Economic Growth is Political

by: Matt Stoller

Fri Dec 05, 2008 at 17:03


Ed Kilgore and Josh Marshall picked up my post on why conservatives like deflation and recession.  Marshall suspects that three possible motivations, one economic (deflation is a transfer of wealth from debtors to creditors), one moral, and one based on ignorance, are behind the neo-Hooverite conservatives.  Kilgore adds important context to what I wrote, pointing to justification for deflation from goldbugs as "synonymous with honesty and integrity and the sanctity of contracts."  He cites modern 'prosperity gospel preachers' and the notion that if you're smart, you're rich as moral codes that are uniquely American (see the validation of Warren Buffett and the super-CEO paeons in the 1990s for further evidence).
Matt Stoller :: Economic Growth is Political
Though Marshall and Kilgore primarily ascribe the argument I'm making as strictly utilitarian in nature (deflation moves wealth to conservatives, so they like it), my point was more that conservatives believe in a strict social hierarchy in which they are on top, and that deflation serves that end.  Conservatives are principled adherents to an aristocratic ordering, and they are not primarily driven by money or wealth but by a desire to preserve and promote a stable society with their own needs protected and serviced and the needs of those in the out groups placed in dependency.  Deflation, like tax cuts for the wealthy or busting unions or gutting trial lawyers or breaking net neutrality or preventing universal health care or mobilizing the state for wars of choice or undermining civil liberties for those in the out groups while increasing it for conservatives themselves (see Sarah Palin's notions that her first amendment includes preventing criticism of conservative figures), serves that end well.  The economics is in service to the principle, in other words.  It's not a dry technical science.

As we redefine the economy, which is what we will have to do in this mini-depression, we are going to have to debate the question of how to use our resources.  And what the right wants is to get a bunch of resources for themselves, while making sure that everyone else is placed into some form of dependency.  The challenge is to convince progressive elites that this is the basic frame for the debate.  Currently, economists tend to self-identify as 'experts' above politics, even Barack Obama argues that we need an administration that makes decisions without partisan bickering in the mix, decisions based on common sense and expertise, begging the question of whose common sense and whose expertise he means.  Treasury Secretary designate Tim Geithner, neck deep in the decisions that led to the financial crisis, is going after Sheila Bard, one of the only principled high profile regulators who got it right, for not 'being a team player' when she tried to extract concessions to help homeowners as a condition for bailing out Citigroup.  

If economics is a moral question with different competing groups, then the question here is whose team is Geithner on?  He would say he's trying to make good policy without regard to ideology, but does that construct make sense?  People disagree on what good policy means.  Some people think women should focus on child-rearing and the natural family state is a nuclear family, some people think that child-rearing is a community endeavor.  These are different ideas, and they have different policy consequences.  There is no 'good' or 'bad' here, only value systems.  And yes, some people think that poverty is a sign of moral character, and others take a systemic analysis.  Their economic frames are not coincidences but reflections of this.  Single white people who move to cities are liberal, white couples in suburbs are conservative.  In other words, we disagree on lifestyle choices, and when a society has to make choices about how resources are used and institutional arrangements are ordered, there is no escaping from politics.  That's how we decide these questions.  

Suggesting that someone is not a team player or that they are too ideologically is simply a power play couched in the dishonest frame that we all agree on everything except for pesky and dangerous irritants, who are called everything from 'not team players' to terrorists to extremists to liberals.  Note, for instance, how Tim McVeigh or anti-abortion bombers are not really discussed as a terrorists, since their radical anti-government ideology is not particularly threatening to elites, while eco-terrorists that have no measurable impact on anything, or even simply union leaders are regularly compared on television to organized criminals by powerful groups like the US Chamber of Commerce.

How do conservatives get away with this?  How do their frame their choices as dominant non-ideological and done in the name of American progress, while liberal arguments that have consistently been proven prescient over such public disasters like Iraq or financial deregulation are regularly sidelined as ideologues?  It's a difficult question, and there are many component pieces.  But essentially it has to do with how the story of America is controlled by elites that, whether Democratic or Republicans, organize their thoughts around legitimizing their own power.  

One fundamental human need is to justify your own actions with meaning.  It's nearly as powerful as hunger, thirst, sex, or breathing, and religions have been with us for thousands of years.  Consider how wealthy and powerful people explain to themselves why they are wealthy and powerful.  No one ever writes a story in Forbes listing the 50 luckiest CEOs.  Wealthy people tell themselves they work hard, they are smarter and more deserving, they take risks, and their positions are justified by their courageous ability to seize opportunities others were too meek or stupid to see.  Telling an effective story to yourself is a way of justifying follow-on actions.  "I am successful because I studied hard in law school and lawyers do valuable work" provides the meaning that allows for confident assertions that our legal system is just and that defending large corporate law firms is useful work, whereas "I am successful because I was not the child of a drug addicted teenage mother" does not.  Both are true, controlling the context by which lawyers justify their own actions controls to a large extent what avenues of law they choose to pursue and develop.  

The story of America told in post-war 20th century textbooks is not one of randomness, idealism and injustice mixed with bounty, or even conflicting notions of patriotism, it is one of controlled and inevitable progress.  It's not a coincidence that the most prolific philanthropist on the left is George Soros, who understands that this narrative is incomplete, since he grew up in Nazi and Communist controlled territory as a child and understands that cultural rules are often arbitrary.  How you tell a story is extraordinarily powerful, and switching narratives is extremely painful.

The notion of inevitable progress is embedded in the educated white liberal world.  When I started blogging, just after a great and fulfilling college experience, I had this notion in my head that the breakdown of our political consensus was due to a communications problem.  Democratic leaders did badly because they didn't communicate with the grassroots, and vice versa, conservatives wanted small government but wouldn't work with Democrats that wanted to shrink military spending, Republicans were betrayed by Bush, racism was in the past, etc.  Progress is inevitable in this country, it was only miscommunication holding it back - we've figured out economic growth, Keynesian stimulus, science, computers, etc.  America would soldier on, justly in most cases with a few errors here and there, but the best in the world, despite what some reactionaries on the left might add.

Among the dumber decisions in my life - and a direct result of this frame - was my support of the war in Iraq.  Sure I had all the requisite liberal nonsensical 'go to the UN' qualifiers in there, and my support turned quickly against it before the conflict actually started, but in essence, I just sort of trusted American elites and abrogated my duty as a citizen to be skeptical towards those in power.  And eventually, as I've worked in politics for five years, I've seen that the higher you rise the more likely it is that you deal with people who zealously believe in the righteousness of the modern American order, be it the current incarnation of the security state, a hardcore love of fruitless protests, a trust that media spotlights can change the world, or a strong belief in the righteousness of Republican or Democratic leaders.  The bailout was a good example of how this translates into policy terms.  Small dollar donors thought it was a bad idea, $2300 donors thought it was necessary, and $100k donors thought you were fucking insane if you didn't support a bailout.  Now, the bailout was meant to stop a bank run for billionaires, and it's obvious that Paulson is just taking the trillion or so in the pot for his buddies in the name of systemic support.  Screw the automaker unions, they are fat and happy with their hourly cost that rises to $60 or $70 an hour.  Imagine that, workers that are overpaid!  The nerve.

How did this happen?  How is it that we find a morally equivalent sin in irresponsible CEOs taking millions and workers getting a middle class wage?  And I don't mean elites, I mean most Americans, who do not support help for the auto industry.  It starts with marginalizing people like Michael Moore, Noam Chomsky, unions, Malcolm X, or perverting icons like Martin Luther King into safe Disney versions stripped of radicalism.  That is how elites keep their story dominant, it's how they keep journalism they control credible, disgraced CEOs in power, and a residual force of American troops in Iraq in place as some sort of nonsensical end to the war in Iraq.  If no one can tell a different narrative, then the default narrative is the only possible story to access.

But it's not just narrative, that's a tool.  It also starts with refusing to recognize that we really truly do disagree with our fellow citizens on how our country should be ordered.  If you don't countenance disagreement, then you'll get annoyed at people who 'cause trouble', and the dominant elite will be able to use norms like politeness to discredit left-wing political leaders like Pete Stark.  You'll accept technocratic sounding expertise without skepticism from people like Ben Bernanke, Hank Paulson, Tim Geithner, and Robert Rubin.  Since elementary school, as James W. Loewen documents Lies My Teacher Told Me, we're taught to see America as a story of individual success, an unblemished narrative of increasing freedom and equality for all, with no villains, only misunderstandings causing quaint long-dead traditions like slavery and segregation.

Americans really do disagree with each other.  A lot of conservatives really don't think that single women should be able to live in a city and have sex with whoever they want, and I don't think that conservatives should be able to teach creationism using public money.  This is not something that is reconcilable.  We don't agree on values.  And progressive policy priorities follow on those values; resources should flow to the disempowered through a higher minimum wage, a progressive tax system, punitive measures against those that externalize their costs onto others, etc.  Broad-based economic growth is important, not because GDP is good (who gives a fuck about GDP) but because that's a reflection of a progressive and fair value system that distributes power more evenly.  A recessionary deflation is perhaps necessary, argue conservatives, because it is precisely the opposite, it moves power upward, to those honest and sober individuals wise enough to use it.

Conservative economics is predicated upon hiding these aristocratic norms in dry technocratic debates, and convincing liberal economists and elites that radicalism and populism is dangerous.  After all, power in the form of complicated economic debates, should be held by a privileged few.  That liberal economist worked hard to get where he is, he learned a lot of math, and he deserves to make decisions based on what's right, not what's politically popular.  Arguing that poor people shouldn't have power is just not a reasonable narrative because it is a direct personal challenge to the meaning of aristocratic elites.  

Ironically, aristocratic elites must use progressive arguments for why they are the meritocratic choice for making resource decisions, they must argue that their choice to deny freedom to some increases freedom overall, that conservative elitists are anti-elitists, that taxes and regulations create 'dead weight losses' and privilege special interests, that unions reduce power for workers, that the science of climate change is on their side, and that liberals control the government and our culture.  The really believe all this stuff, so identifying how we disagree with them is tough, since their cognitive dissonance is so profoundly bound up in this series of progressive-sounding false narratives.

Frankly, though, the modern conservative construct is no different than the ideology of slaveholders, who gradually designed a cultural argument that slaves liked and needed slavery, though this collapsed as the Confederacy eventually tried to recruit slaves into their army with the 'reward' of emancipation.  Aristocrats must provide meaning, and in the American construct, one in which the thirteen colonies revolted against England on behalf of democratic norms, meaning can only be provided via a fake liberal framework combined with an out group, the modern out group being subsumed into anti-American Muslim terrorist radical homosexual corrupt elitist leftist.

So when you hear economic growth, or any such ideologically neutral term, recognize that buried in it is a series of norms that redound to the power of aristocrats.  The internet provides a vehicle to tell a different story, a competing narrative vehicle that does not require capital and/or power to access television.  And that's why the left is using this medium, because it is a more democratic cultural system than the broadcast-suburbia complex.  

So when you hear of experts preaching conservative arguments, be skeptical and take them not as knowledgeable credible sources, but as ideologues for the right.  And when you hear of experts on the left, make sure that you find out whether these people have sacrificed for their beliefs, however small that sacrifice might be.  Because the elite ideological indoctrination in modern America is extremely strong.  And as we go into this mini-depression, we will challenge it.


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Believe it or not (4.00 / 3)
There are those who believe that a world of haves and have nots is what God wants, as the haves prove themselves morally fit by attaining wealth.

God and/or the Invisible Hand (0.00 / 0)
 

[ Parent ]
Right (4.00 / 1)
That goes right along with the protestant work ethic that essentially founded this country, and that Max Weber famously wrote about. I guess it would be tricky to convince a certain part of society that others should have some as well, when they were seemingly granted their wealth from God.  

Stoller comes through. (4.00 / 6)
This stuff is why I come here.

Excellent post (4.00 / 2)
You even make the same points I'd make when countering a couple my quibbles* on this post.  Well done.

(*I think you confuse conservatives with the aristocratic leaders of the movement, like when you said the "right wants is to get a bunch of resources for themselves".  Many conservatives don't get those resources at all, but believe in a rigid power structure; a point you basically make elsewhere.)


wow - well said... (4.00 / 2)
Wow - this is one of the better essays I've read in a while.  Matt, you are really on-target here.  I am an economist by training, and I've been saying something similar to this (although not this eloquently) for a while.

Conservatives really are different from progressives, and we do really hold different values.  I believe that there is absolute truth, but that truth is not to be found with the so-called "experts", that's for sure.  Truth is something much more ephemeral than that, and anyone who tells you anything different is selling you a load of BS.

There is no such thing as a compassionate conservative.  Conservatives exist to conserve power for themselves, and power should not exist to be conserved.  We all have a responsibility to one another, and conservatives do everything they can to shirk that responsibility.


Yes, and here's a point that you always miss in these expert panels: (4.00 / 1)
if we just talk about policy in terms of cause and effect--I'm enacting this policy, in order to have this effect; THEN we can have a technocratic debate about what to do about it.

But you can't have that debate unless you've identified the problem and have decided in what direction you want to go.  And there is no objective way to do that step.  

Now that doesn't mean that you can go and give a trillion technocratic reasons why the Iraq war won't end with children throwing flowers in the street, and hwy it will require a lot of work to get the country together.  You can take something justified using corrupt conservative logic and still be able to say "LOOK!  It doesn't even do what they say it will do"

But it should still be said that their goals are fucked up, too.


[ Parent ]
One of your best posts, Matt. (4.00 / 3)
You tie a lot together.  I especially like this:

Conservative economics is predicated upon hiding these aristocratic norms in dry technocratic debates, and convincing liberal economists and elites that radicalism and populism is dangerous.

It's the whole pragmatic bs.  All policy choices involve winners and losers and are inherently political.


The Pie is shrinking (0.00 / 0)
And as it shrinks, the political struggle will be about maintining your size of the pie as the overall pie gets smaller.  For the past 25 years or so, the Pie has always been getting bigger, so our politics basically condoned the rich getting a bigger and bigger slice as everyone else's slice basically stayed the same in absolute terms, but smaller in relative terms.  This is Dworkin's ethical justification for the massive inequalities in a capitalist economy- as long as it makes the poor slightly better off (or no worse) than its OK for the rich to become much better off.  


well (0.00 / 0)
For the past 25 years or so, the Pie has always been getting bigger, so

Kevin Phillips persuasively argues that this is not so, that the stats saying this are essentially falsified.


[ Parent ]
depends how we define pie (0.00 / 0)
but Kevin Philips makes a lot of good points in that respect.  

if you want to say the "pie" hasn't gotten bigger since the end of stagflation, ok.  but my point is the same: the pie is going to get a lot smaller now and politics will now be defined by the struggle over the distribution of a shrinking overall pie, not the struggle over the distribution of a pie that is staying the same size or growing.  


[ Parent ]
Good Post (0.00 / 0)
I agree with almost all of it, and what is more I think it is an important thing to say.

The one thing I do disagree with is the claim that disagreements rooted in differences in fundamental values cannot be reconciled.  It is certainly possible to acheive political reconciliation.  I have fundamental disagreements with pro-life people I know about what makes a person morally valuable, and so whether we should protect fetuses and embryos by applying coercive force to women.  And while I have managed to move only a few people away from a strong pro-life position before (so move them towards a view where first trimester abortions should not be restricted, which is basically what Roe says anyway), I have had much better success taking away the political disagreement.  A lot of pro-life people I know are much more left wing on almost every other issue (this might be from living in cities and college towns my whole life), so when I have gotten them to deprioritize their commitment to the pro-life plank, I have effectively moved them well to the left politically.  

And such deprioritization is pretty easy to do.  Point out to them that for some reason the Republicans always dissapoint them when it comes to judges when the republicans are in power.  Point out to them that the real leadership of the republican party doesn't actually care about abortion.  Point out to them that the protections afforded by Roe are overwhelmingly popular in this country and that any party which overturned Roe would suffer tremendous political losses.  Essentially you need to point out to them that supporting the Republicans does not actually help them with their cause.  Then, despite the fact that they think the abortion issue is of central moral importance, they come to realize that if they want to get movement on that issue, it has to be done by convincing more people to come around to the pro-life position, i.e. more grassroots work and less electoral work.

Also I think genuine revision of a person's deep values are possible.  Just incredibly hard to pull off.  But people do experience religious conversions.  Plenty of kids go to college and change the moral view to which they subscribe.  It can take a long time and it takes really knowledgable people who are gifted communicators, but such disputes can sometimes be resolved.  What that means is that resolving them is a bad goal to have for political organizations (too many resources would have to go in with a low likelihood of success), but probably a good goal to have in private life.  The first strategy is a good one for political orgnizations to try though.


well (4.00 / 3)
Also I think genuine revision of a person's deep values are possible.  Just incredibly hard to pull off.

Depressions help.

But I think that this misses the point a bit.  Winning new political coalitions is not about convincing people that they should take your side on a charged issue like abortion, it's about changing the framework of a debate and discrediting their storytellers as fundamentally untrustworthy.

Nixon created abortion as an issue to bring working class hardhats into his coalition; before that they were Democrats who voted on an economic frame, but Nixon's effective story about liberal elites and the nature of the civil rights movement helped turn them.  Some pro-life advocates will switch if they learn that progressive policies help reduce abortions, but a good number of their leaders are just using pro-life arguments to advance a conservative hierarchy.  Remember, conservatives use liberal rhetoric, like valuing every life, to advance aristocratic privilege and a rigidly hierarchical society.


[ Parent ]
I took myself to be agreeing (0.00 / 0)
with this point in my comment.  The kinds of institutions we create and join for the purposes of political activity are not well equipped to do the job of changing someone's deep values, nor do they need to.  But I do think it is useful to do the kind of thing I described as ending the political disagreement.  I think you can move a lot of people away from the republican coalition by pointing out to them that the republican leadership treats cultural conservatives as a bunch of rubes who can be led around by whoever owns the biggest bible.

[ Parent ]
excellent post (4.00 / 1)
a little more sociology:

As people gain in wealth, status, fame, or other sorts of power, they tend to become more conservative.  Also, as they increase in age.

(except sociologists -- they tend to become more liberal).

--Wm. J Goode, Stanford class lecture on Class, Status, and Power , sometime around 1985-87.

The underlying notion, I believe, is that people who do well at a game are more likely to think that the game and it's rules are great.

Also, people tend to adapt to the norms and morés of the culture they find themselves in. As you become wealthier, you adjust your thinking to match that of your wealthier friends, for example. The wealthy and powerful actually do see themselves as "civilization", the thing that society should organize and expend resources to preserve -- and they have more power and wealth to make it so, and to legitimize the notion. Let this go on long enough, and you have an aristocracy.

That's why I've always like the Founder's notion of Checks and Balances. Power is useful and important; too much power in any one group's hands should be checked.  


This is a fundamental problem with academia (4.00 / 2)
the way that almost everything in acedemia is done is completely broken.  But the people making decisions about how academia should function are the ones that are the gatekeepers to reform.  

[ Parent ]
yeah it took me a while to realize that knowledge production is an industry (0.00 / 0)
with a political economy to it.  but it is.  and i'm going to go into it!

hopefully with some self-awareness and belief in labor rights. :)


[ Parent ]
Don't mourn, organise! (0.00 / 0)
You're based in London, right? I assume that means SOAS, but I haven't really been here long enough to know what does which courses where.

In that case, definitely look at the UCU. I've heard good things about it (and it certainly can't be worse than the thoroughly spineless NUS). And, please, fight the good fight. As a wannabe specialist in medieval Scandinavia, I think I'd far too marginal to ever have any effect if I took industrial action.

Forgotten Countries - a foreign policy-focused blog


[ Parent ]
work where you are :) (0.00 / 0)
when i was an undergrad in the u.s., there was graduate student organizing that I wish I had done more to support, in hindsight.  but we did challenge the university's power structure at a time when  the university as corporation model was in full force.  I think it helps. :)

anyway, i'm not mourning though i am trying to figure out where to go with all this.  i do think that no matter what your academic specialty, looking at academia in a political context helps you understand that the function your perform in your job (studying medieval scandinavia) and the function you perform as a member of a social institution (student, research student, faculty member, etc.) are separate.

And of course I try to do my share over the internets :)


[ Parent ]
See, I think the problem is a lot more fundamental (0.00 / 0)
The entire way that the structure is set up, with tenure, to endless time at grad school, etc.  was designed for a very different age.  The assumpion that we're willing to completely put our lives on hold until our mid thirties is patently ridiculous.  Back in the days when you had a smaller university system, fewer people jockeying for publications, and eveyone was a male with a housewife, it was much less insane.

But those days have been gone for several generations.  I'm seriously considnering getting my doctorate and just outright leaving academia entirely.


[ Parent ]
well that's one option (0.00 / 0)
but regardless of whether you stay in or outside academia, you've identified a problem - and there are ways to address it - this is why one of my interests is looking at the political economy of knowledge production - to understand both how it influences what knowledge is produced as well as to figure out where the structures can be challenged towards better ends (as part of a broader strategy of social change).

[ Parent ]
fabulous post (0.00 / 0)
A recessionary deflation is perhaps necessary, argue conservatives, because it is precisely the opposite, it moves power upward, to those honest and sober individuals wise enough to use it.

Conservative economics is predicated upon hiding these aristocratic norms in dry technocratic debates, and convincing liberal economists and elites that radicalism and populism is dangerous.  After all, power in the form of complicated economic debates, should be held by a privileged few.  That liberal economist worked hard to get where he is, he learned a lot of math, and he deserves to make decisions based on what's right, not what's politically popular.  Arguing that poor people shouldn't have power is just not a reasonable narrative because it is a direct personal challenge to the meaning of aristocratic elites.

I think that this gets to the heart of a couple of real issues that you discuss in depth but don't address directly - namely a) does the U.S. elite in bulk still believe in capitalism; and b) in what form?

I would argue thhat it does, which is why what is left of Republican economic ideology was rejected (what you refer to broadly as "conservatism") by nearly everyone, including most of the rich, and the Democrats are largely now the pro-market party, with a very few exceptions here and there that might qualify as populist.  This was hard for me to realize, because I didn't underestand that the people who were speaking in the language of the market (market fundamentalists) were the people who believed in it least - and in fact were interested solely in profit taking of the kind you describe (and which is much broader than this - it extends to the Bush tax cuts, to the war in Iraq, and other things which are seen as "insane" - namely because they cut directly against the interests of sustained growth in the capitalist economy).  Meanwhile, the people who were portraying themselves as 'progressive' were mainly pro-market (which is why you need a woman/Black person/etc - you have to provide some progressive angle to what is basically a pro-market, "stationary bandit" set of policies to replace the roving bandit policies of the last 8 years).

Anyway, all this is to say thank you, and I hope that you develop and expand on this further in the future.  It's really really interesting.


Growth can't be our focus (4.00 / 1)
Excellent post, but there is another dimension to growth.

Economics cannot be centered on growth in a finite world.  Globally, we have pretty much reached the limits of economic growth, due to resource constraints and capacity to absorb waste (primarily greenhouse gasses).

To me, that means a just economics going forward must be based on redistribution (there, I said it!), since growth to "raise all boats" is no longer an option.

You thing the conservatives don't like growth?  Wait 'til they see the only sustainable alternative -- redistribution.


Excellent post (0.00 / 0)
This is why we fight, this is why we can be vitriolic - because we disagree on a very fundamental level with our ideological opponents, and where there is no common ground, there is no chance of true negotiation.

And that is why bipartisanship in the Washington sense of "can't we all just get along" is so pervasively awful. We can't get along. We MUST NOT get along. If we did, where would the democracy be?

Forgotten Countries - a foreign policy-focused blog


Whether "Progressive" or "Conservative" (4.00 / 1)
for Americans there is no wrong way of doing things, only wrong outcomes.

As a self-styled Freudian Conservative, I agree with your insight into the motivations of the aristocracy. I would even go along with you in calling it wicked.

But I scanned your piece for the same analytical prowess turned towards other segments of society and didn't see it. So I will fill in the gap: the non-aristocrats aren't good either.

We could say with the Christians that all men are sinners, or we could say with Hamlet that 'judge each man after his own deserts and who shall escape a whipping', or we can dress it up in post-modern verbiage, but the reality is the same.

Morality, like all other multi-factorial human traits, distributes itself along a bell curve. Some people are good, some people are evil, but most people are just normal folk. Where you err is in thinking that your partisans cluster along the good side of the curve, and the other guy clusters along the bad side and you fight for/over the folk in the middle.

Note the the Fountainhead of evil in our time straddles this divide and Moses-like raises its hand to advance left one day, and right another while devouring both.

So that one minute they are free-market and the next minute they are nationalizing their business on the backs of the poor.

So don't blame it on an ideology.


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