Arin Dube: Dude, Where are my Liberal-Neo-Liberal technocrats? …or… Where Paul R. Krugman from 1996 argues against J. Bradford DeLong in 2011 regarding the political economy of policy-making:
Brad DeLong has consistently argued for a ‘reality based’ ‘technocracy’ as the way to address our current economic ailments. As far as I am concerned, if we could replace our current corps of politicians and policy intellectuals with clones of one J. Bradford DeLong today, we would be made better off. Our federal government would borrow money when there is a negative real interest rate, and not discuss the merits of different ways to implement drastic austerity.
However, it goes without saying—and I think Brad would agree—that we do not currently have in power people who can be characterized as ‘reality based’ ‘technocrats.’ This, then, begs the question: what are the foundations of a technocratic vision that has been described also as ‘left neo-liberal’ (LNL) ideology – one which Brad espouses while shunning political-economic explanations based on organized economic interests? What is one’s theory of political economy that explains such a disjuncture, especially at such a crucial time as this?
Brad seems to reject the notion that class, or class-based organizations such as unions, plays an important explanatory role in elucidating why bankers have been given a pass by the Obama administration, while the cost of austerity is not being internalized by decision makers. Brad certainly argues against pushing for increased power of unions as a way forward. He said recently that it is neither ‘workable (n)or advisable’ for ‘Big Labor and Big Celebrity to neutralize and offset their Big Business and Big Fundamentalism, so that then the public interest can bubble up via grassroots democracy.’
Generally speaking, I think Brad’s arguments here lack a coherent political-economic framework – which is surprising given Brad’s interest in history. At the minimum, he should provide a sketch of the political economy he has in mind that involves actively shunning ‘Big Labor’ as a way for the ascendance of ‘reality based’ ‘technocrats.’ (Full disclosure: I do not know what the term ‘Big Celebrity’ means – unless the referent is the set of actors-an example would be William Shattner-who have put on a bit of weight since their heyday. I ignore this term hereafter.)
As an example of some arguments about collective action as it relates to the current period, I list a small subset of arguments made by economists who Brad knows, and that should be taken into account when discussing the political economy of organized economic interest and power:
- Johnson and Kwak who specifically argue the power of the banking sector is a critical force explaining the determinants of our recent economic history.
- Krugman circa 2011 who argues about the power of the rentier class.
- And by the way, what do unions actually do? Well, here’s Richard Freeman on that question in an interview this year. (No contemporary economist has done more work on the economics of labor unions than Richard): ‘Of course, not all unions function well. But our evidence, and the evidence people generated twenty years later, demonstrated that, on net, unions are a positive force in the economy.’
Note: none of the works cited above are by the one whose name we dare not pronounce in front of Brad, but whose initials do involve the letters K and M and who did talk about the political economy of organized economic interests.
But let us leave all of this aside. Instead, let us turn the mike over to one Paul R. Krugman circa 1996 discussing how we as citizens should think about the political economy of supporting various ‘interest groups’ such as unions. I think this is at least as relevant today as it was in 1996:
But unions helped keep us a middle-class society — not only because they forced greater equality within companies, but because they provided a counterweight to the power of wealthy individuals and corporations. The loss of that counterweight is clearly bad for society. The point is that a major force that kept America a more or less unified society went into a tailspin. Our whole society is now well into a similar downward spiral, in which growing inequality creates the political and economic conditions that lead to even more inequality … In particular, we also need to apply strategic thinking to the union movement. Union leaders and liberal intellectuals often don’t like each other very much, and union victories are often of dubious value to the economy. Nonetheless, if you are worried about the cycle of polarization in this country, you should support policies that make unions stronger, and vociferously oppose those that weaken them.
I hereby request that Brad respond to Krugman(1996) regarding the political economy of political change when it comes to supporting specific ‘interest groups’ allied to the Democratic Party also known as labor unions when it comes to policies designed to achieve the common good. Not Karl Marx, or Doug Henwood. Or Henry Farrell. Just Paul R. Krugman.
So questions for Brad:
Do you disagree with Krugman (1996)?
If so, why?
If not, why is Krugman (1996) consistent with your statement:
‘It turns out that what he want is for our Big Labor and Big Celebrity to neutralize and offset their Big Business and Big Fundamentalism, so that then the public interest can bubble up via grassroots democracy. And I really don’t think that is workable or advisable. I don’t think that is the way things work…’
I would note that capital a a whole has done significantly worse under the policies of 2007-2015 than it would have done under more aggressively Keynesian reflation policies. Capital with then have a slightly smaller share of a much bigger pie. It is true that equity finance has done well since 2007–but small business has not, and those holding their wealth in safe savings vehicles have not.”
