What is the economy for — GDP, corporate profits, or people?
This week, Nick and Goldy talk with Elizabeth Wilkins, President and CEO of the Roosevelt Institute, about Roosevelt’s new Good Life Agenda and why so many old assumptions about markets, government, and growth are suddenly up for grabs. It’s a conversation about human flourishing, public power, and what democracy has to deliver if people are going to believe in it again.
Elizabeth Wilkins is the President and CEO of the Roosevelt Institute. She previously served as Chief of Staff to the Chair and Director of the Office of Policy Planning at the Federal Trade Commission. She has also held senior roles in the White House and the Office of the Attorney General for the District of Columbia, clerked for Justice Elena Kagan and then-Judge Merrick Garland. She began her career as a labor organizer with SEIU 32BJ. She is one of the authors of Roosevelt’s new report, The Good Life: An Agenda for Fuller Lives, a Stronger Economy, and Renewed Trust.
Social Media:
@elizabethwwilkins.bsky.social
Further reading:
The Good Life: An Agenda for Fuller Lives, a Stronger Economy, and Renewed Trust.
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Nick Hanauer:
The rising inequality and growing political instability that we see today are the direct result of decades of bad economic theory.
Goldy:
The last five decades of trickle-down economics haven’t worked, but what’s the alternative?
Nick Hanauer:
Middle-out economics is the answer.
Goldy:
Because the middle class is the source of growth, not its consequence.
Nick Hanauer:
That’s right.
Announcer:
This is Pitchfork Economics with Nick Hanauer, a podcast about how to build the economy from the middle-out. Welcome to the show.
Nick Hanauer:
Goldy, it’s so interesting how you can just watch, if you’ve been at this for as long as you and I have been at it, how things change, how people’s views change, how the collective common sense evolves. Today, we’re talking to our good friend, Elizabeth Wilkins, who is President and CEO of the Roosevelt Institute about their new Good Life Agenda.
Goldy:
By Good Life Agenda, they don’t mean your life-
Nick Hanauer:
No.
Goldy:
… which is flying around the world, in yachts, and yeah.
Nick Hanauer:
No, but they mean a normal good life agenda. The thing that really struck me about it was that it’s anchored by a foreword by Paul Krugman, who is a brilliant, but it’s safe to say, pretty orthodox economist.
Goldy:
Well, he defines himself as neoclassical. We’ve had him on the pod. That’s how he thinks. He is obviously very progressive, but he is an orthodox economist.
Nick Hanauer:
Yeah. His foreword to The Good Life Agenda is centered around the proposition that the purpose of the economy is, doesn’t use exactly these words, but human flourishing as what we’re committed to in marking humanism.
Goldy:
To improve people’s lives.
Nick Hanauer:
Yes. Not GDP for the sake of GDP. The Good Life Agenda embraces that sense of the purpose of the economy and fills out the picture of what it takes from a policy perspective and an intervention perspective to do that. It’s so interesting because it’s just not what we would’ve seen 10 years ago.
Goldy:
We’re not saying that Krugman used to be opposed to the good life.
Nick Hanauer:
No, no, no, no, no, no, no.
Goldy:
We’re saying he…
Nick Hanauer:
This is not the language he would’ve used-
Goldy:
Yes.
Nick Hanauer:
… to talk about economics-
Goldy:
Yes.
Nick Hanauer:
… what the purpose of economics is.
Goldy:
That’s right.
Nick Hanauer:
We are definitely in this moment where people are coming to terms with the fact that they’ve been sold the bill of goods, and that we need to fundamentally change our approach-
Goldy:
Right.
Nick Hanauer:
… to economic policymaking, and democracy, and a whole bunch of other things. For that reason, I am very excited to talk to our friend Elizabeth who has been at the center of economic policymaking for a really long time, not just at The Roosevelt Institute, but in various administrations, and so on, and so forth.
With that, let’s talk to Elizabeth.
Elizabeth Wilkins:
Hi, my name is Elizabeth Wilkins. I’m President and CEO of The Roosevelt Institute. We just put out our Good Life Agenda, which I’m very excited to talk about.
Nick Hanauer:
That’s fantastic. What I was really struck by was Paul Krugman’s foreword because he was all, the economy isn’t about GDP, it’s about welfare, which is beautiful.
Goldy:
He doesn’t use the term human flourishing-
Nick Hanauer:
I guess.
Goldy:
… but improving people’s lives.
Nick Hanauer:
Yeah. I know Paul’s been on our side for a really long time, but I believe that that is movement. That’s a change from before. Obviously, your report fully embraces that, but it’s just interesting to hear from a pretty serious economist.
Goldy:
From an economist, yeah. It’s not like he never supported improving people’s lives. Obviously, that was his life goal. That’s just not the language he used.
Nick Hanauer:
Yeah.
Elizabeth Wilkins:
Right.
Nick Hanauer:
Obviously, you’re highly familiar with our work enough to know that we are violently in agreement. But just tell our listeners more about the agenda, and why you did it, and why you think it’s new and different.
Elizabeth Wilkins:
Well, first of all, I love that you started there, Nick, with Krugman’s foreword and with this idea of what the economy is for. That is one of the most important things-
Nick Hanauer:
Yes.
Elizabeth Wilkins:
… that this report does is to reorient us to what policy is supposed to be. We’re in a really interesting and in some ways terrible, but some ways exciting moment right now, where a lot of baseline assumptions are up for grabs. That means we need to seize the moment and the narrative and lay out what life could look like, what society could look like, if we make different choices than what we have before. That starts with what our baseline grounding assumptions and values are.
And so, one of the most important things that we wanted to do with this report is precisely that, to say, “What is the economy for?” If we change our answer on that, what might life look like? What might follow in terms of economic assumptions and policy? What might follow in terms of the role of government in relationship to markets? What might that feel like for human beings? There’s a little bit of both, what is economic policy for, it’s truly for human flourishing. What should it feel like, it should feel like everybody having the building blocks for a good life. Trying to start and end with that in a serious policy agenda about economics felt like an important intervention to make in this time where assumptions are contested.
Nick Hanauer:
Yeah. Well, we couldn’t agree more.
Goldy:
Contesting assumptions is our shtick.
Nick Hanauer:
Yeah, exactly.
Goldy:
That’s what we do here.
Nick Hanauer:
The framework that you’ve built has basically, six pillars, public options, taxes, industrial policy, anti-monopoly policy, monetary policy, and countervailing power, which pretty much covers it. Tell us a little bit about how you came at the problem and how you got to all of this.
Elizabeth Wilkins:
This is going to sound very familiar to you guys. One of the difficulties we have in policymaking is, neoliberalism isn’t a policy. It’s not one single thing. It’s the water we swim in. It’s a set of assumptions that move in the background. And so, what does it take to actually change people’s default or background assumptions? That’s a little bit why we had a whole chapter on policymaking tools, is to say, “We can’t just keep saying tax cuts don’t work.” We have to actually actively give policymakers a different set of tools that they should be defaulting to, and to give them a map of, okay, if this is the problem you’re trying to solve, what should you reach for? Should you reach for a tax cut? Should you reach for a tax credit? Should you reach for a deregulatory solution? Or should you say, “Okay, what kind of a problem is this?” Is it undersupply of something? Is it a negative externality? And then give them an alternate toolbox to reach for that should be their default.
Oh, it’s an undersupply of something. Maybe there are some industrial policy tools that we should use to drive market incentives towards producing more of that. Oh, there’s weird incentives happening in this market based on what the private profit making incentives are. Maybe a public option is actually the right tool to reach for to fix that. This is a little bit, what does the work of changing the baseline assumptions of a particular political order look like? Some of that is changing the economic models. Some of that is changing academia. And then some of that is changing, as I said, the baseline default assumptions that policymakers have for what tools are the right ones to reach for to fix certain kinds of problems.
This is something that we’re actually working on more broadly. We put out a long paper on public options earlier this year that goes really deep into a taxonomy of, when are these good tools to use to solve what problems for whom? We’re doing some more of that with state capitalism and industrial policy tools, trying to say to policymakers, there really is an alternative. We’re not just saying this set of neoliberal tools over here is bad. We’re saying there’s a whole policy toolkit that was forgotten, or that other countries use all the time that we can reach for to better solve those problems.
Nick Hanauer:
Let’s zoom in on that. What tools have policymakers over relied on for the last 50 years, and what tools have we forgotten to use? Can you give us some examples?
Elizabeth Wilkins:
Sure. I talked a little bit about them already. Tax cuts, A, number one, we just celebrated the one-year anniversary of the one big ugly bill. I was listening to a clip of our president recently talking about how he delivered the biggest tax cut and it’s going to create the most jobs, which is just a baseline…
Nick Hanauer:
Lie, lie.
Elizabeth Wilkins:
Right, lie.
Nick Hanauer:
It’s a lie.
Elizabeth Wilkins:
I’ll take it, lie. I’ll take it.
Nick Hanauer:
Okay.
Elizabeth Wilkins:
Lie.
Nick Hanauer:
It’s a lite.
Elizabeth Wilkins:
Yes, right, okay. Trickle-down ec- The idea that you cut taxes, it invests in the economy in a way that goes to everybody’s benefit is a lie. It’s a tool that we have reached for forever, and that we are still very actively reaching for, and that we need to get rid of. That’s a good one.
Tax credit is a more complicated one. There are some really good things that tax credits have done. The EITC is fantastic, it does fantastic work. The child tax credit is fantastic, does fantastic work. That’s a place actually where progressives with good intentions have shoved a lot of policy precisely because it’s not as salient as big spending government programs. But do you know what that does also? It submerges the role of government in people’s lives. People don’t even know they’re getting it. In the Biden administration, we had the biggest expansion of the child tax credit ever, and nobody knew about it, and there was no political will for it, and we lost it. That’s one of the major stories of COVID relief.
And so, I’m not saying tax credits should never happen, but we have to be really careful about what it does to submerge all of our really good social policy in some place that is hidden and where people don’t understand it, versus say, social security, which everybody understands and everybody loves.
And then the last one I would think that one… Not the last one, there’s plenty others, but what I think about a lot is, in the Biden administration, we did more industrial policy than we have in decades more explicitly, right?
Nick Hanauer:
Yes.
Elizabeth Wilkins:
Very exciting. We did it almost entirely with corporate subsidies, grants, loans, et cetera. We really did it through private entities. That’s not the only way to do industrial policy. In fact, this administration is pulling out a whole bunch of tools like taking equity stakes, sovereign wealth funds, et cetera, that the US government has left on the table for a very long time, but are now back on the table.
Those are three examples where, one example, which we should really not do very much at all, tax cuts. But two, examples where it’s not that we should never use those tools, it’s that right now we think those are the only ways to do things, when actually there’s a much more expansive and much more direct public power toolkit to get our work done.
Nick Hanauer:
Yeah. One of the things that you say in the report is that certainly, lots of Democrats say is that we have to defend democracy, but your report makes it pretty clear that democracy needs to be more than defended. Democracy needs to deliver. That’s the thing that we feel so strongly about is, for 50 years, no matter who is in power, whether it’s Democrats or Republicans, the lives of ordinary people get worse while a few people at the very tippy-top do better. At some point, rational people conclude that democracy is stupid and doesn’t work.
Goldy:
Right.
Nick Hanauer:
And so, then they begin to reach for authoritarians who promise to fix it all. That’s the box we’re in, right?
Goldy:
And don’t and make things worse, which undermines faith in democracy and markets even more-
Nick Hanauer:
Even more.
Elizabeth Wilkins:
Even more.
Nick Hanauer:
Right, yeah.
Goldy:
… which allows them to do more bad things.
Nick Hanauer:
Yeah.
Elizabeth Wilkins:
Indeed, there are many ways in which the distance between elected leaders and policymakers on the one hand and ordinary people on the other, is really toxic for the way that our democracy works. But one of them is, I suspect everybody in this conversation gets a little dopamine hit when we put our I Voted sticker on. I like democracy. I have a value of democracy that’s separate and apart from everything else. But it is very easy to remember that I am weird, I am not normal in that sense. It is much more normal to be living one’s life and to care more about whether you can make ends meet, have time on the weekends, spend time with your family, et cetera. Whether or not you feel good about voting is much more inherently tied to, whether you think voting or other symbols of being-
Nick Hanauer:
Right.
Elizabeth Wilkins:
… connected to democracy, feel connected to those things that are inherently valuable to you. The last 50 years have pulled democratic institutions farther and farther and farther away from people’s sense of whether or not they actually do anything for the things they care about in their regular lives. If we’re going to save democracy, we’ve got to pull those things closer together again.
Nick Hanauer:
That’s right, absolutely.
Give us some more of the highlights of the report.
Elizabeth Wilkins:
I will say, I’ll step back and say, there’s a lot of, this is a moment right now where everybody’s coming out with the, these are the five things that every political leader needs to think about. That is not what this report is intended to do. This report is intended to reframe the debate to say a couple of things. One, we’re in this affordability moment. Fine.
Nick Hanauer:
Yeah, but are we? But are we? Can we just…
Elizabeth Wilkins:
Well, what’s your pushback? What’s your pushback?
Nick Hanauer:
We’re not really in an affordability crisis. We’re in a wage crisis.
Elizabeth Wilkins:
Yes. Well, okay. Well, here, this is… Fine, I was about to problematize it. I’ll problematize it. You can tell me where I should do it more.
One of the moves the report tries to say is, if we stop at this idea of an affordability, a cost affordability moment, we will really miss the mark both on what people are asking for and the opportunity for more radical change. When people say, “Things cost too much,” I think they’re saying a couple of other things and this is what’s in the report. One, their wages are too low. There’s two sides to the cost equation.
Nick Hanauer:
Yes.
Elizabeth Wilkins:
But two, even more deeply, people are saying, “I have no control over my life. I can’t control whether I can afford my groceries. But more broadly, I can’t afford retirement. I don’t know what my life is going to look like. I don’t know when my kids are going to be able to buy a house.” That is way, way, way broader than, let’s put a cap on utility fees. That is like, there is something fundamentally broken between the, I contribute and what do I get back? That’s move number one.
What that says to me is, our economic policy has to fundamentally reshape power in our economy. It’s not just about capping costs or a redistribution model where we make sure to put more money in people’s pockets. That is about dismantling the amount of power both that corporations hold and that now we can see so clearly corporations walk over into political power, translate into political power, and it means building up the power of ordinary people.
Our solutions to this quote-unquote, “Affordability crisis,” have to be deep and structural. We need to be able to fix our housing market, our healthcare market, our market for higher education. We have to have deep fixes for those markets, and we have to have a government that is actually resourced and skilled enough to use those tools that we just talked about to fix those markets. That’s really what the agenda tries to say.
It has some examples about things we could do. For example, more public options in housing finance, public options in childcare. But I would say, all of the ideas are good in there obviously, but they are not meant to say, “If you do these 20 things, we’re done.” They’re meant to say, “Here’s an example.” Here’s a set of really powerful examples for how if we do things differently, people will experience the economy differently in the way that we aspire for them to.
Nick Hanauer:
Yeah, but I just want to emphasize one thing which we’ve been thinking about. The so-called affordability crisis is a bit of a red herring, in the sense that there is, in the near term, nothing you can do about prices. You could, we could pass a law which allowed the government to set prices, but there is a huge amount of evidence to show that that does not work out very well.
Elizabeth Wilkins:
Right.
Nick Hanauer:
The only thing that government can do in the near term is increase wages.
Elizabeth Wilkins:
That’s very true.
Nick Hanauer:
And so, when everybody’s like, “Look, affordability crisis, look over here, affordability,” we are distracting people from the real problem, which is stagnant wages for 50 years. Two quick interventions like a $25 minimum wage and a $90,000 overtime threshold, which you could do tomorrow-
Elizabeth Wilkins:
Yes.
Nick Hanauer:
… would end the affordability crisis for most people.
Elizabeth Wilkins:
Indeed.
Nick Hanauer:
Just like that, and that is something you can do.
Elizabeth Wilkins:
Yes.
Nick Hanauer:
It’s just that people don’t want to face the idea of doing it because it makes them uncomfortable.
Goldy:
This is true in public policy across the board that we only talk about the spending side of the equation. We never talk about the other side of the balance sheet, the income side. With government, it’s always, government’s overspending, not that they’re not raising enough revenue. It’s always that households need to manage their budget better or things have gotten too expensive. It’s never about, oh, well, wages are too low. They’ve been stagnant for 50 years.
Nick Hanauer:
Yeah.
Elizabeth Wilkins:
Right.
Goldy:
Across the economy, we just never talk about that side.
Elizabeth Wilkins:
Well, and let’s just point out, part of the ideological fight that we are in is this question of interventionism or not in markets. Raising the minimum wage is a major intervention in business operations and markets that we should all feel totally comfortable with-
Nick Hanauer:
Yes.
Elizabeth Wilkins:
… because that is driving business investment to the places that we want it to be rather than places that we don’t. But it requires a particular attitude towards the relationship between government regulation and private market that we have lost for a long time.
Nick Hanauer:
But also, and this speaks to our work, it requires a different way of understanding the economic cause and effect. Our work, our work on a new economic paradigm is aimed at this, which is this view that is embedded in policymaking in the heads of policymakers, both on the left and the right, that because it’s Pareto-optimal equilibrium, if you raise wages, it’ll kill jobs and therefore it makes no sense to do it.
Goldy:
And Nick, growth comes first-
Nick Hanauer:
Yeah.
Elizabeth Wilkins:
Right.
Goldy:
… and improving people’s lives come second, building a middle class comes second where we say it’s the other way around.
Nick Hanauer:
Yeah. Just to emphasize in this conversation and for our listeners, how deeply this stuff is embedded. I was on the phone with, I had a call yesterday with an unnamed but very prominent left-wing economist who told me that indeed when we cooked up the $15 minimum wage, which happened in Seattle in the 2012, ’13, that he and his collaborators mostly all thought we had lost our minds, that it was much too much, much too fast, and that it would be a debacle.
And so, here’s the thing, if even left-wing economists think an intervention like the $15 minimum wage is a terrible idea, it is very hard to help people.
Elizabeth Wilkins:
Yeah, totally.
Nick Hanauer:
It is very hard to help people, and that’s what we have been up against. Obviously that is softening, but it should be profoundly embarrassing to the economics profession that it took a couple of clowns from Seattle to cook up this intervention and prove to them that they weren’t right.
Goldy:
Right, it took three decades of empirical evidence.
Nick Hanauer:
Yeah.
Elizabeth Wilkins:
Right. What is really interesting about the project of market humanism, the project of the good life, and a bunch of other projects that are happening right now is, it is the work of, yes, the ground is softening, but what would be a death knell? You need an alternative to truly have a death knell for something.
And so, what I see you guys doing is, attacking and trying to build an alternative model for the economics that underlies so much of this.
Nick Hanauer:
Yes.
Elizabeth Wilkins:
One piece of this is, we’ve got to dismantle the economics and build something new. I see these as parallel interventions-
Nick Hanauer:
Right, yes.
Elizabeth Wilkins:
… because then there’s economists. If I think about, what are all of the things that we need to dismantle and reorganize and rebuild in a different way? There’s the economists, there’s policymakers and lawyers who aren’t economists, but have…
Nick Hanauer:
Absorbed the economics.
Elizabeth Wilkins:
By osmosis, exactly, absorbed the economics.
Nick Hanauer:
Yes.
Goldy:
Right.
Nick Hanauer:
They’ve learned the worst lessons.
Elizabeth Wilkins:
Yes, correct. And so, we need interventions at each part of this ecosystem to drive the stake into the heart. And then also, offer an alternative for like, okay, if I’m not supposed to behave that way, how am I supposed to behave? The thing that’s super cool about this moment with market humanism, with a good life, with a bunch of these other interventions is, all right, we’re just going to push ahead to what the thing should look like in the next era. We’re going to start planting some flags instead of c- It is always easier to critique. It’s always easier, not that it’s easy, but it’s always easier to tear down and say, “This doesn’t work. Let me poke holes in it.”
But I do think that there’s this moment where many of us who are like-minded are saying, “All right, we’re now going to do the hard work. We’re going to get criticized for it. People are going to start poking holes in our thing,” blah, blah, blah, but this is actually the hard work that we have to do now is to put out the alternative that people should start reaching for, and let’s just start doing it and start building it. This is the work. This is the work.
Goldy:
I was curious in reading the piece, it looked like, at times, you and your co-authors carefully chose your words. We’re talking here about reframing this conversation. I’m curious about how much effort you put into the narrative, the words you chose to describe things.
For instance, I’m a big fan of the term, public option. A friend of the pod, Ganesh Seetharaman has a whole book on that. And I was talking to somebody recently, for example, about Mamdani’s proposal for city-owned grocery stores in food desert areas. It sounds like, oh, the government’s going to own a grocery store. It’s really just a public option. If you think about it instead as, it’s a food bank, but we charge cost for it. If it works well, and maybe a private grocer wants to come in there, oh, there’s a market there. We could be providing better service for a few cents more, then they can come in. It doesn’t sound so bad.
It’s like, I hate the term, social housing. Social housing, it sounds like it’s a commune. Social, it’s going to be a bunch of-
Nick Hanauer:
Hippies.
Elizabeth Wilkins:
Yeah.
Goldy:
… lefties, hippies, whatever. It doesn’t describe what it is. It’s a public option. That’s all it is. It’s a public option for rental housing that provides not just more affordable housing, but stable pricing because it is not rent seeking in the economic sense of the term. I’m wondering how much thought you all put into this when you actually decided how to describe these policies.
Elizabeth Wilkins:
A good amount. It’s funny that you pick out public options, that goes both ways. On the one hand, I’ve heard lots of feedback saying, “That’s a very wonky expert term,” et cetera, et cetera. Nobody knows what it is. But you’re right, if people don’t like the word socialism or they don’t like-
Goldy:
Right.
Elizabeth Wilkins:
… big government programs or government-run X, an option is consistent with choice, which is consistent with a very individualistic version of freedom. This is very much not that scary.
I actually, we did a poll alongside The Good Life Agenda, and I was surprised at this. We did a bunch of polling on public options. To the first comment I made, which is like, “Nobody knows what a public option is. Everybody tells me this is a wonky term,” off the charts, public option for healthcare, public option for college, for parks, for public transit, for banking, everybody was like, “Yes, we love this.” Maybe it’s not wonky and maybe it’s doing exactly the work that we’re talking about, which is, government’s not taking over this. We’re just providing one good option, which ideally will discipline the market to make the whole market better.
Goldy:
Right. People say, “Oh, public. Oh, it’s like public housing. Nobody likes the word public.” Public schools, public libraries, public parks, public swimming pools. These are all popular things that people support-
Elizabeth Wilkins:
Yes.
Goldy:
… and vote to spend their tax dollars on. Okay, if you have a little public bodega because you don’t have one in your neighborhood.
Elizabeth Wilkins:
Yes, how bad could that be? No, exactly. That’s right.
Goldy:
Right.
Elizabeth Wilkins:
Again, the report is doing something interesting. It’s trying to say, we’ve got to figure out how to talk about post-neoliberalism in terms that people can understand, what’s the life that people want to lead. But the tools really are focused on policymakers. Here’s the toolkit that you…
There’s a little bit of going back and forth about the terminology and who are we speaking to. But I love that you picked out public options because it’s one that I thought was in one category. It turns out, it’s pretty publicly popular, so who knew?
Goldy:
That’s good to know because I hadn’t actually seen any focus group or polling on it to support my intuition that it’s a pretty good term.
Elizabeth Wilkins:
It is.
Goldy:
The fight for the Affordable Care Act, when we didn’t get the public option, that educated a lot of people about what a public option is.
Elizabeth Wilkins:
Is.
Goldy:
In fact, that’s the first time most people heard it. When you bring it up, they immediately think, healthcare? Now that my premiums are doubling, maybe that public option would be preferable.
Nick Hanauer:
Yeah, absolutely.
Elizabeth Wilkins:
Right, exactly right.
Nick Hanauer:
Elizabeth, one of the other things you talk about in the report is time, which is really, really super important. Time is related to agency, obviously. Can you speak to that a little bit?
Elizabeth Wilkins:
Yeah. This is a really important piece of this idea that we put human beings back at the center of economic policy. If we do that for real, then we understand that people don’t just live for their household balance sheets. In fact, they definitely don’t live for their household balance sheets. They live for everything that that balance sheet can provide. If you go back to that slogan, the labor movement, we brought you the weekend, that the human-centered economics really does center the idea of leisure time. The idea of, it’s a little bit of pushing back on an uber capitalist understanding of all of us human beings as just cogs in a wheel producing economic value and reverses that, and says, “No, no, the economy is supposed to give us back value.”
Nick Hanauer:
That right.
Elizabeth Wilkins:
For us, the value, it may be. I am lucky enough to be one of those people who loves my job, but that’s not the premise that everybody should. It’s great if that’s what you want. But what you want is to be able to work in order to live, we should have an economy that allows for that. That was the idea about putting time as a pillar to say, “This is not an afterthought for economic policy. This should be core to what economic policy is trying to provide.”
Nick Hanauer:
Elizabeth, I just have to mention that a couple of months ago, I went down this rabbit hole, created this thing for myself, it’s only for myself so far, called the Human Flourishing Index. It was anchored around the idea that you just expressed, is that the point of life is life, not work. What I did is, I re-ranked all of the economies in the world, basically how much leisure they provided their citizens.
Of course, what happens is that the US, in GDP terms, the US ranks very, very near the top, top two or three. But if you re-rank based on the baseline assumption that an hour of leisure is worth twice as much as an hour of work to the typical person. For some people, it might be 10X. For some people, it might not be worth more. You may love your job so much, you’d rather do it 24 hours a day, but it’s safe to say that the majority of citizens consider leisure time more important than work time.
When you do that, you come up with a completely different way of looking at who is delivering the goods and who isn’t. This is at the core of what we should be moving to, is thinking about the economy in that way because people want to go on vacation. In most of our peer nations, people get 2 to 10 times as much time off as Americans on average get.
Elizabeth Wilkins:
Exactly right, exactly right.
Nick Hanauer:
It’s crazy.
Elizabeth Wilkins:
Totally crazy, it’s totally crazy. It really does show you how much capitalist ethic has colonized the way that we think about things. It’s such an obvious point, and yet one that we do not do policy for at all.
Now, I will say one thing that has been an interesting conversation since we released the report is, so then some folks say, “Oh, okay. This proposal that AI companies have to eliminate a bunch of jobs and give everybody universal basis income, you must love that because isn’t that all time?”
Nick Hanauer:
Bullshit.
Elizabeth Wilkins:
I was like, “Oh, boy, that is definitely not where we were going with this.”
Nick Hanauer:
No.
Elizabeth Wilkins:
Definitely, definitely not.
Nick Hanauer:
No.
Elizabeth Wilkins:
Because we were…
Goldy:
Well, that’s where orthodox economics goes because there is no such thing as voluntary unemployment. You’re just choosing to be unemployed because you like the leisure of it.
Nick Hanauer:
Yeah.
Elizabeth Wilkins:
Yes. We skipped some part of this equation where people want actual agency in their lives and choice and dignity, et cetera, et cetera. The idea of handing all of our otherwise democratic control over to a very small set of companies to make all of the decisions for us is really not consistent with time. I just felt like I needed to say that because I’ve heard that enough now that I feel like it’s important to say. But other than that, yes.
Nick Hanauer:
Just to be clear, the AI companies are not going to pay people a universal basic income.
Elizabeth Wilkins:
Yes.
Nick Hanauer:
They’re going to monetize the world’s intellectual property, keep all of that for themselves, and let the rest of us tax ourselves to pay for the universal basic income.
Elizabeth Wilkins:
But yes, other than that, it is a very simple, but at the same time, somewhat profound insight. What exactly are we trying to govern for? What are we driving for for people? When we think of, quote-unquote, “economic policy,” we have a hard time not thinking about anything other than what we consider to be economics. But if we put humans at the center of that, it becomes pretty clear that people’s economic lives, what we consider to be people’s economic lives are only one slice and sometimes not even the most important slice of what they do and what they care about, and we should be making policy for the whole people.
Nick Hanauer:
If you could implement just one thing in your agenda, if you were the goddess of the world…
Goldy:
No political constraints-
Nick Hanauer:
Yeah.
Goldy:
… what is at the top of the list?
Elizabeth Wilkins:
Okay. Well, you could cons-
Nick Hanauer:
Several of her staffers are going to be really mad now.
Elizabeth Wilkins:
I know. I’m going to have to pick some of my favorite children.
Actually, I find this easier to answer for the following reason. There are policies that are load-bearing economy-wide, and then there are policies that are core to actually delivering for people. I would say, if I had to pick a couple, I would pick the load-bearing structural ones. Major tax reform, major financial regulatory reform, things like that to me are almost upstream of your ability to do a bunch of the stuff that you care about the most.
Nick Hanauer:
Okay, okay.
Elizabeth Wilkins:
I would pick, those two are the ones that come to mind immediately as unlocking the ability to do all of the rest of what we would want to do. And then if you made me pick a child from the… It’s hard not to say, housing and healthcare feel pretty high up there in terms of, again, not the, can you make your ends meet today or this week, but is there a promise of long-term stability where you feel like the bargain of, I contribute and I get back. Those two feel like places where that promise is pretty fundamentally broken.
Nick Hanauer:
Yeah.
Goldy:
Weirdly, the things you chose, these are all big lifts. They’re actually the most doable because we know how to do them.
Elizabeth Wilkins:
Yes, we do.
Nick Hanauer:
Yeah. Yes, we know how to do them.
Elizabeth Wilkins:
It’s about will.
Goldy:
It’s really clear.
Nick Hanauer:
Yes.
Goldy:
Right. It’s really clear what to do.
Nick Hanauer:
Yeah.
Elizabeth Wilkins:
I do not disagree. It is about will. Again, there’s a lot of things about this moment that are pretty upsetting and depressing, but the one thing that is positive is that so many more things are up for grabs, and so many people are so frustrated. We found 32% of our poll, we called disillusioned because they were just like, “Everything government touches is bad. Nobody cares about me,” et cetera, et cetera. The work that we have to do to re-energize those people is not tinkering around the edges. It is doing big things. That is seeping in to the common sense right now, so I do think there’s an opportunity of, we can seize it to do a couple of big things.
Nick Hanauer:
Yeah, great. One final question, why do you do this work?
Elizabeth Wilkins:
Oh, man. My dad was Head of the Community Relations Service in Department of Justice under President Johnson.
Nick Hanauer:
Wow.
Elizabeth Wilkins:
In the 1960s… I know, right? In the 1960s, it was his job to fly around the country whenever there were riots, to meet with community leaders, to understand why people were so unhappy. And then to come back to government and do something about it. It was the 1960s, so basically they thought, great. I hope this is a safe podcast to say this. Great, we hired our Black guy. He’s going to be our community relations guy. He’s going to quell the problems, and those crazy people who are rioting will quiet them down.
My dad instead was like, “I am the movement’s inside guy. My job is to deeply feel and understand why people feel disconnected to the institutions of our country,” and then come back into government and fight like hell to get the levers of power to work for these people, to make them understand that these are our citizens, our community who want jobs and education and freedom. That has always been my model and my inspiration.
Nick Hanauer:
He apparently did a pretty good job.
Elizabeth Wilkins:
He is in a long line of people who are just going to keep fighting and fighting and fighting. I feel like I have a legacy to uphold.
Goldy:
Nick, you started at the top talking about Paul Krugman’s foreword and how it surprised you a little to see how he was talking about the purpose of economics being to improve people’s lives. As opposed to GDP, and let’s be clear, as I said, he is an orthodox economist. He thinks of himself as a neoclassical economist. At the core of orthodox economics for the past 50, 75, 100 years, has been this distinction between what they would say positive economics, versus normative economics.
Nick Hanauer:
Right.
Goldy:
That positive economics is how the economy actually works.
Nick Hanauer:
Yes.
Goldy:
Normative, they dismiss as, that’s wishful thinking.
Nick Hanauer:
What you should do, what you should do.
Goldy:
How it should work, how it should work. But really the neoclassicals have focused on the positive.
Nick Hanauer:
Yes.
Goldy:
And so, when you get to, he’s saying the purpose of economics should be to improve people’s lives. Essentially, you’re saying that’s what economics should be about. And then we get to the most popular introductory textbook of the previous 30 years, which describes economics…
Oh, I have the page open in front of me so I can give you the quote.
Nick Hanauer:
Amazing, amazing.
Goldy:
Economics is the study of how society manages its scarce resources.
Nick Hanauer:
Right.
Goldy:
What a bummer. What, what, what a bummer of a science that, oh, it’s just about distributing scarcity. It’s a scarce world we live in. All of these things that people want, that affordability they want, that affordable housing, the affordable healthcare, the high quality affordable public schools, the time off, the leisure, well, there just isn’t enough of all of that to go around.
Our goal should be to figure out how to distribute it efficiently in a way that rewards people for their contribution to society, which, oh, magically, that’s what markets do. Whatever the outcomes are, those are the most efficient distribution of resources. They’re the most fair because marginal productivity and all of that bullshit, it’s a meritocracy.
I go there at this point because it’s really important to see how not just the policy proposals of this Good Life Agenda are a radical departure from that old way of thinking, but the language of it. They’re calling it The Good Life Agenda as if that’s something economics can deliver. That’s something that democracy can deliver. That’s something that the United States of America can deliver for its people is the good life.
In fact, since we just celebrated the, I don’t even know how to say it, the semiquincentennial, is that right? Whatever, the 250th anniversary of what we consider the founding of our nation, the signing of the Declaration of Independence. Remember that important phrase that’s in there that Jefferson wrote, “Life, liberty, and the pursuit of happiness.” That line, “The pursuit of happiness,” what he was doing was translating from the ancient Greek. We’ve talked about this. Happiness, that is a translation, it’s eudaimonia. It’s the eudaimonic goal, which is the good life.
Nick Hanauer:
Yes.
Goldy:
That is what he was talking about. Remember, he didn’t say, “Life, liberty, and happiness.” He said, “The pursuit of happiness.” It’s not that we’re going to guarantee outcomes. We’re going to guarantee opportunity that everybody has an opportunity to achieve the good life. How could economics not be about anything but that?
Nick Hanauer:
Well, sure hasn’t been for a long time, so let’s hope it changes.
Goldy:
Right. If you want to read more, obviously we encourage you to read the full report. We will provide a link in the show notes to The Roosevelt Institute and their report, The Good Life, An Agenda For Fuller Lives, A Stronger Economy and Renewed Trust.
Freddy:
Pitchfork Economics is produced by Civic Ventures. If you liked the show, make sure to follow, rate, and review us wherever you get your podcasts. Find us on other platforms like Twitter, Facebook, Instagram, and Threads @pitchforkeconomics. Nick’s on Twitter and Facebook as well @NickHanauer.
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