Paradise Not Yet Found

Paradise Not Yet Found
Paradise Not Yet Found
By Sacha Zimmerman

Economist J. Bradford DeLong ’78 on the 20th century’s startling successes—and unfulfilled promise.

Brad DeLong ’78, the author of the recent Slouching Towards Utopia (Basic Books, 2022),
is an economics historian, a professor of economics, and an associate director of the Blum Center at the University of California, Berkeley. He is also the author of the popular Substack Brad DeLong’s Grasping Reality. DeLong sat down with Head of School Bryan Garman on the Lives That Speak podcast to discuss John Maynard Keynes, Twitter, a new New Deal, and more.

BRYAN GARMAN: Were there people at Sidwell Friends who left an impact on you?

BRAD DELONG: Major teachers who really stand out are the very impressive battery of math and science teachers at the Upper School. I’m most grateful to Florence Fasanelli, because the School let her take four of us and run a second-year calculus seminar in our senior year, rather than make us go off and do something else since we’d run our way through the normal math curriculum. It turned out that was a great help to me in life, to have had a second year of calculus in high school, and Sidwell was willing to pony up the resources to do it.

BG: From Sidwell Friends, you head off to Harvard, where you do three degrees.

BD: I graduated with a bachelor’s degree in June 1982 when the unemployment rate was 11 percent. I thought, This is not a job market I want to try to get a job in.I want to stay in school. So, I got a master’s degree in economics and then a Ph.D. in economics. That then led to a lectureship at MIT, an assistant professorship at Boston University, an assistant professorship at Harvard, and then a full professorship at Berkeley. The only time I ever ventured out of academia was three years working for the Treasury Department somewhere in the middle. You could say I took a look at the job market in 1982 and decided never to leave education.

BG: Talk about your work at Treasury during the Clinton administration?

BD: Back then, Congress had put itself under a set of rules whereby nothing could be proposed unless it reduced the deficit. That meant everything proposed had to have a substantial tax component in it, which meant Treasury had to work on it, which meant the treasury secretary basically decided whether it got out the door. Because staff time was limited, the secretary had people work only on things he thought would be actually good policies with a high chance of congressional passage. I was in the Department of Economic Policy, and we kept being thrown questions from the secretary: “Is this actually a good idea for the country?”

We wound up doing not just Treasury business but poking our noses into the business of every single other thing the government was doing. We had to come up very quickly with a recommendation as to how good a policy would be for the country, and thus how high up on the priority list it should be. I worked on the 1993 deficit-reduction package, the North American Free Trade Agreement, the assault-weapons ban. And I spent a lot of time watching the Federal Reserve, trying to understand what it was doing, and then communicating that to the rest of the administration.

The late 1990s were the best time for America since the early post–World War II decades in terms of economic growth and real wage increases. We did a considerable part of that through our policies. We were greatly aided by the fact that our policies happened to affect the economy just at the moment when an additional boost to investment in America triggered the dot-com boom. That is, we happened to shift America toward investing in its future at exactly the right moment, when the benefits of doing so were extremely high.

BG: What about the current administration in terms of the economy?

BD: Joe Biden has been an enormously effective president and has managed to do something like six years’ worth of Congress’s normal work in two, which is a remarkable accomplishment given how bitter partisan divisions have become and how much Republicans still seem to be following the Newt Gingrich playbook—that their job is to make the president of the other party appear a failure no matter what. Now, post-mid- terms, there will likely be very little public business getting done; there will be a lot of posturing and a lot of screeching. That really is too bad because we do face extremely large challenges.

BG: What are those challenges?

BD: The most important is global warming. It’s much, much cheaper to minimize it now and move extremely rapidly away from fossil fuels into renewables and closed-cycle fuels. Much cheaper to do it now than to deal with the consequences come 50 or 75 years from now when we exceed a 3 percent rise in temperatures Fahrenheit. That’s extremely important. Consider that this year, the monsoon was 300 miles off of where it’s supposed to be, which means that Pakistan went underwater and the Yangtze River was some 16 feet lower than it’s supposed to be. There are three and a half billion people who live in the six Great River Valleys of Asia, plus the monsoon regions where they need snowfall on the Tibetan plateau and the other high pla- teaus of Asia. Monsoons need to be in the right place, at the right time, at the right strength, at the right temperature. Billions of people do not have the wealth to move to Vancouver and find new jobs in case the monsoon fails. That is challenge number one for humanity.

BG: Where do you see leadership in that regard right now?

BD: In the book, I flirt with the idea that much of what is good in the second half of the long 20th century, we owe to Franklin Delano Roosevelt. The political, economic, sociological order we got after World War II was the fruit of that empirical and progressive spirit of FDR: We’re going to try everything and reinforce what succeeds. And it worked, and it worked quite well. During the Great Depression, every other place else in the world, but for Sweden and Norway, saw politics swing hard right. Authoritarians became interested in more unequal income distributions and in focusing people’s attention on their enemies outside their country or internal enemies and ethnic minorities, like Jews. But had FDR not been there, well, it’s a world in which fascism doesn’t end in 1945, but instead is dominant as a reaction to a Great Depression. The world we have without FDR, would by now be a much worse world than the one we have.

BG: Are we entering a reactionary fascist mode again?

BD: Ezra Klein has this great worry that the shift to a communications infra- structure of video and attention-getting is betraying us, because it means you gain attention and mind-share only by first declaring, “These are my enemies.” That’s how to get noticed. I agree. The communications infrastructure we really need is a very different one—one that allows for more thoughtful discussion, compromise, and empathy rather than assigning people to the role of enemies. If you start out by saying, “These are my enemies,” things are likely to go rapidly downhill. It is very unsettling. But we can see this in macro and in micro. Look at the way the new executives of Twitter have started by denouncing the “Blue Check Elite,” when the Blue Check Elite are people who have shown themselves willing to actually pay money for Twitter, as opposed to everyone else who’s simply riding along for free. It’s a very strange thing to do, promptly saying that those who are contributing money and resources to the company are the enemies.

You don’t have to be incredibly insightful to think this really can’t go well. Twitter is supposed to be a corporation that runs a productive enterprise, that finds customers and provides them with things they want, producing the infrastructure and the kind of website dialogue they value. If you view the people who you’re trying to enter into a win-win economic exchange with as your enemies, you’re not going to get anywhere. It’s a very strange situation, and this apparent self-destruction by Twitter’s executive team of the loyalty of its primary customers only reinforces that.

BG: In your conclusion, there’s a quote from Keynes: “We lack more than usual, a coherent scheme of progress, a tangible ideal.” We need a new grand narrative. What is it?

BD: I’ll give you the same answer Keynes did: that he really did not know. He had ideas, which he then developed over the next 15 years. But as I say in the end of the book, the move was not so much with the head as with experience, feedback, and then recalibration. It was like FDR’s declaration that what we need most is bold experimentation. People thought very hard about what the new subset of social and political and economic arrangements should be, but it was FDR who said, “Let’s try everything.” If you could get into his office with a half-plausible story, you would have an agency in a week. But then he also reinforced success and pruned apparent failures very quickly. Now, we need a similar bold experimentation. It would be really nice if it took the collected form of a New Deal. But if it doesn’t, we’re going to have to look for examples of things working all over the place for the next 10 years.

BG: One of my favorite sentences from the book is, “The shotgun marriage of Friedrich von Hayek to Karl Polanyi, blessed by John Maynard Keynes, that helped raise the post-World War II North Atlantic developmental social democracy was as good as we have so far gotten. But it failed its own sustainability test.”

BD: It did. In the 1970s, people reacted against that, and you moved to what we now call “neoliberalism,” to ideas much more connected with Margaret Thatcher and Ronald Reagan: that the country needed to be more unequal because the job creators needed to be richer so they’d be incentivized to do more work rather than spend their time engaging in tax evasion, and that too many people were figuring out how to featherbed their way through society and were consuming more than they produced. It ascended from there to the idea that, if you can’t make it yourself in the market, you don’t deserve to be rich, happy, or prosperous at all. It was a return to Andrew Carnegie: The law of competition is hard, but it is necessary for the progress of technology. Except that in the neoliberal era, there seemed to be some who thought income inequality was not a bug, but a feature.

BG: Our students are worried about what their place will be in the new economy. Can you give them hope?

BD: Learn how to interface with and understand the technologies that are emerging; that has always been a wonderful thing to do in terms of making yourself useful for humanity during your career. And if you make yourself useful to humanity, then you’ll be able to decide what form you want that utility to take, and within reason, what your standard of living will be. Also, always be curious. Old routines, old practices, old jobs are going to change over the next 30 years. So, the broader and the more liberally you can be educated, the better positioned you will be to actually be useful. You have a brain, which is an absolutely wonderful thing. And, after however many years at Sidwell, an enormous amount of society’s resources have gone into helping you be smart and think smart for the benefit of humanity. Treasure that and try to make it a brain that can continue to learn new things and that can actually try, look, assess, evaluate, and try again.

Looking for a new Substack? Check out Brad De Long’s Grasping Reality at It’s a mash-up of economic history, economics, political economy, finance, and forecasting: “Here to try to make you (and me) smarter in a world with many increasingly deep and complicated troubles.”

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