Better Off Dead: A Q&A With the Author of The Tyranny of Dead Ideas

INSERT DESCRIPTION Matt Miller

It isn’t hard to think of ideas that were once considered conventional wisdom — “Women shouldn’t vote,” “People should be segregated by race” — but were eventually laid to rest.

In his book The Tyranny of Dead Ideas: Letting Go of the Old Ways of Thinking to Unleash A New Prosperity, Matt Miller writes that the country’s biggest problem right now isn’t the suffering economy, but a few outdated ideas that “prevent us from responding forcefully in this new situation to improve people’s lives.”

He identifies some of the most damaging of these “dead ideas” and predicts which ideas might eventually replace them.

Miller is a senior fellow at the Center for American Progress, a contributing editor at Fortune, and the host of public radio’s Left, Right & Center program. He is a senior adviser to global management and consulting firm McKinsey & Company, and he served at the Clinton White House from 1993 to 1995 as a senior adviser in the Office of Management and Budget.

He has agreed to answer a few of our questions about the book and talk about the three dead ideas he thinks did the most to get us into the economic and financial crisis we’re in now.

Question

What are dead ideas and why does society keep them around?

Answer

Dead ideas are eternal, universal phenomena that plague all of us. They’re the result of an essential vulnerability in human psychology: our slowness in updating the way we think about the world even when the world itself radically changes.

So the book is about the trouble we get into because of the things we think we know. Think of dead ideas as conventional wisdoms that retain their power long after it makes any sense to hold onto them — or beliefs that, while comforting, are so at odds with reality that they amount to delusions that hold us back.

By the way, dead ideas don’t just apply to our economic lives, though that’s the focus of the book. They’re prevalent in businesses and nonprofit organizations, which often get stuck in old ways of doing things long after these habits become a threat to their success, or even survival. And anyone who’s been married for any length of time knows that dead ideas can take hold in relationships as well.

Why do we keep these dead ideas around? In part because we’re human, which means it takes a huge shock — like today’s economic crisis or a spouse’s threat of divorce — to force us to wake up to the fact that we’re not seeing things right, and in part because powerful constituencies form around the status quo and make it hard to change.

Question

So what dead idea is most responsible for the recent A.I.G. bonuses?

Answer

It is the idea that “Money follows merit” — by which I mean that market capitalism is a meritocracy in which people basically end up, in economic terms, where they deserve to. As we can see by how fiercely Wall Street resists change, financiers cling to the idea that their outsized rewards reflect something superior about their performance in the “free market” — as opposed to being the result of rigged compensation systems that reward failure or mediocrity as often as success.

Question

Do you find yourself clinging to any ideas that you already know are dead?

Answer

Absolutely! Truth is, most of us probably couldn’t get through the day without a few dead ideas. In my professional life, the deadest idea I cling to is that “Rational analysis can lead to constructive change” — which, if you’ve read any history, may never have been that “alive” an idea in the first place. The biggest dead idea I’m in the grip of at home is that my daughter (who turns 12 this month) is still a little girl.

Question

Can you name the three dead ideas you think did the most to bring about the current recession/ financial crisis and whether they’ve since died, are currently on their way out, or may stick around longer?

Answer

“Financial markets can regulate themselves.”

This dead idea was a major culprit in today’s mess. Modest, common-sense rules — like adequate capital requirements or scrutiny of credit default swaps — could have avoided much of the pain we’re going through. This idea has plainly been exposed as a relic (even Alan Greenspan, its chief champion, now says so). But we won’t know it’s dead for sure until we see how the battle over financial regulatory reform plays out.

“Your company should take care of you.”

This dead idea is making the recession far worse than it needs to be. I refer to our employer-based system of health care benefits. Each day in this recession, 14,000 people have lost their health coverage; that’s 100,000 every week. And it’s all because we have a system that inanely links your health coverage to your job.

Unfortunately, Washington doesn’t seem ready to move past employer-based health care yet, even though this dead idea hurts both worker security and business competitiveness. Politically, it seems too big a departure from what people are used to. But I’m hopeful that any big health reform will, for the first time, include ways for people to access group coverage outside the employment setting, which could let a parallel system evolve that in time kills this dead idea for good.


“Taxes hurt the economy (and they’re always too high).”

Most people will get a tax cut as we muscle through this recession; but once the downturn has passed, taxes will rise more broadly over the next decade no matter who is in power, because we’re retiring the baby boom, which means doubling the number of people on Social Security and Medicare. The good news is that when this happens, the economy will be fine. But for political reasons, this is an undiscussable fact. Worse, this dead idea stops us from reforming our tax system to better promote prosperity, even as we raise more revenue. In my view, this means cutting taxes on payrolls and corporations and raising taxes on dirty energy.

Question

What two new ideas is the current economic climate most likely to bring about?

Answer

One of my “destined ideas” in the book is that “Only government can save business” — not just in the sense of plugging the hole in the banking system or rescuing Detroit, but in playing a bigger role in assuring basic health care and pension security (and thus relieving corporate America of this burden). It may take the next decade to play out, but the idea that government now needs to play a more active (and smarter) role has been set in motion.

Another is the idea that “Only the (lower) upper class can save us from inequality.” The revolt of the professional class (which I dub the Lower Uppers) against the undeserving ultrarich is underway.

It’s epitomized by the revulsion against bankers who’ve walked away with millions after gambling with junk securities that wrecked the economy. The Obama team and Congress are led by Lower Uppers, and they’re poised to reign in excesses at the top — partly through taxes, and partly through reforms in executive compensation. This may take the edge off the inequality that’s grown so extreme in recent years.


the Gooch

A dead idea he's apparently not willing to examine:

The federal government is capable of effectively accomplishing anything and everything it attempts.

Chris

I, a lefty, am on board with all the ideas discussed, but I find it surprising that all of the dead ideas are from one side of the political spectrum and all of the necessary replacements are from the other. Surely nobody will take seriously such a thinly veiled partisan work.

Michael F. Martin

"Think of dead ideas as conventional wisdoms that retain their power long after it makes any sense to hold onto them - or beliefs that, while comforting, are so at odds with reality that they amount to delusions that hold us back."

Sound more like undead ideas to me.

Ellen

Dead ideas are so transparent that we absorb them from a pre-verbal age. One idea I know of that is so dead it has never even lived, is that consistent, reliable and dedicated service to an employer delivers benefits to the employee.

Being a loyal and self-sacrificing employee has been conflated with being a decent human being, a desirable spouse and a good parent. Based on my own observation over sixty-plus years, I think that whole idea is a fond fable perpetrated by upper management and by the upper classes in general. From the dedicated employees of Enron who were shamelessly defrauded, to the countless people molted off as a company moves through its various phases, this outrageous myth has remained healthy and viable for most people. Upper management also manipulates the well-established human instinct to sacrifice for one's team or group, in order to to coax workers to act against their own interests.

At one company, for example, I was always pressured to work longer and longer (uncompensated) hours at the expense of my family. When I resisted, the fury among my colleagues was palpable --- even though my work product was exceptional and always timely. They worked those long hours merely to show their dedication to upper management (oblivious to them, of course) and to prove their bond with the "team." One day, they all got pink slips when the CEO decided to move a crony from the UK in to take over our department. The CEO didn't even bother to thank or even acknowledge his frantic "team" (who were still seeking reasonable excuses for his behavior even as they were ushered out).

What became of me? I bounced right into another job because I always had resumes out and working their way through the hiring process. By the way, I helped many of my former "teammates" find new jobs despite their petty nastiness to me. I never blamed them or thought it was their fault, the way they behaved. They had simply bought the myth that they had control over their respective fates with that company. To this day, even those whose long hours contributed substantially to their divorces, do not question their overworking. The answer would be too painful and too disruptive for them to deal with.

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Dr. Tonic

A dead idea:

The multiplier effect is ever > 1

Pyrrho

Yeah...because that's what he is saying.

teej

Here's another dead one:

A for-profit business is better at doing any given task than the government.

w

"Dead Ideas" may or may not be a prominent force in today's society, but in this context they just serve to legitimate a book that would otherwise be titled "Ideas Matt Miller Disagrees With."

Quin

These are all ideas from the Right's bag of tricks, but I'd like to hear the dead ideas from the Left's now.

Eric M. Jones

Great stuff! As a technologist, I love long-dead but madly-persistent ideas.:

1) Royalty....need I say more?

JVJ

"The federal government is capable of effectively accomplishing anything and everything it attempts"

I might point out that that comment is based on the dead idea that government can't do anything right, and that sweeping generalities are a good way to end an argument.

I look forward to reading the book, and I hope that soe of these dead ideas finally die.

Walter G

If these Republican ideas still have weight, and it looks like they still do, they may be more like zombie ideas. Just enough alive to horrify the thinking person. As for why no apparent lefty ideas are included, I surmise this due to the fact it is has been 30 years of Republican and Conservadem ideas that have governed.

JC

"Dead ideas are eternal, universal phenomena that plague all of us. They're the result of an essential vulnerability in human psychology: our slowness in updating the way we think about the world even when the world itself radically changes."

Anyone else see the elephant in the room?

GDM

@ Gooch - Your comment insults every current active duty military member and every veteran who served honorably. You ought to be ashamed of yourself, but I'm sure you're not.

J. Daniel Smith

"... This may take the edge off the inequality that's grown so extreme in recent years. ..."

This inequality is one of the "big picture" reasons for the current mess: with ever fewer people controlling ever larger amounts of money there is no such thing as a "free market".

Rather than 100,000 individuals each deciding what to do with their $10,000, we have 10 people controlling $100 million ($1 billion either way). Of course, the consequences of one person's bad decisions are much more severe in the later case.

The free market is about lots of individuals making meaningful decisions in their best interest.

Avi Rappoport

A Dead Idea that crosses political boundaries:

"people will operate in a rational way, for their own best interests. "

Alan Greenspan pointed out how wrong that was, and I've seen it happen everywhere, from software companies to diplomacy to the PTA. People are often blind to what we really want, and the logical consequences of our actions. We soil our own nests. We ignore useful feedback. We refuse to let go of our prejudices. We choose the immediate benefit before the long-term. We are silly silly animals.

In general, and when regulated, capitalism in a democracy tend to counteract our irrationality and reward rational behavior. As such, it seems better than full-on communism, despotism, kleptocary or fascism. But it needs a big dollup of socialism to keep the people with temporary power from screwing everything up.

Avi

Jayson Virissimo

"Financial markets can regulate themselves."

So when was this period of unregulated financial markets he is referring too exactly?

As far as I know, only Scotland in the 18th century and Sweden in the 19th century actually experimented with free banking.

Steve

"The stock markets and the real estate markets create wealth."

Intelligent people have been fighting this nonsense since the early 70s. They may make certain people wealthy, at others' expense, but at the best of times its a zero sum game. In times like now, its far less than zero because the early beneficiaries have taken much of their profits out and hedged their bets in T-bills. Soon, they intend to dictate to us.

Real investment - the type that creates wealth - is always the first casualty of speculation. American business has been de-investing in order to speculate, since Reagan entered the White House.

Nichlemn

This (and other comments) seem to be nothing more than political ideology dressed up as they were objectively proven. I don't mind people having their own ideas but it's grating when they try to dress them up as science. How is it that there is so much political division even amongst intelligent people? One possibility is that a great deal of the population is simply deluded (I suspect this is by far the most popular explanation, given that, of course, it applies to those with *different* political views). The other is that economics and politics are so complicated that there are a lot of questions that are simply too difficult to prove or disprove with any reasonable level of certainty. I adhere to this position. "The markets had a level of regulation X" and then "the markets crashed" is not sufficient evidence for the respective claims "regulation was to blame!" (which I hear from libertarians) or "deregulation was to blame!" (which I hear from leftists).

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colin

Dead Ideas=Anything I Think Is Wrong