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If you want to understand how the liberal brain trust is thinking about politics
and the economy today, a good place to start would be a new book by two
widely read political scientists on the left, Jacob Hacker of Yale University and
Paul Pierson of the University of California, Berkeley.
In "American Amnesia," Hacker and Pierson argue that Americans have
forgotten the hard-headed resourcefulness that made America prosper -- that
we've forgotten that sometimes the best tool for fixing a problem is the
government. The authors blame this absentmindedness on what they view
as misguided conservative ideology.
Americans now tend to think about our government as a constraint on our
freedom, or, at best, as a kind of necessary evil that is occasionally useful for
correcting the free market's excesses. Even those on the left sometimes
narrowly view the government primarily as a way of redistributing income
from the wealthy to those in need, according to Hacker and Pierson.
In Hacker and Pierson's expansive account of the history of U.S. politics, by
contrast, the government isn't just a means for redistribution or even an
economic handicap. Rather, they argue, the government is a crucial source of
economic growth.
Specifically, they write, one of the main reasons that we're so much better off
than previous generations of Americans is that the government can make
people do things for society's benefit that they wouldn't ordinarily do, such
as pasteurize their milk and vaccinate their kids. Also, the government can
make people pay taxes to fund lucrative investments in education, scientific
research and the construction of roads and rails -- to name a few of the
main reasons for material progress in the past century.
The authors argue that these limitations on freedom are how the United States
became a rich country, and why there are relatively few rich nations in the
world with a small government. "Government works because it can force
people to do things," they write on the first page, opening the book with a
challenge to the conventional wisdom on both sides of the aisle about the
relationship among economic freedom, economic growth and well being in
general.
Wonkblog interviewed Hacker and Pierson by phone last week, and an
edited transcript is below.
The interview started with a comparison of average heights in different
countries. For most of the history of the United States, Americans were the
tallest people in the world. Recently, though, northern Europeans became the
world's tallest people. The Scandinavians have a reputation for stature, but it
turns out it is the Dutch who are the tallest -- eight inches taller, on average,
than they were two centuries ago.
Hacker and Pierson argue the shift occurred because, these days, active
government has made Europeans healthier than we are. In particular,
according to the authors, they have healthier childhoods, because their
governments offer more material help to pregnant women and infants than
does the U.S. government.
Hacker: The United States has gone from being the country with the tallest
people in the world by a pretty significant margin -- during the Second World
War, Americans were a couple inches taller than the Germans they were
fighting -- to a country in which heights are pretty middling compared with
other rich democracies. We mention Dutch men running into the tops of
doorways because we and the people who study height think its a very good
marker of population health. It tells you about nutrition in the womb and
socioeconomic cohesion and the degree to which a society is good at
encouraging a sort of healthy flourishing, particularly in early life.
The fact that we have gone from being the tallest to among the smallest
dovetails with all the other evidence in the book. While we're continuing to
improve in areas -- like education, life expectancy and the rest -- we're
improving much more slowly than in the past, and we're improving much
more slowly than other rich democracies are today.
Pierson: It's not that Americans are getting shorter. It's that the rate of
improvement has slowed down dramatically, which has not been true in a lot
of other countries. We're not waxing nostalgic for the idea that life was so
much better in some earlier time. We're really trying to celebrate the
incredible progress that the United States and other rich democracies made
over the course of the 20th century. Whats alarming is the way in which -- in
relative terms, either compared with our own past, or compared with the
performance of other countries -- the rate of progress has slowed down. Thats
something to be concerned about.
Hacker: We have grown bigger in one way, of course. We've gotten
significantly heavier. The average male in the 1960s weighs the same amount
as the average woman weighs today.
One of the other really interesting parts of the book was where you
talk about creativity. Economists have long hypothesized that the
reason economic growth happens in the modern world is that
people are creative. They come up with new ways of doing things.
They invent things, they engineer things, they have new ideas and
they discover things, and that makes us all better off. Today,
dimensions. And if you bring it up, they do think its important -- "Oh yeah,
they took lead out of gasoline and out of paint, and cleaned up the air and the
water." I don't think it's prominent.
Hacker: We tend to focus on this zero-sum element, this point-in-time
element of government's role, the transfers that go from one group to
another. George W. Bush once said, "Make the pie higher." One of the
mistakes is to think that making the pie "higher," making the economy larger,
means deregulating the small circle who are putatively creating prosperity. If
you start to understand prosperity as a social product, then you really start to
see government's role as much broader and much less about redistribution.
Conservative readers will say that the free market has done quite a
bit to improve people's standards of living, with free trade being
the classic example. If you look at, say, local housing regulations,
conservatively inclined folks have a very strong argument that
government is getting in the way of prosperity as well as fairness.
I'm just wondering if there is anything that you would add for
conservatives who think you're only telling one side of the story
here.
Hacker: We're not arguing that government always does the right thing. You
mentioned land use policies, which are clearly responsive to concentrated
interests. The conservative critique of crony capitalism carries a lot of weight.
It's just misdirected. It's not the Export-Import bank thats the problem. We
can debate it, but it's a flea on an elephant. The problem is that government
isnt effectively regulating industry.
We also have the fact that we spend vastly more than other rich countries on
health care because we have a set of policies that are far too solicitous of the
private health-care industry. The same kind of story can be told about the
financial industry, the degree to which its offloading large systemic risks on
the rest of our economy. Climate change is a huge rent, as economists call it,
that the fossil fuel industry enjoys. And so rent-seeking can take both forms,
but the biggest forms of rent-seeking -- the ones I just mentioned in health
care, energy, the fossil fuel industry and finance -- dwarf everything else.
At this point in our history, people do not understand the story we tell. The
valuable contribution of the book is to excavate and surface the enormous
positive contribution of government that transformed our society and all rich
societies in the course of less than a century from places where health and
income and education were all extremely low to enormously prospering,
flourishing societies.