GUEST POST from Greg Satell
In 1929, just before the stock market crash, Louis Bamberger and his sister, Caroline Bamberger Fuld, sold their department store in Newark to R.H. Macy and Company for $25 million ($343 million in 2015 dollars). Grateful to the people of Newark for their support, they planned to endow a medical college in that city.
Things didn’t turn out that way. They were convinced by Abraham Flexner to create the Institute for Advanced Study instead, and to build it in Princeton. It would soon be the home of Albert Einstein and would become a beacon for scientists fleeing Europe, who would prove critical to winning the war and making America a technological superpower.
What always struck me about the story is that the Bambergers achieved their greatest impact not through greater knowledge or accomplishment, but humility. They could have stuck to their initial plan, but because they were willing to see its flaws and support another’s dream, they were able to change the world. We rarely understand the full impact of our actions.
Meritocracy and Humiliation
In 1940, James Conant, the President of Harvard, gave a talk at the University of California that was soon republished in The Atlantic magazine. Entitled, “Education for a Classless Society,” it championed the idea of social mobility based on merit, rather than privilege being handed down through inheritance.
Today, Conant’s idea has become inseparably intertwined with the American dream and repeated with almost metronomic regularity by politicians seeking office, parents raising children and educators trying to motivate students. We’re told, “You can be anything you want to” and “You can make it if you try.”
Yet as Michael Sandel points out in The Tyranny of Merit, this sorting system has had an insidious effect on our culture. Those who are deemed worthy get all the benefits that society has to offer. Those that are not are not only left behind, but are seen as “takers” rather than “makers” and therefore undeserving of even basic things like access to health and child care.
The unlucky have come to be seen as culpable and those more fortunate consider themselves beholden to no one. Many in America, especially the two thirds of the country who do not have a college degree, are not only poor, but humiliated, creating opportunities for populist politicians. Elites, for their part, wonder what’s the matter with Kansas?.
Citizens United, The Rise of Regulation and the Decline of Competitive Markets
In 2009, a conservative organization called Citizens United brought a suit against the Federal Elections Commission which argued that limits on corporate political donations violated the free speech clause of the First Amendment. Its success at the Supreme Court led to the rise of Super PACs and nearly unlimited political spending.
At first, things went according to plan. Studies have found that the ruling did indeed help Republicans, especially in their effort to win statehouses in 2010 and take control of redistricting. However, the decision also opened the door to massive funding of liberal causes and Democrats handily outraised Republicans in the 2020 election.
Yet perhaps the most perverse effect of the Citizens United decision has been how it has fed the rise of lobbying expenditures and regulation. When you allow business to invest unlimited amounts of money to influence government, it should be surprising that a significant portion of that money is used to restrict competition.
It’s hard to escape the irony. An organization that bills itself as dedicated supporting free enterprise and “restoring our government to citizens’ control” has not only led to a weakening of free markets but is also deeply unpopular. Pretty much the opposite of what was intended.
Income Inequality and Healthcare Costs
Research from the Pew Foundation finds that inequality is not only at record levels in the United States, but significantly higher than other developed nations. That should be cause for alarm in itself, but there is also growing evidence that there may be a reflexive relationship between income inequality and healthcare costs.
First, let’s start with the obvious. Income inequality has been shown to adversely affect mental and physical health. Part of the reason this is so is that people at the low end of income spectrum suffer from adverse social comparisons, which lead to depression and anxiety. However, evidence also suggests that even higher income people suffer from fear of losing their position, which has larger implications in a more unequal society.
There’s significant evidence that causality runs in the opposite direction. Because most Americans have insurance plans with high deductibles, we’re often getting hit with big out-of-pocket bills. Researchers have found that these expenses are having a measurable impact on income inequality.
Put simply, we’re becoming so worried about money that it’s affecting our physical and mental health and the costs associated with that deterioration in our health that it’s making us poor, creating a vicious cycle that’s bankrupting our mind, body and spirit.
We Need to Think Less Like Engineers and More Like Gardeners
James Conant was a scientist and an educator, not an economist or a politician. Nevertheless, his ideas have deeply contributed to America’s political zeitgeist. In much the same way, the activists at Citizens United probably didn’t imagine that achieving their goals would undermine their aims. Few medical specialists are aware of the economic impacts of health policy.
We usually take action to solve specific, narrow problems within a domain in which we have acquired some expertise. Often, we train for years to develop that expertise and years more to gain the experience needed to plan and implement an effective solution. During all that time, we rarely stop to consider the impact of our work outside our chosen field.
In a sense, we’ve been trained to think like engineers. We identify problems to be solved, reduce those problems to a limited set of variables, develop metrics to evaluate those variables and develop a solution that is optimized for those metrics. Unfortunately, the solutions we create often create even more problems.
That’s the essence of the humility principle. We rarely fully understand the consequences of the actions we take. We live in a world not of linear cause and effect, but complex ecosystems in which even our best laid plans touch of a complex web of ripple effects.
It’s time for us to take a more biological view in which we think less like engineers and more like gardeners that grow and nurture ecosystems. Instead of assuming we can design perfect solutions, we need to take a more Bayesian approach and make our systems less imperfect over time, fertilizing and pruning as we go.
A good place to start is to, like the Bambergers, think less of ourselves and open up to the mysteries of a universe we do not understand, to people who possess knowledge we do not and to the potential of the future as a collaborative project.
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