Customer Reviews

Against Thrift: Why Consumer Culture is Good for the Economy, the Environment, and Your Soul

5 star:		(5)
4 star:		(2)
3 star:		(1)
2 star:		(1)
1 star:		(5)

 

 

This book is going to push a lot of people's buttons. Just look at the distribution of reviewer scores!
It's not a masterpiece, but it's well worth reading for a fresh perspective on the economics of our time.

Now that reading books before talking and writing about them is no longer fashionable, I feel out of place offering my own opinion on Livingston's latest. Still, I think some kind of clarification is in order before this page is overrun by either our keeper's-of-the-faith in rational/instrumental/universal economic theory, or worse, just plain (patriotic) insanity. I have read the book, by the way, and it's a terrific achievement. It's not only the best available on the current economic dilemmas of our time, it considers these crises as moral and cultural revolutions of the long 20th century; they are still in the making, whose meanings and outcomes haven't been decided. This kind of formidable task requires, among other things, an intricate understanding of the history, thoughtful and nuanced arguments, and clarity. All of which, to be sure, Livingston possesses in abundance. As such, this book can be put into any number of categories, and this is its strength. The author's command of the subject is staggering as he moves easily among Left and Right arguments against an economy based on consumer culture (treating all with respect-"fair and balanced"), and navigates a passage of his own that locates an optimistic based on the democratizing and socializing possibilities consumer spending/culture.

Let's correct something: The author DOES NOT say that if you're under a mountain of debt you should keep swiping that card of yours. He DOES NOT say we need a giant state apparatus to direct all our economic decisions. And he IS NOT anti-capitalist. In fact, he says that markets and functioning democracy are conditions of each other. Look, individuals already "redistribute" their wealth in this country through taxes. The point is that to stop the Great Recession, and prevent future ones, we need to socialize, or "redistribute," the redundant profits of corporations which have no real productive outlet except into speculative, crisis-creating bubbles. In the hands of consumers--of "we the people"--that money can be spent to achieve real growth and equality.

But don't listen to me, get the book and decide for yourself.

I caught the tail end of a radio interview with the author, and was quite intrigued by the little bit that I heard. As another reviewer wrote, I am generally intrigued by contrarian perspectives--from what I heard on the radio, Livingston was not merely contrarian but also arguing sensibly, and as a bonus, entertainingly.

Sadly, I am rather disappointed in the book, so disappointed that I am not bothering to read past the first few chapters. I take Livingston at his word in his opening that to convince us of his perspective in the second half of the book, he first must convince us of the flaws in other, more conventional, perspectives. If that structure is necessary, as he says it is, then he is utterly failing in his first-half effort so I'm not bothering to read on to his second half.

The main flaw in his first-half effort is that he conflates the arguments of others, and replaces their actual arguments with similar-sounding straw-man arguments. For example, in arguing against the idea that failure-to-act by regulators was a leading contributor to the current economic crisis, Livingston quotes Dean Baker's assertion of regulatory failure, but then ignores the details of Baker's full argument (e.g., exactly which regulators failed in what ways at what times, and why those in/actions constituted failure). Instead, Livingston glosses over Baker's extensive arguments and, in the space of a few short paragraphs, pseudo-paraphrases them in such a way that he (Livingston) can then seem to easily rebut them.

Another disappointing feature for me has to do with Livingston's tone in the portion of the book that I read. He casts himself as having effectively an utterly unique perspective on the economic situation, as though no one else has written about "surplus capital" as the underlying problem with the economy. In fact, a number of other writers and economists/economic commentators have argued this way, for example Les Leopold in "The Looting of America." It's possible that later in the book Livingston takes on a more humble attitude, but in the first portion as he "rebuts" the arguments of others he treats the world of economic commentary as one totally blind to the new truth he aims to reveal.

All of this is disappointing at another level, because I do indeed think that "surplus capital" is a driving force for our contemporary economic woes, and a better, more convincing book on Livingston's part would help explain that situation to the public at large. However, more nuanced writers, writers who treat their intellectual adversaries with more respect, such as Les Leopold, are able to weave together more of reality's complexity in their conclusions: rather than say "surplus capital is the sole problem and all the other economic commentators have it wrong when they point to things like regulatory failure," these writers point out that "in a world suffering from surplus capital, the dangers of regulatory failure are greatly increased because the financial bubbles that regulators are supposed to prevent or address can quickly grow to disastrous size." (This is not to say that Leopold doesn't sometimes "go for the kill" when arguing against other perspectives, rather that he respects his adversaries--and trusts his own arguments--enough to present them as they really are when constructing his counter-arguments.) Because Livingston fails to respect his intellectual adversaries, and by extension his readers, his book will not be useful in decently educating the public.

I'll add that much of this criticism on my part goes toward Livingston's editors at Basic Books. Whatever Livingston's original manuscript looked like, a good editor should have ensured that Livingston's final version dealt with these complex issues better than it does. His editors may have demanded that he dumb the book down, or they may have failed to demand that he smarten it up: either way, they share the blame for the second-rate result.

All that said, while my strict feeling is that the book deserves 2 stars, I am giving it 3 as benefit-of-the-doubt for the portion of the book that I have not read.

I don't like this book at all. I got hold of it because I like books with contrarian viewpoints. However, the book is not well argued mainly because it deals with economic issues without making a strong economic case. It is all right to include references to social theorists and historians, but it is not okay to leave out a detailed economic justification for the arguments.

Here is some substantial critique:
1. The author might think that today is a rainy day. However, it can get much worse. If it does, then, maybe, an artificial boost of consumption would be a good temporary solution. To be an historian, the author seems to care an awful lot about here and now. As if economic well-being during the next five years is more important than getting the US economy back in order.
2. Second, more consumer spending is going to worsen the trade balance since a lot of goods are produced in China. This is especially so for the goods that the poor people want to buy. Since the author is arguing for the redistribution of income to poor people, I would venture to say that the trade balance is going to get even worse.
3. Morally, I don't think it is advisable to tell Americans to consume more goods. We already spend more than enough to generate happiness. Learning to economise on scare resources and thrift, that is what many Americans need.

I also dislike the style of the book. It is written in a rather informal style but with a lot of references to social theorists. This is fine. Less appealing is the preachy style. The author has his viewpoint clear and the whole narrative is geared towards convincing the reader that the author is right. Many times, I'm left thinking "Is this really what Marx/Nietzsche/nn said?" But then the author has already moved on. So I don't think I learnt much from reading the book. Had the book been more objectively written (but still keeping the core argument of the author), at least I would have learnt something. Now I am just left thinking that everything in the book is just arguments to support the core argument. And I am not convinced.

Okay, let me state this right up front about my own political predilections: I often say, only half in jest, that I am a left-wing, libertarian, libertine. I find, in fact, if I take one of those pesky on line political polls I land pretty much right in the middle because I've got views on the extreme end of both the political left and the political right which pretty much cancel each other out and put me in the middle. Statistically. In any case, when I heard about this book advocating more spending, more consumerism, and less saving, it raised a whole lot of hackles on this old boy's pale red neck. I spent the first half of my life getting into debt, and have been spending the second half trying to get out of debt. Now, I've read a few of Livingston's other books like "Pragmatism and the Political Economy of Cultural Revolution 1850-1940", and hey, sounds like a book you just want to curl up with on the couch right? Let me just say this, that very early book is an erudite slog suitable for the professional historian, and you're gonna need a whole lot of caffeine just to get through it.

And this somber tome was followed with more books on pragmatism, feminism, and the like, and then in a sudden, something remarkable happened. He writes a book called "The World Turned Inside Out". Its got a picture of Robert DeNiro on the cover in front of some X-rated movie marquees in the background, and so I thought I'd give it a try. I read the first chapter and think: Holy Crap! What happened to this guy? (Was it was all the blogging he does, maybe it loosened him up. Who knows? ) I couldn't put the book down, the writing style was completely different. It was like having a long conversation with a good friend on a cold winter's day with a cup of coffee and time stretching out ahead of you with no other place to go or be. And this new book continues on in that style; a long conversation with the reader about how we got into the current economic crisis, and how we might get ourselves out of it. When my wife asked me what the book was about, I couldn't rightly answer in way that was anywhere near succinct, but I'll take a shot at it now. The author basically uses economic history and hard numbers to make the case that less investment in the hands of the large investment banks, and more spending by us consumers will lead us out of the current recession. And to describe the author with an easy political appellation? How about a free market Marxist?

Did I buy his argument? In spite of myself, in part anyway, yeah. The idea, at the very least, is compelling and worth a discussion. What else can I tell you with out spoiling anything? Well, one caveat is that the book is a little wonky, so it might help if you understand the difference between say, John Maynard Keynes and Adam Smith, or John Kenneth Galbraith and Milton Friedman, or brush up on some basic economics a bit before you dive in. And stick with it. In the last chapter, or the coda, as he calls it, he confronts and engages the trilogy of food, sex, and death. Yes, you read that right, food, sex and death, in a treatise on economic history. Here is where it all comes together, the great Hegalian synthesis, as an academic might phrase it. In this chapter he bares his soul--takes on the fearsome trilogy in an outrageous and truly novel way. This chapter, far and away my favorite section, features among other things; a giant hamburger, dreams of a dying dog, and the author standing on an existential edge at the end of a long personal journey. This chapter had me smiling and thinking all the way to the final credits and beyond. Yes, this book was a delight to read. The economic world turned upside down, and a psychic inner world turned inside out. Five shinning stars.

It's a Catch-22, isn't it? With more consumption we'll hopefully have more jobs (vs. the jobs being outside the US), but first someone needs to hire to create more US jobs. And it's also a paradox: what's good for the country (more consumption by individuals) is not necessarily good for individuals, who focus on being thrifty. So exactly who is the author to tell people to spend more, when what they really want to do is save? To those who want more American consumption, I say "You go first!" Meanwhile, those barely scraping by will continue to behave thriftily. Living within your means can also be "good for your soul".

When you speak with people in the United States, many will posit that jobs are the number one issue our government has to address. Excluding government sponsored infra-structure projects, about 70% of jobs and services are created through consumption - and there it is. Before a job is created, a good or service has to be consumed. Economists use the phrase "marginal product" to describe the output produced by one more unit of a given input. It is here the author drives home his theory - "Instead of accumulating surplus capital and inflating bubbles by cutting taxes on profits, dividends, and capital gains, we should now be empowering consumers by ensuring that they can earn, or rather receive, incomes sufficient to make their demands for goods and services effective; we should be embracing consumer culture rather than bemoaning the excesses of the recent past and imposing austerity on ourselves among others. In other words, more consumption is the key to balanced (economic) growth in the future. Americans need to save less and spend more." After reading this book, the author convinced me that consumption is first and foremost, then resulting in job creation. Thus, ascertaining the inputs needed to increase marginal products is the starting point for job creation.

In the face of slow growth, a massive federal debt, stagnant wages, and high unemployment, James Livingston argues in Against Thrift that consumer spending can provide a way out of our wilderness of economic misery.

Unquestionably, it's a heretical argument, but with the global economy in the doldrums and no national consensus about the way to grow the economy and to bring the 15 trillion dollar national debt under control -- as evidenced by the poisonous debt ceiling debate and the recent failure of the Debt Commission to come to an agreement on how to move forward on the nation's liabilities -- Livingston offers a fresh and thoughtful perspective on how to engender prosperity in America.

Highly recommended.

500 years ago the Protestant Revolution set out to link real world effort and reward. The Protestant notion that each of us is free to sell our labor -- that we "own" our own bodies -- is responsible for the development of capitalism, free markets, democracy and the liberation of countless human beings in the years since. But while "From each according to their ability - To each according to their work" has become simple common sense to us, it was a radical, indeed criminal concept back in the day. This book, it seems to me, attempts to show us the way to overturn that "common sense" in our time. And I would say it's implications are as revolutionary as any the Protestants inspired.
With regard to that earlier revolution, Against Thrift begins with an obvious historical fact that this common sense of our time is unable grasp: "that was then - this is now". The scarcity that defined us since the advent of capitalism is over. We are in an age of surplus now and the old ideas that helped us develop so spectacularly just don't make sense anymore. We made it! We've been trying to get here for 15 thousand years and we finally did it! We figured out how to create enough wealth to satisfy the needs (and most of the desires) of the entire society. This is a miracle in human social development and our public policy (along with our social sense and morality) should accept it, celebrate it and move forward accordingly. I read this book as a call to make the moral turn from the development model that got us here to the one that can take us forward. I found Livingston's case both deeply troubling and inspiring at the same time -- especially his case for why consumer culture is good for the environment. This book is troubling to be sure. A lot of people will find the argument hard to swallow. But revolutionary ideas are always hard to take in their own time - just ask Martin Luther.

I will leave it to other reviewers to attack Prof. Livingston's various conclusions in detail. My intention is to go after his fundamental fallacy, which is his regressive approach to economic theory. I believe most if not all of his errors can be traced back to the belief that it is possible to mechanistically distill economic truths from piles of historical data. This is the only assumption that could permit Livingston to believe that large and small economies are somehow fundamentally different.

It is necessary to comprehend that aprioristic economic theory is indispensable for the interpretation and understanding of any statistics or historical facts. Without economic theory, all such data is just a senseless cacophony, a meaningless and disconnected set of isolated factoids from which any arbitrary conclusions can be drawn. All appeals to "empirical verification" in economics are really just a way of camouflaging the theoretical assumptions underlying the selection and interpretation of the empirical facts. It is not that economics should not proceed empirically; it is that it CANNOT proceed empirically.

To use an example from Mises: an ancient Chinese historian could report that the emperor's sin brought about a catastrophic drought and that rain fell again when the ruler had atoned for his sin. Livingston, applying his economic techniques to meterology, might conclude that ancient weather systems were governed by a distinct and separate set of laws that permitted rainfall to be influenced by the morality of the head of state. We, of course, reject this interpretation (as well as the causal interpretation of the ancient Chinese historian) out of hand, but the only thing that intellectually equips us to do so is our prior understanding of natural law. Similarly, any reader lacking a prior understanding of economic law is defenseless against Livingston's fallacies.

In reality, economic law is apodictic and universally valid. The laws of human action apply wherever and whenever there are individuals planning and acting; it does not matter if the economy is large or small, and it does not matter if the prevailing economic order is one of direct exchange (barter) or indirect exchange (monetary exchange). For this reason, Livingston is forced to explicitly disavow any connection between macro- and microeconomics; he must refuse to reduce his claims to the level of the acting individual, because if he tries to play that game he will lose it: applying his prescriptions to a "Crusoe economy" shows how absurd and destructive they are.

I also cannot resist pointing out that it is ridiculous that this book is being sensationally and cynically marketed as somehow unconventional or even revolutionary. There is nothing more commonplace today, especially among the general public targeted by this book, than the belief that "spending drives the economy." This book is yet another indicator of how bankrupt and tragically misled the economic profession is in modern times. Livingston is not some maverick exposing an unpopular truth; he's just telling people what they want to hear.

Finally, I'd like to provide my own book recommendations for any readers who would like to develop a correct and comprehensive understanding of economics:

Beginner: "How an Economy Grows and Why it Crashes," by Peter D. Schiff and Andrew Schiff
Intermediate: "Economics in One Lesson," by Henry Hazlitt
Advanced: "Human Action," by Ludwig von Mises; "Man, Economy, and State" by Murray Rothbard