Synopsis after the jump.
1. Though household incomes have increased over the last thirty-five years, median incomes for males have actually dropped by $800. (Women make less still.) Household incomes have only increased because both partners are working.
2. Household savings have gone from 11% of take-home pay to -0.8%, while the contemporary family has negative savings: revolving debt has risen from 1.4% of annual incomes to 15%. From saving 11% of annual income to indebtedness of 15% of income!
3. However, contemporary households actually spend less on consumer goods than they once did: 35% less on clothing, 18% less on food (including eating out,) 52% less on appliances, 24% less on automotive expenses per car. This revolving debt is not the result of consumer society, despite what everyone would have you believe.
4. Comparing households from 1970 with households in 2006, Warren adjusts for family size by asking questions about the two parent/two child household.
5. Mortgage payments are up 76%: real estate costs are way up, but it’s not really a matter of size. Median home size has gone 5.8 rooms to 6.1 rooms, basically an extra bathroom. However, new construction is aimed at the top 20% of families.
6. Health insurance and health costs are up 74%.
7. Since more families need two cars, the lower per car cost still leads to 52% increases in automotive costs for the two-income household.
8. Child care is up 100%, but that’s just because the average two couple household had no child care costs thirty-five years ago.
9. The median family is paying 25% more taxes than thirty-five years ago.

So: single income families in the 1970s earned less money but had more disposable income. Today, the two-income family spends 3/4 of its annual income on fixed expenses, and spends the 1/4 left on food, clothing, and entertainment. They can’t pare back their spending when financial hardships arise, and if either income is lost through family illness or job loss, the 2006 family can’t pay its fixed costs!

The contemporary middle class (literally media) household works harder, its individuals make less money, it is more brittle, vulnerable to risk. All this volatility spells the coming collapse of the middle class. Bankruptcies are rising, all due to job loss, family illness, or divorce, but people aren’t admitting it. “A middle class where people are falling out and into poverty is a middle class that has less room to bring people up and out of poverty.” Poverty is intractable because the middle class is shrinking, and I think Warren is right to say that our economy is increasingly becoming a two-class society: those who don’t get sick, lose their job, or get divorced, and those who do.

One thing that’s always irritated me about broadly materialist historical explanations is the tendency to miss the importance of contingent historical events. Geography is not destiny, as Jared Diamond suggests, but rather it becomes a destiny when mixed with certain kinds of choices and chances. In The Longterm Effects of Africa’s Slave Trades, Harvard economist Nathan Nunn has shown that Africa’s exceptional poverty is directly linked to the slave trade:

if the slave trades had not occurred, then 72% of the average income gap between Africa and the rest of the world would not exist today, and 99% of the income gap between Africa and the rest of the underdeveloped world would not exist. In terms of economic development, Africa would not look any different from the other developing countries in the world.

If Jared Diamond is right, then Africa’s exposure to tropical diseases and the inadequacy of tropical agriculture suggest that investment in public health is the key to Africa’s future healthy and eventual equilibrium with the rest of the world. This thesis is popular among those who see our responsibilities towards Africa in the light of a the duty of assistance, rather than identifying some deeper obligations like recompense or reparation. It also appeals to our sense of pity, rather than invoking the much messier emotions of guilt and responsibility.

If Nunn is right, slave raiding destroyed institutions in the very most developed parts of Africa, shifting local comparative advantages in the continent away from institutionally stable, politically cohesive, and agriculturally rich coastal and agricultural societies towards remote, rugged, and difficult to access societies. Thus, we should invest in the things we destroyed: institutional stability and political cohesion in coastal and agricultural nations. I have independent reasons for supporting the institutional hypothesis, insofar as I suspect that institutions are the best tools for producing legitimate outcomes and that legitimacy has a greater impact on growth and justice than public health or the forms of production. Still, it’s nice to have some confirmation that the worst thing that human beings have ever done to each other is still the same: not genocide, which is a remarkably modern and weird form for our aggressive nihilism to take, but good, old fashioned domination.

Some short pieces derived from Nunn’s work:
Slave trade and African underdevelopment
The Blessing of Bad Geography

Just look how they conclude. Pogge ends with a supplication:

The analysis shows that the problem of world poverty is both amazingly small and amazingly large. It is amazingly small in economic terms: The aggregate shortfall from the World Bank’s $2/day poverty line of all those 40 percent of human beings who now live below this line is barely $300 billion annually, much less than what the United States spends on its military. This amounts to only 0.7 percent of the global product or less than 1 percent of the combined GNIs of the high-income countries. On the other hand, the problem of world poverty is amazingly large in human terms, accounting for a third of all human deaths and the majority of human deprivation, morbidity, and suffering worldwide.

Most of the massive severe poverty persisting in the world today is avoidable through more equitable institutions that would entail minuscule opportunity costs for the affluent.

While Held concludes with a warning:

It is highly improbable that the multilateral order can survive for very much longer in its current form. [...] Instead, the test of deliberative generalisability needs to be built into reflections on “ways forward” in order to help ensure a focus on global solutions to global challenges – not just American, French, British, German, European Union, Chinese solutions. In other words, we require a multi-perspectival mode of forming, defending and defining political preferences – a mode that is in fact, other- and future-regarding.

The plight of the global poor is disheartening, even enraging… but arguments from injustice do not appear to serve as an efficacious ‘reason to act,’ certainly not ones that can motivate states to make even ‘minuscule sacrifices.’ Whereas the regime-theorist can encompass justice issues within the larger question of legitimacy, demonstrate not our moral responsibility but our mutual interdependence and the potential dangers large-scale inequalities bring to bear on our common world, and show the necessity, rather than the desirability, of solutions to address them.

Seriously? Clinton is backing an inheritance tax that starts at $7 million dollars, saying that we Americans think people should have to ‘work for what you get.’ Except the first $7 million: that you get for free. Don’t get me wrong: I’m not a communist. But given the record deficits we’re facing, I think maybe we could go back to the old $1 million tax-free limit without really hurting anybody. If they want to be ‘truly wealthy,’ let them earn the last $9 million themselves.

The White House argues that the President’s management of his employees allows him to excuse them from such demands. I can certainly understand the sentiment when it comes to operational restrictions like the requirement that the Border Patrol ‘relocate its checkpoints around Tucson every seven days to improve efforts to combat illegal immigration.’ This strikes me as an unusual level of detail for the legislature to slip into an appropriations bill… but it’s still law. A government employee shouldn’t ignore these kinds of regulations when his very powers come from the same branch of government telling him how to use them. This, of course, is a highly controversial view of the relationship between the administrative state and the legislature, which is not supported by case law. But I think it’s right, nonetheless.

Generally, these agencies are withholding information demanded by Congress in exchange for their budgets. These transgressions are even more troubling, though easier to excuse because it seems yawn-worthy that some report wasn’t made or wasn’t detailed enough. The Pentagon can effectively duck requirements that it break out the costs of the global war on terror in its budgetary process because our nation’s safety depends on the work they do; we’re not likely to slash their funding in response. Yet the letter of the law and the spirit of the law are pretty clearly in sync here: if Congress appropriates it, they should be told how it was spent. Without that kind of informational accountability, there’s absolutely no connection between the democratic process and the functioning of government. Given this result, we can say in truth that we have no democratic control of our military’s spending.

Yet it is politics, not statutory law or some fancy theory of the unified executive, that prevents the legislature from standing up to the military on this issue. The unpopularity of taking on war-time profiteering is due to the fact that the money wasted, no matter how egregiously, still pales in comparison to the lives lost. What’s a few billion here or there when our soldiers are in danger? The unspoken assumption is that the absurdly unworkable weapons-systems upon which the money is wasted will save our men and women in uniform, when in fact they simply need better body and vehicle armor, cheap in comparison to military R & D, but not nearly as lucrative.

The GAO’s conclusions were typically modest and relatively neutral, given the political climate. But the implications are startling: our democratically-elected representatives are in many cases powerless to steer the federal government. The Presidency looks more and more like the elected king proffered by Alexander Hamilton but rejected by the Constitutional Congress. Well why not? It’s already hereditary.

DarkForest asks:

Lets say that everything went electric. Cars, power plants, factories, everything. How many nuclear plants (using current technology) would we need to produce?

The first answers are straight mathematical computations from the backs of napkins, and we get estimates ranging from 1000 to 4100 regular nuclear plants, to 200 thorium plants. Then somebody chimes in with the energy efficiency argument. Basically, increasing efficiency is cheaper than increasing capacity, and the return on investment for energy-efficient light-bulbs is three times as high as the most efficient solar installation. He advocates:

[A]doption of public policy that rewards end-use efficiency and penalizes inefficiency, so that we actually end up with the same or better end-use services [than increased carbon/nuclear production] while driving total energy demand down.

This is straight out of Amory Lovins’ Soft Energy Paths. I love this argument, because I love the clever turn back to economic efficiency justifying green policy, rather than pitting industry against the environment. But it doesn’t stop there.

Someone with the deeply satisfying screenname ‘Dasein‘ chimes in to argue against efficiency. “Money that is saved through efficiencies is reinvested in new energy-intensive applications,” he says. He goes on to explain:

You change your old appliances for new, energy-efficient ones. You change all your lightbulbs to compact fluorescents. As a result, you save $200 a year on energy, say. Do you just put that in a bank account? No, you buy a flight to Hawaii. Has your CO2 footprint gone down? If the power had been produced by a nuclear station, it might just have gone up.

A business invests in energy efficiency and saves a million dollars a year at its factory. What does it do? It drops prices on its products, allowing it to sell more for the same profit, and put the savings towards expanding capacity. Lower prices mean more people buy more of the product. Gains in efficiency are offset by increases in absolute production enabled by the efficiency.

I have to be honest: I’ve never thought of this before. It’s an extension of the basic Heideggerian argument about efficiency, which is that when we get into the mode of treating things like ‘standing reserve’ we’re completely constrained by this limitless attempt to store and harness the world, rather than letting it be. I think that might be right… but this is the first time I’ve ever seen it translated back into economics! The same thing seems to hold for gasoline usage, which is actually responsive to prices and thus cannot be curtailed through hybridization alone. Economists call it the ‘rebound effect,’ and the initial Lovinsian (who goes by flabdablet) responded with this report: apparently, no more than 40% of energy saved through efficiency is reinvested, and with automobiles it’s less than that: 10-30%, probably.

Sadly, that report depends on single sector evaluations of energy usage. It doesn’t measure the increased usage of gasoline due to space cooling efficiencies, for instance. While some people might work less if their energy bill was smaller, markets in general find ways to absorb efficiencies into increased productivity. This is easiest to see in industrial increases in efficiency, but it’s really just an effect of the way currency circulation constantly invokes energy expenditure, usually through the increased production and transportation of goods.

Take, for example, Volkswagen and Volvo advertising from the early 1960s. Both automakers used the critique of “planned obsolescence” quite prominently in their advertising campaigns. The message was clear: buy from the big Detroit automakers and show everyone that you’re a dupe, a victim of consumerism; buy our car and show people that you’re too smart to be duped by advertising, that you’re wise to the game. This sort of “anti-advertising” was enormously successful in the 1960s, transforming the VW bug from a Nazi car into the symbol of the hippie counterculture and making the Volvo the car of choice for an entire generation of leftist academics.

The article makes the case that most of our counter-culture actually fuels the economy of waste and obsolescence that drives it. Distaste for conformity is actually an acquired taste, a mark of distinction, and ‘rebelling’ against consumerism by avoiding brand names, for instance, is precisely the measure of a person’s consumption: they must have something new and different, and demand that the economy provide that novelty. These rebels actually -get- their novelty because they occupy positions of power or possess some form of advantage. They can afford the loft apartment; they have the right connections to discover the latest underground band; they have enough vacation time and the cultivated taste to prefer unspoiled wilderness.

What we need to see is that consumption is not about conformity, it’s about distinction. People consume in order to set themselves apart from others. To show that they are cooler (Nike shoes), better connected (the latest nightclub), better informed (single-malt Scotch), morally superior (Guatemalan handcrafts), or just plain richer (bmws).

This is actually fairly well trod ground among media academics and cultural critics of a certain variety, going back to Adorno’s theory of the culture industry and its ‘pseudo-individualization.’ What makes the Heath/Potter book so good are their recommendations. Instead of beating the culture of consumerism with newer, trendier fashions or lifestyle changes that only bring their own set of competitive waste, they articulate banal, practical changes to things like the tax code:

At this stage of late consumerism, our best bet is legislative action. If we were really worried about advertising, for example, it would be easy to strike a devastating blow against the “brand bullies” with a simple change in the tax code. The government could stop treating advertising expenditures as a fully tax-deductible business expense (much as it did with entertainment expenses several years ago).

Yet the very practicality and unsexiness of this proposal is why it’s also the right kind of move. Seductive strategies that promise coolness and glamour are what’s gotten us into this mess. Good stuff.

(m) Ask yourself, what is the big fashion in my profession right now, or in my specific area? Fashions usually edit reality, leaving out important issues that will come roaring back sooner or later. Don’t be a reactionary by trying to roll back the current fashion to something that came before. Instead, identify those elements of the current fashion that are valuable, and articulate an agenda that remixes those elements with the elements that are being left out.

This is good advice: Agre is not the too-clever problem described in the title. In my field, political philosophy, the answer is undoubtedly deliberation, and so I have structured a good deal of my recent work on the things deliberators ‘edit out.’ But let’s take another field, economics. The trend there appears to be Steven Levitt’s style of wacky slice-of-life research, popularized in Freakonomics, that satisfies the infotainment market by giving nice, juicy nuggets of economic data.

Noam Scheiber critiques that trend in this New Republic piece. His argument is that Levitt’s economics-light style distracts his discipline from the big questions of poverty and wealth, famine and obesity, disease and sanitation that ought to occupy them, in search of ‘clean identification,’ tricky little hiccups in the world that give us clear indications of causality, as when Levitt proved that

“a slight increase in the chance of arrest dramatically deterred auto theft. Levitt discerned this by studying cities that had approved the use of Lojack, a transmitter that leads police to stolen cars.”

Much of the rest of the work done in this style tends to be useless and unsurprising, like his studies of sumo wrestling corruption, or else so controversial as to be muddled by the ensuing debate, like his claim that the legalization of abortion led to lower crime rates. So if this is the trend, which is already experiencing a backlash, what’s being edited out? Well, Scheiber points to two things: slow, arduous quantitative empirical studies, and formal economic theorizing. Methodologically, he’s right, but what he’s ignoring is that Levitt’s methods are appealing to a public still ignorant of the ‘duh’ moments he identifies in Freakonomics. It seems to me that Levitt’s work is also good for taking ordinary experiences and making them resonate with the economic theories.

So, as a humble philosopher, I’d suggest that the next big thing is this: making the big questions of poverty, famine, and disease resonate with popular audiences. These things do affect us, so it shouldn’t be so hard. Maybe young economists will have to reject the quest for ‘clean identification’ in the search for quotidian but profound research, but I’m not sure that’s completely reprehensible. The scholars who can keep asking the big questions in a mundane key, people who emulate Amartya Sen instead of Levitt, will be able to ride out both this trend and its aftermath.

Putnam likes to imagine that there is a triangle, its points comprising where you sleep, where you work, and where you shop. In a canonical English village, or in a university town, the sides of that triangle are very short: a five-minute walk from one point to the next. In many American cities, you can spend an hour or two travelling each side. “You live in Pasadena, work in North Hollywood, shop in the Valley,” Putnam said. “Where is your community?” The smaller the triangle, the happier the human, as long as there is social interaction to be had. In that kind of life, you have a small refrigerator, because you can get to the store quickly and often. By this logic, the bigger the refrigerator, the lonelier the soul.

Putnam’s favorite city is Bologna, in Italy, which has a population of three hundred and fifty thousand; it’s just small enough to retain village-like characteristics. “It would be interesting to swap the citizens of Bologna with the population of New Jersey,” Putnam said. “Do the Bolognese become disconnected and grouchy? Is there a sudden explosion of malls in Bologna? How much of the way we live is forced on us? How much is our choice?”

The New Yorker has this excellent rumination on traveling to work, and it reminds me of the various strategies we adopt to shrink our ‘triangles.’ My father was a commuter; he spent his early adulthood listening to motivational speakers and working late to avoid rush hour. Antoinette’s parents chose a small town in upstate New York: their commutes were short, and her mother can walk to the school where she works.

Antoinette and I have taken the metropolitan approach thus far: we live in cities, and rent less space. Early in life, this was simply an economic necessity: we went where the jobs were. Now, it’s become a habit; most of the time the prospect of a fifteen minute drive is enough to make the trip unnecessary. Antoinette’s environmental commitments will likely never allow us to live anywhere that didn’t have public transportation again.

But Putnam, of Bowling Alone fame, adds the above caveat about social isolation. Two hours in the car every day has a greater impact on your habits and outlook than going to church on Sunday, joining a political cause, or doing volunteer work, because it shrinks the time you’ll have to do those other things. It’s our daily habits that make us who we are, even more than our hopes and dreams, our faith or our compassion. The way we spend our time molds our fantasies, changes our convictions, and attenuates our capacity to relate to each other. I think he’s right even as I’ve found cities to be rather isolating. Cities can certainly be less satisfying for the working poor, the ones who most need the community interaction and social capital of which the commute deprives them, even as they provide wonderful opportunities for the upper middle class to cavort and play in their comfortable two bedroom apartments steps from the Opera, the gym, and a five-star restaurant. In Manhattan I spent two hours in the subway every day, and I often went farther if I wanted to stop somewhere on the way home. If I ever returned to New York City I’d make more money, take more cabs, and live in a broom closet on Central Park West. That, apparently, is the key to happiness.

1. Many of the objections that people have to Walmart are actually objections that we would levy at states. For instance, when Walmart won’t sell a book or cd for ideological reasons, we call it censorship. No one calls it censorship when a mom-and-pop bookstore won’t sell politically or sexually-charged media.

2. Walmart is really quite big: 1.4 million employees in the US alone. So they’re hell-bent on restricting worker unionization, of course. (In much the same way that the Soviet Union dissolved all independent worker’s councils….) Much like the classically totalitarian models of socialism, Walmart imposes burdensome restrictions from their workers, or even extorts labor from them.

3. Like all powerful institutions, Walmart seems to be more agnostic than evil. Without any guiding principles but profit and growth, its power is used both to enslave and to free. The size of its labor base and its distribution across the country means that their treatment of laborers almost automatically becomes the national standard. Why join the army, for instance, if you can make the same money working for Walmart? That’s also why the minimum wage arguments are mostly fluff: Walmart already pays almost twice the national minimum. In addition, Walmart takes significant losses when even their poor health coverage is taxed by rising health care costs. Because of this, they seem to be advocating nationalized health care, at least for the nation’s poor (i.e. their workers.) They’ll fight tirelessly to externalize their costs… but that means sharing the burden of poverty with the rest of the country… not such a bad thing.

4. Because of their marketshare, Walmart can regulate industries singlehandedly, by setting contractual standards for its distributors. Take Chilean salmon:

“Wal-Mart buys so much salmon that if it imposed and enforced a set of standards on how salmon was to be raised, and how salmon workers were to be treated, salmon farming and processing companies would need to comply, either to keep Wal-Mart’s business or to stay competitive. And because the volume of purchasing is so high, and because Chile is driving to further expand the supply of farmed salmon, the improved conditions for both the salmon and the people would not cause much of an increase in the price of a pound of salmon in the seafood case.”

They did just that. In February 2006. they made a small change to their supply chain. Now, they won’t buy any salmon uncertified by the Marine Stewardship Council. (MSC site)

5. Walmart can jumpstart an industry, if it chooses. Take solar panels and wind power. By making a substantial purchase of solar panels for all its facilities, Walmart could break through the economy of scale problem and finally bring sustainable power into the reach of the average consumer. As Joel Makower puts it,

“If they follow through, it will be profound and will have a long-lasting impact on the global solar industry.”

On the other hand, they’re not going to stick with technologies that aren’t ready for the marketplace. So with wind turbines, there might not be much feasability at this level:

Now it’s testing wind power in the Colorado store. So far, it’s been a failure. “It might be our familiarity with the equipment,” admits Mosley. “When they break, they break pretty good before we realize it.” The company hasn’t abandoned wind power yet but isn’t blown away by it, either.

The bottom line is that they see themselves “as an aggregator of carbon.” Where there’s profit to be made in going green, they’ll do it.

6. By the way, in researching this entry, I came across a number of proposals from the American National Socialist Worker’s Party, who advocate:

“the nationalization of Walmart…[and] all companies who have betrayed the United States and its white working class.”

Yikes. You’ll get no linkage from me, but I thought it was a bit disappointing to discover these results already out there, discrediting the meme with racist hate.

My point is just the opposite: there’s no reason to nationalize a greedy corporation like this, because they’re actually nationalizing themselves, willingly. Sure, eventually they’re going to need to unionize, and more oversight and regulation at the government level is always better when it comes to safety, labor, consumer protection, and environmental practices. But as Walmart get its hooks further into the American economy, its success becomes inextricable from the success of the country. If Walmart devalues the dollar, its own profits become less valuable. If it drives us into a recession by slowing the growth of wages, it’ll sell less and make less profits. As goes the American Dream, so goes Walmart… and as tough and mean and cunning as these bastards are, they’re not bad allies. I’d rather have them with us than against us.