Frank Bruni had a thoughtful column the other day about how rarely anyone, including our leaders, talks about sacrifice anymore. That means sacrifice in personal situations for the sake of a larger national good. Bruni mentions several factors as both manifestations and causes of the children of the Greatest Generation being so much more selfish than their parents. These include the diminishing proportion of the population that performs military service and “the rise of interest groups, identity politics and cause-specific lobbyists.”
The most conspicuous characteristic of the now-dominant pattern of selfishness—which extends to not only the children but also the grandchildren of the Greatest Generation—is an overriding priority given to the acquisition of personal wealth. It is the pursuit of wealth as a value for its own sake, or as a means to nothing other than high net worth and conspicuous consumption. It is especially, consistent with other ways in which American society has moved increasingly to winner-take-all rules, the aspiration to acquire great wealth.
The attitudes involved echo some patterns in earlier periods of the nation's history. Gilded ages come and go. Over the last half century, the principal trend has been a long one away from the sense of national obligation and sacrifice of which John Kennedy spoke to the selfish society that we see today. Bruni notes that Jimmy Carter, the only president since Kennedy who tried to interrupt this trend by telling us to don sweaters and turn down thermostats, was ridiculed for doing so. Even during his presidency Carter was able to observe, “Too many of us now tend to worship self-indulgence and consumption.” This pattern is even more pronounced now than when Carter was in office.
This circumstance raises many issues of domestic equity, fairness and meeting the needs of large portions of the citizenry. But set those issues aside and consider just what this pattern means for the overall strength of the United States, bearing in mind how that strength affects how well the country can assert its interests in world affairs. We are all familiar with free-market concepts, dating back to Adam Smith, that explain how economic activity motivated at the individual level by personal aggrandizement can lead to a bigger and more prosperous economic whole. But among the portions of the economy that have grown most conspicuously in recent decades have been ones whose contribution to that bigger and more prosperous whole has been minimal or nonexistent. In short, they are parasitic.
This is true of large parts of that much-ballooned segment of the economy known as the financial sector. Parts of that sector provide the important function of efficient allocation of capital. But other parts do not, and some of the latter are among the most obvious models for aspiring titans of the latest gilded age. An op-ed by Roger Lowenstein discusses just one example: high-frequency trading, the computerized practice of split-second moving in and out of equities to take advantage of even tiny inefficiencies in the market. Some big fortunes have been made from this practice. And as one former trader testified to a Congressional committee, the practice has “no social benefit.” Instead, it is “a destructive force in the market,” as illustrated by the flash crash two years ago. It is easy to find other examples. They include the creation and peddling of some of the instruments that were most involved in the financial meltdown four years ago. And they include the manipulation of debt, fees and corporate control that are the techniques of private-equity artists.
All of this gets to what was perhaps most wrong about Mitt Romney's now-infamous statement about the 47 percent. It is not just that there is no segment of the U.S. population that fits the entire description he offered in terms of economic status, personal aspirations and political preference. It is not even only that there is far more dependence on government, in terms of dollar value, in the upper reaches of the other 53 percent, certainly when taking tax preferences into account. The biggest mistake is that being a parasite rather than a producer is not only, or even chiefly, a matter of receiving a check from the government.
Some of the financial methods that are destructive rather than productive can have a direct impact on matters that go beyond that nation's shores. The international contagion involved in the financial crisis demonstrates some of the ways. As for high-frequency trading, Paul Sullivan has an interesting analysis of how that side of financial markets threatens to amplify the negative repercussions of any political and security crisis in the Persian Gulf.
The largest impact, however, is on the overall health, growth and productivity of the national economy, which is ultimately the basis for the assertion of national power. The more the economy is skewed toward what is parasitic rather than productive, the less good that is for national power. The skewing involves an unfortunate allocation of the nation's resources, including its most precious resource: the talents of its people. Romney is a glaring but by no means unique example. What is the principal purpose to which his legal and business training at an outstanding university has been applied? Evidently, the devising of ownership and control arrangements that ensured the flow of fees and in-and-out profits to private-equity partners while the risks and burdens of (sometimes excessive) debt were placed on whatever company was actually providing a good or service. That, and the devising of incredibly complex international financial structures to add to the gains by shielding much of it from taxation. Think about how much more the economy or society as a whole would benefit if that kind of skill and creativity were instead applied to providing a needed good or service.
The unfortunate allocation continues. A disproportionate number of the best and brightest graduating from U.S. universities today head for the financial sector because that's where the money—potentially a lot of money—is, rather than building or designing a better mousetrap, much less embarking on a career of public service.
One way to make the selfish society less selfish is to cut the government-provided incentives that encourage its continuation. That involves addressing, for example, the provisions in the tax code that mean, as the New York Times puts it, “that elite investors like Mr. Romney are able to increase their fortunes in ways unavailable to most taxpayers.” Another important ingredient is political leadership that can get past the Jimmy Carter comparisons and instill once again more of a national sense of duty and commitment. Kennedy's “do for your country” message got lost when the best and brightest of his day took a detour into Vietnam. But the association with that expedition does not represent an inherent or necessary connection. There are many ways to sacrifice for the sake of the common good that ought to be noncontroversial.