Monday, June 03, 2013

Ben Bernanke's over-the-cliff notes

No one needs me to add my wonder to that of everyone encountering Ben Bernanke's remarkable commencement speech at Princeton debunking the concept of meritocracy as defined by nearly every politician in America who pays lip service to it. No one needs me either to highlight the implicit rebuke to a party fanatically devoted to preserving low taxes for the rich and benefit cuts for the poor. 

I will only gild the lily so far as to note how thoroughly Bernanke set up the climactic credo from the moment he opened his mouth.  With caustic good humor, he repeatedly struck notes that eventually merged in the climactic chord: Life is unpredictable; merit is a product of chance; you are collectively the luckiest of the lucky; and your only instrument of meaningful control is a determination to do well by others. To wit:

I'll extend my best wishes to the seniors later, but first I want to congratulate the parents and families here. As a parent myself, I know that putting your kid through college these days is no walk in the park. Some years ago I had a colleague who sent three kids through Princeton even though neither he nor his wife attended this university. He and his spouse were very proud of that accomplishment, as they should have been. But my colleague also used to say that, from a financial perspective, the experience was like buying a new Cadillac every year and then driving it off a cliff.
You few, you happy few, whose parents can afford four Cadillacs. And yet, even those gifted Cadillacs can't map your course:
The poet Robert Burns once said something about the best-laid plans of mice and men ganging aft agley, whatever "agley" means. A more contemporary philosopher, Forrest Gump, said something similar about life and boxes of chocolates and not knowing what you are going to get. They were both right. Life is amazingly unpredictable; any 22-year-old who thinks he or she knows where they will be in 10 years, much less in 30, is simply lacking imagination.  
Unpredictability does not, however, erase responsibility:
What will you do with it? Will you keep learning and thinking hard and critically about the most important questions? Will you become an emotionally stronger person, more generous, more loving, more ethical? Will you involve yourself actively and constructively in the world?
And thence to the remarkable core. What the hell, let it be reprinted in as many places as possible:
The concept of success leads me to consider so-called meritocracies and their implications. We have been taught that meritocratic institutions and societies are fair. Putting aside the reality that no system, including our own, is really entirely meritocratic, meritocracies may be fairer and more efficient than some alternatives. But fair in an absolute sense? Think about it. A meritocracy is a system in which the people who are the luckiest in their health and genetic endowment; luckiest in terms of family support, encouragement, and, probably, income; luckiest in their educational and career opportunities; and luckiest in so many other ways difficult to enumerate--these are the folks who reap the largest rewards. The only way for even a putative meritocracy to hope to pass ethical muster, to be considered fair, is if those who are the luckiest in all of those respects also have the greatest responsibility to work hard, to contribute to the betterment of the world, and to share their luck with others. As the Gospel of Luke says (and I am sure my rabbi will forgive me for quoting the New Testament in a good cause): "From everyone to whom much has been given, much will be required; and from the one to whom much has been entrusted, even more will be demanded" (Luke 12:48, New Revised Standard Version Bible). Kind of grading on the curve, you might say.
Bernanke's humbled/humbling view of the success rate in action and analysis by politicians and economists is in keeping with this suggestion that we can at best steer half-blind with an internal compass powered by as much good will and courage as we can muster (an internal striving the outcome of which, his rumination on merit implies, is itself a product of chance). 90 percent of economic policies proposed by politicians, he suggested, are wildly illogical. Economics can highlight the worthlessness of those proposals, but is of more limited value charting an effective course (does this imply that the wildly illogical policies that have held so much sway since say 2010-11  are supported only by crank economists?).

Bernanke is "conservative" in his view of the limited though not negligible power of human will and intellect, if apparently quite radical, as Paul Krugman suggests, in his economic ethics.

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