Confronting Recession Confusion

A friend told me that recently -- suddenly, almost in a panic -- he had decided to sell a collection of baseball cards accumulated since childhood. The reason: He was worried about the recession and the economy.

It had struck him that if he didn't sell quickly he might not get anything for his cards. (In his rush, he took $2,000 for the collectors' items. Had he waited, acting more carefully, he said his cards might have been worth twice that amount.)

Aside from the odd fact that many Americans seem willing to spend more for "collectors' items" than, say, shelter for the homeless, my friend's panic reflects a vague, nervous uneasiness about the state of the economy which many people experience. It also reflects our lack of real information and understanding about what may happen to us as unemployment increases.

Above all, our uneasiness, I believe, is a reflection of our common lack of perspective on overarching economic issues, what they mean, and how people committed to democratic values should think about economics and our own activist possibilities.

The conventional media discussion of the recession presents economics as an odd hybrid located somewhere on the news between the weather and the stock market. On the one hand, there is very little one can do about it; on the other, the jumble of statistics on unemployment, growth rates, inflation, durable goods sales, housing starts, and inventories is sprayed at the public in a manner that leaves the average citizen numb: If the war is short (some think), the recession will end. If it is long (others think), it will not end. But still others reverse the argument.

To be sure, we are informed that "someone" might be able to do something about the economy -- usually the Federal Reserve Board or the government. Mainly, the options are narrow and highly technical: "Lowering interest rates" by "the Fed," we are told, might "stimulate" the economy; a "speed-up" of government spending might do the same thing. What we might do -- or could, or should, do -- is simply not discussed.

Again, even if someone does something, the goal of "stimulating" the economy is higher economic growth.

The question of whether growth is good is not discussed. Nor, for that matter, is there discussion of the more limited question of growth for what purpose: Do we really want to "grow" by putting more people to work making Lincoln Towncars that only the very rich can afford? Is it "good" to build luxury hotels?

And, of course, no one asks very serious questions about equity. Even people who urge that the rich should pay more commonly propose "realistic" tax changes that would hardly alter America's highly unequal distribution of income beyond a few tenths of a percentage point.

More fundamental, we simply do not confront the painful possibility (I think likelihood) that America's capitalist economy is slowly stagnating, following a longer range trajectory that (despite a cycle of minor ups and downs around the trend) is one of profound decay.

In a sense, this is understandable. When people are in pain, out of work, without shelter, fundamental questions seem beside the point. Almost any job is better than none. Even making guns and bombs; even making weapons of mass destruction.

Is there any way to escape from the confusion -- and the intellectual and political bind? Let me suggest a few possible starting points.

First, we need to recognize that ultimately, if we are serious, a good economic system must aim consciously at certain key values: equality, democracy, liberty, individual development, ecological sustainability, community, peace. Second, if we wish the economy to achieve the goals and values we affirm, it requires a common decision to make this a priority. Today the economy responds to the market -- which means that dollars vote, and consumers make choices.

In the United States, the top one-fifth of society ("the suburban rich") has about 50 percent of family income (including interest, dividends, and rent). The same number (about 50 million human beings) among the bottom one-fifth have about 3.6 percent of such income. When dollars vote, on average each "rich" person has more than 10 times the power of the average individual in the bottom fifth (and a great deal more than the "poor," who have less income still). The very rich among the top 1 to 5 percent, of course, are far, far more favored.

A more democratic way to decide what we want the economy to produce requires either that income be more equitably distributed; or that a public, democratic decision be made; or both. In theory at least, through government, one vote per person is the way officials are elected and democratic choices are made.

Also, implicit in the idea of choosing a more equitable, ecologically sustainable, human economy is the requirement that we as a society must plan -- a reality most people don't like to face. It is, however, the only way to decide clearly that, say, we want more rapid transit systems and solar collectors -- rather than big cars and nuclear energy facilities.

(The idea of planning can easily be mystified: For years we have planned to make Patriot missiles and B-2 bombers. We spent money and used tax credits and other policies to implement our plans; that is why we have them now. Had we decided to plan for a less energy-dependent, more ecologically balanced society, we would have that now, too.)

But to achieve an economy that would actually respond to human choice -- to make it democratically manageable -- requires that it be much more "human" in scale. That, over the long haul, requires decentralization.

All over the world the reality that huge nation-states simply don't work very well is increasingly reflected in moves toward regional semiautonomy: Quebec in Canada, many republics in the Soviet Union, many smaller nations which make up "Europe 1992." We are unlikely to be exempt from this global trend.

Ultimately, far greater public economic management powers must devolve to the American states (or groups of smaller states taken together). Even now, as federal political stalemates hobble national action, many states are beginning to see that their communities and their citizens require new, innovative state economic policies.

Commonly, such policies involve provision of credit, technical assistance, tax benefits, training, public procurement of goods and services, and other help to improve local economic development. The broad sweep of policies could also help build more democratic industries involving worker, neighborhood, and community control -- if we were to demand this.

Those who wish ultimately to break out of the pain and confusion of the current economic choices we are offered must obviously be willing to take the long view. Building on some of the more promising experiments, we must slowly evolve a vision and a series of practical demonstrations of new ways of doing things, and new supportive policies, which together can slowly chart a new course and a different direction.

My friend who sold his baseball cards had one other thing to say as he reflected on the choices we face: "You know, the recession just possibly could become the kind of crisis that helps us clarify our values.

The difficult point is to keep oneself open, even amid the fear. If we can do this, we might even risk dreaming a new dream and over time, through the economic pain and decay, begin building slowly toward that dream."

Another friend, an elderly retired baker in the Midwest, once put it this way: "I don't understand why we can easily put everyone to work when there is a big war -- but we seem to have recession or depression otherwise. Why couldn't people be put to work building good things we need? Isn't it just a matter of political will?"

Precisely.

Gar Alperovitz was president of the National Center for Economic Alternatives, a fellow at the Institute for Policy Studies in Washington, DC, and the author of Atomic Diplomacy: Hiroshima and Potsdam (Viking Penguin, 1985) when this article appeared.