Economy and Justice

We the people of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the blessing of Liberty to ourselves and our Posterity
Preamble, United States Constitution

But let justice roll down like waters and righteousness like an everflowing stream.
The prophet Amos (5:24)

There must be some way out of here
said the joker to the thief.
There’s too much confusion
I can’t get no relief.
Businessmen, they drink my wine.
Plowmen dig my earth.
None of them along the line,
know what any of it is worth.
Bob Dylan, “All Along the Watchtower”

This spring I read two books that indicate we may be in a time of economic confusion, a time to ask about what things are worth, about the meaning of justice and welfare.
Tyler Cowan, The Great Stagnation is an e-book that David Brooks has said may be “the most debated nonfiction book so far this year. “America is in disarray and our economy is failing us,” Cowan begins his book. He argues that we are in the midst of a multi-decade economic stagnation that began in the 1970s. Median wages have risen only slightly since then. Recent economic recoveries have been relatively jobless. Our economic success earlier this century, he contends, was based on picking “low-hanging fruit”: abundant land, rapid technological development, and a pool of bright, but uneducated children and youth. His words about technology are particularly interesting given many of the new developments we have experienced. Today… apart from the seemingly magical internet, life in broad material terms isn’t so different from what it was in 1953. We still drive cars, use refrigerators, and turn on the light switch (9). To make his argument, Cowan notes the rate of growth of median family income. It slows significantly in 1973. From 1947-1973, median family income doubled; from 1973-2007, it grew less than 22%. Cowan believes that until we find the next new low-hanging fruit, we might expect much the same – the great stagnation.
The other book, which I also read on an e-reader this spring, published in 2006 prior to the recent economic meltdown, is Jacob Hacker’s The Great Risk Shift. It comes at our recent economic history from another angle. For decades, Americans and their government were committed to a powerful set of ideals – never wholly achieved, never without internal tension – that combined a commitment to economic security with a faith in economic opportunity. Animating this vision was a conviction that a strong economy and society hinged on basic financial security, on the guarantee that those who worked hard and did right by their families had a true safety net when disaster struck…. Today, however, the social fabric that bound us together in good times and bad is unraveling. Over the last generation, we have witnessed a massive transfer of economic risk from broad structures of insurance, including those sponsored by the corporate sector as well as by government, onto the fragile balance sheets of American families. (8-9, 15) Hacker acknowledges growing economic inequality in our economy. From 1979-2003 the average income of the richest Americans doubled, factoring for inflation, while the middle class saw their average income rise 15%. The incomes of middle-class families aren’t much higher today than they were in the 1970s – and they are much more at risk. (24) Hacker is less concerned about inequality than the great risk shift.
Weaving the arguments from these two works together we can say that at a time when economic opportunity seems more limited and difficult, average families are being asked to assume more economic risk. What might the meaning of justice be in such circumstances? How do we care for the general welfare? How do we balance sufficient government revenue for an adequate safety net with the encouragement of economic opportunity? These questions do not lend themselves to easy answers. My greatest frustration is that too few are even asking them.

With Faith and With Feathers,

David