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January 07, 2008

Let's Give Rationality A Shot And See If It Works Out

The Scanner points out that the recent Times of London story is wrong that the UK has higher living standards than the US. Be sure to read to the end for embarrassing France-bashing by Obama's main economic adviser.

Also see Le Scanner's follow-up to an an earlier post about the lack of a real ideology in our current movement (such as it is).

—Jonathan Schwarz

Posted at January 7, 2008 02:29 PM

OK, but isn't "American exceptionalism" based (in good part) on the absence of any ideology, the fear of any movement? Only when threatened by outside forces (and their Un-American ideologies) do Americans get together and smite the enemy.
Every American can become a millionaire or president or both. A few winners, millions of loers. The American Dream arises out of the (vanishing) point of the self, for the self.

Posted by: donescobar at January 7, 2008 03:07 PM

typo above: losers

Posted by: donescobar at January 7, 2008 03:10 PM

From the Scanner:

There are a limited number of social movements in U.S. history, but the main examples include the Republican/antislavery insurgency of the 1840’s-1850’s; the Populist movement, 1885-1896; the CIO organizing upsurge of 1935-38; the civil rights movement; and the conservative movement of the 1960’s.

Notice anything missing from the list? The women's movement? The gay rights movement? The environmental movement?

And that's the Scanners main error, I think. S/he is looking for a crowd marching behind a banner labelled "The Progressive Movement", and, not finding that, concludes we're all fucked. Meanwhile, many diverse movements - oh, I forgot the immigrant-rights movment - continue to grow and succeed.

This problem extends back to the Scanner's original post on the topic which claimed that progressives lacked a clear program, because the Center for American Progress was operating based on a mission statement filled with meaningless "valence-speak."

Well, sure. The more you try to agglomerate diverse movements into a single movement, the more fuzzy and unspecific the language becomes. But go back to those movements that the Scanner doesn't think worthy of the name, and you'll find, hard, positional statements. I don't think the gay rights movement, for example, is getting by on mere "valence speak."

Posted by: SteveB at January 7, 2008 03:29 PM

The Scanner is on to something with his analysis of the Progressive Movement (though I disagree about the reason why there's no ideology).

But yes only Republicans and Libertarians have an ideology. Liberals have no such thing (neoliberalism is their true creed, but they won't admit it).

In view of the wild success of my post on priorities (misinterpreted as one on religion), I think I'll write an essay about it.

Posted by: Bernard Chazelle at January 7, 2008 03:49 PM

The Scanner overegss his pudding a bit about the idiocy of the Times of L piece.

It's not quite as simple and I've talked to many economists who are quite divided about GDP vs PPP.

GDP is (by and large) an objective measure: exchange rates. It's the best measure of wealth you can get.

Now if you are concerned about standards of living then you say an iPod should cost the same everywhere and you get the PPP.

There are many problems with the PPP.
Its definition is highly subjective (who gets to pick the basket of goods and services).

Some economists have alternative measures that provide wildly different results. Others will even go as far as arguing that if you own a third car for the sole purpose of commuting 100 miles a day
it should not be counted as added wealth relative to someone with only 2 cars and a train commute, etc, etc.

So, I think the Scanner's point is valid. But PPP is far from being the be-all and end-all of wealth measures, and the Oxford Econ study is signiticant.

Posted by: Bernard Chazelle at January 7, 2008 04:02 PM


So, I think the Scanner's point is valid. But PPP is far from being the be-all and end-all of wealth measures, and the Oxford Econ study is significant.

Yes, although my very limited understanding is that PPP measures have become more valid over time. On the other hand, the Scanner just uses PPP per capita, when I assume a better measurement would be median PPP (if such a thing is even possible). We'd probably look better than we should with per capita.

Beyond that, who knows how this study weighted various factors? Not me. Who cares enough to read it and find out? Again, not me.

Maybe Dean Baker will explain more.

Posted by: Jonathan Schwarz at January 7, 2008 04:19 PM

For those just tuning in...The Times of London article was claiming that Britain's GDP per capita is surpassing America's. The question is this: In the UK, GDP is measured in pounds, while in the US it's measured in dollars. Statistically, how does one compare them on an apples-to-apples basis? By what factor do you convert pounds to dollars?

The article used market exchange rates. I'm using PPP exchange rates. Market exchange rates are sometimes used to convert GDP, but they're clearly inappropriate when you're trying to compare actual standards of living. That's because currencies fluctuate, sometimes wildly, on a daily basis, thus drastically changing measures of GDP without producing any significant change in actual living standards.

PPP is the standard way of making this comparison. Bernard is right, it's not necessarily perfect (though it's certainly more useful than market rates). It's compiled by constructing a representative basket of goods and seeing how much they cost in two countries. The "correct" PPP exchange rate is $x to the pound, where x dollars buys the same amount in the US as one pound does in the UK. In general, PPP exchange rates are more accurate the more similar two countries' consumption patterns are. So for the US and UK, that's not much of a problem. Dean Baker often criticizes journalists for not using PPP to convert China's GDP, even though Chinese consumption patterns are much more different from ours than British consumption patterns.

Of course, any attempt to measure living standards using some measure of GDP is subject to all the standard provisos about GDP's limitations as a measure of well-being.

...Bernard, I'm looking forward to your essay...

...SteveB, your point is well taken. The changes in, say, relations between men and women in the last 40 years are at least as profound as the changes wrought by any of the movements I mentioned. However, most of those changes took place at the molecular level of society, in a way qualitatively different than the others and, I'd argue, belonging in a different category.

When I was talking about social movements, I was talking about those that are embodied in institutions. The women's movement has had institutions, of course, but I'd argue that they played a relatively much smaller role in what the movement ended up accomplishing than the institutions of the other movements I mentioned. In other words, to make an analogy: SCLC was to the civil rights movement as the CIO was to the labor movement. But NOW was *not* to the women's movement as SCLC was to the civil rights movement.

That's a whole interesting debate unto itself...

Posted by: The Scanner at January 7, 2008 07:32 PM

suffrage and property holding are only molecular if the formal economy is all you look at

Posted by: hapa at January 7, 2008 08:30 PM

Didn't you love the way the World Bank fucked up the PPP computation for China (and India) by using old prices. Whoopsie, sorry, guys, you're just 40 percent poorer than you thought.

And the best part was the reaction of the Chinese gvt. Yes yes we are poorer. We are very very poor.
Don't even think of asking us to do things that only rich countries should be doing.

Posted by: Bernard Chazelle at January 7, 2008 09:05 PM


When you talk about local activists fighting for an antiwar resolution at city hall, I consider that institutional. There is an organized group somewhere, orchestrating the fight. Just because it's small and local doesn't mean it's not institutional. It doesn't have to be a big, national organization.

What I'm calling molecular change is more like this: A school principal in a small, Southern town starts to crack down on the bullying of gay students, even though in the past it was always winked at. He's more sensitive to the issue than his predecessors were because his stepson came out as gay, because one of his favorite TV actors is gay, because his daughter argues for gay rights at the dinner table. After the bullying crackdown, students in town and their families gradually start becoming more circumspect about their homophobia, or even start to realize the suffering homophobia causes. As a result, a few of them go on to make similar decisions when they have positions of responsibility or influence in their own jobs. Etc.

Obviously the gay rights movement has done a lot of important institutional work, fighting for resolutions in the city council, and so on. But I'd argue that a much larger share of the progress that's been made on gay issues (and on women's issues) has come from molecular change. In fact, the institutional advances have often been the result of - you could even say the ratification of - molecular change that had happened previously.

Contrast that with the civil rights movement. I don't think you could say, historically, that much progress was being made on integration in the South as the result of individual-level molecular change - until the civil rights movement, as a set of institutions, came along and forced the issue.

Posted by: The Scanner at January 7, 2008 11:27 PM

i LOVE the clash, especially that song, and have to say the very title of that post made me love your site even more

Posted by: almostinfamous at January 8, 2008 01:02 AM

i LOVE the clash, especially that song, and have to say the very title of that post made me love the scanner even more.

Posted by: almostinfamous at January 8, 2008 01:02 AM

my enthusiasm for the clash obviously made me double-post.

as re: india, it is largely very poor and the poor are sinking further thanks to the sudden (and i would argue iurrational) shift of priorities from agrarianism, which still supports about 50% of our people, to industrialization, along with a callously enthusiastic 'liberalization' of the economy. there has been some fight, but most of it has been neutralized thanks to a murdoch-style news media that is relentlessy hostile to left-wing approaches and indeed people of left-wing mindsets.

Posted by: almostinfamous at January 8, 2008 01:19 AM

The feminist movement was embodied within an institution: the CIA. Google "Gloria Steinem" and "Redstockings." Then again, the CIA has been embodying itself in all sorts of things over the years in order to defeat them.

Posted by: Bob In Pacifica at January 8, 2008 09:20 AM

Your "institutional" v. "molecular" distinction seems completely arbitrary to me. To use your hypothetical, why did the stepson come out? Was it perhaps because there was an organized, nationwide movement asserting that gay people should be open about their sexuality?

All movements operate this way. A national movement gives people the impetus to act at a personal level, and it's those millions of personal actions that actually move the public, and change the conventional wisdom. Your school principal, for example, might be more inclined to oppose the war because he sees that nice old Mrs. Perkins from the library in front of the courthouse every week at the peace vigil. Or at least he's less inclined to believe the right-wing talking point that antiwar activism is confined to decadent coastal elites.

You do have a point about the civil rights movement. Federal troops enforcing the orders of the Supreme Court came before any widespread change in attitudes among Southerners. Some movements win by persuading a critical mass of people that the status quo is immoral, other movements win by persuading a critical mass of people that the status quo is impossible.

And sometimes people get the "impossible" part before they get the "immoral" part. I expect that to be the case with Iraq. When we do leave, it will be because some critical mass of Americans has been persuaded that occupying Iraq is impossible. When that happens, we can give the credit to that social movement known as the Iraqi resistance.

Posted by: SteveB at January 8, 2008 09:50 AM

My personal cost-of-living is lower now than it was. Does this count for anything?

Posted by: Bob In Pacifica at January 8, 2008 12:28 PM