Oren Cass's "Productive Pluralism"

Oren Cass’s The Once and Future Worker: A Vision for the Renewal of Work in America is nothing if not bold. He is only 17 pages in when he takes on Adam Smith, whose dictum that economic activity is about consumption rather than production was sanctified by Keynes and made the cornerstone of 20th century macroeconomic policy. The result, Cass argues, is that we define prosperity in terms of the overall size of the economic pie—“economic piety,” in his formulation—rather than according to the dignity of work.

Cass’s powerful analysis is a call to place the human need to produce at the center of policymakers’ attention. The goal, he writes, should be “rising productivity for all workers” rather than an agenda “that aims to maximize what each household can consume.” The notion that prosperity is definable in terms of overall GDP conceals the real pressures it places on production.

It is possible, Cass suggests, to have a growing economic pie—even one broadly shared—while large swaths of the population are excluded from the vital and meaningful activity of production. The postwar emphasis on the size of the pie rather than personal production holds that even those who lose out on production can, by means of redistributionist welfare policies, be robust consumers.  What Cass recognizes—and what Smith was not wholly inured to either—is the vapidity of a life of consumption without production.

This is a book that demands attention from every critic of President Trump, but especially from those who persist in bewilderment at his ascent. Many conservatives will bristle at the whiff of economic engineering it sometimes emits, but there is less of that then first meets the eye. Cass’s emphasis is more on leveling the playing field for production and removing distortions that favor consumption at work’s expense.

Regardless, Aristotelian conservatives concerned with human flourishing will find its political diagnosis compelling even if they do not accept his economic treatment. The politics of the book are encapsulated in Cass’s observation that “[m]ost of the activities and achievements that give life purpose and meaning are, whether in the economic sphere or not, fundamentally acts of production.”

This is a book that demands to be read not just for its economics but for its politics.  Cass’s definition of prosperity in terms of meaningful production rather than mere consumption directs the reader toward the purpose of politics, which is to be concerned with the human things and not just the economic ones.

Scott Winship, among others, have offered thoughtful empirical critiques of Cass’s dire portrait of the state of the American worker. But the book’s overall case for an economics of production over consumption demands a reckoning.

Cass rejects the dichotomy between “open” and “closed” economies. “As their framing makes clear, those purveying the open–closed dichotomy regard only one of its sides as valid. They elevate the free flow of goods and people as the nonnegotiable underpinning of both economic and social progress. Anyone with other priorities is condemned to the closed camp—closed-minded, even racist.”

The “open agenda,” Cass argues, does not address the country’s most compelling challenges, even if it makes such commitments as redistribution to economic losers or education—which he identifies as singularly difficult the lower one descends on the economic ladder—to lift them up.

There are problems with this account, one of which is its tendency to see economic policy as monocausal, often to the exclusion of cultural concerns. An excellent case can be made that borders were even more open at the beginning of the 20th century, when there were virtually no impediments to the flow of capital or people, than they were at the dawn of the 21st, despite the accelerated pace of transfer that technology has enabled. Chalking problems up to open borders alone seems too easy an explanation. Something has changed culturally in attitudes toward work and responsibility, and it is difficult to attribute that solely to economics.

Still, Cass makes a compelling political argument that a mutual commitment to globalization and a strong safety net is unsatisfying if not outright condescending to those left without meaningful work. How, then, to restore the latter?

Cass’s answer is “productive pluralism: the economic and social conditions in which people of diverse abilities, priorities, and geographies, pursuing varied life paths, can form self-sufficient families and become contributors to their communities.” He warns against “allowing the consumption tail to wag the production dog…. Production without consumption creates options; consumption without production creates dependence and debt.”

This entails tradeoffs that may come at the expense of economic piety. Cass writes: “A math whiz may not earn within commuting distance of his hometown what he could in Silicon Valley; he may not find use for his math skills at all. But he should be able to achieve vocational success, support a family, and so on.” Society should emphasize the preservation of “proven options” for productive success, “with the expectation that rising prosperity will open new paths over time.” It should resist economic outlooks that, for example, depend on mass migration and the dismantling of traditional communities to succeed.

This emphasis on a discrete “society” as a director or at least substantial influencer of economic outcomes—as opposed to the economy being the product of trillions of diffuse choices—has its limits. One is that Cass’s single-minded focus on productive pluralism tends to exclude other values, such as freedom of exchange and the opposition to the statism that follows, like night after day, attempts to impose outcomes on a Hayekian spontaneous order in which prices are the best mechanism of information. Cass, to be sure, opposes “efforts to conduct social engineering in favor of new choices that enjoy no historical precedent.” The question is whether engineering to impede the evolution of old choices is any likelier to succeed given the infinite diffusion of knowledge and choices the market reflects.  Cass argues, for example:

Productive pluralism is not satisfied with an efficient labor-market outcome per se. It requires a particular outcome: the provision of sufficient meaningful work to sustain families and communities. If the labor market settles on an efficient outcome in which large segments of the population lack meaningful work, our response can’t be to say “thanks, understood” and then to wait for those displaced people suddenly to transform themselves into something else, or simply to give them government aid. Our response must be “that needs to change.”

It may be preferable for things to change, but the reader of Cass cannot avoid the nagging question of the state’s power and, more important, skill with respect to imposing outcomes it prefers. A sense of skepticism of state interventions and their unintended consequences seems occasionally missing from this work. Yet in the end, Cass offers more encouragement than engineering. These solutions are actually reasonably modest and, again, targeted less toward arranging ideal economic outcomes than removing impediments to preferable ones.

Indeed, Cass is unwilling “to blame the labor market for acting like a labor market.” His point is not that policy can dictate microeconomic outcomes but rather that it can influence macroeconomic forces. “Productive pluralism says nothing about who should work for whom or at what wage, and trying to outperform a free market in answering such questions would be foolhardy.” If anything, Cass’s problem lies with market-distorting policies that, in one of his examples, tax energy while subsidizing health care.

Cass is at his most persuasive in exposing the substantial economic costs of fractional environmental improvements mandated through standards for things like clean air that exceed what European nations require.  The myth that all environmental rules are worth their costs is enhanced by voodoo regulatory economics according to which cost-benefit analyses assign a dollar value to any environmental improvement such that the benefits always and inherently outweigh the cost. (In 2010, Cass reports, the EPA was claiming $4 trillion in quantifiable, annual economic benefits from the Clean Air Act.) He recommends a regulatory budget that would constrain these seemingly cost-free, or at least cost-dwarfed, rules.

Among the changes Cass suggests is a European-style system of educational, including vocational, tracks rather than the egalitarian delusion that everyone can and should go to college. This latter belief has itself distorted macroeconomic conditions by tailoring education solely to the college track, where those best served need the least help.

Cass takes up the topic of borders and globalization in a cogent chapter dealing with immigration and trade. He understands globalization as pertaining to two dynamics: “immigrant workers and imported substitutes, especially when produced by American firms that have moved operations overseas. In other words, they are upset about globalization’s warping of the labor market.” “Warped” seems strong here: Cass might better have said they “shaped” the labor market. His broader point is that public policy can shape the labor market too.

He thus suggests a policy goal of “matching the nation’s supply of workers to the demand for their work….” Again, some skepticism of the economics may be warranted: Public policy is a blunt and uninformed tool for matching supply and demand of any commodity, labor included. But his policy suggestions of limiting the inflow of low-skill immigration while pursuing trade policies that punish or counteract the unfair practices of other countries are modest and tailored to his aims.

Certainly some attention to immigration makes sense. The state cannot escape addressing it and thus should address it thoughtfully. On trade, Cass seems overly concerned with deficits as measures unto themselves. His most useful contribution in this regard is shifting our attention from bilateral trade deficits, which he suggests are unrevealing except insofar as they result from unfair foreign practices, to overall imbalances, which result from Americans trading debt for foreign goods.

He is less persuasive in seeking advantages for domestic industries: Cass rightly says government need not pick winners and losers among firms within a sector, but one can be forgiven some skepticism about his assertion that policymakers are “well suited” to elevate “domestic firms and industries at the expense of competitors overseas.” His suggestions in this regard are, to be fair, not outright mercantilism: He prefers instead public research, infrastructure improvements and education. Public industrial research is the least persuasive of these—government has no expertise in matching it with market needs, and it will inevitably become politicized—but infrastructure and education are necessary interventions anyway, so it makes sense that they should prioritize American competitiveness.

Cass does want, and makes a compelling case for, aggressive action against countries like China that engage in systematic manipulation of markets, including massive thefts of intellectual property. He calls these “asymmetric deterrents that target blatantly unfair practices abroad….” Cass is by no means opposed to international trade but does want policy used as an instrument for influencing it.

The Universal Basic Income is another target of Cass’s incisive pen, especially insofar as it is detached from work.   The UBI, he writes, is a mechanism for bribing economic losers into silence by sating them with consumption at the expense of their human need to produce. He instead argues persuasively for a wage subsidy that rewards work.

While Cass’s book helps us to understand the rise of Donald Trump, he does not fawn. He criticizes the president for withdrawing from the Trans-Pacific Partnership and is skeptical of the 2017 tax reform.

There are, in all, reasonable challenges to be made to the economics underlying this book—at times, one waits for the word “alienation” at the next turn of the page—though it should be said that Cass’s basic orientation is toward, but not worshipful of, an unfettered market. Similarly, one can fairly argue that Cass overlooks competing priorities like economic freedom.  On the other hand, the great contribution he has made is less in resolving the tradeoffs we face but rather in identifying them and forcing us to choose self-consciously.

The book thus succeeds masterfully as a work of politics regardless of what one thinks of its economics.  The reason is that it speaks to the human things that political life exists to ennoble, including the need to contribute to society rather than merely consuming from the largesse of others. For that, Trump supporters as well as critics are in Oren Cass’s debt.