Inequality, Unemployment and Market Values

New York Stock Exchange

If there is one thing that Wonkblog is exceedingly good at, it’s taking some deep-seated moral problems and making it about economics. Since they’re a nominally lefty blog – enough of a lefty blog that Ezra Klein can appear regularly on MSNBC – this may make them one of the few places in the liberal blogosphere that can be counted on to subscribe to market values: the idea that the ultimate arbiter of values (like goodness, beauty, truth, etc.) is the market and that the best way to realize those values is through the application of ‘pro-growth’ economic policies. I’m not trying to pick on Wonkblog in this – this sort of market-as-arbiter-of-values attitude is generally dominant in much of American culture – but it is worth noting.

And Ezra Klein has done an amazing job of illustrating this tendency of Wonkblog to reduce all questions to questions about the market in this piece entitled: Inequality Isn’t ‘The Defining Challenge of Our Time’.

Now, I could write a very long post analyzing Klein’s piece, but let me just briefly summarize.

Klein begins with an acknowledgement that ‘inequality’ is an important issue in liberal politics, from the Occupy Movement to a recent speech by President Obama. He notes that ‘inequality’ is “easy to worry about” and “offends our moral intuitions” and even “tears into the fabric of the American dream.”

He then asks us to imagine a situation where we’re “given a choice between reducing income inequality by 50 percent and reducing unemployment by 50 percent” and discusses how each of those actions would affect economic growth. This is an important shift. After all, something might offend our moral intuition without having any effect on economic growth. But the way that Klein has now framed the question makes that growth the arbiter of the moral question. And that is exactly how Klein treats it: finding that “evidence of joblessness and weak growth are pervasive”, he goes on to say that joblessness is “a more severe and more urgent problem than inequality.”

Finally, Klein admits that, in a sense, none of this matters. Regardless of whether liberal policy preferences are focused on joblessness, inequality or growth is “the defining economic challenge of our time”, Congress isn’t likely to give them a hearing. But again the shift is noticeable. Where Obama  - and the title of Klein’s piece – spoke of ‘the defining challenge of our time’, Klein now writes of a defining economic challenge. That is an important difference, and it is difficult to tell to what extent Klein notices that there is a difference.

There are a couple of points in the piece where Klein seems to notice this difference. First, he writes that fixing the joblessness problem “is necessary, though not sufficient, to making real headway against inequality.” Second, he writes about “asking whether inequality or joblessness or growth is the defining economic challenge of our time.”

In the first case, he seems to suggest that combating joblessness is part of solving the problem of inequality. Whether that means he sees inequality as more than an economic problem is left up in the air, but at least the choice is not so simple as whether we choose solve joblessness or inequality. In the second case, he seems to propose that there are multiple problems that we could approach, all of which may be on equal moral footing. Whether they are more than economic problems is again up in the air, but the possibility is there.

But the overall tone and trajectory of the piece – a tone and trajectory common to posts on Wonkblog – is clear: we move from moral intuition to questions of growth as though they’re the same thing.

Now, I could point out several things here. For example, I could point out that inequality – even economic inequality in general or income inequality in particular – is not an abstract problem. People do not seem to simply be complaining over something as simple as some people having more than others. Rather, the anger seems to be that some people work very hard at back-breaking or soul-taking jobs while still struggling to get ahead or even while falling further and further behind; meanwhile, other people receive substantial advantages in life because they are already wealthy. The question is not simply one of inequality, but one of injustice. As Obama put it in his speech: “a dangerous and growing inequality and lack of upward mobility that has jeopardized middle-class America’s basic bargain that if you work hard, you have a chance to get ahead.”

Or I could point out that ‘reducing joblessness’ – even by half – doesn’t mean anything without asking what kinds of jobs those are precisely because inequality is not an abstract issue. There is a substantial moral difference in helping more people get low-wage physical jobs that enrich wealthy corporate executives and stockholders while the workers themselves struggle or fail to meet basic living requirements and helping more people find jobs that help them achieve or maintain a high standard of living.

Or I could point out that ‘growth’ as an abstraction leaves important moral questions open. Economic growth may increase inequality depending on how that growth is distributed. And this is true even if we reduce joblessness. Put enough people in the right low-wage jobs and having more of the benefits of that increase employment go to the wealthy than to these new workers and you will have reduced joblessness, increased growth and done nothing to solve inequality. There may be laudable reasons to seek specific configurations of economic growth, but the idea of economic growth in the abstract doesn’t contain enough information to make a moral assessment unless we assume that growth simpliciter is a moral good.

What I want to do here, however, is point to this piece as an illustration of something I’ve discussed elsewhere, something that has even gotten play in the nonprofit sector: the idea that the ultimate arbiter of values is the market.

The dangers of making ‘the market’ the arbiter of values – the ultimate judge – should be abundantly clear. The market is a configuration of human relationships and it is that configuration that currently accepts high unemployment, high inequality and low growth. It is that configuration of human relationships that accepts the idea of large numbers of people – in America and globally – working for far too little to thrive (and, too often, survive). It is that configuration of human relationships that allows there to be both homes in which no one is living and people without homes in the same neighborhood.

It is the logic of that configuration of human relationships that suggests that Jaimie Dimon is the best person to run JP Morgan Chase because the stock value of that bank has been high during his tenure, even though the bank recently faced the largest fine in the history of Wall Street regulation because it engaged in actions that, as Klein might put it, offend our moral intuitions.

Put quite simply, if we are going to accept the market as the ultimate judge of our values and our policies – and especially if we are going to do so as naively as Klein and the other folks at WonkBlog do – then we must also acknowledge that it is a capricious judge who allows and often demands unimaginable human suffering and sacrifice while tending to benefit relatively few people. This isn’t necessarily true of all market arrangements, but it certainly seems to be true of the market of global capitalism.

And because of that, I think that Klein, the other Wonkblog contributors, the left in general and humanity as a whole needs to to ask whether the judge that is so passively accepted is the one to which we want to be responsible.

One thought on “Inequality, Unemployment and Market Values

Leave a Reply