Two stories about capitalism, which explain why economists don’t reach agreement
Why is it that if you know an economist’s political leaning you can guess many of his or her factual beliefs? Would raising the minimum wage would help or hurt the poor overall? Is austerity or stimulus is the more reliable route to economic recovery? Is rising income inequality a drag on growth? Is Piketty’s data sound? These are factual questions, not value judgments, so why don’t economists converge? It’s the same for historians. If you know which party they vote for, you can guess their general views on capitalism, and on the recent debates about whether slavery in the American South was crucial for its development (by providing cotton for the mills in Manchester), or irrelevant for the spectacular flowering of capitalism in the 19th century.
The answer, in part, is that there are two basic master narratives about capitalism that have been circulating in the West since the time of Adam Smith. One story is that capitalism (and business more generally) is exploitation, so we need a strong government to keep the greed and amorality of capitalists in check. The other story is that capitalism is liberation. People were mostly serfs and peasants until capitalism came along and freed people to keep the fruits of their own labor, so we need to keep government’s role to a minimum, given how prone it is to capture, corruption, and inefficiency. Let the markets work in peace.
I’ve been seeing these stories all around me since 2011, when I moved to a business school at the same time that the Occupy Wall Street protests broke out. I find it so helpful to know these stories that I turned them into 70 second video montages to share them with others. The two montages are included in a talk I gave in November at the Zurich Minds festival, which you can watch below.
The talk explains the most useful concept I have encountered in recent years – the concept of “wicked problems,” which refers to problems that activate the moral and political identities and desires of the experts, thereby warping their thinking.
Wicked problems (like poverty, education, or racial inequality) activate all the post-hoc reasoning and biased searching for support that I described in chapters 3 and 4 of The Righteous Mind. They are so different from tame problems (like curing cholera), which can be very challenging technically, but they just sit there and let the experts converge upon solutions. My hope is that a better understanding of moral psychology can help people to think clearly about economic debates, which are usually also wicked problems with moral implications.
I have also made the two montages available as separate files, in the hope that teachers and professors will find them useful for showing in classes that discuss morality, history, politics, or economics.
You can also download the two separate stories at: www.ethicalsystems.org/capitalism
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Advice for Democrats and Republicans
I did a short video interview with The Economist, which is turning out to be the most tweeted thing I’ve done in a while. People seem to be interested primarily in the answers I gave when the interviewer, Roger McShane, asked me for specific advice for Obama and Romney. Normally I’m careful not to offer specific campaign advice. Political strategy is a game I know nothing about. All I can do is comment on when and why candidates connect, or fail to connect, with the moral concerns of various groups. So here’s what I said:
Q: How should the Democrats change their message to appeal to a broader base? How should Barack Obama change his message?
A: …The Democrats tend to focus too much on messaging and framing, as though if they can construct the perfect message vehicle, put it up into message space and send it out, it’s going to go into people’s ears, turn a key, like lock-and-key, and get the message across. That’s not the way persuasion works. You have to trust the messenger. Persuasion is not done very well directly. But if you use more indirect means… The bottom line is that if they trust you, they’re more likely to listen to you. And the Right, and especially businessmen… if the business community doesn’t trust Obama, doesn’t trust the Democrats, then when he makes an argument — and there’s some merit to the argument he’s making [in the “you didn’t build that” speech] — they don’t follow the argument carefully and try to understand its logic; they go right for what’s wrong with it.
…So if i had to give advice to the Democrats, it would be: stop focusing so much on how do you message each particular issue, policy, or rule, and think much more about the long term. What does the party stand for, what does it mean to be a liberal in the 21st century?
Q: Is there anything that Republicans should be doing differently?
A: I think the Republicans got their message straight in the 1980s, but… I think the Republicans have become too rigid, and too hard-hearted [in contrast to Ronald Reagan, who was often flexible.] George W. Bush tried to promote compassionate conservatism, I don’t think that really flew. But Mitt Romney really comes across as cold and uncaring. If you’re going to talk about capitalism, well, its weak spot is that it creates losers and victims. And if a governing party doesn’t care about those people at all, well, that’s going to alienate a lot of people. And frankly I think it’s the wrong position to take.
Just to be clear: I love capitalism, and I think that anyone who cares about the poor should love it too. It’s capitalism that generated such vast wealth in the West over the last 250 years that almost everybody was lifted out of poverty, and now capitalism is working its magic by cutting poverty at lightening speed in East Asia and South Asia. But come on, Republicans, read Charles Dickens. We can do better than that. Tell us how you’re going to protect workers from abuse, and protect the public from harmful externalities. Celebrate capitalism, but show us that you’re at least aware that it can cause massive suffering and environmental damage on its path to massive public benefit.
McShane then asked me what is unique about America that generates such high levels of political polarization. I mentioned some of the usual suspects, plus one that I haven’t seen mentioned elsewhere, but have been thinking about recently. I talked about how the Founding Fathers set up our governing institutions to pit factions against factions, and to seek out balance between competing interests and institutions. They expected that there would be many cross-cutting divisions, such as the states vs. the federal government, and the three branches of government against each other. But in recent decades, the Left-Right divide has risen to such prominence that it suppresses all other divisions, and that is bad news for a tribal species such as ours:
Our moral psychology makes us very adept at having shifting teams and coalitions, and that can be healthy,* when you’ve got lots of cross-cutting divisions. And the founders of this country knew that. Unfortunately, all those cross-cutting divisions have been wiped away, and there’s just one giant chasm, one giant fault line, and all the institutions of government are lining up along that line. And so everything gets paralyzed, and within each [institution] you get more demonization, more hatred across the line.
Here’s the 7 minute video:
*note: I got the idea that it can be healthy to have multiple competing divisions and identities from an excellent book on our tribal psychology: Us and Them, by David Berreby.
Read MoreChris Hedges Joins the Tea Party
I recently read an essay at TruthDig.com in which Chris Hedges, a journalist and author active in Occupy Wall Street, argued that “People who work hard should get to keep the fruits of their labor. People who are lazy and irresponsible should suffer the consequences.” I was stunned. I had just done a discussion with him last week at the 92nd Street Y in New York, where we had what I thought was a very interesting and civil discussion about war, politics, and capitalism. We agreed on many points, such as that business is not intrinsically bad, but that corporations, when left unchecked by government, sometimes become super-organisms that can take over, corrupt the government, and then rig the system so that they get to pass on external costs to innocent bystanders. We both agreed that the financial sector was the most dangerous genie that had escaped from the bottle, wreaking havoc and suffering across the globe. But Hedges was well to the left of me.
So what was he doing spouting Tea Party lines, such as dismissing “slackers” and “cheaters” and everyone else who “drinks the water rather than carries it for the group.” He actually argued in his TruthDig essay that such people should be “denied social assistance in the name of fair play.”
Now, if you actually read Hedges’ essay, you’ll see that in the quotations I gave, he’s quoting or paraphrasing me. Those lines do really appear in his essay, so I was not wrong to quote them. But it was terribly wrong of me to suggest that Hedges was making those arguments himself, rather than reporting them as my beliefs, which he extracts from my book, which he was reviewing.
Yet this is exactly what Hedges did to me in his review. In The Righteous Mind, I try to help everyone understand the other side. I try to say what liberals, conservatives, and libertarians believe. For example, on p. 169 I’m trying to show the difference between liberal and conservative understandings of fairness. I quote some letters I received from angry conservatives who rejected my explanation of What Makes People Vote Republican. One letter said: “I vote republican because I’m against other people (authority figures) taking my money (that I work hard for) and giving it to a non- producing, welfare collecting, single mother, crack baby producing future democrat.” I then tried to analyze these conservatives’ notion of fairness. Here’s the key passage:
These emails were overflowing with moral content, yet I had a hard time categorizing that content using Moral Foundations Theory. Much of it was related to fairness, but this kind of fairness had nothing to do with equality. It was the fairness of the Protestant work ethic and the Hindu law of karma: People should reap what they sow. People who work hard should get to keep the fruits of their labor. People who are lazy and irresponsible should suffer the consequences.
I’ve never taken a journalism class, but I don’t think it was appropriate for Hedges to take that last sentence out of context and present it as though it was my personal belief.
Hedges does this to me over and over again. He repeatedly calls me a “social Darwinist,” by which he means the belief that we ought to let the poor starve to death, so that the gene pool can benefit from the “survival of the fittest.” Yet I do not believe this, and nowhere do I suggest anything remotely like this. My book is overwhelmingly descriptive. I’m trying to understand divergent moral matrices by climbing into them and seeing how they are built. Yet Hedges frequently takes my descriptions as though they were proclamations of my own personal values.
He also makes stuff up. I do talk about my urge, on and after 9/11, to display the flag and be a team player, even supporting the President. But Hedges then asserts: “Haidt became a lover of conservatism and nationalism when he became afraid. He embraced an irrational, not to mention illegal, pre-emptive war against a country, Iraq, that had nothing to do with 9/11.” Yet I am not now and never have been a conservative. Both before and after 9/11, I was a liberal Democrat, as I say in the book. I got into political psychology in 2005 specifically to help the Democrats do a better job of connecting with American morality. And while I supported the invasion of Afghanistan, I did not support the invasion of Iraq. Again, I’m no journalist, but I think that when journalists contradict their sources, they are supposed to have some evidence.
Hedges makes some valid criticisms of me. He’s right that I’m not sufficiently attentive to oppression by the powerful. He’s right that I’m too positive about social life in Bhubaneswar, India, in part because I spent very little time talking to people of very low caste. He could have written a compelling critique of my book from the perspective of the religious left, a critique I would have valued and learned from. But instead, he ended up demonstrating one of the principles of the book, which he quoted and rejected: “Conscious reasoning is carried out for the purpose of persuasion, rather than discovery.”
Read MoreWelcome to the Righteous Mind Blog
this is a test…
I’ll be blogging here about current events and moral psychology.
And I’ll be inviting guest bloggers with interesting perspectives.
Check back soon…
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