Missing the forest

Atrios does a good job of capturing how I actually feel about people on the so-called center-left (most notably Larry Summers) wonkifying their way out of support for near-universal $2000 checks. They are mistaken on the narrow technocratic grounds over which they claim authority, an authority that decades of experience prove they absolutely do not deserve. But they are mistaken (or worse than mistaken) at a more fundamental level. They do not get (or if they do get, they have never deigned to address) that the point of universalist benefits isn’t to stimulate the economy, nor to maximize utility while minimizing a fiscal outlay, but to reorder the relationship between citizens, the state, and one another.

Let’s start with the most straightforward case against $2000 checks. Here’s Catherine Rampell:

Simply put, sending money to nearly every American family to ensure that help gets to the much tinier fraction who actually need it is not a terribly efficient use of resources. The payments end up being a pittance for higher-income, fully employed households, yet insufficient for the households that suffered large income losses. The error is compounded if these funds come at the expense of more targeted relief measures — such as expanded unemployment benefits, which the new law guarantees only through March.

Advocates on the left argue that there is room to do both. But even if you believe that there are no real debt constraints, given how low interest rates are, there are still political constraints. Republicans set a $900 billion cap on relief measures in the final deal, which meant that funding stimulus payments required shortchanging unemployment benefits (and state and local assistance).

First, it’s worth noting that Rampell is misleading on the facts here to help buttress her case. It is true that Republicans initially tried to cap the deal size, and so that when $600 checks were included in the current version of the relief bill, the funds were clawed away from other uses. However, the cost of a potential increase from $600 to $2000 was never proposed to be taken from elsewhere. What Republicans like Donald Trump and Josh Hawley proposed was to simply increase the size of the bill.

Rampell is taking a constraint as given, immutable if not by hard economics then by hardball politics, even when by the time she wrote, the constraint was already contested within the political caucus supposedly imposing it. But political constraints are endogenous, and the very purpose of universalism is to reshape them. It blows my mind that Rampell quotes an estimate that the proposed checks would benefit 94% of US households like that is a bad thing. If you believe (as I think Rampell does!) that a just and functional polity will require a larger state footprint in fiscal affairs (which need not not imply bigger deficits, but larger gross outlays which may or may not be matched with offsetting taxes) then surely the program’s benefiting lots and lots of people should be scored a plus!

If you imagine you are the wise planner, given $400B-ish to spend as you choose, then yes, maybe you could do more good with some allocation other than universal-ish checks. But who is living in political fantasyland in this thought experiment? The $400B only exists as potentially allocable money because universal outlays are popular. And a state that typically provides benefits on universal terms will be popular in general, relaxing constraints on further state action — on outlays, but also on progressive taxation, which the state’s beneficence will render more palatable. And progressive taxation will help target net benefits, despite untargeted outlays, relieving economic (as opposed to political) constraints on state action, while also countering democracy-corroding wealth concentration and improving the predistribution. It’s win-win-win!

Paul Krugman writes

No binding budget constraint for the feds, so this is all about politics. And my sense is that broad issuance of checks is actually kind of a loss leader, helping to sell a package that includes UI

At the time he wrote this, still-too-stingy UI had already been passed and signed into law as part of the relief package, and no further expansion was on any political horizon. So maybe original the $600 was the sugar for a broader public to help make more desperate medicine go down, but, as with Rampell, there’s this reluctance to acknowledge that universal benefits might be worthwhile on their own terms because the space of the politically possible expands when broadly everyone is a beneficiary. An increase now from $600 to $2000 wouldn’t be a “loss leader” for any other thing. It would, however, increase the public’s satisfaction with and broad enthusiasm for government and therefore increase the probability that America rediscover’s the virtues of collective action in some broadly general interest, without which we face an apocalypse.

Technocratic authority so often just gives cover to myopia. It’s easy enough to compare different allocations of a hypothetical $400B, and sound smart dissing the “untargeted” one as suboptimal. It can be gratifyingly technical to compute (under tendentious assumptions) little cost-benefit analyses, one controversy at a time, taking the horizons of any deeper future as given, immutable as a lazy shorthand for unknowable. That is a way of sounding smart while being stupid. It has gotten us just where we are.

Judged not as a one-off, but as precedent and practice, universalism is good policy on technocratic grounds. Myopic optimization in response to every shock scrambles incentives (as people try to account for ways their actions might place them in or remove them from classes that will seem worthy of assistance). It creates embittered losers every time, people who feel deserving of aid but whom policymakers decide (optimally or arbitrarily) to exclude. In practice ad hoc optimization is gamed (see, for example, the contemporary PPP program), leading to widespread perception, and also the reality, of corruption, further discrediting government action. The Obama-ites thought their financial crisis response was “smart”, putting out fires while putting wooly concerns about justice and power to the side. It was optimal in the same way that the next dose of heroin is optimal for an addict. It’s true, after all, that absent a dose, the addict will get very sick! We need a theory of state action that is effective at addressing current crises — even profound crises like COVID and the 2008 financial collapse — while supporting rather than undermining social cohesion and the legitimacy of the state. Universalism is that theory.

In the previous post, I wondered: If we now conceive of racism as systemic and institutional, rather than individual and personal, could we also do the same for love? Universalism is one way of embedding unconditional love in the shape of our institutions. The warmth of our civilization flows to all, not in the form of threadbare assistance to those who prove they “deserve” it, but as benefits that we all share. It’s the contribution to this social foundation that we’d means-test, through the tax system. One can imagine, neoliberally, that taxation to support a generous universal foundation would so blunt incentives to produce that we’d collapse to destitution. Have you noticed, neoliberally, that we are already in collapse due to precarity, social resentment, incapacity to manage conflicts and coordinate through government? Is it really inadequate incentives to succeed that are holding back our advances, technological and otherwise, or the fact foregoing a career at McKinsey or Google to do something interesting is just too risky, given how precariously we all live, how far there is to fall? Universal benefits are popular because they are actually good, in both a technocratic and ethical sense. They are opposed by incumbent interests not because they would fail, but because they might succeed.

I’ll let Atrios have the last word:

[T]hey would prefer plunging the economy into a deeper recession and the misery of millions of people on the off chance people might realize government is actually capable of doing things for them.

1303 words

The people whom it is easiest for me to love are people who love words. When I am in company, I live for conversation. When I am alone, I read. When I am not reading, not working, when I am not “consuming” media or running errands, my mind is at play. My play is word play.

Perhaps it is yours as well, dear reader. There’s selection bias here. Readers of words like these, impractical superfluous words, are a different population than readers of memoranda, court orders, and instruction manuals. If you are reading these words, you probably read novels. Have you noticed how in novels, at a level of generality that ridiculously broad, the protagonists, the good guys, the heroines and heroes, are disproportionately bookish? We love the word, we readers and writers, and through the word we recognize one another, we love one another. We construct our selves, our souls, from words we mouth incorporeally, and our conversations are sex, incorporeally. Arguments if we like it rough.

The word is a sign, its nature, taught Saussure, arbitrary and differential. So too is human love. It is often arbitrary, whom we love, a matter of chance and circumstance and accidents of birth. Love is differential. The set of those to whom we give our hearts tacitly defines a complement, those to whom we do not.

We, you and I, readers and writers, we lovers of the word and so lovers of each other, fancy ourselves cosmopolitan. We read from many cultures, perhaps in many languages. Yet reading itself is its own insularity. Culture is an insularity. To the theater-goer, the kind of person unlikely to come to a play is visible only as refracted through the words of a playwright, who is likely to be the kind of person likely to come to a play. On television, in the new social media cliché, God herself is “the writers”. Those of us who love to read and write may read and write as widely as we wish. We read only writers, and if our writing is broadcast into “democratic media” we become exhibitionists to rather than lovers of those outside our circle.

As children many of us were bullied. We did well at school. As adults, most of us like most of everyone lead precarious lives. But those who do not, those who do well, are drawn disproportionately from our ranks.

We constitute a tribe of insular cosmopolitans, incestuous exhibitionists. And from the outside it might seem like we are running things. It is hard not to read what I’m writing as a dog-whistle for Jews, but I think that’s backwards. Jews are a metonym for us, not the other way around. If you know what a metonym is, you are probably one of us. No need to wear a yarmulke, or have Ashkenazi roots. Few of us do.

We people of the word, people of the book, seem to run things not because we have some unified plot to rule. Argument is our sex, we mostly do like it rough. Those who rule are drawn from our ranks because it turns out magic is real and spells are formed of words and symbols. Whether in science, business, or social affairs, a facility with words and symbols imparts capacity to predict, coordinate, organize, and inspire. Most of us do not succeed, in the way our social hierarchies define success, because the word is its own distraction. Reading and writing and praying our selves into existence all day long divert one from the bottom line. But at our margins there are those who are distractible from distraction, within whom the word and practical affairs and ambition do not crowd one another out. These people do very well. We are simultaneously a class of losers and leaders, and that is our reputation, well enough deserved.

But the effect of all of this is we are perceived by others as a ruling class, a ruling caste. On average, we are, but only in the way that the average person in a room that includes Jeff Bezos is a billionaire. It is an irony that the accusations of betrayal that beset us are often framed in terms of cosmopolitanism, when our failures are of insularity. We ourselves are mostly losers, but we set ourselves apart and on the same side of a great divide with the industrialists and mandarins who do in fact organize and coordinate and reap disproportionately the benefits of an increasingly enclosed world. We do this not out of malice, or prejudice, but gentle affinity. People who love words love people who love words. We find one another, and relegate to everyone else the role of anthropological subject, to be examined at a safe distance from behind a page. The putative (much overrated) accuracy of our “social science” is a very far cry from love. Our journalists interview and our novelists invent, with results (of whose “empathy” our reviewers gush) that cannot help but be projection, tinged with grievance and condescension.

We have, amongst ourselves, a “What’s The Matter With Kansas” problem. We love ourselves too much, too indiscriminately. Most of us share material interests more with the lumpenproletariat than we do with the sliver of us that reaps outsize gains. But we share the same academy with the TED celebrities. We join them on panels, at forums, in casual conversations. Our journals and nonprofits, our “activism” and “organizing”, are funded by and often led by them. We read Barack Obama’s new memoir. He is plainly one of us, thoughtful, self-critical, erudite, eloquent. To read is to love. If we are “on the left” we may denounce these beautiful winners, but our loyalties are divided. We bask in reflected honor, we enjoy a warmth, emotional and sometimes material, from an institutional and social closeness that participation in the conversation can bring. They are of us and we take pride sometimes even in the achievements of people whom our politics would argue are crushing us.

It is fashionable, and correctly so, to talk about systemic or structural or institutional racism. Addressing villainous personal bigotry is the easy part. Social problems are, tautologically, social problems, embedded in patterns and practices of behavior, many of which might seem innocuous or even virtuous in isolation.

That people who love words love people who love words seems innocuous or even virtuous. But it is time, I think, to talk about love as systemic or structural or institutional. The social fissure, between people who become coded as “educated professionals” (whatever jobs we do or don’t have) and the great majority who don’t, may derive “naturally” from accidents of affinity. There is no study we can undertake, no book we can write, that will remedy it. But there are institutions that might. We could alter the landscape of material and social life so that we mix more, so that we are not as able or likely to segregate ourselves among ourselves, geographically, occupationally, digitally. Even those of us with overdeveloped insular cortices remain capable of affection beyond ourselves. We look upon ourselves, upon one another, as the civilized people. (We cosmopolitan liberals might resist putting it that way, we’d not want to imply that the people we condescend to are uncivilized.) But when the civilized self-segregate, should they be surprised that among the population they have fled emerges barbarism? We need to love more openly, more promiscuously, more forgivingly. We will fail if we treat this as a matter of personal virtue or obligation. Love is a material and institutional project. Love is downstream from politics.

We have done our part, without intention or malice, to create this world we so lament. It is time for us to do our part to undo it.

May 2021 be a better year for us all.

Repealing Section 230 as antitrust

Section 230 of the Communications Decency Act is a piece of law I always thought that I supported. I think I may be changing my mind.

From Timothy B. Lee:

Eric Goldman, a professor at the Santa Clara University Law School, argues that this rule made the modern Internet possible.

It’s hard to imagine sites like Yelp, Reddit, or Facebook existing in their current form without a law like Section 230. Yelp, for example, is regularly threatened by business owners for allegedly defamatory reviews. Section 230 allows Yelp to basically ignore these threats. Without Section 230, Yelp would need a large staff to conduct legal analysis of potentially defamatory reviews—a cost that could have prevented Yelp from getting off the ground 15 years ago.

I’m a “free speech absolutist” and early internet romantic. Though I devoted my early adulthood to helping develop it, I cannot applaud this “modern internet”. It has its benefits, sure. But of the potential internets that seemed possible in the mid-1990s, the one we’ve selected is pretty dystopian. From a social perspective, it is a cesspool. From a political perspective, it has centralized enormous powers of surveillance and influence in a few unaccountable actors, all in the name of “connectedness” and “decentralization” and “free speech”.

If you believe in free speech, the internet as currently architected offers no good choices. If contemporary internet forums (Twitter, Facebook, TikTok, Yelp, Youtube, Pornhub, whatever) take a laissez faire attitude towards “content”, there emerges tremendous abuse that undermines the virtues of open and inclusive exchange. On the other hand, if you ask status quo forums to address abuse by moderating, you hand corporate monopolies immense power over our collective cognition, power that will never be insulated from the economic and political interests of the platforms.

And you will satisfy no one. There is no way Twitter or Facebook can “solve” the moderation problem. Their AIs are beside the point. We have strong disagreements over what kind of speech should be legitimate in public fora, what the lines are between opinion, which may be productive even if mistaken, and “disinformation”, which should be suppressed for its invidious effects. There is no right answer. Under status quo platforms what will emerge, what has already emerged, is that the standards of “good enough” moderation will be determined in reaction to the outrage of influential political factions. It’s hard to imagine a regime more antithetical to the purposes of free speech, whether it’s Facebook favoring conservative agitprop to appease prominent Republicans or Democrats suppressing “misinformation” in the name of “believe the science”.

Section 230 is the thread that links the problems of abuse and unaccountable power. Section 230 is responsible the persistence of abusive and libelous speech online. At the same time, it is prerequisite to the existence of “platforms” whose enormous scale and reach render them agents of invidious influence.

The conventional justification for our dystopian internet is that network effects imply “natural” economies of scale. Metcalfe’s conjecture argues that the value of a network grows with the square of nodes connected, suggesting one big “platform” of connectedness should be much more worthwhile than many “balkanized” competitors. But there is a ceteris paribus assumption in that thinking. The details of the platform or network are abstracted away, and it is presumed that value derives independently from each connection, that connection quality is constant or at least independent of the form or scale of connectedness. As soon as we begin to think in terms of “moderation”, this reasoning collapses. When we moderate, we are accepting that connections have varying quality or value, that they sometimes they have negative value, that there’s no reason to imagine that the determinants of quality are independent of scale or of details of structure that may be difficult to scale. We are acknowledging that connectedness is a bad shorthand for value, that value instead derives from the particulars of patterns of connections.

From this perspective, Section 230 has created artificial and destructive economies of scale. Eliminating all COVID liability would increase economies of scale to indoor dining, from a commercial perspective. That doesn’t mean the crowded restaurants would be a good thing. High quality moderation is by its nature artisanal. It requires detailed attention to the evolving norms of very particular human communities. Our “atavistic” pre-internet legal infrastructure was sensitive to these particularities in ways that the fanciest of Apocalypticorp’s much touted AIs have yet to match. A pluralistic society requires multiple fora with wildly different community standards. It is a great irony that this phrase, which in law came to represent the heterogeneity of standards, has been adopted by gigantic social media platforms developing one-size-fits-all straitjackets — uniform in theory but capricious in practice — to which most public speech must now conform.

Repealing Section 230, then, would be a blow to incumbent internet platforms. They brag about their AIs. Let’s see if they are up to the task of moderating to standards consistent with their de facto role as publishers, accepting the ordinary liability that role entails. I suspect they are, but it will require erring on the side of caution, rendering their platforms much less attractive for people who want to, say, discuss public affairs rather than share baby pictures. Public affairs controversies will migrate to publishers who take responsibility for the content they produce, which are much more likely to be boutiques. “Social media” would come to look more like the blogosphere of a decade ago than the platform homogeneities that prevail today. (Full disclosure, those were interfluidity‘s glory days, beware my biases.) We’d still have a broad public sphere, but it would be diverse and variegated. The old-school blogosphere relied on Section 230 only for its comments sections. With a repeal of Section 230, something like it might reemerge, but comments would either disappear (start your own blog!) or be held for moderation prior to posting.

Without Section 230, individuals would become more responsible for the curation of their own communication. They could choose to rely on particular aggregators (who would themselves be publishers), or make use of technologies like RSS to design their own feeds. Facebook and Twitter and their ilk, if they survive, would become like network television in the 1980s, struggling to entertain while avoiding controversy or offense. Limitations in scope would become limitations in scale.

There would still be the notion of a common carrier. The boundaries between publisher and common carrier would have to be disputed and defined. I’d expect that ISPs and cloud hosting providers would be required to ensure their customers are identifiable and refrain from content-based favoritism, but would then be treated as common carriers. Social networks would be publishers, and would increasingly fragment and gate themselves in order to become legally cognizable communities whose standards of permissible speech could diverge. Edge cases would be platforms like Substack, Patreon, wordpress.com, or blogger.com. There would probably emerge safe-harbor standards (again having to do with neutrality and identifiability of customers) under which these platforms could be common carriers. Otherwise, they would be publishers and liable for the content they choose to host.

It is often argued that Section 230 is “deregulation”, and deregulation is good for competition because regulation favors incumbents who benefit from barriers to entry and can afford to bear compliance burdens. That theory, like most pronouncements on topics so broad, is sometime true and sometimes false. Regulation does not exist on a scalar spectrum between more and de-. Some forms of regulation favor scale, some disfavor it, and some have effects sufficiently mixed or orthogonal to scale that we’d characterize them as neutral. If you think that digital speech and sociability inevitably devolves to a few giant behemoths bestriding the planet, then repealing Section 230 would indeed be anticompetitive. It will be hard for new entrants to catch up to the running start that Google and Facebook now have in clever AI and moderation bureaucracies. But if you think it is not inevitable that collective cognition and conversation condense to such colossal calamities, then repealing Section 230 would expose incumbents to pro-social standards under which scale becomes (literally) a liability rather than an asset, where upstarts have a competitive advantage that derives from contextually and carefully applied human attention, which does not easily scale.

This is a turnabout for me. As an old-school let-the-Nazis-march-in-Skokie free speech guy, I always thought I favored Section 230. But the Nazis in Skokie would still have been subject to libel law. I think I now favor outright repeal of Section 230, because I favor a much more plural and decentralized public sphere. Is that wrong?

Jubilee

Should a Biden administration unilaterally forgive student debt?

On the one hand, higher education has grown into an ugly mechanism for transmuting the hopes, dreams, and fears of young people into revenue for a sanctimonious, often destructive, industry, via a debt overhang that ruins lives. With legislative gridlock likely in 2021, forgiving Federally held student debt is one of the few ways that a Biden administration could make a direct, material, positive difference in people’s lives. The President could do it with the stroke of a pen.

On the other hand, the potential side effects seem terrible. The Democratic Party is trending towards becoming a party of the educated professional class alone. I view that as a horrible development we should move heaven and earth to reverse. So long as we are (miserably) a two-party system, the complement of a professional-class party is a fascist party. The Republicans we detest are the obverse of what we are allowing ourselves to become. Letting the working class remain in hock — underwater on unforgiven credit card debt, kiting paycheck loans to feed the kid and make the rent — while we unilaterally forgive higher education debt strikes me as an almost cartoonishly perfect wedge issue to polarize the college and noncollege elements of the Democratic electorate. Republicans would ruthlessly demagogue and exploit student loan cancellation to build their new “multiethnic, multiracial, working-class coalition.”

On technocratic rather than political grounds, there are big problems with just forgiving student debt. Come next fall, an unreformed higher education finance system will remain. Kids will sign on the dotted line for new Federal loans, just after the last round has been wiped away as a remedy to the same predatory regime they are joining. Will the obligation embedded in those new loans be legitimate, then? Regardless of where you stand on that ethically, will there be an incentive to max out loans — rather than spend out of family means, or take work to minimize indebtedness — on the theory that new debt might be forgiven in a next round students (and their families) might reasonably predict? Will that end up harming kids even more, if a second round of forgiveness fails to emerge? If a new round of forgiveness does appear, will it end up being perceived as a grift by well-to-do families, many of whom may have suddenly opted to finance college with debt rather than out of savings?

For all of this, I can’t persuade myself to simply oppose unilateral forgiveness of student debt. The last thing Democrats need is, yet again, to find technocratic grounds to persuade themselves not to directly, materially help humans desperate for relief.

My suggestion (which owes everything to a conversation with the remarkable Carlos Mucha) is that Democrats push for what Steve Keen describes as a “modern jubilee“: a flat per-capita transfer to citizens and permanent residents that must be used to pay down debts. Any balance that remains after debts are repaid becomes money recipients can bank. (Mucha suggests this difference be remitted as savings bonds, which could be structured to mature over time in order to prevent a destabilizing spike and then withdrawal of new spending power.)

Ordinarily, this kind of jubilee would be unlikely to get through a Republican, or even closely divided, Senate. But, as we’ve seen, a Biden administration could implement part of it — an effective “pay down” of Federally-held student debt — with the stroke of a pen. My suggestion is that Democrats do that at the same time as they pass, in the House, a bill universalizing the transfers to the rest of us. They should pick a number (Mucha suggests $10K; I might go for $20K), and forgive each student their loans up to that amount. The House bill would specify that the student loan forgiveness constitutes a first tranche of payments under the proposed jubilee. The write-offs would be irreversible; student debt relief would be a fait accompli. The burden would then be on the Senate to pass the bill and resolve the equity issues, by authorizing payments to everyone else (as well as payment of any excess balances owed to student debtors). If noncollege humans get angry, understandably, that college types got bailed out and they didn’t, Mitch McConnell’s would be the number to call. The Democratic coalition would be ostentatiously fighting like hell so they get theirs too. Instead of letting student debt relief become a wedge by which Republicans can even further peel the working class from the Democratic coalition, this would flip the table. Relief to some would be a done deal. Republicans’ choice then would be to complete the work, or to leave desperately felt, easily remediable, inequities unremedied, against a Democratic Party fighting for the working class.

This proposal would not reform the predatory grift that higher education finance has become, alas. But it wouldn’t place existing system in a strange netherworld, either. Student debt would not be specifically delegitimized; it would become just one of many forms of debt per-capita transfers might pay down. The proposal would not create counterproductive incentives to expand indebtedness, student or other, in hopes of profiting from future forgiveness. As a tactic, the proposal represents a useful compromise between barreling headlong towards an “imperial Presidency” or accepting the gridlock of a dysfunctional legislature. The President would not, by the stroke of a pen, try to give himself just what he wants, and then hope for legislative and judicial acquiescence. Instead he would overcome the status quo bias of Congress by upending the status quo in a way that demands legislative action. The comfortable in Congress would be forced to act, if they are to retain their comforts. They can’t win by just pocketing inertia.

What do you think?

Update History:

  • 18-Nov-2020, 3:45 p.m. EST: “…yet again, to find technocratic grounds to persuade themselves not to directly, materially help humans in need of desperate for relief.”; “the same predatory regime they will be are joining.”
  • 27-Dec-2020, 6:35 p.m. EST: “Student debt would not be specifically delegitimized;”

Social democracy or feudalism

Yesterday, I attended a Zoominar featuring Matthew C. Klein and Brad DeLong, which was unsurprisingly excellent. The conversation was inspired by Klein’s book with Michael Pettis, Trade Wars are Class Wars, which I’ve not read yet, but hope to very soon. The conversation skewed sweeping and historical, discussing dual themes, first balance-of-payments wonkery and the challenges associated with managing international financial flows, then elite and government incentives, are better choices possible and why haven’t they been taken? Delong and Klein are more sane and sensible than I tend to be. Both pointed out, in different ways, that managing the swelling waves and yawning canyons that emerge when funds can be lent and spent across borders, and withdrawn at the drop of a hat, presents challenges even for the best placed and most well intentioned governments. Coordination problems rather than conspiracy might explain some of the ugly outcomes (fragility and inequality) these flows have been let to engender. But judging from Klein and Pettis’ title, I think they have more than a little sympathy for my less sane and sensible view that, while not choreographed as conspiracy, our failure to manage these flows and their costs has something to do with the interests of those to whom the costs are paid (incompletely, for sure, but the deadweight losses fall elsewhere).

Very Delong-ianly, the conversation ranged over a sweep of centuries rather than decades, with discussions of the historical transition from overt imperialism and strategies where colonial powers coercively outsourced demand and indebtedness to conquered peripheries, into parallel dynamics that have emerged between (notionally) independent nations today with less explicit recourse to the point of a gun. (This is a tale told in bleedingly broad watercolor brushstrokes, but it places the contemporary United States in an interesting, paradoxical position.) Things change, things stay the same, in international (trade) affairs then also perhaps in social (class) affairs. Trade wars are class wars.

This got me to thinking that if we should recognize an echo of empire in contemporary trade imbalances, should we not also recognize an echo of feudalism in contemporary class dynamics? The class wars embedded in trade wars of the past generation have provoked growing chasms of inequality (within societies inscribed by nation-state borders), along with (oh Gatsby curve) declining mobility and dynamism between classes.

Nothing has grown so stale, I think, as the argument between “capitalism” and “socialism”. It is, in the scheme of things, a quarrel between cousins, a squabble among friends. Adherents of capitalism and socialism both share a deeper enemy, traditional caste-ordered society in which ones station is fixed and determined by birth, and social relations are ordered by customary — but coercively enforced — obligations between classes. Marx, at least in my vulgar Cliff-Notes understanding of his oeuvre, predicts a progression like

Feudalism ⇒ (revolution of the bourgeoisie) ⇒ Capitalism ⇒ (contradictions of capitalism) ⇒ Socialism.

But perhaps it’s more parsimonious to imagine that, in the face of contradictions, society might revert to its most historically stable prior form, rather than inventing a new one. Maybe rather than a progression, we risk a cycle

Feudalism ⇒ (new technological possibility yields a revolutionary bourgeoisie) ⇒ Capitalism ⇒ (contradictions of capitalism yield conflict and backlash) ⇒ Feudalism (at a new technological level, but with uses controlled and further development suppressed).

During the early capitalist period, feudalism is mocked as primitive, a “dark age”. During the late capitalist period, it becomes appealing, a source of order, stability, community. The contradictions of capitalism yield social pathology, and a caste-based communitarianism offers remedy without revolution, appealing to the winners of the capitalist period. Feudalism can derive from experiments in socialism. That was the experience of Soviet communism. Feudalism can also arise from liberal capitalism. That is the precipice on which we stand right now. It is modernity itself that is at stake, this conceit of a continually dynamic society upon which the contours of power are not rigidly and durably inscribed.

Delong asked, when I made an inchoate attempt to express these reflections after the Zoominar, whether I wasn’t echoing Rosa Luxemburg’s “socialism or barbarism”. I wish I was, because that’s a pretty easy choice. One might be optimistic that the humans, like Winston Churchill’s probably apocryphal Americans, will do the right thing after exhausting all the alternatives. The choice between modernity and feudalism is actually a difficult choice, one to which there is not a universally agreed better answer. Lots of conservatisms are tacit calls for feudalism as the practical grounding of an ordered community. If you call it “feudalism” it has few defenders, but by other names it is an ascendant creed. Over the past few years, in the United States, it has become fashionable among modernists — liberal capitalists and left-ish socialists both — to use the term “fascism”. At least in part, this can be understood as a desperate attempt to blunt the appeal of feudalism by tarnishing it with its most garishly malignant strain. But the appeal of feudalism, along with the social forces that are drawing us towards it, is not a messaging problem.

For a while, in the West, we thought we had proved Marx wrong. We had experienced contradictions of capitalism, but rather than succumbing to revolution, we coordinated via democratic states to work towards reasonably just, reasonably stable, still dynamic, hybrids of capitalist forces and socialist solidarity. Within the modernist camp, there are lots of capitalists and lots of socialists who consider a social-democratic hybrid not viable, inherently unstable. After all, if social democracy was sustainable, why did it prove vulnerable to the neoliberal turn that destroyed it? Why have we “retrenched” so far from the great societies we were building?

However, one historically contingent datapoint constitutes pretty thin grounds to discredit a whole class of social experiments — by far the most successful of modernity’s social experiments, while it lasted. Despite tremendous correlative forces that move “the West” together, despite decades of pressure towards a Washington consensus, social democracy survives and thrives in Scandinavia in a form stronger than anything that ever took hold in the United States. Social democracy is certainly no more discredited than capitalism (which has now failed spectacularly at least twice), or socialism (to which some responsibility for the catastrophes of Soviet communism and Maoism must be ascribed). Perhaps there are better capitalisms or better socialisms that we have not tried. And perhaps there are better hybrids, better social democracies. Rather than thinking of social democracy as a point between, a detente or armistice of two implacably opposed systems, maybe it’s best to think of it as a union, a full surface at whose opposing edges sit “pure” capitalisms or socialisms in their many varieties, between which lies a field of points that draw in different ways and degrees from both. That surface is a map of modernity, and its undiscovered best sits more likely in the interior than at an edge.

The choice before us, then, is not capitalism or socialism, not socialism or barbarism, but social democracy or feudalism.

(Or perhaps there are syntheses there, too. Perhaps China is an emerging example of a country neither modern nor feudal, but a hybrid, with social democracy and feudalism together proving adaptive if not quite appealing. As a positive matter, it remains to be seen how durably the contradictions of such a hybrid can be assuaged. As a normative matter, I am ideological. I’d rather explore the full space of social democracy before making any kind of peace with a journey, however partial, towards legitimating permanent hierarchy and caste warily enforced by deployment of coercive violence against internal threats.)

Update History:

  • 15-Nov-2020, 12:35 p.m. EDT: “…maybe it’s best to think of it as a union, a full surface at whose opposing edges sit “pure” communisms capitalisms or socialisms…” Thank you commenter Ivan!

Merge the court

If the Democrats win the Presidency and the Senate, and if they are not inclined to betray the country to plutocratic interests (who would be glad to compensate them for the electoral cost of doing so), they will reform the Federal judiciary in some manner next year.

The most widely discussed reform is to “pack the court” by increasing the number of Supreme Court Justices, creating vacancies a President Biden could fill, to counter or correct Republicans’ “constitutional hardball” with respect to replacements for Antonin Scalia and Ruth Bader Ginsburg. Packing the court is a “tit” that conjures an obvious “tat” — Republicans almost assuredly would expand the size of the court next time they held the Presidency and the Senate, in an escalatory game without obvious end. Unfortunately, I think simple court-expansion is the most likely reform, because it retains and enhances the role of the Supreme Court as an existential polarizing issue during election campaigns, which is great for fundraising and preserving incumbency. These escalations are terrible for the country, but good for a politics industry that includes both parties.

However, if a Biden administration wants to do the right thing for the country, rather than for their industry, here is my proposal.

I. Merge the Federal Appeals Court into Supreme Court

The Federal judiciary is currently a three-level hierarchy, with district courts, appeals (or “circuit”) courts, and the Supreme Court. It should be collapsed into a two-level hierarchy. All of the members of the current appeals court would become Supreme Court justices. That would leave the Supreme Court with a Republican skew, but much more balanced than the current Court’s expected 2 to 1 skew. Presuming Amy Coney Barrett is confirmed (and no further turnover), there would be 104 Republican appointees and 84 Democratic appointees.

Cases would still be heard by nine-member panels, but each panel would be randomly selected from the full body of the Court. “Certiorari” petitions would be voted up or down by a majority vote of the full body.

Ordinary appeals would be heard as they are now, within still extant circuits of the now merged Court. These could then be appealed to the plenary Supreme Court.

II. Require a supermajority to strike down laws as unconstitutional

Marbury v. Madison is a live issue again in American politics. Matt Bruenig and Ryan Cooper argue we should simply cease to respect the prerogative claimed by the judicial branch to strike down laws judges deem inconsistent with the Constitution.

I oppose that approach. I do think we want to preserve the supremacy, in practical terms, of a rights-protecting core of law that can only be overridden by a difficult amendment process. However, there should be a lot more deference to a presumption that the legislative branch would have considered and respected the constitutionality of laws when they act. The judicial branch should only be able to strike down laws as unconstitutional when a strong consensus prevails within this now very broad Supreme Court.

I propose the following procedure: Whenever a panel of nine of the reformed Supreme Court hears a case, it’s first duty is to determine whether there is a constitutional question implicated that might render some or all of the law it is asked to apply unconsititional. If at least three of the panel believe there is such an issue, the justices on both sides (if they are not unanimous) would write opinions unrelated to the specific facts of the case before them, solely on the controversy over constitutionality. The full body of the Court would then vote on the question, and the legislature would only be overridden if three fourths of the justices concur that the law was unconstitutional. Once the constitutionality question has been settled, the case would return to the nine-member panel for adjudication consistent with that determination.

This supermajority deference would not apply to executive orders and actions. When the executive and the judiciary conflict, the legislature must decide the issue. Reforming our dysfunctional legislature is a whole ‘nother ball of wax, but we should start now to counter our drift towards an atrophied Congress and imperial Presidency.

III. Eliminate fixed sizes and any notion of “vacancy”

There should be no fixed size for the new Supreme Court. Justices should continue to serve within “circuits”, and new appointments should be allocated to circuits according to which circuit is most understaffed relative to the population served. If, at a given time, the Third Circuit serves an area with 7% of the population, but only 4% of Supreme Court justices are assigned to that circuit, and no other circuit is even more underrepresented, then the next appointment would go to that circuit.

The only position that could ever become “vacant” would be the Chief Justice of the Supreme Court, who would be nominated and confirmed according to the current process, usually from within the existing court (though it might not be constitutional to require that). The Chief Justice would perform her constitutionally prescribed roles, and would remain the administrative and ceremonial head of the Court, but in the business of deciding cases she would just be primus inter pares, perhaps an unusually respected voice but one accorded no special formal privileges.

IV. Limit the number of appointments per Presidential term to enforce near parity of influence

Congress should fix a limit to the number of Supreme Court appointments that can be made in any four-year Presidential term. This would be a number close to ten, if we wish to preserve approximately the current size of the newly merged judiciary. Each President would be free to make appointments until that limit had been exhausted. The Senate might block an administration’s appointments, of course, preventing the full complement of nominees from being seated. In that case, the next administration would be limited to appointing the number of justices seated by the prior administration, plus one. In other words, the number of appointments a President may make per four year term would be the minimum of the fixed limit of ten and the number seated by the prior administration plus one. This would limit any hope of partisan profit in Senate obstructionism. Blocking low-quality appointments would remain fine and wise, but stalling one President’s appointments would give little advantage to the next President’s party.


None of these ideas are, I think, original. I was delighted, for example, to see that Jamelle Bouie favors a randomized Supreme Court. According to Ryan Doerfler and Samuel Moyn, the idea of a supermajority requirement for declaring a law unconstitutional dates back to the 1920s. I don’t know antecedents to the fixed-appointment-schedule, variably-sized court idea, but I am sure they exist.

The reform proposed here would not be “packing the Court” in any partisan sense. It would in fact preserve a narrow Republican appointment majority all the way through a Biden term. Supermajority judicial review would be a strike for judicial modesty that publics of both parties, rendered fearful by negative partisanship, should support. Random draws mean that some cases would be decided by heavily skewed panels, but the scope of each panel’s discretion would be modest (due to the plenary supermajority required for judicial review), and the temptation to very partisan decision-making would be tempered by the fact that other cases will be decided by panels tilted the other way. Judges of neither party could imagine that an exercise of plain partisan overreach could escape reversal or retaliatory escalation by the other side. With “running the ball down the field” for ones own party a prescription for certain stalemate, hopefully justices’ shared interest in coherent and consistent application of the law would prevail and guide the operation of the merged, reformed Court.

Update History:

  • 21-Oct-2020, 3:30 p.m. EDT: Add clarification to “I. Merge the Federal Appeals Court into Supreme Court” that ordinary appeals still proceed within circuits.
  • 21-Oct-2020, 3:35 p.m. EDT: “…respected the constitutionality of law laws…”

[seminar] Paraparty cooperatives

In August, interfluidity (hi!) hosted a seminar over Zoom, which I enjoyed very much. The main problem was that I talked too %$@&*-ing much. So, this time, I propose a bit of a different experiment.

I propose we try a “random seminar”. I’ve written a little app to draw names from a metaphorical hat, and then show a timer. Rather any kind of presentation, or the jungle hierarchy of who chimes in, or discretionary moderation, I thought it’d be fun to choose a topic, and let who-speaks-when be random. You can decline, if you don’t know what to say or prefer just to listen. (We’d love to hear from you though!) In parallel, there will be the more ordinary, discretionary conversation that Zoom encourages in the comments.

I’ll rig the game by framing a topic, see the overlong diatribe below. But the written piece is it. I won’t present in any fashion. I’ll just run the clock and be a participant.

If you’re interested, we’ll try on Friday, October 16, 2020 at 4 pm Eastern / 1 pm Pacific / 8 pm UTC.

If you participated last time around, or indicated an interest to participate in the comments there, I’ll spam you with an e-mail with the zoom link later this week. Otherwise, please leave a comment to this post and supply your real e-mail (which won’t be published) and I will add you to the list. Thank you!


Ryan Cooper had a great piece on a “paraparty cooperative” in Rhode Island that sat both on the inside and the outside of the Rhode Island Democratic Party, and worked to reform and substantially replace it.

In the context of our current electoral system, which favors two major parties and makes third-party factionalism largely self-defeating, intra-party and para-party politics are the primary means of effecting change. I am one of those people who detests both American political parties, one for being outright terrible, the other for (in my view, rightly or wrongly) often betraying my values and interests while pretending to represent them, both together for constituting an industry of a piece with American corruption. So for me, this fact that under status quo political institutions, the path to change lies through these abysmal organizations rather than around them is a very bitter pill. Altering our electoral system to encourage the formation of more, better parties is one of my core priorities. But in the meantime, we have to operate through these corpses. Solidaristic paraparty organizations are, I think, the way.

“Solidaristic” is a word. Cooper quotes Cynthia Mendes, one of the primary candidates successfully supported by the Rhode Island cooperative: “They do what the political parties used to do for their candidates…show up with volunteers, a shared platform, training.” Unions famously used to look after the material well-interests of their workers, both in their formal role (collective bargaining, advocating for workers in disputes), but also informally, organizing support for members who met with some mischance, and bringing “locals” together socially in ways that reinforced a tangible political identity. Churches, much more within the Republican than the Democratic coalition, also serve this kind of role. Fraternal organization were once important sources of material security, social identity, and political activism. The “Tea Party” movement — whatever you think of them, and yes, fertilized by plutocratic subsidy — blurred the social and the political and effected massive change within Republican politics. Its successor, QAnon, steals a page from the fraternals and then scrawls Zodiac symbols all over it. As the fraternals used wacky rituals, QAnon uses adherence to beliefs mocked and disdained by the broader culture as a mark and measure of belonging. Those beliefs are mistaken and malignant, but QAnon has become a political force within the Republican coalition in part because its practices engender solidarity. (One hopes solidarity is achievable without insularity. Or at least without batshit lunacy.)

I now donate hundreds of dollars I can’t really afford each election cycle via Act Blue. Sometimes I donate to 501(c)(3) organizations that solicit my funds for various causes. Again, no criticism, no apologies, we do what we can in the world as it is. But increasingly I think of both of these paths as neoliberal activism, in a pejorative sense. Distant campaigns and organizations present themselves to me in a competitive marketplace of professionally-organized virtue, “effective altruism” if you will. My role is analogous to that of a consumer, to spend my dollars wisely, get the most virtue done for the buck. The relationship is fundamentally transactional. We are isolated, atomized, coordinating only through the offerings providers choose to make available. I worry that these donations are somewhat analogous to masturbation in the Proud Boys’ ontology, that they represent a kind of leakage of energy that could be put to more fruitful use. Act Blue has raised more than three billion dollars this election cycle, to be mostly spent within the politics industry. What if some of those billions had gone to solidaristic, activist organizations to move the Democratic coalition? 501(c)(3) nonprofits collect hundreds of billions of dollars in donations annually, many of which do go to politically active solidaristic organizations, those churches that profoundly influence politics within the Republican coalition. The existence of GoFundMe is a sad, grifty, paean to a desperate need for solidaristic mutual aid, which might be levered towards political change that renders such improvisations less necessary.

So, I think that, politically, the way forward is solidaristic paraparty organizations that are overtly political within the two party coalitions. Their role would be to force representation of interests and values currently eclipsed by the cadres who dominate both parties, professionals for whom constituents are purses to shake, attached to voting habits that impose constraints they have become adept at loosening. These “paraparty cooperatives” would adopt both “outside” strategies (primarying incumbents who don’t represent them, sometimes challenging bad general election candidates despite the risk of spoiling) and “inside” strategies (securing roles within party committees, think-tanks, etc while maintaining solidaristic connections to discourage them from entirely “going native”).

If this is of interest to you, please participate in the seminar on Friday!

Universalism and means-testing

Meagan Day points out, correctly, that the pandemic experience has buttressed the case for universalism over means-tested programs:

When eligibility for benefits is conditional, all kinds of bad things happen, ranging from the intentional exclusion of whole (usually maligned and disempowered) demographics to huge numbers of otherwise-eligible people tripping over red tape and falling through the cracks. Another major problem with means testing is political: so long as there’s an income threshold, austerity-minded politicians will always try to lower it, leaving more people out as time goes on. In other words, targeted social programs make easy targets.

Part of the architecture of capitalism is that truly wealthy people are a tiny minority of the population, and the focus on whether this minority gets a minor boost out of a universal program that would bring stability, security, and prosperity to the vast majority (and would be paid for by progressive taxes) has always been a distraction.

Max Sawicky (with whom this blog has tangled on universalism before) responds. In my view Sawicky is far from persuasive:

Means-tested benefits are said to limit eligibility and leave many needy behind, unlike ‘universal benefits.’ Unfortunately, there is no really existing universal benefit that remedies this problem, so we are committing the basic fallacy of criticizing an existing program by comparison to an idealized alternative. There is no reason a benefit founded on a means-testing formula could not be provided to anyone you might like.

The real rationale for means-testing is not that it deprives the unworthy of assistance. That is a straw man often deployed by the less progressive among us. It is that for any sub-group of the population, a means-tested program will be cheaper, or for any given amount of money, it can provide more assistance than a universal one. Advocates for universal benefits must compete with equally righteous left advocates for other types of spending. In practice, public funds are limited. (Also true in an MMT world, by the way.)

It is Sawicky, I think, who is guilty of straw-manning here. That the stated purpose of means-testing is to maximize the benefit-per-unit-dollar to the targeted group is not disputed by anyone. No one suggests that means-testing is imposed explicitly to create bureaucratic hoops in order to deny benefits to the eligible. Universalists suggest that in practice, means-testing of individual programs often has that effect, sometimes unintended, some tacitly intended by public officials who, whether out of ideological pique or in response to fiscal pressures, engineer eligibility criteria to limit disbursals. We had a spectacular example of that when Florida’s Republican governor Ron DeSantis had to acknowledge that his predecessor had deliberately made filing for unemployment benefits difficult, in order to forestall pressure on the insurance fund that might have required raising business taxes. (Unemployment insurance is not a means-tested program, but like means-tested programs it is gated by an application bureaucracy which always has the effect, whether intended or not, of limiting benefits to a subset of the eligible.)

It’s a particularly odd time for Sawicky to write “there is no really existing universal benefit that remedies this problem, so we are committing the basic fallacy of criticizing an existing program by comparison to an idealized alternative.” In the CARES Act, we just had an (almost) universal $1200 cash payment, and despite the fact that the United States lacks the infrastructure for benefits deposits that are a matter of course in more civilized countries, those payments were almost universally received. Someday a comparison will be done of the fraction of the eligible who received their $1200 payments, versus the fraction of eligible people and small businesses that received Federally enhanced unemployment insurance and forgivable PPP loans. Does Sawicky believe the comparison will reflect well upon the latter?

A fundamental misunderstanding undergirds this whole debate, that it’s an argument of “means-testing” versus “universalism”. Universalists don’t dispute the necessity of means-testing, they dispute how and where means should be tested. Partisans of “means-testing” are really arguing for within-program means-testing — that each benefits program should have its own means-based eligibility infrastructure. “Universalists” are also very devoted to means-testing. We just think all programs should share a single, efficiently managed and enforced, means-testing infrastructure rather than jerry-rigging one for each individual benefit. Means-testing is inherently intrusive of privacy. It is costly in time, money, and sometimes dignity, for applicants and for validators. It imposes, in the language of economists, large deadweight costs, from the cost of the exercise itself, and from the social cost of benefits deterred by the exercise and so undelivered. It is simply more efficient to have a single and, um, universal means-test, and use that for all programs.

And we do have a universal means-test. It is called the income tax. Universalists argue that rather than means-testing program by program, we should just provide the benefits unconditionally, but “take them back”, in different degrees, financially, via the income tax. In accounting terms, gross outlays (whether they be cash benefits or “in-kind”) are to be divorced from means-testing and, to the maximum extent possible, any other sort of eligibility bureaucracy that imposes deadweight costs. But net outlays — benefits extended minus taxes paid — are absolutely means tested.

This is just more efficient than multiplying eligibility bureaucracies for every program. But its advantages go beyond eliminating redundancies. Providing benefits up-front and then charging on a sliding scale as income is realized supports the insurance function of social spending. People’s incomes are uncertain and only verifiable after some delay. Requiring demonstration of inadequate means up-front, rather than on the back-end, creates at best a delay between when a shock is experienced and when it can be ameliorated. “Delay” can mean your kid skips meals, you start rationing your insulin, or your family is evicted from its home. It’s a big deal.

Further, from the perspective of recipients, benefit withdrawal is itself a kind of income tax, often imposing very high effective marginal rates at low levels of income. We make programs “cheap” by making people just richer than beneficiaries pay their way, rather than let the burden fall higher on the income distribution. Within-program means testing may be “progressive” relative to no program at all, but it’ll be regressive relative to a universal program funded from the general budget. Bouncy tax rates and cliffs are bad policy that affect human incentives in real, socially costly ways. Restricting means-testing to the tax system allows us to structure incentives rationally and burdens ethically.

Less materially, but perhaps more importantly, universal programs unite and ennoble us while within-program means testing divides and diminishes us. Humans perceive flows of funds and services in gross terms rather than in net terms. We all have the use of the roads “equally”. In net terms, you can argue that poorer people get full use of the roads without much funding them in taxes, so they are lucky duckies. Or you can argue that the rich use the roads much more than even the home-owning, property-tax-paying middle class, so the flow of net benefits is severely regressive. Argue this shit all you want, as a wonk or whatever. Most of us just perceive the roads to be fair and free to all, and the taxes as something else entirely. Roads are common infrastructure, an interest we share, a good reason to support solidaristic government. Given the high salience of gross flows rather than net, it’s a free-lunch in terms of social cohesion to provide services and support to all, rather than make very explicit that some are getting “free stuff” that others are not.

But what about the inflows? If universal outflows to the public are supportive of social cohesion, aren’t the radically varying inflows we require as taxes corrosive of the same? Yes, of course they are. Have you seen how rich people talk about the income tax?

However, these aren’t equal and opposite effects. More affluent Americans still enjoy and support the roads and national parks, despite “overpaying” for them. Many of them would be grateful for the option to send their kids to college less stressfully. Further, developed countries have tremendous flexibility in how we finance universal benefits. There is no one-to-one correspondence between a new dollar spent to support a universal benefit and an increase of divisive dispersion in the tax system. Social democracies support universal benefits with a wide mix of income and payroll taxes that render the benefit system more net-means-tested (when they are not capped) and other taxes (e.g. VATs) that render them less so. Choices about the progressivity of income taxes affect the degree to which the benefits state is net-means-tested, and have potentially complicated effects on social solidarity. (Very progressive taxes leave high-income people disgruntled over the short term, but over the long-term, very progressive of taxation can contribute to a “predistribution” more conducive of solidarity.) Developed countries that control their own currencies have wide latitude to finance benefits with “debt” instruments that are more like preferred equity. If they are careful, they can wisely distribute the inflation risk public expenditure may occasion, rather than let expenditure merely magnify it. A wide variety of regulatory policies (e.g. discouragement of predatory consumer credit arrangements) can reduce the degree to which benefits put pressure on prices and so must be offset with potentially divisive taxes.

Finally, means-testing obligations rather than benefits better aligns social provision with human dignity. When a person applies for means-tested benefits, they are asked to prove their poverty, which in our society shades towards inadequacy, in order to get something that they need. They must make themselves charity cases. When we means-test obligations, no one is humiliated. Detached from “getting a handout”, there’s not much indignity filing a tax return, regardless of ones income. When ones tax bill is high, some people feel pride (“taxes are the price of civilization”) and some people feel ripped off. But no one is diminished in the eyes of their community, or in their own eyes. If you think taxes are theft and the state is predatory, that is a reason to be angry at others. But your high tax bill is not a personal failing. On the contrary. Whether you are content to pay your taxes or outraged that you have to, the cause of your predicament is a source of pride rather than of shame.

From the market or from other sources, the benefits we receive from others without having to beg tell us what we are worth to our society. The taxes we have to pay may be irksome, but they are not deducted from that social expression of value, as long as they are levied on nondiscriminatory terms. There is a free lunch in human welfare embedded in these propositions. We are idiots not to take maximal advantage of it.


Note: While I was writing, Matt Bruenig published a response to Sawicky and Day. I suspect I’ll agree with it, though I haven’t read it carefully yet.

Update History:

  • 28-Sep-2020, 3:55 p.m. EDT: “It is costly in time, money, and sometimes dignity, for applicants and for validators.”
  • 22-Oct-2020, 1:35 p.m. EDT: “…the benefits we receive from others without having to beg tell us what we are worth to others in our society.”

Represent

It has become a cliché to say that this election is not about electing a President, but preserving democracy in America. That’s much less because of Donald Trump than because of the “doom loops” (in Lee Drutman’s term) between the two political parties. It’s bad enough that we have only two parties that leave most of us poorly represented. But as the parties increasingly differentiate themselves across issues of identity and culture, the “winner-take-all” nature of our electoral and political institutions can no longer tempered by the horsetrading and difference-splitting. Our conflicts can no longer be resolved by compromises that leave us all feeling represented, albeit imperfectly, and fighting over matters of degree. Instead the parties have manufactured two distinct superidentities, and rehistoricized them as ancient hatreds. Both parties, and the partisans they’ve made us all, agree that we face a battle of good versus evil, sanity versus chaos, for the very soul of the American republic. Only one slight difference remains to be resolved: Which is which, who is who.

Framed this way, I am not neutral, I have a view, my own allegiances. But it is a catastrophe that we have framed things this way. Democracy is a sham, in practice and in theory, if half of the people are simply evil. And they are not, in any objective sense. Our horrible party system, a politics industry that caters to plutocrats, and insiders’ incentives to secure incumbency, have caused us to reconstruct ourselves in this way, yin to one another’s miserable yang.

One source of our discord is majoritarianism, which drives destructive competition between our political factions to win just a tiny margin over the other one. “Majority rules” is a deeply flawed basis for democratic institutions. It conflicts with a more functional virtue, representation, the idea that everybody should have a voice, no one’s interests should fall beneath consideration. Under strict majoritarianism, minorities have effectively no voice if a majority organizes to wield power. In liberal democracies, the most catastrophic harms of majoritarianism are (supposed to be) mitigated by minority rights, basic protections and liberties that even organized majorities are not permitted to violate. But even when those are respected, majoritarianism leaves minorities boxed out of any agency in the national project. When organized factions are nearly evenly matched (as our abysmal political institutions encourage), unsubverted majoritarianism would have 50% of the electorate plus 1 rule entirely, no matter how strenuous the objections of the other 50% – 1. This is not a functional or legitimate way to rule. (Our abysmal political institutions are not so straightforwardly majoritarian, so they don’t have that flaw, exactly.)

Opposing majoritarianism is not a defense of minoritarianism. The idea that some benighted minority should rule is obviously worse. But Republicans’ anti-majoritarian turn is itself a function of the structural majoritorianism of the institutions they contest. Majoritarian institutions invite the question “majority of whom?”, and the winner-take-all character of “majority rules” means the whole ballgame can turn on small changes in the always contested boundaries of the enfranchised. Under institutions where power is proportionate rather than binary, temptations to nibble at the edges of electoral eligibility or convenience disappear. Questions of suffrage become the fundamental questions about the nature of the polity that they ought to be, rather than playthings for party operatives looking to shave a few points from their opponents.

Representation is the ideal to which our political institutions should aspire, not “majority rules”. But representation must not be merely formal. Having “representatives” in a legislative body where they are always outvoted is not really representation at all. A democratic polity requires institutions that ensure the entire public is represented in outcomes, not merely in deliberations that become perfunctory or, even worse, performative, so the routinely outvoted become recklessly extreme, as compensation for impotence and in competition for press. Obviously, contending factions sometimes have mutually exclusive preferences, so that one faction must win and others must lose. But then you should win some and lose some, in proportion to your support among the general public. When possible, compromises should be crafted that attend in degrees to all of the public’s interests, and then passed with a high degree of legislative consensus. And such compromises usually are possible, when politics properly orients itself around conflicts in the material world, where differences can be split and priorities traded, rather than around questions of identity, morality, and status, questions on which contending factions must win or lose with nothing in between. Where compromises are not possible, we should have to take turns. Turn-taking should occur much more frequently than multiyear election cycles. Even within a single legislature, the majority should win only sometimes, and lose sometimes, in rough proportion to its dominance. There should be no possibility, none at all, of any faction dominating eternally, winning so big they need never fear reprisal for whatever they do to others. The golden rule must be a norm upheld and always enforceable between political factions. Our politics creates its public much more than the public creates our politics. We should seek a politics that constructs a public respectful of difference, that wields persuasion as its core implement of change.

Representation in the way I’ve described it can conflict with other virtues. There are tensions between turn-taking and the strategic coherence required to run an effective state. When everyone seems represented, it becomes harder to know whom to hold accountable, and how, for policy failures. It must be possible to take actions, sometimes to make big, contentious changes, and commit to them in ways that won’t immediately be reversed in stupid oscillations when the next turn is taken. American institutions already suffer from terrible status quo bias, and richer representation should not exacerbate that.

These are real issues, but they are (imperfectly) resolvable issues. Representation is the heart of democracy. Forms of majoritarianism that circumvent rather than support it should be abandoned. In the short term, for the United States, this means eliminating abominations like the “Hastert Rule” (which both parties and both chambers have now effectively adopted) in favor of legislative procedures designed to maximize enfranchisement, of the minority party and of diverse factions within the parties. In the medium term, it implies changing our electoral system to one that yields proportionate representation, rather than reshape the public into two bitterly contending factions. In the longer term, it implies innovations within the institutions of democracy that ensure turns are always taken except when strong consensus can be reached.


Note: I’ve just read Drutman’s book Breaking the Two-Party Doom Loop, which has helped color my thinking. I’d take issue with some aspects of the political history it tells, but it does a great job of explaining why our politics is such a mess, and casting a light forward towards the kinds of ideas that might remedy it. I heartily recommend it. We’d have a better world if it were more widely read.

Update History:

  • 22-Sep-2020, 12:40 p.m. EDT: “…would have 50% of the electorate plus 1 rule entirely, no matter how strenuous the objections of the other 50% – 1.”; “I’ve recently just read Drutman’s book Breaking the Two-Party Doom Loop, which has helped color my recent thinking.”

Politics is an American industry

American industries — the ones that sit at the new commanding heights of the economy — look nothing like the collections of the atomized, competitive firms described in an introductory Economics textbook. Industries like technology, finance, health care, higher education, and media dominate our collective lives, and yet they are not regulated by anything recognizable as open competition for the custom of decentralized consumers. These industries share some things in common.

I. American industries do great things

Health care is really important. Doctors and nurses and hospitals and drugs do great things. Finance is essential. Without a payments system, credit, and investment a prosperous economy would be impossible. “Big tech” and the ecosystem of startups that serves as its farm team really do put much of the world’s knowledge at our fingertips and make it possible, even through the isolation of this pandemic, for us to communicate and collaborate, to escape and to love despite our bodies’ imprisonment. Higher education, regardless of whether employers value it for skills or for signalling, is powerfully transformative for many of us who experience it. Etc.

II. The means by which they finance themselves are problematic

Yeoman capitalism tells a very simple story about how firms and industries get financed. It is supposed to be end consumers who, en masse, finance or fail to finance firms by virtue of well-informed, voluntary choices about whom to pay in exchange for delivered value. This is an apt description of how none of these industries get paid. Health care, finance, education, technology, and media are not for the most part financed by independent bilateral transactions between well-informed parties. These goods are sometime purchased in bundles, sometimes financed by third parties or the state, sometimes financed by contractual contingencies imperfectly understood by their payers (“tricks and traps”, as Elizabeth Warren used to call them), often arranged under circumstances of asymmetric information or simply absent information. Rather than vying against one another for customers, “competitors” in these industries often work cooperatively to secure the shared bases of their cash flow. Citibank and JP Morgan, Berkeley and Stanford, the Mayo Clinic and Johns Hopkins, Google and Apple, they all do genuinely compete for “customers”, but their fates are much more determined jointly, by the terms on which the state structures finance, offers research grants and student loans, by third-party health insurers (public and private), by how antitrust law is interpreted and enforced.

Often the financing of these industries is perceived (accurately) as predatory or plutocratic or both. Outside of informed, competitive markets, payments become less than voluntary. Late fees and overdraft fees, usurious interest on credit you never intended to revolve, incomprehensible medical bills for services not meaningfully chosen at outrageous prices never meaningfully agreed, tuition affordable only by virtue of taking on arbitrary debt, in a context where opting out means foregoing any chance of a comfortable middle class life: All of these financing arrangements are predatory. If you get into Harvard, maybe tuition is paid, thanks to an endowment based on flattering plutocrats. Print media increasingly depends upon supplemental “support” from the wealthy, which conditions the character of the national conversation. Google and Facebook are far from free. Every user and every nonuser of the services pays exorbitantly for their services, and not just in “data”. Their profit margins are embedded in the costs of every good and service that advertises on those platforms. We finance them, but we don’t have any choice or control over the product like we would as customers in a competitive market.

III. The people who work for them are nice

As human beings, at an interpersonal level, people who work in technology, higher education, heath care, technology, or even finance are good people. Not all of them, of course. Perhaps there is some accuracy in a statistical sense to bankers being bastards or Silicon Valley tech bros or whatever. But even within those industries, as among nearly every occupational category, most people are good people, doing the best they can, trying to do the right thing although no doubt accepting some tradeoffs. Nurses are notoriously caring, and yet their salary derives from a predatory, kafka-esque pricing system. My college professors were amazing people. In terms of dimensions like civility or politeness, the workforces of these predatory, problematic industries are probably nicer than the general population, because they are disproportionately educated and the norms we define as polite are to some degree the cultural mores of the educated. And because of affluence. Certain kinds of patience, civility, and generosity are “normal goods” in economics-speak, things the comfortable can afford but the less comfortable must do with less of. However you want to cut it, the people who work for these industries are not “bad people” in any natural sense. You can define them as bad by construction, if you like, by virtue of their complicity in their industries’ sins. But they’d do fine in any Turing test for niceness and decency in which occupational status was blinded.

IV. American industries evolve to insulate most of their workforces from aspects of their industry’s finance

They have to, in order to reconcile points II and III above.

If you ask ER doctors about the “chargemaster” — the hidden skein of prices that vary by procedure, party, and phase of the moon that determines how much you are billed — they will not be great fans! In my experience, most doctors agree that it’s a shitty system, incomprehensible and unjust, and they sincerely wish that it were different. If you ask whether that system affects the care they provide, the answer is usually no. Doctors mostly say they provide the best care they can in medical terms, and don’t think very much about what happens on the financial side. You can argue that this is good thing (best care possible!), or a bad thing (maybe second-best would have been more than good enough and would have helped the patient financially). But it is a thing.

Most people who traded the bonds that in 2006 were stuffed with predatory and fraudulent mortgages never themselves sold home-buyers from minority communities on adjustable-rate mortgages with prepayment penalties that would become unaffordable once the teaser rate expired. They were professionals at big banks, selling to institutional counterparties, all wearing similar suits. A lot of what amounted to fraud in aggregate was straightforwardly justifiable by the people most directly involved in perpetrating it. Real-estate can be valued by capitalizing the rents properties would generate, or in terms of “comparables”, what similar properties are selling for. When market prices started to decouple from capitalization-derived estimates, was it wrong for appraisers to increasingly emphasize valuation by comparables as more “empirically accurate”? Especially since banks, eager to lend, would preferentially hire appraisers “in tune with the actual market”?

In aggregate the industry perpetrated tremendous fraud, but much of it was organized like the translation of Monty Python’s “Funniest Joke In The World“, with each participant never exposed to more than a tiny part of an ugly, lucrative bigger picture, deniable especially to themselves. American industries, which work simultaneously to maximize revenue and keep the loyalty of highly sought professionals, naturally arrange themselves this way.

V. Workforces cannot be completely insulated from disagreeable aspects of their industry’s finance

Somewhere in some office at every hospital chain, there are the people whose job it is to maximize revenue by imposing or negotiating a multiplicity of nose-bleed prices for each medical procedure, none of which will be routinely published or disclosed to patients except at the time of billing. They know it isn’t nice. At every health insurer there are the people whose jobs it is to deny coverage whenever coverage can be denied. All of these people have rationales by which they can justify their work. The hospitals are struggling! (Often the rents in our healthcare system get paid out of hospitals to overpriced providers, drug companies, device manufacturers, administrators, etc rather than accruing as juicy profits in hospitals.) Fighting insurance fraud and limiting coverage to contracted care keeps premiums “low”!

During the housing boom, eager mortgage originators would themselves fudge or (much safer) advise borrowers to lie on loan applications. They understood they were committing or suborning fraud. (But this housing boom has legs! Sure it was lucrative, but they were also democratizing the American Dream, helping new homebuyers succeed despite little blemishes.) Bankers who purchased mortgages to bundle into securities overlooked deficiencies they knew existed in the pools that they purchased. The people they were selling them to (but not people on behalf of whom those people were buying) were “consenting adults”, caveat emptor. Workers at rating agencies would famously take on securities “structured by cows” as part of a focus on “maximizing revenues”. (But they scrupulously applied the formal models that were then the industry standard! Though they knew the model “def does not capture half the risk.” Still, they adhered to procedural norms!)

In these examples from health care and finance, basically a segregated minority of the workforce is exposed sharply to the ickiness of the business model, helping preserve the innocence of the rest. But of course, in all of these industries, there are aspects that cannot be so well shut away. When engineers at Facebook are optimizing for “engagement”, they know what they are doing. The surveillance is not occluded from Googlers by its sexier names, “analytics”, “machine learning”. Until a few years ago, it seemed (at least to me) common for college professors to point to the average “college premium” and argue that the student loans on which their institutions relied were basically a good deal (nevermind the tremendous variation hidden in that premium and that its increase over the decades derived more from falling noncollege wages than rising college wages). Current affairs writers like to think of themselves as proudly independent, but the pieces they pitch, that they expect editors might accept, are conditioned by the perspectives of donors and the red lines of advertisers, as well as by any inherent public or audience interest.

These industries do their best — really! — to carve out zones of independence, within which the incentives that derive from how they are financed are blunted, so that other values can express themselves, and so their professional, decent, often idealistic workers can sleep at night. But they cannot insulate their workforces completely, nor can their workers be absolved entirely for their remunerative complicity with the cash-flow-generating aspects of their industries, however much they may dislike or wish to reform them. And workers overestimate their independence. They internalize the constraints. They make up good reasons for coloring within the lines rather than admit that the gravy train requires they do so. They reflect upon their work proudly. It is only coincidence that their independently defensible choices happen not to conflict irreconcilably with the interests that finance them.


Politics in the United States is another American industry. It runs the gamut from elected officials and their campaigns, to the consultants, think-tanks, lobbyists, staffers etc. Even civil servants and military officers, with secure jobs and government paychecks, are part of the industry, and face the same complicated incentives, as long as the opportunity to rotate into private-sector parapolitics is of value to them.

Like other American industries, politics does great things. A government must be staffed and run, decisions must be made, expertise must be brought to bear in crafting legislation, public policy research must be done. Political parties must contend if representative democracy is to function, and that contest must be staffed and funded. Like its peer industries, politics’ financing model is indirect, predatory, and plutocratic. Obviously the “donor class” that funds PACs and think-tanks is a plutocratic revenue source. Government contracting, revolving doors into which condition civil servants’ real-time decisions, constitute a predatory source of revenue. Politics, like finance, includes certain niches of workers who are explicitly, ostentatiously assholes. But for the most part the politics industry is staffed by well-spoken, idealistic, decent people. Nice people. To outsiders, politics appears horrible: ugly, predatory, oppressive, corrupt. But insiders “know” that while there is some truth to that, it is mostly a caricature. Most people are not selling out or doing horrible things. Most people are working sincerely to advance agendas they believe in. Even many lobbyists, the plainest sort of hired gun, are idealists who choose the causes they work for based on prior attachments and commitments, rather than bending to some plutocrat’s will. (Of course, the likelihood that people working to advance prior commitments succeed at making a career of it is not independent of plutocratic interests. But that is outside the control of the sincerely motivated lobbyist!) Lobbyists are justifiably proud of the resources they bring to bear to support legislative and rule-making processes, resources that far surpass what our intentionally atrophied government makes available to itself for these purposes. Still, it is true that workers in politics cannot completely insulate themselves from the predatory and plutocratic incentives that come with how the money works. Compromises must be made. Just as an aspiring politician can do no good if she cannot get elected (and then re-elected), a research institute can do no good if it has no funding. The people in the industry know this, concede it. For those (not all!) whose political attachments are in conflict with the financial incentives, they lament it. But they also “know” that outsiders underestimate the degree to which their choices are right on the merits, even though they are tarred as betrayals or corrupt concessions. If we were in their shoes, we would understand and feel the same way.

Politics is an American industry, just like all the others. It is awful in some ways, but it is also essential. I think we should wish to reform it, dramatically, but it won’t be reformed alone. It is of a piece with peer industries. It won’t be repaired without also repairing the political economy that surrounds it.


Note: I want to thank all of the people who participated in last month’s “seminar”. I enjoyed it, and hope you did too. I hope to try some other experiment (that involves me talking less) sometime very soon.

Update History:

  • 17-Sep-2020, 2:05 p.m. EDT: “II. The means by which they are financed is are problematic“
  • 17-Sep-2020, 5:35 p.m. EDT: “II. The means by which they are financed finance themselves are problematic“
  • 22-Sep-2020, 12:45 p.m. EDT: “V. Workforces cannot be completely insulated from disagreeable aspect’s aspects of their industry’s finance” (Thanks commenter Jeff!)