David Brooks's moral economy (1 Oct 2009)

A recent David Brooks column in the New York Times foments about the "erosion in economic values" that he expects to launch the "next culture war."

A crusade for economic self-restraint would have to rearrange the current alliances and embrace policies like energy taxes and spending cuts that are now deemed politically impossible. But this sort of moral revival is what the country actually needs.

If it sounds familar, it's because he wrote the same op-ed a year ago. There he wrote:

There are dozens of things that could be done. But the most important is to shift values. Franklin made it prestigious to embrace certain bourgeois virtues. Now it’s socially acceptable to undermine those virtues. It’s considered normal to play the debt game and imagine that decisions made today will have no consequences for the future.

Basically, Brooks is unsatisfied with the much-heralded New Frugality, and he discounts the data that indicates the U.S. savings rate has surged in the past year.

Over the past few months, those debt levels have begun to come down. But that doesn’t mean we’ve re-established standards of personal restraint. We’ve simply shifted from private debt to public debt. By 2019, federal debt will amount to an amazing 83 percent of G.D.P. (before counting the costs of health reform and everything else). By that year, interest payments alone on the federal debt will cost $803 billion.

The logic here seems suspiciously nonsensical. Conflating public and private debt is a subterfuge if you want to rail about personal morality. If there is a connection, as Krugman notes, it's Reagan's fault. (He proved, after all, that "deficits don't matter," as Dick Cheney put it.) Kevin Drum, channelling Elizabeth Warren, notes that Americans stopped saving when their wages grew stagnant and their bills kept increasing, and banks were deregulated enough to lend recklessly to them.

And as Andrew Leonard argues at Salon, morality has little to do with our tendency to respond to economic incentives:

Americans ran up a lot of debt in the last few decades. There's no question about that. But one of the most striking developments of the last year has been how Americans have responded to the financial crisis at an individual level. We made a collective decision to start saving and stop spending. Is this because we woke up one morning last fall and suddenly became born-again Calvinists? No, it seems clear that we were responding rationally to economic incentives. The economy crashed, unemployment surged, home prices plummeted, and presto: We all started pinching pennies. Morality, insofar as expressed via our spending habits, is merely a reflection of the economy.

That's why I've generally been skeptical about the new frugality -- we've been trained by being raised in capitalism to respond to the economic drift and call that morality; the idea that we have a morality that supersedes what is happening in the economy is outdated, which is what I think Brooks is lamenting. He wants morality to drive the economy rather than vice versa, but for that to be the case you have to question the conservative tenet of trusting the market to arbitrate social conflicts. You would need to champion a resistance to economic incentives, a dismantling of the market-made consciousness, a rejection of the idea that there is justice in economic equilibria, of the idea that markets are fair. Religious conservatives can probably make that case and argue for a subjectivity grounded in religion, not the market. Brooks seems to want it both ways, though: He wants to condemn consumer desire as evil but champion the prerogatives of the businesses that have ushered in the consumerist era that have done so much to instigate that consumer desire.

When we respond to incentives, ideologically it seems as though we are being allowed to choose freely. If we are expected to adhere to some higher set of values, often these register as constraints, prohibitions and proscriptions -- curtailments of freedom. The problem is that "freedom" has come to be defined in terms of the breadth of consumer choice so that other sorts of inequalities (income inequalities in particular) could be allowed to persist. Not clear how a return to Calvinism can be sold as liberating.