The economics of democracy

Democracy is not elections. Democracy is about all of us being in this together. We are forgetting that. Two read-the-whole-thing commentaries on the economics of democracy.

2012
The Water-Park Scandal and Two Americas in the Raw: Are We a Nation of Line-Cutters, or Are We the Line?

CHARLOTTE, N.C. —

A few days ago, I took my daughter to the big water park in Marietta, Georgia, just outside Atlanta. It’s called Whitewater, and I take her there every year, on Labor Day weekend, at the end of summer. I take her there not just for the “rides,” which in most cases aren’t really rides at all, but slides that combine water and gravity in varying proportions, and so pack a pretty elemental wallop.

I take her for the lines.

See, you have to wait in line when you go to Whitewater — or, for that matter, any other water park. It’s like Disney that way, or any of the other big amusement parks that traffic in the ability to wring screams from even the most jaded customers. The distinctive thing about waiting in line at Whitewater, however, is that you have to wait in line without any clothes on. You have to wait in line wet and semi-naked, in close proximity to hundreds of other wet and semi-naked people. That’s why the lines at Whitewater are not simply preludes to the Whitewater experience, not simply inconveniences to be endured before you go down a big blue slide that calls itself a “flume”: The lines at Whitewater are the experience. They’re a vision not just of democracy in action but democracy unveiled, a glimpse of what the last line is going to look like, when all is revealed, and we're waiting for our interview with Saint Peter.

And let me tell you, it ain’t pretty.

I have seen some things, at Whitewater. I have seen the American enormity and I have seen — it almost goes without saying — enormous Americans. I have seen the obese, the augmented, the implanted, and the steroidal. I have seen boobs the size of butts, and butts the approximate size of bumper cars. I have seen stretch marks in geographic profusion, and every kind of scar, from every kind of delivery system — the sinkholes left by bullets, the crenellations left by knife, the apocalyptic lightning left by scalpel and surgical saw. I have seen people comparing scars, to while away the time. I have seen piercings in Babylonian profusion, and nail art in colors found not in the rainbow but rather in boxes of Froot Loops. And I have seen tattoos — oh, Lord, I have seen tattoos. I have seen devils and angels, Satan laughing and Christ Jesus weeping; I have seen people who have turned themselves into walking tombstones, sporting memorials for the dead, and the etched images of departed loved ones, both human and canine; I have seen soldiers who will never escape their inked dogtags, scholars and patriots with the Declaration of Independence written on their backs, and endless scrolls of text rendered illegible by time and known only to those who wear them on their skin. I have seen every form of erotic invitation and advertisement, not just tramp stamps but entire tramp field maps, and mothers of three and four and five with cobras and Tasmanian devils arising from their bikini bottoms. I have seen all the evidence I need that America, far from being a Christian nation, is at heart a pagan one, with democracy, at last, turning into a preference for the most personalized decoration.

But here’s the thing about waiting in line at Whitewater, here’s the lesson that you learn from the spectacle of America in the raw: It works. When my daughter gapes and marvels, I tell her that human beings come in all shapes and sizes, and it’s an explanation that seems to satisfy her because it’s inescapable. When I hear the censorious voice in my head saying that the woman in front of me shouldn’t be wearing that bikini, I go on to draw the only conclusion that the evidence all around me permits: that no one should, and that therefore everyone can. Going to Whitewater is like bathing in the Ganges, with chlorine and funnel cakes — and also with the elemental difference that not everyone is poor, lowly, untouchable, an outcast. Rather, everyone is quite simply American, and so the line slouches and stumbles forward, the very definition of a mixed blessing — a blessing mixed black and white, rich and poor, slovenly and buff, and so on down the line. It can be slow going, it can be frustrating, but people have no choice to make the best of it, so they talk to one another, they gripe amusingly, they laugh, they compromise, they endure, and they scream when they finally go down a water slide whose initial pitch approaches 90 degrees. No one cuts, or tries to; the line works because for all its inherent and exhibitionistic imperfections it keeps its promise of equal access, and, by God, it moves.

At least, it used to. I’ve been taking my daughter to Whitewater for the last five years, and over the last two the place has changed. It has changed because someone saw the experience of waiting in line as a problem to be solved rather than as an opportunity to be endured, and applied a “market-based” solution — that is, a combination of money and technology. Apparently, an Englishman named Leonard Sim took his family to Disneyland a few years ago, and his vacation was ruined by waiting in line. He invented something called the Flash Pass, and then sold it to an English company called Lo-Q — as in “Low Queue” — which contracted it to Whitewater. So now, when you go to Whitewater and many other American amusement parks, you pay for parking (^$15, at Whitewater), and then for admission (^$37.⁵⁰, for any human being over 48 inches tall), and finally for a locker (^$16), and then, once you’re inside, you can pay an extra ^$30 for a “standard” Flash Pass or ^$40 for the “gold.” And then you can cut the lines.

It sounds like an innovative answer to the problem that everybody faces at an amusement park, and one perfectly in keeping with the approaches currently in place at airports and even on some crowded American highways — perfectly in keeping with the two-tiering of America. You can pay for one level of access, or you can pay for another. If you have the means, you can even pay for freedom. There’s only one problem: Cutting the line is cheating, and everyone knows it. Children know it most acutely, know it in their bones, and so when they’ve been waiting on a line for a half-hour and a family sporting yellow plastic Flash Passes on their wrists walks up and steps in front of them, they can’t help asking why that family has been permitted the privilege of perpetrating what looks like an obvious injustice. And then you have to explain not just that they paid for it but that you haven’t paid enough — that the ^$100 or so that you’ve ponied up was just enough to teach your children that they are second- or third-class citizens.

It wouldn’t be so bad, if the line still moved. But it doesn’t. It stops, every time a group of people with Flash Passes cut to the front. You used to be able to go on, say, three or four rides an hour, even on the most crowded days. Now you go on one or two. After four hours at Whitewater the other day, my daughter and I had gone on five. And so it’s not just that some people can afford to pay for an enhanced experience. It’s that your experience — what you’ve paid full price for — has been devalued. The experience of the line becomes an infernal humiliation; and the experience of avoiding the line becomes the only way to enjoy the water park. You used to pay for equal access; now you have to pay for access that’s more equal than the access afforded others. The commonality of experience is lost, and the lines are striated not simply by who can pay for a Flash Pass and who can't; they’re also striated by race and class. The people sporting the Flash Passes are almost exclusively white, and they tend to be in better shape than those stuck on line. They tend to have fewer tattoos, and to look less, well, pagan. And by the end of the day, they start cutting lines where Flash Passes don't even apply — because they feel entitled to — and none of them, not even their kids, will so much as look at you.

On the way home, of course, my daughter asked why we couldn’t get Flash Passes. I answered that we couldn’t afford it, but that wasn’t the real reason. The real reason is that I liked the people who were waiting on line better than I liked the people cutting in front of it — that I couldn’t imagine counting myself among those paying for the pleasure of stepping in front of another child who might be as sensitive to slight as my daughter. And that’s what I was thinking on Tuesday night, as I walked around the Democratic National Convention here. I ask myself, often, why I bother with the Democrats — and why I still care about a presidency that has been reliably feckless at home and irredeemably ruthless abroad. But politics is less about the power of policy than it is about the power of people — a measure, at last, of our associations. It’s still tribal that way, and the people I saw on Tuesday night at the DNC were my tribe — they looked like the people you see on line at Whitewater, with clothes on. And the people I saw at the RNC looked like the people cutting in front, by dint of the gold plastic bracelets on their wrists.

This is not to minimize the power of policy but rather to say that policy is driven by preferences we can barely bring ourselves to understand. Both parties have used their conventions to speak endlessly of preserving opportunity, and very often it sounds like they’re addressing the very same thing. But Mitt Romney was born with a Flash Pass on his wrist, and he can't help but conceive opportunity as the opportunity to walk to the front of line — to either pay for it or to dream of being able to pay for it some day. The Democrats can’t help defining opportunity differently: that everybody will have an opportunity to get to the front, if everybody waits. It’s not a particularly popular solution, and a lot of people who regard waiting in line as the problem will ask what ideas the Democrats have for solving it. But they miss the point:

Democrats don’t have particularly innovative ideas for moving to the front of the line because for Democrats the line is the idea — because, as anybody standing half-naked on it can tell you, the line is America itself, and it only stops when you allow people to pass it by.

Even South Park understands.

2026
Degeneracy Is A Symptom

Consider what it means to be a young adult in a developed economy, and consider it across the same three stages.

In the hedge stage of being alive (call it 1955 to roughly 1975 in the Anglosphere), a median wage covers the median life. You leave school, you get a job, you find a partner, you buy a house at three or four times your annual income, you have children, you save into a pension that your employer co-funds, and at the end you retire on something approaching your final salary. Cash flows cover principal. The future is, in the literal financial sense, affordable. The system is hedge-financed at the household level.

In the speculative stage (call it 1980 to roughly 2008), wages cover the running costs of a life but not the accumulation of the assets a life requires. You can pay your rent but you cannot accumulate a deposit at the rate house prices are rising. You can service your student loans but you cannot retire them. You take on more debt to bridge the gap. You roll your overdraft. You buy your house with a 95% mortgage at six times income because there is no other way to buy it. The system is functional so long as credit remains available and asset prices keep rising. You are speculatively financed. You are, in Minsky’s terms, depending on the music continuing.

In the Ponzi stage (call it now), wages do not cover even the running costs of the life that previous generations defined as normal. The deposit is unreachable; the family is unaffordable; the retirement is fictional; the career path that was supposed to deliver these things has been replaced by a sequence of contracts. The only way to access the reference standard of living is to acquire assets that rise faster than wages, which means either inheriting them, marrying them, or speculating into them. Productive labour, in the Ponzi stage, is a losing strategy by construction. You cannot save your way to the life your parents had, because the life your parents had is now priced in a currency (asset wealth) that wages do not convert into.

What does a rational agent do in the Ponzi stage?

She does not work harder at the losing strategy. That would be irrational. She pivots to strategies with the property that their upside actually reaches the reference threshold, even if their expected value is poor. She buys lottery tickets, metaphorical and literal. She speculates on crypto. She gambles on football. She starts an OnlyFans. She day-trades. She marries for money. She sells her eggs. She joins a multi-level marketing scheme. She bets her redundancy on a single hand at the roulette wheel of life because the steady strategy has a known terminal value below the threshold she needs to clear.

Found by way of Silverman On Security, who says:

This is a great analysis of an interesting article. What goes unsaid, and I expect it is only because Paul doesn’t work in the discipline, is that what is being described has been known as Differential Social Organization, which is the beginnings of Social Learning Theory.

It grew out of the response of Sutherland, the father of modern criminology, to his colleagues at Chicago doing the neighborhood studies for the Cook County Courts. Those studies were an attempt to apply sociology & demography to questions of juvenile delinquency and other criminal activity.

As the lore goes, when Sutherland looked at his colleagues’ results he told them what they were really looking at was not normatively versus deviantly organized communities in different neighborhoods & areas (zones) of the city.

Rather, the neighborhoods & areas with the highest levels of delinquency, deviancy, and crime weren’t maladapted, they were differentially socially organized.

What he meant was that in order to be able to survive, function, and live under the socio-economic & socio-political conditions those Chicagoans were living in, it made perfect sense for men, teens, and boys to engage in criminal activity as there were few decent paying jobs. Since their was almost no reward to engaging in the licit economy, the risks of engaging in the illicit one were lower because it was pretty much that or nothing. Similar for women who chose to engage in sex work.

When I read the excerpts that Paul include, clicked through to the piece he’s responding to, and then his take on it my impression was this is a description of Differential Social Organization with two other, and related to each other, empirical sociological / criminological explanations.

Institutional Anomie, which is the macro- to meso-level modern variant of Weber’s classic anomie theory and General Strain Theory, which is the more micro- to meso- version of Weber’s classic. Specifically the alienation from each of the societies socio-economic, socio-political, and social realities.

Differential Social Organization is very apt and useful to look at what happens to states & societies and the groups & people within them under different socio-political, socio-economic, socio-religious, and societal conditions. I’ve used it in my work on Iraq & Afghanistan for the Army.