The Republican’s “New Economy”

Thomas Frank spends considerable time in One Market Under God, defining what he means by the New Economy, probably because there is no easy definition of the term:

While there are of course genuine economic changes underway in America (as there have always been), this idea is in large part not about economies at all but about ways of thinking about economies. It's a set of beliefs (importantly, beliefs first enunciated by Ronald Reagan) that, once enacted into public policy, has permitted an upward transfer of wealth unprecedented in our lifetimes; it's a collection of symbols and narratives that understand the resulting wealth polarization as a form of populism, as an expression of the people's will.

Frank shows that this new definition of populism is nearly the direct opposite of what that term meant historically. And yet, it is this very grafting onto a nearly opposite set of beliefs that makes the concept of the New Economy so powerful.

In essence the New Economy suggests, as I noted in an earlier blog entry, that the economy is the ultimate democracy, that people "vote" their beliefs by what they buy. In the second and third chapters of his work, Frank points out both those beliefs are flawed and how they have been propagated in the media:

And yet the New Economy is a fraud. Tom Friedman's formula, "one dollar, one vote," is not the same thing as universal suffrage, as the complex, hard-won array of rights that most Americans understand as their political heritage. Nor does it mitigate the obscenity of wealth polarization one whit when the richest people ever in history tell us they are "listening" to us, that theirs are "interactive" fortunes, or that they have unusual tastes and work particularly hard. Markets may look like democracy, in that we are all involved in their making, but they are fundamentally not democratic. We did not vote for Bill Gates; we didn't all sit down one day and agree that we should only use his operating system and should pay for it just however much he thinks is right. We do not go off to our jobs checking telephone lines or making cold calls or driving a forklift every morning because this is what we want to do; we do it because we have to, because it is the only way we can afford food, shelter, and medicine. The logic of business is coercion, monopoly, and the destruction of the weak, not "choice" or "service" or universal affluence.

Anyone who has ever tried to buy only products that reflect their values will quickly see how difficult it is to really "vote" your values. First, it's difficult just to know what products do or do not represent a particular value.

For instance, I've always tried to buy locally-grown produce, but it has become increasingly complex to do so in local markets, except perhaps in local Saturday Markets held during the summer. Most grocery stores simply don't label where products come from, and too often the labels conflict with the produce that is actually in the bins. If you want to support organic products, it becomes much more difficult as most supermarkets carry a very limited line of organic products. And it's certainly anyone's guess how the workers who handle these crops are treated.

I would hate to think that every time I finally settled for a product that was less than what I really wanted, that I was somehow voting for what that product repesented. If the market I'm shopping doesn't carry fair-trade, shade-grown organic coffee does that really mean that I support the coffee growers who are destroying the rain-forests, or does it merely mean that companies make it increasingly difficult to really express our values through our purchases? Do I have to quit buying my grandchildren toys if I think it's wrong to outsource American jobs to China?

On another level, I was more than a little dismayed to find out that the "socially-responsible" mutual fund I invested in had invested heavily in Wal-Mart stock. Walmart may be many things, but I never in my wildest dreams thought that my retirement funds would go to support a union-busting company. Yet, unless I'm willing to spend my retirement actually studying and following the stock market, something I'm definitely not willing to do, then I have little choice but to invest through mutual funds, effectively depriving me of my "vote" if we are to believe advocates of the New Economy.

Thomas Frank spends considerable time in One Market Under God, defining what he means by the New Economy, probably because there is no easy definition of the term:

While there are of course genuine economic changes underway in America (as there have always been), this idea is in large part not about economies at all but about ways of thinking about economies. It's a set of beliefs (importantly, beliefs first enunciated by Ronald Reagan) that, once enacted into public policy, has permitted an upward transfer of wealth unprecedented in our lifetimes; it's a collection of symbols and narratives that understand the resulting wealth polarization as a form of populism, as an expression of the people's will.

Frank shows that this new definition of populism is nearly the direct opposite of what that term meant historically. And yet, it is this very grafting onto a nearly opposite set of beliefs that makes the concept of the New Economy so powerful.

In essence the New Economy suggests, as I noted in an earlier blog entry, that the economy is the ultimate democracy, that people "vote" their beliefs by what they buy. In the second and third chapters of his work, Frank points out both those beliefs are flawed and how they have been propagated in the media:

And yet the New Economy is a fraud. Tom Friedman's formula, "one dollar, one vote," is not the same thing as universal suffrage, as the complex, hard-won array of rights that most Americans understand as their political heritage. Nor does it mitigate the obscenity of wealth polarization one whit when the richest people ever in history tell us they are "listening" to us, that theirs are "interactive" fortunes, or that they have unusual tastes and work particularly hard. Markets may look like democracy, in that we are all involved in their making, but they are fundamentally not democratic. We did not vote for Bill Gates; we didn't all sit down one day and agree that we should only use his operating system and should pay for it just however much he thinks is right. We do not go off to our jobs checking telephone lines or making cold calls or driving a forklift every morning because this is what we want to do; we do it because we have to, because it is the only way we can afford food, shelter, and medicine. The logic of business is coercion, monopoly, and the destruction of the weak, not "choice" or "service" or universal affluence.

Anyone who has ever tried to buy only products that reflect their values will quickly see how difficult it is to really "vote" your values. First, it's difficult just to know what products do or do not represent a particular value.

For instance, I've always tried to buy locally-grown produce, but it has become increasingly complex to do so in local markets, except perhaps in local Saturday Markets held during the summer. Most grocery stores simply don't label where products come from, and too often the labels conflict with the produce that is actually in the bins. If you want to support organic products, it becomes much more difficult as most supermarkets carry a very limited line of organic products. And it's certainly anyone's guess how the workers who handle these crops are treated.

I would hate to think that every time I finally settled for a product that was less than what I really wanted, that I was somehow voting for what that product repesented. If the market I'm shopping doesn't carry fair-trade, shade-grown organic coffee does that really mean that I support the coffee growers who are destroying the rain-forests, or does it merely mean that companies make it increasingly difficult to really express our values through our purchases? Do I have to quit buying my grandchildren toys if I think it's wrong to outsource American jobs to China?

On another level, I was more than a little dismayed to find out that the "socially-responsible" mutual fund I invested in had invested heavily in Wal-Mart stock. Walmart may be many things, but I never in my wildest dreams thought that my retirement funds would go to support a union-busting company. Yet, unless I'm willing to spend my retirement actually studying and following the stock market, something I'm definitely not willing to do, then I have little choice but to invest through mutual funds, effectively depriving me of my "vote" if we are to believe advocates of the New Economy.

What do you think?