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Dignity—A Review

A review of Dignity: Seeking Respect in Back Row America by Chris Arnade. Sentinel, 304 pages (June, 2019)

Chris Arnade began his career not long after Michael Lewis retired from bond trading to write his 1989 memoir Liar’s Poker. A physics PhD from Johns Hopkins, Arnade was one of the highly educated new breed of traders, and managed to stay two decades instead of two years like Lewis. But he found his way (or was ushered) to the exit a few years after the mortgage-backed securities that Lewis wrote about blew up the financial system.

The financial crisis caused Arnade to reevaluate his life and to begin chronicling inequality and poverty in America as a journalist. In parts travelogue, sociological observation, and personal memoir, Arnade presents his work as written articles and pictures, and the end result is reminiscent of Jacob Riis’s nineteenth century classic How the Other Half Lives. Arnade’s new book is called Dignity: Seeking Respect in Back Row America, and, within its pages, Arnade shows the explanatory limitations of the spreadsheets he used to understand the world when he worked on Wall Street.

Dignity isn’t for the faint of heart. The discussions and photographic depictions of crushing poverty and addiction are often painful. Arnade initially makes his way to the Hunts Point neighborhood of the Bronx on long walks after work, and winds up talking to drug addicts and prostitutes. He wins their trust, and they tell him their stories. Then, after his job ends, he drives around the country to other down-and-out areas to see if what he finds there jibes with what he’s learned in Hunts Point. Arnade goes to places like Selma, AL, Bakersfield, CA, Gary, IN, Portsmouth, OH, Cairo, IL, and Amarillo, TX—anywhere nobody else wants to visit because of the economic blight, drugs, and general social dysfunction. These places contain what Arnade calls “back row kids” or people who didn’t excel at school and who were not able to use education to catapult themselves into better circumstances.

That is a helpful way to describe the economic and political split in the country, and in Arnade’s telling it sounds like we’re living in a meritocratic system gone berserk. Front row kids are well educated, live in big cities, and have jobs where intellectual capability is required and remunerated. In school, they were “always eager to learn and make sure the teacher knew they were learning.” Back row kids, by contrast, “couldn’t or didn’t want to leave their town or their family to get an education at an elite college…[or] didn’t take to education, because it wasn’t necessarily their thing or because they had far too many obligations—family, friends, problems large and small—to focus on studying.”

Back row kids used to be able to walk out of high school with diplomas and get good-paying factory jobs with benefits that allowed them to live decent lives and educate their kids. Now, however, with labor offshoring and technological advances, those jobs are gone. The front row kids have given Wall Street the lower labor costs it always wanted. Corporate profits, GDP, and the stock market are all higher, but there is no mathematical variable that captures community destruction and the back row’s loss of dignity in the front row’s efficiency equations. And since there is no mathematical accounting for dignity, not many thought about it until the presidential election of 2016, the result of which, it’s worth noting, Arnade does not favor, but correctly predicted.

A consequence of economic blight, in Arnade’s view, is the drug epidemic. He draws a direct line from deprivation to addiction when he writes, “[underachievement] is a stigma that can lead to drugs.” Many people with whom he speaks in crack houses say, “I am dumb,” or “They said I was dumb.” But Arnade is also aware that many drug users have suffered severe psychological trauma, such as physical and sexual abuse and neglect, as children. Surely, economic hardship increases the probability of neglect, but neglect and abuse—and resulting addiction—sadly occur at all socioeconomic levels.

Arnade himself admits to his own difficulty with alcohol and the tranquilizer Xanax, which, since he’s not economically deprived, seems to contradict his hypothesis that drug abuse is a consequence of poverty. He describes himself as fitting the definition of an addict, drinking too much and scoring pills on the street in his early treks to Hunts Point. This gives him a kind of street cred, although eventually he’s able to quit. But we never learn why he started (except for maybe disenchantment with work and a sense of being lost in his life) or why he stopped. One can speculate that as he moved away from Wall Street and found surer footing in the work that eventually resulted in this book, a renewed sense of purpose and meaning helped to sustain him. It’s possible that revealing part of his own story is Arnade’s nod to the complex causes of addiction, but it’s hard to know.

Addicts—and human beings, generally—need community. Much of Dignity is dedicated to showing where people in back row America find it when they can overcome a tendency to isolate themselves. Arnade uses the word “dissociate” (to disconnect mentally or emotionally from thoughts, memories, feelings, or a sense of identity) incorrectly here in discussing that tendency. Nevertheless, the reader gets the message—poverty is shameful and doesn’t make you want to be around others. But being alone is painful, so addicts find solace not only in the drugs they use, but also in the community crack houses and heroin dens provide. Without glorifying drug use, Arnade observes that drug dens serve as the worst communities’ bars.

The other two places where back row America congregates (less dangerously) are McDonald’s and church. In many blighted areas, the local McDonald’s serves as the community center or even the town square. Down-and-out or homeless people can sit and nurse their coffee all day undisturbed. The McDonald’s hosts everything from morning groups of retirees gathering to gossip to people playing dominoes or even bingo. There aren’t a lot of rules governing behavior at McDonald’s, making it more pleasant for many than a shelter. It’s a place to escape the heat or cold, and it has WiFi and sockets to charge a phone. As Arnade says, “McDonald’s was one of the few spaces in Hunts Point open to the public that worked.” McDonald’s is the most functional place in America’s most dysfunctional communities.

Arnade is also warmly welcomed by strangers in their churches (one of which occupies a former Kentucky Fried Chicken), regardless of the predominant race of the parishioners or whether he’s unkempt. Like McDonald’s, churches—or at least those involved in some community outreach—are among the few places that accept people as they are. Arnade is surprised to find that a transgender addict named Shelley, who has lived on the streets since she was a teenager, doesn’t blame religion for being run out of her community, and is herself religious. Her rosary is her “symbol of peace and tranquility… [It] reminds me that there is something greater out there, greater than this earth and its people. Something better than this.” It’s not quite that religion doesn’t judge, but “churches understand the streets, understand everyone is a sinner and everyone fails.” Churches also offer a path out of addiction because they provide hope. “This is how it is on the streets,” says Arnade. “Faith is the reality and a source of hope. Science is the distant thing that doesn’t necessarily do much for you.”

When it comes to race, Arnade repeats the theme of being fooled by numbers, completing his critique of the front row’s obsession with spreadsheets filled with data. On his visits to Selma and the northern part of Milwaukee, African Americans repeatedly tell him that the racism they encounter is only different to that of the Jim Crow era South insofar as it is more covert. This prompts Arnade to reflect on his own experience growing up in a small town in Florida, and he says, “You can ignore data [suggesting that racism has receded], but you can’t ignore when friends are thrown against the wall by police for nothing but their skin color, while the police don’t bother you.”

There aren’t easy solutions to the problems Arnade describes, and he doesn’t try to force any. He only asks us to consider whether boosting GDP, corporate profits, and the S&P 500 are worthy ends if they come at the expense of so many social problems and so many people’s dignity. Arnade defines dignity differently to the philosopher Immanuel Kant, for whom the word was so important. Kant used the word in connection with his moral theory: Human beings should act as if what they do were a universal law and treat themselves and other human beings as ends. Because human beings are capable of morality, they have dignity, according to Kant. But that view makes it’s difficult to excuse depravity as a consequence of economic deprivation. After all, everyone has the ability to think about whether an action could be a universal law and whether they’re treating someone as a means or an end.

Some reflection on Kant can provoke questions about whether Arnade expects too little of the people and places he visits, although it’s impossible to deny they’ve been dealt an unattractive hand. Arnade mostly means that the front row is robbing the back row of its dignity by inflicting economic hardship on it, but it’s not always clear if the economic hardship or the behavior to which it can lead represents the loss of dignity. It’s also possible the front row sacrifices some of its dignity too by inflicting pain on the back row, but Arnade doesn’t make a full case for that. Arnade also tries to show that even in its compromised economic condition, the back row retains some dignity, as he understands it. Back row people who want to stay close to their families at the expense of an education at a good college and a job in a big city display a kind of dignity or virtue in their dedication to others or their communities. Arnade may overstate the extent to which not leaving a small town is a choice, of course.

Dignity also has something to do with pride and identity, according to Arnade. If members of the back row lack dignity because of their economic condition, they sometimes try to reclaim their dignity by identifying with members of their racial group. That may sound overly simplistic, but it’s what Arnade observed in the run-up to the 2016 election in countless communities economically impaired because of factory closings. This may also be the most dangerous political outcome of the turbulence caused by the spread of automation and the consequent loss of economic opportunity.

Michael Lewis’s critiques of Wall Street have never stuck partly because he made the rogues and misfits of Liar’s Poker and The Big Short so lovable and partly because he remains dedicated to spreadsheet rationality. Arnade indicates that he might well choose the same path if he had the chance to live his life again—out of his hometown, into a PhD program, and onto a trading desk. But his anecdotal tour of the American underclass raises thought-provoking questions about the limits of spreadsheet rationalism and its consequences for society’s most disadvantaged.

 

John Coumarianos is a former investment analyst and a freelance writer living in Northern New Jersey. You can follow him on Twitter @JCoumarianos

Photo by Matt Collamer on Unsplash

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38 Comments

    • Tara says

      Except as Arnade’s own drug use shows many of these problems while tied to socioeconomic status are not solely dependent on socioeconomic status and cannot be solved by an “improvement” of socioeconomic status. Many of the deep problems in these communities come just as much from a lack of meaning and purpose as they do from a lack of finances. This is why winning the lottery or receiving an inheritance often doesn’t result in any long term substantiative change for the “backseat kids.” I come from this kind of area and all of the drug addicts I know are impoverished because of their addiction, not the other way around. I have seen disability and welfare destroy generations because it allows people just enough to survive while destroying their ability to seek out meaning and achieve meaningful accomplishment. I wish it were as easy as writing checks but there’s a deeper crisis that must be addressed. Also as a practical matter giving UBI to non-functioning drug addicts will likely result in a spike in overdoses.

      • Ray Andrews says

        @Tara

        “many of these problems while tied to socioeconomic status are not solely dependent on socioeconomic status”

        True. There is no single slogan that identifies the entire problem.

        “all of the drug addicts I know are impoverished because of their addiction, not the other way around”

        But consider the rust belt: Formerly prosperous little towns in, say, Ohio, that had virtually no salient issues with social blight are now hellholes. It seems that their drug addictions have indeed followed their impoverishment. It seems that when you remove hope from people’s lives they end up hopeless in both senses of the word. I don’t think it’s a coincidence that the word has those two meanings.

        “just enough to survive while destroying their ability to seek out meaning and achieve meaningful accomplishment”

        Yes. Meaning and opportunities for accomplishment must be there tho, mustn’t they? I support UBI mostly for a subtle but IMHO very critical psychological difference between UBI and ‘standard issue’ welfare programs: To receive welfare you must make a sob-story of yourself — the more dysfunctional you are, the more you get. Thus your entire self-view is encouraged to maximize Victimhood and self-pity. The SJW-left now feeds on this. But the term: ‘welfare case’ is not complementary and tends to start this self-fulfilling downward spiral, doesn’t it?

        But UBI is different: you don’t have to make a looser of yourself. No one is listening to your sob-story so there’s no reason to tell it or even believe it. The stigma isn’t there because there is no trip to the welfare office to apply for the dole. Professional victimhood stops paying. But the better you manage your life, the better you live. Personal responsibility resurfaces. Buy heroin or buy food, it’s entirely up to you. Want a better cellphone? You’re going to have to go out and earn a few bucks then. Folks get to like being respectable citizens again. Celebrations when one’s taxes paid exceed one’s UBI receipts — one is a contributor again, not a parasite. It feels good. Who really. Really. Really want’s to be a scumbag? Not many, I suggest.

      • Geofiz says

        This is an excellent reply.

        I am an admitted fan of Arnade’s book. I am a very serious “semi-professional” fine art photographer. What that means is that although I occasionally sell a picture, I don’t actually make a living as a photographer. Every so often I do a wedding or Bar Mitzvah, but it is for friends that cannot afford a photographer and I never charge. Arnade’s photos are mind-blowingly good and I have studied them with the goal of becoming a better photographer

        https://www.flickr.com/photos/arnade/

        But the photos only repeat what the text says A UBI is a noble idea. However, it does not work. We know it doesn’t work because the State of Alaska has had one for years. It is called the Alaskan Permanent Fund and it is funded by taxes on oil revenue every year the state government distributes money to every Alaskan. In 2015 every Alaskan got $3209. So, a family of four got $12,836.

        And yet Anchorage has huge homeless problem, Why? Morgan Foster picked out the key reason.

        “Back row kids used to be able to walk out of high school with diplomas and get good-paying factory jobs with benefits that allowed them to live decent lives and educate their kids. Now, however, with labor offshoring and technological advances, those jobs are gone.”
        The Alaska UBI fails for the same reason that many welfare programs fail. Dignity cannot be given. It must be earned. For many who post on this forum, dignity comes from a job. When someone asked who I am, I tell them what I am, a geoscientist. My wife would describe herself as someone who busted their butt to raise two children, both of whom are now successful adults. I was part of that effort as well, but my wife did most of the heavy lifting. There is more dignity in that than any on the left would admit

        So where does dignity come for those who cannot lay claim to those accomplishments. Arnade observed that for those in the back row, dignity comes from two places: the church and the community. That community is in many cases, a group of fellow addicts or a criminal gang.

        We can’t solve this problem by throwing money at it. We have tried that for the last 53 years. What we can do is build on what works. Jobs work!!! If a Democrat was responsible for the current low levels of black unemployment. The Dems would be shouting from the rooftops about it. We can further encourage companies to locate in depressed areas by using the tax code to encourage employers to locate in depressed areas. Some states are already doing this.

        We can further revamp welfare policies to encourage marriage. The best anti-poverty program is a mommy and a daddy. We can encourage and fund programs (including religious based ones) that encourage marriage and that teach child raising. WE can help fund after-schools sports programs. We can stiffen disciplinary standards in schools. We can also look at programs such as the CCC, which was quite successful during the depression. We know military service works. Why not expand that idea to civilian work programs?

        The problem is not racism, despite what the left claims. It is class. Today we are divided into two classes. The cognitively elite and the cognitively disadvantaged. If you are one of the cognitively elite (that includes me) life is pretty good. But not so for the cognitively disadvantaged. Their jobs are now in China and India. Better education will help those who are cognitively elite get out of poverty, but not everyone can become a Python coder and make 250K/yr at Facebook.

        Unless we can set policy to address the issues faced by the cognitively disadvantaged of all races, including helping them to EARN dignity, this problem will never be solved. Adding millions of low skills illegal immigrants to our population makes things far worse. Simply giving away money will never work. Welfare destroys dignity.

        • bumble bee says

          I whole heartedly agree that people need and want dignity more so than extra bucks in their pockets. People want to contribute, they want to be valued, they want a means in which they can feel personal pride either in their job or having the means from a job that allows them to raise a family. UBI will never be enough to satisfy income needs, or allow people to follow a path that gives them meaning.

          What was missed in the article is how the stock market itself is a contributor to loss of jobs, low incomes. When satisfying the stock holders to raise stock prices is the real business, rather than the product or service we have seen jobs cut and salaries stagnate. Where 3% growth is considered a failure because they were shooting for 10%. None of the profits from the work done by workers is realized, and are being overburdened with work because if one can do the job of two, then why hire someone. Same thing could be said for private businesses, instead of getting your third BMW, or buying yachts, pay your employees enough to buy a home and raise a family. I have been in situations where I was going down the financial tube because I was not getting paid enough all the while I listen about the new addition being put on homes, their trips, and every other vanity. They need to start taking pride in how well their employees are able to live the American Dream.

          I would like to see the president make some incentives for businesses to bring back manufacturing from China, India, and other countries so that there is a broader spectrum of jobs for all levels of skill. You can’t educate everyone for highly skilled jobs because there is a carrying capacity for any profession. Soon there would be graduate degrees that are the equivalent of HS diplomas and we are back to square one. Perhaps penalizing companies that send work overseas, or decide to move their headquarters to countries to avoid taxes. I see no reason why China should have an exploding economy when a lot of the stuff is getting bought right here. Make it here, and buy it here needs to be encouraged.

        • Lightning Rose says

          Geofiz, I give your post 10,000 upvotes!

          • S. Cheung says

            I’ve listened to Andrew Yang on JRE and Shapiro’s Sunday Report talk about UBI. I’ve also listened to Naval Ravikant argue eloquently against UBI on JRE.

            From that, my impression is that one shouldn’t expect UBI to solve our current socioeconomic disparity woes. The aimless, downtrodden, and/or addicted of today may well remain that way. However, it might be a preventative measure for some of the foreseeable ADDITIONAL socioeconomic woes coming down the pipe…for all those who will lose their jobs to automation.

            Yang is less hopeful that middle-aged truckers can be successfully retrained and “learn to code”, but he doesn’t rule out that possibility as one of the options that UBI may afford to such people. Ravikant seems much more bullish on the new jobs that the “new economy” will engender (much as past “industrial revolutions” have created new job markets). But he does give a nod to a paid retraining/sabbatical type system.

            All of which is to say that, in evaluating the merits or limitations of UBI, I think one has to look at the foreseeable future rather than the present or the past.

        • Ray Andrews says

          @Geofiz

          Pretty solid post.

          “We know it doesn’t work because the State of Alaska has had one for years.”

          I’d need to see someone knowledgeable about that rebut you. I can’t comment.

          “Jobs work!!!”

          Indeed. By far the best social program.

        • somsai says

          Geofiz, you’ve good ideas and everything you say is true, I’d add however, we have jobs, most of us, what we need are jobs that are steady, pay a good wage, and come with benefits. Working is something almost everyone does, a big problem is we can’t make a living at it. Coal is about gone, oil fields move all the time, the trades have been sold out for lower wages. Twelve to fifteen dollars an hour carpenters, plumbers, and electricians.

          I appreciate what you say about sports. It carries over to many activities at schools, Hundreds of dollars to play a school sport. Or you can get activities at a discount if you want to show you are poor and are the type who will take a handout. Every class comes with a supply list, often of $50 or $75. What happened to public schools?

          Dignity is being able to pay for school sports like the parents of other kids do.

  1. Sarah says

    Ironic that Arnade talks about the back row as if it’s impossible for its members to get to the front row, though he himself did just that, by working hard to get an education.

    The book has some good information. Very true. But the book also has a rose-colored glasses problem, as follows. Arnade conveys the worlds he visits as if they are calm, supportive communities in which everyone gets along. No fighting, no violence, no conflict. Seriously? He goes so far as to say that whenever anyone gets a little windfall, they share it with everyone. Not in any such community in which I’ve ever worked.

    He also says that drug dealers are just nice, normal people, neighborly even, just like you and me. No violence, no danger, no intimidation. Just fine fellas trying to get along. Absurd.

    A reader will walk away with the impression that in the described communities there isn’t any violence, fighting, child abuse, sexual assault, etc. I know I’m repeating myself, but his portrayal in this regard is ludicrous.

    Also, despite his claims, drug addiction isn’t an inevitable consequence of poverty. In the South, in the early and mid 20th centuries, poor blacks and poor whites experienced horrifically grinding poverty. Yet the vast majority stayed together as families, unaddicted, while working very hard to grow, hunt, trap, fish, or otherwise procure food.

    In Arnade’s view, is anyone ever responsible for his/her actions?

    • Geofiz says

      @Sarah:

      Ironic that Arnade talks about the back row as if it’s impossible for its members to get to the front row, though he himself did just that, by working hard to get an education.

      Education only works for those who are bright. Not everyone can get a Ph.D. in physics then become a Wall Street trader. Intelligence is not equally distributed among us.

      There has to be a role in our country for those who lack the cognitive ability to solve complex differential equations or to write code. By offshoring manufacturing, we have removed that role. This fact, more than anything else, is why Trump won. Perot warned us about it in 1992

      Part of recreating that role is to address the destructive effects of crime, out-of wedlock marriage etc. It also involves creating low skills jobs and changing the culture of these poor communities. That means teaching people that they ARE responsible for their own actions. But is also means creating alternatives to gangs and drugs. The left offers only carrots, the right offers only sticks. We need to offer both. But the carrots have to come with strings. Years of welfare dependency has made things far worse. Uncontrolled illegal immigration will do the same

      This is what most churches in poor areas try to do. But it is extremely hard.

  2. Geary Johansen says

    I think it was shelter in the UK that did a study on the newly homeless- of those who didn’t have drug or alcohol abuse problems when they became homeless, 50% had them six months later.

    In America, the problem is made worse by fact each major American city is run like a kingdom unto itself, with those choosing to adopt a more tolerant or helpful attitude towards the homeless, quickly becoming overrun with homeless. In the UK, we may have our problems on this issue, but at least we haven’t reached the stage that there is an endemic problem of human faeces in one city in particular.

    I was watching Johann Hari on Joe Rogan awhile back, and whilst I did disagree with some of the things he said (or at least the way he framed them), his comments on drug addiction and whole life therapy seemed quite cogent. I readily admit that I have little experience on the subject, other than being a smoker and someone who enjoys his single malt whiskey a little bit too much. But what do other people think of his work? Or is there someone else I should be reading?

  3. Morgan Foster says

    “Back row kids used to be able to walk out of high school with diplomas and get good-paying factory jobs with benefits that allowed them to live decent lives and educate their kids. Now, however, with labor offshoring and technological advances, those jobs are gone.”

    This is the reason for most of it.

    • Ray Andrews says

      @Morgan Foster

      Yes. But some here will say that the government has no responsibility to provide an economic environment where people have a fighting chance. They will say that the economy is strictly an arena where the stronger gladiators kill the weaker gladiators, and the only morality is accumulation. The government’s job is to protect the wealth gathering ability of the rich, nothing more.

      • Morgan Foster says

        @Ray Andrews

        Those days of “good-paying factory jobs with benefits” – as the author of this article puts it – represented only a brief fraction of America’s economic life. Prior to the beginning of the 20th Century, there weren’t much in the way of benefits for factory workers.

        Periodic depressions and recessions well into the mid-20th Century meant that what factory jobs existed were an on-again/off-again sort of thing.

        American cities in the 19th Century were swarming with homeless and near-homeless alcoholics. We often forget this now. They weren’t crapping in the streets in the downtown business districts because the police kept them out of sight in the worst neighborhoods, where they crapped in the streets there.

        For most of the history of the Western world, life for the bottom half has been pretty shitty.

        That said, life for everyone under socialism has been very shitty.

        If I thought I could come up with a golden compromise between private and governmental control of the economy, I would offer it here. But I haven’t worked it out yet.

        Like the author, I remember the 1950s with fond appreciation and nostalgia. Most of the industrialized world shattered by war. America’s industry untouched. We won’t have that advantage again.

        • Ray Andrews says

          @Morgan Foster

          There’s honesty in what you say. Yet I’m told that productivity has tripled since the 80’s and workers might therefore be expected to be 3X richer, but they aren’t. But the 0.01% are very, very much richer.

          The golden compromise is always in dispute, but it can shift right or left quite a ways from the abstract ideal without too much trouble either way. It’s only when things get extreme that things get extreme. It always seemed to me that there should be an actual number specified: Joe advocates for the government spending 30% of GPD, Sam says 25% and some socialist says 80%. Some libertarian fanatic says 2%. Me, I like about 20% or maybe 25%.

          • Peter from Oz says

            Ray
            That statistic has been proven to be dodgy indeed. For a start it doen’t take into account the tech sector which hardly existed in its current form in the 80s.
            You need to step back and remember that one of the great blights on the world is the left’s complete thrall to the zero sum fallacy where every dollar that is made by the rich is taken directly from the wallets of the workers. The fact is that the ”workers” are only worth what the market will pay them. They do not add more value merely by being more productive, especially if that productivity occurs because of the capital costs of acquiring more plant and equipment which allows them to increase production.

          • Ray Andrews says

            @Peter from Oz

            “The fact is that the ”workers” are only worth what the market will pay them.”

            Fact, or you proscription? Many preach the theoretically pure free market doctrine, but in what modern industrial democracy is that doctrine ever actually followed? You link ‘worth’ to the market, I link it to production, (both, actually), but can either of us claim ‘fact’? I think these are preferences.

            “They do not add more value merely by being more productive”

            Then what is value? More to the point, if production doubles then surely consumption should double? If I’m a neolithic farmer and I double the production of my farm, then surely my family eats better? If the workers in a society produce twice as much as previously, then if they are not consuming twice as much it must be because some parasite is creaming off even more than previously, no? It seems inescapable.

            “especially if that productivity occurs because of the capital costs ”

            Fine. Mind, the capital costs of plant must surely be less than the anticipated rewards, so nothing is, or should be, done that does not increase bottom line production, no? Capital is nothing but IOUs on labor anyway so increases in overall productivity must include the negatives of research, plant, maintenance, etc, yes? No point in replacing a worker with a robot if the total cost of the robot is greater than the worker, IOW is the actual productivity of the system overall would be less. Anyway I’m inclined to agree that these productivity numbers are highly suspect.

            BTW, one of the nice things about TFM is, as Hayek so well explained, is that it figures out the true cost of things automagically and does so far better than any bureaucracy ever could. Gotta love it. Alas! It makes it’s evaluation with no regard for externalities or social concerns. So we’re back to having a government which controls for externalities, like pollution, and also understands that money isn’t actually everything.

          • Geofiz says

            Ray and Peter:

            To some extent, you are both right. The market worth of a person is a function of two factors:

            1) The rarity of a specific employee skill set.

            2) The market value of that skill set.

            Stephen Curry makes ~$37.5 million a year (plus endorsements). He makes the money he makes because there are very few people with his skill set and having Curry on a basketball team makes the team far more than $37.5 million.

            The guy who mows my lawn makes $30.00 for about 45 minutes of work. I don’t pay him benefits and he has to use some of that money to maintain his equipment. There are a lot of people who mow lawns, particularly here in Texas as most of them are illegal immigrants. The skill set is not rare and the value he brings to me is just not that great. Now if he was the only guy in Houston mowing lawns he would be able to charge more.

            The only people I know who make less than the guy who mows my lawn are Ph.D.’s in humanities who are contingent faculty at many universities. There is a huge oversupply of humanities Ph.D’s. As such they have little market value and from the standpoint of the university, education is a cost center, not a profit center. Therefore that skill set is not valued.

            Overall productivity does not matter. What matters is how much money a specific employee can make for the company and how rare are his or her skills?

            Unions can have a great effect on this. The value of one employee without special skills is minimal. The value of 10,000 is not. Unions and minimum wage laws can act as a stimulus to the economy. The more money people have, the more they spend and the more the economy benefits…..to a point. If the unions get too powerful or the minimum wage is raised too quickly, the result is job losses.

  4. Lightning Rose says

    I don’t believe these problems are solvable; certainly not with top-down forced redistribution schemes. It is the tragedy of a generation whose world, the one they understood and functioned in, no longer exists.

    (1) Economic displacement due to globalization and the shift from manufacturing to information and service-based, rapidly urbanized economy and the offshoring of factory employment.

    (2) Efficiency and technology revolution in farming which means one machine operator has now replaced a hundred or more manual laborers.

    (3) Family breakdown through cultural devaluing of marriage and fatherhood, leaving women and children helplessly mired in poverty and men meaningless and rootless.

    Similar displacements happened after the Civil War, with the rapid ascent of everything from the cotton gin and petroleum to the steamship and railroad, and cars displacing horsepower. Whalemen, sailing ship crews, ship carpenters, drovers, teamsters, and bargemen not to mention farriers and harness makers, ubiquitously necessary lifetime employment before, faced exactly the same thing. A few former coachmen successfully made the switch to working as chauffeurs, but the majority had nowhere to go but the factories–which were being flooded with dirt-cheap immigrant labor at that time. Ditto construction. We have been here before.

    The difference is that in those old days, most people could find a way to make a living through self-employment; the percentage of that in 1900 was enormous, above 90% of the workforce were small businessmen, farmers, or artisans. Today, it’s down to about 2%. What leads to despair is DEPENDENCY on some other institution, corporate or governmental, for a living, which doesn’t pan out. One gets the feeling or is directly told “they’re not worthy,” they start to believe it, and fall down the dark stairwell into substance addiction. The lack of agency is the underlying mental health killer, and what robs one of “dignity.”

    Even Jesus, however, said “The poor will always be with us.” Half the human species is “below average” in IQ alone, leaving aside all other metrics. Equality of outcomes is a Utopian dream, magical thinking at its most unproductive. Instead of “programs” entailing vast bureaucracies administered top-down by government, I’d like to see all these loud-mouthed billionaires step up to the plate with some real-solution philanthropy that would change the game: Jobs provided by non-profits, re-training initiatives, child care cooperatives, free drug rehab clinics paid for by private-sector donations. HOW ABOUT IT, BEZOS, BLOOMBERG, GATES, BUFFETT, KOCH, STEYER AND THE REST OF YOU? Put your money where it would do the most good if you really love this country.

    • ga gamba says

      It is the tragedy of a generation whose world, the one they understood and functioned in, no longer exists. Economic displacement due to globalization and the shift from manufacturing to information and service-based, rapidly urbanized economy and the offshoring of factory employment.

      No longer exists, eh? OK, explain to me how Germany has retained its industrial base and its industrial workers whilst the US has lost much of it. Germany is not only an industrial juggernaut in performance Porsches but also precision pencils. Germany faced and still faces the same (once) low-cost long-hours competition from Japan, then Korea, and now China that cut the US off at the knees.

      I keep reading these despondent “it’s never coming back again” comments. Do you genuinely think the Germans have some attributes exclusive to themselves that the Americans can’t duplicate? Or, have you simply forgotten to think about Germany and how it defies this buh-bye blue-collar jobs defeatism found in the Anglosphere?

      • Plausibly Deplorable says

        If the Germans keep following Merkel and pals down the radical Green rabbit-hole, they’re not even going to be able to flip the lights on pretty soon. They’re buying energy from Russia and you know where that leads. No one talks about the energy poverty that actually KILLS German seniors in the winter. There are deep systemic problems there, same as have now showed themselves in France and Scandinavia. But Porsches, uh-huh.

        As for “it’s never coming back,” an awful lot more of it HAS returned to the USA under the populist businessman Trump than had a snowball’s chance in Hell of EVER doing so under the Great Apologist on watch for the previous 8 years. If Trump can get re-elected with a supermajority, it’s going to be “hold my seltzer!” We’re going to clean TONS of stuff up. Time for cheap political gamesmanship is over.

      • Ray Andrews says

        @ga gamba

        “Do you genuinely think the Germans have some attributes exclusive to themselves that the Americans can’t duplicate?”

        They have a sense of the common good of z’ Fatherland even as it pertains to economic matters (not just military). I saw a very enlightening documentary on the German economic model once: yes they are ‘capitalist’ but not in any way the same way that Americans are. A German employer considers the well being of his employees as part of his mandate. (Unions typically sit on the board.) He also considers the overall health of z’ Fatherland to be part of his mandate. In this show, a few owners of medium sized businesses were interviewed. One was the owner/manager of a company that makes parts for TBMs. It was pointed out to him that he could increase his profits by off-shoring his production. He got this strange, puzzled look on his face and he replied: “Und how can ve hef a prosperous Fazerland if zer are no deezunt jobs for our arbeiters here?” For him, making himself richer at the cost of a poorer Germany was not an option. This was contrasted with the CEO of some multinational who said that, yes, he was planning to off-shore production because that would maximize shareholder value and that was his job. It seems that in Switzerland the economy is pointedly run for the benefit of the Swiss! What a shocking idea. It’s not that they don’t have billionaires, they have lots of them, it’s just that the needs of billionaires to be even richer is not the only thing that matters.

      • David of Kirkland says

        The US has lots of manufacturing, just not dependent on labor. Robots came faster due to increased cost of labor. Germany is a quarter of the size of the US, and certainly less “diverse.” It also was rebuilt after WWII when it ran amok.

        • Shamrock says

          DOK
          Germany is a quarter of the size of the US, and certainly less “diverse.”
          This was certainly true. It’ll be interesting to see what the future holds given the large immigration Germany has been, and is currently receiving.

  5. Jonathan Andrews says

    I was greatly impressed by Arnade’s interview with Russ Roberts on Econtalk this week. As someone who’s wandered aimlessly around apparently mean streets of many British towns without encountering any problems , his experience chimed with.
    I don’t think he saw the places through rose tinted spectacles but simply understood that they are nowhere as near as bad.

    In his interview, he didn’t offer solutions, I felt he just asked us to offer such people a little more dignity.

  6. Denny Sinnoh says

    Re: cover photo
    Back during my wild, party days of my youth,
    I once ordered “The Milk of Human Kindness”
    in a strip club.

  7. Farris says

    So prior to the loss of manufacturing jobs, there were no poor people, no addicts, alcoholics and hobos. Skid row was barren.

    Today there are people who have difficulty buying food or purchasing health care, yet they can afford WiFi devices and illegal drugs.

    There are simply people who lack the drive, initiative and discipline to succeed. Yes they are victims, victims of there own poor decisions. However the story goes that the front row kids by possessing the desire to succeed and earn a better life are actually conspiring against the back row kids. These people will remain mired in their own consequences up and until they take responsibility for their own poor judgements.

    UBI if you want more poor people, then pay people to be poor. UBI is more money for drugs booze and lottery tickets. UBI proponents are claiming once income is provided by the government, the recipients will not squander it. If assistance is not a short term project then it will become a way of life.

    • Ray Andrews says

      @Farris

      “There are simply people who lack the drive, initiative and discipline to succeed. ”

      Yes there are, but there are far more people who can’t get ahead no matter what they do. Just now I’m half way thru a 60 Minutes segment on Ray Dalio, the billionaire who says that billionaires don’t pay nearly enough tax, and that ‘the land of opportunity’ is now about as honest as ‘arbeit macht frei’. He says most of the ultra rich are in fact lazy plutocrats and that the country needs to reinvest in it’s future not hoard it’s wealth in off-shore bank accounts.

      “These people will remain mired in their own consequences up and until they take responsibility for their own poor judgements.”

      I think about those folks in those dead little towns in the rust belt — fine, upstanding people until all possible hope was drained from their lives and, yes, they started making bad choices. I myself am sympathetic — given hope they’d have done otherwise.

      A friend of mine is a social worker. Yeah, the scum of the earth types. Some have little excuse of course, they really are the victims of their own stupidity, but a surprising number are discarded, broken workers. Construction unions have long since faded away so work is almost all short term contract with zero benefits of any kind. Safety standards are mostly a joke — do the work or get off the job. A guy gets hurt. For a while WCB covers for him, but soon his coverage is exhausted and his pain medications are far beyond his zero income ability to pay for. So guess what he does? Yup, heroin/fentanyl.

      “UBI if you want more poor people, then pay people to be poor.”

      Maybe, but I’d still like to try it. I suspect the results would be rather different tho. Welfare literally encourages people to be broken. UBI is there anyway so the mentality should be different. Yang agrees, and he’s a brilliant billionaire entrepreneur, so I’m inclined to listen. Aristocrats like the idea that they are God’s anointed forever. Plutocrats like the idea that once you’ve made it, you’ve made it — from now on you collect rent. Smart billionaires like Yang know that on the contrary, real entrepreneurs need to be kept lean and hungry. Tax them. Jeff, thanks for Amazon, but if you want to purchase the whole of the Bahamas instead of having to make-do with just a lousy private island, they you’re going to have to keep innovating. We’re taxing Amazon!

  8. FREEDOM! says

    It is good to have available, and to offer, scholastic education beyond basic reading, writing, and math skills.

    Imagine, however, if youth as a whole were not forced to labor nearly 7 hours a day, 5 days a week, with no say in the matter or monetary compensation. (There is a word for forced labor without agreeable compensation.)

    Imagine if tax paying citizens were not forced to cover the cost of the weekly incarceration of our resistant youth. Obviously, if a substantial portion of these youth grow to be unhappy, unproductive, substance-addicted adults, the cost of their “education” is not representative of a societal benefit achieved. (Is there a tax law that covers taxes spent that result in harm to portions of society?)

    Imagine if parents could have their children educated and/or apprenticed as suited their child’s existing skills, personal likes, natural talents, and overall disposition. (Ahhh, to be free!)
    Does anyone remember hearing of the times when society knew and understood that parents (on the whole) loved their own children and held themselves personally responsible for that child’s well-being and future? Yes, parents, knowing and loving their children best, once raised their children to become successful adults though various educations and occupations .

    Imagine not having to see your child miserably open a book or angrily drag themselves out the door to what amounts to daily torture. Imagine not having to tell your high school grad that college will mean a full time job for a full load of classes and that grad school is a pipe dream. If we didn’t waste $$$ on the forced imprisonment of those who do NOT want to be “educated” in a public school, I imagine it would be easy to educate all who are academically inclined.

    There are those who adore learning from books and there are those who love laboring with their hands. You’d think we’d understand that the world needs all kinds of people with all kinds of talents and abilities to thrive. Nonetheless, once upon a time, the intellectuals of our world decided that only scholarly achievement was a worthy pursuit and a life not sent as young and a long as possible to “school” was a life wasted and worthless.

    A blue collar kid hopelessly enslaved in a white collar world rarely excels; they often just die a little at a time until they have no dream left. This is the same for the perpetual scholar who will never see college or graduate school. These are sad, preventable, and unnecessary cases of stunted and unfulfilled potential.

    All those “back row” kids are abused and enslaved children who fell victim to do-gooders trying to force their personal idea of life worth living on everyone else. Children who excel in languages, literature, mathematics, or sciences should have the opportunity to reach their potential in their field of interest. Likewise, children who thrive while digging in the earth, ripping things apart, putting things together, climbing heights, diving depths, running, dancing, singing, painting, building, deconstructing…well, those that think and those that do all have the place they fit best and shine their brightest.

    Unfortunately, the “back row” must serve out their unwanted and unearned incarceration until they are set free to live or die, with no one to care about their “wasted” 18-24 years of life. Drugs? Suicide? Rebellion against the enlightened intelligentsia who look down on them? Who could possibly see that coming?

    • David George says

      Freedom; sounds great but don’t know how this could be structured in practical terms. Children are, at once constricted and liberated by structure.
      People need a goal, something to inspire and motivate so it is quite destructive for the back row kid (and for society as a whole) to denigrate non academic occupations and achievement. They need to be encouraged and given successful role models they can identify with. Perhaps your local school could get successful non academic ex pupils along to give a talk. The world will always need, and be willing to pay for, competent practical people. Although in the top 5% academically I left school at 16 and took up an apprenticeship. I’m in the same trade 45 years later.
      Perhaps the options for the back row kids are limited but it’s important to get a good basic education/competence in literacy and numeracy. Just being able to operate in the world requires that as a minimum, never mind completing trades study.

      My observation of the subsequent life success of the people I went to school with is that it is not determined by academic ability but by personal honesty/integrity and having a vision and a willingness to sacrifice to achieve it. In a word: morality.
      Here’s a short lecture that clarifies some of the issues, lower IQ folk have certainly not got a lot of choice or an easy path today, if they ever did have.
      https://youtu.be/pu__97bVyOc

    • Ray Andrews says

      @Charles

      “we need to bring back the distinction between the deserving and the undeserving poor”

      Paradoxically I’d say exactly the opposite: we need to get the government OUT of the business of deciding who is deserving and who is not. See, if it’s up to the government, we can look forward to folks like AOC deciding that all blacks are automatically deserving (because slavery), and no white person can ever be deserving (because Privilege). As a shareholder in the corporation of the country, you get a monthly dividend cheque. You’ll never be destitute unless you are too stupid to know how to manage free money (In which case you become an inmate at the Institute for the Incompetent and the government treats you like the child that you are). But, if you want that new guitar or that top of the line I-phone, sorry, you’re going to have to earn some money. No whining please. No one is listening.

      • Charles says

        I tend to agree we should get our current government out of such decisions, along with any governing, and replace it with an entirely new system. For the most part, we should go back (as my Dalrymple review says) to a system of privately administered charity. The way back to that would require a complete re-work, though. I don’t think the Molbuggian country-as-corporation is the way to go, though.

  9. Heike says

    “Back row kids used to be able to walk out of high school with diplomas and get good-paying factory jobs with benefits that allowed them to live decent lives and educate their kids. Now, however, with labor offshoring and technological advances, those jobs are gone.”

    This wasn’t something that just happened, like the weather. It was premeditated. NAFTA was the deathblow to the American worker, and it had the full support of Bill Clinton and the Democrats. Admitting China to the WTO was nailing the coffin shut. This was no accident. The elites in charge did this on purpose, with the express goal of ruining our working class to advantage foreigners who hate us.

    “Arnade mostly means that the front row is robbing the back row of its dignity by inflicting economic hardship on it”

    Again, completely deliberate. Remember when Crooked Hillary called Americans “deplorable”? The reaction from elites was enthusiastic sustained applause. You go girl! Punch down! You show those unemployed people who’s boss! Speak truth to the powerless!

    • Santa says

      This outcome was inevitable as132 of 175 Republicans and 102 of 258 Democrats voted Yes to pass NAFTA. The Dems where already fully in neoliberal territory and really had no desire to stop it from happening.

      In the last 25 years the “white” working class and the rust belt have devolved into a shell of its former self. It has put a unique perspective on how fragile community is and how reliant it is on an outside force to keep its head above water. I am not convinced that the Right nor the Left “elites” have any desire to help the working class of any skin color. They all agree that profits are more important and those who are already ahead, regardless of being left or right leaning, do little to truly help those below them.

      Now we have a president who deliberately stiffed his contractors, hired illegal immigrants and pointlessly flaunted his wealth. It’s funny that the people Hillary called “deplorable” elected a guy who has treated them poorly his entire life. It’s incredible sad to watch as they would have been shafted either way.

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