David Warsh: Of Biden in '72, Trump now and economic engineering
Reading The Wealth of Nations was a revelation for David Warsh
Calibrate v, trans. to determine the caliber of; spec. to try the bore of a thermometer, or similar instrument, so as to allow in graduating it for any irregularities; to graduate a gauge of any kind with allowance for its irregularities.
Nearly fifty years ago, I showed up as a new employee at the Wilmington (Del.) News-Journal on election night, 1972, the evening that New Castle County Councilor Joe Biden was elected to the U.S. Senate. Biden was 29, I was 28. The second-floor newsroom bubbled with intoxicating excitement and indignation. (President Richard Nixon had carried 49 states). But when Biden was elected president last autumn, I felt as though I had somehow turned the page.
I don’t know whether it was four years of Donald Trump, twelve months of COVID-19, the passage of nearly twenty years since I last worked for a newspaper, or faint memories of New Castle County politics, but a week ago I found the column I was working on, about economics and engineering, more interesting than the prospects of Biden’s presidency. I recognized late in the day that I hadn’t found a way to make it interesting to readers of Economic Principals, my Web site. So I put the topic aside and took a bye. Walking home, I remembered the title of Albert Hirschman’s little book Shifting Involvements: Private Interests and Public Action.
On the other hand, as a copyboy at Chicago’s City News Bureau in 1963, my second assignment had been to cover a Walter Heller press conference at the Palmer House hotel. Heller was then chairman of the Council of Economic Advisers. My attendance at the session was perfunctory; the news desk didn’t want a story. But from the Palmer House on, I was looking someplace other than City Hall in which to invest my interests.
That was all the more so after I returned to college to read history of social thought. Just five authors were on the calendar of the sophomore tutorial that year: Alexis de Tocqueville, Karl Marx, Emile Durkheim, Max Weber and Sigmund Freud. That was the year they omitted Adam Smith altogether and his Inquiry into the Nature and Causes of the Wealth of Nations, perhaps because of the temper of the times (this was 1970-71). When a couple of years after that, in the course of another assignment, I went back to read Smith for myself, it was a revelation. I have been fundamentally interested ever since in the stories we tell (and don’t tell) about economics.
Take that column about economic engineering. I found myself thinking over the last few days not so much about the conclusion of an independent market monitor that the operator of Texas’s power-grid had overcharged residents as much $16 billion during a cold snap last month as about Gov. Greg Abbott’s decision to end the state’s mask mandate and permit businesses to reopen at 100 percent capacity.
The decision to permit the highest legal rates to apply for as much as 32 hours longer than warranted was been reviewed Friday by the Texas Electricity Reliability Council, which declined to reverse the charges, even though the principles would seem to be well-established among specialists. “It’s just nearly impossible to unscramble this sort of egg,” the new chair of the Public Utility Commission said during a commission meeting.
But principles for telling people when and where to wear masks are anything but well-understood and universally agreed-upon. They have something to do with what we call culture. As economist David Kreps said of his 2018 book, The Motivation Toolkit: How to Align Your Employees’ Interests with Your Own: “My colleagues here [at Stanford University and its Graduate School of Business] don’t think this is economics, but it is.” I cannot seem to put that book away.
Economic Principals, says in its flag, “Economic Principals: a weekly column about economics and politics, formerly of The Boston Globe, independent since 2002.” Economic Principals has written frequently about politics for the last five years. Going forward, I hope put the subject mostly on autopilot.
The Trump presidency was accidental. It happened only because so many voters deemed inappropriate a Hillary Rodham Clinton presidency. Trump’s tenure proved to be a turning point, a climax, a crisis that slowly will resolve.
How close he came to re-election! How desperately he fought to hold on to office, even after he lost! The sharpest student of Trump’s career I know, who follows the literature much more widely than I do, believes it was because the now-former president understands that he is facing ruin. Suspicion of money laundering for Russian purchasers of apartments is at the heart of the case.
What I expect to happen is this: the Republican Party will gradually rebuild itself, election by election, as new generations – Gen X (b. 1961-1981) and the Millennials (b. 1982– 2004) take over from the Boomers (b. 1943-1960). The Democratic Party will take advantage of a strong economy and threats posed by the rising great-power competitor that is China to deliver the country into a new era. Congressional elections will be closely fought every two years, but I am guessing that the Democrats may remain in the White House until 2032, though only the Republicans have won the presidency three straight times since Harry Truman.
Meanwhile, I’ll return to engineering and economics next week, and try again to find something interesting to say about blueprints, instruments, and toolkits. Plenty of other columns are already in line. Re-calibration complete!
David Warsh, a veteran columnist and an economic historian, is proprietor of Somerville, Mass.-based economicprincipals.com, where this column first ran.