How Economics and Race Drive America’s Great Divide

Originally published at the Institute for New Economic Thinking website

In the America of haves and have-nots, fewer folks are “movin’ on up” like George Jefferson of the classic sitcom. In a new paper for the Institute for New Economic Thinking, Peter Temin, MIT economist and economic historian, breaks down how it happened and where we’re headed with a powerful model first used by West Indian economist W. Arthur Lewis, the only person of African descent to win a Nobel Prize in economics.

Dual economies are common in less developed countries, but Temin argues that America has now diverged into a top thirty percent, where children receive excellent educations and grow up to work in sectors like finance, technology and electronics industries (FTE)— and then there’s the rest, the low-wage folks who live paycheck to paycheck and whose kids have little hope of joining the lucky ones at the top. Temin explains what drives the dual economy, what race has to do with it, how children are hurt, and why our political system can’t seem to fix anything.

Lynn Parramore: Back when Sir Arthur Lewis talked about the dual economy, he was looking at developing countries where rural people initially serve as a reservoir of cheap labor for people in the cities. Why apply this model to an advanced country like the U.S.?

Peter Temin: For a long time I’ve been concerned with growing inequality. At the same time I’ve seen more problems with education and the condition of infrastructure around the country. I used to see these as separate problems and kind of joked that we’re becoming a less developed country. Suddenly, I realized that Lewis’s model described all of these things as aspects of a single underlying model of the economy.

The Lewis model is very intuitive. It ties together this sense of inequality at the top of the income distribution and wage stagnation at the low end. You start thinking, how are the sizes of the two sectors limited? How do you transition between them?

LP: When did this dual economy take off and what contributed to its creation?

PT: I think it began in the 1970s and 80s and I trace it back to Nixon, and then Reagan who pushed it further. You had people opposed to the New Deal and to the growth of Civil Rights. It wasn’t so much new aims but rather getting more power and being able to advance these aims by various routes that were discovered and exploited in the 1970s and 80s.

LP: Is moving from the low-wage part of the economy to the other, better-paid part just a choice somebody makes?

PT: The key decision that you or your parents make is to get an education — critically, a college education. That is important for two reasons: knowledge and what economists call “social capital,” which might be even more important. Social capital comes during college when you learn new ways of interacting, how to choose who you can trust and how to convey to other people that they can trust you. It’s the kind of lubrication that lets the FTE economy operate. We don’t have a class or major in this. It’s part of what happens in the whole process of education that enables people to move from one sector of the economy to the other.

LP: So it’s not only what goes on in the classroom, but what’s happening outside in the hallways and the social gatherings and the networking that really makes the difference?

PT: Exactly.

LP: You’ve noted that race plays a role that is often overlooked. What are we missing? How do racial biases relate to economic circumstances?

PT: I think a lot of the language of political discussion is tinged with the overtones of race and with the residue of the long history of the long history of America, starting with slavery and continuing with reconstruction and then Jim Crow and then finally the Civil Rights Movement and law changes of the 1960s. Today the discussion isn’t overtly racist but it has the aspect of race in it. Take the Affordable Care Act — almost all the states that refused to expand Medicaid even though the federal government would pay for most of it were Confederate states.

Nobody said, “Oh, the Confederacy will rise again.” But the association doesn’t seem to be accidental. The whole concern for more states’ rights is at least in part an attempt to let states with a troubled racial history go their own way. But since it’s not considered polite to use the terms of race today, these connections are rather underground in the political environment. That’s another reason why political decisions don’t seem to get to the concerns of ordinary people. The use of terms like “Welfare Queen” inflames people and they don’t think clearly. It also distracts from the actual policies that help people in what I call the low-wage sector.

LP: You point out that mass incarceration has had tremendous negative economic impacts on black men and male children. Speaking of the “Welfare Queen” label, can you say a little about the black female experience in the dual economy?

PT: This needs more study because we’re not totally clear what’s happening. But we do know that when the men go to jail, black women become single parents. And if there’s anything we know about the progress of families in the post-war world, it’s that children of single-parent households do badly. That is a major problem. A lot of black women are trying to do the best they can given that the men are in jail, or, if they’ve gotten out of jail, can’t get jobs, can’t live in subsidized housing, and have all of these problems because of public policy. They’re trapped by the system, and even more than that, the children have trouble getting ahead. The children start school with an educational deficit. It’s harder for them to transition into the FTE sector. Some spectacularly intelligent and talented people do, but the numbers are still small.

LP: You’ve stressed the decline of public funding for education and infrastructure that comes with this dual economy. Do you see prospects for a reversal?

PT: The politics of this is very difficult because the Supreme Court has enabled the top of the FTE sector to have a disproportionate influence on the political decisions through its rulings on campaign finance and related issues. So we’re not dealing with the root problems of the dual economy. Current politics is not very responsive to the needs of the citizens.

LP: Would you say that public policy is not only creating a dual economy for the present, but also locking it in for future generations?

PT: Alas, that is an implication of what I’m saying. Yes.

LP: If we continue on the path of the dual economy, will members of the affluent FTE sector do damage to their own interests?

PT: My sense is that we need to first think about the dispersion of incomes within the FTE sector and then for the people near or at the top of the FTE structure. Those people feel themselves to be citizens of the world. They can go anywhere, and they will do fine. They did well out of the global financial crisis in 2008, and they think they can survive anything. I don’t think they’ve thought through what will happen to their position in the world economy if the U.S. really does relapse back into being a developing style economy — that it may change the shape of the world economy. Then they may have problems. The people at the lower end of the FTE economy are concerned that technology and globalization will force them down into the low-wage sector. They’re nervous about what’s going to happen to them and their children and that may shade over into politics.

LP: Does having a dual economy prevent the economy as a whole from growing?

PT: We have a measurement problem here. The GDP concept came in the interwar period, when manufacturing was the center, together with agriculture. You could measure the outputs and then compare them with the inputs and see economic growth and growth in productivity.

When the economy gets to be dominated more by services, and that’s very much the pattern of the FTE sector, we don’t know how to measure the output there. We need to have better measurements in order to better know what the concept of growth is that we’re thinking of, and then we can talk about the effects. There are articles in the paper and now some books about the measurement of national income, GDP, and so on. We’re at the beginning of that discussion. They’re beginning to talk at the UN and elsewhere about the human development index and so on — broadening the concept and having a different measure.

LP: What are some things we might do to reunify?

PT: The first step, which a lot of people are taking, is trying to help people in the low-wage economy. You can go tutor students in an urban school and that will help a few students, and that will be a good thing, but it won’t affect the structure of the economy. There are a whole variety of things, minimum wage laws and other political things that you can do which affect conditions in the low-wage economy but won’t change the overall structure. A concerted political effort is required to try to change the nature of the economy. That’s a long struggle. One reason is that the trend toward the dual economy has been going on for a generation and it’s pretty well entrenched. Politically, one would have to have a kind of big movement. One of our candidates, Bernie Sanders, keeps talking about having a revolution. Yet I think that even what he wants to do is smaller than one would need to do to get rid of the dual economy. I’m talking about a big change.

LP: Then is it fair to say that really none of the presidential candidates is proposing anything that would significantly alter the structure of this dual economy as you’ve described it?

PT: I think that’s fair to say, yes. The question of what to do is difficult for the same reason that measuring the output is difficult. The world is changing. We’re not going to go back to some mythical period in the past where everyone was together. The post-war growth left African Americans out of it, left women out of it in large part. So it wasn’t quite such an inclusive period. Looking backwards is not terribly useful. Technology has changed. The world economy has changed.

If I had to choose one thing to focus it would be education. That’s both because it would help determine how people could move from the lower sector to the upper sector, and also because I think very firmly that more education enhances people’s lives. We’ve focused on testing, but the things that happen in sports or art or history are difficult to test, and they’re now being neglected. Here again we have a measurement problem. This then requires a lot more thought, more investigation.

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  1. JTMcPhee

    LP: Does having a dual economy prevent the economy as a whole from growing?

    PT: We have a measurement problem here. The GDP concept came in the interwar period, when manufacturing was the center, together with agriculture. You could measure the outputs and then compare them with the inputs and see economic growth and growth in productivity.

    When the economy gets to be dominated more by services, and that’s very much the pattern of the FTE sector, we don’t know how to measure the output there. We need to have better measurements in order to better know what the concept of growth is that we’re thinking of, and then we can talk about the effects. There are articles in the paper and now some books about the measurement of national income, GDP, and so on. We’re at the beginning of that discussion. They’re beginning to talk at the UN and elsewhere about the human development index and so on — broadening the concept and having a different measure.

    So “we” can sort of see, through our economialist’s prisms and lenses, can see the house is starting to burn, but some folks in the upper rooms are really getting it on and having a great time, and our long fixation is on GROWTH (just like a cancer cell’s), so maybe rather than try to put the fire out, let’s us put on our thinking caps and come up with an innovative, passionate way to measure and describe and hence render acceptable, conceptually, the varying comparative rate at which various parts of the structure are burning…

  2. Jim Haygood

    ‘really none of the presidential candidates is proposing anything that would significantly alter the structure of this dual economy’

    This is axiomatic. The purpose of the 160-year-long Depublicrat duopoly is to defend the status quo. By the time the winning candidate is vetted and nominated, the party can be certain that he/she/it will threaten no radical structural changes.

    Vote Depublicrat, comrades: for more of the same, piled higher and deeper!

  3. reslez

    “More education” Is certainly a palatable recommendation for anyone who’d like to avoid the truly difficult work of “reshaping” the economy, which will require breaking a few gold-plated rice bowls (as Lambert likes to say). Ideally, education teaches people to think. These days, however, the universities are in the grip of managerial crapifiers, treated as little more than conveyer belts leading to certifications and debt. STEM unemployment is significant at all levels. I’ve even seen discussion lately that unemployed (male) STEM graduates are more likely to turn to vigilantism and terrorism. Be careful what you wish for.

    1. washunate

      That struck me, also. How does an interview touching upon topics like mass incarceration and the misuse of GDP end up with a platitude about education being the number one priority?

    2. Lexington

      Couldn’t agree more.

      As befits an MIT professor Temin’s critique is pretty weak tea and doesn’t come anywhere close to examining key dogmas of the American establishment, such as America is a “meritocracy” (it presumably did right by Prof. Temin, after all), and the meritocracy works, it’s just that many disadvantaged Americans are unable to take advantage of it for want of access to higher education. If everyone could just get a business or engineering degree and join the FTE elite everything would be fine!

      1. participant-observer-observed

        As if a society that only values FTE workers/expertise is somehow worthwhile and satisfying.

        He hints at ‘sports, history, and arts’ but only as a ‘measurement problem’ as if nobody at MIT has every heard of qualitative research methodology.

  4. Durans

    I had a little trouble getting through this, I don’t really disagree with most of it, in fact you can say it is only one letter that I have a major problem with. That letter is “E”, specifically the E in the FTE acronym he made.

    The US has an electronics industry? Don’t make me laugh.

    Okay we do have an electronics industry, but big enough to get included as one of three industries that make up the new economy? I don’t think so. The US electronics industry is only somewhat less dead than it’s manufacturing industry.

    The US electronics industry field is littered with decayed husks of behemoths long since dead. Wandering among them are a few survivors with shrunken and withered bodies, pale shadows of their former selves. A few small creatures still scurry around, having found a niche in which they can survive. The only ones that made it out okay have left for better lands elsewhere, becoming global, no longer truly considering this land home. Over all the land is desolate, its better days having past with no sign of ever coming back.

    1. Lexington

      The US has an electronics industry? Don’t make me laugh.

      Well the US has Apple. Even if it’s basically a Chinese corporation run by American nationals from California.

      Presumably that’s what establishment insiders like Temin understand by an “electronics industry”.

    2. Carla

      The acronym should FTR: Finance, Technology and Robbery. Oh, nevermind. The F and the T fold perfectly into the R, so all we need is R anyway. Very disappointing interview. We have to fix the political system first, because all of our “economic” problems are in fact, political ones. I guess PT hints at that, but then he falls back on “education” as the solution. Really weak.

      1. Malcolm MacLeod,MD

        Carla: You cut to the the chase quite well. It’s true that some education, or
        at least the appearance of it, is good, but what is becoming more important
        in the upper echelons is a fat slice of larceny, and this will get you further
        faster than a Phi Beta Kappa pin. This is already commonly acknowledged
        and practiced world wide.

  5. Paul Tioxon

    Wallerstein’s World System Analysis presents 3 units of analysis. Core, semi-periphery and periphery. The wealth is extracted from the 2 periphery areas to the core. As the global fight to claw their way out of periphery status to semi-periphery, think S Korea, Brazil or Turkey it is not just a hard and fast place that periphery status resides neatly behind national borders. Within the USA are peripherial areas, not just to the US but globally. West Virginia seems to be stuck in a raw material provider role with less linkage to global trade and very little in return for the people and towns directly involved in the coal extraction.

    Ghetto slums in large cities, for example, SW Philadelphia and parts of N Philly, are as distant from the gleaming towers and multimillion dollar condos in Center Cit or the ritzy Main Line as Bangladesh in terms of social connection. The city of Philadelphia has assumed the role as warehouse for the poor and all the diminishing public services provided for them in the SE Pennsylvania/S Jersey multi county region of over 5 million.

    It is the result of long term zoning codes for exclusive development of only single family detached homes of a minimum and thereby expensive acreage and organized community opposition of those very homeowners to multifamily housing, apartment houses or even more affordable townhomes, the classic Philly rowhome by another name. Don’t even think about subsidized or public projects or section 8 vouchers. That is all relegated to Philadelphia proper with all of the predictable results of crowding the working poor, poor and the poorest of the poor together in tightly packed rowhouse neighborhoods with as many as 40 or 50 homes on one side of the street facing maybe 30 feet from the front doors of the homes on the other side of the street. Pray there is no fire in one, the whole block can go down very quickly.

    The model presented here has other corroboration from the sociologists Perrucci and Wysong in the book, THE NEW CLASS SOCIETY. They point to not a pyramid, but a diamond shape of stratification with society requiring about 20% at the top to manage and operate the nation, the economy and that upper quintile leading well provisioned, stable lives with all of the income, status and social capital needed to transmit this lifestyle to their children. College education, regular health care, dental care, stress free years of development until fully prepared and credentialed to enter the work force at the upper end of stratified society. And of course, the segregation of going to the better private colleges where they will meet only similar achieving, intelligent and goal oriented friends and future partners as spouses. The socialization process is what the university system at the extremely expensive high end tuition costs represents. You are only likely to meet the utterly brilliant talented and accomplished from the bottom 80% and mostly the people who can afford to be there with enough capacity to get out in a reasonable amount of time with a degree.

    One final comment, the political revolution that is explicit in Bernie Sanders, is a revolution, a counter-revolution to the the neo-liberal takeover. But you can not over turn the structural features within the USA, because the USA built a global system outward from itself, making the USA the Core at the center of the World System that is not just in name only, but really a global system of trade and national security alliances. The USA as the builder of the United Nations order is enmeshed in a world of its own design and can not simply pass domestic laws piecemeal to make the rest of the world go away to improve the material well being of the population whose income is less and less as a result of the World System. Capitalism will not pass away with one or two successive administrations wide ranging and effective policy implementation. The mixed economy that seemed to grow up until the 1970s has been turned back, but not entirely. There has not been any large scale structural change, but certainly a return to some of the mixed economy I was familiar with and was widely taught in econ course through the 1970s. Political Revolution aims at far more change, the structural kind that will transform power, who has it, who gets what they want, how they want it and get it on terms that can be held onto in the face of inevitable organized opposition to push back.

    1. Nathan LaBudde

      Good addition on your part. I agree with the notion of a “diamond shape” model as opposed to the pyramid.

  6. vegeholic

    I agree with prof. Temin’s analysis completely until the end when he advocates more attention to education to help people move into a higher prosperity bracket. Education in what? The current fashion, FTE, as he describes, is going to be gradually supplanted by more fundamental knowledge requirements. My recommendation is for something like FFSAMM, food, fiber, shelter, animal husbandry, mechanics, and medicine. Our current FTE sector uses vast quantities of nonrenewable resources to produce mostly entertainment, convenience, and unmanageable streams of waste. If we are going to build something which is more equitable, it must also have a strong foundation and be sustainable.

    1. TheCatSaid

      FFSAMM–yes! These are precisely the skills that will be most important sooner that we think. I had a conversation with a local farmer recently along these lines.

      Over the last few generations people in the “developed” world have lost their connection to their collective knowledge base and practical experience in the FFSAMM skills.

      1. Malcolm MacLeod,MD

        TheCatSaid: I agree with you completely. Buy a good farm with its own
        water, lake, forrest, land, and animals, and count your blessings. A library
        and cribbage board would be nice as well.

  7. Skippy

    here is a growing and disturbing trend of anti-intellectual elitism in American culture. It’s the dismissal of science, the arts, and humanities and their replacement by entertainment, self-righteousness, ignorance, and deliberate gullibility.

    Susan Jacoby, author of The Age of American Unreason (link is external), says in an article in the Washington Post, “Dumbness, to paraphrase the late senator Daniel Patrick Moynihan, has been steadily defined downward for several decades, by a combination of heretofore irresistible forces. These include the triumph of video culture over print culture; a disjunction between Americans’ rising level of formal education and their shaky grasp of basic geography, science and history; and the fusion of anti-rationalism with anti-intellectualism.”

    There has been a long tradition of anti-intellectualism in America, unlike most other Western countries. Richard Hofstadter, who won a Pulitzer Prize in 1964 for his book, Anti-Intellectualism In American Life, describes how the vast underlying foundations of anti-elite, anti-reason and anti-science have been infused into America’s political and social fabric. Famous science fiction writer Isaac Asimov once said: “There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that my ignorance is just as good as your knowledge.”

    Mark Bauerlein, in his book, The Dumbest Generation (link is external), reveals how a whole generation of youth is being dumbed down by their aversion to reading anything of substance and their addiction to digital “crap” via social media.

    Journalist Charles Pierce, author of Idiot America (link is external), adds another perspective: “The rise of idiot America today represents–for profit mainly, but also and more cynically, for political advantage in the pursuit of power–the breakdown of a consensus that the pursuit of knowledge is a good. It also represents the ascendancy of the notion that the people whom we should trust the least are the people who best know what they are talking about. In the new media age, everybody is an expert.”

    “There’s a pervasive suspicion of rights, privileges, knowledge and specialization,” says Catherine Liu, the author of American Idyll: Academic Antielitism as Cultural Critique (link is external)and a film and media studies professor at University of California. The very mission of universities has changed, argues Liu. “We don’t educate people anymore. We train them to get jobs.”

    Part of the reason for the rising anti-intellectualism can be found in the declining state of education in the U.S. compared to other advanced countries:

    After leading the world for decades in 25-34 year olds with university degrees, the U.S. is now in 12th place. The World Economic Forum ranked the U.S. at 52nd among 139 nations in the quality of its university math and science instruction in 2010. Nearly 50% of all graduate students in the sciences in the U.S. are foreigners, most of whom are returning to their home countries; The Oklahoma Council of Public Affairs commissioned a civic education poll among public school students. A surprising 77% didn’t know that George Washington was the first President; couldn’t name Thomas Jefferson as the author of the Declaration of Independence; and only 2.8% of the students actually passed the citizenship test.

    Along similar lines, the Goldwater Institute of Phoenix did the same survey and only 3.5% of students passed the civics test; According to the National Research Council report, only 28% of high school science teachers consistently follow the National Research Council guidelines on teaching evolution, and 13% of those teachers explicitly advocate creationism or “intelligent design;”

    8% of Americans still believe that the sun revolves around the earth, according to a Gallup poll; The American Association of State Colleges and Universities report on education shows that the U.S. ranks second among all nations in the proportion of the population aged 35-64 with a college degree, but 19th in the percentage of those aged 25-34 with an associate or high school diploma, which means that for the first time, the educational attainment of young people will be lower than their parents;74% of Republicans in the U.S. Senate and 53% in the House of Representatives deny the validity of climate change despite the findings of the U.S. National Academy of Sciences and every other significant scientific organization in the world;

    According to the 2009 National Assessment of Educational Progress, 68% of public school children in the U.S. do not read proficiently by the time they finish third grade. And the U.S. News & World reported that barely 50% of students are ready for college level reading when they graduate;
    According to a 2006 survey by National Geographic-Roper, nearly half of Americans between ages 18 and 24 do not think it necessary to know the location of other countries in which important news is being made. More than a third consider it “not at all important” to know a foreign language, and only 14 percent consider it “very important;

    According to the National Endowment for the Arts report in 1982, 82% of college graduates read novels or poems for pleasure; two decades later only 67% did. And more than 40% of Americans under 44 did not read a single book–fiction or nonfiction–over the course of a year. The proportion of 17 year olds who read nothing (unless required by school ) has doubled between 1984-2004;

    Gallup released a poll (link is external) indicating 42 percent of Americans still believe God created human beings in their present form less than 10,000 years ago;

    A 2008 University of Texas study found that 25 percent of public school biology teachers believe that humans and dinosaurs inhabited the earth simultaneously.

    Skippy… finally figuring out profit does not equal **True** after decades of privatization under the auspices of neoliberalism, Health, Education, Common pool resources, and wost of all Government should not be run like a Business…. all hail MPS – !!!!!!!!!

    1. Jim

      Richard Hofstadter is one of our greatest mythmakers,

      In his book, “The Age of Reform” he presents an analysis of American agrarian populism which draws primarily on the literary ideas of individual like Horace, French Physiocrats, and English Poets and concludes that American populism was an idea born in irrationality and primarily an attitude based on some kind of romantic yearning.

      Hofstadter didn’t bother to look into the actual internal structure of the agrarian movement itself and I take his book to be a homage to the “cult of ignorance” in American politics.

      There is hardly an American farmer mentioned in his analysis.

      In fact, Hofstadter, seems to have completely overlooked the fact that this grass-roots populist movement succeeded in mobilizing over 2 million individuals and fashioned a broad political agenda that really challenged then emerging industrial power relations.

      His conception of populism became quite popular among intellectuals because it reinforced their implicit condescending attitudes towards average citizens.

      His superficial analysis of populism also became quite popular because his findings harmonized quite well with the conventional wisdom of elite culture, while at the same time confirming such “professionals,” as himself, as being the only proper guide to understanding historical inquiry.

      If anyone was being anti-intellectual– in his analysis of populism–it was Richard Hofstadter.

  8. Jim

    Peter Temin appears, at times, to grasp the true magnitude of the financial/economic/political/cultural crisis the country faces when he states “A concerted political effort is required to try to change the nature of the economy. That’s a long struggle. Politically one would have to have a big movement. One of our candidates, Bernie Sanders, keeps talking about having a revoluton. Yet I think that even what he wants to do is smaller than one would need to do to get rid of the dual economy.”

    So Peter, what is your strategy? How would you change the nature of our economy? How would you create a big movement?

    Now is the time to be explicit.

    What is your conversion narrative?

    1. JTFaraday

      I need a new conversion narrative. But you don’t just sit down and write those things, you know. In any case, as far as I am concerned, the real left still needs to walk back that (re)definition of human being and citizen into (mere) labor fodder. Just invoking education-as-cure-all, especially these days, certainly doesn’t do that.

  9. hemeantwell

    Analyses like this are just flabbergastingly partial. Perhaps I missed a clause, but isn’t it all about Equal Opportunity and about education as a good thing? What about globalization, the erosion of the manufacturing sector, destruction of unions, etc? I get very impatient with such a specialized, narrow approach because its political follow-through is so enfeebled. Proponents end up in wonkish, Powerpointed horsetrading over dwindling budget resources while the Masters of the Universe stumble along and drain the pond we’re all floating in. I don’t expect him to set out a full-blown program of revolutionary socialism, or even a pseudorevolutionary restoration of Keynesianism as we knew it (which no longer appears possible). But there should be at least a gesture at the bigger picture and how it bears on these remedies.

    Must be Friday.

    1. Linda Willaredt

      I agree with your critique. This perspective is shallow and ineffectual. The author talks about altering who might wind up with the seat in a game of musical chairs. It doesn’t discuss the problem that there isn’t adequate seating for all of the participants or how we could alter the process to create adequate seating at the table.

  10. barrisj

    One clear aspect of the “dual economy” as it concerns African-Americans is the institutional foundations which have created and abetted to this day an economically and racially divided society…this is what white people wanted in the decades following the Civil War, not only in the South, but in major urban and suburban regions across the rest of the US. Racial covenants, “red-lining”, and “white flight” have led to huge differences in educational opportunities for black children, as school districts everywhere track the racial composition of their students, and money has flown and continues to flow to predominantly white-neighbourhood schools, to the detriment of inner-city districts – really, de facto resegregation. Even the much reviled and seemingly defunct “separate-but-equal” doctrine appears to be getting a second look, if Justice Scalia’s comments from the bench regarding the UT affirmative-action suit is any guide. Local, state, and the federal government have for generations placed “legal” barriers to a fully integrated society, and books, films – in fact, the entire white cultural edifice – have as well portrayed African-Americans in derogatory, racially stereotypic ways that the white majority has taken on board, whether consciously or otherwise, which nevertheless has produced a race-conscious society, with nearly four centuries of conditioning to try to overcome. The problem has gone way beyond low-level meliorative actions, and it may be time to re-exam the whole question of “reparations” as a more effective strategy of drastically changing race-based educational and economic outcomes…incrementalism has clearly failed time and time again.

    1. TheCatSaid

      Thanks for highlighting this. The original post seemed very weak regarding racism. It mentioned something about being embedded, but didn’t acknowledge the extent to which it was the very foundation of the USA. And it had next to nothing of value to say about how this fundamental system could be changed.

  11. Wayne Gersen

    I have been relentlessly blogging and commenting in opposition to ESSA, the bipartisan act to replace NCLB with a new bill that will give States the authority to set educational standards, design tests to measure those standards, and determine the consequences when a school fails to meet those standards…. and the primary reason for my disdain for this move is captured in one key sentence:

    “The whole concern for more states’ rights is at least in part an attempt to let states with a troubled racial history go their own way.”

    When Alabama, who blatantly tried to take voting rights away from blacks and poor people, is given the opportunity to make education policy it is abundantly clear where they will head when they are allowed to go their own way. When TX, KS, and TN— all of whom want Creationism in the curriculum— it’s difficult to see how giving them the chance to “go their own way” is god to help our country become more economically competitive or help the children raised in poverty to avail themselves of the education they need to move up the economic ladder. And yet education IS the last best chance for us to close the divide…

    I despair at the celebration over passage of this deeply flawed bill…

  12. Carla

    barrisj — everything you said is right. The only thing I would suggest is that there’s no “de facto” about segregation, at least in the parts of the country I’m familiar with. We have plain old segregation — morphing into apartheid.

    1. barrisj

      Thank you, Carla, for your kind response…bottom-line, as they say, is that white folks just don’t get it…and one wonders if in time time they will get it…but, when they do, they will probably be in the minority, and will look for a “saviour” to sort their sorry arses.


  13. TheCatSaid

    Interesting post–but worthwhile because of the comments above.
    I miss banger’s participation.

    I am underwhelmed consistently with Institute for New Economic Thinking (INET). A year ago I saw an interview with one of the principals, and I was excited and impressed–only to slowly realize it was not at all what it said on the box. “New economic thinking” on their terms is wishy-washy small, ineffective moves that don’t pose a significant challenge to what we currently have, or seem designed to stay in the ineffective theoretical stratosphere. This made sense once I realized that George Soros was behind INET. Duh.

    I was disappointed that the article had so little to say or offer regarding racism in a practical way, given the title of the post.

    In the meantime, many people are actually DOING things NOW in a different way. M-CAM, participatory budgeting, urban agriculture, Savory Institute, Grace Lee Boggs Center, Heritable Innovation Trust, and Global Innovation Commons are a few bodies that come to mind that are currently DOING things in new ways.

  14. Jesper

    This part:

    Social capital comes during college when you learn new ways of interacting, how to choose who you can trust and how to convey to other people that they can trust you. It’s the kind of lubrication that lets the FTE economy operate.

    is describing xenophobia and closed minds. If they are not like us, how can we trust them? The great liberal intellectual ignorance and unwillingness to encounter anything outside of their comfort/safe-zone.

    And it also describes how fraudsters so easily can trick those same intellectuals. Convey the proper signals and due diligence is forgotten….

  15. Keith

    We used to believe in demand driven, trickle up Capitalism and now we believe in supply side, trickle down Capitalism.

    The new belief set allows much higher payments at the top and much lower taxation at the top as the money will trickle down.

    Is China finding supply creates its own demand?

    With this new global belief set we have taken out eye off the global consumer and demand is tanking as can be seen in global commodity markets.

    How is the global consumer these days?

    1) The once wealthy Western consumer has had all their high paying jobs off-shored. As a stop gap solution they were allowed to carry on consuming through debt. They are now maxed out on debt.

    2) Japanese consumers have been living in a stagnant economy for decades.

    3) Chinese and Eastern consumers were always poorly paid and with nonexistent welfare states are always saving for a rainy day. Western demand slumped in 2008 and the debt fuelled stop gap has now come to an end.

    4) The Middle Eastern consumers are now too busy fighting each other to think about consuming anything and are just concerned with saying alive.

    5) South American and African consumers are busy struggling with economies that are disintegrating fast.

    With our new beliefs, that are the polar opposite of how Capitalism actually works, we are laying waste to the global consumer.

    We had unregulated, trickledown Capitalism in the UK in the 19th Century.

    We know what it looks like.

    1) Those at the top were very wealthy
    2) Those lower down lived in grinding poverty, paid just enough to keep them alive to work with as little time off as possible.
    3) Slavery
    4) Child Labour

    Immense wealth at the top with nothing trickling down, just like today.

    The beginnings of regulation to deal with the wealthy UK businessman seeking to maximise profit, the abolition of slavery and child labour.

    Thinking the wealthy will act as generous benefactors is a huge mistake.

    Central Banks, believing in the new upside down economics, put money in at the top of the economy, the banks, expecting it to trickle down but it just stays at the top blowing asset bubbles.

    With everything indicating current beliefs are totally wrong we stick with them because they make those at the top rich and feel good about themselves.

    1. Keith

      The new upside-down economics has just take us back to the 1920s and everything is playing out as it did then.

      1920s/2000s – high inequality, high banker pay, low regulation, low taxes for the wealthy, robber barons (CEOs), reckless bankers, globalisation phase

      1929/2008 – Wall Street crash

      1930s/2010s – Global recession, currency wars, rising nationalism and extremism

      You think the 1930s is bad?
      In the 1940s you get global war

  16. Denis Drew

    ” One of our candidates, Bernie Sanders, keeps talking about having a revolution. Yet I think that even what he wants to do is smaller than one would need to do to get rid of the dual economy. I’m talking about a big change. “

    Big Change? How about emulating continental Europe or French Canada: re-establishing high union density? Or emulating Argentina or Indonesia (emulating continental Europe) with centralized (sector-wide) collective bargaining — the gold standard?

    US Union organizing laws have been in place for 3/4 of a century — the issues are presumably settled — said laws are curiously missing one thing: dentures.

    Don’t even need Bernie. Just get the most progressive labor states (WA, OR, CA, NV, IL, NY) to make union busting a felony (to make violating the state or federal laws that are in place a felony) — backed by RICO prosecution for persistent abusers. Next door-state folks will catch on that they too should just be able to collective bargain if just they feel like (for better or worse it’s their market right). Could spread like grass fire — all on its own if some local legislature would spark the kindling.

    Warping, colluding, manipulating your competitors in ANY OTHER market lands you in jail (probably federal) real fast. Why is the most important market of all — most important for the great majority’s economic as well as political health — left completely to the mercy of the powerful: monopsonist owners (one buyer) squishing non-monopoly labor (too many sellers)?

    Consumers always provide the final check on prices — as it should be.

    ” If I had to choose one thing to focus it would be education. “

    40% at most are going to college. What will education do for American born taxi drivers who wont work 60 grueling hours for $500 (we used to earn $800 — adding a dollar a mile might get it back — now 50 cents below 1981)? Or for the 100,000 out of my guestimate 200,000 Chicago gang age males who are dealing drugs? Or for the formerly middle class supermarket workers whose contracts have been gutted by Walmart (centralized bargaining the cure for that).

    Psychological note: our gang bangers would have gladly worked for $200 a week 100 years ago because that would be the best the economy could have rewarded them with at its then level of output. The same gangs wont work for $400 “chump change” today (min wage $11 in 1968). Beauty of collective bargaining is that you know that labor (with ownership) has squeezed out the most the consumer (the free market) is willing to pay.

  17. MarkJ.Lovas

    This guy is making a substantial assumption–one which I doubt. What I studied does matter–and I studied Philosophy (and finally got a Ph.D.).
    It’s not just about learning social skills or whatever. It matters to who I am and how I interact with other people–the thoughts I have in my head. It’s not just about some sort of rhetorical sophistical ability to interact with other people.

    But I am willing to grant that as society is currently constituted, what I learned by studying philosophy (the substance) is of no interest to most employers, and is of no interest to powerful people. They don’t give a damn about a lot of stuff–and that’s why we have wars and no sane reaction to global warming.

    I am sure something is similar is true about the study of literature and other subjects.

    And, in fact, quite ironically, it may well be true that the study of Economics itself is not important because of the concrete subject matter, but mainly because it’s proof than an individual is willing to put up with bullshit coming from on high.–A point Yanis Varoufakis has made–and when he made it he was quoting a successful businessman, and he used more polite words than I’ve just used

  18. Keith

    When losses at the top are pushed onto those at the bottom inequality is going to rise.

    Globalisation always goes in phases of expansion and retrenchment into nationalism.

    We have seen how the current globalisation works.

    In the good times, prior to 2008, all we hear about is the wealth creators. How they are responsible for the boom and how they deserve to keep their rewards.

    In the bad times, after 2008, the easy profits have gone and so have the wealth creators. It is up to national tax payers and national institutions (Governments and Central Banks) to sort out the mess.

    The profits are privatised and the losses are socialised.

    Unconditional bailouts for bankers and austerity for the people.

    A globalist elite lining their pockets at everyone else’s expense.

    What is there not to like?

    We cannot tax the rich any more as they will go abroad, so those at the bottom have to suffer with austerity as there is no money.

    The people know that if more people arrive, then the budget will have further to go and more cuts will be necessary.

    A breeding ground for retrenchment into nationalism.

    1920s/2000s – high inequality, high banker pay, low regulation, low taxes for the wealthy, robber barons (CEOs), reckless bankers, globalisation phase

    1929/2008 – Wall Street crash

    1930s/2010s – Global recession, currency wars, rising nationalism and extremism

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