My Year in Economics: The New Divide

vw minibus

Fourteen months ago I shared an espresso with one of my daughters in Seoul, at a place called the Minibus Café because of the mint condition classic VW bus parked in front. (As you can see, the Asian version is more mini than the ones we see in the States). We talked about what she’s observed through her expat life as well as what was going on back home, covering topics such as globalization, disruptive technologies, the polarization of opinions and lack of public discourse, the “new economy” and its new paradigm job market, populist pushback political movements… all topics that have found their way into this blog series. I told her someone in her generation — maybe her — ought to go to grad school (probably in London, I guessed) and develop a fresh economic model capable of making sense of this bewildering avalanche of change.

“Maybe you should,” she replied.

And so I did, but minus grad school, London. and the fresh economic model. Instead, over the past year I became an economics autodidact, logging 30+ books and hundreds of online articles on economics, jobs, and technology (I get about 10 a day in my email feeds from all around the world). What I’ve learned hasn’t so much explained the world in economic terms, it has turned that world inside-out and upside-down.

Right away, I encountered two persistent themes, which I’ve mentioned before but will again:

  1. There is a dominant line of economic analysis taking place mostly in the rest of the world (and among sympathizers in U.S. academia) that is absent in the U.S. policy-making debate.

rise of the robots

As Silicon Valley entrepreneur, economics writer, and TED speaker Martin Ford writes in Rise of the Robots:  Technology and the Threat of a Jobless Future (2015), “In the field of economics the opinions all too often break cleanly along predefined political lines. Knowing the ideological predisposition of a particular economist is often a better predictor of what that individual is likely to say than anything contained in the data under examination.”

  1. Economic opinions are as hopelessly politically polarized as about everything else, so that any attempt to inject the worldwide analysis into the domestic conversation gets the instant “talk to the hand” response.

Instead of dialogue and inquiry, there’s a dominant “might makes right” and “if it ain’t broke don’t fix it” mentality among U.S. policymakers — in both government and business — that makes our public discourse (such as it is) either dismissive or blind to insights from the rest of the world.

I’ve come to call this insularity the “New Divide,” for reasons I explain below. It’s not difficult to understand where it comes from:  the USA is unquestionably the world’s dominant economic force, and we citizens, as a whole, are the beneficiaries of the highest personal income and net worth on the planet. In my former estate planning and family business succession law practice, I saw every single day how the free market of neoliberalism had prospered hard-working Americans.

This past year, though, I learned that this wasn’t because all my clients were specially gifted in finance and business (although some probably were), they were also riding a massive thirty-year worldwide economic growth trend. (While visiting my daughter in South Korea, I witnessed its “Miracle on the Han River” firsthand.) Still, although the post-WWII economic surge did indeed lift all economic boats around the world, it especially did so in America, and if you compare averages (always a dodgy business), the best the rest of the prosperous First World can boast is roughly 70% of the average wealth of the average American.

All of which makes it easy for Americans to think the Econ 101 supply and demand version of capitalism we learned in school is doing just fine. (Textbook guru Robert Samuelson said it’s probably the only economics any of us remember.) On the other hand, my reading and research over the past year has confirmed something else I noticed in the last years of my law practice:  the self-made, middle class, rags-to-riches millionaire-next-door has increasingly become an historic icon that shows little prospect of a reprise. Not only that, but economics commentators around the rest of the world rarely agree that our Econ 101 model ain’t broke — or that it’s even fixable.

It’s been like finding out that a friend I never see anymore hasn’t been doing so well, and that’s why:  I feel chagrined, like I might have asked, maybe sought them out. Econ 101 capitalism is a remarkably enduring concept that still gets the majority of air time, but was nowhere to be found in the course of my informal studies. Instead, certain disturbing trends — job dissatisfaction, meaning malaise, spiking suicide rates related to meaning malaise, income and wealth inequality, the newly stratified working class system, meaningless jobs, the breakdown in the historical link between productivity and higher earnings, chronic unemployment among young people — are not only worldwide, they’ve been going on long enough to become systemic and unlikely to self-correct.

Finding out about all of that has often left me with a heightened feeling of angst about the world my kids are growing up in (the same world I’m growing old in) that has sometimes made my year investigating the dismal science of economics feel dismal indeed. In that frame of mind, it seems unlikely the New Divide will be bridged any time soon, if ever, and the more we turn a blind eye and deaf ear to global opinions about economic welfare and functionality, the more likely it is that things can’t end well for us. (It’s been fascinating to see many of these economic themes emerging in the protests in Iran.)

Hence, the New Divide. I borrowed the term from a favorite song by a favorite band, Linkin Park — if you know the band, you know they’ve often expressed their own apocalyptic angst. The song came to mind particularly because of the lyric “give me reason to prove me wrong.” I’ve been looking to be proven wrong about what I’ve been learning, but haven’t found it. Instead, the New Divide and its revelations keep asserting themselves, demanding a fresh reckoning.

And reckon we will in the coming weeks and months of blog posts. Next time we’ll look at a consensus list of how our outlook on capitalism has been failing us, and the week after we’ll look at the mega-reality behind the list. Until then, you might take a moment for the song.

Linkin Park performed New Divide at the release party of — ironically — the movie Transformers. Watching the performance again was made more poignant for me by front man Chester Bennington’s suicide earlier this year. Here’s the video:

Linkin Park Transformers

And here are the lyrics:

I remember black skies
The lightning all around me
I remember each flash
As time began to blur
Like a startling sign
That fate had finally found me
And your voice was all I heard
That I get what I deserve

So give me reason
To prove me wrong
To wash this memory clean
Let the floods cross
The distance in your eyes
Give me reason
To fill this hole
Connect this space between
Let it be enough to reach the truth that lies
Across this new divide

There was nothing inside
The memories left abandoned
There was nowhere to hide
The ashes fell like snow
And the ground caved in
Between where we were standing
And your voice was all I heard
That I get what I deserve

So give me reason
To prove me wrong
To wash this memory clean
Let the floods cross
The distance in your eyes
Across this new divide

In every loss in every lie
In every truth that you deny
And each regret and each goodbye
Was a mistake too great to hide
And your voice was all I heard
That I get what I deserve

So give me reason
To prove me wrong
To wash this memory clean
Let the floods cross
The distance in your eyes
Give me reason
To fill this hole
Connect this space between
Let it be enough to reach the truth that lies
Across this new divide
Across this new divide
Across this new divide

Author: Kevin Rhodes

Kevin Rhodes is on a mission to bring professional excellence and personal wellbeing to "anyone wants to create change in their workplaces and personal lives." He draws insight and perspective from his prior career in the law, business, and consulting, also from his studies in economics, psychology, neuroscience, entrepreneurship, technology, and life experience.

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