A recurring moral question for the wealthy is 'how is it right that I have so much, when so many have so little?' The people in the older capitalist class, who used to all vote Republican, could point to a prosperous working and middle class, factories full of the latest goods which were loved by the people who bought them, and a certain amount of philanthropy. In 1953 Eisenhower nominated Charles Wilson, the President of General Motors, to be his Secretary of Defense. During his confirmation hearings was asked if he could make a decision that was bad for GM, he famously replied '“What’s good for GM is good for America.” (Readers here will not be surprised to hear that what the press reported him saying isn't exactly what he said.) For the first few decades after the Second World War, the American business community was united around centrist policies that were in the broad national interest. This behavior was certainly self-interested and pushed policies that were far more favorable to the elite than they were to the working class, but at base business leaders recognized that their interests and the country’s went hand in hand. Since one way to look at the industrial economy is 'convert hydrocarbons into wealth' the elites of this time spent a lot of their time politicking, politicking on the international stage about Oil. Some of what they did there was dreadful, and at this point in time it was the Left that was arguing against these political policies, and at the same time saying that the working class deserved a bigger slice of the wealth created.
But something happened in the 1970s. A new class of business leader emerged, one that was internationalist and which did not believe that their interests went hand in hand with everybody else's. They put their personal interests ahead of those of everybody else's and indeed denied that there was a national interest, or that if there was one, it was shameful. Forbes talks about the problem here: https://www.forbes.com/sites/gautammukunda/2020/06/05/whats-good-for-gm-is-good-for-americawhat-should-you-do-during-a-national-crisis/ but without reference to the economy of expectations that Martin writes about. This business class went out and captured the Democratic party.
Since the 1970s two classes of capitalists have been fighting a serious class war, to the impoverishment of all the rest of us. The new capitalists have been winning. When this class gets to the 'how is it right that I have so much, when so many have so little?' question their only answer is 'because I spend so much on the unfortunate. I should have my wealth because I am more virtuous and noble than the rest of you, and will spend it, on those who need my help most.' (Most of whom, conveniently, live far away and cannot vote for proposals such as a wealth tax that targets share profits, or ending subsidies for windmill generated electricity.) They aren't arguing that the working class deserves a bigger slice of the pie, instead they are arguing that the working class should get nothing, because it's better that cheaper workers overseas get any local wealth creation. And anything else is racist! We'll do away with work for the poor and let them live on the dole! Isn't this what every enlightened person wants, to be free from the need to labour? (Some of them really believe this. It is not just rhetoric with them.)
This oversimplifies, and is only true in the broad outline. There are new business leaders who don't neatly fit in this sociological model. Elon Musk most of the time talks like a old capitalist, and can point to a factory of beloved automobiles and a local workforce -- but of course the green subsidies have been very good for him, and managing stock expectations is how he got to be so rich.
Thus I think that you have misunderstood the past. Business has always been political. It's just that the political goals of the Left are different from the ones you remember from when you were younger, and the Republican Party was the party of business.
"If your goal is to depoliticize business, that’s doing it wrong."
I'm curious, what in Kling's view, is the right way to depoliticize business? The political left has no hesitation about using the power of government to install DEI teams at every major company in the US and pressure every company in the US including Disney to champion their positions on major issues. Yet Kling has focused his criticism, not on the left that leads the charge of politicizing business, but on figures like DeSantis that show the slightest push back.
When Arnold Kling's preferred libertarian policy champion, Paul Ryan, was in the driver's seat in 2017-2018 and had the full backing of the Republican Party and President and Republican voter base, Kling declined to notice, and complained about libertarians getting thrown under the bus.
I would want a distinction between fentanyl deaths and deaths from prescribed opiods. It has been my impression that the fentanyl is a more recent thing. I don't know what you can do to stop the fentanyl epidemic. I am/was an organic chemist, and I state emphatically that fentanyl is ridiculously easy to synthesize via multiple routes starting with a variety of different feed stocks, making it difficult for the DEA to interdict all the possible routes via restriction of purchase (and the feed stocks can be stolen almost with impunity from any research lab in the country). The main danger for the chemist would be accidentally killing themselves in the final isolation/purification stage, but that isn't a high hurdle to get over. And, in any case, the DEA can't do a thing outside the US borders to stop illegal manufacture.
On Furman- what do you really expect- there are no enemies to the left.
Did anyone bridge the international and politicization of business discussions and talk about stuff like Nike lobbying to keep being able to use slave labor in China?
[It would be great if you could get Tom Lehrer to be a guest]
>>the “lonely, orphaned” plight of economic libertarians. <<
Low taxes, low regulation, fewer laws against actions without victims.
I believe minarchist minimal gov't is optimal - but is democratically unstable (has been). Because politicians have a huge incentive to promise to solve problems with bigger gov't - and there are always problems.
Since I voted for Ed Clark instead of Reagan in 1980, I was a Cato supporting active Libertarian and came to Slovakia to support a more market-oriented transition than most big-gov't Democrats. But the market, which is merely a word sort of meaning "people freely making buy & sell choices", allows free people to make mistakes. Sometimes very bad, very expensive mistakes, which often hurt not only the decision maker, but other innocents.
Who will pay for the costs created as a result of bad decisions of a free, poor person who can't pay for the damages they're responsible for? There's too many weak points of Libber philosophy for current "next steps" to elaborate on.
Trump was right to want the USA manufacturing to be more based in America than in Communist China - the Free Market fundamentalists were wrong. Altho free market trading among free people remains optimal, the Chinese are NOT "free people". Naturally, those emotionally committed to the idea of "Free Trade" can, and have, and still do, rationalize why Free Trade with slave using China is better, those rationalizations seem weak to most folk.
On huge and ever growing gov't spending money - we voting consumers seem addicted to OPM. Other People's Money.
It's like there's a hundred folks around a table with a hundred $1 bills, and a little man goes around and gets a buck from each, then gives $50 to a lucky winner! Who feels great, and others don't mind too much.
So the little man does it again, and again, a hundred times. All are $50 richer, but $100 poorer. Bad system, most want to stop - but none want to lose their $50 Free Money.
OPM withdrawal symptoms might be horrible to live thru.
<blockquote>The OECD GDP tracker says that U.S. GDP is 2 percent above what it was a year ago. Not seeing any screeching halt there.</blockquote>
This sounds like the very mistake you call out in your book on Specialization: lumping the economy as a GDP factory.
I'm looking at the supply chains for grain, fertilizer, and especially meat and seeing a huge shortfall that consumers are sure to notice 6 months to a year from now. The biggest changes are EPA regulation of fertilizer use and of meat, raids on Amish farmers, and even a first attempt to make owners of small vegetable gardens register them with the feds. By the time this vicious attack on our dietary habits becomes obvious, it will take years to reverse the damage if they even let us.
I’d love to hear your take on Michael Pettis’s/Matt Klein’s work. In Trade Wars are Class Wars they maintain that countries without capital controls only have three options when a country like China exports to them and the buys assets in that country or its currency (ie manipulates its currency). Countries like the US can increase government debt, increase private debt, or increase unemployment. I’ve always found that traditional conservative disdain for government spending doesn’t deal with this fact. If you keep free trade and capital markets and other countries don’t play fair, then you have to have one of those options. I’ve never heard anyone in your camp account for that.
Another word for perpetual trade deficits is "tribute". If the flow never reverses, then it's basically free money.
There is the question of sustainable patterns of trade. This isn't sustainable in the sense that at some point either we export back (ha) or we just default on all that paper we gave them.
Russia, for instance, found out that owning a bunch of foreign reserve currency is totally worthless when you need it. China would likely find out the same.
The problem with tribute is in many ways an old problem. All of the Mediterranean paid tribute to Rome, and Rome used it to fund the corn dole, but the plebs didn't seemed happy with this arrangement.
re: Do generational differences mean that trying to depoliticize big business is hopeless?
I recently read Roger Martin's book 'Fixing the Game' The thesis there, though he doesn't mention class explicitly, is that the USA now has two capitalist business classes. See a book review here in Forbes. https://www.forbes.com/sites/stevedenning/2011/11/28/maximizing-shareholder-value-the-dumbest-idea-in-the-world/ This comes after reading Mark Mizruchi 'The Fracturing of the American Corporate Elite' .
A recurring moral question for the wealthy is 'how is it right that I have so much, when so many have so little?' The people in the older capitalist class, who used to all vote Republican, could point to a prosperous working and middle class, factories full of the latest goods which were loved by the people who bought them, and a certain amount of philanthropy. In 1953 Eisenhower nominated Charles Wilson, the President of General Motors, to be his Secretary of Defense. During his confirmation hearings was asked if he could make a decision that was bad for GM, he famously replied '“What’s good for GM is good for America.” (Readers here will not be surprised to hear that what the press reported him saying isn't exactly what he said.) For the first few decades after the Second World War, the American business community was united around centrist policies that were in the broad national interest. This behavior was certainly self-interested and pushed policies that were far more favorable to the elite than they were to the working class, but at base business leaders recognized that their interests and the country’s went hand in hand. Since one way to look at the industrial economy is 'convert hydrocarbons into wealth' the elites of this time spent a lot of their time politicking, politicking on the international stage about Oil. Some of what they did there was dreadful, and at this point in time it was the Left that was arguing against these political policies, and at the same time saying that the working class deserved a bigger slice of the wealth created.
But something happened in the 1970s. A new class of business leader emerged, one that was internationalist and which did not believe that their interests went hand in hand with everybody else's. They put their personal interests ahead of those of everybody else's and indeed denied that there was a national interest, or that if there was one, it was shameful. Forbes talks about the problem here: https://www.forbes.com/sites/gautammukunda/2020/06/05/whats-good-for-gm-is-good-for-americawhat-should-you-do-during-a-national-crisis/ but without reference to the economy of expectations that Martin writes about. This business class went out and captured the Democratic party.
Since the 1970s two classes of capitalists have been fighting a serious class war, to the impoverishment of all the rest of us. The new capitalists have been winning. When this class gets to the 'how is it right that I have so much, when so many have so little?' question their only answer is 'because I spend so much on the unfortunate. I should have my wealth because I am more virtuous and noble than the rest of you, and will spend it, on those who need my help most.' (Most of whom, conveniently, live far away and cannot vote for proposals such as a wealth tax that targets share profits, or ending subsidies for windmill generated electricity.) They aren't arguing that the working class deserves a bigger slice of the pie, instead they are arguing that the working class should get nothing, because it's better that cheaper workers overseas get any local wealth creation. And anything else is racist! We'll do away with work for the poor and let them live on the dole! Isn't this what every enlightened person wants, to be free from the need to labour? (Some of them really believe this. It is not just rhetoric with them.)
This oversimplifies, and is only true in the broad outline. There are new business leaders who don't neatly fit in this sociological model. Elon Musk most of the time talks like a old capitalist, and can point to a factory of beloved automobiles and a local workforce -- but of course the green subsidies have been very good for him, and managing stock expectations is how he got to be so rich.
Thus I think that you have misunderstood the past. Business has always been political. It's just that the political goals of the Left are different from the ones you remember from when you were younger, and the Republican Party was the party of business.
"If your goal is to depoliticize business, that’s doing it wrong."
I'm curious, what in Kling's view, is the right way to depoliticize business? The political left has no hesitation about using the power of government to install DEI teams at every major company in the US and pressure every company in the US including Disney to champion their positions on major issues. Yet Kling has focused his criticism, not on the left that leads the charge of politicizing business, but on figures like DeSantis that show the slightest push back.
When Arnold Kling's preferred libertarian policy champion, Paul Ryan, was in the driver's seat in 2017-2018 and had the full backing of the Republican Party and President and Republican voter base, Kling declined to notice, and complained about libertarians getting thrown under the bus.
I would want a distinction between fentanyl deaths and deaths from prescribed opiods. It has been my impression that the fentanyl is a more recent thing. I don't know what you can do to stop the fentanyl epidemic. I am/was an organic chemist, and I state emphatically that fentanyl is ridiculously easy to synthesize via multiple routes starting with a variety of different feed stocks, making it difficult for the DEA to interdict all the possible routes via restriction of purchase (and the feed stocks can be stolen almost with impunity from any research lab in the country). The main danger for the chemist would be accidentally killing themselves in the final isolation/purification stage, but that isn't a high hurdle to get over. And, in any case, the DEA can't do a thing outside the US borders to stop illegal manufacture.
On Furman- what do you really expect- there are no enemies to the left.
Did anyone bridge the international and politicization of business discussions and talk about stuff like Nike lobbying to keep being able to use slave labor in China?
[It would be great if you could get Tom Lehrer to be a guest]
>>the “lonely, orphaned” plight of economic libertarians. <<
Low taxes, low regulation, fewer laws against actions without victims.
I believe minarchist minimal gov't is optimal - but is democratically unstable (has been). Because politicians have a huge incentive to promise to solve problems with bigger gov't - and there are always problems.
Since I voted for Ed Clark instead of Reagan in 1980, I was a Cato supporting active Libertarian and came to Slovakia to support a more market-oriented transition than most big-gov't Democrats. But the market, which is merely a word sort of meaning "people freely making buy & sell choices", allows free people to make mistakes. Sometimes very bad, very expensive mistakes, which often hurt not only the decision maker, but other innocents.
Who will pay for the costs created as a result of bad decisions of a free, poor person who can't pay for the damages they're responsible for? There's too many weak points of Libber philosophy for current "next steps" to elaborate on.
Trump was right to want the USA manufacturing to be more based in America than in Communist China - the Free Market fundamentalists were wrong. Altho free market trading among free people remains optimal, the Chinese are NOT "free people". Naturally, those emotionally committed to the idea of "Free Trade" can, and have, and still do, rationalize why Free Trade with slave using China is better, those rationalizations seem weak to most folk.
On huge and ever growing gov't spending money - we voting consumers seem addicted to OPM. Other People's Money.
It's like there's a hundred folks around a table with a hundred $1 bills, and a little man goes around and gets a buck from each, then gives $50 to a lucky winner! Who feels great, and others don't mind too much.
So the little man does it again, and again, a hundred times. All are $50 richer, but $100 poorer. Bad system, most want to stop - but none want to lose their $50 Free Money.
OPM withdrawal symptoms might be horrible to live thru.
<blockquote>The OECD GDP tracker says that U.S. GDP is 2 percent above what it was a year ago. Not seeing any screeching halt there.</blockquote>
This sounds like the very mistake you call out in your book on Specialization: lumping the economy as a GDP factory.
I'm looking at the supply chains for grain, fertilizer, and especially meat and seeing a huge shortfall that consumers are sure to notice 6 months to a year from now. The biggest changes are EPA regulation of fertilizer use and of meat, raids on Amish farmers, and even a first attempt to make owners of small vegetable gardens register them with the feds. By the time this vicious attack on our dietary habits becomes obvious, it will take years to reverse the damage if they even let us.
I didn't detonate. a live grenade in the kindergarten. It was my free choice, not a government mandate. I respect the free choice of those who did.
I’d love to hear your take on Michael Pettis’s/Matt Klein’s work. In Trade Wars are Class Wars they maintain that countries without capital controls only have three options when a country like China exports to them and the buys assets in that country or its currency (ie manipulates its currency). Countries like the US can increase government debt, increase private debt, or increase unemployment. I’ve always found that traditional conservative disdain for government spending doesn’t deal with this fact. If you keep free trade and capital markets and other countries don’t play fair, then you have to have one of those options. I’ve never heard anyone in your camp account for that.
Another word for perpetual trade deficits is "tribute". If the flow never reverses, then it's basically free money.
There is the question of sustainable patterns of trade. This isn't sustainable in the sense that at some point either we export back (ha) or we just default on all that paper we gave them.
Russia, for instance, found out that owning a bunch of foreign reserve currency is totally worthless when you need it. China would likely find out the same.
The problem with tribute is in many ways an old problem. All of the Mediterranean paid tribute to Rome, and Rome used it to fund the corn dole, but the plebs didn't seemed happy with this arrangement.
Good report. Thanks!