The Road to Freedom

05.17.12

Arthur Brooks' Road

The AEI President's new book may be the blueprint for a Romney administration, where he says inequality matters less then mobility.
Road-to-Freedom1

AEI President Arthur Brooks has a new book out, The Road to Freedom: How to Win the Fight for Free Enterprise. It serves as a time-capsule: a conservative critique of the Obama presidency and the presentation of an alternative. It might even be the blueprint for a hypothetical Romney administration in the same way that the Heritage Foundation's 1981 book, Mandate for Leadership, influenced Ronald Reagan's White House.

While at times the book reads like a collection of the usual conservative talking points about the budget and the deficit, it also has other curious elements. The first half of the book is concerned about the science of happiness and the morality of capitalism.

This creates a strange tension: it seems that Brooks wanted to write a book about the latest research on human happiness, and how best to achieve it. (One is reminded of David Brooks' The Social Animal.) He also wanted to write a book that can defend the morality of capitalism since he thinks that the "materialist" case doesn't suffice.

Yet its not clear those essays really fit with a book that quickly transitions into a general endorsement of the Paul Ryan plan for America. There will be more to write about this in future posts. This is not just a policy document, there is an emotional story being told here as well, and its not clear if the policy and the emotion really fit.

Brooks writes that he believes in a free market system that rewards earned success. But here's the question: how much of the astonishing increase in the "success" of the wealthiest Americans over the past generation is "earned"?

It is a well established fact that despite increases in American productivity over the past few decades, that median wages have not risen:

productivity-chart

For that reason I asked Brooks at his May 16 AEI lecture: given this reality about stagnant wages, does Brooks believe that this is earned success in action (that American workers have not earned more because of their own lack of ability) or if he thinks that in a true free market system, their wages would be rising higher?

In answer, Brooks cited the work of AEI blogger James Pethokoukis, stating that his blog posts on income inequality "greatly attenuates the argument that wages have been stagnant." In short, Brooks buys the thesis that you need to treat the rising cost of health coverage as income as well as government transfers. There are a lot of problems with looking at income this way. 

Then Brooks advanced his core argument, that inequality matters less then mobility:

When the President of the United States of any politician talks about income inequality he's wasting our time. The problem is mobility.

Why mobility? Well for a start, discussing inequality is politically risky:

When you focus only on income inequality, you always end up talking about how to bring the top down. Inevitably. If you talk about mobility you can talk about people at the bottom. ... And what we care about are people at the bottom 20% of the income distribution because those people have objectively seen less income and economic mobility over the last few decades.

Brooks then gave his prognosis for what could be done for the bottom 20%, arguing for education reform, more entrepreneurship, and changing the culture. Essentially citing large chunks of the Charles Murray prescription for fixing America.

You might call this a "pivot." Brooks certainly deserves credit for acknowledging that the bottom 20% of America is in dire states. Improving their mobility is a worthy goal.

But my question wasn't about the bottom 20%, it was about median wages rising with productivity. I appreciate that he answered the question, but he showed he does not agree with the main thesis: he did not sound convinced that median wages really had stagnated.

In his book, Brooks argues that facts are not enough to win the argument for free enterprise:

There are many facts and figures in the previous sections because free enterprise must make sense empirically if it is to make sense at all—and we can be confident that it does. But let’s not forget the main point of this book: that free enterprise is a matter of the heart even more than the head. Whether we’re discussing taxation or Medicare, deficits or jobs, public policy should first and foremost be an expression of values. As free enterprise advocates, we can take comfort in knowing the facts and data are on our side, but we must first show that the moral arguments are on our side as well if we want to prevail.

(emphasis mine)

This statement does not want to confront an uncomfortable situation: what to do when the data is not on your side.

—More to Come—