well enough that they both retired comfortably at 55.
They raised my sister and I as much as our parents did and I absorbed their ethos, which feels now like the language of a dream that has started to vanish from memory. It goes without saying that I’ve never heard someone my age say “You write your own ticket”. Usually, the career advice I get is more along the lines of “It’s all about who you know” or “you have to network, network, network” or even “it’s all just luck”. At the career center last week, the councilor suggested I should leave the PhD off my resume because “they’ll look at that and think they have to pay you more and throw it in the trash!”
None of this is exactly bad advice and certainly not anything new. But I never hear anything like, if you have moderate intelligence there is “-well, almost anything you want to make it.” Admittedly, I’m in Canada now, where aiming low is the national ethos. Do Americans still believe we can do whatever we set out to do? Should I come home?
And what to do with all of these memories? I often feel a kinship with past aesthetics and ideas that I can’t quite name. Shall I call it “conservative” if those things cannot be conserved? Is it “Romantic” to mourn what has slipped into the past? Is it culturally “nostalgic” to value some of the things that were lost while reviling others? Can we be “revivalists”? In a liberal society, must we reject all past ideas and aesthetics for the sake of social progress? Are we doing better?
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“Do Americans still believe we can do whatever we set out to do?”
As with most things, it depends on the person. There are actually a bunch of ways, career-wise, that you can “write your own ticket” in America. I feel like I know a lot of people who have done so — hell, I think I’m someone who’s done so.
But most people tend to want to lean toward the inherent stability of low-risk/low-reward. Despite the ethos, I don’t think it was actually any different back in Stearns’ or your grandfather’s time. I think they were just two people who, in different ways, found the high-risk/high-reward path more compelling — and for each of them, it happened to work out. But I suspect they were still surrounded by communities that largely chose stability over potential — which, when you think about it, is still writing your own ticket.Report
It’s interesting. The question’s on my mind right now for two reasons I didn’t mention:
1. I seem to have a new job that could easily- actually, most likely will- turn into a stable, good paying, long term profession with regular hours in which I would be very well-treated, I think due largely to it being a union job. The downside is that it is not remotely challenging, possibly also as a result of it being a union job.
2. I am also writing this book on my great-grandfather and I am at the point where he and his mother left a small town in Ohio and his father to start over again in Brooklyn when he was 17. As far as I can tell, they simply showed up and he worked a number of jobs to support the two of them, which also seems fantastical to me. He was just out of high school and started at McClure’s Magazine sharpening pencils for the editor, who was Willa Cather at the time! He put himself through college, got a degree in Political Science, and first thing afterwards got a job as a reporter for the Brooklyn Eagle and four years later was manager of their Paris office. I try to imagine taking this sort of path today and, frankly, I can’t see it.Report
the editor, who was Willa Cather at the time
Though after the operation she was Max Perkins.Report
Now, that’s what I call editing!Report
He was just out of high school and started at McClure’s Magazine sharpening pencils for the editor…He put himself through college…and first thing afterwards got a job as a reporter for the Brooklyn Eagle and four years later was manager of their Paris office. I try to imagine taking this sort of path today and, frankly, I can’t see it.
Part of this, I think, is ease of background checking today. I get the sense that people used to be more likely take a chance on hiring if someone just showed up on their doorstep, blank-slate-Don-Draper-like, because back then you didn’t have much way to check someone’s resume/bonafides. If you liked the guy, you simply crossed your fingers and hired and hoped it would work out (if they’d had the gumption to just show up on your doorstep, it often would), and if it didn’t, you’d fire them and try again.
Now, they know they can check your resume and your background and experiences back to birth, and everyone else’s too; so why take a chance on the first guy who shows up? There might be someone better out there, at least on paper; in fact, there ALWAYS is. It’s maybe harder to catch a break because people want, and have gotten, a lot of the randomness removed from the whole hiring process.
Elsewhere, @jaybird talks about having friends in middle management who would have been running the show in the olden days; I wonder how much of this is a function of company size. As communications have gotten easier, I suspect the average company has gotten larger, and its structure has “fattened” (gotten less vertical, more horizontal).
I know people at my company who’ve been there a long time and used to be on speaking terms with the founders, when the company was a small concern. It’s humongous now, and there are so many people in the middle, like me, who don’t know the a lot of the people at the top (or bottom), and vice versa.
Overall, this is a good thing, the company employs far more people than it used to, and average pay (even for the people at the bottom) is better than it was back then. But it’s also a lot harder for me to really imagine rising too far above where I am now; there’s too few slots at the top, and too many people with me in the middle that I would be competing against to get there.
There’s an analogy here to society and middle class, probably, but I’ll see if Roger wants to come along and explore it 😉Report
On 2, a lot of this has to do with the increase in the number of people going to higher education. A lot of jobs that wouldn’t require a college degree in the past, and probably would elicit a lot of laughter if you argued that there should be degree for it, now require a college degree. Being a reporter used to be something that would did after high school. You got a job at your local paper or in city paper working one of the lesser beats and worked your way up. It was this way till way after World War II. Now you need to study journalism in college before you get a degree. A lot of jobs have been professionalized. There are good and bad things about this. We probably do get a higher quality but at the cost of opportunity.
Glyph also has a good point on how its easier to check people’s past now. Its much easier for employers to know what they are getting, so why take a great risk with hiring an unknown when you could get a known. There is also much more competition. Your great-grandfather, who appears to have been younger than my grandparents, didn’t have to compete with women or non-whites for jobs. Since our society is lot fairer than it was in the past, there is more competition for jobs. You might even be competing with somebody not from the United States.Report
It’s my opinion that one of the biggest changes in the past few decades has gone relatively unnoticed: that an employer has to be able to quantify his hires. You can’t just hire someone based on the cut of his jib, if you’re above a certain size company. The HR people now serve the dual functions of handling personnel and handling legal questions about personnel.
If you could hire someone who just radiates skill, degree or not, then you can get a good pencil-sharpener who your gut tells you could go places in the company. If you have to be able to defend your decision to hire this person as a pencil sharpener in court, though, you want something specific you can point to, something that justifies your hiring decision. So you have to narrow your pool of candidates. The easiest, most easily-quantifiable way of doing so is by education.
Where does that leave the kid who doesn’t have any connections or high degree, just a glint in his eye and a spring in his step? Entrepreneurship, I guess, but that relies on having the right idea at the right time. It’s tough. The current structure is more limiting than the “old days”.Report
“an employer has to be able to quantify his hires.”
And his fires, for that matter. There are certain types of persons who you can’t just fire because they don’t work out. If that’s the case, then why take a chance on an unknown quantity?Report
Pinky,
or being an independent contractor. Making the impossible possible, as they say.Report
Yeah, there are possibilities outside the traditional employee/employer structure.
The really bad implication of this theory of mine is that grade inflation and degree devaluation are now built into the system. If you’re an employer, you have to demand over-qualified people for every job. If you’re a future employee, you have to get degrees you don’t actually need. If you’re a university, you can charge anything you want, and if you’re in secondary or higher education, you have to produce students regardless of quality. And every year, moreso.Report
Pinky,
nah, it’s worse than that now. it’s all who you know, and you can know people just as well without a degree as with one. Degrees no longer matter, jobs are far too scarce for that.
You are better off getting hired at a lower rung with a GED than going to college in marketing (or whatnot). Trades are different, but even there you need to be exceptionally picky. We’re talking Robotics, Plastics, Environmental engineering — maybe Nursing.Report
I think you’re overstating it. If people were getting hired as nurses and engineers without sufficient training, then maybe. But that’s not happening.Report
Pinky,
the fuck it’s not happening. “Here’s what I can do” has a surprising ring of truth to it, and “I’ll work for free for the first two weeks” sounds even better.Report
I definitely get the feeling that there are a lot of HR personnel that specialize in CYA.Report
I’ve been giving this a great deal of thought in the last 5 years or so… that was around the time that I started looking forward to the baby boomers starting to retire. I was raised on a similar sentiment as you. Hey, get your college degree and the world is your oyster. It doesn’t even matter what it’s in, I was told.
And my first job was as a contractor… and then my second job was as a contractor. And then my third and fourth and fifth. I looked at all of these employees that surrounded me and I was told that, jeez, the company used to use contracting as an audition for employees but not any more. Contracting job after contracting job after contracting job resulted in me, finally, being an employee… but at a managed service company where I was contracted out to other companies.
I think the longest contract I’ve had was for 5 years. Most were for a lot less than that. I’m lucky insofar as I’m a somewhat quick study and I’m not afraid to crack a book but… man. I wish that I was an employee at a company. That would be sweet.Report
Right!
Let me tell you about Roger- great guy, really good person, always had a smile. Anyway, Roger worked at the hardware store that my great-uncle founded when he got back from the war. Roger was about 18 at the time and just out of high school. But he worked hard and everyone liked him and he just stayed on at the store for the rest of his life. After a few years, he was running the place and they were running other businesses that they’d started- two hardware stores, a card store, and a real estate company- and they all lived out very comfortable middle class lives. At a certain point, they just signed the store over to Roger and then, when he died, his wife and daughter ran the store until they were older and decided to sell it.
And there are times today when I tell people stories like this and I feel like I need to say, “Seriously- I am not making this up!”Report
Yeah. I have friends in middle management. In 1960, they’d be vice-president by now.
I know that much of what is currently going on is due to the scarcity premium disappearing (I mean, the job prospects of scribes were destroyed by public education, right?) and in the same way that we, as a society, are so much better off because of a literacy rate in the high 90’s, I’m sure that we, as a society, are better off due to the scarcity of highly skilled people decreasing.
But, man, in their heyday? Scribes had a pretty sweet gig. It’s pretty easy to miss the forest for the trees and envy them.Report
@rufus-f I actually think this still happens. Well, maybe not the working for Willa Cather part, but the rest of it.
New York is, from what I gather, a rather obscenely expensive place to live so maybe not there, but in Portland I’m always running into trans[planted people who when I ask what brought them here originally tell me that they just wanted to live here, and so packed up and moved one day. A lot of couples and singles alike, in fact. And you meet them and they’re distillers or teachers or software people or whatever, but they did the same thing your grandfather did. (Though perhaps less successfully — because he sounds amazing.)Report
@tod-kelly
There was a New York Times article from a few weeks ago about how people were moving to Portland because it was one of the last places to have a medium-chill but still nice kind of Bohemian life. Meaning you could work as a bartender or barista or in a store and not be too misersable. I’ve also heard that the city is slowly getting more expensive. I also know some people who moved to SF from Portland and they said it is incredibly hard to find jobs in Portland except working in a bike repair shop or bar. That is probably exaggerated but it confirms with some stuff I’ve read:
I’m wondering what you think of this article:
http://www.nytimes.com/2014/09/21/magazine/will-portland-always-be-a-retirement-community-for-the-young.html?_r=0Report
The NY Times article suggests that people are willing to accept lower-pay to live in Portland because Portland as an ethos, vibe, that they like.Report
Saul,
if you want a place where you actually can live and get a job, and have a fun time, you want someplace like Asheville or Pittsburgh. Portland has a really high unemployment rate for the young — and it’s pretty damn expensive.Report
i don’t think the counselor is wrong about the phd, though i don’t think it’s necessarily a “have to pay more” issue [insert adjunct joke here] so much as a “they’ll either be bored or jump ship first chance” thing. depending on what they’re hiring for it may not be much of an issue, but there are a lot of fish in said sea.
as for the rest, i dunno. my earliest memory in life is my father showing me his wallet and telling me that “the amount of freedom you have in america is directly proportional to the amount of this you have”. i was four or five.Report
In my mind, your dad looks like Christopher Walken, and you don’t want to know where the wallet was kept.Report
the tenor of those conversations were similar, even if the storage methods thankfully differed greatly.Report
Some thoughts:
1. There are a lot of professions that have gone through more credentialism and you are no longer able to start out as a self-trained person or with a lowish-level of education. Journalism used to be a blue collar profession. The great and odd filmmaker Samuel Fuller started working as a copyboy at 12 and was a crime reporter by 17. My uncle taught himself computer programming because he realized he wanted to stay in the Bay Area instead of being a linguistics professor at the University of Middle of Nowhere. Since this was during the 1970s, it was possible. Now I am not sure whether we want people out of school at 12 but it is a mixed bag to have things be more credentialed than not. Germany is good at having a lot of apprenticeships even for white collar professions like banking and finance.
2. I still think that there are a lot of people in the United States who believe in the American Dream and that America is a can-do nation and that “You write your own ticket.” I also think this leads to a lot of moralizing where we blame the unsuccessful for not trying hard enough or for being deficient in some way. “You write your own ticket” is a good way to confuse equality of opportunity with equality of outcome. I think it is generally good that more people are recognizing that there is a lot of random luck in who becomes successful and being in the right place at the right time.Report
Another thing is, and we’ve discussed this before on the blog, but the economic prosperity that existed between the mid-1940s and mid-1970s; might be a historical aberration created by the sheer destruction of the Second World War and many dumb economic decisions made by other countries. Thats why the past seems more prosperous and offering more possibility.Report
For those questions, I don’t know if you should come home, but I think you need to keep account of what you mean by “Americans” and “still.” Real wages may have been increasing as a secular trend through those 30 years, but those years weren’t without their challenges, with, for example, the 1890s depression and with the rise of Jim Crow. Also, while I don’t know the facts, I do suspect that in strictly material terms, most Americans were better off in 1935 than in, say, 1914. (But again, I don’t know the facts and won’t insist on it if someone has good counter-evidence.)
As with @dhex ‘s example above, faith in the opportunities America provides is often, and often with the same person, accompanied by a cynicism about access to money (and the social connections necessary to make money) being the more important thing in determining one’s prospects.
These questions I’m not sure exactly how to answer:
I do like the idea of people being able to work and to have the opportunities to work with minimal barriers to entry. That’s one reason why I would like to (somehow) reduce the trend in which so many jobs require college degrees that didn’t before. (But I don’t know how to do this. Even if one agrees the trend is bad, for any given individual college is a necessary and wise choice.) That’s also a reason why I would like to reduce “rent-seeking” regulations (but not the other kind, as if those can so easily be disentangled).
I hesitate to see all that that as revivalism or as a reversion to or continuation of “past aesthetics.” Whatever attributes, aesthetic or otherwise, we assign to what allegedly existed in the US culture (culture being a to my mind real but very inscrutable and difficult to pin down) x years ago, can stand or fall on their own regardless of their association with the past.
Are we doing better (today)? In a strictly material sense, we probably are. In the less tangible senses, it’s very hard to say. We probably have more personal liberty in many ways (and less in some others). But otherwise, it’s difficult to settle on an answer that doesn’t quickly descend into something very like nostalgia for the past or whatever the opposite of that is.Report
Yikes….I didn’t mean that as a response to Lee.Report
I think it was easier in the past. Here’s why:
As was mentioned above, the sheer global devastation post WW2
The lack of credentials needed / formal education. (Back then, you could get by with a high school education for many jobs)
Back then, a high school education actually was a pretty good education.
Complexity and subject matter knowledge (specialization) was a lot less and was needed less.
Less competition as most women were not in the workforce.Report
There is an inherent conflict between this:
and this:
It raises the question: easier for whom?Report
Easier for the sorts of people who used to say “You can write your own ticket.”Report
Not to be an idiot, but shouldn’t more women in the workforce mean more women who want to and can now purchase all sorts of products and services, which should mean more jobs created, to produce those additional goods and services?
Adding women to the workforce might cause a short-term job shortage, but in the long-term shouldn’t that level out? Or am I missing something (are we still in the “short-term”, from an economic POV)?Report
I believe J R was saying that it wasn’t easier for women to “write their own ticket” in the past, which is true. It may in fact be easier for women to write their own ticket now than it ever has been, which I took to be part of the tension Rufus was describing when he wrote, “Is it culturally ‘nostalgic’ to value some of the things that were lost while reviling others?”
But perhaps like J R, I’m always skeptical of this sort of nostalgia, precisely because it is difficult to separate the longing for a simpler time with the fact that it was not, in fact, “simpler” in the desired way for many people, and it is difficult to separate the perception of simplicity from the exclusion of certain people. Here, for example, we’re talking about a time when women, people of color, and many immigrants and the economic underclass were not, at least within their lifetime, capable of “writing thier own tickets”, and the ability to write one’s own ticket was essentially propped up by those who could not do so.Report
Submitted for your consideration: Twilight Zone 2014. Show a guy talking about how great it was in (year). “You could do this, you could do that. All you needed was moxie!” Goes to a cursed curiosity shop and gets a wishing rock. He wishes that he could grow up in (year) back when all you needed was moxie.
Next morning, he wakes up and the radio (or wireless) is playing a Dodgers game and the announcer bombastically announces that it’s gonna be a great 19(whatever) for the Brooklyn Dodgers, those bums. And he looks down and he’s black.Report
Duh, easier for the author 🙂Report
Jaybird, I’m not sure if such a plot would go down well with modern audiences. It falls in the category of “well-meaning but…” Somebody would find some problem with it.Report
Lee,
controversy is good. no such thing as bad publicity.Report
Kim, Bill Cosby would like to have some words with you.Report
I would recommend not taking that meeting.Report
Well, that escalated quickly.Report
That is a perfect Twilight Zone plot (not that Serling would have dared to do that particular one in those days.) It would have to be the 20s, I think. The Depression is implausible as the good old days (if he’s going to take industry by storm with his advanced technical knowledge, it’s a different story entirely.) Making it during WWII is wrong because it implies war profiteering rather than straight moxie. And with anything after that you’ve confused people with an implicit reference to Jackie Robinson,Report
That kind of was a twilight zone plot, wasn’t it?
The one where the bigot is talking about how easy the Jews have it, and then he wakes up a Jew in Nazi Germany?Report
There was this conviction that we were right, that we were winning, and that our mere energy was enough to carry us through. That no fight was needed, that we had to do nothing except wait and the old guard would evaporate all of its own accord.
And if you stand in the right place in Vegas and look West with the right kind of eyes, you can see the place where the wave broke and rolled back.
(I’m sure I’m misquoting, but that’s how the speech lives in me.)Report
“the sheer global devastation post WW2”
I keep seeing this comment, in discussions about the post-war prosperity.
Has it been verified as fact?
I don’t have a strong opinion pro or con, but the political implications are interesting.
Are we saying that those proud Americans who saw the American Way as exemplary were wrong? Was American prosperity not due to some form of exceptionalism, but dumb luck?
How does this stand with the concept of globalism? Isn’t the theory of free trade based on the idea that nations can derive mutual benefit from each other’s prosperity? So that, if Europe and Asia were reduced to rubble tomorrow and we stood, like in 1946, as the sole economic superpower, would we see a 20 year run of prosperity and expansion?Report
“Are we saying that those proud Americans who saw the American Way as exemplary were wrong? ”
As wrong as the people who say that the sharp decrease in violent crime in America during the 1990s was due to anything other than having phased out leaded gasoline during the 1970s.
Russia managed to keep itself going by supplying its half of the world even though they had a command-and-control economy. Turns out that cleaning up rubble and supplying steel is all you really need to keep a country going. Venezuela is another example of how the key is really industry.Report
Remember Snow Crash?
When it gets down to it — talking trade balances here — once we’ve brain-drained all our technology into other countries, once things have evened out, they’re making cars in Bolivia and microwave ovens in Tadzhikistan and selling them here — once our edge in natural resources has been made irrelevant by giant Hong Kong ships and dirigibles that can ship North Dakota all the way to New Zealand for a nickel — once the Invisible Hand has taken away all those historical inequities and smeared them out into a broad global layer of what a Pakistani brickmaker would consider to be prosperity — y’know what? There’s only four things we do better than anyone else:
music
movies
microcode (software)
high-speed pizza delivery
I reckon it’s up in the air whether we do microcode better than anyone else anymore.Report
The art part of microcode, sure, I’ll give us that.
The question is whether that part matters much anymore. Nobody cares how good you can grown an individual potato because there are factory farms that grow barely-acceptable ones by the truckload.Report
Counting on microcode to provide jobs is RISCy.Report
Yeah, I’m not sure how much of Europe’s rebuilding was responsible for our getting ahead. Granted, the UK was broke, while France and Germany were broken, but the Soviet Union had more rebuilding to do than anyone but, perhaps, Germany, but managed to thrive economically for at least the first few decades after the war, perhaps taking advantage of the war-time organization and optimization of its vast military, industrial, and political resources (and continuing a system of oppression and repression strengthened during the war).
So maybe the lesson of the early post-WWII period is that your economy will thrive if the fighting takes place really far away and many of the combatants nearer to the fighting owe you a lot of money or you use vast amounts of basically indentured labor to jumpstart production on an unprecedented scale?Report
China and Japan would like to have some words with you.Report
Not sure what China and Japan want to say.Report
China and Japan had just as much rebuilding to do as the Soviet Union and Germany. Japan’s invasion of China was longer and just as brutal if not more so than the German invasion of the Soviet Union. They also had the damage from their own civil war to rebuild. Japan like Germany was subjected to heavy Allied bombing and was just as rubble filled.Report
Chris,
After WWII, the USSR was still engaged in labor mobilization, moving people out of ag into industry. You get huge gains quickly when you do that (like all the Asian tigers). Rebuilding is part of it, as is the ability to order labor around, as you note. But the fact that they were not yet fully industrialized pre-war is also part of it.Report
Isn’t the theory of free trade based on the idea that nations can derive mutual benefit from each other’s prosperity?
Well, following WWII, half of the planet decided against free trade (or a reasonable facsimile in the same ballpark) for about 50 years.
We put West Germany right next to East Germany for a handful of decades and populated both sides with Germans. One of them did fairly well.Report
But wouldn’t the wartime destruction of potential trading partners in Europe and Asia have resulted in the collapse of the American economy instead of its acceleration?Report
The US essentially gave the Europeans the money to pay America to rebuild Europe.Report
East Germany did very well compared to other Communist countries.Report
LWA, we shouldn’t exaggerate the European situation: the European economies were devestated in 1945, but after a few years of being completely broke, they began really rapid growth through the 70s, much like the U.S., and because we’d financed their war and rebuilding, a lot of that money they were raking in came back to us, and went straight from the government to people as we paid off war bonds and gave war vets college educations and home loans. The U.S. had a jump start because for a few years after the war, we were basically the only folks on the Western side of the post-war divide who could afford to make stuff and had non-bombed facilities to do so. By the early 50s, even West Germany’s economy was booming.Report
But wouldn’t the wartime destruction of potential trading partners in Europe and Asia have resulted in the collapse of the American economy instead of its acceleration?
We had a lot of trading partners anyway. On top of that, the scarcity premium had a lot of white males do pretty well. So good that the best and brightest white males from all over did everything they could to get over here.Report
@lwa It’s worth mentioning that prior to WWII, exports were a comparatively small part of the US economy. By the end of the war, our exports had quadrupled. http://unstats.un.org/unsd/trade/imts/Historical%20data%201900-1960.pdf
A collapse in exports would not have done much harm prior to WWII, comparatively speaking – they were only about 3 percent of GDP as close as I can tell, and that was during a depression-era economy that had been shrinking.
Much of this was by design, too – protectionism, rather than free trade, was the order of the day for the global economy in the interwar period: http://people.brandeis.edu/~chase/research/ripe04.pdf
During the war, our allies needed to borrow money to pay for goods they needed to buy – from us, of course – just to survive the war. That had a big impact on our exports to begin with. But it also resulted in us becoming an economic hegemon by the end of the war, allowing us to more or less dictate the terms of Bretton Woods. Besides, those destroyed economies needed to get the resources and goods with which to rebuild from someone.Report
It stands well with the concept of globalism because both countries are getting something out of the deal. The third world is developing (rapidly) and lifting millions (billions?) out of bone crushing poverty. The first world is getting enormously inexpensive goods and large corporate profits. The former goes to everyone and the latter is captured primarily by the wealthy and upper middle class. The problem, of course, is that (coupled with technological changes) the middle and lower middle class is seeing a lot of their traditional expectations* for employment not being met.
Taken globally globalization is doing absolute wonders for the welfare of the entire species. Taken specifically from the view of the middle class and lower rungs of the first world nations it’s a much more severely mixed bag.
*expectations that were set, mind, during the historical anomaly of the US economy essentially towing the rest of the democratic world out of being economically prostrate from the great Wars.Report
As above, if the same occurrence were repeated- if our competitors in Europe and Asia disappeared tomorrow; would we see the same result?Report
Its an interesting question, LWA. I’d say no. If Europe and Asia got plumeted into rubble than American prosperity would not be the same as it was during the interwar period for several reasons. After World War II, America still had the commercial infrastructure that produced the good paying factor jobs and other things that led to the big expansion of the middle class. We don’t have many manufactures of commercial goods left. A lot of the post-war boom was tilted towards building homes for the growing families of returning veterans and filling them with goods. We also had a better union infrastructure for making sure worker’s got a fair share and ideological opponent that made it necessary to give worker’s a fair share.Report
I agree with Lee but disagree with his analysis. We’re at a much higher level of prosperity and affluence now than the US was at the pre and post war periods. That affluence requires a much larger and more pervasive global economy network to uphold. If all the world outside the USA got pummelled into rubble by some sort of catastrophic war then we’d probably see our level of affluence fall or stagnate due to the loss of all of those goods and services that Americans now enjoy from the rest of the world. America would likely see extremely low unemployment, yes, but our starting point now and starting economy is entirely different than it was for America a century ago.
Also there’s the entire poisonous economically destructive autocratic communism element that simply doesn’t fly today. No one seems to seriously think that communist command economies could ever present an actual challenge to a liberal market one. That was not the case a century ago.
Also Lee, I disagree strongly about your comment about commercial good manufacturing capacity. America manufactures -more- stuff now than it ever did. The issue is she manufactures it using fewer people than ever before.Report
A few weekends back, I watched “Tinker, Tailor, Soldier, Spy” (dude, seriously, watch it) and one of the major plot points involves trying to figure out the identity of the mole. After the mole is caught (whoops, spoiler), he gives a monologue about why he did it and he talks about how it was ideological as much as anything else.
This may be dismissed as (well-written) fiction in response to the claim that, at least, it was thinkable well into the 70’s that someone might reach this conclusion but this is a novelization of the Cambridge Five… spies from a decade and a half earlier.
It wasn’t a century ago. It was as close as half a century ago.Report
As a follow-on to Lee’s point, the financial infrastructure has changed dramatically. As an example, consider what happened when there was a recession in the 1950s. Fed money was only available to commercial banks. Commercial banks couldn’t invest in financial instruments, couldn’t send very much capital overseas very easily, couldn’t relax mortgage standards much. Relocating manufacturing facilities was difficult. Bankers could make somewhat riskier business loans because their cost of money was somewhat lower. Expanding businesses generated jobs either directly or indirectly (by purchasing equipment that someone else built). Recessions were generally inventory recessions, and once the excess inventory had been worked off most workers were rehired.
Recessions since 1990 or so have been quite different, and the differences are indicative of some of the reasons that “write your own ticket” has become more difficult.Report
North, we manufacture a lot but more of it is in capital goods than commercial goods. I used the phrase commercial goods for a reason. Many of our appliances and other commercial goods are manufactured elsewhere. Thats why they are cheaper than ever. My Apple products were made in China. Most of my clothing was made abroad as well. During the mid-20th century boom, commercial goods like this would have been made in the United States.
Our prosperity depends on cheap labor from abroad making many of the goods that used to be made with more expensive labor in the United States, lowering the prices of said goods. With a global collapse, we won’t have the goods or the ability to make them for ourselves quickly.Report
“We’re at a much higher level of prosperity and affluence now than the US was at the pre and post war periods”
Really? We are? All of us?
Without getting into an argument over how we measure affluence, lets talk about prosperity.
What is unarguable, is that since 1980, the economic landscape has become more risky, more uncertain, especially for the middle class.
Defined benefit pensions replaced with 401K (or nothing), the vanishing of unions, the lack of a GI Bill, the rise of offshoring and so on.
Even for those who are (at the moment) employed, the prospect of real poverty, or downward mobility hovers outside the door.
I think that “prosperity” has more components than an aggregation of economic indicators; If it doesn’t contain well-being, security, and a sense of fellowship and belonging to a national identity, then it seems like a hollow word.
I think this gnawing anxiety, that sense of looming disaster, that we (that is, those of us who work for a living) are just a few split second derivative trades away from complete financial ruin is a terrible cancer on our nation.
Look at the bitterness and fury directed at immigrants- that lifeboat logic that tells us that a 12 year old child is a deadly enemy who must be shunned at the border, even if it means sending him back to certain death.
Look at how easily we are stampeded into mind-numbing fear over crisis after crisis- Ebola, ISIS, next week’s existential calamity-to-be-named-later.
When I look out over contemporary America, I don’t see a nation that is prosperous- one that is comfortable, peaceful, so reassured of itself that it can be altruistic and generous to its neighbors.
I see a nation that is traumatized and fearful, and deeply anxious of the future.Report
LWA,
I have met one person, just one, honestly panicky of Ebola.
“sense of fellowship and belonging to a national identity”
… please don’t tell me that you need a certain personality to be middleclass.Report
The first two sentences are from the book, but the last one is, I believe, meant to capture ovyyunlqba’s larger point in the book. Basically, ovyyunlqba argues, the English are powerless, pointless actors in the Cold War: only the U.S. and the Soviets have any will, and any causal efficacy. So if one chooses to act, a English person has to choose not between his or her own country, but between two “monoliths” (his word). He chose the East, for “aesthetic reasons,” and offers some boilerplate Leninist analysis of the U.S. by way of explanation. By the end, itt comes off as though ovyyunlqba chose the East out of pure spite, not a real ideological commitment. He just hates the Americans, and that combined with the Brits’ Cold War impotence means he can do what he did (which got people killed and hurt people physically, professionally, and personally) with no important consequences.
This contrasts him with Smiley, who also seems to recognize the Brits’ impotence, but continues to act in his way out of a sense of loyalty and duty. Smiley is Sisyphyus.Report
We don’t have many manufactures of commercial goods left.
Not true. We’re just producing more with less.
And if Europe and Asia got wiped out by the meteorite while the U.S. was untouched, we’d ramp up quickly to produce the commercial goods we’d lost access to.Report
George Smiley is loyal to his wife and the Circus, but neither one shows loyalty in return.Report
James,
what’s the measure on how much of American manufacturing (harley, hershey, heinz, ppg) is actually done in America and not another country? Do you pull that out of a beigebook?Report
Mike, right, in Smiley’s case, the boulder runs over him on its way down the hill each time.Report
Yes LWA, As compared to 1950 (which is what we were discussing), we are more prosperous and prosperous now. Every single one of us. Absolutely.
Comparing us to pre-Regan 1980 is massive base stealing and on that you can, as you did, make some arguements regarding risk, inequality etc but I have nothing I’d like to say on that matter since it wasn’t the topic at hand. The rest of the world was pretty much rebuilt by 1980 (though the Soviets were still kicking around of course).
Lee, you have a point but a smaller one as James touched on. The funny thing about capital goods is that if you are really good at manufacturing capital goods then you can manufacture capital goods to manufacture consumer goods for you. My point merely is that the US is dependant on the rest of the world for cheap manufacturing labor but if that was cut off it would not bring the country to its knees, it’d just annoy the hell out of everyone as consumer goods rocketted up in price and soon were manufactured in the US or Mexico again.
That said I agree with the global point. We are deeply interconnected now, a WWII global devastation would probably shatter our levels of affluence and prosperity to much lower levels (but we’re probably be at full employment*).
*Now what kinds of jobs those would be is another subject.Report
“prosperity”…If it doesn’t contain… a sense of … belonging to a national identity, then it seems like a hollow word.
Aaaaagh! There is something so fundamentally fascist in your worldview that I just want to bang my head against a sharp pointy object until I’m too brain damaged to recognize it anymore.Report
Interesting use of the word “unarguable.” I guess it’s unarguable if you forget about all of the economic stagnation and uncertainty that happened during the ’70s. The oil embargoes and subsequent shocks, the stagflation. What were mortgage rates like in 1980?
And then I guess you can ignore what most of cities looked like in 1979. Let’s forget that famous New York Daily News cover that reads, “Ford to City: Drop Dead.” And let’s forget the number of people that fled cities for fear that the value of their homes, their biggest asset, drop.
And then lets forget about what the Vietnam War and the Civil Rights Movement and the resignation of Richard Nixon did for the supposed “sense of fellowship and belonging to a national identity” that existed pre-1980.
So yeah, if you forget all of that, then I guess it is unarguable.Report
jr,
the fact that most people nowadays seem content to put their faith in the false god who rules Saudi Arabia doesn’t mean that their financial situation is any more secure than it was in the 1970’s. In a lot of ways, it’s actually worse.
I thought the conservatives around here LIKED incentivizing savings? That’s what non-zero, positive interest rates do, after all.Report
@j-r
Point taken! The landscape has shifted, not just since 1980, but starting in the early 1970’s or so.
@james-hanley
Sorry for that; But even if you dislike the concept of patriotism and national identity, you still have to grapple with the fact that it is deeply meaningful for the overwhelming majority of people around you.
Whether its true or right or not, it can’t be waved away or dismissed. I would aim this comment at some of my fellow liberals as well.
Which brings me full circle- the fact that some economist can point to a graph and tell us we are better off than at point X, is irrelevant. It’s like Thomas Frank asking people in Kansas why they are voting the way they do.
I get why people vote for the Tea Party, even if I disagree with it. Those emotional and irrational needs have to be met, and right now the Right is crafting a more satisfying and convincing vision of them then the Left.Report
@lwa
You are just reiterating the economic nostalgia point. You really think that America was some paradise in the 1960s? Jim Crow was still a way of life in large parts of the country. Women were effectively barred from the large majority of professions. Rural poverty was still a thing on a pretty big scale.Report
I have never understood the hate of numbers. What seems unambigous is compared to the 1940’s, 50’s and 60’s we (all) live longer, die less, have fewer of our children die, eat better and enjoy more entertainment.
But I suppose that fades into in irrelevance when faced with the nebulous indictment that we have less national esprit de corps and no longer can enjoy the murderous delusion that there’s an alternative system to the dreary mundanity of capitalist trudging.Report
@north “I have never understood the hate of numbers.”
Numbers killed my partner.Report
@north
You don’t think patriotism and national identity are real things, important to vast numbers of people?
When I say that our nation is fearful, anxious and traumatized, do you think I am misreading things?Report
@lwa
Misreading has nothing to do with it. You are misusing those terms. A nation cannot be fearful, anxious and traumatized. The people in it can be, but that’s an awful broad brush with which to paint 330 million people.
Me for instance, if I trace my ancestry back as far as my people have been in this country, there is a good chance that I am the least fearful, the least anxious and the least traumatized of them all.Report
How severe were the economic woes of the 70s compared to the great recession that began in 2008, let alone the threatened collapse of the entire financial system that was staved off by the bailouts? The S&L crisis was no picnic, but it was a much smaller thing and at least some of the crooks went to jail.Report
The nation has been fearful and traumatized over this thing or the other pretty much since her founding. I don’t see that changing and I see no merit in catering to it.
@tod-kelly numbers kill everyone my Todd.Report
Actually @north, yes, people are living longer compared to 1980, ya’ know, if you’re in the upper 50% percentile of people (by about five years). If you’re in the lower 50%, you’re living a little over a year longer, but don’t worry, the SS age has been jacked up for two years, so you don’t need to worry about being bored in retirement.
(http://krugman.blogs.nytimes.com/2012/11/13/life-expectancy-of-the-living-dead/?_r=0)
As for the rest, it’s the weird consensus you can’t have pensions, strong unions, universal health insurance, and iPad’s/the Internet.Report
@north, your analysis might overall be right and the globalized economy is working wonders in raising the prosperity and affluence in the United States by lowering the costs of goods. What your analysis ignores is that a lot of the reduced goods we enjoy because of outsourced manufacturing from food to consumer electronics are caused by some really exploitative working situations like this article from the LA Times on vegetable farming in Mexico demonstrates:
http://graphics.latimes.com/product-of-mexico-camps/
This might be situation where there is no good solution and the Mexican farmers could be worse off in a situation without free trade but the situation in the developing world’s factories and fields are often as bad as they used to be in the West. Labor is weaker than ever and business people know how to fight against it more effectively now than in the past.Report
First of all @jesse-ewiak is there some reason we’re comparing now to the 80’s? Because it sure as heck wasn’t the time period we were comparing (post war when the rest of the world was flattened). I don’t hold an enormous brief for the 80’s vs now though I sure as hell wouldn’t trade places with someone in 1980. Now if you’d like to make the same numeric comparison to the 1950’s with a straight face I’ll promise to try and give it a serious reading.
@leeesq The perverse thing is the developing world looks at working conditions the first world considers deplorable and exploitive and says “That’s a thousand times better than the deal we had before” and fights tooth and nail to get hold of those jobs. I’d be fascinated to read anyone’s brief trying to claim that globalization hasn’t lifted millions (billions) out of abject poverty.
I have nothing against labor, in fact I’m all for repealing the laws that hobble it and letting it innovate and experiment. It’s funny how often pro business people and free marketers blanch at that prospect.Report
@lwa
You don’t think patriotism and national identity are real things, important to vast numbers of people?
They are, but against that you have to add up how many people they harm. Nationalism is one of the major causes of war, if not, ultimately, the sole cause. It’s also the cause of immigration policies that leave millions of people in abject poverty. Patriotism is one of the maon reasons we, the people, did not make truly en masse demands for Bush to not invade Iraq–our national identity and patriotism bear the blood of tens of thousands of Iraqi civilians.
Do you think all things people value are equally to be admired? Do you think internet porn, strip clubs, violent movies, street drag racing, and drug use are parts of our prosperity? They are real things, important to vast numbers of people. And in a sense they are part of our prosperity (we can street race hot rods instead of mules!), but do you accept them uncritically?
And yet their collective toll pales compared to the toll of your beloved national identity and patriotism.Report
Yes, of course things are better for you, @north. But, if you were stuck in Tennesse or Indiana making $8/hr at Wal-Mart with no real chance at advancement when your dad was making middle class wages at a tool ‘n’ dye plane in 1980, would you maybe think of trading places, even if it meant no easy access to Netflix?
No, I don’t think anybody will dispute the positives aspects of globalization, but some of us do believe that possibly you could do most of what has happened in the past 30 years without say, the occasional horrible death of hundreds of people in Bangladesh with no negative repercussions for the multinationals involved, but I’m told that if I think just maybe there should be slightly tougher labor laws or maybe some safety guidelines, we’re evil people who think all Third World people should go back to being substantive farmers and furthermore, we know nothing about economics and we just don’t understand that in 2014, there’s no way around having sweatshops for a few generations.Report
@north, I think your description is pat and self-serving. From my reading, there is a lot of labor agitation or at least potential labor agitation in the developing world. Conditions in the very early days were damn exploitative with the fourteen hour days and everything else. Embryonic unions appeared relatively quickly even though conditions as an early factory worker which much better than those of a substance farmer. Its just that business people and governments are much better at fighting off unionism because they had around two centuries of practice right now.Report
First off, the original assertion was talking 1950 versus now, not 1980 so boo on moving LWA’s goalposts. Second, if I was a woman, gay, black or another minority I don’t think I’d switch places with 1980’s me, even for that middle class tool and die job. Third if you were offered a an even shot of being reincarnated as any one human on earth either in 1980 or in 2014 you would be not only a fool but a damned fool if you chose to roll the dice on 1980.
I am 100% in favor of the people of Bangladesh enacting and strictly enforcing as tough a labor law or safety standards as they want. 110% in fact; sign me up. But when we start talking about first world people imposing labor laws or safety standards on the people of Bangladesh from the outside I get off the train. And yeah, sweatshops have been with us forever and probably will be with us until we finally (the sooner the better) lift the last regions on earth out of subsistence squalor into low margin industrial production. I haven’t seen a proposal on the subject yet that does anything but impose first world priorities on third world people, limit their options for developing and add a level of additional corruption into the system of international trade. But hell, outcomes don’t matter so long as our intentions are pure yes? Some things are more important than pesky facts and numbers, like our own self regard.Report
@james-hanley
We certainly agree then, that patriotism is a real thing, not just LWA’s personal illusion.
I also agree with you that it can be a unjust and destructive force.
But its like any of our primal instincts- sex and self-interest for example.
The same force that causes people to behave nobly, creatively, and virtuously can spin out of control easily.
But like those other instincts, it is too easy- and futile besides- to wave a hand and call for their end.
There are positive and constructive uses for groups.
@north @j-r I think you are being dismissive to very profound forces as well. There is such a thing as a group mood, a sense of things shared widely- it usually is most visible when it is in its destructive form, but it also manifests in positive ways.
By inference, you are advocating a certain political posture or idea; Yet your ideas ignore and belittle the aspirations and sacred totems of 99% of your fellow citizens. The fact that you personally don’t share them is irrelevant; Why should anyone listen to you when you hold their ideas in such disregard?Report
@lwa
There are positive and constructive uses for groups.
So you’re moving the goalposts from nationalism/patriotism to groups, eh? Hard to respect that.Report
@lwa
I think your description is pat and self-serving. From my reading, there is a lot of labor agitation or at least potential labor agitation in the developing world. Conditions in the very early days were damn exploitative with the fourteen hour days and everything else. Embryonic unions appeared relatively quickly even though conditions as an early factory worker which much better than those of a substance farmer. Its just that business people and governments are much better at fighting off unionism because they had around two centuries of practice right now.
@leeesq Pat? Quite possibly. Self serving? Eh I enjoy cheap consumer goods as much as the next person so I guess to a degree but frankly I don’t feel enough guilt about 3rd world labor conditions to really need self serving post hoc justifications. At least I don’t think I need em.
Exploitative is a squirrely word but I agree with you that they were. I suppose to one degree yes I’d even agree businesses have gotten better at fighting unions. Now on the other hand one of the ways they’ve gotten better at fighting it is by being not quite so unresponsive to workers desires. On the other hand capital is so mobile now that manufacturers don’t really need to fight unions per say. If a union gets real traction they can just relocate their operations to other areas. Pretty harsh on organized labor I agree.
And yet… the articles are rolling around about how the lowest margin textile manufacturers are beginning to scope out alternative labor markets for their factories. Chinese wages are getting high enough that it’s pinching their margins. I don’t shed a single tear for those foul sweatshops but still the wages have gone up. Now I understand where your revulsion comes from re: low margin abusive manufacturing; there’s little to nothing to like (let alone love) about them. I look to history, however, and it says that these sweatshops were driven out of the US by labor costs and labor regulation adopted by Americans; it says they were driven out of Japan by labor costs and labor regulation adopted by the Japanese; it says they were driven out of South Korea and Taiwan labor costs and labor regulation adopted by Koreans and Taiwanese. I am honestly baffled that any group of liberals think we can drive sweatshops out of foreign countries from outside of them.Report
@LWA I think, perversely, I’m being very respectful of national group moods and social totems. It seems to me that those areas where the numbers and stats don’t apply are areas that government policies (which are by definition numerical and stats driven*) have no business being set up.
*The good ones worth a damn anyhow.Report
I am 100% in favor of the people of Bangladesh enacting and strictly enforcing as tough a labor law or safety standards as they want.
If we’re talking about the building collapsoing, they did. The building’s initial plan was approved for retail, not facories, and the top four floors were built without any permits. When cracks first appeared in the building, it was evacuated and the retail merchants closed, but the factories stayed open because the son of a bitch who owned the building insisted it was safe and the factory owners threatened to dock a month’s pay from anyone who stayed away. After the collapse, the building and factory owners were arrested, as were the inspectors who had renewed the factory’s licenses.
The idea that the West is trying to impose safety regulations that Bangladesh can’t afford is pernicious bullshit. They’ve got the laws, but as in many places (including the US), if you’ve got enough money, the law is optional. I would like to see Western companies refuse to do business with companies that violate their own local safety laws, and I totally support any efforts to shame them into doing so.Report
After the collapse, the building and factory owners were arrested, as were the inspectors who had renewed the factory’s licenses.
But, but…all the lefties told me this couldn’t happen without American consumers refusing to buy anything made in sweatshops. I don’t buy your crazy right-wing pro-globalization lies!
. I would like to see Western companies refuse to do business with companies that violate their own local safety laws,
Do you factually know this doesn’t happen?Report
@james-hanley
I’m guessing that I would have heard some company congratulating themselves if they had, but I don’t know for a fact either way. If anyone has a link, please share it.
And I keep hearing free-market-worshipping wackos telling me that building collapses that kill thousands of people are a necessary step towards wealth, and that being against that kind of thing amounts to taking food away from starving children.Report
And, being serious now, American consumers refusing to buy things made by companies that violate local safety standards would be a very good thing. Not even self-regardingReport
Mike I have no objection to any of the suggestions you bring up in this thread. IANAL (I am not a libertarian) but I doubt libertarians would object either.
But if you think that a lot of people on the left who deplore the working conditions don’t want to externally impose standards on those low margin labor host countries whether via US based laws, US based trade restrictions, a UN mandated entity or other law based mandatory requirements then I am dubious that you’ve been paying attention.
And yes, if people in general refused to buy products that were made under unsavory working conditions regardless of the cost then it would be a different and amazing world. Also if I could flap my arms and fly to the moon I could take my husband for a picnic on the Sea of Tranquility; how cool would that be?Report
James,
“. I would like to see Western companies refuse to do business with companies that violate their own local safety laws,
Do you factually know this doesn’t happen?”
I can cite companies that don’t keep US safety laws, and if I was willing to do a bit of digging, ones that murder their own employees in industrial accidents. Why should I expect them to be better in other places?Report
but, but…all the lefties told me this couldn’t happen without American consumers refusing to buy anything made in sweatshops. I don’t buy your crazy right-wing pro-globalization lies!
Really didn’t take much at all to get them to do it, did it?Report
@jesse-ewiak
I grew up in Indiana in the 70s and 80s, and you didn’t. I can tell you it wasn’t anything like you imagine it to be.
I remember my mom crying in the grocery store because inflation made it hard to feed her family.
I remember eating corn meal mush for dinner because that’s all the good we had in the house.
I remember my parents worrying in hushed tones about how they were going to find the money for the mortgage.
I remember my mom being laid off for long weeks at a time from the factory job that was crippling her with carpel tunnel, and the longest “layoff” of all when the union went on strike–money lost that she never earned back.
I remember thinking nobody in my small twin cared about their property because most of the houses were run-down, then seeing them all get fixed up in the ’90s and realizing they were run down in the ’70s and ’80s because nobody had enough money to fix them up.
I remember the blow to my school district when the largest property tax payer in the county moved it’s operations to Ohio.
I remember how hard it was to find a summer job when I came home from college, and being jobless for a long time when I dropped out in ’83.
I remember my brother being jobless for over a year in the Volcker recession.
So don’t give me your golden age myths about an era you never knew, Jesse. We weren’t sipping champagne on the pool deck while awaiting our lobster Thermidor back then. Life was a damned struggle for most of us Hoosiers.Report
Chris,
I’m not the one who’s said consumers couldn’t cause change. I’m the one who’s said consumers can, and been told that no, they can’t. So you might be barking up the wrong tree with that response.
That said, I also argue that changes in those localities is driven largely by local demand. And of course I’m told that doesn’t happen, either.
Now, what most likely drove the decision to arrest those responsible? I really doubt it was consumer pressure per se. My working hypothesis would be that it was a combination of local demand and concern about national reputation, not (potential) consumers of products made there.
Either way, though, the consistent position of people like North and me has been that with development these stricter codes and responses will come. I think the arrests tend to validate our position.
Of course it’s horrible that apparently a tragedy has to happen to make change, but that’s really how humans tend to do things. We’re more reactive than proactive (or if not actually more, then certainly we’re reactive rather than proactive with distressing frequency). It would be a good thing if we really learned from experience, but largely we don’t. We can, of course, rail against human nature, but to what end I don’t know. We can also turn everything into a morality play, but I don’t see that we gain much from that, either. I see both those actions as having more consumption value than investment value (although maybe some moralistic rage is helpful in goading change–but from such a distance it’s effect is probably attenuated).Report
People often underestimate the role of luck in life because it leads to some implications that they would rather avoid, particularly if they are lucky. Jonathan Chait’s most important incite about Republican politicians was that they don’t seem to believe that luck as any role in life.
It was a bit more complicated than dumb luck. The point about World War II’s destruction is that the sheer destruction created a period of time where only the United States had the world’s biggest intake industrial and service economy. For other countries, it led to a scenario where the only way to go was up because of all the economic activity needed to rebuild. We were also indirectly helped by the spread of Communism and the decisions of former colonies to achieve self-sufficiency because it took them and their populations out of the market economy. Companies couldn’t sell their goods in a large part of the world or couldn’t outsource to underdeveloped countries. This limited the pool of available labor like sexism and racism did domestically, leading to higher wages for those that could get jobs.Report
This is a complicated target. It’s probably best to approach it by looking at specific areas one at a time.
For instance, at the end of WWII, the United States had something on the order of half the world’s productive capacity. That meant something to the role that U.S. manufacturing played in the world and, consequently, the role that industrial labor unions could play within the United States. Think about what it means to drive a Japenese car today and what it meant 40 years ago. Even as late as the late 80s/early 90s I can remember going to the Midwest to visit relatives and the lack of Toyotas and Hondas and Nissans was notable. Anyone remember what it meant to drive a Hyundai 30 years ago? Now relate that to what it meant to work for one of the Big 3 50 years ago and what it means today.
And separately, there was a whole set of macro and monetary arrangements established at Bretton Woods and after the war that had particular advantages to the United States. The Bretton Woods system established the dollar as the world’s reserve currency, which allowed the U.S. government to issue lots and lots of debt at relatively low rates (because people wanted, and still do, to hold dollar assets) to run significant fiscal deficits. Since there was so much low hanging fruit, just about anything the government did with that money was able to generate positive returns. That was never going to last forever and it didn’t.
Long story short, the resumption of international trade that happened after WWII, which resumed a previous trend that WWI interrupted, did make everyone richer. The United States, however, owing to a number of reasons had a particular place within that system that allowed us to essentially earn economic rents. That is to say, the fact that we were the biggest economy, with the biggest army and the reserve currency allowed our factors of production to earn higher returns than they would have earned had they been employed in any other country.Report
Isn’t the theory of free trade based on the idea that nations can derive mutual benefit from each other’s prosperity?
Emphatically, no.
The theory of free trade is based on the idea that nations can derive mutual benefit by specializing, and that this will promote prosperity. Prosperity is the effect, not the cause. (It does then roll back around and play a causal role, but it still depends predominantly on specialization.)Report
Specialization effectively means “difference in productivity”, and that can come in many shapes. Say that country A has invested heavily in infrastructure to produce widgets efficiently. Then trade with A is advantageous because of their prosperity, which allowed them to do that. Country B might be dirt poor, with such a low wage rate that their widgets are cheap even with highly labor-intensive production. Trade with B is advantageous because they’re so poor.
(And now we pause briefly for Hanley to call me an ignoramus.)Report
Mike,
You got absolute advantage down. Now you just need to add in comparative advantage, “perhaps the most complex and counterintuitive principle of economics” (Bucholz, New Ideas from Dead Economics, p.70).Report
One dude is really good at making spears but he can’t make baskets for crap. Another dude is really good at making baskets but he can’t make spears.
They sit down and get to talking and they trade a couple of baskets and a couple of spears to each other. They both walk away saying “man, I totally ripped that other guy off.”
“Why wouldn’t the guy with the spear rob the guy of his baskets?”
“That trick stops working eventually. The guy moves or stops making baskets or something. And if you kill the guy who makes baskets, you’ve killed your basket source. Better to trade and think that you ripped the other guy off because, remember, you can always make more spears.”Report
Jaybird,
In case it makes Mike feel good to have company, you missed comparative advantage, too.
One guy is much better at making spears and baskets than the other guy. But his superiority in spearmaking surpasses his superiority in basketmaking. So even though he’s better than the other guy at basketmaking, he specializes in spears and lets the other guy make the baskets.Report
OH YEAH! This is the thing where the lawyer hires someone to type his letters for him even though he’s better at typing than anyone willing to work for the pay he’s offering to type his letters.
That thing.Report
But in the real world, that would never (ok, almost never) be an absolute. The guy that’s great at baskets but utterly amazing at spears would mostly make spears, but when he can’t find the right wood for the handles or the obsidian chippers are at their annual convention he’d make baskets.Report
This still doesn’t explain how America managed to grow crops this year, that are going to simply rot in the fields, of no value to anyone, including the farmer.Report
@jaybird
So why wouldn’t the guys with the spears enslave the guys with the baskets and force them to make baskets in return for just enough food to live on?Report
Where I get confused is when one of the two countries, rather than exchanging goods, extends vast amounts of credit to the other. Is it one of those “If I owe the bank $100K, the bank owns me; if I owe the bank $100B, I own the bank” situations?Report
A good spear is a spear that might be able to be used multiple times. A crappy spear might only be usable once.
When it comes to being on the wrong end of a spear, whether it’s a good spear or a bad spear is less interesting than the fact that it is a spear.Report
@michael-cain
Kind of. Remember though, lending money is the flip side of buying yield. U.S. Treasuries are an almost riskless store of value.
The United States right now has an absolute advantage in capital markets, especially compared to somewhere like China. Don’t know how long it will last, but it’s the case for now.Report
” why wouldn’t the guys with the spears enslave the guys with the baskets and force them to make baskets in return for just enough food to live on?”
Why is that not still an expression of comparative advantage?
The guys who are better at basket-making are only making baskets. The guys who are better at spear-making are only making spears. The limited resources of the world are being provided to those who make the most efficient use of them.
This is not glibertarian blog-comment snark.
If you want to say “well yeah but that’s not an equitable distribution of profits“, yes, that’s true, but it’s also not what comparative advantage is talking about. It’s also not exactly “free trade”, which you’ll recall is what started this whole sub-thread.Report
Why is that not still an expression of comparative advantage?
It is, totally.Report
But in the real world, that would never (ok, almost never) be an absolute. The guy that’s great at baskets but utterly amazing at spears would mostly make spears, but when he can’t find the right wood for the handles or the obsidian chippers are at their annual convention he’d make baskets.
Are you trolling me, Mike? Are you just trying to goad me into insulting words?
The two person (or state) and two commodity model is just that, a model. To say, “your model doesn’t fully capture reality” is to completely miss the point. The model demonstrates how it can make sense to trade even if you do everything better than your trading partner.
So you don’t specialize 100%? That’s totally irrelevant. Can’t find a good supply of the right wood or knapped flint? We add some complexity to the model by talking about the raw materials and how they’re just another opportunity for more specialization and trade.
The nth spear produced would sell for less than it cost to make, but you still have productive capacity (time you’d rather spend working than relaxing)? So you make a few baskets on the side. But you’ve still specialized in making spears and will maximize your net spear gains before making any baskets.
None of that changes the point, and–amazingly–none of it is unthought of by economists. Your critique is no critique at all.Report
It is, totally.
Sure, but it’s got naught to do with free trade. A big part of free trade is to get the advantage of others’ labor without enslaving them at spear point.
Whatever the “why don’t they just enslave them” is directed at, it certainly doesn’t score against trade or economics. Differing productive abilities are just a reality–if that attracts violence, that’s certainly not on markets, and while economists might study it as an issue of incentives, it’s certainly no part of the normative elements of standard economic theory.
If “people can behave badly” is the issue, I think you’ll find economists nodding their heads sadly in agreement.Report
It’s not intended as a critique. I don’t know why you’d assume it is.
Anyway, once you agree that it’s true (which it is, obviously), we go on to agree that there’s actually an optimization problem present. You spend some fraction of your resources making the thing you’re great at and the rest making the thing you’re merely good at. And while this is actually a complex problem in linear programming, in practice you assumes continuity, slopes not changing too much in the regions you care about, declining marginal productivity etc. to make the problem tractable, and you wind up making the marginal value of each input equal for the two outputs. Rather, the market does this for you.
Right?Report
The “enslave” thing was responding to JB’s explanation of why you don’t kill the goose that lays the golden eggs. And you don’t, you just make damned sure the goose knows who’s boss.Report
Mike,
Well, usually when a person says, “but in the real world…” As a response, they’re critiquing. That, and the way you normally respond, are why I assumed it was a critique. If I lost that wager, I think I’d win more often than not by sticking to it.
As to your “right,” right.Report
Now, imagine two tribes, one where people make baskets in order to make themselves spears. The other where people make baskets at the point of a spear.
Wait a couple of generations.
Which tribe will more easily overtake the other?Report
The biggest problem with the prisoner’s dilemma thought experiment is that people keep forgetting to iterate it.Report
The one that most stubbornly connects human will with superior strategy and awareness of tactical management.Report
The ones that were enslaved will be screwed for generations, even after the slavery ends. The ones that enslaved them will be fine, even after the slavery ends.
What point are you trying to make?Report
“It’s not intended as a critique. I don’t know why you’d assume it is.”
It’s like you’ve got this idea that if you can just write enough words then the Law of Comparative Advantage won’t be true.Report
Free trade is more moral than trying to dictate the terms of how others should trade with you.Report
And not putting your factory in a building that won’t fall down is more moral than putting it in a deathtrap. That doesn’t mean it’s more profitable.Report
The thing is, Mike, is that business decision wasn’t about trade. The same logic of decision-making would apply if the factory had been geared toward domestic production. So as a critique of profits-pursuit it has some bite (and as a critique of government), but as a critique particularly of international trade, it’s a red herring. It’s moral posturing that doesn’t actually address the ideas of free trade.Report
@jim-heffman
It’s like you didn’t read a word I wrote. Not that that’s surprising.Report
@james-hanley
It’s also not much of an argument against the designated hitter. What it is is a response to the (what did I call it? right) pernicious bullshit that the only people who think that buildings collapsing and killing people is a problem are privileged first-world nanny-staters.
How is it a critique of government?Report
“pernicious bullshit that the only people who think that buildings collapsing and killing people is a problem are privileged first-world nanny-staters.”
I’m confused, are we still talking about free trade and the Law of Comparative Advantage or are we talking about something else now?Report
What it is is a response to the (what did I call it? right) pernicious bullshit that the only people who think that buildings collapsing and killing people is a problem are privileged first-world nanny-staters.
Cite, please. I’m really not aware of anyone saying that “only” first-worlders think it’s a problem. In fact those of us who argue that with increasing living standards locals will start demanding stricter laws are basing our argument on the idea that locals do think it’s a problem. It just might not–at a given point in time–their primary concern.
How is it a critique of government?
Governments not enforcing their own building codes is not a government problem….how?
Look, to the extent it’s because they’re being bought off by business/building owners, it’s also a business problem, and plausibly a market problem (depending wholly on how tightly or loosely one wants to define that, and for purposes here, I’m willing to draw it loosely and not try to niggle it). But that doesn’t mean it’s not also a market problem.
And if you want to figure out who are the most persistent critics of government and business getting in bed together, you’re going to have to look at the Marxists and the libertarians. Not liberals, not leftists, and of course not conservatives because all of those groups are in favor of it in particular cases.Report
Are we assuming that quality of construction would have a different value for Marxists and the libertarians? What is the meaning of quality in free trade?Report
Now it’s all “who you know” and “network, network, network”. And this seems like a change from the days when you could show up with a smile and a resume, and be hired that morning and at your desk before quitting time.
But back then it was just assumed that any white man was known, was part of the network.Report
Here is an article from Slate describing the findings of an NYU economist that the average middle class family is less wealthy today than it was in 1969 in 2013 dollars:
http://www.slate.com/blogs/moneybox/2014/12/08/collapse_of_middle_class_wealth_the_median_family_is_worth_less_today_than.htmlReport
To be sure, though, that article, focusing as it does on the effects of the 2008 recession and not on whether incomes have increased over the last 100 years, suggests that as recently as 2007, the wealth of the “median” was much, much higher than in 1969. But then, assuming the article is correct and that its discussion of income and the “median” makes sense (I’m not an economist), that’s quite a collapse.Report
“In his analysis, Wolff doesn’t count consumer goods like televisions or furniture as assets because they’re not easy to sell off, and usually aren’t worth a whole lot anyway. A tiny bit more controversially, he doesn’t count vehicles either, because most people can’t just choose to get rid of their car when they need money (you have to commute to work, after all).”
Kind of not really convinced by a guy who says “wealth hasn’t risen over the past forty-five years, so long as you ignore all of the things that middle-class people actually own.”
And, according to the bar chart in the article, median wealth by that measure was rising up until 2007. If you assume that “wealth” is nothing but real-estate and stock-market holdings, is it really such a surprise that a crash in real-estate values would cause a sharp decline?Report