It was too easy for Noah Smith to make light of and "dance" around structural interpretations, a couple of days earlier. Yet how often does one find concise articles with structural concerns as a basic tenet? In a recent post, I wrote that even the most ardent anti-government factions run to government for cover when they want to protect their own interests. Given this marketplace setting, many assume structural issues as something that - as Noah's post seemed to suggest - is impossible to change.
How to take structural concerns seriously, if today's marketplace seems as though carried down on a tablet from the mountaintop? Even Tyler Cowen noted recently that if discussions become "structural", chances are the meaning is anyone's guess.
Hence no one is surprised, if the U.S. (among other nations) doesn't take structural concerns seriously. For the most part, governments have not felt it necessary to do so. Tax reforms don't particularly quality, because they don't contribute to gains in needed innovation and production reform. And even though U.S. monetary policy is sorely lacking in growth based terms, it looks positively rational by comparison to the antics of some central bankers. If the Fed sees serious structural efforts, one one only hopes it will respond, monetarily. While structural concerns are not the responsibility of central bankers, the fact no one else has stepped forward to assume this vital role, presents problems for central bankers just the same.
Japan is a telling example, as to what happens when structural concerns are set aside too long. No nation should feel overly confident that it is capable of avoiding the same fate. As Scott Sumner noted about Japan, supply side policies have yet to be tried as the third part of a planned strategy (Abenomics). In a sense, Japan serves as a representative canary in a coal mine, for the structural concerns other nations might expect to contend with in the near future.
A missing marketplace is difficult to comprehend, and in its place is plenty of blame. While I understand the desire to politically compromise through tax reshuffles, ultimately this is a non solution. Meanwhile, too many parts of the nation have seen little improvement in economic access since soldiers left the farm for the Great War. Even though rural residents receive a disproportionate amount of government aid compared to other parts of the population, many regions never regained vital economic complexity, once agriculture benefited from the Green Revolution.
If local support systems do not exist to keep people fully engaged, populations come to doubt the ability of logic to assist in the ongoing improvement of humankind. If people in charge are expected to do the knowledge use "heavy lifting" for everyone, people start to ask: why bother doing the hard work to gain economic access if it's not going to happen? In economies which suffer from a lack of complexity, learning the use of logic may not assist those who seek to improve their lot. Individuals or groups with relative advantage may view "excess" logic or ability to think critically, as means to undermine their own power. Lest someone dismiss this as mostly a developing nation issue...think again.
When local economies are not able to maintain economic complexity throughout the population, power plays of every kind imaginable win the day - over and over again. This could include anything from power asymmetries at the level of family members, neighbors or any other groups who have zero incentive - or economic purpose for that matter - to conform to anyone else's wishes. When there are not enough valid economic structures, almost everyone eventually needs to resort to dubious tactics (or possibly force), be they "victim" or "aggressor", for survival.
Long term avoidance of structural concerns has greatly contributed, to the pockets of terrorism which now exist around the world. It has been all too easy for terrorists to gain strongholds in areas basically abandoned in economic terms, by people in power for as long as anyone can remember. Too many knowledge use limits have occurred at local levels, for some of the most important work of our time. Knowledge use limits can destroy civilizations just as surely as knowledge use dispersal can create them.
Nations cannot afford to wait until things go from bad to worse, to look more closely at the structural issues which underlie the global economy. In particular, citizens should not be treated as one homogeneous group which supposedly has the same set of economic needs and values.
Also, the economic life of cities cannot be the only important work there is, for people to take part in. Recent digital gains could bring the full complexity of knowledge based work, to places where people already have the ability to live out their lives. Often it is not reasonable to insist that prosperous regions "double" up in density for the knowledge work that is available, when knowledge work could become a part of life anywhere in the world.
Structural solutions are a "don't hate, create" response to the world's problems. This is a mindset which asks, what continues to hold back potential, and why? Why is it necessary to hate, when resources of all kinds can be reappraised for their ability to overcome problems of poverty and insufficient employment?
Any time that nations and governments insist on maintaining the status quo, too many voices are left unheard, and too many aspirations never get a chance. It would be better to seek forms of economic and social inclusion, which do not force the desired approach of some groups on everyone else. Don't hate. Instead, continue to create. Give peace, and serious innovation - for and by the masses - a realistic chance.