For this American, my favorite holiday has always been Thanksgiving. Why? I have an image in my mind of Native Americans and colonists meeting and sharing food together; they share knowledge and stories. In the midst of their concerns about each other, they found respect for each other. Their spirit of sharing is a great inspiration.
As an economist in this upside-down world of people stressing over their future and present, I find answers in that image of Thanksgiving. People eventually survive by sharing with each other as a community. The poor are fed. The sick are cared for. The struggling are helped, and communal ties are strengthened.
There is a term in economics, social capital. This term refers to the cultural interactions within a society forming cohesion, coordination, and cooperation that allow an economy to function better. An economy relies on people from diverse backgrounds talking, sharing concerns, negotiating, making plans, and working toward common goals. The social quality of their communication determines the true strength and potential of their economy.
When the Native Americans and the colonists met and shared, I see social capital being built. The society became stronger. People would be better able to have their needs met. There would be less conflict and more enjoyment of work. The societuy would be able to grow in potential.
The focus of my research as an economist is in the area of labor share, which is the percentage of the income from production that is shared with labor. I research how changes in labor share affect such things as potential production, employment, productivity, investment, and even monetary policy from a central bank.
In almost all advanced countries, even in China where labor share was already low, labor share has fallen in an exorbitant way since the turn of the century. What has been the effect of labor receiving less share of a national income? Potential output has fallen. Unemployment will be higher than before. Productivity growth will stall much quicker, or even fall as in the United Kingdom. Nominal interest rates from central banks will be stuck near 0%.
The fall in labor share represents a problem in the social capital of advanced countries. Labor is being excluded from economic development. Their concerns are not being heard, while corporate profits extend to new records. Labor’s wages are expected to fall in order for companies to be more competitive globally.
Stop. Take a moment of silence.
Acknowledge the growing problem of inequality, and return now to celebrate this holiday of Thanksgiving. Within this day exists the answers to our economic concerns. As societies, we only need to share more. And in sharing, we show our respect for the value of people within society.
A man can’t get rich if he takes proper care of his family.
The Navajo, or Diné, have a saying: “A man can’t get rich if he takes proper care of his family.” The wisdom embodied in this saying is immense. The wisdom not only assures the strength of each member of the community by building social capital, but it assures a stronger economy.
Now we need to answer the question: Who is family?
Here comes the true meaning of Thanksgiving: We are all family. The poor, the rich, the uneducated, the educated, the powerful, and the powerless, as well as those of different races and cultures. Families, friends, and strangers are invited into our homes to celebrate Thanksgiving. The abundance is shared and ties of respect are celebrated.
The extent to which a society can see everyone within the society as family determines the potential of their economy and eventually the quality of life. So Thanksgiving is a moment to celebrate how different people can embrace each other in a spirit of sharing. In that sharing, a broader vision of family is cultivated. In that vision, sick economies can be healed.
Featured image ‘Home to Thanksgiving’ litohraph by Currier and Ives (1867). Public domain via Wikimedia Commons
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