More money, less problems ?

Although I think it falls flat at the end, I do think there's value in this economic narrative about post-WWII America. It's long, but an easy read, worth reading its entirety.

To summarise into a ludicrously short form : America regenerated itself after the war by fostering a culture of credit and consumerism. Credit allowed returning soldiers to pick themselves up by their bootstraps, making and selling the things to each other that they suddenly wanted. Essentially, giving them a bunch of money meant they were heavily inclined to spend that money back into the economy, fuelling jobs and economic growth, in a sort of virtuous cycle. Inflation spiked, but temporarily. Cultural biases against debt heavily declined, because debt could and did pay for itself. Equality was an implicit and readily achievable goal. This first part of the piece is, I think, very nicely done.

Later - and I think here this lacks any explanation as to why or how - the economy mutated into something that was still booming, but less and less for the average man in the street and more for an elite. Exactly what economic choices were made that facilitated this are unfortunately lacking (Niall Ferguson gives a interesting but limited look at this in relation to the big tech companies, however). But the valuable point made is that Americans still had an expectation of equality even though it was now essentially impossible to achieve. Consequently, coupled with a culture of debt being quite acceptable as a path to prosperity, this helped fuel the credit crunch, with consumer spending on things they couldn't possibly afford running rampant. It should probably be noted that many things they now couldn't possibly afford were things they had every damn right to expect that they could afford, like healthcare and education. It's hardly all a burning desire for avocado smoothies and designer handbags.

(I do wonder about a possibly cultural difference between Europe and America on this point. We make fun of people trying to get above their station, because peasants know full well they can't possibly compete with the aristocrats, so to speak. Trying to keep up with the Jones' is an individual phenomenon, not a widespread lifestyle choice. But this is probably drawing the narrative too far : again, I suspect the bulk of the burden lies in a desire to rightfully expect the essentials to be affordable, not the luxuries.)

This rise in inequality is undeniably a problem, and a whopping big one. But I think the conclusion here that this is a large part in the rise of right-wing populism falls flat. It's easy and tempting to say that income equality => unjust treatment => desire to fix things by desperate measures. But that just doesn't seem to be what the numbers are saying, yet we keep insisting on saying it. In 2016, Trump won the election thanks more to higher earners than poorer ones (though, if I recall correctly, this may not be true in every state, but for big-picture narratives this doesn't matter so much). Although Brexit was won primarily from poorer voters, those switching from Labour to Conservative were actually happier about the decline of industrial Britain than those who stuck with Labour. Paradoxically, perhaps those remaining Labour actually did so out of a sense of small-c conservatism, but clearly, those switching to Tory weren't trying to rebel against the changed reality.

My suspicion is that an integral part of the rise of right wing populism is information driven, not economics driven. It is far too simplistic to suggest that just having more money would fix this. This is not to say that we shouldn't have greater income equality (we emphatically should), just that that would fix different problems. Nigel Farage is very, very rich, yet the King of Brexit is a racist buffoon : resources are important, but they are hardly the whole story in political morality. And nor is this to say that there might not be something to this link between equality and politics - there probably is. But the connection, I suspect, is more complex than this article portrays. Grand narrative pieces like this are valuable, but should be treated with caution.

More research is needed.