Monthly Archives: April 2014

Why economists should try to measure happiness

hen discussing media, the philosopher Marshall McLuhan once said, “We shape our tools and thereafter our tools shape us.” Much the same principle applies to economic indicators; once they have been developed they begin to shape our experience and perceptions in ways we rarely realize. Most of us accept numbers as devoid of ideology, as accurate and unbiased descriptions of the world we inhabit — this is their allure.

In his new book The Leading Indicators, the economist Zachary Karabell takes the opposite tack, arguing that “the world these statistics say we are living in and the world we are actually living in often diverge.” Like Freud, Karabell investigates the unconscious assumptions that permeate our lives, in his case focusing on our dependence on statistics.

Freud, in fact, makes a few appearances in the book. The varied economists who developed national indicators (Fisher, Mitchell, Burns, Kuznets), Karabell explains, suffered from “physics envy.” But economics is not physics. Indicators, rather than representing some objective view of reality, are injected with controversial assumptions.

Karabell writes, “The leading indicators are the products of a particular phase of Western history.” In this phase, economics was seen as a mechanism, rather than a human endeavor subject to what Keynes called the “animal spirits.” The economists therefore “invented statistics to measure material output. And if economies became unstable and unbalanced, it was because the wrong tools were being used or because the data and the statistics were faulty.”

In the years following World War II, national statistics took on a “utopian” bent. Karabell reminds us, if we ever knew, that the U.N. Declaration of Human Rights also included economic rights, which were “characterized at the time as human rights on par with freedom of religion and the rule of law, included the right to sufficient food, shelter, clothes, leisure, health care, and a safety net for unemployment, disability, disease, and old age.”

To ensure these goals were met, the U.N. created a committee to develop “National Income Statistics.” The Consumer Price Index was devised to ensure that wages and benefits kept up with higher prices. Its various iterations were often met with vehement disdain from workers and union organizers who called the Core CPI (which excludes more volatile energy and food prices) “inflation minus whatever gets more expensive.” Unemployment numbers essentially created the idea of unemployment — after all, farmers could be destitute, but they were not considered “unemployed” in the sense we think of now, because they hadn’t previously been paid by an employer.

Karabell tells the story of statistics vividly, illuminating the forgotten characters who shaped our numbers. Ethelbert Stewart, “what Mark Twain would have been had Twain been a statistician,” once threatened to burn Bureau of Labor Statistics data when Congress wanted the agency to analyze individual car manufacturers. Frances Perkins, who pushed for the creation of the unemployment rate, was the first woman to serve in a Cabinet-level position (in FDR’s administration), and was therefore the first woman in American history to be in line for the presidency.

There are also many cocktail party-ready anecdotes. In 1992, when the White House Council of Economic Advisers announced that economic growth would be slower in the second quarter than the first, George H.W. Bush said, “This is the worst news I’ve ever heard” — and then promptly lost the election. When Warren Harding first attempted to discern the unemployment rate in 1920, “there were such divergent opinions about the numbers that the attendees put the question to a vote,” Karabell writes. If anything were to disprove Carroll Wright’s maxim — “Statistics are the fitting and never-changing symbols…to tell the story of our present state” — it is certainly this anecdote.

The Leading Indicators doesn’t just tell the stories of the people behind the statistics; Karabell also describes how the statistics are compiled and kept. For instance, travel expenditures “come from airport surveys of travelers and tour groups. This is not rocket science.” Anyone who has filled out such forms on a whim may find their trust in these statistics diminished by this factoid.

The indicators have become so deeply embedded in the public consciousness that they influence markets, which means they must be closely protected. In an enlightening paragraph, Karabell describes the process:

Within the BLS, procedures are just as stringent. The staff members responsible for compiling the numbers encrypt their computers and store the data into secure locations every time they get up to use the bathroom. The janitors and custodial workers don’t even empty the trash in the week leading up to the release. Only the White House receives an early copy of the report, in a locked and guarded suitcase, Thursday evening, 12 hours before the report is issued to the public the following morning. [The Leading Indicators]

Although Karabell’s diagnosis is correct, his cure for the failure of statistics is ultimately unsatisfying. Betraying a truly 21st-century mindset, his solution is “tailored” indicators. He argues not for a broad measure of society, but rather “bespoke” indicators that “empower” individuals: “Our reliance on 20th-century leading indicators to craft a common narrative of ‘the economy’ is an obstacle.” One such “bespoke” indicator is the Office of Financial Research, established in 2011 to develop statistics that “might identify critical problems before they again threaten to bring down the global financial system.”

Such statistics are welcome, but they will still run into the same problems the old statistics did — simply identifying and measuring a problem will not solve it. Karabell’s palliative still faces the conundrum Freud observed in Civilization and Its Discontents, “It is impossible to escape the impression that people commonly use false standards of measurement — that they seek power, success, and wealth for themselves and admire them in others, and that they underestimate what is of true value in life.”

A better path is not to seek precise, fitted, individualistic metrics, but rather a more holistic vision of society. The small kingdom of Bhutan, squeezed between India and China, used to try to quantify Gross National Happiness (GNH). Its former prime minister explained in 2008, “We distinguish between the happiness in GNH from the fleeting, pleasurable feel-good moods so often associated with that term. We know that true happiness cannot exist while other suffer, and comes only from serving others, living in harmony with nature, and realizing our innate wisdom and the true and brilliant nature of our own minds.”

This is not just happy talk, and the recognition that indicators are failing is not limited to small, mountainous kingdoms. In France, then-President Nicolas Sarkozy asked Joseph E. Stiglitz, Amartya Sen, Jean-Paul Fitoussi to investigate the limits of GDP. In 2010 they produced a short book, Mismeasuring Our Lives, in which Sarkozy notes in the foreword, “Our world, our society, and our economy have changed, and the measures have not kept pace.” As a result of his efforts, Insee, the French statistics agency, has begun incorporating new measures into its accounting process, and released numerous reports on inequalityquality of life, and sustainability. The European Union, the Organization for Economic Cooperation and Development, and the U.N. have all been developing new measures based on the Stiglitz commission’s recommendations.

In Britain, Prime Minister David Cameron, a Tory, launched a similar well-being inquiry with the intention of supplementing GDP with General Well-Being (GWB). So far, the Office of National Statistics has released two national reports (based on interviews with some 150,000 British citizens) that have generated many insights and much discussion.

In the United States, Daniel Kahneman and Alan Krueger have developed the “U-Index,” a “numerical representation of how much time people spend doing things they find unpleasing, such as commuting to work in heavy traffic, doing the laundry, shopping for food, or taking care of young children.” Across the country, states like Vermont, Maryland, and Oregon are implementing the Genuine Progress Indicator, which takes into account 26 indicators of progress, to better measure the environmental and social impacts of growth, as well as its distribution.

Still, in an era when governments pursued massive austerity programs on little more than an Excel spreadsheet error, Karabell’s investigation into the motives and misuses of statistics is all the more important. Ultimately, the shift from national statistics that measure production to those that measure well-being will be a shift toward a humanistic economy.

Originally published at The Week.

How Wall Street is crushing Main Street

Co-Written with Wallace Turbeville.

The conservative assertion that government spending “crowds out” private investment has been ascendant since Ronald Reagan’s claim that “government is not the solution to our problem; government is the problem.” The idea is that the government is so big that it discourages private investors from competing in the marketplace.

Today, we face the reverse condition: the casino market that dominates the finance sector is crowding out important public investments. The deregulation of the financial sector — promoted by Republican and Democratic administrations — has changed America from an economy focused on sustainable growth toward a free-for-all for the wealthy.

This change is called “financialization.” The financial sector has grown to almost 8 percent of GDP, from about 4 percent in Reagan’s time. That the financial sector has grown isn’t necessarily a problem; what is a problem is that it has grown faster than the rest of the economy. The purpose of the financial sector is to facilitate investment in a wide array of activities — to grease the wheels of the economy, so to speak. If the rest of the economy doesn’t grow along with the financial sector, it is not fulfilling that purpose.

Financialization causes many problems. First, the financial industry is a poor producer of middle-class jobs, disproportionately benefiting high-end earners (see chart). Second, the financial industry is extremely myopic when it comes to economic trends. One study finds that the growth of the financial sector has decreased long-term investment in the real economy because financiers work in short-term gains and losses. Finally, financial “innovations” like securitization and derivatives have freed trading markets to grow unconstrained by the actual amount of stocks, bonds, and commodities in the real economy. One need only to recall the mortgage-backed market that crashed in 2008 to grasp the scope of this phenomenon.

A consequence of the rise of the financialization machine is that there is less money available for government investment in the real economy. Direct federal investment is already constrained by fiscal dysfunction, so indirect investment is even more important. When the Federal Reserve tries to pump up the economy through easy money, that easy money flows disproportionately to the supercharged investment in the financial sector. The banks end up using it to backstop trading businesses, rather than lending it to productive enterprises that generate jobs in the real economy.

State and local governments, already strapped by tax bases decimated by the Great Recession, have to compete with the financial industry, since investing in Wall Street is more profitable than investing in Main Street. The financial sector’s preference for the trading markets means that small businesses and households, the bulwark of state and local government tax bases, lose out in the competition for investment. As a result, critical public infrastructure investments have been ignored. One study estimates that our infrastructure system needs a $3.6 trillion investment over the next six years. In South Dakota, Alaska, and Pennsylvania, water is still transported via century-old wooden pipes. Large portions of U.S. wastewater capacity are more than half a century old. And in Detroit, some of the sewer lines date back to the mid-19th century.

Government investment in research and development has plummeted, and this will not be replaced by private investment that must compete with the short-term returns from capital investment in trading. The Financial Times reports that “public investment in the U.S. has hit its lowest level since demobilization” after World War II. That’s a shame, because investments in science, for example, produce huge benefits, both in terms of well-being and economic growth. The Human Genome Project, for instance, cost 3.8 billion in public funding and has produced economic gains of $796 billion. That’s a return of $140 to $1! The internet, too, was a product of government research and has produced tens of trillions of dollars in economic output and growth.

 

Public spending in the U.S. is far below the international average (see chart), and the rise of finance is part of the cause. By taking up a larger and larger share of the economy’s resources and using them for the economic equivalent of roulette, we’ve allowed important public investments to be passed up.

This is simply unsustainable. Rabindranath Tagore once warned of “precocious schoolboys of modern times, smart and superficially critical, worshippers of self, shrewd bargainers in the market of profit and power” who, “driven by suicidal forces of passion, set their neighbors’ houses on fire and were themselves enveloped by flames.” Today, these schoolboys increasingly sit on Wall Street, diverting resources from the real economy into fat paychecks. The only question is when the economy will again be enveloped by flames.

Originally published on The Week. 

The plight of conservative comedy: Where’s the right’s Daily Show?

Fox News has astronomically high ratings. Rush Limbaugh rules talk radio. But liberals dominate political comedy. The few attempts to create a conservative satire show have either not found mainstream success (News Busted, a YouTube series with views typically in the low 30,000s), aired far outside of prime time (Red Eye, filling Fox’s 3 a.m. slot), or been promptly cancelled (Half Hour News Hour, with 13 episodes on Fox). Are right-leaning satires doomed to failure?

The creators of Flipside don’t think so. Their once-a-week program, in the vein ofThe Daily Show or The Colbert Report but with a generally conservative tilt, hosted by comedian Michael Loftus, will premiere this fall. Can it work?

* * *

Most explanations for why Republican-friendly satire struggles pin blame on conservative philosophy. Comedian Mike Macrae told me in an email,

Most American comedy traditions stem from the concept of resisting or questioning authority on some level. Our comedy is about rascals and rule-breakers. Mark Twain skewered the notion of Europe’s cultural hegemony over the rustic New World and its new nation of upstarts. Most Marx Brothers movies are essentially about them evading some arbitrarily deputized authority figure, be it the hotel detective or the sailor in charge of finding stowaways. Cheech and Chong wouldn’t be as funny if marijuana weren’t made pointlessly illegal by right-wing cultural pressures. The common thread in these and other American comedy staples has been that the foils are generally motivated by values that we tend to associate with conservatism or, in some cases, the Republican Party platform itself.

Alison Dagnes, an academic who examined politics and comedy in her book A Conservative Walks Into a Bar, came away with the conclusion that:

The nature of conservatism does not meet the conditions necessary for political satire to flourish: conservatism is harmonized and slow to criticize people in power, and it originates from a place that repudiates humor because it is absolute.

These theories may sound attractive—especially to liberals—but suffer from deep deficiencies. For one: Humor doesn’t rely on the objective nature of the social structure, but rather, one’s subjective understanding of it, which is often fraught with bias. For instance, majority of Republicans think that racial discrimination against whites is as bad as discrimination against minorities. “During the last four decades the Republicans and conservatives in general have conceded a lot of the progressive premises,” Kfir Alfia, one of the executive producers of Flipside, told me. “I would question that premise that conservatives are in a state of, or a position of authority.”

What’s more, skepticism of authority is a conservative tenet itself. It was the great conservative philosopher was Edmund Burke who said, “The greater the power, the more dangerous the abuse.” In the Obama era, there are plenty of liberal institutions ripe for mockery. South Park has brilliantly lampooned many of the left’s excesses, from PETA, to raceenvironmentalismAl Gore, San Francisco smugnessabortiontoleranceanti-smoking activists and celebritieslots of celebrities.

So philosophy isn’t the problem. Indeed, history shows that conservative-leaning comedy isn’t inherently unviable. Half Hour News Hour, for example, did well in its time slot despite weak reviews. Financial concerns, not low viewership, killed it. “Essentially, they were trying to run a broadcast show on a cable budget,” Matthew Sheffield, an executive producer atFlipside told me. “It was a lot cheaper to run Oliver North’s ancient war clip show than it was to do that.”

Before Comedy Central settled on the Colbert Report/Daily Show model, it hadTough Crowd With Colin Quinn, a well-liked panel comedy show with many very funny conservative commentators in conversation with liberal ones. (For a representative segment, watch the famous Giraldo/Leary fight over North Korea.)But Tough Crowd struggled with ratings, especially with younger audiences, so it was cancelled to make room for Colbert. Before Tough Crowd, there was Bill Maher’s Emmy-winning Politically Incorrect, which, unlike his current show on HBO, Real Time, had more equally balanced panels and less demagoguery.

* * *

So if philosophy isn’t preventing conservative comedy from flourishing, what is? Structural, demographic, and financial issues.

Successful comics often rise up out of thriving, crowded standup scenes, which tend to mainly exist in urban areas. Jon Stewart, for instance, spent five years in the New York City comedy world before landing a show on TVBig cities tend to be liberal, and it stands to reason that so would be the people who attend comedy clubs in them. Funny urbanites who are conservative may decide that there just isn’t much of a market for their political material. One comedian who I was referred to declined to be interviewed because, the comedian said, the conservative label, “has never been good to me.”

Similar impediments exist in the entertainment industry, which has a not-undeserved reputation for being run mainly by liberals. “People always ask why there aren’t a lot of really big conservative comedians but I think the deck is stacked against that and I doubt it will ever happen in my lifetime,” Nick Dipaolotold The Daily Caller, mentioning that he suspected that his politics were why HBO wouldn’t air a recent hour-long special he taped. There just aren’t many outlets for conservative comics. The feeling, as Stephen Kruiser writes on Breitbart, is that “most liberals in the entertainment industry expose themselves to conservatives about as readily as they would a leper colony.”

But the problem for right-leaning televised comedy may also have to do with audiences. Historically, it’s young people who have favored news mixed with humor, and polls have shown young people trending liberal for years. Fox News’ viewership is older, of a different generation than any up-and-coming standup comics, and many of its members hold pretty traditional views. That’s not exactly the audience that’ll help nurture boundary-pushing, conversation-making comedy. On Half-Hour News Hour, for instance, one writer complained that “the best material we wrote was rejected because the network considered it too controversial.”

In fact, the closest thing Fox News has to The Daily Show (Red Eye) is broadcast at 3 a.m. In Fox style, the show primarily takes the form of a panel and doesn’t include the more expensive-to-produce field pieces. Its racy humor might be off-putting to much of Fox’s primetime audience, but it’s doing relatively well with young people.

* * *

Loftus already has had a successful career as a comic and a writer. He has an hour-long special to his name (You’ve Changed) and he can woo a city crowd (he often stops by Hollywood Improv in LA for a set). Though I’m a liberal, I’ve enjoyed his bits before (and was excited to see him hosting the show).

If Flipside succeeds, it might be because in this era where high-quality web videos for niche audiences are thriving, it can avoid some of the structural obstacles other attempts at conservative satire have faced. Flipside’s looking for broadcast distribution, but it’ll also try to build an audience online. One of its producers, Kfir Alfia, has worked in TV before and seen “really, really funny things go through a horrible development process and have the funny squeezed out of them,” he says. “We’re not going to have a board of directors with a stick-up-their-ass network to have battles regarding content.”

The pilot episode of Flipside proves there’s plenty of potential material, though the punch lines could use some tuning. One bit mocks Harrison Ford for warning about the effects of global warming and then “flying his plane to get a hamburger.” It’s a promising setup, but the payoff—Mattera spraying aerosol cans in studio—falls flat. Another bit lampooning the possible Hillary Clinton documentaries is funny, but a jab about her attractiveness stuck me as gauche.

Of course, politically infused comedy from both sides of the spectrum is tough to pull off. As Norm Macdonald put it to me, “The problem with coming to comedy with any ideology is the surprise is gone. We know the punchline.” Marc Maron told me that he moved away from his more overtly liberal jokes, because “when you’re doing ideological comedy, from a point of view that pre-exists you, it’s very tricky not to carry water for someone else’s agenda.” The Daily Show, for example, seems aware of this. Jon Stewart happily mocks Democrats, drawing vituperative harangues from lefty viewers. The first great conservative comedy show will put humor before ideology. As Mark Twain noted, “Humor is never artificial.”

Originally published on The Atlantic.

What if economic growth is no longer possible in the 21st century?

Co-Written with Lew Daly.

For decades, rapid economic growth has been the norm for developed countries. An educated workforce, a large population boom, major technological advances, and abundant fossil fuels were the key components of growth, generating substantial and broadly distributed increases in standards of living in many countries. We have grown so used to such growth that we inevitably view it as a panacea for a host of economic ills, whether it’s a deep recession or income inequality.

We now understand, however, that the postwar growth paradigm is not environmentally sustainable. We also know that the shared prosperity it once delivered is itself unraveling. With these combined trends, something has to give in order to maintain living standards.

One possible scenario, with surprisingly good news for average Americans, is that constraints on growth will force political leaders to accept redistribution as a policy tool. Indeed, if we cannot grow our way to broadly shared prosperity again, redistribution is the only way to save the middle class.

Many economists have warned that the old model is dying out. In a much-cited paper, Robert Gordon argues that the rapid growth we take for granted is not only historically anomalous but likely to slow significantly in the 21st century, pointing in particular to diminishing returns from technology as one major drag. Developed countries have already picked the “low-hanging fruit” of technological advance (in Tyler Cowen’s phrase), and future innovations will produce far less growth, he argues.

Steven King, chief economist at HSBC, similarly argues, “The underlying reason for the stagnation is that a half-century of remarkable one-off developments in the industrialized world will not be repeated.” Gordon also points to rising inequality, which has led to stagnating middle-class wages, as a drag on future growth. As a result of these trends and others, average annual growth will fall below 1 percent in the 21st century, he predicts.

Then there is the impact on the global economy that will result from combating global warming. Working from a conservative carbon budget of 450 parts per million (PPM), Humberto Llavador, John Roemer, and Joaquim Silvestre predict that achieving this target will require a substantial slowing of growth, mainly borne by the United States and China. The U.S. and China must keep growth within the threshold of 1 percent and 2.8 percent of GDP per year, respectively, for the next 75 years, they say.

In an interview, Roemer tells us that these results are optimistic; after all, some economists have argued that growth may not occur at all. In the paper, the three argue that “there is no politically feasible solution to the climate change problem unless” both the U.S. and China “honestly recognize the connection between restricting emissions and curbing growth.” In contrast, the Congressional Budget Office’s long-range analyses use a growth projection of 2.2 percent on average over the next 75 years.

Other economists have come to similar conclusions about the connections between growth and sustainability. Early in 2012, Kenneth Rogoff argued that maximizing growth must be weighed against the negative possibilities of growth, like global warming. Indeed as James Gustave Spethnotes, environmental impacts are the most significant challenges to growth: “Economic activity and its growth are the principal drivers of massive environmental decline.”

Growth constraints will push the issue of distribution to the forefront of political discussions. In his forthcoming book Capital, Thomas Piketty predicts that growth will slow to between 1 and 2 percent — 19th-century levels — by the end of the 21st century. This trend, he further argues, will be accompanied by higher returns to capital and lower returns to labor, thereby exacerbating inequality.

The conclusions that flow from these observations are stark. The old economic paradigm relied on unsustainable growth, so we must change the paradigm. For decades, our rising standard of living came at a deep cost to our environment and our children’s future. There is simply not enough planetary bio-capacity to grow our way out of the messy moral discussions of distribution. The idea that inequality is merely an inefficiency to be corrected with a technocratic fix or perpetual growth is no longer tenable.

Fortunately, we have plenty of GDP that could help the middle class, with approximately $200,000 a year potentially available for each family of four. Given that the median family of four only gets about $67,000 a year at this point, it should be clear that it is possible to grow and strengthen our middle class, significantly, while adjusting to the lower GDP growth we are likely to experience in the future.

The question is, will political leaders accept the need for distributional remedies, or will they continue to side with the wealthy against the struggling middle class?

Originally published on The Week.

Conservatives defend inequality out of self-interest — nothing more

Conservatives have justified inequality for decades, arguing that it is an inevitable byproduct of capitalism and broadly beneficial. This intellectual edifice has begun to collapse.

Supply-side economics rest on the assumption that the wealthy drive economic growth, and that by reducing taxes on them, we can unleash latent economic potential. In fact, however, investment is driven by demand, not supply (a point acknowledged by the relatively conservative Martin Feldstein). If there are viable investments, they will be made regardless of tax rates, and if there are no investments, cutting taxes is merely pushing on a string. Thomas Piketty and Emmanuel Saez, two top economists on inequality, find no correlation between marginal tax rates and economic growth.

Recently, two IMF papers confirmed what Keynesians like Joseph Stiglitz have long argued: Inequality reduces the incomes of the middle class, and therefore demand. This stunted demand means fewer opportunities for investment, stunting growth.

Add to this growing body of research the fact that a robust defense of inequality is increasingly difficult to muster when every other OECD country has far lower levels of inequality than the United States. Greg Mankiw’s defense of the 1 percent was widely decried, because a large swath of research shows that the rise of the 1 percent did not come from natural economic forces, but rather rent-seeking.

The evidence is clear: The economic benefits of inequality have been massively oversold. Inequality is, in fact, a detriment to growth. So why has the right not conceded the argument?

The answer is class interest.

“Class interest” does not mean that the wealthy are nefarious schemers. Instead, it means there are various cognitive biases that lead them to justify and perpetuate inequality. For instance, Kris-Stella Trump conducted experiments in which participants were asked to solve anagrams in a high inequality scenario (the winner received $9 and the loser $1) and a low inequality scenario (the winner got $6 and the loser $4). When asked what a fair distribution would look like, the high inequality group preferred an inequality of $5.54 ($7.77-$2.23) while the low inequality group preferred inequality of $2.30 ($6.15-$3.85). She concludes: “Public ideas of what constitutes fair income inequality are influenced by actual inequality.” Inequality perpetuates inequality.

Paul Piff finds that the wealthy feel more entitled to their earnings and are more likely to show personality traits typically associated with narcissism. Recent research by Andrew J. Oswald and Natavudh Powdthavee finds that lottery winners in the UK are more likely to switch their political affiliation to the right, and also more likely to believe that current distributions of wealth are fair. As people get richer, they think that tax policies favoring the rich are fair — not because of the macro-economic benefits, but because of how they benefit me.

These cognitive biases, rooted in class distinctions, have deep implications. As a young economist argued in 1846, “The ruling ideas are nothing more than the ideal expression of the dominant material relationships.” Benjamin I. Page, Larry M. Bartels, and Jason Seawright examined the policy preferences of the very wealthy and found that they generally fall in line with their class interests. The wealthy were far less likely than the general public to believe that “government must see that no one is without food, clothing, or shelter,” or that minimum wage must be “high enough so that no family with a full-time worker falls below official poverty line,” or that “the government in Washington ought to see to it that everyone who wants to work can find a job.”

This is not meant to demean the policy preferences of the wealthy — only to examine the motives. For too long, the wealthy have couched their economic ideas as being broadly good for the country, but in fact, de-unionization, capital market liberalization, and austerity benefit themwhile leaving the rest of us far worse off. It’s time that we were all honest about why we support the policies we support.

Now of course, not everyone who supports conservative economic policy is wealthy. Indeed, there is a large literature devoted to the question why the working class supports policies against their own interests. Engles calls this phenomenon “false consciousness,” writing to Franz Mehring, “the real motive forces impelling him remain unknown to him; otherwise it simply would not be an ideological process.” Thomas Frank proposes that working-class conservatives are swayed by social issues. Ian Haney Lopez argues that racial animus still plays a role. Rick Perlstein notes the power of identity politics. The American ethos of upward mobility certainly plays a role; truck drivers in Tallahassee vote for tax breaks on Wall Street believing that they may someday posses enough wealth that an estate tax might affect them. John Steinbeck noted the power of aspiration, writing, “Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”

But when it comes to wealthy conservatives who favor economic policies that hurt many Americans: Bartels’ previous investigation of economic and political power finds, unsurprisingly, that those with a higher socioeconomic status have more influence on legislative outcomes. Martin GilensDorian WarrenJacob HackerPaul Pierson, and Kay Lehman Schlozman have all recorded similar findings. It seems obvious, but it is important to connect these dots: Not only do the wealthy have interests divorced from the broader interests of society, but they also have the political heft to turn those interests into policy.

It is considered rather gauche to discuss class today, and the inequality debate is therefore situated in a purely theoretical realm. Liberals are constantly confused and aggravated about why the preponderance of evidence that austerity doesn’t work (while stimulus does) and that inequality harms society is lost on a large portion of conservatives.

Well, let’s face it: Those who support austerity and inequality are not really about “trickle-down” economics or “efficiency and equity.” They are protecting the interests of the upper class.

As Jonathan Swift warned, “It is useless to attempt to reason a man out of a thing he was never reasoned into.”

Originally published on The Week.