Category: Uncategorized

Transparent Trojan Horse – Part 2

In Part 1, we confronted the uncomfortable reality that unequal societies like ours do not, unfortunately, fix themselves gradually or peacefully. Instead, conditions ossify and then worsen, until one of the Four Horsemen of violent upheaval comes galloping along to level the socioeconomic landscape. So at the very moment when we need maximum flexibility to confront the looming spectres of climate change, ecological devastation, and the implosion of American-style capitalism, we are faced with seemingly-intractable barriers to meaningful change.

So what to do? Where do we point our energies, our activisms, and our politics? If the walls that protect the powerful and, more importantly, power itself, are so high and impenetrable, are we wasting our time mobilizing for things like universal heath care, free college, free day care, constitutional amendments de-personalizing corporations, etc.?

Well, yes and no. The long list of progressive causes and sentiments is undoubtedly noble. But progressive policies are always embedded in a framework of redistributive confrontation, and thus run smack into the strongest reality of the system itself: its immunity to change. Again, to bring Walter Scheidel’s quasi-tautology back to mind, the very existence of massive inequality is itself the testament to the system’s breadth, complexity, and long-standing ability to deflect or absorb reform.

In short, we’re not going to go through or over the walls that protect asymmetric power. Instead, we will need to be invited into the inner camp, in broad daylight, openly smuggling in something that has the potential to bring down the system from the inside. We need something that the establishment, or at least a good part of it, will see as a wonderful gift. This will be something that the powerful acknowledge as a slight threat, but which they also believe can be easily co-opted for the extension of their dominance. But the friendly invader will prove them wrong. Because once loosed, this thing will quickly spread, kudzu-like, giving rise to multiple channels of meaningful change. What is this potential table-turner?

The Transparent Trojan Horse – Universal Basic Income

At this point, most people will have heard something about UBI or, as it is sometimes known, BIG (basic income guarantee). Andrew Yang is currently making UBI, branded as a “Freedom Dividend,” the centerpiece of his 2020 presidential run. It is an old idea, originally floated in America by none other than Thomas Paine. It is an idea that both liberals and conservatives have supported, for different ideological reasons. Milton Friedman and Charles Murray see it as a replacement for all other government “entitlements.” Martin Luther King, Jr., toward the end of his life, pivoted to UBI as the best hope for completing the Civil Rights Movement, something that would give it true economic teeth. Andy Stern, the former head of the Service Employees International Union, changed his mind on the realistic possibility of re-invigorating labor unions as an engine of change, opting instead for UBI as a better option.

But whatever its particular flavor, the general idea behind UBI is this: every adult citizen would receive money from the government, usually in the neighborhood of $1000 a month. It would not be means-tested, so millionaires and billionaires would also get it. And while not replacing all other social insurance programs, it would eventually eliminate the need for programs like unemployment insurance, food stamps, and potentially Social Security. The exact details do not need to be belabored at this point. Suffice it to say that it has the potential, because it is universal (and digital), to be logistically simple, with limited need for bureaucratic scaffolding.

For our discussion here, the most important thing is that UBI is something that the powerful should welcome with open arms. Wait, what? Why would the Establishment, which is so resistant to universal healthcare, living wages, and free college, give the green light to free money for everyone, including the rich and the lazy? Isn’t UBI the most liberal of all liberal fantasies, the most entitled of all entitlements? Why would any mainstream politician or business leader get behind such a ridiculous thing?

Well, there certainly would be ample resistance to UBI, especially amongst Conservatives and some financial companies. After all, much of the finance industry thrives on money being kept artificially scarce, so that it can be lent back to impoverished workers at interest. But a large portion of the establishment should actually be whole-heartedly in favor of UBI. Any business that actually sells things to people, as opposed to lending money, should be 100% behind any scheme that puts more money into consumers’ hands. This is the battle that has to be won inside the halls of power. Businesses that sell things have to shout down the businesses that lend money. It will obviously be a tough fight, but it can be won, and the tides of public opinion are actually turning, ever so slightly, in the direction of implementing a UBI. After all, Alaska already does it (at a smaller scale). So there’s that.

But the really interesting part is the potential for UBI to change the entire landscape of our economics and politics, once it is implemented. First of all, it would be fast. Despite the massive price tag (more on that later) and sheer breadth of the program, it would actually be fairly easy, bureaucratically, to get in place. And once in place, money would flow quickly, directly to people for immediate spending. Almost overnight, you’re looking at a massive increase in consumer demand, as well as an unprecedented platform for improving the mental, physical, and economic health of regular people.

What makes UBI so unique is that it is not funneled through the systems of business and employment. Almost every other policy program, liberal or conservative, is geared toward either long-term, gradual ‘improvement’ of people, to make them more attractive to businesses as employees, or toward improving the conditions for businesses themselves, so that they will hire more people. There are obviously exceptions. Universal health care is something that is viewed by liberals as a fundamental right (although even there, some of the arguments emphasize that it would free up businesses to pay their employees more by not being saddled with health care costs). But in general, our mainstream policy proposals are all designed to work within the long timeline of bettering our selves and our business climate, with the individual career as the magical, moral linchpin.

UBI isn’t like that. UBI cuts the slow, business-climate piece out of the equation, and just gives money to people. That money then flows immediately into the market place, sending all of the appropriate signals for production and consumption. There is no waiting for our workers to get more ‘productive,’ or for our corporate tax policies to bring all of those jobs ‘back’ from somewhere, or for deregulation to magically make businesses build a million new factories with high-wage jobs for all. None of those things are going to happen anyway, and UBI just cuts out all the bullshit and gives people what they need: cash.

What is Work For?

If we can get the UBI Transparent Trojan Horse inside the ramparts of power, there are some even-more-important ideological shifts that needs to happen, changes in public philosophy that would not be possible without UBI paving the way. One part of this shift is a change to a Modern Money Theory understanding of taxation, government spending, and money itself. And the other crucial piece is wholesale change in our understanding of what work is for, and how it relates to money, government, and economic production.

Let’s take the latter topic first: labor. As some of my earlier posts highlight (here, here), the most fundamental socioeconomic fact of our age is the irreversible decline of labor value. And we are absolutely unwilling to talk about it, at least in mainstream discourse. I won’t hash out everything again here. You can check out my earlier posts, as well as the crucial works by James Livingston, Tim Dunlop, Martin Ford, and Andrew Yang. Long story short is that deep-rooted trends in technology, business management, finance, international trade, supply-chain logistics, and legal infrastructure have consistently eroded the economic value of human skill and labor, over the last four decades. And those trends will not be reversed, meaning that work can no longer bear the economic, social, and moral weight with which it has been freighted since Martin Luther’s idea of a worldly “calling” spawned the Protestant Work Ethic.

For a society like ours, which thrives on work as its core organizational principle, this is bad news. As Tim Dunlop puts it best, in “Why The Future is Workless”:

“Postwork is first and foremost built on the idea of challenging the concept of a work ethic, that form of silent coercion that normalizes and lionizes the work for its own sake. The work ethic is the golden thread that connects and integrates the worldview of the left and the right and allows them to merge, however antagonistically, in the eternal neoliberal present. A long as all sides of politics bow down before the concept of work and insist that all reward must be predicated on the contribution we make to society via a paying job, we will continue to create societies of massive inequality that use work not just as a way of creating wealth but of controlling populations in the interests of an increasingly detached elite. In a society where full-time jobs that can support human thriving across a lifetime are increasingly scarce, and where a diminishing fraction of the workforce can create all that we need in order to live, the demand to work is little more than a demand to control. It is driven less by any rational need to produce stuff than by an ingrained fear that people freed from the demands of a job will become unmanageable. Ungovernable. The work ethic – where work is understood primarily as a paying job – in a world without work, or with less work than there are people, is nothing but a tool of oppression.”    

Put another way, when the economic value of labor declines, the meaning of money itself is fundamentally changed. If work is less valuable to the production process, then there is no need to compel full employment by keeping money artificially scarce. Labor compelled by artificial money-scarcity is only needed if the natural world, in which all economies are embedded, is seen as a hard, withholding, punishing place. That is not our situation any more. In fact, it is now almost precisely opposite: human economic systems have become abundantly powerful, and it is the natural world that has been shoved to its knees. In our current context, continued emphasis on maximum work, maximum production, and maximum economic growth is beyond crazy. It is suicidal.

UBI is the best hope for an immediate challenge to the work ethic. Once a functioning UBI is in place, it will quickly become evident that giving people money is not a moral or economic disaster. All of the studies on limited basic income schemes have consistently shown these outcomes: people may work a little bit less, mostly to spend more time with their families; people’s mental and physical health improves dramatically; people feel freer to take entrepreneurial risks on new businesses; people tend to quit more degrading jobs, in favor of more volunteering, more charity-work, and instead assume part-time positions that might pay less but are more morally or spiritually rewarding. And while it might seem plausible that giving free money to people would just make them waste it all on frivolous consumption, the reality is that people use the money wisely, to pay down debt, create college funds for their children, make improvements to their homes, and to generally improve their overall economic health.

UBI would enable a pivot from the moral primacy of work to that of consumption. As James Livington compellingly argues in “Against Thrift,” a blind devotion to maximum work is not actually frugal or conservative, if the main economic manifestation of that devotion is the accrual of more money at the very top of the system. And an open commitment to the moral value of consumption is not intrinsically wasteful or environmentally-harmful. He stresses that consumption is an immediate, empowering, and profoundly equalizing force, that can be leveraged for progressive, just, and sustainable ends.

UBI would demonstrate that moral superiority of consumption, as all of the evidence from limited trials indicates. I am convinced that people would not become lazy, over consuming, decadent assholes. Rather, I believe that these things would happen: people would begin repopulating the abandoned and semi-abandoned rural areas, small towns, and small cities, because of the long-term economic security afforded by UBI; the coastal areas and overheated cities would thus begin to thin out a bit, taking some of the inflationary pressures off of these sprawling conurbations; communities would have substantially-boosted economic resources to begin rebuilding critical infrastructure, but in ways that are less transportation-centric, since spending power would be more territorially-dispersed; overall employment would go down, but in a positive way, since there would be no desperate need for people to earn money in whatever way possible; younger people, who are already used to collective activity by necessity, would begin constructing much different physical and social realities than the traditional nuclear family, suburban sprawl shitscapes that currently dominate.

In a best-case scenario, UBI would allow a wholesale move away from seeing everything through the lens of business and employment. The federal government would cease to be just an economic midwife, where its only true mission is to make the business climate as friendly as possible, in the hopes that the public good will happen as a benign afterthought. Instead, by de-sacralizing work and putting money into regular people’s hands, the government would transform its primary mission into one of directly improving the lives of its citizens. The marketplace would then be the receptacle of that expanded public well-being, instead of being its conduit.

What is Money?

The other major transition that UBI would open up, and the most important one, involves our understanding of what money has become in a world where labor does not need to be compelled, and where continued emphasis on economic growth will squeeze the last breaths our of our strangling planet. It is here that Modern Money Theory needs to take center stage. Without Modern Money Theory, UBI will be self-sabotaging, because there will always be the nagging question: “how do we pay for it?”

The basic ideas behind MMT are shockingly simple, yet head-swimmingly profound. The easiest way in is to start with the conventional description of the federal budget, spending, and taxes. The perception amongst both regular people and our most-powerful politicians alike is that the federal government is just like a household. It can’t spend what it doesn’t take in. In the case of a household (or a business, or local government, or even state government), money must first come in the door if you want to spend it. People work for their salaries, businesses have to sell stuff, and local governments have to levy taxes to pay for services. You can run some debt for a while, but you eventually have to balance your checkbook, pay down your loans, and keep the books in the black. So the federal government must be the same, right? Wrong. A thousand times wrong.

Individuals, households, businesses, and local/state governments are all currency users. They do not create the money by which they run their economic affairs, so they need to have some semblance of balance in their financial inflows and outflows. The federal government, by contrast, is the currency issuer (for countries that have their own currency). Money is created by the government to accomplish various purposes within its sphere of power. As such, there is no way for a government to ‘run out of money.’ A country that issues its own currency can thus never ‘go broke.’ It can always afford to spend whatever is needed, on whatever is needed, in its own currency. All hard limits limits on federal spending and ‘debt’ are arbitrary and self-imposed.

Well, wait a minute. What about the national debt? I thought we were $22 trillion in hock to China, and our children and grandchildren are going to have to eat twigs for 100 years to pay it all back? And what about our budget deficits, where we’re recklessly spending more than we take in via taxes, like a teenager with their parents’ credit card (Venmo?) while they’re out of town? Certainly we can’t just keep spending! The chickens are coming back at some point, right?

Not really. The ‘national debt’ is simply the result of a political choice in how to run our economy. It represents money that has been spent by the government, but not taxed back as yet (see here for a good quick capsule). And then, the federal government sells treasury bills to enmesh a wide array of business, financial and international entities into our currency. The national debt is all denominated in US dollars, and it all sits in interest-bearing accounts at the Fed. If China decides to suddenly pull all of their money out (which it couldn’t really do suddenly, as instruments mature at different times), it just gets moved to non-interest bearing accounts, also at the Fed, also denominated in US dollars. China can’t cash in their treasury bills to get gold, or Chinese yuan, or pork bellies. Yes, they have a ton of US dollars, but they will then have to buy stuff that is for sale in US dollars.

And here is the one that will really blow your mind. Taxes paid to the federal government don’t actually ‘pay’ for anything. At lower political levels, yes, taxes pay for things, because local and state governments are, as we remember, currency users. As the currency issuer, the federal government doesn’t need tax money to pay for things. If federal taxes were needed to pay for things, wouldn’t our country have puffed into ash by now, since we have only had budget surpluses in four of the last fifty years? We haven’t so something else must be ‘paying’ for stuff.

Then what are federal taxes for? If they don’t really pay for anything, why do we have them at all? Well, the first answer is that taxes drive the currency itself, establishing the economic boundaries of our national system. If individuals and businesses did not need to pay taxes in US dollars, then the currency itself would quickly become useless. Powerful private entities would begin using their leverage to demand payment in Google Dollars, or Apple Dollars, or 99 Restaurant Dollars. Without a need for US dollars to pay taxes, a panoply of private scrip would emerge, and political entities would begin to totter. Taxes, however, basically coerce participation in the federal economy, which then establishes the solid, unified political entity we call a nation. Secondly, federal taxes are used to heat or cool the economy, keeping inflation under control and stabilizing the currency. Ideally, federal taxes are countercyclical, increasing in booms and decreasing in crunches. And finally, taxes can be used to accomplish certain sociopolitical goals, which can be progressive or conservative. Taxes can be used to redistribute wealth, to discourage pollution, to create regional and national infrastructure, to reward maximum financial speculation, etc. But in no sense is the federal government bound by the same rules that dictate how Auntie Celia balances her checkbook at the end of every month. Taxes are not needed first in order for the government to spend afterward.

Another way to think about it is this. Our current establishment portrays the economy and money as independent, mystical entities that must be assuaged, so that the fickle Invisible Hand will bring its alchemical touch to the hard-working and the virtuous. In this scheme, all we have to do is just leave the economic system alone, to allow abstract things like growth and productivity to happen to us. The ideal role of government is to simply be a midwife to the business process. Even the most progressive politicians, who want the most activist government policies possible, still see the overall program as something that will jump start the independent economic engines of growth.

But Modern Money Theory demonstrates that there is nothing mystical about money. It is a political entity through and through, from the moment of its inception. It just so happens that, unfortunately, the monetary power of the US government is currently being used to fulfill the desires of a fairly small subset of American citizens. Government policy rewards speculation, rent-seeking, inequality, labor devaluation, etc. MMT demystifies the realms of money and federal spending, and opens up a whole new way of seeing exactly how the mechanics of our currency could be turned to different political ends.

Breathless Ending

OK, we’ve traversed a lot of ground. So here’s the quick recap:

  • The 3-headed monster of climate change, ecological collapse and imploding American-style capitalism is salivating just outside our door
  • Rapid and significant social change is desperately needed to address these crises
  • Unfortunately, unequal societies like ours do not fix themselves, without massive and violent upheavals
  • To prevent such a situation, Universal Basic Income must be injected into our sociopolitical system right away, in full view of the gatekeepers of power
  • Once established, UBI would quickly bring an end to the fetishistic work ethic and the antiquated money-scarcity model
  • Two crucial spinoffs would be enabled by UBI: Modern Money Theory, which would allow us to take political control of our currency for the common good, and a reengineering of the world of work, to allow non-labor-centric models of citizenship and personhood to flower
  • Armed with these new tools, and with the popular economic might that UBI spawns, we would finally be able to tackle our most pressing problems of all: how to reconnect with our neighbors, with our natural world, and with our own psyches
  • If we can somehow pull this off (hopefully within a wider global collaboration), then the next successful societies should look like this: decentralized but compact; physically sedentary but digitally globetrotting; less formalized labor but more hard work at worthwhile things; less lonely and more connected; open-minded but fiercely loyal to local community and tradition; scientifically curious but newly-open to a spiritual understanding of our place in the world.

May it come to pass, I hope.

WORKS TO CHECK OUT:

Dunlop, Tim. Why the Future is Workless

Ford, Martin. Rise of the Robots

Livingston, James. Against Thrift

Livingston, James. No More Work

Lowrey, Annie. Give People Money

Mason, Paul. PostCapitalism

Scheidel, Walter, The Great Leveler

Stern, Andy. Raising the Floor

Yang, Andrew. The War on Normal People

 

(Cover art courtesy of Steve Gaul – visit http://www.SGaulArt.com)

 

 

 

Transparent Trojan Horse – Part 1

The trouble with the eagerness to make a world is that, because the world is already made, what is there must first be destroyed.  –  Paul Shepard, ‘Nature & Madness’

Modern industrial societies have three fundamental features: they are stupendously successful, stupendously destructive, and stupendously unequal. It is the last facet, inequality, which prevents any meaningful action to mitigate the destruction or redefine success.

Inequality, like many other social ills, is often described as “systemic.” But what does that actually mean? Usually, I think, people are trying to say that systemic problems are deeply-entrenched, historically long-tailed and not easily solved by quick fixes and platitudes. Exactly so, kind of. There is also an implication that there are a lot of people to blame for systemic woes: people not just of the present, but of the recent and distant past.

But a more helpful interpretation of systemic inequality is this: it is actually no one’s fault. In this sense, ‘systemic’ means the accretion of decades, even centuries, of wide-ranging changes in the material world, broadly considered. Social reality and social change are not the accumulated sands of individual actions, which can be swept away with the robed sleeves of justice and progress. A huge systemic thing like inequality is the product of long, multi-channelled evolution in technology, finance, international trade law, corporate organization, mass communication, supply-chain logistics, legal contours of ownership, etc.

Unfortunately, this hefty, depersonalized understanding of inequality also means something else: it is immune to change, except of the catastrophic sort. In his recent and vital book, The Great Leveler, Walter Scheidel, a historian at Stanford, had the unenviable task of reminding us that highly unequal societies do not, in fact, fix themselves gradually. Instead, they are always done in by one of more of the Four Horsemen of violent leveling: mass mobilization warfare, transformative revolution, state failure, and lethal pandemics.

And it makes sense that unequal societies don’t fix themselves in an orderly fashion. The same powerful forces that have created the inequality in the first place are still there, guarding the gates against any and all benign efforts at change. It’s really a reverse-Panglossian tautology: if gradual change could have happened, it would have happened already. The continued and worsening existence of inequality is itself the confirmation of its intractability.

So that’s where we are. Modern industrial societies around the world, regardless of their particular political stripe, are becoming more rigidly unequal, at the exact time when we desperately need monumental change to confront another raiding party of galloping collapse agents: global climate change, mass species extinction, and capitalism’s self-immolation. In a recent piece, Umair Haque describes it thusly:

“We have just one decade left. Just one decade in my estimation, to begin undoing those three existential threats. They aren’t existential threats in the cartoon sense — “the end of humanity!”. They’re existential threats in a real one, a genuinely dangerous one. They will take a world of peace and progress with them. They will reduce human civilization to charred ashes. They will lead to a new Dark Age.”

Is there any escape from Scheidel’s bind? Is there any way to not have our national experiment come to another violent inflection point? How can we overcome the defensive forces that have created our predicament in the first place, the inequality that prevents us from tackling the much larger issues of ecological and socioeconomic collapse?

Solutions to big problems like this are normally conceived to be the stuff of politics and governance, which, in our current situation, is a pretty grim prospect. As highlighted in previous blog posts, our political machinery is extremely successful at just a few things: maintaining power for the who already have it, providing ideological cover for the lack of help for regular people, and perpetuating a comfortable kabuki set for partisan blame-mongering, which conveniently kicks the can down the road, as we wait for the future to bring promised things that will never arrive.

What politics cannot do, as the US has already found out (and as everyone else will soon), is consistently and aggressively redistribute massive wealth and income from the top to the bottom. This is just not going to happen. Again, looking through our reverse-Pangloss glasses, we can see that the massive power imbalances are still there; and the powerful will always find economic, ideological, legal, and political stratagems to keep the fortress intact. There will be no overcoming of, or sneaking past, the guardians of privileged inertia.

Instead, what is needed is a mortal threat to the system that is somehow embraced by the powerful as a boon. Something that will be welcomed inside the ramparts, but which will then quickly bring them down. And this Something needs to be delivered in full sunlight.

(Cover art courtesy of Steve Gaul – visit http://www.SGaulArt.com)

 

The Cerberus of Surplus Capital

“It is the nature of a new idea to confound current consensus.”

William H. Whyte, Jr.

In the previous post, we looked at the most daunting socioeconomic issue facing us today: the decline of labor value. Looking beyond a simple statistic like the unemployment rate, we can see the inescapable reality that technology, and the myriad systemic offshoots enabled by technology, will continue to reduce the economic value of human skill and effort. This is not to say that work is unimportant or unneeded, even economically speaking. Jobs will always be necessary, lots of them. It is just that the monetary value of labor as a component of the overall economic pie will continue to shrink, both in the US and globally. And similarly, the actual amount of labor needed to sustain reasonable economic growth will also decline. In short, it should not be controversial that decade after decade of labor-saving technology has resulted in – surprise, surprise – a reduced need for labor.

In a vacuum, this reduced need for labor is fantastic. If less work is needed to produce the same amount of stuff, then we could all be kicking back on the couch after putting in a couple leisurely morning hours at the job, waiting for the robot bartender/butler to wheel in an afternoon mojito. A growing economy that needs less labor input is the dream support structure for all manner of social betterment: shorter work weeks, more time with family and friends, more space for individual entrepreneurial activity, more resources freed up for charitable activity, more time for people to pursue education, artistic expression, travel, etc.

But in our culture, an American culture that venerates work above all else, the decline of labor value is a disaster. As Hannah Arendt observes, “What we are confronted with is the prospect of a society of laborers without labor, that is, without the only activity left to them. Surely, nothing could be worse.” We have spent the better part of two and a half centuries pushing all of our moral chips into the pot, betting on work as the best and only true way to build people, communities, and the nation. And now that this bet is coming up a loser, we are panicked.

Politically, we are painted into a corner. Both of the major parties still see Full Employment as the only road to salvation, albeit in different ways (the trickle-down path vs. the bubbling spring from below). But as economic reality continues to preclude these hopes for labor rejuvenation, each side must become more strident and extreme in its demonization of the opponent, as that is the only way to preserve some measure of credibility amidst the continuing slow-motion wreckage.

So what has to happen, many say, is a meeting in the common-sense middle. We need more cooperation and less extremism, so that we can find common ground and move forward. We just require some true stateswomen and statesmen, people who will reach across the aisle to unify us on some shared idea of a better future.

Sounds great, but the problem is that both sides of our current political system still exist on the same spectrum regarding labor, one that espouses Full Employment as the linchpin of national improvement. Any meeting in the middle is still going to involve an antiquated and dead-end understanding of economic production, labor value, and modern money. Even if we see a major shift towards bipartisan cooperation and legislative boldness (an unlikely development, but we’ll grant the point for argument’s sake), our mainstream politicians will still be trying to force everything through the funnel of full employment, which basically involves improving our citizens to meet the needs of business. But the business world has already spoken on the subject, and the decline of labor value itself is its declaration. Any legislative activism vis-à-vis the labor market (tax breaks for reshoring jobs, raising minimum wages, scale-tipping for labor union formation, tax holidays for repatriating overseas profits) is basically trying to force business to artificially overvalue labor again, just to preserve our national tunnel vision on the moral and economic worth of work.

From this perspective, it is not surprising that our national leaders in Washington are so ineffective at creating real change to help regular people, especially when it comes to jobs, wages, and basic economic security. Both sides are working off obsolete talking points and stale ideas, tropes that are more suited to the age of the gold standard and lifelong pensions. What is needed is not a meeting in the middle of this arid, scratchy ground. An entirely new set of ideas is necessary, one that acknowledges the realities of work, money, government, business, and overall economic health.

Power and Change

The problem with fomenting real change is, of course, that those in power will not want it. The current system works quite well for a small segment at the top, and those who reap the rewards of the status quo are not about to hand over the keys to those who would dismantle their advantage.

But so what?, the struggling change agent says. We just need to preach the message and fight the good fight, and the gathering winds of popular unrest will turn the tide against the powerful. The activist inclination, especially on the progressive side, is to believe that, because our present injustices are politically created, they can also be politically undone. But this is not the case. The complex, interlocked substructure of power is not just, or even primarily, political. The ascension of a small segment of controlling elites is the result of decades of development in many areas: technological change, the evolution of finance, changes in corporate governance and organization, trends in legal thought about property and ownership, consolidation of mass communication, etc. All of these long-term, algorithmic currents of change cannot be undone by winning a few elections and passing some landmark legislation. They run too deep.

In short, while the gross inequalities of our present situation feel villainous, they are not. They are structural and, like most important public things, economic. Today’s lopsided constellation of the haves and the have-little-or-nothings is a by-product of the victory of technology itself over the “production problem” of capitalism. When the ratios of labor, production, and profit cross a certain threshold, where businesses do not need to reinvest all profits back into themselves in order to grow, the result is surplus capital, which then goes in search of new ways to multiply (see James Livingston’s “Against Thrift” for the full discussion).

Surplus capital, in search of outlet, reaches for a few different dinner trays. Most obviously, it goes for speculation, fueling all manner of bubble with the breath of irrational exuberance. As Livingston notes, the production problem was solved in 1919 in the US, and surplus capital has been inflating stock and resource markets ever since. But surplus capital also allows the business sector to hedge its bets on the vagaries of competition, and it does this by purchasing governments, so that laws and regulations can be written to favor the already-flush. And to justify and explain the purchase of government, surplus capital captures old mass communication organs, as well as creating new ones.

Think of it this way: the Cerberus of surplus capital (speculative finance, the purchase of government, and the capture of public discourse) is not evidence of evil, despite my hellish canine metaphor. Rather, it is simply the way that post-scarcity capitalism manifests itself after the production problem has been solved. The situation is structural, and cannot just be undone, because the underlying relationships between technology, labor, production, and profit will not revert to some older state of reality. All of the factors that have been creating surplus capital for the last 100 years are still in place, and they are not going anywhere.

So we have an economic system that will continue to produce surplus capital, and that capital will continue to create huge power imbalances between the few and the many. And the whole thing is virtually impregnable, because of the wholesale purchase of government, the bloating of the financial sector, and the control of media.

So what to do? There are really only two approaches: redistribution after the fact, or predistribution before the fact. Redistribution will always prove impossible in the long run, because of the self-recreating nature of structural power, detailed above. So predistribution is the only option. And while it sounds like a nice, neat counterpart to redistribution, it is anything but. Predistribution is a complex beast, as it includes a package of unorthodox ideas with a seemingly-impossible task: dismantling the scaffolding of unequal structural power, while being palatable to that very structure itself. In short, we’re looking for a way to get the powerful to willingly choose the form of their own semi-destruction, a socioeconomic Stay-Puft Marshmallow Man.

 

Something Ain’t Workin’

 

The modern age has carried with it a theoretical glorification of labor, and has resulted in a factual transformation of the whole of society into a laboring society…. It is a society of laborers which is about to be liberated from the fetters of labor, and this society does no longer know of those other higher and more meaningful activities for the sake of which this freedom would deserve to be won…

What we are confronted with is the prospect of a society of laborers without labor, that is, without the only activity left to them. Surely, nothing could be worse.

Hannah Arendt (The Human Condition, 1958)

In the last few posts, we have been looking at the stalemate created by the Divided America complex. We have seen that narratives have emerged to appease the masses, narratives that must become more volatile and confrontational through time, as they do not lead to the actual bettering of economic conditions for regular citizens. As things deteriorate, scapegoating and finger-pointing intensify, and the total political annihilation of the other side is held out as the only hope for a return to American greatness. But since total and enduring political and cultural victory is impossible, and because the offered conservative and liberal utopias are so grand in their scope, fulfillment is always deferred, conveniently delayed until that point when only the ideologically pure have their thumbs on the levers of power.

This endless deferment of fulfillment is fundamentally rooted in the shared project of both liberals and conservatives: the restoration of full employment. Jobs, jobs, jobs – who could want anything else, right? Politicians and economists from across the spectrum all want roughly the same thing: well-paid, secure, meaningful, and productive work. The details differ, certainly. From the right, jobs are seen as flowing from private investment; and if government would just step out of the way (stop rewarding freeloaders, mostly), then the entrepreneurially driven jobs of yore would come back with gusto. From the left, jobs also come primarily from the private sector. But there is an additional requirement that government construct a robust supporting infrastructure: anti-discriminations laws, equal pay laws, minimum wage laws, pro-union laws, job training programs, etc. Despite these different points of emphasis between the right and left, all roads for social improvement still lead back to the main thoroughfare of paid employment for all.

But there is a problem here, a big one, and it is one that we have just not been willing to face. Plainly stated, the problem is that the economic value of human labor is declining, and will continue to do so, inexorably. Depending on how we respond to this iron clad axiom, we could be looking at the most disastrous development in modern industrial history, or we could be opening the door to a dazzling reshaping of individual daily life and of the entire socioeconomic infrastructure.

Politically, it will become increasingly impossible to run party platforms through the lens of full employment, because no amount of job re-training programs, corporate tax cuts, minimum wage hikes, or union rejuvenation efforts can change the deep, underlying algorithms of declining labor value vis-à-vis economic production. These trends are long-term, widespread, global, and irreversible; and if we keep swimming against these currents, we are consigning our future to continued economic inertia and the resulting cultural volatility. But if we can somehow lean into the skid, there is still some hope.

The End of Work

What are we talking about when we observe that there is a decline in labor value? Simply put, it means that the monetary worth of the human skills component of the economic pie is shrinking, for a variety of reasons, mostly driven by technology. But technological unemployment (a robot will get my job) is not the only manifestation of declining labor value.

I won’t belabor (sorry) the issue of the decline of work here, as there are other pieces of the puzzle I want to get to, and there are many others who have made the case far better than I ever could. Suffice it to say, there are a whole range of long-term trends that prove the point of declining labor value: stagnant wages, declining labor share of GDP, declining labor force participation, increased inequality in wealth, declining job creation rates, increased long-term unemployment, increased underemployment (people working part-time who want full-time), increased temp and contingent labor (think ‘gig’ jobs), job polarization, lower wages for recent college grads, and so on. Martin Ford calls these developments the “Seven Deadly Trends,” and there are certainly a few more. I would encourage everyone to read the works listed at the end of this post, as they are crucial in understanding what is driving the global labor landscape. For our purposes here, it is enough to note that these trends are long developing, global, and irreversible.

So if this is the case, if labor value is truly on a downward slope with no end in sight, why is “jobs, jobs, jobs” the only political lyric we hear? Why are we still satisfied with the endless deferment of dreams served up by our main conservative and liberal narratives? Why are we content to wait for job retraining, or wider college availability, or better pre-school, or rejuvenated labor unions, or trickle-down job creation, or tariffs that bring back beloved heavy industry, or tax haven magic that re-shores billions and restores US jobs? All of these hoped-for dreams push help for regular people out many years, perhaps generations.

Well, the short answer is that most people are really not content to wait for these developments, and that is why we see so much political disgust and disillusionment. And even beyond that, I firmly believe that much of our free-floating rage, especially the male variety that is so frequently on display in mass and chronic murders, is traceable to the collapse of stable, reliable employment, which is then filtered through failed households, decimated communities, and the ballooning drug/crime/addiction landscape.

But in a more abstract sense, we have been somewhat able to ignore the decline of labor value by hiding it, mostly via the expansion of the state, the addition of breadwinners inside the household (i.e., women entering the workforce), and by the growth of personal debt. As James Livingston notes, ‘entitlements’ now make up 20% of all household income, supplementing a squishy core of regular wage compensation. Declining individual wages have been obscured by putting more emphasis on ‘household income,’ even though those households now have to include a lot more overall labor time just to keep afloat. And while household debt is lower than it was during the 2008 recession, it is still at an uncomfortably high level, especially considering that student loan debt is now larger than credit card debt, just as salaries are cratering for recent college grads.

The Labor Market

To get a little more abstract still, we need to think about jobs in their wider economic setting: the labor market. And we need to look at what the labor market is supposed to do, historically, versus what it is actually doing now. Following Livingston again, what we see today is a labor market that is either totally broken, or absolutely perfect, depending on how you frame the question.

For background, we need to go back to 1919. As Livingston notes, before 1919, economic growth in the United States required ever more capital investment and more labor. But thanks to technological innovation, the 1920s saw massive productivity improvements, robust business profits, but declining employment. The result was surplus capital, which then went in search of speculative outlets, creating the stock market collapse and the Great Depression. Since that pivotal period, the main economic story of the United States revolves around two trends: the growth of the financial sector to handle the surplus capital generated by victory over the ‘production problem,’ and the growth of the government sector to deal with those rendered economically superfluous by that same victory.

Essentially, after 1919, capital owners had the upper hand on labor, economically speaking, since business growth could be sustained without having to increase the labor share of production. If businesses can maintain healthy profit levels without hiring more people or increasing wages for those already employed, then they have no other moral obligation to pursue anything like full employment for society as a whole. The fact that fewer people will have enough money to buy a particular business’s product is not really that business’s problem. As long as they are turning a profit, and their internal logic is telling them to avoid declining returns on investment in labor, those business owners will just take their surplus capital and look for other, more speculative ways to invest, instead of plowing more money into worker wages and capital equipment.

But as the Great Depression showed, declining labor value is a problem for the government, as destitution and desperation are not the best faces for a great nation. FDR and WW2 ushered in an era of government intervention in this labor-capital relationship, and the federal spending spigot was opened up. After the war, we hit a goldilocks period, where government fiscal activism was still robust, and the rest of the industrialized world was in tatters. In that unusual interim, wages climbed and the good life was available, catalyzed by the GI bill, cheap mortgages and real estate, and the continental construction of happy motoring suburbia (nod to Jim Kunstler).

But by the end of the 1970s, these unusual conditions had receded, and the logic of capital’s shedding of labor input resumed its relentless march. Surplus profits were in play again, and they went in search of an impressive neoliberal suite of goodies: deregulation, marginalization of labor unions, privatization of public utilities, loosened campaign finance laws, lower corporate and top-earner income taxes, expanded opportunities in financial securities, and the construction of a sprawling spread of laissez-faire cultural organs (think tanks, research institutes, publishing houses, etc.).

Since the peak of real wages in the late 1970s, these neoliberal trends, combined with the growing sophistication of globalized corporate management techniques and structures, have strip-mined the labor market, squeezing every last bit of surplus value from the lives of regular workers. The result is a populace that is beleaguered, underpaid, stressed, anxious, overworked-yet-underworked, and generally enraged at the rickety economic scaffolding that is splintering under its feet.

Work and Morality

Despite the complexity of current economic conditions, the morality that underlies the American work ethic is really quite simple: people should work hard, because it builds character, keeps them out of trouble, and grows the economy. People who don’t work (when they are able to do so) are lazy and morally suspect, a drain on society and on the hard-working taxpayers who pay the bills. This is an idea that goes back further than the founding of our country. It is rooted in Luther’s concept of a calling, a worldly vocation by which one improves self and society at once. As Livingston puts it: “Before the Reformation, almost no one believed that socially necessary labor was an ennobling activity. After the Reformation, almost everyone did.”

Don’t be deceived by the simplicity of this concept. The Protestant work ethic is still the most powerful moral idea in America, more durable and widespread than any sectarian manifestation of religion, patriotism, family, or ethnicity. These other things multiply and diversify, while the work ethic is a nearly universal unifier. Indeed, the American Dream itself is nothing but the work ethic in a quasi-sacred shroud. As we are a young people, a dizzying diversity set in a massive physical expanse, the work ethic is our history, purpose, and destiny, all in one.

Unfortunately, the deterioration of labor value has rendered this work ethic a cruel joke. We should all know, by now, that labor, effort, skill, and dedication are no longer linked to monetary compensation, social worth, and economic security. Consider this: does anyone really believe that Mark Zuckerberg works 150,000 times harder than the average American household (he takes a $1 annual salary, but makes $9 billion a year just on stock appreciation)? Do Bill Gates, Jeff Bezos and Warren Buffett have more social and moral worth than the bottom half of the US population? Or less dramatically, does a hedge fund manager making hundreds of millions dollars a year have more personal character than an elementary school teacher or a janitor?

So even though we know, deep down, that the labor market is now totally irrational, with no justifiable relationship between effort, character, reward, money, and security, the power of the work ethic prevents us from admitting it. We just feel, in our hearts, that something can and must be done to bring the jobs back and fix the labor market. We reserve our most intense outrage for those people and entities that limit our career opportunities, and (especially) those of our children. We may have other social and political concerns, like guns, abortion, campaign finance, gerrymandering, and the like. But when it comes to the actual mechanism for creating a better future, once some other barriers are eliminated, it is still Work that takes center stage. Jobs, jobs, jobs.

This is a profound misreading of the times. Work cannot carry the load any more, and the work ethic itself must be scrapped, at least in its current form. But in order for this to happen, we need to put something substantial and practical in its place. And any alternative has to be attractive, persuasive, simple, and achievable. Libraries are filled with fantastic and alluring schemes to achieve noble ends. But in today’s socioeconomic situation, the tools of control are highly developed. Power is amazingly concentrated and entrenched, and any plan for the future must be appealing to those who are already in charge.

What we need is a Trojan Horse. We’ll get to that next time.

Key Works on Employment:

Brybjolfsson, Erik & Andrew McAfee, The Second Machine Age (WW Norton: 2014)

Dunlop, Tim, Why the Future Is Workless (Newsouth, 2016)

Ford, Martin, Rise of the Robots (Basic Books, 2015)

Livingston, James.

  • Against Thrift (Basic Books, 2011)
  • No More Work (University of North Carolina Press, 2016)
  • “Why Work?” (The Baffler, No. 35, 2017)

 

 

 

 

 

 

 

 

Setting the Table

In the last couple posts (here and here), we established this general framework: our country is being artificially split into two warring factions, mainly due to our electoral machinery (winner-take-all) and the partisan media that feasts on the resulting confrontational style of politics. As economic conditions on the ground deteriorate for regular people, narrative theodicies arise to explain why things are so screwed up, and who is to blame. These stories, which I described as Dreams Dashed (the conservative variant) and Dreams Derailed (liberal version), have several common characteristics: they are emotionally charged, with compelling heroes and villains; they are both anti-establishment, albeit with different interpretations of who actually makes up the elite; they have built-in excuses for inertia, because total victory over a dehumanized Other is necessary to fulfill their vast and ideologically pure goals; and finally, at bottom, both stories are economic, offering explanations for the pecuniary collapse of the American Dream.

How can we break this logjam? What could possibly reduce the intensity of this Divided America battleground, so that we might approach our fellow citizens with respect and dignity, instead of shouting past each other and walling ourselves into enclaves of like-mindedness?

The popular approach to this impasse is the appeal for a sensible return to “The Middle.” In this interpretation, both sides have become too ‘extreme,’ and the antidote is the common sense of regular, hard-working folks. If we could just get some more ‘moderates’ into the government, then we could right the ship. And not surprisingly, the popular refrain for this return to The Middle is economic: “jobs, jobs, jobs.”

The problem here is that the economic status of labor value has fundamentally changed over the last few decades, and that change is permanent (more on that later). There is no magical job-creating elixir sloshing around in the hallowed Middle. This is the very reason that our conservative and liberal stories have had to become more intense and combative through time. The agreed-upon economic status quo has absolutely stalled in creating ‘full employment,’ even while the overall financial condition of The Establishment is just fine.

The election of Donald Trump and the efforts of Steve Bannon to topple traditional Republicans are perfect illustrations of the emptiness of the wisdom of The Middle. They are now waging, on separate fronts, scorched-earth campaigns not only to destroy everything even remotely left of center, but to also blow up the establishment GOP structure as well. As many have noted, traditional Republicans are now reaping what they have sown, as their intensifying anti-government rhetoric has come home to roost.

But as we have noted on this blog, this intensification of rhetoric is not exclusive to conservatives. Indeed, our political duopoly and companion partisan media must, by necessity, become more combative through time, because economic conditions on the ground continue to erode. People cannot be placated forever with the same old stories. As they become more desperate, their need for scapegoats intensifies, and the bleats for a return to the happy Middle become more quaint and more faint.

So what to do? The first step is to recognize the nature of stories, and how they relate to economic conditions. There is a temptation, especially as we have been looking at the Conservative and Liberal narratives for the last couple posts, to think that the psychological persuasiveness of stories for individuals and communities translates to historical and social causation. Ideas can only do so much heavy lifting. As historical materialism suggests, economic conditions on the ground (how we work, where we live, how we physically move around, how we make things, the arrangements surrounding property, etc.) always constrain and condition the range of possible ideational responses. (Say what you will about Marx’s fanciful historical predictions and political proclivities, his observations on basic social and historical causation are still spot on.)

What that means for our task here is that we should resist the urge to simply create a new narrative as an alternative to the ones that now drive the Divided America battles. We can’t just storytell our way to a better situation. Instead, we should jump directly into our current economic realities, and craft some immediate solutions to the most pressing problems. Once that is under way, then maybe some better stories can grow out of the improved conditions on the ground.