The twentieth century was a mighty laboratory of economic ideals. Out of the tumult and bustle of the previous centuries, two contending stories about the economy crystallized, which were implemented with varying levels of rigor all over the globe.
The opposing camps were those of innocence and adulthood. In the manner of children, the innocents believed perfection was an attainable economic goal, not only in prosperity but in equality and justice, however defined. All one needed was a rational program, and a government strong enough to crush the vested interests responsible for poverty, inequality, and injustice. The motto of innocence was “Father knows best.” Nobody could be trusted except the government.
The adults wanted responsibility. They sought freedom in economic decision-making, and accepted accountability for the consequences. While never dreaming of universal perfection, each nourished dreams for himself and his family. Adults understood tradeoffs: if you have kids, there goes the Jag. Still, they worked hard and smart, and believed that, in a fair economic fight, they would win more often than not. For this reason, they distrusted government attempts to redistribute wealth according to some abstract formula. The motto of adulthood was “Just do it.”
These were moral ideals, but with profound practical implications.
The innocents, when in power, found perfection receding before them. This meant vested interests of class, tribe, or oligarchy were more ruthless and clever than first thought. Implementation of the program demanded a greater ferocity than the enemy’s. In places like the Soviet Union and the People’s Republic of China, millions died to advance economic justice, under programs like collectivization and the Great Leap Forward. In Cambodia, the Khmer Rouge blew up the banks, gave up on money altogether, and drove the population out of corrupt cities and into the killing fields of the countryside.
Government power and paternalism ravaged the economies of these countries. In Western Europe, the advance of innocence was less rigorous, more democratic, but in relative terms the economic results were the same.
The quest for perfection meant the increase of state control. Such control awarded economic decision-making to people who were immune from the consequences. Irresponsibility proved to be bad policy. Father, it turned out, didn’t know best. As a practical matter, wealth tended to be generated by people with a stake in the results.
By the end of the twentieth century, we had lost our innocence.
Celebrations were brief and half-hearted. Even the crustiest seeker after responsibility remembers, with a twinge of sadness, the moment he learned Santa Claus didn’t exist. But things are as they are. Innocence about the world, once lost, is irretrievable.
For a generation, administrations of both parties based economic decisions on an acceptance of the world as it is. The results fell short of perfection, but ever larger numbers of Americans grew prosperous and sleek.
Enter the current recession. In the last two quarters, the US economy has contracted by about 2.5 percent — not a happy time. The baby boomers, confronted by the first serious downturn of their adult lives, did what they do best: they panicked. They cried no fair. They asked Daddy to make it better. The last administration, in its least glorious hour, pretended to oblige them to the tune of $700 billion dollars. I have said all I can on this subject, and will pass it over in silence.
It’s the new crowd that now concerns me. The President has proposed a stimulus package worth a trillion dollars. That is, quite literally, an astronomical amount. A number of questions occur to the most economics-challenged citizen. Will the money simply be printed, or taken in taxes? If printed, how will inflation be stopped? If taken, how will that stimulate anyone or anything?
Such a huge amount of wealth will splash merrily over those who can influence the government, who have friends and connections, who have done nothing more productive than suck up to power. To believe otherwise is innocence. Since innocence was lost, and cannot be regained, we must be dealing with a species of self-delusion. That is another baby boomer specialty.
Because I very much hope for the success of the new administration, I have paid close attention to the President’s arguments on behalf of the stimulus. Other than apocalyptic predictions strangely reminiscent of his predecessor, not much has been offered to persuade a doubter. We are told we must abandon the “failed economic theories” of the past. But which are these, exactly? And why talk about theories, when the problem is practical? The world is what it is. We can’t legislate or stimulate it into an Eden.
President Obama cited St. Paul in his inaugural address. The passage, from Corinthians, reads in full: “When I was a child, I spoke and thought and reasoned as a child. But when I grew up, I put away childish things.” From the perspective of liberal democracy, this is a noble ideal. The defining quality of childhood is dependency — and a childish, dependent people will soon bargain away their freedom.
I find it hard to reconcile the putting away of childish things with the sentiment, expressed today by the President, that unless we embrace the stimulus bill, “our nation will sink into a crisis that, at some point, we may be unable to reverse.” Never ever? That is an argument to frighten children, not to persuade adults.
We are being asked, I fear, to pretend to be innocents. We are being told Father knows best, and never mind the world as we know it to be. We are being invited to resume our economic virginity long after reality has had its way with us. At a certain stage in life, that may be an alluring pose — but we baby boomers are now older, and far less comely to look upon, and no amount of self-delusion will return our maidenhood.