CHARLES MURRAY, MEET DARON ACEMOGLU
I've written a few posts about the notion Charles Murray has been flogging lately, which is that white working-class Americans are suffering economically because their upscale betters don't live nearby, and thus can't impart a work ethic to the degenerate proles, along with a sense of commitment to marital fidelity, and an ethic of personal responsibility in general. (Upscale people just radiate this stuff, according to Murray.) Murray, being a dutiful right-winger, says that the decline of the white working class has nothing whatsoever to do with a decline in white working-class jobs and wages.
I wonder what he'd have to say about the work of Daron Acemoglu, the MIT economist who's the subject of Adam Davidson's column in today's New York Times Magazine:
... in their new book, "Why Nations Fail," Acemoglu and his collaborator, James Robinson, argue that the wealth of a country is most closely correlated with the degree to which the average person shares in the overall growth of its economy....
According to Acemoglu's thesis, when a nation's institutions prevent the poor from profiting from their work, no amount of disease eradication, good economic advice or foreign aid seems to help.
Davidson talks about this in terms of the Third World, but think about this in terms of a working class in a First World country slipping in status in such a way that the workers are becoming more and more like Third World workers.
I observed this firsthand when I visited a group of Haitian mango farmers a few years ago. Each farmer had no more than one or two mango trees, even though their land lay along a river that could irrigate their fields and support hundreds of trees. So why didn't they install irrigation pipes? Were they ignorant, indifferent? In fact, they were quite savvy and lived in a region teeming with well-intended foreign-aid programs. But these farmers also knew that nobody in their village had clear title to the land they farmed. If they suddenly grew a few hundred mango trees, it was likely that a well-connected member of the elite would show up and claim their land and its spoils. What was the point?
Obviously, U.S. blue-collar workers aren't earning as little as Haitian mango farmers, even now. But these days, do they have any incentive to excel or strive? In recent years, no matter what they do, their wages and standard of living have gone pretty much in one direction: down.
Davidson notes that Acemoglu's book doesn't just talk about the Third World -- highly developed societies of the past are also discussed:
The sections on ancient Rome and medieval Venice are particularly compelling, because they show how fairly open and prosperous societies can revert to closed and impoverished autocracies. It's hard to read these sections without thinking about the present-day United States, where economic inequality has grown substantially over the past few decades. Is the 1 percent emerging as a wealth-stripping, poverty-inducing elite?
Acemoglu and Roninson think Americans will fight for their own economic interests, which is a hopeful sign; they cite both Occupy Wall Street and the tea party movement. But it's my impression that Occupy is struggling to make good on its initial promise, while the teabaggers seem to be fighting, whether they know it or not, to make the rich even richer and the non-rich even poorer.
This seems like a good place to bring in a short article Paul Glastris published in The Washington Monthly last summer. Glastris talks about the past examples of societies that effectively committed suicide by allowing the rich to seize more snd more of the wealth while demanding lower and lower taxes:
As it happens, the willingness of the rich to defend their wealth from taxation to the point of national ruin is nothing new in world history, as Francis Fukuyama recounts in his magisterial new book The Origins of Political Order. The Han dynasty in China fell in the third century AD after aristocratic families with government connections became increasingly able to shield their ever-larger land holdings from taxation, which helped precipitate the bloody Yellow Turban peasant revolt. Nearly a millennium and a half later, the great Ming dynasty went into protracted decline in part for similar reasons: unable or unwilling to raise taxes on the landed gentry, the government couldn't pay its soldiers and was overrun by Manchu invaders.
... the cash-strapped sixteenth-century Spanish monarchy sold municipal and state offices off to wealthy elites rather than raise their taxes -- giving them the right to collect public revenues. The elites, in turn, raised taxes on commerce, immiserating peasants and artisans and putting Spain on a path of long-term economic decline. This same practice of exempting the wealthy from taxation and selling them government offices while transferring the tax burden onto the poor reached its apogee in ancien regime France and ended with the guillotine.
So, yeah, maybe this will all end with the people rising up. But we may not be talking about a shift to a broader sharing of the wealth, achieved through democratic means. We may be talking about something that requires pitchforks and tumbrels and guillotines
(Glastris article via the Mahablog.)