What I think about Jacob Hacker and Paul Pierson’s argument
Jacob Hacker and Paul Pierson have explained the four things that they believe have led to people forgetting what factors contributed to the success of America. His basic argument revolves on the role of war on government and how that war has contributed to people disregarding what made America a prosperous nation. In their book, Jacob Hacker and Paul Pierson have highlighted four important concepts of the cause of the amnesia in America. The first point is the adducing of the case on the mixed economy. The mixed economy revolves around enabling the state and the market to work hand-in-hand.
The second point is proving the existence of a mixed government. The United States over the years have become increasingly divided. The business has grown increasingly inclined to anti-state agendas. The third point is that the book tries to explain and illustrate the downfall of the government and its plans. The fourth point is that the book describes the measures that can be taken to recover the lost glory that the government had initially yielded. The book’s political ideas have liberal approaches on plans, just like the Charles Lindblom and J.K Galbraith. Jacob Hacker and Paul Pierson are not advocating for a government with absolute powers but a government that works with the market effectively.
Are Hacker and Pierson, right?
From their arguments, I think that Pierson and Hacker are right in the way they are articulating their ideas on how the government should work. It is true that the government should work hand-in-hand with the market to achieve an effectively mixed economy. Hacker and Pierson have used an analogy that was propagated by Lindblom. The analogy provides that as the market behaves like the fingers of a hand. The fingers enable the person to achieve an ability. The thumb, on the other hand, should be the state that should dish out the authority as well as grasping what is important.
The idea of a mixed economy does not necessarily mean that the state should have the same will in mind as the market when carrying out their functions. All the two entities need to have is a common goal and should work to complement each other. As people who advocate for liberalism, the authors of the book, Amnesia are cautious of the outcome of the state and the market when they work in a suitable system. They bring the point home by highlighting that the state and market are like fingers and the thumb. They work towards a common goal, although the aspect of independence and separation of powers is present.
I entirely agree with the ideas of Hacker and Pierson on the mixed economy. It is true that in the past years, the market and the state worked together, although there existed some tensions, but healthy. The government was very strong and always agitated for the prosperity of its citizens by the tool of its authority that it would exert healthily. During this era, the virtue of doing the right thing was the goal of the day, and the people went as far as differentiating the right leaders from the power-hungry lunatics who were barred from power. Leaders like Vannevar Bush made it their priority that the government of the day made the right investments.
The government manages to satisfy the demands of goods and services by the citizens when it has brought a mixed economy in place. The private sectors would inadequately provide these goods and services. Sometimes, the private sector fails to produce those goods at all, creating a shortage of the same. With the increase in the sophistication of the economy, private sectors adduce leeways in which they can use to exploit the citizens. Hacker and Pierson are quick to identify the efforts of Woodrow Wilson in his attempts to establish an institution that would foresee to it that market competition is regulated. The field of business has to be controlled by the government; otherwise, it would fail.
The evidence that Hack and Pierson provide for the role of the government.
Hack and Pierson provide crucial evidence on the role of the government in business. The New Deal is an example where after a period of initial hostility, business finally aligned itself. The New Deal made the government produce ample goods and services to provide to its citizens. The business organizations saw the imperativeness of joining hands with the government and work with a common goal in mind. The business leaders left themselves with only one choice, to join hands and negotiate with the government to come up with a fair platform that each player would have a voice in the production.
Times have changed in the field of business as today; moderate business and countervailing is the order of the day. Hacker and Pierson demonstrate how business and the Republican party have drowned out the true moderates. The most significant change, as depicted, should include both ideas and initiatives. Plans were very substantial at the beginning when business and state were making the right move. Later, there came a massive crisis where stagnation and inflation took center stage. The economic thinkers had their fingers squarely pointed to the government, claiming that it could not control the economy anymore. The argument provided by Hacker and Pierson is convincing as it explains their point very clearly and one can see the logic behind it.
Why has the attitude towards government has changed?
The attitude towards the government changed greatly as a repudiation of a mixed economy at an alarming rate. The tragedy of it is that people did not bother to dig in deep and find the real problem with it. One can hardly say that the repudiation was caused by encroachment of ideas gradually. The attitude began to change when new insights and understandings started to spread in the field. These ideas collided with economic interests and took them in the same direction as they were heading. These ideas were influencing the American people and American politics more than before. The business leaders were now faced with profit merger challenges and stock that was emaciated. These business leaders mobilized themselves and lobbied Washington.
In an unfortunate turn of events, the business leaders were led into believing the new remedies that the modern market fundamentalists were selling. The fundamentalists convinced the business leaders that the source of their problems was the government and not the foreign competition, unfriendly financial players and the retrogressive process of deindustrialization. Giving the economy a turnaround did not just interfere with the way business was being conducted lightly. It brought about a different view of the power holders and how those with the power placed their priorities.
A good illustration is the case point of Pete Paterson. Pete Paterson was expelled from the Massachusetts Institute of Technology for the offense of plagiarizing a paper written by Roy Cohn. Pete however acquired vast riches through the sale of Lehman and also the establishment of Blackstone. He made much of his wealth by influencing the public on business and politics. In his creation, the Blackstone, he worked with Stephen Schwarzman, who was also his partner. The two partners spent a much time influencing the public and depicting to them on how Obama had proposals that were against the enrichment of the rich people. Pete Paterson and such other figures depict the current and modern elites in the field of economics, that is characterized by the absence of monolith and so distinct from the ancient fields.
These current fields of business are more inclined to Silicon Valley and are very skeptical about the principle of a mixed economy. Other economic elites that buy the idea of Pete Paterson are disdainful of the state and are willing to use a huge amount of their fortune to ensure that the government’s expenditure is limited. Many people are now following in the footsteps of the economic elites. Thomas Piketty once observed that billionaire consumption is not easy to tell the extent of its danger. But one thing he was sure of is that the billionaires consume reporters and academics.
A very good illustration as evidence is the radical transformation that the Republican party and business have undergone. Huge business organizations have been branded very effective outposts. The Republican party has also paid the price for their extremism, but not a hefty one. The reason for the limited price they have paid is because the voters are sometimes ignorant of such factors, very many donors and because the voter turnout has been excellent on their side. There has been a high-end engravement of corruption in current politics. The market institutions have not been left behind in regards to the corruption nightmare. The market institutions are exploiting so much by extracting unreasonably high profits.
Hacker and Pierson are advocating for a mixed economy, as they were back in the days. They have similar ideas as the ones with Elizabeth Warren in the field of market and government. The two authors would want to see America return to the same mixed economy as it were. That’s the turn of events in the economy is as a result of the abovementioned change in attitudes of people.
Counterpoints of my thesis
In as much as Hacker and Pierson are emphasizing on the need to change the way the economy and power are maintained, they forget that the world has become a dynamic place. The dynamic nature of society means that what used to work a long time ago could not necessarily work right now. So, the process of practicing a mixed economy may prove futile. The business leaders have changed in the field of business, and new advancements have been made. The change in time should be taken into consideration, together with the change in policies when considering taking back what was once used and disused. We have witnessed changes even in the field of politics and the means of governance.