The Accidental Theorist Read Free Page B

logic of the economy as a whole is not the same as the logic of a single market.
    I think I know what people like Greider would answer: that while I am talking mere theory, their arguments are based on the evidence. The fact, however, is that the U.S. economy has added forty-five million jobs over the past twenty-five years—far more jobs have been added in the service sector than have been lost in manufacturing. Greider’s view, if I understand it, is that this is just a reprieve—that any day now, the whole economy will start looking like the steel industry. But this is a purely theoretical prediction. And such theorizing is all the more speculative and simplistic because he is an accidental theorist, a theorist despite himself—because he and his unwary readers imagine that his conclusions simply emerge from the facts, unaware that they are driven by implicit assumptions that could not survive the light of day.
    Of course, neither the general public, nor even most intellectuals, realized what a thoroughly silly book Greider had written. After all, it looked anything but silly—it seemed knowledgeable and encyclopedic, and was written in a tone of high seriousness. It strains credibility to assert the truth, which is that the main lesson one really learns from all those pages is how easy it is for an intelligent, earnest man to trip over his own intellectual shoelaces.
    Why did it happen? Part of the answer is that Greider systematically cut himself off from the kind of advice and criticism that could have saved him from himself. His acknowledgments conspicuously did not include any competent economists—not a surprising thing, one supposes, for a man who describes economics as “not really a science so much as a value-laden form of prophecy.” But I also suspect that Greider was the victim of his own earnestness. He clearly took his subject (and himself) too seriously to play intellectual games. To test-drive an idea with seemingly trivial thought experiments, with hypothetical stories about simplified economies producing hot dogs and buns, would have been beneath his dignity. And it is precisely because he was so serious that his ideas were so foolish.

Downsizing Downsizing
     
    The Clinton administration isn’t particularly mendacious on economic matters—in fact, economic analysis and reporting under Clinton have been unusually scrupulous. But the president has changed his mind about economic policy so often that now his officials sound insincere even when they speak the plain truth. And so I felt a bit sorry for Joseph Stiglitz, the eminent economist who for a time chaired Clinton’s Council of Economic Advisers. In the spring of 1996, Stiglitz released a report on the state of the American worker, more or less confirming what most independent economists had already concluded: Workers were not doing as badly as the headlines might have suggested. In particular, the impact of corporate downsizing had been greatly exaggerated.
    Stiglitz’s report was, to all appearances, a sincere attempt to produce a realistic picture of the American labor market. Yet it was treated by nearly all commentators as a purely political document—an election-year effort to accentuate the positive.
    But the commentators had reason for their skepticism. After all, other members of the administration—especially Labor Secretary Robert Reich—had been insistently pushing a very different view. In the world according to Reich, even well-paid American workers have now joined the “anxious classes.” They are liable any day to find themselves downsized out of the middle class. And even if they keep their jobs, the fear of being fired has forced them to accept stagnant or declining wages while productivity and profits soar.
    Like much of what Reich says, this story was clear, compelling, brilliantly packaged, and mostly wrong. Stiglitz, by contrast, was telling the complicated truth rather than an emotionally satisfying fiction.
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