Social Equality Fights Recession!
Cheaper to Free Your Mind? Let’s asssume that the various authorities cited by Brad Plumer are correct: Greater economic inequality has caused middle class households to spend more to ‘keep up with the [rich] Joneses.” Many borrow money to do so, and the resulting “excess debt, in turn, increases the risk of a major financial crisis.”
What would be the best way to combat this not-implausible cycle? A) Reduce income inequality, something liberals have been more or less completely unable to do in the face of the large economic forces (trade, technology, increasing scale of markets, etc.) that are generating it. Or B) change people’s attitudes toward the Joneses, by encouraging middle class people to laugh at their often ridiculous forms of consumption (e.g. unreliable, overpriced Range Rovers).
If, for example, the result of all the Jonesjonesing has been larger houses than people can afford– if, as Robert Frank notes, “the median size of a new single-family house in 2007 was 2,300 square feet, or 50 percent bigger than in 1970”–you could get people to realize they don’t need giant houses to be happy. And we can provide a society–with lots of public institutions like parks and schools and sports stadiums etc. and essential service like health care–where middle class people can in fact be happy, whatever the Joneses are doing with colonics at exclusive spas.
An emphasis on boosting socially egalitarian attitudes about money differences should, in theory, have the same effect at preventing “the risk of a major financial crisis” as reducing money differences themselves. And it (Plan B) seems more doable–at least not less doable than the Canute-like fight against the underlying tide of capitalism and the 1% (or 20%) who ride it.
It’s also in line with traditional hippy-dippy anti-economistic values that used to be associated with the left**–and that might resonate a new with the current generation of propertyless twentysomethings. Why not give it a try? We have nothing to lose but our Range Rovers.
Just a thought!
**–For a fresh advance in this tradition, one many conservatives will find congenial (in part because it’s not statist) I recommend the late Jonathan Rowe’s Our Common Wealth: The Hidden Economy That Makes Everything Else Work.