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Contents Bulletin Scripting in shell and Perl Network troubleshooting History Humor

Neoliberalism war on labor

“Robots are coming for your job” may be more scare talk than reality,
but instilling that belief helps weaken labor bargaining power.

Outsourcing is the way to decimate union power

News Neoliberalism as a New Form of Corporatism Recommended Links The neoliberal myth of human capital Audacioues Oligarchy and Loss of Trust Neoliberal rationality Atomization and oppression of workforce
Scapegoating and victimization of poor and unemployed Destruction of the New Deal Glass-Steagall repeal Think Tanks as Enabler of Neoliberal Coup d'état  Identity politics as diversion of attention from social inequality Identity politics as divide and conquer  Elite [Dominance] Theory And the Revolt of the Elite
Attack of Think Tanks Ayn Rand and her Objectivism Cult Amorality and criminality of neoliberal elite The Deep State Predator state Lewis Powell Memo The Essential Rules for Dominating Population
New American Militarism Neoconservatism Neo-fashism National Security State Propaganda  Inverted Totalitarism  Totalitarian Decisionism
Neoliberalism and Christianity Pope Francis on danger of neoliberalism The Iron Law of Oligarchy Anglican Church on danger of neoliberalism Animal Farm Quite coup Neoconservatism as an attack dog of neoliberalism
  Crowd manipulation Agenda-setting theory Manufacturing Consent Jingoism of the US neoliberal elite Media-Military-Industrial Complex War is Racket
Small government smoke screen "Starving the beast" bait and switcht Bill Clinton, the man who sold Democratic Party to Wall Street and helped FIRE sector to convert the country into casino Over-consumption of Luxury Goods as Market Failure Two Party System American Imperialism, Transnational Capitalist Class and Globalization of Capitalism The Grand Chessboard
Ethno-linguistic and "Cultural" Nationalism as a reaction to Neoliberalism induced decline of standards of living American Exceptionalism Anatol Leiven on American Messianism Machiavellism Skeptic Quotations Humor Etc

Neoliberalism is based on unconditional domination of labor by capital ("socialism for rich, feudalism for labor"). American scholar and cultural critic Henry Giroux alleges neoliberalism holds that market forces should organize every facet of society, including economic and social life, and promotes a social darwinist ethic which elevates self-interest over social needs. A new class of workers, facing acute socio-economic insecurity, emerged under neoliberalism. It is called  'precariat'. 

The imposition of neoliberalism in the United States arose from a the political counterrevolution led by financial oligarchy in the 1970s. It was their reaction of two the falling rate of profitability in manufacturing industry and emergence of strong competitors both in Europe and Asia, competitors which no longer were hampered by WWII decimation of industrial potential and in some way even manage to benefit from reconstruction getting newer better factories then in the USA.

Neoliberalism doesn't shrink government but instead convert it into a national security state, which provides little governmental oversight over large business and multinationals, but toughly control the lower classes, the smacks -- including mass incarceration those at the bottom. With the inmates along with illegal immigrants slowly becoming an important  source of low-wage labor for some US corporations.

Neoliberal policies have contributed to a U.S. economy in which 30% of workers earn low wages (less than two-thirds the median wage for full-time workers), and 35% of the labor force is underemployed; only 40% of the working-age population in the U.S. is adequately employed. The Center for Economic Policy Research's (CEPR) Dean Baker (2006) argued that the driving force behind rising inequality in the U.S. has been a series of deliberate, neoliberal policy choices including anti-inflationary bias, anti-unionism, and profiteering in the health industry

It can not be hidden. Redistribution of wealth up is all the neoliberalism is about. Simplifying, neoliberalism can be defined as socialism for rich and feudalism for poor.

So forms of brutal exploitation when people work 12 hours a day (as contractors now, for whom  labor laws do not apply) or when even bathroom breaks are regulated now are more common.

Amazon, Uber and several other companies have shown that neoliberal model can be as brutal as plantation slavery.

In a way, we returned to the brutality of the beginning of XX century on a new level characterized by much higher level of instability of employment. This is not disputed  even for neoliberal stooges in economic departments of major universities ;-)

As interesting question arise: "What form the backlash might take, if any ?"

I think it is an observable fact that the Us neoliberal elite is now is discredited: defeat of Hillary Clinton and ability to Trump to win nomination from Republican Party and then national elections signify the level of discreditation of the neoliberal elite. Success of Sunders in Democratic Party primaries and the fact that DNC needed to resort to dirty tricks to derail his candidacy signifies the same (even taking into account his betrayal of his voters).

If this does not suggest the crisis of neoliberal governance, I do not know what is. The crisis created conditions for increased social protest which at this stage used voters booth to say "f*ck you" to neoliberal elite.  In 2016 that led to election of Trump, but it was Sanders who captures social protest voters only to be derailed by machinations of DNC and Clinton clan.  At the same time, the efficiency with which Occupy Wall Street movement was neutered means that the national security state is still pretty effective in suppressing of dissent, so open violence probably will be suppressed brutally and efficiently.  "Color revolution" methods of social protest are not effective in  the USA sitution, as the key factor that allow "color revolutionaries" to challenge existing government. It is easy and not so risky to do when you understand that  the USA and its three letter agencies, embassies and NGOs stand behind and might allow you to emigrate, if you cause fail.  No so other significant power such as China or Russia can stand behind the protesters against neoliberalism in the USA. Neoliberals controls all braches of power. And internationally they are way too strong to allow Russia or China to interfere in the US election the way the USA interfered into Russian presidential election.   

Atomization of workforce and establishment of national security state after 9/11 so far prevented large organized collective actions (recent riots were not organized, and with the current technical capabilities of the three letter agencies any organization is difficult or impossible). I think that conversion of the state into national security state was the key factor that saved a couple of the most notorious neoliberals from being hanged on the electrical posts in 2008 although I remember slogan "Jump suckers" on the corner of Wall Street.

But neoliberal attacks on organized labor started much earlier with Ronald Reagan and then continued under all subsequent presidents with bill Clinton doing the bulk of this dirty job. his calculation in creating "New labor" (read neoliberal stooges of Wall Street masked as Democratic Party) was right and for a couple of elections voters allow Democrats to betray them after the elections. But eventually that changes. Vichy left, represented by "Clintonized" Democratic Party got a crushing defeat in 2016 Presidential elections. Does not mean that Trump is better or less neoliberal, but it does suggest that working class does not trust Democratic Party any longer. 

2008 was the time of the crush of neoliberal ideology, much like Prague string signified the crush of Communist ideology. but while there was some level of harassment, individual beatings of banksters in 2008 were non-existent. And in zombie stage (with discredited ideology) neoliberal managed to continue and even counterattack in some countries. Brazil and Argentina fall into neoliberal hands just recently.   Neoliberal actually managed to learn Trotskyites methods of subversion of government and playing on population disconnect in case of economic difficulties as well if not better as Trotskyites themselves.


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Old News ;-)

[May 22, 2017] Th>e best technique of obtaining soundbytes and posturing for neoliberal elite is based on so-called wedge issues

Notable quotes:
"... Calibrate your position so it is a good scrap of meat for your "base" while it drives the adversaries to conniptions, the conniptions provide talking points and together, drive the clueless in your direction. Wash, repeat. ..."
www.moonofalabama.org
Piotr Berman | May 18, 2017 10:04:50 PM | 77
"Donald Trump used alt-right messaging to get into the White House but he and his third-rate staff haven't the slightest clue of what gave rise to the deplorables in the first place and how to address the root despair of the western working class." VietnamVet

I do not know how highly rated the staff was, but it was sufficiently high. If the opponent has fourth-rate staff, it would be wasteful to use anything better than third-rate. Figuring what gave rise to the deplorable is a wasted effort, sociologist differ, and in politics the "root causes" matter only a little.

And all authorities suggest to exploit the despair with soundbites and posturing. Granted, this is a platitude, but how to obtain compelling soundbites and posturing? I think that the best technique is based on so-called wedge issues.

A good wedge issue should raise passions on "both sides" but not so much in the "center", mostly clueless undecided voters.

Calibrate your position so it is a good scrap of meat for your "base" while it drives the adversaries to conniptions, the conniptions provide talking points and together, drive the clueless in your direction. Wash, repeat.

[May 20, 2017] Demand, Secular Stagnation and the Vanishing Middle-Class

Notable quotes:
"... The anger and despair crystalized into a 'groundswell of discontent' among those left behind, which likely helped to propel Donald Trump into the White House on the promise of 'making America great again'. ..."
"... That's my feeling too about one of the key factor that propelled Trump -- "the anger and despair". For some, voting for Trump was a showing middle finger to Washington establishment. ..."
"... Thus, the battle lines between neoliberal and a "social contract" approach to employment are clearly cut. So far Wall Street, the City, and other worldwide "epicenters for free-market discipline," are winning the battle. According to "free market discipline" dogma, if you are hired at below living wave (as in Wall Mart or other retail chain) it's your own fault. Very convenient theory. The fact that it produce strong desire to shoot or hang all neoliberal economists notwithstanding ;-) ..."
May 20, 2017 | economistsview.typepad.com
Christopher H., May 20, 2017 at 10:36 AM
From INET in today's links.

https://www.ineteconomics.org/perspectives/blog/the-new-normal

The New Normal

By Servaas Storm

MAY 19, 2017

Demand, Secular Stagnation and the Vanishing Middle-Class

The Great Financial Crisis of 2008 deeply scarred the U.S. economy, bringing nine dire years of economic stagnation, high and rising inequalities in income and wealth, steep levels of indebtedness, and mounting uncertainty about jobs and incomes

. Big parts of the U.S. were hit by elevated rates of depression, drug addiction and 'deaths of despair' (Case and Deaton 2017), as 'good jobs' (often in factories and including pension benefits and health care coverage) leading to careers, were destroyed and replaced by insecure, freelance, or precarious 'gigs'. All this is evidence that the U.S. is becoming a dual economy-two countries, each with vastly different resources, expectations and potentials, as America's middle class vanishes (Temin 2015, 2017).

The anger and despair crystalized into a 'groundswell of discontent' among those left behind, which likely helped to propel Donald Trump into the White House on the promise of 'making America great again'.

likezkova, May 20, 2017 at 12:35 PM

"The anger and despair crystalized into a 'groundswell of discontent' among those left behind, which likely helped to propel Donald Trump into the White House on the promise of 'making America great again'."

That's my feeling too about one of the key factor that propelled Trump -- "the anger and despair". For some, voting for Trump was a showing middle finger to Washington establishment. When jobs are gone, people are essentially put against the wall. Neoliberal politicians, be it "DemoRats", or "Repugs" do not care, as under neoliberalism this is a domain of "individual responsibility". The neoliberal stance is that you need to increase your value in the "job market" so that you will be eventually hired on better conditions. Very convenient theory for capital owners.

Thus, the battle lines between neoliberal and a "social contract" approach to employment are clearly cut. So far Wall Street, the City, and other worldwide "epicenters for free-market discipline," are winning the battle. According to "free market discipline" dogma, if you are hired at below living wave (as in Wall Mart or other retail chain) it's your own fault. Very convenient theory. The fact that it produce strong desire to shoot or hang all neoliberal economists notwithstanding ;-)

Academic prostitution is not that different and probably less noble that a regular one.

[May 18, 2017] Toward a Jobs Guarantee at the Center for American Progress by Lambert Strether

Notable quotes:
"... By Lambert Strether of Corrente ..."
"... The Financial Times ..."
"... customer ..."
May 17, 2017 | www.nakedcapitalism.com
Posted on May 17, 2017 By Lambert Strether of Corrente

I had another topic lined up today, but this ( hat tip alert reader ChrisAtRU ) is so remarkable - and so necessary to frame contextualize immediately - I thought I should bring it your attention, dear readers. The headline is "Toward a Marshall Plan for America ," the authors are a gaggle of CAP luminaries with Neera Tanden leading and Rey Teixeira trailing, and the "Marshall Plan" indeed includes something called a "Jobs Guarantee." Of course, I trust Clinton operatives like Tanden, and Third Way types like Teixeira, about as far as I can throw a concert grand piano. Nevertheless, one sign of an idea whose time has come is that sleazy opportunists and has-beens try to get out in front of it to seize credit[1] and stay relevant. So, modified rapture.

In this brief post, I'm going to look at the political context that drove CAP - taking Tanden, Teixeira, and the gaggle as a proxy for CAP - to consider a Jobs Guarantee (JG), briefly describe the nature and purpose of a JG, and conclude with some thoughts on how Tanden, Teixeira would screw the JG up, like the good liberals they are.

Political Context for CAP's JG

Let's begin with the photo of Prairie du Chien, WI at the top of CAP's JG article. Here it is:

I went to Google Maps Street View, found Stark's Sports Shop (and Liquor Store), and took a quick look round town. Things don't look too bad, which is to say things look pretty much like they do in my own home town, in the fly-over state of Maine; many local businesses. The street lamps make my back teeth itch a little, because along with bike paths to attract professionals, they're one of those panaceas to "bring back downtown," but as it turns out Prairie du Chien has marketed itself to summer tourists quite successfully as " the oldest Euro-American settlement established on the Upper Mississippi River," so those lamps are legit! (Of course, Prairie du Chien, like so much of flyover country, is fighting an opioid problem , but that doesn't show up in Street View, or affect the tourists in any way.)

More to the point, Crawford County WI, in which Prairie du Chien is located, was one of the counties that went for Obama, twice, and then flipped to Trump ( 50.1% Trump, 44.6% Clinton ), handing Trump the election, although the CAP authors don't mention this. AP has a good round-up of interviews with Prairie du Chien residents , from which I'll extract the salient points. On "flipping," both from Obama (since he didn't deliver) and away from Trump (if he doesn't deliver):

In 2012, [Lydia Holt] voted for Barack Obama because he promised her change, but she feels that change hasn't reached her here. So last year she chose a presidential candidate unlike any she'd ever seen, the billionaire businessman who promised to help America, and people like her, win again. Many of her neighbors did, too .

In this corner of middle America, in this one, small slice of the nation that sent Trump to Washington, they are watching and they are waiting, their hopes pinned on his promised economic renaissance. And if four years from now the change he pledged hasn't found them here, the people of Crawford County said they might change again to someone else.

"[T]hings aren't going the way we want them here," she said, "so we needed to go in another direction."

And the issues:

[Holt] tugged 13 envelopes from a cabinet above the stove, each one labeled with a different debt: the house payment, the student loans, the vacuum cleaner she bought on credit.

Lydia Holt and her husband tuck money into these envelopes with each paycheck to whittle away at what they owe. They both earn about $10 an hour and, with two kids, there are usually some they can't fill. She did the math; at this rate, they'll be paying these same bills for 87 years.

Kramer said she's glad the Affordable Care Act has helped millions get insurance, but it hasn't helped her he and her husband were stunned to find premiums over $1,000 a month. Her daughter recently moved into their house with her five children, so there's no money to spare. They opted to pay the penalty of $2,000, and pray they don't get sick until Trump, she hopes, keeps his promise to replace the law with something better.

Among them is a woman who works for $10.50 an hour in a sewing factory, who still admires Obama, bristles at Trump's bluster, but can't afford health insurance. And the dairy farmer who thinks Trump is a jerk - "somebody needs to get some Gorilla Glue and glue his lips shut" - but has watched his profits plummet and was willing to take the risk.

And of course jobs (as seen in this video, "Inside the Minds and Homes of Voters in Prairie du Chien, WI," made by students at the University of Wisconsin-Milwaukee).

So that's Prairie du Chien, Wisconsin. CAP frames the electoral context this way:

While the election was decided by a small number of votes overall, there was a significant shift of votes in counties in critical Electoral College states, including Iowa, Michigan, Ohio, Pennsylvania, and Wisconsin.

(I could have told them that. In fact, I did! ) And the reasons for the shift:

What was going on in these heavily white working-class counties that might explain support for Trump? Without diminishing the importance of cultural and racial influences, it is clear to us that lingering [sic] economic pressures among important voting blocs helped to create a larger opening for Trump's victory.

We do not yet know the exact reasons for the drop in turnout among young people and black voters. But with President Obama not on the ticket to drive voter enthusiasm, it is quite possible that lingering job and wage pressures in more urban areas with lots of young people, and in areas with large populations of African-Americans, yielded similar, if distinct, economic anxiety in ways that may have depressed voter turnout among base progressives. The combined effect of economic anxiety may have been to drive white noncollege voters toward Trump and to drive down voter engagement and participation among base progressives.

Either way, issues related to lost jobs, low wages, high costs, and diminished mobility played a critical role in setting the stage for a narrow populist victory for Trump.

(I could have told them that, too. In fact, I did! ) Note the lingering "Obama Coalition" / identity politics brain damage that casually assumes "base progressives" equate to African-Americans and youth. Nevertheless, mild kudos to CAP for fighting through to the concept that "economic pressures among important voting blocs helped to create a larger opening for Trump's victory." The CAP paper then goes on to recommend a JG as an answer to such "economic pressures."[2]

Nature and Purpose of a JG

Here's the how and why of a JG (though I wrote it up, I had the help of practioners):

How would the JG work from the perspective of a working person (not an owner?) Or from the perspective of the millions of permanently disemployed? The MMT Primer :

If you are involuntarily unemployed today (or are stuck with a part-time job when you really want to work full time) you only have three choices:

Employ yourself (create your own business-something that usually goes up in recessions although most of these businesses fail) Convince an employer to hire you, adding to the firm's workforce Convince an employer to replace an existing worker, hiring you

The second option requires that the firm's employment is below optimum-it must not currently have the number of workers desired to produce the amount of output the firm thinks it can sell. …

If the firm is in equilibrium, then, producing what it believes it can sell, it will hire you only on the conditions stated in the third case-to replace an existing worker. Perhaps you promise to work harder, or better, or at a lower wage. But, obviously, that just shifts the unemployment to someone else.

It is the "dogs and bones" problem: if you bury 9 bones and send 10 dogs out to go bone-hunting you know at least one dog will come back "empty mouthed". You can take that dog and teach her lots of new tricks in bone-finding, but if you bury only 9 bones, again, some unlucky dog comes back without a bone.

The only solution is to provide a 10 th bone. That is what the JG does: it ensures a bone for every dog that wants to hunt.

It expands the options to include:

    There is a "residual" employer who will always provide a job to anyone who shows up ready and willing to work.

It expands choice. If you want to work and exhaust the first 3 alternatives listed above, there is a 4 th : the JG.

It expands choice without reducing other choices. You can still try the first 3 alternatives. You can take advantage of all the safety net alternatives provided. Or you can choose to do nothing. It is up to you.

If I were one of the millions of people permanently disemployed, I would welcome that additional choice. It's certainly far more humane than any policy on offer by either party. And the JG is in the great tradition of programs the New Deal sponsored, like the CCC, the WPA, Federal Writers' Project , and the Federal Art Project . So what's not to like? ( Here's a list of other JGs). Like the New Deal, but not temporary!

Intuitively: What the JG does is set a baseline[3] for the entire package offered to workers, and employers have to offer a better package, or not get the workers they need. When I came up here to Maine I'd quit my job voluntarily and so wasn't eligible for unemployment. Then the economy crashed, and I had no work (except for blogging) for two years. There were no jobs to be had. I would have screamed with joy for a program even remotely like this, and I don't even have dependents to take care of. It may be objected that the political process won't deliver an offer as good as the Primer suggests. Well, don't mourn. Organize. It may be objected that a reform like the JG merely reinforces the power of the 0.01%. If so, I'm not sure I'm willing to throw the currently disemployed under the bus because "worse is better," regardless. Anyhow, does "democratic control over the living wage" really sound all that squillionaire-friendly to you? Aren't they doing everything in their power to fight anything that sounds like that? The JG sounds like the slogan Lincoln ran on, to me: "Vote yourself a farm!" [3]

So, what does the JG for the economy? MMT was put together by economists; from an economists perspective, what is it good for? Why did they do that? The Primer once more:

some supporters emphasize that a program with a uniform basic wage[4] also helps to promote economic and price stability.

The JG/ELR program will act as an automatic stabilizer as employment in the program grows in recession and shrinks in economic expansion, counteracting private sector employment fluctuations. The federal government budget will become more counter-cyclical because its spending on the ELR program will likewise grow in recession and fall in expansion.

Furthermore, the uniform basic wage will reduce both inflationary pressure in a boom and deflationary pressure in a bust. In a boom, private employers can recruit from the program's pool of workers, paying a mark-up over the program wage. The pool acts like a "reserve army" of the employed, dampening wage pressures as private employment grows. In recession, workers down-sized by private employers can work at the JG/ELR wage, which puts a floor to how low wages and income can fall.

Finally, research indicates that those without work would prefer to have it :

Research by Pavlina Tcherneva and Rania Antonopoulos indicates that when asked, most people want to work. Studying how job guarantees affect women in poor countries, they find the programs are popular largely because they recognize-and more fairly distribute and ­compensate-all the child- and elder care that is now often performed by women for free (out of love or duty), off the books, or not at all.

Enough of this crap jobs at crap wages malarky!

And here's the how and why of a JG, as described by CAP :

We propose today a new jobs guarantee, and we further expect a robust[3] agenda to be developed by the commission.

The low wages and low employment rates for those without college degrees only exist because of a failure of imagination. There is no shortage of important work that needs to be done in our country. There are not nearly enough home care workers to aid the aged and disabled. Many working families with children under the age of 5 need access to affordable child care. Schools need teachers' aides, and cities need EMTs. And there is no shortage of people who could do this work. What has been missing is policy that can mobilize people.

To solve this problem, we propose a large-scale, permanent program of public employment and infrastructure investment-similar to the Works Progress Administration (WPA) during the Great Depression but modernized for the 21st century. It will increase employment and wages for those without a college degree while providing needed services that are currently out of reach for lower-income households and cash-strapped state and local governments. Furthermore, some individuals may be hired into paying public jobs in which their primary duty will be to complete intensive, full-time training for high-growth, in-demand occupations. These "public apprenticeships" could include rotations with public and private entities to gain on-the-ground experience and lead to guaranteed private-sector employment upon successful completion of training.

Such an expanded public employment program could, for example, have a target of maintaining the employment rate for prime-age workers without a bachelor's degree at the 2000 level of 79 percent. Currently, this would require the creation of 4.4 million jobs. At a living wage-which we can approximate as $15 per hour plus the cost of contributions to Social Security and Medicare via payroll taxes-the direct cost of each job would be approximately $36,000 annually. Thus, a rough estimate of the costs of this employment program would be about $158 billion in the current year. This is approximately one-quarter of Trump's proposed tax cut for the wealthy on an annual basis.

With tis background, let's look at how liberals would screw the JG up.

How a CAP JG Would Go Wrong

Before getting into a little policy detail, I'll examine a few cultural/framing issues. After all, CAP does want the program's intended recipients to accept it with good grace, no? Let me introduce the over-riding concern, from Joan C. Williams in The Financial Times : "They don't want compassion. They want respect" :

Williams warns that Republican errors alone won't give Democrats back the WWC.

Or any part of the WC; as even CAP recognizes, although WWC disproportionately voted Trump, and non-WWC disproportionately stayed home.

While [Williams] agrees that the Democrats have mobilised their base since Trump's election, she has "one simple message" for the party: it needs to show the WWC respect, "in a tone suitable for grown-ups". Democrats must say: "We regret that we have disrespected you, we now hear you." She asks: "Is this so hard? Although the risk is that the response will be, 'Oh, those poor little white people with their opioid epidemics, let's open our hearts in compassion to them.' That's going to infuriate them. They don't want compassion, they want respect."

To show respect, it would really behoove liberals to deep-six the phrase "economic anxiety," along with "economic frustrations," "economic concerns," "economic grievances," and "lingering economic pressures."[4] All these phrases make successful class warfare a psychological condition, no doubt to be treated by a professional (who by definition is not anxious, not frustrated, has no grievances, and certainly no economic pressures, because of their hourly rate (or possibly their government contract).

To show respect, it would also behoove liberals to deep-six the concept that markets come first; people who sell their labor power by the hour tend to be sensitive about such things. Take, for a tiny example, the caption beneath the image of Prairie du Chein. Let me quote it:

A customer crosses the street while leaving a shop along the main business district in Prairie du Chien, Wisconsin, January 2017.

Really? A customer ? Does the human figure have to be a customer ? Why?

Along the same lines, drop the "affordable" crap; ObamaCare should have ruined that branding already; what seems like it's affordable to CAP writers in the Beltway probably isn't affordable at all to somebody making $10 an hour. Anyhow, if something like childcare or for that matter #MedicareForAll ought to be a universal direct material benefit, then deliver it!

To show respect, abandon the "Marshall Plan" framing immediately. Because it means the "winners" are going to graciously help the "losers," right? And prudentially, liberals don't really want to get the working class asking themselves who conducted a war against them, and why, right?

To show respect, make the JG a truly universal benefit, a real guarantee, and don't turn it into an ObamaCare-like Rube Goldberg device of means-testing, worthiness detection, gatekeeping, and various complex forms of insult and degradation, like narrow networks. This passage from CAP has me concerned:

Such an expanded public employment program could, for example, have a target of maintaining the employment rate for prime-age workers without a bachelor's degree at the 2000 level of 79 percent.

That 'target" language sounds to me very much like the "dogs and bones" problem. Suppose currently we have 6 bones and 10 dogs. The "target" is 7 bones. Suppose we meet it? There are still 3 dogs without bones! Some guarantee! The JG should be simple: A job for everyone who wants one. None of this targeting or slicing and dicing demographics. The JG isn't supposed to be an employment guarantee for macro-economists (who basically have one anyone).

To show respect, make the JG set the baseline for wages (and working conditions). This passage from CAP has me concerned:

Second, because it would employ people to provide services that are currently needed but unaffordable, it would not compete with existing private-sector employment.

This language seems a bit slippery to me. If Walmart is paying $10.00 an hour, is the JG really going to pay $9.50?

Finally, you will notice that the CAP JG is shorn of any macro-economic implications. Note, for example, that replacing our current cruel system of regulating the economy by throwing people out of work isn't mentioned. Note also that CAP also accepts the false notion that Federal taxes pay for Federal spending. That puts CAP in the austerity box, meaning that the JG might be cut back just when it is most needed, not least by working people.

Conclusion

I do want to congratulate CAP, and without irony, for this passage:

[The JG] would provide the dignity of work, the value of which is significant. When useful work is not available, there are large negative consequences, ranging from depression, to a decline in family stability, to "deaths of [sic] despair."

It's good to see the Case-Deaton study penetrating the liberal hive mind. Took long enough. Oh, and this makes the JG a moral issue, too. The pallid language of "economic anxiety" should be reformulated to reflect this, as should the program itself.

NOTES

[1] The JG originally comes from the MMT community; here is a high-level summary . Oddly, or not, there's no footnote crediting MMTers. Interestingly, Stephanie Kelton, who hails from the University of Missouri at Kansas City's MMT-friendly economics department, before Sanders brought her onto the staff at the Senate Budget committee, was not able to persuade Sanders of the correctness and/or political utility of MMT generally or the JG in particular.

[2] I guess those famous Democrat 2016 post mortems will never be published, eh? This will have to do for a poor substitute. Or maybe the Democrats just want us to read Shattered .

[3] In my view, "robust" is a bullshit tell. Back when I was a hotshot consultant, the operational definition of "robust" was "contained in a very large three-ring binder."

[4] Dear God. Are these people demented? Nobody who is actually under "economic pressure" would use these words. And so far as I can tell, "lingering" means permanent.

About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism ("Because markets"). I don't much care about the "ism" that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don't much care, as long as the benefits are delivered. To me, the key issue - and this is why Medicare for All is always first with me - is the tens of thousands of excess "deaths from despair," as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics - even the worthy fight to help the refugees Bush, Obama, and Clinton's wars created - bright shiny objects by comparison. Hence my frustration with the news flow - currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press - a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let's call such voices "the left." Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn't allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I've been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

ChrisAtRU , May 17, 2017 at 1:38 pm

Thank you! Thank you! Thank you!

Clive , May 17, 2017 at 2:37 pm

No, thank you!

Dead Dog , May 17, 2017 at 4:40 pm

Yes, a great essay. And thank you commentariat.
Of course, there is a potential conflict from those who want a basic income, but don't want to work. Such a position frames such people badly, but a basic income remains an essential part of a JG world IMO.
The JG would provide incentive if you didn't lose the safety net and could add to it by working in a JG program.
Most here in this place accept that a sovereign government can pay for programs which are not funded by taxes (or debt) and the JG and basic income concepts could be a way to test this in a controlled way.
The main reason I think that politicians continue to have blinkers (LA LA, CAN'T HEAR YOU) with respect to MMT is that they are scared witless of a government with unlimited spending powers. That's why we can't have nice things.

jrs , May 17, 2017 at 5:26 pm

don't want to work, hmm I don't even know if I could work in a job without a decent amount of slack (A.D.D. mind may not be capable of it or something and often not for lack of trying, though I do a decent amount of unpaid work in my precious leisure time). Or at least not the full 40 hours, so if the job guarantee bosses are slave drivers, I don't know, I'd probably be fired from my job guaranteed job period.

But what if a job was aligned with one's interest? Don't know, never experienced that.

But all that aside and never even mind unemployment, given how horrible the job circumstances are that I see many people caught in (and I definitely don't mean having slack – that's a good thing, I mean verbal ABUSE, I mean working endless hours of unpaid overtime etc.), any alternative would seem good.

nycTerrierist , May 17, 2017 at 6:19 pm

+1!

PKMKII , May 17, 2017 at 1:55 pm

The "target" language also makes me worry that they're defining optimal employment by the inflation-obsessed standards of Chicago-school economists, thus coming up short in the name of protecting the investor class.

Minor quibble: Does Maine constitute flyover country? Usually that term means the parts of the country that the well-to-do "fly over" from east coast cities to west coast ones, with perhaps an exception for Chicago. You wouldn't fly over Maine for any of those routes. Not to mention, Maine is a popular vacationing/summer home state for rich New Englanders, so it doesn't exactly have an "other" status for them the way rural Wisconsin would.

Huey Long , May 17, 2017 at 4:22 pm

I think Maine is legit flyover country as flying over Maine was once mandatory on the transatlantic route in order to Gander Airport in Newfoundland. I know, I know, it's a bit of a stretch but I'm trying here!

As for Maine's other status, you're spot on about "down east" (coastal) Maine and some of the lakes being popular with the landed gentry, but the interior of the state is sparsely populated, poor, white, and marginalized. Many of the paper mills have gone belly-up and the economy in many places consists of picking potatoes or cutting down trees.

Knifecatcher , May 17, 2017 at 5:06 pm

I used to do a lot of business travel to Nova Scotia. Hard to get there from the US without flying over Maine. But I think Lambert meant flyover in the pejorative "why would you live here when you could be an artisanal pickle maker in Brooklyn" sense.

Peham , May 17, 2017 at 2:17 pm

Thanks much! A JG as you describe plus nationalizing all our current rentier industries ought to just about do the trick.

Sutter Cane , May 17, 2017 at 2:24 pm

Are you still guaranteed a job if you happen to make any negative comments about Neera Tanden? (Asking for Matt Bruenig)

nihil obstet , May 17, 2017 at 6:50 pm

Matt Bruenig had other issues with the article: More Job Guarantee Muddle . While he points out that the jobs suggested in the article should be permanent rather than temporary jobs, I go on with my own little sense of discomfort that they all involve putting the otherwise jobless in charge of caring for the helpless. I don't find that a good idea. I've spent enough time both working with and volunteering in human service organizations to have observed that it's not really appropriate work for a lot of people, even for many good-hearted volunteers. It really dampens my enthusiasm for a JG that I have yet to see an argument for it that doesn't invoke child and elderly care as just great jobs that the jobless can be put to doing.

Just another quibble with this post. I first heard of a job guarantee and heard arguments for it in the U.S. civilian society from Michael Harrington in the early 1980s (guaranteed jobs have been a feature of the state capitalist societies that call themselves socialist throughout the 20th c.), so I don't find it particularly odd when the MMT community isn't mentioned as originating the idea. In fact, I tend to respond with "Hey, MMTers, learn some history."

jrs , May 17, 2017 at 7:06 pm

good points.

Susan the other , May 17, 2017 at 2:47 pm

Thanks for this article Lambert. Why should we trust CAP to handle this when they have done nothing toward this end in their entire history. In fact, in undeniable fact, if we don't do something about demand in this country we will have no economy left at all. For these guys to even approach a JG you know they are panicked. Nobody goes over this fact because it turns them all into instant hypocrites. I spent yesterday listening to some MMTers on U-Tube, Wray and some others. They all clearly and succinctly explain the systemic reasons for JG. Not nonsense. In fact, MMT approaches a JG as the opposite of nonsense on so many levels. As you have pointed out – these CAP people are a little late to reality. And their dear leader Obama is first in line for the blame, followed closely by Bill Clinton and his balance-the-budget cabal of bankster idiots. And etc. And these JG jobs could be just the jobs we need to turn global warming around. It could be the best spent money ever. It is a very straight-forward calculation.

Sue , May 17, 2017 at 2:57 pm

Dispel ambiguity. Call it LWUJG, Living Wage Universal Job Guarantee

Sandler , May 17, 2017 at 3:20 pm

I don't know how you even bother. America is so far away from this intellectually and culturally, there is no chance. Right now the "jobs guarantee" is get arrested for something bogus and be sentenced to prison to do forced labor for outsourcing corporations (yes this is real). Look where the GOP stands on basic issues which were settled long ago in Europe, they are in the Stone age. The Dems are right wing everywhere else.

With US institutions usually run horribly how do you expect this to be well run? Is the VA a shining example? I certainly would not have hope for this at the federal level.

Murph , May 17, 2017 at 3:43 pm

I feel the same way often but I've got to allow myself some hope once in a while. This development is at least turn in the right direction for the moment, nothing else. There's nothing wrong with being (aprehensively) pleased about that.

Sandler , May 17, 2017 at 5:29 pm

I'd like to get a basic unemployment welfare scheme going first. We don't even have that! We have an "insurance" program which requires you to first have held a job which paid enough for long enough, and then get fired, not quit. And it only pays for six months. Again, this was settled in other rich countries a long time ago.

Darius , May 17, 2017 at 6:38 pm

Swing for the fences, ladies or gentlemen. Throw incremental change overboard, along with Hillary, Tim Kaine and Neera.

Disturbed Voter , May 17, 2017 at 6:03 pm

There is a job guarantee in Castro's Cuba. So wonderful, people are swimming from Miami to Havana ever day.

Though you have it exactly right in the US the job guarantee is to be a felon on a privatized prison farm usually called a "plantation". I am looking forward to my neighbors finally being put to work. At least it is only building a Presidential Library for Obama, not a pyramid for Pharaoh.

witters , May 17, 2017 at 6:40 pm

"There is a job guarantee in Castro's Cuba. So wonderful, people are swimming from Miami to Havana ever day."

That is why Cuba will never last! It will die in minutes, without any outside help!

Mind you, here's a thought. Maybe the one's who didn't want to work, left for Florida!

diptherio , May 17, 2017 at 3:49 pm

My prediction: by the time this makes it through Congress, it will be a guarantee for no more than 15 hours per week at slightly below the minimum wage and you'll only be able to be in the program for nine months, total during your lifetime. Or am I being overly cynical?

Maybe we need to update that old saw: "First they ignore you, then they laugh at you, then they co-opt your idea and strip the soul out of it, then you kinda win but not really, but hey that's progress, right?"

Even though I'm cynical, I'm with Lambert in being for just about anything that makes us bottom-20%ers lives better, even if it is highly flawed. Heck, I'd even be for a BIG on that basis, even if Yves is right about the negative side-effects of that policy.

Huey Long , May 17, 2017 at 4:29 pm

they co-opt your idea and strip the soul out of it, then you kinda win but not really, but hey that's progress, right?"

SPOT ON!!!

This is EXACTLY what Bismark did in 1883 with his Staatssozialismus (state socialism) reforms.

Disturbed Voter , May 17, 2017 at 6:03 pm

In 1883, Germany still had hope it was only 12 years old!

Jeff , May 17, 2017 at 3:50 pm

If I understood correctly, Norway is running such a program since many years.
Basically, when you are out of a job, you get unemployment benefits (a low but decent salary, health care and other modern facilities unheard of is the US) – which last forever .
On the other hand, any public institution can call you in to help a hand: washing dishes at the school kitchen one day, waiting on the elderly the other day, helping out in the local library wherever hands are needed but not available.
So it is not really a JG, but you are guaranteed to help out your local community, and you are guaranteed a minimal income. That seems close enough to me.

Fred1 , May 17, 2017 at 4:27 pm

This is just positioning to defend against a challenger from the left who is promoting a genuine JG.

See we agree about a JG, I'm for it too and here is my 9 point proposal on my website.

robnume , May 17, 2017 at 5:56 pm

Thanks, Lambert, for a very interesting post. I combed through CAP's panel of "experts." I was not impressed.
I'm going to start my own think tank. Gonna call it CRAP: Center for Real American Progress.

lyle , May 17, 2017 at 7:18 pm

Of course in the north in the winter you could go back to shoveling snow with snow shovels (no machines allowed) and ban use by public employees of riding lawnmowers in the summer in favor of powered walk behind mowers. From what I have read this is what china did on the 3 gorges dam, partly making the project a jobs project by doing things in a human intensive way. (of course you could go back to the hand push non powered reel mower but then you have to worry about folks and heart attacks. (Or use those in their 20s for this. Growing up in MI and In this is how we mowed the yard. (in the 1950s and 1960) and for snow shoveling, my dad got a snow blower when I went off to college.
Now if you really want a low productivity way of cutting grass get one of the hand grass trimmers and set to work cutting it by that, it would employ a lot of folks and not have the exertion problem of a push mower (Again I used these in the 1960s in MI before we had the string trimmers and edgers etc. (also recall the old hand powered lawn edgers.)

craazyboy , May 17, 2017 at 8:19 pm

I'm partial to John Cleese Silly Walks. It would be creative and artistic. We need more art.

Samuel Conner , May 17, 2017 at 9:46 pm

It sounds like the CAP JG proposal is "top down" in that the "palette" of jobs to be funded is decided by the same agency (or an agency at the same level of government) as the fund disbursement authority, or is specified in the law itself.

IIRC, the JG concept proposed in the MMT primer would devolve the decision of "how to usefully employ willing underutilized workers" to local level. Funding would still be Federal. There would be some kind of "request for proposals/peer review" process to decide which locally-wanted projects would receive JG dollars (presumably in order to be a guarantee, enough projects would be approved for every locality to employ the available under-utilized willing workforce. If a locality only proposed one project, that would be funded)

It that right, Lambert? Is "top down" another way that centrists could screw up a JG? And might the "local devolution" aspect of the NEP/MMT Primer concept appeal to folks on the right?

washunate , May 18, 2017 at 12:13 am

Great write up. I obviously have a long-running disagreement on the policy prescription of JG, but I do find it interesting talking about how groups like CAP present it outside the specific confines of MMT (and, apparently, without even tipping the hat to them ?).

One concrete bit of info I would love to know is how they estimate 4.4 million workers for take-up. First, it's a hilarious instance of false precision. Second, it's remarkably low. $15/hr is approximately the median wage. Tens of millions of workers would sign up, both from the ranks of the crap jobs and from the ranks of those out of the labor force.

[May 15, 2017] Neoliberalisms Latin American Struggle by Robert Hunziker

Notable quotes:
"... "For example, when we say that the Chilean state should become a true guarantor of material rights, that is certainly antithetical to the neoliberal capitalist vision which turns rights into a business to be regulated by the market," - ..."
"... Robert Hunziker lives inLos Angeles and can be reached at roberthunziker@icloud.com ..."
Jan 09, 2015 | www.counterpunch.org

"For example, when we say that the Chilean state should become a true guarantor of material rights, that is certainly antithetical to the neoliberal capitalist vision which turns rights into a business to be regulated by the market," - Camila Vallejo (former Chilean student protest leader) interview by Zoltán Glück at CUNY Graduate Center, Oct. 15, 2012.

Neoliberalism has been an "occupying force in Latin America" for over three decades while it has stripped the nation/state(s) of the functionality of a social contract, pushed through wholesale privatization of public enterprises, and expropriated the people's rights to formal employment, health, and education, all of which are crowning glories for "free-market determinism."

Throughout Latin America (as well as around the world), neoliberalism's motif consists of assault on the state, in favor of the market, on politics, in favor of economics, and on political parties, in favor of corporations. Singularly, neoliberalism brings in its wake a "corporate state."

Henceforth, the corporate state, shaped and formed by neoliberal principles, pushes the social contract backwards in time to the age of feudalism, a socio-economic pyramid with all of the wealth and influence at the pinnacle, but, over time, like an anvil balanced on balsa wood.

Albeit, the Left, with renewed vigor, has pushed back against neoliberalism's robbing the poor to enrich the rich. And, there are clear signals that this pushback has gained traction throughout Latin America.

The harsh social consequence of neoliberalism's free-market economics propels social movements in Latin America into the forefront of resistance. These social movements, including the Zapatistas (Chiapas, Mexico), the Landless Peasant Movement ("MST") in Brazil, the indigenous movements of Bolivia and Ecuador, and the Piqueteros or Unemployed Workers' Activists in Argentina, and the students in Chile constitute some of the more prominent groups in opposition to neoliberalism's tendency for subjugating the people, similar to a plantation economy like the American South, circa 19th century, whereby "slaves" are reclassified as "workers." It's worked for decades.

In that regard, as much as neoliberalism started (1970s) in Chile at the behest of Milton Friedman, its comeuppance is now coming to a head, as the legacy of the Latin American Left revitalizes throughout the continent.

People protesting in the streets understand the principle "to democratize means to de-marketize, to recuperate for the terrain of people's rights that which neoliberalism has delivered into the hands of the market," Emir Sader, The Weakest Link? Neoliberalism in Latin America, New Left Review 52, July-August 2008.

"Latin America is seeing its biggest wave of protests in years," Sara Schaefer Munoz, Protest Wave Poses Test for Latin American Leaders, The Wall Street Journal, Sept. 9, 2013. Tens of thousands hit the streets in Brazil, Mexico, Columbia, and Chile where, across the board, they demand the return of some alikeness of a viable social contract.

The Free Market Battles The People

In strong opposition to interference with neoliberalism, as stated in the Wall Street Journal: "There is always the temptation [for governments] to spend, to improve roads or give credit to small producers,' said Alejandro Grisanti, an economist with Barclays PLC, 'But if the market smells even a little fiscal relaxation, it will be a negative."

Thus, the battle lines between neoliberalism and a social contract are embedded within the dictates of the "free market," which, if it "smells" a little fiscal relaxation, negative consequences will hit the country via Wall Street and the City, the worldwide "epicenters for free-market discipline," chastising the perpetrators.

Thus and so, the battle lines are clear, Markets on one side, people on the other. The markets control the press, the banks, the military, the educational establishment, the media, the communications, and the police. The People control protests. The war continues in the streets.

As it happens, the Western press does not follow it in any detail, but hidden wars have been ongoing throughout Latin America for years.

Chiapas, Mexico, "The Zapatistas form the most important resistance movement of the last two decades," Chris Hedges, We All Must Become Zapatistas, Truthdig, June 1, 2014: "They understood that corporate capitalism had launched a war against us. They showed us how to fight back. The Zapatistas began by using violence, but they soon abandoned it for the slow, laborious work of building 32 autonomous, self-governing municipalities."

In Bolivia, the Cochabamba Water War of 2000 erupted in protest of privatization of the city's municipal water supply accompanied by blatant increases in water bills. Coordinadora in Defense of Water and Life, a community coalition of citizens of Cochabamba, activated tens of thousands protesting in the streets. This massive public pressure caused the city to reverse the water privatization.

Brazil's landless peasant movement ("MST"), 2,000,000 strong, commenced three decades ago, campaigning across the country to change a semi-feudal situation in which, they claim, less than 3% of the population owns two-thirds of the land and more than half the farmland lies idle, while millions of rural workers lack employment. Government forces have killed fifteen hundred (1,500) land reform activists. This hidden war continues to this day, as their struggle is carried out in the remote hinterlands.

Institutionally, the past decade has resulted in a pronounced shift away from pro-market forces, as repudiation of pro-market policies i.e., the Washington Consensus, is the raison d'etre of opposition candidates. By 2010, " roughly 330 million people – or two thirds of Latin America's total population - living in Argentina, Bolivia, Chile, Ecuador, Nicaragua, Uruguay, and Venezuela were governed by the left at the national level," Gustavo A. Flores-Macias, After Neoliberalism? The Left and Economic Reforms in Latin America, Oxford University Press, 2012.

"It's not hard to understand why: Economics. Few want to go back to the disastrous neoliberalism of the 1980s and 1990s," Greg Grandin, Why the Left Continues to Win in Latin America, The Nation, October 27, 2014, "The inability of the right to pull together a coalition and articulate a larger vision shows the depths to which the Cold War in Latin America served as something like a five-decade-long voter-preference-suppression project. Washington-led and financed anti-communism united the right's various branches. Without such an organizing principle the right can't electorally compete, at least for now, with what voters, all things considered, want: economic justice, a dignified life, peace and social welfare."

The Twilight of Neoliberalism

"There is no alternative [to free market policies]," the late British Prime Minister Margaret Thatcher once (1980s) pronounced, but across Latin America, there has been a steady erosion of support for the free market model.

Wherever Latin American countries have rejected neoliberalism, life is better. "Poverty in Latin America has been reduced substantially in the last three decades. In the late 1980s, nearly half of Latin America's population lived in poverty. Today the fraction is about a third. This marks important progress, and it has continued in some area nations. However, it is worth noting that between 2002 and 2008, poverty contracted most in Venezuela, Bolivia, Nicaragua, and Argentina, countries which had largely abandoned neoliberalism," Dr. Ronn Pineo, Senior Research Fellow, The Free Market Experiment in Latin America: Assessing Past Policies and the Search for a Pathway Forward, Council on Hemispheric Affairs, April 11, 2013.

Overall income inequality data for Latin America is less positive; however, during the 2000s the Gini coefficient (a measure of economic inequality) improved in seven countries, five of which, Venezuela, Argentina, Bolivia, Nicaragua, and Paraguay have moved the furthest away from neoliberalism.

In 1970, the richest one percent in the continent earned 363 times more than the poorest one percent. Thirty years later, on the heels of the neoliberal experiment, it's 417 times.

Mainstream economic publications, like The Economist, claim the continent is well on its way to building middle class societies. Au contraire, the evidence suggest otherwise, as 8 out of 10 new jobs in Latin America are in the "informal sector" where more than half of all Latin American workers slug it out as itinerant retail sales clerks, day laborers and other loosely organized day jobs, slugging it out without regulations or benefits, slugging it out by scratching out a measly day-by-day existence. Proof positive of neoliberalistic policies enfeebling Latin American life.

Furthermore, because the bar is set so low for middle class status in Latin America, it's in the sewer.

For example, in Chile, which is the darling of neoliberalists: "Mid-level income is very low in Chile. As a result the distance between the lower classes and the middle class is very small. Their precarious economic position makes them susceptible to social decline due to unemployment, illness, or poverty in old age," Chile's Middle Class Survives on Shaky Ground, Deutsche Welle, 2014. The middle class is defined as those who make more than $500 per month, which equates to $3.12 per hour.

Throughout Latin America, neoliberalism does not work for society because, by siphoning away funds for the betterment of society to enrichment of the elite, two-thirds of Latin American municipalities do not have the funds to treat their sewage but do dump in rivers, and three-fourths do not check public drinking water, so, little wonder tourists get diarrhea on regular occasion.

Here's what Cambridge economist Ha-Joon Chang says about neoliberal policies in Latin America: "Over the last three decades, economists provided theoretical justifications for financial deregulation and the unrestrained pursuit of short-term profits Economics has been worse than irrelevant. Economics, as it has been practiced in the last three decades, has been positively harmful," Ibid.

Neoliberalism in Latin America has been a bust, a dud, a fiasco, except for the wealthy for whom it turned into the bonanza of a lifetime. The people know it, and they're slowly, methodically, assuredly turning left.

What of the rest of the world?

Robert Hunziker lives inLos Angeles and can be reached at roberthunziker@icloud.com

[May 15, 2017] Chris Hedges The Whoredom of the Left - Chris Hedges - Truthdig

May 15, 2017 | www.truthdig.com

VANCOUVER, British Columbia

Prostitution is the quintessential expression of global capitalism. Our corporate masters are pimps. We are all being debased and degraded, rendered impoverished and powerless, to service the cruel and lascivious demands of the corporate elite. And when they tire of us, or when we are no longer of use, we are discarded as human refuse. If we accept prostitution as legal, as Germany has done, as permissible in a civil society, we will take one more collective step toward the global plantation being built by the powerful. The fight against prostitution is the fight against a dehumanizing neoliberalism that begins, but will not end, with the subjugation of impoverished girls and women.

Poverty is not an aphrodisiac. Those who sell their bodies for sex do so out of desperation. They often end up physically injured, with a variety of diseases and medical conditions, and suffering from severe emotional trauma. The left is made morally bankrupt by its failure to grasp that legal prostitution is another face of neoliberalism. Selling your body for sex is not a choice. It is not about freedom. It is an act of economic slavery.

On a rainy night recently I walked past the desperate street prostitutes in the 15 square blocks that make up the Downtown Eastside ghetto in Vancouver-most of them impoverished aboriginal women. I saw on the desolate street corners where women wait for customers the cruelty and despair that will characterize most of our lives if the architects of neoliberalism remain in power. Downtown Eastside has the highest HIV infection rate in North America. It is filled with addicts, the broken, the homeless, the old and the mentally ill, all callously tossed onto the street.

[May 15, 2017] The explosive mixture of middle-class shrinking and dual economy in the West

This idea of two segregated societies within one nation is pretty convincing.
Notable quotes:
"... A book released last March by MIT economist Peter Temin argues that the U.S. is increasingly becoming what economists call a dual economy; that is, where there are two economies in effect, and one of the populations lives in an economy that is prosperous and secure, and the other part of the population lives in an economy that resembles those of some third world countries. ..."
"... The middle class is shrinking in the United States and this is an effect of both the advance of technology and American policies ..."
"... In the United States, our policies have divided us into two groups. Above the median income - above the middle class - is what I call the FTE sector, Finance, Technology and Electronics sector - of people who are doing well, and whose incomes are rising as our national product is growing. The middle class and below are losing shares of income, and their incomes are shrinking as the Pew studies, both of them, show. ..."
"... The model shows that the FTE sector makes policy for itself, and really does not consider how well the low wage sector is doing. In fact, it wants to keep wages and earnings low in the low wage sector, to provide cheap labour for the industrial employment. ..."
"... As already described , the middle-class, which has not collapsed yet in France, still has the characteristics that fit to the neoliberal regime. However, it is obvious that this tank of voters has shrunk significantly, and the establishment is struggling to keep them inside the desirable 'status quo' with tricks like the supposedly 'fresh', apolitical image of Emmanuel Macron, the threat of Le Pen's 'evil' figure that comes from the Far-Right, or, the illusion that they have the right to participate equally to almost every economic activity. ..."
"... The media promotes examples of young businessmen who have succeed to survive economically through start-up companies, yet, they avoid to tell that it is totally unrealistic to expect from most of the Greek youth to become innovative entrepreneurs. So, this illusion is promoted by the media because technology is automating production and factories need less and less workers, even in the public sector, which, moreover, is violently forced towards privatization. ..."
"... In the middle of the pyramid, a restructured class will serve and secure the domination of the top. Corporate executives, big journalists, scientific elites, suppression forces. It is characteristic that academic research is directed on the basis of the profits of big corporations. Funding is directed increasingly to practical applications in areas that can bring huge profits, like for example, the higher automation of production and therefore, the profit increase through the restriction of jobs. ..."
May 14, 2017 | failedevolution.blogspot.gr

The Pew Research Center, released a new study on the size of the middle class in the U.S. and in ten European countries. The study found that the middle class shrank significantly in the U.S. in the last two decades from 1991 to 2010. While it also shrank in several other Western European countries, it shrank far more in the U.S. than anywhere else. Meanwhile, another study also released last week, and published in the journal Science, shows that class mobility in the U.S. declined dramatically in the 1980s, relative to the generation before that.

A book released last March by MIT economist Peter Temin argues that the U.S. is increasingly becoming what economists call a dual economy; that is, where there are two economies in effect, and one of the populations lives in an economy that is prosperous and secure, and the other part of the population lives in an economy that resembles those of some third world countries.

globinfo freexchange

MIT Economist Peter Temin spoke to Gregory Wilpert and the The Real News network.

As Temin states, among other things:

The middle class is shrinking in the United States and this is an effect of both the advance of technology and American policies . That is shown dramatically in the new study, because the United States is compared with many European countries. In some of them, the middle class is expanding in the last two decades, and in others it's decreasing. And while technology crosses national borders, national policies affect things within the country.

In the United States, our policies have divided us into two groups. Above the median income - above the middle class - is what I call the FTE sector, Finance, Technology and Electronics sector - of people who are doing well, and whose incomes are rising as our national product is growing. The middle class and below are losing shares of income, and their incomes are shrinking as the Pew studies, both of them, show.

The model shows that the FTE sector makes policy for itself, and really does not consider how well the low wage sector is doing. In fact, it wants to keep wages and earnings low in the low wage sector, to provide cheap labour for the industrial employment.

https://www.youtube.com/embed/BRs4VcHprqI" name="I1"

This model is similar to that pursued in eurozone through the Greek experiment. Yet, the establishment's decision centers still need the consent of the citizens to proceed. They got it in France with the election of their man to do the job, Emmanuel Macron.

As already described , the middle-class, which has not collapsed yet in France, still has the characteristics that fit to the neoliberal regime. However, it is obvious that this tank of voters has shrunk significantly, and the establishment is struggling to keep them inside the desirable 'status quo' with tricks like the supposedly 'fresh', apolitical image of Emmanuel Macron, the threat of Le Pen's 'evil' figure that comes from the Far-Right, or, the illusion that they have the right to participate equally to almost every economic activity.

For example, even in Greece, where the middle class suffered an unprecedented reduction because of Troika's (ECB, IMF, European Commission) policies, the last seven years, the propaganda of the establishment attempts to make young people believe that they can equally participate in innovative economic projects. The media promotes examples of young businessmen who have succeed to survive economically through start-up companies, yet, they avoid to tell that it is totally unrealistic to expect from most of the Greek youth to become innovative entrepreneurs. So, this illusion is promoted by the media because technology is automating production and factories need less and less workers, even in the public sector, which, moreover, is violently forced towards privatization.

As mentioned in previous article , the target of the middle class extinction in the West is to restrict the level of wages in developing economies and prevent current model to be expanded in those countries. The global economic elite is aiming now to create a more simple model which will be consisted basically of three main levels.

The 1% holding the biggest part of the global wealth, will lie, as always, at the top of the pyramid. In the current phase, frequent and successive economic crises, not only assist on the destruction of social state and uncontrolled massive privatizations, but also, on the elimination of the big competitors.

In the middle of the pyramid, a restructured class will serve and secure the domination of the top. Corporate executives, big journalists, scientific elites, suppression forces. It is characteristic that academic research is directed on the basis of the profits of big corporations. Funding is directed increasingly to practical applications in areas that can bring huge profits, like for example, the higher automation of production and therefore, the profit increase through the restriction of jobs.

The base of the pyramid will be consisted by the majority of workers in global level, with restricted wages, zero labor rights, and nearly zero opportunities for activities other than consumption.

This type of dual economy with the rapid extinction of middle class may bring dangerous instability because of the vast vacuum created between the elites and the masses. That's why the experiment is implemented in Greece, so that the new conditions to be tested. The last seven years, almost every practice was tested: psychological warfare, uninterrupted propaganda, financial coups, permanent threat for a sudden death of the economy, suppression measures, in order to keep the masses subservient, accepting the new conditions.

The establishment exploits the fact that the younger generations have no collective memories of big struggles. Their rights were taken for granted and now they accept that these must be taken away for the sake of the investors who will come to create jobs. These generations were built and raised according to the standards of the neoliberal regime 'Matrix'.

Yet, it is still not certain that people will accept this Dystopia so easily. The first signs can be seen already as recently, French workers seized factory and threatened to blow it up in protest over possible closure . Macron may discover soon that it will be very difficult to find the right balance in order to finish the job for the elites. And then, neither Brussels nor Berlin will be able to prevent the oncoming chaos in Europe and the West.

Read also:

[May 14, 2017] IMF to Greece Sorry Well Destroy You by Michael Hudson

Notable quotes:
"... It doesn't matter what the people vote for. Either you do what we say or we will smash your banking system." Tsipras's job is to say, "Yes I will do whatever you want. I want to stay in power rather than falling in election." ..."
"... Somebody's going to suffer. Should it the wealthy billionaires and the bankers, or should it be the Greek workers? Well, the Greek workers are not the IMF's constituency. It says: "We feel your pain, but we'd rather you suffer than our constituency." ..."
"... The basic principle at work is that finance is the new form of warfare. You can now destroy a country's economy not merely by invading it. You don't even have to bomb it, as you've done in the Near East. All you have to do is withdraw all credit to the banking system, isolate it economically from making payments to foreign countries so that you essentially put sanctions on it. You'll treat Greece like they've treated Iran or other countries. ..."
"... The class war is back in business – the class war of finance against labor, imposing austerity and shrinking living standards, lowering wages and cutting back social spending. It's demonstrating who's the winner in this economic warfare that's taking place. ..."
"... Then why is the Greek population still supportive of Syriza in spite of all of this? I mean, literally not only have they, as a population, been cut to no social safety net, no social security, yet the Syriza government keeps getting supported, elected in referendums, and they seem to be able to maintain power in spite of these austerity measures. Why is that happening? ..."
"... You also need a contingency plan for when the European Union wrecks the Greek banks, which basically have been the tool of the oligarchy in Greece. The government is going to have to take over these banks and socialize them, and use them for public purposes. Unfortunately, Tsipras never gave Varoufakis and his staff the go ahead. In effect, he ended up double crossing them after the referendum two years ago that said not to surrender. That lead to Varoufakis resigning from the government. ..."
"... Tsipras decided that he wanted to be reelected, and turned out to be just a politician, realizing that in order to he had to represent the invader and act as a client politician. His clientele is now the European Union, the IMF and the bondholders, not the Greeks. What that means is that if there is an election in Greece, people are not going to vote for him again. He knows that. He is trying to prevent an election. But later this month the Greek parliament is going to have to vote on whether or not to shrink the economy further and cut pensions even more. ..."
"... The Greek government has not said that no country should be obliged to disregard its democratic voting, dismantle its public sector and give up its sovereignty to bondholders. No country should be obliged to pay foreign creditors if the price of that is shrinking and self destruction of that economy. ..."
"... They haven't translated this political program of not paying into what this means in practice to cede sovereignty to the Brussels bureaucracy, meaning the European Central Bank on behalf of its bondholders. ..."
May 14, 2017 | www.unz.com
Sharmini Peries: The European Commission announced on May 2, that an agreement on Greek pension and income tax reforms would pave the way for further discussions on debt release for Greece. The European Commission described this as good news for Greece. The Greek government described the situation in similar terms. However, little attention has been given as to how the wider Greek population are experiencing the consequences of the policies of the Troika. On May Day thousands of Greeks marked International Workers Day with anti-austerity protests. One of the protester's a 32-year-old lawyer perhaps summed the mood, the best when he said
"The current Greek government, like all the ones before it, have implemented measures that has only one goal, the crushing of the workers, the working class and everyone who works themselves to the bone. We are fighting for the survival of the poorest who need help the most."

To discuss the most recent negotiations underway between Greece and the TROIKA, which is a European Central Bank, the EU and the IMF, here's Michael Hudson. Michael is a distinguished research professor of Economics at the University of Missouri, Kansas City. He is the author of many books including, "Killing the Host: How Financial Parasites and Debt Bondage the Global Economy" and most recently "J is for Junk Economics: A Survivor's Guide to Economic Vocabulary in the Age of Deception" .Michael, let's start with what's being negotiated at the moment.

Michael Hudson: I wouldn't call it a negotiation. Greece is simply being dictated to. There is no negotiation at all. It's been told that its economy has shrunk so far by 20%, but has to shrink another 5% making it even worse than the depression. Its wages have fallen and must be cut by another 10%. Its pensions have to be cut back. Probably 5 to 10% of its population of working age will have to immigrate.

The intention is to cut the domestic tax revenues (not raise them), because labor won't be paying taxes and businesses are going out of business. So we have to assume that the deliberate intention is to lower the government's revenues by so much that Greece will have to sell off even more of its public domain to foreign creditors. Basically it's a smash and grab exercise, and the role of Tsipras is not to represent the Greeks because the Troika have said, "The election doesn't matter.

It doesn't matter what the people vote for. Either you do what we say or we will smash your banking system." Tsipras's job is to say, "Yes I will do whatever you want. I want to stay in power rather than falling in election."

Sharmini Peries: Right. Michael you dedicated almost three chapters in your book "Killing the Host" to how the IMF economists actually knew that Greece will not be able to pay back its foreign debt, but yet it went ahead and made these huge loans to Greece. It's starting to sound like the mortgage fraud scandal where banks were lending people money to buy houses when they knew they couldn't pay it back. Is it similar?

Michael Hudson: The basic principle is indeed the same. If a creditor makes a loan to a country or a home buyer knowing that there's no way in which the person can pay, who should bear the responsibility for this? Should the bad lender or irresponsible bondholder have to pay, or should the Greek people have to pay?

IMF economists said that Greece can't pay, and under the IMF rules it is not allowed to make loans to countries that have no chance of repaying in the foreseeable future. The then-head of the IMF, Dominique Strauss-Kahn, introduced a new rule – the "systemic problem" rule. It said that if Greece doesn't repay, this will cause problems for the economic system – defined as the international bankers, bondholder's and European Union budget – then the IMF can make the loan.

This poses a question on international law. If the problem is systemic, not Greek, and if it's the system that's being rescued, why should Greek workers have to dismantle their economy? Why should Greece, a sovereign nation, have to dismantle its economy in order to rescue a banking system that is guaranteed to continue to cause more and more austerity, guaranteed to turn the Eurozone into a dead zone? Why should Greece be blamed for the bad malstructured European rules? That's the moral principle that's at stake in all this.

Sharmini Peries: Michael, The New York Times has recently published an article titled, "IMF torn over whether to bail out Greece again." It essentially describes the IMF as being sympathetic towards Greece in spite of the fact, as you say, they knew that Greece could not pay back this money when it first lent it the money with the Troika. Right now, the IMF sounds rational and thoughtful about the Greek people. Is this the case?

Michael Hudson: Well, Yanis Varoufakis, the finance minister under Syriza, said that every time he talked to the IMF's Christine Lagarde and others two years ago, they were sympathetic. They said, "I am terribly sorry we have to destroy your economy. I feel your pain, but we are indeed going to destroy your economy. There is nothing we can do about it. We are only following orders." The orders were coming from Wall Street, from the Eurozone and from investors who bought or guaranteed Greek bonds.

Being sympathetic, feeling their pain doesn't really mean anything if the IMF says, "Oh, we know it is a disaster. We are going to screw you anyway, because that's our job. We are the IMF, after all. Our job is to impose austerity. Our job is to shrink economies, not help them grow. Our constituency is the bondholders and banks."

Somebody's going to suffer. Should it the wealthy billionaires and the bankers, or should it be the Greek workers? Well, the Greek workers are not the IMF's constituency. It says: "We feel your pain, but we'd rather you suffer than our constituency."

So what you read is simply the usual New York Times hypocrisy, pretending that the IMF really is feeling bad about what it's doing. If its economists felt bad, they would have done what the IMF European staff did a few years ago after the first loan: They resigned in protest. They would write about it and go public and say, "This system is corrupt. The IMF is working for the bankers against the interest of its member countries." If they don't do that, they are not really sympathetic at all. They are just hypocritical.

Sharmini Peries: Right. I know that the European Commission is holding up Greece as an example in order to discourage other member nations in the periphery of Europe so that they won't default on their loans. Explain to me why Greece is being held up as an example.

Michael Hudson: It's being made an example for the same reason the United States went into Libya and bombed Syria: It's to show that we can destroy you if you don't do what we say. If Spain or Italy or Portugal seeks not to pay its debts, it will meet the same fate. Its banking system will be destroyed, and its currency system will be destroyed.

The basic principle at work is that finance is the new form of warfare. You can now destroy a country's economy not merely by invading it. You don't even have to bomb it, as you've done in the Near East. All you have to do is withdraw all credit to the banking system, isolate it economically from making payments to foreign countries so that you essentially put sanctions on it. You'll treat Greece like they've treated Iran or other countries.

"We have life and death power over you." The demonstration effect is not only to stop Greece, but to stop countries from doing what Marine Le Pen is trying to do in France: withdraw from the Eurozone.

The class war is back in business – the class war of finance against labor, imposing austerity and shrinking living standards, lowering wages and cutting back social spending. It's demonstrating who's the winner in this economic warfare that's taking place.

Sharmini Peries: Then why is the Greek population still supportive of Syriza in spite of all of this? I mean, literally not only have they, as a population, been cut to no social safety net, no social security, yet the Syriza government keeps getting supported, elected in referendums, and they seem to be able to maintain power in spite of these austerity measures. Why is that happening?

Michael Hudson: Well, that's the great tragedy. They initially supported Syriza because it promised not to surrender in this economic war. They said they would fight back. The plan was not pay the debts even if this led Europe to force Greece out of the European Union.

In order to do this, however, what Yanis Varoufakis and his advisors such as James Galbraith wanted to do was say, "If we are going not to pay the debt, we are going to be expelled from the Euro Zone. We have to have our own currency. We have to have our own banking system." But it takes almost a year to put in place your own physical currency, your own means of reprogramming the ATM machines so that people can use it, and reprogramming the banking system.

You also need a contingency plan for when the European Union wrecks the Greek banks, which basically have been the tool of the oligarchy in Greece. The government is going to have to take over these banks and socialize them, and use them for public purposes. Unfortunately, Tsipras never gave Varoufakis and his staff the go ahead. In effect, he ended up double crossing them after the referendum two years ago that said not to surrender. That lead to Varoufakis resigning from the government.

Tsipras decided that he wanted to be reelected, and turned out to be just a politician, realizing that in order to he had to represent the invader and act as a client politician. His clientele is now the European Union, the IMF and the bondholders, not the Greeks. What that means is that if there is an election in Greece, people are not going to vote for him again. He knows that. He is trying to prevent an election. But later this month the Greek parliament is going to have to vote on whether or not to shrink the economy further and cut pensions even more.

If there are defections from Tsipras's Syriza party, there will be an election and he will be voted out of office. I won't say out of power, because he has no power except to surrender to the Troika. But he'd be out of office. There will probably have to be a new party created if there's going to be hope of withstanding the threats that the European Union is making to destroy Greece's economy if it doesn't succumb to the austerity program and step up its privatization and sell off even more assets to the bondholders.

Sharmini Peries: Finally, Michael, why did the Greek government remove the option of Grexit from the table in order to move forward?

Michael Hudson: In order to accept the Eurozone. You're using its currency, but Greece needs to have its own currency. The reason it agreed to stay in was that it had made no preparation for withdrawing. Imagine if you are a state in the United States and you want to withdraw: you have to have your own currency. You have to have your own banking system. You have to have your own constitution. There was no attempt to put real thought behind what their political program was.

They were not prepared and still have not taken steps to prepare for what they are doing. They haven't made any attempt to justify non-payment of the debt under International Law: the law of odious debt, or give a reason why they are not paying.

The Greek government has not said that no country should be obliged to disregard its democratic voting, dismantle its public sector and give up its sovereignty to bondholders. No country should be obliged to pay foreign creditors if the price of that is shrinking and self destruction of that economy.

They haven't translated this political program of not paying into what this means in practice to cede sovereignty to the Brussels bureaucracy, meaning the European Central Bank on behalf of its bondholders.

Note: Wikipedia defines Odious Debt: "In international law, odious debt, also known as illegitimate debt, is a legal doctrine that holds that the national debt incurred by a regime for purposes that do not serve the best interests of the nation, should not be enforceable."

Michael Hudson is the author of Killing the Host (published in e-format by CounterPunch Books and in print by Islet ). His new book is J is For Junk Economics . He can be reached at mh@michael-hudson.com

[May 10, 2017] Globalization and the End of the Labor Aristocracy, Part 4 naked capitalism

Notable quotes:
"... By Jayati Ghosh, Professor of Economics and Chairperson at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi. This is Part 3 of a four-part article, published in the March/April 2017 special "Costs of Empire" issue of Dollars & Sense magazine. Parts 1, 2 and 3 are available here. here , and here , respectively. Cross posted from Triple Crisis ..."
May 10, 2017 | www.nakedcapitalism.com

Globalization and the End of the Labor Aristocracy, Part 4 Posted on May 9, 2017 by Yves Smith Yves here. More and more news stories and academic studies confirm not simply that the middle class in the US has been shrinking and having its standard of living stagnate (at best). They are also showing that things have been decaying for longer than the pundits admitted. Consider what the Washington Post reports today, based on a new NEBR study :

America is getting richer every year. The American worker is not.

Far from it: On average, workers born in 1942 earned as much or more over their careers than workers born in any year since, according to new research - and workers on the job today shouldn't expect to catch up with their predecessors in their remaining years of employment .

While economists have been concerned about recent data on earnings, the new paper suggests that ordinary Americans have been dealing with serious economic problems for much longer than may be widely recognized.

The new paper includes some "astonishing numbers," said Gary Burtless, an economist at the nonpartisan Brookings Institution who was not involved in the research. "The stagnation of living standards began so much earlier than people think," he said

For instance, the typical 27-year-old man's annual earnings in 2013 were 31 percent less than those of a typical 27-year-old man in 1969. The data suggest that today's young men are unlikely to make up for that decline by earning more in the future.

By Jayati Ghosh, Professor of Economics and Chairperson at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi. This is Part 3 of a four-part article, published in the March/April 2017 special "Costs of Empire" issue of Dollars & Sense magazine. Parts 1, 2 and 3 are available here. here , and here , respectively. Cross posted from Triple Crisis

A recent report from the McKinsey Global Institute, "Poorer than Their Parents? Flat or falling incomes in advanced economies" (July 2016) shows how the past decade has brought significantly worse economic outcomes for many people in the developed world.

Falling Incomes

In 25 advanced economies, 65-70% of households (540-580 million people) "were in segments of the income distribution whose real incomes were flat or had fallen" between 2005 and 2014. By contrast, between 1993 and 2005, "less than 2 percent, or fewer than ten million people, experienced this phenomenon."

In Italy, a whopping 97% of the population had stagnant or declining market incomes between 2005 and 2014. The equivalent figures were 81% for the United States and 70% for the United Kingdom.

The worst affected were "young people with low educational attainment and women, single mothers in particular." Today's younger generation in the advanced countries is "literally at risk of ending up poorer than their parents," and in any case already faces much more insecure working conditions.

Shifting Income Shares

The McKinsey report noted that "from 1970 to 2014, with the exception of a spike during the 1973–74 oil crisis, the average wage share fell by 5 percentage points in the six countries studied in depth" (United States, United Kingdom, France, Italy, the Netherlands and Sweden); in the "most extreme case, the United Kingdom, by 13 percentage points."

These declines occurred "despite rising productivity, suggesting a disconnect between productivity and incomes." Productivity gains were either grabbed by employers or passed on in the form of lower prices to maintain competitiveness.

Declining wage shares are widely seen as results of globalization and technological changes, but state policies and institutional relations in the labor market matter. According to the McKinsey report. "Swedish labor policies such as contracts that protect both wage rates and hours worked" resulted in ordinary workers receiving a larger share of income.

Countries that have encouraged the growth of part-time and temporary contracts experienced bigger declines in wage shares. According to European Union data, more than 40% of EU workers between 15 and 25 years have insecure and low-paying contracts. The proportion is more than half for the 18 countries in the Eurozone, 58% in France, and 65% in Spain.

The other side of the coin is the rising profit shares in many of these rich countries. In the United States, for example, "after-tax profits of U.S. firms measured as a share of the national income even exceeded the 10.1 percent level last reached in 1929."

Policy Matters

Government tax and transfer policies can change the final disposable income of households. Across the 25 countries studied in the McKinsey report, only 20-25% of the population experienced flat or falling disposable incomes. In the United States, government taxes and transfers turned a "decline in market incomes for 81 percent of all income segments into an increase in disposable income for nearly all households."

Government policies to intervene in labor markets also make a difference. In Sweden, the government "intervened to preserve jobs, market incomes fell or were flat for only 20 percent, while disposable income advanced for almost everyone."

In most of the countries examined in the study, government policies were not sufficient to prevent stagnant or declining incomes for a significant proportion of the population.

Effects on Attitudes

The deteriorating material reality is reflected in popular perceptions. A 2015 survey of British, French, and U.S. citizens confirmed this, as approximately 40% "felt that their economic positions had deteriorated."

The people who felt worse-off, and those who did not expect the situation to improve for the next generation, "expressed negative opinions about trade and immigration."

More than half of this group agreed with the statement, "The influx of foreign goods and services is leading to domestic job losses." They were twice as likely as other respondents to agree with the statement, "Legal immigrants are ruining the culture and cohesiveness in our society."

The survey also found that "those who were not advancing and not hopeful about the future" were, in France, more likely to support political parties such as the far-right Front National and, in Britain, to support Brexit.

Effects on Politics

Decades of neoliberal economic policies have hollowed out communities in depressed areas and eliminated any attractive employment opportunities for youth. Ironically, in the United States this favored the political rise of Donald Trump, who is himself emblematic of the plutocracy.

Similar tendencies are also clearly evident in Europe. Rising anti-EU sentiment has been wrongly attributed only to policies allowing in more migrants. The hostile response to immigration is part of a broader dissatisfaction related to the design and operation of the EU. For years now, it has been clear that the EU has failed as an economic project. This stems from the very design of the economic integration-flawed, for example, in the enforcement of monetary integration without banking union or a fiscal federation that would have helped deal with imbalances between EU countries-as well as from the particular neoliberal economic policies that it has forced its members to pursue.

This has been especially evident in the adoption of austerity policies across the member countries, remarkably even among those that do not have large current-account or fiscal deficits. As a result, growth in the EU has been sclerotic at best since 2004, and even the so-called "recovery" after 2012 has been barely noticeable. Even this lacklustre performance has been highly differentiated, with Germany emerging as the clear winner from the formation of the Eurozone. Even large economies like France, Italy, and Spain experienced deteriorating per capita incomes relative to Germany from 2009 onwards. This, combined with fears of German domination, probably added to the resentment of the EU that is now being expressed in both right-wing and left-wing movements across Europe.

The union's misguided emphasis on neoliberal policies and fiscal austerity packages has also contributed to the persistence of high rates of unemployment, which are higher than they were more than a decade ago. The "new normal" therefore shows little improvement from the period just after the Great Recession-the capitalist world economy may no longer be teetering on the edge of a cliff, but that is because it has instead sunk into a mire.

It is sad but not entirely surprising that the globalization of the workforce has not created a greater sense of international solidarity, but rather undermined it. Quite obviously, progressive solutions cannot be found within the existing dominant economic paradigm. But reversions to past ideals of socialism may not be all that effective either. Rather, this new situation requires new and more relevant economic models of socialism to be developed, if they are to capture the popular imagination.

Such models must transcend the traditional socialist paradigm's emphasis on centralized government control over an undifferentiated mass of workers. They must incorporate more explicit emphasis on the rights and concerns of women, ethnic minorities, tribal communities, and other marginalised groups, as well as recognition of ecological constraints and the social necessity to respect nature. The fundamental premises of the socialist project, however, remain as valid as ever: The unequal, exploitative and oppressive nature of capitalism; the capacity of human beings to change society and thereby alter their own futures; and the necessity of collective organisation to do so.

NOTE: Parts of this article appeared in "The Creation of the New Imperialism: The Institutional Architecture," Monthly Review , July 2015.

Thuto, May 9, 2017 at 6:50 am

While incomes in the developed world are flat, the outcomes globalization has imposed on labour in the developing world are even more dire. Lets face it, the global south is effectively a labour reserve pool that is used by trans-national corporations as a de facto income growth suppresant in the global north. This dynamic is particurlarly pernicious for global south workers because they enter labour markets at or near subsistence level wages, with upward income mobility nearly impossible as ill informed developing country governments, in their naive quest to create investor friendly environments, bargain away any protections that could ensure said upward income mobility. Furthermore, these trans-national corporations are running a globalized exploitation racket where developing nations are pitted against one another in a race to see who can enslave their labour force more fervently in service of global capital. This of course has the effect of, at best, depressing incomes in developed economies, and at worst, completely eliminating large swathes of jobs in many developed economy sectors

JTMcPhee, May 9, 2017 at 9:11 am

I'd offer that the corporate entities that pretty much rule us are more completely described as post- and supra-national than simply transnational. Creatures birthed like Aliens that ate their way out of the mothers that spawned them. Given life by legalisms born out of nation-states and other grafters of "franchise" and "legitimacy," now ingesting and digesting their parents and lesser siblings.

Also, that there's just too many people living off a declining carrying capacity of the planet. And what is with the notion that we all have some kind or reasonable expectation to be "richer" than our parents? Is that not part of the algo-rhythms that are killing us mopes, wracked with dreams of sugarplum carboconsumption and hyped with fevered visions of "innovation" and "progress" based on "disruption" and monetization? And thus willing (on the part of those who are aware of the vague shape of the Bezzle and hope to gain from it, against the well-being of our fellows) or are so oppressed and oblivious and Bernays-ized not to see it at all.

Immunity, impunity, invulnerability, the hallmarks of the looters. "Upward income mobility" except for the very few that by birth or other lucky happenstance can manipulate their way into the self-feeding gyre of wealth accumulation and attendant power, is an awful example of unobtainium dangled at the end of the carrot-stick

John Wright, May 9, 2017 at 9:24 am

The article points to the elephant in the room when it closes with "as well as recognition of ecological constraints and the social necessity to respect nature."

One can suggest that TPTB may recognize that climate change/ecological damage is quite real and continuing apace.

They know they have a "denominator/divisor" problem with respect to a growing world wide population and resource allocation.

TPTB are hoovering up all they can for their future use.

Austerity policies and encouragement of subsistence level wages delay the ecological day of reckoning as WW consumption is lower as a consequence.

Susan the other, May 9, 2017 at 11:01 am

as Wolfgang Schäuble and many others have said, We can't all trade our way out of this mess. If we carry that insight one step further it becomes, We can't all manufacture our way out of this mess. The problem with trying to invent an inclusive economy is that we don't know how to do so without industry and industry will soon end life on this planet. If the oceans collapse, it's over. So instead of using a mild form of identity politics and a new social contract for sharing the gains of capitalism/socialism we will have to confine ourselves to making and using/recycling what we need and nothing more. No surplus. No trade. No finance based on debt servicing. And in an overpopulated world that means no labor policies as we once knew them. For lack of imagination we are looking at a New Communism. What else?

DavidBarrera, May 9, 2017 at 1:15 pm

From Yves: "On average, workers born in 1942 earned as much or more over their careers than workers born in any year since, according to new research"
1942 makes Schumpeter come to mind. His book Capitalism, Socialism and Democracy is the most celebrated Marxism's bashing to date. Schumpeter's reading of Marx or Marxism does not qualify as unfair; his was a non-reading activity. Here is an excerpt from Schumpeter, the visionary (my emphasis added)
"For the RELATIVE SHARE OF WAGES AND SALARIES IN TOTAL INCOME varies but little from year to year and is remarkably constant over time-it certainly does not reveal any tendency to fall"

Alejandro, May 9, 2017 at 6:03 pm

"creative destruction" has seemed mostly about breaking then remaking a social order that serves the "masters of mankind" not to mention, spinning the fodder that rationalizes an endless war racket, by their sycophantic apologists

"David" makes David Harvey come to mind "Neo-liberalism and the restoration of class power"

https://books.google.com.pr/books?id=Z7sS53uqTJoC&pg=PP3&source=gbs_selected_pages&cad=2#v=onepage&q&f=false

diptherio, May 9, 2017 at 3:55 pm

The new paper includes some "astonishing numbers," said Gary Burtless, an economist at the nonpartisan Brookings Institution who was not involved in the research. "The stagnation of living standards began so much earlier than people think,"

Who are these "people" to whom he refers? Some of us have known that since waaaaay before these numbers came out.

Pelham, May 9, 2017 at 6:19 pm

I wonder whether living standards have suffered much more than is typically documented. The stuff that we're forced to buy - housing, medical care, education - are all way up and, I suspect, make up a much larger share of the inflation-measuring typical basket of household goods.

And other items take a big and probably under-measured chunk of income as well. I've lost track of how many cellphones I've had to buy over the past 10 years, even though I hate them and try to keep my consumption of these toxic little marvels to a minimum (unfortunately, I'm required to have a smartphone for work).

McWatt, May 9, 2017 at 6:23 pm

On the flip side, from an owners perspective, I was able to hire 36 people in 1983 on a given business gross income and today I struggle to employ 2 on that same gross.

[May 08, 2017] Warren Buffett Says Free Trade Has Turned American Workers Into Roadkill

May 08, 2017 | www.breitbart.com
"Nobody should be roadkill," Buffet said Saturday at the festival-like annual meeting of Berkshire Hathaway in Omaha, Nebraska.

The billionaire, who supported Barack Obama and backed Hillary Clinton in the 2016 election, now sounds almost Trump-ish. His comments on American workers echoed the remarks of President Donald Trump in his inaugural speech in January, which described a landscape of "American carnage" where closed factories are "scattered like tombstones."

Toward the end of the question and answer session with Buffett and his longtime sidekick Charlie Munger, investor Whitney Tilson asked if businesses should consider the fates of millions of Americans displaced by trade and technology instead of focussing solely on maximizing shareholder value. Buffett argued that free trade was a benefit to the economy at large but that politicians needed to "take care of the people who become roadkill."

This wasn't the first time Buffett has used the phrase. Back in February, he more-or-less gave this material a test run on CNBC's Squawkbox.

So free trade is wonderful for the world and for the United States, but its benefits are diffused among 320 million people. You buy your bananas cheaper because we don't try and produce them in the United States. But the penalties from free trade are terrible to specific industries. And as an investor, I can own – make a dumb decision on owning a shoe company. But if I own a good insurance company, I can diversify away the problems. If you're a 55-year-old steelworker, you can't diversify away your talents. I mean, you had it if steel or textiles or shoes become subject to total, it all moves offshore. So you want to have free trade, but you also have to take care of the people who, through no fault of their own, have spent their life learning one profession. And you can talk about retraining and all that, but it just isn't practical. And just take Berkshire Hathaway. We started with 2,000 employees in New Bedford, Mass, turning out textiles. And that business was doomed. And we had workers there who really they didn't have alternatives at age 50. Fair number of them just spoke Portuguese. They didn't have a chance. And a rich country that's prospering because of free trade, and as the world is prospering, should keep the free trade as much as possible. But they also should take care of the people that become the roadkill, you know, when an industry moves.

[May 07, 2017] Prime-Age Employment Rate Hits New High for Recovery

May 07, 2017 | economistsview.typepad.com
point , May 07, 2017 at 05:34 AM
Perhaps this report raises the possibility that this low pressure low growth economy may actually lead to a new high in the prime working age cohort, still with little wage growth.
libezkova -> point... , May 07, 2017 at 01:33 PM
Boomers are retiring and that increases employment in prime age (25-54) cohort. So to take only prime age is a little bit disingenuous. This effect needs to be taken into consideration.

Those who were born before 1950 were probably the most numerous. They all will be over 67 at the end of the year.

[May 04, 2017] Atomized workforce make it difficult to unionize

May 04, 2017 | www.nakedcapitalism.com

Workers in the so-called 'gig economy' face heightening conditions of precarity and exploitation. From delivery couriers to taxi drivers, this series has shown that conditions of work are increasingly deleterious and show little sign of improvement.

To combat this, innovative new strategies of organisation and mobilisation have been developed. New, and more direct, tactics of trade union struggle have been at the heart of successful disputes led by the Independent Workers Union of Great Britain in London and via spontaneous strikes by Uber drivers and others across the USA , the UK , France , and beyond .

As yet, there has been less traction for these forms of the gig economy in Latin America. This may be about to change, as according to a recent Bloomberg report Uber HQ is responding to recent negative press attention by turning to the region as its new 'Promised Land'.

Three reasons may explain why the gig economy has had little success so far in the region. First, it relies on a business model that requires particular market conditions, namely a high volume of relatively high-income consumers living alongside significant surplus labour. Such conditions are not as widespread in Latin America as in Europe and North America.

oho , May 4, 2017 at 8:01 am

sorry to be a debbie downer--Uber-Lyft drivers have been trying to organize (both work slowdowns and unions) for years with no success outside of Seattle, Austin, NYC. (wouldn't count Denver) (see the organization forums at uberpeople dot net)

problems: workers' don't have the capital to organize a viable alternative unless there is a very pro-driver local govt/regulatory system (eg, Austin). Austin is literally one of the few municipalities who didn't buy Uber-Lyft's Orwellian it-aint-a-cab-it's "rideshare" nonsense.

Yes, while the app can be replicated--Uber's moats are ultracheap/subsidized fares, regulatory capture, a global network and user inertia as Uber is the go-to app.

More problems: atomized workforce; lots of part-timers who have different incentives v. full-timers; (sorry if this sounds awful) desperate or innumerate natives or recent immigrants who don't mind working at/or below minimum wage as it's > $0; drivers are commodities easily replaced, lack of support/indifference from customers; customers are addicted to low fares and don't want to care about the externalities (like Americans are with cheap meat); people had a low opinion of the taxi industry.

Bottom line; many drivers have been thinking these problems for a while it's David v. Goliath and his lobbyists and his investor cash hoarde.

Cite: I was a driver who completed literally thousands of rides.

oho , May 4, 2017 at 8:22 am

>>so too do the foundations for collective actions and the terms on which workers can begin to fight bac

one more thing the collective action problem's been around FOREVER. And gig economy workers ain't no different.

see "Logic of Collective Action" Mansur Olson.
https://en.wikipedia.org/wiki/The_Logic_of_Collective_Action

Left in Wisconsin , May 4, 2017 at 11:29 am

Gig workers won't organize into unions – until they do. Something will spark it, it will happen first in Seattle and the other places where the organizing infrastructure is in place, and then it will happen lots of other places all at once, well ahead of any drawn out organizing activity. This is how it happens, how it always happens.

Because we have an existing private sector labor law that says independent contractors are not employees, the legal part will be awkward and confusing. But when the spark is lit, that won't really matter. The law will, eventually, accommodate itself to the reality.

The only question is whether this happens sometime in the next two years or in the next twenty years.

FidderHill , May 4, 2017 at 12:52 pm

Actually, I gave up reading the article after the first paragraph (skipped right to the always insightful comments section). Anyone who uses the words 'precarity" (I don't even think that's real word) and "deleterious" in the first two sentences is someone whose clarity of thinking is immediately suspect. Inflated academic jargon has become the death rattle of the university intellectual class. A long time ago Joan Didion hit the nail on the head: "As it happens, I am still committed to the idea that the ability to think for one's self depends upon one's mastery of the language."

[May 01, 2017] Trump: A Resisters Guide by Wesley Yang

Recommended !
Jan 21, 2017 | harpers.org
[Neo]liberalism that needs monsters to destroy can never politically engage with its enemies. It can never understand those enemies as political actors, making calculations, taking advantage of opportunities, and responding to constraints. It can never see in those enemies anything other than a black hole of motivation, a cesspool where reason goes to die.

Hence the refusal of empathy for Trump's supporters. Insofar as it marks a demand that we not abandon antiracist principle and practice for the sake of winning over a mythicized white working class, the refusal is unimpeachable. But like the know-nothing disavowal of knowledge after 9/11, when explanations of terrorism were construed as exonerations of terrorism, the refusal of empathy since 11/9 is a will to ignorance. Far simpler to imagine Trump voters as possessed by a kind of demonic intelligence, or anti-intelligence, transcending all the rules of the established order. Rather than treat Trump as the outgrowth of normal politics and traditional institutions - it is the Electoral College, after all, not some beating heart of darkness, that sent Trump to the White House - there is a disabling insistence that he and his forces are like no political formation we've seen. By encouraging us to see only novelty in his monstrosity, analyses of this kind may prove as crippling as the neocons' assessment of Saddam's regime. That, too, was held to be like no tyranny we'd seen, a despotism where the ordinary rules of politics didn't apply and knowledge of the subject was therefore useless.

Such a [neo]liberalism becomes dependent on the very thing it opposes, with a tepid mix of neoliberal markets and multicultural morals getting much-needed spice from a terrifying right. Hillary Clinton ran hard on the threat of Trump, as if his presence were enough to authorize her presidency.

Where Sanders promised to change the conversation, to make the battlefield a contest between a multicultural neoliberalism and a multiracial social democracy, Clinton sought to keep the battlefield as it has been for the past quarter-century. In this single respect, she can claim a substantial victory. It's no accident that one of the most spectacular confrontations since the election pitted the actors of Hamilton against the tweets of Trump. These fixed, frozen positions - high on rhetoric, low on action - offer an almost perfect tableau of our ongoing gridlock of recrimination.

Clinton waged this campaign on the belief that her neoliberalism of fear could defeat the ethnonationalism of the right. Let us not make the same mistake twice. Let us not be addicted to "the drug of danger," as Athena says in the Oresteia, to "the dream of the enemy that has to be crushed, like a herb, before [we] can smell freedom."

The term "meritocracy" became shorthand for a desirable societal ideal soon after it was coined by the British socialist Sir Michael Young. But Young had originally used it to describe a dystopian future. His 1958 satirical novel, The Rise of the Meritocracy, imagines the creation and growth of a national system of intelligence testing, which identifies talented young people from every stratum of society in order to install them in special schools, where they are groomed to make the best use possible of their innate advantages.

In the novel, what begins as a struggle against inherited privilege results in the consolidation of a new ruling class that derives its legitimacy from superior merit. This class becomes, within a few generations, a hereditary aristocracy in its own right. Sequestered within elite institutions, people of high intelligence marry among themselves, passing along their high social position and superior genes to their progeny. Terminal inequality is the result. The gradual shift from inheritance to merit, Young writes, made "nonsense of all their loose talk of the equality of man":

Men, after all, are notable not for the equality, but for the inequality, of their endowment. Once all the geniuses are amongst the elite, and all the morons are amongst the workers, what meaning can equality have? What ideal can be upheld except the principle of equal status for equal intelligence? What is the purpose of abolishing inequalities in nurture except to reveal and make more pronounced the inescapable inequalities of Nature?

I thought about this book often in the years before the crack-up of November 2016. In early 2015, the Harvard sociologist Robert Putnam published a book that seemed to tell as history the same story that Young had written as prophecy. Our Kids: The American Dream in Crisis opens with an evocation of the small town of Port Clinton, Ohio, where Putnam grew up in the 1950s - a "passable embodiment of the American Dream, a place that offered decent opportunity for all the kids in town, whatever their background." Port Clinton was, as Putnam is quick to concede, a nearly all-white town in a pre-feminist and pre-civil-rights America, and it was marked by the unequal distribution of power that spurred those movements into being. Yet it was also a place of high employment, strong unions, widespread homeownership, relative class equality, and generally intact two-parent families. Everyone knew one another by their first names and almost everyone was headed toward a better future; nearly three quarters of all the classmates Putnam surveyed fifty years later had surpassed their parents in both educational attainment and wealth.

When he revisited it in 2013, the town had become a kind of American nightmare. In the 1970s, the industrial base entered a terminal decline, and the town's economy declined with it. Downtown shops closed. Crime, delinquency, and drug use skyrocketed. In 1993, the factory that had offered high-wage blue-collar employment finally shuttered for good. By 2010, the rate of births to unwed mothers had risen to 40 percent. Two years later, the average worker in the county "was paid roughly 16 percent less in inflation-adjusted dollars than his or her grandfather in the early 1970s."

Young's novel ends with an editorial note informing readers that the fictional author of the text had been killed in a riot that was part of a violent populist insurrection against the meritocracy, an insurrection that the author had been insisting would pose no lasting threat to the social order. Losing every young person of promise to the meritocracy had deprived the working class of its prospective leaders, rendering it unable to coordinate a movement to manifest its political will. "Without intelligence in their heads," he wrote, "the lower classes are never more menacing than a rabble."

We are in the midst of a global insurrection against ruling elites. In the wake of the most destructive of the blows recently delivered, a furious debate arose over whether those who supported Donald Trump deserve empathy or scorn. The answer, of course, is that they deserve scorn for resorting to so depraved and false a solution to their predicament - and empathy for the predicament itself. (And not just because advances in technology are likely to make their predicament far more widely shared.) What is owed to them is not the lachrymose pity reserved for victims (though they have suffered greatly) but rather a practical appreciation of how their antagonism to the policies that determined the course of this campaign - mass immigration and free trade - was a fully political antagonism that was disregarded for decades, to our collective detriment.

A policy of benign neglect of immigration laws invites into our country a casualized workforce without any leverage, one that competes with the native-born and destroys whatever leverage the latter have to negotiate better terms for themselves. The policy is a subsidy to American agribusiness, meatpacking plants, restaurants, bars, and construction companies, and to American families who would not otherwise be able to afford the outsourcing of childcare and domestic labor that the postfeminist, dual-income family requires. At the same time, a policy of free trade pits native-born workers against foreign ones content to earn pennies on the dollar of their American counterparts.

In lieu of the social-democratic provision of childcare and other services of domestic support, we have built a privatized, ad hoc system of subsidies based on loose border enforcement - in effect, the nation cutting a deal with itself at the expense of the life chances of its native-born working class. In lieu of an industrial policy that would preserve intact the economic foundation of their lives, we rapidly dismantled our industrial base in pursuit of maximal aggregate economic growth, with no concern for the uneven distribution of the harms and the benefits. Some were enriched hugely by these policies: the college-educated bankers, accountants, consultants, technologists, lawyers, economists, and corporate executives who built a supply chain that reached to the countries where we shipped the jobs. Eventually, of course, many of these workers learned that both political parties regarded them as fungible factors of production, readily discarded in favor of a machine or a migrant willing to bunk eight to a room.

Four decades of neoliberal globalization have cleaved our country into two hostile classes, and the line cuts across the race divide. On one side, college students credential themselves for meritocratic success. On the other, the white working class increasingly comes to resemble the black underclass in indices of social disorganization. On one side of the divide, much energy is expended on the eradication of subtler inequalities; on the other side, an equality of immiseration increasingly obtains.

Even before the ruling elite sent the proletariat off to fight a misbegotten war, even before it wrecked the world economy through heedless lending, even before its politicians rescued those responsible for the crisis while allowing working-class victims of all colors to sink, the working class knew that it had been sacrificed to the interests of those sitting atop the meritocratic ladder. The hostility was never just about differing patterns in taste and consumption. It was also about one class prospering off the suffering of another. We learned this year that political interests that go neglected for decades invariably summon up demagogues who exploit them for their own gain. The demagogues will go on to betray their supporters and do enormous harm to others.

If we are to arrest the global descent into barbarism, we will have to understand the political antagonism at the heart of the meritocratic project and seek a new kind of politics. If we choose to neglect the valid interests of the working class, Trump will prove in retrospect to have been a pale harbinger of even darker nightmares to come.

[Apr 28, 2017] The Final Stage of the Machiavellian Elites Takeover of America by Paul Fitzgerald & Elizabeth Gould

Notable quotes:
"... The true irony of today's late-stage efforts by Washington to monopolize "truth" and attack alternate narratives isn't just in its blatant contempt for genuine free speech. ..."
"... the entire "Freedom Manifesto" employed by the United States and Britain since World War II was never free at all, but a concoction of the CIA's Psychological Strategy Board 's (PSB) comprehensive psychological warfare program waged on friend and foe alike. ..."
"... The CIA would come to view the entire program, beginning with the 1950 Berlin conference, to be a landmark in the Cold War, not just for solidifying the CIA's control over the non-Communist left and the West's "free" intellectuals, but for enabling the CIA to secretly disenfranchise Europeans and Americans from their own political culture in such a way they would never really know it. ..."
"... The modern state is an engine of propaganda, alternately manufacturing crises and claiming to be the only instrument that can effectively deal with them. ..."
"... PSB D-33/2 foretells of a "long-term intellectual movement, to: break down world-wide doctrinaire thought patterns" while "creating confusion, doubt and loss of confidence" in order to "weaken objectively the intellectual appeal of neutralism and to predispose its adherents towards the spirit of the West." The goal was to "predispose local elites to the philosophy held by the planners," while employing local elites "would help to disguise the American origin of the effort so that it appears to be a native development." ..."
"... Burnham's Machiavellian elitism lurks in every shadow of the document. As recounted in Frances Stoner Saunder's "The Cultural Cold War," "Marshall also took issue with the PSB's reliance on 'non-rational social theories' which emphasized the role of an elite 'in the manner reminiscent of Pareto, Sorel, Mussolini and so on.' ..."
"... With "The Machiavellians," Burnham had composed the manual that forged the old Trotskyist left together with a right-wing Anglo/American elite. ..."
"... The political offspring of that volatile union would be called neoconservatism, whose overt mission would be to roll back Russian/Soviet influence everywhere. Its covert mission would be to reassert a British cultural dominance over the emerging Anglo/American Empire and maintain it through propaganda. ..."
"... Rarely spoken of in the context of CIA-funded secret operations, the IRD served as a covert anti-Communist propaganda unit from 1946 until 1977. According to Paul Lashmar and James Oliver, authors of " Britain's Secret Propaganda War ," "the vast IRD enterprise had one sole aim: To spread its ceaseless propaganda output (i.e. a mixture of outright lies and distorted facts) among top-ranking journalists who worked for major agencies and magazines, including Reuters and the BBC, as well as every other available channel. It worked abroad to discredit communist parties in Western Europe which might gain a share of power by entirely democratic means, and at home to discredit the British Left." ..."
"... The mandate of his Institute for the Study of Conflict (ISC) set up in 1970 was to expose the supposed KGB campaign of worldwide subversion and put out stories smearing anyone who questioned it as a dupe, a traitor or Communist spy. Crozier regarded "The Machiavellians" as a major formative influence in his own intellectual development, and wrote in 1976 "indeed it was this book above all others that first taught me how [emphasis Crozier] to think about politics." ..."
"... Crozier was more than just a strategic thinker. Crozier was a high-level covert political agent who put Burnham's talent for obfuscation and his Fourth International experience to use to undermine détente and set the stage for rolling back the Soviet Union. ..."
"... Crozier's cooperation with numerous "able and diligent Congressional staffers" as well as "the remarkable General Vernon ('Dick') Walters, recently retired as Deputy Director of Central Intelligence," cemented the rise of the neoconservatives. When Carter caved in to the Team B and his neoconservative National Security Adviser Zbigniew Brzezinski's plot to lure the Soviets into their own Vietnam in Afghanistan, it fulfilled Burnham's mission and delivered the world to the Machiavellians without anyone being the wiser. ..."
"... As George Orwell wrote in his "Second Thoughts on James Burnham": "What Burnham is mainly concerned to show [in The Machiavellians] is that a democratic society has never existed and, so far as we can see, never will exist. Society is of its nature oligarchical, and the power of the oligarchy always rests upon force and fraud. Power can sometimes be won and maintained without violence, but never without fraud." ..."
www.truthdig.com

Editor's note: This article is the last in a four-part series on Truthdig called "Universal Empire" -- an examination of the current stage of the neocon takeover of American policy that began after World War ll. Read Part 1 , Part 2 and Part 3 .

The recent assertion by the Trump White House that Damascus and Moscow released "false narratives" to mislead the world about the April 4 sarin gas attack in Khan Shaykhun, Syria, is a dangerous next step in the "fake news" propaganda war launched in the final days of the Obama administration. It is a step whose deep roots in Communist Trotsky's Fourth International must be understood before deciding whether American democracy can be reclaimed.

Muddying the waters of accountability in a way not seen since Sen. Joe McCarthy at the height of the Red Scare in the 1950s, the " Countering Disinformation and Propaganda Act " signed into law without fanfare by Obama in December 2016 officially authorized a government censorship bureaucracy comparable only to George Orwell's fictional Ministry of Truth in his novel "1984." Referred to as " the Global Engagement Center ," the official purpose of this new bureaucracy is to "recognize, understand, expose, and counter foreign state and non-state propaganda and disinformation efforts aimed at undermining United States national security interests." The real purpose of this Orwellian nightmare is to cook the books on anything that challenges Washington's neoconservative pro-war narrative and to intimidate, harass or jail anyone who tries. As has already been demonstrated by President Trump's firing of Tomahawk missiles at a Syrian government airbase, it is a recipe for a world war, and like it or not, that war has already begun.

This latest attack on Russia's supposed false narrative takes us right back to 1953 and the beginnings of the cultural war between East and West. Its roots are tied to the Congress for Cultural Freedom, to James Burnham's pivot from Trotsky's Fourth International to right-wing conservatism and to the rise of the neoconservative Machiavellians as a political force. As Burnham's " The Struggle for the World " stressed, the Third World War had already begun with the 1944 Communist-led Greek sailors' revolt.

In Burnham's Manichean thinking, the West was under siege. George Kennan's Cold War policy of containment was no different than Neville Chamberlain's policy of appeasement. Détente with the Soviet Union amounted to surrender. Peace was only a disguise for war, and that war would be fought with politics, subversion, terrorism and psychological warfare. Soviet influence had to be rolled back wherever possible. That meant subverting the Soviet Union and its proxies and, when necessary, subverting Western democracies as well.

The true irony of today's late-stage efforts by Washington to monopolize "truth" and attack alternate narratives isn't just in its blatant contempt for genuine free speech. The real irony is that the entire "Freedom Manifesto" employed by the United States and Britain since World War II was never free at all, but a concoction of the CIA's Psychological Strategy Board 's (PSB) comprehensive psychological warfare program waged on friend and foe alike.

The CIA would come to view the entire program, beginning with the 1950 Berlin conference, to be a landmark in the Cold War, not just for solidifying the CIA's control over the non-Communist left and the West's "free" intellectuals, but for enabling the CIA to secretly disenfranchise Europeans and Americans from their own political culture in such a way they would never really know it.

As historian Christopher Lasch wrote in 1969 of the CIA's cooptation of the American left,

"The modern state is an engine of propaganda, alternately manufacturing crises and claiming to be the only instrument that can effectively deal with them. This propaganda, in order to be successful, demands the cooperation of writers, teachers, and artists not as paid propagandists or state-censored time-servers but as 'free' intellectuals capable of policing their own jurisdictions and of enforcing acceptable standards of responsibility within the various intellectual professions."

Key to turning these "free" intellectuals against their own interests was the CIA's doctrinal program for Western cultural transformation contained in the document PSB D-33/2 . PSB D-33/2 foretells of a "long-term intellectual movement, to: break down world-wide doctrinaire thought patterns" while "creating confusion, doubt and loss of confidence" in order to "weaken objectively the intellectual appeal of neutralism and to predispose its adherents towards the spirit of the West." The goal was to "predispose local elites to the philosophy held by the planners," while employing local elites "would help to disguise the American origin of the effort so that it appears to be a native development."

While declaring itself as an antidote to Communist totalitarianism, one internal critic of the program, PSB officer Charles Burton Marshall, viewed PSB D-33/2 itself as frighteningly totalitarian, interposing "a wide doctrinal system" that "accepts uniformity as a substitute for diversity," embracing "all fields of human thought -- all fields of intellectual interests, from anthropology and artistic creations to sociology and scientific methodology." He concluded: "That is just about as totalitarian as one can get."

Burnham's Machiavellian elitism lurks in every shadow of the document. As recounted in Frances Stoner Saunder's "The Cultural Cold War," "Marshall also took issue with the PSB's reliance on 'non-rational social theories' which emphasized the role of an elite 'in the manner reminiscent of Pareto, Sorel, Mussolini and so on.' Weren't these the models used by James Burnham in his book the Machiavellians? Perhaps there was a copy usefully to hand when PSB D-33/2 was being drafted. More likely, James Burnham himself was usefully to hand."

Burnham was more than just at hand when it came to secretly implanting a fascist philosophy of extreme elitism into America's Cold War orthodoxy. With "The Machiavellians," Burnham had composed the manual that forged the old Trotskyist left together with a right-wing Anglo/American elite.

The political offspring of that volatile union would be called neoconservatism, whose overt mission would be to roll back Russian/Soviet influence everywhere. Its covert mission would be to reassert a British cultural dominance over the emerging Anglo/American Empire and maintain it through propaganda.

Hard at work on that task since 1946 was the secret Information Research Department of the British and Commonwealth Foreign Office known as the IRD.

Rarely spoken of in the context of CIA-funded secret operations, the IRD served as a covert anti-Communist propaganda unit from 1946 until 1977. According to Paul Lashmar and James Oliver, authors of " Britain's Secret Propaganda War ," "the vast IRD enterprise had one sole aim: To spread its ceaseless propaganda output (i.e. a mixture of outright lies and distorted facts) among top-ranking journalists who worked for major agencies and magazines, including Reuters and the BBC, as well as every other available channel. It worked abroad to discredit communist parties in Western Europe which might gain a share of power by entirely democratic means, and at home to discredit the British Left."

IRD was to become a self-fulfilling disinformation machine for the far-right wing of the international intelligence elite, at once offering fabricated and distorted information to "independent" news outlets and then using the laundered story as "proof" of the false story's validity. One such front enterprise established with CIA money was Forum World Features, operated at one time by Burnham acolyte Brian Rossiter Crozier . Described by Burnham's biographer Daniel Kelly as a "British political analyst," in reality, the legendary Brian Crozier functioned for over 50 years as one of Britain's top propagandists and secret agents .

If anyone today is shocked by the biased, one-sided, xenophobic rush to judgment alleging Russian influence over the 2016 presidential election, they need look no further than to Brian Crozier's closet for the blueprints. As we were told outright by an American military officer during the first war in Afghanistan in 1982, the U.S. didn't need "proof the Soviets used poison gas" and they don't need proof against Russia now. Crozier might best be described as a daydream believer, a dangerous imperialist who acts out his dreams with open eyes. From the beginning of the Cold War until his death in 2012, Crozier and his protégé Robert Moss propagandized on behalf of military dictators Francisco Franco and Augusto Pinochet, organized private intelligence organizations to destabilize governments in the Middle East, Asia, Latin America and Africa and worked to delegitimize politicians in Europe and Britain viewed as insufficiently anti-Communist.

The mandate of his Institute for the Study of Conflict (ISC) set up in 1970 was to expose the supposed KGB campaign of worldwide subversion and put out stories smearing anyone who questioned it as a dupe, a traitor or Communist spy. Crozier regarded "The Machiavellians" as a major formative influence in his own intellectual development, and wrote in 1976 "indeed it was this book above all others that first taught me how [emphasis Crozier] to think about politics." The key to Crozier's thinking was Burnham's distinction between the "formal" meaning of political speech and the "real," a concept which was, of course, grasped only by elites. In a 1976 article, Crozier marveled at how Burnham's understanding of politics had spanned 600 years and how the use of "the formal" to conceal "the real" was no different today than when used by Dante Alighieri's "presumably enlightened Medieval mind." "The point is as valid now as it was in ancient times and in the Florentine Middle Ages, or in 1943. Overwhelmingly, political writers and speakers still use Dante's method. Depending on the degree of obfuscation required (either by circumstances or the person's character), the divorce between formal and real meaning is more of less absolute."

But Crozier was more than just a strategic thinker. Crozier was a high-level covert political agent who put Burnham's talent for obfuscation and his Fourth International experience to use to undermine détente and set the stage for rolling back the Soviet Union.

In a secret meeting at a City of London bank in February 1977, he even patented a private-sector operational intelligence organization known at the Sixth International (6I) to pick up where Burnham left off: politicizing and privatizing many of the dirty tricks the CIA and other intelligence services could no longer be caught doing. As he explained in his memoir "Free Agent," the name 6I was chosen "because the Fourth International split. The Fourth International was the Trotskyist one, and when it split, this meant that, on paper, there were five Internationals. In the numbers game, we would constitute the Sixth International, or '6I.' "

Crozier's cooperation with numerous "able and diligent Congressional staffers" as well as "the remarkable General Vernon ('Dick') Walters, recently retired as Deputy Director of Central Intelligence," cemented the rise of the neoconservatives. When Carter caved in to the Team B and his neoconservative National Security Adviser Zbigniew Brzezinski's plot to lure the Soviets into their own Vietnam in Afghanistan, it fulfilled Burnham's mission and delivered the world to the Machiavellians without anyone being the wiser.

As George Orwell wrote in his "Second Thoughts on James Burnham": "What Burnham is mainly concerned to show [in The Machiavellians] is that a democratic society has never existed and, so far as we can see, never will exist. Society is of its nature oligarchical, and the power of the oligarchy always rests upon force and fraud. Power can sometimes be won and maintained without violence, but never without fraud."

Today, Burnham's use of Dante's political treatise "De Monarchia" to explain his medieval understanding of politics might best be swapped for Dante's "Divine Comedy," a paranoid comedy of errors in which the door to Hell swings open to one and all, including the elites regardless of their status. Or as they say in Hell, " Lasciate ogne speranza, voi ch'intrate ." Abandon hope all ye who enter here.

This poart 4 of the series. For previous parts see

  1. Part 1: American Imperialism Leads the World Into Dante's Vision of Hell
  2. Part 3: How the CIA Created a Fake Western Reality for 'Unconventional Warfare'

Paul Fitzgerald and Elizabeth Gould are the authors of " Invisible History: Afghanistan's Untold Story ," " Crossing Zero: The AfPak War at the Turning Point of American Empire " and " The Voice ." Visit their websites at invisiblehistory.com and grailwerk.com .

[Apr 28, 2017] Former President Obama Has a New Job Control the Official Narrative of American Exceptionalism - Truthdig

Apr 28, 2017 | www.truthdig.com
The ruling class is seriously rattled over its loss of control over the national political narrative-a consequence of capitalism's terminal decay and U.S. imperialism's slipping grip on global hegemony. When the Lords of Capital get rattled, their servants in the political class are tasked with rearranging the picture and reframing the national conversation. In other words, Papa Imperialism needs a new set of lies, or renewed respect for the old ones. Former president Barack Obama, the cool operator who put the U.S. back on the multiple wars track after a forced lull in the wake of George Bush's defeat in Iraq, has eagerly accepted his new assignment as Esteemed Guardian of Official Lies.

At this stage of his career, Obama must dedicate much of his time to the maintenance of Official Lies, since they are central to his own "legacy." With the frenzied assistance of his first secretary of state, Hillary Clinton, Obama launched a massive military offensive-a rush job to put the New American Century back on schedule. Pivoting to all corners of the planet, and with the general aim of isolating and intimidating Russia and China, the salient feature of Obama's offensive was the naked deployment of Islamic jihadists as foot soldiers of U.S. imperialism in Libya and Syria. It is a strategy that is morally and politically indefensible-unspeakable!-the truth of which would shatter the prevailing order in the imperial heartland, itself.

Thus, from 2011 to when he left the White House for a Tahiti yachting vacation with music mogul David Geffen and assorted movie and media celebrities, Obama orchestrated what the late Saddam Hussein would have called "The Mother of All Lies": that the U.S. was not locked in an alliance with al-Qaida and its terrorist offshoots in Syria, a relationship begun almost 40 years earlier in Afghanistan.

Advertisement Square, Site wide He had all the help he needed from a compliant corporate media, whose loyalty to U.S. foreign policy can always be counted on in times of war. Since the U.S. is constantly in a (self-proclaimed) state of war, corporate media collaboration is guaranteed. Outside the U.S. and European corporate media bubble, the whole world was aware that al-Qaida and the U.S. were comrades in arms. (According to a 2015 poll, 82 percent of Syrians and 85 percent of Iraqis believe the U.S. created ISIS .) When Vladimir Putin told a session of the United Nations General Assembly that satellites showed lines of ISIS tankers stretching from captured Syrian oil fields "to the horizon," bound for U.S.-allied Turkey, yet untouched by American bombers, the Obama administration had no retort. Russian jets destroyed 1,000 of the tankers , forcing the Americans to mount their own, smaller raids. But, the moment soon passed into the corporate media's amnesia hole-another fact that must be shed in order to avoid unspeakable conclusions.

Presidential candidate Donald Trump's flirtation with the idea of ending U.S. "regime change" policy in Syria-and, thereby, scuttling the alliance with Islamic jihadists-struck panic in the ruling class and in the imperial political structures that are called the Deep State, which includes the corporate media. When Trump won the general election, the imperial political class went into meltdown, blaming "The Russians"-first, for warlord Hillary Clinton's loss, and soon later for everything under the sun. The latest lie is that Moscow is sending weapons to the Taliban in Afghanistan, the country where the U.S., Saudi Arabia and Pakistan spent billions of dollars to create the international jihadist network. Which shows that imperialists have no sense of irony, or shame. (See BAR: " The U.S., Not Russia, Arms Jihadists Worldwide .")

After the election, lame duck President Obama was so consumed by the need to expunge all narratives that ran counter to "The Russians Did It," he twice yammered about " fake news " at a press conference in Germany with Chancellor Angela Merkel. Obama was upset, he said, "Because in an age where there's so much active misinformation and its packaged very well and it looks the same when you see it on a Facebook page or you turn on your television. If everything seems to be the same and no distinctions are made, then we won't know what to protect."

Although now an ex-president, it is still Obama's job to protect the ruling class, and the Empire, and his role in maintaining the Empire: his legacy. To do that, one must control the narrative-the subject uppermost in his mind when he used Chicago area students as props, this week, for his first public speech since leaving the White House.

"It used to be that everybody kind of had the same information," said Obama, at the University of Chicago affair. "We had different opinions about it, but there was a common base line of facts. The internet has in some ways accelerated this sense of people having entirely separate conversations, and this generation is getting its information through its phones. That you really don't have to confront people who have different opinions or have a different experience or a different outlook."

Obama continued:

"If you're liberal, you're on MSNBC, or conservative, you're on Fox News. You're reading The Wall Street Journal or you're reading The New York Times, or whatever your choices are. Or, maybe you're just looking at cat videos [laughter].

"So, one question I have for all of you is, How do you guys get your information about the news and what's happening out there, and are there ways in which you think we could do a better job of creating a common conversation now that you've got 600 cable stations and you've got all these different news opinions-and, if there are two sets of opinions, then they're just yelling at each other, so you don't get a sense that there's an actual conversation going on. And the internet is worse. It's become more polarized."

Obama's core concern is that there should be a "common base line of facts," which he claims used to exist "20 or 30 years ago." The internet, unregulated and cheaply accessed, is the villain, and the main source of "fake news" (from publications like BAR and the 12 other leftwing sites smeared by the Washington Post, back in November, not long after Obama complained to Merkel about "fake news").

However, Obama tries to dress up his anti-internet "fake news" whine with a phony pitch for diversity of opinions. Is he suggesting that MSNBC viewers also watch Fox News, and that New York Times readers also peruse the Wall Street Journal? Is he saying that most people read a variety of daily newspapers "back in the day"? It is true that, generations ago, there were far more newspapers available to read, reflecting a somewhat wider ideological range of views. But most people read the ones that were closest to their own politics, just as now. Obama is playing his usual game of diversion. Non-corporate news is his target: "...the internet is worse. It's become more and more polarized."

The New York Times, Wall Street Journal, MSNBC and Fox News all share the "common base line of facts" that Obama cherishes. By this, he means a common narrative, with American "exceptionalism" and intrinsic goodness at the center, capitalism and democracy as synonymous, and unity in opposition to the "common" enemy: Soviet Russians; then terrorists; now non-Soviet Russians, again.

Ayanna Watkins, a senior at Chicago's Kenwood Academy High School, clearly understood Obama's emphasis, and eagerly agreed with his thrust. "When it comes to getting information about what's going on in the world, it's way faster on social media than it is on newscasts," she said.

"But, on the other hand, it can be a downfall because, what if you're passing the wrong information, or the information isn't presented the way it should be? So, that causes a clash in our generation, and I think it should go back to the old school. I mean, phones, social media should be eliminated," Ms. Watkins blurted out, provoking laughter from the audience and causing the 18-year-old to "rephrase myself."

What she really meant, she said, was that politicians should "go out to the community" so that "the community will feel more welcome."

If she was trying to agree with Obama, Ms. Watkins had it right the first time: political counter-narratives on the internet have to go, so that Americans can share a "common base line" of information. All of it lies.

Black Agenda Report executive editor Glen Ford can be contacted at Glen.Ford@BlackAgendaReport.com.

[Apr 21, 2017] Petty bourgeois class is not the same thing as middle income: source of income matters hugely

Notable quotes:
"... Petty rentiers live off others above the compensation for inflation and retireds are not earning wages anymore. Even if they live on social security and pensions ..."
"... Income ranking regardless of source is a muddle ..."
"... Most people are in the job class, not the asset owning / one percent class. "High taxes and redistribution do the job nicely, just ask Norway." Not a sufficient answer to issues Marxism raises, just a facile one. ..."
"... I don't have a problem with class warfare. I don't have a problem with Democrats either. I have a problem with losing. ..."
"... I agree with above on workers now retired. However their solidarity with the still active workers is not a sure thing ..."
"... Yep. Further proof that the rich are parasites killing their host. ..."
"... Torturing, not killing is how they get their satisfaction. ..."
"... Yes, but their lack of restraint is killing the host. ..."
Apr 21, 2017 | economistsview.typepad.com
paine -> paine... April 20, 2017 at 06:09 AM
Bourgeois (petty) class is not the same thing as middle income: source of income matters hugely

Petty rentiers live off others above the compensation for inflation and retireds are not earning wages anymore. Even if they live on social security and pensions

Income ranking regardless of source is a muddle

RC AKA Darryl, Ron -> paine... , April 20, 2017 at 06:44 AM

Easy on those retireds. Prefer to think of them as former wage class living off their social dividend for past services rendered. In any case, retirement is still the best job that I have ever had. Got to go cut the grass now, first time this season and way too tall. We were in a drought for a time, but it broke last weekend.
reason -> RC AKA Darryl, Ron... , April 20, 2017 at 08:33 AM
Good thanks. I just think that paine's world view is dated. I don't like class war of either type (down or up) it is too costly for the bystanders (just like any war). Today most people don't fit cleanly into one class (workers) or the other (capitalists) -- actually they never did women and children are a majority not to mention the increasing ranks of the retired. We live in a world where most people are both workers and owners - that is almost the definition of a middle class society. And many rely on "rents" from their hard won qualifications. Marxism is just too simple a view of world, and as it turns out unnecessary. High taxes and redistribution do the job nicely, just ask Norway.
Peter K. -> reason ... , April 20, 2017 at 08:49 AM
Most people are in the job class, not the asset owning / one percent class. "High taxes and redistribution do the job nicely, just ask Norway." Not a sufficient answer to issues Marxism raises, just a facile one.
RC AKA Darryl, Ron -> reason ... , April 21, 2017 at 03:49 AM
I don't have a problem with class warfare. I don't have a problem with Democrats either. I have a problem with losing.

I also have a problem with winning and then just flubbing the replacement. I am mostly for just letting future generations work this out however they can once given the tools of a more democratic political system.

paine -> RC AKA Darryl, Ron... , April 20, 2017 at 09:00 AM
I agree with above on workers now retired. However their solidarity with the still active workers is not a sure thing
ilsm -> paine... , April 20, 2017 at 03:13 PM
instead of make it easier poor make it frequent to escape poor
RC AKA Darryl, Ron -> ilsm... , April 21, 2017 at 03:50 AM
Yep.
DrDick -> reason ... , April 20, 2017 at 06:45 AM
Yep. Further proof that the rich are parasites killing their host.
RC AKA Darryl, Ron -> DrDick... , April 20, 2017 at 07:21 AM
Torturing, not killing is how they get their satisfaction.
DrDick -> RC AKA Darryl, Ron... , April 20, 2017 at 08:34 AM
Yes, but their lack of restraint is killing the host.

[Apr 19, 2017] Neoliberalism is creating loneliness. Thats whats wrenching society apart George Monbiot

Notable quotes:
"... Consumerism fills the social void. But far from curing the disease of isolation, it intensifies social comparison to the point at which, having consumed all else, we start to prey upon ourselves. Social media brings us together and drives us apart, allowing us precisely to quantify our social standing, and to see that other people have more friends and followers than we do. ..."
"... A recent survey in England suggests that one in four women between 16 and 24 have harmed themselves, and one in eight now suffer from post-traumatic stress disorder. Anxiety, depression, phobias or obsessive compulsive disorder affect 26% of women in this age group. This is what a public health crisis looks like. ..."
"... Opioids relieve both physical agony and the distress of separation. Perhaps this explains the link between social isolation and drug addiction. ..."
"... Children who experience emotional neglect, according to some findings, suffer worse mental health consequences than children suffering both emotional neglect and physical abuse: hideous as it is, violence involves attention and contact. Self-harm is often used as an attempt to alleviate distress: another indication that physical pain is not as bad as emotional pain. As the prison system knows only too well, one of the most effective forms of torture is solitary confinement. ..."
"... It's unsurprising that social isolation is strongly associated with depression, suicide, anxiety, insomnia, fear and the perception of threat. It's more surprising to discover the range of physical illnesses it causes or exacerbates. Dementia, high blood pressure, heart disease, strokes, lowered resistance to viruses, even accidents are more common among chronically lonely people. Loneliness has a comparable impact on physical health to smoking 15 cigarettes a day: it appears to raise the risk of early death by 26%. This is partly because it enhances production of the stress hormone cortisol, which suppresses the immune system. ..."
"... Neoliberalism expressly encourages 'atomisation'- it is all about reducing human interaction to markets. And so this is just one of the reasons that neoliberalism is such a bunk philosophy. ..."
"... You can make a reasonable case that 'Neoliberalism' expects that every interaction, including between individuals, can be reduced to a financial one. ..."
Oct 12, 2016 | www.theguardian.com

What greater indictment of a system could there be than an epidemic of mental illness? Yet plagues of anxiety, stress, depression, social phobia, eating disorders, self-harm and loneliness now strike people down all over the world. The latest, catastrophic figures for children's mental health in England reflect a global crisis.

There are plenty of secondary reasons for this distress, but it seems to me that the underlying cause is everywhere the same: human beings, the ultrasocial mammals, whose brains are wired to respond to other people, are being peeled apart. Economic and technological change play a major role, but so does ideology. Though our wellbeing is inextricably linked to the lives of others, everywhere we are told that we will prosper through competitive self-interest and extreme individualism.

In Britain, men who have spent their entire lives in quadrangles – at school, at college, at the bar, in parliament – instruct us to stand on our own two feet. The education system becomes more brutally competitive by the year. Employment is a fight to the near-death with a multitude of other desperate people chasing ever fewer jobs. The modern overseers of the poor ascribe individual blame to economic circumstance. Endless competitions on television feed impossible aspirations as real opportunities contract.

Consumerism fills the social void. But far from curing the disease of isolation, it intensifies social comparison to the point at which, having consumed all else, we start to prey upon ourselves. Social media brings us together and drives us apart, allowing us precisely to quantify our social standing, and to see that other people have more friends and followers than we do.

As Rhiannon Lucy Cosslett has brilliantly documented, girls and young women routinely alter the photos they post to make themselves look smoother and slimmer. Some phones, using their "beauty" settings, do it for you without asking; now you can become your own thinspiration. Welcome to the post-Hobbesian dystopia: a war of everyone against themselves.

Social media brings us together and drives us apart, allowing us precisely to quantify our social standing

Is it any wonder, in these lonely inner worlds, in which touching has been replaced by retouching, that young women are drowning in mental distress? A recent survey in England suggests that one in four women between 16 and 24 have harmed themselves, and one in eight now suffer from post-traumatic stress disorder. Anxiety, depression, phobias or obsessive compulsive disorder affect 26% of women in this age group. This is what a public health crisis looks like.

If social rupture is not treated as seriously as broken limbs, it is because we cannot see it. But neuroscientists can. A series of fascinating papers suggest that social pain and physical pain are processed by the same neural circuits. This might explain why, in many languages, it is hard to describe the impact of breaking social bonds without the words we use to denote physical pain and injury. In both humans and other social mammals, social contact reduces physical pain. This is why we hug our children when they hurt themselves: affection is a powerful analgesic. Opioids relieve both physical agony and the distress of separation. Perhaps this explains the link between social isolation and drug addiction.

Experiments summarised in the journal Physiology & Behaviour last month suggest that, given a choice of physical pain or isolation, social mammals will choose the former. Capuchin monkeys starved of both food and contact for 22 hours will rejoin their companions before eating. Children who experience emotional neglect, according to some findings, suffer worse mental health consequences than children suffering both emotional neglect and physical abuse: hideous as it is, violence involves attention and contact. Self-harm is often used as an attempt to alleviate distress: another indication that physical pain is not as bad as emotional pain. As the prison system knows only too well, one of the most effective forms of torture is solitary confinement.

It is not hard to see what the evolutionary reasons for social pain might be. Survival among social mammals is greatly enhanced when they are strongly bonded with the rest of the pack. It is the isolated and marginalised animals that are most likely to be picked off by predators, or to starve. Just as physical pain protects us from physical injury, emotional pain protects us from social injury. It drives us to reconnect. But many people find this almost impossible.

It's unsurprising that social isolation is strongly associated with depression, suicide, anxiety, insomnia, fear and the perception of threat. It's more surprising to discover the range of physical illnesses it causes or exacerbates. Dementia, high blood pressure, heart disease, strokes, lowered resistance to viruses, even accidents are more common among chronically lonely people. Loneliness has a comparable impact on physical health to smoking 15 cigarettes a day: it appears to raise the risk of early death by 26%. This is partly because it enhances production of the stress hormone cortisol, which suppresses the immune system.

Studies in both animals and humans suggest a reason for comfort eating: isolation reduces impulse control, leading to obesity. As those at the bottom of the socioeconomic ladder are the most likely to suffer from loneliness, might this provide one of the explanations for the strong link between low economic status and obesity?

Anyone can see that something far more important than most of the issues we fret about has gone wrong. So why are we engaging in this world-eating, self-consuming frenzy of environmental destruction and social dislocation, if all it produces is unbearable pain? Should this question not burn the lips of everyone in public life?

There are some wonderful charities doing what they can to fight this tide, some of which I am going to be working with as part of my loneliness project. But for every person they reach, several others are swept past.

This does not require a policy response. It requires something much bigger: the reappraisal of an entire worldview. Of all the fantasies human beings entertain, the idea that we can go it alone is the most absurd and perhaps the most dangerous. We stand together or we fall apart.

, RachelL , 12 Oct 2016 03:57

Well its a bit of a stretch blaming neoliberalism for creating loneliness.

Yet it seems to be the fashion today to imagine that the world we live in is new...only created just years ago. And all the suffering that we see now never existed before.

plagues of anxiety, stress, depression, social phobia, eating disorders, self-harm and loneliness never happened in the past, because everything was bright and shiny and world was good.

Regrettably history teaches us that suffering and deprivation have dogged mankind for centuries, if not tens of thousands of years. That's what we do; survive, persist...endure.

Blaming 'neoliberalism' is a bit of cop-out.

It's the human condition man, just deal with it.

, B26354 , 12 Oct 2016 03:57
Some of the connections here are a bit tenuous, to say the least, including the link to political ideology. Economic liberalism is usually accompanied with social conservatism, and vice versa. Right wing idealogues are more likely to emphasise the values of marriage and family stability, while left wing ones are more likely to favour extremes of personal freedom and reject those traditional structures that used to bind us together.
, ID236975 B26354 , 12 Oct 2016 04:15
You're a little confused there in your connections between policies, intentions and outcomes.
Nevertheless, Neoliberalism is a project that explicitly aims, and has achieved, the undermining and elimination of social networks in favour of market competition.

In practice, loosening social and legal institutions has reduced social security (in the general sense rather than simply welfare payments) and encouraged the limitation of social interaction to money based activity.

As Monbiot has noted, we are indeed lonelier.

, DoctorLiberty B26354 , 12 Oct 2016 04:18
That holds true when you're talking about demographics/voters.

Economic and social liberalism go hand in hand in the West. No matter who's in power, the establishment pushes both but will do one or the other covertly.

All powerful institutions have a vested interest in keeping us atomised and individualistic. The gangs at the top don't want competition. They're afraid of us. In particular, they're afraid of men organising into gangs. That's where this very paper comes in.

, deskandchair , 12 Oct 2016 04:00
The alienation genie was out of the bottle with the beginning of the Industrial Revolution and mass migration to cities began and we abandoned living in village communities. Over the ensuing approx 250 years we abandoned geographically close relationships with extended families, especially post WW2. Underlying economic structures both capitalist and marxist dissolved relationships that we as communal primates evolved within. Then accelerate this mess with (anti-) social media the last 20 years along with economic instability and now dissolution of even the nuclear family (which couldn't work in the first place, we never evolved to live with just two parents looking after children) and here we have it: Mass mental illness. Solution? None. Just form the best type of extended community both within and outside of family, be engaged and generours with your community hope for the best.
, terraform_drone deskandchair , 12 Oct 2016 04:42
Indeed, Industrialisation of our pre-prescribed lifestyle is a huge factor. In particular, our food, it's low quality, it's 24 hour avaliability, it's cardboard box ambivalence, has caused a myriad of health problems. Industrialisation is about profit for those that own the 'production-line' & much less about the needs of the recipient.
, afinch , 12 Oct 2016 04:03

It's unsurprising that social isolation is strongly associated with depression, suicide, anxiety, insomnia, fear and the perception of threat.

Yes, although there is some question of which order things go in. A supportive social network is clearly helpful, but it's hardly a simple cause and effect. Levels of different mental health problems appear to differ widely across societies just in Europe, and it isn't particularly the case that more capitalist countries have greater incidence than less capitalist ones.

You could just as well blame atheism. Since the rise of neo-liberalism and drop in church attendance track each other pretty well, and since for all their ills churches did provide a social support group, why not blame that?

, ID236975 afinch , 12 Oct 2016 04:22
While attending a church is likely to alleviate loneliness, atheism doesn't expressly encourage limiting social interactions and selfishness. And of course, reduced church attendance isn't exactly the same as atheism.

Neoliberalism expressly encourages 'atomisation'- it is all about reducing human interaction to markets. And so this is just one of the reasons that neoliberalism is such a bunk philosophy.

, anotherspace , 12 Oct 2016 04:05
So why are we engaging in this world-eating, self-consuming frenzy of environmental destruction and social dislocation, if all it produces is unbearable pain?

My stab at an answer would first question the notion that we are engaging in anything. That presupposes we are making the choices. Those who set out the options are the ones that make the choices.
We are being engaged by the grotesquely privileged and the pathologically greedy in an enterprise that profits them still further. It suits the 1% very well strategically, for obvious reasons, that the 99% don't swap too many ideas with each other.

, notherspace TremblingFactHunt , 12 Oct 2016 05:46
We as individuals are offered the 'choice' of consumption as an alternative to the devastating ennui engendered by powerlessness. It's no choice at all of course, because consumption merely enriches the 1% and exacerbates our powerlessness. That was the whole point of my post.
The 'choice' to consume is never collectively exercised as you suggest. Sadly. If it was, 'we' might be able to organise ourselves into doing something about it.
, Burstcouch , 12 Oct 2016 04:09
According to Robert Putnam, as societies become more ethnically diverse they lose social capital, contributing to the type of isolation and loneliness which George describes. Doesn't sound as evil as neoliberalism I suppose. Share Facebook Twitter
, ParisHiltonCommune Burstcouch , 12 Oct 2016 07:59
Disagree. Im British but have had more foreign friends than British. The UK middle class tend to be boring insular social status obsessed drones.other nationalities have this too, but far less so Share Facebook Twitter
, Dave Powell Burstcouch , 12 Oct 2016 10:54
Multiculturalism is destroying social cohesion. Share Facebook Twitter
, ParisHiltonCommune Dave Powell , 12 Oct 2016 14:47
Well, yes, but multiculturalism is a direct result of Neoliberalism. The market rules and people are secondary. Everything must be done for business owners, and that everything means access to cheap labour.

Multiculturalism isn't the only thing destroying social cohesion, too. It was being destroyed long before the recent surges of immigrants. It was reported many times in the 1980's in communities made up of only one culture. In many ways, it is being used as the obvious distraction from all the other ways Fundamentalist Free Marketers wreck live for many.

, Rozina , 12 Oct 2016 04:09
This post perhaps ranges too widely to the point of being vague and general, and leading Monbiot to make some huge mental leaps, linking loneliness to a range of mental and physical problems without being able to explain, for example, the link between loneliness and obesity and all the steps in-between without risking derailment into a side issue.

I'd have thought what he really wants to say is that loneliness as a phenomenon in modern Western society arises out of an intent on the part of our political and social elites to divide us all into competing against one another, as individuals and as members of groups, all the better to keep us under control and prevent us from working together to claim our fair share of resources.

Go on, George, you can say that, why not?

, MSP1984 , 12 Oct 2016 04:18
Are you familiar with the term 'Laughter is the best medicine'? Well, it's true. When you laugh, your brain releases endorphins, yeah? Your stress hormones are reduced and the oxygen supply to your blood is increased, so...

I try to laugh several times a day just because... it makes you feel good! Let's try that, eh? Ohohoo... Hahaha... Just, just... Hahahaha... Come on, trust me.. you'll feel.. HahaHAhaha! O-o-o-o-a-hahahahaa... Share

, ID8701745 , 12 Oct 2016 04:19
>Neoliberalism is creating loneliness.

Has it occurred to you that the collapse in societal values has allowed 'neo-liberalism' to take hold?

, totaram ID8701745 , 12 Oct 2016 05:00
No. It has been the concentrated propaganda of the "free" press. Rupert Murdoch in particular, but many other well-funded organisations working in the background over 50 years. They are winning.
, greenwichite , 12 Oct 2016 04:20
We're fixated on a magical, abstract concept called "the economy".

Everything must be done to help "the economy", even if this means adults working through their weekends, neglecting their children, neglecting their elderly parents, eating at their desks, getting diabetes, breaking down from stress, and giving up on a family life.

Impertinent managers ban their staff from office relationships, as company policy, because the company is more important than its staff's wellbeing.

Companies hand out "free" phones that allow managers to harrass staff for work out of hours, on the understanding that they will be sidelined if thy don't respond.

And the wellbeing of "the economy" is of course far more important than whether the British people actually want to merge into a European superstate. What they want is irrelevant.

That nasty little scumbag George Osborne was the apotheosis of this ideology, but he was abetted by journalists who report any rise in GDP as "good" - no matter how it was obtained - and any "recession" to be the equivalent of a major natural disaster.

If we go on this way, the people who suffer the most will be the rich, because it will be them swinging from the lamp-posts, or cowering in gated communities that they dare not leave (Venezuela, South Africa). Those riots in London five years ago were a warning. History is littered with them.

, DiscoveredJoys greenwichite , 12 Oct 2016 05:48
You can make a reasonable case that 'Neoliberalism' expects that every interaction, including between individuals, can be reduced to a financial one. If this results in loneliness then that's certainly a downside - but the upside is that billions have been lifted out of absolute poverty worldwide by 'Neoliberalism'.

Mr Monbiot creates a compelling argument that we should end 'Neoliberalism' but he is very vague about what should replace it other than a 'different worldview'. Destruction is easy, but creation is far harder.

, concerned4democracy , 12 Oct 2016 04:28
As a retired teacher it grieves me greatly to see the way our education service has become obsessed by testing and assessment. Sadly the results are used not so much to help children learn and develop, but rather as a club to beat schools and teachers with. Pressurised schools produce pressurised children. Compare and contrast with education in Finland where young people are not formally assessed until they are 17 years old. We now assess toddlers in nursery schools.
SATs in Primary schools had children concentrating on obscure grammatical terms and usage which they will never ever use again. Pointless and counter-productive.
Gradgrind values driving out the joy of learning.
And promoting anxiety and mental health problems.
, colddebtmountain , 12 Oct 2016 04:33
It is all the things you describe, Mr Monbiot, and then some. This dystopian hell, when anything that did work is broken and all things that have never worked are lined up for a little tinkering around the edges until the camouflage is good enough to kid people it is something new. It isn't just neoliberal madness that has created this, it is selfish human nature that has made it possible, corporate fascism that has hammered it into shape. and an army of mercenaries who prefer the take home pay to morality. Crime has always paid especially when governments are the crooks exercising the law.

The value of life has long been forgotten as now the only thing that matters is how much you can be screwed for either dead or alive. And yet the Trumps, the Clintons, the Camerons, the Johnsons, the Merkels, the Mays, the news media, the banks, the whole crooked lot of them, all seem to believe there is something worth fighting for in what they have created, when painfully there is not. We need revolution and we need it to be lead by those who still believe all humanity must be humble, sincere, selfless and most of all morally sincere. Freedom, justice, and equality for all, because the alternative is nothing at all.

, excathedra , 12 Oct 2016 04:35
Ive long considered neo-liberalism as the cause of many of our problems, particularly the rise in mental health problems, alienation and loneliness.

As can be seen from many of the posts, neo-liberalism depends on, and fosters, ignorance, an inability to see things from historical and different perspectives and social and intellectual disciplines. On a sociological level how other societies are arranged throws up interesting comparisons. Scandanavian countries, which have mostly avoided neo-liberalism by and large, are happier, healthier places to live. America and eastern countries arranged around neo-liberal, market driven individualism, are unhappy places, riven with mental and physical health problems and many more social problems of violence, crime and suicide.

The worst thing is that the evidence shows it doesn't work. Not one of the privatisations in this country have worked. All have been worse than what they've replaced, all have cost more, depleted the treasury and led to massive homelessness, increased mental health problems with the inevitable financial and social costs, costs which are never acknowledged by its adherents.

Put crudely, the more " I'm alright, fuck you " attitude is fostered, the worse societies are. Empires have crashed and burned under similar attitudes.

, MereMortal , 12 Oct 2016 04:37
A fantastic article as usual from Mr Monbiot.

The people who fosted this this system onto us, are now either very old or dead.
We're living in the shadow of their revolutionary transformation of our more equitable post-war society. Hayek, Friedman, Keith Joseph, Thatcher, Greenspan and tangentially but very influentially Ayn Rand.
Although a remainer (I love the wit of the term 'Remoaner') , Brexit can be better understood in the context of the death-knell of neoliberalism.
I never understood how the collapse of world finance, resulted in a right wing resurgence in the UK and the US. The Tea Party in the US made the absurd claim that the failure of global finance was not due to markets being fallible, but because free markets had not been enforced citing Fanny Mae and Freddie Mac as their evidence and of Bill Clinton insisting on more poor and black people being given mortgages.

I have a terrible sense that it will not go quietly, there will be massive global upheavals as governments struggle deal with its collapse.

, flyboy101 , 12 Oct 2016 04:39
I have never really agreed with GM - but this article hits the nail on the head.

I think there are a number of aspects to this:

1. The internet. The being in constant contact, our lives mapped and our thoughts analysed - we can comment on anything (whether informed or total drivel) and we've been fed the lie that our opinion is is right and that it matters) Ive removed fscebook and twitter from my phone, i have never been happier

2. Rolling 24 hour news. That is obsessed with the now, and consistently squeezes very complex issues into bite sized simple dichotomies. Obsessed with results and critical in turn of everyone who fails to feed the machine

3. The increasing slicing of work into tighter and slimmer specialisms, with no holistic view of the whole, this forces a box ticking culture. "Ive stamped my stamp, my work is done" this leads to a lack of ownership of the whole. PIP assessments are an almost perfect example of this - a box ticking exercise, designed by someone who'll never have to go through it, with no flexibility to put the answers into a holistic context.

4. Our education system is designed to pass exams and not prepare for the future or the world of work - the only important aspect being the compilation of next years league tables and the schools standings. This culture is neither healthy no helpful, as students are schooled on exam technique in order to squeeze out the marks - without putting the knowledge into a meaningful and understandable narrative.

Apologiers for the long post - I normally limit myself to a trite insulting comment :) but felt more was required in this instance.

, Taxiarch flyboy101 , 12 Oct 2016 05:42
Overall, I agree with your points. Monbiot here adopts a blunderbuss approach (competitive self-interest and extreme individualism; "brutal" education, employment social security; consumerism, social media and vanity). Criticism of his hypotheses on this thread (where articualted at all) focus on the existence of solitude and lonliness prior to neo liberalism, which seems to me to be to deliberately miss his point: this was formerly a minor phenomenon, yet is now writ on an incredible scale - and it is a social phenomenon particular to those western economies whose elites have most enthusiastically embraced neo liberalism. So, when Monbiot's rhetoric rises:

"So why are we engaging in this world-eating, self-consuming frenzy of environmental destruction and social dislocation, if all it produces is unbearable pain?"

the answer is, of course, 'western capitalist elites'.

We stand together or we fall apart.

Hackneyed and unoriginal but still true for all that.

, flyboy101 Taxiarch , 12 Oct 2016 06:19
I think the answer is only

the answer is, of course, 'western capitalist elites'.

because of the lies that are being sold.

We all want is to: (and feel we have the right to) wear the best clothes, have the foreign holidays, own the latest tech and eat the finest foods. At the same time our rights have increased and awareness of our responsibilities have minimised. The execution of common sense and an awareness that everything that goes wrong will always be someone else fault.

We are not all special snowflakes, princesses or worthy of special treatment, but we act like self absorbed, entitled individuals. Whether thats entitled to benefits, the front of the queue or bumped into first because its our birthday!

I share Monbiots pain here. But rather than get a sense of perspective - the answer is often "More public money and counselling"

, DGIxjhLBTdhTVh7T , 12 Oct 2016 04:42
George Monbiot has struck a nerve.
They are there every day in my small town local park: people, young and old, gender and ethnically diverse, siting on benches for a couple of hours at a time.
They have at least one thing in common.
They each sit alone, isolated in their own thoughts..
But many share another bond: they usually respond to dogs, unconditional in their behaviour patterns towards humankind.
Trite as it may seem, this temporary thread of canine affection breaks the taboo of strangers
passing by on the other side.
Conversations, sometimes stilted, sometimes deeper and more meaningful, ensue as dog walkers become a brief daily healing force in a fractured world of loneliness.
It's not much credit in the bank of sociability.
But it helps.

Trite as it may seem from the outside, their interaction with the myriad pooches regularly walk

, wakeup99 DGIxjhLBTdhTVh7T , 12 Oct 2016 04:47
Do a parkrun and you get the same thing. Free and healthy.
, ParisHiltonCommune SenseCir , 12 Oct 2016 08:47
Unhealthy social interaction, yes. You can never judge what is natural to humans based on contemporary Britain. Anthropologists repeatedly find that what we think natural is merely a social construct created by the system we are subject to.

If you don't work hard, you will be a loser, don't look out of the window day dreaming you lazy slacker. Get productive, Mr Burns millions need you to work like a machine or be replaced by one.

, Sandra Hannen Gomez , 12 Oct 2016 04:46
Good article. You´re absoluately right. And the deeper casue is this: separation from God. If we don´t fight our way back to God, individually and collectively, things are going to get a lot worse. With God, loneliness doesn´t exist. I encourage anyone and everyone to start talking to Him today and invite Him into your heart and watch what starts to happen. Share Facebook Twitter
, wakeup99 Sandra Hannen Gomez , 12 Oct 2016 04:52
Religion divides not brings people together. Only when you embrace all humanity and ignore all gods will you find true happiness. The world and the people in it are far more inspiring when you contemplate the lack of any gods. The fact people do amazing things without needing the promise of heaven or the threat of hell - that is truly moving.
, TeaThoughts Sandra Hannen Gomez , 12 Oct 2016 05:23
I see what you're saying but I read 'love' instead of God. God is too religious which separates and divides ("I'm this religion and my god is better than yours" etc etc). I believe that George is right in many ways in that money is very powerful on it's impact on our behaviour (stress, lack etc) and therefore our lives. We are becoming fearful of each other and I believe the insecurity we feel plays a part in this. We have become so disconnected from ourselves and focused on battling to stay afloat. Having experienced periods of severe stress due to lack of money I couldn't even begin to think about how I felt, how happy I was, what I really wnated to do with my life. I just had to pay my landlord, pay the bills and try and put some food on my table so everything else was totally neglected. When I moved house to move in with family and wasn't expected to pay rent, though I offered, all that dissatisfaction and undealt with stuff came spilling out and I realised I'd had no time for any real safe care above the very basics and that was not a good place to be. I put myself into therapy for a while and started to look after myself and things started to change. I hope to never go back to that kind of position but things are precarious financially and the field I work in isn't well paid but it makes me very happy which I realise now is more important.
, geoffhoppy , 12 Oct 2016 04:47
Neo-liberalism has a lot to answer for in bringing misery to our lives and accelerating the demise of the planet bit I find it not guilty on this one.

The current trends as to how people perceive themselves (what you've got rather than who you are) and the increasing isolation in our cities started way before the neo-liberals.

It is getting worse though and on balance social media is making us more connected but less social. Share

, RandomName2016 , 12 Oct 2016 04:48
The way that the left keeps banging on about neoliberalism is half of what makes them such a tough sell electorally. Just about nobody knows what neoliberalism is, and literally nobody self identifies as a neoliberal. So all this moaning and wailing about neoliberalism comes across as a self absorbed, abstract and irrelevant. I expect there is the germ of an idea in there, but until the left can find away to present that idea without the baffling layer of jargon and over-analysis, they're going to remain at a disadvantage to the easy populism of the right.
, Astrogenie , 12 Oct 2016 04:49
Interesting article. We have heard so much about the size of our economy but less about our quality of life. The UK quality of life is way below the size of our economy i.e. economy size 6th largest in the world but quality of life 15th. If we were the 10th largest economy but were 10th for quality of life we would be better off than we are now in real terms. We need a radical change of political thinking to focus on quality of life rather than obsession with the size of our economy. High levels of immigration of people who don't really integrate into their local communities has fractured our country along with the widening gap between rich and poor. Governments only see people in terms of their "economic value" - hence mothers being driven out to work, children driven into daycare and the elderly driven into care homes. Britain is becoming a soulless place - even our great British comedy is on the decline.
, wakeup99 Astrogenie , 12 Oct 2016 04:56
Quality of life is far more important than GDP I agree but it is also far more important than inequality.
, MikkaWanders , 12 Oct 2016 04:49
Interesting. 'It is the isolated and marginalised animals that are most likely to be picked off by predators....' so perhaps the species is developing its own predators to fill a vacated niche.

(Not questioning the comparison to other mammals at all as I think it is valid but you would have to consider the whole rather than cherry pick bits)

, johnny991965 , 12 Oct 2016 04:52
Generation snowflake. "I'll do myself in if you take away my tablet and mobile phone for half an hour".
They don't want to go out and meet people anymore. Nightclubs for instance, are closing because the younger generation 'don't see the point' of going out to meet people they would otherwise never meet, because they can meet people on the internet. Leave them to it and the repercussions of it.....
, johnny991965 grizzly , 12 Oct 2016 05:07
Socialism is dying on its feet in the UK, hence the Tory's 17 point lead at the mo. The lefties are clinging to whatever influence they have to sway the masses instead of the ballot box. Good riddance to them. Share Facebook Twitter
, David Ireland johnny991965 , 13 Oct 2016 12:45
17 point lead? Dying on it's feet? The neo-liberals are showing their disconnect from reality. If anything, neo-liberalism is driving a people to the left in search of a fairer and more equal society.
, justask , 12 Oct 2016 04:57
George Moniot's articles are better thought out, researched and written than the vast majority of the usual clickbait opinion pieces found on the Guardian these days. One of the last journalists, rather than liberal arts blogger vying for attention. Share Facebook Twitter
, Nada89 , 12 Oct 2016 04:57
Neoliberalism's rap sheet is long and dangerous but this toxic philosophy will continue unabated because most people can't join the dots and work out how detrimental it has proven to be for most of us.

It dangles a carrot in order to create certain economic illusions but the simple fact is neoliberal societies become more unequal the longer they persist. Share Facebook Twitter

, wakeup99 Nada89 , 12 Oct 2016 05:05
Neoliberal economies allow people to build huge global businesses very quickly and will continue to give the winners more but they also can guve everyone else more too but just at a slower rate. Socialism on the other hand mires everyone in stagnant poverty. Question is do you want to be absolutely or relatively better off. Share Facebook Twitter
, totaram wakeup99 , 12 Oct 2016 05:19
You have no idea. Do not confuse capitalism with neoliberalism. Neoliberalism is a political ideology based on a mythical version of capitalism that doesn't actually exist, but is a nice way to get the deluded to vote for something that doesn't work in their interest at all. Share Facebook Twitter
, peterfieldman , 12 Oct 2016 04:57
And things will get worse as society falls apart due to globalisation, uberization, lack of respect for authority, lacks of a fair tax and justice system, crime, immorality, loss of trust of politicians and financial and corporate sectors, uncontrolled immigration bringing with it insecurity and the risk of terrorism and a dumbing down of society with increasing inequality. All this is in a new book " The World at a Crossroads" which deals with the major issues facing the planet.
, Nada89 wakeup99 , 12 Oct 2016 05:07
What, like endless war, unaffordable property, monstrous university fees, zero hours contracts and a food bank on every corner, and that's before we even get to the explosion in mental distress.
, monsieur_flaneur thedisclaimer , 12 Oct 2016 05:10
There's nothing spurious or obscure about Neoliberalism. It is simply the political ideology of the rich, which has been our uninterrupted governing ideology since Reagan and Thatcher: Privatisation, deregulation, 'liberalisation' of housing, labour, etc, trickledown / low-tax-on-the-rich economics, de-unionization. You only don't see it if you don't want to see it.
, arkley , 12 Oct 2016 05:03
I'm just thinking what is wonderful about societies that are big of social unity. And conformity.

Those societies for example where you "belong" to your family. Where teenage girls can be married off to elderly uncles to cement that belonging.

Or those societies where the belonging comes through religious centres. Where the ostracism for "deviant" behaviour like being gay or for women not submitting to their husbands can be brutal. And I'm not just talking about muslims here.

Or those societies that are big on patriotism. Yep they are usually good for mental health as the young men are given lessons in how to kill as many other men as possible efficiently.

And then I have to think how our years of "neo-liberal" governments have taken ideas of social liberalisation and enshrined them in law. It may be coincidence but thirty years after Thatcher and Reagan we are far more tolerant of homosexuality and willing to give it space to live, conversely we are far less tolerant of racism and are willing to prosecute racist violence. Feminists may still moan about equality but the position of women in society has never been better, rape inside marriage has (finally) been outlawed, sexual violence generally is no longer condoned except by a few, work opportunities have been widened and the woman's role is no longer just home and family. At least that is the case in "neo-liberal" societies, it isn't necessarily the case in other societies.

So unless you think loneliness is some weird Stockholm Syndrome thing where your sense of belonging comes from your acceptance of a stifling role in a structured soiety, then I think blaming the heightened respect for the individual that liberal societies have for loneliness is way off the mark.

What strikes me about the cases you cite above, George, is not an over-respect for the individual but another example of individuals being shoe-horned into a structure. It strikes me it is not individualism but competition that is causing the unhappiness. Competition to achieve an impossible ideal.

I fear George, that you are not approaching this with a properly open mind dedicated to investigation. I think you have your conclusion and you are going to bend the evidence to fit. That is wrong and I for one will not support that. In recent weeks and months we have had the "woe, woe and thrice woe" writings. Now we need to take a hard look at our findings. We need to take out the biases resulting from greater awareness of mental health and better and fuller diagnosis of mental health issues. We need to balance the bias resulting from the fact we really only have hard data for modern Western societies. And above all we need to scotch any bias resulting from the political worldview of the researchers.

Then the results may have some value.

, birney arkley , 12 Oct 2016 05:10
It sounded to me that he was telling us of farm labouring and factory fodder stock that if we'd 'known our place' and kept to it ,all would be well because in his ideal society there WILL be or end up having a hierarchy, its inevitable. Share Facebook Twitter
, EndaFlannel , 12 Oct 2016 05:04
Wasn't all this started by someone who said, "There is no such thing as Society"? The ultimate irony is that the ideology that championed the individual and did so much to dismantle the industrial and social fabric of the Country has resulted in a system which is almost totalitarian in its disregard for its ideological consequences. Share Facebook Twitter
, wakeup99 EndaFlannel , 12 Oct 2016 05:08
Thatcher said it in the sense that society is not abstract it is just other people so when you say society needs to change then people need to change as society is not some independent concept it is an aggregation of all us. The left mis quote this all the time and either they don't get it or they are doing on purpose. Share Facebook Twitter
, HorseCart EndaFlannel , 12 Oct 2016 05:09
No, Neoliberalism has been around since 1938.... Thatcher was only responsible for "letting it go" in Britain in 1980, but actually it was already racing ahead around the world.

Furthermore, it could easily be argued that the Beatles helped create loneliness - what do you think all those girls were screaming for? And also it could be argued that the Beatles were bringing in neoliberalism in the 1960s, via America thanks to Elvis Presley and Jerry Lee Lewis etc.. Share

, billybagel wakeup99 , 12 Oct 2016 05:26
They're doing it on purpose. ""If you tell a lie big enough and keep repeating it, people will eventually come to believe it." -- Joseph Boebbels
, Luke O'Brien , 12 Oct 2016 05:08
Great article, although surely you could've extended the blame to capitalism has a whole?


In what, then, consists the alienation of labor? First, in the fact that labor is external to the worker, i.e., that it does not belong to his nature, that therefore he does not realize himself in his work, that he denies himself in it, that he does not feel at ease in it, but rather unhappy, that he does not develop any free physical or mental energy, but rather mortifies his flesh and ruins his spirit. The worker, therefore, is only himself when he does not work, and in his work he feels outside himself. He feels at home when he is not working, and when he is working he does not feel at home. His labor, therefore, is not voluntary, but forced--forced labor. It is not the gratification of a need, but only a means to gratify needs outside itself. Its alien nature shows itself clearly by the fact that work is shunned like the plague as soon as no physical or other kind of coercion exists.

Marx, Economic and Philosophical Manuscripts of 1844

, JulesBywaterLees , 12 Oct 2016 05:08
We have created a society with both flaws and highlights- and we have unwittingly allowed the economic system to extend into our lives in negative ways.

On of the things being modern brings is movement- we move away from communities, breaking friendships and losing support networks, and the support networks are the ones that allow us to cope with issues, problems and anxiety.

Isolation among the youth is disturbing, it is also un natural, perhaps it is social media, or fear of parents, or the fall in extra school activities or parents simply not having a network of friends because they have had to move for work or housing.

There is some upsides, I talk and get support from different international communities through the social media that can also be so harmful- I chat on xbox games, exchange information on green building forums, arts forums, share on youtube as well as be part of online communities that hold events in the real world.

, LordMorganofGlossop , 12 Oct 2016 05:11
Increasingly we seem to need to document our lives on social media to somehow prove we 'exist'. We seem far more narcissistic these days, which tends to create a particular type of unhappiness, or at least desire that can never be fulfilled. Maybe that's the secret of modern consumer-based capitalism. To be happy today, it probably helps to be shallow, or avoid things like Twitter and Facebook!

Eric Fromm made similar arguments to Monbiot about the psychological impact of modern capitalism (Fear of Freedom and The Sane Society) - although the Freudian element is a tad outdated. However, for all the faults of modern society, I'd rather be unhappy now than in say, Victorian England. Similarly, life in the West is preferable to the obvious alternatives.

Interestingly, the ultra conservative Adam Smith Institute yesterday decided to declare themselves 'neoliberal' as some sort of badge of honour:
http://www.adamsmith.org/blog/coming-out-as-neoliberals

, eamonmcc , 12 Oct 2016 05:15
Thanks George for commenting in such a public way on the unsayable: consume, consume, consume seems to be the order of the day in our modern world and the points you have highlighted should be part of public policy everywhere.

I'm old enough to remember when we had more time for each other; when mothers could be full-time housewives; when evenings existed (evenings now seem to be spent working or getting home from work). We are undoubtedly more materialistic, which leads to more time spent working, although our modern problems are probably not due to increasing materialism alone.

Regarding divorce and separation, I notice people in my wider circle who are very open to affairs. They seem to lack the self-discipline to concentrate on problems in their marriage and to give their full-time partner a high level of devotion. Terrible problems come up in marriages but if you are completely and unconditionally committed to your partner and your marriage then you can get through the majority of them.

, CEMKM , 12 Oct 2016 05:47
Aggressive self interest is turning in on itself. Unfortunately the powerful who have realised their 'Will to Power' are corrupted by their own inflated sense of self and thus blinded. Does this all predict a global violent revolution?
, SteB1 NeverMindTheBollocks , 12 Oct 2016 06:32

A diatribe against a vague boogieman that is at best an ill-defined catch-all of things this CIFer does not like.


An expected response from someone who persistently justifies neoliberalism through opaque and baseless attacks on those who reveal how it works. Neoliberalism is most definitely real and it has a very definite history.
https://en.wikipedia.org/wiki/Neoliberalism
http://www.corpwatch.org/article.php?id=376

However, what is most interesting is how nearly all modern politicians who peddle neoliberal doctrine or policy, refuse to use the name, or even to openly state what ideology they are in fact following.

I suppose it is just a complete coincidence that the policy so many governments are now following so closely follow known neoliberal doctrine. But of course the clever and unpleasant strategy of those like yourself is to cry conspiracy theory if this ideology, which dare not speak its name is mentioned.

Your style is tiresome. You make no specific supported criticisms again, and again. You just make false assertions and engage in unpleasant ad homs and attempted character assassination. You do not address the evidence for what George Monbiot states at all.

, heian555 , 12 Oct 2016 05:56
An excellent article. One wonders exactly what one needs to say in order to penetrate the reptilian skulls of those who run the system.

As an addition to Mr Monbiot's points, I would like to point out that it is not only competitive self-interest and extreme individualism that drives loneliness. Any system that has strict hierarchies and mechanisms of social inclusion also drives it, because such systems inhibit strongly spontaneous social interaction, in which people simply strike up conversation. Thailand has such a system. Despite her promoting herself as the land of smiles, I have found the people here to be deeply segregated and unfriendly. I have lived here for 17 years. The last time I had a satisfactory face-to-face conversation, one that went beyond saying hello to cashiers at checkout counters or conducting official business, was in 1999. I have survived by convincing myself that I have dialogues with my books; as I delve more deeply into the texts, the authors say something different to me, to which I can then respond in my mind.

, SteB1 , 12 Oct 2016 05:56

Epidemics of mental illness are crushing the minds and bodies of millions. It's time to ask where we are heading and why


I want to quote the sub headline, because "It's time to ask where we are heading and why", is the important bit. George's excellent and scathing evidence based criticism of the consequences of neoliberalism is on the nail. However, we need to ask how we got to this stage. Despite it's name neoliberalism doesn't really seem to contain any new ideas, and in some way it's more about Thatcher's beloved return to Victorian values. Most of what George Monbiot highlights encapsulatec Victorian thinking, the sort of workhouse mentality.

Whilst it's very important to understand how neoliberalism, the ideology that dare not speak it's name, derailed the general progress in the developed world. It's also necessary to understand that the roots this problem go much further back. Not merely to the start of the industrial revolution, but way beyond that. It actually began with the first civilizations when our societies were taken over by powerful rulers, and they essentially started to farm the people they ruled like cattle. On the one hand they declared themselves protector of their people, whilst ruthlessly exploiting them for their own political gain. I use the livestock farming analogy, because that explains what is going on.

To domesticate livestock, and to make them pliable and easy to work with the farmer must make himself appear to these herd animals as if they are their protector, the person who cares for them, nourishes and feeds them. They become reliant on their apparent benefactor. Except of course this is a deceitful relationship, because the farmer is just fattening them up to be eaten.

For the powerful to exploit the rest of people in society for their own benefit they had to learn how to conceal what they were really doing, and to wrap it in justifications to bamboozle the people they were exploiting for their own benefit. They did this by altering our language and inserting ideas in our culture which justified their rule, and the positions of the rest of us.

Before state religions, generally what was revered was the Earth, the natural world. It was on a personal level, and not controlled by the powerful. So the powerful needed to remove that personal meaningfulness from people's lives, and said the only thing which was really meaningful, was the religion, which of course they controlled and were usually the head of. Over generations people were indoctrinated in a completely new way of thinking, and a language manipulated so all people could see was the supposed divine right of kings to rule. Through this language people were detached from what was personally meaningful to them, and could only find meaningfulness by pleasing their rulers, and being indoctrinated in their religion.

If you control the language people use, you can control how perceive the world, and can express themselves.

By stripping language of meaningful terms which people can express themselves, and filling it full of dubious concepts such as god, the right of kings completely altered how people saw the world, how they thought. This is why over the ages, and in different forms the powerful have always attempted to have full control of our language through at first religion and their proclamations, and then eventually by them controlling our education system and the media.

The idea of language being used to control how people see the world, and how they think is of course not my idea. George Orwell's Newspeak idea explored in "1984" is very much about this.
https://en.wikipedia.org/wiki/Newspeak

This control of language is well known throughout history. Often conquerors would abolish languages of those they conquered. In the so called New World the colonists eventually tried to control how indigenous people thought by forcibly sending their children to boarding school, to be stripped of their culture, their native language, and to be inculcated in the language and ideas of their colonists. In Britain various attempts were made to banish the Welsh language, the native language of the Britons, before the Anglo-Saxons and the Normans took over.

However, what Orwell did not deal with properly is the origin of language style. To Orwell, and to critics of neoliberalism, the problems can be traced back to the rise of what they criticised. To a sort of mythical golden age. Except all the roots of what is being criticised can be found in the period before the invention of these doctrines. So you have to go right back to the beginning, to understand how it all began.

Neoliberalism would never have been possible without this long control of our language and ideas by the powerful. It prevents us thinking outside the box, about what the problem really is, and how it all began.

, clarissa3 SteB1 , 12 Oct 2016 06:48
All very well but you are talking about ruthlessness of western elites, mostly British, not all.

It was not like that everywhere. Take Poland for example, and around there..

New research is emerging - and I'd recommend reading of prof Frost from St Andrew's Uni - that lower classes were actually treated with respect by elites there, mainly land owners and aristocracy who more looked after them and employed and cases of such ruthlessness as you describe were unknown of.

So that 'truth' about attitudes to lower classes is not universal!

, SteB1 Borisundercoat , 12 Oct 2016 06:20

What is "neoliberalism" exactly?

It's spouted by many on here as the root of all evil.

I'd be interested to see how many different definitions I get in response...


The reason I call neoliberalism the ideology which dare not speak it's name is that in public you will rarely hear it mentioned by it's proponents. However, it was a very important part of Thatcherism, Blairism, and so on. What is most definite is that these politicians and others are most definitely following some doctrine. Their ideas about what we must do and how we must do it are arbitrary, but they make it sound as if it's the only way to do things.

If you want to learn more about neoliberalism, read a summary such as the Wikipedia page on it.
https://en.wikipedia.org/wiki/Neoliberalism
http://www.corpwatch.org/article.php?id=376

However, as I hint, the main problem in dealing with neoliberalism is that none of the proponents of this doctrine admit to what ideology they are actually following. Yet very clearly around the world leaders in many countries are clearly singing from the same hymn sheet because the policy they implement is so similar. Something has definitely changed. All the attempts to roll back welfare, benefits, and public services is most definitely new, or they wouldn't be having to reverse policy of the past if nothing had change. But as all these politicians implementing this policy all seem to refuse to explain what doctrine they are following, it makes it difficult to pin down what is happening. Yet we can most definitely say that there is a clear doctrine at work, because why else would so many political leaders around the world be trying to implement such similar policy.

, Winstons1 TerryMcBurney , 12 Oct 2016 06:24

Neo-liberalism doesn't really exist except in the minds of the far left and perhaps a few academics.

Neoliberalism is a policy model of social studies and economics that transfers control of economic factors to the private sector from the public sector. ... Neoliberal policies aim for a laissez-faire approach to economic development.

I believe the term 'Neo liberalism' was coined by those well known 'Lefties'The Chicago School .
If you don't believe that any of the above has been happening ,it does beg the question as to where you have been for the past decade.

, UnderSurveillance , 12 Oct 2016 06:12
The ironies of modern civilization - we have never been more 'connected' to other people on global level and less 'connected' on personal level.

We have never had access to such a wide range of information and opinions, but also for a long time been so divided into conflicting groups, reading and accessing in fact only that which reinforces what we already think.

, John Pelan , 12 Oct 2016 06:18
Sir Harry Burns, ex-Chief Medical Officer in Scotland talks very powerfully about the impact of loneliness and isolation on physical and mental health - here is a video of a recent talk by him - http://www.befs.org.uk/calendar/48/164-BEFS-Annual-Lecture
, MightyDrunken , 12 Oct 2016 06:22
These issues have been a long time coming, just think of the appeals of the 60's to chill out and love everyone. Globalisation and neo-liberalism has simply made society even more broken.
The way these problems have been ignored and made worse over the last few decades make me think that the solution will only happen after a massive catastrophe and society has to be rebuilt. Unless we make the same mistakes again.
A shame really, you would think intelligence would be useful but it seems not.
, ParisHiltonCommune MightyDrunken , 12 Oct 2016 07:19
Contemporary Neo-liberalism is a reaction against that ideal of the 60s
, DevilMayCareIDont , 12 Oct 2016 06:25
I would argue that it creates a bubble of existence for those who pursue a path of "success" that instead turns to isolation . The amount of people that I have met who have moved to London because to them it represents the main location for everything . I get to see so many walking cliches of people trying to fit in or stand out but also fitting in just the same .

The real disconnect that software is providing us with is truly staggering . I have spoken to people from all over the World who seem to feel more at home being alone and playing a game with strangers . The ones who are most happy are those who seem to be living all aloe and the ones who try and play while a girlfriend or family are present always seemed to be the ones most agitated by them .

We are humans relying on simplistic algorithms that reduce us ,apps like Tinder which turns us into a misogynist at the click of a button .

Facebook which highlights our connections with the other people and assumes that everyone you know or have met is of the same relevance .

We also have Twitter which is the equivalent of screaming at a television when you are drunk or angry .

We have Instagram where people revel in their own isolation and send updates of it . All those products that are instantly updated and yet we are ageing and always feeling like we are grouped together by simple algorithms .

, JimGoddard , 12 Oct 2016 06:28
Television has been the main destroyer of social bonds since the 1950s and yet it is only mentioned once and in relation to the number of competitions on it, which completely misses the point. That's when I stopped taking this article seriously. Share Facebook Twitter
, GeoffP , 12 Oct 2016 06:29
Another shining example of the slow poison of capitalism. Maybe it's time at last to turn off the tap? Share Facebook Twitter
, jwestoby , 12 Oct 2016 06:30
I actually blame Marx for neoliberalism. He framed society purely in terms economic, and persuaded that ideology is valuable in as much as it is actionable.

For a dialectician he was incredibly short sighted and superficial, not realising he was creating a narrative inimical to personal expression and simple thoughtfulness (although he was warned). To be fair, he can't have appreciated how profoundly he would change the way we concieve societies.

Neoliberalism is simply the dark side of Marxism and subsumes the personal just as comprehensively as communism.

We're picked apart by quantification and live as particulars, suffering the ubiquitous consequences of connectivity alone . . .

Unless, of course, you get out there and meet great people!

, ParisHiltonCommune jwestoby , 12 Oct 2016 07:16
Marxism arose as a reaction against the harsh capitalism of its day. Of course it is connected. It is ironic how Soviet our lives have become.
, zeeeel , 12 Oct 2016 06:30
Neo-liberalism allows psychopaths to flourish, and it has been argued by Robert Hare that they are disproportionately represented in the highest echelons of society. So people who lack empathy and emotional attachment are probably weilding a significant amount of influence over the way our economy and society is organised. Is it any wonder that they advocate an economic model which is most conducive to their success? Things like job security, rigged markets, unions, and higher taxes on the rich simply get in their way.
, Drewv , 12 Oct 2016 06:30
That fine illustration by Andrzej Krauze up there is exactly what I see whenever I walk into an upscale mall or any Temple of Consumerism.

You can hear the Temple calling out: "Feel bad, atomized individuals? Have a hole inside? Feel lonely? That's all right: buy some shit you don't need and I guarantee you'll feel better."

And then it says: "So you bought it and you felt better for five minutes, and now you feel bad again? Well, that's not rocket science...you should buy MORE shit you don't need! I mean, it's not rocket science, you should have figured this out on your own."

And then it says: "Still feel bad and you have run out of money? Well, that's okay, just get it on credit, or take out a loan, or mortgage your house. I mean, it's not rocket science. Really, you should have figured this out on your own already...I thought you were a modern, go-get-'em, independent, initiative-seizing citizen of the world?"

And then it says: "Took out too many loans, can't pay the bills and the repossession has begun? Honestly, that's not my problem. You're just a bad little consumer, and a bad little liberal, and everything is your own fault. You go sit in a dark corner now where you don't bother the other shoppers. Honestly, you're just being a burden on other consumers now. I'm not saying you should kill yourself, but I can't say that we would mind either."

And that's how the worms turn at the Temples of Consumerism and Neoliberalism.

, havetheyhearts , 12 Oct 2016 06:31
I kept my sanity by not becoming a spineless obedient middle class pleaser of a sociopathic greedy tribe pretending neoliberalism is the future.

The result is a great clarity about the game, and an intact empathy for all beings.

The middle class treated each conscious "outsider" like a lowlife,
and now they play the helpless victims of circumstances.

I know why I renounced to my privileges.
They sleepwalk into their self created disorder.
And yes, I am very angry at those who wasted decades with their social stupidity,
those who crawled back after a start of change into their petit bourgeois niche.

I knew that each therapist has to take a stand and that the most choose petty careers.
Do not expect much sanity from them for your disorientated kids.
Get insightful yourself and share your leftover love to them.
Try honesty and having guts...that might help both of you.

, Likewhatever , 12 Oct 2016 06:32
Alternatively, neo-liberalism has enabled us to afford to live alone (entire families were forced to live together for economic reasons), and technology enables us to work remotely, with no need for interaction with other people.

This may make some people feel lonely, but for many others its utopia.

, Peter1Barnet , 12 Oct 2016 06:32
Some of the things that characterise Globalisation and Neoliberalism are open borders and free movement. How can that contribute to isolation? That is more likely to be fostered by Protectionism.
And there aren't fewer jobs. Employment is at record highs here and in many other countries. There are different jobs, not fewer, and to be sure there are some demographics that have lost out. But overall there are not fewer jobs. That falls for the old "lump of labour" fallacy.
, WhigInterpretation , 12 Oct 2016 06:43
The corrosive state of mass television indoctrination sums it up: Apprentice, Big Brother, Dragon's Den. By degrees, the standard keeps lowering. It is no longer unusual for a licence funded TV programme to consist of a group of the mentally deranged competing to be the biggest asshole in the room.

Anomie is a by-product of cultural decline as much as economics.

, Pinkie123 Stephen Bell , 12 Oct 2016 07:18

What is certain, is that is most ways, life is far better now in the UK than 20, 30 or 40 years ago, by a long way!


That's debatable. Data suggests that inequality has widened massively over the last 30 years ( https://www.equalitytrust.org.uk/infographic-income-inequality-uk ) - as has social mobility ( https://www.theguardian.com/news/datablog/2012/may/22/social-mobility-data-charts ). Homelessness has risen substantially since 1979.

Our whole culture is more stressful. Jobs are more precarious; employment rights more stacked in favor of the employer; workforces are deunionised; leisure time is on the decrease; rents are unaffordable; a house is no longer a realistic expectation for millions of young people. Overall, citizens are more socially immobile and working harder for poorer real wages than they were in the late 70's.

As for mental health, evidence suggest that mental health problems have been on the increase over recent decades, especially among young people. The proportion of 15/16 year olds reporting that they frequently feel anxious or depressed has doubled in the last 30 years, from 1 in 30 to 2 in 30 for boys and 1 in 10 to 2 in ten for girls ( http://www.nuffieldfoundation.org/news/increased-levels-anxiety-and-depression-teenage-experience-changes-over-time

Unfortunately, sexual abuse has always been a feature of human societies. However there is no evidence to suggest it was any worse in the past. Then sexual abuse largely took place in institutional settings were at least it could be potentially addressed. Now much of it has migrated to the great neoliberal experiment of the internet, where child exploitation is at endemic levels and completely beyond the control of law enforcement agencies. There are now more women and children being sexually trafficked than there were slaves at the height of the slave trade. Moreover, we should not forget that Jimmy Saville was abusing prolifically right into the noughties.

My parents were both born in 1948. They say it was great. They bought a South London house for next to nothing and never had to worry about getting a job. When they did get a job it was one with rights, a promise of a generous pension, a humane workplace environment, lunch breaks and an ethos of public service. My mum says that the way women are talked about now is worse.

Sounds fine to me. That's not to say everything was great: racism was acceptable (though surely the vile views pumped out onto social media are as bad or worse than anything that existed then), homosexuality was illegal and capital punishment enforced until the 1960's. However, the fact that these things were reformed showed society was moving in the right direction. Now we are going backwards, back to 1930's levels or inequality and a reactionary, small-minded political culture fueled by loneliness, rage and misery.

, Pinkie123 Stephen Bell , 12 Oct 2016 07:28
And there is little evidence to suggest that anyone has expanded their mind with the internet. A lot of people use it to look at porn, post racist tirades on Facebook, send rape threats, distributes sexual images of partners with their permission, take endless photographs of themselves and whip up support for demagogues. In my view it would much better if people went to a library than lurked in corporate echo chambers pumping out the like of 'why dont theese imagrantz go back home and all those lezbo fems can fuckk off too ha ha megalolz ;). Seriously mind expanding stuff. Share
, Pinkie123 Pinkie123 , 12 Oct 2016 07:38
Oops ' without their permission... Share Facebook Twitter
, maldonglass , 12 Oct 2016 06:49
As a director and CEO of an organisation employing several hundred people I became aware that 40% of the staff lived alone and that the workplace was important to them not only for work but also for interacting with their colleagues socially . This was encouraged and the organisation achieved an excellent record in retaining staff at a time when recruitment was difficult. Performance levels were also extremely high . I particulalry remember with gratitude the solidarity of staff when one of our colleagues - a haemophiliac - contracted aids through an infected blood transfusion and died bravely but painfully - the staff all supported him in every way possible through his ordeal and it was a pivilege for me to work with such kind and caring people .
, oommph maldonglass , 12 Oct 2016 07:00
Indeed. Those communities are often undervalued. However, the problem is, as George says, lots of people are excluded from them.

They are also highly self-selecting (e.g. you need certain trains of inclusivity, social adeptness, empathy, communication, education etc to get the job that allows you to join that community).

Certainly I make it a priority in my life. I do create communities. I do make an effort to stand by people who live like me. I can be a leader there.

Sometimes I wish more people would be. It is a sustained, long-term effort. Share

, forkintheroad , 12 Oct 2016 06:50
'a war of everyone against themselves' - post-Hobbesian. Genius, George.
, sparclear , 12 Oct 2016 06:51
Using a word like 'loneliness' is risky insofar as nuances get lost. It can have thousand meanings, as there are of a word like 'love'.
isolation
grief
loneliness
feeling abandoned
solitude
purposelessness
neglect
depression
&c.

To add to this discussion, we might consider the strongest need and conflict each of us experiences as a teenager, the need to be part of a tribe vs the the conflict inherent in recognising one's uniqueness. In a child's life from about 7 or 8 until adolescence, friends matter the most. Then the young person realises his or her difference from everyone else and has to grasp what this means.

Those of us who enjoyed a reasonably healthy upbringing will get through the peer group / individuation stage with happiness possible either way - alone or in friendship. Our parents and teachers will have fostered a pride in our own talents and our choice of where to socialise will be flexible and non-destructive.

Those of us who at some stage missed that kind of warmth and acceptance in childhood can easily stagnate. Possibly this is the most awkward of personal developmental leaps. The person neither knows nor feels comfortable with themselves, all that faces them is an abyss.
Where creative purpose and strength of spirit are lacking, other humans can instinctively sense it and some recoil from it, hardly knowing what it's about. Vulnerabilities attendant on this state include relationships holding out some kind of ersatz rescue, including those offered by superficial therapists, religions, and drugs, legal and illegal.

Experience taught that apart from the work we might do with someone deeply compassionate helping us where our parents failed, the natural world is a reliable healer. A kind of self-acceptance and individuation is possible away from human bustle. One effect of the seasons and of being outdoors amongst other life forms is to challenge us physically, into present time, where our senses start to work acutely and our observational skills get honed, becoming more vibrant than they could at any educational establishment.

This is one reason we have to look after the Earth, whether it's in a city context or a rural one. Our mental, emotional and physical health is known to be directly affected by it.

, Buster123 , 12 Oct 2016 06:55
A thoughtful article. But the rich and powerful will ignore it; their doing very well out of neo liberalism thank you. Meanwhile many of those whose lives are affected by it don't want to know - they're happy with their bigger TV screen. Which of course is what the neoliberals want, 'keep the people happy and in the dark'.
An old Roman tactic - when things weren't going too well for citizens and they were grumbling the leaders just extended the 'games'. Evidently it did the trick. Share
, worried Buster123 , 12 Oct 2016 07:32
The rich and powerful can be just as lonely as you and me. However, some of them will be lonely after having royally forked the rest of us over...and that is another thing
, Hallucinogen , 12 Oct 2016 06:59

We're the middle children of history, man. No purpose or place. We have no Great War. No Great Depression. Our Great War's a spiritual war. Our Great Depression is our lives.


- Fight Club
People need a tribe to feel purpose. We need conflict, it's essential for our species... psychological health improved in New York after 9/11.
, ParisHiltonCommune , 12 Oct 2016 07:01
Totally agree with the last sentences. Human civilisation is a team effort. Individual humans cant survive, our language evolved to aid cooperation.

Neo-liberalism is really only an Anglo-American project. Yet we are so indoctrinated in it, It seems natural to us, but not to hardly any other cultures.

As for those "secondary factors. Look to advertising and the loss of real jobs forcing more of us to sell services dependent on fake needs. Share

, deirdremcardle , 12 Oct 2016 07:01
Help save the Notting Hill Carnival
http://www.getwestlondon.co.uk/news/west-london-news/teen-disembowelled-years-notting-hill-11982129

It's importance for social cohesion -yes inspite of the problems , can not be overestimated .Don't let the rich drive it out , people who don't understand ,or care what it's for .The poorer boroughs cannot afford it .K&C have easily 1/2billion in Capital Reserves ,so yes they must continue . Here I can assure you ,one often sees the old and lonely get a hug .If drug gangs are hitting each other or their rich boy customers with violence - that is a different matter . And yes of course if we don't do something to help boys from ethnic minorities ,with education and housing -of course it only becomes more expensive in the long run.

Boris Johnson has idiotically mouthed off about trying to mobilise people to stand outside the Russian Embassy , as if one can mobilise youth by telling them to tidy their bedroom .Because that's all it amounts to - because you have to FEEL protest and dissent . Well here at Carnival - there it is ,protest and dissent . Now listen to it . And of course it will be far easier than getting any response from sticking your tongue out at the Putin monster !
He has his bombs , just as Kensington and Chelsea have their money.
(and anyway it's only another Boris diversion ,like building some fucking stupid bridge ,instead of doing anything useful)

, Lafcadio1944 , 12 Oct 2016 07:03
"Society" or at least organized society is the enemy of corporate power. The idea of Neoliberal capitalism is to replace civil society with corporate law and rule. The same was true of the less extreme forms of capitalism. Society is the enemy of capital because it put restrictions on it and threatens its power.

When society organizes itself and makes laws to protect society from the harmful effects of capitalism, for example demands on testing drugs to be sure they are safe, this is a big expense to Pfizer, there are many examples - just now in the news banning sugary drinks. If so much as a small group of parents forming a day care co-op decide to ban coca cola from their group that is a loss of profit.

That is really what is going on, loneliness is a big part of human life, everyone feels it sometimes, under Neoliberal capitalism it is simply more exaggerated due to the out and out assault on society itself.

, Joan Cant , 12 Oct 2016 07:10
Well the prevailing Global Capitalist world view is still a combination 1. homocentric Cartesian Dualism i.e. seeing humans as most important and sod all other living beings, and seeing humans as separate from all other living beings and other humans and 2. Darwinian "survival of the fittest" seeing everything as a competition and people as "winners and losers, weak or strong with winners and the strong being most important". From these 2 combined views all kinds of "games" arise. The main one being the game of "victim, rescuer, persecutor" (Transactional Analysis). The Guardian engages in this most of the time and although I welcome the truth in this article to some degree, surprisingly, as George is environmentally friendly, it kinda still is talking as if humans are most important and as if those in control (the winners) need to change their world view to save the victims. I think the world view needs to zoom out to a perspective that recognises that everything is interdependent and that the apparent winners and the strong are as much victims of their limited world view as those who are manifesting the effects of it more obviously.
, Zombiesfan , 12 Oct 2016 07:14
Here in America, we have reached the point at which police routinely dispatch the mentally ill, while complaining that "we don't have the time for this" (N. Carolina). When a policeman refuses to kill a troubled citizen, he or she can and will be fired from his job (West Virginia). This has become not merely commonplace, but actually a part of the social function of the work of the police -- to remove from society the burden of caring for the mentally ill by killing them. In the state where I live, a state trooper shot dead a mentally ill man who was not only unarmed, but sitting on the toilet in his own home. The resulting "investigation" exculpated the trooper, of course; in fact, young people are constantly told to look up to the police.
, ianita1978 Zombiesfan , 12 Oct 2016 08:25
Sounds like the inevitable logical outcome of a society where the predator sociopathic and their scared prey are all that is allowed.
This dynamic dualistic tautology, the slavish terrorised to sleep and bullying narcissistic individual, will always join together to protect their sick worldview by pathologising anything that will threaten their hegemony of power abuse: compassion, sensitivity, moral conscience, altruism and the immediate effects of the ruthless social effacement or punishment of the same ie human suffering. Share
, Ruby4 , 12 Oct 2016 07:14
The impact of increasing alienation on individual mental health has been known about and discussed for a long time.

When looking at a way forward, the following article is interesting:

"Alienation, in all areas, has reached unprecedented heights; the social machinery for deluding consciousnesses in the interest of the ruling class has been perfected as never before. The media are loaded with upscale advertising identifying sophistication with speciousness. Television, in constant use, obliterates the concept under the image and permanently feeds a baseless credulity for events and history. Against the will of many students, school doesn't develop the highly cultivated critical capacities that a real sovereignty of the people would require. And so on. The ordinary citizen thus lives in an incredibly deceiving reality. Perhaps this explains the tremendous and persistent gap between the burgeoning of motives to struggle, and the paucity of actual combatants. The contrary would be a miracle. Thus the considerable importance of what I call the struggle for representation: at every moment, in every area, to expose the deception and bring to light, in the simplicity of form which only real theoretical penetration makes possible, the processes in which the false-appearances, real and imagined, originate, and this way, to form the vigilant consciousness, placing our image of reality back on its feet and reopening paths to action."

https://www.marxists.org/archive/seve/lucien_seve.htm

, ianita1978 Ruby4 , 12 Oct 2016 08:18
For the global epidemic of abusive, effacing homogenisation of human intellectual exchange and violent hyper-sexualisation of all culture, I blame the US Freudian PR guru Edward Bernays and his puritan forebears - alot. Share Facebook Twitter
, bonhee Ruby4 , 12 Oct 2016 09:03
Thanks for proving that Anomie is a far more sensible theory than Dialectical Materialistic claptrap that was used back in the 80s to terrorize the millions of serfs living under the Jack boot of Leninist Iron curtain.
, RossJames , 12 Oct 2016 07:15
There's no question - neoliberalism has been wrenching society apart. It's not as if the prime movers of this ideology were unaware of the likely outcome viz. "there is no such thing as society" (Thatcher). Actually in retrospect the whole zeitgeist from the late 70s emphasised the atomised individual separated from the whole. Dawkins' "The Selfish Gene" (1976) may have been influential in creating that climate.

Anyway, the wheel has turned thank goodness. We are becoming wiser and understanding that "ecology" doesn't just refer to our relationship with the natural world but also, closer to home, our relationship with each other.

, Jayarava Attwood RossJames , 12 Oct 2016 07:37
The Communist manifesto makes the same complaint in 1848. The wheel has not turned, it is still grinding down workers after 150 years. We are none the wiser. Share Facebook Twitter
, Ben Wood RossJames , 12 Oct 2016 07:49
"The wheel is turning and you can't slow down,
You can't let go and you can't hold on,
You can't go back and you can't stand still,
If the thunder don't get you then the lightning will."
R Hunter Share Facebook Twitter
, ianita1978 Ben Wood , 12 Oct 2016 08:13
Yep.
And far too many good people have chosen to be the grateful dead in order to escape the brutal torture of bullying Predators.
, magicspoon3 , 12 Oct 2016 07:30
What is loneliness? I love my own company and I love walking in nature and listening to relaxation music off you tube and reading books from the library. That is all free. When I fancied a change of scene, I volunteered at my local art gallery.

Mental health issues are not all down to loneliness. Indeed, other people can be a massive stress factor, whether it is a narcissistic parent, a bullying spouse or sibling, or an unreasonable boss at work.

I'm on the internet far too much and often feel the need to detox from it and get back to a more natural life, away from technology. The 24/7 news culture and selfie obsessed society is a lot to blame for social disconnect.

The current economic climate is also to blame, if housing and job security are a problem for individuals as money worries are a huge factor of stress. The idea of not having any goal for the future can trigger depressive thoughts.

I have to say, I've been happier since I don't have such unrealistic expectations of what 'success is'. I rarely get that foreign holiday or new wardrobe of clothes and my mobile phone is archaic. The pressure that society puts on us to have all these things- and get in debt for them is not good. The obsession with economic growth at all costs is also stupid, as the numbers don't necessarily mean better wealth, health or happiness.

, dr8765 , 12 Oct 2016 07:34
Very fine article, as usual from George, until right at the end he says:

This does not require a policy response.

But it does. It requires abandonment of neoliberalism as the means used to run the world. People talk about the dangers of man made computers usurping their makers but mankind has, it seems, already allowed itself to become enslaved. This has not been achieved by physical dependence upon machines but by intellectual enslavement to an ideology.

, John Smythe , 12 Oct 2016 07:35
A very good "Opinion" by George Monbiot one of the best I have seen on this Guardian blog page.
I would add that the basic concepts of the Neoliberal New world order are fundamentally Evil, from the control of world population through supporting of strife starvation and war to financial inducements of persons in positions of power. Let us not forget the training of our younger members of our society who have been induced to a slavish love of technology. Many other areas of human life are also under attack from the Neoliberal, even the very air we breathe, and the earth we stand upon.
, Jayarava Attwood , 12 Oct 2016 07:36
The Amish have understood for 300 years that technology could have a negative effect on society and decided to limit its effects. I greatly admire their approach. Neal Stephenson's recent novel Seveneves coined the term Amistics for the practice of assessing and limiting the impact of tech. We need a Minister for Amistics in the government. Wired magazine did two features on the Amish use of telephones which are quite insightful.

The Amish Get Wired. The Amish ? 6.1.1993
look Who's talking . 1.1.1999

If we go back to 1848, we also find Marx and Engels, in the Communist Manifesto, complaining about the way that the first free-market capitalism (the original liberalism) was destroying communities and families by forcing workers to move to where the factories were being built, and by forcing women and children into (very) low paid work. 150 years later, after many generations of this, combined with the destruction of work in the North, the result is widespread mental illness. But a few people are really rich now, so that's all right, eh?

Social media is ersatz community. It's like eating grass: filling, but not nourishing.

ICYMI I had some thoughts a couple of days ago on how to deal with the mental health epidemic .

, maplegirl , 12 Oct 2016 07:38
Young people are greatly harmed by not being able to see a clear path forward in the world. For most people, our basic needs are a secure job, somewhere secure and affordable to live, and a decent social environment in terms of public services and facilities. Unfortunately, all these things are sliding further out of reach for young people in the UK, and they know this. Many already live with insecure housing where their family could have to move at a month or two's notice.

Our whole economic system needs to be built around providing these basic securities for people. Neoliberalism = insecure jobs, insecure housing and poor public services, because these are the end result of its extreme free market ideology.

, dynamicfrog , 12 Oct 2016 07:44
I agree with this 100%. Social isolation makes us unhappy. We have a false sense of what makes us unhappy - that success or wealth will enlighten or liberate us. What makes us happy is social connection. Good friendships, good relationships, being part of community that you contribute to. Go to some of the poorest countries in the world and you may meet happy people there, tell them about life in rich countries, and say that some people there are unhappy. They won't believe you. We do need to change our worldview, because misery is a real problem in many countries.
, SavannahLaMar , 12 Oct 2016 07:47
It is tempting to see the world before Thatcherism, which is what most English writers mean when they talk about neo-liberalism, as an idyll, but it simply wasn't.

The great difficulty with capitalism is that while it is in many ways an amoral doctrine, it goes hand in hand with personal freedom. Socialism is moral in its concern for the poorest, but then it places limits on personal freedom and choice. That's the price people pay for the emphasis on community, rather than the individual.

Close communities can be a bar on personal freedom and have little tolerance for people who deviate from the norm. In doing that, they can entrench loneliness.

This happened, and to some extent is still happening, in the working class communities which we typically describe as 'being destroyed by Thatcher'. It's happening in close-knit Muslim communities now.

I'm not attempting to vindicate Thatcherism, I'm just saying there's a pay-off with any model of society. George Monbiot's concerns are actually part of a long tradition - Oliver Goldsmith's Deserted Village (1770) chimes with his thinking, as does DH Lawrence's Lady Chatterley's Lover.

, proteusblu SavannahLaMar , 12 Oct 2016 08:04
The kind of personal freedom that you say goes hand in hand with capitalism is an illusion for the majority of people. It holds up the prospect of that kind of freedom, but only a minority get access to it. For most, it is necessary to submit yourself to a form of being yoked, in terms of the daily grind which places limits on what you can then do, as the latter depends hugely on money. The idea that most people are "free" to buy the house they want, private education, etc., not to mention whether they can afford the many other things they are told will make them happy, is a very bad joke. Hunter-gatherers have more real freedom than we do. Share
, Stephen Bell SavannahLaMar , 12 Oct 2016 09:07
Well said. One person's loneliness is another's peace and quiet.
, stumpedup_32 Firstact , 12 Oct 2016 08:12
According to Wiki: 'Neoliberalism refers primarily to the 20th century resurgence of 19th century ideas associated with laissez-faire economic liberalism. These include extensive economic liberalization policies such as privatization, fiscal austerity, deregulation, free trade, and reductions in government spending in order to enhance the role of the private sector in the economy.'
, queequeg7 , 12 Oct 2016 07:54
We grow into fear - the stress of exams and their certain meanings; the lower wages, longer hours, and fewer rights at work; the certainty of debt with ever greater mortgages; the terror of benefit cuts combined with rent increases.

If we're forever afraid, we'll cling to whatever life raft presents.

It's a demeaning way to live, but it serves the Market better than having a free, reasonably paid, secure workforce, broadly educated and properly housed, with rights.

, CrazyGuy , 12 Oct 2016 07:54
Insightful analysis...

George quite rightly pinpoints the isolating effects of modern society and technology and the impact on the quality of our relationships.

The obvious question is how can we offset these trends and does the government care enough to do anything about them?

It strikes me that one of the major problems is that [young] people have been left to their own devices in terms of their consumption of messages from Social and Mass online Media - analogous to leaving your kids in front of a video in lieu of a parental care or a babysitter. In traditional society - the messages provided by Society were filtered by family contact and real peer interaction - and a clear picture of the limited value of the media was propogated by teachers and clerics. Now young and older people alike are left to make their own judgments and we cannot be surprised when they extract negative messages around body image, wealth and social expectations and social and sexual norms from these channels. It's inevitable that this will create a boundary free landscape where insecurity, self-loathing and ultimately mental illness will prosper.

I'm not a traditionalist in any way but there has to be a role for teachers and parents in mediating these messages and presenting the context for analysing what is being said in a healthy way. I think this kind of Personal Esteem and Life Skills education should be part of the core curriculum in all schools. Our continued focus on basic academic skills just does not prepare young people for the real world of judgementalism, superficiality and cliques and if anything dealing with these issues are core life skills.

We can't reverse the fact that media and modern society is changing but we can prepare people for the impact which it can have on their lives.

, school10 CrazyGuy , 12 Oct 2016 08:04
A politician's answer.
X is a problem. Someone else, in your comment it will be teachers that have to sort it out. Problems in society are not solved by having a one hour a week class on "self esteem". In fact self-esteem and self-worth comes from the things you do. Taking kids away from their academic/cultural studies reduces this.
This is a problem in society. What can society as a whole do to solve it and what are YOU prepared to contribute. Share
, David Ireland CrazyGuy , 12 Oct 2016 09:28
Rather difficult to do when their parents are Thatchers children and buy into the whole celebrity, you are what you own lifestyle too....and teachers are far too busy filling out all the paperwork that shows they've met their targets to find time to teach a person centred course on self-esteem to a class of 30 teenagers. Share Facebook Twitter
, Ian Harris , 12 Oct 2016 07:54
I think we should just continue to be selfish and self-serving, sneering and despising anyone less fortunate than ourselves, look up to and try to emulate the shallow, vacuous lifestyle of the non-entity celebrity, consume the Earth's natural resources whilst poisoning the planet and the people, destroy any non-contributing indigenous peoples and finally set off all our nuclear arsenals in a smug-faced global firework display to demonstrate our high level of intelligence and humanity. Surely, that's what we all want? Who cares? So let's just carry on with business as usual!
, BetaRayBill , 12 Oct 2016 08:01
Neoliberalism is the bastard child of globalization which in effect is Americanization. The basic premise is the individual is totally reliant on the corporate world state aided by a process of fear inducing mechanisms, pharmacology is one of the tools.
No community no creativity no free thinking. Poded sealed and cling filmed a quasi existence.
, Bluecloud , 12 Oct 2016 08:01 Contributor
Having grown up during the Thatcher years, I entirely agree that neoliberalism has divided society by promoting individual self-optimisation at the expensive of everyone else.

What's the solution? Well if neoliberalism is the root cause, we need a systematic change, which is a problem considering there is no alternative right now. We can however, get active in rebuilding communities and I am encouraged by George Monbiot's work here.

My approach is to get out and join organisations working toward system change. 350.org is a good example. Get involved.

, SemenC , 12 Oct 2016 08:09
we live in a narcissistic and ego driven world that dehumanises everyone. we have an individual and collective crisis of the soul. it is our false perception of ourselves that creates a disconnection from who we really are that causes loneliness. Share Facebook Twitter
, rolloverlove SemenC , 12 Oct 2016 11:33
I agree. This article explains why it is a perfectly normal reaction to the world we are currently living in. It goes as far as to suggest that if you do not feel depressed at the state of our world there's something wrong with you ;-)
http://upliftconnect.com/mutiny-of-the-soul/ Share Facebook Twitter
, HaveYouFedTheFish , 12 Oct 2016 08:10
Surely there is a more straightforward possible explanation for increasing incidence of "unhapiness"?

Quite simply, a century of gradually increasing general living standards in the West have lifted the masses up Maslows higiene hierarchy of needs, to where the masses now have largely only the unfulfilled self esteem needs that used to be the preserve of a small, middle class minority (rather than the unfulfilled survival, security and social needs of previous generations)

If so - this is good. This is progress. We just need to get them up another rung to self fulfillment (the current concern of the flourishing upper middle classes).

, avid Ireland HaveYouFedTheFish , 12 Oct 2016 08:59
Maslow's hierarchy of needs was not about material goods. One could be poor and still fulfill all his criteria and be fully realised. You have missed the point entirely. Share Facebook Twitter
, HaveYouFedTheFish David Ireland , 12 Oct 2016 09:25
Error.... Who mentioned material goods? I think you have not so much "missed the point" as "made your own one up" .

And while agreed that you could, in theory, be poor and meet all of your needs (in fact the very point of the analysis is that money, of itself, isn't what people "need") the reality of the structure of a western capitalist society means that a certain level of affluence is almost certainly a prerequisite for meeting most of those needs simply because food and shelter at the bottom end and, say, education and training at the top end of self fulfillment all have to be purchased. Share

, HaveYouFedTheFish David Ireland , 12 Oct 2016 09:40
Also note that just because a majority of people are now so far up the heirachy does in no way negate an argument that corporations haven't also noticed this and target advertising appropriately to exploit it (and maybe we need to talk about that)

It just means that it's lazy thinking to presume we are in some way "sliding backwards" socially, rather than needing to just keep pushing through this adversity through to the summit.

I have to admit it does really stick in my craw a bit hearing millenials moan about how they may never get to *own* a really *nice* house while their grandparents are still alive who didn't even get the right to finish school and had to share a bed with their siblings.

, Loatheallpoliticians , 12 Oct 2016 08:11
I prefer the competitive self interest and individualism.

Really I do not want to be living under a collectivist state society thanks. Share Facebook Twitter

, poppetmaster Loatheallpoliticians , 12 Oct 2016 08:21
there is a civilised compromise...we just have to keep searching Share Facebook Twitter
, Pinkie123 Loatheallpoliticians , 12 Oct 2016 08:25
There is no such thing as a free-market society. Your society of 'self-interest' is really a state supported oligarchy. If you really want to live in a society where there is literally no state and a more or less open market try Somalia or a Latin American city run by drug lords - but even then there are hierarchies, state involvement, militias.

What you are arguing for is a system (for that is what it is) that demands everyone compete with one another. It is not free, or liberal, or democratic, or libertarian. It is designed to oppress, control, exploit and degrade human beings. This kind of corporatism in which everyone is supposed to serve the God of the market is, ironically, quite Stalinist. Furthermore, a society in which people are encouraged to be narrowly selfish is just plain uncivilized. Since when have sociopathy and barbarism been something to aspire to?

, LevNikolayevich , 12 Oct 2016 08:17
George, you are right, of course. The burning question, however, is not 'Is our current social set-up making us ill' (it certainly is), but 'Is there a healthier alternative?' What form of society would make us less ill? Socialism and egalatarianism, wherever they are tried, tend to lead to their own set of mental-illness-inducing problems, chiefly to do with thwarted opportunity, inability to thrive, and constraints on individual freedom. The sharing, caring society is no more the answer than the brutally individualistic one. You may argue that what is needed is a balance between the two, but that is broadly what we have already. It ain't perfect, but it's a lot better than any of the alternatives.
, David Ireland LevNikolayevich , 12 Oct 2016 08:50
We certainly do NOT at present have a balance between the two societies...Have you not read the article? Corporations and big business have far too much power and control over our lives and our Gov't. The gov't does not legislate for a real living minimum wage and expects the taxpayer to fund corporations low wage businesses. The Minimum wage and benefit payments are sucked in to ever increasing basic living costs leaving nothing for the human soul aside from more work to keep body and soul together, and all the while the underlying message being pumped at us is that we are failures if we do not have wealth and all the accoutrements that go with it....How does that create a healthy society?
, Saul Till , 12 Oct 2016 08:25
Neoliberalism. A simple word but it does a great deal of work for people like Monbiot.

The simple statistical data on quality of life differences between generations is absolutely nowhere to be found in this article, nor are self-reported findings on whether people today are happier, just as happy or less happy than people thirty years ago. In reality quality of life and happiness indices have generally been increasing ever since they were introduced.
It's more difficult to know if things like suicide, depression and mental illness are actually increasing or whether it's more to do with the fact that the number of people who are prepared to report them is increasing: at least some of the rise in their numbers will be down to greater awareness of said mental illness, government campaigns and a decline in associated social stigma.

Either way, what evidence there is here isn't even sufficient to establish that we are going through some vast mental health crisis in the first place, never mind that said crisis is inextricably bound up with 'neoliberalism'.

Furthermore, I'm inherently suspicious of articles that manage to connect every modern ill to the author's own political bugbear, especially if they cherry-pick statistical findings to support their point. I'd be just as, if not more, suspicious if it was a conservative author trying to link the same ills to the decline in Christianity or similar. In fact, this article reminds me very much of the sweeping claims made by right-wingers about the allegedly destructive effects of secularism/atheism/homosexuality/video games/South Park/The Great British Bake Off/etc...

If you're an author and you have a pet theory, and upon researching an article you believe you see a pattern in the evidence that points towards further confirmation of that theory, then you should step back and think about whether said pattern is just a bit too psychologically convenient and ideologically simple to be true. This is why people like Steven Pinker - properly rigorous, scientifically versed writer-researchers - do the work they do in systematically sifting through the sociological and historical data: because your mind is often actively trying to convince you to believe that neoliberalism causes suicide and depression, or, if you're a similarly intellectually lazy right-winger, homosexuality leads to gang violence and the flooding of(bafflingly, overwhelmingly heterosexual) parts of America.

I see no sign that Monbiot is interested in testing his belief in his central claim and as a result this article is essentially worthless except as an example of a certain kind of political rhetoric.

, Rapport , 12 Oct 2016 08:38

social isolation is strongly associated with depression, suicide, anxiety, insomnia, fear and the perception of threat .... Dementia, high blood pressure, heart disease, strokes, lowered resistance to viruses, even accidents are more common among chronically lonely people.

Loneliness has a comparable impact on physical health to smoking 15 cigarettes a day:

it appears to raise the risk of early death by 26%

Why don't we explore some of the benefits?..

Following the long list of some the diseases, loneliness can inflict on individuals, there must be a surge in demand for all sort of medications; anti-depressants must be topping the list. There is a host many other anti-stress treatments available of which Big Pharma must be carving the lion's share.

Examine the micro-economic impact immediately following a split or divorce. There is an instant doubling on the demand for accommodation, instant doubling on the demand for electrical and household items among many other products and services.

But the icing on the cake and what is really most critical for Neolibralism must be this:

With the morale barometer hitting the bottom, people will be less likely to think of a better future, and therefore, less likely to protest. In fact, there is nothing left worth protecting.

Your freedom has been curtailed. Your rights are evaporating in front of your eyes. And Best of all, from the authorities' perspective, there is no relationship to defend and there is no family to protect. If you have a job, you want to keep, you must prove your worthiness every day to 'a company'.

[Apr 18, 2017] Atomization of workforce and a part of atomization of society under neoliberalism

Notable quotes:
"... a friend of mine, born in Venice and a long-time resident of Rome, pointed out to me that dogs are a sign of loneliness. ..."
"... And the cafes and restaurants on weekends in Chicago–chockfull of people, each on his or her own Powerbook, surfing the WWW all by themselves. ..."
"... The preaching of self-reliance by those who have never had to practice it is galling. ..."
"... Katherine: Agreed. It is also one of the reasons why I am skeptical of various evangelical / fundi pastors, who are living at the expense of their churches, preaching about individual salvation. ..."
"... So you have the upper crust (often with inheritances and trust funds) preaching economic self-reliances, and you have divines preaching individual salvation as they go back to the house provided by the members of the church. ..."
Apr 18, 2017 | www.nakedcapitalism.com
DJG , April 17, 2017 at 11:09 am
Neoliberalism is creating loneliness. That's what's wrenching society apart George Monbiot, Guardian

George Monbiot on human loneliness and its toll. I agree with his observations. I have been cataloguing them in my head for years, especially after a friend of mine, born in Venice and a long-time resident of Rome, pointed out to me that dogs are a sign of loneliness.

A couple of recent trips to Rome have made that point ever more obvious to me: Compared to my North Side neighborhood in Chicago, where every other person seems to have a dog, and on weekends Clark Street is awash in dogs (on their way to the dog boutiques and the dog food truck), Rome has few dogs. Rome is much more densely populated, and the Italians still have each other, for good or for ill. And Americans use the dog as an odd means of making human contact, at least with other dog owners.

But Americanization advances: I was surprised to see people bring dogs into the dining room of a fairly upscale restaurant in Turin. I haven't seen that before. (Most Italian cafes and restaurants are just too small to accommodate a dog, and the owners don't have much patience for disruptions.) The dogs barked at each other for while–violating a cardinal rule in Italy that mealtime is sacred and tranquil. Loneliness rules.

And the cafes and restaurants on weekends in Chicago–chockfull of people, each on his or her own Powerbook, surfing the WWW all by themselves.

That's why the comments about March on Everywhere in Harper's, recommended by Lambert, fascinated me. Maybe, to be less lonely, you just have to attend the occasional march, no matter how disorganized (and the Chicago Women's March organizers made a few big logistical mistakes), no matter how incoherent. Safety in numbers? (And as Monbiot points out, overeating at home alone is a sign of loneliness: Another argument for a walk with a placard.)

Katharine , April 17, 2017 at 11:39 am

I particularly liked this point:

In Britain, men who have spent their entire lives in quadrangles – at school, at college, at the bar, in parliament – instruct us to stand on our own two feet.

With different imagery, the same is true in this country. The preaching of self-reliance by those who have never had to practice it is galling.

DJG , April 17, 2017 at 11:48 am

Katherine: Agreed. It is also one of the reasons why I am skeptical of various evangelical / fundi pastors, who are living at the expense of their churches, preaching about individual salvation.

So you have the upper crust (often with inheritances and trust funds) preaching economic self-reliances, and you have divines preaching individual salvation as they go back to the house provided by the members of the church.

[Apr 18, 2017] Learning to Love Intelligent Machines

Notable quotes:
"... Learning to Love Intelligent Machines ..."
Apr 18, 2017 | www.nakedcapitalism.com
MoiAussie , April 17, 2017 at 9:04 am

If anyone is struggling to access Learning to Love Intelligent Machines (WSJ), you can get to it by clicking though this post . YMMV.

MyLessThanPrimeBeef , April 17, 2017 at 11:26 am

Also, don't forget to Learn from your Love Machines.

Artificial Love + Artificial Intelligence = Artificial Utopia.

[Apr 18, 2017] Corporations love non-class based identity politics, love arguing that the real problems in society are not about economic inequality but rather on identity based sensitivity.

Apr 18, 2017 | www.nakedcapitalism.com
libarbarian , April 17, 2017 at 9:05 am

RE: "Fearless Girl"

A few seasons back, South Park pointed out how easy it was for corporations to co-opt social justice rhetoric. Since then, life has stubbornly insisted on supporting that thesis.

DH , April 17, 2017 at 9:57 am

Every now and then the un-system bites back as we just saw with the Pepsi ad, although they did get a ton of free press, similar to United. That approach worked for The Donald ..

Ernesto Lyon , April 17, 2017 at 2:20 pm

Corporations love non-class based identity politics. They love arguing that the real problems in society are not about economic inequality but rather on identity based sensitivity. You can learn the fancy sensitivity codes at your uppity college and look down your nose at the poor whites who don't get the semiotic coaching. Business as Usual.

[Apr 17, 2017] How many articles have I read that state as fact that the problem is REALLY automation?

Notable quotes:
"... It isn't. It's the world's biggest, most advanced cloud-computing company with an online retail storefront stuck between you and it. In 2005-2006 it was already selling supercomputing capability for cents on the dollar - way ahead of Google and Microsoft and IBM. ..."
"... Do you really think the internet created Amazon, Snapchat, Facebook, etc? No, the internet was just a tool to be used. The people who created those businesses would have used any tool they had access to at the time because their original goal was not automation or innovation, it was only to get rich. ..."
"... "Disruptive parasitic intermediation" is superb, thanks. The entire phrase should appear automatically whenever "disruption"/"disruptive" or "innovation"/"innovative" is used in a laudatory sense. ..."
"... >that people have a much bigger aversion to loss than gain. ..."
"... As the rich became uber rich, they hid the money in tax havens. As for globalization, this has less to do these days with technological innovation and more to do with economic exploitation. ..."
Apr 17, 2017 | www.nakedcapitalism.com
Carla , April 17, 2017 at 9:25 am

"how many articles have I read that state as fact that the problem is REALLY automation?

NO, the real problem is that the plutocrats control the policies "

+1

justanotherprogressive , April 17, 2017 at 11:45 am

+100 to your comment. There is a decided attempt by the plutocrats to get us to focus our anger on automation and not the people, like they themselves, who control the automation ..

MoiAussie , April 17, 2017 at 12:10 pm

Plutocrats control much automation, but so do thousands of wannabe plutocrats whose expertise lets them come from nowhere to billionairehood in a few short years by using it to create some novel, disruptive parasitic intermediation that makes their fortune. The "sharing economy" relies on automation. As does Amazon, Snapchat, Facebook, Dropbox, Pinterest,

It's not a stretch to say that automation creates new plutocrats . So blame the individuals, or blame the phenomenon, or both, whatever works for you.

Carolinian , April 17, 2017 at 12:23 pm

So John D. Rockefeller and Andrew Carnegie weren't plutocrats–or were somehow better plutocrats?

Blame not individuals or phenomena but society and the public and elites who shape it. Our social structure is also a kind of machine and perhaps the most imperfectly designed of all of them. My own view is that the people who fear machines are the people who don't like or understand machines. Tools, and the use of them, are an essential part of being human.

MoiAussie , April 17, 2017 at 9:21 pm

Huh? If I wrote "careless campers create forest fires", would you actually think I meant "careless campers create all forest fires"?

Carolinian , April 17, 2017 at 10:23 pm

I'm replying to your upthread comment which seems to say today's careless campers and the technology they rely on are somehow different from those other figures we know so well from history. In fact all technology is tremendously disruptive but somehow things have a way of sorting themselves out. So–just to repeat–the thing is not to "blame" the individuals or the automation but to get to work on the sorting. People like Jeff Bezos with his very flaky business model could be little more than a blip.

a different chris , April 17, 2017 at 12:24 pm

>Amazon, Snapchat, Facebook, Dropbox, Pinterest

Automation? Those companies? I guess Amazon automates ordering not exactly R. Daneel Olivaw for sure. If some poor Asian girl doesn't make the boots or some Agri giant doesn't make the flour Amazon isn't sending you nothin', and the other companies are even more useless.

Mark P. , April 17, 2017 at 2:45 pm

'Automation? Those companies? I guess Amazon automates ordering not exactly R. Daneel Olivaw for sure.'

Um. Amazon is highly deceptive, in that most people think it's a giant online retail store.

It isn't. It's the world's biggest, most advanced cloud-computing company with an online retail storefront stuck between you and it. In 2005-2006 it was already selling supercomputing capability for cents on the dollar - way ahead of Google and Microsoft and IBM.

justanotherprogressive , April 17, 2017 at 12:32 pm

Do you really think the internet created Amazon, Snapchat, Facebook, etc? No, the internet was just a tool to be used. The people who created those businesses would have used any tool they had access to at the time because their original goal was not automation or innovation, it was only to get rich.

Let me remind you of Thomas Edison. If he would have lived 100 years later, he would have used computers instead of electricity to make his fortune. (In contrast, Nikolai Tesla/George Westinghouse used electricity to be innovative, NOT to get rich ). It isn't the tool that is used, it is the mindset of the people who use the tool

clinical wasteman , April 17, 2017 at 2:30 pm

"Disruptive parasitic intermediation" is superb, thanks. The entire phrase should appear automatically whenever "disruption"/"disruptive" or "innovation"/"innovative" is used in a laudatory sense.

100% agreement with your first point in this thread, too. That short comment should stand as a sort of epigraph/reference for all future discussion of these things.

No disagreement on the point about actual and wannabe plutocrats either, but perhaps it's worth emphasising that it's not just a matter of a few successful (and many failed) personal get-rich-quick schemes, real as those are: the potential of 'universal machines' tends to be released in the form of parasitic intermediation because, for the time being at least, it's released into a world subject to the 'demands' of capital, and at a (decades-long) moment of crisis for the traditional model of capital accumulation. 'Universal' potential is set free to seek rents and maybe to do a bit of police work on the side, if the two can even be separated.

The writer of this article from 2010 [ http://www.metamute.org/editorial/articles/artificial-scarcity-world-overproduction-escape-isnt ] surely wouldn't want it to be taken as conclusive, but it's a good example of one marginal train of serious thought about all of the above. See also 'On Africa and Self-Reproducing Automata' written by George Caffentzis 20 years or so earlier [https://libcom.org/library/george-caffentzis-letters-blood-fire]; apologies for link to entire (free, downloadable) book, but my crumbling print copy of the single essay stubbornly resists uploading.

DH , April 17, 2017 at 9:48 am

Unfortunately, the healthcare insurance debate has been simply a battle between competing ideologies. I don't think Americans understand the key role that universal healthcare coverage plays in creating resilient economies.

Before penicillin, heart surgeries, cancer cures, modern obstetrics etc. that it didn't matter if you are rich or poor if you got sick. There was a good chance you would die in either case which was a key reason that the average life span was short.

In the mid-20th century that began to change so now lifespan is as much about income as anything else. It is well known that people have a much bigger aversion to loss than gain. So if you currently have healthcare insurance through a job, then you don't want to lose it by taking a risk to do something where you are no longer covered.

People are moving less to find work – why would you uproot your family to work for a company that is just as likely to lay you off in two years in a place you have no roots? People are less likely to day to quit jobs to start a new business – that is a big gamble today because you not only have to keep the roof over your head and put food on the table, but you also have to cover an even bigger cost of healthcare insurance in the individual market or you have a much greater risk of not making it to your 65th birthday.

In countries like Canada, healthcare coverage is barely a discussion point if somebody is looking to move, change jobs, or start a small business.

If I had a choice today between universal basic income vs universal healthcare coverage, I would choose the healthcare coverage form a societal standpoint. That is simply insuring a risk and can allow people much greater freedom during the working lives. Similarly, Social Security is of similar importance because it provides basic protection against disability and not starving in the cold in your old age. These are vastly different incentive systems than paying people money to live on even if they are not working.

Our ideological debates should be factoring these types of ideas in the discussion instead of just being a food fight.

a different chris , April 17, 2017 at 12:28 pm

>that people have a much bigger aversion to loss than gain.

Yeah well if the downside is that you're dead this starts to make sense.

>instead of just being a food fight.

The thing is that the Powers-That-Be want it to be a food fight, as that is a great stalling at worst and complete diversion at best tactic. Good post, btw.

Altandmain , April 17, 2017 at 12:36 pm

As the rich became uber rich, they hid the money in tax havens. As for globalization, this has less to do these days with technological innovation and more to do with economic exploitation.

I will note that Germany, Japan, South Korea, and a few other nations have not bought into this madness and have retained a good chunk of their manufacturing sectors.

Mark P. , April 17, 2017 at 3:26 pm

'As for globalization, this has less to do these days with technological innovation and more to do with economic exploitation.'

Economic exploiters are always with us. You're underrating the role of a specific technological innovation. Globalization as we now know it really became feasible in the late 1980s with the spread of instant global electronic networks, mostly via the fiberoptic cables through which everything - telephony, Internet, etc - travels Internet packet mode.

That's the point at which capital could really start moving instantly around the world, and companies could really begin to run global supply chains and workforces. That's the point when shifts of workers in facilities in Bangalore or Beijing could start their workdays as shifts of workers in the U.S. were ending theirs, and companies could outsource and offshore their whole operations.

[Apr 15, 2017] The Trump phenomenon shows that we urgently need an alternative to the obsolete capitalism

Apr 15, 2017 | failedevolution.blogspot.gr

The Trump phenomenon shows that we urgently need an alternative to the obsolete capitalism globinfo freexchange

It's not only the rapid technological progress, especially in the field of hyper-automation and Artificial Intelligence, that makes capitalism unable to deliver a viable future to the societies. It's also the fact that the dead-end it creates, produces false alternatives like Donald Trump.

As already pointed :

With Trump administration taken over by Goldman Sachs , nothing can surprise us, anymore. The fairy tale of the 'anti-establishment' Trump who would supposedly fight for the interests of the forgotten - by the system - Americans, was collapsed even before Trump election.

What's quite surprising, is how fast the new US president - buddy of the plutocrats, is offering 'earth and water' to the top 1% of the American society, as if they had not already enough at the expense of the 99%. His recent 'achievement', was to sign for more deregulation in favor of the banking mafia that ruined the economy in 2008, destroyed millions of working class Americans and sent waves of financial destruction all over the world. Europe is still on its knees because of the neoliberal destruction and cruel austerity.

Richard Wolff explains:

If you don't want the Trumps of this world to periodically show up and scare everybody, you've got to do something about the basic system that produces the conditions that allow a Trump to get to the position he now occupies.

We need a better politics than having two parties compete for the big corporations to love them, two parties to proudly celebrate capitalism. Real politics needs an opposition, people who think we can do better than capitalism, we ought to try, we ought to discuss it, and the people should have a choice about that. Because if you don't give them that, they are gonna go from one extreme to another, trying to find a way out of the status quo that is no longer acceptable.

I'm amazed that after half a century in which any politician had accepted the name 'Socialist' attached to him or her, thereby committing, effectively, political suicide, Mr. Sanders has shown us that the world has really changed. He could have that label, he could accept the label, he could say he is proud of the label, and millions and millions of Americans said 'that's fine with us', he gets our vote. We will not be the same nation going forward, because of that. It is now openly possible to raise questions about capitalism, to talk about its shortcomings, to explore how we can do better.

Indeed, as the blog pointed before the latest US elections:

Bernie has the background and the ability to change the course of the US politics. He speaks straightly about things buried by the establishment, as if they were absent. Wall Street corruption, growing inequality, corporate funding of politicians by lobbies. He says that he will break the big banks. He will provide free health and education for all the American people. Because of Sanders, Hillary is forced to speak about these issues too. And subsequently, this starts to shape again a fundamental ideological difference between Democrats and Republicans, which was nearly absent for decades.

But none of this would have come to surface if Bernie didn't have the support of the American people. Despite that he came from nowhere, especially the young people mobilized and started to spread his message using the alternative media. Despite that he speaks about Socialism, his popularity grows. The establishment starts to sense the first cracks in its solid structure. But Bernie is only the appropriate tool. It's the American people who make the difference.

No matter who will be elected eventually, the final countdown for the demolition of this brutal system has already started and it's irreversible. The question now is not if, but when it will collapse, and what this collapse will bring the day after. In any case, if people are truly united, they have nothing to fear.

So, what kind of system do we need to replace the obsolete capitalism? Do we need a kind of Democratic Socialism that would be certainly more compatible to the rapid technological progress? Write your thoughts and ideas in the comments below.

[Apr 15, 2017] What's missing in each and every case above -- at least in the USA! -- is countervailing power.

Apr 15, 2017 | economistsview.typepad.com
Denis Drew , April 15, 2017 at 06:58 AM
What's missing in each and every case above -- at least in the USA! -- is countervailing power. 6% labor union density in private business is equivalent to 20/10 blood pressure in the human body: it starves every other healthy process.

It is not just labor market bargaining power that has gone missing, it is not only the lost political muscle for the average person (equal campaign financing, almost all the votes), it is also the lack of machinery to deal with day-to-day outrages on a day-to-day basis (that's called lobbying).

Late dean of the Washington press corps David Broder told a young reporter that when he came to DC fifty years ago (then), all the lobbyists were union. Big pharma's biggest rip-offs, for profit school scams, all the stuff you hear about for one day on the news but no action is ever taken -- that's because there is no (LABOR UNION) mechanism to stay on top of all (or any) of it (LOBBYISTS).

cm -> Denis Drew ... , April 15, 2017 at 12:16 PM
It is a chicken and egg problem. Before large scale automation and globalization, unions "negotiated" themselves their power, which was based on employers having much fewer other choices. Any union power that was ever legislated was legislated as a *result* of union leverage, not to enable the latter (and most of what was legislated amounts to limiting employer interference with unions).

It is a basic feature of human individual and group relations that when you are needed you will be treated well, and when you are not needed you will be treated badly (or at best you will be ignored if that's less effort overall). And by needed I mean needed as a specific individual or narrowly described group.

What automation and globalization have done is created a glut of labor - specifically an oversupply of most skill sets relative to all the work that has to be done according to socially mediated decision processes (a different set of work than what "everybody" would like to happen as long as they don't have to pay for it, taking away from other necessary or desired expenditure of money, effort, or other resources).

Maybe when the boomers age out and become physically too old to work, the balance will tip again.

Peter K. -> cm... , April 15, 2017 at 12:18 PM
"What automation and globalization have done is created a glut of labor - "

No it's been policy and politics. Automation and globalization are red herrings. They've been used to enrich the rich and stick it to everyone else.

They don't have to be used that way.

There is nothing natural or inherent about it. It's all politics and class war and the wrong side is winning.

cm -> Peter K.... , April 15, 2017 at 01:32 PM
OK - they have *enabled* it. The agency is always on the human side. But at the same time, you cannot wish or postulate away human greed.
cm -> Peter K.... , April 15, 2017 at 01:44 PM
Same thing with the internet - it has been hailed as a democratizing force, but instead it has mostly (though not wholly) amplified the existing power differentials and motivation structures.

Anecdotally, a lot of companies and institutions are either restricting internal internet access or disconnecting parts of their organizations from the internet altogether, and disabling I/O channels like USB sticks, encrypting disks, locking out "untrusted" boot methods, etc. The official narrative is security and preventing leaks of confidential information, but the latter is clearly also aimed in part at whistleblowers disclosing illegal or unethical practices. Of course that a number of employees illegitimately "steal" data for personal and not to uncover injustices doesn't really help.

Denis Drew -> cm... , April 15, 2017 at 03:19 PM
Surely there is a huge difference between the labor market here and the labor market in continental Europe -- though labor there faces the same squeezing forces it faces here. Think of German auto assembly line workers making $60 an hour counting benefits.

Think Teamster Union UPS drivers -- and pity the poor, lately hired (if they are even hired) Amazon drivers -- maybe renting vans.

The Teamsters have the only example here of what is standard in continental Europe: centralized bargaining (aka sector wide labor agreements): the Master National Freight Agreement: wherein everybody doing the same job in the same locale (entire nation for long distance truckers) works under one common contract (in French Canada too).

Imagine centralized bargaining for airlines. A few years ago Northwest squeezed a billion dollars in give backs out of its pilots -- next year gave a billion dollars in bonuses to a thousand execs. Couldn't happen under centralized bargaining -- wouldn't even give the company any competitive advantage.

[Apr 15, 2017] Th eobly countervailing force, unions, were deliberately destroyed. Neoliberalism needs to atomize work force to function properly and destroys any solidarity among workers. Unions are anathema for neoliberalism, because they prevent isolation and suppression of workers.

Apr 15, 2017 | economistsview.typepad.com
Denis Drew

, April 15, 2017 at 06:58 AM
What's missing in each and every case above -- at least in the USA! -- is countervailing power. 6% labor union density in private business is equivalent to 20/10 blood pressure in the human body: it starves every other healthy process.

It is not just labor market bargaining power that has gone missing, it is not only the lost political muscle for the average person (equal campaign financing, almost all the votes), it is also the lack of machinery to deal with day-to-day outrages on a day-to-day basis (that's called lobbying).

Late dean of the Washington press corps David Broder told a young reporter that when he came to DC fifty years ago (then), all the lobbyists were union. Big pharma's biggest rip-offs, for profit school scams, all the stuff you hear about for one day on the news but no action is ever taken -- that's because there is no (LABOR UNION) mechanism to stay on top of all (or any) of it (LOBBYISTS).

cm -> Denis Drew ... , April 15, 2017 at 12:16 PM
It is a chicken and egg problem. Before large scale automation and globalization, unions "negotiated" themselves their power, which was based on employers having much fewer other choices. Any union power that was ever legislated was legislated as a *result* of union leverage, not to enable the latter (and most of what was legislated amounts to limiting employer interference with unions).

It is a basic feature of human individual and group relations that when you are needed you will be treated well, and when you are not needed you will be treated badly (or at best you will be ignored if that's less effort overall). And by needed I mean needed as a specific individual or narrowly described group.

What automation and globalization have done is created a glut of labor - specifically an oversupply of most skill sets relative to all the work that has to be done according to socially mediated decision processes (a different set of work than what "everybody" would like to happen as long as they don't have to pay for it, taking away from other necessary or desired expenditure of money, effort, or other resources).

Maybe when the boomers age out and become physically too old to work, the balance will tip again.

Peter K. -> cm... , April 15, 2017 at 12:18 PM
"What automation and globalization have done is created a glut of labor - "

No it's been policy and politics. Automation and globalization are red herrings. They've been used to enrich the rich and stick it to everyone else.

They don't have to be used that way.

There is nothing natural or inherent about it. It's all politics and class war and the wrong side is winning.

cm -> Peter K.... , April 15, 2017 at 01:32 PM
OK - they have *enabled* it. The agency is always on the human side. But at the same time, you cannot wish or postulate away human greed.
cm -> Peter K.... , April 15, 2017 at 01:44 PM
Same thing with the internet - it has been hailed as a democratizing force, but instead it has mostly (though not wholly) amplified the existing power differentials and motivation structures.

Anecdotally, a lot of companies and institutions are either restricting internal internet access or disconnecting parts of their organizations from the internet altogether, and disabling I/O channels like USB sticks, encrypting disks, locking out "untrusted" boot methods, etc. The official narrative is security and preventing leaks of confidential information, but the latter is clearly also aimed in part at whistleblowers disclosing illegal or unethical practices. Of course that a number of employees illegitimately "steal" data for personal and not to uncover injustices doesn't really help.

Denis Drew -> cm... , April 15, 2017 at 03:19 PM
Surely there is a huge difference between the labor market here and the labor market in continental Europe -- though labor there faces the same squeezing forces it faces here. Think of German auto assembly line workers making $60 an hour counting benefits.

Think Teamster Union UPS drivers -- and pity the poor, lately hired (if they are even hired) Amazon drivers -- maybe renting vans.

The Teamsters have the only example here of what is standard in continental Europe: centralized bargaining (aka sector wide labor agreements): the Master National Freight Agreement: wherein everybody doing the same job in the same locale (entire nation for long distance truckers) works under one common contract (in French Canada too).

Imagine centralized bargaining for airlines. A few years ago Northwest squeezed a billion dollars in give backs out of its pilots -- next year gave a billion dollars in bonuses to a thousand execs. Couldn't happen under centralized bargaining -- wouldn't even give the company any competitive advantage.

libezkova -> Denis Drew ... , April 15, 2017 at 04:14 PM
"What's missing in each and every case above -- at least in the USA! -- is countervailing power."

It was deliberately destroyed. Neoliberalism needs to "atomize" work force to function properly and destroys any solidarity among workers. Unions are anathema for neoliberalism, because they prevent isolation and suppression of workers.

Amazon and Uber are good examples. Both should be prosecuted under RICO act. Wall-Mart in nor far from them.

Rising fatalities from heart disease and stroke, diabetes, drug overdoses, accidents and other conditions caused the lower life expectancy revealed in a report by the National Center for Health Statistics .

http://www.cdc.gov/nchs/products/databriefs/db267.htm

http://economistsview.typepad.com/economistsview/2017/03/paul-krugman-the-scammers-the-scammed-and-americas-fate.html#comment-6a00d83451b33869e201b7c8e3c7c6970b

== quote ==
Anne Case and Angus Deaton garnered national headlines in 2015 when they reported that the death rate of midlife non-Hispanic white Americans had risen steadily since 1999 in contrast with the death rates of blacks, Hispanics and Europeans. Their new study extends the data by two years and shows that whatever is driving the mortality spike is not easing up.
... ... ..

Offering what they call a tentative but "plausible" explanation, they write that less-educated white Americans who struggle in the job market in early adulthood are likely to experience a "cumulative disadvantage" over time, with health and personal problems that often lead to drug overdoses, alcohol-related liver disease and suicide.

== end of quote ==

Greed is toxic. As anger tends to accumulate, and then explode, at some point neoliberals might be up to a huge surprise. Trump was the first swan.

Everybody bet on Hillary victory. And then...

[Apr 15, 2017] IMF claims that technology and global integration explain close to 75 percent of the decline in labor shares in Germany and Italy, and close to 50 percent in the United States.

Anything that IMF claim should be taken with a grain of salt. IMF is a quintessential neoliberal institutions that will support neoliberalism to the bitter end.
Apr 15, 2017 | economistsview.typepad.com

point, April 14, 2017 at 05:06 AM

https://blogs.imf.org/2017/04/12/drivers-of-declining-labor-share-of-income/

"In advanced economies, about half of the decline in labor shares can be traced to the impact of technology."

Searching, searching for the policy variable in the regression.

anne -> point... , April 14, 2017 at 08:09 AM
https://blogs.imf.org/2017/04/12/drivers-of-declining-labor-share-of-income/

April 12, 2017

Drivers of Declining Labor Share of Income
By Mai Chi Dao, Mitali Das, Zsoka Koczan, and Weicheng Lian

Technology: a key driver in advanced economies

In advanced economies, about half of the decline in labor shares can be traced to the impact of technology. The decline was driven by a combination of rapid progress in information and telecommunication technology, and a high share of occupations that could be easily be automated.

Global integration-as captured by trends in final goods trade, participation in global value chains, and foreign direct investment-also played a role. Its contribution is estimated at about half that of technology. Because participation in global value chains typically implies offshoring of labor-intensive tasks, the effect of integration is to lower labor shares in tradable sectors.

Admittedly, it is difficult to cleanly separate the impact of technology from global integration, or from policies and reforms. Yet the results for advanced economies is compelling. Taken together, technology and global integration explain close to 75 percent of the decline in labor shares in Germany and Italy, and close to 50 percent in the United States.

paine -> anne... , April 14, 2017 at 08:49 AM
Again this is about changing the wage structure

Total hours is macro management. Mobilizing potential job hours to the max is undaunted by technical progress

Recall industrial jobs required unions to become well paid

We need a CIO for services logistics and commerce

[Apr 14, 2017] Automation as a way to depress wages

Apr 14, 2017 | economistsview.typepad.com
point , April 14, 2017 at 04:59 AM
http://www.bradford-delong.com/2017/04/notes-working-earning-and-learning-in-the-age-of-intelligent-machines.html

Brad said: Few things can turn a perceived threat into a graspable opportunity like a high-pressure economy with a tight job market and rising wages. Few things can turn a real opportunity into a phantom threat like a low-pressure economy, where jobs are scarce and wage stagnant because of the failure of macro economic policy.

What is it that prevents a statement like this from succeeding at the level of policy?

Peter K. -> point... , April 14, 2017 at 06:41 AM
class war

center-left economists like DeLong and Krugman going with neoliberal Hillary rather than Sanders.

Sanders supports that statement, Hillary did not. Obama did not.

PGL spent the primary unfairly attacking Sanders and the "Bernie Bros" on behalf of the center-left.

[Apr 12, 2017] The Despair of Learning That Experience No Longer Matters

Apr 12, 2017 | economistsview.typepad.com
RGC , April 12, 2017 at 06:41 AM
The Despair of Learning That Experience No Longer Matters

By Benjamin Wallace-Wells April 10, 2017

.....................

The arguments about Case and Deaton's work have been an echo of the one that consumed so much of the primary campaign, and then the general election, and which is still unresolved: whether the fury of Donald Trump's supporters came from cultural and racial grievance or from economic plight. Case and Deaton's scholarship does not settle the question. As they write, more than once, "more work is needed."

But part of what Case and Deaton offer in their new paper is an emotional logic to an economic argument. If returns to experience are in decline, if wisdom no longer pays off, then that might help suggest why a group of mostly older people who are not, as a group, disadvantaged might become convinced that the country has taken a turn for the worse. It suggests why their grievances should so idealize the past, and why all the talk about coal miners and factories, jobs in which unions have codified returns to experience into the salary structure, might become such a fixation. Whatever comes from the deliberations over Case and Deaton's statistics, there is within their numbers an especially interesting story.

http://www.newyorker.com/news/benjamin-wallace-wells/the-despair-of-learning-that-experience-no-longer-matters

[Apr 11, 2017] Legacy systems written in COBOL that depends on a shrinking pool of aging programmers to baby

Notable quotes:
"... Of course after legacy systems [people] were retrenched or shown the door in making government more efficient MBA style, some did hit the jack pot as consultants and made more that on the public dime . but the Gov balance sheet got a nice one time blip. ..."
"... In the government, projects "helped" by Siemens, especially at the Home and Passport Offices, cost billions and were abandoned. At my former employer, an eagle's nest, it was Deloittes. At my current employer, which has lost its passion to perform, it's KPMG and EY helping. ..."
"... My personal favourite is Accenture / British Gas . But then you've also got the masterclass in cockups Raytheon / U.K. Border Agency . Or for sheer breadth of failure, there's the IT Programme That Helped Kill a Whole Bank Stone Dead ( Infosys / Co-op ). ..."
"... I am an assembler expert. I have never seen a job advertised, but a I did not look very hard. Send me your work!!! IBM mainframe assembler ..."
"... What about Computer Associates? For quite a while they proudly maintained the worst reputation amongst all of those consultancy/outsourcing firms. ..."
"... My old boss used to say – a good programmer can learn a new language and be productive in it in in space of weeks (and this was at the time when Object Oriented was the new huge paradigm change). A bad programmer will write bad code in any language. ..."
"... The huge shortcoming of COBOL is that there are no equivalent of editing programs. ..."
"... Original programmers rarely wrote handbooks ..."
"... That is not to say that it is impossible to move off legacy platforms ..."
"... Wherefore are ye startup godz ..."
Apr 11, 2017 | www.nakedcapitalism.com
After we've been writing about the problem of the ticking time bomb of bank legacy systems written in COBOL that depends on a shrinking pool of aging programmers to baby them for now nearly two years, Reuters reports on the issue. Chuck L flagged a Reuters story, Banks scramble to fix old systems as IT 'cowboys' ride into sunset, which made some of the points we've been making but frustratingly missed other key elements.

Here's what Reuters confirmed:

Banks and the Federal government are running mission-critical core systems on COBOL, and only a small number of older software engineers have the expertise to keep the systems running . From the article:

In the United States, the financial sector, major corporations and parts of the federal government still largely rely on it because it underpins powerful systems that were built in the 70s or 80s and never fully replaced

Experienced COBOL programmers can earn more than $100 an hour when they get called in to patch up glitches, rewrite coding manuals or make new systems work with old.

For their customers such expenses pale in comparison with what it would cost to replace the old systems altogether, not to mention the risks involved.

Here's what Reuters missed:

Why young coders are not learning COBOL . Why, in an era when IT grads find it hard to get entry-level jobs in the US, are young programmers not learning COBOL as a guaranteed meal ticket? Basically, it's completely uncool and extremely tedious to work with by modern standards. Given how narrowminded employers are, if you get good at COBOL, I woudl bet it's assumed you are only capable of doing grunt coding and would never get into the circles to work on the fantasy of getting rich by developing a hip app.

I'm sure expert readers will flag other issues, but the huge shortcoming of COBOL is that there are no equivalent of editing programs. Every line of code in a routine must be inspected and changed line by line.

How banks got in this mess in the first place. The original sin of software development is failure to document the code. In fairness, the Reuters story does allude to the issue:

But COBOL veterans say it takes more than just knowing the language itself. COBOL-based systems vary widely and original programmers rarely wrote handbooks, making trouble-shooting difficult for others.

What this does not make quite clear is that given the lack of documentation, it will always be cheaper and lower risk to have someone who is familiar with the code baby it, best of all the guy who originally wrote it. And that means any time you bring someone in, they are going to have to sort out not just the code that might be causing fits and starts, but the considerable interdependencies that have developed over time. As the article notes:

"It is immensely complex," said [former chief executive of Barclays PLC Anthony] Jenkins, who now heads startup 10x Future Technologies, which sells new IT infrastructure to banks. "Legacy systems from different generations are layered and often heavily intertwined."

I had the derivatives trading firm O'Connor & Associates as a client in the early 1990s. It was widely recognized as being one of the two best IT shops in all of Wall Street at the time. O'Connor was running the biggest private sector Unix network in the world back then. And IT was seen as critical to the firm's success; half of O'Connor's expenses went to it.

Even with it being a huge expense, and the my client, the CIO, repeatedly telling his partners that documenting the code would save 20% over the life of the software, his pleas fell on deaf ears. Even with the big commitment to building software, the trading desk heads felt it was already taking too long to get their apps into production. Speed of deployment was more important to them than cost or long-term considerations. 1 And if you saw this sort of behavior with a firm where software development was a huge expense for partners who were spending their own money, it's not hard to see how managers in a firm where the developers were much less important and management was fixated on short term earnings targets to blow off tradeoff like this entirely.

Picking up sales patter from vendors, Reuters is over-stating banks' ability to address this issue . Here is what Reuters would have you believe:

The industry appears to be reaching an inflection point, though. In the United States, banks are slowly shifting toward newer languages taking cue from overseas rivals who have already made the switch-over.

Commonwealth Bank of Australia, for instance, replaced its core banking platform in 2012 with the help of Accenture and software company SAP SE. The job ultimately took five years and cost more than 1 billion Australian dollars ($749.9 million).

Accenture is also working with software vendor Temenos Group AG to help Swedish bank Nordea make a similar transition by 2020. IBM is also setting itself up to profit from the changes, despite its defense of COBOL's relevance. It recently acquired EzSource, a company that helps programmers figure out how old COBOL programs work.

The conundrum is the more new routines banks pile on top of legacy systems, the more difficult a transition becomes. So delay only makes matters worse. Yet the incentives of everyone outside the IT areas is to hope they can ride it out and make the legacy system time bomb their successor's problem.

If you read carefully, Commonwealth is the only success story so far. And it's vastly less complex than that of many US players. First, it has roughly A$990 billion or $740 billion in assets now. While that makes it #46 in the world (and Nordea is of similar size at #44 as of June 30, 2016), JP Morgan and Bank of America are three times larger. Second, and perhaps more important, they are the product of more bank mergers. Commonwealth has acquired only four banks since the computer era. Third, many of the larger banks are major capital markets players, meaning their transaction volume relative to their asset base and product complexit is also vastly greater than for a Commonwealth. Finally, it is not impossible that as a government owned bank prior to 1990 that not being profit driven, Commonwealth's software jockeys might have documented some of the COBOL, making a transition less fraught.

Add to that that the Commonwealth project was clearly a "big IT project". Anything over $500 million comfortably falls into that category. The failure rate on big IT projects is over 50%; some experts estimate it at 80% (costly failures are disguised as well as possible; some big IT projects going off the rails are terminated early).

Mind you, that is not to say that it is impossible to move off legacy platforms. The issue is the time and cost (as well as risk). One reader, I believe Brooklyn Bridge, recounted a prototypical conversation with management in which it became clear that the cost of a migration would be three times a behemoth bank's total profit for three years. That immediately shut down the manager's interest.

Estimates like that don't factor in the high odds of overruns. And even if it is too high for some banks by a factor of five, that's still too big for most to stomach until they are forced to. So the question then becomes: can they whack off enough increments of the problem to make it digestible from a cost and risk perspective? But the flip side is that the easier parts to isolate and migrate are likely not to be the most urgent to address.

____
1 The CIO had been the head index trader and had also help build O'Connor's FX derivatives trading business, so he was well aware of the tradeoff between trading a new instrument sooner versus software life cycle costs. He was convinced his partners were being short-sighted even over the near term and had some analyses to bolster that view. So this was the not empire-building or special pleading. This was an effort at prudent management.

Clive , April 11, 2017 at 5:51 am

I got to the bit which said:

Accenture is also working with software vendor Temenos Group AG to help

and promptly splurted my coffee over my desk. "Help" is the last thing either of these two ne'redowells will be doing.

Apart from the problems ably explained in the above piece, I'm tempted to think industry PR and management gullibility to it are the two biggest risks.

Marina Bart , April 11, 2017 at 6:06 am

As someone who used to do PR for that industry (worked with Accenture, among others), I concur that those are real risks.

skippy , April 11, 2017 at 6:07 am

Heaps of IT upgrades have gone a bit wonky over here of late, Health care payroll, ATO, Centerlink, Census, all assisted by private software vendors and consultants – after – drum roll .. PR management did a "efficiency" drive [by].

Of course after legacy systems [people] were retrenched or shown the door in making government more efficient MBA style, some did hit the jack pot as consultants and made more that on the public dime . but the Gov balance sheet got a nice one time blip.

disheveled . nice self licking icecream cone thingy and its still all gov fault . two'fer

Colonel Smithers , April 11, 2017 at 7:40 am

Thank you, Skippy.

It's the same in the UK as Clive knows and can add.

In the government, projects "helped" by Siemens, especially at the Home and Passport Offices, cost billions and were abandoned. At my former employer, an eagle's nest, it was Deloittes. At my current employer, which has lost its passion to perform, it's KPMG and EY helping.

What I have read / heard is that the external consultants often cost more and will take longer to do the work than internal bidders. The banks and government(s) run an internal market and invite bids.

Clive , April 11, 2017 at 9:33 am

Oh, where to start!

My personal favourite is Accenture / British Gas . But then you've also got the masterclass in cockups Raytheon / U.K. Border Agency . Or for sheer breadth of failure, there's the IT Programme That Helped Kill a Whole Bank Stone Dead ( Infosys / Co-op ).

They keep writing books on how to avoid this sort of thing. Strangely enough, none of them ever tell CEOs or CIOs to pay people decent wages, not treat them like crap and to train up new recruits now and again. And also fail to highlight that though you might like to believe you can go into the streets in Mumbai, Manila or Shenzhen waving a dollar bill and have dozens of experienced, skilled and loyal developers run to you like a cat smelling catnip, that may only be your wishful thinking.

Just wait 'til we get started trying to implement Brexit

Raj , April 11, 2017 at 12:10 pm

Oh man, if you only had a look at the kind of graduates Infosys hires en masse and the state of graduate programmers coming out of universities here in India you'd be amazed how we still haven't had massive hacks. And now the government, so confident in the Indian IT industry's ability to make big IT systems is pushing for the universal ID system(aadhar) to be made mandatory for even booking flight tickets!

So would you recommend graduates do learn COBOL to get good jobs there in the USA?

Clive , April 11, 2017 at 12:22 pm

I'd pick something really obscure, like maybe MUMPS - yes, incredibly niche but that's the point, you can corner a market. You might not get oodles of work but what you do get you can charge the earth for. Getting real-world experience is tricky though.

Another alternative, a little more mainstream is assembler. But that is hideous. You deserve every penny if you can learn that and be productive in it.

visitor , April 11, 2017 at 1:36 pm

Is anybody still using Pick? Or RPG?

Regarding assembler: tricky, as the knowledge is tied to specific processors - and Intel, AMD and ARM keep churning new products.

Synoia , April 11, 2017 at 3:40 pm

I am an assembler expert. I have never seen a job advertised, but a I did not look very hard. Send me your work!!! IBM mainframe assembler

visitor , April 11, 2017 at 10:02 am

What about Computer Associates? For quite a while they proudly maintained the worst reputation amongst all of those consultancy/outsourcing firms.

How does Temenos compare with Oracle, anyway?

Clive , April 11, 2017 at 10:05 am

How does Temenos compare with Oracle, anyway?

Way worse. Yes, I didn't believe it was possible, either.

MoiAussie , April 11, 2017 at 6:13 am

For a bit more on why Cobol is hard to use see Why We Hate Cobol . To summarise, Cobol is barely removed from programming in assembler, i.e. at the lowest level of abstraction, with endless details needing to be taken care of. It dates pack to the punched card era.

It is particularly hard for IT grads who have learned to code in Java or C# or any modern language to come to grips with, due to the lack of features that are usually taken for granted. Those who try to are probably on their own due to a shortage of teachers/courses. It's a language that's best mastered on the job as a junior in a company that still uses it, so it's hard to get it on your CV before landing such a job.

There are potentially two types of career opportunities for those who invest the time to get up-to-speed on Cobol. The first is maintenance and minor extension of legacy Cobol applications. The second and potentially more lucrative one is developing an ability to understand exactly what a Cobol program does in order to craft a suitable replacement in a modern enterprise grade language.

MartyH , April 11, 2017 at 12:53 pm

Well, COBOL's shortcomings are part technical and part "religious". After almost fifty years in software, and with experience in many of the "modern enterprise grade languages", I would argue that the technical and business merits are poorly understood. There is an enormous pressure in the industry to be on the "latest and greatest" language/platform/framework, etc. And under such pressure to sell novelty, the strengths of older technologies are generally overlooked.

@Yves, I would be glad to share my viewpoint (biases, warts and all) at your convenience. I live nearby.

vlade , April 11, 2017 at 7:52 am

"It is particularly hard for IT grads who have learned to code in Java or C# or any modern language to come to grips with"

which tells you something about the quality of IT education these days, where "mastering" a language is more often more important than actually understanding what goes on and how.

My old boss used to say – a good programmer can learn a new language and be productive in it in in space of weeks (and this was at the time when Object Oriented was the new huge paradigm change). A bad programmer will write bad code in any language.

craazyboy , April 11, 2017 at 9:32 am

IMHO, your old boss is wrong about that. Precisely because OO languages are a huge paradigm change and require a programmer to nearly abandon everything he/she knows about programming. Then get his brain around OOP patterns when designing a complex system. Not so easy.

As proof, I put forth the 30% success rate for new large projects in the latter 90s done with OOP tech. Like they say, if it was easy, everyone would be doing it.

More generally, on the subject of Cobol vs Java or C++/C#, in the heyday of OOPs rollout in the early 90s, corporate IT spent record amounts on developing new systems. As news of the Y2K problem spread, they very badly wanted to replace old Cobol/mainframe legacy systems. As things went along, many of those plans got rolled back due to perceived problems with viability, cost and trained personnel.

Part of the reason was existing Cobol IT staff took a look at OOP, then at their huge pile of Cobol legacy code and their brains melted down. I was around lots of them and they had all the symptoms of Snow Crash. [Neil Stephenson] I hope they got better.

Marco , April 11, 2017 at 12:21 pm

It never occurred to me that the OOP-lite character of the newer "hipster" languages (Golang / Go or even plain old javascript) are a response to OOP run amok.

Arizona Slim , April 11, 2017 at 9:35 am

A close friend is a retired programmer. In her mind, knowing how to solve the problem comes​ first.

MartyH , April 11, 2017 at 12:54 pm

@Arizona_Slim: I agree with her. And COBOL lets you write business logic with a minimum of distractions.

Mel , April 11, 2017 at 11:36 am

In the university course I took, we were taught Algol-60. Then it turned out that the univ. had no budget for Algol compiles for us. So we wrote our programs in Algol-60 for 'publication' and grading, and rewrote them in FORTRAN IV to run in a cheap bulk FORTRAN execution system for results. Splendid way to push home Turing's point that all computing is the same. So when the job needed COBOL, "Sure, bring it on."

rfdawn , April 11, 2017 at 1:30 pm

My old boss used to say – a good programmer can learn a new language and be productive in it in in space of weeks (and this was at the time when Object Oriented was the new huge paradigm change). A bad programmer will write bad code in any language.

Yes. Learning a new programming language is fairly easy but understanding existing patchwork code can be very hard indeed. It just gets harder if you want to make reliable changes.

HR thinking, however, demands "credentials" and languages get chosen as such based on their simple labels. They are searchable on L**kedIn!

A related limitation is the corporate aversion to spending any time or money on employee learning of either language or code. There may not be anyone out there with all the skills needed but that will not stop managers from trying to hire them or, better still, just outsourcing the whole mess.

Either choice invites fraud.

reslez , April 11, 2017 at 2:02 pm

Your boss was correct in my opinion - but also atypical. Most firms look for multi-years of experience in a language. They'll toss your resume if you don't show you've used it extensively.

Even if a new coder spent the time to learn COBOL, if he wasn't using it on the job or in pretty significant projects he would not be considered. And there aren't exactly many open source projects out there written in COBOL to prove one's competence. The limiting factor is not whether you "know" COBOL, or whether you know how to learn it. The limiting factor is the actual knowledge of the system, how it was implemented, and all the little details that never get written down no matter how good your documentation. If your system is 30+ years old it has complexity hidden in every nook and cranny.

As for the language itself, COBOL is an ancient language from a much older paradigm than what students learn in school today. Most students skip right past C, they don't learn structural programming. They expect to have extensive libraries of pre-written routines available for reuse. And they expect to work in a modern IDE (development environment), a software package that makes it much easier to write and debug code. COBOL doesn't have tools of this level.

When I was in the Air Force I was trained as a programmer. COBOL was one of the languages they "taught". I never used it, ever, and wouldn't dream of trying it today. It's simply too niche. I would never recommend anyone learn COBOL in the hopes of getting a job. Get the job first, and if it happens to include some COBOL get the expertise that way.

d , April 11, 2017 at 4:04 pm

having seen the 'high level code' in C++, not sure what makes it 'modern'.its really an out growth of C, which is basically the assembler language of Unix. which it self is no spring chicken. mostly what is called 'modern' is just the latest fad, has the highest push from vendors. and sadly what we see in IT, is that the IT trade magazines are more into what they sell, that what companies need (maybe because of advertising?)

as to why schools tend to teach these languages than others? mainly cause its hip. its also cheaper for the schools, as they dont have much in the way of infrastructure to teach them ( kids bring their own computers). course teachers are as likely to be influenced by the latest 'shinny;' thing as any one else

craazyboy , April 11, 2017 at 4:34 pm

C++ shares most of the core C spec but that's it. [variables and scope, datatypes, functions sorta, math and logic operatives, logic control statements] The reason you can read high level C++ is because it uses objects that hide the internal code and are given names that describe their use which if done right makes the code somewhat readable, along with a short comment header, and self documenting.

Then at high level most code is procedural and/or event driven, which makes it appear to function like C or any other procedural language. Without the Goto statements and subroutines, because that functionality is now encapsulated within the C++ objects. {which are a datatype that combines data structures and related functions that act on this data)

ChrisPacific , April 11, 2017 at 5:31 pm

Well put. I was going to make this point. Note that the today's IT grads struggle with Cobol for the same reason that modern airline pilots would struggle to build their own airplane. The industry has evolved and become much more specialized, and standard 'solved' problems have migrated into the core toolsets and become invisible to developers, who now work at a much higher level of abstraction. So for example a programmer who learned using BASIC on a Commodore 64 probably knows all about graphics coding by direct addressing of screen memory, which modern programmers would consider unnecessary at best and dangerous at worst. Not to mention it's exhausting drudgery compared to working with modern toolsets.

The other reason more grads don't learn COBOL is because it's a sunset technology. This is true even if systems written in COBOL are mission critical and not being replaced. As more and more COBOL programmers retire or die, banks will eventually reach the point where they don't have enough skilled staff available to keep their existing systems running. If they are in a position where they have to fix things anyway, for example due to a critical failure, they will be forced to resort to cross-training other developers, at great expense and pain for all concerned, and with no guarantee of success. One or two of these experiences will be enough to convince them that migration is necessary, whatever the cost (if their business survives them, which isn't a given when it comes to critical failures involving out of date and poorly-understood technology). And while developers with COBOL skills will be able to name their own price during those events, it's not likely to be a sustainable working environment in the longer term.

It would take a significant critical mass of younger programmers deciding to learn COBOL to change this dynamic. One person on their own isn't going to make any difference, and it's not career advice I would ever give to a young graduate looking to enter IT.

I am an experienced developer who has worked with a lot of different languages, including some quite low level ones in my early days. I don't know COBOL, but I am confident that I could learn it well enough to perform code archaeology on it given enough time (although probably nowhere near as efficiently as someone who built a career on it). Whether I could be convinced to do so is another question. If you paid me never-need-to-work-again money, then maybe. But nobody is ever going to do that unless it's a crisis, and I'm not likely to sign up for a death march situation with my current family commitments.

Steve , April 11, 2017 at 6:47 am

"Experienced COBOL programmers can earn more than $100 an hour"

Then the people hiring are getting them dirt cheap. This is a lot closer to consulting than contracting–a very specialized skill set and only a small set of people available. The rate should be $200-300/hour.

reslez , April 11, 2017 at 2:46 pm

I wonder if it has something to do with the IRS rules that made that guy fly a plane into an IRS office? Because of the rules, programmers aren't allowed to work as independent consultants. Since their employer/middleman takes a huge cut the pay they receive is a lot lower. Coders with a security clearance make quite a bit but that requires an "in", getting the clearance in the first place which most employers won't pay for.

d , April 11, 2017 at 4:05 pm

not any place i know of. maybe in an extreme crunch. cause today the most COBOL jobs have been offshored. and maybe thats why kids dont lean COBOL.

ChrisPacific , April 11, 2017 at 5:31 pm

I had the same thought. Around here if you want a good one, you would probably need to add another zero to that.

shinola , April 11, 2017 at 6:52 am

Cobol? Are they running it on refrigerator sized machines with reel-to-reel tapes?

ejf , April 11, 2017 at 8:45 am

you're right. I've seen it on cluckny databases in a clothing firm in NY State, a seed and grain distribution facility in Minnesota and a bank in Minneapolis. They're horrible and Yves is right – documentation is completely ABSENT

d , April 11, 2017 at 4:06 pm

in small business, where every penny counts, they dont see the value in documentation. not even when they get big either

Disturbed Voter , April 11, 2017 at 7:05 am

No different than the failure of the public sector to maintain dams, bridges and highways. Basic civil engineering but our business model never included maintenance nor replacement costs. That is because our business model is accounting fraud.

I grew up on Fortran, and Cobol isn't too different, just limited to 2 points past the decimal to the right. I feel so sorry for these code jockies who can't handle a bit of drudgery, who can't do squat without a gigabyte routine library to invoke. Those languages as scripting languages or report writers back in the old days.

Please hire another million Indian programmers they don't mind being poorly paid or the drudgery. Americans and Europeans are so over-rated. Business always complains they can't hire the right people some job requires 2 PhDs and we can't pay more than $30k, am I right? Business needs slaves, not employees.

d , April 11, 2017 at 4:08 pm

COBOL hasnt been restricted to 2 points to the right of decimal place. for decades

clarky90 , April 11, 2017 at 7:06 am

The 'Novopay debacle'

This was a "new payroll" system for school teachers in NZ. It was an ongoing disaster. If something as simple (?) as paying NZ teachers could turn into such a train-wreck, imagine what updating the software of the crooked banks could entail. I bet that there are secret frauds hidden in the ancient software, like the rat mummies and cat skeletons that one finds when lifting the floor of old houses.

https://en.wikipedia.org/wiki/Novopay

"Novopay is a web-based payroll system for state and state integrated schools in New Zealand, processing the pay of 110,000 teaching and support staff at 2,457 schools .. From the outset, the system led to widespread problems with over 8,000 teachers receiving the wrong pay and in some cases no pay at all; within a few months, 90% of schools were affected .."

"Many of the errors were described as 'bizarre'. One teacher was paid for 39 days, instead of 39 hours getting thousands of dollars more than he should have. Another teacher was overpaid by $39,000. She returned the money immediately, but two months later, had not been paid since. A relief teacher was paid for working at two different schools on the same day – one in Upper Hutt and the other in Auckland. Ashburton College principal, Grant McMillan, said the 'most ludicrous' problem was when "Novopay took $40,000 directly out of the school bank account to pay a number of teachers who had never worked at the college".

Can you imagine this, times 10,000,000????

d , April 11, 2017 at 4:12 pm

this wasnt COBOL. or even a technology problem. more like a management one. big failures tend to be that way

vlade , April 11, 2017 at 7:48 am

"but the huge shortcoming of COBOL is that there are no equivalent of editing programs. Every line of code in a routine must be inspected and changed line by line"
I'm not sure what you mean by this.

If you mean that COBOL doesn't have the new flash IDEs that can do smart things with "syntactic sugar", then it really depends on the demand. Smart IDEs can be written for pretty much any languages (smart IDEs work by operating on ASTs, which are part and parcel of any compiler. The problem is more of what to do if you have an externalised functions etc, which is for example why it took so long for those smart IDEs to work with C++ and its linking model). The question is whether it pays – and a lot of old COBOL hands eschew anything except for vi (or equivalent) because coding should be done by REAL MEN.

On the general IT problem. There are three problems, which are sort of related but not.

The first problem is the interconnectedness of the systems. Especially for a large bank, it's not often clear where one system ends and the other begins, what are the side-effects of running something (or not running), who exactly produces what outputs and when etc. The complexity is more often at this level than cobol (or any other) line-by-line code.

The second problem is the IT personell you get. If you're unlucky, you get coding monkeys, who barely understand _any_ programming language (there was time I didn't think people like that get hired. I now know better), and have no idea what analytical and algorithmic thinking is. If you're lucky, you get a bunch of IT geeks, who can discuss the latest technology till cows come home, know the intricate details of what a sequence point in C++ is and how it affects execution, but don't really care that much about the business. Then you get some possibly even brilliant code, but often also get unnecessary technological artifacts and new technologies just because they are fun – even though a much simpler solution would work just as well if not better. TBH, you can get this from the other side too, someone who understands the business but doesn't know even basic language techniques, which generally means their code works very well for the business, but is a nightmare to maintain (a typical population of this groups are front office quants).

If you are incredibily lucky, you get someone who understands the business and happens to know how to code well too. Unfortunately, this is almost a mythical beast, especially since neitehr IT nor the business encourage people to understand each other.

Which is what gets me to the thirds point – politics of it. And that's, TBH, is why most projects fail. Because it's easier to staff a project with 100 developers and then say all that could have been done was done, than get 10 smart people working on it, but risk that if it fails you get told you haven't spent enough resources. "We are not spending enough money" is paradoxically one of the "problems" I often see here, when the problem really is "we're not spending money smartly enough". Because in an organization budget=power. I have yet to see an IT project that would have 100+ developers that would _really_ succeed (as opposed to succeed by redefining what it was to deliver to what was actually delivered).

Oh, and last point, on the documentation. TBH, documentation of the code is superfluous if a) it's clear what business problem is being solved b) has a good set of test cases c) the code is reasonably cleanly written (which tends to be the real problem). Documenting code by anything else but example is in my experience just a costly exercise. Mind you, this is entirely different from documenting how systems hang together and how their interfaces work.

Yves Smith Post author , April 11, 2017 at 7:52 am

On the last point, I have to tell you I in short succession happened to work not just with O'Connor, but about a year later, with Bankers Trust, then regarded as the other top IT shop on Wall Street. Both CIOs would disagree with you vehemently on your claim re documentation.

vlade , April 11, 2017 at 8:25 am

Yes, in 90s there was a great deal of emphasis on code documentation. The problem with that is that the requirements in real world change really quick. Development techniques that worked for sending the man to the moon don't really work well on short-cycle user driven developments.

90s was mostly the good old waterfall method (which was really based on the NASA techniques), but even as early as 2000s it started to change a lot. Part of it come from the realization that the "building" metaphor that was the working approach for a lot of that didn't really work for code.

When you're building a bridge, it's expensive, so you have to spend a lot of time with blueprints etc. When you're doing code, documenting it in "normal" human world just adds a superfluous step. It's much more efficient to make sure your code is clean and readable than writing extra documents that tell you what the code does _and_ have to be kept in sync all the time.

Moreover, bits like pretty pictures showing the code interaction, dependencies and sometimes even more can now be generated automatically from the code, so again, it's more efficient to do that than to keep two different versions of what should be the same truth.

Yves Smith Post author , April 11, 2017 at 8:31 am

With all due respect, O'Connor and Bankers Trust were recognized at top IT shops then PRECISELY because they were the best, bar none, at "short cycle user driven developments." They were both cutting edge in derivatives because you had to knock out the coding to put new complex derivatives into production.

Don't insinuate my clients didn't know what they were talking about. They were running more difficult coding environments than you've ever dealt with even now. The pace of derivative innovation was torrid then and there hasn't been anything like it since in finance. Ten O'Connor partners made $1 billion on the sale of their firm, and it was entirely based on the IT capabilities. That was an unheard of number back then, 1993, particularly given the scale of the firm (one office in Chicago, about 250 employees).

vlade , April 11, 2017 at 9:23 am

Yves,

I can't talk about how good/bad your clients were except for generic statements – and the above were generic statements that in 90s MOST companies used waterfall.

At the same time please do not talk about what programming environments I was in, because you don't know. That's assuming it's even possible to compare coding environments – because quant libraries that first and foremost concentrate on processing data (and I don't even know it's what was the majority of your clients code) is a very very different beast from extremely UI complex but computationally trivial project, or something that has both trivial UI and computation but is very database heavy etc. etc.

I don't know what specific techniques your clients used. But the fact they WANTED to have more documentation doesn't mean that having more documentation would ACTUALLY be useful.

With all due respect, I've spent the first half of 00s talking to some of the top IT development methodologists of the time, from the Gang Of Four people to Agile Manifesto chaps, and practicing/leading/implementing SW development methodology across a number of different industries (anything from "pure" waterfall to variants of it to XP).

The general agreement across the industry was (and I believe still is) that documenting _THE CODE_ (outside of the code) was waste of time (actually it was ranging from any design doc to various levels of design doc, depending on who you were talking to).

Again, I put emphasis on the code – that is not the same as say having a good whitepaper telling you how the model you're implementing works, or what the hell the users actually want – i.e. capturing the requirements.

As an aside – implementation of new derivative payoffs can be actually done in a fairly trivial way, depending on how exactly you model them in the code. I've wrote an extensive library that did it, whose whole purpose was to deal with new products and allow them to be incubated quickly and effectively – and that most likely involved doing things that no-one at BT/O'Conner even looked at in early 1990s (because XVA wasn't even gleam in anyone's eye at that time).

Clive , April 11, 2017 at 9:54 am

Well at my TBTF, where incomprehensible chaos rules, the only thing - and I do mean the only thing - that keeps major disasters averted (perhaps "ameliorated" is putting it better) is where some of the key systems are documented. Most of the core back end is copiously and reasonably well documented and as such can survive a lot of mistreatment at the hands of the current outsourcer de jour.

But some "lower priority" applications are either poorly documented or not documented at all. And a "low priority" application is only "low priority" until it happens to sit on the critical path. Even now I have half of Bangalore (it seems so, at any rate) sitting there trying to reverse engineer some sparsely documented application - although I suspect there was documentation, it just got "lost" in a succession of handovers - desperate in their attempts to figure out what the application does and how it does it. You can hear the fear in their voices, it is scary stuff, given how crappy-little-VB6-pile-of-rubbish is now the only way to manage a key business process where there are no useable comments in the code and no other application documentation, you are totally, totally screwed.

visitor , April 11, 2017 at 3:51 pm

Your TBTF corporation is ISO 9000-3,9001/CMM/TickIt/ITIL certified, of course?

Skip Intro , April 11, 2017 at 11:48 am

It seems like you guys are talking past each other to some degree. I get the sense that vlade is talking about commenting code, and dismissing the idea of code comments that don't live with the code. Yves' former colleagues are probably referring to higher level specifications that describe the functionality, requirements, inputs, and outputs of the various software modules in the system.
If this is the case, then you're both right. Even comments in the code can tend to get out of date due to application of bug fixes, and other reasons for 'drift' in the code, unless the comments are rigorously maintained along wth the code. Were the code-level descriptions maintained somewhere else, that would be much more difficult and less useful. On the other hand the higher-level specifications are pretty essential for using, testing, and maintaining the software, and would sure be useful for someone trying to replace all or parts of the system.

Clive , April 11, 2017 at 12:30 pm

In my experience you need a combination of both. There is simply no substitute for a brief line in some ghastly nested if/then procedure that says "this section catches host offline exceptions if the transaction times out and calls the last incremental earmarked funds as a fallback" or what-have-you.

That sort of thing can save weeks of analysis. It can stop an outage from escalating from a few minutes to hours or even days.

Mathiasalexander , April 11, 2017 at 8:22 am

They could try building the new system from scratch as a stand alone and then entering all the data manually.

Ivy , April 11, 2017 at 10:39 am

There is some problem-solving/catastrophe-avoiding discussion about setting up a new bank with a clean, updated (i.e., this millennium) IT approach and then merging the old bank into that and decommissioning that old one. Many questions arise about applicable software both in-house and at all those vendor shops that would need some inter-connectivity.

Legacy systems lurk all over the economy, from banks to utilities to government and education. The O'Connor CIO advice relating to life-cycle costing was probably unheard in many places besides
The Street.

d , April 11, 2017 at 4:24 pm

building them from scratch is usually the most likely to be a failure as to many in both IT and business only know parts of the needs. and if a company cant implement a vendor supplied package to do the work, what makes us think they can do it from scratch

visitor , April 11, 2017 at 9:44 am

I did learn COBOL when I was at the University more than three decades ago, and at that time it was already decidedly "uncool". The course, given by an old-timer, was great though. I programmed in COBOL in the beginnings of my professional life (MIS applications, not banking), so I can provide a slightly different take on some of those issues.

As far as the language itself is concerned, disregard those comments about it being like "assembly". COBOL already showed its age in the 1980s, but though superannuated it is a high-level language geared at dealing with database records, money amounts (calculations with controlled accuracy), and reports. For that kind of job, it was not that bad.

The huge shortcoming of COBOL is that there are no equivalent of editing programs.

While in the old times a simple text editor was the main tool for programming in that language, modern integrated, interactive development environments for COBOL have been available for quite a while - just as there are for Java, C++ or C#.

And that is a bit of an issue. For, already in my times, a lot, possibly most COBOL was not programmed manually, but generated automatically - typically from pseudo-COBOL annotations or functional extensions inside the code. Want to access a database (say Oracle, DB2, Ingres) from COBOL, or generate a user interface (for 3270 or VT220 terminals in those days), or perform some networking? There were extensions and code generators for that. Nowadays you will also find coding utilities to manipulate XML or interface with routines in other programming languages. All introduce deviations and extensions from the COBOL norm.

If, tomorrow, I wanted to apply for a job at one of those financial institutions battling with legacy software, my rusty COBOL programming skills would not be the main problem, but my lack of knowledge of the entire development environment. That would mean knowing those additional code generators, development environments, extra COBOL-geared database/UI/networking/reporting modules. In an IBM mainframe environment, this would probably mean knowing things like REXX, IMS or DB2, CICS, etc (my background is DEC VMS and related software, not IBM stuff).

So those firms are not holding dear onto just COBOL programmers - they are desperately hoarding people who know their way around in mainframe programming environments for which training (in Universities) basically stopped in the early 1990s.

Furthermore, I suspect that some of those code generators/interfaces might themselves be decaying legacy systems whose original developers went out of business or have been slowly withdrawing from their maintenance. Correcting or adjusting manually the COBOL code generated by such tools in the absence of vendor support is lots of fun (I had to do something like that once, but it actually went smoothly).

Original programmers rarely wrote handbooks

My experience is that proper documentation has a good chance to be rigorously enforced when the software being developed is itself a commercial product to be delivered to outside parties. Then, handbooks, reference manuals and even code documentation become actual deliverables that are part of the product sold, and whose production is planned and budgeted for in software development programmes.

I presume it is difficult to ensure that effort and resources be devoted to document internal software because these are purely cost centers - not profit centers (or at least, do not appear as such directly).

That is not to say that it is impossible to move off legacy platforms

So, we knew that banks were too big to fail, too big to jail, and are still too big to bail. Are their software problems too big to nail?

d , April 11, 2017 at 4:27 pm

actually suspect banks like the rest of business dont really care about their systems, till they are down, as they will find the latest offshore company to do it cheaper.

Yves Smith Post author , April 11, 2017 at 5:58 pm

Why then have I been told that reviewing code for Y2K had to be done line by line?

I said documentation, not handbooks. And you are assuming banks hired third parties to do their development. Buying software packages and customizing them, as well as greater use of third party vendors, became a common practice only as of the 1990s.

JTMcPhee , April 11, 2017 at 10:33 am

I'm in favor of the "Samson Option" in this area.

I know it will screw me and people I care about, and "throw the world economy into chaos," but who effing cares (hint: not me) if the code pile reaches past the limits of its angle of repose, and slumps into some chaotic non-form?

Maybe a sentiment that gets me some abuse, but hey, is it not the gravamen of the story here that dysfunction and then collapse are very possible, maybe even likely?

And where are the tools to re-build this Tower of Babel, symbol of arrogant pride? Maybe G_D has once again, per the Biblical story, confounded the tongues of men (and women) to collapse their edifices and reduce them to working the dirt (what's left of it after centuries of agricultural looting and the current motions toward temperature-driven uninhabitability.)

Especially interesting that people here are seemingly proud of having taken part successfully in the construction of the whole derivatives thing. Maybe I'm misreading that. But what echoes in my mind in this context is the pride that the people of Pantex, https://en.wikipedia.org/wiki/Pantex_Plant , have in their role in keeping the world right on the ragged edge of nuclear "Game Over." On the way to Rapture, because they did G_D's work in preparing Armageddon. http://articles.chicagotribune.com/1986-09-05/features/8603060693_1_pantex-plant-nuclear-weapons-amarillo

"What a wondrous beast this human is "

lyman alpha blob , April 11, 2017 at 10:57 am

So is it time to go long on duct tape and twine?

ChrisAtRU , April 11, 2017 at 11:19 am

#Memories

My first job out of uni, I was trained as a MVS/COBOL programmer. After successfully completing the 11-week pass/fire course, I showed up to my 1st work assignment where my boss said to me, "Here's your UNIX terminal."

;-) – COBOL didn't strike me as difficult, just arcane and verbose. Converting to SAP is a costly nightmare. That caused to me to leave a job once had no desire to deal with SAP/ABAP. I'm surprised no one has come up with an acceptable next-gen thing . I remember years ago seeing an ad for Object-Oriented-COBOL in an IT magazine and I almost pissed myself laughing. On the serious side, if it's still that powerful and well represented in Banking, perhaps someone should look into an upgraded version of the language/concepts and build something easy to lift and shift COBOL++?

Wherefore are ye startup godz

#OnlyHalfKidding

#MaybeNot

Peewee , April 11, 2017 at 12:22 pm

This sounds like an opportunity for a worker's coop, to train their workers in COBOL and to get back at these banks by REALLY exploiting them good and hard.

MartyH , April 11, 2017 at 12:57 pm

@Peewee couldn't agree more! @Diptherio?

susan the other , April 11, 2017 at 1:02 pm

so is this why no one is willing to advocate regulating derivatives in an accountable way? i almost can't believe this stuff. i can't believe that we are functioning at all, financially. 80% of IT projects fail? and if legacy platforms are replaced at great time and expense, years and trillions, what guarantee is there that the new platform will not spin out just as incomprehensibly as COBOL based software evolved, with simplistic patches of other software lost in translation? And maybe many times faster. Did Tuttle do this? I think we need new sophisticated hardware, something even Tuttle can't mess with.

Skip Intro , April 11, 2017 at 3:40 pm

I think it is only 80% of 'large' IT projects fail. I think it says more about the lack of scalability of large software projects, or our (in-) ability to deal with exponential complexity growth

JimTan , April 11, 2017 at 2:34 pm

Looks like there are more than a few current NYC jobs at Accenture, Morgan Stanley, JPMorgan Chase, and Bank of America for programmers who code in COBOL.

https://www.indeed.com/jobs?q=mainframe+Cobol+&l=New+York%2C+NY

[Apr 09, 2017] Time to do some fact checking on this right wing spin

Apr 09, 2017 | economistsview.typepad.com
DeDude , April 08, 2017 at 12:31 PM
Now isn't that amazing. When you increase the income of the consumer class workers you grow the economy.

http://ritholtz.com/2017/04/new-seattle-post/

Nobody could have predicted that - at least not if they were addicted to right wing narratives.

pgl -> DeDude... , April 08, 2017 at 12:31 PM
Ritholtz has had a field day debunking the right wing intellectual garbage of Martin Perry but today he turns on right wing toadie Tim Worstall.

Great link!

pgl -> pgl... , April 08, 2017 at 12:38 PM
Worstall:

https://www.forbes.com/sites/timworstall/2017/04/05/seattles-2-9-unemployment-rate-tells-us-nothing-about-the-effects-of-seattles-minimum-wage-rise/#782d373068b8

"Sure, it's lovely that unemployment in Seattle dips under 3%. But an attempt to tie that drop in the unemployment rate to the minimum wage isn't going to work. For we can as easily note that the unemployment rate has dropped everywhere in the US over this same time period and the minimum wage hasn't risen everywhere over that time period. We've not even got a consistent correlation between minimum wages and unemployment that is.mWhat we've actually got to do is try to work out some method of what would have happened in Seattle from all of the effects of everything else other than the minimum wage, then compare it to what did happen with the minimum wage. The difference between these two will be the effect of the minimum wage rise. Seattle City Council know this, which is why they asked the University of Washington to run exactly such a study."

Worstall reaches back to this July 2016 paper:

https://evans.uw.edu/sites/default/files/MinWageReport-July2016_Final.pdf

Time to do some fact checking on this right wing spin.

[Apr 07, 2017] No it was policy driven by politics. They increased profits at the expense of workers and the middle class. The New Democrats played along with Wall Street.

Apr 07, 2017 | economistsview.typepad.com
ken melvin -> DrDick ... , April 06, 2017 at 08:45 AM
Probably automated 200. In every case, displacing 3/4 of the workers and increasing production 40% while greatly improving quality. Exact same can be said for larger scaled such as automobile mfg, ...

The convergence of offshoring and automation in such a short time frame meant that instead of a gradual transformation that might have allowed for more evolutionary economic thinking, American workers got gobsmacked. The aftermath includes the wage disparity, opiate epidemic, Trump, ...

This transition is of the scale of the industrial revolution with climate change thrown. This is just the beginning of great social and economic turmoil. None of the stuff that evolved specific the industrial revolution applies.

Peter K. -> ken melvin... , April 06, 2017 at 09:01 AM

No it was policy driven by politics. They increased profits at the expense of workers and the middle class. The New Democrats played along with Wall Street.
libezkova -> ken melvin... , April 06, 2017 at 05:43 PM
"while greatly improving quality" -- that's not given.

[Apr 07, 2017] Tyson applauds labor arbitrage

Apr 07, 2017 | economistsview.typepad.com
point , April 06, 2017 at 05:11 AM
https://www.project-syndicate.org/commentary/trump-mexico-renegotiate-nafta-by-laura-tyson-2017-04

Tyson applauds labor arbitrage:

"Perhaps more important, the US and Mexico aren't just exchanging finished goods. Rather, much of their bilateral trade occurs within supply chains, with companies in each country adding value at different points in the production process. The US and Mexico are not just trading goods with each other; they are producing goods with each other."

One also looks in vain for a mention of the devastation of the small farm corn business in Mexico, which depended on native corn varieties but could not compete with the flood of market rate subsidized US production.

pgl -> point... , April 06, 2017 at 06:15 AM
Have you heard - Mexico is about to place tariffs on corn imported from the US.
RC AKA Darryl, Ron -> pgl... , April 06, 2017 at 06:51 AM
Its about time. They really need to tax drug cartel income though since it may be their only growth industry.
Julio -> RC AKA Darryl, Ron... , April 06, 2017 at 08:54 AM
No, they should not tax exports. We should legalize the drugs and then tax imports, support our local industry.
RC AKA Darryl, Ron -> Julio ... , April 06, 2017 at 09:24 AM
Excellent idea!
Peter K. -> Julio ... , April 06, 2017 at 09:25 AM
Then you'd like Ryan's DBCFT or BAT!

Yes drug users in the U.S. are funding the cartel.

kurt -> Peter K.... , April 06, 2017 at 09:35 AM
True - however, the incentive to push drugs for local dealers and US based cartels would cease to exist if these drugs were legal and if the profit margin was taxed away. Nobody enslaves their neighbor, friend or anyone else if there is no money in it. We did this effectively with alcohol (margins are around 3-5% except for the craft low volume guys) and should do the same with other drugs. It turns out that junkies can respond to treatment if it isn't trade addiction for addiction, and addicted people can function if they aren't cut off or forced to constantly engage in seeking more product.
Peter K. -> kurt... , April 06, 2017 at 01:26 PM
Agreed. Legalize it, mon.

Pay for treatment and government jobs, part time, whatever.

Too bad Trump's AG Sessions is for criminalization.

point -> pgl... , April 06, 2017 at 10:20 AM
I missed that. Perhaps the deal is to give up dispersed gains from trade to allow indigenous farmers to avoid early death. I can't remember whether Ricardo factored in death...
JohnH -> point... , April 06, 2017 at 07:02 AM
You would think that a former chair of the US President's Council of Economic Advisers could make a better case for NAFTA...by giving examples of how the deal improved the lives of somebody or other. But she can't.

Instead, Tyson can only talk about how great the deal was for cross border supply chains...as if that was the goal of economic policy (which it probably is.)

With people like this advising Democrats, they will surely continue to lose, which is apparently their goal.

pgl -> JohnH... , April 06, 2017 at 08:51 AM
She wasn't very effective at communication when she was at the CEA. Which is why she was not in that position for all that long.

[Apr 07, 2017] Republicans is what went wrong. They were all about the globalization and the opportunity to make money in China - but they were unwilling to tax or to engage in redistribution. It isnt like this is hard to figure out - it is their platform.

Apr 07, 2017 | economistsview.typepad.com
Jerry Brown

, April 05, 2017 at 10:28 PM
Artificial Intelligence and Artificial Problems - J. Bradford DeLong

Brad Delong- "If the government is properly fulfilling its duty to prevent a demand-shortfall depression, technological progress in a market economy need not impoverish unskilled workers."
And- "Our market economy should promote, rather than undermine, societal goals that correspond to our values and morals."
And- "First, we need to make sure that governments carry out their proper macroeconomic role, by maintaining a stable, low-unemployment economy so that markets can function properly."
And- "Second, we need to redistribute wealth to maintain a proper distribution of income."
He is real good when he sounds like a semi-socialist capitalist. In my opinion. In any event, I agree with him here.

Tom aka Rusty said in reply to Jerry Brown... , April 06, 2017 at 06:31 AM
Delong always has the same solution.

Let a small but brilliant elite advise an activist government to manage the macro economy. He is, of course, a member of that elite.

This will guarantee sunshine, lollypops and rainbows.

Like NAFTA and China's entry into the WTO was good for US workers.

RC AKA Darryl, Ron said in reply to Tom aka Rusty... , April 06, 2017 at 06:48 AM
:<)
Jerry Brown said in reply to Tom aka Rusty... , April 06, 2017 at 07:40 AM
Maybe NAFTA and China would have been good for workers if Brad could have got the government to "carry out their proper macroeconomic role, by maintaining a stable, low unemployment economy" and to "redistribute wealth to maintain a proper distribution of income".

Unfortunately, something went wrong with that plan.

kurt -> Jerry Brown... , April 06, 2017 at 09:26 AM
Republicans is what went wrong. They were all about the globalization and the opportunity to make money in China - but they were unwilling to tax or to engage in redistribution. It isn't like this is hard to figure out - it is their platform.
anne , April 06, 2017 at 05:31 AM
http://cepr.net/blogs/beat-the-press/robert-atkinson-pushes-pro-rich-protectionist-agenda-in-the-washington-post

April 6, 2017

Robert Atkinson Pushes Pro-Rich Protectionist Agenda in the Washington Post

The Washington Post is always open to plans for taking money from ordinary workers and giving it to the rich. For this reason it was not surprising to see a piece * by Robert Atkinson, the head of the industry funded Information Technology and Innovation Foundation, advocating for more protectionism in the form of stronger and longer patent and copyright monopolies.

These monopolies, legacies from the medieval guild system, can raise the price of the protected items by one or two orders of magnitudes making them equivalent to tariffs of several hundred or several thousand percent. They are especially important in the case of prescription drugs.

Life-saving drugs that would sell for $200 or $300 in a free market can sell for tens or even hundreds of thousands of dollars due to patent protection. The country will spend over $440 billion this year for drugs that would likely sell for less than $80 billion in a free market. The strengthening of these protections is an important cause of the upward redistribution of the last four decades. The difference comes to more than $2,700 a year for an average family. (This is discussed in "Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer," ** where I also lay out alternative mechanisms for financing innovation and creative work.)

Atkinson makes this argument in the context of the U.S. relationship with China. He also is explicitly prepared to have ordinary workers pay the price for this protectionism. He warns that not following his recommendation for a new approach to dealing with China, including forcing them to impose more protection for U.S. patents and copyrights, would lead to a lower valued dollar.

Of course a lower valued dollar will make U.S. goods and services more competitive internationally. That would mean a smaller trade deficit as we sell more manufactured goods elsewhere in the world and buy fewer imported goods in the United States. This could increase manufacturing employment by 1-2 million, putting upward pressure on the wages of non-college educated workers.

In short, not following Atkinson's path is likely to mean more money for less-educated workers, less money for the rich, and more overall growth, as the economy benefits from the lessening of protectionist barriers.

* https://www.washingtonpost.com/opinions/global-opinions/how-trump-can-stop-china-from-eating-our-lunch/2017/04/05/b83e4460-1953-11e7-bcc2-7d1a0973e7b2_story.html

** http://deanbaker.net/images/stories/documents/Rigged.pdf

-- Dean Baker

anne -> anne... , April 06, 2017 at 05:32 AM
http://deanbaker.net/images/stories/documents/Rigged.pdf

October, 2016

Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer
By Dean Baker

The Old Technology and Inequality Scam: The Story of Patents and Copyrights

One of the amazing lines often repeated by people in policy debates is that, as a result of technology, we are seeing income redistributed from people who work for a living to the people who own the technology. While the redistribution part of the story may be mostly true, the problem is that the technology does not determine who "owns" the technology. The people who write the laws determine who owns the technology.

Specifically, patents and copyrights give their holders monopolies on technology or creative work for their duration. If we are concerned that money is going from ordinary workers to people who hold patents and copyrights, then one policy we may want to consider is shortening and weakening these monopolies. But policy has gone sharply in the opposite direction over the last four decades, as a wide variety of measures have been put into law that make these protections longer and stronger. Thus, the redistribution from people who work to people who own the technology should not be surprising - that was the purpose of the policy.

If stronger rules on patents and copyrights produced economic dividends in the form of more innovation and more creative output, then this upward redistribution might be justified. But the evidence doesn't indicate there has been any noticeable growth dividend associated with this upward redistribution. In fact, stronger patent protection seems to be associated with slower growth.

Before directly considering the case, it is worth thinking for a minute about what the world might look like if we had alternative mechanisms to patents and copyrights, so that the items now subject to these monopolies could be sold in a free market just like paper cups and shovels.

The biggest impact would be in prescription drugs. The breakthrough drugs for cancer, hepatitis C, and other diseases, which now sell for tens or hundreds of thousands of dollars annually, would instead sell for a few hundred dollars. No one would have to struggle to get their insurer to pay for drugs or scrape together the money from friends and family. Almost every drug would be well within an affordable price range for a middle-class family, and covering the cost for poorer families could be easily managed by governments and aid agencies.

The same would be the case with various medical tests and treatments. Doctors would not have to struggle with a decision about whether to prescribe an expensive scan, which might be the best way to detect a cancerous growth or other health issue, or to rely on cheaper but less reliable technology. In the absence of patent protection even the most cutting edge scans would be reasonably priced.

Health care is not the only area that would be transformed by a free market in technology and creative work. Imagine that all the textbooks needed by college students could be downloaded at no cost over the web and printed out for the price of the paper. Suppose that a vast amount of new books, recorded music, and movies was freely available on the web.

People or companies who create and innovate deserve to be compensated, but there is little reason to believe that the current system of patent and copyright monopolies is the best way to support their work. It's not surprising that the people who benefit from the current system are reluctant to have the efficiency of patents and copyrights become a topic for public debate, but those who are serious about inequality have no choice. These forms of property claims have been important drivers of inequality in the last four decades.

The explicit assumption behind the steps over the last four decades to increase the strength and duration of patent and copyright protection is that the higher prices resulting from increased protection will be more than offset by an increased incentive for innovation and creative work. Patent and copyright protection should be understood as being like very large tariffs. These protections can often the raise the price of protected items by several multiples of the free market price, making them comparable to tariffs of several hundred or even several thousand percent. The resulting economic distortions are comparable to what they would be if we imposed tariffs of this magnitude.

The justification for granting these monopoly protections is that the increased innovation and creative work that is produced as a result of these incentives exceeds the economic costs from patent and copyright monopolies. However, there is remarkably little evidence to support this assumption. While the cost of patent and copyright protection in higher prices is apparent, even if not well-measured, there is little evidence of a substantial payoff in the form of a more rapid pace of innovation or more and better creative work....

[Apr 06, 2017] Approximately 10 million males ages 25-54 are unemployed. Fifty-seven percent of these are on disability

Apr 06, 2017 | economistsview.typepad.com
New Deal democrat , April 05, 2017 at 05:56 AM
Via Business Insider
http://www.businessinsider.com/jamie-dimon-ceo-letter-jpmorgan-on-education-and-labor-force-participation-2017-4

This is from Jamie Dimon's letter to stockholders:

"If the work participation rate for this group [men ages 25-54] went back to just 93% – the current average for the other developed nations – approximately 10 million more people would be working in the United States. Some other highly disturbing facts include: Fifty-seven percent of these non-working males are on disability"

I don't know where he got the statistic from, but if it is true it is potent evidence that the main factor behind the 60 year long decline in prime age labor force participation by men is an increase in those on disability, probably due to both the expansion of the program, and better longevity and diagnostics -- and probably also tied in to opiate addiction as well.

pgl -> New Deal democrat... , April 05, 2017 at 08:14 AM
So does Jamie sitting on his mountain of other people's money have some magic solution that will get this EPOP back to 93%? I guess if we all bank at JPMorganChase, all will be fine? C'mon Jamie.
New Deal democrat -> pgl... , April 05, 2017 at 08:54 AM
I'm only citing him for the disability stat.

Do you happen to have any source material that would indicate whether that stat is correct or not?

pgl -> New Deal democrat... , April 05, 2017 at 09:37 AM
There has been a bit of a discussion on this - most of which I sort of found unconvincing. Sorry but I am not the expert on this one. And I doubt Jamie Dimon is not either.
EMichael -> New Deal democrat... , April 05, 2017 at 08:26 AM
Never, ever listen to Jamie Dimon about anything.

"This is another common explanation for the drop in male participation. But again it doesn't explain more than a fraction of the phenomenon.

There's not much doubt that Social Security Disability Insurance takes people out of the workforce, often by inelegant design. In order to qualify for disability payments, people typically have to prove that they cannot work full-time. SSDI critics say this policy sidelines many people who might otherwise be able to contribute to the economy.

But how many people does SSDI really remove? From 1967 to 2014, the share of prime-age men getting disability insurance rose from 1 percent to 3 percent. There is little chance that this increase is entirely the result of several million fraudulent attempts to get money without working. But even if it were, SSDI would still only explain about one-quarter of the decline in the male participation rate over that time. There are many good reasons to reform disability insurance. But it's not the singular driving force behind the decline of working men."

https://www.theatlantic.com/business/archive/2016/06/the-missing-men/488858/

pgl -> EMichael... , April 05, 2017 at 08:28 AM
When Dimon makes a recommendation re regulating his own sector, the best thing to do is just the opposite.

[Apr 06, 2017] Economist's View Links for 04-06-17

Apr 06, 2017 | economistsview.typepad.com
Peter K. -> EMichael... , April 06, 2017 at 09:18 AM
What do you make of the DeLong link? Why do you avoid discussing it?

"...
The lesson from history is not that the robots should be stopped; it is that we will need to confront the social-engineering and political problem of maintaining a fair balance of relative incomes across society. Toward that end, our task becomes threefold.

First, we need to make sure that governments carry out their proper macroeconomic role, by maintaining a stable, low-unemployment economy so that markets can function properly. Second, we need to redistribute wealth to maintain a proper distribution of income. Our market economy should promote, rather than undermine, societal goals that correspond to our values and morals. Finally, workers must be educated and trained to use increasingly high-tech tools (especially in labor-intensive industries), so that they can make useful things for which there is still demand.

Sounding the alarm about "artificial intelligence taking American jobs" does nothing to bring such policies about. Mnuchin is right: the rise of the robots should not be on a treasury secretary's radar."

DrDick -> EMichael... , April 06, 2017 at 08:43 AM
Except that Germany and Japan have retained a larger share of workers in manufacturing, despite more automation. Germany has also retained much more of its manufacturing base than the US has. The evidence really does point to the role of outsourcing in the US compared with others.

http://www.economist.com/node/21552567

http://www.economist.com/node/2571689

pgl -> DrDick ... , April 06, 2017 at 08:54 AM
I got an email of some tale that Adidas would start manufacturing in Germany as opposed to China. Not with German workers but with robots. The author claimed the robots would cost only $5.50 per hour as opposed to $11 an hour for the Chinese workers. Of course Chinese apparel workers do not get anywhere close to $11 an hour and the author was not exactly a credible source.
pgl -> pgl... , April 06, 2017 at 08:57 AM
Reuters is a more credible source:

http://www.reuters.com/article/us-adidas-manufacturing-idUSKBN0TS0ZM20151209

Pilot program making initially 500 pairs of shoes in the first year. No claims as the wage rate of Chinese workers.

libezkova said in reply to pgl... , April 06, 2017 at 05:41 PM
"The new "Speedfactory" in the southern town of Ansbach near its Bavarian headquarters will start production in the first half of 2016 of a robot-made running shoe that combines a machine-knitted upper and springy "Boost" sole made from a bubble-filled polyurethane foam developed by BASF."

Interesting. I thought that "keds" production was already fully automated. Bright colors are probably the main attraction. But Adidas commands premium price...

Machine-knitted upper is the key -- robots, even sophisticated one, put additional demands on precision of the parts to be assembled. That's also probably why monolithic molded sole is chosen. Kind of 3-D printing of shoes.

Robots do not "feel" the nuances of the technological process like humans do.

kurt -> pgl... , April 06, 2017 at 09:40 AM
While I agree that Chinese workers don't get $11 - frequently employee costs are accounted at a loaded rate (including all benefits - in China would include capital cost of dormitories, food, security staff, benefits and taxes). I am guessing that a $2-3 an hour wage would result in an $11 fully loaded rate under those circumstances. Those other costs are not required with robuts.
Peter K. -> DrDick ... , April 06, 2017 at 08:59 AM
I agree with you. The center-left want to exculpate globalization and outsourcing, or free them from blame, by providing another explanation: technology and robots. They're not just arguing with Trump.

Brad Setser:

"I suspect the politics around trade would be a bit different in the U.S. if the goods-exporting sector had grown in parallel with imports.

That is one key difference between the U.S. and Germany. Manufacturing jobs fell during reunification-and Germany went through a difficult adjustment in the early 2000s. But over the last ten years the number of jobs in Germany's export sector grew, keeping the number of people employed in manufacturing roughly constant over the last ten years even with rising productivity. Part of the "trade" adjustment was a shift from import-competing to exporting sectors, not just a shift out of the goods producing tradables sector. Of course, not everyone can run a German sized surplus in manufactures-but it seems likely the low U.S. share of manufacturing employment (relative to Germany and Japan) is in part a function of the size and persistence of the U.S. trade deficit in manufactures. (It is also in part a function of the fact that the U.S. no longer needs to trade manufactures for imported energy on any significant scale; the U.S. has more jobs in oil and gas production, for example, than Germany or Japan)."

http://blogs.cfr.org/setser/2017/02/06/offshore-profits-and-exports/

anne -> DrDick ... , April 06, 2017 at 10:01 AM
https://fred.stlouisfed.org/graph/?g=dgSQ

January 15, 2017

Percent of Employment in Manufacturing for United States, Germany and Japan, 1970-2012


https://fred.stlouisfed.org/graph/?g=dgT0

January 15, 2017

Percent of Employment in Manufacturing for United States, Germany and Japan, 1970-2012

(Indexed to 1970)

ken melvin -> DrDick ... , April 06, 2017 at 08:45 AM
Probably automated 200. In every case, displacing 3/4 of the workers and increasing production 40% while greatly improving quality. Exact same can be said for larger scaled such as automobile mfg, ...
The convergence of offshoring and automation in such a short time frame meant that instead of a gradual transformation that might have allowed for more evolutionary economic thinking, American workers got gobsmacked. The aftermath includes the wage disparity, opiate epidemic, Trump, ...
This transition is of the scale of the industrial revolution with climate change thrown. This is just the beginning of great social and economic turmoil. None of the stuff that evolved specific the industrial revolution applies.
Peter K. -> ken melvin... , April 06, 2017 at 09:01 AM
No it was policy driven by politics. They increased profits at the expense of workers and the middle class. The New Democrats played along with Wall Street.

[Apr 06, 2017] The impact of information technology on employment is undoubtedly a major issue, but it is also not in society's interest to discourage investment in high-tech companies.

Apr 06, 2017 | economistsview.typepad.com
Peter K. , April 05, 2017 at 01:55 PM
Interesting, thought-provoking discussion by DeLong:

https://www.project-syndicate.org/commentary/mnuchin-automation-low-skill-workers-by-j--bradford-delong-2017-04

APR 3, 2017
Artificial Intelligence and Artificial Problems
by J. Bradford DeLong

BERKELEY – Former US Treasury Secretary Larry Summers recently took exception to current US Treasury Secretary Steve Mnuchin's views on "artificial intelligence" (AI) and related topics. The difference between the two seems to be, more than anything else, a matter of priorities and emphasis.

Mnuchin takes a narrow approach. He thinks that the problem of particular technologies called "artificial intelligence taking over American jobs" lies "far in the future." And he seems to question the high stock-market valuations for "unicorns" – companies valued at or above $1 billion that have no record of producing revenues that would justify their supposed worth and no clear plan to do so.

Summers takes a broader view. He looks at the "impact of technology on jobs" generally, and considers the stock-market valuation for highly profitable technology companies such as Google and Apple to be more than fair.

I think that Summers is right about the optics of Mnuchin's statements. A US treasury secretary should not answer questions narrowly, because people will extrapolate broader conclusions even from limited answers. The impact of information technology on employment is undoubtedly a major issue, but it is also not in society's interest to discourage investment in high-tech companies.

On the other hand, I sympathize with Mnuchin's effort to warn non-experts against routinely investing in castles in the sky. Although great technologies are worth the investment from a societal point of view, it is not so easy for a company to achieve sustained profitability. Presumably, a treasury secretary already has enough on his plate to have to worry about the rise of the machines.

In fact, it is profoundly unhelpful to stoke fears about robots, and to frame the issue as "artificial intelligence taking American jobs." There are far more constructive areas for policymakers to direct their focus. If the government is properly fulfilling its duty to prevent a demand-shortfall depression, technological progress in a market economy need not impoverish unskilled workers.

This is especially true when value is derived from the work of human hands, or the work of things that human hands have made, rather than from scarce natural resources, as in the Middle Ages. Karl Marx was one of the smartest and most dedicated theorists on this topic, and even he could not consistently show that technological progress necessarily impoverishes unskilled workers.

Technological innovations make whatever is produced primarily by machines more useful, albeit with relatively fewer contributions from unskilled labor. But that by itself does not impoverish anyone. To do that, technological advances also have to make whatever is produced primarily by unskilled workers less useful. But this is rarely the case, because there is nothing keeping the relatively cheap machines used by unskilled workers in labor-intensive occupations from becoming more powerful. With more advanced tools, these workers can then produce more useful things.

Historically, there are relatively few cases in which technological progress, occurring within the context of a market economy, has directly impoverished unskilled workers. In these instances, machines caused the value of a good that was produced in a labor-intensive sector to fall sharply, by increasing the production of that good so much as to satisfy all potential consumers.

The canonical example of this phenomenon is textiles in eighteenth- and nineteenth-century India and Britain. New machines made the exact same products that handloom weavers had been making, but they did so on a massive scale. Owing to limited demand, consumers were no longer willing to pay for what handloom weavers were producing. The value of wares produced by this form of unskilled labor plummeted, but the prices of commodities that unskilled laborers bought did not.

The lesson from history is not that the robots should be stopped; it is that we will need to confront the social-engineering and political problem of maintaining a fair balance of relative incomes across society. Toward that end, our task becomes threefold.

First, we need to make sure that governments carry out their proper macroeconomic role, by maintaining a stable, low-unemployment economy so that markets can function properly. Second, we need to redistribute wealth to maintain a proper distribution of income. Our market economy should promote, rather than undermine, societal goals that correspond to our values and morals. Finally, workers must be educated and trained to use increasingly high-tech tools (especially in labor-intensive industries), so that they can make useful things for which there is still demand.

Sounding the alarm about "artificial intelligence taking American jobs" does nothing to bring such policies about. Mnuchin is right: the rise of the robots should not be on a treasury secretary's radar.

anne , April 05, 2017 at 03:14 PM
https://minneapolisfed.org/research/wp/wp736.pdf

January, 2017

The Global Rise of Corporate Saving
By Peter Chen, Loukas Karabarbounis, and Brent Neiman

Abstract

The sectoral composition of global saving changed dramatically during the last three decades. Whereas in the early 1980s most of global investment was funded by household saving, nowadays nearly two-thirds of global investment is funded by corporate saving. This shift in the sectoral composition of saving was not accompanied by changes in the sectoral composition of investment, implying an improvement in the corporate net lending position. We characterize the behavior of corporate saving using both national income accounts and firm-level data and clarify its relationship with the global decline in labor share, the accumulation of corporate cash stocks, and the greater propensity for equity buybacks. We develop a general equilibrium model with product and capital market imperfections to explore quantitatively the determination of the flow of funds across sectors. Changes including declines in the real interest rate, the price of investment, and corporate income taxes generate increases in corporate profits and shifts in the supply of sectoral saving that are of similar magnitude to those observed in the data.

anne -> anne... , April 05, 2017 at 03:17 PM
http://www.nytimes.com/2010/07/06/opinion/06smith.html

July 6, 2010

Are Profits Hurting Capitalism?
By YVES SMITH and ROB PARENTEAU

A STREAM of disheartening economic news last week, including flagging consumer confidence and meager private-sector job growth, is leading experts to worry that the recession is coming back. At the same time, many policymakers, particularly in Europe, are slashing government budgets in an effort to lower debt levels and thereby restore investor confidence, reduce interest rates and promote growth.

There is an unrecognized problem with this approach: Reductions in deficits have implications for the private sector. Higher taxes draw cash from households and businesses, while lower government expenditures withhold money from the economy. Making matters worse, businesses are already plowing fewer profits back into their own enterprises.

Over the past decade and a half, corporations have been saving more and investing less in their own businesses. A 2005 report from JPMorgan Research noted with concern that, since 2002, American corporations on average ran a net financial surplus of 1.7 percent of the gross domestic product - a drastic change from the previous 40 years, when they had maintained an average deficit of 1.2 percent of G.D.P. More recent studies have indicated that companies in Europe, Japan and China are also running unprecedented surpluses.

The reason for all this saving in the United States is that public companies have become obsessed with quarterly earnings. To show short-term profits, they avoid investing in future growth. To develop new products, buy new equipment or expand geographically, an enterprise has to spend money - on marketing research, product design, prototype development, legal expenses associated with patents, lining up contractors and so on.

Rather than incur such expenses, companies increasingly prefer to pay their executives exorbitant bonuses, or issue special dividends to shareholders, or engage in purely financial speculation. But this means they also short-circuit a major driver of economic growth.

Some may argue that businesses aren't investing in growth because the prospects for success are so poor, but American corporate profits are nearly all the way back to their peak, right before the global financial crisis took hold.

Another problem for the economy is that, once the crisis began, families and individuals started tightening their belts, bolstering their bank accounts or trying to pay down borrowings (another form of saving).

If households and corporations are trying to save more of their income and spend less, then it is up to the other two sectors of the economy - the government and the import-export sector - to spend more and save less to keep the economy humming. In other words, there needs to be a large trade surplus, a large government deficit or some combination of the two. This isn't a matter of economic theory; it's based in simple accounting.

What if a government instead embarks on an austerity program? Income growth will stall, and household wages and business profits may fall....

anne -> anne... , April 05, 2017 at 03:21 PM
http://www.nakedcapitalism.com/2017/04/global-corporate-saving-glut.html

April 5, 2017

The Global Corporate Saving Glut
By Yves Smith

On the one hand, the VoxEU article does a fine job of assembling long-term data on a global basis. It demonstrates that the corporate savings glut is long standing and that is has been accompanied by a decline in personal savings.

However, it fails to depict what an unnatural state of affairs this is. The corporate sector as a whole in non-recessionary times ought to be net spending, as in borrowing and investing in growth. As a market-savvy buddy put it, "If a company isn't investing in the business of its business, why should I?" I attributed the corporate savings trend in the US as a result of the fixation of quarterly earnings, which sources such as McKinsey partners with a broad view of the firms' projects were telling me was killing investment (any investment will have an income statement impact too, such as planning, marketing, design, and start up expenses). This post, by contrast, treats this development as lacking in any agency. Labor share of GDP dropped and savings rose. They attribute that to lower interest rates over time. They again fail to see that as the result of power dynamics and political choices....

[Apr 04, 2017] Americans Want More Than Just Money to Live On

Apr 04, 2017 | www.bloomberg.com

APRIL 3, 2017 9:00 AM EDT

Donald Trump's election as president should have reminded liberals that Americans want more than money from their work. They responded to Trump's promise of jobs more than to Hillary Clinton's promise of government benefits because in addition to money, people also need dignity, a sense of self-reliance and respect within their community. For centuries, jobs have provided all of those.

To say that work is disappearing would be an exaggeration. But despite the low unemployment rate, fewer Americans have jobs than in years past:

[chart]

This new class of non-workers may be able to survive on the government dole, the charity of friends and family or via black-market activities like drug sales. But they've probably lost some of the dignity and respect that used to come with working for a living. Falling employment has been linked to declining marriage rates, reduced happiness and opiate abuse. Some economists even blame disappearing jobs for the recent rise in mortality rates afflicting white Americans.

What's more, the longer people stay out of the labor force, the more trouble they will have getting back into it. They lose work ethic, skills and connections, and employers become suspicious of the large gaps in the resumes. Economists Brad DeLong and Larry Summers have shown that this so-called labor-market hysteresis can have potentially large, long-lasting negative effects on the economy.

When the economy is in recession, the best approach is probably a combination of fiscal and monetary stimulus. But when the labor-force dropout problem is chronic, as it is now, a different kind of policy may be needed -- a government-job guarantee.

The U.S. has used an approach like this before. In 1935, the administration of President Franklin Roosevelt established the Works Progress Administration, which employed millions of American men, mostly in public-works projects. WPA employees received hourly wages similar to other unskilled workers in the surrounding area. Most of them built infrastructure and buildings, but a few were paid to make art and write books. The total cost of the program was high -- $1.3 billion a year, or about 1.7 percent of U.S. gross domestic product. An equivalent expenditure now would be a little more than $300 billion, or about half of federal defense spending. But the popularity of the program is hard to deny, given Roosevelt's resounding victory in his reelection bid in 1936.

The idea of a new work program isn't a new one -- economists on all sides of the political spectrum have been kicking it around for years now. It has received support from Stephanie Kelton, an adviser to the Bernie Sanders presidential campaign, and from Kevin Hassett, who is reportedly Trump's pick to lead the Council of Economic Advisers. Jeff Spross has an excellent article in Democracy exploring the idea in depth.

William Darity of Duke University has been a particularly avid promoter of a job guarantee. He describes it thus:

Any American 18 years or older would be able to find work through a federally funded public service employment program -- a "National Investment Employment Corps." Each National Investment Employment Corps job would offer individuals non-poverty wages, a minimum salary of $20,000, plus benefits including federal health insurance. The types of jobs offered could address the maintenance and construction of the nation's physical and human infrastructure, from building roads, bridges, dams and schools, to staffing high quality day care.
There is no shortage of work to be done. Even beyond the tasks Darity lists, the U.S. is full of jobs that need doing, from elder care to renovation of old decaying buildings, to cleanup of lead and other pollution, to construction and staffing of transit systems.

Darity estimates the cost of the program at $750 billion a year, Spross at $670 billion. That's about equivalent to all of the U.S.'s current anti-poverty programs, and would be about twice the size of the old WPA. So this would be a very big deal. But the true cost to society would be considerably less, because the jobs would provide value. Better infrastructure, more child care and elder care, and a cleaner, healthier environment would make the nation a richer, better place to live -- in other words, those benefits should defray much of the program's cost. Also, the program would take people off of the welfare rolls and cut government anti-poverty spending. Finally, even when the economy isn't in a recession, more income will probably increase demand in the local economy.

All told, the program could end up being a bargain. And if the guarantee is limited to distressed, low-employment areas, which could lower the costs down even more, and allow for pilot programs to establish the viability of the concept.

Many people on the left and elsewhere don't like this idea. They doubt that government make-work will provide dignity. And they believe strongly in the theory that automation will soon put large numbers of people out of a job entirely. The only solution, they say, is to change U.S. culture and values to make work less important, and to rely on programs like universal basic income. On the right, some would inevitably see the plan as a first step on the road to socialism.

Maybe the critics will prove right in the long run. But for now, forcing a dramatic change on American culture is a lot harder than simply giving people jobs. Robot-driven unemployment and new social values are still mostly in the realm of science fiction, while the American public wants jobs now. A job guarantee looks like a very good thing to try.

Peter K. said in reply to Peter K.... Do both, the UBI and Job Guarantee.

Why doesn't Noah Smith discuss Fed Fail in detail and about how conservatives forced unprecedented austerity on the economy.

This is not just "natural" or the evolution of technology, demographics and innovation.

He should be supporting an NGDP target, etc.

At very least run the economy hot.

Reply Tuesday, April 04, 2017 at 12:08 PM Peter K. said in reply to Peter K.... What Smith does not discuss is how the Fed is currently raising rates to kill jobs. Reply Tuesday, April 04, 2017 at 12:09 PM

[Mar 31, 2017] Does productivity drive wages? No, instead of increased pay the demand was met with borrowing, instead of increased pay, this was bound to collapse

Mar 31, 2017 | economistsview.typepad.com

djb , March 31, 2017 at 05:15 AM
" Does productivity drive wages? Evidence from sectoral data - Bank Underground


in order to have demand to match increased product

real income increases must match increase production

so

unless the rich who are getting richer have an identical propensity to consume

then is would have to be true that not only does real total income have to keep up with real production but also real median incomes must keep up with real production

simple

for years instead of increased pay the demand was met with borrowing, instead of increased pay, this was bound to collapse

anne -> djb... , March 31, 2017 at 05:23 AM
https://fred.stlouisfed.org/graph/?g=dbTX

January 30, 2017

Labor Share of Nonfarm Business Income and Real After-Tax Corporate Profits, 1992-2016

(Indexed to 1992)

Decline in labor share of income:

92.7 - 100 = - 7.3%

Increase in real profits:

281.0 - 100 = 181.0%

anne -> djb... , March 31, 2017 at 05:23 AM
https://fred.stlouisfed.org/graph/?g=dbTM

January 30, 2017

Labor Share of Nonfarm Business Income and Real After-Tax Corporate Profits, 2000-2016

(Indexed to 2000)

Decline in labor share of income:

91.2 - 100 = - 8.8%

Increase in real profits:

213.9 - 100 = 113.9%

[Mar 31, 2017] A capitalist economy appears to inevitably lead to an accumulation of a surplus in the hands of the few.

Mar 31, 2017 | economistsview.typepad.com

RGC March 31, 2017 at 05:09 AM

The Surplus:

A capitalist economy appears to inevitably lead to an accumulation of a surplus in the hands of the few.

That seems to be detrimental for the many. What should be done?

Karl Marx said the many (the proletariat) should establish a dictatorship and confiscate the surplus going forward.

Henry George said the unearned income of landowners, monopolists and the like(rentiers) should be taxed such that all public needs would be supported by that tax.

John Bates Clark said the capitalists deserved what they received and the system should stay as it was.

John Maynard Keynes said the state should direct and control the economy such that the surplus would accrue to the state to such an extent that private capital would become superfluous (euthanasia of the rentier).

[Mar 31, 2017] The reason for this mess is the decline price offered to labor, which is in contrast to the four decades long conservative effort to increase the prices of capital above the cost of labor, which requires restricting labor additions to capital to create a reduction in demand to cut the price of labor

Mar 31, 2017 | economistsview.typepad.com
mulp , March 30, 2017 at 04:26 PM
"In the U.S. labor market unemployed individuals that are actively looking for work are more than three times as likely to become employed as those individuals that are not actively looking for work and are considered to be out of the labor force (OLF). Yet, on average, every month twice as many people make the transition from OLF to employment than do from unemployment to employment." H-K-L via Justin Fox

"But mostly these men have dropped out of the labor force for other, unhappier reasons, as Nicholas Eberstadt recounted in his recent book "Men Without Work: America's Invisible Crisis." I think it's fair to characterize this as "a mess with jobs" -- although it's a mess that's been many decades in the making, and I doubt President Trump really knows what to do about it."

As someone OLF since Bush cut my taxes in 2001, the reason for this "mess" is the decline price offered to labor, which is in contrast to the four decades long conservative effort to increase the prices of capital above the cost of labor, which requires restricting labor additions to capital to create a reduction in demand to cut the price of labor.

And as women enter the labor force, men attached to women can become OLF when the labor price falls too low, while being primed to become employed when the price offered exceeds their price minimum. Alternatively, men with capital that is inflating in price can become OLF by selling capital until the price offered for their labor increases high enough.

These men actually remain connected to the job market, either by avocation, networking with peers, getting job training, etc.

But the bottom line, if you want more workers in the labor force who are actually working full time, your policies must be focused on increasing the offered price for labor. Keynes and FDR in the 30s provide the foundations for such policy:

1) remove the unemployed from the market by hiring them to build public capital assets, paying them a wage intended to be 90% of the market rate for part-time work, providing transportation to new locates to do the work in community with peers, offering them job skills beyond work discipline. Aka the CCC.

2) structure taxes to favor businesses that build lots of labor capital: tax economic profits and rents heavily while exempting from taxes all labor costs paid, including labor costs building capital.

3) invest tax revenue from today and tomorrow in new capital with high labor cost with long horizons to recover the cost of these capital assets. Building rail lines in the 19th century involved lots of public investment, but the taxes paid in the subsequent century provided positive returns in excess of cost to the public, and these assets still generate returns to the public, even when privately operated for private return.

China has focused heavily on 3, building a high labor cost transportation system. They have also had tax policy that favored building lots of productive capital using lots of labor, shifting to high labor cost capital: taxes on exports are very low.

It's the latter that is driving the Republican BAT, a tax that does not tax US labor at the same rate as imported labor. Unfortunately, it's a bandaid to Republican tax policy that makes paying labor more have a high after tax cost: if your profits are taxed at zero, paying higher labor costs means a 100% reduction in profits in the short term, while building capital, and the lower profits as capital increases supply beyond demand and prices are forced down, destroying profits. An the tax policy means a dollar reduction in before tax profits means a dollar reduction in after tax profits.

In the last chart Fox includes, I see each of the declines coming in response to tax cuts, increases in employment coming with tax increases, recently in stealth tax hikes, like the AMT and the tax on SS benefits. Both have a fixed baseline intentionally not indexed so that the tax hits more people and generates more revenue. All revenue gets spent by government with all of it going to workers directly or indirectly by way of people who must pay workers. (Sick, disabled, young, old).

[Mar 31, 2017] Blame the victim: anti-labor neoliberal propaganda in Boston Globe

Mar 31, 2017 | economistsview.typepad.com
anne , March 30, 2017 at 05:49 AM
http://cepr.net/blogs/beat-the-press/the-generation-of-nonsense-in-the-boston-globe

March 30, 2017

The Generation of Nonsense in the Boston Globe

The main economic story of the last four decades is the massive upward redistribution of income that has taken place. The top one percent's share of national income has more than doubled over this period from roughly ten percent in the late 1970s to over twenty percent today. And, this is primarily a before-tax income story, the rich have used their control over the levers of economic power to ensure that an ever larger share of the country's wealth goes into their pockets. (Yes, this is the topic of my book, "Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer" * -- it's free.)

Anyhow, the rich don't want people paying attention to these policies (hey, they could try to change them), so they endlessly push out nonsense stories to try to divert the public's attention from how they structured the rules to advance their interests. And, since the rich own the newspapers, they can make sure that we hear these stories.

This meant that yesterday the New York Times gave us the story ** of how robots are taking all the jobs and driving down wages. Never mind that productivity growth is at its slowest pace in the last seven decades. Facts and data don't matter in the alternative world where we try to divert folks' attention from things like the Federal Reserve Board (who are not robots, last I checked) raising interest rates to make sure that we don't have too many jobs.

One of the other big alternative facts for the diverters is the generational story. This is the one where we tell folks to ignore all those incredibly rich people with vast amounts of money, the reason most people are not seeing rising living standards is the damn baby boomers who expect to get Social Security and Medicare, just because they paid for it. The Boston Globe gave us this story *** by Bruce Cannon Gibney, conveniently titled "how the baby boomers destroyed everything." (Full disclosure: I am one of those baby boomers.)

There is not much confusion about the nature of the argument, only its substance. Gibney complains about:

"the unusual prevalence of sociopathy in an unusually large generation. How does that disorder manifest? Improvidence is reflected in low levels of savings and high levels of bankruptcy. Deceit shows up as a distaste for facts, a subject on display in everything from Enron's quarterly reports to daily press briefings. Interpersonal failures and unbridled hostility appeared in unusually high levels of divorce and crime from the 1970s to early 1990s."

Starting with the bankruptcy story, the piece to which Gibney helpfully linked noted a doubling of bankruptcy rates for those over 65 since 1991. It reported:

"Expensive health care costs from a serious illness before a patient received Medicare and the inability to work during and after a serious illness are the prime contributors to financial crises among those 55 and older."

Yes, we have clear evidence of a moral failing here.

The crime rate story is interesting. We had a surge in crime beginning in the 1960s and running through the 1980s, with a sharp fall beginning in the 1990s. Gibney would apparently tie this one to the youth and peak crime years of the baby boomers. There is an alternative hypothesis for which there is considerable evidence: exposure to lead. While the case is far from conclusive, it is likely that lead exposure was an important factor. **** More importantly, the point is that crime was a story of what was done to baby boomers, not just kids acting badly.

I really like the complaint about the low level of savings among baby boomers. I guess Gibney is the Boston Globe's Rip Van Winkle who missed the housing bubble collapse and resulting recession. A main complaint among economic policy types in the last decade has been that people were not spending enough. The argument was that people were being too cautious in the wake of the crash and not spending the sort of money needed to bring the economy back to full employment.

But Gibney wants to blame baby boomers for spending too much. Oh well, it's alternative facts day at the Boston Globe!

The rest of the piece is in the same vein. Boomers are blamed for "unaddressed climate change." Well, boomers also were the force behind the modern environmental movement. Many of us boomers might look more to folks like Exxon-Mobil and the Koch brothers who have used their vast wealth to try to stifle efforts to combat climate change -- but hey, why focus on rich people acting badly when we can blame a whole generation?

Gibney blames boomers for every bad policy of the last four decades, including the war on crime, which took off in the late 1970s, when many of the boomers had not even reached voting age. We even get blamed for the repeal of Glass-Steagall, another great generational cause.

The amount of confusion in this piece is impressive. We get this one:

"From 1989 to 2013, wealth gaps between older and younger households grew in the same way as those between the top 5 percent and the bottom 95 percent. Today's seniors (boomers) are much wealthier relative to the present young than the seniors of the 1980s were to then-young boomers. All those tax breaks, bailouts, easy money, deregulation, and the bubbles they spawned supported that boomer wealth accumulation while shifting the true costs to the future, to the young."

Wealth is a virtually meaningless measure for the young. Gibney is crying for the Harvard Business school grad with $150,000 in debt. Young people do have too much debt, but the bigger issue is the horrible labor market they face (partly the result of boomers saving too much money). Furthermore, while the ratio of boomer wealth to wealth of the young has risen (because of college debt), the typical boomer reaching retirement actually has less wealth than their parents. ***** It's also important to remember in these comparisons that boomer parents likely had a traditional pension (an income stream that does not get included in most wealth measures). If boomers are to have any non-Social Security income in retirement, it will likely be in the form of a 401(k) that does count as wealth.

And of course we get the completely meaningless national debt horror story:

"Still, no amount of tax reallocation could keep the government together and goodies flowing, so boomers tolerated astounding debt expansion while chopping other parts of the budget. Gross national debt, 35 percent of GDP when the boomers came of age, is now 105 percent, a peacetime record expanding 3 percent annually, forever."

Economics fans would note that interest on the debt (net of money refunded by the Federal Reserve Board) is around 0.8 percent of GDP, near a post-war low. They would also point out that formal borrowing is just one way in which the government can create obligations for the future. The government also pays for things like innovation and creative work with patent and copyright monopolies.

These monopolies effectively allow their owners to impose taxes on consumers. Due to these monopolies we will pay $440 billion on prescription drugs this year for drugs that would likely sell for less than $80 billion in a free market. The difference of $360 billion is more than twice the net interest burden of the debt that Gibney wants us to worry about. And this is just patent protection for prescription drugs, the costs for the full range and patent and copyright monopolies throughout the economy would almost certainly be two or three times as large.

Of course Gibney could also blame the commitment of these monopoly rents on baby boomers (after all, people elected by baby boomers were the ones who made these monopolies stronger and longer), but that might be a bit hard to sell. It would look pretty obvious that the story is one of a massive upward redistribution to the rich -- some of whom happen to be baby boomers -- and that would undermine the whole effort at distraction in which Gibney and the Globe is engaged.

* http://deanbaker.net/images/stories/documents/Rigged.pdf

** https://www.nytimes.com/2017/03/28/upshot/evidence-that-robots-are-winning-the-race-for-american-jobs.html

*** https://www.bostonglobe.com/ideas/2017/02/26/how-baby-boomers-destroyed-everything/lVB9eG5mATw3wxo6XmDZFL/story.html

**** http://scholarcommons.usf.edu/cgi/viewcontent.cgi?article=5632&context=etd

***** http://cepr.net/documents/wealth-scf-2014-10.pdf

-- Dean Baker

New Deal democrat , March 30, 2017 at 05:55 AM
A quick comment on the Case-Deaton study that Noah Smith discusses in the link above. I think there is a very good case that economic depression, a decline in labor force participation, opioid use, and voting for populist candidates (like Donald Trump last year) is all linked.

If I am right that the biggest factor behind the 60 year decline in prime age male work force participation has been the increase in disability, coupled with better long-term medical care and longevity, then everything else follows.

The biggest drivers in the increase in disability claims are mental health issues and neck and back problems.

Most people over age 35 have one or more herniated discs in their neck or back (and frequently, those bulging or herniated discs touch on one of the nerves leading out from the spine. With better medical imaging, this is easier to document.

So when the local mills close, one alternative to being penniless is to go on disability for a herniated disc or associated problems.

And do we have pills for that? Yes we do! Opioids!

And since opioids are one step away from heroin, they are extremely addictive, even after just a few days' use.

So now we have a heroin-like epidemic in white Appalachia and the Rust Belt where the mills have closed, not just in black urban areas.

Opioid use leads to deaths by overdose.

And now the opioid abuse and epidemic of deaths just compounds the economic depression.

And those people looking for an answer turn to populists, no matter how rancidly racist they are.

QED (IMO).

anne -> New Deal democrat... , March 30, 2017 at 06:07 AM
A quick comment on the Case-Deaton study that Noah Smith discusses in the link above....

[ Where is the reference link? ]

Peter K. -> anne... , March 30, 2017 at 07:19 AM
https://www.bloomberg.com/view/articles/2017-03-29/how-to-help-the-white-working-class-live-longer

How to Help the White Working Class Live Longer

MARCH 29, 2017 6:00 AM EDT

By Noah Smith

The U.S. white working class is in big trouble. The data is piling up. Economists Anne Case and Angus Deaton have a new paper out, exploring mortality trends in the U.S. The results confirm the finding of their famous 2015 study -- white Americans without college degrees are dying in increasing numbers, even as other groups within and outside of the country live longer. And the negative trends continued over the past year.

The problem appears to be specific to white Americans:

Mortality rates among blacks and Hispanics continue to fall; in 1999, the mortality rate of white non-Hispanics aged 50-54 with only a high school degree was 30 percent lower than the mortality rate of blacks in the same age group; by 2015, it was 30 percent higher. There are similar crossovers between white and black mortality in all age groups from 25-29 to 60-64

In contrast to the US, mortality rates in Europe are falling for those with low levels of educational attainment, and are doing so more rapidly than mortality rates for those with higher levels of education.
You can see this pattern clearly in this chart from their 2015 study:

[graph]

Why is this happening? Case and Deaton don't really know. Obesity would seem like a possible culprit, but it's also up among black Americans and British people, whose mortality rates from heart disease have fallen. Deaths from suicide, alcoholism and drug overdoses -- what the authors collectively call "deaths of despair" -- have been climbing rapidly. But they only account for a minority of the increase. And no one knows the definitive reason for white despair.

One tempting explanation -- especially for those on the political right -- might be that immigration and diversity are causing white people to lose a sense of community and cultural homogeneity, driving them to self-destruction. But mortality rates for working-class white people in the U.K. and Europe, which are experiencing even bigger fights over immigration, have fallen very rapidly in recent years. Europe also casts doubt on the hypothesis that the decline in marriage is to blame, since marriage also fell in European countries and among black Americans.

Case and Deaton instead suggest economic causes -- lack of opportunity, economic insecurity and inequality. But this is hard to square with falling mortality for black Americans, who also suffered mightily in the Great Recession and have been on the losing end of increasing inequality.

So the reason for the increase non-college white mortality remains a mystery, for now. Perhaps it will always just be a mysterious nationwide episode of anomie, like the massive increase in Russian death rates after the Soviet Union's fall. But whatever the cause, I know of one policy that would go a long way toward fighting the baleful trend -- national health care.

A national health service -- which also goes by the names of single-payer health care and socialized medicine -- would drive down the price of basic health care. Because an NHS would be such a huge customer, it would be able to use its market power to get better deals from providers. This is probably why the same health-care treatments and services cost so much less in Europe than in the U.S. -- those other countries have their governments do the bargaining. In fact, this already works in the U.S. -- Medicare, the single-payer system that ensures the elderly, has seen much lower cost growth than private health insurance, even though Medicare isn't yet allowed by law to negotiate for cheaper drugs.

Another way an American NHS would be able to help the white working class is by having doctors monitor patients' behavior. In the U.K., doctors ask patients about their alcohol consumption, exercise and other habits at free checkups. There's some evidence that this sort of checkup doesn't increase health in Canada, but that may be because Canadians already mostly avoid heroin, alcoholism and suicide. A U.S. NHS would be able to check patients' mental health (to prevent suicide), their alcohol intake, their opiate and other drug use, and a variety of warning signs.

Finally, an NHS could prevent overuse of opioids. Prescription of painkillers has been a major factor in the opiate epidemic, which has hit the white working class hard. Drug manufacturers, however, have lobbied to preserve widespread access to opioids. These companies have also given doctors incentives and perks -- essentially, bribes -- to keep prescribing these dangerous drugs. An NHS would be able to resist lobbying pressure and make sure doctors didn't have an incentive to hand out too many opioid pills.

A NHS wouldn't require the creation of a new bureaucracy -- it would just require expanding Medicare to cover the whole nation. There's already a campaign to do this, led by none other than Senator Bernie Sanders. An NHS also wouldn't prevent rich people from buying expensive or rapid treatment in private markets.

So while an NHS might not solve all the health problems of the U.S. white working class, it would go a long way toward doing so. If President Donald Trump wanted to prevent the people who elected him from continuing to die in rising numbers, he would join Sanders in the campaign to extend Medicare to cover all Americans. Unfortunately, the health-care proposal that Trump backed went in the opposite direction, reducing health coverage rather than expanding it. The self-styled champion of the white working class has not yet answered their despair with action.

Peter K. -> Peter K.... , March 30, 2017 at 07:21 AM
"Perhaps it will always just be a mysterious nationwide episode of anomie, like the massive increase in Russian death rates after the Soviet Union's fall."

Economics is science!

lol Russia's economic output fell by half. Poverty rates and suicides skyrocketed.

Anomie?

Peter K. -> Peter K.... , March 30, 2017 at 07:22 AM
The Economics Guild and former CEA Chairs should write Smith letter excommunicating him.
Paine -> Peter K.... , March 30, 2017 at 08:40 AM
Yes
The White male American wage class has a close relative in Russia

Trump v Putin suggests what that leads to

Paine -> Peter K.... , March 30, 2017 at 08:41 AM
Sudden massive De industrialization plus real wage collapse

Pass the vodka !

[Mar 31, 2017] A tao of politics

Mar 31, 2017 | www.interfluidity.com
A tao of politics Most uses of language can be understood in both referential and functional terms. If I tell the policeman "He ran the red light", in referential terms I am claiming that, in some world external to my language, there was a car driven by a person I refer to as "he" which crossed an intersection while a red lightbulb was lit. But my words have functions as well, quite apart from what they refer to. A person might be fined or go to jail as a consequence of what I say. I might be conveniently exonerated of responsibility for an accident. Those consequences might be independent of the referential accuracy of the remark. Or they might not be. Perhaps there will be other corroborations, and inconvenient penalties if I am deemed to have lied. Regardless, it is simultaneously true that words refer to things and utterances have consequences. Both as speakers and as listeners (or as writers and as readers) we need to consider the "meaning" of a use of language on both levels if we are to communicate effectively.

Often there are tensions between referential accuracy and functional utility. Referential accuracy does not necessarily imply virtue. Whether we agree with the practice or not, we all understand what is meant by a "white lie". Statements with identical referential meaning can yield profoundly different social consequences depending on how they are said. To "speak diplomatically" does not mean to lie, but rather to pay especial attention to the likely effects of an utterance while trying to retain referential accuracy. To "spin" has a similar meaning but a different connotation, it suggests subordinating referential clarity to functional aspects of speech in a crassly self-interested way. But paying attention to the functional role of language is not in itself self-interested or crass. We all pay attention to how we speak as well as what we say. If we did not, we would needlessly harm people. Even if we are scrupulously truthful, we all make choices about what to say and what to omit, when to speak and when to remain silent. When we discuss our inner lives, often the consequences of our utterances are more clear (even to ourselves) than their referential accuracy, and perhaps we let the desirability of the consequences define what we take to be the truth. Perhaps that is not, or not always, without virtue.

This bifurcation of language into referential and functional strikes me as illuminating of the stereotyped left-right axis in politics. In broad, almost cartoonish, terms, one might describe a "left" view that humans as individuals have limited power over their own lives, so the work of politics is to organize collectively to create circumstances and institutions that yield desirable social outcomes. The "right" view is that, absent interference by collectivities that are inevitably blind to fine-grained circumstances (and that usually are corrupt), individuals have a great deal of power over their own lives, so that differences in outcome mostly amount to "just desserts". It's obvious why there might be some conflict between people who hold these different views.

On the key, core, question of whether individuals have a great deal of power or very limited power to control outcomes in their own lives, the stereotyped left view is, in referential terms, more accurate. If you are born in poverty in a war-torn country and fail to achieve a comfortable American-style upper-middle-class life style, it's hard to say that's on you, even if some very tiny sliver of your countrymen do manage to survive to adulthood, emigrate, and prosper. In narrower contexts, the question becomes less clear. For those lucky enough to be born in a developed country, are differences in outcome mostly a result of individual agency? For Americans born white, raised in middle-class comfort, and provided an education? For people born with identical genes? The case that differences in outcome result from choices under the control of individuals, for which they might be held responsible, grows stronger as we restrict the sample to people facing more similar circumstances. But even among the most narrow of cohorts, shit happens. People get sick, debilitated even, through no fault of their own. As a general proposition, individual human action is overwhelmed by circumstance and entropy. Policies designed with grit and bootstraps for their engine and individual choice for their steering wheel usually fail to achieve good social outcomes. This is the sense in which it's true that " the facts have a well-known liberal bias ".

But, before the left-ish side of the world takes a self-satisfied gloat, it should face an uncomfortable hitch. In functional terms, widespread acceptance of the false-ish right-ish claim - that people have a great deal of power over their own lives, and so should be held responsible as individuals for differences in outcome - may be important to the success of the forms of collective organization that people with more accurate, left-ish views strive to implement. This isn't a hard case to make. A good society, qua left-ish intuitions, might provide a lot of insurance to citizens against vicissitudes of circumstance. A generous welfare state might cushion the experience of joblessness, housing and medical care might be provided as a right, a basic cash income might be provided to all. But a prosperous society with a generous welfare state requires a lot of people to be doing hard work, including lots of work people might prefer not to do. If people are inclined to see their own and others' affairs as products of circumstance, they might easily forgive themselves accepting the benefits of a welfare state while working little to support it, and even lobbying for more. They might find it difficult to criticize or stigmatize others who do the same. That would lead to welfare-state collapse, the standard right-wing prediction. But if an ethos of agency and personal responsibility prevails, if differences in outcome are attributed to individual choices even in ways that are not descriptively accurate, if as a social matter people discriminate between justifiable and unjustifiable uses of public benefits and stigmatize the latter, the very prevalence of a right-wing view of human affairs might falsify the right-wing prediction and help to sustain the left-wing welfare state. Conversely, the existence of a left-wing social democratic welfare state renders the right-wing view less wrong, because it diminishes disparity of circumstance, increasing the degree to which differences in outcome actually can be attributed to individuals' choices. Irreconcilable views reinforce one another.

God is an ironist. If left-ish views are referentially accurate while right-ish views are functionally useful, then a wise polity will require an awkward superposition of left-ish perspectives to inform policy design and right-ish perspectives as public ethos. Singapore is ostentatiously capitalist, is widely perceived as a kind of protolibertarian paradise, yet it builds a rich welfare state out of mandatory, government-controlled "savings" and extensive intervention in health care and housing markets. The Scandinavian countries are left-wing social democracies, built on a politics of trade union solidarity, yet the right-wing Heritage Foundation ranks them about as "economically free" as the United States despite governments that spend much larger shares of GDP . Nordic politicians bristle at being called "socialist" , and they maintain higher levels of labor-force participation than the welfare-stingy US.

Like Yin and Yang, black and white, right and left might stand perpetually in opposition even as they require one another to form a coherently incoherent whole.

This entry was posted on Wednesday, March 29th, 2017 at 8:21 pm PDT.

[Mar 31, 2017] Automation -- a convenient way to absolve the oligarchy.

Notable quotes:
"... Agree: "I've seen a few articles recently claiming that low wage growth is because productivity by workers has been stalling. A convenient way to absolve the oligarchy." ..."
Mar 31, 2017 | economistsview.typepad.com
New Deal democrat March 30, 2017 at 05:05 AM

I've seen a few articles recently claiming that low wage growth is because productivity by workers has been stalling. A convenient way to absolve the oligarchy.

Except, if the theory were true, we should see bigger wage gains in the sectors of the economy with the most productivity growth.

Well, some British researchers studied that:
https://bankunderground.co.uk/2017/03/30/does-productivity-drive-wages-evidence-from-sectoral-data/

And here is what they found:

"Does productivity growth help predict wage growth at an industry level?

Not really, no. The distribution of productivity growth across industries ispositively correlated with subsequent wage growth – industries with higher productivity growth now will tend to have higher wage growth in subsequent quarters. However, productivity growth has little additional value in predicting wage growth over and above univariate models...."

The real conclusion is buried in the prior discussion:

"These correlations may also tell us something about how an increase in productivity in a particular industry feeds through into real wages. Rather than bidding up relative nominal wages (and therefore, the relative RCW in that industry), an increase in productivity leads to lower relative prices for the output of that industry, increasing RPW for given nominal wage. This boosts the real consumption wages of workers in all industries."

So, productivity gains lead to a deceleration in consumer inflation, *not* better nominal wage growth.

Oops!

So I am sure mainstream economists will do what they typically do when the theory is contradicted by the data ....

Peter K. said in reply to New Deal democrat... , March 30, 2017 at 06:35 AM
Good point. I've seen Dean Baker make this point as well.

High productivity sectors should see wage gains.

They don't because the savings are passed on to the consumer (must be competitive industries with competitive firms).

Tighter labor markets would see nominal wage growth. But the Fed will see that labor markets don't get too tight by rationing demand to the economy.

Anyway, robots!

JohnH -> New Deal democrat... , March 30, 2017 at 07:21 AM
Agree: "I've seen a few articles recently claiming that low wage growth is because productivity by workers has been stalling. A convenient way to absolve the oligarchy."

When productivity was rising rapidly in the past, wages were still stalling...because capital absconded with the gains.
http://www.epi.org/productivity-pay-gap/

Class warfare at its finest! Apparently 'librul' economists know which side of the bread the butter is on...capital's side.

Paine -> JohnH... , March 30, 2017 at 08:17 AM
Let's cut thru the fluttering birds surrounding this pivotal subject


Simply heat up job markets and see what happens

That is the job class pov

More jobs
tighter markets
higher wage rates
more hours

JohnH -> Paine ... , March 30, 2017 at 10:59 AM
Heresy!

[Mar 30, 2017] 80 years ago Congress forgot to put criminal enforcement in the NLRA(a)

Mar 30, 2017 | economistsview.typepad.com
We can start to protect collective bargaining at the state by state level.

Peter K. -> Denis Drew ... , March 29, 2017 at 06:59 AM

"80 years ago Congress forgot to put criminal enforcement in the NLRA(a). Had union busting been a felony all along we would be like Germany today."

Many of us on the left ask why we can't be more like Germany (or Denmark?) Germany is still international and outward-looking. The center-left like Krugman, EMichael, bakho, Sanjait, Summers etc keep saying it's robots not politics/trade policy.

Nothing we can do. The Left says look at Germany which kept output up despite trade, robots and bad monetary policy.

Center-left Hillary says we are not Denmark/Germany.

Denis Drew -> Peter K.... , March 29, 2017 at 07:23 AM
There is something we can do. We can start to protect collective bargaining at the state by state level.

Old saw is that federal preemption cuts states out of protecting collective bargaining rights. But just because Congress never included felony prosecution for union busting doesn't mean Congress did not want anyone else to -- and would not have mattered if Congress did not want it. All state protection does is reinforce the (toothless) federal set-up.

Congress could not constitutionally pass a law that states may not protect bargaining (OF ANY KIND!) from being muscled. No more than Congress may prevent states from making their own minimum wages (which Republicans would have tried a long time ago if it were possible).

Jimmy Hoffa said: "A union is a business." There is no reason one business (owner) should have carte blanche to bust the bargaining power of another business (labor) in a democracy.

Progressive state to start with: WA, OR, CA, NV, MN, IL, MA, NY, MD, etc.

And don't forget to get around to centralized bargaining (like the Teamster's National Master Freight Agreement -- or, where else, German, Denmark, etc.). Supermarket and airline workers (especially employees under RLA) would kill for (legally mandated?) centralized bargaining.

[Mar 30, 2017] Truly populist up politics in the long run reduce financialization, for-profit scams, phara gouging

Notable quotes:
"... Centralized bargaining (sector wide labor agreements) practiced by the Teamster's National Master Freight Agreement -- also by French Canada, continental Europe and I think Argentina and Indonesia -- blocks the Walmart-killing-supermarket-contracts race to the bottom. Airline employees would kill for centralized too. ..."
"... Truly populist up politics in the long run reduce financialization, for-profit scams, phara gouging, etc. etc., etc. Dean of Washington press corps said when he came to Washington (1950s?) all the lobbyists were union. ..."
"... The center-left are technocrats and don't really believe in unions or economic democracy. ..."
"... They're all about the meritocracy and so instead of arguing for workers to get organized and political and instead of arguing for a hot economy so labor markets are tight, they scold workers for not "skilling up" and acquiring the skills business want for their jobs. ..."
Mar 30, 2017 | economistsview.typepad.com

Denis Drew , March 29, 2017 at 06:42 AM

STARTS OUT A LITTLE OFF TOPIC BUT THEN GOES PRECISELY WHERE THE AUTHOR WANTS US TO GO I THINK

Re: Keynes' flaws - Stumbling and Mumbling
[cut-and-paste]
Neither rust-belt Americans nor Chicago gang-bangers are interested in up-to-date kitchens or two vans in the driveway. Both are most especially not interested in $10 an hour jobs.

Both would be very, very especially interested in $20 an hour jobs.

80 years ago Congress forgot to put criminal enforcement in the NLRA(a). Had union busting been a felony all along we would be like Germany today. Maybe at some point our progressives might note that collective bargaining is the T-Rex in the room -- or the missing T-Rex.

The money is there for $20 jobs. 49 years -- and half the per capita income ago -- the fed min wage was $11. Since then the bottom 45% went from 20% overall income share to 10% -- while the top 1% went from 10% to 20%.

How to get it -- how to get collective bargaining set up? States can make union busting a felony without worrying about so-called federal preemption:

+ a state law sanctioning wholesalers, for instance, using market power to block small retail establishments from combining their bargaining power could be the same one that makes union busting a felony -- overlap like min wage laws -- especially since on crim penalties the fed has left nothing to overlap since 1935

+ First Amendment right to collectively bargain cannot be forced by the fed down (the current) impassable road. Double ditto for FedEx employees who have to hurdle the whole-nation-at-once certification election barrier

+ for contrast, examples of state infringement on federal preemption might be a state finding of union busting leading to a mandate for an election under the fed setup -- or any state certification setup for labor already covered by NLRA(a) or RLA(a). (Okay for excluded farm workers.)

Collective bargaining would ameliorate much competition for jobs from immigrants because labor's price would be set by how much the consumer can be squeezed before (s)he goes somewhere else -- not by how little the most desperate worker will hire on for. Your kid will be grabbed before somebody still mastering English.

Centralized bargaining (sector wide labor agreements) practiced by the Teamster's National Master Freight Agreement -- also by French Canada, continental Europe and I think Argentina and Indonesia -- blocks the Walmart-killing-supermarket-contracts race to the bottom. Airline employees would kill for centralized too.

Republicans would have no place to hide -- rehabs US labor market -- all (truly) free market.

Truly populist up politics in the long run reduce financialization, for-profit scams, phara gouging, etc. etc., etc. Dean of Washington press corps said when he came to Washington (1950s?) all the lobbyists were union.

PS. After I explained the American spinning wheels labor market to my late brother John (we were not even talking about race), he came back with: "Martin Luther King got his people on the up escalator just in time for it to start going down for everybody."

Peter K. -> Denis Drew ... , March 29, 2017 at 06:52 AM
I agree. All of the center-left are like Keynes in a bad way. Chris Dillow nails it.

The center-left are technocrats and don't really believe in unions or economic democracy.

They're all about the meritocracy and so instead of arguing for workers to get organized and political and instead of arguing for a hot economy so labor markets are tight, they scold workers for not "skilling up" and acquiring the skills business want for their jobs.

They enjoy scolding the backward rural and dying manufacturing towns where the large employers have closed.

The technocrats are running the economy the best they can, it's up to the workers to educate themselves so they can be "competitive" on international markets.

Meanwhile for the past 40 years the technocrats have been doing a poor job.

(or maybe a good job from their sponsors' perspective as Chris Dillow points out.)

DeLong is right about mainstream economics. SWL is wrong. "Mainstream" economics is complicit as the technocrats are complicit.

Peter K. -> Peter K.... , March 29, 2017 at 06:53 AM
Perhaps even DeLong is too much like Keynes and too much the "neoliberal" technocrat to understand why businessmen keep voting Republican even though the economy does better on Democrats.

[Mar 29, 2017] Job Loss in Manufacturing: More Robot Blaming

Mar 29, 2017 | economistsview.typepad.com
anne , March 29, 2017 at 06:11 AM
http://cepr.net/blogs/ beat-the-press/job-loss-in-manufacturing-more-robot-blaming

March 29, 2017

It is striking how the media feel such an extraordinary need to blame robots and productivity growth for the recent job loss in manufacturing rather than trade. We got yet another example of this exercise in a New York Times piece * by Claire Cain Miller, with the title "evidence that robots are winning the race for American jobs." The piece highlights a new paper * by Daron Acemoglu and Pascual Restrepo which finds that robots have a large negative impact on wages and employment.

While the paper has interesting evidence on the link between the use of robots and employment and wages, some of the claims in the piece do not follow. For example, the article asserts:

"The paper also helps explain a mystery that has been puzzling economists: why, if machines are replacing human workers, productivity hasn't been increasing. In manufacturing, productivity has been increasing more than elsewhere - and now we see evidence of it in the employment data, too."

Actually, the paper doesn't provide any help whatsoever in solving this mystery. Productivity growth in manufacturing has almost always been more rapid than productivity growth elsewhere. Furthermore, it has been markedly slower even in manufacturing in recent years than in prior decades. According to the Bureau of Labor Statistics, productivity growth in manufacturing has averaged less than 1.2 percent annually over the last decade and less than 0.5 percent over the last five years. By comparison, productivity growth averaged 2.9 percent a year in the half century from 1950 to 2000.

The article is also misleading in asserting:

"The paper adds to the evidence that automation, more than other factors like trade and offshoring that President Trump campaigned on, has been the bigger long-term threat to blue-collar jobs (emphasis added)."

In terms of recent job loss in manufacturing, and in particular the loss of 3.4 million manufacturing jobs between December of 2000 and December of 2007, the rise of the trade deficit has almost certainly been the more important factor. We had substantial productivity growth in manufacturing between 1970 and 2000, with very little loss of jobs. The growth in manufacturing output offset the gains in productivity. The new part of the story in the period from 2000 to 2007 was the explosion of the trade deficit to a peak of nearly 6.0 percent of GDP in 2005 and 2006.

It is also worth noting that we could in fact expect substantial job gains in manufacturing if the trade deficit were reduced. If the trade deficit fell by 2.0 percentage points of GDP ($380 billion a year) this would imply an increase in manufacturing output of more than 22 percent. If the productivity of the manufacturing workers producing this additional output was the same as the rest of the manufacturing workforce it would imply an additional 2.7 million jobs in manufacturing. That is more jobs than would be eliminated by productivity at the recent 0.5 percent growth rate over the next forty years, even assuming no increase in demand over this period.

While the piece focuses on the displacement of less educated workers by robots and equivalent technology, it is likely that the areas where displacement occurs will be determined in large part by the political power of different groups. For example, it is likely that in the not distant future improvements in diagnostic technology will allow a trained professional to make more accurate diagnoses than the best doctor. Robots are likely to be better at surgery than the best surgeon. The extent to which these technologies will be be allowed to displace doctors is likely to depend more on the political power of the American Medical Association than the technology itself.

Finally, the question of whether the spread of robots will lead to a transfer of income from workers to the people who "own" the robots will depend to a large extent on our patent laws. In the last four decades we have made patents longer and stronger. If we instead made them shorter and weaker, or better relied on open source research, the price of robots would plummet and workers would be better positioned to capture than gains of productivity growth as they had in prior decades. In this story it is not robots who are taking workers' wages, it is politicians who make strong patent laws.

* https://www.nytimes.com/2017/03/28/upshot/evidence-that-robots-are-winning-the-race-for-american-jobs.html

** http://economics.mit.edu/files/12154

-- Dean Baker

anne -> anne... , March 29, 2017 at 06:14 AM
https://fred.stlouisfed.org/graph/?g=d6j3

November 1, 2014

Total Factor Productivity at Constant National Prices for United States, 1950-2014


https://fred.stlouisfed.org/graph/?g=d6j7

November 1, 2014

Total Factor Productivity at Constant National Prices for United States, 1950-2014

(Indexed to 1950)

anne -> anne... , March 29, 2017 at 09:31 AM
https://fred.stlouisfed.org/graph/?g=dbjg

January 4, 2016

Manufacturing Multifactor Productivity, 1988-2014

(Indexed to 1988)


https://fred.stlouisfed.org/graph/?g=dbke

January 4, 2016

Manufacturing Multifactor Productivity, 2000-2014

(Indexed to 2000)

[Mar 29, 2017] I fear Summers at least as much as I fear robots

Mar 29, 2017 | economistsview.typepad.com
anne -> RC AKA Darryl, Ron... , March 29, 2017 at 06:17 AM
https://www.washingtonpost.com/news/wonk/wp/2017/03/27/larry-summers-mnuchins-take-on-artificial-intelligence-is-not-defensible/

March 27, 2017

The robots are coming, whether Trump's Treasury secretary admits it or not
By Lawrence H. Summers - Washington Post

As I learned (sometimes painfully) during my time at the Treasury Department, words spoken by Treasury secretaries can over time have enormous consequences, and therefore should be carefully considered. In this regard, I am very surprised by two comments made by Secretary Steven Mnuchin in his first public interview last week.

In reference to a question about artificial intelligence displacing American workers,Mnuchin responded that "I think that is so far in the future - in terms of artificial intelligence taking over American jobs - I think we're, like, so far away from that [50 to 100 years], that it is not even on my radar screen." He also remarked that he did not understand tech company valuations in a way that implied that he regarded them as excessive. I suppose there is a certain internal logic. If you think AI is not going to have any meaningful economic effects for a half a century, then I guess you should think that tech companies are overvalued. But neither statement is defensible.

Mnuchin's comment about the lack of impact of technology on jobs is to economics approximately what global climate change denial is to atmospheric science or what creationism is to biology. Yes, you can debate whether technological change is in net good. I certainly believe it is. And you can debate what the job creation effects will be relative to the job destruction effects. I think this is much less clear, given the downward trends in adult employment, especially for men over the past generation.

But I do not understand how anyone could reach the conclusion that all the action with technology is half a century away. Artificial intelligence is behind autonomous vehicles that will affect millions of jobs driving and dealing with cars within the next 15 years, even on conservative projections. Artificial intelligence is transforming everything from retailing to banking to the provision of medical care. Almost every economist who has studied the question believes that technology has had a greater impact on the wage structure and on employment than international trade and certainly a far greater impact than whatever increment to trade is the result of much debated trade agreements....

DrDick -> anne... , March 29, 2017 at 10:45 AM
Oddly, the robots are always coming in articles like Summers', but they never seem to get here. Automation has certainly played a role, but outsourcing has been a much bigger issue.
Peter K. -> DrDick ... , March 29, 2017 at 01:09 PM
I'm becoming increasing skeptical about the robots argument.
jonny bakho -> DrDick ... , March 29, 2017 at 05:13 PM
They are all over our manufacturing plants.
They just don't look like C3PO
JohnH -> RC AKA Darryl, Ron... , March 29, 2017 at 06:21 AM
I fear Summers at least as much as I fear robots...
Peter K. -> JohnH... , March 29, 2017 at 07:04 AM
He's just a big bully, like our PGL.

He has gotten a lot better and was supposedly pretty good when advising Obama, but he's sort of reverted to form with the election of Trump and the prominence of the debate on trade policy.

RC AKA Darryl, Ron -> JohnH... , March 29, 2017 at 07:15 AM
Ditto.

Technology rearranges and changes human roles, but it makes entries on both sides of the ledger. On net as long as wages grow then so will the economy and jobs. Trade deficits only help financial markets and the capital owning class.

Paine -> RC AKA Darryl, Ron... , March 29, 2017 at 09:59 AM
There is no limit to jobs
Macro policy and hours regulation
can create

We can both ration job hours And subsidies job wage rates
and at the same time
generate
As many jobs as wanted

All economic rents could be converted into wage subsidies
To boost the per hour income from jobs as well as incentivize diligence skill and creativity

RC AKA Darryl, Ron -> Paine... , March 29, 2017 at 12:27 PM
Works for me.
yuan -> Paine... , March 29, 2017 at 03:50 PM
jobs, jobs, jobs.

some day we will discard with feudal concepts, such as, working for the "man". a right to liberty and the pursuit of happiness is a right to income.

tax those bots!

yuan -> yuan... , March 29, 2017 at 03:51 PM
or better yet...collectivize the bots.
RGC -> RC AKA Darryl, Ron... , March 29, 2017 at 08:47 AM
Summers is a good example of those economists that never seem to pay a price for their errors.

Imo, he should never be listened to. His economics is faulty. His performance in the Clinton administration and his part in the Russian debacle should be enough to consign him to anonymity. People would do well to ignore him.

Peter K. -> RGC... , March 29, 2017 at 09:36 AM
Yeah he's one of those expert economists and technocrats who never admit fault. You don't become Harvard President or Secretary of the Treasury by doing that.

One time that Krugman has admitted error was about productivity gains in the 1990s. He said he didn't see the gains from computers in the numbers and it wasn't and they weren't there at first, but later productivity numbers increased.

It was sort of like what Summers and Munchkin are talking discussing, but there's all sorts of debate about measuring productivity and what it means.

RC AKA Darryl, Ron -> RGC... , March 29, 2017 at 12:29 PM
Yeah. I am not a fan of Summers's, but I do like summers as long as it does not rain too much or too little and I have time to fish.

[Mar 28, 2017] normal use of resources = Normal rate of wage growth suppression

Mar 28, 2017 | economistsview.typepad.com

Paine -> Peter K.... , March 28, 2017 at 12:04 PM

"normal use of resources "

Translation

Normal rate of wage growth suppression

"Volatility" here means an asset market contraction

Yes the capitalist class needs to be protected from excessive policy induced capital loses !

Would that the fed were as concerned about lost potential wage gains

[Mar 26, 2017] Plant-Closing Threats, Union Organizing and the North American Free Trade Agreement

Notable quotes:
"... These overall percentages actually underestimate the extent employers use plant-closing threats, since they include industries and sectors of the economy where threats to shut down and move facilities are much less likely and carry less weight because the industry or product is less mobile. In mobile industries such as manufacturing, transportation and warehouse/distribution, the percentage of campaigns with plant-closing threats is 62 percent, compared to only 36 percent in relatively immobile industries such as construction, health care, education, retail and other services. Where employers can credibly threaten to shut down or move their operations in response to union activity, they do so in large numbers. ..."
economistsview.typepad.com

anne -> anne... March 24, 2017 at 05:22 AM

http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1018&context=cbpubs

March, 1997

We 'll Close! Plant Closings, Plant-Closing Threats, Union Organizing and the North American Free Trade Agreement
By Kate Bronfenbrenner

Abstract

This article is based on "Final Report: The Effects of Plant Closing or Threat of Plant Closing on the Right of Workers to Organize." The report was commissioned by the tri-national Labor Secretariat of the Commission for Labor Cooperation (the North American Free Trade Agreement labor commission) "on the effects of the sudden closing of the plant on the principle of freedom of association and the right of workers to organize in the three countries."

Plant-closing threats and actual plant closings are extremely pervasive and effective components of U.S. employer anti-union strategies. From 1993 to 1995, employers threatened to close the plant in 50 percent of all union certification elections and in 52 percent of all instances where the union withdrew from its organizing drive ("withdrawals"). In another 18 percent of the campaigns, the employer threatened to close the plant during the first-contract campaign after the election was won.

Nearly 12 percent of employers followed through on threats made during the organizing campaign and shut down all or part of the plant before the first contract was negotiated. Almost 4 percent of employers closed down the plant before a second contract was reached.

This 15 percent shutdown rate within two years of the certification election victory is triple the rate found by researchers who examined post-election plant-closing rates in the late 1980s, before the North American Free Trade Agreement (NAFTA) went into effect.

These overall percentages actually underestimate the extent employers use plant-closing threats, since they include industries and sectors of the economy where threats to shut down and move facilities are much less likely and carry less weight because the industry or product is less mobile. In mobile industries such as manufacturing, transportation and warehouse/distribution, the percentage of campaigns with plant-closing threats is 62 percent, compared to only 36 percent in relatively immobile industries such as construction, health care, education, retail and other services. Where employers can credibly threaten to shut down or move their operations in response to union activity, they do so in large numbers.

[Mar 24, 2017] There is no such thing as an automated factory. Manufacturing is done by people, *assisted* by automation. Or only part of the production pipeline is automated, but people are still needed to fill in the not-automated pieces

Notable quotes:
"... And it is not only automation vs. in-house labor. There is environmental/compliance cost (or lack thereof) and the fully loaded business services and administration overhead, taxes, etc. ..."
"... When automation increased productivity in agriculture, the government guaranteed free high school education as a right. ..."
"... Now Democrats like you would say it's too expensive. So what's your solution? You have none. You say "sucks to be them." ..."
"... And then they give you the finger and elect Trump. ..."
"... It wasn't only "low-skilled" workers but "anybody whose job could be offshored" workers. Not quite the same thing. ..."
"... It also happened in "knowledge work" occupations - for those functions that could be separated and outsourced without impacting the workflow at more expense than the "savings". And even if so, if enough of the competition did the same ... ..."
"... And not all outsourcing was offshore - also to "lowest bidders" domestically, or replacing "full time" "permanent" staff with contingent workers or outsourced "consultants" hired on a project basis. ..."
"... "People sure do like to attribute the cause to trade policy." Because it coincided with people watching their well-paying jobs being shipped overseas. The Democrats have denied this ever since Clinton and the Republicans passed NAFTA, but finally with Trump the voters had had enough. ..."
"... Why do you think Clinton lost Wisconsin, Michigan, Pennysylvania and Ohio? ..."
Feb 20, 2017 | economistsview.typepad.com
Sanjait -> Peter K.... February 20, 2017 at 01:55 PM

People sure do like to attribute the cause to trade policy.

Do you honestly believe that fact makes it true? If not, what even is your point? Can you even articulate one?

Tom aka Rusty -> Sanjait... , February 20, 2017 at 01:18 PM

If it was technology why do US companies buy from low labor producers at the end of supply chains 2000 - 10000 miles away? Why the transportation cost. Automated factories could be built close by.

ken melvin said in reply to Tom aka Rusty... , February 20, 2017 at 02:24 PM
Send for an accountant.
cm -> Tom aka Rusty... , February 20, 2017 at 03:14 PM
There is no such thing as an automated factory. Manufacturing is done by people, *assisted* by automation. Or only part of the production pipeline is automated, but people are still needed to fill in the not-automated pieces.

And it is not only automation vs. in-house labor. There is environmental/compliance cost (or lack thereof) and the fully loaded business services and administration overhead, taxes, etc.

You should know this, and I believe you do.

Peter K. said in reply to Sanjait... , February 20, 2017 at 03:14 PM
Trade policy put "low-skilled" workers in the U.S. in competition with workers in poorer countries. What did you think was going to happen? The Democrat leadership made excuses. David Autor's TED talk stuck with me. When automation increased productivity in agriculture, the government guaranteed free high school education as a right.

Now Democrats like you would say it's too expensive. So what's your solution? You have none. You say "sucks to be them."

And then they give you the finger and elect Trump.

cm -> Peter K.... , February 20, 2017 at 03:19 PM
It wasn't only "low-skilled" workers but "anybody whose job could be offshored" workers. Not quite the same thing.

It also happened in "knowledge work" occupations - for those functions that could be separated and outsourced without impacting the workflow at more expense than the "savings". And even if so, if enough of the competition did the same ...

And not all outsourcing was offshore - also to "lowest bidders" domestically, or replacing "full time" "permanent" staff with contingent workers or outsourced "consultants" hired on a project basis.

Peter K. said in reply to cm... , February 20, 2017 at 03:33 PM
True.
Peter K. said in reply to Sanjait... , February 20, 2017 at 03:35 PM
"People sure do like to attribute the cause to trade policy." Because it coincided with people watching their well-paying jobs being shipped overseas. The Democrats have denied this ever since Clinton and the Republicans passed NAFTA, but finally with Trump the voters had had enough.

Why do you think Clinton lost Wisconsin, Michigan, Pennysylvania and Ohio?

[Mar 24, 2017] Paltering as a new way to not tell the truth

Notable quotes:
"... The palter was to skip the fact that it had broken down twice in the last year, instead saying, "This car drives very smoothly and is very responsive. Just last week it started up with no problems when the temperature was 5 degrees Fahrenheit." The outright lie would have been: "This car has never had problems." Researchers learned that car sellers perceived paltering as more ethical than lying, and thus used it more. ..."
"... Paltering allows people who consider themselves honest to deceive others while getting the same results that lying would. In a third experiment, participants in a pretend real estate negotiation performed just as well when they paltered as they did when they lied. Their successes didn't come without costs, however. When the deception was discovered, negotiation partners deemed palterers as untrustworthy as liars. ..."
"... One occasional advantage of paltering over lying is plausible deniability: You can blame any misunderstanding on the listener. ..."
"... So how can you avoid falling victim? "If you ask a specific question, that specific question should be answered, not a variant of it," Rogers says, even though insistence on clarification "often makes you look like a jerk." ..."
"... Paltering relies on our tendency to trust others and not cause a scene. ..."
Mar 19, 2017 | economistsview.typepad.com
Fred C. Dobbs : March 18, 2017 at 08:39 PM , 2017 at 08:39 PM 'Paltering,' a new way to not tell the truth
http://www.bostonglobe.com/ideas/2017/03/17/paltering-new-way-not-tell-truth/TRB2ap22NK5Ya8KjF4x0GI/story.html?event=event25 via @BostonGlobe
Matthew Hutson - March 17, 2017

... ... ..

Although paltering occurs in all realms of life, researchers at Harvard's Kennedy School of Government focused on its use in negotiation. In one of eight studies to be published in the Journal of Personality and Social Psychology, study participants pretended to sell a used car on eBay. They answered the buyer's question "Has this car ever had problems?" with a response selected from a list supplied by the researchers.

The palter was to skip the fact that it had broken down twice in the last year, instead saying, "This car drives very smoothly and is very responsive. Just last week it started up with no problems when the temperature was 5 degrees Fahrenheit." The outright lie would have been: "This car has never had problems." Researchers learned that car sellers perceived paltering as more ethical than lying, and thus used it more.

In another study, half of surveyed executives said they paltered in more than "a few" of their negotiations, versus a fifth who said they actively lied more than a few times. Consistent with this discrepancy, executives viewed the behavior as more honest than lying.

Paltering allows people who consider themselves honest to deceive others while getting the same results that lying would. In a third experiment, participants in a pretend real estate negotiation performed just as well when they paltered as they did when they lied. Their successes didn't come without costs, however. When the deception was discovered, negotiation partners deemed palterers as untrustworthy as liars.

Another study found that victims saw palterers as less ethical than palterers saw themselves. We have a "broken mental model" of paltering, the researchers have concluded, seeing this behavior as honest when others do not.

One occasional advantage of paltering over lying is plausible deniability: You can blame any misunderstanding on the listener. Without knowing the speaker's intentions, it's difficult to diagnose paltering with certainty says Todd Rogers, a behavioral scientist at the Kennedy School and the paper's lead author. Few examples are as clear as Bill Clinton's response when asked if he'd had a sexual relationship with Monica Lewinsky: "There is not a sexual relationship - that is accurate." (Note the slick use of present tense.)

So how can you avoid falling victim? "If you ask a specific question, that specific question should be answered, not a variant of it," Rogers says, even though insistence on clarification "often makes you look like a jerk."

Paltering relies on our tendency to trust others and not cause a scene. "It's pretty amazing how much you can get away with because of people's truth bias," says David Clementson, a researcher at Ohio State University's School of Communication, who was not involved in the study. "Paltering totally takes advantage of that, diabolically and deceptively."

Artful Paltering: The Risks and Rewards
of Using Truthful Statements to Mislead Others
Rogers, Todd; Zeckhauser, Richard; et al.
Journal of Personality and Social Psychology,
Vol 112(3), Mar 2017,
https://www.apa.org/pubs/journals/releases/psp-pspi0000081.pdf

There's a Word for Using
Truthful Facts to Deceive: Paltering
HBR - Francesca Gino - October 05, 2016
https://hbr.org/2016/10/theres-a-word-for-using-truthful-facts-to-deceive-paltering

[Mar 24, 2017] We are in a sea of McJobs

Feb 26, 2017 | http://economistsview.typepad.com/economistsview/2017/02/links-for-02-24-17.html
RC AKA Darryl, Ron -> RC AKA Darryl, Ron... February 24, 2017 at 10:05 AM

Instead of looking at this as an excuse for job losses due to trade deficits then we should be seeing it as a reason to gain back manufacturing jobs in order to retain a few more decent jobs in a sea of garbage jobs. Mmm. that's so wrong. Working on garbage trucks are now some of the good jobs in comparison. A sea of garbage jobs would be an improvement. We are in a sea of McJobs.

Paine -> RC AKA Darryl, Ron... February 24, 2017 at 04:25 AM ,
Assembly lines paid well post CIO
They were never intrinsically rewarding

A family farm or work shop of their own
Filled the dreams of the operatives

Recall the brilliantly ironic end of Rene Clair's a la nous la Liberte

Fully automated plant with the former operatives enjoying endless picnic frolic

Work as humans' prime want awaits a future social configuration

RC AKA Darryl, Ron -> Paine... , February 24, 2017 at 11:27 AM
Yes sir, often enough but not always. I had a great job as an IT large systems capacity planner and performance analyst, but not as good as the landscaping, pool, and lawn maintenance for myself that I enjoy now as a leisure occupation in retirement. My best friend died a greens keeper, but he preferred landscaping when he was young. Another good friend of mine was a poet, now dying of cancer if depression does not take him first.

But you are correct, no one but the welders, material handlers (paid to lift weights all day), machinists, and then almost every one else liked their jobs at Virginia Metal Products, a union shop, when I worked there the summer of 1967. That was on the swing shift though when all of the big bosses were at home and out of our way. On the green chain in the lumber yard of Kentucky flooring everyone but me wanted to leave, but my mom made me go into the VMP factory and work nights at the primer drying kiln stacking finished panel halves because she thought the work on the green chain was too hard. The guys on the green chain said that I was the first high school graduate to make it past lunch time on their first day. I would have been buff and tan by the end of summer heading off to college (where I would drop out in just ten weeks) had my mom not intervened.

As a profession no group that I know is happier than auto mechanics that do the same work as a hobby on their hours off that they do for a living at work, at least the hot rod custom car freaks at Jamie's Exhaust & Auto Repair in Richmond, Virginia are that way. The power tool sales and maintenance crew at Arthur's Electric Service Inc. enjoy their jobs too.

Despite the name which was on their incorporation done back when they rebuilt auto generators, Arthur's sells and services lawnmowers, weed whackers, chain saws and all, but nothing electric. The guy in the picture at the link is Robert Arthur, the founder's son who is our age roughly.

http://www.arthurselectric.com/

[Mar 24, 2017] New research identifies a 'sea of despair' among white, working-class Americans

Notable quotes:
"... Anne Case and Angus Deaton garnered national headlines in 2015 when they reported that the death rate of midlife non-Hispanic white Americans had risen steadily since 1999 in contrast with the death rates of blacks, Hispanics and Europeans. Their new study extends the data by two years and shows that whatever is driving the mortality spike is not easing up. ..."
"... less-educated white Americans who struggle in the job market in early adulthood are likely to experience a "cumulative disadvantage" over time, with health and personal problems that often lead to drug overdoses, alcohol-related liver disease and suicide. ..."
Mar 24, 2017 | economistsview.typepad.com
anne -> George H. Blackford ... March 24, 2017 at 05:00 AM
https://www.washingtonpost.com/national/health-science/new-research-identifies-a-sea-of-despair-among-white-working-class-americans/2017/03/22/c777ab6e-0da6-11e7-9b0d-d27c98455440_story.html

March 23, 2017

New research identifies a 'sea of despair' among white, working-class Americans
By Joel Achenbach and Dan Keating - Washington Post

Sickness and early death in the white working class could be rooted in poor job prospects for less-educated young people as they first enter the labor market, a situation that compounds over time through family dysfunction, social isolation, addiction, obesity and other pathologies, according to a study published Thursday by two prominent economists.

Anne Case and Angus Deaton garnered national headlines in 2015 when they reported that the death rate of midlife non-Hispanic white Americans had risen steadily since 1999 in contrast with the death rates of blacks, Hispanics and Europeans. Their new study extends the data by two years and shows that whatever is driving the mortality spike is not easing up.

The two Princeton professors say the trend affects whites of both sexes and is happening nearly everywhere in the country. Education level is significant: People with a college degree report better health and happiness than those with only some college, who in turn are doing much better than those who never went.

[Graph]

Offering what they call a tentative but "plausible" explanation, they write that less-educated white Americans who struggle in the job market in early adulthood are likely to experience a "cumulative disadvantage" over time, with health and personal problems that often lead to drug overdoses, alcohol-related liver disease and suicide.

"Ultimately, we see our story as about the collapse of the white, high-school-educated working class after its heyday in the early 1970s, and the pathologies that accompany that decline," they conclude....

anne -> anne... , March 24, 2017 at 05:26 AM
https://fred.stlouisfed.org/graph/?g=d5HR

January 4, 2017

Employment-Population Ratios, * 2000-2017

* Bachelor's Degree and Higher, Some College or Associate Degree, High School Graduates, No College; Employment age 25 and over

jonny bakho said in reply to anne... , March 24, 2017 at 05:26 AM
The white working class only thrived because of unions

Reagan destroyed the unions

The white working class abandoned the unions and the Dems for white christian patriarchal identity politics.

They vote to prop up a dying culture that is not adapted to the modern economy.

The culture is dysfunctional and must change, but people would rather fight the windmills of economic change than travel the difficult road of cultural change

anne -> jonny bakho... , March 24, 2017 at 05:52 AM
http://www.bls.gov/webapps/legacy/cpslutab3.htm

January 15, 2017

United States Union Membership Rates, 1992-2016

Private wage and salary workers

1992 ( 11.5)
1993 ( 11.2) Clinton
1994 ( 10.9)

1995 ( 10.4)
1996 ( 10.2)
1997 ( 9.8)
1998 ( 9.6)
1999 ( 9.5)

2000 ( 9.0)
2001 ( 8.9) Bush
2002 ( 8.6)
2003 ( 8.2)
2004 ( 7.9)

2005 ( 7.8)
2006 ( 7.4)
2007 ( 7.5)
2008 ( 7.6)
2009 ( 7.2) Obama

2010 ( 6.9)
2011 ( 6.9)
2012 ( 6.6)
2013 ( 6.7)
2014 ( 6.6)

2015 ( 6.7)
2016 ( 6.4)

[Mar 23, 2017] Automation threat is more complex than it looks

Mar 23, 2017 | discussion.theguardian.com
, EndaFlannel , 17 Nov 2016 09:12
In theory, in the longer term, as robotics becomes the norm rather than the exception, there will be no advantage in chasing cheap labour around the world. Given ready access to raw materials, the labour costs of manufacturing in Birmingham should be no different to the labour costs in Beijing. This will require the democratisation of the ownership of technology. Unless national governments develop commonly owned technology the 1% will truly become the organ grinders and everyone else the monkeys. One has only to look at companies like Microsoft and Google to see a possible future - bigger than any single country and answerable to no one. Common ownership must be the future. Deregulation and market driven economics are the road technological serfdom.
, Physiocrat EndaFlannel , 17 Nov 2016 09:58
Except that the raw materials for steel production are available in vast quantities in China.

You are also forgetting land. The power remains with those who own it. Most of Central London is still owned by the same half dozen families as in 1600. Reply Share

, Colin Sandford EndaFlannel , 17 Nov 2016 10:29
You can only use robotics in countries that have the labour with the skills to maintain them.Robots do not look after themselves they need highly skilled technicians to keep them working. I once worked for a Japanese company and they only used robots in the higher wage high skill regions. In low wage economies they used manual labour and low tech products.

[Mar 22, 2017] Stephen Williamson New Monetarist Economics What is full employment anyway, and how would we know if we are there

Mar 22, 2017 | newmonetarism.blogspot.com
Sunday, March 19, 2017 What is full employment anyway, and how would we know if we are there? What are people talking about when they say "full employment?" Maybe they don't know either? Whatever it is, "full employment" is thought to be important for policy, particularly monetary policy. Indeed, it typically enters the monetary policy discussion as "maximum employment," the second leg of the Fed's dual mandate - the first leg being "price stability."

Perhaps surprisingly, there are still people who think the US economy is not at "full employment." I hate to pick on Narayana, but he's a convenient example. He posted this on his Twitter account:

Are we close to full emp? In steady state, emp. growth will be about 1.2M per year. It's about *twice* that in the data. (1) Employment is growing much faster than long run and inflation is still low. Conclusion: we're well below long run steady state. end
Also in an interview on Bloomberg, Narayana gives us the policy conclusion. Basically, he thinks there is still "slack" in the economy. My understanding is that "slack" means we are below "full employment."

So what is Narayana saying? I'm assuming he is looking at payroll employment - the employment number that comes from the establishment survey. In his judgement, in a "steady state," which for him seems to mean the "full employment" state, payroll employment would be growing at 1.2M per year, or 100,000 per month. But over the last three months, the average increase in payroll employment has exceeded 200,000 per month. So, if we accept all of Narayana's assumptions, we would say the US economy is below full employment - it has some catching up to do. According to Narayana, employment can grow for some time in excess of 100,000 jobs per month, until we catch up to full employment, and monetary policy should help that process along by refraining from interest rate hikes in the meantime.

Again, even if we accept all of Narayana's assumptions, we could disagree about his policy recommendation. Maybe the increase in the fed funds rate target will do little to impede the trajectory to full employment. Maybe it takes monetary policy a period of time to work, and by the time interest rate hikes have their effect we are at full employment. Maybe the interest rate hikes will allow the Fed to make progress on other policy goals than employment. But let's explore this issue in depth - let's investigate what we know about "full employment" and how we would determine from current data if we are there or not.

Where does Narayana get his 1.2M number from? Best guess is that he is looking at demographics. The working age population in the United States (age 15-64) has been growing at about 0.5% per year. But labor force participation has grown over time since World War II, and later cohorts have higher labor force participation rates. For example, the labor force participation rate of baby-boomers in prime working age was higher than the participation rate of the previous generation in prime working age. So, this would cause employment growth to be higher than population growth. That is, Narayana's assumptions imply employment growth of about 0.8% per year, which seems as good a number as any. Thus, the long-run growth path for the economy should exhibit a growth rate of about 0.8% per year - though there is considerable uncertainty about that estimate.

But, we measure employment in more than one way. This chart shows year-over-year employment growth from the establishment survey, and from the household survey (CPS): For the last couple of years, employment growth has been falling on trend, by both measures. But currently, establishment-survey employment is growing at 1.6% per year, and household survey employment is growing at 1.0% per year. The latter number is a lot closer to 0.8%. The establishment survey is what it says - a survey of establishments. The household survey is a survey of people. The advantages of the establishment survey are that it covers a significant fraction of all establishments, and reporting errors are less likely - firms generally have a good idea how many people are on their payrolls. But, the household survey has broader coverage (includes the self-employed for example) of the population, and it's collected in a manner consistent with the unemployment and labor force participation data - that's all from the same survey. There's greater potential for measurement error in the household survey, as people can be confused by the questions they're asked. You can see that in the noise in the growth rate data in the chart.

Here's another interesting detail: This chart looks at the ratio of household-survey employment to establishment-survey employment. Over long periods of time, these two measures don't grow at the same rate, due to changes over time in the fraction of workers who are in establishments vs. those who are not. For long-run employment growth rates, you should put more weight on the household survey number (as this is a survey of the whole working-age population), provided of course that some measurement bias isn't creeping into the household survey numbers over time. Note that, since the recession, establishment-survey employment has been growing at a significantly higher rate than household-survey employment.

So, I think that the conclusion is that we should temper our view of employment growth. Maybe it's much closer to a steady state rate than Narayana thinks.

But, on to some other measures of labor market performance. This chart shows the labor force participation rate (LFPR) and the employment-population ratio (EPOP). Here, focus on the last year. LFPR is little changed, increasing from 62.9% to 63.0%, and the same is true for EPOP, which increased from 59.8% to 60.0%. That looks like a labor market that has settled down, or is close to it.

A standard measure of labor market tightness that labor economists like to look at is the ratio of job vacancies to unemployment, here measured as the ratio of the job openings rate to the unemployment rate: So, by this measure the labor market is at its tightest since 2001. Job openings are plentiful relative to would-be workers.

People who want to argue that some slack remains in the labor market will sometimes emphasize unconventional measures of the unemployment rate: In the chart, U3 is the conventional unemployment rate, and U6 includes marginally attached workers (those not in the labor force who may be receptive to working) and those employed part-time for economic reasons. The U3 measure is not so far, at 4.7%, from its previous trough of 4.4% in March 2007, while the gap between current U6, at 9.2% and its previous trough, at 7.9% in December 2006, is larger. Two caveats here: (i) How seriously we want to take U6 as a measure of unemployment is an open question. There are problems even with conventional unemployment measures, in that we do not measure the intensity of search - one person's unemployment is different from another's - and survey participants' understanding of the questions they are asked is problematic. The first issue is no worse a problem for U6 than for U3, but the second issue is assuredly worse. For example, it's not clear what "employed part time for economic reasons" means to the survey respondent, or what it should mean to the average economist. Active search, as measured in U3, has a clearer meaning from an economic point of view, than an expressed desire for something one does not have - non-satiation is ubiquitous in economic systems, and removing it is just not feasible. (ii) What's a normal level for U6? Maybe the U6 measure in December 2006 was undesirably low, due to what was going on in housing and mortgage markets.

Another labor market measure that might be interpreted as indicating labor market slack is long term unemployment (unemployed 27 weeks or more) - here measured as a rate relative to the labor force: This measure is still somewhat elevated relative to pre-recession times. However, if we look at short term unemployment (5 weeks or less), this is unusually low: As well, the insured unemployment rate (those receiving unemployment insurance as a percentage of the labor force) is very low: To collect UI requires having worked recently, so this reflects the fact that few people are being laid off - transitions from employment to unemployment are low.

An interpretation of what is going on here is that the short-term and long-term unemployed are very different kinds of workers. In particular, they have different skills. Some skills are in high demand, others are not, and those who have been unemployed a long time have skills that are in low demand. A high level of long-term unemployed is consistent with elevated readings for U6 - people may be marginally attached or wanting to move from part-time to full-time work for the same reasons that people have been unemployed for a long time. What's going on may indicate a need for a policy response, but if the problem is skill mismatch, that's not a problem that has a monetary policy solution.

So, if the case someone wants to make is that the Fed should postpone interest rate increases because we are below full employment - that there is still slack in the labor market - then I think that's a very difficult case to make. We could argue all day about what an