Review: Good Economics for Hard Times

Review: Good Economics for Hard Times

Good Economics for Hard Times: Better Answers to Our Biggest Problems by Abhijit V. Banerjee

My rating: 4 of 5 stars

Economics is too important to be left to economists.


After listening to a series of lectures on introductory economics, I was struck by the degree to which the basic logic of supply and demand was used to make sweeping pronouncements about human behavior and economic policy. The lecturer, starting from the premise that supply and demand is inexorable, would rule out certain policies as working against the market, while promoting those he considered ‘market-friendly.’ But rarely did he stop to actually examine a case study to see how these theories played out, leaving me with the impression of a wholly a priori logic.

The central thrust of this book is that a priori logic cannot be trusted. The economy is complex and unpredictable, so the best way to understand it is through historical case studies and randomized control trials. The authors find that, when the economy we examine in such a way, many of our intuitions about how the it works or will respond to certain policies are wrong. Indeed, though this could hardly be called a revolutionary book—its tone is engaging but mostly academic—the two authors, Banerjee and Duflo, reach quite heterodox conclusions.

One basic economic argument used against permissive immigration policies is that the increased supply of cheap labor will inevitably drive down wages, thus hurting native workers. The logic is simple but it does not hold up under the evidence. In case study after case study, immigration is shown to be either economically neutral or beneficial to native workers. Indeed, ironically—and contrary to what Trump and his ilk may say—low-skill immigrants are better for native workers than highly skilled ones, because they often take jobs that native workers do not want—jobs requiring little communication and much labor. Native workers may even benefit by being promoted to managerial roles. A multilingual immigrant doctor actually competes more directly with native workers than a monolingual immigrant fruit picker.

Perhaps you can see that the above supply and demand argument against immigration is simplistic, since immigrants, apart from increasing the labor supply, also increase demand for goods. Indeed, most professional economists are decidedly in favor of migration. Workers have much to gain from moving to where their skills will be most highly rewarded; and businesses would gain from having good workers. But here the economists’ logic is shown to have its own flaw. Real workers are actually quite averse to migration. Banerjee and Duflo show that, even when a better job may just require move from the country to the city, most will simply not go. There is a large amount of inertia built into real people’s lives—the pull of family, friends, and familiarity—which works against even obviously beneficial moves.

This is not the only way that the real economy is (in economic parlance) ‘sticky.’ Though economists imagine a world of workers ready to move and re-train, of companies willing to fire and hire, banks that drop bad investments and jump on promising new ones, firms willing to relocate to new countries with cheaper labor, new businesses popping up and inefficient ones disappearing—in a word, a dynamic world governed by shifting supply and demand—the real world is consistently stickier than this logic suggests. This seems particularly true in the developing world—the authors’ main area of study—where they found that efficient and inefficient businesses coexisted, where bad-selling product lines were retained, where banks merely rubber stamped loan applications from existing clients and denied new ones, and where people do not migrate for work, or even take the work that is available locally.

Inhabitants of planet earth will likely not be surprised by all this. But the upshot, the authors argue, is that free trade does not deliver all that it promises. Now, the logic of free trade is simple and compelling, grounded in the law of Comparative Advantage put forward by David Ricardo. Simply put, this law states that we all will benefit from trade, since we can all specialize in what we are comparatively better at doing.

But the logic has not exactly played out as hoped. Though touted as a way of propelling developing nations out of poverty, in practice free trade policies have a mixed record. The authors use the example of India, which transitioned from a highly-regulated economy with high tariffs to a free market with low tariffs in the 1990s. The result of this transition was hardly the economic wonder that some economists could have predicted. In many places, wages actually went down rather than up, and in subsequent years much of the economic growth has simply gone to the country’s rich. This is not to say that the results of economic liberalization were all bad, only that it was hardly the panacea that free-market advocates promised.

The consequences for rich nations, like the United States, have also been mixed. While most economic transitions involve winners and losers, the shock of free trade has benefited those who were already ‘winning,’ and hurt those who were already ‘losing.’ In other words, while the big cities full of college-educated workers have grown richer, the arrival of cheap goods—mostly from China—has ravaged many blue-collar communities.

Admittedly, the theory of Comparative Advantage does predict that free trade will temporarily hurt some workers who are forced to compete with cheaper goods from abroad. But the belief in economic adaptability (not to mention the political will to help assuage the problem) was overly optimistic.

Even when jobs disappear, workers do not move. Many simply go on disability and leave the workforce entirely. In short, workers are sticky. Not only that, but the United States has been very bad at redistributing the gains of free trade in the form of worker retraining and extended unemployment. No wonder that many in the country are skeptical of the benefits. However, the authors are careful to note that the solution to this problem is not to impose new tariffs on China. This will only create further economic harm in other sectors (like agriculture) without remedying the harm already done. What is needed, the authors argue, are generous government programs to either re-train displaced workers, or to subsidize industries that are being driven out of business.

This leads us to the longest and most theoretical chapter in this book, that on growth. The argument is fairly dry but the conclusion the authors reach is striking: we do not know what makes economies grow. The greatest years of economic growth in the developing world were between the end of WWII and the 1970s. This was also a time dominated by Keynesian economics, which led many to give Keynes the credit for this economic miracle. But the magic wore off with the coming of stagflation, which the Keynesian seemed powerless to stave off. This crisis brought the managed economy into discredit, and ushered in the neoliberal revolution, where deregulation, lower taxation, and free trade were seen as the best tools to rejuvenate the economy. Unfortunately, that did not work, either, and growth has never picked up to pre 1970s levels.

Instead, what has grown since the neoliberal turn has been inequality. Rather than stimulate the economy into mad activity, these policies have merely directed what modest economic growth there has been to the much-maligned top 1%. And their political influence has grown right along with their fortunes, which only reinforces the government’s tendency to embrace these sorts of ‘business-friendly’ policies.

As usual, the economic logic used to argue in favor of these policies—that lower taxes on the rich will spur greater activity—is supported by a priori logic rather than actual evidence. But the evidence does not bear it out. People work just as hard whether they are being taxed at 30% or 70%, or not at all, as demonstrated by a series of tax holidays in Switzerland. The notion that high salaries reflect employee value (which supply and demand would predict) is also not supported, as demonstrated by the remarkably high wages paid to those who manage stock portfolios, which consistently underperform against index funds—meaning that the wages are essentially a rent for holding onto money. (And since the high salaries in finance influence salary negotiations in other industries, this increases salaries across the board.)

A strange picture emerges from all this, a picture of an economic policy—at least in the United States—that is entirely divorced from reality. We wring our hands about immigration at a time when immigration is not going up, and even though immigrants pose no credible economic or cultural threat. We argue about tariffs but not about how to actually help those hurt by free trade policies. We cut taxes and deregulate businesses in the name of growth that never appears. Meanwhile, automation is likely to make many of these problems that much worse, and we persist in putting off any action related to the looming climate crisis.

The current pandemic—and concomitant economic crisis—has only put this magical thinking into high relief. Perhaps the best thing to call it is free-market fundamentalism: the belief that the economy, acting on its own, will sort out all of our problems—from poverty to pandemic—without any government aid. Strangely, it is a faith held most ardently by those who see the least evidence for it: people who have been hit by the economic dislocation of free trade. Indeed, at just the time when inequality is rising, we have embraced a kind of social Darwinism that treats the economic pecking order as a perfect reflection of personal merit. This mentality, resting upon the assumption of an imagined economic mobility (which is even lower in the US than in the European Union), justifies both extreme poverty and extreme wealth, since both are ‘deserved.’ To the extent that anyone is held responsible for the situations, it is either outsiders like immigrants or minorities, or the government—not the wealthy.

As Manny has suggested, the situation is rather reminiscent of the USSR in its final years. In both cases we have an economic philosophy based on a priori logic rather than evidence, and believed on the same grounds. As this philosophy fails to deliver, the country’s elites still do not publicly renounce it, but instead only increase their displays of fervor. Rather, entirely irrelevant factors—immigrants, minorities, nefarious citizens—are used to explain the lack of prosperity. Meanwhile, the rich line their already deep pockets while spouting the old egalitarian slogans. The result is a society gripped by nihilism, wherein the old ideals become barely-disguised lies by corrupt and incompetent leaders, and anger and hopelessness descend upon a country that senses it is going in the wrong direction but does not understand why.

This may seem rather hyperbolic. But when you consider how bad things have gotten in the United States in the short time since the publication of this book, when it was already quite bad, then perhaps you can see the justification.

If our economic logic is often misguided, and our policies either useless or worse, what do the authors suggest? Here is where I thought that the book was mostly lacking. Banerjee and Duflo are extremely heterodox when criticizing conventional economics, but are not nearly so bold in proposing solutions. Their general point, however, is that we ought to shift our focus away from trying to grow the economy—since we do not know how to do that anyway—and towards most justly distributing the resources we have now. High tax rates on the rich will help curb inequality without reducing effective incentives. Coordinated efforts between countries can help to reduce tax dodging, and enforcing anti-trust legislation will help curb corporate power.

The authors have a fairly nuanced view of basic income. They think that basic income schemes work well in developing countries, where the poorest are mostly working a variety of temporary or seasonal jobs. But they do not think UBI would work in developed countries, because people have come to rely on jobs not only for income but for structure and even meaning in their lives. In studies, people who stop working do not tend to increase time socializing, or volunteering, or on hobbies; instead, most people end up just watching a lot of television—which does not increase happiness or well-being. This is why the authors prefer significantly stronger unemployment support—helping workers to retrain and relocate.

This seemed somewhat timid to me. But perhaps it is misguided to seek bold, sweeping solutions from authors who insist on hewing to trial, experiment, and evidence. Hard-headed economists, the authors do not promise miracles. Yet if you are looking for a probing and insightful look at many of our current economic woes—now only exacerbated by the coronavirus recession—then this book is quite an excellent place to start. The most pressing point is that our economical problems have political solutions. As usual, the only thing we need is the political will to start acting.



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Review: Evicted

Review: Evicted

Evicted: Poverty and Profit in the American City by Matthew Desmond

My rating: 5 of 5 stars

Eviction is a cause, not just a condition, of poverty.

Yesterday, on July 24, the federal moratorium on evictions—protecting about 12 million renters—ended; and many state-level moratoriums will conclude soon as well. Enhanced unemployment benefits, which gave households an extra $600 per month, will terminate this month, too, meaning that families will lose income at just the moment they are vulnerable to eviction. Meanwhile, as the virus rages on, so does massive unemployment. It seems likely, then, that the United States is on the cusp of a huge wave of evictions. Under these circumstances, I thought it was a good time to read this book.

This is an urban ethnography written about the lives of the desperately poor as they struggle to find stable housing. Matthew Desmond lived for months in a trailer park and then in the inner city, following people around, taking notes and photographs, recording conversations, conducting interviews, and carrying out large surveys. In many ethnographies—especially since the postmodern turn—the author has striven to include herself in the narrative, emphasizing the subjectivity of the process. But Desmond has effaced himself from this book, and has instead written a kind of nonfiction novel of eight families undergoing eviction.

The first thing that strikes the reader is that Desmond is an excellent writer. The narration is gripping from the beginning—dramatic, vivid, and even occasionally poetic—meaning that my first reaction was emotional rather than intellectual. Wrenching pity for the people caught up in this cycle of poverty alternated, at times, with light disapproval at seemingly self-destructive behavior, which disappeared into outrage at the landlords profiting from this situation, and then incredulity that such things can be allowed to go on in a supposedly advanced nation. Often, I found it hard to take in, and had to put the book down to take a breath:

[Crystal] had been born prematurely on a spring day in 1990 shortly after her pregnant mother was stabbed eleven times in the back during a robbery—the attack had induced labor. Both mother and daughter survived. It was not the first time Crystal’s mother had been stabbed. For as far back as she could remember, Crystal’s father had beat her mother. He smoked crack and so did her mother and so did her mother’s mother.

But if this book were merely a collection of such stories, it would be little more than poverty voyeurism. This book has quite an important point to make, though, and that is how eviction is not only a consequence of poverty, but one of its major causes.

Any account of housing instability needs to begin with the fact that most people who qualify for housing aid to not get it—3 out of 4 receive no aide whatsoever. This leaves them at the mercy of the private housing market, which has seen steadily rising rents for years, at a time when wages are stagnant. Though it is normally recommended to pay no more than 30% of your wages in rent, the subjects of this book paid far, far more—in some cases, over 90%. This has serious consequences. Most obviously, if you are paying so much of your income in rent, it is impossible to save, and often even to pay basic expenses. What is more, this means that virtually any unforeseen expense—repairs, medical problems, or a funeral—can make a renter fall behind.

Once behind, it is extremely difficult for a renter to catch up. This effectively puts them at the mercy of the landlord. Even if the house is in disrepair and violates safety codes, missing rent means that the renter can be evicted on short notice. As Desmond describes, some landlords are willing to be lax—at least for a time—and cut deals with tenants. But for many who fall behind, the sheriff will soon be knocking on their door, along with a team of movers, giving the tenants a stark choice: to have their things left on the curb, or put into storage (where they need to pay extortionate fees in order to keep it from being trashed). Most evictees do not have housing lined up, and many end up in homeless shelters.

In a market where buyers are desperate and sellers are relatively scarce, there is little incentive for landlords to reduce prices, or even to make basic repairs of their properties. As Desmond explains, it is often more profitable for landlords to evict late-paying tenants and contract new ones than to make their properties livable. The tenants in these pages put up with rats, roaches, broken walls, smashed windows, clogged plumbing, sagging ceilings, to give just a short list. Desmond himself did not have hot water during his stay at the trailer park, despite paying rent on time, repeatedly asking the landlord, and even informing them that he was writing a book about life in a trailer park.

Eviction is not a rare occurrence—there are well over one million per year in the United States—and it is also not merely a private tragedy. Unsurprisingly, evictions concentrate in poor neighborhoods; and when residence in an area is unstable, it makes it an even less desirable place to life. As Jane Jacobs pointed out, neighborhoods are not primarily made safe by patrolling police, but by the constant presence of people on the street, people with a sense of ownership of the neighborhood. Ejecting residents obviously erodes this possibility—and not only in the area where people are evicted from, but also in the areas they unwillingly move to—which makes the city generally less safe.

Eviction is also not colorblind. Just as black men are disproportionately locked up, Desmond found that black women are disproportionately thrown out. And when you consider that having either a conviction or an eviction record can disqualify you from public housing, and can legally be used to screen potential renters by private landlords, you can see that this disadvantage is compounded. The white families in these pages certainly did not have an easy time finding and maintaining housing, but the black families were significantly worse off. Desmond followed one white couple who managed to find a place despite both of them having eviction and felony records, and one of them an outstanding warrant!

It is crucial to remember that housing instability is not merely the byproduct of individuals navigating private markets. The government is not only culpable for being a bystander to suffering citizens, but for propping up this very situation. Just as government force—in the guise of police officers and prisons—has been used to deal with the social fallout of disappearing jobs, so has government force—in the form of eviction courts, sheriffs, movers, public eviction records, and homelessness shelters—been used to deal with the disappearance of affordable housing. Without this government backing, the situation could not exist.

In many cases Desmond documented, government workers actually encouraged landlords to evict their tenants. Since many properties do not meet building codes, virtually any government attention—whether from the police, the fire department, an ambulance, or social services—can motivate a landlord to eject a tenant. What is more, if too many 911 calls come from an address, the property is labeled a ‘nuisance property,’ and landlords are forced by the police to ‘take action’—usually through an eviction. Even victims of domestic abuse are often evicted, one reason that many victims do not contact the police.

If we can agree that this situation is unconscionable, then of course we must do something to change it. But what? One solution is rent control: establish maximum prices that landlords can legally charge. This can have some quite negative unintended consequences, however. For one, if low-income housing ceases to be profitable, then there is no incentive to create more. This leads to shortage. But what about simply giving people more money, such as by raising the minimum wage or a basic income scheme? The problem with this strategy is that rising rents can easily offset income gains.

One fairly easy, short-term solution would be to provide defendants in civil courts with public defenders. Currently, in the United States, only defendants in criminal courts have such a right, though many other nations also provide legal counsel in civil cases. At the moment, most people do not even show up for their eviction hearings; the majority who show up do not have a lawyer, and most of them lose the case. Legal counsel can profoundly change the odds of evictees. And it is worth noting that, though hiring lawyers is expensive, cycling people through homelessness shelters is even more so—and this does not even take into account the other forms of economic disruption caused by eviction, such as job loss (quite common when people lose their home).

Another solution, popular in the past, has been to build public housing. This has several obvious problems, too. For one, as happened in NYC, vibrant and affordable neighborhoods were bulldozed to make way for enormous housing projects. What is more, the design of public housing projects was ill-conceived: enormous high-rises with parks in between. By isolating the poor into these buildings—with no shops or other services nearby, and few good communal spaces—the projects became dangerous and dysfunctional.

It is possible that smarter public housing could play an important role in the housing crisis. If apartments are scattered through the city, rather than concentrated, and integrated with shops, restaurants, and other businesses, then it is much less likely that they will become dangerous. An added benefit to cheap public housing is that they exert a downward pressure on the housing market, since private apartments must compete with them. However, the housing shortage is so acute that public housing alone is unlikely to be enough; it would require too much building.

This is why Matthew Desmond advocates housing vouchers. These vouchers basically pick up the tab for renters, covering anything above 30% of their income. However, there is an obvious problem with such a scheme: landlords are incentivized to overcharge for their properties, since the money is guaranteed. Indeed, according to Desmond, this often happens, which leads to a lot of wasted taxpayer money. Clearly, some mechanism is necessary to establish reasonable prices. But the voucher scheme does have the great advantage of scalability: they can be distributed quickly and widely.

Such a program would not be cheap. And in the United States, welfare programs tend to be politically divisive, since in our individualistic culture we prefer to hold the poor responsible for their own poverty. This mindset runs very deep. Desmond even records a preacher who, after giving a sermon about the importance of charity, refused to help a homeless woman so that she could learn her lesson. And certainly many of the people in this book did make bad, self-destructive choices. But as Desmond points out—and as psychological studies have shown—living in poverty actively erodes people’s ability to choose wisely and to think in the long term. Furthermore, many behaviors which seem irrational to middle-class onlookers are actually sensible adaptations to poverty.

The other important point to consider is that those of us lucky enough not to live in poverty are also benefiting from government policies. The federal government subsidizes mortgages—a policy that mainly benefits people with six-figure incomes. The capital gains exception means that homeowners who sell their house do not have to include much of that money in their income, and thus are not taxed. Indeed, the United States loses far more in tax revenue through these kinds of tax breaks than it spends in housing aid for the poor. This fits into a common pattern in American life: that those least in need of help are those most likely to receive it (and vice versa, of course).

As I hope you can see, this is a gripping and important book. The reader comes away with both an intellectual and a visceral understanding of housing insecurity. There are some things that I wish Desmond included—most notably, what economic trends drove this change—but, on balance, I do not think anyone could have written a better book on this topic. Now, as we face the prospect of mass evictions in the wake of the coronavirus pandemic, perhaps we will summon the political will to do something about the problem.

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Review: Tightrope

Review: Tightrope

Tightrope: Americans Reaching for Hope by Nicholas D. Kristof

My rating: 4 of 5 stars

Something is wrong with America’s tax structure when the working poor pay taxes so the federal government can make a payment to an e-commerce giant owned by the world’s richest man.

This book was timely when it was released, and it has only grown timelier since the pandemic struck. Normally, Americans are typified by high levels of patriotism and pride in our country—the unshakeable conviction that we are the greatest. (Indeed, as the authors note, while Americans students are not especially strong by international standards, they are most likely of all to think they have mastered the subject-matter.) But now, as the virus comes roaring back, with unemployment soaring and systemic racism undeniable, this illusion is difficult to maintain. Indeed, the pandemic may have been the perfect crisis to expose the underlying weaknesses in our society. With every country responding to the same challenge, we can compare successes and failures; and at the moment the US response is not inspiring.

The premise of this book is that the United States is falling behind its peer countries in many respects—high-school enrollment, healthcare, child mortality, incarceration—largely as a result of a governmental philosophy embraced in the 1970s. In a nutshell, this was the philosophy of extreme individualism: that every person is wholly responsible from themself. Put another way, this was a kind of radical, economic meritocracy—the belief that the distribution of wealth was a perfect reflection of people’s worth. Thus, the wealthy deserved their wealth and should not be taxed or regulated, while the poor deserved their poverty and should not be helped.

The effects of this mentality can be seen in all sorts of places. The IRS is much more likely to audit someone making less than $20,000 than someone making a thousand times that. White collar crimes are rarely prosecuted, and if so with a fine or a light sentence, while a shoplifter can face serious jail time. After irresponsibly marketing OxyContin—and contributing to a heroine epidemic that cost many lives—Purdue paid a fine that was a mere fraction of their profits, while there are many poor individuals serving life sentences for drug possession. Two zip codes in the same city, one rich and one poor, correspond with life expectancies that differ by twenty years. Income bracket is a stronger predictor of college success than SAT scores (and income partially predicts SAT scores, too). The list goes on.

One irony of American life is that the excuse given for not having welfare programs is always the same: How will we pay for it? When it comes to helping out poor Americans we suddenly become extremely penurious. Thus, we wring our hands about Section 8 housing assistance but not tax breaks for mortgages, and we knit our brow at public healthcare but rarely discuss the tax breaks for employer-based healthcare. We underinvest in social services, rehab facilities, education, and housing, but we do not bat an eye at the expense of cycling the poor through shelters, emergency rooms, and jails. When it comes to police, prisons, and the military, there is never any discussion of affordability.

What makes this book worthwhile is not for this information, however, as it can be found in many places, but for the stories from Nicholas Kristoff’s life. The son of Yamhill, a small town in Oregon, Kristoff has watched many of the kids he grew up with succumb to deaths of despair over the years. The most memorable case may be the Knapp family. After growing up with an abusive, alcoholic father, the five Knapp children all died before their sixtieth birthday. One died of liver failure, one of hepatitis from injecting drugs, one of a heroin overdose, one of an explosion in a drug lab, one of a fire while inebriated and unconscious. In fact, when the book was published one of the siblings, Keylan, was still alive, but died last March.

While in any individual case you can make an argument about bad choices, the mere fact that a quarter of the children on Kristoff’s school bus died points to a deeper problem. In the authors’ opinion, the fundamental shift is the disappearance of decent, blue-collar work—particularly for men. By now, the story is familiar enough. Whereas, in the past, a person without a high school diploma could work a unionized job in a factory and afford a house, that is simply not the case nowadays.

The disappearance of jobs has a kind of domino effect: people deal drugs to make money, take drugs to ward off boredom, get arrested, lose custody of children, have their driver’s license revoked, get evicted—in short, the cycle of poverty.

Now, as Kristoff and WuDunn repeatedly point out, it is far too easy to write this off as a series of irresponsible choices. And it is true, many poor people make bad decisions. Being impoverished does not inculcate saintliness or enlightenment. But to ascribe the failure to individuals is, I think, both illogical and unfair, though that is so often how we choose to see it in America. Indeed, this sort of individualistic thinking can be quite compelling, such as in the case of Tanitoluwa Adewumi, a Nigerian immigrant who won the New York State K-3 chess championship at the age of eight while living in a homeless shelter. His tale attracted attention and Tani is now living in a real home, thanks to the generosity of many strangers.

Stories like this are intensely inspiring, since they seem to validate our belief that real merit will always get rewarded in the end. But arguably the more socially important fact of Tani’s story is that all the children he was competing against were from well-off families, with private chess tutors. And this underscores the essential point: that chess ability—like so many things—is not normally the product of raw talent and individual drive alone, but also the result of resources and environment.

For me, the best way of thinking about the competing influences of environment and individual merit is that they conflict only at their extremes. Here is what I mean. The environment is akin to the menu in a restaurant, and the individual chooses from these pre-set options. Only rarely, in extreme cases, does the diner get to switch restaurants and look at a new menu.

Just so, when a child is born into a family of a certain economic class, there is a certain range of likely economic outcomes. A child of a middle-class family has a decent chance of becoming, say, a doctor, while the child of a wealthy family has a fair shot at becoming a CEO. In the United States, at present, most children will not radically change the economic class they were born into. It is even more unlikely that a child of a billionaire will end up homeless than that a homeless boy will win a chess championship. But a small number of people, through a combination of luck and skill, will succeed in radically raising themselves (or, in some cases, lowering themselves). In these cases, individual factors will seem to have trumped environmental influence.

To continue the metaphor, just as it is the responsibility of the individual to choose wisely from the menu, it is the responsibility of the society to make sure that nothing on the menu is poisonous. Too often, however, people are born into circumstances that make it extremely difficult to choose correctly. And in the case of the poor, one bad choice can be disastrous. This is the meaning of the book’s title: the least advantaged have the least room for error—one mistake, and society brands them a criminal, a junkie, or a welfare queen—while those from wealthy backgrounds can make any number of mistakes without facing catastrophic consequences. To use the book’s metaphor, then, it is the individual that has to walk, but it is society that choses whether they will walk on a tightrope or a promenade.

How can we change this situation? The book ends with a series of policy suggestions—universal health care, jobs programs, child credits, maternity leave—which I suspect will not be terribly surprising. But if we are going to adopt any of these, we must first throw off the perspective of seeing every person as wholly responsible for their fate, our belief that the market is a faultless reflection of personal merit—which is the perfect excuse for inaction. We say of poor kids like Tani that they “beat the odds,” and they do deserve accolades. But these stories should motivate us to change those very odds, so that they are not stacked so heavily against the poor.



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Review: When Work Disappears

Review: When Work Disappears

When Work Disappears: The World of the New Urban Poor by William Julius Wilson

My rating: 4 of 5 stars

It is just as indefensible to treat inner-city residents as superheroes who are able to overcome racist oppression as it is to view them as helpless victims.

This book is remarkable to read now, as it documents a phenomenon that has only grown more widespread in the years since its publication. William Julius Wilson set his sights on understanding the causes and effects of urban poverty, particularly as it afflicted the black community.

The process Wilson identifies will be familiar to most Americans now: As factories close and industry decamps, well-paying jobs for people without college degrees dry up. The disappearance of decent work causes a kind of domino effect. Those who can move out, do so, leaving only the most disadvantaged to stay. Little by little, the community starts to crumble. Families fall apart as people—particularly fathers—are unable to support their children. Drug use and drug dealing become widespread in a community with few legitimate employment opportunities.

Meanwhile, the government provides little support for the people trapped in this situation. The chronically underfunded schools did not provide a ladder out of poverty. The lack of public transportation means that people who do not own cars have little opportunity to find work elsewhere. Mothers are forced to choose between staying on welfare, facing stigma and losing a sense of autonomy, or taking minimum-wage work and losing health insurance—for themselves and their children. Instead of providing drug counseling and addiction support, the primary response is to incarcerate drug offenders in large numbers, which only further debilitates the community and makes family life even more difficult.

By now, this basic process has played out in many parts of America. But before it affected rural whites, it hit urban African Americans. And here is where the country’s racial attitude became a major factor. For the public response to this suffering was not sympathetic; rather, people worried about “thugs” and “super predators,” making American streets unsafe—people so dangerous that they could not be helped, only locked away. The public pointed the finger at “welfare queens” and accused poor mothers of milking the system to live a life of ease. In other words, as is so often the case in the United States, we blamed the poor for living in poverty.

As Wilson, a distinguished sociologist, is at pains to show, the key factor in this process is the disappearance of jobs. When there is no opportunity to make a decent living, a community suffers. Nowadays such a thesis is hardly controversial. Indeed, we have seen it play out in many parts of the country. But at the time, it was a vital point to make, since the public discourse insistently framed the problem as a kind of moral failing on the part of the poor. Either that, or some sort of negative cultural attribute was blamed. And, of course, all of this was racially coded. But as more and more communities succumb to this process, the explanations relying on personal responsibility or cultural traits seems less and less plausible. This is a structural problem.

This is not to say that Wilson is against using culture as an explanation. To the contrary, in the first part of this book, where he relies on surveys and interviews performed by his team, he notes how living in such an environment can cause adaptations that are maladaptive elsewhere. This can become a self-reinforcing cycle, since negative stereotypes are sometimes borne out, and used to further stigmatize the community. One of the most fascinating sections are a series of interviews with employers in the area, many of whom give excuses and justifications for not wanting to hire black employees, particularly males. But even more striking is that most of Wilson’s respondents endorsed the basic American value system of individualism and personal responsibility. Those on welfare did not relish a life of ease, but longed for work that could support themselves and their children.

The second part of this book looks at larger trends and solutions. Wilson notes that the sort of urban poverty widespread in American cities is virtually nonexistent in Europe, and credits the strong safety net there. His own proposals for improving the lives of the urban poor are familiar by now—universal healthcare, improved infrastructure, more funding for education—but they do not seem much closer to reality now than in 1996, when this book was published. We can start moving in direction at any time. All that is lacking is the political will.



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Review: Are Prisons Obsolete?

Review: Are Prisons Obsolete?

Are Prisons Obsolete? by Angela Y. Davis

My rating: 4 of 5 stars

Despite the important gains of antiracist social movements over the last half century, racism hides from view within institutional structures, and its most reliable refuge is the prison system.

If you know anything about Angela Davis—anti-racist activist, Marxist-feminist scholar—you know that her answer to the question posed in the title is “Yes.” This is a short primer on the prison abolition movement, written at a time (2003) when criminal justice reform was not an especially popular topic in mainstream politics. Though mass incarceration was already well underway by the time Angela Davis published this book, it would take the public over a decade to come to grips with this disturbing transformation of the American criminal justice system.

Angela Davis spent some time in prison herself. Indeed, she was the third woman to make it onto the FBI’s 10 most-wanted list, when guns registered under her name were used in a deadly courtroom attack. (After a nationwide campaign, a court ruled that mere possession of the arms used in a crime was not enough evidence to entail guilt, and she was released.) Davis already considered herself an anti-prison activist in the late 1960s, when the national prison population was about 200,000. By the time she published this book, that number had gone up by 1,000%.

Davis provides some valuable background into the rise of prisons. Though nowadays the prison—like public schools and office jobs—seems like an inevitable part of life, it is worth remembering that, like so much we take for granted, it arose under particular historical circumstances in the not-too-distant past. In the case of prisons, it arose in the context of the Enlightenment, specifically when ideas of the social contract and individual rights became more widespread. After all, it does not make much sense to punish somebody by depriving them of their rights if they did not have any to begin with. (This is also why prison was not used as a punishment for slaves or, for many years, women.)

Another historical root of the prison is Christianity. The name ‘penitentiary’ indicates what early prison advocates hoped it would accomplish: by giving criminals time to reflect upon their evil ways, they would repent, reform themselves, and be able to return to society as a productive member. It does not take much imagination to see the continuity between the monastery and the jail, where the inhabitants occupy cells, follow strict routines, and endure much time alone.

Thus, prison originally arose as a far more humane alternative to the sorts of corporal and capital punishments common in America and Europe—lashings, removal of limbs, burning, hanging, and so on. And of course, however brutal prisons may be, I think we must acknowledge that they are certainly more humane than what came before. Nevertheless, we must also acknowledge that much of the rhetoric of reform and repentance has fallen away. Considering the brutal conditions inside prisons, and the high rates of recidivism upon release, talk of personal transformation nowadays would sound insincere at best.

Davis then goes on to offer a series of other critiques of the prison system. The anti-racist perspective—that the criminal justice system disproportionately targets people of color—will be familiar to most Americans nowadays. Davis also has much to say on the subject of female prisons, the most disturbing of which is the widespread sexual assault that occurs in these institutions. Last, Davis talks about the perverse economic incentives of prison: cheap labor, captive markets, and a way of dealing with otherwise ‘unproductive’ members of society. In short, the criminal justice system, as it stands today, exacerbates and reinforces existing inequalities.

The last chapter is on potential alternatives, and this is where I thought the book was most lacking. Davis is fairly vague on the possible alternatives to prison. She does, however, make the important point that there is not one, single replacement, but a variety of options for different sorts of problems. Some of these are obvious: expanding mental health resources, legalizing and regulating sex work, drug rehabilitation programs, and other usual suspects. But the great stumbling block to prison abolition is not the many non-violent acts that are currently criminal, but violence. What shall we do with rapists, armed robbers, and murderers (which, it is important to note, commit a minority of crimes)?

Davis does not directly answer this question, but instead ends with the story of Amy Biehl, a young white American woman who was killed in South Africa during the unrest of Apartheid. The four men convicted of her murder were pardoned as part of the Truth and Reconciliation Commission; two of them eventually met Biehl’s parents, and were hired to work in the NGO established in Amy’s name.

Davis offers this story as an example of “restorative,” rather than “retributive,” justice. However, I think that reliance on such stories does sidestep the essential issue at hand, and that is the issue of deterrence.

In my view, the strongest justification for prison is as a deterrent to socially destructive behaviors, and its continued existence should depend on how effective it is as a deterrent. Admittedly, this is not how most of us think about prison. The natural human tendency—so strong as to be almost irresistible—is to think of punishments as vengeance. The idea that somebody could commit a horrid act and get away with it can be deeply disturbing. It is as if the whole universe has been set wrong, and harsh punishment is required to set it right.

This compulsion is so strong that even many people arguing for police defunding or decarceration ask for vengeance. After all, one common demand is that offending police officers be themselves arrested and imprisoned. It is remarkably upsetting to consider that, say, police officers could bust into Breonna Taylor’s house and kill her in her sleep, and not even lose their jobs. And yet letting go of this sense of vengeance is exactly what activists such as Davis are asking us to do.

In cooler moments, we may consider that no amount of punitive action for those officers will bring Taylor back. And, of course, the same is true of most crimes: the punishment may seem to correct the cosmic scales, but it rarely undoes the crime (unless, say, a thief returns stolen goods). The truth, however, is that punishment is not really about the criminal; it is a negative consequence imposed to deter further criminal acts by others. In other words, the punishment is really for all would-be criminals. Thus, punishment is justified if, say, imprisoning the police responsible for Taylor’s death would make other atrocities less likely.

(Of course, in some cases there is also a public safety element to imprisonment. If a person is potential danger to their community, then it is justifiable to remove them. Thankfully, the number of serially violent criminals is fairly low.)

To revisit the case of Amy Biehl, if every murderer was pardoned and then offered a job, I think it is fair to say that this would create a perverse incentive structure. This is the challenge of radical criminal justice reform. And this leads us many empirical questions: How effective are prisons at crime deterrence? Does the crime rate depend on the incarceration rate? Does the crime rate depend on the severity of the sentencing? Is there another sort of deterrence that would be more humane? While considering all these points, the guiding ethical principle must be to inflict the least suffering consistent with a safe community.

Judging for myself, it seems implausible that the incarceration rate and the stringency of sentencing have a decisive effect on the crime rate. The United States has the highest incarceration rate in the world, and yet the country is hardly a paradise of lawful behavior. On the contrary, by many metrics the US experiences far more violent crime than comparable nations. Clearly other factors—widespread poverty, a poor social safety net, the availability of guns—are playing a big role. Furthermore, the continued use of the death penalty in the US, and the use of long sentences and brutal ‘supermax’ prisons, does not seem to have had an appreciable effect on the crime rate.

There is also the question of how our prison system is even contributing to the crime rate. After all, if we incarcerate huge numbers of people for nonviolent crimes, subject them to dehumanizing conditions, and then release them saddled with criminal records—effectively barring them from many jobs and forms of housing—then it stands to reason that criminal behavior will often result. And it does: recidivism rates are persistently high. Ideally, any justice system would not only deter crimes, but would help to rehabilitate those who have committed crimes. After all, the whole community gains when a former inmate becomes a productive citizen. Our current system, by contrast, traps former inmates into second-class citizenship.

If we want to examine a justice system built along different lines, we may take a look at Norway. There, prison sentences are much shorter (the average is around 8 months), and prisons themselves can look very different from what we imagine. In many prisons there are no security cameras and no barred windows, and the security guards are unarmed. (Also keep in mind that Norway’s incarceration rate is nearly ten times lower than America’s!) The consequence of this light treatment has not been an explosion of crime. On the contrary, Norway is one of the safest countries in the world. The recidivism rate is also low, meaning that most former inmates find work and lead productive lives.

Now, one may argue that the Norwegian way could not work in the United States, since it is a country with much less poverty and a stronger social safety net. But this is precisely the point of anti-prison activism: By discouraging us from seeing the prison as a dumping ground for undesirable members of society—a kind of human trash bin—it helps to focus our attention on improving our communities in other, less punitive, ways. A thriving society will simply not need as many prisons as one that is struggling. Imagining a decarcerated world thus requires that we imagine a world where government support comes in the form of jobs programs, affordable housing, drug addiction support, mental health resources, functioning schools—and not simply in the form of a baton and handcuffs.



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Review: The New Jim Crow

Review: The New Jim Crow

The New Jim Crow: Mass Incarceration in the Age of Colorblindness by Michelle Alexander

My rating: 5 of 5 stars

A war has been declared against poor communities of color, and police are expected to wage it.

When I was in high school, I was taught a story about American history. It went basically like this: The Founding Fathers created the Bill of Rights, which enshrined personal liberty into law. But being flawed men, they did not think of extending these rights to black slaves. This error was corrected over time: we fought the civil war, struck down Jim Crow, and marched for civil rights—trying to create a society where a person’s worth depended on the content of her character, not the color of her skin. This long and difficult process culminated in the election of Barack Obama, whose presidency seemed to be the strongest proof that the ark of history did, indeed, bend towards justice. I watched his inauguration in the auditorium of my high school, as living proof of the validity of this narrative.

When I was in high school, I also read Aleksandr Solzhenitsyn’s description of life in a gulag, and was taught about the horrors of repressive countries where citizens lack basic rights. The Bill of Rights would prevent any such thing from happening on American soil.

But there were many things I was not taught. For example, I was not taught that the United States currently has more people behind bars than Stalin ever had. Nor was it mentioned that, with less than 5% of the world’s population, we have over 20% of the world’s prisoners. None of my teachers likely knew that the United States not only has more prisoners per capita than China—an authoritarian country—but more prisoners in total—more prisoners than a country with over four times our population. In my class on American government, we did not learn that the US incarceration rate is six to seven times that of most European countries. In high school, we learned a little about Nelson Mandela, but we did not learn that the United States imprisons a greater percentage of its black population than South Africa during Apartheid.

When I was in high school, a police officer came in to give us a talk about illegal drugs. He was part of the D.A.R.E. program (Drug Abuse Resistance Education), which has been repeatedly proven ineffective. As if to underline the point, a substantial percentage of my white classmates went on to experiment with drugs, and I cannot recall a single instance of serious legal repercussions faced by any of them. We were not routinely stopped and searched, our homes were not broken into, we did not know anyone who was carted off to jail. My university was the same story: substantial levels of drug use with little enforcement and few consequences. For a white American growing up in these circumstances, the only way to learn about America’s enormous prison population—fueled by a War on Drugs that never seemed to manifest in white neighborhoods—would be to read a book like this one.

In this book, Michelle Alexander describes a criminal justice system totally incompatible with what we think of as the land of the free. She describes a system in which police focus attention on poor, black neighborhoods, and are given legal cover to racially profile. She describes police conducting searches without probable cause and confiscating money and items for mere suspicions. In this system, private residences can be broken into without warning by militarized SWAT teams, often on flimsy or false evidence. Alberta Spruill, a 57 year-old woman in Harlem, died of a heart attack when a flash bang grenade was thrown into her apartment. In 2015, a flash bang grenade was thrown into a baby’s crib in Georgia, burning the infant. In 1992 Donald Scott, a reclusive millionaire, was killed in his own home, apparently because police hoped to confiscate his assets. In none of these cases were drugs found. The case of Breonna Taylor is only the most recent example of this.

Simply put, the Bill of Rights has not prevented a situation from arising that would not be out of place in a book by Aleksandr Solzhenitsyn.

The Fourth Amendment is intended to protect us from “unreasonable searches and seizures,” and requires that warrants have “probable cause” and to specify the “things to be seized.” But when someone can be stopped on the street and patted down based on mere suspicion, or when someone can be stopped in their car and told to lie down in the street while police rummage through their car, confiscating any loose cash, then this constitutional language is dead letter.

The Eighth Amendment forbids “excessive bail” and “excessive fines,” and prohibits “cruel and unusual punishment.” Meanwhile, since the vast majority of those arrested are living in or near poverty, people routinely sit in jails for months, without being convicted of a crime, simply because they cannot make bail. When prisoners are released, they are provided with a pittance at the gate and told to go find work. At a time of extreme financial vulnerability, many are required to pay bills for their own incarceration, their own mandatory drug programs, and their own probation requirements.

As far as cruel and unusual punishment goes, the United States is notorious for being one of the few developed countries that maintains the death penalty. But even putting that to the side, the United States imposes prison sentences for drug offenses that are unusual in the world context, and undeniably cruel. In the Supreme Court case Harmelin v. Michigan, the court upheld a conviction of a life sentence without parole for possession of 672 grams of cocaine. Also unusual and cruel are the penalties imposed on criminals, even after serving their prison sentences. They are not eligible for food stamps or public housing, and often are forever deprived of the right to vote or serve on a jury. And this is putting aside the legal discrimination against former convicts when it comes to housing and employment. In short, any amount of prison time can turn one into a second-class citizen.

The Sixth Amendment guarantees citizens the right to a “speedy” trial, though I have already mentioned that many people are held in jail, unable to pay bail, for weeks, months, or even years. Though the amendment guarantees a “public” trial, many are thrown into prison without having had a trial at all. This is because prosecutors can tack on charge after charge, with little restraint, meaning a guilty verdict could result in decades behind bars. Faced with such a prospect, even some innocent people take plea deals in order to shorten their sentences.

The amendment guarantees an “impartial jury,” but jury selection—and the exclusion of black jurors—has been common practice for decades. Last, the amendment grants the accused the right to “the Assistance of Counsel,” but, as noted, many are imprisoned without ever having spoken to a lawyer. Even those who do ask for public counsel are wont to be sorely disappointed. Unlike prosecutors—remarkably powerful in the current system—public defenders are underpaid and overworked. The New York Times reports on one lawyer in Louisiana who had 194 cases at the same time.

The Thirteenth Amendment outlaws slavery but makes an exception for convicted criminals. This exception has blossomed into an enormous industry of cheap prison labor. Prisoners work, sometimes voluntarily and sometimes involuntarily, for far less than the minimum wage. The government also provides tax incentives for businesses to use prison, and it is a popular choice. Prisoners making a few cents per hour have labored for Starbucks, Walmart, and Victoria’s Secret, to name just three of the dozens of companies. In seven states, prisoners work the State Capitol Buildings and Governor’s Mansions, cleaning the spaces for the legislators who write the crime bills. In New York City, prisoners were used to dig the mass graves on Hart Island, where the city’s indigent are buried.

Why did this happen? Up until around the 1970s, the United States had an incarceration rate that was broadly similar to other developed countries. The change was political, and started with Nixon, who pioneered the “law and order” rhetoric that was to replace explicit mentions of race. Ronald Reagan put this rhetoric into action by initiating the War on Drugs, ushering in legislation that beefed up enforcement and instituted harsher sentences. But the Democrats certainly do not have clean hands, either. Michelle Alexander singles out the 1994 Crime Bill as the worst piece of legislation in the War on Crime, which was signed into law by Bill Clinton and written by none other than Joe Biden (even Bernie Sanders voted for it). The result of this legislation was a frightening increase in the incarceration rate. And it is difficult to see the timing of this vast expansion—coming right on the heels of the landmark civil rights legislation of the 1960s—as coincidental.

If our criminal justice system is really so egregious, why did it take us so long to realize it? One answer is obvious: the War on Drugs (which Alexander holds as mostly responsible for mass incarceration) is primarily directed against poor people of color, who have little political power. If SWAT teams were regularly raiding college dorms and frat houses—which they would be doing if we were really serious about the evils of drug use—then this level of police overreach and incarceration would never be tolerated.

But the other reason that this system was tolerated for so long is that, unlike earlier forms of segregation, the new War on Crime is formally colorblind. Instead of explicit mentions of race, mass incarceration is supported by the logic of meritocracy. Meritocracy is a seductive idea, not only because it allows us to say that the downtrodden “deserve it”—they are criminals after all—but because it always throws up exceptional counter-examples to the rule. This allows us to turn away from the thousands of black and brown people behind bars and turn toward remarkable people like Barack Obama and, indeed, Michelle Alexander herself. Yet just as the remarkable rags-to-riches stories of some entrepreneurs does not show that the economy is fair, the extraordinary success of Oprah Winfrey does not show that racism is dead.

Michelle Alexander has written an important and, in retrospect, a remarkably prescient book. Writing during the euphoria of the early Obama years, she alerted the public to an enormous and, at the time, largely invisible tragedy. Mass incarceration is simply incompatible with a free society; it has torn apart black and brown communities, and it harms many white Americans (mostly poor) as well. Now, as the current pandemic is spreading through our overcrowded prisons, decarceration is especially vital. And, of course, people who have served their time should not be forced to endure second-class citizenship once they are released. The spate of disturbing police killings is just the most visible symptom of a system that arrests far too many people, and can be reduced simply by decreasing the number of arrests. Decades after the War on Drugs was declared, we have millions behind bars, on probation, or on parole; and as the recent heroine epidemic has demonstrated, the drugs have not gone anywhere.



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Review: The End of Policing

Review: The End of Policing

The End of Policing by Alex S. Vitale

My rating: 5 of 5 stars

A kinder, gentler, and more diverse war on the poor is still a war on the poor.

Like many white Americans, I was complacent about the problem of police violence for many years. I figured that there would always be tragic accidents, always a few bad officers, and that we must make allowances for people doing what is, no doubt, a very difficult job. My attitude started to change when I left the country, and realized that the levels of police violence and incarceration in America are exceptionally high. Still, I figured that the United States was always going to be a uniquely violent country, and that an over-aggressive police force was simply one aspect of this.

The killing of George Floyd and the recent protests have been a turning point for me, as they have been for many people in the country. The death of yet another unarmed black man in police custody—yet another citizen choked to death by government workers, as he repeated that he could not breathe—was gruesome enough. But the seemingly infinite videos of flagrant police abuse that surfaced during the protests pushed me from complacent, to skeptical, to indignant. Peaceful protesters and journalists were shoved, beaten, sprayed, gassed, shot with “less-lethal” ammunition, and arrested.

Few people, I hope, can see the video of Martin Gugino—a 75-year old man pushed to the ground by Buffalo police, bleeding from his head as police march past him indifferently—without a sense of outrage. The only way to rationalize such an obviously unnecessary use of force is to embrace ridiculous conspiracy theories, as the president recently has. Meanwhile, the police response to this incident is entirely typical: after the two offending officers were suspended, the rest of the 57 members of the emergency response team resigned in protest.

It is in this context that the rallying cry “Defund the Police” has begun to circulate. In other circumstances, such a statement would strike me as absurdly Utopian; but once I learned that its proponents were not proposing to eliminate policing entirely, but to reduce it and divert resources to other social services, it began to sound all the more reasonable. (I do I fear the slogan is poorly chosen, however, since it gives many people the mistaken idea that nobody will be around to solve murders or investigate thefts. If a slogan requires a lengthy clarification, then it is not an effective slogan; and it risks alienating people by making the idea seem more radical than it really is. Personally, I think something like “Reimagine Policing” may capture the idea much better, even if it sounds a bit twee.)

This book is an excellent resource for those who wish to reimagine the role of police in America. (It is now available for free download on Verso.) Alex Vitale, a professor at Brooklyn College, examines the many ways that police are asked to do a job they are ill-suited for, and proposals to replace them. His first essential point is that the problem goes far beyond the conventional discourse about police reform. Body cameras, implicit bias training, and diversifying police forces do not reliably reduce police violence. Certainly, there are reforms that can and should be made—such as stopping the 1033 program which transfers military equipment to police departments, or changing the training regimes that instill a “warrior” mentality into police officers—but even the best of these reforms miss the point.

As with the issues of healthcare and higher education financing, there is a tendency in America to frame the issue of policing in terms of technocratic fixes, as if value-neutral reforms could be instituted that would make the police a perfect institution. But this ignores the greater moral and philosophical question: What do we have police for?

The police are distinguished from other public servants in being armed and authorized to use violence. Their presence is warranted if somebody poses a violent threat—as in the case of an assault, a sexual predator, or someone on a shooting spree—and even then, it is their responsibility to use a minimum of force. The problem, however, is that the vast bulk of police work does not consist in dealing with violent threats; it consists of traffic stops, border patrol, noise complaints, domestic abuse calls, drug busts, school fights, or prostitution. What connects so many of these situations is not the threat of violence, but poverty—which in America is inevitably racialized.

The life of George Floyd exemplifies the problem with policing. Born into difficult circumstances, he had many run-ins with the police during his life, none of which helped him. He served ten months in a state prison for a $10 drug deal, and then five more years after a plea deal for armed robbery. In the incident that led to his death, he was allegedly trying to pay for cigarettes with a fake $20 bill. What ties these together is that they are crimes of poverty—and that the only government intervention available came in the form of a punitive criminal justice system.

Nobody is in favor of robbery or counterfeit money; but I think that such crimes are inevitable if people are forced to endure a low standard of living with few legitimate economic opportunities to improve their situations. The question we need to ask, then, is whether locking people away, or saddling them with police records—or, in the case of Floyd, outright murder—is the right way to improve our country. Put another way, the essential question is whether a criminal justice mentality—which treats crime as an individual choice, subject to moral sanctions—is appropriate for the many social problems besetting our communities.

The case of police in schools is illustrative of how this mentality is applied to social problems. In the United States, we have apparently come to accept the constant possibility of school shootings; and partly as a response to this, armed police officers have been stationed in tens of thousands of schools across the country. In fact, two-thirds of American high school students attend a school with at least one police officer present; many schools have officers but lack counselors or nurses.

In too many cases, the police are not present merely to prevent violence, but actively take part in disciplining students. In this way, schools become a microcosm of American society: Inequality of opportunity (since schools are funded by property taxes) and an increasingly narrow metric of success (in this case, standardized tests) lead to undesirable behavior, which is dealt with through increasingly punitive measures. Who benefits from this system?

Another clear illustration of the criminal-justice approach is the war on prostitution and drugs. One does not need to be in favor of either of these activities to see that criminalizing them has not worked. Anyone who wants to buy drugs or sex can do so, just as any college student under 21 (the legal drinking age in America) can find a way to buy alcohol. Meanwhile, this approach has resulted in millions of people—most of whom are non-violent—being thrown into prison. Not only does our approach fail to address the problem, then, but we multiply the social harm into the bargain.

Any visitor to Amsterdam can see that the legalization of prostitution and marijuana has not caused the social order to descend into chaos. On the contrary, the condition of sex workers in places where sex work is legal and regulated, such as New Zealand, is far better than in the United States (even though we justify our approach as preventing human rights abuses). The case of Portugal’s drug policy is even stronger evidence of the failure of our approach. After decriminalizing drug use in 2001, and treating it as a public health issue, Portugal now has the lowest drug mortality rate in Europe, fifty times lower than the United States—and this is on top of the huge reduction in drug-related arrests.

As a final point, we also must remember that America’s War on Drugs has not only had devastating consequences domestically, but has contributed to drug-related violence around the world. Indeed, the destabilizing effects of these policies have, in part, driven unauthorized immigration, a problem that we have chosen to address using—of course—more policing.

Prostitution, drug use, and policing in schools are just three of the examples that Vitale examines. In these as in so many other cases—such as homelessness and mental illness—we must ask: Should a police officer be handling this problem? That is to say, should we have armed personnel, authorized to use violent force, treating these problems as matters of individual choice that deserve punishment? In so many cases, I believe the answer is no. I am sure that many police officers try to do these jobs conscientiously and diligently, but a gun, a baton, and handcuffs are simply not the proper tools, and imprisonment is not the proper approach.

If we are to learn from the current pandemic, I think it should be that a public health approach to social problems is both more rational and more humane. We would, of course, never throw somebody in jail for testing positive for COVID-19, even if having the disease can put other people’s lives at risk. When it comes to disease, we do not think of it as a problem of individual choice, personal responsibility, and deserved punishment. Just so, I think that we should see drug use, prostitution, school misbehavior, petty theft, and unauthorized immigration as processes that are driven by factors that go far beyond individual choice, and which merit coordinated social support rather than criminal prosecution. Imagine if the thousands of dollars that were spent sending George Floyd to jail for a $10 drug deal were instead spent on improving his situation.

As one final point, I think there is a significant factor of police violence that is not addressed in this book: gun ownership. If we choose to live in a society where, at any moment, somebody can open fire into a crowd, then I think this puts serious constraints on the degree to which we can disarm or reduce police forces. So many stories of police killings involve somebody being killed for reaching into their pocket, holding a shiny object, or even for a car backfiring. In places where gun ownership is rare, this almost never happens. This is another issue that could benefit from a public health approach. But even if we eliminated all civilian guns in the country, we would still be left with policing practices that exacerbate, rather than alleviate, the immense social divides in America. With a little bit of imagination, I think we can find a better way.

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Review: Paying the Price

Review: Paying the Price

Paying the Price: College Costs, Financial Aid, and the Betrayal of the American Dream by Sara Goldrick-Rab

My rating: 4 of 5 stars

Soaring rhetoric about the value of hard work obscures the fact that family money has long been one of the best predictors of college success.

Among the so-called developed nations, the United States is unique in many respects, not least in higher education. Whereas going to university is either free or quite cheap in most of Europe, in America college can often be a serious financial burden. Admittedly, America also has many of the best universities in the world, so perhaps the extra cost is justified for the small fraction of students who attend these elite institutions. But costs are also high in public universities; indeed, even our community colleges are expensive by European standards.

This book is not primarily concerned with why the cost is so high. Instead, sociologist Sara Goldrick-Rab focuses her attention on how students go about paying for it. To do this, she conducted Wisconsin Scholars Longitudinal Study, in which she and her team followed 6,000 low-income students from 2008 onwards. The study involved many surveys and much statistical work, but also in-depth interviews of selected students. Her aim was to find out how the various forms of financial aid—grants, loans, work-study—affect graduation rates. With such a wealth of evidence, Goldrick-Rab can speak with quite a bit of authority about the challenges faced by low-income students.

The picture that emerges is of a complicated and often ineffective financial aid bureaucracy, which allows too many low-income students to fall through the gaps. Much of this is due to financial aid being outpaced by the rising cost of college. Consider the Pell Grant, the primary economic subsidy provided by the federal government to low-income students. When it was passed into law, in 1965, it covered 80% of an undergraduate degree. Nowadays, however, a Pell Grant covers less than 1/3 of that price. Meanwhile, contributions by state governments have steadily dropped off, leaving students with ever-higher tuition costs.

Federal loans have arisen as a way to bridge the gap between the rising price of attending college and the decreasing purchasing power of grants. Though better than private student loans, even the federal loans cannot be discharged through bankruptcy. To qualify, the student must fill out a FAFSA application every year, which determines what types of loans the student qualifies for, how big a loan, and the “expected family contribution”—the amount the government expect the student’s family to be able to pay.

In Goldrick-Rab’s telling, there are many ways in which this system fails. One obvious difficulty is the expected family income. Most obviously, even if a student’s family has the available money, they may not be willing to pay; and of course the government cannot force families to make the expected contribution. What is more, the formulas used by the government to determine how much a student’s family can pay are not always realistic. They do not account for the reality that, rather than being financially supported by their families, many students financially contribute to their families while they are studying.

Basing financial aid on last year’s tax returns can also subject students to sudden shifts in their aid. If a parent gets a new job, for example, a student may suddenly find that they no longer qualify for grants or subsidized loans, and that their expected family contribution has drastically risen. To take an example from my own life, FAFSA also factors in whether a student has any siblings in college; and the graduation of a sibling can also cause a dramatic reduction in financial support.

The call for increased financial aid has sometimes been met with the response that students ought to work more in university. But this advice is misguided for a multitude of reasons. For one, students are already working a great deal. But the days when students could pay their way through college by stacking boxes during the summers are long gone. The students in this book did work, often for long hours, making the minimum wage of $7.25 an hour. At that salary, it is difficult to even make a significant dent in the cost of attending college (the average debt of a graduating student is about $37,000).

Working while in school presents other difficulties, too. Scheduling is an obvious example. Most college classes are during normal work hours, which forces many of the students in the study to work night shifts and weekends. Time spent working is time spent not studying, and often time spent not sleeping, which hinders academic progress. The requirements on loans and grants only compound the problem of balancing work and study, since many forms of financial aid require a minimum GPA and full-time enrollment. This can result in a double-bind, since if a student drops one class to focus on the others, she may switch from full-time to part-time; and if she keeps all her classes, her GPA may suffer.

The Federal Work-Study program provides financial assistance to students working on campus, and according to Goldrick-Rab is a beloved program. However, the rules for applying to the program are somewhat confusing. Many students assume that acceptance into the program means that they will be given a job. But this only means that they can start applying to jobs that are covered under the program. Aside from this, work-study depends on the amount of funds and work available at a given moment, and so has not proved to be a reliable way for most students to pay for college.

College is meant to be a stepping-stone to a greater life. But for many of the people in this book, their time at university became a weight around their neck. As low-income students struggle to balance family, jobs, and study— negotiating a complex financial aid system that relies heavily on loans—they often found themselves unable to keep up with their classes and unable to pay for even basic living expenses. Indeed, since there is no university equivalent to subsidized school lunch programs, many of the students were literally too hungry to focus.

Worst of all, if a student decides that they cannot complete their studies, then they do not only lose the opportunity of a degree: they are saddled with debt, without the job opportunities to pay it off. As a result, the decision to study in university carries considerable financial risk in the United States, especially for low-income students. If a student succeeds in graduating, they will have significantly better job opportunities than their peers; but if they fail, they will be significantly worse off than their peers who did not even try.

To me it seems clear that the American system for funding higher education is not working. Student debt is the fastest growing type of debt, and the second highest private debt category in the country, after house mortgages. This was not true twenty years ago. Collectively, $1.5 trillion is owed by 45 million students—about 7.5% of America’s GDP. Roughly one in ten students defaults on their loan payments within three years, and, unsurprisingly, default rates are three times higher among students who did not complete their degrees. When you consider that education has one of the highest returns on investment of any government expenditure, our failure to support it is especially baffling.

Why has higher education become so outrageously expensive? I am still unclear on this, and it is not the main focus of this book. But we are not powerless to change it. In so many other countries, the decision to study in university is not nearly so fraught with financial peril. Indeed, the phrase “Student Debt,” like “Medical Debt,” is virtually unknown here in Spain. Of course, this is not an isolated problem. Even if we fixed financial aid, students from poorer neighborhoods would still be at intense disadvantages, not least because American public schools are funded by property taxes (and so reflect a neighborhood’s wealth). But making higher education affordable and financially risk-free would go a long way in bolstering the economy and widening opportunity.



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Review: A War on Normal People

Review: A War on Normal People

The War on Normal People: The Truth About America’s Disappearing Jobs and Why Universal Basic Income Is Our Future by Andrew Yang

My rating: 4 of 5 stars

I admit that I hardly paid attention to Andrew Yang during the primaries. I knew that he was for Universal Basic Income (UBI), but little else; and it did not seem to matter, given his pole numbers. But during the economic fallout caused by the coronavirus lockdowns, UBI is starting to look all the more reasonable (especially after I received a direct deposit from the federal government!). So I decided that it was time to take a second look.

This book could easily have been mushy pap—a boilerplate campaign book only published for publicity. Yang could have gone on and on about his good work in Venture for America, all the inspiring young people he met, all the businesses he helped grow, and all of the wonderful places he visited across America. He could have talked about his own story from first generation American to entrepreneur and politician. Some of that is in here, of course; but not nearly as much as one might expect. Instead, Yang has written a serious work on the problems facing America.

Yang covers a remarkable amount of ground in this short book—video game addiction, the importance of malls in communities, the rising cost of universities—but his primary message is fairly simple: Automation is going to eliminate many millions of jobs, and we need to transform the economy accordingly. As someone with many friends in Silicon Valley, Yang speaks convincing on the subject of automation. An obvious example is self-driving cars. Once the technology becomes reliable enough, virtually all driving jobs are threatened. Considering the numbers of people whose work involves transporting either passengers or cargo, this alone can be dramatic. What would happen to all the taxi, bus, and truck drivers of the world?

But according to Yang, self-driving cars would only be the beginning. While automation may call to mind robotic arms laboring in factories, white collar jobs are also liable to being automated. Chances are, if you work in an office, at least some of your work is rote and repetitive; and that means a computer could potentially do it, and do it far better than you can. While most of us are far removed from the world of artificial intelligence, those in the community routinely seem alarmed by the prospect of increasingly powerful A.I. Every year a new program accomplishes another “impossible” task, such as mastering the Chinese game Go. Yang even mentions computer-written symphonies and computer-generated artwork! (I was happy to note, however, that Yang did not seem to think teachers could be automated away.)

This will result in still more intense economic stratification. Many parts of America have already hollowed out as a result of recent economic trends. Most of the country’s factories have closed, destroying some of the most well-compensated blue-collar jobs. The rise of online retail—only accelerated by the coronavirus crisis—threatens to permanently destroy much more employment. Of course, when some jobs are eliminated, other types of jobs come into being. But we cannot rely on this process to correct the imbalance—first, because automation destroys more jobs than it creates (think of the one trouble-shooter for every five self-checkout registers), and second, because the new jobs usually require different skills, and exist in different parts of the country.

There are many proposed solutions in this book, but Yang’s signature idea is UBI. This would be a monthly payment of $1,000, or $12,000 a year, to every citizen over the age of 18; and it would be given a very patriotic name: the Freedom Dividend. Yang proposes to pay for this with a Value Added Tax (VAT) of 10%. (I was actually unaware of the difference between a VAT and a sales tax before reading this book, which is that a VAT must be paid at every step in the production process. This has the added advantage of taxing automated industries, since robots do not pay an income tax.) But the hefty price tag of UBI would also be partially compensated by the reduction or elimination of other government welfare programs. And, of course, if you put more money into the hands of consumers, most of them will spend rather than save it, and this will in turn increase tax revenue.

One obvious objection to UBI is that, by giving money indiscriminately, we will inevitably be giving it to people who do not need it. The most apposite reply to this objection, for me, is that subjecting government assistance to means-testing creates a host of problems. For one, there is a great deal of cumbersome bureaucracy involved in determining whether a particular person ‘deserves’ aide—bureaucracy that would be rendered entirely redundant by UBI, since the checks can be sent out through the IRS. Indeed, this cumbersome bureaucracy only creates added waste, since many NGOs exist simply to help people navigate the complex government paperwork. Of every, say, $100 spent on welfare, what portion of that goes to those in need, and what portion to the paychecks of bureaucrats laboring to determine who gets the money and how they can spend it?

Indiscriminate giving would also eliminate the pesky problem of disincentivizing work. At the moment, Republicans and Democrats are in a dispute over this very issue, as Republicans are arguing that the extra $600 of unemployment money (as part of the coronavirus aid package) will encourage people not to work. While some on the left disagree, personally I think this is a rather strong objection—not to giving people money, but to making the money conditional on not having a job. The same issue is present in many other sorts of government aid, such as disability payments, which cease as soon as the recipient becomes employed. If the money were unconditional, however, then people would have no disincentive to work; on the contrary, they would be able to substantially improve their economic situation by working, perhaps even making enough to start saving and investing.

UBI, then, has potential appeal for both those on the left and on the right. Those on the left may like it because it is a way of redistributing wealth, while those on the right may like it since it is a way of shrinking the government. The latter statement might seem more far-fetched, but I do think that a solid, conservative case could be made for UBI. After all, Milton Friedman was quite an avid supporter of the concept, for a multitude of reasons: it shrinks government, it reduces government paternalism, it promotes both work and consumption, and it would avoid dividing people into different categories.

This last point merits some comment. Presently, a great deal of anti-welfare rhetoric is concerned with parasitism—the idea that lazy people are simply ‘on the dole,’ dragging down the rest of society. It is the perfect recipe for shame and resentment, since inevitably it divides up society into groups of givers and takers; and even the best government bureaucracy in the world could not hope to distribute money in the fairest way possible. Inevitably, some people who ‘deserve’ aid will not get it; and others who do not ‘deserve’ it will—since no definition of ‘deserving’ will be perfect, and in any case there is no way of perfectly measuring how much somebody ‘deserves.’

UBI works against this psychology in a powerful way, by being entirely indiscriminate. Though the rich would be paying more in taxes than they receive back, they too would receive their monthly payment, and I think this fact alone would help create an added sense of social solidarity. UBI would be something shared by everyone, everywhere, rather than something that marks you out as being poor and dependent, a mark of stigma and shame. This strikes me as quite a positive thing in the age of dramatic political polarization.

Another aspect of UBI that I find deeply appealing is that it will give people the freedom to pursue less well-remunerated, but more socially beneficial, work. As Yang points out, many of the most humanly important jobs—being a parent, an artist, or even an online book reviewer—are quite poorly compensated, if they are compensated at all. An economist might argue that this is justified, since the free market determines the value of work based on supply-and-demand. But I think that this logic will become less appealing as robots start to out-compete humans. Indeed, perhaps automation will erode our faith in the wisdom of markets and meritocracy, since it will be difficult to believe that a delivery drone is more deserving than a delivery driver, even if it gets more work done.

There are, of course, many objections to UBI, one being that it will encourage widespread free-loading. But the evidence for this is quite weak. As Yang demonstrates, in the many UBI trials that have been conducted, work reduction was quite low, mostly taking place among new mothers. And as I mentioned above, our current welfare system arguably encourages free-loading far more effectively than UBI would, since UBI does not disincentive work. In any case, I think all of us—especially new mothers!—could do with a modest reduction in work hours, given the fact that study after study shows that long hours do not benefit productivity. Instead of having humans emulate work machines, then, it would be far better to automate as much work as possible—since machines never sleep, never eat, and never get sick—and focus on the remaining work which really does require a human touch.

Yang addresses many other objections to UBI, and most of his arguments are convincing. I do have one nagging question, however, and it is this: If the purchasing power of the general population is increased across the board, will prices of food and housing correspondingly increase? Though I am economically naïve, it strikes me that this is bound to happen, at least somewhat; and this may partially offset the gains of UBI. But perhaps I am mistaken. Another question is whether automation will go as far as Yang predicts. I found most of his forecasts—particularly about self-driving vehicles—quite compelling. But it does seem possible that the affects will be less sweeping than Yang supposes. For example, I cannot imagine couples turning to an A.I. marriage counselor with the voice of Morgan Freeman, as Yang somewhat fancifully imagines.

In any case, while Yang’s twin themes of automation and UBI are his central message, his book has far more to offer. I particularly appreciated his portrayal of the economic plight facing many parts of America, and the increasingly stark divide between those with and without a college degree. For example, I often find myself forgetting that the majority of American adults do not have degrees, if only because almost all of my friends and family have one. Considering how many jobs—including low-skilled jobs—require a degree, this is a major economic disadvantage nowadays.

The fact that I can forget about this economic disadvantage is a measure of the degree to which different parts of the country are insulated from one another. And the university system is not helping to even the playing field. After all, most of the people who do obtain degrees are already from comparatively better-off families. The university system also does not add to economic diversification, since students are pursuing an increasingly narrow range of majors; and after college, most graduates move to one of a handful of large cities. The result is an increasingly stark economic divide between Americans with college degrees living in large cities, working in a shrinking number of industries, and those living in more rural areas, or hallowed out cities, without degrees. It is an inimical process.

Yang also deserves credit for his mental flexibility. Besides UBI, this book contains a range of proposals, all of them quite new to me. Considering the degree to which political debate is dominated by decades-old proposals, I found this extremely refreshing. Admittedly, I do think that Yang’s Silicon Valley message failed to resonate with the voting public for a reason. While he has much to say about the future of America’s economy, he is less convincing on problems besetting many Americans now, most notably health care. Yang does favor a version of universal coverage, and he has some very intriguing things to say about how technology can change the role of the doctor, but I think it is fair to say that this was a minor part of his book.

Yet if this book fails as political marketing, it succeeds in being both a thoughtful meditation on the problems facing the average American, and a set of bold proposals to address these problems. While so many politicians come across as blindly ideological, stupidly partisan, or simply as creatures of the political system, Yang is intelligent, imaginative, and unconventional. I hope that this is not the last we hear from him.



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Review: Priced Out

Review: Priced Out

Priced Out: The Economic and Ethical Costs of American Health Care by Uwe Reinhardt

My rating: 4 of 5 stars

Mantras about the virtues of markets are no substitute for serious ethical convictions.

There are a great many things for Americans to feel embarrassed about. Depending on your politics, you may bemoan the rise of identity politics and the snowflake culture predominating on college campuses; or perhaps you rage against racist policing or our lax gun laws. But I think that, as Americans, we can all come together and feel a deep and lasting shame over our health care system—specifically, how we finance it. According to Reinhardt, our system is so bad that it is routinely invoked in international conferences as a kind of boogey man, an example of what to avoid. And after reading this book, it is easy to see why.

I did not suspect that our system was quite so bad until I left the country. But, in retrospect, the evidence was quite apparent. Virtually all of my friends have expressed anxiety about their health care at some point—high premiums, high deductibles, or simply no health insurance at all. I have seen family members spend weeks negotiating with insurance companies for payment of their medicines (and even after the insurance chips in, the cost is still breathtaking). Meanwhile, in my five years here, I have yet to hear a single Spaniard express anxiety over how they will pay for a medicine or a medical procedure. Here, as in most of Europe, this type of anxiety is quite uncommon.

The U.S. system fails on many different fronts. Most simply, there is coverage. Millions of Americans have no coverage, and millions more have inadequate coverage (such as many of my friends, whose deductibles are so high that they may as well not have insurance). Second is cost. Both medical procedures and medicines are significantly more expensive in the United States. For example, the drug Xarelto (for blood clots) costs $101 in Spain, $292 in the U.S. The average cost of an appendectomy is $2,003 in Spain, $15,930 in America. A third failure— closely related to cost—is waste. Our byzantine payment system requires doctors and hospitals to spend great amounts of time and money communicating with insurance companies, which of course costs money, which of course gets transferred to the consumer.

But most fundamental failure is a failure of ethics. Or perhaps it is better to say a lack of ethical vision. As Reinhardt explains, while much of the debate on health care in America concerns itself with technicalities—risk pools, risk exposure, whether premiums should be actuarially fair or community-rated, etc.—this debate conceals the fact that we have yet to come to a consensus on the moral foundations of health care. Most of the world’s developed nations have established their systems on the presumption that health care is a social good. In the United States, on the other hand, we are sort of muddled, at times treating health care as if it is a commodity, and yet unwilling to face up to the implications of that choice—such as letting poor people die without treatment.

Aside from the ethical issues involved, health care has many features that make it unlike a typical commodity, and thus poorly governed by supply-and-demand. If I want to buy a car, for example, typically I am not in a great rush to do so. I can shop around, test-drive cars, compare prices across companies and locations, and read reviews. I can even decide that I do not want to buy a car after all, and instead buy a train pass. All of this contributes to control the price of cars, and incentivizes car companies to give us the best value for our money.

None of this is the case in our health care system. The demand is non-negotiable and, very often, time-sensitive. Furthermore, most patients lack the knowledge needed to evaluate what procedures or tests are justified or not, so oftentimes we cannot even be fully aware of our own ‘demand.’ Besides that, we have no ability to compare prices or to compare treatment efficacy. And even if we are careful to go to a hospital in our insurance network, there may be doctors ‘out of network’ working there, leading to the ugly phenomenon of surprise medical bills.

Added together, it is as if the car salesman blindfolded me, put a gun to my head, told me I had to choose a car in five minutes, while he was the only source of information about what car I needed (and medical bills can be quite as expensive as cars!). This is the position of the American “consumer” of healthcare.

My own brief experience with emergency medical care highlights the situation. The only time that I have ever been taken to an emergency room, I was unconscious. I woke up after being transported by the ambulance. Luckily, I was quickly discharged, and I also had insurance. But even though my insurance covered the hospital bill, it did not cover the ambulance, which I had to pay out of pocket. Again, I was lucky, since I was able to afford it. Many cannot, however, and have the experience of waking up from an accident, an injury, or an operation in debt. How can you be an intelligent consumer when you are unconscious?

The helplessness of the consumer creates a perverse incentive in our system. There is little downward pressure on prices. Instead, what results is a kind of arms race between health care providers and insurers. Insurers are incentivized to put up as many barriers as possible to paying out, which requires doctors and hospitals to invest ever-more resources into their billing departments, which of course only increases the cost to the patient. In many hospitals, there are more billing clerks than hospital beds; and when you realize that these billing clerks have their own counterparts in the insurance companies, you can get some idea of the enormous bloat created by our financing system.

I think there is a particular irony to this situation, since our American insistence on market values has created a labyrinthine network of incomprehensible rules, endless paperwork, and legions of bureaucrats—the very thing that capitalist principles were supposed to eliminate. Indeed, ironies abound in our system. For example, we endlessly discuss the affordability of government programs, while the tax incentives for employment-based insurance (which costs the federal and state governments an annual $300 billion in foregone revenues) is never mentioned. What is more, while the insurance mandates of Obamacare were roundly criticized as forcing the healthy to subsidize the unhealthy, as Reinhardt points out, the exact same thing occurs in insurance-based healthcare. And as a final irony:

It is fair to ask why, if socialized medicine is so bad, Americans for almost a century now have preserved precisely that construct for their military Veterans, and, indeed, why the latter are so defensive and protective of that socialized medicine system.

After reading this review, you may be excused for thinking that this book is a fiery manifesto about the evils of the system. Far from it. Uwe Reinhardt was a prominent economist and much of this book consists of tables and graphs. The writing is, if anything, on the dry side, and the tone is one of intellectual criticism rather than passionate outrage. Yet, strangely, this is why I found the book so effective. It is one thing for an arm-swinging socialist to condemn the evils of the system, but quite another for a calm economist to go through the data, point by point, and explain how it all works and how it compares with other countries’ performance.

You may also be excused for thinking that, given all this, Reinhardt would be an advocate for a single-payer system in the United States. After all, he was one of the architects of Taiwan’s single-payer system, which costs about 6% of the country’s GDP. (For comparison, America’s system costs us 17% of GDP!) But Reinhardt thinks that such a system would not work on American soil. For one, the libertarian streak in our culture runs too deep for such a system to be broadly acceptable. More importantly, however, Reinhardt thinks that our campaign finance system is so corrupt that the health care lobby would be able to exert a heavy influence on the government, thus canceling the benefit.

He instead advocates for an ‘all-payer’ system. The idea is to consolidate the market power of consumers by having standard prices set either by the government, or by associations of care providers and insurers. This would, at the very least, avoid the wild price variability that can be found in even a single city in the United States. It also helps to bring costs down, as demonstrated in Maryland, which has had an all-payer system for quite a while. Japan’s system is also established on this principle, and spends far less money per capita on its health care system, despite having a significantly older population than the United States.

In normal times, I was not exactly optimistic about the prospect of reforming out broken health care system. But in the wake of this pandemic, it does seem as if major reforms might not only be possible, but inevitable. Employment-based insurance makes little sense if people lose their jobs during a major health crisis, as has already happened to many millions of Americans. And high unemployment may persist for some time. What is more, a major health crisis, resulting in many thousands of additional hospital stays, will put pressure on private insurance firms and lead to a significant rise in insurance premiums. Basically, higher-risk patients create higher cost, and a pandemic puts far more people into the high-risk category. The greater strain on an already teetering system may be the proverbial straw on the camel’s back. We shall see.

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