American Compass founder Oren Cass is today a darling of economic nationalists and populist conservatives. And for good reason. He writes clearly and with a flair. He conjures lovely images of a largely imaginary lost golden age of mid-20th-century America. Most importantly, he presses all the right (!) buttons of people who live in fear of the new – and, hence, unfamiliar – economic institutions and social arrangements that are inevitably produced by dynamic free markets. Unsurprisingly, among his most frequent targets is international trade. Because people burdened by such fear tend to be poorly informed about both history and economics, Cass’s case against free markets and free trade rings true to them.
Yet anyone who is reasonably familiar with the facts, and who is also competent at Econ 101, cannot encounter Cass’s writings without experiencing a feeling of exasperation. Just beneath the surface sophistication lie layers of fallacies, contradictions, and economic misunderstanding of the sort that one expects to hear at rallies of Bernie Sanders.
Cass’s latest op-ed in the New York Times is par for this course.
Consider its title, which is true to its message: “The Elite Needs to Give Up Its G.D.P. Fetish.” Cass argues, correctly, that a full and satisfying human life consists in more than consuming ever-larger quantities of goods and services that are exchanged in markets (and, thus, that are figured into G.D.P. statistics). Love of family, time spent with friends, a sense of belonging to a community, a feeling of purpose beyond simply earning more money – who this side of psychopathy denies the value of these and countless other situations and experiences that cannot be obtained directly through commercial exchange? No one.
Yet care must be taken when comparing the importance of ‘higher’ or ‘non-material’ aspects of life to material goods and services. Contrary to Cass’s belief, the latter have not become substitutes for the former; they are, as they have always been, typically complements to each other. Greater access to material goods and services – the kinds of things that, when exchanged, are accounted for in GDP data – are often necessary for greater access to the kinds of ‘non-economic’ situations, experiences, and personal connections that Cass rightly counsels us to treasure.
Material Goods and Services Bring Non-Material Benefits
A more plentiful selection of foods makes possible improved nutrition. New and better construction materials make our homes and workplaces sturdier. The increasing abundance of air conditioning and central heating makes our homes and workplaces not only more comfortable but also more safe in the heat of summer days and in the cold of winter nights. Bigger cup holders and other new bells and whistles on automobiles come along also with backup cameras and other new safety features.
People who are well-nourished, comfortable, clean, and safe are more able and willing to produce and participate in higher endeavors than are people whose lives are replete with physical discomforts and hazards. There’s more. Automatic washers and dryers cleanse our clothing without – as the late Hans Rosling beautifully demonstrated – consuming precious time that we can spend on higher pursuits. Ditto for automatic dishwashers.
Modern consumer electronics enhance our ability to communicate with loved ones and friends, as well as to work from home when a child or spouse is ill and in need of nursing. The flatscreen TVs that serve as Cass’s example of frivolous material possessions provide access not only to an array of options for entertainment – the human need for which, by the way, is real – but also to educational programs that enlighten our minds and enrich our souls.
Even many seemingly mundane consumer products protect our health and conserve our time, thus better enabling us to pursue higher aspirations. What modern American would wish to do without the health made possible and the time freed up by goods such as disposable paper towels, antibacterial hand soap, sealable sandwich bags, pull-string plastic garbage bags, and powerful detergents for doing laundry and washing dishes – not to mention refrigeration, indoor plumbing, electric lighting, and affordable roofing shingles?
By historical standards we Americans are today so astonishingly wealthy – and this wealth, despite incessant claims to the contrary, is so widely shared – that we take our prosperity for granted. We thereby are blind to the countless non-material benefits made possible only by the material abundance generated through global markets featuring open trade.
Today’s Pandemic in Historical Context
A noteworthy instance of this blindness is Cass’s description of the Covid pandemic as causing us Americans to die “in unprecedented numbers.” His claim is untrue. To see why, start by taking the upper end of Virginia Tech professor Ronald Fricker’s unusually high estimate of the number of excess deaths caused through July 2020 by Covid – specifically, an estimate that Covid has caused the total death rate in the U.S. to be as much as 12 percent higher than otherwise.
Pre-Covid, the United Nations predicted that in 2020 0.888 percent of Americans would die – approximately 2,914,000 persons. Therefore, if Prof. Fricker’s most pessimistic estimate is correct – and if (as almost certainly will not be the case) this estimate holds through January 2021 – Covid will, on an annual basis, raise the number of American deaths by almost 350,000, to a total of roughly 3,264,000. That’s 995 Americans dying per every 100,000. Put differently, on extremely pessimistic assumptions, Covid is on track to raise America’s annual death rate to just shy of 1.0 percent.
While unquestionably lamentable, this rate of death is hardly unprecedented. The annual rate of death in America did not fall to this level until the late 1940s. One hundred years ago (1920), for example, roughly 1,300 out of every 100,000 Americans died. That’s a death rate of 1.3 percent. (See the graph on page 67 of this study found at the Centers for Disease Control website.)
Americans’ rate of death fell as we became materially wealthier – as we gained more access not only to medicines such as antibiotics, but also to the detergents, the garbage disposals, the latex gloves, the laptops, and the many other seemingly frivolous goods that global markets routinely pack into the warehouses of Wal-Mart, Target, Home Depot, Safeway, Amazon, and other retailers. We also became better educated and better able to stay connected to family and friends.
Had this material wealth been produced in less abundance, the range of higher goals that ordinary Americans would today be able to pursue would be narrower. And this material wealth would indeed have been produced in less abundance had Americans been saddled with more of the tariffs, subsidies, and other government interventions for which Oren Cass tirelessly pleads.