The Debt Crisis: a Toulmin-Style Analysis

 

–Lael Ewy

 

What is often viewed as a crisis of economics is often a crisis of values. The current debate about whether or not to raise the US debt limit is an example of this. At heart is not who has the money or how it should be distributed but why. The conservative politicians who have resolved to protect the wealthy from taxes even at the risk of putting the US government into default are simply operating out of a different set of values than than those who seek to raise the debt ceiling and combat further indebtedness with tax increases on the wealthy.

It comes down to what we think of as “earned” income and what we think of as “deserving” wealth. Facts are almost immaterial here; values determine the most important thing: the interpretation of the facts. What is at issue is what Stephen Toulmin would call the warrant for the claims made when interpreting the data (facts). In this case, neither side will take the time or risk the exposure of actually expressing the warrant, the set of values or principles being applied.

Here they are in simplified form:

For a conservative, income is earned by virtue of having been acquired through legal means. Markets exist in order to provide opportunities to make money, and whatever means present themselves for that to happen legitimize the possession of wealth by definition. Because of this, conservatives claim that taxes are theft: income earned by virtue of its possession through market forces is legitimate, and taxes represent income from outside the market. Further, because that money is taken outside the market by the system of taxation, conservatives consider it no longer earnable; all that the government possesses that cannot be brought back into the market (through tax breaks, royalty reductions, government contracts) are lost earnings opportunities.

The liberal view of wealth is that some value must be added to goods or services through application of labor or assumption of risk through capital investment in order for wealth to be earned. You earn money as a worker by having added the value of your labor to the service or object. You earn money as an investor through risking your capital on a venture. In either case, there is something at stake: time, sweat, money, skill. Value can be measured in monetary terms, but the availability of value-added services or products creates a good. From this perspective, then, taxes are an investment in a public good. In the case of the current debate, the public good is dealing with public debt. Asking the wealthy to pay more in taxes is legitimized because the rich are better equipped than other segments of society to add value to that public good, and they have been rewarded at a disproportionate rate for their investment of labor or risked capital.

Since conservatives fundamentally do not believe in the public good under this formulation (it is not “earned” on the market), allowing the government to default is perfectly legitimate as well; the public debt, as well as public wealth, was ill-gotten to begin with. Their only real concern is that a default on public debt might have ramifications for the private market and thereby threaten earning opportunities.

The matter is considerably complicated by electoral politics, in this case, and, in fact, that is probably the most immediate concern of the parties involved. Obama and by extension the Democrats want to be seen as the more responsible “grown up” party; the Republicans are trying to present themselves as stalwart and principled. They are also trying to prove their contention that government is broken by making it so.

The “job creation” argument for keeping taxes low is historically unprovable, but, again, that is not the point; values drive the claims. For conservatives, the only valid way to create jobs is through the market since the market creates legitimacy in earnings, and, by extension, in jobs. Because of this, government jobs are not legitimate, not “real” jobs because they represent market earnings opportunities lost. Certain conservative economists even go so far as to call government jobs “parasitic.”

A liberal perspective does not make this distinction. Since labor and capital add value by their application to a service or object, the origin of the object or service is immaterial. A public good is a good; a private good is a good—the difference is in how they are accessed. Money spent by a government employee spends the same as that spent by a private sector employee.

Again, this is an oversimplification of what is actually going on, of course, but it demonstrates how making clear the warrants—the values and principles that underly a claim—can explain how seemingly simple negotiations can quickly take on the trappings of impossibility.

July 4th, the Passion and the Promise

By EW Wilder

Every 4th of July I get this feeling: patriotic stirrings combined with irritation and a little bit o’ malaise.

You see, for all there is to be proud of in this experiment in self-government, there’s also a lot to regret, many ways in which it’s a failure. More accurately, we’ve failed the nation, failed to live up to the promise that Jefferson so fervently thought we’d rise to, so insightfully worried we’d not be educated enough to pursue.

I feel this even more keenly schmoozing into a new election year, with the polls showing the popularity of candidates who are little more than what the Soviets would have called “useful idiots,” figures selected more for ideological loyalty than any kind of ability, wisdom, or smarts. I actually find it quite disturbing that I can completely eviscerate the arguments of even the politicians considered too dangerously intellectual to be elected. When middling minds like mine can out-think the smart ones, and the smart ones are rare, why are we surprised when things go so consistently wrong so much of the time?

As products of the Age of Reason, our much-worshiped “founding fathers” had in mind that The People, while themselves ill-educated and prone to folly, would, when given a chance to elect representatives, choose people who were smarter and wiser than they. This we have not done. Instead, we buy into the idea that “representative” means “somebody who represents how we actually think,” not “someone who will better represent our interests than we could.” We elect “just folks” with whom we’d like to have a beer, not those whose talents for leadership and forward-thinking are clearly beyond our own.

Perhaps it’s our narcissism, our myth of each being somehow individually capable of Taming the West, that leads us to this behavior. Perhaps it’s our own vast ignorance of what we do not know, what more there is to know.

For Jefferson, the latter might have been a more compelling argument. His tombstone reads: “Here was buried Thomas Jefferson, author of the Declaration of American Independence, of the Statute of Virginia for Religious Freedom, and Father of the University of Virginia.” Nothing about the presidency is written there, but the founding of a university is. Take what you will of the good faith of his argument that he refused to free his slaves for fear that they would not be educated enough to conduct themselves well in a state of liberty, but the fact is he made that argument, and it applies to the rest of us as well.

By embracing liberty but not embracing education as a lifelong passion, as a continual pursuit, we make ourselves ignorant of what good leadership looks like, and we make ourselves incapable of the liberty our constitution guarantees and that our declaration helped secure. Doing this is the height of irresponsibility.

If you’re active in a political party, encourage those who are intellectually beyond you to run. If you’re considering an existing candidate, ask yourself if you really trust someone whose followers feel compelled to change Wikipedia to comply with her historical gaffes. If you’re thinking about what qualities you’d like to see in a candidate, don’t think of someone with whom you’d like to have a beer; think of someone from whom you’d like to take a class.

Above all, educate yourself genuinely, deeply. Close the clamshell of your laptop and go the library (yes, the public library), and check out the primary sources: don’t just read the Constitution, read Madison’s notes on the constitutional convention. Read the Federalist Papers. Read actual histories from real scholars and see where and why they disagree.

But don’t stop there: the fiction and poetry this nation has produced, the European philosophical underpinnings of our founding political thought, the contemporary concerns of our scholars and writers—all these inform what we know about who we are.

On this July 4th, make the pledge that you’ll live up to the promise this nation represents, the real pledge of allegiance, not to a flag, but “to which it stands,” the content, now, and not the form.

Imagination and Humanity’s Natural State, (a Baby Step) Toward a Holistic Cultural Philosophy

by Lael Ewy

 

1. Because human beings are products of culture, ie. we’re cultural beings,
2. “state of nature” arguments are based not on conditions that pertain to human experience but on the imaginations of those advocating them, and

3. they are inherently circular, presupposing the outcomes those arguing for them wish to promote. The notion of “promoting an idea” is, itself, a product of culture (Promoting it to whom? To what end?). This is, perhaps, most easily seen in Hobbes.

4. The use of the imagination to create/re-create cultural conditions is, itself, a manifestation of acculturation, in Hobbes’ case, western civilization.

5. We have imaginations to do, among other things, exactly that: find a place “outside” our current condition from which to view our current condition, with the understanding that

6. what we imagine is influenced by the conditions from which we imagine. We can imagine flying above the ground, but this presupposes the ground.

In other words, since we have co-evolved with culture, it is impossible to be entirely without it, as our imaginations are part of our evolution.

 

None of this is to say that such thought experiments are pointless, merely that as we do them, we should try to tease out and make manifest, to take into account, those cultural presuppositions and intellectual artifacts that skew what we think of as socially “prior” conditions. We can say, for instance, that we can learn much if we strip away some set of values or some set of legal or material conditions that we think of when we think of culture, but that does not mean we are presenting anything “real.” Even in “failed” states, even in times of extreme cultural chaos, there are vestiges of mores and ways of living that remain from functioning cultures that came before; there also develops a spirit of bricolage, of forging those elements people need to survive from the material at hand.

 

Humanity would not be here at all if Hobbes’ “state of nature” had ever obtained for any substantial period. Or, put positively, the state of nature, for human beings, is the state of living within and contributing to, a culture.

 

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About halfway through this story, you’ll hear a venture capitalist say, out loud, and unapologetically, that what he learned from the big tech bubble of ten years ago is not that bubbles are bad, but that you should simply sell sooner in order to take full advantage of them. This is, of course, exactly what is wrong with venture capitalists, exactly why they are, contrary to popular belief, not “job creators” but destroyers of the economic security regular folks rely on, bereft of human values, wretched, and bad. And, sadly, over the last 30 years, both major parties have actively supported this behavior and the ideas these people espouse.

http://www.npr.org/2011/05/26/136655334/in-linkedin-ipo-hints-of-another-tech-bubble

–TS deHaviland