From Network Narratives to Russian Nihilism

Life is better for many and worse for some. The stories people read and hear shape how they understand wealth or poverty in their own lives. We compare our life to those around us and to the people we see on television, in movies and magazines and online.

When life feels less than ideal, we wonder why. In the retail world companies try to sell goods, services, and ideas. Companies make products and services and promote them via television, radio, and Internet. Politicians and government agencies similarly promote the goods and services they provide. People unemployed, homeless or deeply in debt attract government agencies offering their services as well as private sector firms looking to hire workers, build and rent apartments, and provide financial management services.

Television commentators and networks offer competing narratives on the claimed causes of socials problems, and promote competing policies to resolve or reduce those problems. The focus is on costly and counterproductive government regulations in some network stories. Other reporters and networks focus on deceptive advertising and a lack of regulations on some goods and services that hurt or frustrate consumers.

Some are critical of government programs for being costly and distorting markets (government insured home loans and college loans, for example). Others blame private companies for poor or expensive services (Comcast cable service, payday lending, and health insurance, for example). Most are critical of deceptive advertising by private firms and deceptive speeches by politicians.

The battle of narratives continues between “blame government” and “blame corporations” along various fronts, from income inequality and the “shrinking middle class,” to minimum wage laws, health care and insurance, unemployment, immigration, and educational opportunity.

Earlier posts have tried to explain and contrast these narratives in light of economic principles, changes on tax rates and policies, and shifts in household size. As an example of how increasing wealth expands options but doesn’t solve most social challenges: single-parent families are far more likely to struggle to make ends meet. Fifty years ago when living standards in the U.S. were significantly lower, few mothers even tried to manage single-parent households. They were compelled to remarry or give up their children for adoption.

Higher wages and increased monthly income allows more young people to rent their own apartment rather than share with one, two, or three roommates. Having your own place has advantages, but also changes and I think narrows one’s experiences. Having larger houses on larger lots means people see and talk with neighbors less. Living further from cities driving more cars means people walk less, and again likely chat with neighbors less. Greater mobility means we can more easily gather with others who share interests, rather than struggle in conversations with neighbors who likely have fewer shared interests.

Each increase in wealth brings more choices and access to more and higher quality goods and services, but each advance in the material world brings trade-offs in our social and family worlds.

I explain in Economic Thinking workshops for debate students the many ways that living standards are improving across most of the economic landscape. But even with living standards improving, life in some ways seems worse to many. Higher wages, for example, significantly raise the cost of labor-intensive services, for example.

A recent USA Today article, “7 things the middle class can’t afford anymore”
was shared on Facebook, and people added comments on rising costs and their own financial challenges.

Drawing from The Economist, the article suggests that the best way to define the idea of “middle class” is by disposable income:

a middle class income begins at the point where a person (or family) has one-third of their income left over for discretionary purposes after they’ve provided themselves with food and shelter.

Using this measure, has America’s middle class expanded or contracted over the last ten, thirty, and fifty years? How many people and families have one-third of their income available for “discretionary purposes” after paying for food and housing?

The USA Today article also referenced the relative decline of manufacturing jobs compared to service jobs:

 Bill Maher reminded us a few months back that 50 years ago, the largest employer was General Motors, where workers earned an equivalent of $50 per hour (in today’s money). Today, the largest employer — Wal-Mart — pays around $8 per hour.

My comment on the USA Today article explains that in many ways life over the last fifty years for everyday people is much improved:

Among changes for middle income consumers: homes are much larger, clothes less expensive and higher quality, dental and medical care much improved and less expensive (at least for services available in 1964). Used cars are much safer now and offer a better ride and mileage than new cars in 1964. Taxes are higher for middle income brackets. Airfare is much less expensive, so middle income people fly now but rarely did then. Vacation options are more exotic. Camping out, hiking and visiting relatives (the normal vacation for middle income people 50 years ago) have similar costs, though camping equipment is much improved. Middle income people didn’t go out to dinner much in 1964, but out on the town or in the mall a lot more now. Inflation-adjusted prices at Olive Garden offer better food at a better though standardized restaurant than most in 1964. GM and other assembly line workers were physically worn-out by age 60 and dead by 67.

In many ways camping with the family is a more fulfilling experience than a trip to Disneyland, and hiking more enlightening for young couples than a trip to Las Vegas or Cancun, Mexico. Wealth brings more glitter in reach of middle income people, but such glitter can before long lure people into debt and despair.

Consider though the gains in living standards in the U.S. through 1990:

Over the past four generations, the time an average U.S. employee devotes to on-the-job work decreased by nearly one-half. Looking at just the most recent two decades [1970-1990], when concerns about American living standards became more pronounced, work hours declined an additional 9.3 percent, the equivalent of 23 days a year. 

Daily work hours aren’t the end of what’s happening to leisure. Americans are starting work later in life and, perhaps even more significant, they are enjoying longer periods of retirement. In the two decades after 1970, the age at which an average worker entered the labor force pushed forward by seven months. A typical retirement grew by more than four years. In addition, the average daily time devoted to household chores fell consistently—from 4 hours, 12 minutes in 1950, to 3 hours, 48 minutes in 1973, to an estimated 3 hours, 30 minutes in 1990. Over a year, 18 minutes a day aren’t trifling: they add up to more than four extra days off. [These are the Good Old Days, Dallas Fed (pdf)]

Consider these improvements from 1970 to 1990 for average U.S. households:

 Improvements in living standards have continued since the 1990s with millions of U.S. households having access to goods and services like cell phones and smartphones that barely existed in 1990.

Progress though is not a matter of better gadgets and more efficient technologies, but of how people manage their lives and their relations with others, regardless of available goods and services.

Increased wealth gives more range for poor choices that impoverish the future.  Consider this Values & Capitalism post

The disparity in economic and social outcomes between children raised by married versus single parents is vast. Compared to those raised by divorced parents, children raised by married parents “are more than twice as likely to move up the economic scale.” … 

In their book “Growing Up with a Single Parent,” Sara McLanahan and Gary Sandefur report that: 

Adolescents who have lived apart from one of their parents during some period of childhood are twice as likely to drop out of high school, twice as likely to have a child before age twenty, and one and a half times as likely to be “idle”—out of school and work—in their late teens and early twenties. 

Various well-meaning welfare programs create incentives for single-parent families by withholding various government support programs to low-income two-parents families.

I’m not sure how to end this already long post, but from The writer who foresaw the rise of the totalitarian state, an essay by John Gray on the ideas of Fyodor Dostoyevsky:

When Fyodor Dostoyevsky described in his novels how ideas have the power to change human lives, he knew something of what he was writing about. 

Born in 1821, the Russian writer was in his 20s when he joined a circle of radical intellectuals in St Petersburg who were entranced by French utopian socialist theories. …

From then onwards he realised that human life was not a movement from a backward past to a better future, as he had believed or half-believed when he shared the ideas of the radical intelligentsia. Instead, every human being stood at each moment on the edge of eternity. As a result of this revelation, Dostoyevsky became increasingly mistrustful of the progressive ideology to which he had been drawn as a young man. 

He was particularly scornful of the ideas he found in St Petersburg when he returned from his decade of Siberian exile. The new generation of Russian intellectuals was gripped by European theories and philosophies. French materialism, German humanism and English utilitarianism were melded together into a peculiarly Russian combination that came to be called “nihilism”. 

We tend to think of a nihilist as someone who believes in nothing, but the Russian nihilists of the 1860s were very different. They were fervent believers in science, who wanted to destroy the religious and moral traditions that had guided humankind in the past in order that a new and better world could come into being. There are plenty of people who believe something similar today. …

Dostoyevsky suggests that the result of abandoning morality for the sake of an idea of freedom will be a type of tyranny more extreme than any in the past. As one of the characters in Demons confesses: “I got entangled in my own data, and my conclusion directly contradicts the original idea from which I start. From unlimited freedom, I conclude with unlimited despotism.” …

Dostoyevsky thought the flaw at the heart of Russian nihilism was atheism…