Good’n’Plenty

Literature as a pure art approaches the nature of pure science.
—“The Scientist of Letters: Obituary of James Joyce.” The New Republic 20 January 1941.

 

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James Joyce, in the doorway of Shakespeare & Co., sometime in the 1920s.

In 1910 the twenty-sixth president of the United States, Theodore Roosevelt, offered what he called a “Square Deal” to the American people—a deal that, the president explained, consisted of two components: “equality of opportunity” and “reward for equally good service.” Not only would everyone would be given a chance, but, also—and as we shall see, more importantly—pay would be proportional to effort. More than a century later, however—according to University of Illinois at Chicago professor of English Walter Benn Michaels—the second of Roosevelt’s components has been forgotten: “the supposed left,” Michaels asserted in 2006, “has turned into something like the human resources department of the right.” What Michaels meant was that, these days, “the model of social justice is not that the rich don’t make as much and the poor make more,” it is instead “that the rich [can] make whatever they make, [so long as] an appropriate percentage of them are minorities or women.” In contemporary America, he means, only the first goal of Roosevelt’s “Square Deal” matters. Yet, why should Michaels’ “supposed left” have abandoned Roosevelt’s second goal? An answer may be found in a seminal 1961 article by political scientists Peter B. Clark and James Q. Wilson called “Incentive Systems: A Theory of Organizations”—an article that, though it nowhere mentions the man, could have been entitled “The Charlie Wilson Problem.”

Charles “Engine Charlie” Wilson was president of General Motors during World War II and into the early 1950s; General Motors, which produced tanks, bombers, and ammunition during the war, may have been as central to the war effort as any other American company—which is to say, given the fact that the United States was the “Arsenal of Democracy,” quite a lot. (“Without American trucks, we wouldn’t have had anything to pull our artillery with,” commented Field Marshal Georgy Zhukov, who led the Red Army into Berlin.) Hence, it may not be a surprise that World War II commander Dwight Eisenhower selected Wilson to be his Secretary of Defense when the leader of the Allied war in western Europe was elected president in 1952, which led to the confirmation hearings that made Wilson famous—and the possible subject of “Incentive Systems.”

That’s because of something Wilson said during those hearings: when asked whether he could make a decision, as Secretary of Defense, that would be adverse for General Motors, Wilson replied that he could not imagine such a situation, “because for years I thought that what was good for our country was good for General Motors, and vice versa.” Wilson’s words revealed how sometimes people within an organization can forget about the larger purposes of the organization—or what could be called “the Charlie Wilson problem.” What Charlie Wilson could not imagine, however, was precisely what James Wilson (and his co-writer Peter Clark) wrote about in “Incentive Systems”: how the interests of an organization might not always align with society.

Not that Clark and Wilson made some startling discovery; in one sense “Incentive Systems” is simply a gloss on one of Adam Smith’s famous remarks in The Wealth of Nations: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public.” What set their effort apart, however, was the specificity with which they attacked the problem: the thesis of “Incentive Systems” asserts that “much of the internal and external activity of organizations may be explained by understanding their incentive systems.” In short, in order to understand how an organization’s purposes might differ from that of the larger society, a big clue might be in how it rewards its members.

In the particular case of Engine Charlie, the issue was the more than $2.5 million in General Motors stock he possessed at the time of his appointment as Secretary of Defense—even as General Motors remained one of the largest defense contractors. Depending on the calculation, that figure would be nearly ten times that today—and, given contemporary trends in corporate pay for executives, would surely be even greater than that: the “ratio of CEO-to-worker pay has increased 1,000 percent since 1950,” according to a 2013 Bloomberg report. But “Incentive Systems” casts a broader net than “merely” financial rewards.

The essay constructs “three broad categories” of incentives: “material, solidary, and purposive.” That is, not only pay and other financial sorts of reward of the type possessed by Charlie Wilson, but also two other sorts: internal rewards within the organization itself—and rewards concerning the organization’s stated intent, or purpose, in society at large. Although Adam Smith’s pointed comment raised the issue of the conflict of material interest between organizations and society two centuries ago, what “Incentive Systems” thereby raises is the possibility that, even in organizations without the material purposes of a General Motors, internal rewards can conflict with external ones:

At first, members may derive satisfaction from coming together for the purpose of achieving a stated end; later they may derive equal or greater satisfaction from simply maintaining an organization that provides them with office, prestige, power, sociability, income, or a sense of identity.

Although Wealth of Nations, and Engine Charlie, provide examples of how material rewards can disrupt the straightforward relationship between members, organizations, and society, “Incentive Systems” suggests that non-material rewards can be similarly disruptive.

If so, Clark and Wilson’s view may perhaps circle back around to illuminate a rather pressing current problem within the United States concerning material rewards: one indicated by the fact that the pay of CEOs of large companies like General Motors has increased so greatly against that of workers. It’s a story that was usefully summarized by Columbia University economist Edward N. Wolff in 1998: “In the 1970s,” Wolff wrote then, “the level of wealth inequality in the United States was comparable to that of other developed industrialized countries”—but by the 1980s “the United States had become the most unequal society in terms of wealth among the advanced industrial nations.” Statistics compiled by the Census Bureau and the Federal Reserve, Nobel Prize-winning economist Paul Krugman pointed out in 2014, “have long pointed to a dramatic shift in the process of US economic growth, one that started around 1980.” “Before then,” Krugman says, “families at all levels saw their incomes grow more or less in tandem with the growth of the economy as a whole”—but afterwards, he continued, “the lion’s share of gains went to the top end of the income distribution, with families in the bottom half lagging far behind.” Books like Thomas Piketty’s Capital in the Twenty-first Century have further documented this broad economic picture: according to the Institute for Policy Studies, for example, the richest 20 Americans now have more wealth than the poorest 50% of Americans—more than 150 million people.

How, though, can “Incentive Systems” shine a light on this large-scale movement? Aside from the fact that, apparently, the essay predicts precisely the future we now inhabit—the “motivational trends considered here,” Wilson and Clark write, “suggests gradual movement toward a society in which factors such as social status, sociability, and ‘fun’ control the character of organizations, while organized efforts to achieve either substantive purposes or wealth for its own sake diminish”—it also suggests just why the traditional sources of opposition to economic power have, largely, been silent in recent decades. The economic turmoil of the nineteenth century, after all, became the Populist movement; that of the 1930s became the Popular Front. Meanwhile, although it has sometimes been claimed that Occupy Wall Street, and more lately Bernie Sanders’ primary run, have been contemporary analogs of those previous movements, both have—I suspect anyway—had nowhere near the kind of impact of their predecessors, and for reasons suggested by “Incentive Systems.”

What “Incentive Systems” can do, in other words, is explain the problem raised by Walter Benn Michaels: the question of why, to many young would-be political activists in the United States, it’s problems of racial and other forms of discrimination that appear the most pressing—and not the economic vice that has been squeezing the majority of Americans of all races and creeds for the past several decades. (Witness the growth of the Black Lives Matter movement, for instance—which frames the issue of policing the inner city as a matter of black and white, rather than dollars and cents.) The signature move of this crowd has, for some time, been to accuse their opponents of (as one example of this school has put it) “crude economic reductionism”—or, of thinking “that the real working class only cares about the size of its paychecks.” Of course, as Michaels says in The Trouble With Diversity, the flip side of that argument is to say that this school attempts to fit all problems into the Procrustean bed of “diversity,” or more simply, “that racial identity trumps class,” rather than the other way. But why do those activists need to insist on the point so strongly?

“Some people,” Jill Lepore wrote not long ago in The New Yorker about economic inequality, “make arguments by telling stories; other people make arguments by counting things.” Understanding inequality, as should be obvious, requires—at a minimum—a grasp of the most basic terms of mathematics: it requires knowing, for instance, that a 1,000 percent increase is quite a lot. But more significantly, it also requires understanding something about how rewards—incentives—operate in society: a “something” that, as Nobel Prize-winning economist Joseph Stiglitz explained not long ago, is “ironclad.” In the Columbia University professor’s view (and it is more-or-less the view of the profession), there is a fundamental law that governs the matter—which in turn requires understanding what a scientific law is, and how one operates, and so forth.

That law in this case, the Columbia University professor says, is this: “as more money becomes concentrated at the top, aggregate demand goes into decline.” Take, Stiglitz says, the example of Mitt Romney’s 2010 income of $21.7 million: Romney can “only spend a fraction of that sum in a typical year to support himself and his wife.” But, he continues, “take the same amount of money and divide it among 500 people—say, in the form of jobs paying $43,400 apiece—and you’ll find that almost all the money gets spent.” The more evenly money is spread around, in other words, the more efficiently, and hence productively, the American economy works—for everyone, not just some people. Conversely, the more total income is captured by fewer people, the less efficiently the economy becomes, resulting in less productivity—and ultimately a poorer America. But understanding Stiglitz’ argument requires a kind of knowledge possessed by counters, not storytellers—which, in the light of “Incentive Systems,” illustrates just why it’s discrimination, and not inequality, that is the issue of choice for political activists today.

At least since the 1960s, that is, the center of political energy on university campuses has usually been the departments that “tell stories,” not the departments that “count things”: as the late American philosopher Richard Rorty remarked before he died, “departments of English literature are now the left-most departments of the universities.” But, as Clark and Wilson might point out (following Adam Smith), the departments that “tell stories” have internal interests that may not be identical to the interests of the public: as mentioned, understanding Joseph Stiglitz’ point requires understanding science and mathematics—and as Bruce Robbins (a colleague of Wolff and Stiglitz at Columbia University, only in the English department ) has remarked, “the critique of Enlightenment rationality is what English departments were founded on.” In other words, the internal incentive systems of English departments and other storytelling disciplines reward their members for not understanding the tools that are the only means of understanding foremost political issue of the present—an issue that can only be sorted out by “counting things.”

As viewed through the prism of “Incentive Systems,” then, the lesson taught by the past few decades of American life might well be that elevating “storytelling” disciplines above “counting” disciplines has had the (utterly predictable) consequence that economic matters—a field constituted by arguments constructed about “counting things”—have been largely vacated as a possible field of political contest. And if politics consists of telling stories only, that means that “counting things” is understood as apolitical—a view that is surely, as students of deconstruction have always said, laden with politics. In that sense, then, the deal struck by Americans with themselves in the past several decades hardly seems fair. Or, to use an older vocabulary:

Square.

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Old Time Religion

Give me that old time religion,
Give me that old time religion,
Give me that old time religion,
It’s good enough for me.
Traditional; rec. by Charles Davis Tilman, 1889
Lexington, South Carolina

… science is but one.
Lucius Annaeus Seneca.

New rule changes for golf usually come into effect on the first of the year; this year, the big news is the ban on “anchored” putters: the practice of holding one end of a putter in place against the player’s body. Yet as has been the case for nearly two decades, the real news from the game’s rule-makers this January is about a change that is not going to happen: the USGA is not going to create “an alternate set of rules to make the game easier for beginners and recreational players,” as for instance Mark King, then president and CEO of TaylorMade-Adidas Golf, called for in 2011. King argued then that something does need to happen because, as King correctly observed, “Even when we do attract new golfers, they leave within a year.” Yet, as nearly five years of stasis has demonstrated since, the game’s rulers will do no such thing. What that inaction suggests, I will contend, may simply be that—despite the fact that golf was at one time denounced as atheistical since so many golfers played on Sundays—golf’s powers-that-be are merely zealous adherents of the First Commandment. But it may also be, as I will show, that the United States Golf Association is a lot wiser than Mark King.

That might be a surprising conclusion, I suppose; it isn’t often, these days, that we believe that a regulatory body could have any advantage over a “market-maker” like King. Further, after the end of religious training it’s unlikely that many remember the contents, never mind the order, of Moses’ tablets. But while one might suppose that the list of commandments might begin with something important—like, say, a prohibition against murder?—most versions of the Ten Commandments begin with “Thou shalt have no other gods before me.” It’s a rather clingy statement, this first—and thus, perhaps the most significant—of the commandments. But there’s another way to understand the First Commandment: as not only the foundation of monotheism, but also a restatement of a rule of logic.

To understand a religious rule in this way, of course, would be to flout the received wisdom of the moment: for most people these days, it is well-understood that science and logic are separate from religion. Thus, for example, the famed biologist Stephen Jay Gould wrote first an essay (“Non-Overlapping Magisteria”), and then an entire book (Rock of Ages: Science and Religion In The Fullness Of Life), arguing that while many think religion and science are opposed, in fact there is “a lack of conflict between science and religion,” that science is “no threat to religion,” and further that “science cannot be threatened by any theological position on … a legitimately and intrinsically religious issue.” Gould argued this on the basis that, as the title of his essay says, each subject possesses a “non-overlapping magisteria”: that is, “each subject has a legitimate magisterium, or domain of teaching authority.” Religion is religion, in other words, and science is science—and never the twain shall meet.

To say then that the First Commandment could be thought of as a rendering of a logical rule seen as if through a glass darkly would be impermissible according to the prohibition laid down by Gould (among others): the prohibition against importing science into religion or vice versa. And yet some argue that such a prohibition is nonsense: for instance Richard Dawkins, another noted biologist, has said that in reality religion does not keep “itself away from science’s turf, restricting itself to morals and values”—that is, limiting itself to the magisterium Gould claimed for it. On the contrary, Dawkins writes: “Religions make existence claims, and this means scientific claims.” The border, Dawkins says, Gould draws between science and religion is drawn in a way that favors religion—or more specifically, to protect religion.

Supposing Dawkins, and not Gould, to be correct then is to allow for the notion that a religious idea can be a restatement of a logical or scientific one—but in that case, which one? I’d suggest that the First Commandment could be thought of as a reflection of what’s known as the “law of non-contradiction,” usually called the second of the three classical “laws of thought” of antiquity. At least as old as Plato, this law says that—as Aristotle puts it in the Metaphysics—the “most certain of all basic principles is that contradictory propositions are not true simultaneously.” Or to put it another, logical, way: thou shalt have no other gods before me.

What one could say, then, is that it is in fact Dawkins, and not Gould, who is the more “religious” here: while Gould wishes to allow room for multiple “truths,” Dawkins—precisely like the God of the ancient Hebrews—insists on a single path. Which, one might say, is just the stance of the United States Golf Association: taking a line from the film Highlander, and its many, many offspring, the golf rulemaking body is saying that there can be only one.

That is not, to say the least, a popular sort of opinion these days. We are, after all, supposed to be living in an age of tolerance and pluralism: so long ago as 1936 F. Scott Fitzgerald claimed, in Esquire, that “the test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.” That notion has become so settled that, as the late philosopher Richard Rorty once remarked, today for many people a “sense of … moral worth is founded on … [the] tolerance of diversity.” In turn, the “connoisseurship of diversity has made this rhetoric”—i.e., the rhetoric used by the First Commandment, or the law of non-contradiction—“seem self-deceptive and sterile.” (And that, perhaps more than anything else, is why Richard Dawkins is often attacked for, as Jack Mirkinson put it in Salon this past September, “indulging in the most detestable kinds of bigotry.”) Instead, Rorty encouraged intellectuals to “urge the construction of a world order whose model is a bazaar surrounded by lots and lots of exclusive private clubs.”

Rorty in other words would have endorsed the description of golf’s problem, and its solution, proposed by Mark King: the idea that golf is declining in the United States because the “rules are making it too hard,” so that the answer is to create a “separate but equal” second set of rules. To create more golfers, it’s necessary to create more different kinds of golf. But the work of Nobel Prize-winning economist Joseph Stiglitz suggests another kind of answer: one that not only might be recognizable to both the ancient Hebrews and the ancient Greeks, but also would be unrecognizable to the founders of what we know today as “classical” economics.

The central idea of that form of economic study, as constructed by the followers of Adam Smith and David Ricardo, is the “law of demand.” Under that model, suppliers attempt to fulfill “demand,” or need, for their product until such time as it costs more to produce than the product would fetch in the market. To put it another way—as the entry at Wikipedia does—“as the price of product increases, quantity demanded falls,” and vice versa. But this model only works, Stiglitz correctly points out, only insofar as it can be assumed that there is, or can be, an infinite supply of the product. The Columbia professor described what he meant in an excerpt of his 2012 book The Price of Inequality printed in Vanity Fair: an article that is an excellent primer on the problem of monopoly—that is, what happens when the supply of a commodity is limited and not (potentially) infinite.

“Consider,” Stiglitz asks us, “someone like Mitt Romney, whose income in 2010 was $21.7 million.” Romney’s income might be thought of as the just reward for his hard work of bankrupting companies and laying people off and so forth, but even aside from the justice of the compensation, Stiglitz asks us to consider the effect of concentrating so much wealth in one person: “Even if Romney chose to live a much more indulgent lifestyle, he would spend only a fraction of that sum in a typical year to support himself and his wife.” Yet, Stiglitz goes on to observe, “take the same amount of money and divide it among 500 people … and you’ll find that almost all the money gets spent”—that is, it gets put back to productive use in the economy as a whole.

It is in this way, the Columbia University professor says, that “as more money becomes concentrated at the top, aggregate demand goes into a decline”: precisely the opposite, it can be noted, of the classical idea of the “law of demand.” Under that scenario, as money—or any commodity one likes—becomes rarer, it drives people to obtain more of it. But Stiglitz argues, while that might be true in “normal” circumstances, it is not true at the “far end” of the curve: when supply becomes too concentrated, people of necessity will stop bidding the price up, and instead look for substitutes for that commodity. Thus, the overall “demand” must necessarily decline.

That, for instance, is what happened to cotton after the year 1860. That year, cotton grown in the southern United States was America’s leading export, and constituted (as Eugen R. Dattel noted in Mississippi History Now not long ago) nearly 80 percent “of the 800 million pounds of cotton used in Great Britain” that year. But as the war advanced—and the Northern blockade took effect—that percentage plummeted: the South exported millions of pounds of cotton before the war, but merely thousands during it. Meanwhile, the share of other sources of supply rose: as Matthew Osborn pointed out in 2012 in Al Arabiya News, Egyptian cotton exports prior to the bombardment of Fort Sumter in 1861 resulted in merely $7 million dollars in exports—but by the end of the war in 1865, Egyptian profits were $77 million, as Europeans sought different sources of supply than the blockaded South. This, despite the fact that it was widely acknowledged that Egyptian cotton was inferior to American cotton: lacking a source of the “good stuff,” European manufacturers simply made do with what they could get.

The South thusly failed to understand that, while it did constitute the lion’s share of production prior to the war, it was not the sole place cotton could be grown—other models for production existed. In some cases, however—through natural or human-created means—an underlying commodity can have a bottleneck of some kind, creating a shortage. According to classical economic theory, in such a case demand for the commodity will grow; in Stiglitz’ argument, however, it is possible for a supply to become so constricted that human beings will simply decide to go elsewhere: whether it be an inferior substitute or, perhaps, giving up the endeavor entirely.

This is precisely the problem of monopoly: it’s possible, in other words, for a producer to have such a stranglehold on the market that it effectively kills that market. The producer in effect kills the golden egg—which is just what Stiglitz argues is happening today to the American economy.  “When one interest group holds too much power,” Stiglitz writes, “it succeeds in getting policies that help itself in the short term rather than help society as a whole over the long term.” Such a situation can have only one of two different solutions: either the monopoly is broken, or people turn to a completely different substitute. To use an idiom from baseball, they “take their ball and go home.”

As Mark King noted back in 2011, golfers have been going home since the sport hit its peak in 2005. That year, the National Golf Foundation’s yearly survey of participation found 30 million players; in 2014, by contrast, the numbers were slightly less than 25 million, according to a Golf Digest story by Mike Stachura. Mark King’s plan to gain those numbers back, as we’ve seen, is to invent a new set of rules to retain them—a plan with a certain similarity, I’d suggest, to the ideal of “diversity” championed by Rorty: a “bazaar surrounded by lots and lots of exclusive private clubs.” That is, if the old rules are not to your taste, you could take up another set of rules.

Yet, an examination of the sport of golf as it is, I’d say, would find that Rorty’s description of his ideal already is, more or less, a description of the current model for the sport of golf in the United States—golf already is, largely speaking, a “bazaar surrounded by private clubs.” Despite the fact that, as Chris Millard reported in 2008 for Golf Digest, “only 9 percent of all U.S. golfers are private-club members,” it’s also true that private clubs constitute around 30 percent of all golf facilities, and as Mike Stachura has noted (also in Golf Digest), even today “the largest percentage of all golfers (27 percent) have a household income over $125,000.” Golf doesn’t need any more private clubs: there are already plenty of them.

In turn, it is their creature—the PGA of America—that largely controls golf instruction in this country: that is, the means to play the game. To put it in Stiglitz’ terms, what this means is that the PGA of America—and the private clubs who hire PGA professionals to staff their operations—essentially constitute a monopoly on instruction, or in other words the basic education in how to accomplish the essential skill of the game: hitting the ball. It’s that ability—the capacity to send a golf ball in the direction one desires—that constitutes the thrill of the sport, the commodity that golfers pursue golf to enjoy. Unfortunately, it’s one that, for the most part, most golfers never achieve: as Rob Oller put it in the Columbus Dispatch not long ago, “it has been estimated that fewer than 25 percent of all golfers” ever break a score of 100. According to Mark King, all that is necessary to re-achieve the glory days of 2005 is to redefine what golf is—under King’s rules, I suppose it would be easy enough for nearly everyone to break 100.

I would suggest, however, that the reason golf’s participation rate has declined is not due to an unfair set of rules, but rather because golf’s model has more than a passing resemblance to Stiglitz’ description of a monopolized economy: one in which one participant has so much effective power that it effectively destroys the entire market. In situations like that Stiglitz (and many other economists) argue that regulatory intervention is necessary—a realization that, perhaps, the United States Golf Association is arriving at also through its continuing decision not to implement a second set of rules for the game.

Constructing such a set of rules could be, as Mark King or Richard Rorty might say, the “tolerant” thing to do—but it could also, arguably, have a less-than-tolerant effect by continuing to allow some to monopolize access to the pleasure of the sport. By refusing to allow an “escape hatch” by which the older model could cling to life the USGA is, consciously or not, speeding the day in which golf will become “all one thing or all the other,” as someone once said upon a vaguely similar occasion, invoking a similar sort of idea to the First Commandment or the law of non-contradiction. What the stand of the USGA in favor of a single set of rules—and thus, implicitly, in favor of the ancient idea of a single truth—appears to signify is that, to the golf organization, it just might be that fashionable praise for “diversity” is no different than, say, claiming your subprime mortgages are good, or that the figures of the police accurately reflect crime. For the USGA then, if no one else, that old time religion is good enough: despite being against anchoring, it seems that the golf organization still believes in anchors.