Discover more from Brad DeLong's Grasping Reality
David Chance: REVIEW of “Slouching” at Independent.ie
Nice to see:
David Chance: ‘At 600-plus pages… not for the faint-hearted, but there’s little in the way of jargon… the booked is laced with interesting anecdotes, although DeLong does get a bit wordy…’
“A bit wordy.” Hah! At over 600 pages, it is not a book for a flight from Dublin to Frankfurt or a ferry ride to Liverpool. Think “transoceanic” instead.
Slouching Towards Utopia <bit.ly/3pP3Krk>
David Chance: Slouching Towards Utopia: Clinton guru’s sweeping story of an economic dream that died: ‘Economist Brad DeLong has described himself as a ‘card-carrying neoliberal’ and a firm believer in the power of globalisation and free markets to deliver prosperity.
His narrative <bit.ly/3pP3Krk> of capitalism and the unprecedented wealth it created during a ‘long century’ that lasted from 1870 until 2010 tells a tale in which near-universal poverty finally ended for those fortunate enough to be born white and male and to live in northern industrial countries.
DeLong is professor of economics at the University of California and was a top US Treasury official during Bill Clinton’s presidency, where he helped to make policy on issues such as the North American Free Trade Agreement, which critics say killed US manufacturing.
This book, more than two decades in the making, tells the story of what DeLong says is an era in which economic transformation was the dominant force in society for the first time.
The story is presented through the prism of two individuals. The first is Friedrich Hayek, the intellectual father of free markets and the force behind Thatcherism; the second is Austro-Hungarian philosopher Karl Polanyi, who believed self-regulating markets were incompatible with human needs and desires.
At 600-plus pages, it is not for the faint-hearted, but there’s little in the way of jargon and the booked is laced with interesting anecdotes, although DeLong does get a bit wordy.
With a century and a half to cover including two world wars, the rise and fall of fascism and communism (or, as DeLong irritatingly insists on calling it, ‘really-existing socialism’), the Great Depression and the post-war economic miracle, the tale rips along at a decent pace.
The starting point is one in which the life of ordinary people has barely changed in centuries — it is defined by the precarity of too little food, poor health, high population growth and high infant mortality.
Life, for most people, was just grim. All of that started to change in 1870, DeLong argues, when the industrial revolution was married to the organisational skills of modern firms by free-market capitalism.
It is not just the invention of the flush toilet or electric power that had a transformative effective on the lives of ordinary people, he argues, but the ability of companies to deliver those products.
“What is most important is never so much the arrival of any particular technology as it is the burgeoning understanding that there is a broad and deep range of new technologies to be discovered, developed and deployed,” he writes.
For this to work, you needed the market order of property rights, contracts and exchange to incentivise production of goods, said Hayek, whose life spanned most of that ‘long century’.
Yes, life was still hard, dirty and very unequal in the US but it was a life that people from Ireland, Hungary and Russia would travel thousands of miles to live. Hayek believed that not only did justice and fairness not matter, they were antithetical to the workings of the market and to freedom.
The marriage of technology and business saw the average wage of unskilled workers rise by a half by 1914 as commerce became globalised like never before.
Then the music stopped with the ‘isms’ that would derail progress — the nationalism of the World War I and then the emergence of communism and fascism followed by a second global war.
This is where Polanyi comes in. In reaction to the displacement of social relationships by the market, he argued society would strike back against what it sees as unfair outcomes.
“As a consequence, a market society will face a backlash — it can be a left-wing backlash, it can be a right-wing backlash, but there will be a backlash — and it will be powerful,” DeLong writes.
A backlash also killed off the equitable wealth creation of the social democratic post-war era amid the great inflation of the 1970s which then ushered in Thatcherism and Reaganism.
Despite what DeLong sees as the failure of the new neoliberal project, it remains the dominant economic and political force, animating Bill Clinton and Tony Blair as well as Fine Gael here in Ireland.
DeLong had announced in a 1998 lecture with the same title as this book that he aimed to complete the work by the end of that century. Had he done so, it would have been a very different narrative. Communism had been defeated only a decade earlier and China had not yet started cutting a swathe through the American heartland.
As recently 2006, DeLong saw “rising working- and middle-class incomes in America during the next generation”. Economists, he stated, could transform the business cycle “from a life-threatening economic yellow fever of the society into the occasional night sweats and fevers”.
That dream died in the financial crisis, which the author says was mishandled by Barack Obama. Now we have real fascists winning the Italian election and ‘nativists’ running Hungary, Britain and America under Donald Trump. Europe is at war again, thanks to Vladimir Putin. While income growth for those at the top is better than ever, white men lower down the scale now resent having to share their slice of the economic pie with ethnic minorities and women. “A new story, which needs a new grand narrative that we do not yet know, has begun,” DeLong concludes.
Non-fiction: Slouching Towards Utopia <bit.ly/3pP3Krk> by J Bradford DeLong
Basic Books, 624 pages, hardcover €22.99; e-book £17.99