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.”
Thus a person who drives a Hummer regardless of the consequences for others is deemed “rational” provided the price of gas is cheap. “Developmentally challenged” would be a more accurate term.
Homo economicus is a projection screen that reflects the mind that embraces him. Studies show that economists, more than the rest of us, do resemble the conceit they have created. You know the type: quick, facile, and whizzes in math — the type that knows all the answers and none of the questions. They are the kind of people you might go to with a question about annuities, but not the kind with whom you would share a problem of the heart.
There are exceptions of course. I count some among my friends. But to a one they are in fundamental opposition to their own profession, and probably would say my description here is kind. They spend their lives trying to devise ways to make their colleagues confront the human, biological and physical realities that lurk outside the confines of their self-affirming system of belief. The concept of “externalities” is an example. A profession that regards affects upon other people and the world as “external” is one that has some growing up to do. Yet economists of conscience must resort to strategems like that to get their colleagues to consider such effects — a little the way a parent might slip a little wheat germ into a child’s frosted flakes.
The type is found in purest form at the market fundamentalist end of the spectrum. You can extrapolate most libertarian economics — in particular the petulant aversion to boundaries and rules — from the way a thirteen year old feels about his or her parents. There was a time when this was what a psychologist might call “developmentally appropriate.” It matched the situation people faced, or seemed to at least. Back in the childhood of the industrial age, the world seemed vast, and material resources without limit. The only imperative was to grow, much as it is for a five year old.
But we aren’t children any more. The world is smaller. Our actions bump up against those of others in increasing and inescapable ways. The task now requires maturity and cooperation, and not just license for a “gimmee gimmee” view of the world. Which brings me to the subject of “takings”, which has become a quiet crusade of the Bush Administration.
The takings theory derives from libertarian hostility to boundaries and rules, with the ironic twist that it seeks to turn these into a big new burden on taxpayers. As has been discussed here before, the theory says that each and every government restriction on the use of property represents a “taking” of it, in violation of the Fifth Amendment to the U.S. Constitution. Taxpayers must compensate affected property owners accordingly. The Supreme Court has rejected this view, as have strict constructionists such as Justice Antonin Scalia. But the crusade continues, because its adherents believe that judicial activism in the cause of property is okay; it’s just the kind that helps people that isn’t.
A typical expression of this view came from Janice Rogers Brown, a justice on the California Supreme Court whom President Bush has nominated to the D.C. Circuit Court, which is the second highest court in the land. Justice Brown says that zoning laws are a form of “theft,” which means such restrictions require compensation from the rest of us. If zoning laws prevent a property owner from, say, building a gas station or convenience store on their lot, then according to this view they should be able to demand compensation from their neighbors for “damages.” (And these people say they are against the litigation explosion.)
It’s not just zoning laws. Brown would reverse Supreme Court decisions that have upheld bans on sweatshops and child labor and that reduced workplace hazards, all because these represent takings from the businesses involved. Brown and her cohorts are not reticent about their aims. Richard Epstein, a University of Chicago law professor and leading proponent of the takings cause, says he wants to “invalidate much of the twentieth century legislation.” Coaches like to remind their players that there is “no ‘me’ in team.” There’s a lot of it in takings — little else in fact.
What these people forget is that a lot of what they say is “theirs” came as a gift from the rest of us. Land is a prime example. The value of any given parcel in downtown Manhattan or San Francisco has little to do with the owner’s efforts (we are talking about the land here, not the structures on it) and much to do with the society as a whole. It results from the investments of surrounding property owners and of the city, the latter in the form of streets, parks, sanitation, transportation — the whole list.
The same could be said of just about all property. In writing this entry I made use of the World Wide Web, a social creation that accounts for much of the value of my computer. Where would oil stocks be without the massive infrastructure for automobiles, and the U.S. military presence in the Middle East, both provided by us taxpayers? For that matter where would they be without a functioning stock market, which is a joint enterprise, a social creation, and not the work of any individual who happens to participate in it.
No property is an island — none that is worth anything at least. For almost every “taking” there is a corresponding giving, and often a great many of them. We the givers are the silent majority in takings cases, and it is time for us to stand up for our rights. The stakes are high, and not just as a matter of defense. As David Morris of the Institute for Local Self Reliance points out, (http://www.alternet.org/story/21791/) it is possible to finance transit systems and the like through the recapture of givings, in the form of land value increases near transit stops. (How about financing public and community broadcasting through fees for the use of the broadcast spectrum?)
Morris’ article is a call to action. Read it. Then let’s get going.