Issue #20, Spring 2011

Individual Age Economics

To read the other essays in the “First Principles: Arguing the Economy” symposium, click here.

Yet, in this Jeffersonian moment, Americans are largely being offered two Hamiltonian approaches from their political leaders, with both progressives and conservatives promoting a top-down view of economic prosperity. Beyond the rejectionism of the Tea Party, mainstream conservatives still see economic policy solely through the prism of providing more capital to the privileged captains of industry who can then make the best choices on how those funds should be used. Most progressives, along with so-called “national greatness” conservatives, have their own Hamiltonian vision of our economic future—one of high-speed trains racing across the plains, deserts filling up with solar arrays and prairies sprouting wind turbines, government-sponsored research into new technologies and cures, cities tied together with networks of broadband and repaired bridges.

While the top-down tax cuts are of limited long-term economic value, the top-down infrastructure initiatives are crucial to our future but incomplete as an economic program. Moreover, they ring hollow to Americans who are less concerned with the rise of China than with their own personal ability to get ahead in today’s economy. While making America more globally competitive is vital, the gaping hole in our economic discussion is an agenda for making Americans more personally competitive.

Today, instead of Hamiltonian means to Jeffersonian ends, we need the reverse: Jeffersonian means to Hamiltonian ends—strengthening the hand of the individual and breaking up concentrated power in both government and corporate bureaucracies in order to unleash national prosperity and economic growth.

What would an Individual Age economic policy look like? It would start by refashioning the Department of Labor into a “Small Business Administration for individuals,” with help and training for workers in navigating their careers, assistance for entrepreneurs, lifelong learning loans, and wage insurance plans. Unemployment benefits should be modernized from a safety net into a trampoline so that they not only cushion the blow for millions of laid-off workers but help them find better jobs and create new ones. Health-care and retirement benefits should be made more personalized, portable, affordable, and universal, as envisioned by Oregon Senator Ron Wyden and others. Fundamental immigration reform should open the doors of America to the most highly skilled and hardest-working people of every country in the world. New initiatives should be taken to help Americans build assets from birth so that they can use them to start new businesses and create personal wealth. The Obama Administration’s smart Startup America public-private partnership should be taken to scale so that new businesses can be started with the kind of urgency and resources the federal government used to bail out failed dinosaur corporations. The public education system needs to be radically reformed and a college education made as universal as Industrial Age reformers made high school a century ago.

These ideas have been discussed previously in isolation, but as a whole this people-focused economic approach is not on Washington’s radar screen. If we are going to reclaim the promise of broad-based growth, it needs to be. An economy battered by recession will start to stir again in the coming months and years, but it is not enough to seek to restore the economy as it was before the flood. We need more than a return to the status quo of a lost decade and a generation of diminished expectations, when flipping houses and shorting stocks took the place of innovation and effort, two-income couples maxed out their credit cards and took out second mortgages just so their families could tread water, and the nation piled enormous deficits on top of already monster debts with nothing to show for it.

The task ahead in the Individual Age is to create a Horatio Alger economy, a drive to rebuild the possibility of upward mobility that is at the heart of the American experience. For today’s middle-class Americans, life is a game of “Chutes and Ladders” with more chutes than ladders. While individuals have been thrown back upon themselves, both progressives and conservatives have acted as if the economy still functions from the top down. If America is to recapture the economic growth that was Hamilton’s concern and the broad equality of opportunity that was Jefferson’s dream, our mission must be to forge a new economics for the Individual Age that rethinks our economy from the bottom up.

 

More from Democracy: A Journal of Ideas

Growth and the Middle Class by David Madland

Read More »
Issue #20, Spring 2011
 
Post a Comment

Glenn Snead:

Andrei, how do you propose we spur our dino-laden government into change? D vs R and R vs D doesn't work. D is R and R is D. Your paper has merit, but your steady belief in the government is your biggest failure.

Remember that one definition of political insanity is trusting the same organizations that routinely fail you, then expecting a different result.

Mar 19, 2011, 12:06 AM
Patrick Nevis:

Thank you for your thought-provoking article. I've often felt the 2 parties are more similar than not, but you've explained the political philosophical basis for it. They are both committed to bigness and individual rights with different means to similar ends. For them to significantly reduce their commitment to bigness would take changes about which I don't think they are capable unless they get help. Historically, our 2 parties have changed when a third party brings up good ideas with broad popular appeal; e.g., Bull Moose Party of 1912, which advocated social security, workmen’s compensation, women’s suffrage, and federal income tax to name a few. I thought for a while the Ross Perot's United We Stand America presidential effort (electronic direct election of national officials, balance the budget, pro-choice, and anti-gun control) was going to help make that change before he self-destructed. Also, it's unfortunate that the Tea party isn't this third party, though they head in the right direction in some ways. The ideas they profess attempt to get at one "bigness"- big government - without addressing the other "bigness"- the centralization of wealth in the hands of the few. In addition, many of the impacts of their policies also hurt individual economics for those with less means, especially the young in health care, education and safety. Too bad they couldn't have taken a broader view of the problem. Seems we need another third party.

Mar 20, 2011, 9:48 PM
Ty Brentwood:

To establish an Economical Platform that proclaims what is Right for the People at its heart, consider the merits of The FALGAFT Plan.

Mar 21, 2011, 2:12 AM
Patrick Nevis:

Where can I obtain a copy? I've looked on the internet and find only references to it. Thanks

Mar 21, 2011, 2:40 PM
Maureen Schmid:

Meanwhile there is the debt. The Individual Age Economy can't be every man/woman for himself/herself. We see where that philosophy has gotten us. How about this? Every extended family sends a member to college. Everyone who can pay keeps his/her mortgage. The rich forego their Social Security benefits. The moderately fixed take a cut in their benefits. How about politicians asking citizens to step up?

Mar 30, 2011, 2:57 PM
Alan Reder:

This piece is provocative but it also raises a lot of questions.

1. Not everyone is cut out to be an entrepreneur. What do those folks do if they can't find a job? I have a close relative who is a wonderful employee. She couldn't start or run a business to save her life. If she loses her job, she's sunk.

2. What kinds of businesses will all these entrepreneurs start when the middle class is tapped out and has no extra money to spend and large corporations can out-compete them in so many businesses? You can't start an office supply store in an age of Office Depot or a hardware store in an age of Home Depot.

Apr 1, 2011, 10:04 PM
Ty Brentwood:

The FALGAFT Plan is putting together a Public Draft on a web site.
go to https://sites.google.com/site/falgaftplan/
Apparently due to the size and configuration it will take awhile to complete.
Keep an eye on it as it grows.

Apr 18, 2011, 2:59 AM
Steve McKinney:

I'm thrilled to have just discovered your site. As I read I couldn't help but thinking "yes, but...." Basically, I would be concerned about that idea of always fighting the last war or trying to outguess that mysterious process which brings about society spontaneously. Your ideas could already be obsolete but we won't know that for a while.

Jun 8, 2011, 8:00 AM

Post a Comment

Name

Email

Comments (you may use HTML tags for style)

Verification

Note: Several minutes will pass while the system is processing and posting your comment. Do not resubmit during this time or your comment will post multiple times.