Nick Hanauer, the Plutocrat of the Common Man

A well-deserved honor for a great friend of Democracy (and democracy).

By Nick Hanauer Michael Tomasky

Tagged DemocratsEconomicsInequality

This Sunday, September 30, Democracy board member and frequent contributor Nick Hanauer will receive the 2018 Harvard and MIT Humanist of the Year award in Cambridge, Massachusetts. Here, we asked Greg M. Epstein, the humanist chaplain of both universities, to write a brief essay about the award and Nick’s selection. It is followed by a Q & A between Hanauer and Democracy editor Michael Tomasky.

By Greg M. Epstein 

I’ve served as the Humanist Chaplain at Harvard since 2005, advising atheists and agnostics among the student body, in the faculty, and around the university. During that time I’ve seen skyrocketing numbers of students who describe themselves as nonreligious: together, atheists and agnostics now outnumber all Christians combined among Harvard College students. An avalanche of studies has emerged to suggest a similar trend is emerging among young people nationwide, perhaps even worldwide.

These demographic changes are already impacting our democracy, and while that fact hasn’t yet earned atheists full, open inclusion in influential public policy and civic spaces, it will in a generation or so once millennials replace their generally more conservative and traditionally religious counterparts in public leadership roles.

People always want to know, meanwhile, what a humanist chaplain does. It’s actually pretty simple: I help people learn to live ethical and meaningful lives. Humanism is not primarily about whether you believe in a god. It’s about whether you do good, here and now. One thing we’ve often done to drive this message home is give awards to notable humanists And fortunately for us, inspiring people are often willing to come to Harvard to accept awards! So we’ve honored plenty of famous humanists like the late Carrie Fisher, Sir Salman Rushdie, Seth MacFarlane, Piper Kerman, and Joss Whedon.

But when I was recently invited to expand my work by becoming the Humanist Chaplain at Harvard and MIT, one topic and one person stood out this year. Nick Hanauer, our 2018 Harvard and MIT Humanist of the Year, has spent the past decade arguing that we need to talk about the economy we are creating. Simply highlighting the need for public service or assistance for the poor or even “corporate social responsibility” is no longer good enough.

With heroes like Elon Musk or Mark Zuckerberg, students at both Harvard and MIT (and other similar institutions) are creating and shaping science, technology and industries that will change the nature of human existence. But with such powers have often come devastating divides between haves and have-nots: savage inequalities that should make us very, very afraid. Rising inequality could mean that, for all our progress, we’ve simply made it to the top of the roller coaster. If we’re not careful to share our wealth in a more just manner, we could be due for a very steep and rapid decline.

Enter Nick Hanauer: a zillionaire plutocrat who has become, as he recently told me, the official “turd in the punchbowl” at gatherings of his fellow global super-elites. Hanauer’s good fortune and even better investing acumen made him wealthy; his repeated warnings of pitchforks coming for people like him have made him famous.

But I’m especially excited to hear from him this weekend because I’m hopeful the best is yet to come. The humanist heroes we need most this century are those who can help us all learn what it means to collaborate, to include others, and to care about much more than simply the immediate bottom line. That’s what Nick Hanauer and the team at his think tank Civic Action are working on, and they have ambitious plans. I hope many young people, secular and religious alike, will learn from them and work with them – for the sake of humanity as a whole.

Q & A with Michael Tomasky

Michael Tomasky: How’d you find out about the award?

Nick Hanauer: Apparently these folks had been tracking our work on a variety of subjects for a couple of years. They called my office and told me that we’d won. I should say my first instinct was to look up the word “humanist” to make sure it was a good thing.

MT: It’s a good thing! How do you hope this reinforces the work you’re doing?

NH: As you know, because we talk a lot about these things and because you’ve read the stuff I and my collaborators have written, I believe strongly that neoclassical economics and neoliberalism are built on a lie. That lie is that the best way to characterize human behavior is to see us as selfish rational maximizers.

From that mistaken idea about human behavior, you essentially can derive, or we have derived, a bunch of really bad ideas about how to arrange human societies. Because if it is true that people are intrinsically selfish maximizers, and we accept that as true, then it must be true by definition that all of our prosperity is a consequence of selfishness; that selfishness creates prosperity, that the more selfish we are, the more prosperous we will become. And from that, you can derive other things, like that the only purpose of the corporation is to enrich shareholders. How could that not be a good idea?

We now know with scientific certainty that that idea about human behavior—homo economicus—is just objectively false.

MT: What’s the right idea?

NH: That homo sapiens is other-regarding, reciprocal, and moral. We evolved to be moral creatures because cooperation is our superpower. It is how we survive, evolve, and compete. And what that means, in turn, is that it’s not selfishness that creates prosperity, it’s cooperation and reciprocity.

MT: What’s the scientific evidence you’re referring to?

NH: The last 40 years of research on human behavior. Psychological research, sociological research, behavioral economic research: It’s just demonstrably true that human beings are fundamentally moral heuristic reasoners, and not selfish calculators. If we start with this new assumption about how humans behave, you derive a bunch of different ideas about why capitalism creates prosperity in human societies and what policies will make us all better. What you won’t derive is “the more selfish we are, the better things will go.”

MT: Your work for some time now is an attempt to inject this thinking into the civic, political, and economic bloodstream. That’s a big job. How do we turn that big lumbering frigate around?

NH: Well, there are three big jobs. The first is in the academy, to build up a new academic framework that replaces neoclassical economic thinking and all the assumptions about the dynamics of human social systems and the metrics that we use to measure human welfare. GDP is another deeply flawed idea.

The second is to create a movement across disciplines around that new set of economic ideas. Finally, it’s organizing institutions that can embody those new ideas and create power and change. So you need to build a new set of ideas, you need to build a movement, and you need to build powerful institutions that are driven by that movement and embody those ideas. So our work touches all of those things.

MT: Are you encouraged? How are we doing on all three of those fronts?

NH: The ideas are evolving nicely, and there’s a huge thirst globally for those new ideas. Most thoughtful people recognize that the existing economic framework and the existing ideological framework—the existing economic framework, neoclassical economics, and the existing ideological framework, which we call neoliberalism—are not working out. That they need to be replaced.

People are less sure about what replaces them. My colleague Eric Beinhocker and I have a strong view that we doknow what will replace them. We’re writing a book on that. But we have yet to find out whether anyone else in the world agrees with Eric and me. I’m involved in a ton of organizing around creating change that is animated by those ideas. The $15 minimum wage is animated by that kind of thinking.

MT: Let’s talk about that for a moment, because those reading this may be aware that you’re involved in that movement in Seattle. It was successful. There was one study that tried to knock it down, but you have an answer to that.

NH: What’s important to recognize is that the aim or claim of trickle-down economics, neoliberalism, is that anything that benefits rich people directly will benefit the entire society, and anything that benefits poor people directly harms the entire society, including the poor people. The most pointed instantiation of that generalized claim is that raising wages kills jobs. The reason that that claim is made so relentlessly, in the absence of any empirical evidence to support it, is that it’s the only moral argument available to keep wages low and profits high. They can’t just say we’re rich, you’re poor, and we want to keep it that way. You have to clothe your naked self interest in some sort of moral claim, and what rich people have been saying to poor people for thousands of years is some form of “it will harm the very people it’s intended to help.”

Whether it was eliminating slavery, where the South made the argument that slaves were better off as slaves than as free people. Whether it was giving women the right to vote, where they argued that giving them the right vote would harm them. These arguments always take the same form. They say “we woulddo this thing for you, but it’d harm you, so we won’t.” Not the more naked statement, which is that we prefer women not voting, because then we’re more powerful; we prefer you remain slaves because it’s working out for us.

So there are many people with the Chamber of Commerce who have about a trillion reasons a year to advance the claim that raising wages kills jobs, and there are all sorts of ways to build a study to prove that’s true, if that’s your goal.

The way these studies work is that they take reality, then they build a synthetic reality and try to compare the two and show the synthetic reality with a lower minimum wage would have more jobs. By the way, not that there are fewer jobs in existing reality, just that, in theory, there would be more in an alternative one. But you can build that synthetic reality any way you want. And the University of Washington study found a way to build a synthetic Seattle that was an inaccurate representation of actual Seattle, and you know that because they use ZIP codes that are not in Seattle to build their alternative.

MT: Kind of a giveaway.

NH: Yeah, when there are some other synthetic alternatives that have been modeled and correlated from other cities that are like Seattle. If you do that then you see that the minimum wage in Seattle didn’t kill jobs at all. I mean it’s clear: Unemployment fell from 4.9 to 3.6 percent over the time we implemented it so the idea that it killed jobs is ludicrous.

MT: Restaurants seem pretty full.

NH: They are. What people need to recognize, and I’ve written about this a lot, including in Democracy, is that the people in the Chamber of Commerce are not going to stop making this claim. Ever. They will never stop making this claim because it’s the only claim that will make wage suppression defensible. If it’s not true that raising wages kills jobs than why in the world wouldn’t we raise wages a lot, right? There’s no place to hide if it’s not true that raising wages kills jobs. Then all you can say is no, no, no we love us those high profits and don’t give a shit about you, and that’s awkward.

MT: Right. Let me ask you about corporate America. There’s more and more talk about corporate social responsibility. Some prominent CEOs have emphasized this and are trying to push this. Do you get a sense that that’s gaining any currency in boardrooms?

NH: You know, the CEOs of lots of big companies feel the pressure to be good corporate citizens and to not be openly rapacious and exploitative. How that is being translated into a change in behavior is harder to see. PR stunts are easy and cheap. Significantly raising wages for workers is not. So you have more of the former than the latter.

MT: And, finally, let’s talk a little bit about politics. Talk a little bit about the political lay of the land as you see it right now. You know what’s happening within the Democratic Party, what’s happening between the parties. You know we have a very important election coming up. What do you see shaking out?

NH: Well, the Republican Party has gone off the rails and the Democratic Party doesn’t really know what it wants to be. I would argue that the shit show that is American politics today is a consequence of the fact that, to a greater or lesser extent, both political parties abandoned the economic interests of the bottom nine deciles of Americans. That, as a Democrat, if you’re being honest, we massively contributed to the rich getting richer too, it’s just that we would more occasionally throw bones to poor people. That’s why most American wages have been stagnant for 30 or 40 years and why everyone, on the left and the right, is so angry at the political system. Because, in fact, it is rigged against them.

And the Democratic Party needs to figure out if it’s going to continue being merely a kinder and gentler form of trickle-down economics, sort of neoliberalism light, but with less racism. Or if the party is actually going to rotate toward a policy agenda and a politics aimed at materially and substantially advancing the economic interests of a majority of Americans with the belief that that set of policies not only won’t harm business, it will help it, despite what the Chamber of Commerce says.

MT: Do you see a potential 2020 candidate who intrigues you at this point?

NH: No. I mean, I know many of the people who are running for office. Many of them are friends. Many of them would make good presidents, but I have zero confidence in my ability to predict the future. And if Daffy Duck was the leading candidate as a Democrat, I would vote for Daffy Duck.

Read more about DemocratsEconomicsInequality

Nick Hanauer is a serial technology entrepreneur, venture capitalist, civic activist, author, and philanthropist. He is the founder of Civic Ventures, a public policy incubator, and the host of the Pitchfork Economics podcast.

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Michael Tomasky is the editor of Democracy: A Journal of Ideas.

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