The Urban Monk – Never Enough: Capitalism and the Progressive Spirit with Guest Neil Gilbert

The Urban Monk – Never Enough: Capitalism and the Progressive Spirit with Guest Neil Gilbert


(funky music) – Hey, welcome back to the Urban Monk. I am happy to be back in studio. It’s a interesting time of
year, things are getting kinda funky with holidays,
and so we’re doing a few more shows this next few weeks just to kind of fill in
and let daddy hibernate for the holidays. And many of that I have been on this quest making this movie, really
looking at the economy, conscious capitalism,
trying to figure out whether the way we spend our
money can be a solution for our greater needs and what
the problems are in the world and all that. And so I’m happy to
introduce my guest today. Neil Gilbert has a new book
out called Never Enough, so you know I already love him. It’s about capitalism,
the progressive spirit. He’s got a lot of provocative
statements he’s making, and we’re gonna really start unpacking this consumption economy and what it means and whether or not this
whole thing is insane, and maybe there’s a better
way to look at this. So hey, welcome to the show. – Thank you very much, happy to be here. – Yeah, great. So you’ve been around,
you’ve done a lot of work. You used to work, did some
work with the United Nations, you’re up at UC Berkeley, you
said go north of 40 years now at UC Berkeley? – Pretty much, yeah. – Yeah, so you have been
looking at the economy and you’ve been looking
at how the economy, I mean, even in the last 40 years, has changed dramatically, right? I mean, this container
economy of just shoes and plastic toys and all this
stuff coming over from China by the gigaton, that’s relatively new, and it’s kind of a mark of our
new kind of way of rolling, and so it’s like I remember
when 9/11 happened, George Bush came out and famously said, “Don’t stop shopping.” Like, keep buying things. And so that’s become our way of life. And so you have a criticism
of that in some ways, so I’d love to really get in and explore your hypothesis and what
you have to say around this. First of all, you observed
that we’re actually living in an era of
unprecedented abundance, okay? You mentioned this in the book. How does this fit with what
we’re hearing in the media, and has this effect kind of
the progressive social agenda? – Yeah, well one of the reasons, Pedram, that I wrote this book is
because I wanted to calm public apprehensions
about the rate, the degree and the implications of
poverty, increasing inequality and declining social ability in America, which is conveyed in the media. Because I think that
these are exaggerated, grossly exaggerated. In fact, we are very
well-off in this country. When I say an era of abundance, in 1929, John Maynard Keynes, at the
height of the Depression, John Maynard Keynes
was writing and he said in about a hundred years from
now, we’re going to solve the economic problem. And then society is going
to be faced with an issue. And the issue won’t be
how do I put enough food on the table to survive, or
how I put a roof over my head, the issue will be how do I live a wise and reasonably good life? And he said, in 1929, he said
and that’s going to create a problem for people. I think we’re at that point
today, where the question of what is a good life, a good
society, is possible to ask not how can we consume more. But the thing is we see often in the press and conveyed by the media
suggest that there’s big problems of poverty, the
inequality is burdening society and that there’s very
little social mobility. And in fact, when you
look clearly at the data and look at the implications
of it, this is not the case. We are incredibly well off. This is a country where
the median income is about $50,000, $54,000 a year in a world where one to two billion people are living on $1,000 a year. So we’re in very, very good shape. Today’s middle class, you think
about a middle-class person, can experience, have the life experiences of really wealthy people. They can eat the food they
eat, they can experience entertainment, they can do
almost everything short of taking a vacation in outer
space, which is now becoming a possibility for a couple
hundred thousand dollars a year. But in terms of travel, seeing the world, seeing entertainment, all
the things that you would say are the material benefits
of life, medical care, they’re all within reach
of the modern middle-class of America today. – So what’s everyone so stressed about? I mean, we’re talking about
the middle class shrinking. Are you contending that the
middle class isn’t shrinking, or is there just a kind
of a different definition that’s being applied
that, that’s challenging these assumptions? – Yes, is the middle class shrinking? So the middle class in
fact is shrinking a bit. That’s quite true. And the question is
well, is this a problem? Because the implication,
the prevailing assumption when you say the middle class is shrinking is ah, everyone’s getting poorer. But in fact, when you look at the data, the middle class is shrinking
because more of them are becoming wealthier. They’re moving out of the
middle class into the upper reaches of the income distribution. So that the shrinking middle class, and it’s a grossly
exaggerated problem also, because it depends how
you define middle class and where the income line is. – So okay, so you’re
saying looking at the data, there’s really not that much
shrinking of the middle class, depending on what income bracket
you consider middle class, and you’re saying a lot of the shrinking is actually attributed to
people kind of rising up and out of there and finding
more relative wealth? – Absolutely. – That’s fascinating. This is obviously a highly
politicized data point, right? And everyone’s talking about
the middle class shrinking, jobs going to China and the
1% taking all the wealth. How much of that is happening? And when you look at the data, is there a hyper concentration
of wealth in that 1% that’s somewhat unfair? – Aha, yeah, they’ve got a lot of money. In fact, it’s not the 1%, okay? It’s more like the 1/10 of 1%. The top 1%, the top 1%,
starts at about 300, I think, and $70,000 roughly in that area. That’s what we would call
very prosperous people, but they’re not fantastically wealthy. The fantastic wealth, the serious wealth begins at the top 1/10 of 1% where I think it starts at $1.7 million a year. So yes, the rich are getting richer, there’s no question about it. The question is are we
experiencing increasing inequality? And if you ask people today,
are the rich getting richer and the poor getting poorer,
the vast majority will say yes. At least that’s according
to the Pew surveys that have been done. 75% or so of the people
asked will say yeah, the rich are getting richer and
the poor are getting poorer. And if you read what’s
often described in the press and the media, the famous book
by Piketty about capitalism, that there’s greater
increasing inequality, and in fact it’s partly true, but it’s not really true, okay? And that is, it depends
on how you count income. And economists understand this, and most people don’t realize. If you look at market income, market income is what your W-2
form says your boss gave you. That is, it’s your salary. If you look at market income,
then between 1979 and 2005, it’s quite true that the
people in the bottom 20% of the income distribution,
their income, market income, declined by 30%, and
that people in the top, they had a market income
increasing by well over 30%. But none of us live on market income. I’d love to live on my market income, and that is the income
that is on my W-2 form. There’s another way of measuring income, which is the real income that we live on. It’s called disposable household income. And that is what’s left in your pocket after government taxes,
after all the transfers the government makes. The government today has 80 programs that provide income
transfers to low-income that are means-tested
to low income people, and they amount to, overall,
I think $708 billion of transfer to people
who have lower incomes. Now market income doesn’t
take into consideration any of these transfers. It doesn’t take into
consideration the amount of money that the government takes from my salary. Disposable household income is a more accurate measure
of how well people are doing. And when you look at
disposable household income, you find a very different picture. And this is not data that
comes from the right wing or the left wing. This is the Congressional Budget Office. The Congressional Budget
Office is considered pretty much the gold standard in terms of nonpartisan analysis of income data. And according to them,
when you look at disposable household income, the bottom
half of the distribution, I think the bottom 20%,
their income has increased between 1979 and 2010. Their income increased by, I think, 49% or 50%. If you look at people in the top 20%, that’s the wealthiest people, the top 20%, their income increased by 71%. Now if you go to the top 1%,
their income increased by 201%. So it’s a huge difference. But there are two facts
about this distribution that’s very important. One is everybody’s income increased, and that is the rich didn’t get rich and the poor got poorer. The rich got richer and
the poor got richer. The rich just got richer
at a higher level. And in fact, it’s not the
top 1% as I said before, but it’s more of the
top 1/10 of a percent. When you take them out of the equation, the top 1/10 of a percent,
it looks very much like according to the best
economic research I’ve seen, that since 1993, there’s
been no significant increase in inequality, economic
inequality, in this country. So this vision of tremendous inequality really depends upon how
you count the income, and it also depends upon recognizing that life is not very static. It’s dynamic. So people who start off in the bottom 20% don’t stay there for their whole life. When you say there’s
inequality in this country, it doesn’t mean that the
people in the bottom 20% are stuck there. There’s a tremendous
amount of mobility going on over the life cycle so that 50% of the people
who are in the bottom 20% will have moved out of that
between 1995 and I think 2006. So there’s a lot of movement
over the life cycle. – So within a decade,
they were able to get out and bump up a category. Hey, one quick second, I’m
gonna have you move my screen, I know we’re live, but if
you can move the screen that you’re seeing me on
a little more centered, just because you’re
looking a little right– – Looking too much at you? Okay. – Yeah, you’re looking a
little right and center. Yeah, that’s perfect, that’s perfect. – I’ll just look at my screen– – Yeah, perfect, perfect. A lot of things that you’re saying here are provocative, right? And it seems like the political discourse has really been galvanized around this kind of discontent and, really, kind of working this narrative
of discontent out there. But on all sides. There’s inequality, all of
these kind of slogan things that drove this, especially
this last political season, they created a lot of kind of really negative energy around this. And so what you’re saying
is look, it ain’t that bad, and there’s plenty of
mobility from the bottom up, and people are all making money. But what I’m hearing here
is there’s a something north of 700 billion in either
rebates or subsidies or something that’s being
given that then kind of evens the playing field between
the different measures that you’re talking about. I just wanna make sure I’m
understanding that right. – Pedram, absolutely. Think of it this way. People who are officially designated, the population officially
designated as poor in the United States,
okay, 40% of those people who are officially designated
as poor, own their own homes. And their homes, on average,
the square footage is larger than in many of the European countries. Almost 80% of them own automobiles. 75% of them have air-conditioning. And of course, most of
them have refrigerators and microwaves. 100% have television sets. The material well-being of people who are supposed to be
poor in this country is unprecedented, which
is not to say there’s not real poor people, it’s just to
say that the figures we have for people that are poor
are grossly exaggerated. And people who understand
this realize that these official numbers don’t represent the real circumstances. – So okay, we’re not Bangladesh. – If you think about poverty in America, you think about what poverty means, if you’re poor for six months, is that a problem in society? Because I ask my students in my college, in my university class, how
many of you have ever been poor? And 2/3 of them will raise their hand, that various times, even right now, the way poverty is measured,
there’s almost three million college students who
are living off campus. And because they’re off-campus and living, they are counted amongst poor in America. So there’s a temporal dimension to poverty that you have to take into consideration. And the way poverty is
measured in America today doesn’t take that into consideration. Now when I say this to people,
I say how can you say that? Open your eyes. Don’t you see on the streets
of Berkeley in San Francisco, there’s immense number of homeless people? And that’s absolutely the case. I (mumbles) we have solved the problem of probably five to 7% of
the people in this country are chronically poor. And the homeless are amongst them. But one of the reasons that many of them, if not most of them, are chronically poor, is that they have other issues. Homeless people, the
data on homeless people, suggest that many of
them have mental health and addiction issues, and that it’s not simply a
matter of give them money and they’ll function well. So a clearer vision of
who’s poor in America today, I think, is very important. When they look at other data
that the government collects, it turns out that the bottom 20% of the income distribution
amongst whom the poor are, spend 200% of their supposed income. How can this happen? I mean, something is missing here when you have a set of data that say they’re spending twice as
much as they presumably have. And we don’t know exactly why. Some of it maybe debt. Some of it maybe the fact that people don’t report their income accurately. 36% of the people who receive food stamps did not report income on that. A big part of it may be something that we don’t track very well in this country, and that is, there’s a tremendous amount of intra-family transfer. 50% of the people from 50 to 64 give financial presents to their kids which average 8,000 a year. So there’s huge amount of
money that’s being transferred within families that we don’t see. A lot of that is wealthy families, but a lot of that is going
to people who are counted amongst the poor. So it helps to get a better sense because if we can focus on
what the real problem is, we can solve it because it’s manageable. The 5% of people that I think are chronic, it’s five to 7% chronically poor, we ought to be able to do something about. But when we claim that it’s closer to 15%, that becomes a problem
where you’ve got to change everything in society. You’ve got to change capitalism. – Okay, so does this
include the food insecurity? I mean, I get a lot of
statistics kind of fed my way about how many children go
to sleep hungry at night and how much food insecurity
there is in our country. How much of that factors
into that say, five, is that, that five to 7%? Or is that kind of above and beyond that? – Oh Pedram, food insecurity, now this is not popular to say but it is an empirical
reality in modern society. The problem for poor people is not hunger. The problem poor people
have like the middle class, it’s not just the poor people, is obesity. Obesity is a much bigger
problem than hunger. When you say food insecurity, you have to know how that is defined. Food insecurity is a definition that the federal government
has based on surveys they do, and one of the questions is if
you didn’t have enough money or felt insecure for one day of a year, then you have food insecurity. There is, and I’m not saying
that people don’t have food insecurity, but there’s
a much bigger problem in this country for poor
people and for middle-class. And it turns out that
amongst the middle class, I believe, a higher proportion
of men are obese than women. And amongst the poor, a
higher proportion of women are obese than men. But obesity is a much bigger problem. People are not hungry by and large for the most part in this country. – So what is it that they’re not getting? I mean, we were just talking about, like, all the containers full
of shit coming over and filling up the Target
store that they can’t afford to get on kind of
a disposable income basis. Because if they’re getting
food and food stamps and there’s that $700 billion cushion to kind of close that gap,
and you’re suggesting that food insecurity is obviously statistically not that relevant, what
are the biggest problems with poverty in this country? Like, what is the core issue there? – There’s a huge, from I think, If I say 5%, that’s 15 million people. That’s a lot of people who
have very serious problems of functioning in a
modern capitalist society. A huge portion of those
people have problems of mental illness, and they
have problems of addiction. We could solve that in a
sense of we could provide or I would call honorable
dependency for those people. We could say okay, the people
who are not really able to work and function,
let’s create as good a life as possible for them. We have the money, we’re
wealthy enough to do that. If we focus and realize
we’ve got to define who the real chronic poor are, as opposed to always making
the problem much larger so we require much more
spending for government and the people who are most in need don’t, are the last to get the money. – Yeah, I was listening
to, back in the day, and obviously, for those
of you who know me, I’m not an economist so
this is all new to me, I remember listening to Alan
Greenspan giving a talk once, and he was talking about
some of the positive markers on the economic outlook. And he had mentioned
something that blew my mind. He said worker insecurity
was nice and high, was right around five to 7%. And so I started asking some
economist friends of mine what the hell that means. It’s like well, there’s a
little downward pressure and people wanna kind
of hang on to their jobs and all this kind of stuff. And it feeds this kind of
dialogue about capitalism really kind of being
evil and not allowing for kind of the humanity of, say,
like the social democracies of Scandinavia. And so what you’re suggesting
is we have plenty of money in capitalism to deal with
that bottom five to 7%, to bring that up, and then
there’s that kind of, like, low-to-mid tier 20%
that’s crowding and making too much noise and
creating kind of political, what’s the word, battles
that don’t need to be there. – I think that the struggle we see today, and the reason
why poverty, inequality and social mobility are being described as the biggest challenge in our society, is the struggle between not
the haves and the have-nots but between those who have
and those who have more. And that a lot of the
information that we receive about why there’s so much inequality, which doesn’t, it doesn’t
include the fact that the way they measure inequality in America doesn’t tell you anything
about the existential reality of life. So if I told you somebody in San Francisco makes $100,000 a year,
and somebody in Montana makes $85,000 a year, you’d say okay, well, it’s not equal. The person in San Francisco
is making more money. In fact, if you look
at the cost of living, the person in Montana
is looking much better. That is, once you adjust
the cost of living, their 85,000 is worth more
than 100,000 in San Francisco. For a 100,000 in San Francisco,
you can rent the closet to live in.
– Totally. – For 85,000 in Montana,
you can get a real house. This is true, of course, in our country. And so a lot of these
figures ignore that fact, and the reason it’s felt
very strongly is because the places where it’s
felt from the two coasts are where you have the
progressive intellectual leaks, and where you have this
resentment between those who have and those who have a lot,
between the intellectuals and the business world. A number of people have
said this over history, from Irving Kristol to von Mises and David Brooks in the New
York Times wrote about this, it’s called the status income discrepancy, where people who feel resentment about what they perceive as inequality are the intellectual elites. Most people don’t get up
in the morning and say, “Bill Gates, dammit, he’s
out on his private jet “flying to the Mediterranean today “and I have to go to work.” Most people compare themselves
to their reference group, and they don’t have a larger sense of some grand inequality in society, that the rich are really out there. They look at people who they work next to, Nicole down the block from
me is making more money than I am, and she has a similar job. With one exception, and that is the intellectual
elite in society. And now I’m talking about
the pundits, the professoria, the newspaper columnists,
the people who make very nice salaries, who
have very high status and who tend to associate and affiliate with extremely wealthy millionaires. And they look at them and they say, why does this lawyer who used to be in my
class, a mediocre student, he has his second home in Bellagio and he can’t appreciate
Italian Renaissance art the way I can? This simply isn’t fair. So you have that resentment,
and you have this group which is continually beating the drum about inequality and poverty. For most people, they’re
living much better than their families did, than
the families they grew up in. And that’s the real measure
of material well-being. – That’s really interesting. John Mackey, the founder of Whole Foods, said a very similar thing. He really felt that intellectuals
give business a hard time. He actually equated it to
maybe old, old European kind of judgment of the Jews
who where more mercantilist and were successful, and
they drew kind of the ire of these intellectual types there. It’s really interesting
that those arguments are coming up again. And so you you see this in
the intellectual circles. You’re saying that this is
obviously a known phenomenon that is talked about, and it’s
something that is influencing because, let’s face it, New
York Times, Washington Post, LA Times, you’re saying that the cultural intellectual centers are the
ones that are disseminating this information and
these opinions that aren’t necessarily of guy on the street? – Absolutely, absolutely. And they are the people to
whom this inequality matters. For most average people, if
you grew up in an apartment and you had two bedrooms and
six people living in them, and when you became an adult
you are able to buy a house and you have three bedrooms
and four people living in it, and you had a car and you’re well-off, you’d think you’re doing
pretty well in life. And this is true for the
vast majority of people in this country. That is, they have a much
higher income than their parents and their families had. And it’s also true for immigrants. This country has a remarkable
amount of opportunity. The first-generation immigrant children, first generation of kids of immigrants, the median income for that group is $58,000 a year. And this is according to a big survey that the Pew research organization did. It’s the same as the middle class. The first generation of
immigrants has a higher percentage of college graduates than the Americans who have been here longer than them. And they have the same
percentage of homeownership. So things are going reasonably well, and you don’t get this
impression when you read the press or you hear
some of the pundits, yeah. – That’s interesting. I don’t know how popular
you are in Berkeley. You’re probably standing in
the face of a lot of these guys up there, huh?
(chuckles) – That may be true. But I’m not making these numbers up, okay? And anyone who wants
to, can go look at the Congressional Budget Office numbers. And anyone who wants to can
look at what $1 million will buy in San Jose, California. In my book, I have a picture of a house that you could purchase
for $1 million in San Jose. And it’s a little bungalow,
it’s a three-bedroom, I think, two bath bungalow basically. And then I’ve got a picture
of a million-dollar house, which is a five-and-a-half
bedroom, three bathroom, swimming pool, it looks like a palace. It looks like a castle in Austin, Texas. Now the person who’s living in San Jose doesn’t have better
housing for that money. So the notion of inequality
has to take into consideration the vast differences in cost
of living in this country. – That’s interesting. And so you’re saying that
because that’s not factored in, those numbers are all
fundamentally skewed? – They don’t tell us
the existential reality of what it means. You can say, people say,
well, okay, Montana, yeah, you can live well in Montana. Who wants to live there? The fact of the matter is, if you don’t like noise and
crowds and garbage and traffic, and you like clean air and open space, Montana is pretty nice. It’s a question of individual preference. The people who live in Montana call it the last best place, and it’s a secret. They don’t wanna tell everybody else. – Well, you have told
everybody on Facebook Live. So sorry, Montana, we’re coming. (laughter) So let’s talk about the
social mobility thing, because you’re saying that
there’s a tremendous amount of social mobility
currently within the system. But in the book, you’re
suggesting that, that might start to diminish over time from what I gather. I’d love to kind of figure
out why that would be. – Yes, yes, okay. There’s two parts of that. And one, I think, is very important, because there’s a myth out there that social mobility in
the United States is lower than in European countries,
and this was a statement that President Obama made in
which his speech was hailed as one of his great economic speeches, and this is based on one study by an economist in Toronto, which was data from
more than 10 years ago, one can look at it, there
were 24 studies done. I don’t want to go on the
technical aspects of it right now, it’s all written there in my book, but the fact is that a
recent study has been done, the most rigorous study,
50 million tax forms have been analyzed by two of the most distinguished economists in America, one from Berkeley, one
from Harvard, both winners of MacArthur Genius
award, and another member who was part of the IRS
senior economist there. They did a study of social
mobility in America. Their figures show, and
it’s the most rigorous study done to date, their figures
show that we have one of the highest levels
of, and this is relative social mobility, relative
social, I’ll explain it because there’s a real difference between absolute and relative,
relative social mobility, that we have one of the
highest degrees in the world after maybe four other
countries that are much smaller than us and have different systems. But relative mobility,
which is what progressives are always interested in,
has to do with the fact that my income compared to yours is higher, if your father’s
income was higher than mine, and my income is higher
than yours, then I’m mobile. If your father’s incomes is
higher than my father’s income, and your income is higher than
mine, we’ve stayed the same. Our position has stayed the
same relative to our parents. And this notion of relative mobility is, if you’re born in the bottom 20%, you should be able to
make it to the top 20%. So President Obama has a
statement that everybody should have a chance, should
make it into the top 20%. They should be able to get there. Well, you can’t have relative mobility where everyone goes to the top 20%. I mean, the arithmetic doesn’t work. So relative mobility,
everyone that goes up, someone has to go down. If you wanna talk about
relative upward mobility, what you’re also arguing for
is relative downward mobility. And relative mobility
says that I’m only happy if I’ve got more than you, okay? This is one way of looking at consumption, keeping up with other people. Absolute mobility is a different measure, and that is, am I better
off today than I was when I was growing up? And our absolute mobility
rate is very, very high. I say the vast majority of people, depending upon how you measure it, between 70% and 80%, 60, 70, and 80% of families are better off than the
families they came from. And those that aren’t,
most of them aren’t because they came from very wealthy family. So if you’re born to
a very wealthy family, you might not end up better
off than your parents. So we have a high degree
of absolute mobility. And relative mobility is much higher than has been publicized by,
I say, basically one study that got a lot of press, and it was done a number of years ago. – Interesting. I know we have a few, yeah, go ahead. – But you asked a different question. Why do I think mobility is gonna change? And the reason for that has
to do with something called, a sortative mating. This is a term that Gary Becker, a Nobel
Prize winning economist, but essentially, it means that people, men and women of the same class, will increasingly marry each other. And that is, particularly nowadays, when women are expected
to earn money also, expected to go to work, you’ll find that people
who are highly educated, who are high potential earners, ending up marrying each other
more today than in the past. One reason for this is that
people are getting married much later today. So that 40 years ago, they
marry in their early 20s. Today they’re marrying in their late 20s. It may not seem like a big difference, but it’s huge in terms of
knowing your trajectory in life. So if you get married when you’re 21, either you’re a college
graduate or you begin working something, neither
partner really knows what the likely earning
power of the other will be 20 years from now. If you get married when you’re
29 and people have gone, they’ve got their education,
they may have gone to graduate school, they’ve
got their positions, it’s much clearer where
you’re gonna end up. That is, the trajectory
is much more established. And more and more today, when
people look at each other, both men and women, when
men look at women today, they wonder what is your earning capacity, and women look at men in the same vein, you have this increasing sortative mating, and so people who are
likely to earn high incomes will increasingly marry each other. And that will reduce
the degree of mobility because their children
will benefit from the inheritance of endowments, the luck of endowment it’s called that the parents have. That is both their intellectual abilities, their drive, their education. The children will benefit from that. And the degree of
mobility society, I think, is very likely to decrease
in the coming years. – That’s very interesting,
very, very interesting. Yeah, and you see it
happening all over the place. I mean, listen, most of the people I know are getting married in their late 30s now. And so they’ve already
established their careers and everyone knows what’s up by then. So it makes a big difference. And frankly, you want
someone who has kind of comparable aspirations for the most part. Yup. I know we have a few
questions from the audience. We’ll go to that real
quick, and then I have a couple of other questions to follow. So I’m gonna go to Lorenzo here. – Okay. From MK here, we have, do
you think that television and movies have set people’s
expectations unrealistically for many people, making them
think they should have more, just like what is created for sets? – Sure. So do you think television
and movies have created unrealistic expectations,
making people feel like they should have more? I kind of think of that,
I was thinking of that when you were speaking of
the mobility of like these kind of gangster rap videos. And it’s like, it’s not
enough to just get a job and get a middle-class life. It’s like you need a
Rolls-Royce and money to throw in the air. And it’s a very skewed reality. – Absolutely, and it’s frightful. There are several ways to think about it. One way is to think about the Brady Bunch, where the good life was the mother and father, all
these kids and family together and sitting around the table, enjoying the holidays,
which was very popular. And then you have Sex and the City, where you’ve got these young
women who are not married or not having children, they’ve got jobs that you very rarely see. Most of the time, they’re doing lunch and going to parties and drinking. And now, today, we’ve gone
one step higher than that, where you have the
Kardashians, this reality TV where all it is, is consumption. Whether they’re buying
and they’re showing off their big houses and
their cars and the surgery that’s going on to make
them more beautiful. And so a tremendous amount
of this is being conveyed through the media. Somebody one time said, if you wanted to change the world and you had a choice, what occupation, would you want to be a U.S. senator, be up there with the power? Do you want to be a vice president? And the answer was make
me a movie producer, because that’s where the norms, that’s where they generate these visions that have influence on people. – Hey, that’s why I got into movies, is because I realized
the messaging out there was absolutely toxic, and there
needed to be a counterpoint. But I really appreciate that. Let’s take a couple more questions then we’ll come back to mine. – Dale asked early on, to
what extent does the term middle-class change with the
shift of the mean income? – To what extent does the
term middle-class change with the shift of the
mean income, asks Dale. – To what extent does it
change with the median income? – [Pedram] With the mean income, yes. – Middle class in a America,
it’s an interesting term because lots of people think
of themselves as middle class. And it’s not only income. Middle class is generally
defined by education, income and occupation. And because it’s a very
democratic society, even the very wealthy people often tend not to see themselves, no one wants to be part
of the upper class. It’s not cool when a survey is done, somebody asks you what class, I’m from the upper class. And no one wants to be seen really as part of the lower-class either,
so the middle class, it’s a very nebulous sort of definition. In terms of income, it’s
often used with regard to somewhere around the median. So if you look at $54,000 and you go up and down 10, $20,000, you get a range that someone
just establishes, okay, on the face of it, that’s where I think the middle class is, yeah. – So there’s no agreed-upon
definition really. You’re saying it’s this nebulous cloud. – No, in my book I show
there are two studies that were reported, very interesting. One was supported by the New York Times, one was supported by the
Pew Research Organization. And both of them use different definitions of middle class. There’s a range of
income that they include with the middle class, yeah. – Fascinating. – That’s about all for now. – I have a question I wanna jump in. The title of your book is Never Enough. Why? That’s very provocative. – Yeah, well the reason is because I’m looking at life, where I think of as the progressive spirit. That is, what progressives
want for society and how they want to achieve that. And the way to achieve
it is through government, how the government would
be providing more and more. And part of the storyline of my book is that, that was a
very important approach and very helpful and very useful in the 20th century. Before the great society,
before the new deal, when there was child
labor, when there was real palpable poverty in America, that was very helpful, and
you wanted to get government in the picture, you
wanted government to make some kind of distribution
to provide some kind of safety net in society. That’s been achieved. And the reason I say
never enough is because the progressives are still on that agenda. So now that it’s been
achieved, they still want more. And the way you do that
is you claim the problems are still vast. The government has to do more, the government has to spend more. So the fact that there’s,
as I said, $700 billion being spent on transfers,
that’s not enough. You don’t see progressive proposals, let’s say government should
be spending less money. – That’s interesting. And so where does capitalism come in? How does capitalism resolve some of this? And has capitalism gotten a bad rap? – Well, capitalism,
left to its own devices, left to its own devices,
capitalism is immensely productive in terms of providing
for material well-being. But in terms of the
distribution of income, it has a distributional floor that is, if the government were not in the picture, which is what market income shows us, then we see that just under capitalism, just allowing for people
to earn their incomes by what the market demands, we would find that the
poor are getting poorer and the rich are getting richer. You have this huge growing
division in society and with (mumbles) is not fair. But capitalism is a tremendous
engine for production, and it’s an engine that
has to be somehow balanced by government so that
what capitalism produced has a reasonably fair distribution. The question is at what
point do you have enough? At what point is it fair? How much do you need? And my answer is, if
the floor’s high enough, if people have enough to
eat, if most people have good housing, then you’re
really approaching that point. And we have solved the economic
problem in America today. Never in the history of the world has obesity been a major
problem in society. It was always hunger, it was
always do you have enough calories to survive? Today, that’s not a serious
problem in American society. It is in some places in the world, but not in the advanced
industrialized nations. – That’s interesting, using
obesity as a moniker for that. Now we’re talking about over
consumption of calories, which is a whole different problem, right? – Yeah
– Yeah, and it has become a problem of the poor. What’s interesting is
in the news this week, Donald Trump went to this Carrier plant and is really kind of
championing this deal of keeping these factory jobs in state, I think it was in Indiana,
and saving these jobs. And so the commentary on
that was really interesting. There was a gentleman from
the Brookings Institute who was mentioning, is like,
we don’t know where the hell we stand anymore because
we’re talking about a champion of capitalism going in and making an intervention that looks like what a social democrat would be doing to preserve jobs, right? Which one is it? Is it free market, or am I gonna stop you from getting these jobs out of here? – Absolutely. No, I mean, it’s not the
conventional free-market view where government is telling
businesses you can’t go, you can’t move, that is, you have to stay within this country. But I think the larger issue is that there’s a real difference between what people may feel because it’s conveyed through the media. You feel insecurity and how
you’re living day to day. And that is the extent of
which you’re worried about am I gonna have another meal? Do I have a roof over my head? And we have a very,
very strong safety net. We went through an immense recession, close to the Great Depression, in 2008. And even the federal statistics on poverty just changed less than maybe a percentage. We didn’t have the kind
of disaster that occurred in the Great Depression. And the reason for that is that we have the modern welfare state,
and it’s done its job. The question is should it get bigger? And at some point, if it gets so big, it begins to impinge upon the market, impinge upon capitalism
and drive businesses to other places because you
have to tax people more, you have to tax businesses more, and they’ll go to places
where there isn’t as much tax, they can make a profit. – But that is the conservative argument in much of the kind of political sphere, is that this welfare
state is bankrupting us and it’s the over
encroachment of government into the market and all that. So is your position on
this, that it’s right in that Goldilocks zone? Or where does it need to go,
where does it need to stay? – Yeah, well, so that’s why
it’s called never enough. Because my position is
that the welfare state is very good, it’s here to stay, it doesn’t have to be expanded. As a matter of fact, it’s grown too large. Right now, our social security system is facing a huge, huge deficit. I forget it’s $9 trillion
over the next 75 years for social security. That is, the welfare state has expanded to the point that we’ve promised more than we can deliver in society, which is not to say we should
collapse the welfare state, but it’s to say we got
to look carefully at it and at the promises. And is it really necessary for governments to provide benefits to
people in middle class? Because a tremendous amount
of these transfers today don’t go to poor people. They’re not targeted, they’re not focused. They’re not means tested on poor people. A lot of these public
transfers go to people who are well off. So the government is taking
money and giving it back. And it’s made all these
promises with regard to what I’m gonna give you in the future, so the welfare state needs,
it needed a correction. It needed a correction. You can’t continue. Between 1960 and 1980, Pedram, the proportion of the
gross domestic product that was spent on what we
call social expenditures, welfare state expenditures, doubled. It doubled from 10 to 20% of
the gross domestic product. At that rate, over 20
years, if you had a doubling every 20 years within
the next 40, 60 years, 100% of the gross domestic
product would have to go, the government would have to
collect it to redistribute it. It can continue growing like that. So at some point, you’ve got
to say it’s large enough, it’s doing its job, it’s
dealing with the people who are most in need in the
country where the median income is $54,000. Most of the people don’t need government. – So you’re saying
reduce it down to support the five to 7% that are actually in need and make adjustments– – People most in need, yes, absolutely. – Yeah, and we’re not gonna
unravel social security, because there’s a generation
of people that paid into it that are gonna get screwed
out of it later, which is– – They’re getting screwed over right now. They’re being screwed out of it right now. The promise was you could retire at 65, now you can’t retire at 65. Every time they raise the age retirement, they’re reducing your
social security benefit and reducing it most to poor people. Because poor people die
earlier than wealthy people. So if you’re a poor person
and you’ve contributed your whole life, and now
you can retire at 65, no, no, you can’t retire
until you’re 67 or 70. You may not live that long. You never get to cash in on it. – Huh, that’s interesting. And so they’re effectively saving money by crowding you out? – Yeah, the system has
to either reduce benefits or increase taxes. Right now, they’ve been reducing benefits. They ought to begin
means testing them more, and they can do that. And they ought to change it. Sweden, it’s a progressive social democratic country, and they reformed their welfare system and made it into a very,
what I think of as, neoliberal reform. They no longer have a
social security program that provides a defined benefit. They changed it so it’s what we call now a defined contribution, which means that your benefit is what you’ve put into it. The amount of money you’ve
put in, that’s how much you can get out. And if you work longer, the
amount that’s in that fund is larger. And when you retire, they annuitize it, and that’s how much money you can get. And if you’re not making
enough money so that when you retire you have
enough money in there, they have a means-tested
benefit for the very, very poor people who have been very poor and haven’t been able to contribute, they have a means-tested benefit so they you assure you when you’re old that you’ll have enough to live. – I mean, at that point, you might as well get one of those term or
life insurance policies and invest in your own
private market thing. – Right, it is very much
like private insurance. It is very, very much like
private insurance, yes. – That’s interesting, with a safety net for the poorest of poor. – [Neil] Yeah, exactly, exactly. – Yeah, very interesting. Well listen, we’re out of time, and I could talk about this for days. I really enjoy where your head’s at. And I think that this is
an important conversation. This is not easy. I mean, you’re not kind of
towing the line in any way where you’re not saying
provocative things. I’m sure there’s plenty of
people that they get outraged, especially in Berkeley when you make some of these statements, but you’re making data-driven statements
and I appreciate you taking the stance. The book is called Never
Enough by Neil Gilbert. When is the book available? Is it available for– – It’s in December. It’ll be in Amazon in December. – Great.
– Which is right now, I guess. – Yeah, yeah, exactly. So yeah, great. So get it on Amazon, and thank you so much
for your work and keep up the good work. And I’d love to have you back. I mean, this is something
that’s gonna be provocative for my audience. I know I have a bunch
of follow-up questions that we’ll come back to you on. – I’d be pleased, I’d be pleased. Thank you, Pedram. Good talking to you. – Thank you. Let me know what you think,
and I will see you next time. This is Pedram Shojai, the Urban Monk.

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