Socialist Bernie Sanders is taking a bashing from economists as he reveals his economic plans during his contention with Hillary Clinton for the Democratic canditature come the presidential election in November. Patently unable to explain just how his plans could be paid for, Sanders has been ‘helped’ by Robert Reich who says they can be achieved with a 3.8% rate of unemployment and a 5.3% of economic growth.
Quite how Reich arrived at these precise figures I don’t know. A former professor of social and economic policy at the Heller School for Social Policy and Management of Brandeis University, and having served in the administrations of Presidents Gerald Ford and Jimmy Carter, topping it all up as Secretary of Labor under President Bill Clinton from 1993 to 1997, he seems to be more than qualified. Note, however, that although he seems to be an expert on employment, he is not an economist.
The percentages he quotes — which sound quite practical to the layman — have seldom ever been achieved before, except in brief periods of no more than a year or two. To fully pay for Sanders’ plans and, presumably, to pay off the US national debt as well, they would have to be maintained for at least 15 years. There’s no possibility of such a Shangri-La. No wonder economists tore strips off Reich.
If economists are able to pour scorn on Reich and Sanders for pragmatic reasons are they, in turn, able to take a dose of pragmatism themselves? One of the most pragmatic rules of them all — the Principle (or Law) of Least Effort — says that whatever can take place physically will inevitably take place sooner or later so long as it’s the least energetic of all the alternatives.
The person who lifted this principle from the recondite world of inter-atomic forces and showed that it is fundamental to all physical laws — and thus to all physical systems — was one of the geniuses of he last century, Richard Feynman.
Meanwhile, until the principle can be included in the curriculum of all student economists at university then pretty well the whole body of economists for at least another generation will not be able to take this on board yet. Mind you, some economists, such as Larry Summers, are puzzled enough by the present world-wide trading impasse, to be using phrases like ‘secular stagnation’. It could be that the world economy — including man’s numbers, health and reactionary impulses (which are also part of physical systems) — may already be close to the point of stabilization.
If this is so, then the only way that rampant economic growth could be resumed — say at a rate last achieved in the earliest years of the industrial revolution — is by significantly increasing energy inputs. But this, despite the lowest prices ever for energy, and the desperate pleas of billions of people around the world for adequate nutrition, never mind consumer goods, economists don’t know how to raise the game from the present world trading recession.