Evil Geniuses: The Unmaking of America: A Recent History (45 page)

Permit me to repeat: forty years ago in a
Wall Street Journal
column, the pioneering modern right-wing intellectual
announced
a main part of that cynical plan, presenting it as a defining fuck-you-chumps feature of the conservatives’ new approach: if tax cuts for the rich and big business “leave us with a fiscal problem,” Irving Kristol wrote, again with a smile, mammoth government debt is
fine,
because from now on “the neoconservative” would force “his opponents to tidy up afterwards.”

Ever since, the liberals’ political role on economics and deficits has been to disprove the circa-1960s tax-and-spend caricature, to prove that they are responsible grown-ups, sensible Goldilocks moderates, conservative the way conservatives used to be. As college-educated professionals became a more and more important Democratic constituency, the general reluctance on the left to try anything
too crazy
also grew. In the 1970s and ’80s that was understandable, but the left learned the lesson too well, and by the ’90s it became a very bad habit, especially unattractive as a default posture among the liberal well-to-do—
restraint
helping out the less-lucky majority but
reckless
on big business and the rich getting their way.

In the spring of 2020 we urgently increased the total federal debt by 13 percent. Watch: if Democrats get more power in Washington anytime soon, there will be a new Republican outbreak of mock fiscal panic and insistence on restraint—hysterical in both senses, overwrought as well as darkly funny. It’s past time to resist that trap, to dial back the excessive liberal aversion to risk, where habitual fear of political counterreaction to transformative new policies and programs prevents them from even having a chance at getting popular and enacted. Knee-jerk centrism, splitting the difference
from the get-go
between themselves and the official right, with the goal of upsetting nobody very much, has been a terrible Democratic reflex on economics. For a while going forward, our forty-year-long tyranny of the status quo may make doing some of what needs doing feel a bit radical. And mistakes will be made. As an ER physician friend once told me, part of her job is to minimize scarring, but you can’t let that stop you from doing the main job, saving the patient.

Most people who call themselves progressive properly insist that we move beyond rigid binary categories concerning gender and sexuality. The progressive consensus in psychology and psychiatry also now considers the mind and consciousness itself to be fundamentally nonbinary, and individual people to be
neither
absolutely rational
nor
delusional but on continuums somewhere in between the poles, most of us clustered on the sane side. But why limit that sensible acceptance of fluidity and nuance to sexuality and mental states? It’s unfortunate that so many on the left tend to be as ferociously binary as people on the right when it comes to politics and policy.

Being ideologically nonbinary can sometimes make
political
sense (bigger tent, more allies), but that’s not mainly why I’m for it. It isn’t my groovy synonym for
centrist
or
bipartisan
. The policy position on any given subject that appears to be at the “center,” equally distant from the positions of the organized right and left, is sometimes quite wrong. What’s more, old-fashioned default bipartisanship is impossible when one of the two parties is cuckoo or operating in bad faith or both. Rather, being nonbinary on economics means sticking to goals that can seem radical—lots more power for workers and average citizens, optimizing the economy for all Americans rather than maximizing it for rich ones and corporations—but then being nondoctrinaire about how we achieve the goals. It’s like “hybrid vigor” in genetics, where stronger offspring are produced by outbreeding rather than by inbreeding. It’s the virtue of every kind of diversity in organizations and on teams, in addition to justice and kumbaya, because seriously divergent points of view can increase the odds of finding and pursuing the best ideas, tactics, and strategies.

In a famous Supreme Court opinion during the Depression, Justice Louis Brandeis wrote that “one of the happy incidents” of America’s federal system is that Washington can treat smaller governments and jurisdictions as policy proving grounds, because “a single courageous state may serve as a laboratory and try novel social and economic experiments without risk to the rest of the country.” Surely we can expand our laboratories-of-democracy purview beyond U.S. states to include the virtual World’s Fair of successful social and economic policies on display from which we can pick and choose.

Running a society well and fairly requires optimizing more than maximizing, going for the greatest happiness of the greatest number and the smallest possible number being screwed. Single-minded maximization of any one thing turns into crazed binary thinking—maximum profits are
everything,
regulations are
all
bad or
all
good (as it also tends to do for individuals: never apologize, constantly apologize, practice celibacy, practice promiscuity, eat as much as possible, starve yourself, and so on). Before the 1970s and ’80s, back when corporate CEOs were still supposed to worry about their employees and communities and the public good as well as the price of their stock, that was optimization.

But then by focusing exclusively on one or two numbers, corporate executives become willfully simpleminded, like primitive calculators, artificially unintelligent.
^*3
The business school authors of “Theory of the Firm,” that 1976 paper that became the scripture for ignoring such “stakeholders,” actually argued in a subsequent paper that optimization for a whole society or diverse community or complicated individual simply
Does. Not. Compute
: “Since it is logically impossible to maximize in more than one dimension, purposeful behavior requires a single valued objective function.”

Among the great examples of nonbinary thinking are the efforts of both presidents Roosevelt: they got the federal government to intervene in the free-market system in the early 1900s as it never had before in order to save the free-market system, to keep out-of-control capitalists from wrecking capitalism. The year upper-class FDR said of the forces of “business and financial monopoly” and “organized money” that he “welcome[d] their hatred” was the same year F. Scott Fitzgerald wrote that “the test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time.”

The new Washington think tank that I mentioned a few pages ago is the Niskanen Center, and the thinkers there would remodel our economy along the lines of the Nordic social democracies. So…socialist? Not exactly—it was created by apostate defectors from Charles Koch’s libertarian Cato Institute. “Markets are not just the natural and spontaneous consequence of government inaction,” its 2018 manifesto explained. Remember: the economic right’s great confidence trick in the 1980s was to redesign and reengineer the economy to privilege the rich and business—and
then
to insist that a market economy is like a precious unchangeable piece of nature, neither designed nor engineered.

Markets are products of design—for good or ill….For instance, when we design markets that do not price the costs that a firm imposes on others—for example through pollution, or in finance…—then we get far more of things that we don’t want (like global warming and financial catastrophes). Environmental or financial regulation of this sort is not “anti-market”; on the contrary, it is essential to a properly constituted market where firms can’t make excess profits by pushing off costs onto others.

“Countries like Canada, Denmark and Sweden,” says Will Wilkinson, Niskanen’s head of policy, “have become more robustly capitalist over the past several decades. They needed to be better capitalists to afford their socialism.” What he calls “free-market ‘socialism’ ”—note that he puts
socialism
in quotation marks—may seem like an oxymoron, but in fact it’s acknowledgment of the range of vigorous real-world nonbinary hybrids.

The headlines on a few recent U.S. opinion surveys were basically These Crazy Kids Love Socialism, but my takeaway from the data is that younger people tend to be more ideologically nonbinary. A survey of people under thirty by Harvard’s Kennedy School of Government found that majorities said they “don’t support” capitalism
or
socialism, with small fractions who “identify as” either socialist (16 percent) or capitalist (19 percent). In a 2019 Survey Monkey/Harris poll of adults of all ages, six out of ten of those under twenty-five “have a positive reaction to the word
socialism
”—but six out of ten of them
also
have a positive reaction to the word
capitalism,
more or less the same as among people over twenty-five. Basically, the younger you are, the closer you come to thinking that—given no particulars spelled out—capitalism and socialism are equally okay.

But how does nonbinary thinking shape particular policies?

Our healthcare system is a grotesque jerry-built Rube Goldberg machine that’s expensive, wasteful, ineffective, unfair, anxiety-provoking, and confusing. It welds together private and public components in some of the worst possible ways—such as the federal law prohibiting Medicare from negotiating prices with pharmaceutical companies, which may cost us an unnecessary $50 billion a year, 7 percent of the entire Medicare budget.
^*4
The system should get a complete overhaul. That is a binary starting point, but deciding what that means really isn’t binary at all, because the range of vastly superior versions from relatively less (Switzerland) to more (Canada) to totally (the U.K.) government-run is wide. The irreducible and correct ideological binary in the politics of healthcare is fair and effective versus unfair and ineffective. But a nonbinary approach is also enthusiastic about the genuinely virtuous free-market effects of government-guaranteed healthcare—everyone unshackled to switch jobs or occupations at will, to freelance or have multiple part-time jobs, to raise children, to become an artist, or to start a business.

Not all regulation is good, and not all deregulation is bad. I described earlier how the sensible deregulation of some industries, such as the overregulated airlines in 1978, was undertaken in good faith by people on the left—to increase competition to make prices lower and service better, antitrust by other means. But then conservatives turned suspicion of regulation into a true phobia and insistence on deregulation
of every kind
into dogma. That’s because regulation that benefits Americans in general by making life safer or fairer or healthier also often prevents businesses from absolutely maximizing profits, which is taboo.

Or was: concerning antitrust regulation of the giant tech companies, the regulation-
bad
binary has started to crack even on the right. All sorts of antitrust experts and enforcers—federal and state, right and left—have been suddenly looking hard at Google and Facebook (and Amazon and Apple), as if it’s the twentieth century again.

It is nonbinary to support the careful deregulation of urban real estate development as one necessary way to create more apartments and houses in prosperous cities that would be affordable for more people. Excessive regulations and approval processes really can drive rents and real estate prices unnecessarily higher, and the policy choice shouldn’t be binary—laissez-faire Houston versus restrictive San Francisco. As with antitrust suddenly being taken seriously again, there are hopeful new models for smart, democratic
re
-regulation intended to make urban housing cheaper and cities more dense and environmentally sound—such as the fairly radical and fairly uncontroversial zoning code Minneapolis just adopted.

That’s a joke. But when Andrew Yang was an infant—decades before the idea of a universal basic income began its national emergence in
Phineas Finn
fashion, from
chimerical
past
dangerous
to merely
difficult
on its way—possibly, eventually—to
absolutely needed
—a modest version went into effect in America. In fact, this shockingly successful socialist experiment began at the very moment when the rest of the country made its historic right turn in the 1970s and early ’80s—and in
Alaska,
the self-consciously ultra-libertarian state that only one Republican presidential nominee has ever lost. It’s a fantastic nonbinary American laboratory-of-democracy tale.

In my telling, the central character is Arlon Tussing. He grew up in Oregon’s rural Rogue Valley and Berkeley, California, in the 1930s and ’40s, attended the University of Chicago when Milton Friedman had just started teaching there, and graduated from college at seventeen. He went on to get an economics Ph.D.—and during the 1950s and early ’60s, he become a leader of and writer for the Socialist Party of America. In 1965 he moved up to Fairbanks to teach at the University of Alaska, and while a professor there, he also served as the U.S. Senate Energy Committee’s chief economist.

Shortly after Tussing became an Alaskan, North America’s largest deposit of oil was discovered on the North Slope, and oil companies paid the state of Alaska the equivalent of $6.5 billion up front to start drilling, with royalties to follow. The good-looking young Alaska professor, when asked by a reporter how the oil money should be used, said, “The only way to guarantee that the money does any good to most of us is to hand it out to the people.” The new Republican governor agreed, and after personally getting Milton Friedman’s okay, he made it his main political project to amend the state constitution to put a quarter of the state’s oil revenues into a dedicated fund, the Alaska Permanent Fund, then send a dividend check every year to every resident of Alaska, including children. Free money for everyone, no strings attached! Just as the new plan was being finalized, the governor visited China and met with Premier Zhou Enlai, who was just beginning the struggle to move his country’s economic system away from dead-end Communism. “You Alaskans,” Zhou told him, “are more socialistic than
we
are!”

The annual Alaska dividend varies each year, depending on how the fund’s $66 billion worth of investments perform—it was $1,600 per person in 2019 and 2018, or $6,400 each year for a family of four, but it has occasionally reached the equivalent of nearly $3,000 per person and rarely dipped below $1,000. In 2007 another Republican governor got the legislature to pass an even higher tax on the oil companies’ profits, an astoundingly progressive tax with rates that increased as the market price of oil increased. As a result, a year later each Alaskan got the equivalent of nearly $4,000, including the governor and her husband and five children, whose $28,000 universal basic income checks probably arrived just days before she failed to be elected the Republican vice president of the United States.
^*5
Professor Tussing died a few years ago in an old town in another archetypal western place, Silicon Valley. His two final Facebook posts are fabulous. One concerned a news story floating the possibility that Texas governor and future energy secretary Rick Perry might become president (“hell. No!”) and the other was about himself: “I. Am happy on public demand to explain why and how I have long been Libertarian AND a Socialist.”

It has worked out fine for Alaskans. According to the academic research, their modest universal no-strings cash entitlement hasn’t made them work less, although it has made more people who hadn’t worked take part-time jobs, especially women, apparently because the dividend helps them afford childcare. It also seems to make for better nutrition, with fewer underweight newborns and fewer obese toddlers, especially among the poor, and it has lifted a third of Alaska’s officially poor rural Native citizens above the poverty line. The effect on overall inequality is unclear, but in the early 1980s Alaska had the highest income inequality of any state in America, and now it has about the lowest.

North to the Future
is Alaska’s official motto. The U.S. future will almost certainly need something like a Permanent Fund and a popular understanding, acceptance, and extension of its underlying idea of social wealth. Social wealth is really not an extreme or unfamiliar notion. Alaska’s phenomenal oil strike was a one-off, but the new part was the direct sharing, giving some of the government’s take from the windfall to everybody individually and equally. All Americans collectively own, through the government, 28 percent of the land in the United States, as well as the coastal seabed. A small bit of that is leased—to drilling and mining companies, solar and wind and geothermal firms, ranchers—for $12 billion a year.
^*6
The money is ours, it just doesn’t go to any of us individually unless we’re among the Natives whose land the feds administer and lease out for them.

Before the oil age, starting in the 1860s, a large piece of America’s collective wealth, one-tenth of all federally owned land, was given by the government to millions of individual Americans, to live on and farm and own as homesteaders. At that same time, the government granted another 100 million of our collectively owned acres to individual states—to sell and then use those proceeds to create the hundred public colleges and universities that became the foundation of the U.S. higher education system.

What else do all Americans own in common that could generate income and directly improve everybody’s lives, like the oil under the North Slope did only for Alaskans? The air over the whole United States. Instead of just
giving away
the right to dump 5 billion tons of carbon dioxide into our air every year, we should start charging a fee for it, by means of taxes on oil and other fossilized carbon we burn. Those tax revenues could cover an annual dividend paid to every citizen, even oil-enriched Alaskans. A group of sane conservative éminences grises, including three former Republican treasury secretaries, recently proposed exactly that.

The same scheme was proposed a few years earlier by the left activist Peter Barnes in his book
With Liberty and Dividends for All: How to Save Our Middle Class When Jobs Don’t Pay Enough.
As Hillary Clinton was about to launch her 2016 presidential campaign, she read it. What happened next is a sad and perfect epitome of the last few decades of Democratic political economics. “I was fascinated by this idea,” she wrote in her memoir,

as was my husband, and we spent weeks working with our policy team to see if it could be viable enough to include in my campaign. We would call it “Alaska for America.” Unfortunately, we couldn’t make the numbers work….We decided it was exciting but not realistic, and left it on the shelf. That was the responsible decision. I wonder now whether we should have thrown caution to the wind and embraced “Alaska for America” as a long-term goal and figured out the details later.

I wonder if she thought about putting scare quotes around “responsible.”

Another rich territory of social wealth isn’t a natural resource, but it is ubiquitous and collectively created. It’s the Internet. U.S. government funding was directly responsible for developing the semiconductor industry (and other fundamental pieces of computers) and for inventing the Internet, and after that for Google, Siri, and GPS, among other platforms and technologies.

If we behaved like the seed investors and venture capitalists we were and are, we’d now be collecting many billions a year from companies using our publicly funded Internet. But so far, we are not. It’s as if we built the interstate highway system but then, because
free markets,
let some dudes set up tollbooths along its 49,000 miles and keep all the money they collected for themselves. But it’s even more ridiculous than that. Now without all our ongoing billions of individual hours of daily keystrokes and clicks and pictures and videos, all the data and “content” that we donate to Google and Facebook and the rest of them, they’d have nothing to sell to advertisers—and selling ads is their business. So on the glorious new public digital superhighway we built, we’re also now all working as volunteer staff for the insanely profitable tollbooth-and-billboard businesses that the private companies installed.

In fact, Mark Twain invented this business model in 1876 as a joke—Tom Sawyer’s fence-painting grift, persuading a crowd of fun-loving young people with time on their hands that the tedious work he needed doing was
fun,
then even charging the eager fools to do it for him. Since 2013, when the digital pioneer and Microsoft philosopher-prince Jaron Lanier wrote a book about the basic unfairness of the Internet economy and proposed requiring the tech companies to somehow pay for our data, that notion has also moved from
chimerical
toward
possible.

Ditto with universal basic income. Andrew Yang’s presidential candidacy was quixotic but also successful—it gave the first extended, respectful national spotlight to the two important truths underlying his campaign: the inexorable automation of jobs, and our need to radically readjust the political economy to cope.

Who knows how or when or if a universal basic income could be rolled out, or what its precise funding mechanisms and rules would be? But it’s feasible.
^*7
The Yang campaign version was $1,000 a month from age eighteen on, funded by a value-added tax and a carbon tax. In a Pew Research survey about automation and economics in 2017, pre-Yang, 61 percent of people were in favor of the government giving “all Americans a guaranteed income that would meet their basic needs” as a way of dealing with “robots and computers [that] are capable of doing many human jobs.” Two surveys in 2019 asked about UBIs in a badly inaccurate way—about hypothetical government incomes paid
only
to people “whose jobs are threatened by automation” or “who lose their jobs because of advances in artificial intelligence”—that is, not a no-strings, no-stigma payment that everyone would get. But even asked that way, half or nearly half of respondents were still in favor, including as many as three-quarters of younger people.

Replacing our patchwork of existing social welfare programs with a unified, universal system of cash payments is a basic idea that conservatives from Hayek to Friedman have supported. Charles Murray proposed a full-on UBI fifteen years ago in a book published by the American Enterprise Institute, and now that “we are going to be carving out millions of white-collar jobs, because artificial intelligence, after years of being overhyped, has finally come of age,” he recently started pushing it hard once again. “Yes,” he wrote in
The Wall Street Journal
in 2016, “some people will idle away their lives under my UBI plan. The question isn’t whether a UBI will discourage work, but whether it will make the existing problem significantly worse.” The approval of people on the right, and of tech billionaires like Mark Zuckerberg and Elon Musk, does not make universal basic income a better idea, just a somewhat more politically plausible one.