Beyond secular stagnation

The novelty with the faith of these men, and especially Talarico, isn’t especially about the fact that they are non-Republicans engaged in a faith-forward sort of politics. While most religiously unaffiliated voters are Democrats, most Democrats are nonetheless religiously affiliated, and most Democratic leaders are happy to talk using the language of religion. Every recent Democratic president has been open or indeed passionate about their faith.

What’s more interesting is the way they integrate their faith into their politics and connect it with their sunny optimism. Their religion isn’t simply a part of their identity, or a thing from which they derive strength, and it isn’t primarily a way to make inroads with more conservative or family-values voters. Instead, they celebrate the positive core values of their religions, which directly inform their political aims and purposes. Both Christianity and Islam preach a duty to love and care for all others, to protect the vulnerable, and to welcome the stranger. Talarico and Mamdani embrace this and make it the basis of an agenda which is inclusive—they want to help you no matter what you believe—and which is focused on addressing real world hardships and building a better future.

This feels extremely refreshing. Far too often, Political Christianity and Political Islam have been focused on the judgment and repression of others, rather than on love and care. And America is now in the grips of a noxious Christian Nationalism, which has made itself the enabler of corruption, lawlessness, and violence committed against innocents. The events of the past year or so vividly demonstrate how much more closely Christian values align with Democratic priorities as opposed to Republican ones.

Talarico makes this point very well. In an interview with Stephen Colbert (which appeared on YouTube because CBS refused to air it), he says:

Well, for 50 years, the religious right, a political movement, that is the perfect description for it. They convinced a lot of our fellow Christians that the most important issues were abortion and gay marriage. Two issues that aren’t mentioned in the Bible. Two issues that Jesus never talked about.

Jesus in Matthew:25 tells us exactly how you and I, and every one of our fellow believers, how we’re going to be judged and how we’re going to be saved. By feeding the hungry, by healing the sick, by welcoming the stranger. Nothing about going to church, nothing about voting Republican. It was all about how you treat other people.

The really intriguing thing to me, though, is the broader critique of society embedded in the politics of Talarico and Mamdani. It’s a critique which transcends the usual left-right fights and which could become an engine of American renewal. The critique begins with two propositions: it takes good people to build a good society, and a good society is one that strives to make the world better. And the judgment it asserts is that we’ve made a serious mistake in thinking that clever institutions could cover for self-interested behavior in the construction of a better world.

That might not seem like much of a foundation to build on, but a lot of powerful things flow from it. First, it provides a powerful framework through which to scrutinize society’s dysfunctional institutions, which is a welcome departure from politics as usual. Helpfully, the idea underlying the framework is powerful and true. It is important that society encourages its members to behave ethically and with regard to others’ well-being. It is really important that we hold the leaders of our political and civic and economic institutions to the highest of ethical standards.

We have spent decades arguing over the proper role of the government relative to the market, and meanwhile the performance of both has grown ever less satisfactory because of the ascendence of the norm that only suckers expose themselves to risk by standing on principle. Over the past few years, reality has grabbed hold of us and demanded that we recognize this, as leader after leader and institution after institution has chosen cowardice and deference in the face of authoritarian behavior, protecting themselves at the expense of others. A message of recognition that this is the core problem in our country would resonate with many Americans, in my view. I certainly hope it would, given how difficult it is to see a road back to a functional state, a healthy civic life, and an economy whose outputs are more obviously good for society as a whole without progress along this dimension.

An important aspect of this framework is that the critique of our institutions and their leaders naturally extends to all of society. Pursuing this extension may not seem like electoral dynamite. Obviously lots of people enjoy the permission society increasingly extends to engage in anti-social behavior, to spend hours dissolving brain cells online, to attentionmaxx rather than engage in the purposeful effort to be a better person. But I also think most of us actually hate this. It’s ugly and brutal and stupid. It’s nice when people feel at least some social pressure to be kind and responsible, to learn and to appreciate the acquisition of skill and knowledge, to help maintain the health of their community. Doing all this can be depressing when no one else seems interested, but it is incredibly personally rewarding when a critical mass of others is working with you. Asking more of ourselves as we ask more of our leaders makes intuitive sense, and I think many Americans will buy into the notion that working to flip us into a more pro-social equilibrium is a good thing to do. That’s nice, because again I think the road to American renewal is an almost impossible one if we can’t make this happen.

Finally, this critique can help us understand what economic growth is for in a post-material age. I don’t mean to imply that there is a post-material threshold that can be crossed and we’ve crossed it. Instead, there is a continuum, and American society has traveled far enough along it to be confronted by some of the serious challenges a post-material condition presents. What sorts of challenges? It seems to me that a socially destabilizing number of people struggle to find purpose in their economic lives. There is always more to buy, but much of what is there to be consumed is empty or unworthy, or exists purely as a token in an unwinnable status game. Meanwhile extraordinary wealth exists alongside real scarcity and need. As a result, I think it has become harder for people to see the point of continued economic growth, which wouldn’t be a bad thing except that it actually is quite important that economic growth continue.

If we can embrace the idea that it takes good people to build a good society, and a good society is one that strives to make the world better, then we can reframe economic growth in a way that doesn’t simply sound better but which also delivers better outcomes. The first thing to understand is that we should not want growth for its own sake. What is good about growth is that it expands our collective capacities: we come to know more and we are able to do more. This, in turn, allows us to alleviate suffering, to discover more things about the universe, and to spend more time being complete people.

As we become a more post-material society, we should be more willing to prioritize the construction of the kind of society we want. We can direct resources toward education, or public transportation, or the development of better health treatments and their broad accessibility, simply because those are things worth doing. We can see economic growth as the pursuit of greater productive capabilities which give us ever greater room to do good things for good things’ sake.

There is a complementarity here between shifting economic priorities and the call for strong public ethics described above. It is reasonable to expect that behavioral standards can improve across society, and it is reasonable to think that this improvement can improve the quality of our collective decision-making and spending. I’m not saying that incentives don’t matter or that there won’t always be people who abuse systems. But professionalism, a sense of duty, and public-spiritedness are real things that have a meaningful impact on the way institutions of all kinds perform. The better we are, the more we can do.

As we become better at demonstrating the tangible public benefits that flow from economic growth, we can make a stronger case that we have a personal obligation to prioritize the public good alongside our own narrow interests. We can all make some sacrifices to make society better for everyone. We need to be able to build a lot more housing in the places people really want to live; that is critical to our ability to make the world better. That will be easier to do if we can persuade people that it’s anti-social to be a NIMBY who holds up a housing development or an infrastructure project. It’s ok to expect people to pay more in tax. We can more easily make the case that it is a good thing to pay more if we actually use the money to make people’s lives better by delivering effective and affordable health care or making it easier to get around. We can draw a similar connection between a stronger sense of social responsibility, entrepreneurship and innovation, and economic growth. A private sector which takes seriously its responsibilities to do business ethically and with regard for the collective welfare is one which may be less bound by red tape. A society in which we all expect more of each other is one that can accept more experimentation and disruption.

Recognizing our common humanity and our duty to others also provides a more attractive basis for global openness. Immigrants are people. Their welfare matters. We should treat them like our neighbors. If we do, then we also expand our collective capacities, because more people in a good society means more people learning and discovering and contributing to growth. Similarly, we don’t need to rely solely on economic arguments to support open trade. People in other countries are also our neighbors, and we should be able to engage in mutual exchange with them on that basis. This doesn’t mean we have to be naive. In deciding how to engage in trade with another country whose government does not respect its own citizens’ humanity and autonomy, we need to make sure we are enhancing those citizens’ welfare and liberty. But here again, a more ethical and humane world is also one with a greater capacity to discover new things and alleviate suffering.

In sum, the sunny and optimistic pitch is a good one and a true one. We can all treat each other better, and we should push ourselves to do that. By doing that we can create a society which is richer and more dynamic and just better. As we become more comfortable seeing growth in that way, a post-material age comes to seem less bleak. Sure, it requires faith to see the possibilities here. I think that’s why a Talarico or a Mamdani can envision it, and I think that’s why they may be able to help the rest of us see it too. At least, I hope that they or others like them will.

*******

A post-script

Sixteen years ago I had just become a father. I was a new and inexperienced parent, but I was already worrying at an elite level. Driving was among the things I fretted over—my daughter’s driving, of a motor vehicle—despite the fact that she could not yet roll over. I was a hellion of a driver at 16, and so my brain decided to allocate some not-insignificant share of its thinking power to all the things that might happen if she drove that way or was on the road with others who did. It occurred to me, though, that technology might bail me out. I was much more online back then, so I tweeted this thought: that thanks to the eventual arrival of autonomous vehicles my daughter might not ever need to get a license.

A number of people read that tweet and expressed skepticism, and I ended up in a spirited back and forth with Tim Lee, a friend and tech journalist. (I highly recommend his Understanding AI newsletter.) Anyway, Tim ultimately offered me a bet. If on her 16th birthday my daughter could get in a vehicle with no driver in Washington, take a nap, and exit the vehicle in Philadelphia, then Tim would owe me $500; otherwise, I’d owe him. Well, you know how it turned out. I wasn’t too far off. There are a good number of cities where one can now hail a driverless vehicle for a crosstown ride. Intercity travel is still a ways off, but if we’d said 21 rather than 16 I’d feel good about my chances. Long-story short: Tim kindly invited me to join him on his podcast, and you can click over to hear us discussing lessons learned.

The views expressed here are mine alone.

Crazy is somewhat vague so let’s put this a different way. Many of us, looking around, feel a sense of incomprehension at what we’re seeing. We have certain expectations concerning how people ought to respond in particular situations, and the actual behavior that we observe conflicts with those expectations. The mental models we use to make sense of the world are letting us down, and we are thus unable to understand the choices others are making, at all levels of society. This is confusing, disorienting. It’s frightening.

It is important that we take this feeling seriously, because it is a key to understanding what we’re doing here and how things are going wrong. Much of the understanding that we have of the world we obtain from other people, directly or through one or another form of human-created media. We orient ourselves through our connections with others, by learning what they believe and how strongly, and by observing how beliefs affect choices and with what result. Among other things, we may thus see an individual as a particular configuration of social connections. To be one is to be a unique node in a vast network of overlapping social links. These links are vectors of information flow, and the unique nodes—the individuals—determine how incoming information is transformed and then radiated back out into the network. As a consequence, changes in the nature of the network, or in what information flows across it, have real and significant effects on society.

Looking across the social sciences, there are certainly people who think about the operation of society in this way or something like it, but it very much has not been the dominant paradigm over the past century. The more prominent approach, rather, takes a very individual-centered view of behavior and decision-making. It’s a perspective which grows out of some of the fundamental tenets of liberalism, like the primacy of individual autonomy and freedom and rationalism, but I would also say that it has been given a boost by the ascent of economics as the dominant voice in public-policy debates. Very generally speaking, it is one in which society is composed of individuals operating within systems. To understand it, we have to ask questions like: what are the incentives created by those systems, what preferences does an individual have, what utility function are they seeking to maximize? We may then reason from there about what is likely to happen and what leverage is available to improve aggregate outcomes.

There are absolutely contexts in which that sort of approach makes perfect sense, and when studying pockets of society it can generate real insights. As the basis of significant policy discussions, or serious conversations about what is and isn’t working across society, or even personal choices about one’s responsibilities to the community, it leaves much to be desired. It is an abstraction too far, which leaves out something fundamental to the nature and operation of society. It doesn’t work, not without some major assistance from a different approach.

That different approach is pretty intuitive! It begins with the recognition that humans are first and foremost social animals. That’s the secret of our success. Obviously we are still individual people with our own thoughts in our own skulls. But that individuality and those thoughts are bound up with our social network. We learn from people around us; we put more weight on some relationships than others, we update our beliefs based on what others are saying or doing and how their actions appear to help or harm them. You might think of us, collectively, as a social organism, trying in its own weird, complex, undirected way to gather useful information about the natural and social environment. Through our interactions and our own personal behavioral responses we process this information, and use it to survive and thrive given the resources available to us. Society makes lots of mistakes, obviously, but that’s how it learns, and the hope is that over time we become better at gathering and processing information, and better at being a society.

What does thinking about the world in this way tell us? Well, for one thing it suggests that shocks to social networks and information flows can have significant macro-level consequences. They can change the world.

Never before in history has it been so easy not to interact with others. From the comfort of your couch you can luxuriate in content while nearly everything you need is delivered right to your door. When you venture out, it is both easy and socially acceptable to remain safely cocooned within your personal electronics: eyes on a screen, buds in the ears. The social interactions we choose tend to be highly curated and consumption oriented. We’ve given ourselves permission to avoid the social responsibilities that force us into more boring sorts of social interactivity. We’ve given ourselves permission to put ourselves first and care less about the needs and troubles of others. It makes complete sense to me that we should feel disoriented, perplexed by the way others are behaving. I don’t see how we could avoid it. It makes sense, too, that this has coincided with eroding norms, eroding support for democracy, and the shocking rise of a corrupt autocrat to the highest office in the land.

To better understand why all this matters we can look to Minnesota. In Minneapolis, the attacks carried out by DHS have pushed people into the streets to defend their neighbors and their fundamental rights. Out there in the cold, Minnesotans have demonstrated their commitment to particular values. As a community, they affirmed these values, and performed the behaviors appropriate to them. They enhanced the status of these values across the community, and they facilitated a meeting of the minds that enables easier and more effective collective action. This is how a community sustains itself and decides what kind of society it should be. The effect on the world is material and enduring.

I very much liked the way Adam Serwer wrote about this in a moving piece published in the Atlantic in January:

If the Minnesota resistance has an overarching ideology, you could call it “neighborism”—a commitment to protecting the people around you, no matter who they are or where they came from. The contrast with the philosophy guiding the Trump administration couldn’t be more extreme. Vice President Vance has said that “it is totally reasonable and acceptable for American citizens to look at their next-door neighbors and say, ‘I want to live next to people who I have something in common with. I don’t want to live next to four families of strangers.’” Minnesotans are insisting that their neighbors are their neighbors whether they were born in Minneapolis or Mogadishu. That is, arguably, a deeply Christian philosophy, one apparently loathed by some of the most powerful Christians in America.

This neighborism is the foundation of a functioning open society. It is the foundation of a good society. It is the heart and soul of a community that takes democratic self-government and the protection of fundamental rights seriously.

The book elaborates on this way of understanding the world in detail. One significant upshot—really, the main point of the book—is that the nature and distribution of belief across a society shape what that society can be. We can be a democracy if and only if we care about being a democracy and behave, collectively, as if we care about it. It is critical that we wrap our arms around this.

We are in the midst of lawlessness. The president believes that the American military is his, rather than a force of Americans who have volunteered to defend the Constitution and the individual freedoms that it protects. He has taken for himself the right to send these Americans into combat, without any democratic accountability, without any concern for international or domestic law or the value of human life. In Minnesota and many other places, our president has attacked his own people, attacked human beings without regard for their well-being—or indeed with quite purposeful disregard for their well-being. He is rejecting the ideals of democracy, of self-government, of individual autonomy, of the fundamental rights and dignity of every person. He is slapping us in the face, behaving as if we have no society, no democracy, and are nothing but isolated individuals, of no worth or consequence.

Is he right? Have we already lost it all? If we have, all the good things we enjoy about the modern world, and there are many, may be lost. Tomorrow, within weeks, we could find ourselves in a place where people are dying by the thousands or hundreds of thousands. It is here, it is at hand. What stops that, what stops the horrors of the 1930s and 1940s—the global wars, the genocides, the mass imprisonment and starvation—is the network that is a free society. It is the connections that join us all up, reinforce our core beliefs, and encourage us to behave like we care about things bigger than ourselves.

So, if you have that feeling of unease and incomprehension, the sense that we’ve gone a little bit crazy: don’t ignore it. Don’t wave it away. Don’t treat it as the natural ennui appropriate to a world beyond history. It is a warning. A dire one. If we don’t recognize it for what it is and respond then we will be unable to repair what is broken.

The views expressed here are mine alone.

It has been nearly three years since I last posted here. There’s lots to talk about.

Let me first bring to your attention something I’m incredibly excited about. My new book, In Good Faith: How the Nature of Belief Shapes the Fate of Societies, will be published on April 21st of this year. I cannot wait to get this into your hands. It is available for pre-order now from your bookseller of choice.

Over the months ahead I’ll be doing some writing about the themes of the book. I want to begin here with a discussion of the broader context: the gravest crisis liberalism has faced since the first half of the 20th century. It may seem premature to characterize our situation in this way, but I don’t believe so. The illiberal tide rising around us has been unmistakable over the past decade, here and around the globe. The postwar international order is being dismantled by the country most responsible for its construction and maintenance. It is all too easy to imagine the collapse of American democracy, and I don’t feel the need to wait for horrors on the scale of the 1930s and 1940s to call this mess what it is.

Just why the liberal world has found itself in crisis is a matter of active debate. There are voices on the right arguing that liberalism was never a particularly good idea in the first place: that people need to be ruled, or that true fulfillment only comes through celebration of god and tribe and tradition. As someone who very much enjoys thinking for himself and making his own choices I find these arguments unappealing at a gut level, but they also fail to reckon with liberalism’s overwhelming record of delivering the goods. The world we seem determined to put behind us is the richest, most just, and most free that people have ever created, by miles and miles. Not free and just and rich enough! But we should allow ourselves to accept that with liberalism we really seem to be onto something.

This freedom and prosperity is profoundly good, it is worth remembering. It is good when people have enough to eat. It is good when people no longer have to worry about dying from diseases that claimed their ancestors. It is good to have access to more knowledge and art and opportunity. Liberalism’s victories are not empty ones! No god worth worshipping would demand that we give them up.

At the same time, I believe we have discovered a very serious flaw within liberalism, and it is one that liberalism’s defenders have difficulty perceiving. To see it, it helps to take a long-term perspective. The last great crisis of liberalism took place in a very different material context from the present one. People lived much closer to the edge of hunger. Political rights were much more limited and concentrated. Tyrannies emerged in the shadow of the First World War, which took millions of lives and left political and economic chaos in its wake. Illiberalism was reinforced by economic cataclysms far worse than the developed world has faced in our lifetimes.

Our crisis is a different beast. We’ve had our troubles, but they pale in comparison to those of a century ago. The world we are dismantling would seem an eden to the people of the early 1900s. This is not a crisis of material desperation. Instead, today’s illiberalism is rooted in the desocialization of large swathes of the population. And it is amplified into a dire threat by the cynicism and moral apathy of a very broad class of elites. A critical mass of us can be all too easily suckered, and a critical mass of us believe that only suckers make sacrifices for the greater good.

This is a deeply uncomfortable thing to have to confront. We lack a satisfying intellectual framework for making sense of it. It is so much easier to imagine that a political reform here or a social-media regulation there or a bit of economic redistribution over yonder is all that’s really needed. It is disconcerting to think that we may be confronting a frightening new social phenomenon which threatens to halt or reverse human progress. And honestly it would be much easier to just hope for the best and continue to pursue our own career and personal interests. Much of the liberal commentary about this crisis thus ends up taking too constricted a view of the situation.

We can’t afford to remain stuck this way, and it is time to push the discussion forward. One good place to start is a new book by Brink Lindsey, called The Permanent Problem: The Uncertain Transition from Mass Plenty to Mass Flourishing. Brink is a scholar at the Niskanen Center and a friend, and he has been a source of insight and encouragement for me as I’ve worked on my book. He argues that John Maynard Keynes’s old prophecy — that once economic growth liberated us from material scarcity, our real troubles would begin — is now being realized. We can meet our basic needs, but we have no idea what to do with ourselves. Thirty years ago, it was a little hard to see how this might become an existential problem for the modern world. I don’t believe it is any longer.

Brink’s readers have not known quite what to do with his arguments. I’ll give you one example from a writer I like and respect, Jonathan Rauch, who responds by writing:

While modern capitalism certainly has its problems, I do not believe it is destroying itself, that “society is falling apart,” or for that matter that “the mass of men lead lives of quiet desperation,” per Thoreau in 1854. (People have been worrying about the soul-destroying aspects of modernity for a long time.) If I did believe that society is falling apart, I would not believe that “intentional communities” and “pioneer archipelagos” could realistically solve the problem. When I read Lindsey saying his ideas are “potentially civilization-rescuing,” I see rhetoric that has gotten carried away with itself. When I reached his call for “another great awakening—a spiritual movement,” I wrote in the margin: “Good grief!”

I completely understand this reaction. Ten years ago, I would have said much the same. A decade of grappling with the world as it is changed my perspective. The flow of events is depriving us of the luxury of persisting in such skepticism.

Society continues to function, yes. Having lived through the deterioration in US governance over the past decade, how can we not take seriously the possibility that things will get much worse? How much of today’s critical institutional infrastructure has roots in social schemes that once seemed hopeless? Can we really look at history and deny the transformative power of spiritual awakenings? A grand democratic experiment that’s a quarter of a millennium old is in real trouble. We must expand the scope of our self-examination if we hope to address the weakness in liberalism that has been exposed.

What is that weakness? A good liberal society provides plenty of room to individuals to satisfy their preferences and build lives of personal meaning. That is all that some of us need, but it is not enough for enough of us. We evolved to cooperate, and that cooperation has always been rooted in stories that provide collective meaning and purpose. Material plenty doesn’t liberate us from the need for such things; on the contrary, it makes them more important than ever. And so the question we face is: how can a liberal society cultivate collective meaning? How can we forge a shared understanding of why any of this matters, what it means, what we’d like our future to be, and how we ought to conduct ourselves to achieve that? How do we do this without essentially conceding the future to fascists and theocrats? These are very difficult questions, but they are pressing ones.

Again, I very much understand if this approach feels daft or unconvincing. If I could fully persuade you in a thousand words, I wouldn’t have written a 300-page book! What I hope to do is convince you that there might be something in this line of thought worth picking at. I hope that you will have a little faith. Then we can see where that takes us.

It’s good to be back. Thank you all for sticking around or subscribing despite my silence. I intend to make it worth your while.

All views expressed here are mine alone.

Nearly 16 years ago, I received an email from Megan McArdle asking if I was interested in trying out for a slot writing for The Economist’s economics blog, Free Exchange. Up to that point, my résumé as a journalist consisted of some work for my college newspaper, writing and editing at DCist, and a personal blog with a readership that soared into the hundreds after being linked to by Matthew Yglesias. I quickly replied to say yes, and thus began the most unlikely of careers at one of the great journalistic institutions.

It has been an extraordinary experience, for which I will always be grateful, but the time has come for a change. I wanted to let you all know that as of this week, I am leaving The Economist, and indeed journalism, to pursue a new and exciting opportunity. I will also be suspending my contributions to this newsletter. Thanks very much to all of you for reading and commenting; I appreciate you sharing some of your valuable time with me. 

I am not disappearing, entirely. I have been hard at work on a book, which touches on many themes that I’ve addressed in this newsletter. I’m extremely excited about it, and I hope you’ll look out for information about its publication sometime in the next year or two.

For now, I’ll say thank you again. You’ve been a wonderful audience.

Cheers,

Ryan

I also said, in my last dispatch, that I would be sharing some final, sweeping thoughts on Slouching Towards Utopia. Brad has been asking readers to tell him what they think he gets really wrong in the book, and I want to give him a good answer. It is not a fair answer, I’m ashamed to say, because it does not judge the book on its own terms but rather suggests it should in fact be a very different book. Worse, it is a self-serving answer, because that different book is one which would share many features with the book that I am currently in the process of writing. But in any case, here it is.

Slouching is an economic history of what Brad calls the long twentieth century. It is an economic history in the traditional sense: written by someone trained in economics, who seeks to explain how the interplay of economic forces shaped the course of events. In addition, he makes the further claim that the history of this long twentieth century was uniquely economic—that it was profoundly influenced by economic developments in a way that simply was not true of prior periods. In other words, many of the crucial, history-altering choices made over this period were taken by figures hanging on for dear life to a world transformed by radical economic change, whereas in prior centuries the economic backdrop was relatively static and history was instead influenced by other forces, like religious tides and the rise and fall of empires.

But Brad’s long twentieth century was also one which was shaped, to an unusual degree, by economic thinking. There had been influential economists before, much as there had been quite significant industrialization and a measurable acceleration in economic growth before. But a sea change occurred around 1870 with the rise of the marginalists and the emergence of a far more mathematized and “scientific” economics. As Brad very well notes, the growth of the long twentieth century was qualitatively different from that of earlier eras because of the deliberate and bureaucratized way in which businesses, and ultimately economies as a whole, pursued innovation and economic development. The rise of economics can be understood as a similar and complementary trend. 

So, it was no longer enough to make economic policy through tinkering and intuition—the sort of approach Britain’s early industrialists had taken to the development and application of their innovations. No longer would economic thinking be pushed ahead by jacks of all trades, publishing tracts when not minding a parish or serving in parliament. Instead, the moment called for professionals. Because the long twentieth century was both unusually economic and purposefully bureaucratic, it provided an extraordinary opportunity to whichever field could provide the most compelling and actionable ideas about how an economy worked. Economics seized its moment.

Now, the evolution of economic thinking is there in the text that Brad has written. It is much more apparent at some times than at others; we get a description of Keynes’s view of the Depression, for instance, and the way his ultimate intellectual victory contributed to the glorious decades following the second world war. The famous names that you expect to read in an economic history of the twentieth century do make their appearances. But Brad’s is not a book which assigns them much of a role in authoring the history of his period of study (Keynes being a notable exception). It is an interesting choice given some other recent scholarship on twentieth-century economic history—by Binyamin Appelbaum and Elizabeth Popp Berman, for instance—which makes the case, convincingly in my view, that economists and economic modes of thinking became ever more influential over time, in very consequential ways.

If the economists aren’t shaping the course of this very economic era, then who is? As most reviews of the book mention, Brad structures his history as a sort of tug of war between Hayekian forces, or people pursuing their interests through the market, and Polanyian ones, through which people resist the market when it threatens to transform individuals and the things they care about into mere commodities or factors of production. But how does this work, exactly? We see the interplay of these forces in the narrative, and come to understand which developments belong to one category rather than the other—because the book tells us. But there isn’t much there to guide someone hoping to arrive at a deeper understanding of this back-and-forth: which might allow for out-of-sample predictions, say. At best we might venture that there is something thermostatic at play: too much market disruption triggers a backlash. But how useful is this when the backlash can mean anything from political mobilization in support of modest reforms to violent uprisings of a radically left- or right-wing nature?

Now, this is unfair; the running argument between Hayek and Polanyi is a narrative device, not an attempt to build a grand theory. Brad is writing an economic history, not setting out to upend the social sciences. I did say I would be unfair, though. And importantly, this matters. It matters why we get one anti-market response rather than another; it matters a lot. Of course, economics has plenty to say about trade and investment flows, industrial organization and productivity growth, the business cycle and its management, and those are a crucial part of the story of the twentieth century. But there are other, epoch-defining parts of the story as well: the things which shape our thinking about the era and which make Brad’s argument that we should place our temporal brackets at 1870 and 2010 a novel and subversive one. What can economics tell us about those?

Some economists would try to explain these other major social or political developments in terms they find familiar and comfortable: with just-so stories about more or less rational people pursuing what they perceive to be their own self-interest. The work such economists tend to produce is rarely of much interest or use, for the important and obvious-to-most reason that people do not merely pursue their own self-interest but rather act in the service of deeply held beliefs, and that furthermore such belief-motivated actions are among the leading causes of history. 

Brad, who is a brilliant scholar, does not fall into this trap; he quotes Weber as saying that material interests may drive the train down the tracks but ideas are the switchmen. Good! But he refers to this quote while discussing the potent nationalism which swept across Europe in the 19th and early 20th century, setting the stage for the first world war and all the horrors that followed. That was a pretty crucial development! The outbreak of World War I is such a fundamental hinge point in history that it very nearly upsets the overarching conceit of Brad’s book, that the period from 1870 to 2010 deserves to be seen as a cohesive whole. 

Other ideas seem quite important too. It feels off to shove the sentiments and world views behind both socialism or fascism under the broad tent of Polanyian backlash. Come to mention it, the institutional innovations Brad credits with helping to launch modern economic growth—the industrial research laboratory and the modern corporation—are themselves made of ideas. The people who work for a big company obviously care about their financial well-being, but they aren’t merely following their own narrow self-interest. They are part of a culture, holding a sense of shared purpose which shapes their identity and helps to motivate their work. Where do such cultures come from? How do ideas spread? Which beliefs will we find ourselves at the mercy of in the years ahead?

Brad’s book does not have the answers to these questions, in large part because economics does not have the answers to these questions. This seems likely to change, I hasten to add. There are exciting new ideas in the field which have not yet managed to transform economics in the way I believe it needs to be transformed, but I remain hopeful. But economic orthodoxy, even when rather generously defined, does not yet tell us much of use about how the currents of belief and thought flow. 

This is a gaping void. The extent to which most economists, or indeed much of the intellectual establishment as a whole, are unaware of it is in fact a fundamental and consequential attribute of our society at this moment. It is an example of how ideas matter. The belief that you can discern most of what you need to know about a society by assuming that people mostly try to maximize their own utility, or the idea that society is something which can and should be engineered through the clever application of incentives: these are strange components of a particular belief system which was not shared by other people at other times and places and which shapes behavior at the individual level and in aggregate. These are views which would leave the great thinkers of the nineteenth century dumbfounded—and I imagine the great thinkers of the twenty-first will ultimately share the feeling.

To be clear: Brad is far more flexible in his thinking and far more open to insights from other social sciences than the typical economist. He has not written a book which tries to shove complex history through an absurd doorframe built of useless economic theory. He has not written a book in which people lack agency or complex inner lives. He has not written a book in which the beliefs people have pale in historical importance relative to hard economic realities like the rate of return on capital. If he had, I would not be telling you how good the book is or how valuable you’re likely to find it. 

Rather, it seems to me that the book embodies something essential about the twentieth century: which is a skepticism that there is much to be gained from a close study of what people believe and why. It is a view which carries an implication that belief is an annoying anachronism, something which must matter ever less as we grow richer and more technologically capable. And the sense of disappointment with which the book concludes has its mirror in the wider world’s dawning awareness that “material wealth is of limited use in building utopia”, as Brad so ably puts it. Beliefs are having their revenge. We are realizing that there is more moral work to do.

What might a different perspective on the long twentieth century look like? Well, one might say that what people believe and how those beliefs are distributed are matters which are and have always been of crucial importance. One might say that the emergence of modern economic growth was in fact rooted in shifting patterns of belief: around the social legitimacy of scientific inquiry and commerce, for instance. One might say that the detached, economistic perspective that has become the default mode of thinking among rich-world elites is in fact its own belief system, rather than some enlightened cognitive endstate which becomes available to those who transcend the normal human preoccupation with beliefs and values. One might say that we are approaching the limits of what that belief system can achieve in the absence of new cultural innovations, and one might say that the world stands to benefit from a concerted effort to understand the dynamics of belief better. In fact I hope to say all of that in my forthcoming book! I did also warn that this note would be self-serving.

So there you are. In truth, I am not upset that Brad’s book does not say those things. It does what it does well, and I am grateful for it. And if he had said those things then I would need to have an uncomfortable conversation with my publisher. 

The situation we’re in now is obviously not all the Fed’s doing. We had a pandemic, we have a war, we’ve had decades of compounding bad decisions and weakening trust within and across countries. It’s obviously not Jerome Powell’s fault that Xi Jinping has taken China in a disastrous direction, or that Vladimir Putin has invaded Russia, or that Britain is now governed by Liz Truss. And it is easy to understand why the Fed has chosen the course that it has chosen over the past nine months. Its job is to deliver low and stable inflation, and it has limited tools with which to achieve that aim. What else can it do under present circumstances than use those limited tools to try to deliver on that aim?

But look: we need to be clear-eyed about the state of the world. Adam Tooze likes to characterize world events as taking place within an unfolding polycrisis: which is to say, the world is experiencing multiple disruptive shocks which interact in ways that tend to foil our efforts to try to solve our problems. It is a word that can easily be overused to exaggerate the seriousness of what are actually quite run-of-the-mill difficulties. There is no question that it applies now. 

After the past three very difficult years, the social fabric is stretched to the point of tearing across much of the world. We experience, on just about a weekly basis, extreme weather events which leave our economies and our societies less resilient in the face of other problems. We have one nuclear-armed superpower which is losing a war and which is potentially facing a domestic political crisis. We have another nuclear-armed superpower in which the authoritarian leader is negotiating his way through a tricky effort to secure his absolute power, in the face of a domestic economic crisis and an increasingly tense relationship with yet another nuclear-armed superpower. The world economy is sinking toward recession, squeezed by high food and energy prices and the most intense round of synchronous monetary tightening in at least 40 years. There is no give in the system. Maybe no final straw will come to rest on the camel’s back. But we have not been particularly lucky of late.

In this context, robust American economic growth ought to be something to cheer. American demand can bolster economies elsewhere. And of course, America faces its own serious domestic political crisis, which might just about be kept in check for the moment if a strong economy boosts the electoral fortunes of the party that still believes in democracy. But from a global perspective this robust American growth is a curse, because it means that the Fed will carry on with its work, tightening the monetary screws until it snuffs out America’s expansion—or until something important breaks. 

I don’t know what exactly will break. There are many, many weak points across the global economy, and the markets’ staggering on news that Britain’s new budget has £10bn more in borrowing than previously announced suggests that it need not be something obvious or even particularly big that pushes the world over the edge. But problems that seem manageable right now will very quickly come to look impossible if big things begin to go wrong: if some small but important economy unexpectedly faces balance-of-payments troubles, maybe, which gets a bank or two in a bind, which prompts a chaotic scramble for dollars, triggering hasty and ill-advised market interventions, which lead to cascading economic difficulties and people in the streets and who knows what else. It doesn’t have to go like that. There are lots of ways it could go, which is precisely the problem.

Under these circumstances, there is no avoiding the fact that the dollar is the world’s reserve currency, that Treasury bonds are the world’s most critical safe asset, and that the stance of American monetary policy has massive effects on financial conditions worldwide. Jerome Powell and the rest of the Federal Open Market Committee can close their eyes and stick their fingers in their ears and mutter that the Fed is an American institution charged with managing the American economy with no obligations to the rest of the world la-la la-la la-la. In the end, that will not absolve them in history’s eyes if the financial strain induced by American rate hikes help push the world into disaster.

There is a very boring and mandate-oriented way to try to make the point. The Fed’s actions have global spillovers; this is well documented in the economic literature. Those spillovers can have effects which wash back over the American economy, in destabilizing ways. If the Fed does not take adequate account of those spillovers, then it runs the risk of making a policy error as judged against its own narrow domestic mandates. Given the very large uncertainty facing the Fed right now, it seems prudent to pause tightening for a moment, so as not to carelessly stumble into a global economic state that is considerably less consistent with maximum employment and stable prices than what we’ve got now.

The broader point is that now is a moment for caution and good judgment. I understand why Fed officials are doing what they’re doing. They are central bankers who feel they have betrayed the one core principle of the central banker. They feel that they risk destroying the dearly-purchased legacy of Paul Volcker. 

But what did Paul Volcker do? Did he dumbly repeat the actions of some past central-bank hero, hoping to achieve good results by luck? No, although dumbly following through on one orthodoxy or another has historically been a common cause of central-banking disasters. Rather, Volcker took a risk, and broke new ground. Sometimes you have to do that. Sometimes the situation demands it.

In truth, I’m not certain that the benefits of Volcker’s actions were worth the costs. Yes, inflation came down. But in addition to the severe recession he caused in the United States, high American interest rates and a soaring dollar did terrible damage to economies around the world, especially developing ones. We know that this happened. And this is the experience which the Fed now seems determined to imitate, at this moment, in this state of the world. 

Would pausing present risks? Yes, of course. Larry Summers and others have been warning the Fed not to relent prematurely, saying that that is precisely the error central bankers made in the 1970s and initially in the 1980s. Blink now, and inflation may rise and become more persistent, such that even harsher policy is needed to finally get things under control down the road. And it is true, things could go that way. But maybe down the road is a much better time, all things considered, for harsh medicine. Maybe inflation will stay in the high single digits and that won’t, in the end, mean the end of the world. Maybe the global economic weakness that is already baked into the cake will in fact be enough to bring price pressures to heel. We shouldn’t feel confident about any of that, but we should be clear-eyed about what benefits we expect to get from current Fed policy and whether they do in fact make the potential costs of that policy worth bearing.

Others will say that a dovish pivot in Fed policy will be dangerous in and of itself, will be destabilizing, will cause a loss of confidence in the dollar, and so on. And sure, that is something which could conceivably happen. But let’s try to be sensible about this. Was the policy stance that markets perceived the Fed to have back in mid-summer, before Powell made clear that several more 75 basis-point hikes would be coming, dangerously risky? One could certainly argue that it was inconsistent with a rapid reduction in inflation back to target, I’ll grant that. But did it threaten to make the near-term situation drastically worse? No, it didn’t. A pause now would mean a looser policy position relative to that mid-summer stance, but not by much. But equally, a pause does not mean abandoning the fight against inflation; it merely preserves an optionality that will be lost if big things begin breaking. 

And, if Americans are unhappy with a Fed pause, there are other things which can be done to address the inflation problem. Congress has shown that it can legislate. It can legislate up a temporary tax that will directly address spending within the American economy, so that the Fed doesn’t need to achieve its domestic policy goals by inducing ever tighter financial conditions across a world economy that may be unable to bear them. This challenge is important enough and this moment is dangerous enough that we should be willing to entertain some outside-the-box ideas. You don’t want the Fed to change course? Fine, at least grapple with the dangers of the moment and throw out some other ideas about how to defuse them.

Because blindly following a monetary orthodoxy in a fragile world leads to very bad places. And it is really beyond time that we have a serious conversation about the potential global cost of keeping Fed policy on its current path. Of course, a Fed policy shift won’t magically solve everything. Things could still go very wrong in many different ways; that’s what it is to be in the midst of a polycrisis! And of course, there is a chance that things will somehow work out fine even if the Fed continues on. But it seems to me that monetary policy is following a course that may look very puzzling to future historians, as they look at what we stood to gain from a quick return to low inflation, and what we ended up losing.

But as I said at the outset, my track record on this inflation isn’t what I would like it to be, so do with this what you will…

How so? Well, for one thing, 1870 was a watershed year in terms of the development and deployment of new technologies and the pace of economic growth. Before that, growth at the productivity frontier was just about fast enough to allow for sustained growth in real incomes; after that year, the world was off and sprinting away from its Malthusian past. And for another, the period 1870-2010 traces the arc of America’s rise to economic dominance and its subsequent humbling. The end-year choice of 2010 is a little arbitrary; arguably either 2008 or 2016 would have made more sense. But the message communicated by the end date is clear enough. Around that time, America’s economy sat wounded by the global financial crisis and its aftermath, its eclipse by China seemed certain and obvious, and its capacity to perform a critical role as global hegemon and democratic exemplar looked very much in doubt.

Now, let me say here that Slouching is a wonderful book and you should buy and read it. It should become one of the books that helps structure people’s thinking about the twentieth century. But because it is such a very good book by a very compelling thinker and writer, it deserves to be engaged with in a critical way. I will have some sweeping things to say about the book in a forthcoming dispatch, but before that I wanted to take a moment to reflect on the broader economic story that Brad is telling—and ask whether it is the right one. 

Brad has a primary narrative, which he structures as a push and pull between the ideas of Hayek and (Karl) Polanyi. Hayek stands in for the power of the market to harness distributed information and deliver Good Things, subject to certain caveats; from 1870 on, Hayekian forces transformed industrializing economies and led them down the path toward “economic El Dorado”. But Hayekian forces can easily trample rights that people feel quite strongly about: to have a say in society whether or not they own property, for instance, or to earn a stable and adequate income. And so the transformation wrought by the market repeatedly ran into Polanyian forces, in the form of efforts to preserve human communities and individual rights in the face of market disruption. People sought the franchise, and they voted for redistribution and regulation—and occasionally they went and had a revolution. 

After decades of back and forth between the Hayekian and Polanyian forces, the world, or parts of it, found their way to the happy middle ground of postwar social democracy. The marriage of Hayek and Polanyi that it embodied (combined with the Keynesian insight that governments should help the economy maintain full employment) allowed markets to do their work while preparing people to participate in the market and insuring them against its vicissitudes. Having found its way to that good place, the rich world enjoyed a generation of blistering, broad-based growth. 

That feels like a happy ending to the narrative, but of course there was more twentieth century left. And like the crummy last season of a beloved show, tacked on in a cynical effort to wring more profit from the fan base, the last few decades of the twentieth century were a disappointing muddle. Faced with the productivity slowdown and macroeconomic headaches of the 1970s, rich economies tried to bring back the glorious postwar economy by dialing down the Polanyi a bit and dialing up the Hayek. But this “neoliberal” turn didn’t bring back the scorching growth of the postwar era. Instead it contributed to rising inequality in the rich world (which amplified the pain that slower aggregate growth imposed on poorer households) and to financial excess, though also and more beneficially to a period of rapid growth in some emerging economies. The show then ends with the heroes wondering how they drove the economy into a major financial crisis, while previously peripheral characters in South and East Asia, seemingly introduced solely to lay the groundwork for a spin-off series, lecture the rich world about the weaknesses of western capitalism. 

Are there morals to this story? There are: that economic growth is powerful, that governments should let markets work where markets work well but also have critical roles to play in keeping an economy working well, and above all that material prosperity is a necessary but not sufficient condition for utopia—and we’re still trying to figure out what the other ingredients are. 

But maybe there is another moral, as well: that it is important to know when to conclude the narrative. 

The story above is the main one that Brad tells but it is not the only one. Why did growth accelerate around 1870? It did so because the nature of industrialization changed. For the first century of the industrial era, Britain led the way. The British industrial revolution was concentrated in a few key sectors, like textiles and iron production, powered by water and steam, and authored mostly by tinkerers on the make. But a major shift occurred around 1870. Then, technological leadership passed from Britain to Germany and the United States. As it did so, the pursuit of productivity-enhancing innovations became more purposeful; as Brad puts it, leading economies invented invention. 

So, societies which were investing heavily in education produced lots of engineers and scientists, who went to work in corporate research laboratories, whose innovations were exploited by sophisticated firms with complex bureaucracies that allowed for a high degree of task specialization. And while this was happening there was fantastic growth in the scale of the market thanks to globalization. Yes, people and goods and money and ideas had flowed around the world for ages. But in the latter third of the 19th century, transportation and communication costs tumbled, and cross-border flows of all of those things exploded. Growth in the size of available markets gave a spur to the resource-intensive, massive-scale industry that allowed productivity growth to rocket upward in places like America. This revolution physically transformed the world. Cities grew massively and became electrified. The pace of travel grew fantastically thanks to mass car ownership and commercial air travel. Mass education transformed society: from one in which almost no one had completed high school to one in which almost everyone had. 

And all of this did indeed usher in mass prosperity, or something like economic El Dorado: because Depression and war and high levels of taxation battered the fortunes of the rich, but also because the structure of the economy permitted it. Sophisticated, capital-intensive production at massive scale, undergoing rapid productivity growth, created the conditions for almost-utopia. Strong labor unions and governments committed to full employment helped workers capture a large share of the producer surplus generated across the economy. And a compressed distribution of income encouraged firms to produce consumer goods for a mass market, at an enormous scale which facilitated continued productivity growth. 

But it couldn’t last. That, I think, is the key point. Why couldn’t it last? For a few reasons. 

One very big one is that there was a tension between the rich world’s desire to maintain high levels of employment at good wages in mature manufacturing industries, the developing world’s desire to get rich, and the rich world’s commitment to an open global economy. Another was that the rich world had for more than a century achieved rapid productivity growth by augmenting the efforts of labor with ever larger amounts of energy and other resources, with little attention paid to environmental costs. But as societies grew richer, the environmental side effects of the prevailing growth strategy no longer seemed worth bearing, and the energy shocks of the 1970s led to a dramatic shift in attitudes toward energy consumption. 

But beyond that, the nature of technology was changing. Many of the key innovations which had powered growth over the prior century had matured, while other promising ones were in their infancy. And another very powerful general-purpose technology had by the 1970s grown beyond its infancy into an increasingly disruptive force. Intel was founded in 1968, Microsoft in 1975, and Apple in 1976. This new technological force, however, operated according to rules quite different from those of the golden age of industrialization. Looking back on the first few decades of the “new economy”, two insightful economists noted:

It is a fact that we today simply do not know yet how to make the intellectual property system work for the new economy. Back in the Gilded Age, intellectual property as such was not such an important factor. Industrial success was based on knowledge, but on knowledge crystalized in dedicated capital. Many people knew organic chemistry. Few companies—those that had made massive investments—could make organic chemicals.

Today, it appears that intellectual property is rapidly becoming a much more important source of value. One response would be to reinforce the rights of “owners.” The underlying idea is that markets work because everything is someone’s property. Property rights give producers the right incentives to make, and users the right incentives to calculate, the social cost of what they use. It is clear that without strong forms of protection of property rights, a great many useful products would never be developed at all. This principle applies as strongly to intellectual as to other forms of property. 

But with information goods, the social marginal cost of distribution is close to zero. One of the most fundamental principles of economics is that prices should be equal to social marginal cost. In this case, strong intellectual property rights have the potential to decrease economic efficiency by driving prices away from marginal social costs.

“New institutions and new kinds of institutions…may well be necessary,” wrote Larry Summers and Brad DeLong in that paper, before concluding:

What changes in the government-constructed underpinnings of the market economy are needed for it to flourish as the economic changes produced by computers take hold? How should governments deal with their possibly large distributional implications? And what failures to change or what changes made in support of vested interests would hobble the transformation now under way?

In Slouching, Brad argues that key institutional innovations were critical to unlocking the growth potential that was realized from 1870 on. That seems absolutely right to me. A few places, through luck and foresight, made critical policy choices and fostered the evolution of powerful corporate forms, which got things rolling in the last third of the 19th century. Governments then struggled mightily to manage what they’d unlocked, learning some incredibly tragic lessons along the way, but ultimately built up a social, corporate, governmental complex of institutions which yielded extraordinary prosperity.

That is the complete story of that era, which ended in the 1970s when a confluence of forces fatally weakened the economic basis of that complex. It isn’t a long century; it is just about one century exactly, albeit inconveniently misaligned with our preferred way of slicing time up. And the next chapter would ideally have been one in which societies really grappled with the difficult questions posed by the end of that era: and threw themselves into the job of achieving an energy revolution, and an information revolution and above all an institutional revolution which would have helped society continue down the path to economic El Dorado in a rapid and equitable way. But it wasn’t. The ideas simply weren’t there. As Brad writes, people looked in the store window for a new intellectual framework to replace the one that seemed to stop working in the 1970s and found such a dismal set of options that neoliberalism looked most attractive. 

It’s funny; in the book, Brad writes that he can very easily imagine how the critical innovations which enabled rapid growth after 1870 might never have come to pass. In that case we would have remained locked in what he calls a “Permanent Steampunk” world: in which we were much less rich than we could have been; in which new technologies, like the airplane, appeared but remained must less transformative than it seemed they should be, and in which a whole slew of other and older technologies simply remained a critical part of life for far longer than seemed appropriate—though it might not have seemed so to the people stuck in that world, who couldn’t know that an alternate future was possible, except perhaps through imagination and intuition.

But—isn’t that the world we’re in now? Aren’t we in a world in which it seems as though a hand-off from one set of marvels to another should have taken place but somehow…didn’t? Isn’t that the story of this unsatisfying new chapter of global economic history: this lackluster instantiation of the multiverse in which far too many people remain far too poor, and we seem more interested in recapturing the best bits of an older era than in constructing a wild new one?

In this interpretation, the bitter side-effect of the otherwise marvelous fall of communism wasn’t that it validated neoliberalism, as Brad argues, but that it validated the rich world’s broader approach to generating new ideas and turning them into higher living standards, which neoliberalism ultimately did not alter by all that much. And the missing piece to the puzzle of rich-world ennui isn’t just the One Weird Trick that will allow us to build a utopia out of the material prosperity we now enjoy; it’s a set of new institutional arrangements which will help us solve the very real and serious problems we continue to face globally and allow us to believe in a promising future once again.

I don’t know if that’s right, of course. But I’d be curious to know what Brad thinks, because I do feel that his book lends itself to this interpretation of recent economic history. 

The memory of that piece forced its way into my awareness as I sat reflecting on the chapter in Brad DeLong’s new book which discusses the rise of fascism. Mussolini, Brad writes, was a socialist who became disillusioned with his chosen ideology when the socialists of Europe, who had promised to respond to declarations of war by calling general strikes which would force politicians to pursue peace, instead responded to the July crisis of 1914 by joining the broader nationalistic fervor and going to work operating the war machine. Off socialism, impressed by the power of ethno-nationalism, and keen to lead a mass movement, Mussolini crept and felt his way toward a set of core principles, based in large part on what seemed to work best: another algorithm, learning from incoming data.

What was it that became the tenets of fascism? Brad flirts with the notion that actually there was never much of anything coherent there: just an algorithmically learning leader exploiting the intoxicating power of nationalism to elevate himself into a position of power, through which he could enjoy access to wealth or adulation or whatever his troubled soul desired. But even if fascism often is that, it is also something else—and its capacity to attract millions of supporters is the proof. 

What is that something else? It is a belief, first, in the fundamental importance of the ethno-nationalist community, appeals to which have a terrible unifying and inspirational power. It is implacably opposed to socialism and to liberalism, and the boundaries of the ethno-nationalist community are often drawn to exclude those associated, in reality or through insinuation, with such beliefs. It embraces a certain economic pragmatism and rejects deference to the market; the role of business is to follow the lead of the state and pursue those goals which best serve the interest of the ethno-nationalist community, as judged by the leader. And yes, it is about the leader: a figure who charts a course for his people, who through force of will can overcome all obstacles to action, who sees in the rule of law and the operation of normal political institutions only weakness and failure. 

It is not on its face a particularly alluring set of principles, and its appeal has to be understood in the context of the shortcomings of other ideologies. In the middle of the 20th century, those shortcomings were all too obvious. The pre-1914 economic and political order had failed spectacularly, yielding inequality and war, then chaos and depression. Socialism, meanwhile, seemed an appealing alternative to many people but a terrifying one to many others, mostly the ones that owned property. And in that muddle, fascism found its moment. It was never the kind of movement that commanded large electoral majorities. But then it was never the kind of movement which was going to let a little thing like that stop it from gaining power.

In any case, Brad’s treatment of fascism prompted the memory of Cathy’s piece. And it did so in part because the other main item of Sunday reading I’d been through was the current issue of The Economist, which through a few different pieces assesses the state of Trumpism and the Republican party. There is a very good briefing which describes how the GOP has become ever more a Trumpist party, there is a nice business piece on the fractures opening up between the Republican party and big business, and other stories too; you won’t be able to read them if you’re not a subscriber, but you should be.

Now, I don’t want to discuss things which happen behind the editorial curtain, but a big question hanging over the package was the extent to which there might be a Trumpism without Trump, and if so what it might have at its heart. It’s a question which lots of writers at lots of publications have grappled with over the past year, as Trump’s hold over the party has strengthened, even as the road to a second Trump presidency remains dotted with obstacles: from his age to his legal troubles.

Is there a Trumpism without Trump? It’s a useful question, because it forces us to try to work out what all of this is actually about. Trump’s own financial and emotional self-interest? Very much so. But to write the Trump phenomenon off as a con-job and nothing more would be a mistake—and its capacity to attract millions of supporters is a big piece of the proof. A machine-learning algorithm doesn’t need to be a conscious thing with a complex set of political beliefs to tell us something important about the data on which it’s been trained.

Instead I think we need to recognize that it exploits the power of ethno-nationalism to unify and inspire. Many people, myself included, have seen Trumpism as being animated in large part by racism, but in fact that’s not quite right—as its appeal to many non-white Americans, and the Trumpified GOP’s capacity to absorb them, helps illustrate. Trumpy nationalism has room for people of different races, provided that they are not part of the Other: the liberal anti-patriots who fail to show sufficient respect to real Americans, who fail to love their country, and whose kooky beliefs threaten the health and security of the American nation.

Some writers process this failure of the Trumpist movement to adhere to a familiar racism by trying to reinterpret it through a classist lens. I think, actually, that our package this week makes this mistake here and there. But the GOP isn’t becoming a working-class party. It’s still full of rich people, and it still votes for lots of pro-business policies and against lots of pro-worker policies. Its evolution may be better understood as a movement toward a certain kind of economic pragmatism: in which the interests of the nationalist community are preeminent, and in which certain liberal cows can be slaughtered in the pursuit of national ends. Trump illustrated this very well during his presidency. He signed into law a big tax cut. He also tried to make the American economy more insular, and he tried to jawbone American businesses into helping him with this goal. Class never had anything to do with it; economic theories, of one sort or another, never had anything to do with it. There was something else at work.

And then of course, Trumpism is about Trump: the leader with no time for the hindrances of law and established institutions, in his supporters’ eyes the nation and the ideology personified. So: if you take that away, is there anything left? Is there a domesticated little American version of the national front, which can be trusted to loathe immigrants while also dutifully abiding by electoral law?

And in the end, I think that really isn’t the critical question just now, given the ground we’ve covered above. That Trump has succeeded in the way that he has tells us something profound about the American electorate. It tells us that our society has within it certain terrible capacities. If Trump goes away, do we imagine that those capacities will too? Do we imagine that no one else will ever try, in either a strategic way or a grasping and algorithmic one, to harness those capacities?

That those capacities are there tells us something about the economic and political order under which we live. It took extraordinary material hardship to create the conditions in which a fascist regime could take power in Germany. Even if we say that Trumpism isn’t fascism, but is more like the half-formed kernel around which an American fascism might coalesce if luck and the flow of history were against us, isn’t that on its own a remarkable thing? Doesn’t that suggest that whatever else our current system is and does, it has within it this extraordinary vulnerability, that some large portion of the population are ready to rip up everything to follow a Trump wherever he goes? Mostly sunny with a chance of afternoon fascism is one hell of a forecast. 

And if the excuse for nonchalance is that Trump seems unlikely at this point to command electoral majorities, how is that reassuring? He didn’t win a majority of the popular vote in 2016. Majorities eluded many of history’s most electorally successful fascist movements: and it didn’t matter, because they didn’t consider themselves bound by institutions or norms or the results at the ballot box. And of course, among the most crucial components of Trumpism today is a commitment to undermining the legitimacy and the function of our electoral system. When our society has produced this, this imminent and enduring threat, I’m not sure that gaming out Ron DeSantis’s political options is really the best use of our time and mental energy.

I was in London, actually, while the current issue was being put together. It also includes coverage of the fight between Rishi Sunak and Liz Truss to replace Boris Johnson as leader of the Tories and as prime minister, and I have to admit that while there I gently ribbed some of my colleagues about how America has over the past few months come to seem slightly less doomed than Britain or Europe (or for that matter much of the rest of the world). And truthfully, I have felt a bit less pessimistic of late; the economy has been surprisingly resilient, we are weathering the energy crunch much better than many other places, and Congress has been oddly and usefully productive in recent months.

And it may be that optimism rather than relentless gloom is the more helpful sentiment just now, as so much hangs in the balance. It may very well be the case that the best the rest of us can do is dare to feel hope about America’s future, dare to detect a sense of purpose in the actions of our elected leaders and share a confidence that good things will come of it. 

But reading Brad’s book, I found myself imagining a future, decades from now, in which people try to understand the events that led to a second Trump term—still a good bet, according to the bookies—and everything which flowed from that. What would they say about us? What choices that we are making would seem unfathomable to them, or unconscionable? What will they think we should have understood, should have seen coming? I don’t know. I don’t know. 

A major point of emphasis of the book is that up until the latter third of the 19th century, the world had traveled very little distance, if any, from the backwardness and poverty that had prevailed over the prior 10,000 years—even in the most prosperous and industrialized parts of northwest Europe. There had been technological progress, yes, and indeed an acceleration in the pace of innovation and growth, but the rate of increase of our productive capacity remained very slow, and much of the benefit of that increase was realized in the form of faster population growth rather than increased living standards. After 1870, though, things changed, and most of the book is focused on why and how and with what effect.

It is fascinating to consider what people living before this great acceleration believed progress would look and feel like. Brad mentions Edward Bellamy, who wrote a 19th-century novel which places its narrator in the year 2000, where he considers the wonders that have emerged over the past century and a half or so. The narrator encounters a device which allows him to listen to the music of any one of several orchestras at the touch of a button, at a time of his choosing. He is left in awe; Brad quotes him as saying: 

“If we [in the 1800s] could have devised an arrangement for providing everybody with music in their homes, perfect in quality, unlimited in quantity, suited to every mood, and beginning and ceasing at will, we should have considered the limit of human felicity already attained.”

Italics mine. From the perspective of an inhabitant of the 19th century, it was difficult to conceive of anything more wonderful and desirable than unlimited access to a library of outstanding musical performances. And in one sense, this is a perfectly comprehensible sentiment. That the music we create is our most extraordinary, most perfect and sublime achievement seems a very defensible claim to me. And yet on the other, we have the very thing at which Bellamy’s narrator marveled, and yet one does not often hear people argue that we have attained the limit of human felicity. A resident of a rich country could with a relatively modest amount of work earn an income sufficient to provide the bare necessities, a good pair of headphones, and a Spotify subscription. But how many of us do? How many of us would consider someone who chose such a life to be living out a perfect existence?

There are a number of ways to think about this state of affairs. One might say that we can in fact have too much of a good thing. Or one could note that we are the victims of what is often called the hedonic treadmill; we quickly get used to new pleasures (or the abatement of old pains) and come to take them for granted, such that no matter how much progress we manage as a society we feel dissatisfied. That’s a gloomy thought, since it suggests that no matter how powerful our technology becomes, we will be left wanting more, never content.

But of course the way that we feel about our lives is about more than the material comforts around us. We seek and find meaning in other ways, and derive satisfaction from that. And yet it occurred to me, reading Brad’s book, that because we are only a few generations into an era of real plenty, we have not yet developed a system of belief—a faith or a creed—to provide us with the spiritual ballast we need to enjoy our prosperity in a fulfilling and munificent way. We had 10,000 years to develop faiths and ethe to help us navigate life at the edge of subsistence, surrounded by suffering and death. We are a long way from finding adequate replacements, suited to our new circumstances.

What should such creeds entail? They should, first, help us make sense of the world as it is and our place within it. They should provide us with a practical ethics, to help guide us in our interactions with others. And they should have the property that this practical ethics, when broadly held and followed, yields a society which is more resilient and comprehensible and cohesive than societies without such creeds. This latter point is important. To keep large societies working requires massive acts of collective cooperation, and none of us is capable of working out what we ought to be doing to facilitate this cooperation through reason alone. We thus need rules of thumb to steer us. Self-interest is one, but it seems unlikely that we could build or maintain a complex society based solely on self-interest; certainly the one we have now required more in its construction. 

Is that to say that our old creeds helped us to arrive at our moment of prosperity? I think so. Joseph Henrich and co-authors argue that the societies in which industrialization and modern economic growth emerged differed in important ways from others; researchers, across many social-science studies, have found that behavioral tendencies relating to cooperation, fairness, and reasoning style (among other attributes) are systematically different in rich, Western societies than elsewhere. This has nothing to do with genes. It is, rather, a reflection of the different way in which cultures evolved in different parts of the world. The choices we make are informed by the norms we internalize as we grow up, which are in turn bolstered by the stories we tell about the world and the way we see our role within it. 

And so creeds which emphasized that we should respect individual initiative, thrift, education, public-spiritedness, and so on helped to lay the groundwork for prosperity. They provided a foundation, too, for other crucial systems of belief; like the values of the Enlightenment and the scientific revolution—that we can and should seek to understand how nature works, and use that knowledge to improve our own material condition—which Joel Mokyr argues made the crucial difference in touching off economic growth. Or the idea that economically prudent behavior and commercial success are consistent with a broadly virtuous life, which Dierdre McCloskey reckons were part of the growth-friendly package of values held by the bourgeoisie of northwest Europe at industrialization’s critical moment. 

But the process set in motion by the evolution of these creeds launched us into an entirely unfamiliar world, in which societies are far larger and more diverse and more technologically capable and wealthier than ever before. We need new systems of belief to guide us through this world.

We are groping our way toward creeds of plenty. The most successful effort so far may well be the laissez faire, “supply-side” neoliberalism which emerged in anglo-American economies from around the 1960s or so. It presented people with a coherent narrative about the world: the market will provide us with good material things to enjoy if we let it. It had a practical ethics: our responsibility here is to make money and spend it on things that we want. And it held that if we all, collectively, abided by these principles, then we would continue to find shelves stocked with new and improved goodies. This creed has a certain universal appeal. But many people also seem to find the sense of meaning that it provides to be inadequate—quite understandably. Efforts to graft this creed onto evangelical Christianity through the “prosperity gospel” have not much helped.

Another proto-creed is emerging in the ideas surrounding the concept of “de-growth”. There are many people who seem to feel that our big problems result from the fact that we are not living in harmony with nature; our new prosperity means that we now have the ability to provide for our basic necessities even as we work to reduce our environmental impact. This creed has the makings of a practical ethics: seek satisfaction in simple pleasures and use no more of available natural resources than you need to. And it offers its visions of the good life: in which the world returns to an edenic state, with which we live in harmony thanks to our technology and to the restraint of our appetite for consumption. It is easy to identify potential problems with such ideas, and yet it is also easy to see how this might well become one of the major faiths of the future.

Can we do better? I think that we probably have to, if we’re to make it through the challenges we face today. There is something brewing in the space of people interested in effective altruism, technological optimism, and so on: a nascent faith built on the idea that technology can help us both alleviate suffering and find meaning, which recasts the profit-motive as a temporarily necessary expedient to help us achieve our goals rather than a morally valid end in itself. But the ideas circulating in this area are riddled with contradictions, and there is a long road to travel to get toward a practical ethics and a vision of a meaningful existence that has broad appeal. 

But it does seem to me that it is both inevitable that creeds of plenty emerge and desirable—although with matters of faith there is always a lot that can go wrong—and that in the future people will struggle to understand this moment of nonbelief and vulgar materialism. Yes, we, in the rich world, no longer have to worry that the threat of death by hunger or disease looms around every corner, in the way that it once did. But as Emily St. John Mandel’s Travelling Symphony rightly has it: survival is insufficient.

Social media is in many respects a comparable problem. Lots of people seem to value it; certainly lots of people use it a lot of the time. But it generates large social costs, and we need to work collectively to use it less and/or better. And while there will inevitably be people who reject this assessment, it should be the case that most of us feel an ethical responsibility to moderate our use, for the sake of others.

And yet this is not a particularly popular way to talk about social media, and there is not anything like a consensus across elite opinion-makers that social media causes broad public harms which need to be addressed through collective action. There are notable exceptions; Ezra Klein’s latest column, which is the impetus for this dispatch, is one example. But an awful lot of leading pundits are pretty heavy users of social media, and most don’t seem to think there is anything wrong with that.

Why don’t they? One possible answer is that they’re not convinced that social media is bad. There is a massive effort underway to document social media’s effects, much of which is described in a public file maintained by Jonathan Haidt and Chris Bail. As Haidt describes here, there are plenty of research findings that are at least a little troubling. But poring over the results, it is hard to find any smoking gun which has the power of the cumulative work demonstrating the powerful link between carbon emissions and global warming. But this does not excuse us from taking an appropriately critical view of social media, for a couple of reasons. 

First, the ills that social media researchers often study are not necessarily the most worrying—and the most worrying ills are not the sort that are easy to grapple with in quantitative social-science research. A lot of research questions address things like echo chambers and the way they contribute to radicalization, or focus on the prevalence and effect of misinformation. If you love social media and don’t want to be confronted with its negative effects, these sorts of papers make for comfortable reading; they often suggest that these problems aren’t as big as is popularly imagined, and in any case elite power-users probably reckon that they are savvy enough to avoid such traps in their own social-media engagement.

But as I discuss here, this way of studying social media misunderstands what is most dangerous about it. The problem is not so much that people are being exposed to bad information and are thus changing their views on particular issues in destabilizing ways. It is, rather, that social media dramatically changes the way we interact with each other, alters our perception of prevailing norms and values, and thus plays havoc with our capacity to cohere and reason as a society. Because social media disrupts our collective capacity to process information and make judgments, studies of how individuals are affected inevitably fail to capture the problems of greatest concern. 

Second, you don’t need research to see some of the really horrific things about social media; you just need to be able to temporarily step outside the perception-altering social-media milieu and exercise critical thinking. As Haidt says, in a quote in Ezra’s column, “People talk about how to tweak it — oh, let’s hide the like counters. Well, Instagram tried — but let me say this very clearly: There is no way, no tweak, no architectural change that will make it OK for teenage girls to post photos of themselves, while they’re going through puberty, for strangers or others to rate publicly.” We have just thoughtlessly allowed this state of affairs to emerge, even though no one in their right mind would argue that this is a good and appropriate way to help young people learn to navigate the world and live within it as capable and confident adults. We just shrug at it. And share away on Instagram without feeling personally complicit in what the service is and what it does to us, even though we are very much enabling its harms.

But third, we correctly feel a moral urgency about climate change even though empirical work concerning the broad social effects of climate change is also extremely tenuous. We know what causes climate change, and we have a pretty good sense of how climate change is likely to contribute to shifts in extreme weather, in crop viability, in sea levels, and so on. But we have no idea what global climate change will do to a highly complex global society, for the simple reason that there is no past experience to draw upon. It could be that societies will be far more resilient in the face of climate shifts than we expect. Or it could be the case that our complex modern world is far more fragile with respect to climate variability than we understand, and that near-apocalyptic effects are much more probable than we appreciate. Most of us, rightly, feel an ethical responsibility to try to limit climate change despite this enormous uncertainty.

So it should be with social media. We don’t get to divide 100 complex societies into control and treatment groups so that we can see how often social media leads to major social crises. But we don’t need to have that to perceive its harms and to recognize the responsibility we have to reduce them.

But perhaps many people are prepared to accept that social media is bad in many respects, but do not feel that this awareness translates into a personal responsibility to use social media less. And yet individual responsibility, on the part of all users, is precisely what is required given the nature of the beast. Everyone who is in a media business understands network effects. People use social media because people use social media. If there were fewer people using a network, it wouldn’t be as valuable or essential to be there, and fewer people would feel the need to join while more people would find it easy to quit. The more time each of us spends on social media, the more we contribute, the more we validate use of the networks as good and appropriate, and the more we enable its negative consequences, even if we think we’re the good ones who aren’t engaging in this or that bad behavior.

This is a question of personal responsibility, and we need to face up to it. Ezra closes his column by writing:

Attention is contagious. What forms of it, as individuals and as a society, do we want to cultivate? What kinds of mediums would that cultivation require?

This is anything but an argument against technology, were such a thing even coherent. It’s an argument for taking technology as seriously as it deserves to be taken, for recognizing, as McLuhan’s friend and colleague John M. Culkin put it, “we shape our tools, and thereafter, they shape us.”

There is an optimism in that, a reminder of our own agency. And there are questions posed, ones we should spend much more time and energy trying to answer: How do we want to be shaped? Who do we want to become?

Is what we’re doing now really how we want society to work? Do we think it’s a good and appropriate thing, people just scrolling away for hours on their phones? When we imagine a well-adjusted adult living a rewarding life, do we picture them reading social media and posting all hours of the day, or cultivating an online following for their little kids? Are we happy with a world where our leading figures in politics and business feel like they have to out-meme and dunk on each other?

Because to me, this stuff is all pathetic and terrible, and as much as I enjoy a good meme or a sublime bit of internet weirdness, it’s not worth it. It’s not worth it.

As Ezra notes, complaints like these read a little like crankery. People have complained about new technology and warned of its corrosive effects forever. When we were growing up, we got constant lectures about video games, about the “idiot box”, and so on. And hey, look at us.

But hey: look at us! With the benefit of hindsight, it certainly does seem that television may have had some negative effects on our capacity to function effectively as a society, the many wonderful things about TV notwithstanding. And furthermore, it seems like the efforts our parents made to keep us from watching too much television, or to at least be savvy and restrained consumers of it, probably did some good. Thinking about the potential harms that can come from immoderate use of a technology, exercising self-restraint, and working to cultivate the value of self-restraint in our children is what responsible adults do. Is it what we’re doing now?

We don’t need to be reflexively anti-technology, and we should be cautious before jumping to more extreme approaches to the problems created by social media: like getting the government to shut them down. But this is our world, and it will be a good one or a bad one depending on the actions we take. To feel the world change as it has, to see the role social media has played, and to just keep scrolling? We can do better than that.

I think the time has come to concede that I have gotten some big things about the inflation situation wrong. In my defense, we got a huge and unexpected shock in Russia’s invasion of Ukraine. And I have also gotten some big things right. The supply-chain problems that really constrained the economy in 2021 have relaxed considerably, and we have good reason to think that this will weigh on inflation in the months ahead. We don’t appear to have entered a new macroeconomic regime; neither market-based measures of inflation expectations or long-term Treasury yields ever rose by very much, and while wage growth remains high, we haven’t seen steady acceleration, of the sort that might indicate a wage-price spiral. Rate hikes have been really bad for the emerging world, and will continue to be.

But I did not expect inflation to rise as high as it has, I did not expect it to take so long for inflation to peak and decelerate, and I did not think that economic activity in the United States would be this resilient in the face of such aggressive Fed tightening. I got that stuff wrong, and other people got it right. Mea culpa.

Why did I get it wrong? I think I have to allow that it was partly about cognitive error. I can be bloody-minded about things, especially when it feels like people are converging around a particular narrative on the basis of insufficient information; that’s a good trait sometimes but not always, and I try to adjust for this predisposition but I don’t always adjust enough. In addition, I think I screwed up by assuming that we couldn’t get a sustained inflation problem without underlying structural change: like a meaningful shift in labor power. And maybe I also got sloppy, thinking for instance that because some of the people warning about inflation had bad arguments that the case for concern about inflation overall was weak. 

In any case, I wish I had done better, and I will try to do better in the future. And kudos to those who got it right.

In the light of all that, what insight can I offer on where we are now, what’s coming, and what we ought to take away from this whole experience? With humility, here are a few thoughts.

First, it seems important to acknowledge that fiscal policy is really powerful. There will be people who argue that the lesson of the past two years is that fiscal policy is dangerous and can lead to overheating, and it certainly is the case that too much of a fiscal boost in too short a time in the face of constrained supply will generate a sharp rise in inflation. But while the Great Recession and the Covid recession were very different animals, it seems very reasonable to conclude from recent experience that the recovery from the global financial crisis could have been far more rapid, and the broader social costs of the crisis much reduced, had the fiscal response been more aggressive. It will be tempting for some observers to read these two experiences as providing mixed messages about using fiscal policy—that it can be good but it can also be bad, or that we should use it but only reluctantly—and that seems an incorrect reading to me. Both experiences demonstrate that fiscal policy is a good thing to use, and we just need to work on using it more effectively.

Second, central banks still have to do their jobs. The role of the central bank is to coordinate people’s expectations around the future path of demand growth. It might have been reasonable to hope in early 2021 that credibility alone would get this job done, but as inflation rose above central banks’ projections over the course of last year, the Fed needed to adjust its communications and policy to get everyone on the same page, expectations-wise. I don’t think the Fed was wrong in its assessment that transitory factors were pushing up inflation. But powerful transitory forces aren’t a reason to say, in effect, “eventually we will get to where we need to be”; that leaves far too much room for people to form expectations about the future based on other information around them: like soaring asset prices or the fact that everyone they know is buying a ton of stuff or what have you. Rather, transitory forces make it all the more important to be clear about what the Fed wants to see, what it is prepared to do to get there, and then also what it will do if unexpected developments mean that realized inflation misses in one direction or the other. Mea maxima culpa here, as I was definitely *not* encouraging the Fed to do this late last year. 

Third, while we have ended up with more inflation than we wanted, it was absolutely appropriate for inflation to rise well above 2% for a sustained period of time. Too much demand is too much demand, fine. But it is also the case that we have seen wrenching shifts over the past three years in both the composition of demand and in the capacity of the global economy to give consumers what they want. This has entailed enormous shifts in relative prices, and in a few cases those relative-price shifts have made something like a full round trip: way up and then way down or vice versa. The process of managing these shifts has been made much easier by inflation (which allows the real price of stuff to fall farther, faster than would otherwise be the case). But for that, the adjustment process would probably have meant more unemployment and harder times for businesses.

Many people go out of their way to mention how painful inflation is for lots of households, what a bad thing it is—as bad as or worse than recession, etc—and here we need to be clear that this is not quite right. People are hurting, yes, because some things that they need are in very short supply, and as a consequence they can’t buy as much of those things with their available income as they’d like, and the economy as a whole operates much less productively than it otherwise could. The problem we’re facing is real, actual scarcity in the world: of energy, of food, of port capacity, of chips and so on. Making all the excess inflation go away wouldn’t solve that underlying scarcity; it would simply redistribute the pain it causes relative to what we’ve got now. 

It is in some sense understandable that someone with lots of job security would prefer a different macroeconomic policy approach, in which the cost of scarcity was imposed on a relatively small group of people whose disposable income was crushed by the loss of a job, such that those who kept their jobs could buy more things with the income they continue to earn. But it is not necessarily macroeconomically or morally good to give those people what they want, and it is at least a little misleading to say that what’s annoying them is inflation, rather than the underlying problems of scarcity. In the face of big supply-chain problems and a massive food and energy shock, you could be hitting an inflation rate of 2% bang on and people would still be really upset with the state of the economy. 

Fourth, it is probably unreasonable to expect any central-bank target to be able to perfectly accommodate the wild stuff that happened over the past three years, but it seems fair to say that the target we’ve got accommodated the wild stuff less well than alternatives might have. A target for nominal wages or nominal GDP would have allowed the Fed to accept a lot of inflation within its policy framework, and it would have been nice if the Fed had chosen one of those when it updated its policy framework back in 2020, rather than “flexible average inflation targeting”.

Fifth, and relatedly, the decision to stick with an inflation target is going to mean more short-run macroeconomic volatility than is really necessary. I have a feeling that GDP figures for the first two quarters of this year will end up being revised by quite a lot, but for the moment it appears that nominal GDP, not adjusted for inflation, expanded at an annual rate of about 8% in the second quarter of this year. One could decompose this into a rise in inflation of more than 8%, plus a contraction in real output. The Fed wants to get inflation back down to 2%, and it feels that it needs the real economy to be even weaker, such that unemployment rises, in order to achieve this. 

So if we’re unlucky (more on this in a moment), we may end up in a situation in which the Fed continues to choke off real economic activity, and we hit 2% inflation at a level of nominal GDP growth of 2% (implying zero growth across the real economy) or 1% (implying a contraction in real GDP of 1%) or lower still. That’s a huge swing in demand: from 8% growth in nominal GDP to 1%! If the Fed were instead aiming to achieve growth in nominal GDP of 5%, and was agnostic about whether that was mostly real growth or mostly inflation, then it could be happy engineering a decline in nominal GDP growth of just three percentage points. In the context of a growth-busting energy shock, that still wouldn’t be comfortable, exactly; it might well mean we’re living with zero growth and 5% inflation for a little while. But as long as the Fed is serious about hitting 5% nominal GDP growth on a sustained basis, that’s ok; the Fed is inducing a much lower amount of volatility, it’s not trying to guess how transitory a particular inflationary force is or communicate information about its guesses to the public, and it’s not unnecessarily punishing people by throwing them out of work because Russia invaded Ukraine.  

Of course, point six, it is possible that we end up being lucky, because global economic factors reduce inflationary pressures in the US, such that the Fed feels that it needs to induce less domestic unemployment to meet its goals. The wonderful scenario in which this happens is Russia halts its war and deposes Putin and maybe we discover cheap fusion and a bunch of grain we didn’t know we had or something. That’s the less plausible way. The more plausible way is that we “accidentally” use our power as the world’s monetary hegemon to destroy global growth and, voila, inflationary pressures abate. 

There is only so much available oil or wheat or manufacturing capacity to go around, and when lots of economies around the world are doing well there is a lot of competition for those things and the prices of oil and wheat and manufactured goods rise. When lots of economies aren’t doing so well, there is less competition and prices don’t rise so much. For instance, prices for natural resources like oil have gone up by less this year than they could have, because China is very badly managing its property-market problems and its Covid policies and is thus doing very poorly, economically speaking. But there are other things which can hurt global growth, too, and it turns out that tightening by the Federal Reserve is one of them. The dollar is the world’s main reserve currency, Treasury bonds are the world’s most important safe asset, and when the Fed tightens that usually translates into harsher global financial conditions and a rising dollar. 

Now, there’s no iron law that says that the global effects of Fed tightening are more powerful than the effects of tighter policy on America’s domestic economy. But it happens to be the case that America’s recovery from the Covid recession has been particularly robust, and American balance sheets are relatively solid, whereas much of the rest of the world has not recovered as much and is not in the best financial situation and is really struggling with the dual pressures of high food and energy prices and rising interest rates in the US. And so it seems likely that a larger than normal share of disinflation within the US economy may be accounted for by falling world prices for food, energy and other goods and commodities, which is in turn associated with widespread economic hardship across low- and middle-income countries especially. In other words, it is relatively hard to get an American to stop spending right now, but comparatively easier to force residents of struggling middle-income countries to scale back on their consumption by inducing a massive depreciation in their currencies, and so a given amount of the former will come with a larger than normal amount of the latter.

Seventh (sorry, this is starting to get Martin Wolfish), in terms of inducing reductions in spending, Fed policy is also having some other perverse, though totally foreseeable, effects. Inflation is high in part because the cost of housing has gone up a lot, which is partly about increased housing demand but also very much about the fact that we’ve built too little housing in recent years. Now, spending on new housing construction is spending, and if there is too much spending in the economy, then reducing spending on new housing construction is a way to solve your short-run problem of too much spending. But if the longer-run problem is that there is too little housing, then it does seem like kind of a stupid way to tackle the short-run problem. Unfortunately this is what we’re doing; have a look at this chart from Bill McBride at Calculated Risk, which shows the long period of underinvestment in new housing after the global financial crisis, then an upward jump in new housing starts in recent years, followed by a sharp jag downward as the Fed stops the party.

And this is a story which is about more than housing. In the context of persistently weak demand in the 2010s, we got too little investment, which meant that too much of the surge in demand over the past two years could not be met by increased production and instead ended up as inflation. But because investment spending is more cyclical than consumption, an induced downturn will hit investment harder than consumption, “solving” the short-run problem by exacerbating the long-run problem.

Which leads me to my eighth and final point. Big macroeconomic gyrations usually yield important macroeconomic lessons. We don’t know for sure what the lessons of this period will be; that will depend on how exactly this tightening cycle plays out, and also on which intellectuals are most successful at framing the challenges we’ve faced. But one possibility is that the big lesson of this mess is in some ways an extension of the lessons of the global financial crisis and its aftermath. 

After the Great Inflation, there was a push to get most of government out of the business of macroeconomic management, and to make macro stabilization as simple and automatic as possible: thus independent central bankers aiming at public targets, often by following simple policy rules. The global financial crisis and the weak ensuing recovery reduced the appeal of this approach, because it turned out that after leaving everything to central banks you could still end up with massive recession and a decade of pitifully weak growth. But the light-touch approach is an attractive way of structuring things in a world where governments can’t seem to do anything right, and so one might naturally conclude that it is an attractive way of structuring things here and now.

But a world in which we don’t trust the government to do anything is not a world in which we are able to solve our big problems, and we should therefore not be very happy with that world. Instead we should think how best to develop the capacities within government that we need government to have. And part of that is taking a more purposeful and holistic approach to business-cycle management. 

Both supply and demand matter, and because supply matters the composition of demand matters: when we have to cut back, we need to cut back on unnecessary consumption before we cut back on basic spending or on investment. We need to think about the global context; crushing emerging-world economies on the heels of a devastating pandemic and while those economies face rising costs of climate change is really bad. It pushes the world toward horrific humanitarian catastrophes, and it also hurts us over the long run because countries which are rich and friendly to us augment our domestic production much more than countries which are poor and hostile to us. It is fine to want central banks to pursue straightforward targets in transparent ways, but that doesn’t relieve the rest of the government of its macroeconomic responsibilities. 

And it seems just possible that the government could meet them. I know the past few years haven’t gone exactly as one would want them to go. But we should acknowledge that in the face of very difficult circumstances, even the government of the United States of America did some pretty good stuff. It sped along the process of vaccine development. It engineered a massive fiscal response to the massive Covid recession, which helped spark an historically rapid economic recovery. And in the face of supply-chain problems and inflation, it has passed measures to boost investment and may well enact a very sensible, demand-reducing tax measure through the Inflation Reduction Act.

We could clearly improve on this. But we are working our way back from an extremely counterproductive era of intense hostility to the idea that the government might be able to help an economy function better. And we are also struggling through a difficult political moment which is probably best seen as a consequence, at least in part, of that era. Let’s learn from our mistakes and try harder. 

From 1870 to 1970, the world was racked by violent change, across all spheres of human activity. National borders were drawn and redrawn. The residents of these shifting states experimented with the most radical forms of social organization ever attempted. Technologically, the world lurched from stagecoach journeys to landings on the Moon, from mechanical calculators to digital computers, from a near ignorance of “germs” to the study of our DNA. In the richest economies, incomes tripled, creating a large middle class and moving its members from a position uneasily close to subsistence to one of historically unprecedented wealth. Social relations—between sexes, races and classes—were upended. Culturally, the world experienced perhaps the greatest efflorescence of art ever: in literature, music, architecture, and just about wherever else one looked. It was an almost unbearably frenetic period of creative destruction, and destructive creation.

And then, around 1970, societies positioned at the frontier of human advance declared: enough. We went to the Moon; that was far enough. We grew tired of efforts to create utopia through our governments, and chose instead to enable the better heeled to consume the fruits of their labor by cutting their taxes. We began to freeze our cities in amber: by abandoning idealistic efforts to improve slums, prohibiting the replacement of the fine buildings of yesterday with the bold and the new, and shifting ever more of the population into the comfort and familiarity of suburbia. With rare exceptions, the energy and innovation bled out of our artistic endeavors. We lost interest in bold new political projects or grand reforming crusades; indeed we ultimately judged that we had found the best of all possible systems of social organization and declared that history had not only stopped but come to its very end. We made ourselves caretakers of a world built by our forebears—or less even than that: parasites upon it, draining what consumer comforts we can from it while they last.

The result has been a profound stasis, powered by a conservatism so deep and penetrating that we scarcely perceive it. To what do the ambitious among us aspire, today? To a structured life, repeating familiar steps: university, lucrative profession, comfortable retirement, modest thrills delivering anticipated rewards. We think our politics has become gridlocked because different factions have such different visions of the future, but that’s mistaken; our politics delivers very little, because even a little change is more than most of us are interested in. Seemingly radical shifts—in tolerance for same-sex relationships for instance—are achieved within an overarching social rigidity, in which power and class relations are preserved and the general order of daily life is undisturbed. Resistance to change has evolved into fear of the unknown; we have all been engaged in a paralyzing process of autoinfantilization, pursuing trivial comforts and eschewing risk. 

How did we arrive at this place? One might look for the answer in a materialist explanation. The 1970s were a watershed because that is when the raw material needed to power rapid change—radical and underexploited new technologies and abundant energy—dried up. As productivity and income growth slowed, the scope for wholesale reimagining of society narrowed. And yet this is an incomplete account at best; in the context of resource scarcity and slowing growth, it was a choice to allocate available resources to increased consumption rather than an ambitious program of research and investment intended to alleviate constraints on rapid economic expansion. 

Perhaps the issue was something like exhaustion, after a century of upheaval? Having come through revolutions, depressions, and wars—bitter ideological conflicts which threatened the very survival of humankind—maybe we chose to catch our breath, consolidate our gains, and live in quasi-peace. Maybe. Yet this, too, feels off. In the 1970s, the rich world was a very young place; indeed, the median age in America stood below the level of the immediate postwar years. Most of the country was too young to remember the Depression or to have fought in a World War; a large share of the population knew only the postwar years of breakneck growth. And more recently, of course, most of us have known only stasis; there has been little major change for us to have been exhausted by.   

The above factors, and others of a similar nature, may have nudged the rich world toward its era of conservative sclerosis. But ideas are powerful, and it seems likely that we can find the roots of today’s monolithic conservatism in the ideological currents of the 20th century. The 18th and 19th centuries gave rise to two ambitious ideologies that would guide social evolution in the tumultuous period beginning around 1870: a liberalism which viewed the autonomy and liberty of the individual as central to progress, and a utopian progressivism which reckoned that ever-better societies could be engineered into being through the application of reason and political force. These two currents interacted—working variously in conflict and cooperation—until eventually rich countries converged around a particular form of social organization: consisting of participatory democracy and market economies, minded by large and technocratic states which maintained generous social safety nets, all undergirded by a lattice of civic institutions that oriented society toward solidarity and progress.

But from the middle of the 20th century, two ideological offshoots of liberalism and progressivism became ascendent. The first was a market-oriented economism, which received a boost from the slowing growth and high inflation of the 1970s. It validated the pursuit of one’s narrow self-interest as an ethical norm, encouraged skepticism of utopian ideas, and contributed to an erosion of the legitimacy of centralized state action. The second was a progressive conservationism, which received a boost from an increased understanding of the environmental costs of modern economic growth and from revulsion at the effects of mid-century civic renewal. It validated preservation as an ethical norm, encouraged skepticism of grand plans of all sorts, and contributed to an erosion of the legitimacy of ambitious civic and private-sector action. Both were animated in part by concern about real social problems. Both achieved some worthwhile aims. But in concert, the two facilitated a slow dismantling of society’s capacity to pursue and achieve grand aims, while also helping to entrench a forbiddingly powerful interest group in the propertied middle class, with both the incentive and the means to stymie change. 

From the interaction of these two movements there emerged a broad ideological consensus, spanning much of the left and the right, which shares as its core belief that things may not be perfect, but that dramatic changes of any sort are likely to yield more costs than benefits, particularly to those of some means and property. This uninspiring worldview has been sustained with help from the expansion and intensification of a consumerist culture, through which the public demands palliatives and status symbols from the market, with the resulting production providing the bulk of the motive power for our conservative age’s weakened growth engine. This culture is where we go to look for meaning and where we find the threads that continue to bind us together as a society, such as they are: the moth-eaten community of Marvel fandom and overproduced sporting events.

If we have thus become stuck, what reason is there to expect an end to the conservative consensus that has us trotting through the motions of the Good Life as our grandparents imagined it circa 1960? There are at least two that I see. One is the destabilizing effect of the internet. Over a remarkably short amount of time the flow of information around society has been dramatically rerouted, imparting a disequilibrating influence on the ideological environment. You can see this dynamic in operation in the rise and reaction to wokeness, and more potently in the emergence of an anti-democratic or neo-reactionary politics. Another is climate change: the inevitable result of a determination to avoid disruptive change which will ultimately force us out of our comfort zones, one way or another. One might argue that there are others: in the accumulation of potentially transformative technological innovations, or in the new openness to odd beliefs—in the wisdom of Q, or that aliens are among us—which could be interpreted as a yearning for something more spiritually meaningful than our spent consumerist religion is at present capable of providing. These things threaten the prevailing conservatism: because business-as-usual may no longer deliver outcomes which fall within an acceptably narrow range, and because arguments that the current order can only be preserved through radical action become increasingly credible. 

So it is ever easier to contemplate radicalism of various sorts, and as radical actions by some groups seem an increasingly real possibility, others which might otherwise constitute a powerful anti-change bloc will begin to consider radical action or reaction of their own. The world begins to wobble off its course, each lurch in one direction invigorating forces which propel a lurch in yet another. For us, the children of the conservative age, it is a terrifying moment. The future is wildly uncertain. The fledgling movements vying to explain our troubles and offering new ideologies and institutions as replacements for the old seem threatening, repugnant. Some clearly are, but on the other hand how could anything disruptively new not look that way to us? Conservatism is all we know. The things we have been told to want, that we have learned to value, are all bound up in a time and a society that is nearing its end. That credential. That house. That career. That income. Those markers of social respectability. That sense of ourselves, of who is like us and who is not, of what is good and what is bad. That safety.

But seeing the conservatism around us for what it is, and then seeing beyond it, will enable us to think new thoughts and, eventually, to realize new possibilities. The world we grew up in was a good one, certainly, compared to those which came before it, but has it really been so wonderful that we should be prepared to fight to preserve it? Billions of people remain poor; they don’t need to be. We remain yoked to the burning of fossil fuels; that is absurd. Generations before us reveled in the creation and experience of thrilling new art; shouldn’t we want to know that sensation? We can reimagine what it means to be human, what we all deserve and owe to each other; are we so content with the way we treat each other now? Should we not try to conceive of ways in which the world becomes much better, soon, instead of hoping vainly that it becomes a little better, eventually? 

If we do, we will make mistakes, including some big ones. That is how it goes. But this order that we are so violently committed to maintaining is the fruit of wild risk-taking and repeated mistakes. If we see value in it, then we should also recognize that we have an obligation to take some risks which ensure that we make our own errors. We have a duty to make ourselves uncomfortable, to gamble on change, to bet that we can bring into being something substantially better than this dear but shabby comfort-blanket of a civilization.

What is important to recognize, though, is that the critical choice has in many ways already been made. We grasped the world and did our utmost to hold it in place for as long as we could. We yelled Stop, and it did, curiously, for decades. But we are losing our grip, and there is no getting it back. There are two camps now: those who prefer not to see this reality and those working to make a different one. Those of us who value liberty and democracy, who care about the dignity and welfare of all people: if we aren’t helping to build something radically new, then we are leaving the future’s construction to others.

It would be nice, or easier at least, not to have to do this work. It would be much more comfortable to just relax at the barbecue and watch the game and assume that the opportunity to enjoy those same things in more or less the same way will be there, undisturbed, for our children. That feeling is the essence of this age of conservatism. It is high time that we grow out of it. We will have to, whether we like or not.