Wednesday, May 29, 2024

How Noble a Nobel.

I never heard of Nobel-Prize-winning economist Edmund Phelps until I read a review of his recent book in The Wall Street Journal. 

As someone who's spent his entire life as a "creative," and is spending his current "after-life" bemoaning the death of creativity, how could you read the headline and subhead below and not, immediately, post-haste, and right now rush out to buy the book?

A Nobelist calls for creativity. 

Try that on the next junior assistant intern brand manager who's assigned to review your work who comes back with 73 changes in 14-colors and who has successfully removed every shred of likability from your work and convinced his machine-made bosses that spots that open with a logo and a chime perform 1.3-percent better on rainy days in the Atacama than spots that don't.

Second, the WSJ's subhead, which includes these words, which at one time might have described the best of agencies in the best of times. You know, when agencies were independent, profitable, important to their clients and advertising was an actual way to make a living. The words are "vast imaginarium."

Sorry, Dr. Phelps, most businesses today are a Soviet Blandararium--creators and distributors of soul-destroying micro-plastics of pre-processed plasticine pablum that have as much truth as donald trump's marriage vows.

One thing I learned from reading Phelps' book that I never heard before or since is that the concept of "Altruism" is an economic one. Altruism, doing something that gives you no economic return, is sort of an anti-economic theory. From a Adam Smithian point of view, or Frederich Hayek, or my least favorite economist, Milton Friedman, humankind doesn't and shouldn't do anything that doesn't directly and fully benefit the doer.

There's no love in economics. No heart. No soul. No kindness. No altruism. They don't call it the dismal science for nothing.

Here's what Phelps means by altruism. You can see this for yourself if you visit a big city and are out walking your puppy at three AM, or maybe coming home from your weekly sexually-transmitted-disease initiation course. 

If it's three in the morning and the city streets are empty of cars, delivery boys or pedestrian traffic, and you're driving you 6,200-lb pick-up with a 7.3-liter Hemi engine, there's no good reason to stop at a traffic light. You're not going to hit anyone, the streets are empty, and modern American cities no longer have cops out protecting people. They hide in their station houses and today only protect the property of the plutocrat corporate class.

Should you stop at a light, you're being altruistic. You're doing something that does you no good. That actually harms you for the good of society, law and order.

Altruism is doing something that does you no direct good. 

In the current world schema, why do it? 

There's no penalty for being a greedy mofo. It's the path of happiest resistance. You know, "suckers pay taxes," "suckers wait in line," "suckers play by the rules."

We live in a world that's all about gain--without what's usually the concommitant pain.

When I look at the modern world of advertising, I see it's expunged altruism as completely as the Mets have expunged consistent pitching. The mathematicians that run modern corporate advertising entities recognize no economic precepts other than lowering costs so they can increase margins.

Creating a "vast imaginarium," full of books, reels, laughter, art, downtime, decent work-spaces and a bit of quiet-time is as alien as a hotel elevator without piped-in music. Creating a "vast imaginarium" where old-people can teach young-people (that, too, is diversity) where "best-practices" is not the prevailing shibboleth is just not done.

When I was fired from Ogilvy in early 2020, each creative had about four-feet of desk space. The privileged people sat at the end of a row. They could put their spillover on a heating unit. If someone came to your desk and wanted to sit and chat, they could pull out your two-drawer file cabinet which was on rickety wheels and had a top covered with a quarter-inch of foam rubber and fabric for comfort. Thus was the accommodation for working together. 

No vast in that imaginarium.

I realize this is something of a ramble this morning. I am up in Boston visiting my daughter and grandson and son-in-law and it's early. There's no place in this entire city that isn't blaring loud processed-cheese-food music, and no place to even get a bagel or a piece of toast that doesn't enrich an out-of-town corporate behemoth.

There's no trace of authenticity, humanity or altruism anywhere.

Walking my eight-month-old golden retriever in the light drizzle this morning, I thought about opening a small store. I'd call it, "The Store That Doesn't Suck." And I'd probably do a land-office business. Then I'd open then more stores, franchise the idea and get mega-rich until my stores suck, too.

Some years ago at the end of another endless therapy session, the good Dr. Lewis, laid some Leviticus on me, from the Jewish Bible--the books co-opted by the Goyim. He said, "God tells the Israelites not to cut the corners of their fields. They were also not to pick all their grapes when they harvested, but were to leave some for the poor and alien."

I rewrote that to "don't reap the corners of your fields," so it would be tattoo-length. In other words, do something decent for the other person.

Of course, we're only a Christian nation when it jibes with our barbarity. All other times, it's everyone for themselves.

Learn from Terry at 2:10.


The review, sans paywall:

‘My Journeys in Economic Theory’ Review: A Creative Nobelist

After a lifetime of contributions to economics, Edmund Phelps has made the culmination of his work a defense of capitalism’s ‘vast imaginarium.’



Edmund Phelps is a knotty riddle for taxonomists. In the present day, with thinkers consigned to “left” or “right” on the basis of a few well-worn clichés, some would be tempted to class him as progressive solely on account of his long friendship with John Rawls, the late philosopher-saint of American income redistributionists.


My Journeys in Economic Theory

By Edmund Phelps

Columbia University Press

248 pages

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And yet Mr. Phelps, the winner of the 2006 Nobel Prize in economics and emeritus professor of political economy at Columbia University, is among the most lucid, passionate and original defenders of capitalism. (He is also the founding director of Columbia’s Center on Capitalism and Society.) He disparages European-style corporatist economies as being unsuited to dynamism or innovation. Progressives who’d claim him as their own would do well to remember that he takes a hostile view of the idea of a universal basic income.

In “My Journeys in Economic Theory,” Mr. Phelps declares that it is “disappointing that UBI”—embraced by such modish politicians as Andrew Yang and Alexandria Ocasio-Cortez—“has not received widespread opposition.” The idea, if implemented, “would entice people and their children away from meaningful work and thus from a sense of involvement in the economy—society’s central project.”


The long shadow of China’s Cultural Revolution, Edmund Phelps’s case for capitalism, a jazz pianist’s odyssey and more.

It is this last, humane observation that distinguishes Mr. Phelps from the economists’ tribe, reflecting his belief that the nobility of capitalism lies in the chance it offers for prosperity and self-discovery on a national scale. He calls this phenomenon “mass flourishing,” words that make up the title of his late-in-life magnum opus, published in 2013 when he was 80.

Mr. Phelps will turn 90 in July, and these memoirs—economical of word and sometimes almost bashful—had to be squeezed out of him by close colleagues and well-wishers. They are scarcely as self-revelatory as the recent memoirs of Amartya Sen, another Nobel laureate, reflecting the difference, perhaps, between an argumentative Indian (Mr. Sen’s own phrase) and a taciturn WASP. Mr. Phelps’s first draft—I’m told by those who know him—was full of equations and mentioned his wife only rarely, which was at odds with his uxorious disposition. The elegant finished book, mercifully, has no equations. It also tells us how he met Viviana Montdor, a feisty Argentine who worked as an administrator at Columbia’s economics department, in 1972. Mr. Phelps bummed cigarettes off her for three consecutive days after they first ran into each other at the Xerox machine. On the fourth day, he asked her out—to a concert of Leonard Bernstein’s New York Philharmonic—and they married two years later.

That Mr. Phelps isn’t always celebrated alongside the other great American economists of the past 50 years is an injustice. To him, with Milton Friedman, goes the credit for refuting the Phillips Curve—conceived in 1958 by A.W. Phillips, an economist—which stated that inflation and unemployment were inversely related. In other words, the higher the inflation in an economy, the lower the unemployment, and vice versa. In 1967, both Friedman and Mr. Phelps arrived independently at the conclusion that there is no such trade-off in the long run. Their view was borne out in eye-catching fashion by “stagflation” in the 1970s.

In “My Journeys in Economic Theory,” Mr. Phelps recalls an encounter in late 1968 with Richard Nixon, then president-elect, for whom he was working on a task force on inflation. Shaking hands with Mr. Phelps in the receiving line at a bustling banquet, Nixon exclaimed: “I want to reduce the inflation without causing more unemployment, but [Fed chairman-to-be] Arthur Burns said that’s impossible.” This was pure Phillips Curve reasoning, of course, and Mr. Phelps writes that he “felt this packed room with its long line behind me was not the place to try to convey my thinking on the subject.”

Mr. Phelps has, to be sure, done plenty of thinking on an uncommon range of subjects, as acknowledged by his Nobel citation in 2006. Among the work flagged as seminal by the prize committee was his very first published paper, “The Golden Rule of Accumulation,” which appeared in the American Economic Review in 1961.

He is also lauded for his work on tracing the microeconomic foundations of macroeconomic theory, the roots of which go back to his undergraduate days at Amherst (class of 1955). He had wanted to major in philosophy, but, encouraged by his father (who’d lost his job in the Depression), he took a course in economics. He found Paul Samuelson’s textbook, first published in 1948, “brilliant” but was puzzled by something he encountered in the introductory course: “It was not clear to me how macroeconomics . . . might be connected to microeconomics. . . . There seemed to be a disconnect between the two fields.” The precocious sophomore Phelps was also drawn by “the sense that bridging the gap might make a difference for economic policy.”

Mr. Phelps is a courtly man, and his memoirs are unstinting in their praise for others, including even Mrs. Murphy from second grade at his school in Hastings-on-Hudson, for teaching him how to read. Occasionally—and entertainingly—he bristles. There is a flash of indignation on the page when he describes James Tobin, the 1981 Nobel laureate in economics who had been his advanced statistics teacher when Mr. Phelps was a doctoral student at Yale (a classroom experience Mr. Phelps describes as “not my cup of tea”). Both men were later colleagues at Yale together, but they became estranged after Mr. Phelps published his first book, “Fiscal Neutrality Toward Economic Growth” (1965). Tobin, a cheerleader for government intervention in the economy, never spoke of the book to its author, who had deviated from Tobin’s own cherished ideas. Mr. Phelps writes of him as “the teacher who underestimated me.” Tobin was “pained when someone close to him took a different view. And he had a hard time dealing with it.”

It is apparent in his memoirs that Mr. Phelps wishes to be remembered most for his theories of the past two decades, which focus on the workplace and creativity. He believes that economists are mistaken in their supposition that the reward for work is pay alone. As he writes in “Dynamism” (2020), in America “it is very clear that work is central to a meaningful life.” People at all rungs of the economy “possess imagination and creativity,” and the modern economy is “a vast imaginarium” in which growth comes from “creativity within the workforce.”

Mr. Phelps underscores a connection between economic growth and job satisfaction. He urges economists “not to stop at the standard theory” but to explore an “uncharted realm” of human desires and fulfillments. There’s more to life than capital, mere employment and national income. And certainly more to economics.

Mr. Varadarajan, a Journal contributor, is a fellow at the American Enterprise Institute and at Columbia University’s Center on Capitalism and Society.

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