Liberalz R Nutz -- Alexandria Ocasio-Cortez

"Capitalism has not always existed in the world and will not always exist in the world"

Jul 25

The uninformed economic views of Alexandria Ocasio-Cortez in 2 charts

Alexandria Ocasio-Cortez, the new Democratic darling and self-described democratic socialist, said some odd things in a PBS interview. First, she tried to explain away the  current low unemployment rate this way: “Unemployment is low because everyone has two jobs.”

Two jobs

Well, no, not even accounting for political exaggeration. The latest employment numbers are from the June jobs report. They show that only 4.8 percent of employed Americans hold multiple jobs. That’s lower than before the Great Recession and lower than during the 1990s boom. Indeed, that number has been declining for years. As the BLS noted in a 2015 report:

MULTIPLE JOBHOLDING HAS BECOME LESS COMMON in the United States over the past two decades. The downward trend cannot be attributed either to changes in the sociodemographic composition of the working-age population or to shifts in the occupation or industry structure of the economy. Instead, this article shows that the trend originates from a lower propensity of single jobholders to take on a second job. Multiple jobholders, in contrast, did not become more likely to give up their second job. One explanation for these findings is that workers may have become increasingly reliant on alternative sources of income to meet expenses or to pay off debt. Another, noneconomic explanation is that looking for enjoyment through a second, different job may have become more unusual.

And as a 2014 Pew Research analysis noted:

Based on recent media reports, many people may think that, because of the tough economy and stagnant wage growth, more and more people are working multiple jobs. You may have read that more Americans are moonlighting with a part-time night shift at Target, selling homemade jam at farmers’ markets on the weekend, or cobbling together two, three or more part-time jobs to approximate a living income. However, that assumption would be wrong. Both in terms of raw numbers and as a share of all employed people, fewer Americans are working more than one job than in the mid-1990s.

Then there was this from Ocasio-Cortez: “Capitalism has not always existed in the world and will not always exist in the world.” Actually, capitalism has pretty much always existed. People have been trading since there was something to trade. “The market economy, contrary to what you might have heard, has existed since the caves,” writes Deirdre McCloskey in “Bourgeois Dignity.” 

And if what Ocasio-Cortez means is “modern capitalism” of the sort that took off in the 1800s and that Karl Marx tried to describe — McCloskey prefers to call it “trade-tested progress” or “innovism” — then she needs to grapple with the parabolic improvement it brought in living standards as demonstrated by this chart:

And as for her flippant forecast of capitalism’s eventual demise, what does she see replacing it? Is this one of those “post-capitalism,” “artificial intelligence will replace markets” kind of  hot-take things? Since innovation-driven capitalism has created an abundance beyond the imaginings of Marx, perhaps we shouldn’t be so eager to replace it with something -- anything!

Posted by James Pethokouk on July 16, 2018 at 4:12 PM

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