A New Fault Line Among Liberals April 19, 2009Posted by Dwight Furrow in Current Events, Dwight Furrow's Posts, Ethics, Political Philosophy, politics.
Tags: defining liberalism, defining wealth, nature of happiness, Paul Krugman, revising the American Dream, Tim Geithner
Cross-posted at Reviving the Left
As the various debates regarding economic recovery are unfolding, an emerging fault line is developing among liberals regarding the nature of reform.
I think the fault line can best be described as follows: Are we trying to return the United States to levels of growth and consumption patterns prior to the Bush debacle, i.e. during the Clinton era? Treasury Secretary Tim Geithner seems want something like that. Or do we need a more substantial restructuring of the economy, as someone like Paul Krugman would endorse? Should we preserve the goal of increasing levels of homeownership and robust consumerism through expanding credit and financial services, albeit with more effective regulation. Or is the idea of an economy based on easy credit, mass ownership of stocks, homes, and other investment vehicles, and dominated by the financial sector a bad idea?
Will an economy consumed with the pursuit of wealth always be subject to bubbles, gross inequality, and instability caused by excessive greed, regardless of the regulations we put in place?
On the surface these may appear to be purely economic questions. But in fact there is a moral dimension.
It is hard to see how a society based on wheeling and dealing could be anything but a society in which selfishness rules. Norms and virtues inevitably flow from our activity—we become what we do. When wealth acquisition is the measure of a person there is no natural limit to the temptation to acquire more. And because wealth begets wealth conferring a competitive advantage on the already wealthy, most people will in end be unable to compete and will fall by the wayside, like the bankrupt homeowners who window-shop at the malls today. Meanwhile, the wheeler dealers will always find a way to outwit regulators, who will be resented by everyone whose aspirations outstrip reality—most of us.
So I don’t think a return to Clinton era prosperity is quite the way to go. Getting more and more people into the middle and upper middle class is a worthy aspiration, but trying to expand the pie through cheap tricks won’t get us there.
The downside of more significant reforms, however, is less growth. And that is not a good thing. Maybe we should be willing to forgo the new wardrobe, hold on to a car for 5 years, and stick with last year’s cell phone technology. But what about the people who design, make, and sell clothes, cars, and cell phones? Slower growth means more unemployment, less opportunity, and these are moral issues as well because they entail suffering.
I don’t think we have to choose between growth and contraction. But we will have to re-describe the nature of wealth. The kind of wealth we have sought to create over the past 30 years was private wealth. And the excessive pursuit of private wealth inevitably leads to the greedy melee that we are still trying to disentangle.
But if we define wealth more broadly in term of social capital—better education, health care, transportation, a clean environment, higher levels of trust—we can pursue rampant growth and keep people well employed without creating lots of Bernie Madoffs in the process.