January 2, 2006
Follow the Power Posted by John Steele Gordon at 07:35 AM EST Rich Karlgaard, the publisher of Forbes, has an
interesting column in the January 9 issue of that estimable
magazine called “World's Worst Disease.” That
disease, he thinks, is “zero-sum thinking.” Zero-sum thinking, according to Karlgaard, is based on the
following false premises: that “the earth is running out of
resources,” that “people consume more than they
contribute,” and that “wealth is a zero-sum
distribution game.” These premises are, indeed, false, as even the most cursory
review of economic history shows. The bottom quintile of the
American population today lives at a higher standard of living
than did all but the very rich at the turn of the twentieth century,
and in some ways even better than they did (air conditioning, for
instance, television, microwave ovens, cell phones, and so on). So unless we have been sending pirating expeditions to Mars
and bringing back lots of loot, we must have been creating
prodigious wealth in the last hundred years. So why, Karlgaard wonders, is this ludicrous idea so popular
with politicians, journalists, and the professoriate. He thinks it
might be because these people live in what they see as a zero-
sum world. There can be only one president, fifty governors, a
hundred senators. There are only a fixed number of bureau
chiefdoms and editorships at a newspaper, so many tenured
slots in an academic department. So, as in a poker hand, there
can be only one winner and all the rest must be losers. This is an interesting point, and I don't doubt that it plays a part.
But among journalists I think the fact that bad news sells more
newspapers than good news is a potent factor as well. (And, of
course, the often astonishing ignorance of even the most
fundamental economic concepts and statistics among political
journalists is also a factor.) But I suspect there is another, more potent, underlying cause,
wrapped up in James Madison's idea that “men love
power.” (Let me hasten to point out that Madison was
using the word “men” in the eighteenth-century
sense of “human beings.” Women love power
quite as much; just ask Queen Elizabeth I or Margaret Thatcher.) If we did, indeed, live in a zero-sum world, then someone would
have to be in charge of achieving an equitable distribution, and
that, of course, would be a position of great power. Those in
charge of this distribution would need experts on how to do it. In
other words, in a zero-sum world politicians and academics
would need to be more powerful than they are already. That, of
course, would suit them just fine. Consider what happened in the 1930s. Keynesian economics
swept the economic field in an astonishingly short period of time,
and within a generation had swept most politicians as well. Only
30 years after Keynes published his most important book,
The General Theory of Employment, Interest, and Money,
in 1936, even so conservative a politician as Richard Nixon
admitted that “we are all Keynesians now.” Why? Easy, Keynesian economics made economists and
politicians more powerful. Before Keynes, the first, and usually
last, economic duty of politicians was to balance the
government's budget; after Keynes, it was to fine-tune the
economy to keep it humming along at full employment. Before
Keynes, economists had about as much political power as
astronomers; after Keynes, they were whispering in presidential
ears. Only a decade after The General Theory, Harry
Truman joked that what he needed was a one-armed economist
because the ones he had were always saying “on the
one hand . . . but on the other hand. . . .” A more modern example of the popularity among politicians and
academics of theories that add to the power of politicians and
academics is global warming. That the earth has been by some
measures warming up in recent decades is clear. The cause of
this warming is not; how long or even if it will continue is less
clear still. But to listen to environmentalists and their political
allies, there is one cause and one cause only: human beings
and their economic activity. Other causes, such as variation in
solar output and volcanic activity, are simply ignored. Computer models, all based on endless assumptions-each of
which diminishes the probability that the model reflects the real
world-are taken as proof, despite the fact that these models
conflict with one another, often fundamentally. Again, why? Again, easy. Human-caused global warming would
greatly increase the power of politicians and environmental
scientists. There is not a whole lot we can do, after all, about
solar output or volcanic activity. If that is the cause, then there
will be palm trees in New Jersey whether we like it or not. But
human activity can be regulated. Getting to make the choices as
to when and how and where to regulate economic activity for the
sake of Planet Earth would be power with a capital P. No wonder
the idea of human-caused global warming is so popular with the
Sierra Club, etc. Every rookie policeman knows that for certain kinds of crimes,
the solution lies in “following the money.” In the
world of political economy, following the power has equally great
explanatory potential.
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