Consider one of the most applauded of Roosevelt’s programs, the Civilian Conservation Corps, from 1933 to 1942. The program was open to young men, initially those 18 to 25, a group that was quite vulnerable economically. The C.C.C. emphasized labor-intensive projects like planting trees.
The public appreciated the tree planting because the projects addressed big problems that had been ignored. Major dust storms in and around Oklahoma raged from 1930 to 1936, denuding whole regions of agricultural land. The storms were vivid evidence of an externality that environmentalists had warned about for years, to little avail. Unregulated farming and lumbering had allowed pervasive soil erosion.
Aside from the environmental benefits, the C.C.C. encouraged a sense of camaraderie, taught young men new skills and gave its workers a sense of participation in something historic.
IDEAS: Your book comes out at an interesting moment for America’s relationship with free-market economics--to a lot of people, it looks like everyone in the financial markets has been behaving in defiance of the broader interests of the society.
VALERI: I asked a hedge fund manager I know if he had said to the traders described in [Michael Lewis’s] ”The Big Short,” ”What you’re doing will result in huge financial calamity, unemployment, people losing their homes--isn’t that socially irresponsible?”, what would they have said? He said, ”Their response would be, ’that doesn’t matter, that’s not my concern. My job is to make as much money as I possibly can.’”
My book shows the people who built the capitalist system did not think like that. The people who built the market economy had a whole cluster of deep collective loyalties and moral convictions.
IDEAS: How do economists react to your ideas?
VALERI: They basically say, ”Well that can’t be. People are motivated by rational interests.” My message to them is you’re lacking historical consciousness. You’re not being honest with the way the whole market was envisioned and created and put in place. You’re making a lot of false assumptions that the market is a natural order, when it is a cultural creation. Which explains why economic reality confounds economic theory.