Thoughts on the Yang Gang Part 1: Should We Eat The Seed Corn?

A twelve hour workday seems unthinkable for moderns, but in the 19th century, it was often the demand of the labor movements. Gradually the demand started going down and down, until it reached forty circa 1950, and hasn’t budged since. However, when you look at actual hours worked per worker and remove women from the analysis, you’ll see that hours actually worked have indeed gone down since 1950. If I had to give just a single explanation for the decline in hours worked and labor force participation since 1950, I’d say that it’s for the same reason working hours declined before 1950. People generally do not like work, and when they are rich enough to avoid it, many will.

Yang is running on a platform of blaming automation for this decline. I don’t buy it. It’s entirely possible that automation might cause problems in the future, but there’s little evidence it’s occurring now. Yang claims that people today are less likely to say “I’m unemployed” if they can’t find a job and this explains why the supposed automation problem doesn’t show up in the unemployment data. But I’ve never heard a good reason why they do this. Occam’s razor is that the data says what it says.

What about the UBI? Can America afford it? Contrary to what some think, America could easily afford a 12K a year basic income if taxes as a percentage of GDP were raised to the European level. What would be the effect of this mass increase in taxation? I can’t say I know for sure. But consider this: Americans are much richer than Europeans or Japanese. This becomes clear when you look at virtually any measure of wealth. For certain measures, you hear the excuse that Europeans consume less for “cultural” reasons. But is it believable that Europeans own fewer cars and have fewer rooms per dwelling and are less likely to own dishwashers or microwaves and eat out more and spend less on toys for their children, ect., all for “cultural” reasons? If they make the same incomes and yet consume less, they must have much more in savings, but on that measure, too, they have less. American’s economy is, for one reason or another, much more productive than considering that fact it makes you wonder if it’s really a good idea to blow a whole in it by radically increasing its tax burden, starving it of investment.

But not many people actually know that America’s economy is much more productive than Europe’s. One of the defining beliefs of the Blue Tribe is that Europe has a “higher standard of living” than America despite all the numbers saying not really. So they don’t see the best performing economic machine in the world, they see a broken machine that they know how to “fix.” And the Red Tribe? They are closer to reality, but even as they may say that America has the world’s highest standard of living, many don’t really feel like it. There’s a sense of malaise in America quite unrelated to the true economic conditions, one in which radical solutions to an imaginary problem can become prominent. It is a cultural malaise more than anything. Perhaps the real problem, and solution, then, can be found in the culture?

Should we even look? There is an attitude among many conservatives, libertarians, and economically moderate liberals that we shouldn’t as economic utility is all that matters. But I’m sure when it comes to individual happiness, the tune they sing will be different. On an individual level, they say “money can’t buy happiness” but on a societal level they will say “society has mo’ money, why isn’t it happy? Must be irrationality.” I am not saying this. It really is true that, for example, divorce rates are much higher than they used to be, and I don’t think the rise was inevitable. But an economic solutions ultimately can’t fix a non-economic problem.

Nevertheless, I do intend to vote for Andrew Yang. Part 2 will try to explain why.

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