Frog Economy?—A Reaction to Professor Reich’s Tortoise Economy

frogWith great respect and much trepidation, I wish to challenge Professor Reich’s “tortoise” analogy, because he focuses so tightly on the challenge his tortoise faces in trying to climb to higher ground from the depths of a recession-already-underway, thereby obscuring a more fundamental question: how did the tortoise get into such a bad spot in the first place? As I see it, the starting point we choose for our analysis influences the policy options that can “occur to us”, and so, constrain our analyses, our evaluation criteria, and ultimately the recommendations we make.

Now, I agree with Professor Reich that “The underlying problem is structural, not cyclical.” My problem with his analysis comes down to his choice of a tortoise to his metaphorical heavy lifting. His tortoise started out already known for winning races against much faster opposition, through determination alone. His tortoise also started out at the bottom of a steep wall that any sensible, plodding tortoise would surely have spotted far enough ahead to turn around and head back out. So, Professor Reich’s tortoise metaphor would apply to only three types of tortoises: those that aren’t sensible enough to stay out of trouble, those that are determined to get into trouble, and those that trouble chases into the situation that he posits as “Tortoise Starting Point (here).

I wish Professor Reich would have chosen a frog to do his metaphorical work. As many people know, frogs have a peculiar trait: if we put a frog into a pot of cool water, and then heat the water slowly, the frog somehow overlooks the actual temperature of the water—and ends up being cooked. In contrast, if we heat the water rapidly, the frog will jump out of the pot. Apparently, at least at such relatively low temperatures, frogs are more sensitive to the rate of change of temperature than they are to temperature as such. In contrast, tortoises have problems negotiating steep (viz high rate of change) hills, but the actual altitude apparently doesn’t trouble them so much. Notice, too, that the frog story accounts for the frog’s presence in the story: it starts out outside the story, and then we bring it in.

tortoise economyHere’s why I think the differences are important. It avoids the question I posed above, “how did the tortoise get into such a bad spot in the first place?” The frog analogy suggests that entrance into the deep structural problem that Professor Reich simply posited for his tortoises would have been very gradual, and so, taken a long time—likely beginning before anyone detected it—sort of like growing old! Were the entrance precipitous, we would have good reason to expect that the frog would avoid going there, on its own. I realize that even the best of tortoises are not 5.13c rock climbers, but it is possible that they could waddle down a “steeper” hillside (measured in distance downward divided by distance traveled) than a frog could (measured in degrees divided by time traveled).

If I am right in suggesting that the frog economy could only have gotten into the current mess “slowly”, then the frog problem has been eating away at the economy in the background, even as conventional political economists continued to speak of recessions and recoveries—as if business cycles had somehow acquired capacity for agency, including capacity to decide on their own the terms and measures with which they would admit of adequate description. Over an extended period, including an undetermined number of business cycles—that could be a lot of things.

Historical explanations are like that. They rely largely on coherence for being accepted.

Here’s my frog (and termite) story of how such tremendous structural problems developed in the US political economy. In the years immediately following World War Two, US workers took what was widely seen as being a series of huge losses. First, the Republican Party passed the Taft-Hartley Act, which really did severely weaken the ability of unions to organize. Then, unions (apparently) lost a series of big strikes. The price of those lost strikes was that unions agreed to limit collective bargaining to wages, benefits, and working conditions. I included “apparently” parenthetically, for two reasons. First, that is how I first learned it. Second, I want to argue that the outcomes of those strikes provided the impetus for the structural problems that Professor Reich mentioned.

In the sixty years since then, the ways of the world have demonstrated that both sides lost those strikes. It was immediately clear that workers and their unions lost. It was enough to make an American worker have a few rounds of beers and shots, and get hooked on watching professional sports, especially football, where everyone had a job to do just like at work, and a boss to tell them what to do and when to do it, in the person of the quarterback.

There were “skill people”, “big linemen”, “Coach Jones”, and of course “Mr. Smith”, the owner—all reproducing the hierarchy of the working world. In the late 1960s, “overtime” got added, first in the form of The Super Bowl, and later in the form of Monday Night Football. Compared to learning mechanics, thermodynamics, or evolution, all of those alternatives were either much easier or much righter—and could be controlled by the worker, not a boss, provided only that the worker showed up at work, at least nearly on time, at least nearly able to work at nearly 100 percent.

In the longer run, this amounted to a loss for owners, who can’t find technically savvy workers in this country—and then cite that “fact” as a beyond-argument argument FOR offshoring jobs. In effect, owners complain about the adverse effects of earlier decisions by previous owners to remove product design and production technology from the realm of collective bargaining. And workers complain about losing jobs they fought to have more of a say in, but lost—and have learned how to get by differently, until now.

Things could be different. The US could at least try to transition to a political economy more along the German lines. Why? Because as Thomas Geoghagen wrote in the March 2010 issue of Harper’s, it works for the Germans. According to Geoghagen, the German’s are “beating us”, and “managing to take six weeks of vacation every year”. Indeed, he writes: “Since 2003, it’s not China but Germany … that has either led the world in export sales or at least tied for first.”

How do German workers do this? Geoghagen offers three reasons:

  • the works council,
  • the co-determined board, and
  • Germany’s regional wage-setting institutions.

robert letcherWhy do I think these institutions would help reinvigorate the US political economy? Because their existence would, I hope, eventually convince every American to study harder and help each other learn. The workforce has become as dilapidated as the proverbial rust-belt factory. It took a long time for us all to get us all into this mess, and it’s going to take at least as long for us all to work ourselves back out of it. It won’t be easy, or fun. But if we don’t embrace learning what we might have learned had those early post-war years gone differently, we’ll end up dead in the middle of the road, and it won’t matter whether we think of ourselves as dead frogs or dead tortoises.

Robert A. Letcher, PhD

Robert A. Letcher, Ph.D describes himself as “an academic with a disability instead of a portfolio, a writer, and a Qigong practitioner who tries to help people learn”.

Published by the LA Progressive on September 20, 2010
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About Robert Letcher

Robert A. Letcher, Ph.D. is a political economist who describes himself as "an academic without portfolio, writer, political activist, and Qigong practitioner who tries to help people learn".