Pragmatic Utopia #28

You’ve probably seen or heard Tyler Cowen promoting his new book The Complacent Class over the past two weeks. The book argues that American life has lost its dynamism in matters economic, political, geographical, cultural, and personal. The accusation of “complacency” proves a powerful, if unwieldy, concept because it applies equally to individuals, groups, and civilizations. The title is somewhat misleading in this way–although affluent Americans tend to lead the vanguard of complacency, the argument describes not so much a particular class as an entropic force which drives us toward stasis. If the thermodynamic equilibrium of a universe is heat death, the equilibrium of a rich society may be complacency.

After sharing what I found interesting about Complacent Class, I’d like to introduce one of my favorite newly discovered social theorists, Roberto Unger. Everything about Unger’s political philosophy is oriented toward disrupting complacency and entrenchment. While Cowen proposes several visions of a less complacent future, we can’t magically wish them into existence except by hoping for technology as deus ex machina. Here I find Unger’s thinking on the relationship between ideology and institutions much more helpful.

Teams and companies move around the country (like the Raiders to Las Vegas), but people no longer do

Complacent Class is is the third entry in Cowen’s trilogy of books about the challenges America has faced since the end of the mid-century golden age (see my post on the “Great Exception”). The first two books were creative takes on mainstream economic questions: The Great Stagnation was about “the new normal” of slow economic growth and Average is Overaddressed the future of inequality. Complacent Class is a more unusual book; you can think of it as addressing the social and cultural backdrop of the stagnation.

You can get a sense of what Cowen means by complacency through his primary examples, each of which gets a chapter of interesting factoids. First, Americans have stopped movingto different towns and states compared to historical rates.

Second, segregation is by some measures at its all-time worst, especially if you include not just racial segregation (which has gotten worse in schooling and housing since the 80s) but also segregation by income and education.

Third, the rate of entrepreneurship and new business creation is down–even in the San Francisco Bay Area!–famous exceptions notwithstanding.

Fourth, both violent crime and physically disruptive political protest have declined,although this may be changing, and America’s current drugs of choice are mostly sedatives rather than stimulants.

Finally, although many people hoped (and Cowen still does) that the digital revolution would prove disruptive, it hasn’t yet. Instead, the most important digital technology has beenmatching, which reduces search and transaction costs and helps us find things and people we already know we’ll like. 

The amazing thing about Complacent Class is it presents Cowen (affiliated with George Mason; a friend of the Austrian School) at his most liberal. I advance this claim hesitantly, especially given the delight Cowen takes in hiding his real meaning and practicing hermeneutics on others. Check out his best-ever “Straussian” reading, when he argued convincingly that the Snow White movie “Mirror, Mirror” starring Julia Roberts was actually allegory for the Indira Gandhi assassination.

Fittingly, you can find people arguing that Complacent Class represents a neoreactionary worldview:  “The task for an innovator of the next twenty years is to construct a quasi-governmental organization capable of maintaining segregated, high-trust, eucivic networks and use it to escape democratic pathology for good in a Great Reset.” But they had to read the chapters in reverse to conclude that, so whatever. 

I am saying this is a newly liberal Tyler Cowen because most of his diagnoses of complacency can be reframed as problems of entrenched power and rent-seeking. Where Cowen sees complacency, I see power disparity: typically, someone who benefits from the status quo alongside someone who does not, one with no interest in change and the other with no leverage.

Cowen nearly admits as much in his discussion of new business formation, when he observes that startups gain less traction in part because incumbents–especially in the healthcare, banking, telecommunications, and retail sectors–rarely fail.  He even includes a sub-heading on monopoly power and corporate concentration! Is this the same Tyler Cowen who wasdismissive of Lina Khan’s Amazon antitrust article on Twitter?

Cowen also points out that immigrants bring the strongest brand of anti-complacency to American life (this is a more predictable libertarian point, but still welcome). By definition, immigrants make bold geographical moves and tend to be socially and economically mobile as well. If we wanted to take a stand against complacency, celebrating immigration in our popular culture and public discourse would be one way to start

Politics is another arena where complacency may be defended or challenged. Cowen frames recent political turmoil as the result of the complacent class being unable to articulate any vision beyond marginal adjustments to the status quo, which then leaves a vacuum for demagoguery. He proposes we measure complacency in political life by the extent of the budgetary chains in which we have bound ourselves. By 2022, 90% of the federal budget will have been allocated to non-discretionary purposes, leaving relatively little available for significant changes–if we could even agree on such a thing.

Cowen says “true democracy,” on the other hand, is when you are unbound by past commitments and are free to try new things. This was truly striking to me because it is nearly exactly the language of Roberto Unger, the Brazilian philosopher.

Unger says that a “high-energy democracy” (sorry, Jeb) must meet three tests. It subjects the structures of society to effective challenge and revision. It diminishes the dependence of change on crisis. And it weakens the power of the dead over the living. The goal of such a society is to free people from “the prewritten script” provided by hierarchy, social position, and the division of labor. The purpose of such freedom is, well, freedom: to allow all people to freely recombine all opportunities and experiences. 

Cowen paints several pictures of a post-complacent future. In each, society is energized (for better or worse) by something new: more residential mobility, a wave of African immigration, the arrival of cheap clean energy, the ascent of artificial intelligence, a revolution in fertility rates and family size, or the threat of crisis and terrorism.

It seems there are two categories of things here: external “solutions” that may or may not drop from heaven without much input from most of us, and new patterns of behavior in which we’d all take part. The first category is a totally plausible source of change, but one to which we can only react. Because I am interested in democracy and self-determination, I tend to prefer thinking about the second category.

So does Unger. One of his central ideas is that institutions and ideology are intertwined. This means: what we think we want is limited by the institutions we’ve experienced (e.g. democracy, communal agriculture, military conscription, religious monasticism), and the institutions we can imagine creating are limited by what we think we want.

The recipe for change, then, is to notice the competing alternatives in our current institutions and nourish each of them, incrementally inventing new ways of living based on little hints from what we already have. “Let a hundred flowers bloom,” indeed, but the buds are already hidden in our midst.

In what I’ve read so far, Unger mentions four (relatively…) concrete institutional innovations that might help overcome complacency and the entrenched social hierarchy that I think is the real issue.

First, he would remake our system of property rights, abolishing consolidated property in favor of temporary, provisional rights to property allocated through a “rotating capital fund.”

Second, he would replace the classic bilateral executory contract with “relational contracts” that govern ongoing relationships rather than discrete deliveries of goods or services.

Third, he would create “structure-revising structures” such as a citizen’s right to disrupt and reorganize entrenched political bodies or companies.

Fourth, he would institute “plasticity-enabling endowments” like portable healthcare and/or basic income which enable individuals to take risks and participate in the much more dynamic economy presupposed by the first three innovations. Unger develops these ideas at more length in Democracy Realized: The Progressive Alternative, which I have not yet read.

Everything I’ve cited so far comes from Unger’s book on the Critical Legal Studies movement. In that book, he argues that legal theory is the most natural place to pursue these assaults on tradition and sclerotic institutions, and criticizes the various other tasks jurists have taken up instead. I’ll admit that I understand less than half of this book, perhaps because I’m not yet familiar enough with the traditions in legal thought that he is critiquing.

One useful point for thinking about complacency is his argument that society is always bound by a a particular legal order and that order–in this case the New Deal–goes through three phases: foundation, normalization, and darkening. The New Deal moment was the most recent foundation, the last American Revolution (this is what Bruce Ackerman says too).

In the normalization period–postwar through the 1970s–legal doctrine has its heyday, as jurists strive to defend the system over which they are designated custodians. In the darkening period, where we’ve been since Reagan, the order is under attack but there is no new alternative in sight (note that this theory offers a supercycle to Stephen Skowronek’s theory of presidential cycles; the Reagan cycle is still part of the longer FDR cycle).

I expect to write about Unger again here as I work slowly through his massive CV. He is hard to read and frustratingly unspecific. But one thing that really resonates is that he is a leftist thinker who values cooperation, creativity, and innovation more than almost any libertarian. He forces us to consider whether there is something a whole lot freer than the “free markets” we know. I find this very powerful.

1. One more industry you didn’t know was extorting you
On Twitter someone gave David Dayen a complimentary epitaph option: “extremely good at shining light on obscure middlemen and complex systems that are causing harm.” That he is. This week Dayen dropped this detailed look at the Pharmacy Benefit Manager (PMB) industry, which boasts three of the largest 25 companies in the Fortune 500: Express Scripts, CVS Caremark, and OptumRx, which together control 80% of the market. These companies are the middlemen between drug companies and pharmacies, and it turns out they have a lot of leverage to decide how much drugs will cost. For one, they get rebates from drug companies for including a certain drug in their network, but don’t have to inform health plans of the inflated cost. “Express Scripts’ adjusted profit per prescription has increased 500 percent since 2003.” A Republican Congressman says:  “They show no interest in playing fair, no interest in the end user. They act as monopolistic terrorists on this market.”

2. Antitrust as civil right
How about another article about monopoly. This essay reviews the connection between the civil rights movement and black-owned small business. I hadn’t thought about how small businesses were one of the few independent sources of power for black people even in the 1960s, and that many such business owners funded movement infrastructure. Moreover, they explicitly used antitrust law as a civil rights wedge: “In 1961, the owners of ten independent medical practices used the Sherman Antitrust Act against sixty-one local hospitals and medical organizations in Chicago [representing 75% of market share] that barred black Americans from the medical staff.” Thurgood Marshall, one of the last major defenders of antitrust, was the grandson of two independent grocery store owners.

I saw some people say that this article should have made a bigger deal about the double-edged sword of segregation, which guaranteed a captive customer base to black-owned businesses. I think that’s totally fair as an explanation of the past, but doesn’t refute the importance of business ownership in the present. Also, “According to a 2013 study of TARP investments, black-owned banks were ten times less likely to receive bailout money than nonminority-owned banks” (what about if you control for size? But that’s the point I guess).

3. Job guarantee vs UBI
There is a fun little inter-left policy war heating up: job guarantee vs universal basic income.Here, Jeff Spross makes the case for the job guarantee in Democracy Journal. The way it would work: local government agencies and nonprofits submit jobs they would like to have done to a central database; local administrators match job-seekers to a job based on proximity and skills; the state or federal government pays the wage at roughly $25,000/year.

Matt Bruenig (a UBI partisan), says the problem with a job guarantee is that it is supposed to be a cyclical safety net (to pick up slack during private sector recessions) but very few of the jobs Spross imagines are actually cyclical. We either need more teachers or we don’t, need to build more bridges or we don’t, so such jobs should be permanent, not cycle-stabilizing. By the way, if the answer is yes we need more of these things, why can’t expanding public sector employment be the plan irrespective of job guarantee? Anyway, Pavlina Tcherneva is a major jobs guarantee booster to follow if you’re interested in this. She argues that “low capital intensity projects are in great shortage, can vary with the mood swings of the economy, and are not make-work.” As examples she mentions jobs removing invasive species from a river and jobs helping restore historical architecture. I just have no idea how far such local short-term projects get you. 

4. Sociology vs journalism
Two UCLA sociologists read Dreamland (the book about opioids) and wondered–what’s the difference between journalism and sociology, again? Jeff Guhin concludes what most sociologists would, namely that we both tell stories, but sociologists are more interested in the theory exemplified by the story. Personally, I think this often leads to shallow storytelling stretched to make claims it can’t possibly substantiate.

Gabriel Rossman gives several nice examples of sociological concepts present in Dreamland, from competitive social display (the Mexican dealers showing off when back home in Xalisco) to social capital (why it works to pay the rookie dealers on salary rather than commission, because you know all their friends and family back home) to the obfuscation of the production of scientific claims (see Latour and Woolgar, here represented by doctors’ credulous acceptance of the idea that “only 1% of Oxy patients become addicted”).

Does it matter to know these concepts have official names when you’re reading the book? It’s certainly useful to know about these concepts because they’ll help you make sense of the next story where they pop up. But you can notice and appreciate these concepts (as my book club comrades did) without caring about their names. In this light, journalism is just about as explanatory as sociology, and much better written.

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