Today, as Summers notes, the economy seems mostly back to normal — but joblessness is still endemic. Growth simply isn’t producing enough jobs. This is a more severe and more urgent problem than inequality. Moreover, fixing it is necessary, though not sufficient, to making real headway against inequality.
Ezra Klein thinks that the American left—bizarrely, he seems to include the Democratic Party in the category, but that is the least of his category errors, so we’ll leave it be—is overly concerned with the problem of income inequality and insufficiently concerned with unemployment. There is a sense in which he is correct. Too much economic discourse focuses on the narrow caste of people who, because they are mentally disordered, deranged, and in deep need of our pity and the best psychiatric treatment that our doctors can yet provide, waste their lives not in the pursuit of human joy and affection and invention and transcendence, but in the weird, obsessive accumulation of hundreds of millions of electronic credits. “Yes Mr. Lebowski, these unfortunate souls cannot love in the true sense of the word.” Marginal efforts to solve all of our ills by sending the taxman to shake a few more rubles from these sad gangsters are indeed doomed to fail. Most of their wealth is illusory, a product of the speculative machinery of the financial markets, soap bubble wealth, one good solar storm from evaporation.
I mention this because these billion-dollar fortunes are part of the same illusion that causes Ezra Klein and Larry summers to wonder “whether the country’s growth machine [is] so fundamentally broken that adequate demand required credit bubbles.” This is a question? Of course demand requires credit bubbles. Also, what is this growth stuff?
When a society financializes its economy as thoroughly as ours has, growth is nothing but a bubble; it is the computerized manipulation of electronic currency to cause numbers to get bigger. Growth in the sense of extracting more resources and making more things and hiring more people as the population increases is like Manifest Destiny, like the frontier. Eventually, you run out of Indians to swindle and massacre, and all the cars and TVs are made by robots. It’s the closing of the frontier, in the Jackson Turnerian turn of phrase. Economists call these phenomena “gains in productivity,” which just means that the fake pile of fake money that is our fake economy is self-inflating fast enough to make it appear that each little still-employed economic ant makes a larger share of the wealth. You take the big pile of money, divide it by some man-hour construct, and suddenly it appears that few workers are making all the wealth quite well, thank you very much. We need fewer people to make all this pretend money. For all the Tom Friedmans who lament the lack of “skills”—and really, has anyone ever managed to mention what any of these skills actually are, I mean, specifically—the larger problem is demand for workers. We just don’t need that many of you guys.
So Klein’s solution, the broad, technocratic consensus on both the left and the right, is that we need to figure out a way to create more jobs. The Democrats want to over-hire more road crews, and the Republicans want companies to use the windfall of reduced taxes to hire more phony middle managers, and then all that unnecessary employment will make it rain like a cash-heavy bar owner at a strip club. Regardless of the mechanism, though, all these jobs have one thing in common. They are fake.
Well, here is a quote from that congenial lunatic, Bucky Fuller, that’s been making the rounds lately:
We must do away with the absolutely specious notion that everybody has to earn a living. It is a fact today that one in ten thousand of us can make a technological breakthrough capable of supporting all the rest. The youth of today are absolutely right in recognizing this nonsense of earning a living. We keep inventing jobs because of this false idea that everybody has to be employed at some kind of drudgery because, according to Malthusian-Darwinian theory, he must justify his right to exist. So we have inspectors of inspectors and people making instruments for inspectors to inspect inspectors. The true business of people should be to go back to school and think about whatever it was they were thinking about before somebody came along and told them they had to earn a living.
He said this in the seventies, so you can only imagine how true it is today. The increased automation of industrial production has reduced the necessity of employing lots of people. A few of us may invent the internet, or whatever, and be free to make our billions and cackle greedily over them in the lonely attics of our tacky mansions. Meanwhile, per Fuller, we ought to just give most people money to go to school, not so that they can Develop the Skills of Tomorrow Today in order to Win the Future against the Chinese, but so that they can do chemistry experiments or read Russian literature or ponder the mysteries of the Trinity or learn to throw pots. If Ezra Klein can make, say, what, a buck fifty—probably more?—to blog, then why can’t we just agree to pay everyone who takes cute pictures of their cat or makes lists of their favorite recipes fifty or sixty grand a year? Thesis: maintaining an interesting Tumblr is more closely related to labor in the classical sense than writing macros as an “analyst” in a Fortune 1,000 firm.
But really, this gets us back to those accumulators of immense fortunes, both individuals and corporations. Because we are addicted to primitive forms of exchange that are probably necessary to the allocation of goods in an environment of actual material scarcity, there is a sense that, by hoarding so many dollars, the very rich are preventing the poor from getting the currency required to acquire the things that they need. True, but in the long term, the solution is to recognize that we are actually a post-scarcity society; conditions of material deprivation are artificial products of the very economic system that is supposed to allocate goods. Thesis: inequality and poverty are failures of the supply chain. The problem is not the hoarding of money, but the persistent connection of money to things that we can easily produce and distribute to everyone without some conniving Whartonian middleman.