From the Wall Street Journal:
To sum up, Mr. Cowen believes that America is dividing itself in two. At the top will be 10% to 15% of high achievers, the “Tiger Mother” kids if you like, whose self-motivation and mastery of technology will allow them to roar away into the future. Then there will be everyone else, slouching into an underfunded future of lower economic expectations, shantytowns and an endless diet of beans. I’m not kidding about the beans.
Poor Americans, writes Mr. Cowen, will have to “reshape their tastes” and live more like Mexicans. “Don’t scoff at the beans,” he says.
In other words, sure, America had its centuries in the sun as a high wage / low cost of land country as Benjamin Franklin pointed out in the first immigration restrictionist essay. But now America will suffer the inevitable fate first described by the Mexican polymath Francisco Galtonez in his landmark 1869 book Hereditary Peonage: Regression to the Bean.
Or America could do something about cutting back on immigration, but that's unthinkable, so: Beans ahoy!
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I actually like beans. My family has been saving a lot of money by eating lots of homemade hummus (Garbanzo beans / Chickpeas) and making bean-only Chili.
From Green economy to Bean economy.
Bean Cuisine could be a new line of food products.
Throw them some red meat? What no more red meat? Throw them some pinto beans.
America: a has-bean nation!
Off-topic, can Steve or one of his readers remind me of the passage he has quoted a few times, mostly with reference to the obscure ethno-geography of the Caucasus region and specifically Chechnya? It is from a satirical (inter-war?) novel and contains vague and obscure references to a fictitious region whose precise location seems impossible to describe with any precision. I've tried searching for the posts in question but can't find them.
I ask because these posts are hilarious. I've found the one where Steve mixes up a potted description of Chechen/Dagestani geopolitics with Rick Moranis's exegesis on the terrible conquests of Gozer the Traveller, and that gave me a good laugh.
(If Steve could at some point work the description of Vigo the Carpathian from "Ghostbusters II" into an appropriate post, i.e. something to do with mediaeval European history, that would also be highly amusing...)
http://isteve.blogspot.com/2013/04/the-avar-bomb-mom-logic-of-mixed.html
ah, Tyler "Let them eat beans" Tyler, foo-foo queen of the neoliberals and media darling.
Thank you Steve!
15% of the entire country, if the country is just shy of 50% white (say 45% for rounding purposes) means 1/3 of whites will be successful, 2/3 of whites and all the rest will be bean eaters (of course, Asians are up there, but they don't have the numbers to affect this math. And of course, a smattering of other races will be up there as well).
This is entirely reasonable. 1/3 of whites are probably the maximum that really should be in college, anyway.
In other words, these numbers are entirely reasonable given the future demographics of the country.
The whites that really should be in college today will still make it in college tomorrow, and will still be successful (admittedly, in private schools, gated communities, and lots of telecommuting, unfortunately). The future is just grim for the masses. I think the hardest hit will be the borderline whites: those that yesterday studied business and stumbled into a meaningless job that nevertheless paid enough to get into the nice suburbs. They aren't smart/driven enough to really contribute to a company, and there's no slack to employ them any more. They will drop a tier, and have crappy jobs-poorly paid overworked assistant manager at Wallmart rather than well paid, cush job as sales rep for a paper company. Yesterday, they were able to work and live above their station: tomorrow, its back where they belong.
The nation will be more stratified because before, that overcompensated whites' kids could buy into decent schools in decent neighborhoods, and at least have a chance to escape. Tomorrow that same guy's kids will be in crappy schools with crappy neighbors, and he will find it very difficult to escape.
So the country will be 100 Detroits; horrific cities with decent suburbs. That's really not so different from today, and its been trending that way for 40 years.
(incidently: who will those 1/3 whites be? My theory: Jews, Mormons, and upper tier Catholics).
anonymousse
Chili without meat is just bean soup.
--A Texan.
First, I am not advocating violence in case there are any NSA types monitoring this discussion. But things are not going to change until the 10 to 15 percent that Cowen talks about begin to feel some pain. What form this will take, I do not know. But I do know that things will not change until those at the top feel some pain.
Some of those who were in that elite status have changed their views as they themselves have become victims of this new order. I've seen white collar types who never sympathized with blue collar factory workers over outsourcing, suddenly become Pat Buchanan-like on trade and immigration when their tech fields faced the same threat
American stores are going to be selling a lot more lard. Places like Food 4 Less already do. Makes beans, tostadas, burritos, and the like yummy.
I have a bean!!
Beans at last, beans at last, thank god almighty we have beans at last!
A change in idolatry. From the Golden Calf to the Silver Bean.
No wonder they call it the windy city.
"(of course, Asians are up there, but they don't have the numbers to affect this math. And of course, a smattering of other races will be up there as well)" - Give chain migration time, though really, this idea is just cover for the very few who will loot America. It will have nothing to do with how productive they are.
Inherit the Wind.
Gone with the Wind.
"I've seen white collar types who never sympathized with blue collar factory workers over outsourcing, suddenly become Pat Buchanan-like on trade and immigration when their tech fields faced the same threat"
They came for the factory workers, and I didn't speak up because I wasn't a factory worker.
They came for the middle-aged middle managers, and I didn't speak up because I wasn't a middle-aged middle manager.
Then they came for the programmers, and I didn't speak up because I wasn't a programmer.
Then they came for me...and you know the rest of it.
Irony intended. ;)
Try butterbeans, they're high in soluble fibre and cooked with slices of thick bacon, onions and celery make for a hearty and tasty meal. All this goodness within a neo-feudal budget. So next time have the lady of the house pick up a bag of butterbeans on her next trip to the market. Butterbeans, America's future.
It almost brings tears to my eyes, thinking of the Wall Street Journal and its long, lonely struggle. Sometimes, if you wish hard enough, dreams can come true!
...cooked with slices of thick bacon, onions and celery...
Well la-dee-da.
Soylent Bean.
I detest beans. Yuck.
So we're to have 10-15% of Americans riding high on the gravy train with their heels on the back of the necks of the rest of us, holding our snouts in the bean trough? I call DISPARATE IMPACT!
First, I am not advocating violence in case there are any NSA types monitoring this discussion. But things are not going to change until the 10 to 15 percent that Cowen talks about begin to feel some pain. What form this will take, I do not know. But I do know that things will not change until those at the top feel some pain.
How many iSteve readers are in the top 15% (but not the top 3%) of the income distribution? It's not exactly Xanadu, though we should count our blessings. The truly ambitious set their sights higher, and if you follow Peter Turchin, this will be drive the next political, as disappointed, highly talented status-seekers find that their MBAs, law degrees etc. have bought them nothing but life-long servitude to the banks. If the 10%-15% comfortably well-off threaten to become 7%-10% of the population, then we have literally tens of millions of intelligent, capable people willing to revolt.
Good. Useful, docile white servants will be cheap again... just like in the last century.
The future is just grim for the masses. I think the hardest hit will be the borderline whites: those that yesterday studied business and stumbled into a meaningless job that nevertheless paid enough to get into the nice suburbs. They aren't smart/driven enough to really contribute to a company, and there's no slack to employ them any more. They will drop a tier, and have crappy jobs-poorly paid overworked assistant manager at Wallmart rather than well paid, cush job as sales rep for a paper company. Yesterday, they were able to work and live above their station: tomorrow, its back where they belong.
Why not let them have their own piece of land where they can run their own affairs, rather than incorporating them into some highly stratified society?
A bean rich diet is gonna be bad for posture. Even with rice it's not a complete protein. Everybody outside of the gated cities (I predict Manhattan, DC, SF and Westside of LA will eventually become gated, served by robots instead of laborers) will be 5'3'' and 300 pounds. Guess that'll keep them from storming the gates.
If the 10%-15% comfortably well-off threaten to become 7%-10% of the population, then we have literally tens of millions of intelligent, capable people willing to revolt.
Gen. Handgrenade: Mr. President, bad news, the American public are revolting!
Mr. Obama: Yes, they are.
Cowen's point is not really surprising. What he is saying is that the differential between skilled and unskilled labor is reverting to its nineteenth-century norm. At that time, a skilled tradesman (e.g., a tool-and-die maker, foundry patternmaker, typographer, gunsmith) could expect to make at least 3 times the wage that an unskilled mill hand did. The original industrial revolution benefitted the skilled and not the unskilled worker.
This began to change with the advent of such things as the time-and-motion studies of Taylor and Gilbreth, and the advent of process engineering. These developments made it possible to employ the unskilled in highly productive labor that required very little training. An early example of their benefit was the unprecedented $5 per day wage that Henry Ford began to to pay his assembly-line workers in 1914.
The real heyday of the unskilled American worker began during World War II, when factory labor was at a premium because so many men had been withdrawn from the work force by the war. It continued after the war because, alone in the developed world, American industry had suffered none of the destruction that had been visited on Europe and Japan. It was furthered by the success of the CIO unions and the UAW in organizing unskilled factory laborers, by the restrictive 1924 Immigration Act, and by relatively high tariffs that denied cheaper foreign goods competitive advantage.
To hope for a return to such conditions is an exercise in nostalgia, not realism. Globalization has taken place because the countries devastated in WWII rebuilt, and with newer and better plant and equipment than we had at the peak of our prosperity; and countries that were undeveloped have even newer and better plant and equipment than theirs. Tariff and immigration barriers have dropped and the political will to restore them is non-existent. Absent these market constraints, efforts to re-unionize any segment of American industry will, if they succeed, simply bankrupt the businesses in question, or will fail.
Given all of this, yes, indeed - the age of average is over, just as Cowen says. The point should be, though, that it was a transitory phase of our history that came about because of a unique conjunction of circumstances which are unlikely to recur, and it didn't even last very long.
A very small top 1% of the top 1% living plutocratically, with 80-85% of the people living in permanent chronic abject poverty, in between them a 10-15% Tiger Parent achiever class.
Yep, sounds just like the third world.
And also...I despise beans.
"A very small top 1% of the top 1% living plutocratically, with 80-85% of the people living in permanent chronic abject poverty, in between them a 10-15% Tiger Parent achiever class."
I knew this social class system sounded familiar.
http://en.wikipedia.org/wiki/Ingsoc#Ingsoc.27s_social_class_system
"If there is hope, it lies in the frijoles."
Yesterday, they were able to work and live above their station: tomorrow, its back where they belong.
Behold the mind of a libertarian! It turns out to look suspiciously like the mind of a medieval lord. "Those peasants need to learn their proper place - on their knees before me, where they belong!"
Cowen's point is not really surprising. What he is saying is that the differential between skilled and unskilled labor is reverting to its nineteenth-century norm.
Cowen is not making a point, he's making an argument. He's arguing for one possible socio-ecnomic order, as opposed to other possible ones. Is the world Cowen wants to see come to pass one we should wish for? No, it's really not. And in spite of what Cowen and his defenders want to imagine, his preferred future is not (to use a communist phrase they'll be very familiar with) "historically inevitable".
Crawfurdmuir said:
Tariff and immigration barriers have dropped and the political will to restore them is non-existent.
You make some good, if conventional, points about the direction economic forces are pushing us, but you've glossed over the possibilities of political change. Sure, there's little scope within America's current, utterly stagnant and corrupt political culture, but the culture itself may change. Political cultures typically do, on a scale of several decades.
Assume a political regime (under the same constitution, no doubt) that put the well-being of the median American citizen foremost, and was willing to control population flows, tariffs, and tax rates to achieve that end. What would prevent them from engaging in redistributionist policies?
Flip comparisons to the Soviet Union will be graded zero.
"Assume a political regime (under the same constitution, no doubt) that put the well-being of the median American citizen foremost, and was willing to control population flows, tariffs, and tax rates to achieve that end. What would prevent them from engaging in redistributionist policies?"
Nothing - but immigration controls and tariffs are prerequisites for the success of such a social-welfare state. A social-welfare state is incompatible with borders that are wide open to immigration and trade, and any attempt to put high tax rates and redistributory policies in place without closing them will come a-cropper.
Cowen is not making a point, he's making an argument. He's arguing for one possible socio-ecnomic order, as opposed to other possible ones. Is the world Cowen wants to see come to pass one we should wish for? No, it's really not. And in spite of what Cowen and his defenders want to imagine, his preferred future is not (to use a communist phrase they'll be very familiar with) "historically inevitable".
Exactly. His "inevitablism" is no different from that of those who argue that "diversity" and "multiculturalism" are "inevitable."
Nothing - but immigration controls and tariffs are prerequisites for the success of such a social-welfare state. A social-welfare state is incompatible with borders that are wide open to immigration and trade, and any attempt to put high tax rates and redistributory policies in place without closing them will come a-cropper.
I couldn't have put it better myself.
Behold the mind of a libertarian! It turns out to look suspiciously like the mind of a medieval lord. "Those peasants need to learn their proper place - on their knees before me, where they belong!"
I don't think it takes the mindset of a medieval lord to realize that the US has had a very charmed life during the years of the two world wars and the immediate post-war period when the rest of the world was mired in destruction and hunger.
Many mediocre American middle class types seem utterly unable to grasp the reality that the days of the U.S. GDP being 50% of that of the world was a historically highly unique and anomalous state of affairs.
They are rather like the white nationalist types who seem unable to comprehend that the Rise of the West was a distinctly 16-20th Century phenomenon that may not endure forever and had not held always for much of the preceding centuries. There was a time, after all, that the Germanics were merely violent savages fleeing from other savages from the East more proficient at war than they.
I'd rather like the WASP-dominated nostalgic America as much as the next Russell Kirk wannabe, but it won't be coming back I am afraid. The best we can hope for is a stable, relatively free country with some vestige of a constitutional structure and a bifurcated population (a majority of white-Asian-Hispanic mixed "beige" people and a continuing minority of troublesome blacks).
If Shakespeare were alive and writing today, that famous line in Henry VI might have been about economists instead of lawyers.
Yes, this worked really well during the French Revolution.
"The people are starving, they have no bread!"
"Let them eat beans!"
Many mediocre American middle class types seem utterly unable to grasp the reality that the days of the U.S. GDP being 50% of that of the world was a historically highly unique and anomalous state of affairs.
I know you're trying to be a hard-nosed realist, but the American share of world GDP does not determine the distribution of income within the U.S. It's true that market forces are tending to create winner-take-all situations in the economy, but so what? In the city I grew up, the river tended to overflow its banks and flood the downtown, so they built a dam.
The sky is not falling. People who can formulate a rational thought will be fine. We've been living in an anomalous age where blue collar American workers had an inflated wage. They weren't more talented or ambitious, they were just lucky to be born here. These aren't tremendously productive people, if at all.
I haven't seen Tyler Cowen directly discuss any racial breakdown, but look at higher education and you can see it clearly. For those of you who worry about whites, just stop worrying, because most whites will continue to live a life envied by 99% of the world. The bottom 10% may struggle, but they are lucky to have lived during an inflated prosperity.
Continuing globalization and the coming of age of robot workers will increase the supply of blue collar workers. I doubt restricting the borders will effect the decreasing median income of the bottom 3 quartiles.
If we're restricting immigrants that are more dependent on the government than they contribute towards society, then it may slow down the increasing liabilities on the taxpayers.
However, if we're restricting productive immigrants who have disposable income, then we're just destroying the parts of the economy that rely on those people spending. For example, Asian immigrants have among the highest disposable income, and there are blue collar jobs in our country that rely on those successful immigrants.
They also need homes and cars built, goods made and shipped, like the rest of us. Quality immigration helped stave off Australia from the global recession, and that's what we need to do.
Our liabilities are already so high. I just listended to Laurence Kotlikoff explain that our government is already bankrupt, and it's just the accounting that is disguising it.
As for the bottom 3 quartiles, they won't be living like today's poor Indians or Chinese. They will still have access to some of the best technology in the world, which will give them alot of cheap leisure. Video games, television, internet, 3D printing inventions, etc will continue to bring pleasures.
They will also continue to have plenty of food and access to our cheaper and better quality education that continues to innovate. Society will become more meritocratic, so more bright and ambitious Americans will be able to climb the socioeconomic ladder. I wouldn't fear this change. There's plenty of good things to come.
Well, at least it adds up to beans.
And let's thank Cowen for spilling the beans as to what globalization was really about.
"Anonymous said...
They will also continue to have plenty of food and access to our cheaper and better quality education that continues to innovate. Society will become more meritocratic, so more bright and ambitious Americans will be able to climb the socioeconomic ladder. I wouldn't fear this change. There's plenty of good things to come."
You are a deluded fool. The "economic ladder" will be an economic foot-stool for many people. We are becoming Brazil. That is not a "good thing".
"Quality immigration helped stave off Australia from the global recession, and that's what we need to do"
And here I was like a total rube, thinking it was the commodities boom.
Ontario, Canada has had a lot of "quality immigration", and it doesn't seem to have helped. Saskatchewan, which until recently had net negative migration, has been booming.
"The sky is not falling. People who can formulate a rational thought will be fine. We've been living in an anomalous age where blue collar American workers had an inflated wage. They weren't more talented or ambitious, they were just lucky to be born here. These aren't tremendously productive people, if at all." - They were never paid above their productivity, wages tracked productivity up until mass immigration got started and their "luck" ran out.
"Quality immigration helped stave off Australia from the global recession, and that's what we need to do." - you are thinking of the commodities bubble.
"We've been living in an anomalous age where blue collar American workers had an inflated wage. They weren't more talented or ambitious, they were just lucky to be born here. These aren't tremendously productive people, if at all."
I would add to the above "... UNSKILLED blue collar American workers..."
What people really mean when they talk about the "decline of the middle class" is the disappearance of the well-paying factory job for someone without a skilled trade or a university degree. To some extent it also includes those who may have university degrees that don't involve technical or business subjects and who can't find white-collar employment.
I grew up during the 'fifties and 'sixties in a small town where the major source of employment was a large factory. There were also numerous farms in the rural area outlying the town. I suppose my family could have been called part of the local upper class, for my parents both held postgraduate degrees, and my father was a successful businessman. However, all the local children of my generation, whether their families were rich, poor, or somewhere between, went to the local public schools (which were reasonably good).
One of the characteristics I recall about the boys whose fathers worked at that factory was that the great majority of them had no ambition other than to get a job there after they graduated from high school. It was the "route of least resistance." They had every expectation that life would be as good for them as it was for their dads, and thought no further effort was necessary. They had no particular interest in learning a trade skill or in going to college. The girls from such families typically expected to get married after graduation and to become housewives, though a few more ambitious ones might have hoped to become schoolteachers or nurses.
The kids that wanted to learn trade skills or go to college were most usually those whose parents were farmers, skilled tradesmen, or college-educated businessmen and professionals. Achievement and ambition seemed higher among this group, driven I suspect partly by superior native intelligence and partly by household environments and parental expectations. One that stands out in my memory was the son of a local electrician. He worked his way through college and graduate school as an assistant to his dad - I remember them wiring equipment in my father' business. He earned a PhD in nuclear physics and ended up working at a prominent research laboratory.
I might mention that there was no racial division to speak of in this small Midwestern town - everyone was white, and just about all of them were Christian, divided between various Protestant denominations and the Roman Catholic church. There was only one Jewish family, that of the local scrapyard owner.
The expectation of gtaduating from high school and then getting a factory job largely worked out for the working-class kids of my age cohort, but it has not done so for their children, and I do not think it will for any future generation.
I'm not sure that Cowen is completely right about tech skills in computer-driven fields being the only route to the top 10-15%. However, the mastery of some sort of skill, or some kind of entrepreneurial bent, will be necessary. The route of least resistance now runs straight to the lower depths.
"Yesterday, they were able to work and live above their station: tomorrow, its back where they belong.
Behold the mind of a libertarian! It turns out to look suspiciously like the mind of a medieval lord. "Those peasants need to learn their proper place - on their knees before me, where they belong!"
Sorry, I used a word incorrectly. By 'back where they belong' I meant 'they will be earning more in line with what they are producing' rather than 'back to where they morally merit.' It was a poor choice of words on my part.
Seeing what is happening to the country, I am losing a great deal of my libertarian leanings, because libertarians don't appreciate this distinction.
anonymousse
I know you're trying to be a hard-nosed realist, but the American share of world GDP does not determine the distribution of income within the U.S. It's true that market forces are tending to create winner-take-all situations in the economy, but so what? In the city I grew up, the river tended to overflow its banks and flood the downtown, so they built a dam.
Sure it does. When the US GDP was half that of the world in the immediate post-war years, the US had surplus of everything -- land, capital, inputs, outputs, customers, buyers, what have you. And, just as important, there was a complete dearth of competition overseas. We were essentially the only industrial power left intact feeding, clothing and equipping the whole world.
America, economically at least, is now becoming a normal nation again. That means, even with immigration restriction, the lower class is unlikely to enjoy middle class wages and lifestyle the way it did in the golden years.
I am opposed to mass immigration (mainly for cultural-social harmony reasons), but blaming it for the woes of the American worker is misplaced.
Sorry, I used a word incorrectly. By 'back where they belong' I meant 'they will be earning more in line with what they are producing' rather than 'back to where they morally merit.' It was a poor choice of words on my part.
Seeing what is happening to the country, I am losing a great deal of my libertarian leanings, because libertarians don't appreciate this distinction.
Not many Libertarians who are economically literate floss the labor theory of value ("paid in line with what they are producing") either...
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