2020: The 1960s Redux?
Amity Shlaes is chairman of the board of trustees of the Calvin Coolidge Presidential Foundation, she is a classical liberal, and she knows economics. She much appreciates Mises’s emphasis on property and bureaucracy, both of which influence her work. She has authored six books, including three New York Times bestsellers, on Calvin Coolidge, the New Deal, and the Great Society.
JEFF DEIST: Let’s start by letting readers know a little bit more about you. Do you consider yourself an historian, journalist, biographer? How do you describe your work?
AMITY SHLAES: A historian. In all my work, the goal is to impart knowledge about the past.
JD: You went to undergrad at Yale. Did you imagine a career in writing and history?
AS: When I was at Yale I said, I’ll give journalism five years and if it doesn’t work out I’ll go to law school. I thought I should play to my comparative advantage and my comparative advantage at the time was in the humanities.
JD: It sounds like it worked out. Did you consider yourself a conservative at the time?
AS: No, I considered myself someone interested in history and in English, German, and French.
JD: After Yale you made your way into financial journalism. Over the years you’ve written for Forbes, Financial Times, Bloomberg, and on the editorial board for the Wall Street Journal. What do you think of financial journalism today? A lot of our readers think these publications are overly credulous about markets and the Fed.
AS: I don’t know about today. But good journalism is genuine inquiry. One reason I was attracted to the Wall Street Journal in the day, was it did pursue inquiry. The WSJ could have been called Wall Street Journal University, where one was lucky to be admitted. What makes the market go up, what makes it go down, and reporting on that movement—we learned that in real time. Herman Melville said of whaling: “for a whale ship was my Yale College and my Harvard.” I could also say: the Journal was my Yale College and my Harvard.
JD: I bet that was quite an education.
AS: The Journal in the 1980s was an institution that took a commonsense attitude. The paper was not particularly ideological. Its work was marvelously empirical, and fairly accurate. The penalty for reporter error was high. After all, if we got something wrong, that error moved company share prices or interest rates. Within seconds, a company, or even a central bank, would be on the phone to the editor. The editor would turn to—or turn on—the reporter. Let us just say the dynamic wasn’t dissimilar to basic training in the army. In this way the Journal served as a university to many. The paper’s contribution remains undertold.
JD: Did you come away from the Journal with any strong sense about economists and their role? Is the profession doing much good?
AS: The Journal is not an economics newspaper; it is a business newspaper. My time there was like the difference between going to a PhD economics program and an MBA program. Though I was an MBA, so to speak, after a while, it was the economists who interested me, because the economists explained what business people were doing—sometimes better than the business people, who were too busy for seminar sessions. The economists also had a playful aspect that attracted me from my early twenties. An economist would tell the Journal—“well the obverse could also be true.” Other institutions—corporations, or the Securities and Exchange Commission—saw only a single solution to a challenge.
JD: What else helped shape your viewpoint?
AS: Two other parts of my education were very important. One was my father’s businesses, and the other was my time in Europe, where I went to Communist countries. That was even before I went to the Wall Street Journal.
My father, Jared Shlaes, was a real estate appraiser, but he also tried his hand at real estate development, built buildings. He thought a lot about what people like and what they don’t like, and he found himself bumping up against subsidy programs whose perverse incentives created subpar, unsatisfying buildings. He couldn’t stomach the architecture that resulted from urban renewal programs and federal subsidies. As some of your readers might know, urban renewal was an especial disaster in Chicago, where I come from. On the South Side of Chicago, where the University of Chicago is, a comment made by one comic became legend: “Urban renewal,“ it was said, “is black and white marching together, hand in hand, against the poor.“ And my father saw firsthand what it meant to eminent domain a whole swath of the city, bulldoze homes of poor people, sometimes homes they loved, and then see nothing to replace the rubble, because various jurisdictions were fighting over the land, or because there was a shortage of capital to build. “Improvement“ was actually destruction. The rubble lot just stood there for years. The new building when it finally came might be hideous. Cinder block.
Shoddy construction is also an expression of too much political intervention. My father took it all in and tried at first to work with government—governments, actually, and the very imperial University of Chicago.
As children we actually played in those vacant lots. At the time I didn’t think what my father was doing had much to do with me, but later I came to appreciate the struggle and my father’s choices. For example, he built with more expensive materials than some developers—special red brick—and everyone asked why. He responded, “I want to build places where people actually want to live.” He was more interested in the customer than the rent seekers who ruled real estate.
JD: That sounds like a real-world MBA right there.
AS: I remember when I was in Germany they asked, What does your father do? And I said, He’s a developer. But the closest word in the German dictionary was “speculator.“ There’s another nicer word in German for consultant, and I ended up saying consultant because Germans rejected the concept of a developer as too exploitive and capitalist. German is a Marx cartoon language a lot of the time! You could barely explain what my father did in German, and you could barely explain it to an American high school or college student either.
JD: This experience shows in your writing. There is definitely something very pragmatic and human in your books.
AS: There’s a great tension in writing history between the chronological and the thematic. Do you write about your theme or about your events and people? Because events and people are quirky and they don’t fit into themes very well. This is always the tension all of us have. Had I gotten a doctorate in econ, I would have been more inhibited about writing chronologically.
JD: Considering your work about the Great Depression, do you see political parallels today? We have calls for universal basic income and free rent and Medicare for All and a Green New Deal. Are the 2020s going to look like the 1930s?
AS: Today looks more like the Great Society of the 1960s, and the result will be more like the 1970s. The scale of ambition among some voters and some politicians now recalls the scale of some of the Great Society advocates. I’m thinking specifically of Charles Reich, who was a guru for Great Society culture and a law professor at Yale. Reich wrote The Greening of America, which is kind of a flaky book. But he also wrote a deeply influential paper on property rights where he suggested welfare should be property—as, say, a patent is. The Supreme Court mentioned him in a case called Goldberg v. Kelly and ruled welfare really is property of the recipient. In the Great Society there was the sanctioning of permanent redistribution that was more serious than any such sanctioning in the New Deal. Remember, the New Deal won its mandate because of economic emergency. The New Deal gave us the National Recovery Administration, but the NRA, crafted to ru
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