Do you avoid certain neighborhoods deemed “unsafe?” What exactly gives them that reputation? And what might you find if you did not avoid a stroll through these places?
That’s exactly what Chris Arnade, a former small town guy turned Wall Street trader, set out to do. He started in such neighborhoods in his New York home, and then took an epic road trip to better understand life in America in the “back row.” His experience turned into his new book, Dignity: Seeking Respect in Back Row America, also the subject of this EconTalk episode.
What was the most interesting thing you heard in this week’s episode? Has this conversation prompted you to broaden your walking horizon? And below we offer some more questions for further thought and discussion. So sit back, relax, and enjoy more conversation.
1- What does Arnade mean by delineating Americans into a front row versus a back row? What is “the credential machine” to which he refers, and what role does it play in this demarcation? To what extent do you believe Arnade’s analogy of a narrow path to be true?
2- Roberts offers what he describes as both a negative and a positive view of Arnade’s book. On what margins do these two views differ? To what extent can they both be true?
3- Can you discard the emphasis on economic growth and still be unabashedly free market? What are the “human reasons” for which we should want economic growth? For which we should not?
4- Arnade says he argues in favor of certain policies (universal health care, for example) not because they are economically right, but because they are morally right. He says, “I think the problem is that we’ve put the market at the center of everything. And, when you do that, that ends up eroding those norms we’ve talked about.” How does Roberts push back on this? To what extent is it a mistake to look for policy solutions to these kinds of problems? Where should we look for solutions?
5- Is there anything inherently destructive about markets? How exactly do Roberts and Arnade differ on this question? With whom do you find yourself more in agreement with, and why?
READER COMMENTS
SaveyourSelf
Jul 29 2019 at 3:08pm
What does Arnade mean by delineating Americans into a front row versus a back row?
In the podcast, Arnade uses the metaphor of the front and back row to try and differentiate people who find success in the “post-industrial knowledge-based economy” and those that don’t. He is trying to build a model for what differentiates the “winners” and “losers” so that he can identify some causal agent and intervene. He proposes that the educational system explains much of the difference between the two groups but also generalizes beyond education. “Part of it,” he says, “is just that narrow path requires you to know things. And to be aware of it. And a lot of people aren’t aware of it. They don’t know anything about it. They don’t know the availability. They don’t know the unwritten rules.“ He proposes, therefore, that ignorance is the cause of poverty.
My 13 year old daughter had a different explanation when I told her about this hypothesis that not knowing leads to failure. She said, “No. They know. They know what it takes to succeed. But it’s hard being successful. It’s uncomfortable. And you have to sacrifice a lot. And they don’t want to work. And they don’t want to sacrifice. And they don’t have to. So they don’t. But it’s not because they don’t know. They know. They chose. And I chose. And I won. But in a way they won to. Because they chose. And they got what they wanted.” She was talking about her classmates at school, but I found her statements generalizable and surprisingly profound.
Amy Willis
Aug 6 2019 at 4:10pm
Your daughter sounds awesome! Hearing about family conversation sparked by EconTalk is one of our favorite things!
SaveyourSelf
Jul 30 2019 at 8:21am
3. Can you discard the emphasis on economic growth and still be unabashedly free market?
Yes and no. On the one hand, yes, you can advocate for free markets without advocating for economic growth. Economic growth is a byproduct of a healthy free market. It is an emergent phenomenon, not an intentional one. Since it is not intentional, whether we focus on it or not is unimportant to the function of the market. Hence we can remain unabashedly free market without concerning ourselves with economic growth.
Markets are complex systems. As such, they contain infinite amounts of information relative to the actors that make them up and the economists who are trying to assess their function. “Growth” is one very rough measure of the health of an economy. It captures both the gains to efficiency from specialization/trade and also gains from innovation. It is a somewhat useful tool for evaluating the underlying health of a complex economy for which there are very few other reliable metrics.
Additionally, measuring “growth” can help us differentiate gains made through innovation and specialization from gains obtained through theft. Stealing from one person and giving the ill-gotten property to another person creates “growth” for the recipient of the transfer, a loss of prosperity for the victim, and no change or a negative change to overall standard-of-living when the two are averaged. Most people will agree that theft is immoral in principle, but when they find themselves the recipient of the windfall from someone else’s immoral acts, the beneficiaries may find it suddenly difficult to see the whole picture as accurately as they did before they knew they would be made richer by it. There is a temptation to ignore the victim, or worse, vilify him or her. Upholding “growth” as a general goal is helpful for dispersing the illusion of gain from redistribution. Using growth as a goal metric might help us discipline ourselves against such temptation. It makes sense, therefore, that people who adore redistribution schemes abhor growth metrics. As a side note, measuring growth does not help to dispel the illusion of prosperity produced by short term borrowing. So growth alone is not a perfect measure of economic health.
On the other hand, no, we cannot abandon economic growth as a metric and remain “free market” oriented. Because one of the assumptions underlying free market models is that individuals have unlimited desires—unlimited desires for resources, unlimited desires for accumulation, unlimited desires–in other words–for growth. And, although that assumption is not always strictly true in reality, it is true enough on average that models designed around that assumption work remarkably well. In order to ignore “growth” as a goal of society, therefore, we must first assume that individuals in the society no longer have unlimited desires. That change in assumption would have enormous implications to the predicted outcomes of our economic models. In my assessment, our models would not work. They would have no predictive power. They would no longer describe with any accuracy the world around us. Thus, abandoning “growth” as desirable goal for markets is the same as abandoning our current understanding of human nature and, with it, everything we think we know about economics.
SaveyourSelf
Jul 30 2019 at 8:28am
Is there anything inherently destructive about markets?
This is a loaded question. Markets are collections of people rationing resources. Rationing is moving resources about. To say that moving resources away from some arbitrary point is “destructive” and toward a different arbitrary point is “constructive” is, you guessed it, arbitrary. “Destructive” applies a negative connotation on a neutral process. What’s more, it is a poor descriptor of what is actually going on in markets. So no, there is nothing inherently destructive about markets. And it is probably a mistake to apply the word “destructive” to market processes at all.
Amy Willis
Jul 30 2019 at 11:10am
Fair response, it IS a loaded question. And I agree with your last statement regarding the way in which we talk about markets. So how can we further conversations about markets with folks like Arnade and Mary Hirschfeld (who I thought had a similar perspective), using the same, or at least not loaded, language?
SaveyourSelf
Jul 30 2019 at 9:14am
4a- Arnade says he argues in favor of certain policies (universal health care, for example) not because they are economically right, but because they are morally right. He says, “I think the problem is that we’ve put the market at the center of everything. And, when you do that, that ends up eroding those norms we’ve talked about.”
Arnade is making an error here that F.A. Hayek goes to great pains to describe. A moral is a general rule. The hope is that following the moral rule will makes us—on average—better off. Moral rules are generally made in the form of “thou shall not…” Importantly, moral rules are applied at the time of a decision, when future outcomes are uncertain. What Arnade has done is to make a claim that a particular outcome is known to make us better off—having healthcare, for example—and, since we are better off with that outcome, any rule that leads to that outcome is moral. It is another form of “the ends justify the means.” It reverses the direction of time for reasoning purposes. It imagines the future is knowable, understandable, and controllable. It is a retrospective argument in a prospective world.
Retrospective reasoning is sometimes helpful for generating a hypothesis, but retrospective reasoning is otherwise worthless when applying the scientific method. Where are the comparison groups? What are the causal relationships? What are the tradeoffs? These questions, and many others, cannot be answered with retrospective analysis. Rules are moral, not outcomes. Arnade is confusing the two. His reasoning is faulty.
The market is a generic rationing tool. Single payer healthcare is an already made decision. Arnade, therefore, is making a decision about the allocation of resources—TONS of resources—, dispensing with the current decision making apparatus—the market—, and then proposing to force his decision on everyone else using government policy. His justification for depriving every citizen of their decision making capacity is “Look. People, the biggest–the only thing I really hear about every day from people out there is health care, health care, health care, health care.’ It’s just–it’s the political issue that if somebody “solves it,” they are going to get elected.” He is saying, therefore, that people want healthcare, therefore giving it to them is moral. He confuses morality with popularity. He has confused justice with justification. He has confused wishful thinking with scientific reasoning.
4b. To what extent is it a mistake to look for policy solutions to these kinds of problems?
Policies are rules. There is nothing wrong with looking for rules to help guide our decisions to produce desirable outcomes. Who is in the best position to decide and how best to answer those questions is where we differ.
4c. Where should we look for solutions?
Trial and error prospective comparisons using the scientific method. A free market produces exactly that kind of trial and error prospective comparison as a matter of course. The free market is a scientific machine. Discarding the free market and replacing it with government rationing is nonscientific. Chris Arnade’s reasoning and suggestions are regressive.
SaveyourSelf
Jul 31 2019 at 10:31am
“So how can we further conversations about markets with folks like Arnade and Mary Hirschfeld (who I thought had a similar perspective), using the same, or at least not loaded, language?”
That is a really great question, Amy.
How to teach economics? How to convince kindly people that failure is, at worst, a necessary evil and, at best, an indispensable part of learning. That without stumbling, we would learn less well, or not at all. Then persuade them that allowing others to act freely, even knowing their choices will have impacts on everyone else in society, and that those freed people are going to make mistakes, and those mistakes will have consequences for others, but—both in spite of and because of those tribulations—freedom is still in everyone’s best interest, is a hard sell. Not only because that explanation is long and wordy, but because it predictably invokes strong negative emotions—fear of strangers, fear of harm, fear of the unknown, etc.
With Chris Arnade, I think we further the conversation best by just listening. He has recognized by some happy accident that information is local. He thinks there is a problem and he has gone to those places personally to see it for himself. And, at his best, he is not advocating policy. He is simply describing what he has seen. Mary Hirschfeld is already well familiar with economic models. She requires no teaching. She has some assumptions that she may not be aware of that expose themselves when she talks generically about policy. But with her I think a gentle pointing out of her overconfidence in policymakers abilities to make good decisions for others will be sufficient. I suspect she will return to scientific discipline by choice when given the opportunity. All that said, I admit I wondered how to get Chris Arnade to understand and internalize market models while listening to this podcast. You’d think he would be in a good position to absorb it. His epiphany that McDonalds is not evil, for example, startled him. If he were to generalize that finding, it might make him open to learning different models of reality.
My current approach to communicating economics is to avoid using words that carry an emotional connotation—positive or negative. Like the word trade. Nobody has an automatic emotional reaction when they hear the word trade. So it’s safe. You’d think market would be safe, and it usually is, but it is not well understood. I’ve tried describing markets to other people, explaining that markets are just a bunch of people trading, but it’s still not much use in conversation. Nobody gets it. So I’m avoiding markets. I’m getting a lot of mileage from rationing and tool and rationing-tool, rationing through trade, and rationing through violence to describe, well, a lot of things (https://www.independent.org/publications/tir/article.asp?id=1413 ).
The world is complicated. And, unfortunately, even our simplified models of the world are more complicated than most people are willing or able to contemplate. Even the simplest of causal chains require holding two disparate concepts in short term memory. That kind of exercise is energy intensive and effortful for the brain and makes people uncomfortable. Most people resent math and abstractions for that reason.
Daniel Kahneman has a lot to say about the proclivities of the mind in Thinking Fast and Slow. System two [the part of our brain somewhat under our conscious control] follows rules, compares objects based on multiple attributes, and makes deliberate choices between options. But it is lazy and limited, avoiding work whenever it can and only able to operate for a finite amount of time each day even when it can be encouraged to work. Worse, our bodies make us feel slightly uncomfortable when focusing—a built in punishment for attempting cognitive work. All this just means trying to educate people about math models—which is what economic models are, largely—is going to be an uphill struggle.
By avoiding emotionally laden words, I am hoping I can talk to people in a way that they will not automatically throw up barriers to what I am saying. When it works, I am able to converse with people who have remarkably different understandings and appreciations for freedom than myself without giving or taking offense. And it’s kind of working. I am having conversations with people about individual freedom and rationing over and over and they aren’t unfriending me on Facebook or kicking me out of their parties. They don’t often “like” my comments but some of them have told me that they read them. I’m hoping that through patient repetition over time this approach will eventually ease other people into a basic understanding of economics—rather like learning through osmosis rather than effortful study. I’m putting in the effort. All they have to do is listen or read.
That’s where I am right now anyway. I’d love to hear your thoughts on the question.
Arde
Aug 6 2019 at 5:00am
I listened to Mary Hirshfeld’s episode and I understood her thoughts slightly differently from you two.
Amy, as regards the similarities between Hirshfeld and Arnade, they both are against the centrality of the markets. However, Arnade is much more negative about markets than Hirshfeld is. Arnade sees them as destructive and as always ending up in a winner takes it all situation. Hirshfeld, on the other hand, is more positive about markets. She says: “I love markets. I think private property is an institution that’s absolutely fitting to human nature.” However, in her view (which is also my view), markets are very good for addressing our physical needs, but they are not at all suitable for providing things which she calls human goods, and which are very important,
Saveyourself, my listening of Hirshfeld did not leave at an impression that she is overconfident in policy makers ability to make good decisions for others. She does not advocate any top down approaches. She advocates introspection (to understand what is good/beautiful/true for you) and conversations.
Amy Willis
Aug 6 2019 at 4:12pm
Arde- that’s fair. I agree with your interpretation of Hirschfeld. But I wonder if Arnade IS that negative about markets. Think about the way he talks about McDonald’s for example. That’s a market providing the sort of community center that is really positive for some of these neighborhoods. It might be true that he’d rather see PUBLIC community centers, but I guess I still see him as closer to Hirschfeld than not.
Arnold Ginsburg
Aug 7 2019 at 11:12am
Before I listened to this podcast I never thought that the homeless had anything of value that was of primary importance in protecting. I thought about this concept of dignity and found that it opened up an entirely new area to be considered in dealing with homelessness. The issues of housing and socialization of the homeless have to include the question of whether any life change includes the preservation of the dignity of the recipients.
Tracy Boshart
Aug 20 2019 at 10:06am
Unfortunately, Mr. Arnade made a comment that invalidated his efforts. He mentioned that he gained trust of his subjects by letting them hold his $3,000.00 camera while he stepped away. The fact that he did not understand that his subjects did not either know that the camera was worth that much or that, even if they did, the value to them for hock with little to nothing, certainly not worth the risk of taking it. If Mr. Arnade actually understood his study subjects and/or their circumstances he would/should have known this.
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