How conservatives are turning against one of their core economic principles: efficiency
What if conservatives' longstanding obsession with maximizing GDP growth and efficiency has actually been a catastrophic blunder? Many leftists and progressives might respond, "Well, duh."
The news is that one of conservatism's big thinkers may agree.
Oren Cass is a senior fellow at the Manhattan Institute, a premier conservative think tank. Before that he was the domestic policy director for Mitt Romney's 2012 presidential bid and a prolific writer on matters of politics and policy. He has a big new piece out in the American Interest — coupled with a new book — that poses a pretty straightforward critique: "In making GDP growth and rising consumption the central objectives of public policy, economic piety represents a truncated and ultimately self-undermining concept of prosperity," he writes.
American discourse tends to treat gross domestic product as the catch-all measure for society's prosperity and well-being. But ultimately, GDP just measures how much we consume. As plenty of people note, the measurement tells us nothing about how consumption is distributed.
But Cass cuts even deeper: "What if people's ability to produce matters more than how much they can consume?"
This is a 180-degree turn from the orthodoxy that's ruled economic thinking — especially conservative economic thinking — for decades. As the economist Milton Friedman once argued, "jobs are a price" we pay to consume. According to Friedman, our goal should be to minimize jobs: to create as much as possible with as few jobs as possible. In other words, to maximize efficiency. And plenty of economists since have lamented American politics' fixation on "jobism."
But, as Cass points out, "Workers have no standing in this view of the economy; neither do their families or communities." People exist as both consumers and workers, but the orthodox view understands their well-being purely in terms of the former. Certainly, goods and services are one benefit we derive from the economy. But they're not the only benefit. The chance to participate in productive activity with our neighbors is a benefit too. Partially, that's because a job is one of the main ways our society distributes money. But doing helpful things for our fellows — which is all a job is (or, at least, what it's supposed to be) — also binds communities together, giving people a place in society and a sense of purpose.
To the casual observer of American politics, Cass' observation might not seem all that remarkable. Indeed, President Trump's own enthusiasm for "jobism" is a big reason why he infuriates many conservative intellectuals and wonks.
But whatever politicians may shout on the campaign trail, when it comes to the actual design of American economic policy, Friedman won the argument.
For decades, U.S. trade and currency policy focused on "growing the pie" while ignoring workers. Our antitrust policy has basically allowed any level of market concentration as long as consumer prices don't rise. Corporate governance focuses on acquisitions and layoffs to maximize shareholder payouts. As Cass points out, national GDP increased threefold from 1975 to 2015 as America's social fabric came apart at the seams: wage stagnation, rising financial instability, divorce, mortality, suicide, the opioid crisis, etc.
The failure has also been pretty thoroughly bipartisan. Democrats as much as Republicans advanced the globalized trade push of recent decades. They eagerly held up education as a cure-all for looming inequality. And many liberal wonks are responding to the death of small town and rural economies by suggesting that we just pack everyone into cities. What all these ideas have in common is the underlying assumption that people should be remade to fit the work the economy offers, rather than the other way around.
Of course, Cass has a few blinders of his own.
He doesn't talk much about the welfare state, but what he does say is unconvincingly dismissive. He also completely misses how monetary and fiscal orthodoxy — championed overwhelmingly by his own party — conspire to keep demand for labor permanently low. He blames our college obsession on a cultural turn in public education, rather than on employers placing absurd demands on potential hires. He also unsurprisingly adopts the right's anti-immigration fervor, mistakenly assuming immigrants drive down wages and job opportunities for American workers.
All that said, the greater thrust of Cass' argument — that the chance to work is at least as important as the chance to consume — is welcome. And if anything suggests the time is ripe for Republicans to hear what Cass has to say, it's Trump's ascension to the White House.