Machinebrain (R) vs. Gardenbrain (D)

The economy as an engine/machine metaphor doesn’t actually make much sense.  From the NY Times today:

Call it the “Machinebrain” picture of the world: markets are perfectly efficient, humans perfectly rational, incentives perfectly clear and outcomes perfectly appropriate. From this a series of other truths necessarily follows: regulation and taxes are inherently regrettable because they impede the machine’s optimal workings. Government fiscal stimulus is wasteful. The rich by definition deserve to be so and the poor as well.

This self-enclosed metaphor is the gospel of market fundamentalists. But there is simply no evidence for it. Empirically, trickle-down economics has failed. Tax cuts for the rich have never once yielded more net revenue for the country. The 2008 crash and the Great Recession prove irrefutably how inefficient and irrational markets truly are.

What we require now is a new framework for thinking and talking about the economy, grounded in modern understandings of how things actually work. Economies, as social scientists now understand, aren’t simple, linear and predictable, but complex, nonlinear and ecosystemic. An economy isn’t a machine; it’s a garden. It can be fruitful if well tended, but will be overrun by noxious weeds if not.

In this new framework, which we call Gardenbrain, markets are not perfectly efficient but can be effective if well managed. Where Machinebrain posits that it’s every man for himself, Gardenbrain recognizes that we’re all better off when we’re all better off. […] Gardenbrain challenges many of today’s most conventional policy ideas.

Consider regulation. Under the prevailing assumption, regulation is an unfortunate interruption of a frictionless process of wealth creation in a self-correcting market. But Gardenbrain allows us to see that an economy cannot self-correct any more than a garden can self-tend. And regulation — the creation of standards to raise the quality of economic life — is the work of seeding useful activity and weeding harmful activity. […]

True, not all spending is equally useful, and not every worthy idea for spending is affordable. But this perspective helps us understand why the most prosperous economies are those that tax and spend the most, while those that tax and spend the least are failures. More important, it clarifies why more austerity cannot revive an already weak private economy and why more spending can.

Seeing the economy this way does not make you anti-capitalist. In fact, nothing could be more pro-business and pro-growth than a Gardenbrain approach — because by focusing our attention on the long term over the short, on the power of markets to create wealth through evolutionary adaptations and on the health of the whole rather than a part, it gives us prosperity that is widely shared, sustained and self-reinforcing.

The Machinebrain narrative is vulnerable in the wake of the financial crisis, and that doesn’t bode well for Mitt Romney this fall or for any Republican in the near future.  I really don’t know how you look at the past few decades and say, “Gee, what this economy really needs is more high-end tax cuts and less oversight of the Wall Street banks that wrecked the global economy.”  But that’s what Romney economics boils down to — the same exact prescription that got us into this mess.  It’s not a path we can afford to go down again.

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About Hammertime
Georgetown sophomore, Job Creator.

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