Updated: Sep 10, 2020
Or, Tired Old Narrative(s) is Fueling the Protests: Change It!
From Pietsch (2020): On Saturday night, a caravan of supporters … traveled through Portland, Ore., and clashed with counterprotesters. A man was shot and killed during the unrest. Image Credit: Mason Trinca for The New York Times
Seeing images of protests, and reading about evidence of provoked violence between people on the extreme Left and people on the extreme Right, and listening to the vitriolic discourse between Democratic Governor(s) and Mayors on the Left and a sitting Republican President on the Right, reminded me of the story told by Lakey (2017), and, also by Wise (2015). Focusing first on Lakey (2017), I am zeroing in here on what specifically happened in Norway, because it is the main source of my gene pool, and experience, so I can identify with it. All of my Norwegian ancestors (and, I had some Swedish ancestors, too, with similar experiences) emigrated from Norway (along with thousands of others) during the period 1890-1920 because of the poverty; lack of economic opportunity; extreme concentration of wealth and power in an elite, all leading up to what happened in the 1920s and 1930s. By that time, any semblance of good capitalism had collapsed in Norway. Political turmoil and protests were both regular occurrences. And, recent event: Norway #1 in the Social Progress Index, just released in early-September (https://www.nytimes.com/2020/09/09/opinion/united-states-social-progress.html?campaign_id=45&emc=edit_nk_20200910&instance_id=22054&nl=nicholas-kristof®i_id=573053&segment_id=37736&te=1&user_id=dad75bd033697c775464a0050f1f312f ) Why is the US 28th, even though the per capita income, on average, is the highest on the Spaceship? Well, it is quite easy to understand, actually.
So, what happened? Why is the US 28th? Well, as Metaeconomics makes clear, it is easy to see why the US keeps slipping, and political economic turmoil is the symptom, which arises whenever the essential balance needed for a good capitalism is lost. With bad capitalism the driver, as economic history makes clear, the extreme Political Left and extreme Political Right always appear on the scene, both bringing forward Zombie propositions and promises that do not work. It happened in Norway; they found a way to fix it. And, now Norway ranks #1.
And, clearly in rank #28, America needs some fixing: Neither extreme currently being considered, as represented in the protests, can restore the American Dream (which is fundamentally what is at stake in said protests). The Dream had real content during the 1930s -1960s period, during which time right&left jointly worked with business and industry, together, to make it real. Unfortunately, progress toward making that Dream a reality ended for most by the late-1960s. Since the early-1970s, realizing the American Dream has been possible only for a very few: It is the reason for the protests, at least that is my story in this Blog. It is a story which we will now try to make further sense of, with the help of the approach suggested by Metaecononmics --- a close relative of Viking Economics, which has helped achieve the Scandinavian Dream (which the US might consider, as argued in Lakey, 2017).
Restoring the American Dream will require a substantively different economic and political narrative from that in vogue since the early-1970s, especially different from the narrative of the last few years. The new narrative is about Making America Think Again, about what actually works. That is the overall theme of my story. So, hang on, here we go.
Lakey (2017) points out:
In the 1920s and ’30s … Norwegian fascists (on the extreme Right) openly paraded and spewed their anti-Semitism, embrace of violence, and hatred of democracy. At the same time, Communists (on the extreme Left) were agitating for dictatorship of the proletariat. Cities and towns—even families—were split (loc 3245-3246).
The Norwegian politician Vidkun Quisling (on the extreme Right), an admirer of Hitler, organized a fascist party in 1933. Its uniformed paramilitary wing sought to provoke violent clashes with leftist students. When fascist violence had occurred in Germany, other German political parties formed paramilitary units of their own, precipitating more injuries and death. The reactivity of the Left and its willingness to unleash counterviolence reduced its ability to win over the Germans sitting on the fence, who were understandably frightened by the nation’s descent into violent chaos.
Norwegians did not follow the Germans’ example of organizing counterviolence. Instead, the progressive movement of farmers and workers, joined by middle-class allies, continued to wage nonviolent direct-action campaigns and to grow their base … . In other words, most Norwegians did not allow Quisling to choose the arena of struggle, nor to define the rules (loc 3305).
Further, the Norwegian Left understood that Quisling was a symptom, not the cause of the mess Norway was in … Rather than obsess about the symptom, progressive Norwegians focused on the cause, which was primarily the dominance of the economic elite. Norwegians challenged that dominance by targeting the elite in nonviolent campaigns for specific, widely shared demands. The campaigns multiplied and the movement gained strength behind a broadly united vision. So many people joined the growing nonviolent direct-action campaigns that Norway became ungovernable by the economic elite. Quisling reportedly held discussions with military officers about measures to crush the campaigns. The stage was set for a fascist “solution.” Instead, Norway broke through to a social democracy… (loc 3315).
Fortunately, a critical mass of people in … Norway chose a creative response to the tension. And that decision ultimately gave rise to (one of ) the world’s most progressive nations. Their creative response had four dimensions: Gaining a rough agreement among the Left on a vision for a new society; using cooperative ownership models to prefigure that vision; practicing inclusivity; and, maintaining a commitment to nonviolent struggle. Nordic organizers and educators achieved majority support for an alternative vision to the one that was failing them. They found that harnessing the positive energy of a paradigm shift (note: read narrative shift) added to the power of their movement (loc 3245-3256).
Lots of disturbing (and encouraging) correlations with what is happening here in the US: Just replace the term Norwegian fascists with US extreme right wing, who appear to be in the main authoritarians with intolerance for racial, political, and moral diversity (the three main features, see Stenner, 2005, with most authoritarians on the Political Right, but there are quite a few on the Political Left, too: Authoritarians tend to be in the extremes); said people on the Right also tend to demonstrate quite extreme ego-centric framing (Wear a mask? Not me!); said individuals also self-identify with a narrow view of what the American Flag stands for, meaning only justice for the favored few; and, apparently believe (or are unaware of what might happen if we move to) an authoritarian capitalism with a fascist twist will somehow be better than the (bad) capitalism we have now.
Also, replace Norwegian communists (in the story) with US extreme left wing, authoritarians with collectivist aspirations, likely to be extremely empathic-centric, who see little in the way of individualism being a good thing. Said group also seems to believe that some kind of authoritarian capitalism on the left (e.g. China is an authoritarian capitalism with communist tendencies) is going to be better than the bad capitalism we have now.
And, I will let you replace Norwegian politician Vidkun Quisling, and who is being admired by Quisling, with whatever US politician(s) you would like to insert, including who you wish to substitute for Hitler, who Quisling admired. And, if you cannot think of anyone --- the US politician(s) and which authoritarian world leader(s) is being admired --- I have a suggestion or two.
One last thing: Most Norwegians did not buy into either the extreme on the Left or the extreme on the Right, in that reasonable Norwegians saw clearly that the real problem was actually economic. The real, deeper problem was extreme inequality in income, wealth, and power: The economic&political (and, I use the “&” here to mean jointly intertwined, each feeding on the other, the ultimate in crony capitalism and oligarchy) elite were running Norway, with the middle class having little wealth or power. Poverty was wide-spread, with the wealth concentrated in the economic and political elite, who the fascist (s) were assembling and concentrating even more. That is why my ancestors left, and, it is a good thing the US Wall had not yet been built!
To provide some empirical content, to help understand the story, using the Portland, OR, protests as a case in point, Pietsch (2020) reports (in italics here):
On Saturday night, a caravan of supporters … traveled through the city, clashing with counterprotesters. A man was shot and killed during the unrest…. Supporters of the president gathered on Saturday at a shopping center a few miles southeast of Portland. The caravan of hundreds of trucks then traveled into the city. Most were flying “T____ 2020” or thin blue line flags, which are commonly associated with support for the police and often seen as antithetical to the Black Lives Matter movement. The caravan clashed with counterprotesters at times. People shot paintball guns from trucks and protesters threw objects at them. Some conflicts devolved into fistfights in the streets. A video showed a small group in the street, where gunfire erupts and a man collapses. …. Medical responders arrived at the scene and determined that the man was dead, the police said…. man’s identity has not been released …. He was wearing a hat with the insignia of … a far-right group based in the Portland area. The group says it seeks to combat “corruption, big government and tyranny, using God for strength and the power of love…” In recent weeks, right- and left-wing groups have clashed. On Aug. 22, a demonstration outside the U.S. courthouse in Portland turned violent as right-wing demonstrators, … , clashed with Black Lives Matter protesters. Objects were thrown, paintballs were fired and shouting turned to shoving and punching. … Last month, camouflaged federal agents were sent to the city, against the wishes of the local authorities… Mr. T____ has not spoken specifically about the shooting death in Portland, but on Sunday morning he retweeted a message that said Portland “needs to be federalized at this point.”
The Portland Mayor retorted, in a news conference later that day (August 30, 2020, “It’s you (that has created hate and division)” and “ … (what is needed is for) T_____ to be stopped.” Perhaps, so. The Norwegians stopped Quisling. So, if you still are having trouble filling in the blank after removing Norwegian Quisling from the story, with some US politician, the “needs to be federalized…” may be a clue: Quisling was planning to send in the federal troops to “fix-it” in Norway, too. It would have been impossible: Peaceful, nonviolent protests involving virtually everyone in the middle of the Norwegian political spectrum stopped it. Quisling backed off. Perhaps there is hope in the US, too, if the focus can be shifted from crushing the protests to fixing the underlying causes of the protests.
Now, admittedly we need to be careful here, as not all the Right wing supporters in that caravan are authoritarian fascists (just like we cannot presume everyone from the Left wing are communists, "anarachists," or any other kind of particular "ist." I have quite a few friends, relatives, and neighbors who are supporters of the Right who clearly are not of that frame of mind, as well as lots of the same kind of people on the Left who just want to deal with the underlying causes. Good reasonable people on the less extreme Right and Left are needed to provide stability: It is essential to avoid the extremes.
Yet, it does seem reasonable to guess that the group from the Right that did participate were quite extreme, in that joining a caravan wearing camouflage; some with weapons, concealed or not; and, also, a young man coming fully armed and actually shooting someone (not the same protest, but the same mindset), perhaps represents authoritarian fascism at work? And, protestors on the Left, concerned with eliminating injustice in the policing and judicial system --- perhaps some are communistsn or other "ists" --- it is not clear.
What is clear that most of the non-violent protestors, nationally, if not in Portland, might be more accurately characterized with what we might say as “woke” in the sense of seeking to reduce racial and social injustice. And, sure, the Left has a broader plan, too, also pushing for more of a helping hand in health care; in education; in housing; in access to adequate food; and, most importantly, in access to higher paying jobs (which is likely the main reason there is also a caravan of those on the Right, too, when you get right down to it: Decent paying jobs, please, which the old narrative cannot produce) that can provide both a decent living and a decent retirement; as well as for attention to sustaining Spaceship systems.
It was said kind of list that drove the Left in Norway, in consort eventually with a large contingent from the moderate Right, to join together in shared community (Metaeconomics refers to it as the shared other-interest) to build a better, a good, capitalism. Socialism, but not communism, perhaps? Well, that might work better, as long as we also introduce Scroogism on the Right to clarify what is at issue, as in Scroogism vs Socialism, and the essential need to find balance, as in Scroogism&Socialism.
So, how do we make sense of it? As you might have suspected by now --- it is a Metaeconomics Blog, afterall --- Metaeconomics can not only make sense of it, but also suggest directions forward. Intriguingly, the Nordic countries provide a great deal of empirical (including ethical) evidence that the path framed with Metaeconomics holds a high probably of success, even in the US. And, why do I say, “even in the US?” Well, it is because the Economic Narrative that has brought the US to the point where citizens are protesting and fighting in the streets will not easily be replaced.
Also, my guess is that while racial justice in the policing and (in)justice system, and racism is still a player in the US, as in a deep and wide systemic racism, my contention is that the more fundamental reason for the protests is economic. And, it may take years to fix it: Sending in the Federal troops, and otherwise implementing an authoritarian style capitalism on the edge of fascism --- extreme law and order coupled with extreme economic oligarchy and cronyism --- which is the current trajectory, is not going to help. What is going to help? Changing both the economic and the political narrative, something more akin to what was done in Norway, and the Nordic Countries in general, could work. And, bottom line, getting a bit ahead of ourselves here: Give everyone the chance for enough income and wealth to live the American Dream --- come on, capitalists and political leaders, elite and otherwise, wake-up and build a Woke Capitalism --- and no one will be in the streets protesting: Look to the Nordic Countries, the Viking Economies, right now (see Lakey, 2017).
The overall context for the bad capitalism leading to the turmoil has come from an Old and Tired Narrative touted by the Neoliberals, and given some supposed “scientific” credence by the Chicago School of Economics, especially the Libertarian branch. It has also been given credence by the Public Choice School of Economics. More specifically, it all starts in the late-1960s to early-1970s --- intriguingly, right after the Civil Rights Acts and Voting Rights Acts, and, the attempt with more of a helping hand in the Great Society programs of the time --- with an early reference point the Friedman (1970) contention that The Social Responsibility of Business Is to Increase Its Profits. The idea was popularized in that magazine article, which went viral, as narratives often do (see Shiller, 2019). It still contributes to all manner of corporate responsibility and governance problems to this day.
The second reference point is in the early-1980s, reflected in the Reagan-Thatcher narrative that the market can do no bad and the government can do no good (the latter reinforced by the “science” of the Public Choice School of Economics, especially after Buchanan, see MacLean, 2017). Combining all three narratives --- business has no social responsibility other than to increase share prices, and the incestuous CEO pay; the market can only do good; and, the government can only do bad --- led to the political reality that both the US and the UK moved, to the Nationalist end of a new Cosmopolitan-Nationalist political spectrum, as represented in the current US President and the current UK Prime Minister.
And, that political shift to Nationalism was in turn driven by the massive resentment of the people (which led to blaming everyone who was different --- racial, political, and moral intolerance, and especially the new immigrants --- for it) arising from a bad capitalism, a capitalism that no reasonable person can go along with.
As Krugman (2018) disparagingly refers to it, said Narrative has led to what we might refer to --- with a bit of tongue in cheek, but it frames the picture well--- that of a Potemkin Economy, built on tax cuts that do not stir real investment (most of the recent massive tax break to corporations went to buying back stocks, driving up stock prices in the Potemkin Stock Market: Shareholders and CEOs are happy!); running on borrowed money, anyone can look wealthy with lots of borrowed money; a huge deficit; and misplaced trade policies and strategies, none of which has led to any long term, sustainable outcomes. It is built using a raft of Zombie economic ideas (again, some tongue-in-cheek, here, after Krugman, 2020) that do not work, especially the supply-side, trickle-down style of economics (also see Stiglitz, 2019), and even an attempt to eliminate the payroll tax (Social Security going down, anyone?).
All the Zombie ideas do one thing: Concentrate wealth and power. As a result, we have just made matters worse, contributing to an unparalleled distortion in the move to an even more extreme level of income and wealth inequality --- and associated distortion in political power --- not seen since the 1920s, right before the 1930s Great Depression: And, the 1930s are not exactly a time to go back to, which is where the Make America Great Again mantra is taking the economy. It seems people from both the Right and Left being in the street suggests as much? Again, sorry to say it again, but it is not an economy that people can go along with. It would be far better to Make America Think Again: That thinking needs to look to finding an optimal inequality --- inequality is inherent and essential in every living system --- staying way from the extremes. Find things that really work, rather than going on blind faith in ideologies.
As Payne ( 2018) makes clear, the America with said level of extreme inequality can never be Great, other than in a Dark and Depressed sort of way. In fact, the narrative of the American Dream was formed during a time when the idea of putting out a helping hand was on both Right and Left, during the 1930s -1960s period. It was the helping hand that made the American Dream possible (GI bill; safety net programs; FHA low-interest loans; low tuition rates due to government funding of trade schools, colleges, and universities; Social Security and Medicare; lots of infrastructure investment, like building the interstate road system; public investment in research, like the agricultural research that filled the supermarkets with high quality and inexpensive food, and the public funded research that gave the basis for the iPhone: Apple, maybe you should pay the taxpayer back?). Starting with the early-1970s, the American Dream was crushed, as the shut-down of government Narrative spread like a nasty coronavirus: It is now possible only for a very few. So, what can be done? Change the Narrative, albeit that is simpler said than done.
Actually, there are two Narratives that need to be changed. We have alluded to the need for a new Economic Narrative, which is the main story. But, as Paul Harvey always pointed out, there often was another important story intertwined with the main story. Metaeconomics helps weave the main story, drawing on Lynne (in press), which is about Tempering Excessive Greed. The rest of the story comes from Wise (2015), which is about how to move away from being Under the Affluence.
The main story --- which suggests the essence of the New Economic Narrative --- rests on the fundamental proposition that a capitalism-based economy must be something that everyone can go along with, a very old story that is still valid, which Adam Smith (1759/1790, loc 1714-1727) made clear, in The Theory of Moral Sentiments:
Though it may be true, therefore, that every individual, in his own breast, naturally prefers himself to all mankind, yet he dares not look mankind in the face, and avow that he acts according to this principle. He feels that in this preference they can never go along with him, … If he would act so as that the impartial spectator may enter into the principles of his conduct, which is what of all things he has the greatest desire to do, he must, upon this, as upon all other occasions, humble the arrogance of his self-love, and bring it down to something which other men can go along with
Unfortunately, economics departments and business schools have produced a managerial and business class that apparently never heard of the fundamental role of the Sentiments (or, rejected the idea in practice) in making a market economy, a capitalism, work for everyone. The impartial spectator is never elicited, the act of going to that station, and applying the conscience, searching for the best thing to do.
Adam Smith saw the Sentiments doing the tempering. Metaeconomics agrees, and makes it clear one must temper that self-interest with an empathy-based (the sentiments) other (shared with others, what everyone can go along with, yet internalized to own-self)-interest. It is then possible to seek an own-interest, which is only possible if one sees the need to provide a helping hand to the other --- as represented in that shared other-interest --- as we are all joint, interdependent, and non-separable. As Adam Smith (1776/1789, loc 239-251) says it:
…man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages )
Notice this is about seeking own-interest, as represented in a self-interest tempered by the shared other-interest, represented in the “almost constant occasion for the help of his brethren” who are not going to help unless it is on the common ground of the shared other-interest. It is about balance in self&other-interest. It is the shared other-interest among the butcher, brewer, baker and the consumer of the meat, beer, and bread that makes it all work, as it is that which everyone can go along with that facilitates each pursuing self-interest, which is possible only through balance in the own-interest.
So, sorry Chicago School and Public Choice Economics Libertarians: Your framework and theory is missing the point. It is not about self-interest only, whether in the market (Chicago) or the government (Public Choice). It is about an empathy-based other-interest, and it is through said empathy we also evolve a moral and ethical dimension that everyone can go along with. And, even more sorry, as McCloskey (2019, p. 93) makes clear, it does not work to be “fiercely opposed to any ethical reflection” as in the Chicago School. As McCloskey (2019) makes clear, ethical reflection is essential to a truly humane liberalism like that envisioned by the Enlightenment thinkers, like Adam Smith, and ethical reflection (and scientific reality) is essential to forming a good capitalism, and, as we stand today, saving capitalism.
So, is there any hope for a New Economic Narrative? Fortunately, it is starting to appear on the horizon in some parts of the business community, and, unfortunately, is currently missing in an anti-science and unethical government. In general, it works to address all stakeholders in business, not just the Friedman et al. focus on the shareholders. And, it plays well in a Metaeconomic sense, as it works to strike a balance in self&other-interest, person&company, company&community, and, ultimately, in market&government, for everyone under the flag, not just a favored few.
Sorkin (2019) points to the Jamie Gamble suggestion for new business rules ---and, I would add good rules for government, too --- a new narrative, all about the shared other-interest:
(corporations, business in general, would) “adopt a binding set of ethical rules, approved by stockholders and addressing the key ethical dimensions of corporate life” including:
■ Their “relationships with employees.”
■ Their “relationships with the communities in which they produce and sell.”
■ Their “relationships with customers.”
■ Their “effects on the environment.”
■ And their “effects on future generations.”
Another way to frame it all is with ESG, from Editors (2020):
… ESG criteria are a set of standards for a corporation’s operations utilized by “socially conscious” investors to screen potential investments. Environmental criteria, for instance, consider how a company performs as a steward of nature in abating climate change. Social criteria look at managing relationships with suppliers, customers, employees, and local communities. Among other things, governance deals with a company’s leadership, executive pay, and shareholder rights.
In Metaeconomic terms --- and consistent with the Adam Smith construct represented in the Sentiments which give context to the market and capitalism in general --- it is about walking-in-the-shoes-of-the-other and asking how-would-I-wish-to-be-treated, with the many kinds of shoes illustrated in the Gamble list and the ESG criteria. It is about forming a shared other-interest with every other group (including all creatures and functions in the Spaceship system), and tempering the primal tendency to self-interest with that which is shared. It is about tempering the primal tendency (and every person has it in varying degrees) to Scroogism. The new Economic Narrative has some variant on the ESG criteria influencing the way the economy evolves. In effect, the Economic Narrative asks for the ethical reflection that is missing from the dominant narrative --- that extreme greed is extremely good, without ethical reflection, without a sense that everyone needs to go along with it --- that has brought people into the streets, much like happened in Norway (and the other Nordic Countries) in the 1920s-1930s.
Now, for the rest of the story: Wise (2015) is important here. The plot thickens when we also address the Narratives characterized as Meritocracy and the Culture of Cruelty, both of which are especially part of the Friedman-Reagan-Thatcher Narrative about minimizing if not eliminating government while claiming the market can fix everything.
The main feature of the old Friedman-Reagan-Thatcher Narrative has been a long standing core ideology in America, that of meritocracy characterized at the core by rugged individualism (Wise, 2015, loc 346):
It is this notion—the idea that anyone can make it in America if they try— (and, it follows that, if) … one believes in this fundamental ideology of Americanism, it becomes easy to look at those who don’t succeed in life and conclude that they have no one but themselves to blame. Likewise, it becomes easy to view the successful as exemplars of hard work and inherent talent.
The meritocracy has even been extended, on both the Right and Left, to include a university education. If one is trained "in the school of hard knocks" or even in a solid, well orchestrated trade, as through a trade school, it is somehow not deemed meritorious (see Sandel, 2020).
Wise (2015, loc 3827) points out that many dimensions of Meritocracy now constitute a kind of cornerstone of a Culture of Cruelty. Horatio Alger characters in his books, are presumed endowed with the capability to be rugged individualists, including in more recent times even obtaining a university education, leading to said character(s) earning the right to be part of the meritocracy; everyone else is to be punished or otherwise discounted, held in disdain, until finding a way --- on their own, everyone for themselves, extreme individualism --- to become like that Alger character. Also, that cruelty frame tends to point to the myth of a culture of poverty --- as though people want to stay poor --- which as Wise (2015, loc 335) points out, is really a culture of predatory affluence, another form of cruelty: So, operating Under the Affluence is not only mythical, but predatory and cruel.
And, there is an education prejudice --- credentials awarded from going off to a university, especially an Ivy League University --- at work here, too. Like Sandel (2020) frames it, looking at the credentials aspect of Meritocracy as one dimension that needs consideration, perhaps we should:
... focus less on arming people for a meritocratic race and more on making life better for those who lack a diploma but who make important contributions to our society — through the work they do, the families they raise and the communities they serve. This requires renewing the dignity of work and putting it at the center of our politics.
And, please, go read Wise (2015) for more of the details: As he documents with plentiful scientific and experiential evidence, empirical reality in general: The Merit Class, everyone from Fox News commentators, who are regularly cruel, to include many politicians on the extreme Right, and even some on the Left who point to the Horatio Alger myth as though it is reality, in not wanting to provide a helping hand for the Horatio character to rise above it all. That Cruelty is displayed in everything from not funding health care; disparaging commentary regular put out there about, and working to eliminate, public education; looking down at the less educated, disparaging what are often essential jobs like garbage hauling, and even disparaging the trades; making it extremely difficult to obtain unemployment benefits, and shaming those receiving same; refusing to help pay for re-education when jobs vanish because of robots or from shipping jobs to low wage countries; shaming a poor child who was able to obtain an iPad, which might help that child someday become meritorious, just because it was purchased with funds provided as a helping hand; and shaming people on food stamps who need some help to gain access to adequate food.
Also, not to pick on Walmart --- other American companies are doing similar things, McDonalds being one of them --- but it is a glaring example of cruelty and excessive attention to the entitlement of the meritorious (documented in Wise, 2015): It is demonstrated in paying extremely low wages, such that many employees --- those vile and incapable, inferior poor people, who should just be thankful Walmart is giving them a job --- need food stamps to survive. Such governance is not only cruel, but it also shifts the financial burden over to the taxpayer who funds the food stamp program, in effect moving tax money into the pockets of the Walton family, who do everything possible to not pay taxes. Scroogism, perhaps?
Build a culture of compassion. Poor people are not inherently vile; unethical and dishonest; inferior in some fundamental racial, social, or less educated sense; and unproductive even thoug doing essential work. So, stop the culture of predation, taking advantage with extremely low wages, including even refusing to raise the minimum wage, which if paid with money saved at the top of the pay structure will make everyone better off. Move to a culture of empathy, with empathy working to temper ego, in the search of a new balance that works for everyone. mart? Just asking.
An old, well-known example of what raising wages, minimum and otherwise, accomplishes: Henry Ford increased the daily wage on the Model-T factory line from $1 to $5: And, we all know what happened. Factory line workers bought Model-T vehicles by the thousand, and, also built a better Model-T because $5/day gave them dignity, pride in their work. No more sabotage, putting out a faulty product to hurt Scrooge; rather, Scrooge gave a little, and everyone was better off. A more recent example, CEO Price, of a Seattle firm, went to a $70000/year minimum wage --- that which could give a decent living to all of the employees --- paid almost exclusively out of cutting the CEO pay. The company is booming (see $70000 minimum wage). People spend that minimum wage, that higher wage, and the economy does better for everyone. Overall, this new narrative is about moving to a culture of empathy, with said empathy going every direction: Employees of that Seattle firm chipped in and bought the CEO a new Tesla.
So, stop the practice of cruelty: It is not nice. Neoclassical Economic --- Microeconomics --- framing also indirectly enables cruelty, because it is a framework and theory without ethical reflection, and no analytical machinery for representing it. So, the conclusion is that the current reality of meritocracy and the culture of cruelty in the market is just the Invisible Hand at work --- we have to assume --- always doing the right thing, and, it is inherently economically efficient: Really? Adam Smith would not agree: He always pointed to the Visible Hand, made visible at the station of the impartial spectator, which would change things. Metaeconomics, too, points to the need for the Visible Hand. Also, analytically, economic efficiency can only arise with a balance in self&other-interest, and it may never occur with only the invisible hand of self-interest, especially if representing meritocracy and a culture of cruelty: Scroogism is not economically efficient.
As Wise (2015) convincingly argues, cruelty is the Narrative, punishment is favored over helping out (American prisons are full), all hidden in the Horatio Alger myth, a character doing it completely on his own. I am reminded of the history of the English and Scottish debtor prisons, about which I became aware during a sabbatical leave at the University of New England, New South Wales, Australia, and during that time reading the wonderful book The Fatal Shore. It was believed that punishment would fix the poor, get their attention to being meritorious. But, the Scroogism (Christmas Carol, anyone, written about Wales coal mines, which is sometime later, and still going on) of the time filled the poor-people prisons, so what to do? Well those prisons were emptied in the early-1700s through early-1800s, and poor-people, with cruelty the standard way to treat them, hauled first to the Georgia colony, and, then after Georgia was no longer available after the Revolutionary War, to Australia. The practice continued to about the time of the US Civil War. And, intriguingly, the punishment did no good. What did work was a helping hand: Releasing said poor, eventually, after they were sufficiently punished into being meritorious, into the booming new economies of Georgia (after the revolutionary war) and Australia (by the mid-1860s), which ensured most if not all could also have a chance at actually being meritorious. The helping hand of a frontier, with plentiful land and opportunity, is what worked: Not the prisons. That fact points to the empirical reality that it is not that the poor are some vile and inferior group of people incapable of being meritorious: The key is that said people need a helping hand to make it work.
The Culture of Cruelty has also historically had a racist twist. As Wise (2015, loc 365) says it “…racism and the manipulation of white racial resentment have been critical to stoking opposition to government programs to help those in need.” Welfare Queens (former slaves, that genetic origin always the imagery), anyone (the Reagan myth, as Wise, 2015, documents)? So, those with Merit --- the good (generally white, especially during the Jim Crow years) people in the good market --- have found ways to ensure that the Horatio character does not get a helping hand, in that they, afterall, did it all on their own. And, the fact they are now Meritorious, both successful and fully entitled to everything --- the entitlements are really more in the wealthy class than in the poorer people class --- they have managed to accumulate, justifies both racial and social injustice be maintained. Again, cruelty at work.
So, racism is also a part of the extreme income and wealth inequality, too. Having been born into the favored blond-haired, blue-eyed Norwegian group (as the POTUS framed it a couple of years back, like why aren’t we bringing those favored people in as immigrants; sorry, Mr. POTUS, Norway and Sweden are better places right now, and do not want to come), well, sure, it makes sense. I would just point out in thinking about all that: My Scandinavian relatives, mainly Norwegians but also quite a few Swedes, were given a huge helping hand when they arrived in the US: My immigrant ancestors were given hundreds of acres of farmland through the Homestead Act of 1862.
Now, they had to be industrious, Horatio Alger types to make it work: My great-grandfather who homesteaded 160-acres in the middle of North Dakota needed 7-years as a character acting out in a Horatio Alger novel, with demonstrated determination, and rugged individualism, to earn the deed, the private property right in that land. And, building a farm in the harsh conditions of North Dakota was no easy task. So, some Merit is due; yet, the US was not at that time pushing a Culture of Cruelty on the new arrivals. Merit was one thing; a Culture of Compassion (phrase used by Wise, 2015, the new Narrative he sees as essential) --- a helping hand --- to get it started was the other.
The other thing my ancestors brought from Norway (and Sweden) was a sense that we are all in this together, a sense of community. It was a community built on a Culture of Compassion --- in Metaeconomic terms, a Culture of Empathy --- something they had learned was missing in the Norway they had been forced to leave: The economic elite operated on ego-only, self-interest only, and it crashed the Norwegian economy. One result of the community, empathy framing the Norwegians brought with them to the US was the building of cooperative forms of business enterprise. I grew up in coops: We purchased virtually all of our farm inputs --- seed, fuel, fertilizer, and, machinery if we could, from a farm supply coop. We bought our electricity from a cooperative. We sold our livestock and grain through a coop. We purchased all the groceries ---things we could not grow on that farm --- through a coop. We bought all of our insurance through a coop. If there was a coop, we joined it, participated in it, and supported it, and, most importantly we built wealth in it. We went outside the coop only if it was something we could not buy or sell in a coop, and, there were lots of those things, too.
So, we also engaged with private and corporate business. It was a mix, a balance, in cooperative and privately owned business that made it all work, not just one or the other: No extremes, please. Intriguingly, the same group that built and participated in the coops also tended to be nonpartisan. It was not about Right or Left. It was about Right&Left, integrated, joint, using the best from both Political Isles. The result was the formation of the Nonpartisan League, a political movement that focused on problem solving, not on ideology (for the history, see Shoptaugh, 2019).
And, important here, to all the egoists: Acting with empathy is not a sign of weakness, which is also part of that American Myth of Rugged Individualism. In fact, someone acting with empathy needs more strength, in that ego is a primal tendency. It takes real strength to temper and otherwise bound the ego, especially when put together in the terrible three of egoism-hedonism-narcissism. Strong people can find and maintain balance. Weak people --- who are anything but rugged individualists --- run on egoism-hedonism-narcissism, which not only destroys the person, but everything around them, represented in dysfunctional families (lots of divorces; children with ruined lives, often turning them into egoists, too, due to critical and strict, authoritarian parenting: the authoritarians on the extreme left and right when they are older); ruined and bankrupted businesses, with disaffected employees, unpaid input suppliers; and, if they become political leaders, damaged or destroyed governments and the countries they are supposed to serve, not pillage and terrorize. The egoist, authoritarian fascists in Germany and Italy demonstrated it: It took a World War II to take them down, and restore balance.
Now, why is the coop significant to the current conversation about a New Narrative? Well, forming coops was one of the main ways that Norway (as well as the other Nordic countries) managed to move away from the extremes of Left wing Socialism and Right wing Scroogism, the latter of which threatened to go even further, to Fascism. A cooperative business structure could be used to wrench some economic power away from the economic elite, and provide some balance between capital and labor. People owning coops could build wealth, while also increasing their own income. Having an ownership stake in the company also means that if the decision is to sell it, the worker/owners also get something out of it, not just losing their jobs: Who owns the capital matters. A cooperative is a democracy at work within a capitalistic structure. It is a capitalistic business --- seeking profit --- run on principles of democracy. It is about seeking good balance in the ego-based self-interest focused on profit and the other (shared with others in the cooperative)-interest which often was priceless. It was all about a tempered capitalism, the tempering coming from the Culture of Compassion evolving out of forming an empathy-based other-interest shared widely.
Cooperatives still play a major role in Norway, and in the Nordic Economies in general, as documented in Lakey (2017). Cooperatives used to be prominent in the US: Like other things destroyed by the Friedman-Reagan-Thatcher Narrative, coops were “MBAed” to death, shifting the balance so much to the ego-based self-interest, profit-only side of the scale that they are no longer viable --- lacking in empathy --- cooperatives. And as an aside, with more details in Lynne (in press), the American Labor Union also died because of that same, old, tired, and Zombie idea in that old Friedman-Reagan-Thatcher narrative. Bring the unions back, but make sure they operate on shared other-interest, not self-interest only of the labor leader, which will also cause them to self-destruct: Balance, please. Perhaps even consider putting representatives from labor on boards of directors of corporations: Heaven forbid the use of principles from democracy in a corporation, the Scroogist says. And, there are many other ways to build offsets to power and influence, and to move to a more optimal inequality, an inequality that encourages invention, innovation, creativity, entrepreneurship, and rewards ambition, but does not destroy the community, does not destroy that which we can all go along with.
So, like Paul Harvey used to say, “now you know the rest of the story.” And, as you can also now see, it is a story that integrates nicely within Metaeconomics, in that empathy-based ethics --- focusing on that which we can all go along with, which serves to temper the arrogance of self-love displayed in self-interest only --- plays a substantive part in a Metaeconomics based market and capitalism.
1. Business must temper the pursuit of profit with consideration for paying an American Dream level of living wage to labor, that which can not only provide a decent living but a reasonable retirement; provide quality products to consumers; pay reasonable prices to input suppliers; see the fact that a business is embedded within a community of shared interest; and, recognize the fact that a business is embedded within the systems of the Spaceship, such that sustaining said systems is essential to sustaining the business.
2. The idea of minimizing government while maximizing the market is fundamentally flawed. Instead, it is all about balance, as in seeing a joint, interdependent, and non-separable market&government (a recent example the joint SpaceX&NASA success in building a space transport; an older example is the fact the supermarkets are full of high quality food because of AgMarkets&LandGrantUniversityResearch).
3. Move away from the meritocracy idea as an ideology (which has led to elitism, feeling entitled, with people who are not as rich and successful deserving to be treated badly, shamed), and move toward meritocracy as an ideal to which everyone is encouraged to strive: Work hard, be industrious, do it honestly (no lying, please). And, recognize it takes a helping hand: Help everyone become and stay healthy, industrious, hard working, educated to the extent essential to be productive, while recognizing not everyone needs a full university education; and, most importantly, stop thinking of success and wealth as producing an entitlement
4. Build a culture of compassion (need more Ghosts to visit Scrooge). Poor people are not inherently vile; unethical and dishonest; inferior in some fundamental racial, social, or less educated sense; and unproductive even though doing essential work. So, stop the culture of predation, taking advantage with extremely low wages, including even refusing to raise the minimum wage, which if paid with money saved at the top of the pay structure will make everyone better off. Move to a culture of empathy, with empathy working to temper ego, in the search of a new balance that works for everyone.
5. Build a new narrative around seeing the essential role of maintaining the incentive to make wealth --- and some are better at it than others, and need to be rewarded for it --- which then points to avoiding the extremes and finding an optimal inequality. There is plentiful scientific evidence that it can be done. For example, in professional sports teams, there is overwhelming empirical evidence that extreme inequality or extreme equality --- both reduce team performance. An optimal inequality maximizes team performance. Same is true in business.
Next steps? Hey, US Scandinavian readers --- especially all of you with shared Norwegian and Swedish roots --- perhaps you can help lead the charge? We have to fix it, as I don’t think the Nordic countries want a bunch of Americans coming back --- and if things do not change, we may have to emigrate back to our roots. Or, perhaps it is time to recall the lessons our ancestor immigrants taught us, and put them to work in saving US capitalism, like was done in the Nordic countries (again, see Lakey, 2017), and the democracy on which it depends. And, we Scandinavians like community: So, ya’al (I lived and worked in the southern US 20-years: I love that word!) come join us. Perhaps we can once again actually realize the American Dream.
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