Survival of the Richest

Is economic behavior best understood in Darwinian terms? Actually, no.

In other words, Frank is seeking to lay the theoretical case for government intervention in the workplace. Yet in doing so, he is treating the issue purely as a technical matter of dispassionate difference trimming, with state overseers calibrating the correct regulation to the suitable working environment. And this is, among other things, an account entirely at odds with the history of agitation for workplace safety. For to the extent that governments have taken on the authority to regulate hazards to workers, they’ve done so at the behest of those workers themselves, who effectively organized and publicized their grievances via trade unions.

This was, to put things mildly, not a proposition of positional consumption, but rather a simple assertion of a political right, grounded in core conceptions of fairness and equity held to be self-evident virtues in industrial democracies. In the aftermath of the 1911 Triangle Shirtwaist fire, which claimed the lives of 146 garment workers, leaders of the International Ladies Garment Workers Union mobilized a march of more than 100,000 citizens in the streets of Manhattan to pressure New York legislators to enact meaningful laws to secure workplace safety.

Frank never once mentions unions in advancing his evolutionary model of economic behavior—and seemingly permits no affirmation of the prospect that the workers might themselves enter into the debate over public oversight of private-sector affairs. Instead, he largely envisions the whole issue as a quarrel between doctrinaire libertarians and soi-disant pragmatic advocates of regulation such as himself, Cass Sunstein—the law professor brought on as the Obama White House’s regulatory czar—and the law-and-economics scholar Ronald Coase. Frank frames his appeal to evolutionary ideas as an empirically advanced yet idealistic effort to win libertarians over to the cause of limited government regulation—and indeed, as the theoretical basis for something he calls the “libertarian welfare state.” But civilian participants in the real economy might rightfully ask just why and how the signature questions of economic policy have become mere debating fodder for Randian enthusiasts of free-market delusion and conflict-averse centrist technocrats.

At several key points in The Darwin Economy, it becomes evident that Frank’s view of the economic-policy playing field is badly skewed. Again and again, for instance, Frank portrays the case for state intervention as the need to “act collectively” to secure social goods in the face of depredations grounded in self-seeking individual behavior. But in the absence of any mention of unions, who or what exactly are these collectives, and how are they formed and represented in an economic system governed by the prime directive of maximizing shareholder profits? Frank won’t, and evidently can’t, say—beyond gesturing vaguely toward the power workers theoretically exercise in “electing legislators who enact regulations,” a ludicrously anemic brand of political legitimacy, especially in a system of representative government that, as Frank himself concedes, is dominated by a plutocratic campaign donor class.

At other times, Frank’s omission of the politicized labor movement becomes a blindingly obvious aporia. In contesting the trickle-down doctrines of the libertarian set, Frank notes that, contrary to what such theories would predict, greater income inequality does not in fact correlate to increased economic growth. Instead, he notes, “when researchers examine the data within individual countries over time, they find a negative correlation between growth rates and inequality.” Specifically, Frank marvels, “During the three decades immediately following World War II…income inequality was low by historical standards, yet growth rates in most industrial countries were extremely high. In contrast, growth rates have been only about half as large during the years since 1973, a period in which income and wealth inequality have been steadily rising in most countries.”

This same period of postwar prosperity, of course, corresponds to peak labor union membership in most industrial countries—just as the drop-off in growth in the early 1970s also marks in many instances the high point of postwar union clout in the West. Plenty of research has demonstrated the strong correlation between high levels of national union membership and comparatively low rates of inequality—a condition that, by Frank’s own analysis, should promote sturdy and comparatively equitable trends of economic growth. Yet Frank can give an account of the last four decades of inequality and unproductive patterns of growth without even mentioning the single most crucial institutional bulwark of economic equality: the trade-union movement. It’s a bit like trying to chronicle the devastation of the 2011 Japanese tsunami without ever bothering to describe the earthquake that preceded it.

In part, such oversights are a fairly typical function of academic parochialism. As a scholar of comparative consumption, Frank naturally focuses on the behavior of consumers and regulators rather than on the workers who are the producers of wealth. More fundamentally, though, the analytical blind spots in The Darwin Economy reflect the broader distemper of mainstream economics and policy prescription in America. For virtually since its incarnation as a professionalized academic discipline, economics has sought to treat historically contingent arrangements governing access to goods and services as immutable laws of human nature—or, in Frank’s case, as nature itself.

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