Listen to the Victims of the Free Market

Both parties push free trade without seriously addressing the needs of displaced American workers.

Blue-collar workplaces are not just for photo opportunities.

Photographer: Bill Pugliano/Getty Images

Last week, I talked about why market liberalism is, despite its upsets, the right program for America. Today I’m going to talk about why American elites are doing such a bad job of selling it, and why I think people in both parties are revolting so strongly against their influence.

Any government policy creates winners and losers; that is simply unavoidable. That’s why I am always leery of articles about policy that consist of saying “This person has been helped” or “This person has been hurt.” Even the Soviet economy worked well -- for the commissars. But you cannot run a nation of 300 million people by competitive anecdote.

Market liberalism is no exception to this problem. The dynamic forces of creative destruction make many people better off, especially the descendants who will inherit the collective fruits of generations of American ingenuity. It also makes some people indisputably and permanently worse off, as previously stable and profitable careers are made obsolete. Those people are not going to accept that they’ll just have to lean into the strike zone and take one for the team, no matter how logically elegant your arguments.

QuickTake The Middle Class

That said, the arguments for market liberalism are bound to sound a lot less convincing when they invariably issue from the folks who aren’t expected to take one for the team -- who are, in fact, being made better off, thanks to skills that are prized by the global market and thanks to trade, automation and immigration that have put more goods and services within their reach.

It’s not so easy to remedy that problem, since academic economists and policy analysts are among the knowledge workers who have benefited greatly from liberalization. On the other hand, those people could stop being so tone deaf in the way that they talk about these things, and so blithely sure that what is good for them is, always and everywhere, good for everyone else.

To see what I mean, let’s look at something that elites consistently fail to talk about in any meaningful way: good jobs. Oh, we talk around those things. We talk about trade and immigration, if forced, though we do not of course do any listening on the same topic. We talk about inequality, and paid leave. We talk about education. Politicians make ritual obeisances toward the necessity of decent work, promising that some policy, laughably inadequate to the task, will provide thousands of good jobs doing something we want to do for completely different reasons, like reducing carbon emissions.

But neither party has any meaningful policy to foster good work -- by which I mean work that offers opportunity, stability, respect and enough money to raise a family.  The closest either party comes is the $15-an-hour minimum wage, a policy with the slight drawback that it may throw a lot of people out of work.

Instead of asking how we have ended up with an economy that offers stability and reward only to the holders of a college diploma, and how we might change that, elites of both parties focus on the things they want for themselves. Republicans offer tax cuts and deregulation, as if everyone in America were going to become an entrepreneur. Democrats offer free college tuition and paid maternity leave, as if these things were a great benefit to people who don’t have the ability, preparation or inclination to sit through four years of college, and as a result, can’t find a decent job from which to take their leave.

While there are a lot of things on the parties' agendas that primarily benefit the educated, there are very few that primarily benefit people who aren’t like us. The implicit assumption of elites in both parties is that the solution for the rest of the country is to become more like us, either through education or entrepreneurship. Rarely does anyone discuss how we might build an economy that works for people who aren’t like us and don’t want to turn into us.

And the giant hole at the center of this discussion we aren’t having is work. We talk a lot about how to palliate the effects of a labor market that no longer offers many rewards to the less educated. We act as if jobs inevitably grow, like weeds, in the fertile soil of capitalism. Or worse, as if they were a sort of optional intermediary step in the important business of distributing money and fringe benefits. Given how central work is to the lives of the elite, how fearful we are of losing our own careers, this belief is somewhat inexplicable. It’s also politically suicidal, as the current moment now shows us.

People have been pondering the rise of Bernie Sanders and Donald Trump, wondering why people are suddenly so exercised by populism at a moment when employment is all right, incomes are not plummeting, China is faltering, and Mexican immigration is flowing south across the border rather than north. The simple answer is that people don’t worry about statistics. They worry about their own lives, and especially, they worry about work.

Even if they are still consuming the same amount of stuff, even if their incomes are all right for the moment, if people feel that they cannot count on work, then they will feel helpless and frightened, and they will turn to politicians who can assuage those fears by pointing to specific enemies who can be vanquished to secure their safety.

Democrats convinced that they have the answer to populism in the form of more social welfare programs are as gravely mistaken as the Republicans who focused on the same old pro-business program while the populist revolution was rising in their own party. Populist movements do not arise because people are desperately worried about inadequate tuition subsidies. They arise because people are worried about their physical security and their ability to make a decent life for themselves.

And “for themselves” is the important phrase in that sentence. Of course it is true that no man is an island; anything you have beyond what you could wring out of the land with your own hands without benefit of modern tools is as much a product of the society around you as it is of your own efforts. But that does not mean that most people will be content to be the well-fed wards of that society, or for that matter, to be the wardens. Most people want to be in a reciprocal relationship with the society around them, providing valued labor in return for valued goods and services. Giving them the goods and services without the work is as unsatisfying as giving someone an Olympic gold medal for a sport they’ve never competed in.

There is no better example of the folly of the elites than the current fashion for a universal basic income among both liberals and libertarians. Instead of trying to figure out something hard, like how to build an economy that provides adequate work for everyone, the idea is to do something easy, like give them checks.

I’ve argued about the technical aspects of this before -- how much it would cost, what it would mean for immigration policy, how difficult it would actually be to replace many of the welfare programs that are supposed to be cut to pay for it with a straight-out cash transfer. Leave those aside. The idea that a universal basic income can substitute for a job is exactly the sort of thing that makes sense to an educated elite that already has a lot of other sources of status and reward in our society. 

I’ve sat on a lot of panels on this topic, and inevitably someone waxes lyrical about the creative possibilities that will be unleashed by a universal basic income, the opportunities for art, community service, political activism, cultivation of family and friends. This is, needless to say, completely divorced from the actual experience of communities with high rates of long-term dependence, whether they are American communities where Social Security disability has become a substitute for long-gone industrial work, or European countries with a long-term dole.

Being out of work makes people unhappy and depressed, even when they have an income stream to take care of their basic needs. What those unhappy depressed people mostly increase when they are out of work is their sleeping and television-watching; during the great recession, volunteering, education and exercise basically didn’t budge.

But how many of today’s mandarin class are actually intimately familiar with those types of communities? Very few, so instead they imagine the only dependent community they are familiar with: a college dormitory.

I will give the universal basic income people this much; even if they aren’t really grappling with the need for work, at least they understand that there is a problem in the labor markets. That’s more than you’d gather from the major speeches or the policy programs of our two main political parties.

If the elites want to sell market liberalism, and immigration, and all the rest of the package, then the first thing they have to do is stop talking to each other about these things, and start thinking about how to listen and talk to everyone else.

Don’t answer every question about jobs with boilerplate about clean energy, or entrepreneurship, or anything that assumes that the solution to our problems is to somehow arrange for everyone in America to get a four-year degree.

Don’t assume that the rest of the country is full of Morlocks who do not need what you have for yourself: a stable job that connects you to other people, gives you a sense of usefulness and security, and offers you some chance at an even better future. 

Don’t try to assuage security concerns about immigration by comparing terrorism to car accidents, or any other impersonal and undeterrable force. In other words, treat people as people, with normal people-type emotions, rather than abstract statistics, or undifferentiated blobs of human potential waiting to be molded into your image.

That improved conversation is not an answer to either the political or the economic problems that Americans are facing. But at least it’s a start.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

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