Reptilian Economics

What do you say about people who define “rationality” as a myopic focus on the self and its desires, and who regard the well being of others as an “externality”in the drama of life? What do you say of people who can’t tell the difference between price and value, and who think that when a kid sits on a couch and plays video games and feeds his face with junk food, and then needs medications for obesity and attention deficit, the result is a “virtuous circle” of consumption that betokens prosperity and “growth”?

If you are such a person — ie an economist of the conventional sort — then you call this Nobel-worthy brilliance. You heap accolades upon a Gary Becker, the economist at the University of Chicago who wrote a book analyzing interactions within a family in terms of this self-seeking model. (“Ten dollars tonight dear? Fifteen?”) If you are a member of the news media, then you quote such lights as oracles of great authority.


We the Givers

Economics as practiced in the United States is a state of arrested psycho-emotional development. There is an infatuation with mechanisms and statistics — trucks and baseball cards — with little interest in the human realities and complexities that lie beneath them. There is also a solipsistic concern for the self and its desires, to the exclusion of everyone else.

That self-concern is embodied in the hypothetical person who inhabits the economics texts. It is homo economicus, the economic man, who lives according to a closed and relentless calculus of personal loss and gain. Economic man is a slug like Adam in the Garden of Eden, except that he is better at math. He has no conscience and no sense of right and wrong, only a capacity to respond to external “incentives.” His god is self-gratification; and his myopic self-seeking is what the economist calls “rationality.”


Down Among the Economists

Of the organized belief systems in America today, economics is surely among the strangest – and economists themselves are even stranger. How such agile and ambitious minds could drift so far out of touch with daily reality, is a question which merits the attentions of our most astute psychologists. The profession is like a cult of the highly IQd, and I’ve always wondered about the strange rites and rituals that could enable their beliefs to persist.

So last winter, when I heard that the American Economic Association was holding its annual meeting around the corner from my office, I felt a little like an anthropologist who finds an encampment of aborigines in his back yard. Would anyone raise questions about basic premises, as opposed to the arcane mathematics of hypothetical markets and pecuniary gain? Would they talk about the actual experience of ordinary Americans, or only abstractions like “productivity” and “growth?” I never imagined they’d be talking about me. Several months before, the Atlantic Monthly had published an article by myself and two colleagues, Cliff Cobb and Ted Halstead, called “If the economy is up, why is America down?” The article explored the paradox that had befuddled the nation’s policy establishment during the 1992 Congressional campaigns. The economy was doing well, by the conventional reckonings – the GDP was up: people were supposed to be happy and fulfilled.


A Civic Economy

There was a coffee shop near my apartment on the West Side of Manhattan that served as a refuge for the troubled souls in the neighborhood. Older men sat for hours mumbling into their coffee. The owner, a kind Greek lady, would greet them when they arrived and wish them well when they departed. The waitresses were spunky pencil-behind-the-ear types who kept up a good-natured banter. It might have been the only warm human contact these men experienced in the course of their bleak days.

Late in the afternoon, I’d see some of these same men a few blocks up 8th Avenue, nursing more coffee in a McDonalds and looking forlorn in the plastic, bolted-down seats. Kids would tease them; the manager would wipe their tables in an attempt to shoo them away. In the family business they had been part of a community; here they were impediments to a target return per square foot.


The GDP Myth

George Orwell really did see it coming. “As soon as certain topics are raised,” he wrote, “the concrete melts into the abstract.” Nowhere does it melt more quickly than in economics. Public discussion of the economy is a hothouse of evasive abstraction. Opinionators and politicians rarely name what they are talking about. Instead they waft into generalities they learned in Economics 101.

The President’s State of the Union Address was a case in point. The President boasted of the “longest peacetime expansion of our history.” That’s how pols always talk. It sounds like truly wonderful news. But what actually has been expanding? A lot of things can grow, and do. Waistlines grow. Medical bills grow. Traffic, debt, and stress all grow. We can’t know whether an “expansion” is good or not unless we know what it includes. Yet the President didn’t tell, and the media hordes didn’t ask, which was typical too.


Major Growing Pains

It’s a conundrum that has vexed politicians and pundits alike. Despite an economic “expansion” that ranks as one of the longest in the nation’s history, Americans remain unsettled about their economic future. Neither Republican challenger Bob Dole, who stresses the need for more growth, nor Bill Clinton, who is trying to take credit for the current expansion, has been able to assuage the public’s deep, brooding concerns.

The usual explanation for the nation’s economic unease includes the layoffs and two-worker families that lurk beneath the rosy growth figures and the way the fruits of prosperity have been falling mainly to those at the top. But there’s another possible explanation, one that has received much less attention: namely, that much of the rapid growth in recent years actually consists of things Americans want less, not more of.