Mainstreaming Steady-State Economics (with Pat Choate)

Disrupting the status quo in American politics is a notoriously difficult task, but in the 1990s, the Reform Party did just that. It gave Americans a viable third choice in a rigid two-party system. In this episode, Ph.D. economist and former Reform Party vice-presidential candidate Pat Choate speaks with Brian about the challenges of running a third-party campaign, effective messaging tactics, and how to bring steady state economics to the mainstream.

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Richard Tibbetts  00:01

From the Center for the Advancement of the Steady State Economy, this is The Steady Stater, a podcast dedicated to discussing limits to growth and the steady state economy.

Brian Czech  00:10

Welcome to the show. I'm your host, Brian Czech, and our guest today is Pat Choate, the political economist who is best known as Ross Perot's running mate in the American presidential election of 1996. You will have insights about third party politics, for sure, but we wanted Pat on the show for another reason as well. Pat is one of the rare economists, PhD economists, with a solid and practical background in economic development, who also gets it about limits to growth and the need for a steady state economy. Pat Choate, welcome to The Steady Stater.

Pat Choate  00:59

Brian, great being with you.

Brian Czech  01:03

Well, Pat, let's start with kind of a fun question. Evidently, you hosted a radio show called "The Week Ahead" from 1994 to 1996, and the Pat Choate Show from '97 to 2000. What's the most memorable episode you had from those shows?

Pat Choate  01:22

I'd say the most memorable is, Ross Perot and I did a show together in Wichita, Kansas, about NAFTA, and we had about 300 stations carrying it at the time. We had an audience of about 1000 people. And it was an instance where we actually went over NAFTA and involved people from the audience. And it was truly amazing how well the audience and people understood what was happening with NAFTA. The takeaway for me is that if you'll explain things to people, to the American people, they'll understand it and support it.

Brian Czech  02:11

Excellent. Well, that is a great takeaway. You know, and you've done a lot of explaining to a lot of Americans, you've certainly been a wide-ranging figure in American civil life. By profession, you're an economist, but you've served in think tanks, government agencies, research consortiums and academic faculties. And of course, you ran for VP. So my question is this, Pat: which of these roles have you most enjoyed, and which do you think offer the most traction for advancing the steady state economy?

Pat Choate  02:48

I'd say, my work in government, by and large for 15 years was the most interesting. I worked for the state of Oklahoma, I was Commissioner of Development for the state of Tennessee and worked in Department of Commerce in the Economic Development Administration. I really enjoyed the public service side of it because it was very direct in that work and attempting to develop a couple of states and then I worked extensively in the southern United States to assist those communities to have basic infrastructure, to have good jobs, to be able to prosper and develop. I've also enjoyed, I've done a lot of writing, I've written eight books, and I've enjoyed that. Because, as much as anything in writing a book, it forces the author to really examine your premises and better understand your subject. So I've always said that I got the most out of writing the books because I learned the most because I had to teach myself and examine the work of others. So it's been an interesting career.

Brian Czech  04:13

Well, as I understand it, several of those books are bestsellers. I am familiar with a couple of them. But which one would you say is the most important for our listeners at The Steady Stater podcast?

Pat Choate  04:26

I'd say "America in Ruins" would certainly be one. It was the book that introduced the concept of decaying infrastructure. This is back in 1980, 40 years ago, hard to believe. The second one was a book that just did moderate sales but got great reviews. In 2005, I had a book called Hot Property, and it was about the role of innovation, and of inventors, in creating new concepts, new ideas, new technologies, etc. And if one is really going to have quality growth and growth is just simply unconstrained, that book, I think, really lays out the entire question of how we both can have quality growth, and at the same time, limit some of the destructive behaviors that we now find. You know, one of the things that greatly disturbs me by our growth, and I know it does you as well, is how we're destroying our planet, destroying species, and are on the way to destroying ourselves, destroying the human species. And finding better ways of doing things is a key to that. One of the things that disturbs me greatly is that what we have had is a combination of the governments of Europe and Asia, and transnational corporations, particularly in the high-tech side, have set about weakening the patent systems of the world, and particularly the patent system of the United States. And as a consequence of that, what we find is that individual inventors, which really are the source of a major part of the innovation of the world, are being discouraged. Twenty years ago, individual inventors got almost 20% of all the patents issued in the United States. As we've weakened the patent system and made it more difficult for people to bring new concepts, new technologies, we're down to a point where individual inventors now get barely 4% of all the patents. What what we're doing is just closing down innovation, as such.

Brian Czech  07:30

Yeah, I want to talk a little bit more about "Hot Property" and patent law and stuff a little bit further into the interview, but, you know, we got to ask you about that vice presidential run. I think a lot of our listeners will want to think back to that. And for those that weren't around then, think about it. For starters, what drew you to the Reform Party, and how did you end up as Ross Perot's running mate?

07:57

Well, I have, over my career, held appointed positions in the administration of Richard Nixon, Gerald Ford, and Jimmy Carter. And one of the things that happened, and I've always been a political independent. My appointments were into technical positions for economists. And one of the things that became increasingly clear to me as we went through the late 70s and 80s, is that the political parties were heading towards gridlock, which has only gotten worse, and that there really wasn't the opportunity to do the things that needed to be done, that you had to have something a bit outside of that. I had become acquainted with Ross Perot, when I had done a book called "Agents of Influence" in 1990. And he and I became friends. He ran in 1992 and he asked me to be economic adviser to the campaign. And I did that, and of course he dropped out of the race prematurely. He was ahead of both political parties. And he dropped out of the race, and then he came back into the race and he ultimately got 20% of the vote. He understood that he had made a mistake dropping out. He would have been president if he hadn't dropped out. 

Brian Czech  09:37

Really?

Pat Choate  09:39

I think so. The American people were ready for a fresh face.

Brian Czech  09:44

At what stage did he drop out temporarily?

Pat Choate  09:48

He dropped out in June of 1992, and then he came back. He realized he had made a mistake and then picked it up to run again in 1993. We did a series of things fighting the North American Free Trade Agreement. Basically, we said it'll strip us of a big part of our manufacturing base, we predicted it would cost us about 7 million jobs, and it's just about that number that it has caused us. And so as we came in to the '96 election, we were unable to persuade any prominent Democrat or Republican to join the campaign. And we went to several. We went to Sam Nunn, we went to Marcy Kaptur, and a series of others. But understandably, they didn't want to break from their party. And so he just said, "okay, I'd like for you to do it." And I really did not want to do it, but I did it. If I was asking him to run, how could I say no when he asked me to run? So we did it. And it was a very interesting campaign. We got about 9% of the vote. The two major parties would not have us into the debates. But what did happen is, it provided a really interesting national forum to discuss issues. We were able to get, with a 9%, enough votes to qualify under the Federal Election Commission rules to be designated as a national party and eligible for federal funds for the future. It's the only time that that's happened in US history. I came away from that experience with the realization that a third party really cannot have a chance to win in this country. The state laws are such that it just makes it so difficult to get on the ballot. Ross spent about 135 million bucks in the '92 campaign, I think we spent 35 million in the '96 campaign, which then was a terrific amount of money. Today, it's a very small amount of money for these races.

Brian Czech  12:26

That really resonates about the difficulty about, you know, getting on the ballot with a third party. I remember a fellow trying to persuade me back around 2003 to help create a new political party, very much focused on the principles of steady state economics. You know, the Green Party of the US had a steady state plank, but we felt the Green Party was just stretched too far left on issue after issue to be viable at the polls. So, you know, we thought about this third party. Pat, how difficult is it to establish a political party in the USA that's worth having, and how much work and money does it take?

Pat Choate  13:11

Ross Perot couldn't do it with 130 million dollars. So the question is, is how do you raise the amount of money where it can be done? I concluded it can't. I conclude, at best, what you're going to see as the third party can do probably 20 to 25% of the vote. Ross did almost 20 in 1992, because he was allowed into the debate. In 96, we did a little over 9%, but we were not allowed into the debates. The debate commission, as such, as controlled by the two major parties, [did] not allow any third-party in. The conclusion that I came to out of this is that if one really wishes to do something, you need to burrow into one of the two major parties and be able to change what they do. Donald Trump is a good example of that. He came into the Republican Party, and he's taken over the Republican Party. And if one is going to have a counter action, other than what those two parties stand for, that's the path is to go with an inside a party, build a coalition inside the party and do that. Starting a third party it I just do not think it can't be done. It just takes too much time and money. I gave you another example. Charles Koch of the Koch brothers put money into the Libertarian Party and ran as vice president in 1972 in the Libertarian Party. He exactly the same conclusion.

Brian Czech  15:00

He sure burrowed in.

Pat Choate  15:02

He burrowed into the Republican Party and is a major, the Koch brothers are major influencers inside that party.

Brian Czech  15:13

Yeah, I think that dark money has burrowed into both parties, but especially that one. Well, this is a great conversation and I want to get right back to it. But right now we need to take a short non-commercial break with Rick Tibbetts.

Richard Tibbetts  15:36

Hi there, we hope you're enjoying the show. The 2020 presidential election is over and the question of who won is settled. It's Joe Biden. But many questions still remain about how a Joe Biden administration will affect CASSE and the mission of achieving a steady state economy. To find out about CASSE's hopes, predictions, and recommendations for a Biden administration, check out our newest blog article in the Steady State Herald, where you will also find contact information for how to get in touch with the Biden-Harris team and your elected officials. Simply go to steadystate.org, pan over to the Track button and click "Steady State Herald" in the drop-down menu. Now, back to the show.

Brian Czech  16:18

Pat, you know, as a CASSE signatory, you made what we what we like to call our notables list among the highly accomplished group of dignitaries. You're listed right between Mark Chandler, the famous climate scientist from Columbia University, and David Cobb, the 2004 presidential candidate of the Green Party. So we're kind of back to that point again. It seems like we have a number of politicians who've seen fit to acknowledge the need for a steady state economy, but to date, none of them at the higher levels of the Democratic or Republican Party, at least not among current office holders. What's it going to take to crack into those circles, the two big parties, with some bonafide steady state economics.

Pat Choate  17:09

I think what is really required is to get the ideas down, really simple, where the politicians can take and express it to their constituencies and build their constituencies. I think it requires educating the media on what this is about where they can get it down to epigrams. And then is, just respond to the times that we're in.

Brian Czech  17:45

Those are great answers. Great answers. I think that we have learned the hard way that steady state economy as the alternative to unsustainable growth, we have to simplify the message and repeat it over and over and over again. And you know, some of your work, I would imagine you did a lot of that with the kinds of points you were trying to make as well, like you were you worked with the congressional economic Leadership Institute was that part of the the game there was to simplify and get these messages into soundbite form?

Pat Choate  18:29

It was, and it was also to recognize the dynamics inside the Congress. Most members of Congress are just inundated with requests for information. Most members of Congress will be on one or two committees. And they really have no way to systematically learn about the work in other committees. Now, if you're talking about a steady state economy, you're talking about a whole variety of factors that are involved. And so what we did with the Congressional Economic Leadership Institute was a coalition. We had 200 House members and 12 senators, and one of the things that we would do when Congress was in session, is once a week, generally Wednesday, we would do a lunch and we would have a very well-informed speaker. And we've lined up to 30 to 50 members that vary on [unintelligible] that would come in and have discussions of various issues, the whole range of issues that [unintelligible] the economy. And we invite them and their chief of staff, or them and the staff person that's staffed on issues and we gave them a sandwich, we held the meetings in 45 minutes because they're always busy, and it was a good way to spread ideas. And it was a form in which we always ask the members, "who would you like to hear?" And we'd go out and find those speakers. And so we would wind up with the authors of new books, you know, Tom Friedman. We've had Larry Summers, the Secretary of Treasury. We've had Secretary of Agriculture.

Brian Czech  20:28

What about Herman Daly? Did he ever give a talk there?

Pat Choate  20:33

No, no, did not do that.

Brian Czech  20:38

Did they ever have any topics that bordered, at least, on thinking about or implications, connotations toward limits to growth?

20:49

Oh, absolutely. Absolutely. At all times, you know, a good way to get into the discussion of limits of growth is to talk about innovation. And so many of the techniques and policies that we now use are what one reacts to, with limits of growth? It's the whole question of how do you do more with less? How do you do more better? How do you do things differently? And then how do you find those technologies? One of the things that I'm working on now is with individual small company, and vendors and small companies, define what I call orphan technologies, technologies, that generally don't get attention but can make a difference on the whole questions of limits of growth. Give you an example, is one technology with a little company called the Green Planet Group out in Phoenix, has devised a system of raising vegetables and feed for cattle. A one acre site for one of these units will replace about 600 acres of cropland, produce an organic food that is much better for the cattle, the poultry, sheep, goats, etc., and uses 1% of the amount of water as used in the field. Another technology that another company has created, literally will take diesel and clean it up. It makes diesel green by using hydrogen and an additive that they put into the system. It seems like that no other company has a system to build a netzero house, a house that literally, the frame itself, by using solar, enables them to have net zero.

Brian Czech  23:19

I need to challenge you a little bit at this point here, Pat. You know, everybody wants greater productive efficiency with very few exceptions. We all want that, but on the other hand, and you as a CASSE signatory, we know that you get this. Ultimately sustainability comes down to a matter of scale, and you can never get 100% efficient. There's always waste and in the gross, it seems to get greater, it does get greater with GDP. And you know, the Jevons paradox isn't so paradoxical, macroeconomically because you had to liquidate the natural capital to generate the money to spend on the research and development to get the innovation. So, you know, there there are a lot of great ideas out there, but don't you think we need some central fiscal and monetary policies that go straight to the establishment of a steady state economy with stabilized population and per capita production and consumption, all else equal, as indicated by GDP?

Pat Choate  24:32

Absolutely.

Brian Czech  24:34

Okay, and what are some of the policies that you would propose for that?

Pat Choate  24:39

Well, first of all, let's just talk about population. There seems to be, with all species, some natural level that it comes to and the population slows, where we take a look at the demographics that's happening in the developed countries. As people get healthcare, and as they get education, as they move away from agriculture, the reproductive rate drops and drops and drops. So look at various demographic studies, What it suggests is probably the world population is going to level out at 10 or 11 billion people. Okay, so the first thing is the demography, you hold a steady state on the number of people. Then the question becomes one, how do we have an equitable distribution of the goods? We're setting up under a, we're set up under a system where people get so much psychic income by becoming multi billionaires and that 1/10 of 1% take the product, how do we have a distribution system that is balanced out and equitable for everyone, we'll have health care, housing, food, clothing, opportunity to advance themselves, so you get the equitable to the equity side of the tradeoff between efficiency and equity,

Brian Czech  26:33

That seems reasonable.

Pat Choate  26:36

Then you come to the question of how do you have a stable governance system? Democracy is our system. Other systems do it a different way, as the Chinese do it, as the Japanese do it. The question is, how do you have stability in that? If we can find better ways that doesn't destroy ourselves, destroy Earth, then we come closer to having a steady state economy, and to have a sustainable economy that is in balance with all of the elements. So, we've got to get to housing, that is not polluting, and buildings that are not polluting. We've got to have energy, that is not polluting, not destroying the atmosphere. We've got to have food production that, in itself, can sustain us, but it doesn't use primitive techniques where we're destroying massive amounts of the earth. We've got to have policies for the oceans, where we're not destroying it with chemicals and plastics, etc., where it can revive itself and provide the foods that we need. To me, what we're talking about is achieving harmony and a balance here, so that literally, we do not destroy ourselves.

Brian Czech  28:34

Right. One thing that actually kind of frustrates us a little bit at CASSE is we have all of these organizations and individuals that are focused on any of those scenarios that you just mentioned, you know, oceanic pollution, plastic pollution, greenhouse gas, and so on that but hardly any, connect all those dots back to the goal of GDP growth. And so we feel that the first order of business is to get that macroeconomic goal right to start with, and then seek to get the right kind of housing and, you know, the most efficient methods and so on. But, you know, at some point, the monetary policy comes into the picture here, too. And here's a question for you: How much control does the federal government really have over the Federal Reserve System?

Pat Choate  29:33

None. Not really, virtually none. Federal Reserve system operates truly independently, and it operates globally. Our Federal Reserve is the leader of the world. In this it takes that responsibility to try to balance out among all economies, that's why it's given the privilege of being the reserve currency for the world. When you take a look at that balancing out economy, just you take a look at the levers that you have. One lever is fiscal policy, as you mentioned. The second is monetary policy. A third one is exchange rate policy. A fourth one is trade policy. And the fifth one is innovation policy. So, you've really got five levers. It is how, how do you balance those levers out to get the GDP you want? How do you set it out with the trade policies where it's distributed around the world where all people are allowed to come along with it? On the innovation policy: How do you set policies to introduce new innovations, improvements into the economy? How do you protect them? How do you advance them? How do you distribute them? At the present point on fiscal policy, is just simply unbounded. On our monetary policy, we're in a situation where we're putting massive amounts of money to keep from growing into a depression as happened in 1929 and 1930. Our trade policy is basically under a change right now is we see that the mistakes that we've made with the World Trade Organization, and that the US has been truly arrogant along with the British, of trying to impose the Anglo-American trade model on the rest of the world that doesn't want it. You wind up with the whole question of innovation policy. We've gutted our patent laws so that big tech and major corporations literally can take or steal anything that individual inventors, small companies don't have the protections that they did 20 years ago. So we're setting policy mismatch here. And we need some North Stars, we need some stars. Yeah, once those policies can be realigned.

Brian Czech  32:27

Yeah, well, we're going to want your advice. You know, our legislative project for the long-term is to fully amend the Full Employment and Balanced Growth Act of 1978. and convert that into the Full and Sustainable Employment Act or the Full Seas Act, we like to call it. And so, we'll be getting back with you on that. But finally, Pat, I want to ask, what are your plans for the future? Do you ever plan to get back into politics?

Pat Choate  33:00

No, I don't. I tend to be advocating public policies. I am working with inventors. I'm interested in water, clean water. I'm interested in clean energy. I'm interested in efficient houses, and I'm interested in food is how do we have a sustainable food supply for the rest of the world? How do we develop agriculture with things like shrimp and mussels and tilapia and other fishes, that is safe, that's clean, that's plentiful, that's low cost? How do we clean up energy or diesel or natural gas and [unintelligible]? We can't do it with wind and solar. Other things, other technologies? How do we do that? About a third of our pollution comes from heating buildings. How do we make our buildings more efficient? How do we literally have self-sustaining buildings, as such? So those are the things I'm working on. That's working well. Then there's raising money, trying to put together projects and to the extent that I do anything politically, it'll be working with you and others.

Brian Czech  34:36

Well, Pat, that sounds like a really worthwhile lineup of projects. And yeah, we do look forward to working with you on those and I just want to thank you so much for the fascinating conversation this morning, and for the tips on advancing the steady state economy in American politics. We'd love to have you on again in 2021. Maybe for a discussion of The Biden cabinet selections. 

Pat Choate  35:03

Brian, I'd love to do it. I've enjoyed our chat and the work you're doing on the steady state economy. Keep at it.

Brian Czech  35:11

All right. Well, thank you so much. Well, folks, that about wraps her up. We've been talking with Pat Choate, the PhD economist who appeared on the ballot with Ross Perot in 1996. When we reflect on today's episode, I think we can take some encouragement that there are many ways and means by which to advance the steady state economy in American politics at the national level. With that, I'm Brian Czech and you've been listening to The Steady Stater podcast. See you next time.