Alexandria Ocasio-Cortez's Pie-in-the-Sky Vision for the Economy Ignores So Much
This summer, Democratic Socialist Alexandria Ocasio-Cortez pulled off an unprecedented upset in New York’s 14th Congressional district, as voters showed they favored her over establishment incumbent, Joseph Crowley. As the assumed representative for the Bronx and Queens come November, and the presumed start of a leftward shift in the Democratic party, Ocasio-Cortez has been doing the media rounds. A July 13 appearance on PBS’s The Firing Line with Margaret Hoover, however, earned Ocasio-Cortez plenty of criticism, as she flubbed unemployment terms and botched her usually-composed talking points.
While the goals of widespread material abundance and dignified work-life balance should be lauded by everyone, Ocasio-Cortez misunderstands the economic data in a way that could be quite damaging to her egalitarian mission.
In the PBS appearance, Ocasio-Cortez draws on an intuitive––and simplistic––understanding of unemployment when she says, “Unemployment is low because everyone has two jobs.” It sounds right, but it doesn’t quite add up: If you divide the number of unfilled jobs in the economy by the total number of jobs, the only explanation for a low “unemployment” number is people taking on multiple jobs, right?
But the number of people moonlighting a second job stands at merely 4.8 percent, which means the vast majority of folks aren’t actually working two jobs. More importantly, unemployment is actually measured by dividing the number of people unable to find work by the whole labor force (which includes people with jobs and people looking for jobs). While Ocasio-Cortez looks at jobs––and tries to make the point that everyone is overworked––the actual statistic looks at people.
Yes, there are some issues with how unemployment is calculated––what exactly counts as “looking for work”? But the data is still concentrated on the central variable: people. After all, jobs are not an end in themselves, but a means toward getting fed and having a roof over your head. So, focusing on jobs alone is backwards for two reasons.
First, the people looking for work don’t necessarily have the skills for the unfilled jobs. In other words, unemployment can be related to human capital investments gone wrong, and isn’t just a matching problem. Second, the number of jobs is not static. When an immigrant moves to the United States, they don’t just take up an unfilled job––their work, savings and spending creates new opportunities for others. An entrepreneur’s idea for a magazine that will forever change a nation’s sexual norms opens up doors that were previously closed, and so on and so forth.
In the PBS appearance, Ocasio-Cortez draws on an intuitive––and simplistic––understanding of unemployment when she says, “Unemployment is low because everyone has two jobs.” It sounds right, but it doesn’t quite add up: If you divide the number of unfilled jobs in the economy by the total number of jobs, the only explanation for a low “unemployment” number is people taking on multiple jobs, right?
But the number of people moonlighting a second job stands at merely 4.8 percent, which means the vast majority of folks aren’t actually working two jobs. More importantly, unemployment is actually measured by dividing the number of people unable to find work by the whole labor force (which includes people with jobs and people looking for jobs). While Ocasio-Cortez looks at jobs––and tries to make the point that everyone is overworked––the actual statistic looks at people.
Yes, there are some issues with how unemployment is calculated––what exactly counts as “looking for work”? But the data is still concentrated on the central variable: people. After all, jobs are not an end in themselves, but a means toward getting fed and having a roof over your head. So, focusing on jobs alone is backwards for two reasons.
First, the people looking for work don’t necessarily have the skills for the unfilled jobs. In other words, unemployment can be related to human capital investments gone wrong, and isn’t just a matching problem. Second, the number of jobs is not static. When an immigrant moves to the United States, they don’t just take up an unfilled job––their work, savings and spending creates new opportunities for others. An entrepreneur’s idea for a magazine that will forever change a nation’s sexual norms opens up doors that were previously closed, and so on and so forth.
Hoping that good ideas get voted in works out sometimes, but it’s not an effective institutional check on bad ideas.
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There is no list of unfilled jobs somewhere. The interplay of individual and collaborative skills, resources and opportunities over time is what determines available jobs. The same fixed-pie logic underlying Ocasio-Cortez’s misunderstanding of the unemployment numbers motivates President Trump’s populist crackdown on immigration and his rash, ill-conceived trade war. If jobs are not created, but merely filled, then immigrants and foreign producers could “steal” jobs otherwise filled by Americans. But today’s immigrants increase the size of the pie before they take their slice. Focusing on jobs instead of people is precisely the wrong way to help those most in need.
It’s possible that Ocasio-Cortez simply bungled a few terms, but a deeper look into her platform shows more fallacies. On PBS, Hoover delves into her own ideological bias a bit more clearly, saying, “The benefit of capitalism is that you engage in voluntary trade and that because it creates value, it is the system that––unlike all the others––has lifted more people out of poverty over the course of human history than any other system.”
Ocasio-Cortez’s response falls short when she tells Hoover, “I think that those things that you talk about, that you discuss, are part of the course of human evolution...Democratically Socialist economies...are done with the full input of everybody. You vote, it’s democratic. So, if something is not a good idea, it doesn’t get voted for, ideally.”
This is a wildly optimistic view of the voting populace given that Ocasio-Cortez explicitly opposes many of the populist ideals that recently made it to the White House. As we’ve all learned, hoping that good ideas get voted in works out sometimes, but it’s not an effective institutional check on bad ideas. We are too easily consumed by tribal allegiances that let fear and easy-sounding solutions win out over logic. For her to place such immense faith in voters feels like a rewrite of the history that’s played out over the last two or so years.
Turning everything over to voting risks turning daily life into a sort of live-action Twitter, dominated by 24/7 culture warring. And the incentive for fellow citizens to surveil their neighbors, lest they be doing things the winning voters disapprove of, could rival the Puritan colonies. While mass democracy promises unanimous decision-making, voluntary trade achieves unanimity without conformity. Playboy models can model and Playboy readers can...read, yet neither of them depend on convincing anyone else (let alone a voting majority filled with lots of prudes) to publicly endorse their activities and even allocate resources to them.
Look at the most marginalized people today––immigrants, sex workers, people of color––these same folks would be far worse off if even more of their lives, especially their economic livelihoods, were left up to the discretion of the voting population that elected Donald Trump.
And what about the wealth Ocasio-Cortez attributes to mere human evolution? If creating wealth was some natural feature of our evolution, why was it mostly stagnant for almost our entire history? Any miniscule amount of existing wealth was enjoyed only by the lords, bishops and a few merchants. But starting around 1800 and continuing into today, the ordinary person experienced a tremendous increase in living standards from about three dollars a day to thirty dollars a day (calculated in 2008 dollars). Not to mention the $90 a day enjoyed in Japan, $120 in America, and $137 in Norway. In only a couple hundred years, billions of people have escaped abject poverty. You can’t just vote for that kind of improvement. In order to share that wealth with billions more people, we need to permit––and dignify––the voluntary trade that created it.
Ocasio-Cortez is right to worry about the unemployed and overworked. We can and should do better––she is just shortsighted in her means. While capitalizing on one’s talents and ingenuity was a privilege first afforded only to able-bodied, white males in England and Holland, the freedom to trade with others is a right slowly but surely being extended to everyone. Today, global poverty is on the downswing. Trade is enriching the whole world. Going after regulatory privileges and barriers to voluntary trade like occupational licensing and zoning restrictions would create new opportunities for people to create wealth and help that wealth go further, to reach the people who have wrongfully been excluded from it in the past.
As Ocasio-Cortez reminds us in the interview, “Young people are very receptive to a strong economic message of dignity for working-class Americans.” She’s absolutely right, and dignity for the working class shouldn’t be a talking point trotted out by either political party, but a common objective shared by all. Some of us are just skeptical of politicians––whatever their professed ideology––controlling our economy, or domineering voters getting to control what the rest of us do with our time, money and brains. The goal should be dignity without coercion or conformity––and voting Democratic Socialists like Ocasio-Cortez into office simply might not get us there.
It’s possible that Ocasio-Cortez simply bungled a few terms, but a deeper look into her platform shows more fallacies. On PBS, Hoover delves into her own ideological bias a bit more clearly, saying, “The benefit of capitalism is that you engage in voluntary trade and that because it creates value, it is the system that––unlike all the others––has lifted more people out of poverty over the course of human history than any other system.”
Ocasio-Cortez’s response falls short when she tells Hoover, “I think that those things that you talk about, that you discuss, are part of the course of human evolution...Democratically Socialist economies...are done with the full input of everybody. You vote, it’s democratic. So, if something is not a good idea, it doesn’t get voted for, ideally.”
This is a wildly optimistic view of the voting populace given that Ocasio-Cortez explicitly opposes many of the populist ideals that recently made it to the White House. As we’ve all learned, hoping that good ideas get voted in works out sometimes, but it’s not an effective institutional check on bad ideas. We are too easily consumed by tribal allegiances that let fear and easy-sounding solutions win out over logic. For her to place such immense faith in voters feels like a rewrite of the history that’s played out over the last two or so years.
Turning everything over to voting risks turning daily life into a sort of live-action Twitter, dominated by 24/7 culture warring. And the incentive for fellow citizens to surveil their neighbors, lest they be doing things the winning voters disapprove of, could rival the Puritan colonies. While mass democracy promises unanimous decision-making, voluntary trade achieves unanimity without conformity. Playboy models can model and Playboy readers can...read, yet neither of them depend on convincing anyone else (let alone a voting majority filled with lots of prudes) to publicly endorse their activities and even allocate resources to them.
Look at the most marginalized people today––immigrants, sex workers, people of color––these same folks would be far worse off if even more of their lives, especially their economic livelihoods, were left up to the discretion of the voting population that elected Donald Trump.
And what about the wealth Ocasio-Cortez attributes to mere human evolution? If creating wealth was some natural feature of our evolution, why was it mostly stagnant for almost our entire history? Any miniscule amount of existing wealth was enjoyed only by the lords, bishops and a few merchants. But starting around 1800 and continuing into today, the ordinary person experienced a tremendous increase in living standards from about three dollars a day to thirty dollars a day (calculated in 2008 dollars). Not to mention the $90 a day enjoyed in Japan, $120 in America, and $137 in Norway. In only a couple hundred years, billions of people have escaped abject poverty. You can’t just vote for that kind of improvement. In order to share that wealth with billions more people, we need to permit––and dignify––the voluntary trade that created it.
Ocasio-Cortez is right to worry about the unemployed and overworked. We can and should do better––she is just shortsighted in her means. While capitalizing on one’s talents and ingenuity was a privilege first afforded only to able-bodied, white males in England and Holland, the freedom to trade with others is a right slowly but surely being extended to everyone. Today, global poverty is on the downswing. Trade is enriching the whole world. Going after regulatory privileges and barriers to voluntary trade like occupational licensing and zoning restrictions would create new opportunities for people to create wealth and help that wealth go further, to reach the people who have wrongfully been excluded from it in the past.
As Ocasio-Cortez reminds us in the interview, “Young people are very receptive to a strong economic message of dignity for working-class Americans.” She’s absolutely right, and dignity for the working class shouldn’t be a talking point trotted out by either political party, but a common objective shared by all. Some of us are just skeptical of politicians––whatever their professed ideology––controlling our economy, or domineering voters getting to control what the rest of us do with our time, money and brains. The goal should be dignity without coercion or conformity––and voting Democratic Socialists like Ocasio-Cortez into office simply might not get us there.
