Rueff considered Keynes’s ideas to be counterproductive because they gave governments excuses to avoid responsibility
A large section of Tucker Carlson’s criticism of “market capitalism” early this month focused on the impact of economic changes on the American family. “Any economic system that weakens and destroys families is not worth having,” he said. The argument? The loss of manufacturing jobs in the U.S.—jobs traditionally held by men—caused men’s wages to decline in the U.S., and women don’t want to marry men who earn less than they do. As a result,
[T]his causes a drop in marriage, a spike in out-of-wedlock births, and all the familiar disasters that inevitably follow – more drug and alcohol abuse, higher incarceration rates, fewer families formed in the next generation.
Carlson here both goes too far in his argument against “market capitalism”—wrong identifying it as the culprit when the phenomenon he identifies would have occurred in non-market economics as well—but, also, he arguably did not go far enough in his indictment of markets.
First the former, then in my next post, the latter.
As an initial matter Carlson rightly identifies “a” factor affecting family formation. The economic reductionism of the argument Carlson advanced is ironic. It’s ironic because Carlson criticizes free market conservatives and libertarians for making economic well-being the sum of human life. Carlson then argues Americans value economic outcomes so predominantly that men earning less than women has fundamentally undermined family life in the U.S.
Beyond economic changes, however, one would be hard-pressed to ignore a welter of other cultural, technological, legal, and political changes—and more specifically, changes that fundamentally shifted the character of the “mating market” between men and women over the last several generations.
Setting aside these additional factors, however, I want to consider Carlson’s claim that the economic factors he does discuss in fact resulted from an almost religious commitment to “market capitalism” in the U.S.
I’m open to the hypothesis. Yet when I hear the market blamed for different evils, one test of the claim is to run it through this mental experiment: Let’s assume an ideal, centrally-planned economy—“ideal” here meaning one without the huge inefficiencies induced as a practical matter by any system of central planning. Now ask whether the same phenomenon of economic dislocation, especially among men, would be replicated in this centrally-planned economy? (Or, in the alternative, in an economy in which economic decisions are made hierarchically even if those decisions are made diffusely.) That is, would the same thing occur in an economy with no markets at all, one in which all “economic” decisions are made politically.
The thing is, the existence of comparative advantage between nations, and so gains from trade, does not depend on the existence of internally free markets in those nations, it depends only on relative cost advantages in production. Hence, even in our centrally-planned economy in which no markets exist, political authorities would be faced with this decision: Do we trade a smaller overall national economic pie—that is, our national population eats less—in order to sustain the current set of manufacturing jobs within the country?
I am actually open to the possibility that the answer would be “yes” over some range. At the same time, certainly some level of cost would change the answer to “no.” Consider an analogy from a technological shift rather than a shift derived from comparative national advantage: At the end of the 19th century there existed a large industry devoted to the production of horse harnesses and carriages. Even in our ideal non-market, centrally-planned economy, the cost of sustaining employment in this industry at existing rates after the advent of the automobile, at some point, becomes unconscionably high. The political authorities will want to move the economy along, with the result that individuals in the harness and carriage industry will be unemployed. Or, in the alternative, they’d be assigned to work in which they do not use their old skills.
The point is, the loss of jobs in a given sector of an economy, and economic dislocation more generally, result from changes in underlying economic factors whether a market system organizes an economy or an alternative form of production and distribution organizes an economy. Further, political decisions to draw out transition periods, and how long to extend them, would be no more obvious or easy in the centrally-planned economy than in a market economy.
To consider the same point from the other direction, one could have an autarkic national economy internally replete with free markets and not experience any of the loss of manufacturing jobs Carlson identified. The cost would be huge, but the point is, again, that underlying economic variables cause the changes, not whether the economy is organized using markets or non-market forms.
More empirically, consider the economic status of men in the old Soviet Union or in the old communist China. They were not immune from economic changes. And, more generally, it’s unclear the economic status of men was markedly superior to men in market economies. Perhaps more pertinent to anti-market arguments from the right, I am unsure men today, though subjected to the vagaries of the market, are in palpably worse shape than men in the past who instead were in subjection to economic decisions made by the manor’s lord.
This, rather than centrally-planned economies, seems to be the vision of the non-market economy that anti-market conservatives seem to romanticize. And this romanticization occurs on parts of the left as well; Karl Polyani romanticizes away the disadvantages to traditional life on the manor in his epic, The Great Transformation.
The challenge for Carlson and other critics of the market is to generate criticisms unique to the market rather than criticisms generic to economic transitions in general, whether affecting market economies or non-market economies. I will identify candidates for criticisms of this sort in my next post.