Through the Eyes of Yankelovich

Challenging the Economist Worldview

In a recent New York Times article, the noted American economist Tyler Cowen challenged one of the truisms of economic theory: the assumption that it is just a matter of time before technological innovation replaces all the jobs that it destroys. Economists have taken this assumption for granted ever since Britain proved the Luddite challenge unfounded in the late 18th century. The Luddites wanted to destroy the new machines that they felt were destroying their jobs. But as time passed, technology came to be seen as a mighty creator as well as destroyer of jobs.

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Through the Eyes of Yankelovich

A Debate with Large Consequences

In industrialized nations we are in the early stages of one of the most important debates in our lifetime:
• Is growing income inequality inevitable or susceptible to change?
• If it is inevitable, what should we do to reduce its harmful effects?
• If it is susceptible to change, what actions should we take to restore greater fairness to our economies? Starting in the 1970s, and accelerating after the Great Recession of 2007-8, income of those at the top of the scale grew enormously, while wages for the middle and bottom parts of the scale stagnated.

It wasn’t until the gifted French economist Thomas Piketty published his masterful book, “Capital in the Twenty-First Century” that a serious and thoughtful debate about inequality trends began in earnest. The book has caught the attention of the industrialized nations for several reasons.

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Through the Eyes of Yankelovich

Tokyo 5

In the coming months, people in America and Japan should expect a lot of discussion on a topic that may at first glance seem like technical economics, but is in fact a red-hot political issue whose consequences are hard to exaggerate.

The topic is whether or not our capitalist systems are undergoing a lasting structural change. Are we inadvertently shifting from forms of capitalism that are compatible with political democracy to forms that are undemocratic?

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Rethinking the MBA

As the global financial crisis has subsided, some business schools have added one or two courses on ethics to their MBA programs. The courses are mostly an afterthought. The thinking behind them is: “Our financial institutions have behaved badly, so maybe it would be a good idea to add a touch of ethical instruction to the curriculum.” Nothing could be more revealing of the mindset of our economic thinkers than that business ethics has become a sideshow, an add-on, an extra frill.

The prevailing view of the economy as a giant autonomous mechanism following inexorable laws is a highly abstract, quasi-scientific conception. Like the laws of gravity, there isn’t much room for ethics. But, in fact, this prevailing view conflicts sharply with how we actually experience the economy in our day-to-day encounters.

The Hungarian philosopher Karl Polanyi emphasized the importance of what he called “tacit knowledge,” or non-conscious knowledge that accumulates from our experience with ideas, objects, people or institutions without our being fully aware of it.

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See how one of the world’s most influential people in public affairs, communications and public relations, Daniel Yankelovich, views the world.

A PROBLEM NOT CONFINED TO THE UNITED STATES

DEMOCRACIES with capitalist economic systems like those in Japan, the United States and Europe have many features in common. One is to compartmentalize thinking about the economy as if it were an autonomous system that operated in isolation of the larger society to which it belongs. Such thinking can lead to serious miscalculations of the sort that currently threaten the social contract that now prevails in the United States.

Most economic theorists acknowledge that capitalism creates inequalities. This is a tradeoff that most Americans up to now have willingly accepted, despite the high value we place on equality. To reconcile the conflicting pulls of freedom and equality, Americans have settled on the principle of equality of opportunity as the underlying core value of democratic capitalism. Unfortunately, however, the traditional American value of seeking to “better oneself ” is beginning to show signs of erosion. This is because it is becoming increasingly difficult to realize.

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