The Myth of Ownership

Binyamin Appelbaum and Robert Gebeloff of the New York Times have written a very good piece that was published a few days ago, and I just got a chance to sit down with it. While the article is quite long, I highly recommend you read it.

If you're strapped for time, I can tell you that the basic gist of Appelbaum and Gebeloff's work is a profile a series of self-identified fiscal conservatives (in the sense that they prioritize the budget deficit over other issues) who also draw benefits from the state in some way or another. I think it would be too facetious to characterize the whole thing as cognitive dissonance on the interviewees part; they are real people with real struggles, that, as Appelbaum and Gebeloff explain,

"describe themselves as self-sufficient members of the American middle class and as opponents of government largess are drawing more deeply on that government with each passing year." (emphasis mine - JMG)

Ta-Nehisi Coates has touched on the power of the myth of self-sufficiency (which he terms the "Cowboy"), and he has done a very good job of it. I would like to expand on it a bit, specifically the way the myth of self-sufficiency plays into a myth of ownership; that we are the sole owners of our life's outcomes, without regard to environmental influences like government.

The subjects of Appelbaum and Gebeloff's profile allude to an ideal of self-sufficiency, and they experience frustration, guilt, and resentment over their need for public benefits. Part of the problem with their thinking is the assumption that, absent direct in-kind transfers, they would then be "free" of onerous government interference.

The fact is that government "interferes" with our daily lives in some of the broadest and most minute ways. I would argue on the balance that is a good thing, too. When you buy ground beef, the FDA has (hopefully) made sure the meatpacking facility that made it meets basic health standards. When you buy gas for your car, a local weights and measures inspector has (hopefully) checked to make sure the pump hasn't been rigged to rip you off.

To be "free of government" one would need to be free of society, or more plainly, free of other people. Unless we truly live on an island or in a cave, the notion that all of our life's successes and failures are attributable to oneself and oneself alone is, well, mythical. An understanding of oneself as "independent" in the context of the market is a denial of the myriad connections that exist between market participants.

It's no accident, then, that calls for "limited government" are commonly framed in the conceptual rather than concrete ways. Government spending in abstract is politically unpopular because people enjoy mythological beliefs about their independence. In the same turn, government spending specifics are popular because they tend to cultivate a political constituency of real people, with real needs on a scale that calls for public action.

I'd like to close by relating this to some of my prior comments on the trap of making normative moral judgments based market outcomes. When people are unsuccessful the the market (i.e. not rich) there's a tendency to attribute personal failure. I think a lot of the respondents found in the NYT piece have internalized this. They judge themselves based on their lack of material wealth, and their inability to enjoy their neighbor's standard of living without public assistance.

Morality and Markets

Suzy Khimm reports on a new study from the Journal of Psychological Science that studies the relationship between income inequality and personal beliefs of individual ability. In short:

In societies with more income equality, people may not only have more equal incomes, but they may also feel a pressure to seem more similar to others.

I have always been curious about the ways non-economic factors influence market activity, and maddened by the way neo-classical theory strives to eliminate such considerations from its models. Specifically, as exemplified in the above study, there is often a conflation between observations about an individual's market performance, and normative judgement about that individual. On that point, I wanted to draw your attention to something Larry Summers said in an Ezra Klein interview some time ago that just is not said enough:

[...] people see economic issues through moral frames and people think there’s an extent to which recessions are punishment for sins — mainly sins of excess — and you don’t expiate sins by binges. So there’s a kind of moral counterintuitiveness that has made it difficult for the public and for political figures to accept stimulus. (emphasis mine - JMG)

From a policy perspective, it is very frustrating that political opinions on fiscal and monetary stimulus is held up in conceptions of desert. There are very real concerns about the long-term inflationary risks of stimulative fiscal policy, without some type of monetary easing. But we are not having debates about this type of question. We are having Senators harp on about how the stimulus "failed" with critiques completely divorced from the actual theory of fiscal stimulus, and largely being accepted by people who are not particularly curious about the theory in the first place.

Economist can certainly do a better job of outlining how theory models and policy solutions are unrelated to normative values about society and individual choice. Critics need to do a better job of relating their objections to polices either in the broader theory itself, or its narrow malpractice in specific legislation.