How Past Generations Thought Differently about the Economy

The Federal Reserve’s two most recent unemployment reports remind us that the nation’s top economists remain optimistic about the job market. It’s a familiar tune by now: Business is scrambling for new employees and work is plentiful. As Chair of the Federal Reserve Jerome H. Powell put it plainly in his January report, “The jobs picture continues to be strong.”

Yet something about economists’ unwavering optimism seems to offend the progressive sensibilities. Several Democratic presidential hopefuls, including California Senator Kamala D. Harris, Massachusetts Senator and Law School Professor emeritus Elizabeth A. Warren, and former Secretary of Housing and Urban Development Julián Castro, have already made fixing the economy a keystone issue — adding to a raucous chorus of new progressive voices in Congress that are raising concerns about subsistence wages and what they consider the growing ranks of working poor. There’s also something unsettling, as the conservative British author Tim Montgomerie once put it, about the amorality of the capitalist marketplace in general. Something about divorcing economics from civic or moral judgment naturally unsettles us.

As government economists continue to laud the current job climate, we might stop to consider the question of work from a civic perspective. Are we missing something important about the quality and dignity of labor in the American economy, as so many Democrats — particularly from the party’s progressive wing — would have us believe?

As with all civic questions, the Founders are a safe place to start. What do they tell us about the kind of work Americans should aspire to?

Thomas Jefferson, perhaps the most interested of the Founders in the course that labor might take in an industrial age, was deeply skeptical of factory work. In Query XIX of his “Notes on the State of Virginia,” Jefferson laid out his skepticism explicitly, noting, “[L]et us never wish to see our citizens occupied at a work-bench, or twirling a distaff.”

In his essay on a “Project for Moral Perfection” from his autobiography, Benjamin Franklin supplied another kind of insight on the question of dignified work, listing “Industry” as a cardinal virtue, whose chief precept he described succinctly as “Lose no Time.” In that same essay, Franklin characterized industry as “producing Affluence and Independance [sic].”

Abraham Lincoln, perhaps America’s greatest public philosopher (though not technically a Founder), would also speak on several occasions about work. In a speech from 1860, Lincoln observed, “When one starts poor, as do most in the race of life, free society is such that he knows he can better his condition.” It is the promise of improvement that justifies the unequal division of endowments in a free society. As long as a person can expect to see returns on their hard work, what does it matter if they start out as a hired hand?

For a long time, these civic and moral questions of economic thinking received similar neglect from Republicans and Democrats. In his book “The Age of Reform,” the great historian of American populism Richard Hofstadter describes a sense of disinterest in the grander moral and ethical questions of the economy following Roosevelt’s New Deal. The new faith was in “enlightened administration” and no longer in the moral project that that solution was meant to underwrite. Now that disinterest, I think, has evolved into full amoral rot.

To recover the project, I think it would do us good to introduce some healthy normativity into the “dismal science.”

We can consider the jobs question. The Federal Open Market Committee’s December 2018 report was in many ways promising. Unemployment bottomed out at 3.7 percent, near all-time “tights” (job openings per worker). Year-over-year wage growth in non-farm industries also tracked slightly above two percent, narrowly outpacing inflation. And staff economists predicted “larger-than-usual upward pressure” on labor force participation rate (a measure of working or work-seeking adults as a fraction of the total working-age population).

These data paint a singularly optimistic picture of the American labor market (lethargic wages notwithstanding). The takeaways from the Bureau of Labor Statistics’ most recent data, however, were more ambiguous. On the one hand, as labor market economist Julia Pollak ’09 pointed out, the tight labor market meant more choices for workers, whether as better pay packages, expanded non-wage benefits, or more professional advancement opportunities.

But amid the “arms race to bring in people,” certain sectors saw their greatest increases in the low-skilled bucket. In health care, the fastest growing sub-sector was ambulatory services, which saw 22,000 new jobs. In “transportation and warehousing,” the largest job gains materialized among “couriers and messengers” and “warehousing and storage.” Additionally, two of the fastest growing sectors year-over-year for 2018 were manufacturing and food services, industries known for slim worker protections and ultra-high turnover.

At the state level, job-growth data gives similar reason for pause. Florida reports that it needs more construction workers; Texas more truckers; and Carmel, Indiana more fast food workers. These are fine jobs, but perhaps not ones that offer citizens a better alternative to Jefferson’s dreaded “work-bench” or Franklin’s dependency job.

What I suggest is that as new figures on the size of the economy continue to emerge, we also apply to them our age-old civic questions. Do these jobs foster livelihoods? Do they fortify character? And most importantly, do they pave the way to individual improvement?

When we can answer all these questions in the affirmative, then we will have achieved strong economies both fiscal and moral. That kind of achievement would truly signal American greatness.

Henry N. Brooks ’19 is a Social Studies concentrator in Currier House. His column appears on alternate Fridays.