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Economic View

By ROBERT J. SHILLER

“Make America Great Again,” the slogan of President-elect Donald J. Trump’s successful election campaign, has been etched in the national consciousness. But it is hard to know what to make of those vague words.

We don’t have a clear definition of “great,” for example, or of the historical moment when, presumably, America was truly great. From an economic standpoint, we can’t be talking about national wealth, because the country is wealthier than it has ever been: Real per capita household net worth has reached a record high, as Federal Reserve Board data shows.

But the distribution of wealth has certainly changed: Inequality has widened significantly. Including the effects of taxes and government transfer payments, real incomes for the bottom half of the population increased only 21 percent from 1980 to 2014. That compares with a 194 percent increase for the richest 1 percent, according to a new study by Thomas Piketty, Emmanuel Saez and Gabriel Zucman.

That’s why it makes sense that Mr. Trump’s call for a return to greatness resonated especially well among non-college-educated workers in Rust Belt states — people who have been hurt as good jobs in their region disappeared. But forcing employers to restore or maintain jobs isn’t reasonable, and creating sustainable new jobs is a complex endeavor.

Difficult as job creation may be, making America great surely entails more than that, and it’s worth considering just what we should be trying to accomplish. Fortunately, political leaders and scholars have been thinking about national greatness for a very long time, and the answer clearly goes beyond achieving high levels of wealth.

Adam Smith, perhaps the first true economist, gave some answers in “An Inquiry Into the Nature and Causes of the Wealth of Nations.” That treatise is sometimes thought of as a capitalist bible. It is at least partly about the achieving of greatness through the pursuit of wealth in free markets. But Smith didn’t believe that money alone assured national stature. He also wrote disapprovingly of the single-minded impulse to secure wealth, saying it was “the most universal cause of the corruption of our moral sentiments.” Instead, he emphasized that decent people should seek real achievement — “not only praise, but praiseworthiness.”

Strikingly, national greatness was a central issue in a previous presidential election campaign: Lyndon B. Johnson, in 1964, called for the creation of a Great Society, not merely a rich society or a powerful society. Instead, he spoke of achieving equal opportunity and fulfillment. “The Great Society is a place where every child can find knowledge to enrich his mind and to enlarge his talents,” he said. “It is a place where leisure is a welcome chance to build and reflect, not a feared cause of boredom and restlessness.”

President Johnson’s words still ring true. Opportunity is not equal for everyone in America. Enforced leisure has indeed become a feared cause of boredom and restlessness for those who have lost jobs, who have lost overtime work, who hold part-time jobs when they desire full-time employment, or who were pushed into unwanted early retirement.

But there are limits to what government can do. Jane Jacobs, the great urbanist, wrote that great nations need great cities, yet they cannot easily create them. “The great capitals of modern Europe did not become great cities because they were the capitals,” Ms. Jacobs said. “Cause and effect ran the other way. Paris was at first no more the seat of French kings than were the sites of half a dozen other royal residences.”

Cities grow organically, she said, capturing a certain dynamic, a virtuous circle, a specialized culture of expertise, with one industry leading to another, and with a reputation that attracts motivated and capable immigrants.

America still has cities like this, but a fact not widely remembered is that Detroit used to be one of them. Its rise to greatness was gradual. As Ms. Jacobs wrote, milled flour in the 1820s and 1830s required boats to ship the flour on the Great Lakes, which led to steamboats, marine engines and a proliferation of other industries, which set the stage for automobiles, which made Detroit a global center for anyone interested in that technology.

I experienced the beauty and excitement of Detroit as a child there among relatives who had ties to the auto industry. Today, residents of Detroit and other fading metropolises want their old cities back, but generations of people must create the fresh ideas and industries that spawn great cities, and they can’t do it by fiat from Washington.

All of which is to say that government intervention to enhance greatness will not be a simple matter. There is a risk that well-meaning change may make matters worse. Protectionist policies and penalties for exporters of jobs may not increase long-term opportunities for Americans who have been left behind. Large-scale reduction of environmental or social regulations or in health care benefits, or in America’s involvement in the wider world may increase our consumption, yet leave all of us with a sense of deeper loss.

Greatness reflects not only prosperity, but it is also linked with an atmosphere, a social environment that makes life meaningful. In President Johnson’s words, greatness requires meeting not just “the needs of the body and the demands of commerce but the desire for beauty and the hunger for community.”

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