ABANDONING SCHOLARSHIP FOR ADVOCACY?

Peter Temin had a choice in offering The Vanishing Middle Class: Prejudice and Power in a Dual Economy as a reasoned analysis of technical change or development economics or macroeconomics, or as an audition to become a court intellectual for Nation and Progressive readers.  He chose the latter course.  Perhaps, this Book Review N^o. 5 will argue, because to do so enabled him to write a shorter book.



His focus, and his is not the first to so focus, is on the changes in the United States economy between the end of World War II, or perhaps since the end of the Cold War, and today.  There has been a great deal of work on those changes, from a variety of perspectives.  My interpretation is that the lopsided win in that War got a lot of people thinking that those conditions could go on forever, when, for better or worse, reality returned, and the country's traditional comparative advantage in advanced-technology, knowledge-intensive goods and services returned.  That return took place at a particularly bad time for much of what we understood as the industrial middle class, as a combination of Fordist manufacturing methods enabling workers with modest academic credentials to produce advanced-technology goods with an absence of competing countries, either because their industrial base had been bombed out, or because they had not yet developed their own industries, gave way to new advanced technologies requiring workers with stronger academic credentials, and those factory jobs in rebuilding and developing countries looked pretty good compared to subsistence farming.

Where Professor Temin deviates from much of the received wisdom is in thinking of the United States economy as a different kind of developing economy, with a prosperous, core or "capitalist" sector and a hardscrabble, peripheral or "subsistence" sector.  In the United States, that core includes finance, technology, and education: that is, knowledge-intensive and advanced technology goods and services, and a potential collection of villains (heirs to the robber barons, stripping assets; disrespecters of privacy who, worst case, are establishing a shadow government; and gatekeepers, possibly reinforcing technologies of oppression.)  Here's a David Korten summary of how that works.

Temin notes that the U.S. economy has fractured into two sectors rather like the split between capitalist and subsistence sectors in traditional developing economies. Roughly 20 percent of U.S. workers are now employed in a high-paying finance, technology, and electronics sector. The other 80 percent face a daily struggle to survive on insecure, low-wage jobs in an everything-else subsistence sector.

When I was growing up in the 1950s, we assumed that a middle-class family could be supported by one adult with a secure 40-hour-a-week job. The family owned a home and a car, met daily expenses without consumer debt, expected its children would graduate debt-free from trade school or college, and looked forward to a secure and comfortable retirement. That lifestyle, once enjoyed by most white families, now requires an income at least twice the current median U.S. family income of $57,617.

I'll leave the confounding effects of increased female labor force participation for the reader as an exercise.  Left for future research is whether the Amazons and Bitcoins will figure out ways to use the skills of people currently "not qualified" in their enterprises, or whether they will find themselves overtaken by events.  Mr Korten is not hopeful.  "We are dealing with the consequences of a collapsing system that puts the future of all—including Jeff Bezos—at risk. It cannot be fixed simply by increasing opportunities for a few women and people of color to briefly become equal opportunity exploiters." Neither is Noah Smith.

No matter how hard Trump supporters shut their eyes and visualize the past, the average American is not going to time-travel back to the world of the 1950s. Some Americans will work tending the robot factories of the future, but many others will have to find jobs as craft brewers, or construction workers, or social-media managers, or nurses.

The next component of Professor Temin's argument is the deterioration of government.  Using the developing-country model, he suggests that the core sector secures control of the machinery of state, implying that governance exists along a continuum from oligarchic to autocratic.  Here, there's also room for additional research, as the major political parties are both uneasy coalitions of parts of the core sector and sub-populations among the people he assigns to the subsistence sector.  Moreover, there are fracturing forces at work in those coalitions.  Michael Lind appears to be thinking along similar lines to Professor Temin, and it might be wise to read his essay in full.  Consider this.

The managerial class has destroyed the social settlements that constrained it temporarily in the second half of the twentieth century and created a new kind of politics, largely insulated from popular participation and electoral democracy, based on large donors and shifting coalitions within a highly homogeneous coalition of allied Western elites. Following two decades of increasing consolidation of the power of the managerial class, the populist and nationalist wave on both sides of the Atlantic is a predictable rebellion by working-class outsiders against managerial-class insiders and their domestic allies, who are often recruited from native minorities or immigrant diasporas.

That's hardly the situation a controlling oligarchy would want to find itself, and yet those fractures among the old major party coalitions are likely to continue.  Mr Lind has one vision of an ultimate resolution, "Is there an alternative to a Latin American or Southern future for the West, an endless clash of oligarchs and populists? If there is, it will take the form of a settlement like that of the post-1945 social contract in its spirit, though not in its details."  Definitely not in details, those days are gone.  Mr Temin suggests another, p. 156, involving strengthening public education, imprisoning fewer people, rebuilding roads and sewers, forgiving student loan debts, and expanding "democracy" and "diversity."  We could get those talking points from the magazines I suggested at the start of the review.  Thus, ultimately, my disappointment.  Professor Temin is among the people who interprets "Make America Great Again" as nostalgia for a whiter country -- is it really wise to dismiss any reference to earlier times when stuff worked as somehow racist? -- and his policy proposals might leave out many of the very people who have, whether by the dynamics of credentials and creative destruction, or something more nefarious, been displaced from middle class to subsistence.

(Cross-posted to 50 Book Challenge.)