A letter to the editor will be considered for publication only if it relates to an article or review published in the AHR. Letters should not exceed 1,000 words. They can be submitted by e-mail to email@example.com, either as a Microsoft Word attachment or within the body of the message. Publication is solely at the editors' discretion. The AHA disclaims responsibility for statements, of either fact or opinion, made by the writers. For detailed information on the policies for this section, see http://www.historians.org/publications-and-directories/american-historical-review/letters-to-the-editor. REVIEWS To the Editors: I was not familiar with Robert E. Wright before reading his review of my Dismantling Solidarity: Capitalist Politics and American Pensions since the New Deal (AHR, December 2017, 1643–1644). It gave me reason to look him up. I found that in this very “Communications” section of the American Historical Review, Wright once was on the other side, defending himself (October 2004, 1365–1366). After arguing that his book had been misinterpreted “from cover to cover” he concluded, “a valuable review challenges rather than dismisses, and all reviews should adequately characterize a book’s arguments.” Unfortunately, his review of my own book falls woefully short of the standard he sets for others. Dismantling Solidarity shows how since the New Deal private, occupational pensions became so critical to retirement security in America and why they have become increasingly embedded in markets. It sets out to explain the three main shifts in this broader story, each distinct but overlapping: the installment and expansion of occupational plans, which were adopted as a supplement to Social Security in the postwar period; the allocation of pension fund assets into the stock market as a means to build up pools of money for retirement; and most recently the decline of traditional defined-benefit plans and the rise of more risky defined-contribution 401(k) options that allow for no employer guarantee of a benefit. The AHR reader might not know this, since Wright begins as if the book is about the Social Security program instead. And throughout, he manages to bury both the basic explanandum and the explanans. My book re-centers capitalism in our understanding of the social context of policymaking, arguing that the critical driver in each of the histories I explore was policymakers’ effort to promote growth and avoid economic crisis. When we consider why retirement income was marketized, it wasn’t because the vision of one interest group won out over another or that, as Wright speculates, “the median American voter” thinks it is “fairer.” Instead, I argue that the configuration of pensions today was an inadvertent result of governing for economic growth. I don’t have the space to review the history that substantiates this argument; had Wright done this, we might be having a more substantive exchange. But those who engage with my book will learn about how the Truman administration supported collectively bargained plans to promote labor peace, how the Taft-Hartley Act of 1947 and ERISA of 1974 laid down regulations that encouraged workers’ funds to invest in ways that mimicked practices on Wall Street, and how the Reagan administration increased regulations on pension funds to weaken labor, to stave off an inflation crisis, inadvertently causing a shift into 401(k)s. Wright would have the reader believe I only deal in “high-level abstractions,” but these are concrete historical processes. That Wright misinterprets the book’s basic task and then ignores the historical research could be chalked up to hasty reading, were it not that his distortions are repeatedly used as a foil for his ahistorical pronouncements. And here we surely contrast. Even though the book is primarily concerned with this history, it is motivated by multidisciplinary research concluding that this shift in retirement security has significantly increased retirement risk (see the Retirement Equity Lab’s work, http://www.economicpolicyresearch.org/retirement-equity-lab). But Wright doesn’t seem to think that much of this research matters. Instead he proclaims that most problems are the result of “political meddling” and callously says that anyone who had to postpone retirement during the 2008 financial crisis has their own ignorance of investing to blame. This sounds like a “blame the poor” response to an outcome with much deeper causes. Instead of fair characterization and criticism, Wright’s review is mainly made up of trivial protestations and argument by innuendo, most of which are obviously false after even skimming the book. Wright says I “mythologize” the Social Security program, implying that its “only flaw was that it was not extended far enough.” Apparently, I make “no mention of” its negative effects on “poor minority men,” but on the very same page he cites, I write, “It excluded … domestic and agricultural workers, many of whom were black and Latino” (3), and I later reference the door-to-door salesmen, truck drivers, pieceworkers in the home, hotel, laundry, and public sector workers also barred (50). Surely the most interesting historical flaws lay in the way Southern landed elites and Southern Democrats blocked access for certain occupational groups (47–51), not its “overpriced life annuity.” But none of this is what the book is primarily about—private pensions. Wright’s mode of critique fudges what is non-essential to the book’s basic argument, and in doing so presents itself as taking down the whole endeavor. His central method is to change the subject. Further, he says that I use vague and “timeless Marxist constructs,” which I never define—“capitalism,” “solidaristic,” “marketization,” and “class struggle.” Did Wright not read the book? Because I do define “solidaristic,” “marketization” (10), and “class struggle” (30, 37–38). Surely “capitalism” isn’t some dusty, outdated word. But yes, even here I spend pages defining precisely what I mean by the capitalist context for policymaking as well (23–31). Either Wright is ill-equipped to deal with works that employ any kind of generalizations, or he simply can’t engage fairly with something that doesn’t accord with his worldview. There are many other misrepresentations, like when Wright says I don’t know “the first thing about investing.” I am no asset manager, but don’t take Wright’s word for it. Read chapter 4, which like 3 and 5 he never references, and judge for yourself. This all gets to the rather tiresome ideological axe Wright grinds, evident from the first sentence. He cites Katznelson’s kind blurb of my book as “policy history of the first rank” and then complains that instead it “is actually a work of Marxist economic sociology” (in a point-scoring exercise, Wright pejoratively characterizes me as Marxist three times). Wright’s intellectual insularity and narrowness show when he casts the work of history and sociology as mutually exclusive, the latter of which is not much worth engaging for good historians like himself. Dismantling Solidarity is an example of historical sociology. I use historical methods to construct historical comparisons, from which I tried to glean some more general insights about policymaking. My fieldwork delved into the archival collections and records of the major business associations, unions, and politicians involved in the making of the private pension system. But not a single shred of my historical narrative seems to be of interest to Wright either. That it is sociology alone seems to be grounds for a quick dismissal. But Wright isn’t really angling for “theory-free,” straightforward narrative history. Nearly all his criticisms are deployments of theoretical generalities drawn from economics and, in one case, Forbes. It’s not that Wright has a different worldview that concerns me, it is that his dismissals and asides don’t engage with the book’s core arguments and history. I am not surprised that someone who has written that the cause of durable indigenous American poverty is “socialized medicine and education” and “socialist” reservations—which he says have “stripp[ed] Indians of their willingness and ability to engage in entrepreneurial activities” (http://financehistoryandpolicy.blogspot.com/2017/10/why-are-many-indians-so-poor-in-short.html)—didn’t like the normative implications of my book. I would have welcomed a serious libertarian engagement with the book’s actual arguments. Unfortunately, Wright takes on the politics he seems to think motivated me to write Dismantling Solidarity rather than the book itself, and not very effectively. Michael A. McCarthy Marquette University Robert E. Wright responds: Our Gattungswesen (species-being) is such that Professor McCarthy likely will never agree with the thesis of my review, that his Dismantling Solidarity is not good policy history, but if he were to peruse my corpus for several years, instead of cherry picking a few quotations, he would better understand and perhaps even appreciate it. Doubting that he will invest the time, I’ll distill the gist into the word count allotted here. If initially granted the word limits for both the review and this exchange of letters, I would have summarized the book more fully and perhaps not aroused the author’s ire. I did not ask the AHR for more words because I adequately explored what I took to be “the book’s core arguments” and did not think they merited additional attention. Scholars need to take policy studies with the utmost seriousness. Although policymakers are notorious for not making sufficient use of history, understandings of the past do sometimes (mis)inform policy debates. I sit on the board of the international NGO Historians Against Slavery, for example, because I am concerned that activists and scholars may cause grave injury to vulnerable people throughout the globe by misrepresenting the histories of abolition movements and slavery. When real people’s lives are at risk, policy researchers need to be careful lest they make recommendations that could injure innocents. McCarthy makes his radical policy agenda explicit. He wants to redirect “America’s retirement system toward more solidaristic institutions and arrangements” (172) but believes, on the basis of his exploration of the interaction between America’s political system and “capitalism,” that “only large scale collective action” (173) can bring that about. In other words, he wants Americans to agitate, presumably more vigorously than the easily “crushed” (172) Occupy Wall Street movement, to expand Social Security, which he believes is the only “system that ensures that our retired can live financially comfortable and stable lives” (173). Personal financial stability is a laudable goal but not one that McCarthy’s policy achieves. Retirement may turn out to be an aberration that became common in a few rich nations in that brief century or so when people still did manual labor but lived long enough to be unable to perform it any longer. In spite of the negative emotional and physical effects of ceasing regular work, some nations moved toward a society-wide artificial superannuation life model instead of one based on disability, regardless of age. The artificial superannuation model raised the problem of how to support adults who no longer supported themselves. At first, individuals who stopped working relied primarily on private savings and transfers (e.g., home ownership and payments from adult children). That worked well until the Great Depression, which spurred permanent policy responses to temporary problems. Much of what is FUBAR with the U.S. economy today has roots in the New Deal. Foremost among those problems are our idiosyncratic employment-linked health insurance system and Social Security, policies that, combined with our deduction-laden income tax system, explain a great deal of the excess inequality America exhibits today. When I complained that McCarthy did not account for the effects of Social Security on minorities, I was not referring to his claim that some were initially left out of the system, I was referring to the fact that they were eventually forced to join the system and then systematically exploited by it. A disproportionate number of poor men—black, Hispanic, American Indian, and cracker—pay Social Security taxes for decades but die before collecting. Many are unmarried, and few have children young enough to receive benefits. The winners are middle-class white women because they live longest on average and receive the higher of their own earned benefits or half their husbands’. NBER economists demonstrated this massive transfer statistically, and their findings, which make sense to anyone conversant with U.S. demographics, have not been refuted and yet remain unmentioned by proponents of Social Security. The other major problem with Social Security, besides its inadequate “any occ” disability benefit, is that it is a mere life annuity with limited survivorship benefits. Unlike private savings, it does not leave a sum of assets that can be passed to the next generation to fund education, start a business, or buy real estate. It leads to solidarity alright, solidarity in a cycle of poverty that is not easily broken when government mandates the diversion of virtually all of the poor’s available savings power into a type of product that few voluntarily purchase. In short, the U.S. retirement system was not “marketized” as the author imagines. Rather, policymakers stopped the expansion of a New Deal policy with dreadful effects on the poor before it entirely crowded out the existing system of private savings, regulation of which policymakers thoroughly botched. I do not “blame the victim” when I state that many people nearing retirement in 2008 employed inappropriate asset allocation strategies, I state a fact. Blame primarily falls on our educational systems, which do a horrible job of teaching financial literacy. That is why for the last decade I have volunteered my services at the Museum of American Finance and why I penned an affordable Money and Banking textbook, now in its third edition, and co-authored an inexpensive investment primer, The Wall Street Journal Guide to the 50 Economic Indicators That Really Matter. McCarthy and I hold different definitions of definition. The dictionary definition is “an exact statement or description of the nature, scope, or meaning of something.” So in my Poverty of Slavery (2017), I quote and discuss the limitations of earlier definitions of slavery (19–24), set forth twenty discrete characteristics of slavery (25–26), and explore the real-world implications of my definition (27–33). Writing that “class struggle comes in an [sic] innumerable numbers of configurations, varying greatly across different institutions, different societies, and different times,” does not define class struggle (30). McCarthy also implies that words like “capitalism” that have been in long and wide usage need not be rigorously defined. In fact, the opposite is true, especially when addressing a diverse audience. According to Edward A. Purcell Jr. (“Capitalism and Risk: Concepts, Consequences, and Ideologies,” Buffalo Law Review 64 : 24), scholars have used “capitalism” in at least 111 distinct ways. Some scholars pull sophomoric stunts like “say capitalism, drop mic, exit stage left.” McCarthy is better than that, but despite his protests he does not make readers privy to the exact nature or scope of his meaning of various key words. Policy scholars, especially, need to express what they mean with precision. Usually those critical of “capitalism” really mean rent-seeking behavior, corruption, market failure, or some other specific problem that readers may not associate with capitalism. McCarthy would like you to believe that I am critical of his book because I am libertarian. But the fact is that I came to pragmatic libertarianism after studying Marxism intensively under Georg Iggers (who passed away late last November) at SUNY Buffalo. Ultimately, I rejected Marxism’s main tenets because after careful analysis I found them, like McCarthy’s book, incompatible with the real world. McCarthy’s other ad hominem insinuations I will pass over. Robert E. Wright Augustana University ERRATUM In the heading for the Collected Essays listing for Marriage by Force? Contestation over Consent and Coercion in Africa, edited by Annie Bunting, Benjamin N. Lawrance, and Richard L. Roberts (AHR, October 2017, 1366), and in the references to this book in the index (1389, 1392–1394), the name Lawrence should have read Lawrance. The error has been corrected in the online issue. © The Author 2018. Published by Oxford University Press.
The American Historical Review – Oxford University Press
Published: Feb 1, 2018
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