White goods and the struggle against communism

Forty six million Americans are living in poverty but nobody seems to care. In a comment at Crooked Timber, Moe says:

I had this strange evening where I watched a bit of Jackie Kennedy talking smack about people and then heard this statistic about the increase in poverty and I was thinking of the alteration in attitudes toward poverty in the US between the Kennedy years and our years. I think the only thing that can explain the change in attitude, rhetoric and policy is the decline of the Soviet Union. There are no rival models, there’s no need for lip service about shared prosperity.

Moe is right. In the late 1950s Americans had something to prove — that American capitalism was outperforming Soviet communism in eliminating poverty and delivering prosperity to the people. As Soviet leader Nikita Khrushchev said: "Let’s compete. The system that will give the people more goods will be the better system and victorious."

In 1959 vice president Nixon was Moscow promoting an American exhibition that included washing machines, cars, cosmetics and frozen vegetables. The Soviets fought back by claiming that most Americans didn’t enjoy these things. America, they said, was a nation plagued by unemployment, unaffordable health care and racial discrimination.

The Kennedy and Johnson administrations felt the same pressure to demonstrate the superiority of capitalism. So when socialist activist Michael Harrington wrote a book in the early 1960s about widespread and entrenched poverty in America people in the Kennedy administration took notice. Johnson ended up declaring "unconditional war on poverty in America".

Here’s a paper I wrote a few years ago: Anti-poverty activism in the 1960s.

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Paul Montgomery
Paul Montgomery
10 years ago

The unfinished part of your argument seems to be whether a similar dynamic can be re-enacted with China and/or India to kickstart the right’s engagement with the poor.

conrad
conrad
10 years ago

I think that there is an obvious rival model (i.e., China), so an alternative is that many Americans simply think they will “lose” against them, and so perhaps now it’s everyone for themselves and hope that it doesn’t get too bad before you die. I also think that things differ from the 60s, because in the 60s, I doubt many people thought that the zenith of US power had been reached or was even close to being reached (both them and the Soviets were on the up), which I think is different to now (data?), so it’s much easier to have defeatist attitudes.

Not that I want to kick off something that will derail the thread, but that is also somewhat congruent with attitudes on climate change in the US — it’s hard to get anything going that you have no direct self-interest in, since many people know they will die before it affects them even if things are going downhill, and I doubt people really do care as much about the next generation as is often assumed.

Pedro
Pedro
10 years ago

Moe might be right that there is no longer an explicit competition between competing ideologies, but do you really think that nobody cares about poverty or wants to promote equality? Sounds like crap to me.

Patrick
Patrick
10 years ago

Really? The impact of China and India is the opposite Paul – it is rather morally dubious to accept that we must kneecap those who have never seen a washing machine to help make sure that our own citizens can buy a new one every five years.

An alternative take to Don’s would be that providing poor people with a bit of money and whitegoods is quite easy – it just takes money! Hence we’ve done it. Making them not poor is quite hard – it is behavioural and cultural – and hence we haven’t advanced nearly so much.

Of course it may be that the achievement of the easy goal has had negative implications for the harder one, too.

Patrick
Patrick
10 years ago

And to respond to Conrad’s gratitious derailment, what is it with the US? I am not aware of any country outside the EU (and am very sceptical about the actual citizens of the EU member states) who have any material willingness to pay for climate change policies.

conrad
conrad
10 years ago

Patrick, I just used that as an example of defeatist attitudes, where instead of doing something, people are happy to do nothing even if the later consequences are worse, especially if the consequences won’t affect them. In hindsight of one hour ago, I think I shouldn’t have mentioned it given the previous threads.

Peter Patton
Peter Patton
10 years ago

I’d say emigration application figures are a pretty good test. ;)

Peter Patton
Peter Patton
10 years ago

So when socialist activist Michael Harrington wrote a book in the early 1960s about widespread and entrenched poverty in America people in the Kennedy administration took notice

Leftists no longer care about this sort of stuff. They fell for the great con of substituting race for class, so now spend their time racked with paranoia suspiciously reading TV ads for signs of racism, or huffing and puffing about imperialism and ‘Othering’ in some god forsaken dump or other.

Paul Frijters
Paul Frijters
10 years ago

Don,

you might well be right, though i wonder about the trends in terms of votes. Do the poor come out to vote in the US as much as they did previously and are they voting on the basis of their material interest or are they following some other cause?

I agree with Peter that emigration intentions are the right test of which system is working better.

Dont count on China treating its poor any better than the US. It is currently a more brutal capitalist society than the US (which is also why it is becoming more religious). If the US can learn anything from China then it is to educate less lawyers :-)

Peter Patton
Peter Patton
10 years ago

Donald Horne was remarkably prescient about even 21st century Australian socialists – oops, sorry, I understand they are all ‘activists’ now.

But as Horne explained, a fascination with American
social-problem literature was part of the derivative nature of Australian intellectual life:

“Power elites, Paper Economies, Organization Men, Radical Rights, Hidden Persuaders… These ogres march upon Australians with such force that Australians sometimes look for Radical Rights or Organization Men under their own beds…” (Horne, 1965) : 85.

Except of course, today’s orgres come from France more than the US. Or France, via the US.

Don Arthur
Don Arthur
10 years ago

Paul – I don’t think Kennedy’s interest in poverty was about winning over the votes of poor Americans. According to Nicholas Lemann:

Kennedy had been briefed on the 1964 election by Richard Scammon, the director of the census. Scammon said that many voters thought that federal programs really didn’t help them. Kennedy asked him how a new poverty program might affect the campaign. Scammon said that it wouldn’t do him much good, because most voters didn’t consider themselves poor, and those who did weren’t the ones a Democratic presidential candidate had to win over.

Kennedy adviser, Joseph Heller pushed for an anti-poverty program. He argued:

that a poverty program would help in the 1964 campaign, not by bringing in more of the poor-person vote but by pulling good-hearted suburban Republican Protestant churchwomen away from Nelson Rockefeller.

Don Arthur
Don Arthur
10 years ago

… and, as Lemann argues, Kennedy almost certainly wouldn’t have declared unconditional war against poverty. That was a Johnson thing.

Peter – Leftists like John Quiggin care about this kind of stuff.

Peter Patton
Peter Patton
10 years ago

That’s true, Don. You’ve got one there.

Peter Whiteford
Peter Whiteford
10 years ago

Peter

There are actually an extremely large number of think tanks, lobby groups, NGOs, church groups and academic research centres in the USA that analyse and advocate about poverty and they have done so since the 1960s or in some cases before.

Paul Bamford
Paul Bamford
10 years ago

@4:

…providing poor people with a bit of money and whitegoods is quite easy – it just takes money! Hence we’ve done it. Making them not poor is quite hard – it is behavioural and cultural – and hence we haven’t advanced nearly so much.

Sad but true – the complacent self-satisfaction of the Aussie bourgoisie is so deeply entrenched in culture and behaviour that it’s hard to imagine how it might be overcome.

Mike Pepperday
Mike Pepperday
10 years ago

“providing poor people with a bit of money and whitegoods is quite easy”

I don’t know about money but regarding whitegoods, there were no home microwave ovens in east Germany because the government decided it was too hard.

.
.
10 years ago

Don,

Another interesting post. Keep them coming.

Steve X
Steve X
10 years ago

From the PBS link:

DOUGLAS BESHAROV, University of Maryland: Well, I think, yes, that’s right.

For as long as we have been collecting statistics about poverty, we have seen a slow, but steady reduction in poverty rates in the country, with members of racial and ethnic groups being left behind, at least somewhat, and problems of family breakdown, divorce, non-marital births contributing to poverty rates.

So, poverty has been decreasing, leading people to worry about it less. So, gradually something was being done.

Now, the US is in a poor economic state, which people care lots about. In part because of poverty. Again from the PBS link:

ISABEL SAWHILL, Brookings Institution: Oh, it is definitely unemployment that’s driving this increase in poverty rates and leading to the record numbers that you talked about in the lead-in.

People do care about poverty. But people don’t share the same solutions.

To engage Conrad’s derail, people also care about the future. It’s just that many people think that Climate Change is not the great threat that some do. Indeed, if you look at many of the arguments against C02 reduction policies the point they make is that we will be worse off with carbon reduction policies.

Pedro
Pedro
10 years ago

Don I guess the idea that there is a war over poverty policy is the final debunking of the original claim that nobody cars about poverty. But maybe what you really meant is that now that the Sovs are gone, the heartless right-wingers have reverted to type and are leading a successful anti-anti-poverty assault.

murph the surf.
murph the surf.
10 years ago

Paul – when does self satisfaction qualify as happiness?
If they are truly happy why are you intent on making them unhappy?
Is it for their own good or for the satisfaction of other’s political agendas?
Don @ 21 -What do you think was the factor present in the 60’s that has faded away now?
Maybe there was a strong memory of collective action in the war period and subsequent reconstruction effort.
The 70’s seemed to drift and then the inflation period released the Thatcher/Reagan era and the time since then has been spent trying to philosophically and morally defend selfishness.
You know,it is for our own good apparently.

KB Keynes
KB Keynes
10 years ago

Murph,

Contrary to a lot of thinking selfishness, greed et al is actually bad for the capitalist system.

It is how we get business cycles with rather large amplitudes.

A rising standard of living makes poverty evaporate for a lot of people. Poverty was much worse back in the 50s and 60s. For example I doubt many have bread and dripping to eat.

.
.
10 years ago

selfishness, greed et al is actually bad for the capitalist system

What drives the profit motive Homer?

It is how we get business cycles with rather large amplitudes.

Explain how this works Homer.

For example I doubt many have bread and dripping to eat.

I know old farts who like it.

Pedro
Pedro
10 years ago

Didn’t Clinton make a lot of big welfare changes? Maybe sixties typepolicies were dropped because they didn’t much work.

KB Keynes
KB Keynes
10 years ago

Pedro,

the Clinton Welfare policies were great whilst the economy was growing however they didn’t work well with Republican presidents and recessions.

Very easy to explain how greed affects the economy. If workers go for excess wage increases or companies attempt to gain excess profit through price rises the Central bank raises interest rates and engineers a recession.

The Recession is enlarged as behaviour takes time to change.

Profit maximization is not greed.

This is the rudiments of capitalism.

Few people liked bread and dripping and this fell away as living standards rose.

jtfsoon
jtfsoon
10 years ago

Very easy to explain how greed affects the economy. If workers go for excess wage increases or companies attempt to gain excess profit through price rises the Central bank raises interest rates and engineers a recession.

A central bank not guided by monetarist insights perhaps Homer. As Friedman explained the last time he was here, trade unions can’t be blamed for inflation.

Paul Bamford
Paul Bamford
10 years ago

Paul – when does self satisfaction qualify as happiness?
If they are truly happy why are you intent on making them unhappy?
Is it for their own good or for the satisfaction of other’s political agendas?

Murph:

In answer to your first question, what qualifies as “happiness” is a very old philosophical conundrum. Self satisfaction may not qualify as “genuine” happiness, however it is a pleasant feeling so, insofar as pleasant feelings contribute to happiness, self satisfaction makes you happier than self dissatisfaction.

In answer to your second question, I am by no means intent on making the Aussie bourgoisie unhappy. Should the Aussie bourgoisie demonstrate the capacity to feel good about themselves without looking down on those whose behaviour and culture (rather than personal misfortune) make them poor then by all means let the Aussie bourgoisie be happy.

In answer to your third question – neither. It’s for my own personal happiness. Patrick’s declaration at #4 that “Making them not poor is quite hard – it is behavioural and cultural” deserved to be challenged since it implicitly assumes that poverty is the product of bad behaviour and bad culture, rather than a product of resource allocation. The general acceptance of that view leads to policy prescriptions that punish the poor for the misfortune of poverty. if the Aussie bourgoisie had the good grace to recognise that their well-being is largely the product of good fortune, things might be different.

KB Keynes
KB Keynes
10 years ago

we always thank the Lord Central Banks pay little attention to Milton in that sense. Even our own Barry Hughes gave Milt a bit of a caning on Monday conference.
john Halfpenny regularly used this in the absurd wage negotiations later.

funny how increased wage costs have NO impact of profit levels.

the RBA ,courtesy of Bernie Fraser , raised rates because neither Unions nor Companies took low inflation seriously.

They did after rates rose.

Soony has never taken to economic history but then he is a catallaxian.

.
.
10 years ago

the RBA ,courtesy of Bernie Fraser , raised rates because neither Unions nor Companies took low inflation seriously

Evidence please Homer. I’m sure this is buried somewhere in Vol 3 of the 1981 Zimbabwean Journal of Monetary Macroeconomic Dynamics.

KB Keynes
KB Keynes
10 years ago

evidence. never heard of the RBA website? Cash rates?

Look Marky we know your one sandwich short of a picnic but this is ridiculous even for someone as a lazy catallaxian (sorry for tautology)

.
.
10 years ago

So Homer, how do the cash rates prove that greed causes business cycles and that “unions and companies didn’t take inflation seriously”.

This is the quip of a cream puff who has never worked in the private sector as an owner, manager or worker.

KB Keynes
KB Keynes
10 years ago

what you do not know why the RBA put up rates?

Thought so.

wow and you are wrong on all counts but I do agree you are a cream puff.

Still cannot think either

.
.
10 years ago

You are just a contradicting idiot Homer.

You are spouting crap from the 1970s that unions, employers and good economists don’t agree with.

KB Keynes
KB Keynes
10 years ago

I haven’t said anything from the 70s.

you really do lose it when you clearly have been found out.

.
.
10 years ago

I haven’t said anything from the 70s.

Can you find one respected economist from the 1980s onward who says that business and unions cause inflation?

Give up Homer. Even this basic level of discussion is above you.

KB Keynes
KB Keynes
10 years ago

Really what happens when companies attempt to raise profit margins by raising prices or unions attempts to gain wage rises well in advance of what profitability is in the company.

We were still getting used to low inflation in 1994 whereas we are fully used to it now. Behaviour has changed.

That is what low inflation and keeping it low is all about. Getting rd of the greed mentality.

I do agree this is well above you however

.
.
10 years ago

That is what low inflation and keeping it low is all about. Getting rd of the greed mentality.

This isn’t even descriptive economics, it is so fucking utterly stupid. To increase the savings rate – the cash rate is cranked up. Investors flocking to 20% interest rates around 1982 and 1990 wasn’t a problem? I suppose by lowering the amount of leverage available to firms and wage earners mortgage’s, “greed” was eliminated?

You are literally too goddamned stupid and dishonest to debate any issue with.

Somehow, just fucking somehow you destroy every article you come across. Well done you ill educated, over promoted whack job.

No one cares what you say Homer, but you’re too fucking stupid to realise that.

I’ve had enough of your asinine, intellectually bankrupt shilling for a grotesque version of the most unpopular parts of ALP policy.

KB Keynes
KB Keynes
10 years ago

increasing the savings rate?

wow where did that come from.

It is pretty simple. Keeping inflation low means companies cannot increase their profit margin by simply increasing prices. Nor can trade Unions win undue increased wage increases.

The RBA in 1994 increased rates twice despite where the output gap was. It did this to change behaviour and it succeeded. Bernie Fraser went into RBA folklore as the Best ever Governor.

you can’t debate any issue as when you are being beaten around the head you try to change the issue again and again as we see here. Very transparent

.
.
10 years ago

The RBA in 1994 increased rates twice despite where the output gap was. It did this to change behaviour and it succeeded. Bernie Fraser went into RBA folklore as the Best ever Governor.

You’re on planet X you crackpot.

Not even descriptive economics.

At the end of the day, no one cares what you say Homer.

Pedro
Pedro
10 years ago

http://econlog.econlib.org/archives/2011/09/30.html

“… the weird way in which the federal government counts people who are poor: it doesn’t include in their income many of the benefits it gives them to take them out of poverty. If those benefits were included, many millions of people now officially counted as poor would not be so counted …”