To explain: We know Megan McArdle worships the rich. She sees herself as an authoritarian leader, one of the elite, and is unstinting in her support of their actions, no matter how venal, deadly, or just plain stupid. We also know she is not rich herself although she grew up surrounded by rich people, and therefore must be content with being a follower. If you are not rich but you support them you must justify this action to yourself; otherwise you're just some envious schmuck who watches E! to find out what kind of phone Paris Hilton is using. We also know from Stanley Milgrim that many people only need permission from an authority to do what they already want to do. And this morning, I hit paydirt.
[yap]
Even those who think wealth is good (or at least harmless) often implicitly suggest that the pursuit of wealth and the pursuit of moral goals are separate questions. They would do well to read Benjamin Friedman's The Moral Consequences of Economic Growth. The author, a professor of political economy at Harvard, has written an economic tome that is accessible to the average reader without failing to offer something new to specialists as well: a compelling argument that rising incomes make us not just richer people, but better ones.
[yap yap]
Economists have long known that what they call the “wealth effect” can stimulate spending: If people feel richer because the value of their home or stock portfolio has gone up, or because they think their income is likely to rise in the future, they will loosen up and spend more. Friedman suggests that people don’t merely become more willing to treat themselves to home entertainment systems and $4 cups of coffee as their wealth grows; they also become more generous to others. “With rising incomes,” he says, “more people become willing to donate time and money. And among those who do so, rising incomes also allow people to feel able to do more.”
But direct charity is only one of the ways we become more generous. Even more important is the tolerance that growing wealth brings for competition from others. There is a growing recognition that trade is a vastly more effective way to reduce global poverty than foreign aid; even Oxfam, a reliably left-wing nongovernmental organization, has jumped on the free trade bandwagon with a campaign against agricultural subsidies. Better still, trade benefits domestic consumers. Yet progress on that front is nearly impossible unless economic prosperity is rising fast enough to ease the fears of those who are threatened by a more open market.
Here's McArdle's justification for wealth worship: People with more money donate more money, and free trade helps the poor much more than actual, you know, help.
Damn! I feel like I've found the map to King Solomon's Mines, if his mines were huge, empty cavities filled with greed and vanity instead of gold and pearls.
"a compelling argument that rising incomes make us not just richer people, but better ones."
ReplyDeleteMeaning, the same argument made during the rise of the Middle Ages to justify the aristocracy as the ruling class. Well done on that original thought!
What she lacks in originality, she makes up for in predictability. She has another post now titled "The Rich Really Are Different."
ReplyDeleteHeh. I can't tell if she's taunting me or is simply the world's best boot-licker.
As a would-be professional historian, nothing bugs me more than economic determinism - and nothing surprises me less than seeing Megan jump on board that particular ship. I especially "admire" how Friedman gave himself a huge out by arguing that if a xenophobic or anti-democratic movement does happen to coincide with an economic boom, then, well, it was because people were still anxious about their economic situation*.
ReplyDeleteAlso, there's this:
That’s why an American postal worker might not be particularly happy with his income, even though in terms of transportation, health care, and personal comfort he has a better standard of living than Cornelius Vanderbilt and other past plutocrats.
Leave it to Megan to take a time-worn conservative/Libertarian line and make it into something even stupider. At least I'm not as confident as Megan that our hypothetical postal worker would be so reluctant to trade in his small townhouse with paperthin walls for a posh Fifth Avenue mansion, even without the technological luxuries of the twenty-first century.
*Just to clarify: that's not to say that I don't think widespread poverty and discontent over socio-economic immobility weren't major causes for the rise of Fascism, the Bolshevik Revolution, or institutionalized racism in the American South, but to argue that economics is the preeminent, if not the only, factor influencing major historical events and movements is just...silly, not to mention insulting to historians in other fields.
Oh yeah, I love your "General Hospital" reference, especially since I think Alan Quartermain, as someone who gave up a guaranteed spot at the top of the corporate world in order to become a doctor and enter a career all about helping people who aren't him, represents everything Megan fears and hates (well, maybe besides people who are poor and are still happy about themselves and their lives).
ReplyDeleteChad--actually, I forgot about General Hospital. I used to watch it in college, but haven't seen it since. I was referring to the book King Solomon's mines. But as a former English teacher, I love to see people find new meanings I never thought of.
ReplyDeleteMegan seems to think that because we won't get smallpox or killed by Vikings, we're luckier than the richest people in the world. Just another feeble excuse to tell the poor what lucky ducks they are.
Leave it to me to interpret a reference in the kitschiest way possible.
ReplyDeleteMegan seems to think that because we won't get smallpox or killed by Vikings, we're luckier than the richest people in the world. Just another feeble excuse to tell the poor what lucky ducks they are.
I makes me want to expose Megan to Terry Jones' argument that medieval peasants and artisans were in a few ways better off than modern office drones, since they typically had much more leisure time and fewer responsibilities, but I'm sure she'd just respond that of course 60-hour workdays are worth it as long as you can afford a Playstation 3.
And eat grapes during winter.
ReplyDeleteI guess poor people don't know how lucky they are. I'm sure glad McArdle is there to remind them.
Damn.
ReplyDeleteAwesome, awesome find. I'll inevitably have no choice but to reference this frequently, I think.
Economists have long known that what they call the “wealth effect” can stimulate spending: If people feel richer ... they will loosen up and spend more.
ReplyDeleteHOLY SHIT! Yet again the supposedly Dismal Science whacks you upside with a jawdropping insight which will have you sitting bolt upright in bed three weeks from now as its implications truly sink in.
Yeah, from what little I've read about it, the data doesn't support the theory of the wealth effect. As far as I know the equity people were taking out of their house was a contributing factor to increased spending, and access to easy credit was the cause.
ReplyDeleteShe really does just talk out of her rear end, doesn't she? Astonishing.