Ersatz individualism makes the American collective strong

Here’s a statement that I don’t think will be too contentious, across the ideological spectrum:

The American way is to draw sharp distinctions between winners and losers, in order to encourage people to hustle.

People on the political left might rephrase this in stronger, more derogatory language. People on the political right would mostly celebrate the statement. But as a description of the American status quo, I think it is fairly uncontroversial. It expresses the barely tacit rationale behind a whole panoply of American institutions that comfort the already comfortable and afflict the already afflicted. Consider the so-called corporate welfare state, or tax expenditures like the mortgage interest deduction and the deductibility of health costs (only) of the stably employed. These things come to exist for specific historical reasons, they are won by particular lobbies, but they endure because of widespread hospitable ideology. It should be possible to “make it”. “Making it” should be a safe, comfortable place, while those who fail to make it should bear consequences for their deficiencies.

Suppose, as I think many people on the right would argue, this ideology or worldview has contributed to power and prosperity of the United States. Sharp distinctions between winners and losers encourage individuals to work hard rather than slack off. Some succeed, some don’t, but the net effect is to reward effort and enterprise, generating a vibrant, prosperous economy. The punishment of losers is a price that must be paid to create a nation that is collectively a winner. And the burden of that price falls on those who most deserve it, those who lose — in part due to misfortune sure, but largely because they simply failed to work as hard or as well as their competitors.

People on the political left would dispute this account for all kinds of (good) reasons. But let’s put that aside, and consider it on its own terms. This perspective on American life would, I think, be described as “rugged individualism”.

But, in the lingo of economics, consider the “social welfare function” embedded in this story. The claim is emphatically not that this system maximizes some measure of aggregate utility that could be decomposed to a sum of individual welfares. On the contrary, it celebrates as necessary large costs in individual welfare for the sake of impersonal characteristics of the aggregate: “prosperity”, or “strength”. It is an entirely collectivist justification for policies that are deeply harmful at an individual level, if you take seriously at all the idea of diminishing marginal utility. The individualist approach to maximizing welfare would be to redistribute. If we (contentiously but commonly) assume people share comparable utility functions, aggregate utility is maximized by taking from the rich and giving to the poor. At least in a methodological sense, it is socialists who are the individualists, attending to the sum of individual welfares, while unsympathetic capitalists rely upon collectivism to justify their good fortune and the policy apparatus that magnifies and sustains it.

People on the political right who are uncomfortable with the claim that their policy views are only coherent if they put the welfare of a depersonalized collective above the welfare individual humans might respond in two ways. Some libertarians would slough off the whole conversation, and argue that they are not concerned with either the well-being of any collective, or of individual human beings in the abstract, but require only that just procedures should be followed and concrete liberties respected, regardless of outcome. That’s a self-consistent view, but one that will never be very useful or interesting, other than to its disproportionately comfortable adherents. The more interesting rejoinder is a claim that there is no tension between individualism and collective goals like American strength and prosperity. Even accounting for the utilitarian harms provoked by celebrating and therefore engineering sharp divergences in outcome, the success of the collective improves characteristics of the population of outcomes so much that welfare gains due to increased prosperity outweigh welfare losses due to tolerance of internal divergences.

That’s an interesting claim, contestable but not incoherent. It would in principle depend upon the scale of the increase in prosperity and the degree to which it “raises all boats”. I think it’s a hard view to support, what with sinking rowboats and rising yachts and successful counterexamples like the Nordic countries. But perhaps Acemoglu, Robinson, and Verdier are right and the Nordics only succeed by free-riding off of America’s collective achievement.

Regardless, it’s a very communitarian view, one in which welfare dynamics cannot be adequately understood by building from individual microfoundations. It is a theory that both acknowledges divergences in individual welfare and posits an important role for social or “meso”-level abstractions in explaining (and justifying) the American status quo. The religious right and “national greatness” conservatives will be perfectly at home with all this. But it’d be nice if the economists on whom they rely to craft (and justify) policy would catch up.


Inspired by @zerg_rush01 and @MattBruenig.

Update History:

  • 25-Sept-2013, 4:05 p.m. PDT: edit a badly phrased sentence: “a self-consistent view, but one the rest of us will never consider that will never be very useful or interesting, other than to its disproportionately comfortable adherents.”
  • 6-Aug-2014, 3:50 p.m. EEDT: “they are won by particular lobbies”
 
 

41 Responses to “Ersatz individualism makes the American collective strong”

  1. Vladimir writes:

    Yes economics has a deep and abiding connection with utilitarianism. Bentham, Mill etc.

  2. Nicholas Weininger writes:

    I think this argument rests on an entirely incoherent idea of individualism. Individualism is precisely about disputing, or at least arguing for limits on, the “contentious but common” assumption of interpersonal utility comparability. For many right-libertarians, it’s just that incomparability of different people’s utility that underlies the claim that procedural justice and respect for liberty are more important than aggregate outcomes, but there’s nothing inherently right-libertarian there. If you want, say, a Rawlsian framing instead, individualism means emphasizing the separateness of persons; if you want a left-libertarian framing, an individualist is one who walks away from Omelas.

    It’s also totally unnecessary, and proves too much, to invoke hospitable ideology to explain the endurance of policy carveouts benefiting wealthy special interests. All sorts of such carveouts exist, and for any ideology you mention some of them will fit that ideology and some will not. Mancur Olson’s observation about diffuse costs and concentrated benefits is all the explanation you need.

  3. Thomas Pindelski writes:

    Good piece, thank you. However, I do not think you mean to include the word ‘ersatz’ in your title. This adjective refers to a (typically) fake substitute for the real thing. There is nothing ersatz about American individualism, augmented daily by our nation’s obsessive belief in ranking, league tables, etc. be if of sports, investmemnts, schools, fgoods, wealth, and so on, all serving to stoke the competitve fire.

  4. stone writes:

    However America has done it, I’m very grateful for all the technological breakthroughs from the USA – BUT is it actually true that those fabulous technological breakthroughs were primarily driven by a “let’s get rich” mentality?

    My (quite possibly wrong) impression was that they were largely driven by enthusiasts motivated by a compulsive enthusiasm for technology for technology’s sake.

    Yves Smith seemed to make that point in a post:
    http://www.nakedcapitalism.com/2012/05/adam-davidson-parrots-disinformation-as-he-extols-rule-by-the-top-0-1.html#LDw6BTY5kcbGi5u5.99

    “Second, investors had comparatively little to do with the growth and success of the computing industry (and in general this is true. Bhide has found that only 1/4 of the Inc 500 companies were venture capital funded). If you look at the PC revolution (which was when the real falls in price and growth in reach of computers took place), the drivers were geek tinkerers and hobbyists who all wanted to create a new Hewlett Packard. HP was founded in 1939 and it grew into a dominant Silicon Valley player in the 1950s and 1960s, when top Federal marginal income tax rates were over 90% in the later 1950 and over 70% in the 1960s. Silicon Valley came into being thanks to the work of engineers who clearly were not motivated by dreams of becoming Filthy Rich, since it was pretty much impossible back then.

    If you look at the iconic companies of the 1980s tech revolution, few had venture capital or wealthy individuals as backers. Apple funded itself off of purchase orders. Software firms like Microsoft and Oracle didn’t need meaningful seed money. Cisco didn’t take VC until shortly before its IPO so as to get a better multiple.

    Third, the internet was created by the Federal government (remember them?). Unix, still the most robust computing platform, was funded by heavily regulated and highly profitable monopoly AT&T, not by wealthy investors. These are also important parts of the tech infrastructure.”

  5. bob mcmanus writes:

    The American way is to draw sharp distinctions between winners and losers, in order to encourage people to hustle.

    The Japanese way is to draw sharp distinctions between winners and losers, in order to encourage people to form and maintain small group dependencies and loyalties.

    More “was than “is” anymore. And the first clause could be improved. And probably not unique to Japan. Just added to note that there might alternatives to rugged individualism or depersonalized collectivism.

  6. Handle writes:

    Let’s consider Eurovision, and let us assume it is both ‘European’ and not ‘American’, however you want to derive the True Platonic ideal forms of those words.

    Eurovision is a tournament market. Like a lottery, it attracts huge numbers of people into the tournament despite the fact that most of them should know they have a tiny probability of winning. Unlike a lottery, there is a merit component to who wins, and participants tend to invest comparatively larger amounts of resources into preparation, and put their self-esteem on the line of whether the results match their pipedreams. But, as they say, you can’t win if you don’t play, and people win all the time.

    We can’t all be equal winners, and there is such a thing as scarcity, so life is full of such tournaments. Tournaments for the slot in the elite school, the lucrative job, the pretty girl, etc.

    There is a psychological-statistical question similar to the common one concerning voting. Despite a negligible change of affecting the outcome, people vote. Despite a negligible change on winning the lottery, or any tournament, people play. If people only ever did this one time as a mistake, that would be one thing. But they come back, again and again.

    They must get something out of playing the game itself, totally apart from the result.

    Yes, there may be collective benefits from incentivizing ‘hussle’. These may easily be conceived as individual benefits if you think of life as a multi-turn game, and where, yes, you may win or lose this round, ‘make-it’ or fail, but that because of the game itself, ‘making-it’ is better for makers in the next round, whereas failing remains the same. That’s a perfectly good individualized reason to favor preserving the fruit of ‘market-origin incentives’ from redistribution. So it can be both.

    But, there may just as likely be collective detriments from such incentivization. What if you are a paternalist and you judge that people are wasting their resources on the folly and cheap-thrill of the lottery, or their time preparing for a music competition they can never hope to win, and that such time and resources would be better spent elsewhere – both individually and collectively? Gambling is regulated in every state. And so is finance, more or less. But in general, if tournaments can be both individually and collectively wasteful, then the converse is that the absence of a tournament, or insufficient incentives within one, could also yield negative individual and collective results. That’s the American judgment about the American way.

    So, I prefer to reframe your aphorism that it is the American way to preserve a larger fraction of market-origin incentives for labor from governmental redistribution because of a prevailing judgment that, in our culture, such preservation produces better overall results, both individually and collectively, now and in the future.

  7. Unanimous writes:

    Every nation has winners and losers. The countries with the largest divisions between winners and losers by many measures are in the third world, and this has been the case for a long time (perhaps 200 years). You can see this when you look at many suburbs in third world cities – people living in compounds in western style housing with families living in improvised boxes made of plywood and corrugated metal outside the compound. The US is far more like Europe than it is like third world countries. It is slightly in the direction of the third world compared to most developed countries, but only slightly.

    There is a good argument to be made that big divisions between winners and losers does not enhance national well being. Historical evidence seems to indicate that the most effective division western countries have experienced was during the 1940s – 1960’s – i.e. far more equal than now.

    But, you have still made an interesting point that some justifications for current differences in individual outcomes are dependant on collective benefits. However, I don’t think these are very common justifications, nor do they stand up to scrutiny. The majority of people who believe large differences in individual outcomes are necessary, or beneficial overall, are just stupid. They feel more successful if they group themselves with wealthy people by sympathising with arguments that support wealthy people.

  8. [...] Motivation: (And partially inspired by Interfluidity’s latest) [...]

  9. stone writes:

    Has there been a bit of an ideological shift in how America sees itself? In the aftermath of WWII, the USA saw itself as the land of the New Deal that was proving Marx wrong by ensuring widespread prosperity. The USA at that time was instrumental in ensuring that “cuddly capitalism” was put in place in Japan and Germany. By the 1990s when the Harvard team were invited to guide post-Soviet Russia, “tooth and claw capitalism” was viewed as the ideal. Russia has produced lots of billionaires thanks to that but the hundreds of millions of educated Russian people did not give rise to an economy of technological innovation. Only a few computer viruses came out of Russia rather than a crop of innovative companies such as Google, Intel, etc.

  10. stone writes:

    Could part of the success of the US West Coast be due to its great geographical distance from any major banking center? Perhaps there the best and brightest are less likely to be recruited to investment banks and so they develop technological innovations rather than CDO-squareds or whatever?

  11. kebko writes:

    “The American way is to draw sharp distinctions between winners and losers, in order to encourage people to hustle.”

    I think only someone from the left would think this is not contentious. It’s like describing Christianity as “A belief that you can get away with anything because God will forgive you.” It is literally true while missing the point entirely. You aren’t likely to meet any Christians who have ever thought of it that way and you aren’t likely to meet any libertarians who think of the American ideal that way.

    Also, the left has an obsession with using the state to take property. We could frame this same discussion around the distribution of sex, popularity, love, familial support, social influence, etc. These are all important factors in a measure of utility. These factors aren’t a part of discussions of redistribution because Americans from all factions view these areas through a lens of liberty.

    Or even if we stick to income redistribution, someone without the predetermined focus of a modern leftist might think that the obvious remedy would be more redistribution within extended families.

    To insist on a dichotomous description of what, in actuality, is an infinitely complex population, and then to focus on state-centered utility adjustments, saddles the whole discussion with an awfully peculiar set of priors.

    For starters, if you went around polling people and said, “The American way is to draw sharp distinctions between winners and losers. Are you a winner or a loser?” You’d get a lot of funny looks, and possibly a couple glove slaps. Few people think of themselves that way. I doubt if you think of many people that way except when you’re dealing in political rhetoric.

    PS. I love your blog and find most of your posts to be thoroughly thought provoking…including this one, apparently.

  12. stone writes:

    I think a case could be made that redistribution could actually ENCOURAGE risky enterprise that leads to collective (and individual) prosperity. Ole Peters has posted a great video lecture ( http://www.gresham.ac.uk/lectures-and-events/time-for-a-change-introducing-irreversible-time-in-economics ) about how random events play out (that’s a crude model of enterprise risk). He shows a simple game where a coin flip decides whether the player gains 50% or loses 40%. Clearly winning gains more than losing loses BUT a subsequent win does not make up for a preceding loss and a subsequent loss loses more than was gained by a preceding win (1.5×0.6=0.9<1). So a large enough population of players will, in aggregate, steadily gain from playing the game but all of the winnings will randomly accrue to an ever smaller minority of players whilst almost everyone loses almost everything. Ole Peters points out that from an individual’s perspective playing such a game appears highly unattractive. BUT if wins and losses are pooled and rebalanced across many players, then the game becomes universally attractive.
    I also had a go posting about that:
    http://directeconomicdemocracy.wordpress.com/2013/04/19/chance-luck-risk-and-economic-democracy/

  13. I think that any sort of growth whatsoever is a matter of reducing “transaction/ transformation/ translation costs” INSIDE of something, whether that something is a mechanical hand tool (which reduces the work needed for the application of a Newtonian force) or it is a huge social welfare institution (which reduces transaction costs and risks). (The intentionalities are different, but that is a follow-on discussion.) The maximization of the flow, by reduction of the cost, becomes the comparative advantage, on the next level up. This combinative idea (of reduction of transformation/transaction costs, interposed with specialization and trade) is essential to getting us out of the current conceptual confusion. It may make more sense this way: I am putting this into a nonmathematical model, and making 1-minute videos. Here are “New Atom for Science”, “You Belong in an Institution”, “Two Thinks at a Time”, and “Organic Mechanics”, fanciful names but basic ideas, in an automatic sequence:
    http://www.youtube.com/watch?v=UKXlqRIA92U&list=PLT-vY3f9uw3AcZVEOpeL89YNb9kYdhz3p

  14. Morgan Warstler writes:

    I don’t think we disagree, but I think where you are wrong, its bc you are overly emotional :)

    “The American way is to draw sharp distinctions between winners and losers, in order to encourage people to hustle.”

    Let’s shorten that:

    “The American way is to encourage people to hustle.”

    This would more accurate, right?

    Note you didn’t say to be industrious or to be simply to be productive, you went for the special kind of thing that is truly American. The hustle. The inventor. The cowboy. etc.

    —-

    Also in America, there is a tendency “to draw sharp distinctions between winners and losers”

    But we know this in part driven by lack of trust that occurs in a multicultural system right? We aren’t all tall blondes, or deviant germans, who believe that each of their tribe is putting up similar effort and therefore is can make a moral claim on shared resources.

    That’s not very earth shaking either.

    The last thing you’d have to grant is that atleast comparing US to the rest of the world, in the we are the superpower that would indicate there’s some likelyhood that:

    Hustle with no Trust has outperformed Trust without Hustle.

    What we want is Trust and Hustle.

    —–

    Taken together then, I think then we can clearly see what IS the most freedom loving, free market driven, good old American way of being rugged individualists with a heart:

    1. We assure thru the architecture of the safety net, the basic income, that EVERYONE who claims they can work, is put to work for the ROI of other individuals. The labor is directed by the demand of the private market. The governments JOB is just like Ebay (unlike say Craigslist) to work tirelessly to assure everyone the maximum amount of trust.

    Both sides of two sided clearinghouse need a fair referee, not one driven by politics, but one driven by increasing TRUST.

    2. That the system of basic income REWARDS THE HUSTLERS. That what we create actually creates MORE PEOPLE LIKE US – here again TRUST.

    The point of America isn’t to draw a false dichotomy between an Apollonian dad and the Dionysian mom. It isn’t to exist somewhere between pure free market anarchy and communism.

    The POINT is that the THING THAT WE LOVE ABOUT OURSELVES IS….. THE HUSTLE!

    The HUSTLE Steve, is so important we build it into everything we do EVEN OUR SOCIAL WELFARE SYSTEM.

    We can love each other the the way hustlers do.

    And good libertarians, the best libertarians, are the ones who are pragmatic enough to cheer that deal.

  15. [...] But, in the lingo of economics, consider the “social welfare function” embedded in this story. The claim is emphatically not that this system maximizes some measure of aggregate utility that could be decomposed to a sum of individual welfares. On the contrary, it celebrates as necessary large costs in individual welfare for the sake of impersonal characteristics of the aggregate: “prosperity”, or “strength”. It is an entirely collectivist justification for policies that are deeply harmful at an individual level, if you take seriously at all the idea of diminishing marginal utility. The individualist approach to maximizing welfare would be to redistribute. If we (contentiously but commonly) assume people share comparable utility functions, aggregate utility is maximized by taking from the rich and giving to the poor. At least in a methodological sense, it is socialists who are the individualists, attending to the sum of individual welfares, while unsympathetic capitalists rely upon collectivism to justify their good fortune and the policy apparatus that magnifies and sustains it.  read more [...]

  16. Almost all of the great scientific advances that have led to technological breakthroughs have nothing to do with the “hustle”. It is usually just scientific curiosity about the world combined with the artistic impulse to creativity. And a LOT of lost time and money, coming up with null results. The “hustle” mostly leads to masturbatory decadence and a long decline. See: the ancient Roman empire.

  17. stone writes:

    Lee A. Arnold @16, I think you are quite right that the hustlers are not directly the tech innovators, but that makes it especially striking that so much high tech innovation has sprung out of the US (in particular the US West Coast). What is it about the American way that engenders that? Do you think the “hustle” is totally irrelevant or might an aspect of the “hustle mentality” rub off on the innovators (who as you say are driven by curiosity and creativity)? Perhaps in a world of hustle, those key curious and creative geeks are somehow imbued with a “can do attitude” that elevates them to achieve breakthroughs that they wouldn’t were they in Finland or Japan???? The hustlers inspire an empowered state of mind in the creators even though the hustlers don’t directly do anything great and the creators don’t hustle???

  18. Morgan Warstler writes:

    Stone,

    Lee was freaking out bc I squared the circle.

    The outcome then is that even our best safety net, a basic income, favors the poor the hustle. The best system teach, train, reward those who hustle more than non-hustlers EVEN WHEN they choose to live their lives on GI.

    It’s about engendering a state of mine, reinforcing the cultural celebration of cowboys and innovators, inventors and pitchmen, more generally hustlers.

    This is my plan – Guaranteed Income / Choose Your Boss – its actually meant to be an open source software solution for states / nations to adopt.

    http://www.morganwarstler.com/post/44789487956/guaranteed-income-choose-your-boss-the-market-based

    Note Lee / Stone that the system REWARDS say a hustler who really just wants to play piano teaching piano lessons and performing in piano bars.

    It”s not about everyone must seek to maximize profits, thats not a true free market, its about whatever your particular jones is, whatever your particular dream job is…. systemically EVERYONE knows that hustling ALWAYS pays off.

    The right welfare system valorizes hustlers, to do whatever they want, as long as SOMEONE else will pay at least $40 per week for it.

    Say you wanted to pull down pants – that’s your DREAM JOB, you just want to run around pulling down people’s pants.

    Now I can’t imagine people wanting to pay for that, but I have an open mind…

    And I can totally imagine a that UNDER MY SYSTEM, a hustler like yourself, has the best possible chance of self-actualizing his dream, if you hustled, you might be able to turn it into a performance art thing, start to market it, get some hipsters into it, make it a thing that they hire out for parties.

    I don’t think it’ll happen, BUT I’ve optimized the best possible moral chance for pants pulling down to ENTER THE MARKET, and see if it can fly.

    And doing that, which is maximizing the new market entries, occurs by encoding hustling into the machine.

    America, its hustlers all the way down.

  19. Stone, I think there are at least two different things. 1. Scientific creativity comes out of the Enlightenment tradition. 2. Agglomerations such as West Coast high-tech are historical accidents of time and place. The Enlightenment tradition is that nature is discoverable and you can manipulate it to improve the world: Francis Bacon. Very young scientists, when interviewed, are usually major altruists, looking at solving a world problem about energy, medicine, or the environment. But the requirement to hustle is usually counterproductive to all of that, because creative discovery is not directed by clock-time. The mind needs to wander. Bell Labs paid scientists to simply think about stuff: under observation, they appeared to be staring at walls. (But they were known to be scientists already; a welfare system that tried to do this would be a disaster.) AFTER that, comes institutionalization, specialization, marketization and agglomeration. Silicon Valley is a case in point — the earliest innovators were mostly dreamers, connected to the Haight-Ashbury psychedelia. The entrepreneurs came in years later. Discovery and creativity can occur after marketization of course, because there really are no rules at all, and so, companies are now doing things to encourage “lateral thinking” (Edward DeBono) such as requiring playtime (Google, among many examples). But even that is “on the clock”, so I would guess that the returns are tiny. The only thing we do know is that requiring creativity to be productive, to hustle, is its death. I think the safest bet is to throw tons of money at early education, making sure every kid gets taken care of, gets social capital (emotional support), and is praised for self-expression. Because we don’t know where it is going to come from. The historical evidence is pretty clear that companies have their run, then are superseded.

  20. TheDumbMoney writes:

    I am at heart a libertarian (and comfortable). But I support existing social welfare programs and redistribution, and would even support higher marginal tax rates. To me, this is not about protecting the individual today who did not make it. In other words, to me this is an individualistic stance, and NOT in a utilitarian sense about helping all individual people today a bit more. It is selfish, it is about me, it is about my kids eventual trust funds, and it is about the future. History teaches us that when the people who have “made it” do not sufficiently aid the people who have not “made it,” the “have-nots” eventually behead/hang/shoot/nationalize/etc. the “haves.” The most famous example is Revolutionary France, epitomized by “Let them eat cake.” But Czarist Russian and Pre-Fidel Cuba are great examples. Venezuela. The problem in all of these countries is that the financial elites got too comfortable thinking they could always repress the masses using their money and power. Eventually you can’t. From this point of view, FDR’s New Deal let steam out of the pressure cooker of the Depression and stymied people like Eugene Debs from taking over. The flexibility in our political system worked. From this point of view, it is troubling that we are reaching historically-high levels of inequality, and many just want more of the same. Every “conservative” I have ever explained this too either screams irrationally at me, or covers his ears. They absolutely hate the idea that social welfare programs can be explained in purely selfish terms, because it defeats the entire story that such programs are about collectivist redistribution in the first place. They’re not: they are about modestly redistributing some of your wealth now so that some guy named Chavez does not come in later and nationalize your whole company. Their answer is basically either to ignore history and explain it in some other non-empiracle way, or say “it could never happen here.” Both responses are intellectually vapid. Cheers.

  21. stone writes:

    Lee A Arnold @19, I’ve still got this impression that even pure “dreamers” dream better in a constructive ambiance. Might an example be the theory of evolution by natural selection. It was simultaneously and totally independently dreamed up by Darwin and Wallace. Those two had utterly different personal life histories and educational backgrounds so I think it could be said that the theory was the product of its age and place. Could the backdrop of the industrial revolution in England at the time have prompted the boldness of thought that gave rise to that theory? Likewise now could the US West Coast have a culture that prompts a general boldness of thought?

  22. Neildsmith writes:

    As a lefty who has nonetheless succeeded in this horrible hunger game we call the “economy” in America, I think it’s kind of funny that some are still debating the morality of that “whole panoply of American institutions that comfort the already comfortable and afflict the already afflicted.”

    Of course there are stupid useless people who can’t compete. And of course, there are plenty of successful and wealthy crony capitalists who have exploited every loophole and advantage given them by the aforementioned stupid useless voters (and non-voters).

    Here is the thing though… if you want me to lend a hand to the stupid useless voters who can’t compete, then they are going to have to at least stand up and make their presence known to the crony capitalists. How they make their presence felt is up to them (I have a few suggestions that are not necessarily appropriate to suggest in this forum). I eagerly await the engagement of the suffering losers in this war. The Lord, it is said, helps those who help themselves.

  23. Scott Sumner writes:

    I think you’ve accurately described many conservatives. On the other hand I don’t think it describes many conservative economists. They seem to justify their views on essentially utilitarian grounds.

  24. Greg writes:

    DumbMoney@20

    Actually their answer now is to arm them selves to the teeth, hire thugs to beat down any signs of insurrection and use a surveillance state to keep tabs on “them”.

    You are correct that there is a perfectly selfish reason to be for more redistribution. One analogy I think about is a poker game where one guy has a mountain of chips and the other nine guys have one each. He can tell the other guys to cut their chips up and play with partial chips (a view of monetary policy in this example), he can agree that more chips simply get printed and distributed to everyone equally (a form of depreciation) or he can allow some of his stack to be circulated to the others so the game can continue (fiscal policy). If the goal is to continue playing poker one must do something and each choice of solutions has affects but doing nothing and stopping the game isnt really an option in life. I think mostly the third but some of the second are better options because it can keep the antes the same and the rewards of the game dont change as much but if you are the best poker player you will continue to keep accumulating the chips you redistibuted, and if your not……………….

    I like playing the game we’ve been playing, for the most part. The game I grew up with involved most people having access to chips on a regular basis and many things were bullt. Altering that has changed the landscape of many places. There are fewer people who can be reliable customers so sales are less. Choking off the income of your customer base is a stupid idea for anyone who wants to run a business, so simply allowing some to recirculate gives you more opportunities to keep playing and that is what you should be wanting to do keep playing. So your desire to keep playing should be stronger than your desire to sit back and figure how much you won the last game by.

  25. Stone @21 — I’m not sure I understand your question or perhaps its terms. There is no doubt that ideas come in droves, due to prior developments, and that both the Enlightenment tradition (i.e., individualism + manipulation of nature) and social capital are facilitators. But “boldness of thought”? The U.S. Tea Party calms “boldness of thought” but wants things that would cause the slow decline of the country. The U.S. West Coast is rapidly losing “boldness of thought”: computers are headed to commodity status like oranges or plywood, and the West Coast is now involved mostly in working-out the property-rights development of commercial ideas (hustling, in other words). The Silicon Valley honchos have begun to acquire the distinct odor of bean-counting movie producers.

  26. JB writes:

    “The punishment of losers is a price that must be paid to create a nation that is collectively a winner”

    I think that this is not true. There are many things you can accomplish, and having a strong economy without satisfied and prosperous people who love their life is not an accomplishment for me. We are social animals, born to socially interact. If we don´t, we are doing something wrong.

    The major part of the population still holds this “ideology” of individualism, but there are already signs of problems – an abuse and overuse of anti-depressants or people who we can consider under-class (unable to achieve anything in this ever more competitive environment).

    For many people, the only success would be to independentize themselves and go live off the grid. When you realize that everyone will end the same – dead, you have to think about other things than just your person.

  27. stone writes:

    Lee A. Arnold @25, I’m interested that you think that California has now lost its capacity for innovation. I was thinking that it is a place that still has an uncanny way of giving rise to startling new technologies. Third generation DNA sequencing ( http://www.pacificbiosciences.com/ )is a fairly recent example.
    It would be great if there was far more of such innovation right around the world. I do think it is worth examining what it is about places and times that give rise to innovation.

  28. [...] about the Canadian middle class They Pretend to Think, We Pretend to Listen: Liberalism in the tank Ersatz individualism makes the American collective strong Daryl Hannah Reveals Her Autism Start your engines: Fung Wah, Lucky Star buses may roll again this [...]

  29. I object to your argument on the grounds that it is implicitly nationalistic and ignores the humanity of the billions of people who aren’t Americans. It may be true, at least on the current margin that the individualist approach to maximizing welfare would be to redistribute, BUT who’s welfare can be most effectively maximized by redistribution? Certainly not Americans. Not the privileged citizens of a country which is so comparatively blessed with opportunity that people willing submit to second class citizenship to live here so they can work as busboys and fruitpickers. Any Utilitarian should by crying out for redistribution to the worlds poorest, and open borders to lift them out of that poverty, not more middle class entitlements for the privileged few. (by which I don’t mean millionaires, I mean you and me)

  30. David Lloyd-Jones writes:

    Surely the reasons for capitalist America’s economic preeminence are the same as those of socialist Sweden: both countries have fantastic bounties of natural wealth, and both countries ran the major businesses of the last hundred years — World Wars I and II — at huge profits.

    -dlj.

  31. Marc Laventurier writes:

    America: Darwinian by Design ©

  32. winterspeak writes:

    LOL!

    You cannot throw a phrase out like “I don’t think [this phrase] will be too contentious, across the ideological spectrum” and not expect someone to contest!

    I don’t think that captures the American way at all. I think a phrase that better captures “the American way” is “All men are equal.”

    Note that “All men are equal” seems to be pointing in the opposite direction from “The American way is to draw sharp distinctions between winners and losers, in order to encourage people to hustle.” Also note that “All men are equal” better captures both the libertarian, “rugged individualist” strain in the American psyche and also the collectivist strain that’s brought us a whole host of Progressive causes, from universal suffrage, to civil rights, to affirmative action and the host of collectivist policies we have now. It also, I think, captures the neo-conservative urge to invade other countries and bring democracy there (or certainly supports the rhetoric around that).

    Given that the US has become more collectivist over the past 150 years, not less, I think that the progressive side of this can be considered the avant garde, and the Conservative side the read garde. But they are both part of the whole. Remember, Economics, as understood today, was originally a Progressive, Left Wing discipline (re: Carlyle’s “dismal science”). That it is seen as rightist today is more a reflection on where we are as a culture than it’s absolute position on the political spectrum.

  33. Alex Godofsky writes:

    There seems to be a little ideological blindness here. I know plenty of conservatives who would read this and say “of course we are ‘collectivist’!” It’s called nationalism. And there “characteristics of the population” bit would have religious conservatives rolling their eyes and saying “duh”.

    It’s pretty much just conservative economists who would object. Unsurprisingly, disagreements between conservative and liberal economists often end up being about the the empirical parameters and elasticities used to determine the optimal size of the welfare state.

  34. alexh writes:

    > The American way is to draw sharp distinctions between winners and losers

    If the comparison is to Western Europe, so far as I know:

    – bankruptcy law in US is widely viewed as been much more focused on allowing
    an individual a fresh start than in much of Europe, where there is more concern with making the creditors whole and/or moral censure

    – it is widely believed that there is less societal stigma for a U.S. bankrupt, and quicker commercial rehabilitation post-bankruptcy.

    – it is frequently claimed that having run a failed business (even one that did not
    go bankrupt) has a stigma in much of Europe and tends to impede further commercial endeavors,
    whereas the U.S. this may more often be regarded as a learning experience

    – it seems to me (not completely sure how right I am) that in the U.S. limited liability business structures are broadly cheaper, more accessible to individuals in other ways as well, and more reliable, than in much of Europe.

    Do you disagree, or if not how do these fit with the thesis? There may be other reasons
    why Americans prefer a weaker social safety net than elsewhere – which is probably true –
    than having a preference for sharp categorization into winners and losers – which seems a rather different, and more dubious, claim.

  35. [...] Ersatz individualism makes the American collective strong Interfluidity [...]

  36. Nat Scientist writes:

    Neither Freedom or anything is Free if it’s true cost is unknown, or was not earned.

  37. The great Breakthrough in your life comes when you realize it that you can learn anything you need to learn to accomplish any goal that you set for yourself.This means there are no limits on what you can be, have or do.

  38. reason writes:

    kebko @11
    1. Libertarians are not the whole of the right (not they really belong on a left right access).
    2. Since property is basically a creation of the state (whereas family, love, sex etc are not) I don’t think your analogy works.
    3. “Or even if we stick to income redistribution, someone without the predetermined focus of a modern leftist might think that the obvious remedy would be more redistribution within extended families.” Someone who rarely cared about individual freedom, and noticed how traditional families actually worked, wouldn’t no.

  39. reason writes:

    Oops
    not access – axis!

  40. reason writes:

    kebko @11
    I’m sorry I can’t help but get the feeling that “Libertarians” aren’t really so much pro-freedom as anti-state. Your post seems to me a classic piece of evidence pointing in this direction.

  41. reason writes:

    OK – so many typos I’ll write it again:
    1. Libertarians are not the whole of the right (not that they really belong on a left right axis).
    2. Since property is basically a creation of the state (whereas family, love, sex etc are not) I don’t think your analogy works.
    3. “Or even if we stick to income redistribution, someone without the predetermined focus of a modern leftist might think that the obvious remedy would be more redistribution within extended families.” Someone who really cared about individual freedom, and noticed how traditional families actually worked, wouldn’t no.