President Obama gave a speech to the Center for American Progress in Washington this past Wednesday on the theme of economic mobility:
Our point of view here, however, is related to economism. I have quoted from previous Obama speeches, both in The Golden Calf and in this blog. As a rule, in the past, I was quite happy if I could identify one or two passages in an entire speech that seemed fully expressive of an anti-economism posture. In this speech, on the other hand, I was hard put to find a passage that did not seem to me to call out economism for the flawed ideology and policy that it is.
Along the way, the President trots out many of the statistics that people worried about income inequality commonly cite—like the CEO who was content to make20 to 30 times that the average worker made in the 1960s now makes 273 times as much, and that the top few percent of the population are running off with an increasingly disproportionate percentage of wealth and new economic growth. He deals with many of the standard ploys that economism’s defenders use to defend the status quo (like the claim that raising the minimum wage would hurt poor workers) and points out why all of them are misguided or inaccurate. He insists that government policy must play a major role in redressing the problems.
The road back from economism (maybe that’s a good title for the book that refutes the standard reading of Hayek’s The Road to Serfdom) will be long and difficult, but it has to start with the flaws of economism becoming the subject of robust political debate. As I explained in The Golden Calf, for far too long, economism has thrived on the widespread belief that the key portions of its ideology are nothing but common sense and that no rational politician could possibly disagree with them. Just to call them out and to insist that the debate must start is a major step forward.