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.

Paper Moon

Say, it’s only a paper moon
Sailing over a cardboard sea
But it wouldn’t be make-believe
If you believed in me
—“It’s Only A Paper Moon” (1933).

 

As all of us sublunaries knows, we now live in a technological age where high-level training is required for anyone who prefers not to deal methamphetamine out of their trailer—or at least, that’s the story we are fed. Anyway, in my own case the urge towards higher training has manifested in a return to school; hence my absence from this blog. Yet, while even I recognize this imperative, the drive toward scientific excellence is not accepted everywhere: as longer-term readers may know, last year Michael Wilbon of ESPN wrote a screed (“Mission Impossible: African-Americans and Analytics”) not only against the importation of what is known as “analytics” into sports—where he joined arms with nearly every old white guy sportswriter everywhere—but, more curiously, essentially claimed that the statistical analysis of sports was racist. “Analytics” seem, Wilbon said, “to be a new safe haven for a new ‘Old Boy Network’ of Ivy Leaguers who can hire each other and justify passing on people not given to their analytic philosophies.” But while Wilbon may be dismissed because “analytics” is obviously friendlier to black people than many other forms of thought—it seems patently clear that something that pays more attention to actual production than to whether an athlete has a “good face” (as detailed in Moneyball) is going to be, on the whole, less racist—he isn’t entirely mistaken. Even if Wilbon appears, moronically, to think that his “enemy” is just a bunch of statheads arguing about where to put your pitcher in the lineup, or whether two-point jump shots are valuable, he can be taken seriously if he recognizes that his true opponent is none other than—Sir Isaac Newton.

Although not many realize it, Isaac Newton was not simply the model of genius familiar to us today as the maker of scientific laws and victim of falling apples. (A story he may simply have made up in order to fend off annoying idiots—a feeling with which, if you are reading this, you may be familiar.) Newton did, of course, first conjure the laws of motion that, on Boxing Day 1968, led William Anders, aboard Apollo 8, to reply “I think Isaac Newton is doing … the driving now” to a ground controller’s son who asked who was in charge of the capsule—but despite the immensity of his scientific achievements, those were not the driving (ahem) force of his curiosity. Newton’s main interests, as a devout Christian, were instead about ecclesiastical history—a topic that led him to perhaps the earliest piece of “analytics” ever written: an 87,000-word monstrosity the great physicist published in 1728.

Within the pages of this book is one of the earliest statistical studies ever written—or so at least Karl Pearson, called “the founder of modern statistics,” realized some two centuries later. Pearson started the world’s first statistics department in 1911, at the University College London; he either inaugurated or greatly expanded some half-dozen entire scientific disciplines, from meteorology to genetics. When Albert Einstein was a young graduate student, the first book his study group studied was a work of Pearson’s. In other words, while perhaps not a genius on the order of his predecessor Newton or his successor Einstein, Pearson was prepared to recognize a mind that was. More signifcantly, Pearson understood that, as he later wrote in the essay that furnishes the occasion for this one, “it is unusual for a great man even in old age to write absolutely idle things”: when someone immensely intelligent does something, it may not be nonsense no matter how much it might look it.

That’s what led Pearson, in 1928, to publish the short essay of interest here, which is about what could appear like the ravings of a religious madman, but as Pearson saw, weren’t: Newton’s 1728 The Chronology of Ancient Kingdoms amended, to which is prefixed: A Short Chronicle from the First Memory of Things in Europe to the Conquest of Persia by Alexander the Great. As Pearson understood, it’s a work of apparent madness that conceals depths of genius. But it’s also, as Wilbon might recognize (were he informed enough to realize it) it’s a work that is both a loaded gun pointed at African-Americans—and also, perhaps, a very tool of liberation.

The purpose of the section of the Chronology that concerned Pearson—there are others—was what Pearson called “a scientific study of chronology”: that is, Newton attempted to reconstruct the reigns of various kings, from contemporary France and England to the ancient rulers of “the Egyptians, Greeks and Latins” to the kings of Israel and Babylon. By consulting ancient histories, the English physicist compiled lists of various reigns in kingdoms around the world—and what he found, Pearson tells us, is that “18 to 20 years is the general average period for a reign.” But why is this, which might appear to be utterly recondite, something valuable to know? Well, because Newton is suggesting that by using this list and average, we can compare it to any other list of kings we find—and thereby determine whether the new list is likely to be spurious or not. The greater the difference between the new list of kingly reigns and Newton’s calculations of old lists, in short, the more likely it is that the new list is simply made up, or fanciful.

Newton did his study because he wanted to show that biblical history was not simply mythology, like that of the ancient Greeks: he wanted to show that the list of the kings of Israel exhibited all the same signs as the lists of kings we know to have really existed. Newton thereby sought to demonstrate the literal truth of the Bible. Now, that’s not something, as Pearson knew, that anyone today is likely much to care about—but what is significant about Newton’s work, as Pearson also knew, is that what Newton here realized was that it’s possible to use numbers to demonstrate something about reality, which was not something that had ever really been done before in quite this same way. Within Newton’s seeming absurdity, in sum, there lurked a powerful sense—the very same sense Bill James and others have been able to apply to baseball and other sports over the past generation and more, with the result that, for example, the Chicago Cubs (managed by Theo Epstein, Bill James’ acolyte) last year finally won, for the first time in more than a century, the final game of the season. In other words, during that nocturnal November moonshot on Chicago’s North Side last year, Sir Isaac Newton was driving.

With that example in mind, however, it might be difficult to see just why a technique, or method of thinking, that allows a historic underdog finally to triumph over its adversaries after eons of oppression could be a threat to African-Americans, as Michael Wilbon fears. After all, like the House of Israel, neither black people nor Cubs fans are unfamiliar with the travails of wandering for generations in the wilderness—and so a method that promises, and has delivered, a sure road to Jerusalem might seem to be attractive, not a source of anxiety. Yet, while in that sense Wilbon’s plea might seem obscure, even the oddest ravings of a great man can reward study.

Wilbon is right to fear statistical science, that is, for a reason that I have been exploring recently: of all things, the Voting Rights Act of 1965. That might appear to be a reference even more obscure than the descendants of Hammurabi, but in fact not so: there is a statistical argument, in other words, to be derived from Sections Two and Five of that act. As legal scholars know, those two sections form the legal basis of what are known as “majority minority districts”: as one scholar has described them, these are “districts where minorities comprise the majority or a sufficient percentage of a given district such that there is a greater likelihood that they can elect a candidate who may be racially or ethnically similar to them.” Since 1965, such districts have increasingly grown, particularly since a 1986 U.S. Supreme Court decision (Thornburg v. Gingles, 478 U.S. 30 (1986) that the Justice Department took to mandate their use in the fight against racism. The rise of such districts are essentially why, although there were fewer than five black congressmen in the United States House of Representatives prior to 1965, there are around forty today: a percentage of congress (slightly less than 10%) not much less than the percentage of black people in the American population (slightly more than 10%). But what appears to be a triumph for black people may not be, so statistics may tell us, for all Americans.

That’s because, according to some scholars, the rise in the numbers of black congressional representatives may also have effectively required a decline in the numbers of Democrats in the House: as one such researcher remarked a few years ago, “the growth in the number of majority-minority districts has come at the direct electoral expense of … Democrats.” That might appear, to many, to be paradoxical: aren’t most African-Americans Democrats? So how can more black reps mean fewer Democratic representatives?

The answer however is provided, again perhaps strangely, by the very question itself: in short, by precisely the fact that most (upwards of 90%) black people are Democrats. Concentrating black voters into congressional districts, in other words, also has the effect of concentrating Democratic voters: districts that elect black congressmen and women tend to see returns that are heavily Democratic. What that means, conversely, that these are votes that are not being voted in other districts: as Steven Hill put the point for The Atlantic in 2013, drawing up majority minority districts “had the effect of bleeding minority voters out of all the surrounding districts,” and hence worked to “pack Democratic voters into fewer districts.” In other words, majority minority districts have indeed had the effect of electing more black people to Congress—at the likely cost of electing fewer Democrats. Or to put it another way: of electing more Republicans.

It’s certainly true that some of the foremost supporters of majority minority districts have been Republicans: for example, the Reagan-era Justice Department mentioned above. Or Benjamin L. Ginsberg, who told the New York Times that such districts were “‘much fairer to Republicans, blacks and Hispanics” in 1992—when he was general counsel of the Republican National Committee. But while all of that is so—and there is more to be said about majority minority districts along these lines—these are only indirectly the reasons why Michael Wilbon is right to fear statistical thought.

That’s because what Michael Wilbon ought to be afraid of about statistical science, if he isn’t already, is what happens if somebody—with all of the foregoing about majority minority districts in mind, as well as the fact that Democrats have historically been far more likely to look after the interests of working people—happened to start messing around in a fashion similar to how Isaac Newton did with those lists of ancient kings. Newton, remember, used those old lists of ancient kings to compare them with more recent, verifiable lists of kings: by comparing the two he was able to make assertions about which lists were more or less likely to be the records of real kings. Nowadays, statistical science has advanced over Newton’s time, though at heart the process is the same: the comparison of two or more data sets. Today, through more sophisticated techniques—some invented by Karl Pearson—statisticians can make inferences about, for example, whether the operations recorded in one data set caused what happened in another. Using such techniques, someone today could use the lists of African-American congressmen and women and begin to compare them to other sets of data. And that is the real reason Michael Wilbon should be afraid of statistical thought.

Because what happens when, let’s say, somebody used that data about black congressmen—and compared it to, I don’t know, Thomas Piketty’s mountains of data about economic inequality? Let’s say, specifically, the share of American income captured by the top 0.01% of all wage earners? Here is a graph of African-American members of Congress since 1965:

Chart of African American Members of Congress, 1967-2012
Chart of African American Members of Congress, 1967-2012

And here is, from Piketty’s original data, the share of American income captured etc.:

Share of U.S. Income, .01% (Capital Gains Excluded) 1947-1998
Share of U.S. Income, .01% (Capital Gains Excluded) 1947-1998

You may wish to peruse the middle 1980s—perhaps coincidentally, right around the time of Thornburg v. Gingles both take a huge jump. Leftists, of course, may complain that this juxtaposition could lead to blaming African-Americans for the economic woes suffered by so many Americans—a result that Wilbon should, rightly, fear. But on the other hand, it could also lead Americans to realize that their political system, in which the number of seats in Congress are so limited that “majority minority districts” have, seemingly paradoxically, resulted in fewer Democrats overall, may not be much less anachronistic than the system that governed Babylon—a result that, Michael Wilbon is apparently not anxious to tell you, might lead to something of benefit to everyone.

Either thought, however, can lead to only one conclusion: when it comes to the moonshot of American politics, maybe Isaac Newton should still—despite the protests of people like Michael Wilbon—be driving.