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May the source be with you, but remember the KISS principle ;-)
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'ιtat  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 led to the situation in the US 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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[Dec 17, 2017] Identity politic is and attempt to swipe under the carpet contradictions based on money and economics power issues and replace them with something else like race, gender, age, etc.

Dec 17, 2017 | www.nakedcapitalism.com

JBird , December 16, 2017 at 5:14 pm

Yes, it can be used for that , but often the goal is to channel, and contain the thinking from or to whatever, not degrade. Using modern neoliberal economics as an example. The older 19th and early 20th century mainstream political economy were deeper, more comprehensive, and often better at explaining economics. It was also called political economy, and not just economics for that reason.

There was a real financed campaign to narrow the focus on what we call economics today. Part of that effort was to label people very narrowly as just economic beings, which is what libertarianism is, and to label economic thought outside of it as socialism/communism, which is Stalinism, which is the gulag, which is bad thought. The economists studying this were just as intelligent, thoughtful, and incisive, but the idea, the worm of people=money=economics created a thought stop, or an an un-acknowledgment of anything else, the inability to even see anything else.

I sometimes think some are against the masses getting any higher education because one is exposed to other ways of thinking, and believing. A student might never change their beliefs, but the mind is expanded for considering the possibilities and at looking at where others are coming from. Those mindworms are also more obvious, and less useful.

So you could be ninety year blockhead, but if you are willing to listen, to think on what you are exposed to in college, your mind is expanded and strengthen. Which is perhaps the main goal of a liberal arts education. Even a very hard college education will still have some of the same effect.

Plenue , December 16, 2017 at 6:45 pm

"The economists studying this were just as intelligent, thoughtful, and incisive, but the idea, the worm of people=money=economics created a thought stop, or an an un-acknowledgment of anything else, the inability to even see anything else."

So would you say identity politics is the same thing in reverse? Intelligent people looking at issues from every perspective but that of money and economics?

JBird , December 16, 2017 at 7:41 pm

Yes, as it is used now. It can be very important, but what I have against identity politics as it is done today is that it is the first and last answer to everything. Many people can see, they just think one's identity is paramount. MLK said it best when he talked about being judged for the content of their character rather than the color of their skin.

Please keep in mind that the identity being used could anything. Your sex, gender, orientation, age, class, religion, anything.

Today it's skin color, tomorrow?

[Dec 16, 2017] Indirect Effects of Unfair Employer Behavior on Workplace Performance by Matthias Heinz ,

Notable quotes:
"... Originally published at VoxEU ..."
"... Any organisation that needs to restructure, cut wages, or make layoffs needs to know how the employees who are not affected will respond. This column presents a field experiment which revealed that the perception that employers are unfair – in this case, as a result of layoffs – reduces the performance of employees who have not been not directly affected. As part of the experiment, experienced HR managers were able to successfully anticipate the consequences of unfair employer behaviour on unaffected workers. ..."
Dec 16, 2017 | www.nakedcapitalism.com

Sabrina Jeworrek , Vanessa Mertins , Heiner Schumacher , and Matthias Sutter .

Originally published at VoxEU

Yves here. There has been much gnashing of teeth in the US about lackluster productivity growth, with the citied culprits ranging from lack of fundamental breakthroughs to cheap labor costs discouraging investment. Almost entirely absent from consideration is poor management demotivating worker. This article helps fill that gap.

Any organisation that needs to restructure, cut wages, or make layoffs needs to know how the employees who are not affected will respond. This column presents a field experiment which revealed that the perception that employers are unfair – in this case, as a result of layoffs – reduces the performance of employees who have not been not directly affected. As part of the experiment, experienced HR managers were able to successfully anticipate the consequences of unfair employer behaviour on unaffected workers.

Management matters for the success and profitability of companies. We know that simple management practices – including the regular maintenance of machines, optimisation of inventory, or recording types of quality problems – can improve the productivity of companies substantially (Bloom et al. 2013). Many of these management practices relate to the structure of an organisation, in particular its workflow and how it is controlled. But the relationship between managers and workers is also important. This relationship is characterised by both the wage paid to a worker as an incentive to work hard, but also by the worker's perception that he or she is being treated fairly (Akerlof 1982).

If workers believe that their employer is acting unfairly towards them, this can greatly reduce their performance at work. For example, Mas (2008) demonstrated that the conflict between Caterpillar and its workforce in the 1990s led to lower production quality. It is not clear, though, whether workers react to employer behaviour that they think is unfair only if they are directly affected (for example, through wage cuts or reorganisation), or also if they are not directly affected (their colleagues suffer, but they do not). This distinction is important for any organisation that reorganises or lays off some of its workers.

Random Layoffs

In our new study, we set up a field experiment to measure how unaffected workers react to unfair employer behaviour (Heinz et al. 2017). We rented a call centre and hired 195 employees to conduct a telephone survey in two shifts. Overall, our organisation was very employee-friendly – we paid a generous hourly wage, offered flexible work times, a pleasant work atmosphere, and full discretion to workers how to perform their job. We measured individual performance precisely by the number of calls each worker made during a shift.

We used three treatments to identify the effect of unfair employer behaviour on the performance of unaffected workers:

To keep the remaining workers' prospects constant (in the only remaining shift), we made explicit that there would be no future employment possibilities in our organisation. We also paid the wage upon arrival for each shift. This meant that workers in the 'layoff' treatment knew at the beginning of the second shift that the layoffs of their co-workers could not have any consequences for them.

The Effect of Layoffs on Survivors

We found that the layoff announcement decreased the remaining workers' performance by 12% (Figure 1). In the 'layoff' treatment, workers took a longer break at the beginning of the second shift, and they left their workplace earlier than in the other treatments. The layoff announcement also lowered the quality of workers' output.

In contrast, there was no significant difference in performance between our 'no-layoff' and 'quasi-layoff' treatments. The reduction in staff size per se had no effect on performance. Further robustness checks revealed that our treatment differences were not driven by a change in beliefs about the importance of the job, or changes in perceptions of the management's competence. Since our employees worked in single offices, and few of them had social ties to employees from other treatments, we can largely rule out peer effects.

Figure 1 Difference in performance (number of calls made) between the first and second shift in the 'no layoff', 'quasi-layoff' and 'layoff' treatment

Source : Heinz et al. (2017).

After the field experiment, we conducted surveys with our workers. Overall, workers in all treatments were quite satisfied with their salary, the management's behaviour towards them, and the atmosphere in the call centre. The remaining workers in the 'layoff' treatment, however, were significantly less satisfied with management behaviour towards their colleagues than the workers in the other treatments. We also asked workers from the 'layoff' treatment which parts of the layoff announcement they considered anti-social. Their answers indicate that they saw the layoffs per se, and the random selection of workers, as particularly unfair.

To back up our interpretation of the data, we conducted a prediction experiment with 43 professional human resource managers from medium-sized and large companies in Germany (they had, on average, eight years of professional experience). We explained our call centre setting and our treatment variation to them, and then asked them to predict the change in workplace performance between the first and second shifts.

The HR managers' predictions were remarkably accurate, in the aggregate. They predicted that performance in the 'layoff' treatment would drop significantly between the first and second shift, and that would drop only slightly in the other treatments. A large majority of the HR managers mentioned fairness concerns as the main reason for the performance reduction.

Maintaining Productivity During Layoffs

Our results imply that unfair behaviour towards workers can be costly for the employer, even if the only workers who are directly affected have quit the firm. This is important for any organisation that has to accommodate economic shocks by reducing labour costs.

To reduce or mitigate the costs of supposedly unfair acts, organisations could apply a number of HR practices. They could use HR practices that avoid layoffs (for example using natural fluctuation in the workforce). They could provide severance pay or outplacement services. They might shift the blame to interim managers or business consultants. They could also separate profitable and unprofitable business units, and downsize only the unprofitable units. These practices may help employers to maintain a productive relationship with their workforce.

[Dec 15, 2017] Rise and Decline of the Welfare State, by James Petras

Highly recommended!
Petras did not mention that it was Carter who started neoliberalization of the USA. The subsequent election of Reagan signified the victory of neoliberalism in this country or "quite coup". The death of New Deal from this point was just a matter of time. Labor relations drastically changes and war on union and atomization of workforce are a norm.
Welfare state still exists but only for corporation and MIC. Otherwise the New Deal society is almost completely dismanted.
It is true that "The ' New Deal' was, at best, a de facto ' historical compromise' between the capitalist class and the labor unions, mediated by the Democratic Party elite. It was a temporary pact in which the unions secured legal recognition while the capitalists retained their executive prerogatives." But the key factor in this compromise was the existence of the USSR as a threat to the power of capitalists in the USA. when the USSR disappeared cannibalistic instincts of the US elite prevailed over caution.
Notable quotes:
"... The earlier welfare 'reforms' and the current anti-welfare legislation and austerity practices have been accompanied by a series of endless imperial wars, especially in the Middle East. ..."
"... In the 1940's through the 1960's, world and regional wars (Korea and Indo-China) were combined with significant welfare program – a form of ' social imperialism' , which 'buy off' the working class while expanding the empire. However, recent decades are characterized by multiple regional wars and the reduction or elimination of welfare programs – and a massive growth in poverty, domestic insecurity and poor health. ..."
"... modern welfare state' ..."
"... Labor unions were organized as working class strikes and progressive legislation facilitated trade union organization, elections, collective bargaining rights and a steady increase in union membership. Improved work conditions, rising wages, pension plans and benefits, employer or union-provided health care and protective legislation improved the standard of living for the working class and provided for 2 generations of upward mobility. ..."
"... Social Security legislation was approved along with workers' compensation and the forty-hour workweek. Jobs were created through federal programs (WPA, CCC, etc.). Protectionist legislation facilitated the growth of domestic markets for US manufacturers. Workplace shop steward councils organized 'on the spot' job action to protect safe working conditions. ..."
"... World War II led to full employment and increases in union membership, as well as legislation restricting workers' collective bargaining rights and enforcing wage freezes. Hundreds of thousands of Americans found jobs in the war economy but a huge number were also killed or wounded in the war. ..."
"... So-called ' right to work' ..."
"... Trade union officials signed pacts with capital: higher pay for the workers and greater control of the workplace for the bosses. Trade union officials joined management in repressing rank and file movements seeking to control technological changes by reducing hours (" thirty hours work for forty hours pay ..."
"... Trade union activists, community organizers for rent control and other grassroots movements lost both the capacity and the will to advance toward large-scale structural changes of US capitalism. Living standards improved for a few decades but the capitalist class consolidated strategic control over labor relations. While unionized workers' incomes, increased, inequalities, especially in the non-union sectors began to grow. With the end of the GI bill, veterans' access to high-quality subsidized education declined ..."
"... With the election of President Carter, social welfare in the US began its long decline. The next series of regional wars were accompanied by even greater attacks on welfare via the " Volker Plan " – freezing workers' wages as a means to combat inflation. ..."
"... Guns without butter' became the legislative policy of the Carter and Reagan Administrations. The welfare programs were based on politically fragile foundations. ..."
"... The anti-labor offensive from the ' Oval Office' intensified under President Reagan with his direct intervention firing tens of thousands of striking air controllers and arresting union leaders. Under Presidents Carter, Reagan, George H.W. Bush and William Clinton cost of living adjustments failed to keep up with prices of vital goods and services. Health care inflation was astronomical. Financial deregulation led to the subordination of American industry to finance and the Wall Street banks. De-industrialization, capital flight and massive tax evasion reduced labor's share of national income. ..."
"... The capitalist class followed a trajectory of decline, recovery and ascendance. Moreover, during the earlier world depression, at the height of labor mobilization and organization, the capitalist class never faced any significant political threat over its control of the commanding heights of the economy ..."
"... Hand in bloody glove' with the US Empire, the American trade unions planted the seeds of their own destruction at home. The local capitalists in newly emerging independent nations established industries and supply chains in cooperation with US manufacturers. Attracted to these sources of low-wage, violently repressed workers, US capitalists subsequently relocated their factories overseas and turned their backs on labor at home. ..."
"... President 'Bill' Clinton ravaged Russia, Yugoslavia, Iraq and Somalia and liberated Wall Street. His regime gave birth to the prototype billionaire swindlers: Michael Milken and Bernard 'Bernie' Madoff. ..."
"... Clinton converted welfare into cheap labor 'workfare', exploiting the poorest and most vulnerable and condemning the next generations to grinding poverty. Under Clinton the prison population of mostly African Americans expanded and the breakup of families ravaged the urban communities. ..."
"... President Obama transferred 2 trillion dollars to the ten biggest bankers and swindlers on Wall Street, and another trillion to the Pentagon to pursue the Democrats version of foreign policy: from Bush's two overseas wars to Obama's seven. ..."
"... Obama was elected to two terms. His liberal Democratic Party supporters swooned over his peace and justice rhetoric while swallowing his militarist escalation into seven overseas wars as well as the foreclosure of two million American householders. Obama completely failed to honor his campaign promise to reduce wage inequality between black and white wage earners while he continued to moralize to black families about ' values' . ..."
"... Obama's war against Libya led to the killing and displacement of millions of black Libyans and workers from Sub-Saharan Africa. The smiling Nobel Peace Prize President created more desperate refugees than any previous US head of state – including millions of Africans flooding Europe. ..."
"... Forty-years of anti welfare legislation and pro-business regimes paved the golden road for the election of Donald Trump ..."
"... Trump and the Republicans are focusing on the tattered remnants of the social welfare system: Medicare, Medicaid, Social Security. The remains of FDR's New Deal and LBJ's Great Society -- are on the chopping block. ..."
"... The moribund (but well-paid) labor leadership has been notable by its absence in the ensuing collapse of the social welfare state. The liberal left Democrats embraced the platitudinous Obama/Clinton team as the 'Great Society's' gravediggers, while wailing at Trump's allies for shoving the corpse of welfare state into its grave. ..."
"... Over the past forty years the working class and the rump of what was once referred to as the ' labor movement' has contributed to the dismantling of the social welfare state, voting for ' strike-breaker' Reagan, ' workfare' Clinton, ' Wall Street crash' Bush, ' Wall Street savior' Obama and ' Trickle-down' Trump. ..."
"... Gone are the days when social welfare and profitable wars raised US living standards and transformed American trade unions into an appendage of the Democratic Party and a handmaiden of Empire. The Democratic Party rescued capitalism from its collapse in the Great Depression, incorporated labor into the war economy and the post- colonial global empire, and resurrected Wall Street from the 'Great Financial Meltdown' of the 21 st century. ..."
"... The war economy no longer fuels social welfare. The military-industrial complex has found new partners on Wall Street and among the globalized multi-national corporations. Profits rise while wages fall. Low paying compulsive labor (workfare) lopped off state transfers to the poor. Technology – IT, robotics, artificial intelligence and electronic gadgets – has created the most class polarized social system in history ..."
"... "The collaboration of liberals and unions in promoting endless wars opened the door to Trump's mirage of a stateless, tax-less, ruling class." ..."
"... Corporations [now] are welfare recipients and the bigger they are, the more handouts they suck up ..."
"... Corporations not only continuously seek monopolies (with the aid and sanction of the state) but they steadily fine tune the welfare state for their benefit. In fact, in reality, welfare for prols and peasants wouldn't exist if it didn't act as a money conduit and ultimate profit center for the big money grubbers. ..."
"... The article is dismal reading, and evidence of the failings of the "unregulated" society, where the anything goes as long as you are wealthy. ..."
"... Like the Pentagon. Americans still don't readily call this welfare, but they will eventually. Defense profiteers are unions in a sense, you're either in their club Or you're in the service industry that surrounds it. ..."
Dec 13, 2017 | www.unz.com

Introduction

The American welfare state was created in 1935 and continued to develop through 1973. Since then, over a prolonged period, the capitalist class has been steadily dismantling the entire welfare state.

Between the mid 1970's to the present (2017) labor laws, welfare rights and benefits and the construction of and subsidies for affordable housing have been gutted. ' Workfare' (under President 'Bill' Clinton) ended welfare for the poor and displaced workers. Meanwhile the shift to regressive taxation and the steadily declining real wages have increased corporate profits to an astronomical degree.

What started as incremental reversals during the 1990's under Clinton has snowballed over the last two decades decimating welfare legislation and institutions.

The earlier welfare 'reforms' and the current anti-welfare legislation and austerity practices have been accompanied by a series of endless imperial wars, especially in the Middle East.

In the 1940's through the 1960's, world and regional wars (Korea and Indo-China) were combined with significant welfare program – a form of ' social imperialism' , which 'buy off' the working class while expanding the empire. However, recent decades are characterized by multiple regional wars and the reduction or elimination of welfare programs – and a massive growth in poverty, domestic insecurity and poor health.

New Deals and Big Wars

The 1930's witnessed the advent of social legislation and action, which laid the foundations of what is called the ' modern welfare state' .

Labor unions were organized as working class strikes and progressive legislation facilitated trade union organization, elections, collective bargaining rights and a steady increase in union membership. Improved work conditions, rising wages, pension plans and benefits, employer or union-provided health care and protective legislation improved the standard of living for the working class and provided for 2 generations of upward mobility.

Social Security legislation was approved along with workers' compensation and the forty-hour workweek. Jobs were created through federal programs (WPA, CCC, etc.). Protectionist legislation facilitated the growth of domestic markets for US manufacturers. Workplace shop steward councils organized 'on the spot' job action to protect safe working conditions.

World War II led to full employment and increases in union membership, as well as legislation restricting workers' collective bargaining rights and enforcing wage freezes. Hundreds of thousands of Americans found jobs in the war economy but a huge number were also killed or wounded in the war.

The post-war period witnessed a contradictory process: wages and salaries increased while legislation curtailed union rights via the Taft Hartley Act and the McCarthyist purge of leftwing trade union activists. So-called ' right to work' laws effectively outlawed unionization mostly in southern states, which drove industries to relocate to the anti-union states.

Welfare reforms, in the form of the GI bill, provided educational opportunities for working class and rural veterans, while federal-subsidized low interest mortgages encourage home-ownership, especially for veterans.

The New Deal created concrete improvements but did not consolidate labor influence at any level. Capitalists and management still retained control over capital, the workplace and plant location of production.

Trade union officials signed pacts with capital: higher pay for the workers and greater control of the workplace for the bosses. Trade union officials joined management in repressing rank and file movements seeking to control technological changes by reducing hours (" thirty hours work for forty hours pay "). Dissident local unions were seized and gutted by the trade union bosses – sometimes through violence.

Trade union activists, community organizers for rent control and other grassroots movements lost both the capacity and the will to advance toward large-scale structural changes of US capitalism. Living standards improved for a few decades but the capitalist class consolidated strategic control over labor relations. While unionized workers' incomes, increased, inequalities, especially in the non-union sectors began to grow. With the end of the GI bill, veterans' access to high-quality subsidized education declined.

While a new wave of social welfare legislation and programs began in the 1960's and early 1970's it was no longer a result of a mass trade union or workers' "class struggle". Moreover, trade union collaboration with the capitalist regional war policies led to the killing and maiming of hundreds of thousands of workers in two wars – the Korean and Vietnamese wars.

Much of social legislation resulted from the civil and welfare rights movements. While specific programs were helpful, none of them addressed structural racism and poverty.

The Last Wave of Social Welfarism

The 1960'a witnessed the greatest racial war in modern US history: Mass movements in the South and North rocked state and federal governments, while advancing the cause of civil, social and political rights. Millions of black citizens, joined by white activists and, in many cases, led by African American Viet Nam War veterans, confronted the state. At the same time, millions of students and young workers, threatened by military conscription, challenged the military and social order.

Energized by mass movements, a new wave of social welfare legislation was launched by the federal government to pacify mass opposition among blacks, students, community organizers and middle class Americans. Despite this mass popular movement, the union bosses at the AFL-CIO openly supported the war, police repression and the military, or at best, were passive impotent spectators of the drama unfolding in the nation's streets. Dissident union members and activists were the exception, as many had multiple identities to represent: African American, Hispanic, draft resisters, etc.

Under Presidents Lyndon Johnson and Richard Nixon, Medicare, Medicaid, OSHA, the EPA and multiple poverty programs were implemented. A national health program, expanding Medicare for all Americans, was introduced by President Nixon and sabotaged by the Kennedy Democrats and the AFL-CIO. Overall, social and economic inequalities diminished during this period.

The Vietnam War ended in defeat for the American militarist empire. This coincided with the beginning of the end of social welfare as we knew it – as the bill for militarism placed even greater demands on the public treasury.

With the election of President Carter, social welfare in the US began its long decline. The next series of regional wars were accompanied by even greater attacks on welfare via the " Volker Plan " – freezing workers' wages as a means to combat inflation.

Guns without butter' became the legislative policy of the Carter and Reagan Administrations. The welfare programs were based on politically fragile foundations.

The Debacle of Welfarism

Private sector trade union membership declined from a post-world war peak of 30% falling to 12% in the 1990's. Today it has sunk to 7%. Capitalists embarked on a massive program of closing thousands of factories in the unionized North which were then relocated to the non-unionized low wage southern states and then overseas to Mexico and Asia. Millions of stable jobs disappeared.

Following the election of 'Jimmy Carter', neither Democratic nor Republican Presidents felt any need to support labor organizations. On the contrary, they facilitated contracts dictated by management, which reduced wages, job security, benefits and social welfare.

The anti-labor offensive from the ' Oval Office' intensified under President Reagan with his direct intervention firing tens of thousands of striking air controllers and arresting union leaders. Under Presidents Carter, Reagan, George H.W. Bush and William Clinton cost of living adjustments failed to keep up with prices of vital goods and services. Health care inflation was astronomical. Financial deregulation led to the subordination of American industry to finance and the Wall Street banks. De-industrialization, capital flight and massive tax evasion reduced labor's share of national income.

The capitalist class followed a trajectory of decline, recovery and ascendance. Moreover, during the earlier world depression, at the height of labor mobilization and organization, the capitalist class never faced any significant political threat over its control of the commanding heights of the economy.

The ' New Deal' was, at best, a de facto ' historical compromise' between the capitalist class and the labor unions, mediated by the Democratic Party elite. It was a temporary pact in which the unions secured legal recognition while the capitalists retained their executive prerogatives.

The Second World War secured the economic recovery for capital and subordinated labor through a federally mandated no strike production agreement. There were a few notable exceptions: The coal miners' union organized strikes in strategic sectors and some leftist leaders and organizers encouraged slow-downs, work to rule and other in-plant actions when employers ran roughshod with special brutality over the workers. The recovery of capital was the prelude to a post-war offensive against independent labor-based political organizations. The quality of labor organization declined even as the quantity of trade union membership increased.

Labor union officials consolidated internal control in collaboration with the capitalist elite. Capitalist class-labor official collaboration was extended overseas with strategic consequences.

The post-war corporate alliance between the state and capital led to a global offensive – the replacement of European-Japanese colonial control and exploitation by US business and bankers. Imperialism was later 're-branded' as ' globalization' . It pried open markets, secured cheap docile labor and pillaged resources for US manufacturers and importers.

US labor unions played a major role by sabotaging militant unions abroad in cooperation with the US security apparatus: They worked to coopt and bribe nationalist and leftist labor leaders and supported police-state regime repression and assassination of recalcitrant militants.

' Hand in bloody glove' with the US Empire, the American trade unions planted the seeds of their own destruction at home. The local capitalists in newly emerging independent nations established industries and supply chains in cooperation with US manufacturers. Attracted to these sources of low-wage, violently repressed workers, US capitalists subsequently relocated their factories overseas and turned their backs on labor at home.

Labor union officials had laid the groundwork for the demise of stable jobs and social benefits for American workers. Their collaboration increased the rate of capitalist profit and overall power in the political system. Their complicity in the brutal purges of militants, activists and leftist union members and leaders at home and abroad put an end to labor's capacity to sustain and expand the welfare state.

Trade unions in the US did not use their collaboration with empire in its bloody regional wars to win social benefits for the rank and file workers. The time of social-imperialism, where workers within the empire benefited from imperialism's pillage, was over. Gains in social welfare henceforth could result only from mass struggles led by the urban poor, especially Afro-Americans, community-based working poor and militant youth organizers.

The last significant social welfare reforms were implemented in the early 1970's – coinciding with the end of the Vietnam War (and victory for the Vietnamese people) and ended with the absorption of the urban and anti-war movements into the Democratic Party.

Henceforward the US corporate state advanced through the overseas expansion of the multi-national corporations and via large-scale, non-unionized production at home.

The technological changes of this period did not benefit labor. The belief, common in the 1950's, that science and technology would increase leisure, decrease work and improve living standards for the working class, was shattered. Instead technological changes displaced well-paid industrial labor while increasing the number of mind-numbing, poorly paid, and politically impotent jobs in the so-called 'service sector' – a rapidly growing section of unorganized and vulnerable workers – especially including women and minorities.

Labor union membership declined precipitously. The demise of the USSR and China's turn to capitalism had a dual effect: It eliminated collectivist (socialist) pressure for social welfare and opened their labor markets with cheap, disciplined workers for foreign manufacturers. Labor as a political force disappeared on every count. The US Federal Reserve and President 'Bill' Clinton deregulated financial capital leading to a frenzy of speculation. Congress wrote laws, which permitted overseas tax evasion – especially in Caribbean tax havens. Regional free-trade agreements, like NAFTA, spurred the relocation of jobs abroad. De-industrialization accompanied the decline of wages, living standards and social benefits for millions of American workers.

The New Abolitionists: Trillionaires

The New Deal, the Great Society, trade unions, and the anti-war and urban movements were in retreat and primed for abolition.

Wars without welfare (or guns without butter) replaced earlier 'social imperialism' with a huge growth of poverty and homelessness. Domestic labor was now exploited to finance overseas wars not vice versa. The fruits of imperial plunder were not shared.

As the working and middle classes drifted downward, they were used up, abandoned and deceived on all sides – especially by the Democratic Party. They elected militarists and demagogues as their new presidents.

President 'Bill' Clinton ravaged Russia, Yugoslavia, Iraq and Somalia and liberated Wall Street. His regime gave birth to the prototype billionaire swindlers: Michael Milken and Bernard 'Bernie' Madoff.

Clinton converted welfare into cheap labor 'workfare', exploiting the poorest and most vulnerable and condemning the next generations to grinding poverty. Under Clinton the prison population of mostly African Americans expanded and the breakup of families ravaged the urban communities.

Provoked by an act of terrorism (9/11) President G.W. Bush Jr. launched the 'endless' wars in Afghanistan and Iraq and deepened the police state (Patriot Act). Wages for American workers and profits for American capitalist moved in opposite directions.

The Great Financial Crash of 2008-2011 shook the paper economy to its roots and led to the greatest shakedown of any national treasury in history directed by the First Black American President. Trillions of public wealth were funneled into the criminal banks on Wall Street – which were ' just too big to fail .' Millions of American workers and homeowners, however, were ' just too small to matter' .

The Age of Demagogues

President Obama transferred 2 trillion dollars to the ten biggest bankers and swindlers on Wall Street, and another trillion to the Pentagon to pursue the Democrats version of foreign policy: from Bush's two overseas wars to Obama's seven.

Obama's electoral 'donor-owners' stashed away two trillion dollars in overseas tax havens and looked forward to global free trade pacts – pushed by the eloquent African American President.

Obama was elected to two terms. His liberal Democratic Party supporters swooned over his peace and justice rhetoric while swallowing his militarist escalation into seven overseas wars as well as the foreclosure of two million American householders. Obama completely failed to honor his campaign promise to reduce wage inequality between black and white wage earners while he continued to moralize to black families about ' values' .

Obama's war against Libya led to the killing and displacement of millions of black Libyans and workers from Sub-Saharan Africa. The smiling Nobel Peace Prize President created more desperate refugees than any previous US head of state – including millions of Africans flooding Europe.

'Obamacare' , his imitation of an earlier Republican governor's health plan, was formulated by the private corporate health industry (private insurance, Big Pharma and the for-profit hospitals), to mandate enrollment and ensure triple digit profits with double digit increases in premiums. By the 2016 Presidential elections, ' Obama-care' was opposed by a 45%-43% margin of the American people. Obama's propagandists could not show any improvement of life expectancy or decrease in infant and maternal mortality as a result of his 'health care reform'. Indeed the opposite occurred among the marginalized working class in the old 'rust belt' and in the rural areas. This failure to show any significant health improvement for the masses of Americans is in stark contrast to LBJ's Medicare program of the 1960's, which continues to receive massive popular support.

Forty-years of anti welfare legislation and pro-business regimes paved the golden road for the election of Donald Trump

Trump and the Republicans are focusing on the tattered remnants of the social welfare system: Medicare, Medicaid, Social Security. The remains of FDR's New Deal and LBJ's Great Society -- are on the chopping block.

The moribund (but well-paid) labor leadership has been notable by its absence in the ensuing collapse of the social welfare state. The liberal left Democrats embraced the platitudinous Obama/Clinton team as the 'Great Society's' gravediggers, while wailing at Trump's allies for shoving the corpse of welfare state into its grave.

Conclusion

Over the past forty years the working class and the rump of what was once referred to as the ' labor movement' has contributed to the dismantling of the social welfare state, voting for ' strike-breaker' Reagan, ' workfare' Clinton, ' Wall Street crash' Bush, ' Wall Street savior' Obama and ' Trickle-down' Trump.

Gone are the days when social welfare and profitable wars raised US living standards and transformed American trade unions into an appendage of the Democratic Party and a handmaiden of Empire. The Democratic Party rescued capitalism from its collapse in the Great Depression, incorporated labor into the war economy and the post- colonial global empire, and resurrected Wall Street from the 'Great Financial Meltdown' of the 21 st century.

The war economy no longer fuels social welfare. The military-industrial complex has found new partners on Wall Street and among the globalized multi-national corporations. Profits rise while wages fall. Low paying compulsive labor (workfare) lopped off state transfers to the poor. Technology – IT, robotics, artificial intelligence and electronic gadgets – has created the most class polarized social system in history. The first trillionaire and multi-billionaire tax evaders rose on the backs of a miserable standing army of tens of millions of low-wage workers, stripped of rights and representation. State subsidies eliminate virtually all risk to capital. The end of social welfare coerced labor (including young mother with children) to seek insecure low-income employment while slashing education and health – cementing the feet of generations into poverty. Regional wars abroad have depleted the Treasury and robbed the country of productive investment. Economic imperialism exports profits, reversing the historic relation of the past.

Labor is left without compass or direction; it flails in all directions and falls deeper in the web of deception and demagogy. To escape from Reagan and the strike breakers, labor embraced the cheap-labor predator Clinton; black and white workers united to elect Obama who expelled millions of immigrant workers, pursued 7 wars, abandoned black workers and enriched the already filthy rich. Deception and demagogy of the labor-

Issac , December 11, 2017 at 11:01 pm GMT

"The military-industrial complex has found new partners on Wall Street and among the globalized multi-national corporations."

"The collaboration of liberals and unions in promoting endless wars opened the door to Trump's mirage of a stateless, tax-less, ruling class."

A mirage so real, it even has you convinced.

whyamihere , December 12, 2017 at 4:24 am GMT
If the welfare state in America was abolished, major American cities would burn to the ground. Anarchy would ensue, it would be magnitudes bigger than anything that happened in Ferguson or Baltimore. It would likely be simultaneous.

I think that's one of the only situations where preppers would actually live out what they've been prepping for (except for a natural disaster).

I've been thinking about this a little over the past few years after seeing the race riots. What exactly is the line between our society being civilized and breaking out into chaos. It's probably a lot thinner than most people think.

I don't know who said it but someone long ago said something along the lines of, "Democracy can only work until the people figure out they can vote for themselves generous benefits from the public treasury." We are definitely in this situation today. I wonder how long it can last.

Disordered , December 13, 2017 at 8:41 am GMT
While I agree with Petras's intent (notwithstanding several exaggerations and unnecessary conflations with, for example, racism), I don't agree so much with the method he proposes. I don't mind welfare and unions to a certain extent, but they are not going to save us unless there is full employment and large corporations that can afford to pay an all-union workforce. That happened during WW2, as only wartime demand and those pesky wage freezes solved the Depression, regardless of all the public works programs; while the postwar era benefited from the US becoming the world's creditor, meaning that capital could expand while labor participation did as well.

From then on, it is quite hard to achieve the same success after outsourcing and mechanization have happened all over the world. Both of these phenomena not only create displaced workers, but also displaced industries, meaning that it makes more sense to develop individual workfare (and even then, do it well, not the shoddy way it is done now) rather than giving away checks that probably will not be cashed for entrepreneurial purposes, and rather than giving away money to corrupt unions who depend on trusts to be able to pay for their benefits, while raising the cost of hiring that only encourages more outsourcing.

The amount of welfare given is not necessarily the main problem, the problem is doing it right for the people who truly need it, and efficiently – that is, with the least amount of waste lost between the chain of distribution, which should reach intended targets and not moochers.

Which inevitably means a sound tax system that targets unearned wealth and (to a lesser degree) foreign competition instead of national production, coupled with strict, yet devolved and simple government processes that benefit both business and individuals tired of bureaucracy, while keeping budgets balanced. Best of both worlds, and no military-industrial complex needed to drive up demand.

Wally , Website December 13, 2017 at 8:57 am GMT
"President Obama transferred 2 trillion dollars to the ten biggest bankers and swindlers on Wall Street " That's twice the amount that Bush gave them.
jacques sheete , December 13, 2017 at 10:52 am GMT

The American welfare state was created in 1935 and continued to develop through 1973. Since then, over a prolonged period, the capitalist class has been steadily dismantling the entire welfare state.

Wrong wrong wrong.

Corporations [now] are welfare recipients and the bigger they are, the more handouts they suck up, and welfare for them started before 1935. In fact, it started in America before there was a USA. I do not have time to elaborate, but what were the various companies such as the British East India Company and the Dutch West India Companies but state pampered, welfare based entities? ~200 years ago, Herbert Spencer, if memory serves, pointed out that the British East India Company couldn't make a profit even with all the special, government granted favors showered upon it.

Corporations not only continuously seek monopolies (with the aid and sanction of the state) but they steadily fine tune the welfare state for their benefit. In fact, in reality, welfare for prols and peasants wouldn't exist if it didn't act as a money conduit and ultimate profit center for the big money grubbers.

Den Lille Abe , December 13, 2017 at 11:09 am GMT
Well, the author kind of nails it. I remember from my childhood in the 50-60 ties in Scandinavia that the US was the ultimate goal in welfare. The country where you could make a good living with your two hands, get you kids to UNI, have a house, a telly ECT. It was not consumerism, it was the American dream, a chicken in every pot; we chewed imported American gum and dreamed.

In the 70-80 ties Scandinavia had a tremendous social and economic growth, EQUALLY distributed, an immense leap forward. In the middle of the 80 ties we were equal to the US in standards of living.

Since we have not looked at the US, unless in pity, as we have seen the decline of the general income, social wealth fall way behind our own.
The average US workers income has not increased since 90 figures adjusted for inflation. The Scandinavian workers income in the same period has almost quadrupled. And so has our societies.

The article is dismal reading, and evidence of the failings of the "unregulated" society, where the anything goes as long as you are wealthy.

wayfarer , December 13, 2017 at 1:01 pm GMT

Between the mid 1970's to the present (2017) labor laws, welfare rights and benefits and the construction of and subsidies for affordable housing have been gutted. 'Workfare' (under President 'Bill' Clinton) ended welfare for the poor and displaced workers. Meanwhile the shift to regressive taxation and the steadily declining real wages have increased corporate profits to an astronomical degree.

source: http://www.unz.com/jpetras/rise-and-decline-of-the-welfare-state/

What does Hollywood "elite" JAP and wannabe hack-stand-up-comic Sarah Silverman think about the class struggle and problems facing destitute Americans? "Qu'ils mangent de la bagels!", source: https://en.wikipedia.org/wiki/Let_them_eat_cake

... ... ...

Anonymous , Disclaimer December 13, 2017 at 1:40 pm GMT
@Greg Fraser

Like the Pentagon. Americans still don't readily call this welfare, but they will eventually. Defense profiteers are unions in a sense, you're either in their club Or you're in the service industry that surrounds it.

Anonymous , Disclaimer December 13, 2017 at 2:43 pm GMT
As other commenters have pointed out, it's Petras curious choice of words that sometimes don't make too much sense. We can probably blame the maleable English language for that, but here it's too obvious. If you don't define a union, people might assume you're only talking about a bunch of meat cutters at Safeway.

The welfare state is alive and well for corporate America. Unions are still here – but they are defined by access and secrecy, you're either in the club or not.

The war on unions was successful first by co-option but mostly by the media. But what kind of analysis leaves out the role of the media in the American transformation? The success is mind blowing.

America has barely literate (white) middle aged males trained to spout incoherent Calvinistic weirdness: unabased hatred for the poor (or whoever they're told to hate) and a glorification of hedge fund managers as they get laid off, fired and foreclosed on, with a side of opiates.

There is hardly anything more tragic then seeing a web filled with progressives (management consultants) dedicated to disempowering, disabling and deligitimizing victims by claiming they are victims of biology, disease or a lack of an education rather than a system that issues violence while portending (with the best media money can buy) that they claim the higher ground.

animalogic , December 13, 2017 at 2:57 pm GMT
@Wally

""Democracy can only work until the people figure out they can vote for themselves generous benefits from the public treasury." We are definitely in this situation today."

Quite right: the 0.01% have worked it out & US democracy is a Theatre for the masses.

Reg Cζsar , December 13, 2017 at 3:08 pm GMT

They elected militarists and demagogues as their new presidents.

Wilson and FDR were much more militarist and demagogic than those that followed.

Reg Cζsar , December 13, 2017 at 3:20 pm GMT
@whyamihere

I don't know who said it but someone long ago said something along the lines of, "Democracy can only work until the people figure out they can vote for themselves generous benefits from the public treasury."

Some French aristocrat put it as, once the gates to the treasury have been breached, they can only be closed again with gunpowder. Anyone recognize the author?

phil , December 13, 2017 at 4:48 pm GMT
The author doesn't get it. What we have now IS the welfare state in an intensely diverse society. We have more transfer spending than ever before and Obamacare represents another huge entitlement.

Intellectuals continue to fantasize about the US becoming a Big Sweden, but Sweden has only been successful insofar as it has been a modest nation-state populated by ethnic Swedes. Intense diversity in a huge country with only the remnants of federalism results in massive non-consensual decision-making, fragmentation, increased inequality, and corruption.

HallParvey , December 13, 2017 at 4:57 pm GMT
@Anonymous

The welfare state is alive and well for corporate America. Unions are still here – but they are defined by access and secrecy, you're either in the club or not.

They are largely defined as Doctors, Lawyers, and University Professors who teach the first two. Of course they are not called unions. Access is via credentialing and licensing. Good Day

Anonymous , Disclaimer December 13, 2017 at 4:57 pm GMT
@Linda Green

Bernie Sanders, speaking on behalf of the MIC's welfare bird: "It is the airplane of the United States Air Force, Navy, and of NATO."

Elizabeth Warren, referring to Mossad's Estes Rockets: "The Israeli military has the right to attack Palestinian hospitals and schools in self defense"

Barack Obama, yukking it up with pop stars: "Two words for you: predator drones. You will never see it coming."

It's not the agitprop that confuses the sheep, it's whose blowhole it's coming out of (labled D or R for convenience) that gets them to bare their teeth and speak of poo.

Anonymous , Disclaimer December 13, 2017 at 5:54 pm GMT
@HallParvey

What came first, the credentialing or the idea that it is a necessary part of education? It certainly isn't an accurate indication of what people know or their general intelligence – although that myth has flourished. Good afternoon.

Logan , December 13, 2017 at 9:10 pm GMT
@Realist

For an interesting projection of what might happen in total civilizational collapse, I recommend the Dies the Fire series of novels by SM Stirling.

It has a science-fictiony setup in that all high-energy system (gunpowder, electricity, explosives, internal combustion, even high-energy steam engines) suddenly stop working. But I think it does a good job of extrapolating what would happen if suddenly the cities did not have food, water, power, etc.

Spoiler alert: It ain't pretty. Those who dream of a world without guns have not really thought it through.

Logan , December 13, 2017 at 9:19 pm GMT
@phil

It has been pointed out repeatedly that Sweden does very well relative to the USA. It has also been noted that people of Swedish ancestry in the USA do pretty well also. In fact considerably better than Swedes in Sweden

[Dec 15, 2017] Paul Krugman: Republicans Despise the Working Class

This is a typical feature of neoliberalism in general, not just Republicans. Democratic Party is the same. And this is not just despite. There is real class war against working class unleashed in the USA since 1980. and neoliberals are winning.
Neoliberals disdain for ordinary working Americans as opposed to investors, heirs, and business owners runs so deep that they can't contain it.
Notable quotes:
"... "Their disdain for ordinary working Americans as opposed to investors, heirs, and business owners runs so deep that they can't contain it": Republicans Despise the Working Class, by Paul Krugman, NY Times : You can always count on Republicans to do two things: try to cut taxes for the rich and try to weaken the safety net for the poor and the middle class. ... ..."
"... PK would probably even tell you that some of his best friends are working class. As a show of his undying love, he even penned opinion pieces on their behalf, promoting the gift of China's ascension the WTO in 2000, saying how great it would be for labor...that was before the great sucking sound of jobs going to China... ..."
"... Britain's opposition Labour leader Jeremy Corbyn warned Morgan Stanley that bankers are right to regard him as a threat because he wants to transform what he cast as a rigged economy that profits speculators at the expense of ordinary people. ..."
"... I have news for you Paul.... the wealthy have always treated labor as second class citizens... what else is new and why are you just now figuring this out? ..."
"... It's interesting that regardless of which party has been in power since the 1960's (e.g. since Johnson) neither have provided any gains in real income to labor's share of income. ..."
"... And regardless of which party has been in power since the 1970's median incomes have grown at a barely perceptible rate while GDP has continued to grow unabated at a very much greater rate... the gap (wedge) has continued to increase without a hitch. ..."
"... Lower prices of goods and services offered to just a small amount above costs of labor in operations and capital. If every business paid 100% of revenue to workers, the taxes owed in profit taxes will be zero. ..."
"... The bizzare result in a corporation pays no taxes for 10 to 15 years when the factory is new and it's productivity means the highest return on investment, until the factory is old and less competitive, and now the loss carry forward is zero so any profit is now taxed, at the time when the factory is old. ..."
"... The point of cutting the profit tax rate is to kill jobs. A profit tax of zero would promote a business trying to create a slave labor force so 100% of revenue is tax free to the owners. A zero profit tax rate means every single dollar paid to workers cuts shareholder income by 100% of those dollars. ..."
"... Maybe only half will end up homeless and hungry, but those will be the ones moving into their kids, or grandkids living rooms, eating their food. In exchange for a $500 tax cut for working class families, these families get to feed and house their grandparent or parent, assuming they were earning enough to move out of their parent's basement. ..."
"... he globalist Democrats despise the working class, but play nice each election cycle while they suck money out of union treasuries. ..."
Dec 15, 2017 | economistsview.typepad.com
"Their disdain for ordinary working Americans as opposed to investors, heirs, and business owners runs so deep that they can't contain it": Republicans Despise the Working Class, by Paul Krugman, NY Times : You can always count on Republicans to do two things: try to cut taxes for the rich and try to weaken the safety net for the poor and the middle class. ...

But ... something has been added to the mix. ...Republicans ... don't treat all Americans with a given income the same. Instead, their bill ... hugely privileges owners, whether of businesses or of financial assets, over those who simply work for a living. ...

The nonpartisan Tax Policy Center has evaluated the Senate bill, which the final bill is expected to resemble. It finds that the bill would reduce taxes on business owners , on average, about three times as much as it would reduce taxes on those whose primary source of income is wages or salaries. For highly paid workers, the gap would be even wider, as much as 10 to one. ...

If this sounds like bad policy, that's because it is. More than that, it opens the doors to an orgy of tax avoidance. ... We're pitting hastily devised legislation, drafted without hearings over the course of just a few days, against the cleverest lawyers and accountants money can buy. Which side do you think will win?

As a result, it's a good guess that the bill will increase the budget deficit far more than currently projected. ...

So why are they doing this? After all, the tax bill appears to be terrible politics as well as terrible policy. ... The ... public overwhelmingly disapproves of the current Republican plan.

But Republicans don't seem able to help themselves: Their disdain for ordinary working Americans as opposed to investors, heirs, and business owners runs so deep that they can't contain it.

When I realized the extent to which G.O.P. tax plans were going to favor business owners over ordinary workers, I found myself remembering what happened in 2012, when Eric Cantor -- then the House majority leader -- tried to celebrate Labor Day. He put out a tweet for the occasion that somehow failed to mention workers at all, instead praising those who have "built a business and earned their own success." ...

Cantor, a creature of the G.O.P. establishment if ever there was one, had so little respect for working Americans that he forgot to include them in a Labor Day message.

And now that disdain has been translated into legislation, in the form of a bill that treats anyone who works for someone else -- that is, the vast majority of Americans -- as a second-class citizen.

Paine , December 15, 2017 at 12:07 PM

Fair play for the ever so many petty wage heads. Out there ! High achieving high dollar earning high altruism embodying.

Our PK. What a guy ! "haut Liberal oblige " at its most glowing

Exploited citizens are indeed like oppressed citizens. Inferior class types
Hillary prefers earning her daily bread. By making humanist speeches to bankers and writing best selling alibi seasoned memoirs for the bibliophilic public. Why oh why does Paul love her so ?
JohnH -> Paine ... , December 15, 2017 at 01:33 PM

PK would probably even tell you that some of his best friends are working class. As a show of his undying love, he even penned opinion pieces on their behalf, promoting the gift of China's ascension the WTO in 2000, saying how great it would be for labor...that was before the great sucking sound of jobs going to China...

Republicans have no monopoly on selling out the working class...but workers have yet to figure out that there are more than two candidates running for President.

Paine -> JF... , December 15, 2017 at 12:40 PM
Labor parties exist in the OECD. But they had a third way fantasy. Where we all dance together. Most have still not shaken off this collaborationist pipe dream despite the fall of 2008. And the ten year doldrums since
Christopher H. said in reply to Paine ... , December 15, 2017 at 03:08 PM
https://www.reuters.com/article/us-britain-politics-banking/british-labour-leader-corbyn-tells-morgan-stanley-were-a-threat-idUSKBN1DV44L

DECEMBER 1, 2017 / 3:23 AM / 14 DAYS AGO

British Labour leader Corbyn tells Morgan Stanley: 'We're a threat'

Guy Faulconbridge

LONDON (Reuters) - Britain's opposition Labour leader Jeremy Corbyn warned Morgan Stanley that bankers are right to regard him as a threat because he wants to transform what he cast as a rigged economy that profits speculators at the expense of ordinary people.

...

Longtooth , December 15, 2017 at 12:16 PM
I have news for you Paul.... the wealthy have always treated labor as second class citizens... what else is new and why are you just now figuring this out?

It's interesting that regardless of which party has been in power since the 1960's (e.g. since Johnson) neither have provided any gains in real income to labor's share of income.

And regardless of which party has been in power since the 1970's median incomes have grown at a barely perceptible rate while GDP has continued to grow unabated at a very much greater rate... the gap (wedge) has continued to increase without a hitch.

So Paul, are you just no noticing this or are you under the impression that it's just the GOP wealthy that have disdain for labor... since it would appear to me that it's the wealthy regardless of party identification -- though there are admittedly a few notable exemptions.... but those are only after they have become among the globes richest persons.

DrDick -> Longtooth... , December 15, 2017 at 01:01 PM
That seems a grotesque misreading of the piece, which never claims this is new, just that it is even worse than before. Krugman has also written extensively about these issues in the past (he lambasted the Bush administration for exactly the same issues).
Longtooth -> DrDick... , December 15, 2017 at 02:30 PM
Dr. Dick,

I've been reading PK probably since before you could even read or perhaps since you graduated from Dick, Jane, Sally, & Spot. I'm even a huge fan except:

  1. I lambast him for not calling a spade a spade (which until just very recently he never did before), and
  2. For intentionally misleading, even though the direction he misleads favors my own positions.

In this case he made a clear statement that in the context of his post is intended to mean the current GOP (as you also were led to believe by your statement "worse then before", or perhaps "recent GOP" as you also believed by your statement "Bush administration...").

You are in fact the direct intent of my comment.. people who believe this GOP is any different than any other GOP. The only difference in this one and any other is that the party has a bullet proof majority in both houses AND a complicit Executive to do their bidding. That just makes it possible for the GOP to carry out its objectives... the objectives have never changed... since Coolidge and Hoover at least.

Krugman's explicit statement inferring and implying this GOP is different is:

"But Republicans don't seem able to help themselves: Their disdain for ordinary working Americans as opposed to investors, heirs, and business owners runs so deep that they can't contain it."

In fact this has been the case all along so why if its not new news does he even mention it? Moreover he neglects entirely to say that it's not just the GOP that has disdain for labor but the entire wealth class, regardless of party. The Dems were persuaded by organized labor to pay attention to labor's issues and preferences .. or else!

Even at that all actual evidence shows quite clearly that labor takes it in the shorts since the 1960's at least, and if you go back to Coolidge and Hoover it was also in clear and obvious evidence at that time as well.

And yet, in all the time since, through all administrations and congress's labor keeps getting the shaft so it's not just the GOP that caters to the wealth, but the Dems as well... and this shouldn't be a surprise (but I'm sure is) because the U.S. gov't is actually run by and to the primarily benefit of the wealthy -- and it always has been in case you haven't much history under your belt yet.

You took Krugman's statement as he intended people like you to take it in his post hook line and sinker.

(my uncle was high up in organized labor in western US in the 1950's through 1970's. I lived with he and my aunt for a summer between college years. He said often and astutely based in his intimate political dealings with Democratic national and State leaders, "The Democrats have nor more back-bone than what Organized Labor provides." The parties aren't really that much different when it comes to the working class."

I was taken aback, and didn't believe him --- after all he was a labor leader --- but I watched over the ensuing decades and sure 'nuff, he was dead on right then and nothing's changed.

To make a difference gov't control has to be taken from the wealthy and has to be shared equally with labor... it doesn't do that nor has it ever done that. Ignore the rhetoric and look at the evidence over time... it's quite obvious and not even remotely vague.

DeDude , December 15, 2017 at 12:20 PM
But even among the predatory capitalists GOP types some are quite angry at the current tax "reform"

https://riabiz.com/a/2017/12/14/why-brent-brodeski-a-6-billion-gop-ria-is-in-a-furious-full-time-fight-against-the-republican-ria-unfriendly-tax-bill

There is likely to be a lot more of that. When some guys get $10 million then others are going to be angry that they only got $1 million. The donor class as a whole will be happy, but some of them will be very unhappy. They may even be willing to support the "Repal the Trump tax cuts" movement and actively support democratic candidates.

Paine -> DeDude... , December 15, 2017 at 12:41 PM
A giant Shark frenzy ? To good to be likely
Patricia Shannon , December 15, 2017 at 12:57 PM
True, but the Democrats do too. When I was active in the local Democratic party, the only concerns were for minorities and the middle-class. The only time the Caucasian working class was mentioned was to put them down.
Patricia Shannon -> Patricia Shannon ... , December 15, 2017 at 12:58 PM
I was referring to attitudes to the low income working class.
mulp -> Fred C. Dobbs... , December 15, 2017 at 02:29 PM
If only Democrats were explaining how corporations can cut their taxes: Hire more workers to increase labor cost tax dodging! Pay workers higher wages to increase labor cost tax dodging. Provide more tax exempt benefits to increase labor cost tax dodges. Pay workers to do more R&D which is expensed. Borrow at low interest rates to pay workers to build a huge costly factory that will generate huge depreciation tax dodges plus interest cost tax dodges.

Lower prices of goods and services offered to just a small amount above costs of labor in operations and capital. If every business paid 100% of revenue to workers, the taxes owed in profit taxes will be zero.

mulp , December 15, 2017 at 02:20 PM
Krugman constantly fails to understand that the GOP, intentionally or not, works to kill jobs.

All businesses can dodge that "highest in the world" 35% corporate PROFITS tax by PAYING MORE TO WORKERS!

The biggest corporate business tax dodge in the US is labor costs.

Granted, the tax dodge of paying labor costs building a factory is spread out over decades, but if you build a billion dollar factory, the revenue after paying workers to operate the plant will almost never come close to a billion dollars. Immediate expensing of the billion dollar factory is likely to result in taxable losses of a billion dollars, that can be carried over to shelter $50-100 million in "profit" as the capital cost of production is zero - the capital costs is fully depreciated if capital is expensed, meaning the factory has a book value of zero.

The bizzare result in a corporation pays no taxes for 10 to 15 years when the factory is new and it's productivity means the highest return on investment, until the factory is old and less competitive, and now the loss carry forward is zero so any profit is now taxed, at the time when the factory is old.

Standard double declining balance depreciation spreads taxes out over the life of the factory, so taxes are flatter. Note that selling the factory after taxes are owed merely triggers capital gains equal to the price because the capital book price is zero.

The point of cutting the profit tax rate is to kill jobs. A profit tax of zero would promote a business trying to create a slave labor force so 100% of revenue is tax free to the owners. A zero profit tax rate means every single dollar paid to workers cuts shareholder income by 100% of those dollars.

To create jobs by lowering profit tax rates, investors must suddenly say "No no don't give me so much in dividends and do not increase the price of my shares by stock buyback! I HAVE TOO MUCH MONEY AND I WANT WORKERS TO GET MY MONEY"

To go a step further, the GOP will next call for killing jobs by ending or cutting SS and Medicare and Medicaid payments which pay workers to feed, cloth, house, care for those getting those benefits.

Maybe only half will end up homeless and hungry, but those will be the ones moving into their kids, or grandkids living rooms, eating their food. In exchange for a $500 tax cut for working class families, these families get to feed and house their grandparent or parent, assuming they were earning enough to move out of their parent's basement.

Economies are zero sum.

One person's costs are another person's 100% income.

Cut costs, you cut income.

As I liberal, I say that, like Newt ordered "death" replace "estate", every mention of "costs" get replaced with "jobs".

On tax and spend, the GOP is focused on killing jobs. Cut taxes to kill jobs. Cut spending to kill jobs.

After all, I never knew any employee going into a corporate meeting on cost cutting expecting to hear of a big hiring program or of company wide wage and benefit hikes, other than mandatory long vacations, at zero pay.

Tom aka Rusty , December 15, 2017 at 02:20 PM
The globalist Democrats despise the working class, but play nice each election cycle while they suck money out of union treasuries.

[Dec 15, 2017] Neoliberalism undermines workers health not only via the financial consequences of un/under employment and low wages, but also through chronic exposure to stress due to insecurity

Neoliberalism as "Die-now economics." "Embodiment into lower class" or "the representation as a member the lower class" if often fatal and upper mobility mobility is artificially limited (despite all MSM hype it is lower then in Europe). So just being a member of lower class noticeably and negatively affects your life expectancy and other social metrics. Job insecurity is the hazard reserved for lower and lower middle classes destructivly effect both physical and mental health. Too much stress is not good for humans. Neoliberalism with its manta of competition uber alles and atomization of the workforce is a real killer. also the fact that such article was published and the comments below is a clear sign that the days of neoliberalism are numbered. It should go.
Notable quotes:
"... In our new book , we draw on an extensive body of scientific literature to assess the health effects of three decades of neoliberal policies. Focusing on the social determinants of health -- the conditions of life and work that make it relatively easy for some people to lead long and healthy lives, while it is all but impossible for others -- we show that there are four interconnected neoliberal epidemics: austerity, obesity, stress, and inequality. They are neoliberal because they are associated with or worsened by neoliberal policies. ..."
"... Neoliberalism operates through labor markets to undermine health not only by way of the financial consequences of unemployment, inadequate employment, or low wages, as important as these are, but also through chronic exposure to stress that 'gets under your skin' by way of multiple mechanisms. Quite simply, the effects of chronic insecurity wear people out over the life course in biologically measurable ways . ..."
"... Oh, and "beyond class" because for social beings embodiment involves "social production; social consumption; and social reproduction." In the most reductive definition of class -- the one I used in my crude 1% + 10% + 90% formulation -- class is determined by wage work (or not), hence is a part of production (of capital), not social consumption (eating, etc.) or social reproduction (children, families, household work ). So, even if class in our political economy is the driver, it's not everything. ..."
"... "Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that "the market" delivers benefits that could never be achieved by planning. ..."
"... Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve." ..."
"... As opposed to being champions of "self-actualization/identity" and "absolute relativism", I always got the impression that they were both offering stark warnings about diving too deeply into the self, vis-a-vis, identity. As if, they both understood the terrifying world that it could/would create, devoid of common cause, community, and ultimately empathy. A world where "we" are not possible because we have all become "I". ..."
"... Wonks like Yglesias love to mock working class concerns as "economic anxiety," which is at once belittling (it's all about f-e-e-e-lings ..."
"... "we have measurable health outcomes from political choices" So True!!! ..."
Dec 12, 2017 | www.nakedcapitalism.com

...Neoliberal epidemics are particular pathways of embodiment. From Ted Schrecker and Clare Bambra in The Conversation :

In our new book , we draw on an extensive body of scientific literature to assess the health effects of three decades of neoliberal policies. Focusing on the social determinants of health -- the conditions of life and work that make it relatively easy for some people to lead long and healthy lives, while it is all but impossible for others -- we show that there are four interconnected neoliberal epidemics: austerity, obesity, stress, and inequality. They are neoliberal because they are associated with or worsened by neoliberal policies. They are epidemics because they are observable on such an international scale and have been transmitted so quickly across time and space that if they were biological contagions they would be seen as of epidemic proportions.

(The Case-Deaton study provides an obvious fifth: Deaths of despair. There are doubtless others.) Case in point for one of the unluckier members of the 90%:

On the morning of 25 August 2014 a young New Jersey woman, Maria Fernandes, died from inhaling gasoline fumes as she slept in her 13-year-old car. She often slept in the car while shuttling between her three, low-wage jobs in food service; she kept a can of gasoline in the car because she often slept with the engine running, and was worried about running out of gasoline. Apparently, the can accidentally tipped over and the vapours from spilled gasoline cost her life. Ms Fernandes was one of the more obvious casualties of the zero-hours culture of stress and insecurity that pervades the contemporary labour market under neoliberalism.

And Schrecker and Bambra conclude:

Neoliberalism operates through labor markets to undermine health not only by way of the financial consequences of unemployment, inadequate employment, or low wages, as important as these are, but also through chronic exposure to stress that 'gets under your skin' by way of multiple mechanisms. Quite simply, the effects of chronic insecurity wear people out over the life course in biologically measurable ways .

... ... ...

Oh, and "beyond class" because for social beings embodiment involves "social production; social consumption; and social reproduction." In the most reductive definition of class -- the one I used in my crude 1% + 10% + 90% formulation -- class is determined by wage work (or not), hence is a part of production (of capital), not social consumption (eating, etc.) or social reproduction (children, families, household work ). So, even if class in our political economy is the driver, it's not everything.

nonclassical , December 11, 2017 at 8:30 pm

L.S. reminiscent of Ernst Becker's, "The Structure of Evil" – "Escape from Evil"? (..not to indicate good vs. evil dichotomy) A great amount of perspective must be agreed upon to achieve "change" intoned. Divide and conquer are complicit, as noted .otherwise (and as indicated by U.S. economic history) change arrives only when all have lost all and can therefore agree begin again.

There is however, Naomi Klein perspective, "Shock Doctrine", whereby influence contributes to destabilization, plan in hand leading to agenda driven ("neoliberal"=market fundamentalism) outcome, not at all spontaneous in nature:

"Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that "the market" delivers benefits that could never be achieved by planning.

Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve."

Amfortas the Hippie , December 11, 2017 at 4:20 pm

Well done, as usual.

On Case-Deason: Sounds like home. I keep the scanner on(local news) ems and fire only since 2006(sheriff got a homeland security grant). The incidence of suicide, overdose and "intoxication psychosis" are markedly increased in the last 10+ years out here in the wilderness(5K folks in whole county, last I looked). Our local economy went into near depression after the late 90's farm bill killed the peanut program then 911 meant no hunting season that year(and it's been noticeably less busy ever since) then drought and the real estate crash(we had 30 some realtors at peak..old family land being sold off, mostly). So the local Bourgeoisie have had less money to spend, which "trickles down" onto the rest of us.:less construction, less eating out even at the cheap places, less buying of gas, and on and on means fewer employees are needed, thus fewer jobs. To boot, there is a habit among many employers out here of not paying attention to labor laws(it is Texas ) the last minwage rise took 2 years to filter out here, and one must scrutinize one's pay stub to ensure that the boss isn't getting squirrelly with overtime and witholding.
Geography plays into all this, too 100 miles to any largish city.

... ... ...

Rosario , December 11, 2017 at 10:55 pm

I'm not well versed in Foucault or Lacan but I've read some of both and in reading between the lines of their writing (the phantom philosophy?) I saw a very different message than that often delivered by post-modern theorists.

As opposed to being champions of "self-actualization/identity" and "absolute relativism", I always got the impression that they were both offering stark warnings about diving too deeply into the self, vis-a-vis, identity. As if, they both understood the terrifying world that it could/would create, devoid of common cause, community, and ultimately empathy. A world where "we" are not possible because we have all become "I".

Considering what both their philosophies claimed, if identity is a lie, and the subject is always generated relative to the other, then how the hell can there be any security or well being in self-actualization? It is like trying to hit a target that does not exist.

All potentially oppressive cultural categorizations are examples of this (black, latino, gay, trans, etc.). If the identity is a moving target, both to the oppressor and the oppressed, then how can it ever be a singular source of political action? You can't hit what isn't there. This is not to say that these groups (in whatever determined category) are not oppressed, just that formulating political action based strictly on the identity (often as an essential category) is impossible because it does not actually exist materially. It is an amalgamation of subjects who's subjectivity is always relative to some other whether ally or oppressor. Only the manifestations of oppression on bodies (as brought up in Lambert's post) can be utilized as metrics for political action.

... ... ...

Lambert Strether Post author , December 11, 2017 at 11:20 pm

I thought of a couple of other advantages of the "embodiment" paradigm:

Better Framing . Wonks like Yglesias love to mock working class concerns as "economic anxiety," which is at once belittling (it's all about f-e-e-e-lings *) and disempowering (solutions are individual, like therapy or drugs). Embodiment by contrast insists that neoliberalism (the neoliberal labor market (class warfare)) has real, material, physiological effects that can be measured and tracked, as with any epidemic.

... ... ...

oaf , December 12, 2017 at 7:11 am

"we have measurable health outcomes from political choices" So True!!!

Thank you for posting this.

[Dec 15, 2017] The Crisis Ahead The U.S. Is No Country for Older Men and Women

Notable quotes:
"... The U.S. has a retirement crisis on its hands, and with the far right controlling the executive branch and both houses of Congress, as well as dozens of state governments, things promise to grow immeasurably worse. ..."
"... It wasn't supposed to be this way. Past progressive presidents, notably Franklin D. Roosevelt and Lyndon B. Johnson, took important steps to make life more comfortable for aging Americans. FDR signed the Social Security Act of 1935 into law as part of his New Deal, and when LBJ passed Medicare in 1965, he established a universal health care program for those 65 and older. But the country has embraced a neoliberal economic model since the election of Ronald Reagan, and all too often, older Americans have been quick to vote for far-right Republicans antagonistic to the social safety net. ..."
"... Since then, Ryan has doubled down on his delusion that the banking sector can manage Social Security and Medicare more effectively than the federal government. Republican attacks on Medicare have become a growing concern: according to EBRI, only 38 percent of workers are confident the program will continue to provide the level of benefits it currently does. ..."
"... As 2017 winds down, Americans with health problems are still in the GOP's crosshairs -- this time because of so-called tax reform. The Tax Cuts and Jobs Act (both the House and Senate versions) includes provisions that would undermine Obamacare and cause higher health insurance premiums for older Americans. According to AARP, "Older adults ages 50-64 would be at particularly high risk under the proposal, facing average premium increases of up to $1,500 in 2019 as a result of the bill." ..."
"... Countless Americans who are unable to afford those steep premiums would lose their insurance. The CBO estimates that the Tax Cuts and Jobs Act would cause the number of uninsured under 65 to increase 4 million by 2019 and 13 million by 2027. The bill would also imperil Americans 65 and over by cutting $25 billion from Medicare . ..."
"... Analyzing W2 tax records in 2012, U.S. Census Bureau researchers Michael Gideon and Joshua Mitchell found that only 14 percent of private-sector employers in the U.S. were offering a 401(k) or similar retirement packages to their workers. That figure was thought to be closer to 40 percent, but Gideon and Mitchell discovered the actual number was considerably lower when smaller businesses were carefully analyzed, and that larger companies were more likely to offer 401(k) plans than smaller ones. ..."
"... Today, millions of Americans work in the gig economy who don't have full-time jobs or receive W2s, but instead receive 1099s for freelance work. ..."
"... The combination of stagnant wages and an increasingly high cost of living have been especially hellish for Americans who are trying to save for retirement. The United States' national minimum wage, a mere $7.25 per hour, doesn't begin to cover the cost of housing at a time when rents have soared nationwide. Never mind the astronomical prices in New York City, San Francisco or Washington, D.C. Median rents for one-bedroom apartments are as high as $1,010 per month in Atlanta, $960 per month in Baltimore, $860 per month in Jacksonville and $750 per month in Omaha, according to ApartmentList.com. ..."
"... yeah, Canada has a neoliberal infestation that is somewhere between the US and the UK. France has got one too, but it is less advanced. I'll enjoy my great healthcare, public transportation, and generous paid time off while I can. ..."
"... Europeans may scratch their heads, but they should recall their own histories and the long struggle to the universal benefits now enjoyed. Americans are far too complacent. This mildness is viewed by predators as weakness and the attacks will continue. ..."
"... Not sure if many of the readers here watch non-cable national broadcast news, but Pete Peterson and his foundation are as everpresent an advertiser as the pharma industry. Peterson is the strongest, best organized advocate for gutting social services, social security, and sending every last penny out of the tax-mule consumer's pocket toward wall street. The guy needs an equivalent counterpoint enemy. ..."
"... The social advantages that we still enjoy were fought in the streets, and on the "bricks" flowing with the participants blood. 8 hr. day; women's right to vote; ability and right for groups of laborers to organize; worker safety laws ..and so many others. There is no historical memory on how those rights were achieved. We are slowly slipping into an oligarchy greased by the idea that the physical possession of material things is all that matters. Sheeple, yes. ..."
"... Mmm, I think American voters get what they want in the end. They want their politicians because they believe the lies. 19% of Americans believe they are in the top 1% of wealth. A huge percentage of poor people believe they or their kids will (not can, but will) become wealthy. Most Americans can't find France on a map. ..."
"... I may have been gone for about thirty years, but that has only sharpened my insights into America. It's very hard to see just how flawed America is from the inside but when you step outside and have some perspective, it's frightening. ..."
"... Our government, beginning with Reagan, turned its back on promoting the general welfare. The wealthy soon learned that their best return on investment was the "purchase" of politicians willing to pass the legislation they put in their hands. Much of their investment included creating the right wing media apparatus. ..."
"... The Class War is real. It has been going on for 40 years, with the Conservative army facing virtually no resistance. Conservatives welcome Russia's help. Conservatives welcome barriers to people voting. Conservatives welcome a populace that believes lies that benefit them. Conservatives welcome the social and financial decline of the entire middle class and poor as long as it profits the rich financially, and by extension enhances their power politically. ..."
"... "Single acts of tyranny may be ascribed to the accidental opinion of the day, but a series of oppressions, begun at a distinguished period and pursued unalterably through every change of ministers, too plainly prove a deliberate, systematic plan of reducing [a people] to slavery" Thomas Jefferson. Rights of British America, 1774 ME 1:193, Papers 1:125 ..."
"... yes, my problem with the post as well, completely ignores democrat complicity the part where someone with a 26k salary will pay 16k in insurance? No they won't, the system would collapse in that case which will be fine with me. ..."
"... As your quote appears to imply, it's not a problem that can be solved by voting which, let's not forget, is nothing more than expressing an opinion. I am not sticking around just to find out if economically-crushed, opiod-, entertainment-, social media-addled Americans are actually capable of rolling out tumbrils for trips to the guillotines in the city squares. I strongly suspect not. ..."
"... This is the country where, after the banks crushed the economy in 2008, caused tens of thousands to lose their jobs, and then got huge bailouts, the people couldn't even be bothered to take their money out of the big banks and put it elsewhere. Because, you know, convenience! Expressing an opinion, or mobilizing others to express an opinion, or educating or proselytizing others about what opinion to have, is about the limit of what they are willing, or know how to do. ..."
Dec 14, 2017 | www.nakedcapitalism.com

Yves here. I imagine many readers are acutely aware of the problems outlined in this article, if not beset by them already. By any rational standard, I should move now to a much cheaper country that will have me. I know individuals who live most of the year in third-world and near-third world countries, but they have very cheap ways of still having a toehold in the US and not (yet or maybe ever) getting a long-term residence visa. Ecuador is very accommodating regarding retirement visas, and a Social Security level income goes far there, but yours truly isn't retiring any time soon. And another barrier to an international move (which recall I did once, so I have some appreciation for what it takes), is that one ought to check out possible destinations but if you are already time and money and energy stressed, how do you muster the resources to do that at all, let alone properly?

Aside from the potential to greatly reduce fixed costs, a second impetus for me is Medicare. I know for most people, getting on Medicare is a big plus. I have a very rare good, very old insurance policy. When you include the cost of drug plans, Medicare is no cheaper than what I have now, and considerably narrows my network. Moreover, I expect it to be thoroughly crapified by ten years from now (when I am 70), which argues for getting out of Dodge sooner rather than later.

And that's before you get to another wee problem Lambert points out that I would probably not be happy in a third world or high end second world country. But the only bargain "world city" I know of is Montreal. I'm not sure it would represent enough of an all-in cost saving to justify the hassle of an international move and the attendant tax compliance burdens .and that charitably assumes I could even find a way to get permanent residence. Ugh.

By Alex Henderson, who has written for the L.A. Weekly, Billboard, Spin, Creem, the Pasadena Weekly and many other publications. Follow him on Twitter @alexvhenderson. Originally published at Alternet

Millions can no longer afford to retire, and may never be able when the GOP passes its tax bill.

The news is not good for millions of aging Baby Boomers and Gen Xers in the United States who are moving closer to retirement age. According to the Employee Benefit Research Institute's annual report on retirement preparedness for 2017, only 18 percent of U.S.-based workers feel "very confident" about their ability to retire comfortably ; Craig Copeland, senior research associate for EBRI and the report's co-author, cited "debt, lack of a retirement plan at work, and low savings" as "key factors" in workers' retirement-related anxiety. The Insured Retirement Institute finds a mere 23 percent of Baby Boomers and 24 percent of Gen Xers are confident that their savings will last in retirement. To make matters worse, more than 40 percent of Boomers and over 30 percent of Gen Xers report having no retirement savings whatsoever .

The U.S. has a retirement crisis on its hands, and with the far right controlling the executive branch and both houses of Congress, as well as dozens of state governments, things promise to grow immeasurably worse.

It wasn't supposed to be this way. Past progressive presidents, notably Franklin D. Roosevelt and Lyndon B. Johnson, took important steps to make life more comfortable for aging Americans. FDR signed the Social Security Act of 1935 into law as part of his New Deal, and when LBJ passed Medicare in 1965, he established a universal health care program for those 65 and older. But the country has embraced a neoliberal economic model since the election of Ronald Reagan, and all too often, older Americans have been quick to vote for far-right Republicans antagonistic to the social safety net.

In the 2016 presidential election, 55 percent of voters 50 and older cast their ballots for Donald Trump against just 44 percent for Hillary Clinton. (This was especially true of older white voters; 90 percent of black voters 45 and older, as well as 67 percent of Latino voters in the same age range voted Democratic.)

Sen. Bernie Sanders' (I-VT) economic proposals may have been wildly popular with millennials, but no demographic has a greater incentive to vote progressive than Americans facing retirement. According to research conducted by the American Association of Retired Persons, the three greatest concerns of Americans 50 and older are Social Security, health care costs and caregiving for loved ones -- all areas that have been targeted by Republicans.

House of Representatives Speaker Paul Ryan, a devotee of social Darwinist Ayn Rand , has made no secret of his desire to privatize Social Security and replace traditional Medicare with a voucher program. Had George W. Bush had his way and turned Social Security over to Wall Street, the economic crash of September 2008 might have left millions of senior citizens homeless.

Since then, Ryan has doubled down on his delusion that the banking sector can manage Social Security and Medicare more effectively than the federal government. Republican attacks on Medicare have become a growing concern: according to EBRI, only 38 percent of workers are confident the program will continue to provide the level of benefits it currently does.

The GOP's obsession with abolishing the Affordable Care Act is the most glaring example of its disdain for aging Americans. Yet Obamacare has been a blessing for Boomers and Gen Xers who have preexisting conditions. The ACA's guaranteed issue plans make no distinction between a 52-year-old American with diabetes, heart disease or asthma and a 52-year-old who has never had any of those illnesses. And AARP notes that under the ACA, the uninsured rate for Americans 50 and older decreased from 15 percent in 2013 to 9 percent in 2016.

According to the Congressional Budget Office, the replacement bills Donald Trump hoped to ram through Congress this year would have resulted in staggering premium hikes for Americans over 50. The CBO's analysis of the American Health Care Act, one of the earlier versions of Trumpcare, showed that a 64-year-old American making $26,500 per year could have gone from paying $1,700 annually in premiums to just over $16,000. The CBO also estimated that the GOP's American Health Care Act would have deprived 23 million Americans of health insurance by 2026.

As 2017 winds down, Americans with health problems are still in the GOP's crosshairs -- this time because of so-called tax reform. The Tax Cuts and Jobs Act (both the House and Senate versions) includes provisions that would undermine Obamacare and cause higher health insurance premiums for older Americans. According to AARP, "Older adults ages 50-64 would be at particularly high risk under the proposal, facing average premium increases of up to $1,500 in 2019 as a result of the bill."

The CBO estimates that the bill will cause premiums to spike an average of 10 percent overall, with average premiums increasing $890 per year for a 50-year-old, $1,100 per year for a 55-year-old, $1,350 per year for a 60-year-old and $1,490 per year for a 64-year-old. Premium increases, according to the CBO, would vary from state to state; in Maine, average premiums for a 64-year-old would rise as much as $1,750 per year.

Countless Americans who are unable to afford those steep premiums would lose their insurance. The CBO estimates that the Tax Cuts and Jobs Act would cause the number of uninsured under 65 to increase 4 million by 2019 and 13 million by 2027. The bill would also imperil Americans 65 and over by cutting $25 billion from Medicare .

As morally reprehensible as the GOP's tax legislation may be, it is merely an acceleration of the redistribution of wealth from the bottom to the top that America has undergone since the mid-1970s. (President Richard Nixon may have been a paranoid right-winger with authoritarian tendencies, but he expanded Medicare and supported universal health care.) Between the decline of labor unions, age discrimination, stagnant wages, an ever-rising cost of living, low interest rates, and a shortage of retirement accounts, millions of Gen Xers and Baby Boomers may never be able to retire.

Traditional defined-benefit pensions were once a mainstay of American labor, especially among unionized workers. But according to Pew Charitable Trusts, only 13 percent of Baby Boomers still have them (among millennials, the number falls to 6 percent). In recent decades, 401(k) plans have become much more prominent, yet a majority of American workers don't have them either.

Analyzing W2 tax records in 2012, U.S. Census Bureau researchers Michael Gideon and Joshua Mitchell found that only 14 percent of private-sector employers in the U.S. were offering a 401(k) or similar retirement packages to their workers. That figure was thought to be closer to 40 percent, but Gideon and Mitchell discovered the actual number was considerably lower when smaller businesses were carefully analyzed, and that larger companies were more likely to offer 401(k) plans than smaller ones.

Today, millions of Americans work in the gig economy who don't have full-time jobs or receive W2s, but instead receive 1099s for freelance work. Tax-deferred SEP-IRAs were once a great, low-risk way for freelancers to save for retirement without relying exclusively on Social Security, but times have changed since the 1980s and '90s when interest rates were considerably higher for certificates of deposit and savings accounts. According to Bankrate.com, average rates for one-year CDs dropped from 11.27 percent in 1984 to 8.1 percent in 1990 to 5.22 percent in 1995 to under 1 percent in 2010, where it currently remains.

The combination of stagnant wages and an increasingly high cost of living have been especially hellish for Americans who are trying to save for retirement. The United States' national minimum wage, a mere $7.25 per hour, doesn't begin to cover the cost of housing at a time when rents have soared nationwide. Never mind the astronomical prices in New York City, San Francisco or Washington, D.C. Median rents for one-bedroom apartments are as high as $1,010 per month in Atlanta, $960 per month in Baltimore, $860 per month in Jacksonville and $750 per month in Omaha, according to ApartmentList.com.

That so many older Americans are renting at all is ominous in its own right. FDR made home ownership a primary goal of the New Deal, considering it a key component of a thriving middle class. But last year, the Urban Institute found that 19 million Americans who previously owned a home are now renting, 31 percent between the ages of 36 and 45. Laurie Goodman, one of the study's authors, contends the Great Recession has "permanently raised the number of renters," and that the explosion of foreclosures has hit Gen Xers especially hard.

The severity of the U.S. retirement crisis is further addressed in journalist Jessica Bruder's new book "Nomadland: Surviving America in the 21st Century," which follows Americans in their 50s, 60s and even 70s living in RVs or vans , barely eking out a living doing physically demanding, seasonal temp work from harvesting sugar beets to cleaning toilets at campgrounds. Several had high-paying jobs before their lives were blown apart by the layoffs, foreclosures and corporate downsizing of the Great Recession. Bruder speaks with former college professors and software professionals who now find themselves destitute, teetering on the brink of homelessness and forced to do backbreaking work for next to nothing. Unlike the big banks, they never received a bailout.

These neo-nomads recall the transients of the 1930s, themselves victims of Wall Street's recklessness. But whereas FDR won in a landslide in 1932 and aggressively pursued a program of progressive economic reforms, Republicans in Congress have set out to shred what little remains of the social safety net, giving huge tax breaks to millionaires and billionaires . The older voters who swept Trump into office may have signed their own death warrants.

If aging Americans are going to be saved from this dystopian future, the U.S. will have to forge a new Great Society. Programs like Social Security, Medicare and Medicaid will need to be strengthened, universal health care must become a reality and age discrimination in the workplace will have to be punished as a civil rights violation like racial and gender-based discrimination. If not, millions of Gen Xers and Boomers will spend their golden years scraping for pennies.

Expat , , December 14, 2017 at 6:29 am

I certainly will never go back to the States for these and other reasons. I have a friend, also an American citizen, who travels frequently back to California to visit his son. He is truly worried about getting sick or having an accident when he is there since he knows it might bankrupt him. As he jokes, he would be happy to have another heart attack here in France since it's free!

For those of you who have traveled the world and talked to people, you probably know that most foreigners are perplexed by America's attitude to health care and social services. The richest nation in the world thinks that health and social security (in the larger sense of not being forced into the street) are not rights at all. Europeans scratch their heads at this.

The only solution is education and information, but they are appalling in America. America remains the most ignorant and worst educated of the developed nations and is probably beaten by many developing nations. It is this ignorance and stupidity that gets Americans to vote for the likes of Trump or any of the other rapacious millionaires they send to office every year.

A first step would be for Americans to insist that Congress eliminate its incredibly generous and life-long healthcare plans for elected officials. They should have to do what the rest of Americans do. Of course, since about 95% of Congress are millionaires, it might not be effective. But it's a start.

vidimi , , December 14, 2017 at 6:40 am

France has its share of problems, but boy do they pale next to the problems in America or even Canada. Life here is overall quite pleasant and I have no desire to go back to N.A.

Marco , , December 14, 2017 at 6:46 am

Canada has problems?

WobblyTelomeres , , December 14, 2017 at 7:47 am

Was in Yellowknife a couple of years ago. The First Nations people have a rough life. From what I've read, such extends across the country.

vidimi , , December 14, 2017 at 8:03 am

yeah, Canada has a neoliberal infestation that is somewhere between the US and the UK. France has got one too, but it is less advanced. I'll enjoy my great healthcare, public transportation, and generous paid time off while I can.

JEHR , , December 14, 2017 at 1:46 pm

The newest neoliberal effort in Canada was put forward by our Minister of Finance (a millionaire) who is touting a bill that will get rid of defined benefit pension plans given to public employees for so-called target benefit pension plans. The risk for target plans is taken by the recipient. Morneau's former firm promotes target benefit pension plans and the change could benefit Morneau himself as he did not put his assets from his firm in a blind trust. At the very least, he has a conflict of interest and should probably resign.

There is always an insidious group of wealthy people here who would like to re-make the world in their own image. I fear for the future.

JEHR , , December 14, 2017 at 1:55 pm

Yes, I agree. There is an effort to "simplify" the financial system of the EU to take into account the business cycle and the financial cycle .

Dita , , December 14, 2017 at 8:25 am

Europeans may scratch their heads, but they should recall their own histories and the long struggle to the universal benefits now enjoyed. Americans are far too complacent. This mildness is viewed by predators as weakness and the attacks will continue.

jefemt , , December 14, 2017 at 10:02 am

We really should be able to turn this around, and have an obligation to ourselves and our 'nation state' , IF there were a group of folks running on a fairness, one-for-all, all-for-one platform. That sure isn't the present two-sides-of-the-same-coin Democraps and Republicrunts.

Not sure if many of the readers here watch non-cable national broadcast news, but Pete Peterson and his foundation are as everpresent an advertiser as the pharma industry. Peterson is the strongest, best organized advocate for gutting social services, social security, and sending every last penny out of the tax-mule consumer's pocket toward wall street. The guy needs an equivalent counterpoint enemy.

Check it out, and be vigilant in dispelling his message and mission. Thanks for running this article.

Running away: the almost-haves run to another nation state, the uber-wealthy want to leave the earth, or live in their private Idaho in the Rockies or on the Ocean. What's left for the least among us? Whatever we create?
https://www.pgpf.org/

Scramjett , , December 14, 2017 at 1:43 pm

I think pathologically optimistic is a better term than complacent. Every time someone dumps on them, their response is usually along the lines of "Don't worry, it'll get better," "Everything works itself out in the end," "maybe we'll win the lottery," my personal favorite "things will get better, just give it time" (honestly it's been 40 years of this neoliberal bullcrap, how much more time are we supposed to give it?), "this is just a phase" or "we can always bring it back later and better than ever." The last one is most troubling because after 20 years of witnessing things in the public sphere disappearing, I've yet to see a single thing return in any form at all.

I'm not sure where this annoying optimism came from but I sure wish it would go away.

sierra7 , , December 14, 2017 at 8:45 pm

The "optimism" comes from having a lack of historical memory. So many social protections that we have/had is seen as somehow coming out of the ether benevolently given without any social struggles. The lack of historical education on this subject in particular is appalling. Now, most would probably look for an "APP" on their "dumbphones" to solve the problem.

The social advantages that we still enjoy were fought in the streets, and on the "bricks" flowing with the participants blood. 8 hr. day; women's right to vote; ability and right for groups of laborers to organize; worker safety laws ..and so many others. There is no historical memory on how those rights were achieved. We are slowly slipping into an oligarchy greased by the idea that the physical possession of material things is all that matters. Sheeple, yes.

Jeremy Grimm , , December 14, 2017 at 4:44 pm

WOW! You must have been outside the U.S. for a long time. Your comment seems to suggest we still have some kind of democracy here. We don't get to pick which rapacious millionaires we get to vote for and it doesn't matter any way since whichever one we pick from the sad offerings ends up with policies dictated from elsewhere.

Expat , , December 14, 2017 at 6:10 pm

Mmm, I think American voters get what they want in the end. They want their politicians because they believe the lies. 19% of Americans believe they are in the top 1% of wealth. A huge percentage of poor people believe they or their kids will (not can, but will) become wealthy. Most Americans can't find France on a map.

So, yes, you DO get to pick your rapacious millionaire. You send the same scumbags back to Washington every year because it's not him, it the other guys who are the problem. One third of Americans support Trump! Really, really support him. They think he is Jesus, MacArthur and Adam Smith all rolled up into one.

I may have been gone for about thirty years, but that has only sharpened my insights into America. It's very hard to see just how flawed America is from the inside but when you step outside and have some perspective, it's frightening.

Disturbed Voter , , December 14, 2017 at 6:29 am

The Democrat party isn't a reform party. Thinking it is so, is because of the "No Other Choice" meme. Not saying that the Republican party works in my favor. They don't. Political reform goes deeper than reforming either main party. It means going to a European plurality system (with its own downside). That way growing Third parties will be viable, if they have popular, as opposed to millionaire, support. I don't see this happening, because of Citizens United, but if all you have is hope, then you have to go with that.

Carolinian , , December 14, 2017 at 8:05 am

Had George W. Bush had his way and turned Social Security over to Wall Street, the economic crash of September 2008 might have left millions of senior citizens homeless.

Substitute Bill Clinton for George Bush in that sentence and it works just as well. Neoliberalism is a bipartisan project.

And many of the potential and actual horrors described above arise from the price distortions of the US medical system with Democratic acquiescence in said system making things worse. The above article reads like a DNC press release.

And finally while Washington politicians of both parties have been threatening Social Security for years that doesn't mean its third rail status has been repealed. The populist tremors of the last election -- which have caused our elites to lose their collective mind -- could be a mere prelude to what will happen in the event of a full scale assault on the safety net.

KYrocky , , December 14, 2017 at 12:05 pm

Substitute Obama's quest for a Grand Bargain as well.

Our government, beginning with Reagan, turned its back on promoting the general welfare. The wealthy soon learned that their best return on investment was the "purchase" of politicians willing to pass the legislation they put in their hands. Much of their investment included creating the right wing media apparatus.

The Class War is real. It has been going on for 40 years, with the Conservative army facing virtually no resistance. Conservatives welcome Russia's help. Conservatives welcome barriers to people voting. Conservatives welcome a populace that believes lies that benefit them. Conservatives welcome the social and financial decline of the entire middle class and poor as long as it profits the rich financially, and by extension enhances their power politically.

If retirees flee our country that will certainly please the Conservatives as that will be fewer critics (enemies). Also less need or demand for social programs.

rps , , December 14, 2017 at 5:01 pm

"Single acts of tyranny may be ascribed to the accidental opinion of the day, but a series of oppressions, begun at a distinguished period and pursued unalterably through every change of ministers, too plainly prove a deliberate, systematic plan of reducing [a people] to slavery" Thomas Jefferson. Rights of British America, 1774 ME 1:193, Papers 1:125

tegnost , , December 14, 2017 at 8:59 am

yes, my problem with the post as well, completely ignores democrat complicity the part where someone with a 26k salary will pay 16k in insurance? No they won't, the system would collapse in that case which will be fine with me.

Marco , , December 14, 2017 at 6:55 am

"President Richard Nixon may have been a paranoid right-winger with authoritarian tendencies, but he expanded Medicare and supported universal health care."

"Gimme that old time Republican!"

One of the reasons I love NC is that most political economic analysis is often more harsh on the Democrats than the Repubs so I am a bit dismayed how this article is way too easy on Team D. How many little (and not so little) knives in the back from Clinton and Obama? Is a knife in the chest that much worse?

OpenThePodBayDoorsHAL , December 14, 2017 at 3:57 pm

This entire thread is simply heartbreaking, Americans have had their money, their freedom, their privacy, their health, and sometimes their very lives taken away from them by the State. But the heartbreaking part is that they feel they are powerless to do anything at all about it so are just trying to leave.

But "People should not fear the government; the government should fear the people"

tagio , December 14, 2017 at 4:39 pm

It's more than a feeling, HAL. https://www.newyorker.com/news/john-cassidy/is-america-an-oligarchy Link to the academic paper embedded in article.

As your quote appears to imply, it's not a problem that can be solved by voting which, let's not forget, is nothing more than expressing an opinion. I am not sticking around just to find out if economically-crushed, opiod-, entertainment-, social media-addled Americans are actually capable of rolling out tumbrils for trips to the guillotines in the city squares. I strongly suspect not.

This is the country where, after the banks crushed the economy in 2008, caused tens of thousands to lose their jobs, and then got huge bailouts, the people couldn't even be bothered to take their money out of the big banks and put it elsewhere. Because, you know, convenience! Expressing an opinion, or mobilizing others to express an opinion, or educating or proselytizing others about what opinion to have, is about the limit of what they are willing, or know how to do.

[Dec 14, 2017] In defence of the labour theory of value

Actually Marx's "labor theory of value" should be properly called the "theory of surplus value".
Notable quotes:
"... For Marx, value was socially-necessary labour time: David Harvey is good on this. From this perspective, exploitation and alienation are linked. Workers are exploited because they must work longer than necessary to get their consumption bundle. And they are alienated because this work is unsatisfying and a source of unfreedom. Now, I'll concede that many people hate the labour theory of value. One reason for this is that many discussions of it quickly become obscurantist – as if "value" is some mystical entity embodied in commodities. ..."
"... This, though, certainly was not Marx's intention. Quite the opposite. He intended his theory to be a demystification. He wanted to show how what looked like relations between things – the exchange of money for goods or labour-time – were in fact relations between people. And unequal ones at that. ..."
"... I suspect that some of the animosity to Marx's use of LTV arises because of a resistance to the inference that Marx drew from it – that workers are exploited. This issue, however, is independent of the validity of not of the LTV. For example, Roemer thinks workers are exploited without believing in the LTV, and Smith believed the LTV without arguing that workers were exploited. ..."
"... * He seems to be recovering now. The vet is also expected to make a full recovery eventually. ..."
"... Further understanding, which evolved after Marx, is that the LTV is just special case of the principle that what produces a surplus of usefulness is not labour per se, but the energy used in the transformation of a larger quantity of something into a smaller quantity of something else, and muscle power is just one way, even if it was the main one for a very long time, to obtain energy to transform a large quantity of less useful commodities into a smaller quantity of more useful commodities. ..."
"... And this follows into the impression that I have derived from various authors that our high standards of living depend not on the high "productivity" of labour, but on the high "productivity" of fossil fuels, which are the product of the fertility of land ..."
"... the complex process of differentiation in the economy (aka the division of labor) obscures the relationship between the creation of the surplus (work time above that necessary to reproduce consumption bundle) and its utilization by capitalists via investment. Investment is not possible without exploitation of workers, but that relationship is occluded by the mechanics of employment, markets, and property. ..."
"... My impression is that your bearded friend Karl does not use "alienation" in that sense at all, in an economic sense, but in a humanist sense: that by being separated from the means of production proletarians are alienated from the meaning of their work, from work as a human activity, as distinct from an economic activity ..."
"... Practically every "Dilbert" strip is about "alienation". This is my favourite ..."
"... Placing a high value on the frivolous and "useless" has always been the hallmark of those most able to decide the value of anything, because they have no use for economic use (so to speak), but rather social signaling. Broad social respect is an extremely expensive thing to buy with money alone. ..."
Dec 11, 2017 | stumblingandmumbling.typepad.com

Lucius has been poorly recently, which has required some trips to the vet and therefore a bill of a size that only David Davis could negotiate*. This has made me wonder: is there more to be said for the labour theory of value than we like to think?

For a long time, I've not really cared about this theory one way or the other. This is partly because I've not bothered much with questions of value; partly because, as John Roemer has shown, we don't need (pdf) a labour theory of value to suggest workers are exploited; and partly because the main Marxian charges against capitalism – for example that it entails relationships of domination – hold true (or not!) independently of the theory.

As I approach retirement, however, I've begun to change my mind. I think of major expenses in terms of labour-time because they mean I have to work longer. A trip to the vet is an extra fortnight of work; a good guitar an extra month, a car an extra year, and so on.

When I consider my spending, I ask: what must I give up in order to get that? And the answer is my time and freedom. My labour-time is the measure of value.

This is a reasonable basis for the claim that workers are exploited. To buy a bundle of goods and services, we must work a number of hours a week. But taking all workers together, the hours we work are greater than the hours needed to produce those bundles because we must also work to provide a profit for the capitalist. As Marx put it:

We have seen that the labourer, during one portion of the labour-process, produces only the value of his labour-power, that is, the value of his means of subsistence During the second period of the labour-process, that in which his labour is no longer necessary labour, the workman, it is true, labours, expends labour-power; but his labour, being no longer necessary labour, he creates no value for himself. He creates surplus-value which, for the capitalist, has all the charms of a creation out of nothing. This portion of the working-day, I name surplus labour-time.

For Marx, value was socially-necessary labour time: David Harvey is good on this. From this perspective, exploitation and alienation are linked. Workers are exploited because they must work longer than necessary to get their consumption bundle. And they are alienated because this work is unsatisfying and a source of unfreedom. Now, I'll concede that many people hate the labour theory of value. One reason for this is that many discussions of it quickly become obscurantist – as if "value" is some mystical entity embodied in commodities.

This, though, certainly was not Marx's intention. Quite the opposite. He intended his theory to be a demystification. He wanted to show how what looked like relations between things – the exchange of money for goods or labour-time – were in fact relations between people. And unequal ones at that.

What's more, the charge of obscurantism against Marx is an especially weak one when it comes from orthodox economics. Much of this invokes unobservable concepts such as the natural rate of unemployment, marginal productivity, utility, the marginal product of capital and natural rate of interest – ideas which, in the last two cases, might not even be theoretically coherent.

In fact, the LTV is reasonably successful by the standards of conventional economics: we have empirical evidence to suggest that it does (pdf) a decent (pdf) job of explaining (pdf) relative prices – not that this was how Marx intended it to be used.

You can of course, think of counter-examples to the theory. But so what? in the social sciences, no substantial theory is 100% true.

I suspect that some of the animosity to Marx's use of LTV arises because of a resistance to the inference that Marx drew from it – that workers are exploited. This issue, however, is independent of the validity of not of the LTV. For example, Roemer thinks workers are exploited without believing in the LTV, and Smith believed the LTV without arguing that workers were exploited.

By the (low) standards of economic theories, perhaps the LTV isn't so bad.

* He seems to be recovering now. The vet is also expected to make a full recovery eventually.

December 11, 2017 Permalink

Comments

Luis Enrique , December 11, 2017 at 02:09 PM

But the LTV says more than the output of the economy is divided between the workers and the (suppliers and) owners of capital goods, doesn't it? I mean, mainstream econ says that too. And unless ownership of capital inputs to production is distributed equally across society, then some people consume things that other's labour has produced, which means workers must produce more than they consume. But again, that's basic mainstream stuff, not LVT. You end by saying you can believe in exploitation but not LVT, and vice versa, but the main body of this blog seems to be connecting the two. I am confused.

Of course if you have the ability to vary your labour supply, and labour is how you earn your money, then you ask yourself how much you need to work to purchase whatever. But again that's mainstream not LVT.

David Friedman , December 11, 2017 at 06:14 PM

Your version of the labor theory of value is one of Adam Smith's versions. I don't think it is Marx's, but I know Smith better than Marx.

And definitely not Ricardo's.

ConfusedNeoLiberal , December 11, 2017 at 08:51 PM

What about value, in terms of risk among others, that the employers put in starting a new business?

Blissex , December 12, 2017 at 12:23 AM

"Smith believed the LTV without arguing that workers were exploited."

The Marxian approach was interested in, as other commenters have said, in the specific capitalist case, where "capitalism" for him means strictly "labour for hire" by workers alienated from the means of production by their ownership by capitalists.

But the labour theory of value, as understood by what Marx called "classicals", applies also to all labour, and he used it in that sense.

My understanding of the classicals and the LTV is reduced to a minimum this:

Further understanding, which evolved after Marx, is that the LTV is just special case of the principle that what produces a surplus of usefulness is not labour per se, but the energy used in the transformation of a larger quantity of something into a smaller quantity of something else, and muscle power is just one way, even if it was the main one for a very long time, to obtain energy to transform a large quantity of less useful commodities into a smaller quantity of more useful commodities.

And this follows into the impression that I have derived from various authors that our high standards of living depend not on the high "productivity" of labour, but on the high "productivity" of fossil fuels, which are the product of the fertility of land.

Blissex , December 12, 2017 at 12:29 AM

"value, in terms of risk among others, that the employers put in starting a new business?"

If the business produces a surplus, that is value added, than the surplus is the product of the energy/labour expended by all participants

How it is accounted for is one issue, especially over multiple time periods, and how it is shared out is a social relationship.

As to risk, everybody in the business runs the risk of not getting paid at the end of the month, and the opportunity cost of not doing something else, whichever labour they put in.

How risk and opportunity cost are accounted for, especially over multiple time periods, is another issue, and how they are shared is another social relationship.

Blissex , December 12, 2017 at 01:14 AM

"the surplus is the product of the energy/labour expended by all participants"

I'll perhaps further diminish the reputation of my "contributions" this way: perhaps all social relationships of production (at least among males) map closely onto (cursorial) group hunts.

https://78.media.tumblr.com/d4db6631d383cbfc9bd135c799a06e7f/tumblr_n3u8r0eJu01sohvpko1_500.jpg

:-)

Luis Enrique , December 12, 2017 at 08:40 AM

That's a very long winded way of saying that making stuff requires labour.

Blissex , December 12, 2017 at 01:50 PM

"a very long winded way of saying that making stuff requires labour"

Well, that's obvious, but what the classicals thought of as the LTV was not entirely obvious: that "surplus" (rather than "stuff") comes from the fertility of land and the transformation achieved with labour, and that nothing else is needed to achieve "surplus". Because for example capital goods are themselves surplus from fertility or labour, again back to the first blades made from chipping lumps of obsidian.

That's quite a bit more insightful, never mind also controversial, than "making stuff requires labour".

Rich Clayton , December 12, 2017 at 03:35 PM

Love this post. But, being a fellow marxist, I can't help but to disagree with this bit: "And they are alienated because this work is unsatisfying and a source of unfreedom." This is a colloquial use of alienation, and its not wrong.

But Marx is getting at something else: the complex process of differentiation in the economy (aka the division of labor) obscures the relationship between the creation of the surplus (work time above that necessary to reproduce consumption bundle) and its utilization by capitalists via investment. Investment is not possible without exploitation of workers, but that relationship is occluded by the mechanics of employment, markets, and property.

That's the sense in which workers are alienated under capitalism. Socialism could still have boring work, but, in so far as the investment function is brought under collective democratic control, workers would not be alienated in the special sense Marx is using.

Lukas , December 12, 2017 at 03:41 PM

@Luis Enrique

"Where else could stuff come from?" Well, assuming by "stuff" we mean objects of value, nowhere. But the reasons for which we value them are not dependent upon their natural origins or the labor required for their production. I don't value a computer because it's made of plastic and silicon and so forth, nor because of the labor required to produce it. It's useful because of what it does, not what it is; it's sort of Kant's definition of art versus the general conception of tools.

As for the relationship between production functions and the LTV, that seems (at least prima facie) pretty straightforward. If there is a high olefimity ascribed to the surplus provided by the product created by X, Y, then those production functions will, themselves, be assigned greater value, i.e., be worthy of more labor-time to attain. E.g., even if I'm not very good at fishing, if I really like the flavor of fish over other protein sources, I'll spend more time increasing my labor efficiency (be a better fisherman).

Blissex , December 12, 2017 at 05:36 PM

"Everything ultimately derives from nature and the labour of humans. Where else could stuff come from? That's all there is."

Then in theory the cost (not the price) of everything can be measured in terms of physical quantities of primary inputs and of hours of work.

"What's controversial about it?"

What is controversial is that written like that you sound like a Marxist: the alternative approach is to say that *property* creates surplus.
In the standard neoclassical approach "property" is the often forgotten "initial endowments" of the single representative agent.

Anyhow the "narrative" is: as Mr. Moneybags owns the iron mine and the coal mine and the smelter and the ingot roller and spoon press, then he is entitled to the surplus because without his property it is impossible to make spoons. Labour on its own is worthless, wastes away, while property is "valuable" capital.

"And how one gets from a production function (stuff is made from X, Y and Z) to LTV"

Production functions are just not very elaborate scams to pretend that property is the factor of production, rather then the fertility of land and the energy of labour, and land does not exist (after JB Clark "disappeared" it) and labour is just an accessory. Part of the scam is that "X, Y and Z" are denominated in money, not physical quantities.

As I wrote in another answer accounting for the output of land fertility and labour energy and how it is shared are the difficult bits. Welcome to the institutional approach to the political economy. :-)

Blissex , December 12, 2017 at 05:41 PM

"the reasons for which we value them are not dependent upon their natural origins or the labor required for their production"

And here be dragons. Your old bearded acquaintance Karl has something to say about this :-).

"It's useful because of what it does, not what it is"

So cleaning floors which is very useful should have a high value, while Leonardo paintings, that are merely scarce, should have a low value :-).

I though that most people reckoned that "value" depends on scarcity: so there is a scarcity of even not very good promoters of torysm, so G Osborne is entitled to £600,000 a year to edit the "Evening Standard", but there is no scarcity of excellent cleaners, so cleaners gets minimum wage if they are lucky.

:-)

Luis Enrique , December 12, 2017 at 05:43 PM

counting hours of worked is not a measure of cost, it is a tally of hours worked. In mainstream econ, production functions describe a physical production process (to make 1 unit of Y, you combine inputs like so) and are not not denominated in money. e.g. You multiply L by w to get cost.

mulp , December 12, 2017 at 05:46 PM

Economies are zero sum. GDP must be paid for, otherwise it won't be produced. The only source of money comes from labor costs, the money paid to workers to work producing GDP. As conservatives note, all taxes fall on workers by directly taking their pay, or by hiking the prices of what workers buy.

Taxes pay workers, e.g. teachers, and doctors with Medicare and Medicaid, weapons makers and warriors, or pay people to pay workers, Social Security benefits and SNAP.

Capital has value because it is built by paying workers. It gets a cut to repay the payers of workers.

Monopoly rent seeking is unsustainable. If a monoplists takes more from workers than they pay workers, he eventually takes so much money workers can no longer pay for GDP and it falls to zero as workers produce what they consume without buying from the monopolist capital.

Tanstaafl

As Keynes put it:

"I feel sure that the demand for capital is strictly limited in the sense that it would not be difficult to increase the stock of capital up to a point where its marginal efficiency had fallen to a very low figure. This would not mean that the use of capital instruments would cost almost nothing, but only that the return from them would have to cover little more than their exhaustion by wastage and obsolescence together with some margin to cover risk and the exercise of skill and judgment. In short, the aggregate return from durable goods in the course of their life would, as in the case of short-lived goods, just cover their labour costs of production plus an allowance for risk and the costs of skill and supervision.

"Now, though this state of affairs would be quite compatible with some measure of individualism, yet it would mean the euthanasia of the rentier, and, consequently, the euthanasia of the cumulative oppressive power of the capitalist to exploit the scarcity-value of capital. Interest today rewards no genuine sacrifice, any more than does the rent of land. The owner of capital can obtain interest because capital is scarce, just as the owner of land can obtain rent because land is scarce. But whilst there may be intrinsic reasons for the scarcity of land, there are no intrinsic reasons for the scarcity of capital. An intrinsic reason for such scarcity, in the sense of a genuine sacrifice which could only be called forth by the offer of a reward in the shape of interest, would not exist, in the long run, except in the event of the individual propensity to consume proving to be of such a character that net saving in conditions of full employment comes to an end before capital has become sufficiently abundant. But even so, it will still be possible for communal saving through the agency of the State to be maintained at a level which will allow the growth of capital up to the point where it ceases to be scarce."


Economies are zero sum. The value of goods and services must equal the labor costs in the long run. Tanstaaafl

Blissex , December 12, 2017 at 06:01 PM

"Socialism could still have boring work, but, in so far as the investment function is brought under collective democratic control, workers would not be alienated in the special sense Marx is using."

My impression is that your bearded friend Karl does not use "alienation" in that sense at all, in an economic sense, but in a humanist sense: that by being separated from the means of production proletarians are alienated from the meaning of their work, from work as a human activity, as distinct from an economic activity.

Collective ownership does not change at all that kind of alienation: being a cog in the capitalist machinery is no less alienating than being a cog in the collectivist machinery.

I think that our blogger when he talks about distributing control of the production process to workers is far closer to the marxian ideal than a collectivist approach.

Practically every "Dilbert" strip is about "alienation". This is my favourite:

http://dilbert.com/strip/2002-03-09

But these are also good:

http://dilbert.com/strip/1991-12-26
http://dilbert.com/strip/1993-01-05
http://dilbert.com/strip/1993-04-26
http://dilbert.com/strip/1994-11-07
http://dilbert.com/strip/1996-03-03
http://dilbert.com/strip/1996-07-24
http://dilbert.com/strip/1996-10-10
http://dilbert.com/strip/2002-08-10

Luis Enrique , December 12, 2017 at 06:26 PM

That is not what zero sum means

Blissex , December 12, 2017 at 06:53 PM

"counting hours of worked is not a measure of cost"

For a definition of "cost" that is made-up disregarding P Sraffa's work and in general the classics.

"multiply L by w to get cost."

As J Robinson and others pointed out that "w" depends on the distribution of income, on the interest rate, etc., so is an institutional matter.
As I was saying, accounting for the surplus and how to share it is not so easily handwavable.

Luis Enrique , December 12, 2017 at 08:55 PM

sorry, I meant for a money definition of cost that is not just counting inputs, but which is inputs multiplied by their prices.

nobody is hand waving. I think the mainstream view is that 'value' and 'surplus' are not meaningful terms, only prices and profits and subjective value. A production function says nothing about prices, you have to explain them with other stuff, and as you say, institutions and all manner of things could come in the play there.

You can say that that workers produce more in money terms than than they are paid, which is trivial (the wages paid by an employer are less than its gross profits so long as there are non-zero returns to capital, interest on a loan or dividends or whatever) and to my mind it's silly to define that as exploitation because it would apply in situations where the 'capitalist' is getting a small return and workers rewarded handsomely by any standard. Better imo to define exploitation as when capitalists are earning excess returns (and I'd fudge that by differentiating between workers' wages and salaries of top execs). Otherwise you lay yourself open to "the only thing worse than being exploited by capitlists is not beingn exploited by capitalists" which is J Robinson too I believe.

Luis Enrique , December 12, 2017 at 08:57 PM

and i think you only have to look at the income distribution to infer workers are being expoloited

B.L. Zebub , December 13, 2017 at 04:02 AM

@Blissex,

This is a genuine question: what you exposed above is related to or influenced by Steve Keen's ideas, yes? If so, I'd be interested in reading about that in more detail.

Lukas , December 13, 2017 at 04:28 AM

@Blissex

I've always thought that defining value by scarcity was an absurd misdirection, in part because there is no reason that the two should correlate at all. At any point in socioeconomic development beyond subsistence, value is to some extent socially defined, not economically defined. Status ends up being the most "useful" resource, as we see among all those who've never had to worry about their material conditions.

Placing a high value on the frivolous and "useless" has always been the hallmark of those most able to decide the value of anything, because they have no use for economic use (so to speak), but rather social signaling. Broad social respect is an extremely expensive thing to buy with money alone.

@Luis Enrique

Ah, but name for me a production process that doesn't take place over time. There's an infinite amount of time for all of us, but for each of us only so much, and those who fail to value it die full of regret. Surely someone somewhere must have something to say about this.

Luis Enrique , December 13, 2017 at 08:34 AM

I don't know why I wrote the above. Surplus is also a mainstream term. See wages set by bargaing over a surplus. Presume it's based on prices of outputs compared to inputs or if in model with real quantities not prices, then in subjective values.

Lukas production functions are defined over a period of time.

Blissex , December 13, 2017 at 11:43 AM

Ahem, I am trying to explain my understanding of Marx, who wrote both as economist and a philosopher, and a politial theorist.

Alienation, exploitation and inequality are technically distinct concepts, even if in the marxist (view (and that of every business school, that are faithful to marxist political economy) capitalist control of the means of production leads to alienation which leads to exploitation which leads to inequality. In the marxian political economy inequality can exist even with exploitation, for example, and that makes it less objectionable.

"Surplus is also a mainstream term. See wages set by bargaing over a surplus."

Some Economists have not forgotten at least some terminology of political economy and some Departments of Business still have surviving "history of economic thought" courses that some postgrads may still accidentally occasionally wander into and pick up some terms from...

"are not meaningful terms, only prices and profits and subjective value."

But the mainstream focus on prices and profits etc. is the purest handwaving, because it begs the question...

"A production function says nothing about prices"

Ha! This is one of the best examples where mainstream theory handwaves furiously: mainstream production functions switch effortlessly from "capital" as phusical quantities to aggregating "capital" by reckoning it in "numeraire". That is all about prices, and even about future expected prices and future expected rates of discount. Therefore rational expectations, a grand feat of handwaving.

Blissex , December 13, 2017 at 11:51 AM

"defining value by scarcity was an absurd misdirection, in part because there is no reason that the two should correlate at all."

Ahhhhhhh but this is a very political point and not quite agreeable because:

One of the conceits of "microfoundations" is to show that there are "laws" of Economics that are precise, so everybody get exactly their just compensation, so for example demand-supply schedules are always presented, cleverly, as lines and static.

The view of political economists is that instead "everything" lies within boundaries of feasibility, which are dynamic, so for example demand-supply schedules are ribbons that change over time and circumstances, and transactions happens not at uniquely determined points of intersections, but in regions of feasibility, the precise point dependent on institutional arrangements.

So the LTV determines one boundary for "price" and desirability another boundary.

Blissex , December 13, 2017 at 12:03 PM

"exposed above is related to or influenced by Steve Keen's ideas"

Related and independently derived, but also a bit influenced. I had always suspected that the "classicals" used "labour" as a synonym for "muscle power", but various later readings persuaded me that was indeed the case. Later post will have some hopefully interesting detail. Then I looked into the literature and found that obviously this had been figured out before (centuries ago in some cases, like B de Mandeville).

Anyhow for similar approaches some references:

Luis Enrique , December 13, 2017 at 04:33 PM

Blissex if you can come up with a better way of trying to describe total quantities of highly heterogeneous things (i.e. capital) you have a Nobel awaiting. Everybody know that attempts to put a number on the real quantity of capital is always going to be a rough and ready endeavour.

I don't see how working with prices and profits is 'handwaving'. What question does it beg? Much of economics is about trying to explain these things. I would not say economics focuses on prices and profits because many economics models work with real quantities that are high abstract and in theory are made commensurate using subjective value (utility) as the unit of account.

And I don't think this lot
https://www.theguardian.com/business/2010/oct/11/nobel-prize-for-economics-three-winners
picked up the term surplus by accidentally wandering in to the wrong seminar

[Dec 13, 2017] A stunning 33% of job seekers ages 55 and older are long-term unemployed, according to the AARP Public Policy Institute

Notable quotes:
"... And, recent studies have shown, the longer you're out of work - especially if you're older and out of work - the harder it becomes to get a job offer. ..."
Dec 13, 2017 | www.nakedcapitalism.com

Livius Drusus , December 13, 2017 at 2:44 pm

I thought this was an interesting article. Apologies if this has been posted on NC already.

A stunning 33% of job seekers ages 55 and older are long-term unemployed, according to the AARP Public Policy Institute. The average length of unemployment for the roughly 1.2 million people 55+ who are out of work: seven to nine months. "It's emotionally devastating for them," said Carl Van Horn, director of Rutgers University's John J. Heldrich Center for Workforce Development, at a Town Hall his center and the nonprofit WorkingNation held earlier this year in New Brunswick, N.J.

... ... ...

The fight faced by the long-term unemployed

And, recent studies have shown, the longer you're out of work - especially if you're older and out of work - the harder it becomes to get a job offer.

The job-finding rate declines by roughly 50% within eight months of unemployment, according to a 2016 paper by economists Gregor Jarosch of Stanford University and Laura Pilossoph of the Federal Reserve Bank of New York. "Unemployment duration has a strongly negative effect on the likelihood of subsequent employment," wrote researchers from the University of Maryland and the U.S. Census Bureau in another 2016 paper.

"Once upon a time, you could take that first job and it would lead to the next job and the job after that," said Town Hall panelist John Colborn, chief operating officer at the nonprofit JEVS Human Services, of Philadelphia. "The notion of a career ladder offered some hope of getting back into the labor market. The rungs of the ladder are getting harder and harder to find and some of them are broken."

In inner cities, said Kimberly McClain, CEO of The Newark Alliance, "there's an extra layer beyond being older and out of work. There are issues of race and poverty and being defined by your ZIP Code. There's an incredible sense of urgency."

... ... ...

Filling a work gap

If you are over 50, unemployed and have a work gap right now, the Town Hall speakers said, fill it by volunteering, getting an internship, doing project work, job-shadowing someone in a field you want to be in or taking a class to re-skill. These kind of things "make a candidate a lot more attractive," said Colborn. Be sure to note them in your cover letter and rιsumι.

Town Hall panelist Amanda Mullan, senior vice president and chief human resources officer of the New Jersey Resources Corp. (a utility company based in Wall, N.J.), said that when her company is interviewing someone who has been out of work lately, "we will ask: 'What have you done during that time frame?' If we get 'Nuthin,' that shows something about the individual, from a motivational perspective."

... ... ...

The relief of working again

Finally finding work when you're over 50 and unemployed for a stretch can be a relief for far more than financial reasons.

"Once I landed my job, the thing I most looked forward to was the weekend," said Konopka. "Not to relax, but because I didn't have to think about finding a job anymore. That's 24/7 in your head. You're always thinking on a Saturday: 'If I'm not doing something to find a job, will there be a posting out there?'"

Full article: https://www.marketwatch.com/story/jobs-are-everywhere-just-not-for-people-over-55-2017-12-08

[Dec 13, 2017] Stress of long-term unemployment takes a toll on thousands of Jerseyans who are out of work by Leslie Kwoh

Notable quotes:
"... Leslie Kwoh may be reached at lkwoh@starledger.com or (973) 392-4147. ..."
Jun 13, 2010 | www.nj.com

At 5:30 every morning, Tony Gwiazdowski rolls out of bed, brews a pot of coffee and carefully arranges his laptop, cell phone and notepad like silverware across the kitchen table.

And then he waits.

Gwiazdowski, 57, has been waiting for 16 months. Since losing his job as a transportation sales manager in February 2009, he wakes each morning to the sobering reminder that, yes, he is still unemployed. So he pushes aside the fatigue, throws on some clothes and sends out another flurry of resumes and cheery cover letters.

But most days go by without a single phone call. And around sundown, when he hears his neighbors returning home from work, Gwiazdowski -- the former mayor of Hillsborough -- can't help but allow himself one tiny sigh of resignation.

"You sit there and you wonder, 'What am I doing wrong?'" said Gwiazdowski, who finds companionship in his 2-year-old golden retriever, Charlie, until his wife returns from work.

"The worst moment is at the end of the day when it's 4:30 and you did everything you could, and the phone hasn't rung, the e-mails haven't come through."

Gwiazdowski is one of a growing number of chronically unemployed workers in New Jersey and across the country who are struggling to get through what is becoming one long, jobless nightmare -- even as the rest of the economy has begun to show signs of recovery.

Nationwide, 46 percent of the unemployed -- 6.7 million Americans -- have been without work for at least half a year, by far the highest percentage recorded since the U.S. Labor Department began tracking the data in 1948.

In New Jersey, nearly 40 percent of the 416,000 unemployed workers last year fit that profile, up from about 20 percent in previous years, according to the department, which provides only annual breakdowns for individual states. Most of them were unemployed for more than a year.

But the repercussions of chronic unemployment go beyond the loss of a paycheck or the realization that one might never find the same kind of job again. For many, the sinking feeling of joblessness -- with no end in sight -- can take a psychological toll, experts say.

Across the state, mental health crisis units saw a 20 percent increase in demand last year as more residents reported suffering from unemployment-related stress, according to the New Jersey Association of Mental Health Agencies.

"The longer the unemployment continues, the more impact it will have on their personal lives and mental health," said Shauna Moses, the association's associate executive director. "There's stress in the marriage, with the kids, other family members, with friends."

And while a few continue to cling to optimism, even the toughest admit there are moments of despair: Fear of never finding work, envy of employed friends and embarassment at having to tell acquaintances that, nope, still no luck.

"When they say, 'Hi Mayor,' I don't tell a lot of people I'm out of work -- I say I'm semi-retired," said Gwiazdowski, who maxed out on unemployment benefits several months ago.

"They might think, 'Gee, what's wrong with him? Why can't he get a job?' It's a long story and maybe people really don't care and now they want to get away from you."


SECOND TIME AROUND

Lynn Kafalas has been there before, too. After losing her computer training job in 2000, the East Hanover resident took four agonizing years to find new work -- by then, she had refashioned herself into a web designer.

That not-too-distant experience is why Kafalas, 52, who was laid off again eight months ago, grows uneasier with each passing day. Already, some of her old demons have returned, like loneliness, self-doubt and, worst of all, insomnia. At night, her mind races to dissect the latest interview: What went wrong? What else should she be doing? And why won't even Barnes & Noble hire her?

"It's like putting a stopper on my life -- I can't move on," said Kafalas, who has given up karate lessons, vacations and regular outings with friends. "Everything is about the interviews."

And while most of her friends have been supportive, a few have hinted to her that she is doing something wrong, or not doing enough. The remarks always hit Kafalas with a pang.

In a recent study, researchers at Rutgers University found that the chronically unemployed are prone to high levels of stress, anxiety, depression, loneliness and even substance abuse, which take a toll on their self-esteem and personal relationships.

"They're the forgotten group," said Carl Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers, and a co-author of the report. "And the longer you are unemployed, the less likely you are to get a job."

Of the 900 unemployed workers first interviewed last August for the study, only one in 10 landed full-time work by March of this year, and only half of those lucky few expressed satisfaction with their new jobs. Another one in 10 simply gave up searching.

Among those who were still unemployed, many struggled to make ends meet by borrowing from friends or family, turning to government food stamps and forgoing health care, according to the study.

More than half said they avoided all social contact, while slightly less than half said they had lost touch with close friends. Six in 10 said they had problems sleeping.

Kafalas says she deals with her chronic insomnia by hitting the gym for two hours almost every evening, lifting weights and pounding the treadmill until she feels tired enough to fall asleep.

"Sometimes I forget what day it is. Is it Tuesday? And then I'll think of what TV show ran the night before," she said. "Waiting is the toughest part."


AGE A FACTOR

Generally, the likelihood of long-term unemployment increases with age, experts say. A report by the National Employment Law Project this month found that nearly half of those who were unemployed for six months or longer were at least 45 years old. Those between 16 and 24 made up just 14 percent.

Tell that to Adam Blank, 24, who has been living with his girlfriend and her parents at their Martinsville home since losing his sales job at Best Buy a year and half ago.

Blank, who graduated from Rutgers with a major in communications, says he feels like a burden sometimes, especially since his girlfriend, Tracy Rosen, 24, works full-time at a local nonprofit. He shows her family gratitude with small chores, like taking out the garbage, washing dishes, sweeping floors and doing laundry.

Still, he often feels inadequate.

"All I'm doing on an almost daily basis is sitting around the house trying to keep myself from going stir-crazy," said Blank, who dreams of starting a social media company.

When he is feeling particularly low, Blank said he turns to a tactic employed by prisoners of war in Vietnam: "They used to build dream houses in their head to help keep their sanity. It's really just imagining a place I can call my own."


LESSONS LEARNED

Meanwhile, Gwiazdowski, ever the optimist, says unemployment has taught him a few things.

He has learned, for example, how to quickly assess an interviewer's age and play up or down his work experience accordingly -- he doesn't want to appear "threatening" to a potential employer who is younger. He has learned that by occasionally deleting and reuploading his resume to job sites, his entry appears fresh.

"It's almost like a game," he said, laughing. "You are desperate, but you can't show it."

But there are days when he just can't find any humor in his predicament -- like when he finishes a great interview but receives no offer, or when he hears a fellow job seeker finally found work and feels a slight twinge of jealousy.

"That's what I'm missing -- putting on that shirt and tie in the morning and going to work," he said.

The memory of getting dressed for work is still so vivid, Gwiazdowski says, that he has to believe another job is just around the corner.

"You always have to hope that that morning when you get up, it's going to be the day," he said.

"Today is going to be the day that something is going to happen."

Leslie Kwoh may be reached at lkwoh@starledger.com or (973) 392-4147.

DrBuzzard Jun 13, 2010

I collect from the state of iowa, was on tier I and when the gov't recessed without passing extension, iowa stopped paying tier I claims that were already open, i was scheduled to be on tier I until july 15th, and its gone now, as a surprise, when i tried to claim my week this week i was notified. SURPRISE, talk about stress.

berganliz Jun 13, 2010

This is terrible....just wait until RIF'd teachers hit the unemployment offices....but then, this is what NJ wanted...fired teachers who are to blame for the worst recession our country has seen in 150 years...thanks GWB.....thanks Donald Rumsfeld......thanks Dick Cheney....thanks Karl "Miss Piggy" Rove...and thank you Mr. Big Boy himself...Gov Krispy Kreame!

rp121 Jun 13, 2010

For readers who care about this nation's unemployed- Call your Senators to pass HR 4213, the "Extenders" bill. Unfortunately, it does not add UI benefits weeks, however it DOES continue the emergency federal tiers of UI. If it does not pass this week many of us are cut off at 26 wks. No tier 1, 2 -nothing.

[Dec 13, 2017] Unemployment health hazard and stress

The longer you are unemployed, the more you are effected by those factors.
Notable quotes:
"... The good news is that only a relatively small number of people are seriously affected by the stress of unemployment to the extent they need medical assistance. Most people don't get to the serious levels of stress, and much as they loathe being unemployed, they suffer few, and minor, ill effects. ..."
"... Worries about income, domestic problems, whatever, the list is as long as humanity. The result of stress is a strain on the nervous system, and these create the physical effects of the situation over time. The chemistry of stress is complex, but it can be rough on the hormonal system. ..."
"... Not at all surprisingly, people under stress experience strong emotions. It's a perfectly natural response to what can be quite intolerable emotional strains. It's fair to say that even normal situations are felt much more severely by people already under stress. Things that wouldn't normally even be issues become problems, and problems become serious problems. Relationships can suffer badly in these circumstances, and that, inevitably, produces further crises. Unfortunately for those affected, these are by now, at this stage, real crises. ..."
"... Some people are stubborn enough and tough enough mentally to control their emotions ruthlessly, and they do better under these conditions. Even that comes at a cost, and although under control, the stress remains a problem. ..."
"... One of the reasons anger management is now a growth industry is because of the growing need for assistance with severe stress over the last decade. This is a common situation, and help is available. ..."
"... Depression is universally hated by anyone who's ever had it. ..."
"... Very important: Do not, under any circumstances, try to use drugs or alcohol as a quick fix. They make it worse, over time, because they actually add stress. Some drugs can make things a lot worse, instantly, too, particularly the modern made-in-a-bathtub variety. They'll also destroy your liver, which doesn't help much, either. ..."
"... You don't have to live in a gym to get enough exercise for basic fitness. A few laps of the pool, a good walk, some basic aerobic exercises, you're talking about 30-45 minutes a day. It's not hard. ..."
Dec 13, 2017 | www.cvtips.com

It's almost impossible to describe the various psychological impacts, because there are so many. There are sometimes serious consequences, including suicide, and, some would say worse, chronic depression.

There's not really a single cause and effect. It's a compound effect, and unemployment, by adding stress, affects people, often badly.

The world doesn't need any more untrained psychologists, and we're not pretending to give medical advice. That's for professionals. Everybody is different, and their problems are different. What we can do is give you an outline of the common problems, and what you can do about them.

The good news is that only a relatively small number of people are seriously affected by the stress of unemployment to the extent they need medical assistance. Most people don't get to the serious levels of stress, and much as they loathe being unemployed, they suffer few, and minor, ill effects.

For others, there are a series of issues, and the big three are:

Stress

Stress is Stage One. It's a natural result of the situation. Worries about income, domestic problems, whatever, the list is as long as humanity. The result of stress is a strain on the nervous system, and these create the physical effects of the situation over time. The chemistry of stress is complex, but it can be rough on the hormonal system.

Over an extended period, the body's natural hormonal balances are affected, and this can lead to problems. These are actually physical issues, but the effects are mental, and the first obvious effects are, naturally, emotional.

Anger, and other negative emotions

Not at all surprisingly, people under stress experience strong emotions. It's a perfectly natural response to what can be quite intolerable emotional strains. It's fair to say that even normal situations are felt much more severely by people already under stress. Things that wouldn't normally even be issues become problems, and problems become serious problems. Relationships can suffer badly in these circumstances, and that, inevitably, produces further crises. Unfortunately for those affected, these are by now, at this stage, real crises.

If the actual situation was already bad, this mental state makes it a lot worse. Constant aggravation doesn't help people to keep a sense of perspective. Clear thinking isn't easy when under constant stress.

Some people are stubborn enough and tough enough mentally to control their emotions ruthlessly, and they do better under these conditions. Even that comes at a cost, and although under control, the stress remains a problem.

One of the reasons anger management is now a growth industry is because of the growing need for assistance with severe stress over the last decade. This is a common situation, and help is available.

If you have reservations about seeking help, bear in mind it can't possibly be any worse than the problem.

Depression

Depression is universally hated by anyone who's ever had it. This is the next stage, and it's caused by hormonal imbalances which affect serotonin. It's actually a physical problem, but it has mental effects which are sometimes devastating, and potentially life threatening.

The common symptoms are:

It's a disgusting experience. No level of obscenity could possibly describe it. Depression is misery on a level people wouldn't conceive in a nightmare. At this stage the patient needs help, and getting it is actually relatively easy. It's convincing the person they need to do something about it that's difficult. Again, the mental state is working against the person. Even admitting there's a problem is hard for many people in this condition.

Generally speaking, a person who is trusted is the best person to tell anyone experiencing the onset of depression to seek help. Important: If you're experiencing any of those symptoms:

Very important: Do not, under any circumstances, try to use drugs or alcohol as a quick fix. They make it worse, over time, because they actually add stress. Some drugs can make things a lot worse, instantly, too, particularly the modern made-in-a-bathtub variety. They'll also destroy your liver, which doesn't help much, either.

Alcohol, in particular, makes depression much worse. Alcohol is a depressant, itself, and it's also a nasty chemical mix with all those stress hormones.

If you've ever had alcohol problems, or seen someone with alcohol wrecking their lives, depression makes things about a million times worse.

Just don't do it. Steer clear of any so-called stimulants, because they don't mix with antidepressants, either.

Unemployment and staying healthy

The above is what you need to know about the risks of unemployment to your health and mental well being.

These situations are avoidable.

Your best defense against the mental stresses and strains of unemployment, and their related problems is staying healthy.

We can promise you that is nothing less than the truth. The healthier you are, the better your defenses against stress, and the more strength you have to cope with situations.

Basic health is actually pretty easy to achieve:

Diet

Eat real food, not junk, and make sure you're getting enough food. Your body can't work with resources it doesn't have. Good food is a real asset, and you'll find you don't get tired as easily. You need the energy reserves.

Give yourself a good selection of food that you like, that's also worth eating.

The good news is that plain food is also reasonably cheap, and you can eat as much as you need. Basic meals are easy enough to prepare, and as long as you're getting all the protein veg and minerals you need, you're pretty much covered.

You can also use a multivitamin cap, or broad spectrum supplements, to make sure you're getting all your trace elements. Also make sure you're getting the benefits of your food by taking acidophilus or eating yogurt regularly.

Exercise

You don't have to live in a gym to get enough exercise for basic fitness. A few laps of the pool, a good walk, some basic aerobic exercises, you're talking about 30-45 minutes a day. It's not hard.

Don't just sit and suffer

If anything's wrong, check it out when it starts, not six months later. Most medical conditions become serious when they're allowed to get worse.

For unemployed people the added risk is also that they may prevent you getting that job, or going for interviews. If something's causing you problems, get rid of it.

Nobody who's been through the blender of unemployment thinks it's fun.

Anyone who's really done it tough will tell you one thing:

Don't be a victim. Beat the problem, and you'll really appreciate the feeling.

[Dec 13, 2017] Being homeless is better than working for Amazon by Nichole Gracely

Notable quotes:
"... According to Amazon's metrics, I was one of their most productive order pickers -- I was a machine, and my pace would accelerate throughout the course of a shift. What they didn't know was that I stayed fast because if I slowed down for even a minute, I'd collapse from boredom and exhaustion ..."
"... toiling in some remote corner of the warehouse, alone for 10 hours, with my every move being monitored by management on a computer screen. ..."
"... ISS could simply deactivate a worker's badge and they would suddenly be out of work. They treated us like beggars because we needed their jobs. Even worse, more than two years later, all I see is: Jeff Bezos is hiring. ..."
"... I have never felt more alone than when I was working there. I worked in isolation and lived under constant surveillance ..."
"... That was 2012 and Amazon's labor and business practices were only beginning to fall under scrutiny. ..."
"... I received $200 a week for the following six months and I haven't had any source of regular income since those benefits lapsed. I sold everything in my apartment and left Pennsylvania as fast as I could. I didn't know how to ask for help. I didn't even know that I qualified for food stamps. ..."
Nov 28, 2014 | theguardian.com

wa8dzp:

Nichole Gracely has a master's degree and was one of Amazon's best order pickers. Now, after protesting the company, she's homeless.

I am homeless. My worst days now are better than my best days working at Amazon.

According to Amazon's metrics, I was one of their most productive order pickers -- I was a machine, and my pace would accelerate throughout the course of a shift. What they didn't know was that I stayed fast because if I slowed down for even a minute, I'd collapse from boredom and exhaustion.

During peak season, I trained incoming temps regularly. When that was over, I'd be an ordinary order picker once again, toiling in some remote corner of the warehouse, alone for 10 hours, with my every move being monitored by management on a computer screen.

Superb performance did not guarantee job security. ISS is the temp agency that provides warehouse labor for Amazon and they are at the center of the SCOTUS case Integrity Staffing Solutions vs. Busk. ISS could simply deactivate a worker's badge and they would suddenly be out of work. They treated us like beggars because we needed their jobs. Even worse, more than two years later, all I see is: Jeff Bezos is hiring.

I have never felt more alone than when I was working there. I worked in isolation and lived under constant surveillance. Amazon could mandate overtime and I would have to comply with any schedule change they deemed necessary, and if there was not any work, they would send us home early without pay. I started to fall behind on my bills.

At some point, I lost all fear. I had already been through hell. I protested Amazon. The gag order was lifted and I was free to speak. I spent my last days in a lovely apartment constructing arguments on discussion boards, writing articles and talking to reporters. That was 2012 and Amazon's labor and business practices were only beginning to fall under scrutiny. I walked away from Amazon's warehouse and didn't have any other source of income lined up.

I cashed in on my excellent credit, took out cards, and used them to pay rent and buy food because it would be six months before I could receive my first unemployment compensation check.

I received $200 a week for the following six months and I haven't had any source of regular income since those benefits lapsed. I sold everything in my apartment and left Pennsylvania as fast as I could. I didn't know how to ask for help. I didn't even know that I qualified for food stamps.

I furthered my Amazon protest while homeless in Seattle. When the Hachette dispute flared up I "flew a sign," street parlance for panhandling with a piece of cardboard: "I was an order picker at amazon.com. Earned degrees. Been published. Now, I'm homeless, writing and doing this. Anything helps."

I have made more money per word with my signs than I will probably ever earn writing, and I make more money per hour than I will probably ever be paid for my work. People give me money and offer well wishes and I walk away with a restored faith in humanity.

I flew my protest sign outside Whole Foods while Amazon corporate employees were on lunch break, and they gawked. I went to my usual flying spots around Seattle and made more money per hour protesting Amazon with my sign than I did while I worked with them. And that was in Seattle. One woman asked, "What are you writing?" I told her about the descent from working poor to homeless, income inequality, my personal experience. She mentioned Thomas Piketty's book, we chatted a little, she handed me $10 and wished me luck. Another guy said, "Damn, that's a great story! I'd read it," and handed me a few bucks.

[snip]

[Dec 12, 2017] Can Uber Ever Deliver Part Eleven Annual Uber Losses Now Approaching $5 Billion

Notable quotes:
"... Total 2015 gross passenger payments were 200% higher than 2014, but Uber corporate revenue improved 300% because Uber cut the driver share of passenger revenue from 83% to 77%. This was an effective $500 million wealth transfer from drivers to Uber's investors. ..."
"... Uber's P&L gains were wiped out by higher non-EBIDTAR expense. Thus the 300% Uber revenue growth did not result in any improvement in Uber profit margins. ..."
"... In 2016, Uber unilaterally imposed much larger cuts in driver compensation, costing drivers an additional $3 billion. [6] Prior to Uber's market entry, the take home pay of big-city cab drivers in the US was in the $12-17/hour range, and these earnings were possible only if drivers worked 65-75 hours a week. ..."
"... An independent study of the net earnings of Uber drivers (after accounting for the costs of the vehicles they had to provide) in Denver, Houston and Detroit in late 2015 (prior to Uber's big 2016 cuts) found that driver earnings had fallen to the $10-13/hour range. [7] Multiple recent news reports have documented how Uber drivers are increasing unable to support themselves from their reduced share of passenger payments. [8] ..."
"... Since mass driver defections would cause passenger volume growth to collapse completely, Uber was forced to reverse these cuts in 2017 and increased the driver share from 68% to 80%. This meant that Uber's corporate revenue, which had grown over 300% in 2015 and over 200% in 2016 will probably only grow by about 15% in 2017. ..."
"... Socialize the losses, privatize the gains, VC-ize the subsidies. ..."
"... The cold hard truth is that Uber is backed into a corner with severely limited abilities to tweak the numbers on either the supply or the demand side: cut driver compensation and they trigger driver churn (as has already been demonstrated), increase fare prices for riders and riders defect to cheaper alternatives. ..."
"... "Growth and Efficiency" are the sine qua non of Neoliberalism. Kalanick's "hype brilliance" was to con the market with "revenue growth" and signs ..."
Dec 12, 2017 | www.nakedcapitalism.com

Uber lost $2.5 billion in 2015, probably lost $4 billion in 2016, and is on track to lose $5 billion in 2017.

The top line on the table below shows is total passenger payments, which must be split between Uber corporate and its drivers. Driver gross earnings are substantially higher than actual take home pay, as gross earning must cover all the expenses drivers bear, including fuel, vehicle ownership, insurance and maintenance.

Most of the "profit" data released by Uber over time and discussed in the press is not true GAAP (generally accepted accounting principles) profit comparable to the net income numbers public companies publish but is EBIDTAR contribution. Companies have significant leeway as to how they calculate EBIDTAR (although it would exclude interest, taxes, depreciation, amortization) and the percentage of total costs excluded from EBIDTAR can vary significantly from quarter to quarter, given the impact of one-time expenses such as legal settlements and stock compensation. We only have true GAAP net profit results for 2014, 2015 and the 2nd/3rd quarters of 2017, but have EBIDTAR contribution numbers for all other periods. [5]

Uber had GAAP net income of negative $2.6 billion in 2015, and a negative profit margin of 132%. This is consistent with the negative $2.0 billion loss and (143%) margin for the year ending September 2015 presented in part one of the NC Uber series over a year ago.

No GAAP profit results for 2016 have been disclosed, but actual losses likely exceed $4 billion given the EBIDTAR contribution of negative $3.2 billion. Uber's GAAP losses for the 2nd and 3rd quarters of 2017 were over $2.5 billion, suggesting annual losses of roughly $5 billion.

While many Silicon Valley funded startups suffered large initial losses, none of them lost anything remotely close to $2.6 billion in their sixth year of operation and then doubled their losses to $5 billion in year eight. Reversing losses of this magnitude would require the greatest corporate financial turnaround in history.

No evidence of significant efficiency/scale gains; 2015 and 2016 margin improvements entirely explained by unilateral cuts in driver compensation, but losses soared when Uber had to reverse these cuts in 2017.

Total 2015 gross passenger payments were 200% higher than 2014, but Uber corporate revenue improved 300% because Uber cut the driver share of passenger revenue from 83% to 77%. This was an effective $500 million wealth transfer from drivers to Uber's investors. These driver compensation cuts improved Uber's EBIDTAR margin, but Uber's P&L gains were wiped out by higher non-EBIDTAR expense. Thus the 300% Uber revenue growth did not result in any improvement in Uber profit margins.

In 2016, Uber unilaterally imposed much larger cuts in driver compensation, costing drivers an additional $3 billion. [6] Prior to Uber's market entry, the take home pay of big-city cab drivers in the US was in the $12-17/hour range, and these earnings were possible only if drivers worked 65-75 hours a week.

An independent study of the net earnings of Uber drivers (after accounting for the costs of the vehicles they had to provide) in Denver, Houston and Detroit in late 2015 (prior to Uber's big 2016 cuts) found that driver earnings had fallen to the $10-13/hour range. [7] Multiple recent news reports have documented how Uber drivers are increasing unable to support themselves from their reduced share of passenger payments. [8]

A business model where profit improvement is hugely dependent on wage cuts is unsustainable, especially when take home wages fall to (or below) minimum wage levels. Uber's primary focus has always been the rate of growth in gross passenger revenue, as this has been a major justification for its $68 billion valuation. This growth rate came under enormous pressure in 2017 given Uber efforts to raise fares, major increases in driver turnover as wages fell, [9] and the avalanche of adverse publicity it was facing.

Since mass driver defections would cause passenger volume growth to collapse completely, Uber was forced to reverse these cuts in 2017 and increased the driver share from 68% to 80%. This meant that Uber's corporate revenue, which had grown over 300% in 2015 and over 200% in 2016 will probably only grow by about 15% in 2017.

MKS , December 12, 2017 at 6:19 am

"Uber's business model can never produce sustainable profits"

Two words not in my vocabulary are "Never" and "Always", that is a pretty absolute statement in an non-absolute environment. The same environment that has produced the "Silicon Valley Growth Model", with 15x earnings companies like NVIDA, FB and Tesla (Average earnings/stock price ratio in dot com bubble was 10x) will people pay ridiculous amounts of money for a company with no underlying fundamentals you damn right they will! Please stop with the I know all no body knows anything, especially the psychology and irrationality of markets which are made up of irrational people/investors/traders.

JohnnySacks , December 12, 2017 at 7:34 am

My thoughts exactly. Seems the only possible recovery for the investors is a perfectly engineered legendary pump and dump IPO scheme. Risky, but there's a lot of fools out there and many who would also like to get on board early in the ride in fear of missing out on all the money to be hoovered up from the greater fools. Count me out.

SoCal Rhino , December 12, 2017 at 8:30 am

The author clearly distinguishes between GAAP profitability and valuations, which is after all rather the point of the series. And he makes a more nuanced point than the half sentence you have quoted without context or with an indication that you omitted a portion. Did you miss the part about how Uber would have a strong incentive to share the evidence of a network effect or other financial story that pointed the way to eventual profit? Otherwise (my words) it is the classic sell at a loss, make it up with volume path to liquidation.

tegnost , December 12, 2017 at 9:52 am

apples and oranges comparison, nvidia has lots and lots of patented tech that produces revenue, facebook has a kajillion admittedly irrational users, but those users drive massive ad sales (as just one example of how that company capitalizes itself) and tesla makes an actual car, using technology that inspires it's buyers (the put your money where your mouth is crowd and it can't be denied that tesla, whatever it's faults are, battery tech is not one of them and that intellectual property is worth a lot, and tesla's investors are in on that real business, profitable or otherwise)

Uber is an iphone app. They lose money and have no path to profitability (unless it's the theory you espouse that people are unintelligent so even unintelligent ideas work to fleece them). This article touches on one of the great things about the time we now inhabit, uber drivers could bail en masse, there are two sides to the low attachment employees who you can get rid of easily. The drivers can delete the uber app as soon as another iphone app comes along that gets them a better return

allan , December 12, 2017 at 6:52 am

Yet another source (unintended) of subsidies for Uber, Lyft, etc., which might or might not have been mentioned earlier in the series:

Airports Are Losing Money as Ride-Hailing Services Grow [NYT]

For many air travelers, getting to and from the airport has long been part of the whole miserable experience. Do they drive and park in some distant lot? Take mass transit or a taxi? Deal with a rental car?

Ride-hailing services like Uber and Lyft are quickly changing those calculations. That has meant a bit less angst for travelers.

But that's not the case for airports. Travelers' changing habits, in fact, have begun to shake the airports' financial underpinnings. The money they currently collect from ride-hailing services do not compensate for the lower revenues from the other sources.

At the same time, some airports have had to add staff to oversee the operations of the ride-hailing companies, the report said. And with more ride-hailing vehicles on the roads outside terminals,
there's more congestion.

Socialize the losses, privatize the gains, VC-ize the subsidies.

Thuto , December 12, 2017 at 6:55 am

The cold hard truth is that Uber is backed into a corner with severely limited abilities to tweak the numbers on either the supply or the demand side: cut driver compensation and they trigger driver churn (as has already been demonstrated), increase fare prices for riders and riders defect to cheaper alternatives. The only question is how long can they keep the show going before the lights go out, slick marketing and propaganda can only take you so far, and one assumes the dumb money has a finite supply of patience and will at some point begin asking the tough questions.

Louis Fyne , December 12, 2017 at 8:35 am

The irony is that Uber would have been a perfectly fine, very profitable mid-sized company if Uber stuck with its initial model -- sticking to dense cities with limited parking, limiting driver supply, and charging a premium price for door-to-door delivery, whether by livery or a regular sedan. And then perhaps branching into robo-cars.

But somehow Uber/board/Travis got suckered into the siren call of self-driving cars, triple-digit user growth, and being in the top 100 US cities and on every continent.

Thuto , December 12, 2017 at 11:30 am

I've shared a similar sentiment in one of the previous posts about Uber. But operating profitably in decent sized niche doesn't fit well with ambitions of global domination. For Uber to be "right-sized", an admission of folly would have to be made, its managers and investors would have to transcend the sunk cost fallacy in their strategic decision making, and said investors would have to accept massive hits on their invested capital. The cold, hard reality of being blindsided and kicked to the curb in the smartphone business forced RIM/Blackberry to right-size, and they may yet have a profitable future as an enterprise facing software and services company. Uber would benefit from that form of sober mindedness, but I wouldn't hold my breath.

David Carl Grimes , December 12, 2017 at 6:57 am

The question is: Why did Softbank invest in Uber?

Michael Fiorillo , December 12, 2017 at 9:33 am

I know nothing about Softbank or its management, but I do know that the Japanese were the dumb money rubes in the late '80's, overpaying for trophy real estate they lost billions on.

Until informed otherwise, that's my default assumption

JimTan , December 12, 2017 at 10:50 am

Softbank possibly looking to buy more Uber shares at a 30% discount is very odd. Uber had a Series G funding round in June 2016 where a $3.5 billion investment from Saudi Arabia's Public Investment Fund resulted in its current $68 billion valuation. Now apparently Softbank wants to lead a new $6 billion funding round to buy the shares of Uber employees and early investors at a 30% discount from this last "valuation". It's odd because Saudi Arabia's Public Investment Fund has pledged $45 billion to SoftBank's Vision Fund , an amount which was supposed to come from the proceeds of its pending Aramco IPO. If the Uber bid is linked to SoftBank's Vision Fund, or KSA money, then its not clear why this investor might be looking to literally 'double down' from $3.5 billion o $6 billion on a declining investment.

Yves Smith Post author , December 12, 2017 at 11:38 am

SoftBank has not yet invested. Its tender is still open. If it does not get enough shares at a price it likes, it won't invest.

As to why, I have no idea.

Robert McGregor , December 12, 2017 at 7:04 am

"Growth and Efficiency" are the sine qua non of Neoliberalism. Kalanick's "hype brilliance" was to con the market with "revenue growth" and signs of efficiency, and hopes of greater efficiency, and make most people just overlook the essential fact that Uber is the most unprofitable company of all time!

divadab , December 12, 2017 at 7:19 am

What comprises "Uber Expenses"? 2014 – $1.06 billion; 2015 $3.33 billion; 2016 $9.65 billion; forecast 2017 $11.418 billion!!!!!! To me this is the big question – what are they spending $10 billion per year on?

ALso – why did driver share go from 68% in 2016 to 80% in 2017? If you use 68% as in 2016, 2017 Uber revenue is $11.808 billion, which means a bit better than break-even EBITDA, assuming Uber expenses are as stated $11.428 billion.

Perhaps not so bleak as the article presents, although I would not invest in this thing.

Phil in Kansas City , December 12, 2017 at 7:55 am

I have the same question: What comprises over 11 billion dollars in expenses in 2017? Could it be they are paying out dividends to the early investors? Which would mean they are cannibalizing their own company for the sake of the VC! How long can this go on before they'll need a new infusion of cash?

lyman alpha blob , December 12, 2017 at 2:37 pm

The Saudis have thrown a few billion Uber's way and they aren't necessarily known as the smart money.

Maybe the pole dancers have started chipping in too as they are for bitcoin .

Vedant Desai , December 12, 2017 at 10:37 am

Oh article does answer your 2nd question. Read this paragraph:-

Since mass driver defections would cause passenger volume growth to collapse completely , Uber was forced to reverse these cuts in 2017 and increased the driver share from 68% to 80%. This meant that Uber's corporate revenue, which had grown over 300% in 2015 and over 200% in 2016 will probably only grow by about 15% in 2017.

As for the 1st, read this line in the article:-

There are undoubtedly a number of things Uber could do to reduce losses at the margin, but it is difficult to imagine it could suddenly find the $4-5 billion in profit improvement needed merely to reach breakeven.

Louis Fyne , December 12, 2017 at 8:44 am

in addition to all the points listed in the article/comments, the absolute biggest flaw with Uber is that Uber HQ conditioned its customers on (a) cheap fares and (b) that a car is available within minutes (1-5 if in a big city).

Those two are not mutually compatible in the long-term.

Alfred , December 12, 2017 at 9:49 am

Thus (a) "We cost less" and (b) "We're more convenient" -- aren't those also the advantages that Walmart claims and feeds as a steady diet to its ever hungry consumers? Often if not always, disruption may repose upon delusion.

Martin Finnucane , December 12, 2017 at 11:06 am

Uber's business model could never produce sustainable profits unless it was able to exploit significant anti-competitive market power.

Upon that dependent clause hangs the future of capitalism, and – dare I say it? – its inevitable demise.

Altandmain , December 12, 2017 at 11:09 am

When this Uber madness blows up, I wonder if people will finally begin to discuss the brutal reality of Silicon Valley's so called "disruption".

It is heavily built in around the idea of economic exploitation. Uber drivers are often, especially when the true costs to operate an Uber including the vehicle depreciation are factored in, making not very much per hour driven, especially if they don't get the surge money.

Instacart is another example. They are paying the deliver operators very little.

Jim A. , December 12, 2017 at 12:21 pm

At a fundamental level, I think that the Silicon Valley "disruption" model only works for markets (like software) where the marginal cost for production is de minimus and the products can be protected by IP laws. Volume and market power really work in those cases. But out here in meat-space, where actual material and labor are big inputs to each item sold, you can never just sit back on your laurels and rake in the money. Somebody else will always be able to come and and make an equivalent product. If they can do it more cheaply, you are in trouble.

Altandmain , December 12, 2017 at 5:40 pm

There aren't that many areas in goods and services where the marginal costs are very low.

Software is actually quite unique in that regard, costing merely the bandwidth and permanent storage space to store.

Let's see:

1. From the article, they cannot go public and have limited ways to raise more money. An IPO with its more stringent disclosure requirements would expose them.

2. They tried lowering driver compensation and found that model unsustainable.

3. There are no benefits to expanding in terms of economies of scale.

From where I am standing, it looks like a lot of industries gave similar barriers. Silicon Valley is not going to be able to disrupt those.

Tesla, another Silicon Valley company seems to be struggling to mass produce its Model 3 and deliver an electric car that breaks even, is reliable, while disrupting the industry in the ways that Elon Musk attempted to hype up.

So that basically leaves services and manufacturing out for Silicon Valley disruption.

Joe Bentzel , December 12, 2017 at 2:19 pm

UBER has become a "too big to fail" startup because of all the different tentacles of capital from various Tier 1 VCs and investment bankers.

VCs have admitted openly that UBER is a subsidized business, meaning it's product is sold below market value, and the losses reflect that subsidization. The whole "2 sided platform" argument is just marketecture to hustle more investors. It's a form of service "dumping" that puts legacy businesses into bankruptcy. Back during the dotcom bubble one popular investment banker (Paul Deninger) characterized this model as "Terrorist Competition", i.e. coffers full of invested cash to commoditize the market and drive out competition.

UBER is an absolute disaster that has forked the startup model in Silicon Valley in order to drive total dependence on venture capital by founders. And its current diversification into "autonomous vehicles", food delivery, et al are simply more evidence that the company will never be profitable due to its whacky "blitzscaling" approach of layering on new "businesses" prior to achieving "fit" in its current one.

It's economic model has also metastasized into a form of startup cancer that is killing Silicon Valley as a "technology" innovator. Now it's all cargo cult marketing BS tied to "strategic capital".

UBER is the victory of venture capital and user subsidized startups over creativity by real entrepreneurs.

It's shadow is long and that's why this company should be ..wait for it UNBUNDLED (the new silicon valley word attached to that other BS religion called "disruption"). Call it a great unbundling and you can break up this monster corp any way you want.

Naked Capitalism is a great website.

Phil in KC , December 12, 2017 at 3:20 pm

1. I Agree with your last point.

2. The elevator pitch for Uber: subsidize rides to attract customers, put the competition out of business, and then enjoy an unregulated monopoly, all while exploiting economically ignorant drivers–ahem–"partners."

3. But more than one can play that game, and

4. Cab and livery companies are finding ways to survive!

Phil in KC , December 12, 2017 at 3:10 pm

If subsidizing rides is counted as an expense, (not being an accountant, I would guess it so), then whether the subsidy goes to the driver or the passenger, that would account for the ballooning expenses, to answer my own question. Otherwise, the overhead for operating what Uber describes as a tech company should be minimal: A billion should fund a decent headquarters with staff, plus field offices in, say, 100 U.S. cities. However, their global pretensions are probably burning cash like crazy. On top of that, I wonder what the exec compensation is like?

After reading HH's initial series, I made a crude, back-of-the-envelope calculation that Uber would run out of money sometime in the third fiscal quarter of 2018, but that was based on assuming losses were stabilizing in the range of 3 billion a year. Not so, according to the article. I think crunch time is rapidly approaching. If so, then SoftBank's tender offer may look quite appetizing to VC firms and to any Uber employee able to cash in their options. I think there is a way to make a re-envisioned Uber profitable, and with a more independent board, they may be able to restructure the company to show a pathway to profitability before the IPO. But time is running out.

A not insignificant question is the recruitment and retention of the front line "partners." It would seem to me that at some point, Uber will run out of economically ignorant drivers with good manners and nice cars. I would be very interested to know how many drivers give up Uber and other ride-sharing gigs once the 1099's start flying at the beginning of the year. One of the harsh realities of owning a business or being an contractor is the humble fact that you get paid LAST!

Jan Stickle , December 12, 2017 at 5:00 pm

We became instant Uber riders while spending holidays with relatives in San Diego. While their model is indeed unique from a rider perspective, it was the driver pool that fascinates me. These are not professional livery drivers, but rather freebooters of all stripes driving for various reasons. The remuneration they receive cannot possibly generate much income after expenses, never mind the problems associated with IRS filing as independent contractors.

One guy was just cruising listening to music; cooler to get paid for it than just sitting home! A young lady was babbling and gesticulating non stop about nothing coherent and appeared to be on some sort of stimulant. A foreign gentleman, very professional, drove for extra money when not at his regular job. He was the only one who had actually bought a new Prius for this gig, hoping to pay it off in two years.

This is indeed a brave new world. There was a period in Nicaragua just after the Contra war ended when citizens emerged from their homes and hit the streets in large numbers, desperately looking for income. Every car was a taxi and there was a bipedal mini Walmart at every city intersection as individuals sold everything and anything in a sort of euphoric optimism towards the future. Reality just hadn't caught up with them yet .

[Dec 09, 2017] November Jobs Report: good month, same caveats

Notable quotes:
"... U6 underemployment rate rose +0.1% from 7.9% to 8.0% ..."
Dec 09, 2017 | bonddad.blogspot.com

So U6 is almost 10% of population. Scary...

HEADLINES : Here are the headlines on wages and the chronic heightened underemployment: Wages and participation rates Holding Trump accountable on manufacturing and mining jobs

Trump specifically campaigned on bringing back manufacturing and mining jobs. Is he keeping this promise?

September was revised upward by +20,000. October was revised downward by -17,000, for a net change of +3,000.

  1. likbez December 9, 2017 7:52 pm

    There are now large categories of jobs, both part-time and full time, that can't provide for living and are paying below or close to minimum wage (plantation economy jobs). it looks like under neoliberalism this is the fastest growing category of jobs.

    Examples are Uber and Lift jobs (which are as close to predatory scam as one can get) . Many jobs in service industry, especially retail. See for example

    https://www.huffingtonpost.com/2013/02/16/jobs-earn-less-than-minimum-wage_n_2689419.html

    They should probably be calculated separately as "distressed employment", or something like that.

    Also in view of "seasonal adjustments" the number of created jobs is probably meaningless.

[Dec 03, 2017] Nokia Shareholders Fight Back

On the topic of outsourcing, IMO it can be cheaper if done right. On paper it always seems like a great idea, but in practice it's not always the best idea financially and/or getting the same or better result in comparison to keeping it in-house. I've worked for companies where they have outsourced a particular department/function to companies where I am the one the job is outsourced to. My observation has been the success of getting projects done (e.g.: programing) or facilitating a role (e.g.: sys admin) rely on a few factors regardless of outsourcing or not.
Notable quotes:
"... On the topic of outsourcing, IMO it can be cheaper if done right. On paper it always seems like a great idea, but in practice it's not always the best idea financially and/or getting the same or better result in comparison to keeping it in-house. I've worked for companies where they have outsourced a particular department/function to companies where I am the one the job is outsourced to. My observation has been the success of getting projects done (e.g.: programing) or facilitating a role (e.g.: sys admin) rely on a few factors regardless of outsourcing or not. ..."
Slashdot

noc007 (633443)

On the topic of outsourcing, IMO it can be cheaper if done right. On paper it always seems like a great idea, but in practice it's not always the best idea financially and/or getting the same or better result in comparison to keeping it in-house. I've worked for companies where they have outsourced a particular department/function to companies where I am the one the job is outsourced to. My observation has been the success of getting projects done (e.g.: programing) or facilitating a role (e.g.: sys admin) rely on a few factors regardless of outsourcing or not.

The first is a golden rule of sorts on doing anything:

You can only pick two; NO exceptions. I've encountered so many upper management types that foolishly think they can get away with having all three. In my experience 9/10 of the time it turns out a lack of quality bites them in the butt sometime down the road when they assumed they somehow managed to achieve all three.

The second is communication. Mostly everyone in at least the US has experienced the pain of being subjected to some company's outsourced customer service and/or tech support that can't effectively communicate with both parties on the same page of understanding one another. I really shouldn't need to explain why communication, understanding one another is so important. Sadly this is something I have to constantly explain to my current boss with events like today where my non-outsourced colleague rebooted a number of production critical servers when he was asked to reboot just one secondary server.

Third is the employee's skill in doing the job. Again, another obvious one, but I've observed that it isn't always on the hiring menu. Additionally I've seen some people that interview well, but couldn't create a "Hello World" HTML page for a web developer position as an example. There's no point in hiring or keeping a hired individual to do a job that they lack the skill to do; even if it's an entry-level position with training, that person should be willing to put for the effort to learn and take notes. I accept that everyone has their own unique skills that can aide or hinder their ability to learn and be proficient with a particular task. However, I firmly believe anyone can learn to do anything as long as they put their mind to it. I barely have any artistic ability and my drawing skills are stick figures at best (XKCD is miles ahead of me); if I were to put forth the effort to learn how to draw and paint, I could become a good artist. I taught an A+ technician certification class at a tech school a while back and I had a retired Marine that served in the Vietnam War as one of my students. One could argue his best skill was killing and blowing stuff up. He worked hard and learned to be a technician and passed CompTIA's certification test without a problem. That leads me to the next point.

Lastly is attitude of the end employee doing the actual work. It boggles my mind how so many managers loose the plot when it comes to employee morale and motivation. Productivity generally is improved when those two are improved and it usually doesn't have to involve spending a bunch of money. The employee's attitude should be getting the work done correctly in a reasonable amount of time. Demanding it is a poor approach. Poisoning an employee will result in poisoning the company in a small manner all the way up to the failure of the company. Employees should be encouraged through actual morale improvements, positive motivation, and incentives for doing more work at the same and/or better quality level.

Outsourcing or keeping things in house can be successful and possibly economical if approached correctly with the appropriate support of upper management.

Max Littlemore (1001285)

How dramatic? Isn't outsourcing done (like it or not) to reduce costs?

Outsourcing is done to reduce the projected costs that PHBs see. In reality, outsourcing can lead to increased costs and delays due to time zone differences and language/cultural barriers.

I have seen it work reasonably well, but only when the extra effort and delays caused by the increased need for rework that comes from complex software projects. If you are working with others on software, it is so much quicker to produce quality software if the person who knows the business requirements is sitting right next to the person doing design and the person cutting code and the person doing the testing, etc, etc.

If these people or groups are scattered around the world with different cultures and native languages, communication can suffer, increasing misunderstanding and reducing the quality. I have personally seen this lead to massive increase in code defects in a project that went from in house development to outsourced.

Also, time zone differences cause problems. I have noticed that the further west people live, the less likely they are to take into account how far behind they are. Working with people who fail to realise that their Monday morning is the next day for someone else, or that by the time they are halfway through Friday, others are already on their weekend is not only frustrating, it leads to slow turn around of bug fixes, etc.

Yeah, I'm told outsourcing keeps costs down, but I am yet to see conclusive evidence of that in the real world. At least in complex development. YMMV for support/call centre stuff.

-- I don't therefore I'm not.

[Dec 03, 2017] Business Has Killed IT With Overspecialization by Charlie Schluting

Highly recommended!
Notable quotes:
"... What happened to the old "sysadmin" of just a few years ago? We've split what used to be the sysadmin into application teams, server teams, storage teams, and network teams. There were often at least a few people, the holders of knowledge, who knew how everything worked, and I mean everything. ..."
"... Now look at what we've done. Knowledge is so decentralized we must invent new roles to act as liaisons between all the IT groups. Architects now hold much of the high-level "how it works" knowledge, but without knowing how any one piece actually does work. In organizations with more than a few hundred IT staff and developers, it becomes nearly impossible for one person to do and know everything. This movement toward specializing in individual areas seems almost natural. That, however, does not provide a free ticket for people to turn a blind eye. ..."
"... Does your IT department function as a unit? Even 20-person IT shops have turf wars, so the answer is very likely, "no." As teams are split into more and more distinct operating units, grouping occurs. One IT budget gets split between all these groups. Often each group will have a manager who pitches his needs to upper management in hopes they will realize how important the team is. ..."
"... The "us vs. them" mentality manifests itself at all levels, and it's reinforced by management having to define each team's worth in the form of a budget. One strategy is to illustrate a doomsday scenario. If you paint a bleak enough picture, you may get more funding. Only if you are careful enough to illustrate the failings are due to lack of capital resources, not management or people. A manager of another group may explain that they are not receiving the correct level of service, so they need to duplicate the efforts of another group and just implement something themselves. On and on, the arguments continue. ..."
Apr 07, 2010 | Enterprise Networking Planet

What happened to the old "sysadmin" of just a few years ago? We've split what used to be the sysadmin into application teams, server teams, storage teams, and network teams. There were often at least a few people, the holders of knowledge, who knew how everything worked, and I mean everything. Every application, every piece of network gear, and how every server was configured -- these people could save a business in times of disaster.

Now look at what we've done. Knowledge is so decentralized we must invent new roles to act as liaisons between all the IT groups. Architects now hold much of the high-level "how it works" knowledge, but without knowing how any one piece actually does work. In organizations with more than a few hundred IT staff and developers, it becomes nearly impossible for one person to do and know everything. This movement toward specializing in individual areas seems almost natural. That, however, does not provide a free ticket for people to turn a blind eye.

Specialization

You know the story: Company installs new application, nobody understands it yet, so an expert is hired. Often, the person with a certification in using the new application only really knows how to run that application. Perhaps they aren't interested in learning anything else, because their skill is in high demand right now. And besides, everything else in the infrastructure is run by people who specialize in those elements. Everything is taken care of.

Except, how do these teams communicate when changes need to take place? Are the storage administrators teaching the Windows administrators about storage multipathing; or worse logging in and setting it up because it's faster for the storage gurus to do it themselves? A fundamental level of knowledge is often lacking, which makes it very difficult for teams to brainstorm about new ways evolve IT services. The business environment has made it OK for IT staffers to specialize and only learn one thing.

If you hire someone certified in the application, operating system, or network vendor you use, that is precisely what you get. Certifications may be a nice filter to quickly identify who has direct knowledge in the area you're hiring for, but often they indicate specialization or compensation for lack of experience.

Resource Competition

Does your IT department function as a unit? Even 20-person IT shops have turf wars, so the answer is very likely, "no." As teams are split into more and more distinct operating units, grouping occurs. One IT budget gets split between all these groups. Often each group will have a manager who pitches his needs to upper management in hopes they will realize how important the team is.

The "us vs. them" mentality manifests itself at all levels, and it's reinforced by management having to define each team's worth in the form of a budget. One strategy is to illustrate a doomsday scenario. If you paint a bleak enough picture, you may get more funding. Only if you are careful enough to illustrate the failings are due to lack of capital resources, not management or people. A manager of another group may explain that they are not receiving the correct level of service, so they need to duplicate the efforts of another group and just implement something themselves. On and on, the arguments continue.

Most often, I've seen competition between server groups result in horribly inefficient uses of hardware. For example, what happens in your organization when one team needs more server hardware? Assume that another team has five unused servers sitting in a blade chassis. Does the answer change? No, it does not. Even in test environments, sharing doesn't often happen between IT groups.

With virtualization, some aspects of resource competition get better and some remain the same. When first implemented, most groups will be running their own type of virtualization for their platform. The next step, I've most often seen, is for test servers to get virtualized. If a new group is formed to manage the virtualization infrastructure, virtual machines can be allocated to various application and server teams from a central pool and everyone is now sharing. Or, they begin sharing and then demand their own physical hardware to be isolated from others' resource hungry utilization. This is nonetheless a step in the right direction. Auto migration and guaranteed resource policies can go a long way toward making shared infrastructure, even between competing groups, a viable option.

Blamestorming

The most damaging side effect of splitting into too many distinct IT groups is the reinforcement of an "us versus them" mentality. Aside from the notion that specialization creates a lack of knowledge, blamestorming is what this article is really about. When a project is delayed, it is all too easy to blame another group. The SAN people didn't allocate storage on time, so another team was delayed. That is the timeline of the project, so all work halted until that hiccup was restored. Having someone else to blame when things get delayed makes it all too easy to simply stop working for a while.

More related to the initial points at the beginning of this article, perhaps, is the blamestorm that happens after a system outage.

Say an ERP system becomes unresponsive a few times throughout the day. The application team says it's just slowing down, and they don't know why. The network team says everything is fine. The server team says the application is "blocking on IO," which means it's a SAN issue. The SAN team say there is nothing wrong, and other applications on the same devices are fine. You've ran through nearly every team, but without an answer still. The SAN people don't have access to the application servers to help diagnose the problem. The server team doesn't even know how the application runs.

See the problem? Specialized teams are distinct and by nature adversarial. Specialized staffers often relegate themselves into a niche knowing that as long as they continue working at large enough companies, "someone else" will take care of all the other pieces.

I unfortunately don't have an answer to this problem. Maybe rotating employees between departments will help. They gain knowledge and also get to know other people, which should lessen the propensity to view them as outsiders

[Dec 03, 2017] Another Democratic party betrayal of their former voters. but what you can expect from the party of Bill Clinton?

Highly recommended!
Dec 03, 2017 | www.nakedcapitalism.com

SpringTexan , December 2, 2017 at 12:08 pm

And I feel like the Democrats get so distracted. They have been talking about sexual harassment and stuff instead of the TAX BILL. It is so damn easy to get them to take their eyes off the ball! and get played again and again. . . and TRAGIC given the consequences . . .

Big River Bandido , December 2, 2017 at 3:10 pm

It's the perfect "distraction". Allows them to engage in virtue-signaling and "fighting for average Americans". It's all phony, they always "lose" in the end getting exactly what they wanted in the first place, while not actually having to cast a vote for it.

Kabuki theater in every respect.

jrs , December 2, 2017 at 3:18 pm

It's all related, less safety net and more inequality means more desperation to take a job, *ANY* job, means more women putting up with sexual harassment (and workplace bullying and horrible and illegal workplace conditions etc.) as the price of a paycheck.

Allegorio , December 2, 2017 at 11:07 pm

Horrible Toomey's re-election was a parallel to the Clinton/Trump fiasco. The Democrats put up a corporate shill, Katie McGinty that no-one trusted.

"Former lobbyist Katie McGinty has spent three decades in politics getting rich off the companies she regulated and subsidized. Now this master of the revolving-door wants Pennsylvania voters to give her another perch in government: U.S. Senator." Washington Examiner.

She was a Clintonite through and through, that everyone, much like $Hillary, could see through.

Expat , December 2, 2017 at 8:01 am

To paraphrase the Beatles, you say you want a revolution but you don't really mean it. You want more of the same because it makes you feel good to keep voting for your Senator or your Congressman. The others are corrupt and evil, but your guys are good. If only the others were like your guys. News flash: they are all your guys.

America is doomed. And so much the better. Despite all America has done for the world, it has also been a brutal despot. America created consumerism, super-sizing and the Kardashians. These are all unforgivable sins. America is probably the most persistently violent country in the world both domestically and internationally. No other country has invaded or occupied so much of the world, unless you count the known world in which case Macedonia wins.

This tax plan is what Americans want because they are pretty ignorant and stupid. They are incapable of understanding basic math so they can't work out the details. They believe that any tax cut is inherently good and all government is bad so that is also all that matters. They honestly think they or their kids will one day be rich so they don't want to hurt rich people. They also believe that millionaires got their money honestly and through hard work because that is what they learned from their parents.

Just send a blank check to Goldman Sachs. Keep a bit to buy a gun which you can use to either shoot up a McDonalds or blow your own brains out.

And some people still ask me why I left and don't want to come back. LOL

tony , December 2, 2017 at 9:30 am

Macedonia of today is not the same are that conquered the world. They stole the name from Greeks.

That being said, the US is ripe for a change. Every policy the current rulers enact seems to make things better. However, I suspect a revolution would kill majority of the population since it would disrupt the all important supply chains, so it does not seem viable.

However, a military takeover could be viable. If they are willing to wipe out the most predatory portions of the ruling class, they could fix the healthcare system, install a high-employment policy and take out the banks and even the military contractors. Which could make them very popular.

False Solace , December 2, 2017 at 5:18 pm

> a military takeover could be viable

Yeah, right. Have you seen our generals? They're just more of the same leeches we have everywhere else in the 0.01%. Have you seen any of the other military dictatorships around the world, like actually existing ones? They're all brilliantly corrupt and total failures when it comes to running any sort of economy. Not to mention the total loss of civil rights. Americans have this idiotic love of their military thanks to decades of effective propaganda and think the rule of pampered generals would somehow be better than the right to vote. Bleh.

Allegorio , December 2, 2017 at 11:20 pm

This is a military dictatorship. The fourth and sixth amendments have been de facto repealed. Trump cared about one thing and one thing only, namely to repeal the estate tax. He is the ultimate con man and this was his biggest con. It is truly amazing how he accomplished this. He has saved his family a billion $$$. He will now turn over governing to the generals and Goldman Sachs. He may even retire. Truly amazing. One has to admire the sheer perversity of it all. When will the American electorate get tired of being conned? The fact is they have nothing but admiration for Trump. We live in a criminal culture, winner take all. America loves its winners.

John Wright , December 2, 2017 at 10:45 am

There is an old 2003 David Brooks column in which he mentions that

"The Democrats couldn't even persuade people to oppose the repeal of the estate tax, which is explicitly for the mega-upper class. Al Gore, who ran a populist campaign, couldn't even win the votes of white males who didn't go to college, whose incomes have stagnated over the past decades and who were the explicit targets of his campaign. Why don't more Americans want to distribute more wealth down to people like themselves?"

Then Brooks goes on to explain

"The most telling polling result from the 2000 election was from a Time magazine survey that asked people if they are in the top 1 percent of earners. Nineteen percent of Americans say they are in the richest 1 percent and a further 20 percent expect to be someday. So right away you have 39 percent of Americans who thought that when Mr. Gore savaged a plan that favored the top 1 percent, he was taking a direct shot at them."

http://www.nytimes.com/2003/01/12/opinion/the-triumph-of-hope-over-self-interest.html

The Republicans have conditioned people to believe government services (except for defense/military) are run poorly and need to be "run like a business" for a profit.

The problem is that not all government services CAN be profitable (homeless care, mental health care for the poor, EPA enforcement, OSHA enforcement). And when attempts are made to privatize some government operations such as incarceration, the result is that the private company tries to maximize profits by pushing for laws to incarcerate ever more people.

The history of the USA as viewed by outsiders, maybe 50 years hence, will be that of a resource consuming nation that spent a vast fortune on military hardware and military adventures when it had little to fear due to geography, a nation that touted an independent press that was anything but, a nation that created a large media/entertainment industry which helped to keep citizens in line, a nation that fostered an overly large (by 2 or 3 times per Paul Whooley) parasitical financial industry that did not perform its prime capital allocation task competently as it veered from bubble to bubble and a nation that managed to spend great sums on medical care without covering all citizens.

But the USA does have a lot of guns and a lot of frustrated people.

Maybe Kevlar vests will be the fashion of the future?

Steve , December 2, 2017 at 2:45 pm

Thanks for the great link on how sadly uninformed average Americans are! I've been looking for it for a while and great comment!

MyLessThanPrimeBeef , December 2, 2017 at 4:08 pm

The provision to do away with the estate tax, if not immediately, in the current versions (House and Senate) is great news for the 1%, and bad for the rest of us.

And if more people are not against that (thanks for quoting the NYTImes article), it's the failure of the rest of the media for not focusing more on it, but wasting time and energy on fashion, sports, entertainment, etc.

Vatch , December 2, 2017 at 7:24 pm

he provision to do away with the estate tax . . . is great news for the 1%

I think it's even a little more extreme than that. The data is a few years old, but it is only the top 0.6% who are affected by estate taxes in the United States. See the data at these web sites:

https://www.irs.gov/statistics/soi-tax-stats-historical-table-17

https://www.irs.gov/statistics/soi-tax-stats-estate-tax-statistics-year-of-death-table-1

Sydney Conner , December 2, 2017 at 5:06 pm

Thanks for the succinct, accurate eloquent description of our nightmare reality.

DHG , December 2, 2017 at 8:13 pm

https://www.rawstory.com/2016/11/the-dark-rigidity-of-fundamentalist-rural-america-a-view-from-the-inside/

JTMcPhee , December 2, 2017 at 10:34 pm

The military adventures were largely in support of what Smedley Butler so accurately called the Great "Racket" of Monroe Doctrine colonialism and rapacious extractive "capitalism" aka "looting."

For those who haven't encountered Maj. Gen. Butler's take on his 33 years of serving the Oligokleptocracy, here's a link: https://www.ratical.org/ratville/CAH/warisaracket.html

A smart and honest fellow, who even declined as a "war hero" to serve as the oligarchs' figurehead in an earlier and clumsier plot to get rid of the trappings and regulation of "democracy:" The Business Plot, https://jtoddring.wordpress.com/2008/01/19/smedley-butler-and-the-business-plot/

It took longer and costed the rich a bit more to buy up all the bits of government, but the way they've done will likely be more compendious and lasting. Barring some "intervening event(s)".

Jonathan Holland Becnel , December 2, 2017 at 11:51 am

Doomed?

Project Much?

While Republicans show their true colors, im out there seeing a resurgence of civil society. And im starting to reach Hard core Tea Party types. Jobs, Manufacturing, Actual Policy.

IOW The Revolution Is Nigh.

2018 will be a Fn watershed.

[Nov 30, 2017] Will Robots Kill the Asian Century

This aritcle is two years old and not much happned during those two years. But still there is a chance that highly authomated factories can make manufacturing in the USA again profitable. the problme is that they will be even more profible in East Asia;-)
Notable quotes:
"... The National Interest ..."
The National Interest

The rise of technologies such as 3-D printing and advanced robotics means that the next few decades for Asia's economies will not be as easy or promising as the previous five.

OWEN HARRIES, the first editor, together with Robert Tucker, of The National Interest, once reminded me that experts-economists, strategists, business leaders and academics alike-tend to be relentless followers of intellectual fashion, and the learned, as Harold Rosenberg famously put it, a "herd of independent minds." Nowhere is this observation more apparent than in the prediction that we are already into the second decade of what will inevitably be an "Asian Century"-a widely held but rarely examined view that Asia's continued economic rise will decisively shift global power from the Atlantic to the western Pacific Ocean.

No doubt the numbers appear quite compelling. In 1960, East Asia accounted for a mere 14 percent of global GDP; today that figure is about 27 percent. If linear trends continue, the region could account for about 36 percent of global GDP by 2030 and over half of all output by the middle of the century. As if symbolic of a handover of economic preeminence, China, which only accounted for about 5 percent of global GDP in 1960, will likely surpass the United States as the largest economy in the world over the next decade. If past record is an indicator of future performance, then the "Asian Century" prediction is close to a sure thing.

[Nov 28, 2017] The Stigmatization of the Unemployed

"This overly narrow hiring spec then leads to absurd, widespread complaint that companies can't find people with the right skills" . In the IT job markets such postings are often called purple squirrels
Notable quotes:
"... In particular, there seems to be an extremely popular variant of the above where the starting proposition "God makes moral people rich" is improperly converted to "Rich people are more moral" which is then readily negated to "Poor people are immoral" and then expanded to "Poor people are immoral, thus they DESERVE to suffer for it". It's essentially the theological equivalent of dividing by zero ..."
"... That said, the ranks of the neoliberals are not small. They constitute what Jonathan Schell calls a "mass minority." I suspect the neoliberals have about the same level of popular support that the Nazis did at the time of their takeover of Germany in 1932, or the Bolsheviks had in Russia at the time of their takeover in 1917, which is about 20 or 25% of the total population. ..."
"... The ranks of the neoliberals are made to appear far greater than they really are because they have all but exclusive access to the nation's megaphone. The Tea Party can muster a handful of people to disrupt a town hall meeting and it gets coast to coast, primetime coverage. But let a million people protest against bank bailouts, and it is ignored. Thus, by manipulation of the media, the mass minority is made to appear to be much larger than it really is. ..."
Mar 20, 2011 | naked capitalism

Spencer Thomas:

Very good post. Thank you.

Over the past three decades, large parts of our culture here in the US have internalized the lessons of the new Social Darwinism, with a significant body of literature to explain and justify it. Many of us have internalized, without even realizing it, the ideas of "dog eat dog", "every man for himself", "society should be structured like the animal kingdom, where the weak and sick simply die because they cannot compete, and this is healthy", and "everything that happens to you is your own fault. There is no such thing as circumstance that cannot be overcome, and certainly no birth lottery."

The levers pulled by politicians and the Fed put these things into practice, but even if we managed get different (better) politicians or Fed chairmen, ones who weren't steeped in this culture and ideology, we'd still be left with the culture in the population at large, and things like the "unemployed stigma" are likely to die very, very hard. Acceptance of the "just-world phenomenon" here in the US runs deep.

perfect stranger:

"Religion is just as vulnerable to corporate capture as is the government or the academy."

This is rather rhetorical statement, and wrong one. One need to discern spiritual aspect of religion from the religion as a tool.

Religion, as is structured, is complicit: in empoverishment, obedience, people's preconditioning, and legislative enabler in the institutions such as Supreme – and non-supreme – Court(s). It is a form of PR of the ruling class for the governing class.

DownSouth:

perfect stranger,

Religion, just like human nature, is not that easy to put in a box.

For every example you can cite where religion "is complicit: in empoverishment, obedience, people's preconditioning, and legislative enabler in the institution," I can point to an example of where religion engendered a liberating, emancipatory and revolutionary spirit.

Examples:

•Early Christianity •Nominalism •Early Protestantism •Gandhi •Martin Luther King

Now granted, there don't seem to be any recent examples of this of any note, unless we consider Chris Hedges a religionist, which I'm not sure we can do. Would it be appropriate to consider Hedges a religionist?

perfect stranger:

Yes, that maybe, just maybe be the case in early stages of forming new religion(s). In case of Christianity old rulers from Rome were trying to save own head/throne and the S.P.Q.R. imperia by adopting new religion.

You use examples of Gandhi and MLK which is highly questionable both were fighters for independence and the second, civil rights. In a word: not members of establishment just as I said there were (probably) seeing the religion as spiritual force not tool of enslavement.

Matt:

This link may provide some context:

http://en.wikipedia.org/wiki/Prosperity_theology

In particular, there seems to be an extremely popular variant of the above where the starting proposition "God makes moral people rich" is improperly converted to "Rich people are more moral" which is then readily negated to "Poor people are immoral" and then expanded to "Poor people are immoral, thus they DESERVE to suffer for it". It's essentially the theological equivalent of dividing by zero

DownSouth:

Rex,

I agree.

Poll after poll after poll has shown that a majority of Americans, and a rather significant majority, reject the values, attitudes, beliefs and opinions proselytized by the stealth religion we call "neoclassical economics."

That said, the ranks of the neoliberals are not small. They constitute what Jonathan Schell calls a "mass minority." I suspect the neoliberals have about the same level of popular support that the Nazis did at the time of their takeover of Germany in 1932, or the Bolsheviks had in Russia at the time of their takeover in 1917, which is about 20 or 25% of the total population.

The ranks of the neoliberals are made to appear far greater than they really are because they have all but exclusive access to the nation's megaphone. The Tea Party can muster a handful of people to disrupt a town hall meeting and it gets coast to coast, primetime coverage. But let a million people protest against bank bailouts, and it is ignored. Thus, by manipulation of the media, the mass minority is made to appear to be much larger than it really is.

The politicians love this, because as they carry water for their pet corporations, they can point to the Tea Partiers and say: "See what a huge upwelling of popular support I am responding to."

JTFaraday:

Well, if that's true, then the unemployed are employable but the mass mediated mentality would like them to believe they are literally and inherently unemployable so that they underestimate and under-sell themselves.

This is as much to the benefit of those who would like to pick up "damaged goods" on the cheap as those who promote the unemployment problem as one that inheres in prospective employees rather than one that is a byproduct of a bad job market lest someone be tempted to think we should address it politically.

That's where I see this blame the unemployed finger pointing really getting traction these days.

attempter:

I apologize for the fact that I only read the first few paragraphs of this before quitting in disgust.

I just can no longer abide the notion that "labor" can ever be seen by human beings as a "cost" at all. We really need to refuse to even tolerate that way of phrasing things. Workers create all wealth. Parasites have no right to exist. These are facts, and we should refuse to let argument range beyond them.

The only purpose of civilization is to provide a better way of living and for all people. This includes the right and full opportunity to work and manage for oneself and/or as a cooperative group. If civilization doesn't do that, we're better off without it.

psychohistorian:

I am one of those long term unemployed.

I suppose my biggest employment claim would be as some sort of IT techie, with numerous supply chain systems and component design, development, implementation, interfaces with other systems and ongoing support. CCNP certification and a history of techiedom going back to WEYCOS.

I have a patent (6,209,954) in my name and 12+ years of beating my head against the wall in an industry that buys compliance with the "there is no problem here, move on now" approach.

Hell, I was a junior woodchuck program administrator back in the early 70's working for the Office of the Governor of the state of Washington on CETA PSE or Public Service Employment. The office of the Governor ran the PSE program for 32 of the 39 counties in the state that were not big enough to run their own. I helped organize the project approval process in all those counties to hire folk at ( if memory serves me max of $833/mo.) to fix and expand parks and provide social and other government services as defined projects with end dates. If we didn't have the anti-public congress and other government leadership we have this could be a current component in a rational labor policy but I digress.

I have experience in the construction trades mostly as carpenter but some electrical, plumbing, HVAC, etc. also.

So, of course there is some sort of character flaw that is keeping me and all those others from employment ..right. I may have more of an excuse than others, have paid into SS for 45 years but still would work if it was available ..taking work away from other who may need it more .why set up a society where we have to compete as such for mere existence???????

One more face to this rant. We need government by the people and for the people which we do not have now. Good, public focused, not corporate focused government is bigger than any entities that exist under its jurisdiction and is kept updated by required public participation in elections and potentially other things like military, peace corps, etc. in exchange for advanced education. I say this as someone who has worked at various levels in both the public and private sectors there are ignorant and misguided folks everywhere. At least with ongoing active participation there is a chance that government would, once constructed, be able to evolve as needed within public focus .IMO.

Ishmael:

Some people would say I have been unemployed for 10 years. In 2000 after losing the last of my four CFO gigs for public companies I found it necessary to start consulting. This has lead to two of my three biggest winning years. I am usually consulting on cutting edge area of my profession and many times have large staffs reporting to me that I bring on board to get jobs done. For several years I subcontacted to a large international consulting firm to clean up projects which went wrong. Let me give some insight here.

  1. First, most good positions have gate keepers who are professional recruiters. It is near impossible to get by them and if you are unemployed they will hardly talk to you. One time talking to a recruiter at Korn Fery I was interviewing for a job I have done several times in an industry I have worked in several times. She made a statement that I had never worked at a well known company. I just about fell out of my chair laughing. At one time I was a senior level executive for the largest consulting firm in the world and lived on three continents and worked with companies on six. In addition, I had held senior positions for 2 fortune 500 firms and was the CFO for a company with $4.5 billion in revenue. I am well known at several PE firms and the founder of one of the largest mentioned in a meeting that one of his great mistakes was not investing in a very successful LBO (return of in excess of 20 multiple to investors in 18 months) I was the CFO for. In a word most recruiters are incompetent.
  2. Second, most CEO's any more are just insecure politicians. One time during an interview I had a CEO asked me to talk about some accomplishments. I was not paying to much attention as I rattled off accomplishments and the CEO went nuclear and started yelling at me that he did not know where I thought I was going with this job but the only position above the CFO job was his and he was not going anywhere. I assured him I was only interested in the CFO position and not his, but I knew the job was over. Twice feed back that I got from recruiters which they took at criticism was the "client said I seemed very assured of myself."
  3. Third, government, banking, business and the top MBA schools are based upon lying to move forward. I remember a top human resource executive telling me right before Enron, MCI and Sarbanes Oxley that I needed to learn to be more flexible. My response was that flexibility would get me an orange jump suit. Don't get me wrong, I have a wide grey zone, but it use to be in business the looked for people who could identify problems early and resolve them. Now days I see far more of a demand for people who can come up with PR spins to hide them. An attorney/treasurer consultant who partnered with me on a number of consulting jobs told me some one called me "not very charming." He said he asked what that meant, and the person who said that said, "Ish walks into a meeting and within 10 minutes he is asking about the 10,000 pound guerilla sitting in the room that no one wants to talk about." CEO do not want any challenges in their organization.
  4. Fourth, three above has lead to the hiring of very young and inexperienced people at senior levels. These people are insecure and do not want more senior and experienced people above them and than has resulted in people older than 45 not finding positions.
  5. Fifth, people are considered expendable and are fired for the lamest reasons anymore. A partner at one of the larger and more prestigious recruiting firms one time told me, "If you have a good consulting business, just stick with it. Our average placement does not last 18 months any more." Another well known recruiter in S. Cal. one time commented to me, "Your average consulting gig runs longer than our average placement."

With all of that said, I have a hard time understanding such statements as "@attempter "Workers create all wealth. Parasites have no right to exist." What does that mean? Every worker creates wealth. There is no difference in people. Sounds like communism to me. I make a good living and my net worth has grown working for myself. I have never had a consulting gig terminated by the client but I have terminated several. Usually, I am brought in to fix what several other people have failed at. I deliver basically intellectual properties to companies. Does that mean I am not a worker. I do not usually lift anything heavy or move equipment but I tell people what and where to do it so does that make me a parasite.

Those people who think everyone is equal and everyone deserves equal pay are fools or lazy. My rate is high, but what usually starts as short term projects usually run 6 months or more because companies find I can do so much more than what most of their staff can do and I am not a threat.

I would again like to have a senior challenging role at a decent size company but due to the reasons above will probably never get one. However, you can never tell. I am currently consulting for a midsize very profitable company (grew 400% last year) where I am twice the age of most people there, but everyone speaks to me with respect so you can never tell.

Lidia:

Ishmael, you're quite right. When I showed my Italian husband's resume to try and "network" in the US, my IT friends assumed he was lying about his skills and work history.

Contemporaneously, in Italy it is impossible to get a job because of incentives to hire "youth". Age discrimination is not illegal, so it's quite common to see ads that ask for a programmer under 30 with 5 years of experience in COBOL (the purple squirrel).

Hosswire

Some good points about the foolishness of recruiters, but a great deal of that foolishness is forced by the clients themselves. I used to be a recruiter myself, including at Korn Ferry in Southern California. I described the recruiting industry as "yet more proof that God hates poor people" because my job was to ignore resumes from people seeking jobs and instead "source" aka "poach" people who already had good jobs by dangling a higher salary in front of them. I didn't do it because I disparaged the unemployed, or because I could not do the basic analysis to show that a candidate had analogous or transferrable skills to the opening.

I did it because the client, as Yves said, wanted people who were literally in the same job description already. My theory is that the client wanted to have their ass covered in case the hire didn't work out, by being able to say that they looked perfect "on paper." The lesson I learned for myself and my friends looking for jobs was simple, if morally dubious. Basically, that if prospective employers are going to judge you based on a single piece of paper take full advantage of the fact that you get to write that piece of paper yourself.

Ishmael:

Hosswire - I agree with your comment. There are poor recruiters like the one I sited but in general it is the clients fault. Fear of failure. All hires have at least a 50% chance of going sideways on you. Most companies do not even have the ability to look at a resume nor to interview. I did not mean to same nasty things about recruiters, and I even do it sometimes but mine.

I look at failure in a different light than most companies. You need to be continually experimenting and changing to survive as a company and there will be some failures. The goal is to control the cost of failures while looking for the big pay off on a winner.

Mannwich:

As a former recruiter and HR "professional" (I use that term very loosely for obvious reasons), I can honestly say that you nailed it. Most big companies looking for mid to high level white collar "talent" will almost always take the perceived safest route by hiring those who look the best ON PAPER and in a suit and lack any real interviewing skills to find the real stars. What's almost comical is that companies almost always want to see the most linear resume possible because they want to see "job stability" (e.g. a CYA document in case the person fails in that job) when in many cases nobody cares about the long range view of the company anyway. My question was why should the candidate or employee care about the long range view if the employer clearly doesn't?

Ishmael:

Manwhich another on point comment. Sometimes either interviewing for a job or consulting with a CEO it starts getting to the absurd. I see all the time the requirement for stability in a persons background. Hello, where have they been the last 15 years. In addition, the higher up you go the more likely you will be terminated sometime and that is especially true if you are hired from outside the orgnanization. Companies want loyalty from an employee but offer none in return.

The average tenure for a CFO anymore is something around 18 months. I have been a first party participant (more than once) where I went through an endless recruiting process for a company (lasting more than 6 months) they final hire some one and that person is with the company for 3 months and then resigns (of course we all know it is through mutual agreement).

Ishmael:

Birch:

The real problem has become and maybe this is what you are referring to is the "Crony Capitalism." We have lost control of our financial situation. Basically, PE is not the gods of the universe that everyone thinks they are. However, every bankers secret wet dream is to become a private equity guy. Accordingly, bankers make ridiculous loans to PE because if you say no to them then you can not play in their sand box any more. Since the govt will not let the banks go bankrupt like they should then this charade continues inslaving everyone.

This country as well as many others has a large percentage of its assets tied up in over priced deals that the bankers/governments will not let collapse while the blood sucking vampires suck the life out of the assets.

On the other hand, govt is not the answer. Govt is too large and accomplishes too little.

kevin de bruxelles:

The harsh reality is that, at least in the first few rounds, companies kick to the curb their weakest links and perceived slackers. Therefore when it comes time to hire again, they are loath to go sloppy seconds on what they perceive to be some other company's rejects. They would much rather hire someone who survived the layoffs working in a similar position in a similar company. Of course the hiring company is going to have to pay for this privilege. Although not totally reliable, the fact that someone survived the layoffs provides a form social proof for their workplace abilities.

On the macro level, labor has been under attack for thirty years by off shoring and third world immigration. It is no surprise that since the working classes have been severely undermined that the middle classes would start to feel some pressure. By mass immigration and off-shoring are strongly supported by both parties. Only when the pain gets strong enough will enough people rebel and these two policies will be overturned. We still have a few years to go before this happens.

davver:

Let's say I run a factory. I produce cars and it requires very skilled work. Skilled welding, skilled machinists. Now I introduce some robotic welders and an assembly line system. The plants productivity improves and the jobs actually get easier. They require less skill, in fact I've simplified each task to something any idiot can do. Would wages go up or down? Are the workers really contributing to that increase in productivity or is it the machines and methods I created?

Lets say you think laying off or cutting the wages of my existing workers is wrong. What happens when a new entrant into the business employs a smaller workforce and lower wages, which they can do using the same technology? The new workers don't feel like they were cut down in any way, they are just happy to have a job. Before they couldn't get a job at the old plant because they lacked the skill, but now they can work in the new plant because the work is genuinely easier. Won't I go out of business?

Escariot:

I am 54 and have a ton of peers who are former white collar workers and professionals (project managers, architects, lighting designers, wholesalers and sales reps for industrial and construction materials and equipment) now out of work going on three years. Now I say out of work, I mean out of our trained and experienced fields.

We now work two or three gigs (waiting tables, mowing lawns, doing free lance, working in tourism, truck driving, moving company and fedex ups workers) and work HARD, for much much less than we did, and we are seeing the few jobs that are coming back on line going to younger workers. It is just the reality. And for most of us the descent has not been graceful, so our credit is a wreck, which also breeds a whole other level of issues as now it is common for the credit record to be a deal breaker for employment, housing, etc.

Strangely I don't sense a lot of anger or bitterness as much as humility. And gratitude for ANY work that comes our way. Health insurance? Retirement accounts? not so much.

Mickey Marzick:

Yves and I have disagreed on how extensive the postwar "pact" between management and labor was in this country. But if you drew a line from say, Trenton-Patterson, NJ to Cincinatti, OH to Minneapolis, MN, north and east of it where blue collar manufacturing in steel, rubber, auto, machinery, etc., predominated, this "pact" may have existed but ONLY because physical plant and production were concentrated there and workers could STOP production.

Outside of these heavy industrial pockets, unions were not always viewed favorably. As one moved into the rural hinterlands surrounding them there was jealously and/or outright hostility. Elsewhere, especially in the South "unions" were the exception not the rule. The differences between NE Ohio before 1975 – line from Youngstown to Toledo – and the rest of the state exemplified this pattern. Even today, the NE counties of Ohio are traditional Democratic strongholds with the rest of the state largely Republican. And I suspect this pattern existed elsewhere. But it is changing too

In any case, the demonization of the unemployed is just one notch above the vicious demonization of the poor that has always existed in this country. It's a constant reminder for those still working that you could be next – cast out into the darkness – because you "failed" or worse yet, SINNED. This internalization of the "inner cop" reinforces the dominant ideology in two ways. First, it makes any resistance by individuals still employed less likely. Second, it pits those still working against those who aren't, both of which work against the formation of any significant class consciousness amongst working people. The "oppressed" very often internalize the value system of the oppressor.

As a nation of immigrants ETHNICITY may have more explanatory power than CLASS. For increasingly, it would appear that the dominant ethnic group – suburban, white, European Americans – have thrown their lot in with corporate America. Scared of the prospect of downward social mobility and constantly reminded of URBAN America – the other America – this group is trapped with nowhere to else to go.

It's the divide and conquer strategy employed by ruling elites in this country since its founding [Federalist #10] with the Know Nothings, blaming the Irish [NINA - no Irish need apply] and playing off each successive wave of immigrants against the next. Only when the forces of production became concentrated in the urban industrial enclaves of the North was this strategy less effective. And even then internal immigration by Blacks to the North in search of employment blunted the formation of class consciousness among white ethnic industrial workers.

Wherever the postwar "pact of domination" between unions and management held sway, once physical plant was relocated elsewhere [SOUTH] and eventually offshored, unemployment began to trend upwards. First it was the "rustbelt" now it's a nationwide phenomenon. Needless to say, the "pact" between labor and management has been consigned to the dustbin of history.

White, suburban America has hitched its wagon to that of the corporate horse. Demonization of the unemployed coupled with demonization of the poor only serve to terrorize this ethnic group into acquiescence. And as the workplace becomes a multicultural matrix this ethnic group is constantly reminded of its perilous state. Until this increasingly atomized ethnic group breaks with corporate America once and for all, it's unlikely that the most debilitating scourge of all working people – UNEMPLOYMENT – will be addressed.

Make no mistake about it, involuntary UNEMPLOYMENT/UNDEREMPLYEMT is a form of terrorism and its demonization is terrorism in action. This "quiet violence" is psychological and the intimidation wrought by unemployment and/or the threat of it is intended to dehumanize individuals subjected to it. Much like spousal abuse, the emotional and psychological effects are experienced way before any physical violence. It's the inner cop that makes overt repression unnecessary. We terrorize ourselves into submission without even knowing it because we accept it or come to tolerate it. So long as we accept "unemployment" as an inevitable consequence of progress, as something unfortunate but inevitable, we will continue to travel down the road to serfdom where ARBEIT MACHT FREI!

FULL and GAINFUL EMPLOYMENT are the ultimate labor power.

Eric:

It's delicate since direct age discrimination is illegal, but when circumstances permit separating older workers they have a very tough time getting back into the workforce in an era of high health care inflation. Older folks consume more health care and if you are hiring from a huge surplus of available workers it isn't hard to steer around the more experienced. And nobody gets younger, so when you don't get job A and go for job B 2 weeks later you, you're older still!

James:

Yves said- "This overly narrow hiring spec then leads to absurd, widespread complaint that companies can't find people with the right skills"

In the IT job markets such postings are often called purple squirrels. The HR departments require the applicant to be expert in a dozen programming languages. This is an excuse to hire a foreigner on a temp h1-b or other visa.

Most people aren't aware that this model dominates the sciences. Politicians scream we have a shortage of scientists, yet it seems we only have a shortage of cheap easily exploitable labor. The economist recently pointed out the glut of scientists that currently exists in the USA.

http://www.economist.com/node/17723223

This understates the problem. The majority of PhD recipients wander through years of postdocs only to end up eventually changing fields. My observation is that the top ten schools in biochem/chemistry/physics/ biology produce enough scientists to satisfy the national demand.

The exemption from h1-b visa caps for academic institutions exacerbates the problem, providing academics with almost unlimited access to labor.

The pharmaceutical sector has been decimated over the last ten years with tens of thousands of scientists/ factory workers looking for re-training in a dwindling pool of jobs (most of which will deem you overqualified.)

http://pipeline.corante.com/archives/2011/03/03/a_postdocs_lament.php

Abe, NYC:

I wonder how the demonization of the unemployed can be so strong even in the face of close to 10% unemployment/20% underemployment. It's easy and tempting to demonize an abstract young buck or Cadillac-driving welfare queen, but when a family member or a close friend loses a job, or your kids are stuck at your place because they can't find one, shouldn't that alter your perceptions? Of course the tendency will be to blame it all on the government, but there has to be a limit to that in hard-hit places like Ohio, Colorado, or Arizona. And yet, the dynamics aren't changing or even getting worse. Maybe Wisconsin marks a turning point, I certainly hope it does

damien:

It's more than just stupid recruiting, this stigma. Having got out when the getting was good, years ago, I know that any corporate functionary would be insane to hire me now. Socialization wears off, the deformation process reverses, and the ritual and shibboleths become a joke. Even before I bailed I became a huge pain in the ass as economic exigency receded, every bosses nightmare. I suffered fools less gladly and did the right thing out of sheer anarchic malice.

You really can't maintain corporate culture without existential fear – not just, "Uh oh, I'm gonna get fired," fear, but a visceral feeling that you do not exist without a job. In properly indoctrinated workers that feeling is divorced from economic necessity. So anyone who's survived outside a while is bound to be suspect. That's a sign of economic security, and security of any sort undermines social control.

youniquelikeme:

You hit the proverbial nail with that reply. (Although, sorry, doing the right thing should not be done out of malice) The real fit has to be in the corporate yes-man culture (malleable ass kisser) to be suited for any executive position and beyond that it is the willingness to be manipulated and drained to be able to keep a job in lower echelon.

This is the new age of evolution in the work place. The class wars will make it more of an eventual revolution, but it is coming. The unemployment rate (the actual one, not the Government one) globalization and off shore hiring are not sustainable for much longer.

Something has to give, but it is more likely to snap then to come easily. People who are made to be repressed and down and out eventually find the courage to fight back and by then, it is usually not with words.

down and out in Slicon Valley:

This is the response I got from a recruiter:

"I'm going to be overly honest with you. My firm doesn't allow me to submit any candidate who hasn't worked in 6-12 months or more. Recruiting brokers are probably all similar in that way . You are going to have to go through a connection/relationship you have with a colleague, co-worker, past manager or friend to get your next job .that's my advice for you. Best of luck "

I'm 56 years old with MSEE. Gained 20+ years of experience at the best of the best (TRW, Nortel, Microsoft), have been issued a patent. Where do I sign up to gain skills required to find a job now?

Litton Graft :

"Best of the Best?" I know you're down now, but looking back at these Gov'mint contractors you've enjoyed the best socialism money can by.

Nortel/TRW bills/(ed) the Guvmint at 2x, 3x your salary, you can ride this for decades. At the same time the Inc is attached to the Guvmint ATM localities/counties are giving them a red carpet of total freedom from taxation. Double subsidies.

I've worked many years at the big boy bandits, and there is no delusion in my mind that almost anyone, can do what I do and get paid 100K+. I've never understood the mindset of some folks who work in the Wermacht Inc: "Well, someone has to do this work" or worse "What we do, no one else can do" The reason no one else "can do it" is that they are not allowed to. So, we steal from the poor to build fighter jets, write code or network an agency.

Hosswire:

I used to work as a recruiter and can tell you that I only parroted the things my clients told me. I wanted to get you hired, because I was lazy and didn't want to have to talk to someone else next.

So what do you do? To place you that recruiter needs to see on a piece of paper that you are currently working? Maybe get an email or phone call from someone who will vouch for your employment history. That should not be that hard to make happen.

Francois T :

The "bizarre way that companies now spec jobs" is essentially a coded way for mediocre managers to say without saying so explicitly that "we can afford to be extremely picky, and by God, we shall do so no matter what, because we can!"

Of course, when comes the time to hire back because, oh disaster! business is picking up again, (I'm barely caricaturing here; some managers become despondent when they realize that workers regain a bit of the higher ground; loss of power does that to lesser beings) the same idiots who designed those "overly narrow hiring spec then leads to absurd, widespread complaint that companies can't find people with the right skills" are thrown into a tailspin of despair and misery. Instead of figuring out something as simple as "if demand is better, so will our business", they can't see anything else than the (eeeek!) cost of hiring workers. Unable to break their mental corset of penny-pincher, they fail to realize that lack of qualified workers will prevent them to execute well to begin with.

And guess what: qualified workers cost money, qualified workers urgently needed cost much more.

This managerial attitude must be another factor that explain why entrepreneurship and the formation of small businesses is on the decline in the US (contrary to the confabulations of the US officialdumb and the chattering class) while rising in Europe and India/China.

Kit:

If you are 55-60, worked as a professional (i.e., engineering say) and are now unemployed you are dead meat. Sorry to be blunt but thats the way it is in the US today. Let me repeat that : Dead Meat.

I was terminated at age 59, found absolutely NOTHING even though my qualifications were outstanding. Fortunately, my company had an old style pension plan which I was able to qualify for (at age 62 without reduced benefits). So for the next 2+ years my wife and I survived on unemployment insurance, severance, accumulated vacation pay and odd jobs. Not nice – actually, a living hell.

At age 62, I applied for my pension, early social security, sold our old house (at a good profit) just before the RE crash, moved back to our home state. Then my wife qualified for social security also. Our total income is now well above the US median.

Today, someone looking at us would think we were the typical corporate retiree. We surely don't let on any differently but the experience (to get to this point) almost killed us.

I sympathize very strongly with the millions caught in this unemployment death spiral. I wish I had an answer but I just don't. We were very lucky to survive intact.

Ming:

Thank you Yves for your excellent post, and for bringing to light this crucial issue.

Thank you to all the bloggers, who add to the richness of the this discussion.

I wonder if you could comment on this Yves, and correct me if I am wrong I believe that the power of labor was sapped by the massive available supply of global labor. The favorable economic policies enacted by China (both official and unofficial), and trade negotiations between the US government and the Chinese government were critical to creating the massive supply of labor.

Thank you. No rush of course.

Nexus:

There are some odd comments and notions here that are used to support dogma and positions of prejudice. The world can be viewed in a number of ways. Firstly from a highly individualised and personal perspective – that is what has happened to me and here are my experiences. Or alternatively the world can be viewed from a broader societal perspective.

In the context of labour there has always been an unequal confrontation between those that control capital and those that offer their labour, contrary to some of the views exposed here – Marx was a first and foremost a political economist. The political economist seeks to understand the interplay of production, supply, the state and institutions like the media. Modern day economics branched off from political economy and has little value in explaining the real world as the complexity of the world has been reduced to a simplistic rationalistic model of human behaviour underpinned by other equally simplistic notions of 'supply and demand', which are in turn represented by mathematical models, which in themselves are complex but merely represent what is a simplistic view of the way the world operates. This dogmatic thinking has avoided the need to create an underpinning epistemology. This in turn underpins the notion of free choice and individualism which in itself is an illusion as it ignores the operation of the modern state and the exercise of power and influence within society.

It was stated in one of the comments that the use of capital (machines, robotics, CAD design, etc.) de-skills. This is hardly the case as skills rise for those that remain and support highly automated/continuous production factories. This is symptomatic of the owners of capital wanting to extract the maximum value for labour and this is done via the substitution of labour for capital making the labour that remains to run factories highly productive thus eliminating low skill jobs that have been picked up via services (people move into non productive low skilled occupations warehousing and retail distribution, fast food outlets, etc). Of course the worker does not realise the additional value of his or her labour as this is expropriated for the shareholders (including management as shareholders).

The issue of the US is that since the end of WW2 it is not the industrialists that have called the shots and made investments it is the financial calculus of the investment banker (Finance Capital). Other comments have tried to ignore the existence of the elites in society – I would suggest that you read C.W.Mills – The Power Elites as an analysis of how power is exercised in the US – it is not through the will of the people.

For Finance capital investments are not made on the basis of value add, or contribution through product innovation and the exchange of goods but on basis of the lowest cost inputs. Consequently, the 'elites' that make investment decisions, as they control all forms of capital seek to gain access to the cheapest cost inputs. The reality is that the US worker (a pool of 150m) is now part of a global labour pool of a couple of billion that now includes India and China. This means that the elites, US transnational corporations for instance, can access both cheaper labour pools, relocate capital and avoid worker protection (health and safety is not a concern). The strategies of moving factories via off-shoring (over 40,000 US factories closed or relocated) and out-sourcing/in-sourcing labour is also a representations of this.

The consequence for the US is that the need for domestic labour has diminished and been substituted by cheap labour to extract the arbitrage between US labour rates and those of Chinese and Indians. Ironically, in this context capital has become too successful as the mode of consumption in the US shifted from workers that were notionally the people that created the goods, earned wages and then purchased the goods they created to a new model where the worker was substituted by the consumer underpinned by cheap debt and low cost imports – it is illustrative to note that real wages have not increased in the US since the early 1970's while at the same time debt has steadily increased to underpin the illusion of wealth – the 'borrow today and pay tomorrow' mode of capitalist operation. This model of operation is now broken. The labour force is now being demonized as there is a now surplus of labour and a need to drive down labour rates through changes in legislation and austerity programs to meet those of the emerging Chinese and Indian middle class so workers rights need to be broken. Once this is done a process of in-source may take place as US labour costs will be on par with overseas labour pools.

It is ironic that during the Regan administration a number of strategic thinkers saw the threat from emerging economies and the danger of Finance Capital and created 'Project Socrates' that would have sought to re-orientate the US economy from one that was based on the rationale of Finance Capital to one that focused in productive innovation which entailed an alignment of capital investment, research and training to product innovative goods. Of course this was ignored and the rest is history. The race to the lowest input cost is ultimately self defeating as it is clear that the economy de-industrialises through labour and capital changes and living standards collapse. The elites – bankers, US transnational corporations, media, industrial military complex and the politicians don't care as they make money either way and this way you get other people overseas to work cheap for you.

S P:

Neoliberal orthodoxy treats unemployment as well as wage supression as a necessary means to fight "inflation." If there was too much power in the hands of organized labor, inflationary pressures would spiral out of control as supply of goods cannot keep up with demand.

It also treats the printing press as a necessary means to fight "deflation."

So our present scenario: widespread unemployment along with QE to infinity, food stamps for all, is exactly what you'd expect.

The problem with this orthodoxy is that it assumes unlimited growth on a planet with finite resources, particularly oil and energy. Growth is not going to solve unemployment or wages, because we are bumping up against limits to growth.

There are only two solutions. One is tax the rich and capital gains, slow growth, and reinvest the surplus into jobs/skills programs, mostly to maintain existing infrastructure or build new energy infrastructure. Even liberals like Krugman skirt around this, because they aren't willing to accept that we have the reached the end of growth and we need radical redistribution measures.

The other solution is genuine classical liberalism / libertarianism, along the lines of Austrian thought. Return to sound money, and let the deflation naturally take care of the imbalances. Yes, it would be wrenching, but it would likely be wrenching for everybody, making it fair in a universal sense.

Neither of these options is palatable to the elite classes, the financiers of Wall Street, or the leeches and bureaucrats of D.C.

So this whole experiment called America will fail.

[Nov 27, 2017] This Is Why Hewlett-Packard Just Fired Another 30K

Highly recommended!
Notable quotes:
"... Imagine working at HP and having to listen to Carly Fiorina bulldoze you...she is like a blow-torch...here are 4 minutes of Carly and Ralph Nader (if you can take it): https://www.youtube.com/watch?v=vC4JDwoRHtk ..."
"... My husband has been a software architect for 30 years at the same company. Never before has he seen the sheer unadulterated panic in the executives. All indices are down and they are planning for the worst. Quality is being sacrificed for " just get some relatively functional piece of shit out the door we can sell". He is fighting because he has always produced a stellar product and refuses to have shit tied to his name ( 90% of competitor benchmarks fail against his projects). They can't afford to lay him off, but the first time in my life I see my husband want to quit... ..."
"... HP basically makes computer equipment (PCs, servers, Printers) and software. Part of the problem is that computer hardware has been commodized. Since PCs are cheap and frequent replacements are need, People just by the cheapest models, expecting to toss it in a couple of years and by a newer model (aka the Flat screen TV model). So there is no justification to use quality components. Same is become true with the Server market. Businesses have switched to virtualization and/or cloud systems. So instead of taking a boat load of time to rebuild a crashed server, the VM is just moved to another host. ..."
"... I hung an older sign next to the one saying Information Technology. Somehow MIS-Information Technology seemed appropriate.) ..."
"... Then I got to my first duty assignment. It was about five months after the first moon landing, and the aerospace industry was facing cuts in government aerospace spending. I picked up a copy of an engineering journal in the base library and found an article about job cuts. There was a cartoon with two janitors, buckets at their feet and mops in their hands, standing before a blackboard filled with equations. Once was saying to the other, pointing to one section, "you can see where he made his mistake right here...". It represented two engineers who had been reduced to menial labor after losing their jobs. ..."
"... So while I resent all the H1Bs coming into the US - I worked with several for the last four years of my IT career, and was not at all impressed - and despise the politicians who allow it, I know that it is not the first time American STEM grads have been put out of jobs en masse. In some ways that old saying applies: the more things change, the more they stay the same ..."
"... Just like Amazon, HP will supposedly make billions in profit analyzing things in the cloud that nobody looks at and has no use to the real economy, but it makes good fodder for Power Point presentations. I am amazed how much daily productivity goes into creating fancy charts for meetings that are meaningless to the actual business of the company. ..."
"... 'Computers' cost as much - if not more time than they save, at least in corporate settings. Used to be you'd work up 3 budget projections - expected, worst case and best case, you'd have a meeting, hash it out and decide in a week. Now you have endless alternatives, endless 'tweaking' and changes and decisions take forever, with outrageous amounts of time spent on endless 'analysis' and presentations. ..."
"... A recent lay off here turned out to be quite embarrassing for Parmalat there was nobody left that knew how to properly run the place they had to rehire many ex employees as consultants-at a costly premium ..."
"... HP is laying off 80,000 workers or almost a third of its workforce, converting its long-term human capital into short-term gains for rich shareholders at an alarming rate. The reason that product quality has declined is due to the planned obsolescence that spurs needless consumerism, which is necessary to prop up our debt-backed monetary system and the capitalist-owned economy that sits on top of it. ..."
"... The world is heading for massive deflation. Computers have hit the 14 nano-meter lithography zone, the cost to go from 14nm to say 5nm is very high, and the net benefit to computing power is very low, but lets say we go from 14nm to 5nm over the next 4 years. Going from 5nm to 1nm is not going to net a large boost in computing power and the cost to shrink things down and re-tool will be very high for such an insignificant gain in performance. ..."
"... Another classic "Let's rape all we can and bail with my golden parachute" corporate leaders setting themselves up. Pile on the string of non-IT CEOs that have been leading the company to ruin. To them it is nothing more than a contest of being even worse than their predecessor. Just look at the billions each has lost before their exit. Compaq, a cluster. Palm Pilot, a dead product they paid millions for and then buried. And many others. ..."
"... Let's not beat around the bush, they're outsourcing, firing Americans and hiring cheap labor elsewhere: http://www.bloomberg.com/news/articles/2015-09-15/hewlett-packard-to-cut-up-to-30-000-more-jobs-in-restructuring It's also shifting employees to low-cost areas, and hopes to have 60 percent of its workers located in cheaper countries by 2018, Nefkens said. ..."
"... Carly Fiorina: (LOL, leading a tech company with a degree in medieval history and philosophy) While at ATT she was groomed from the Affirmative Action plan. ..."
"... It is very straightforward. Replace 45,000 US workers with 100,000 offshore workers and you still save millions of USD ! Use the "savings" to buy back stock, then borrow more $$ at ZIRP to buy more stock back. ..."
"... If you look on a site like LinkedIN, it will always say 'We're hiring!'. YES, HP is hiring.....but not YOU, they want Ganesh Balasubramaniamawapbapalooboopawapbamboomtuttifrutti, so that they can work him as modern day slave labor for ultra cheap. We can thank idiot 'leaders' like Meg Pasty Faced Whitman and Bill 'Forced Vaccinations' Gates for lobbying Congress for decades, against the rights of American workers. ..."
"... An era of leadership in computer technology has died, and there is no grave marker, not even a funeral ceremony or eulogy ... Hewlett-Packard, COMPAQ, Digital Equipment Corp, UNIVAC, Sperry-Rand, Data General, Tektronix, ZILOG, Advanced Micro Devices, Sun Microsystems, etc, etc, etc. So much change in so short a time, leaves your mind dizzy. ..."
Sep 15, 2015 | Zero Hedge

SixIsNinE

yeah thanks Carly ... HP made bullet-proof products that would last forever..... I still buy HP workstation notebooks, especially now when I can get them for $100 on ebay .... I sold HP products in the 1990s .... we had HP laserjet IIs that companies would run day & night .... virtually no maintenance ... when PCL5 came around then we had LJ IIIs .... and still companies would call for LJ I's, .... 100 pounds of invincible Printing ! .

This kind of product has no place in the World of Planned-Obsolesence .... I'm currently running an 8510w, 8530w, 2530p, Dell 6420 quad i7, hp printers hp scanners, hp pavilion desktops, .... all for less than what a Laserjet II would have cost in 1994, Total.

Not My Real Name

I still have my HP 15C scientific calculator I bought in 1983 to get me through college for my engineering degree. There is nothing better than a hand held calculator that uses Reverse Polish Notation!

BigJim

HP used to make fantastic products. I remember getting their RPN calculators back in th 80's; built like tanks. Then they decided to "add value" by removing more and more material from their consumer/"prosumer" products until they became unspeakably flimsy. They stopped holding things together with proper fastenings and starting hot melting/gluing it together, so if it died you had to cut it open to have any chance of fixing it.

I still have one of their Laserjet 4100 printers. I expect it to outlast anything they currently produce, and it must be going on 16+ years old now.

Fuck you, HP. You started selling shit and now you're eating through your seed corn. I just wish the "leaders" who did this to you had to pay some kind of penalty greater than getting $25M in a severance package.

Automatic Choke

+100. The path of HP is everything that is wrong about modern business models. I still have a 5MP laserjet (one of the first), still works great. Also have a number of 42S calculators.....my day-to-day workhorse and several spares. I don't think the present HP could even dream of making these products today.

nope-1004

How well will I profit, as a salesman, if I sell you something that works? How valuable are you, as a customer in my database, if you never come back? Confucious say "Buy another one, and if you can't afford it, f'n finance it!" It's the growing trend. Look at appliances. Nothing works anymore.

Normalcy Bias

https://en.wikipedia.org/wiki/Planned_obsolescence

Son of Loki

GE to cut Houston jobs as work moves overseas http://www.bizjournals.com/houston/news/2015/09/15/ge-to-cut-houston-job... " Yes we can! "

Automatic Choke

hey big brother.... if you are curious, there is a damn good android emulator of the HP42S available (Free42). really it is so good that it made me relax about accumulating more spares. still not quite the same as a real calculator. (the 42S, by the way, is the modernization/simplification of the classic HP41, the real hardcord very-programmable, reconfigurable, hackable unit with all the plug-in-modules that came out in the early 80s.)

Miss Expectations

Imagine working at HP and having to listen to Carly Fiorina bulldoze you...she is like a blow-torch...here are 4 minutes of Carly and Ralph Nader (if you can take it): https://www.youtube.com/watch?v=vC4JDwoRHtk

Miffed Microbiologist

My husband has been a software architect for 30 years at the same company. Never before has he seen the sheer unadulterated panic in the executives. All indices are down and they are planning for the worst. Quality is being sacrificed for " just get some relatively functional piece of shit out the door we can sell". He is fighting because he has always produced a stellar product and refuses to have shit tied to his name ( 90% of competitor benchmarks fail against his projects). They can't afford to lay him off, but the first time in my life I see my husband want to quit...

unplugged

I've been an engineer for 31 years - our managements's unspoken motto at the place I'm at (large company) is: "release it now, we'll put in the quality later". I try to put in as much as possible before the product is shoved out the door without killing myself doing it.

AGuy

Do they even make test equipment anymore?

HP test and measurement was spun off many years ago as Agilent. The electronics part of Agilent was spun off as keysight late last year.

HP basically makes computer equipment (PCs, servers, Printers) and software. Part of the problem is that computer hardware has been commodized. Since PCs are cheap and frequent replacements are need, People just by the cheapest models, expecting to toss it in a couple of years and by a newer model (aka the Flat screen TV model). So there is no justification to use quality components. Same is become true with the Server market. Businesses have switched to virtualization and/or cloud systems. So instead of taking a boat load of time to rebuild a crashed server, the VM is just moved to another host.

HP has also adopted the Computer Associates business model (aka Borg). HP buys up new tech companies and sits on the tech and never improves it. It decays and gets replaced with a system from a competitor. It also has a habit of buying outdated tech companies that never generate the revenues HP thinks it will.

BullyBearish

When Carly was CEO of HP, she instituted a draconian "pay for performance" plan. She ended up leaving with over $146 Million because she was smart enough not to specify "what type" of performance.

GeezerGeek

Regarding your statement "All those engineers choosing to pursue other opportunities", we need to realize that tech in general has been very susceptible to the vagaries of government actions. Now the employment problems are due to things like globalization and H1B programs. Some 50 years ago tech - meaning science and engineering - was hit hard as the US space program wound down. Permit me this retrospective:

I graduated from a quite good school with a BS in Physics in 1968. My timing was not all that great, since that was when they stopped granting draft deferments for graduate school. I joined the Air Force, but as an enlisted airman, not an officer. Following basic training, I was sent to learn to operate PCAM operations. That's Punched Card Accounting Machines. Collators. Sorters. Interpreters. Key punches. I was in a class with nine other enlistees. One had just gotten a Masters degree in something. Eight of us had a BS in one thing or another, but all what would now be called STEM fields. The least educated only had an Associate degree. We all enlisted simply to avoid being drafted into the Marines. (Not that there's anything wrong with the Marines, but all of us proclaimed an allergy to energetic lead projectiles and acted accordingly. Going to Canada, as many did, pretty much ensured never getting a job in STEM fields later in life.) So thanks to government action (fighting in VietNam, in this case) a significant portion of educated Americans found themselves diverted from chosen career paths. (In my case, it worked out fine. I learned to program, etc., and spent a total of over 40 years in what is now called IT. I think it was called EDP when I started the trek. Somewhere along the line it became (where I worked) Management Information Systems. MIS. And finally the department became simply Information Technology. I hung an older sign next to the one saying Information Technology. Somehow MIS-Information Technology seemed appropriate.)

Then I got to my first duty assignment. It was about five months after the first moon landing, and the aerospace industry was facing cuts in government aerospace spending. I picked up a copy of an engineering journal in the base library and found an article about job cuts. There was a cartoon with two janitors, buckets at their feet and mops in their hands, standing before a blackboard filled with equations. Once was saying to the other, pointing to one section, "you can see where he made his mistake right here...". It represented two engineers who had been reduced to menial labor after losing their jobs.

So while I resent all the H1Bs coming into the US - I worked with several for the last four years of my IT career, and was not at all impressed - and despise the politicians who allow it, I know that it is not the first time American STEM grads have been put out of jobs en masse. In some ways that old saying applies: the more things change, the more they stay the same.

If you made it this far, thanks for your patience.

adr

Just like Amazon, HP will supposedly make billions in profit analyzing things in the cloud that nobody looks at and has no use to the real economy, but it makes good fodder for Power Point presentations. I am amazed how much daily productivity goes into creating fancy charts for meetings that are meaningless to the actual business of the company.

IT'S ALL BULLSHIT!!!!!

I designed more products in one year for the small company I work for than a $15 billion corporation did throughout their entire design department employing hundreds of people. That is because 90% of their workday is spent preparing crap for meetings and they never really get anything meaningful done.

It took me one week to design a product and send it out for production branded for the company I work for, but it took six months to get the same type of product passed through the multi billion dollar corporation we license for. Because it had to pass through layer after layer of bullshit and through every level of management before it could be signed off. Then a month later somebody would change their mind in middle management and the product would need to be changed and go through the cycle all over again.

Their own bag department made six bags last year, I designed 16. Funny how I out produce a department of six people whose only job is to make bags, yet I only get paid the salary of one.

Maybe I'm just an imbecile for working hard.

Bear

You also have to add all the wasted time of employees having to sit through those presentations and the even more wasted time on Ashley Madison

cynicalskeptic

'Computers' cost as much - if not more time than they save, at least in corporate settings. Used to be you'd work up 3 budget projections - expected, worst case and best case, you'd have a meeting, hash it out and decide in a week. Now you have endless alternatives, endless 'tweaking' and changes and decisions take forever, with outrageous amounts of time spent on endless 'analysis' and presentations.

EVERY VP now has an 'Administrative Assistant' whose primary job is to develop PowerPoint presentations for the endless meetings that take up time - without any decisions ever being made.

Computers stop people from thinking. In ages past when you used a slide rule you had to know the order of magnitude of the end result. Now people make a mistake and come up with a ridiculous number and take it at face value because 'the computer' produced it.

Any exec worht anythign knew what a given line in their department or the total should be +or a small amount. I can't count the number of times budgets and analyses were WRONG because someone left off a few lines on a spreadsheet total.

Yes computer modeling for advanced tech and engineering is a help, CAD/CAM is great and many other applications in the tech/scientific world are a great help but letting computers loose in corporate and finance has produced endless waste AND - worsde - thigns like HFT (e.g. 'better' more effective ways to manipulate and cheat markets.

khnum

A recent lay off here turned out to be quite embarrassing for Parmalat there was nobody left that knew how to properly run the place they had to rehire many ex employees as consultants-at a costly premium

Anopheles

Consultants don't come at that much of a premium becaue the company doesn't have to pay benefits, vacation, sick days, or payroll taxes, etc. Plus it's really easy and cheap to get rid of consultants.

arrowrod

Obviously, you haven't worked as a consultant. You get paid by the hour. To clean up a mess. 100 hours a week are not uncommon. (What?, is it possible to work 100 hours a week? Yes, it is, but only for about 3 months.)

RaceToTheBottom

HP Executives are trying hard to bring the company back to its roots: The ability to fit into one garage...

PrimalScream

ALL THAT Meg Whitman needs to do ... is to FIRE EVERYBODY !! Then have all the products made in China, process all the sales orders in Hong Kong, and sub-contract the accounting and tax paperwork to India. Then HP can use all the profits for stock buybacks, except of course for Meg's salary ... which will keep rising astronomically!

Herdee

That's where education gets you in America.The Government sold out America's manufacturing base to Communist China who holds the debt of the USA.Who would ever guess that right-wing neo-cons(neo-nazis) running the government would sell out to communists just to get the money for war? Very weird.

Really20

"Communist"? The Chinese government, like that of the US, never believed in worker ownership of businesses and never believed that the commerical banking system (whether owned by the state, or private corporations which act like a state) should not control money. Both countries believe in centralization of power among a few shareholders, who take the fruits of working people's labor while contributing nothing of value themselves (money being but a token that represents a claim on real capital, not capital itself.)

Management and investors ought to be separate from each other; management should be chosen by workers by universal equal vote, while a complementary investor board should be chosen by investors much as corporate boards are now. Both of these boards should be legally independent but bound organizations; the management board should run the business while the investor board should negotiate with the management board on the terms of equity issuance. No more buybacks, no more layoffs or early retirements, unless workers as a whole see a need for it to maintain the company.

The purpose of investors is to serve the real economy, not the other way round; and in turn, the purpose of the real economy is to serve humanity, not the other way around. Humans should stop being slaves to perpetual growth.

Really20

HP is laying off 80,000 workers or almost a third of its workforce, converting its long-term human capital into short-term gains for rich shareholders at an alarming rate. The reason that product quality has declined is due to the planned obsolescence that spurs needless consumerism, which is necessary to prop up our debt-backed monetary system and the capitalist-owned economy that sits on top of it.

NoWayJose

HP - that company that sells computers and printers made in China and ink cartridges made in Thailand?

Dominus Ludificatio

Another company going down the drain because their focus is short term returns with crappy products.They will also bring down any company they buy as well.

Barnaby

HP is microcosm of what Carly will do to the US: carve it like a pumpkin and leave the shell out to bake in the sun for a few weeks. But she'll make sure and poison the seeds too! Don't want anything growing out of that pesky Palm division...

Dre4dwolf

The world is heading for massive deflation. Computers have hit the 14 nano-meter lithography zone, the cost to go from 14nm to say 5nm is very high, and the net benefit to computing power is very low, but lets say we go from 14nm to 5nm over the next 4 years. Going from 5nm to 1nm is not going to net a large boost in computing power and the cost to shrink things down and re-tool will be very high for such an insignificant gain in performance.

What does that mean

  1. Computers (atleast non-quantum ones) have hit the point where about 80-90% of the potential for the current science has been tap'd
  2. This means that the consumer is not going to be put in the position where they will have to upgrade to faster systems for atleast another 7-8 years.... (because the new computer wont be that much faster than their existing one).
  3. If no one is upgrading the only IT sectors of the economy that stand to make any money are software companies (Microsoft, Apple, and other small software developers), most software has not caught up with hardware yet.
  4. We are obviously heading for massive deflation, consumer spending levels as a % are probably around where they were in the late 70s - mid 80s, this is a very deflationary environment that is being compounded by a high debt burden (most of everyones income is going to service their debts), that signals monetary tightening is going on... people simply don't have enough discretionary income to spend on new toys.

All that to me screams SELL consumer electronics stocks because profits are GOING TO DECLINE , SALES ARE GOING TO DECLINE. There is no way , no amount of buy backs will float the stocks of corporations like HP/Dell/IBM etc... it is inevitable that these stocks will be worth 30% less over the next 5 - 8 years

But what do I know? maybe I am missing something.

In anycase a lot of pressure is being put on HP to do all it can at any cost to boost the stock valuations, because so much of its stock is institution owned, they will strip the wallpaper off the walls and sell it to a recycling plant if it would give them more money to boost stock valuations. That to me signals that most of the people pressuring the board of HP to boost the stock, want them to gut the company as much as they can to boost it some trivial % points so that the majority of shares can be dumped onto muppets.

To me it pretty much also signals something is terribly wrong at HP and no one is talking about it.

PoasterToaster

Other than die shrinks there really hasn't been a lot going on in the CPU world since Intel abandoned its Netburst architecture and went back to its (Israeli created) Pentium 3 style pipeline. After that they gave up on increasing speed and resorted to selling more cores. Now that wall has been hit, they have been selling "green" and "efficient" nonsense in place of increasing power.

x86 just needs to go, but a lot is invested in it not the least of which is that 1-2 punch of forced, contrived obsolesence carried out in a joint operation with Microsoft. 15 years ago you could watch videos with no problem on your old machine using Windows XP. Fast forward to now and their chief bragging point is still "multitasking" and the ability to process datastreams like video. It's a joke.

The future is not in the current CPU paradigm of instructions per second; it will be in terms of variables per second. It will be more along the lines of what GPU manufacturers are creating with their thousands of "engines" or "processing units" per chip, rather than the 4, 6 or 12 core monsters that Intel is pushing. They have nearly given up on their roadmap to push out to 128 cores as it is. x86 just doesn't work with all that.

Dojidog

Another classic "Let's rape all we can and bail with my golden parachute" corporate leaders setting themselves up. Pile on the string of non-IT CEOs that have been leading the company to ruin. To them it is nothing more than a contest of being even worse than their predecessor. Just look at the billions each has lost before their exit. Compaq, a cluster. Palm Pilot, a dead product they paid millions for and then buried. And many others.

Think the split is going to help? Think again. Rather than taking the opportunity to fix their problems, they have just duplicated and perpetuated them into two separate entities.

HP is a company that is mired in a morass of unmanageable business processes and patchwork of antiquated applications all interconnected to the point they are petrified to try and uncouple them.

Just look at their stock price since January. The insiders know. Want to fix HP? All it would take is a savvy IT based leader with a boatload of common sense. What makes money at HP? Their printers and ink. Not thinking they can provide enterprise solutions to others when they can't even get their own house in order.

I Write Code

Let's not beat around the bush, they're outsourcing, firing Americans and hiring cheap labor elsewhere: http://www.bloomberg.com/news/articles/2015-09-15/hewlett-packard-to-cut-up-to-30-000-more-jobs-in-restructuring It's also shifting employees to low-cost areas, and hopes to have 60 percent of its workers located in cheaper countries by 2018, Nefkens said.

yogibear

Carly Fiorina: (LOL, leading a tech company with a degree in medieval history and philosophy) While at ATT she was groomed from the Affirmative Action plan.

Alma Mater: Stanford University (B.A. in medieval history and philosophy); University of Maryland (MBA); Massachusetts Institute of Technology

==================================================================

Patricia Russo: (Lucent) (Dedree in Political Science). Another lady elevated through the AA plan, Russo got her bachelor's degree from Georgetown University in political science and history in 1973. She finished the advanced management program at Harvard Business School in 1989

Both ladies steered their corporations to failure.

Clowns on Acid

It is very straightforward. Replace 45,000 US workers with 100,000 offshore workers and you still save millions of USD ! Use the "savings" to buy back stock, then borrow more $$ at ZIRP to buy more stock back.

You guys don't know nuthin'.

homiegot

HP: one of the worst places you could work. Souless.

Pancho de Villa

Ladies and Gentlemen! Integrity has left the Building!

space junk

I worked there for a while and it was total garbage. There are still some great folks around, but they are getting paid less and less, and having to work longer hours for less pay while reporting to God knows who, often a foreigner with crappy engrish skills, yes likely another 'diversity hire'. People with DEEP knowledge, decades and decades, have either gotten unfairly fired or demoted, made to quit, or if they are lucky, taken some early retirement and GTFO (along with their expertise - whoopsie! who knew? unintended consequences are a bitch aren't they? )....

If you look on a site like LinkedIN, it will always say 'We're hiring!'. YES, HP is hiring.....but not YOU, they want Ganesh Balasubramaniamawapbapalooboopawapbamboomtuttifrutti, so that they can work him as modern day slave labor for ultra cheap. We can thank idiot 'leaders' like Meg Pasty Faced Whitman and Bill 'Forced Vaccinations' Gates for lobbying Congress for decades, against the rights of American workers.

Remember that Meg 'Pasty Faced' Whitman is the person who came up with the idea of a 'lights out' datacenter....that's right, it's the concept of putting all of your computers in a building, in racks, in the dark, and maybe hiring an intern to come in once a month and keep them going. This is what she actually believed. Along with her other statement to the HP workforce which says basically that the future of HP is one of total automation.....TRANSLATION: If you are a smart admin, engineer, project manager, architect, sw tester, etc.....we (HP management) think you are an IDIOT and can be replaced by a robot, a foreigner, or any other cheap worker.

Race to the bottom is like they say a space ship approaching a black hole......after a while the laws of physics and common sense, just don't apply anymore.

InnVestuhrr

An era of leadership in computer technology has died, and there is no grave marker, not even a funeral ceremony or eulogy ... Hewlett-Packard, COMPAQ, Digital Equipment Corp, UNIVAC, Sperry-Rand, Data General, Tektronix, ZILOG, Advanced Micro Devices, Sun Microsystems, etc, etc, etc. So much change in so short a time, leaves your mind dizzy.

[Nov 27, 2017] The Robot Productivity Paradox and the concept of bezel

This concept of "bezel" is an important one
Notable quotes:
"... "In many ways the effect of the crash on embezzlement was more significant than on suicide. To the economist embezzlement is the most interesting of crimes. Alone among the various forms of larceny it has a time parameter. Weeks, months or years may elapse between the commission of the crime and its discovery. (This is a period, incidentally, when the embezzler has his gain and the man who has been embezzled, oddly enough, feels no loss. There is a net increase in psychic wealth.) ..."
"... At any given time there exists an inventory of undiscovered embezzlement in – or more precisely not in – the country's business and banks. ..."
"... This inventory – it should perhaps be called the bezzle – amounts at any moment to many millions [trillions!] of dollars. It also varies in size with the business cycle. ..."
"... In good times people are relaxed, trusting, and money is plentiful. But even though money is plentiful, there are always many people who need more. Under these circumstances the rate of embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly. ..."
"... In depression all this is reversed. Money is watched with a narrow, suspicious eye. The man who handles it is assumed to be dishonest until he proves himself otherwise. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks ..."
Feb 22, 2017 | econospeak.blogspot.com

Sandwichman -> Sandwichman ... February 24, 2017 at 08:36 AM

John Kenneth Galbraith, from "The Great Crash 1929":

"In many ways the effect of the crash on embezzlement was more significant than on suicide. To the economist embezzlement is the most interesting of crimes. Alone among the various forms of larceny it has a time parameter. Weeks, months or years may elapse between the commission of the crime and its discovery. (This is a period, incidentally, when the embezzler has his gain and the man who has been embezzled, oddly enough, feels no loss. There is a net increase in psychic wealth.)

At any given time there exists an inventory of undiscovered embezzlement in – or more precisely not in – the country's business and banks.

This inventory – it should perhaps be called the bezzle – amounts at any moment to many millions [trillions!] of dollars. It also varies in size with the business cycle.

In good times people are relaxed, trusting, and money is plentiful. But even though money is plentiful, there are always many people who need more. Under these circumstances the rate of embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly.

In depression all this is reversed. Money is watched with a narrow, suspicious eye. The man who handles it is assumed to be dishonest until he proves himself otherwise. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks."

Sanwichman, February 24, 2017 at 05:24 AM

For nearly a half a century, from 1947 to 1996, real GDP and real Net Worth of Households and Non-profit Organizations (in 2009 dollars) both increased at a compound annual rate of a bit over 3.5%. GDP growth, in fact, was just a smidgen faster -- 0.016% -- than growth of Net Household Worth.

From 1996 to 2015, GDP grew at a compound annual rate of 2.3% while Net Worth increased at the rate of 3.6%....

-- Sanwichman

anne -> anne... February 24, 2017 at 05:25 AM

https://fred.stlouisfed.org/graph/?g=cOU6

January 15, 2017

Gross Domestic Product and Net Worth for Households & Nonprofit Organizations, 1952-2016

(Indexed to 1952)

https://fred.stlouisfed.org/graph/?g=cPq1

January 15, 2017

Gross Domestic Product and Net Worth for Households & Nonprofit Organizations, 1992-2016

(Indexed to 1992)

anne -> Sandwichman ... February 24, 2017 at 03:35 PM

The real home price index extends from 1890. From 1890 to 1996, the index increased slightly faster than inflation so that the index was 100 in 1890 and 113 in 1996. However from 1996 the index advanced to levels far beyond any previously experienced, reaching a high above 194 in 2006. Previously the index high had been just above 130.

Though the index fell from 2006, the level in 2016 is above 161, a level only reached when the housing bubble had formed in late 2003-early 2004.

Real home prices are again strikingly high:

http://www.econ.yale.edu/~shiller/data.htm Reply Friday, February 24, 2017 at 03:34 PM anne -> Sandwichman ... February 24, 2017

Valuation

The Shiller 10-year price-earnings ratio is currently 29.34, so the inverse or the earnings rate is 3.41%. The dividend yield is 1.93. So an expected yearly return over the coming 10 years would be 3.41 + 1.93 or 5.34% provided the price-earnings ratio stays the same and before investment costs.

Against the 5.34% yearly expected return on stock over the coming 10 years, the current 10-year Treasury bond yield is 2.32%.

The risk premium for stocks is 5.34 - 2.32 or 3.02%:

http://www.econ.yale.edu/~shiller/data.htm

anne -> anne..., February 24, 2017 at 05:36 AM

What the robot-productivity paradox is puzzles me, other than since 2005 for all the focus on the productivity of robots and on robots replacing labor there has been a dramatic, broad-spread slowing in productivity growth.

However what the changing relationship between the growth of GDP and net worth since 1996 show, is that asset valuations have been increasing relative to GDP. Valuations of stocks and homes are at sustained levels that are higher than at any time in the last 120 years. Bear markets in stocks and home prices have still left asset valuations at historically high levels. I have no idea why this should be.

Sandwichman -> anne... February 24, 2017 at 08:34 AM

The paradox is that productivity statistics can't tell us anything about the effects of robots on employment because both the numerator and the denominator are distorted by the effects of colossal Ponzi bubbles.

John Kenneth Galbraith used to call it "the bezzle." It is "that increment to wealth that occurs during the magic interval when a confidence trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it." The current size of the gross national bezzle (GNB) is approximately $24 trillion.

Ponzilocks and the Twenty-Four Trillion Dollar Question

http://econospeak.blogspot.ca/2017/02/ponzilocks-and-twenty-four-trillion.html

Twenty-three and a half trillion, actually. But what's a few hundred billion? Here today, gone tomorrow, as they say.

At the beginning of 2007, net worth of households and non-profit organizations exceeded its 1947-1996 historical average, relative to GDP, by some $16 trillion. It took 24 months to wipe out eighty percent, or $13 trillion, of that colossal but ephemeral slush fund. In mid-2016, net worth stood at a multiple of 4.83 times GDP, compared with the multiple of 4.72 on the eve of the Great Unworthing.

When I look at the ragged end of the chart I posted yesterday, it screams "Ponzi!" "Ponzi!" "Ponz..."

To make a long story short, let's think of wealth as capital. The value of capital is determined by the present value of an expected future income stream. The value of capital fluctuates with changing expectations but when the nominal value of capital diverges persistently and significantly from net revenues, something's got to give. Either economic growth is going to suddenly gush forth "like nobody has ever seen before" or net worth is going to have to come back down to earth.

Somewhere between 20 and 30 TRILLION dollars of net worth will evaporate within the span of perhaps two years.

When will that happen? Who knows? There is one notable regularity in the data, though -- the one that screams "Ponzi!"

When the net worth bubble stops going up...
...it goes down.

[Nov 27, 2017] The productivity paradox by Ryan Avent

Notable quotes:
"... But the economy does not feel like one undergoing a technology-driven productivity boom. In the late 1990s, tech optimism was everywhere. At the same time, wages and productivity were rocketing upward. The situation now is completely different. The most recent jobs reports in America and Britain tell the tale. Employment is growing, month after month after month. But wage growth is abysmal. So is productivity growth: not surprising in economies where there are lots of people on the job working for low pay. ..."
"... Increasing labour costs by making the minimum wage a living wage would increase the incentives to boost productivity growth? No, the neoliberals and corporate Democrats would never go for it. They're trying to appeal to the business community and their campaign contributors wouldn't like it. ..."
Mar 20, 2017 | medium.com

People are worried about robots taking jobs. Driverless cars are around the corner. Restaurants and shops increasingly carry the option to order by touchscreen. Google's clever algorithms provide instant translations that are remarkably good.

But the economy does not feel like one undergoing a technology-driven productivity boom. In the late 1990s, tech optimism was everywhere. At the same time, wages and productivity were rocketing upward. The situation now is completely different. The most recent jobs reports in America and Britain tell the tale. Employment is growing, month after month after month. But wage growth is abysmal. So is productivity growth: not surprising in economies where there are lots of people on the job working for low pay.

The obvious conclusion, the one lots of people are drawing, is that the robot threat is totally overblown: the fantasy, perhaps, of a bubble-mad Silicon Valley - or an effort to distract from workers' real problems, trade and excessive corporate power. Generally speaking, the problem is not that we've got too much amazing new technology but too little.

This is not a strawman of my own invention. Robert Gordon makes this case. You can see Matt Yglesias make it here. Duncan Weldon, for his part, writes:

We are debating a problem we don't have, rather than facing a real crisis that is the polar opposite. Productivity growth has slowed to a crawl over the last 15 or so years, business investment has fallen and wage growth has been weak. If the robot revolution truly was under way, we would see surging capital expenditure and soaring productivity. Right now, that would be a nice "problem" to have. Instead we have the reality of weak growth and stagnant pay. The real and pressing concern when it comes to the jobs market and automation is that the robots aren't taking our jobs fast enough.

And in a recent blog post Paul Krugman concluded:

I'd note, however, that it remains peculiar how we're simultaneously worrying that robots will take all our jobs and bemoaning the stalling out of productivity growth. What is the story, really?

What is the story, indeed. Let me see if I can tell one. Last fall I published a book: "The Wealth of Humans". In it I set out how rapid technological progress can coincide with lousy growth in pay and productivity. Start with this:

Low labour costs discourage investments in labour-saving technology, potentially reducing productivity growth.

Peter K. -> Peter K.... Monday, March 20, 2017 at 09:26 AM

Increasing labour costs by making the minimum wage a living wage would increase the incentives to boost productivity growth? No, the neoliberals and corporate Democrats would never go for it. They're trying to appeal to the business community and their campaign contributors wouldn't like it.

anne -> Peter K.... March 20, 2017 at 10:32 AM

https://twitter.com/paulkrugman/status/843167658577182725

Paul Krugman @paulkrugman

But is [Ryan Avent] saying something different from the assertion that recent tech progress is capital-biased?

https://krugman.blogs.nytimes.com/2012/12/26/capital-biased-technological-progress-an-example-wonkish/

If so, what?

anne -> Peter K.... March 20, 2017 at 10:33 AM

http://krugman.blogs.nytimes.com/2012/12/26/capital-biased-technological-progress-an-example-wonkish/

December 26, 2012

Capital-biased Technological Progress: An Example (Wonkish)
By Paul Krugman

Ever since I posted about robots and the distribution of income, * I've had queries from readers about what capital-biased technological change – the kind of change that could make society richer but workers poorer – really means. And it occurred to me that it might be useful to offer a simple conceptual example – the kind of thing easily turned into a numerical example as well – to clarify the possibility. So here goes.

Imagine that there are only two ways to produce output. One is a labor-intensive method – say, armies of scribes equipped only with quill pens. The other is a capital-intensive method – say, a handful of technicians maintaining vast server farms. (I'm thinking in terms of office work, which is the dominant occupation in the modern economy).

We can represent these two techniques in terms of unit inputs – the amount of each factor of production required to produce one unit of output. In the figure below I've assumed that initially the capital-intensive technique requires 0.2 units of labor and 0.8 units of capital per unit of output, while the labor-intensive technique requires 0.8 units of labor and 0.2 units of capital.

[Diagram]

The economy as a whole can make use of both techniques – in fact, it will have to unless it has either a very large amount of capital per worker or a very small amount. No problem: we can just use a mix of the two techniques to achieve any input combination along the blue line in the figure. For economists reading this, yes, that's the unit isoquant in this example; obviously if we had a bunch more techniques it would start to look like the convex curve of textbooks, but I want to stay simple here.

What will the distribution of income be in this case? Assuming perfect competition (yes, I know, but let's deal with that case for now), the real wage rate w and the cost of capital r – both measured in terms of output – have to be such that the cost of producing one unit is 1 whichever technique you use. In this example, that means w=r=1. Graphically, by the way, w/r is equal to minus the slope of the blue line.

Oh, and if you're worried, yes, workers and machines are both paid their marginal product.

But now suppose that technology improves – specifically, that production using the capital-intensive technique gets more efficient, although the labor-intensive technique doesn't. Scribes with quill pens are the same as they ever were; server farms can do more than ever before. In the figure, I've assumed that the unit inputs for the capital-intensive technique are cut in half. The red line shows the economy's new choices.

So what happens? It's obvious from the figure that wages fall relative to the cost of capital; it's less obvious, maybe, but nonetheless true that real wages must fall in absolute terms as well. In this specific example, technological progress reduces the real wage by a third, to 0.667, while the cost of capital rises to 2.33.

OK, it's obvious how stylized and oversimplified all this is. But it does, I think, give you some sense of what it would mean to have capital-biased technological progress, and how this could actually hurt workers.

* http://krugman.blogs.nytimes.com/2012/12/08/rise-of-the-robots/

anne -> Peter K.... March 20, 2017 at 10:34 AM

http://krugman.blogs.nytimes.com/2012/12/08/rise-of-the-robots/

December 8, 2012

Rise of the Robots
By Paul Krugman

Catherine Rampell and Nick Wingfield write about the growing evidence * for "reshoring" of manufacturing to the United States. * They cite several reasons: rising wages in Asia; lower energy costs here; higher transportation costs. In a followup piece, ** however, Rampell cites another factor: robots.

"The most valuable part of each computer, a motherboard loaded with microprocessors and memory, is already largely made with robots, according to my colleague Quentin Hardy. People do things like fitting in batteries and snapping on screens.

"As more robots are built, largely by other robots, 'assembly can be done here as well as anywhere else,' said Rob Enderle, an analyst based in San Jose, California, who has been following the computer electronics industry for a quarter-century. 'That will replace most of the workers, though you will need a few people to manage the robots.' "

Robots mean that labor costs don't matter much, so you might as well locate in advanced countries with large markets and good infrastructure (which may soon not include us, but that's another issue). On the other hand, it's not good news for workers!

This is an old concern in economics; it's "capital-biased technological change," which tends to shift the distribution of income away from workers to the owners of capital.

Twenty years ago, when I was writing about globalization and inequality, capital bias didn't look like a big issue; the major changes in income distribution had been among workers (when you include hedge fund managers and CEOs among the workers), rather than between labor and capital. So the academic literature focused almost exclusively on "skill bias", supposedly explaining the rising college premium.

But the college premium hasn't risen for a while. What has happened, on the other hand, is a notable shift in income away from labor:

[Graph]

If this is the wave of the future, it makes nonsense of just about all the conventional wisdom on reducing inequality. Better education won't do much to reduce inequality if the big rewards simply go to those with the most assets. Creating an "opportunity society," or whatever it is the likes of Paul Ryan etc. are selling this week, won't do much if the most important asset you can have in life is, well, lots of assets inherited from your parents. And so on.

I think our eyes have been averted from the capital/labor dimension of inequality, for several reasons. It didn't seem crucial back in the 1990s, and not enough people (me included!) have looked up to notice that things have changed. It has echoes of old-fashioned Marxism - which shouldn't be a reason to ignore facts, but too often is. And it has really uncomfortable implications.

But I think we'd better start paying attention to those implications.

* http://www.nytimes.com/2012/12/07/technology/apple-to-resume-us-manufacturing.html

** http://economix.blogs.nytimes.com/2012/12/07/when-cheap-foreign-labor-gets-less-cheap/

anne -> anne... March 20, 2017 at 10:41 AM

https://fred.stlouisfed.org/graph/?g=d4ZY

January 30, 2017

Compensation of Employees as a share of Gross Domestic Income, 1948-2015


https://fred.stlouisfed.org/graph/?g=d507

January 30, 2017

Compensation of Employees as a share of Gross Domestic Income, 1948-2015

(Indexed to 1948)

[Nov 27, 2017] Nineteen Ninety-Six: The Robot/Productivity Paradox and the concept of bezel

This concept of "bezel" is an important one
Feb 22, 2017 | econospeak.blogspot.com

Sandwichman -> Sandwichman ... February 24, 2017 at 08:36 AM

John Kenneth Galbraith, from "The Great Crash 1929":

"In many ways the effect of the crash on embezzlement was more significant than on suicide. To the economist embezzlement is the most interesting of crimes. Alone among the various forms of larceny it has a time parameter. Weeks, months or years may elapse between the commission of the crime and its discovery. (This is a period, incidentally, when the embezzler has his gain and the man who has been embezzled, oddly enough, feels no loss. There is a net increase in psychic wealth.)

At any given time there exists an inventory of undiscovered embezzlement in – or more precisely not in – the country's business and banks.

This inventory – it should perhaps be called the bezzle – amounts at any moment to many millions [trillions!] of dollars. It also varies in size with the business cycle.

In good times people are relaxed, trusting, and money is plentiful. But even though money is plentiful, there are always many people who need more. Under these circumstances the rate of embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly.

In depression all this is reversed. Money is watched with a narrow, suspicious eye.

The man who handles it is assumed to be dishonest until he proves himself otherwise. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks."

Sanwichman, February 24, 2017 at 05:24 AM

For nearly a half a century, from 1947 to 1996, real GDP and real Net Worth of Households and Non-profit Organizations (in 2009 dollars) both increased at a compound annual rate of a bit over 3.5%. GDP growth, in fact, was just a smidgen faster -- 0.016% -- than growth of Net Household Worth.

From 1996 to 2015, GDP grew at a compound annual rate of 2.3% while Net Worth increased at the rate of 3.6%....

-- Sanwichman

anne -> anne... February 24, 2017 at 05:25 AM

https://fred.stlouisfed.org/graph/?g=cOU6

January 15, 2017

Gross Domestic Product and Net Worth for Households & Nonprofit Organizations, 1952-2016

(Indexed to 1952)

https://fred.stlouisfed.org/graph/?g=cPq1

January 15, 2017

Gross Domestic Product and Net Worth for Households & Nonprofit Organizations, 1992-2016

(Indexed to 1992)

anne -> Sandwichman ... February 24, 2017 at 03:35 PM

The real home price index extends from 1890. From 1890 to 1996, the index increased slightly faster than inflation so that the index was 100 in 1890 and 113 in 1996. However from 1996 the index advanced to levels far beyond any previously experienced, reaching a high above 194 in 2006. Previously the index high had been just above 130.

Though the index fell from 2006, the level in 2016 is above 161, a level only reached when the housing bubble had formed in late 2003-early 2004.

Real home prices are again strikingly high:

http://www.econ.yale.edu/~shiller/data.htm Reply Friday, February 24, 2017 at 03:34 PM anne -> Sandwichman ... February 24, 2017

Valuation

The Shiller 10-year price-earnings ratio is currently 29.34, so the inverse or the earnings rate is 3.41%. The dividend yield is 1.93. So an expected yearly return over the coming 10 years would be 3.41 + 1.93 or 5.34% provided the price-earnings ratio stays the same and before investment costs.

Against the 5.34% yearly expected return on stock over the coming 10 years, the current 10-year Treasury bond yield is 2.32%.

The risk premium for stocks is 5.34 - 2.32 or 3.02%:

http://www.econ.yale.edu/~shiller/data.htm

anne -> anne..., February 24, 2017 at 05:36 AM

What the robot-productivity paradox is puzzles me, other than since 2005 for all the focus on the productivity of robots and on robots replacing labor there has been a dramatic, broad-spread slowing in productivity growth.

However what the changing relationship between the growth of GDP and net worth since 1996 show, is that asset valuations have been increasing relative to GDP. Valuations of stocks and homes are at sustained levels that are higher than at any time in the last 120 years. Bear markets in stocks and home prices have still left asset valuations at historically high levels. I have no idea why this should be.

Sandwichman -> anne... February 24, 2017 at 08:34 AM

The paradox is that productivity statistics can't tell us anything about the effects of robots on employment because both the numerator and the denominator are distorted by the effects of colossal Ponzi bubbles.

John Kenneth Galbraith used to call it "the bezzle." It is "that increment to wealth that occurs during the magic interval when a confidence trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it." The current size of the gross national bezzle (GNB) is approximately $24 trillion.

Ponzilocks and the Twenty-Four Trillion Dollar Question

http://econospeak.blogspot.ca/2017/02/ponzilocks-and-twenty-four-trillion.html

Twenty-three and a half trillion, actually. But what's a few hundred billion? Here today, gone tomorrow, as they say.

At the beginning of 2007, net worth of households and non-profit organizations exceeded its 1947-1996 historical average, relative to GDP, by some $16 trillion. It took 24 months to wipe out eighty percent, or $13 trillion, of that colossal but ephemeral slush fund. In mid-2016, net worth stood at a multiple of 4.83 times GDP, compared with the multiple of 4.72 on the eve of the Great Unworthing.

When I look at the ragged end of the chart I posted yesterday, it screams "Ponzi!" "Ponzi!" "Ponz..."

To make a long story short, let's think of wealth as capital. The value of capital is determined by the present value of an expected future income stream. The value of capital fluctuates with changing expectations but when the nominal value of capital diverges persistently and significantly from net revenues, something's got to give. Either economic growth is going to suddenly gush forth "like nobody has ever seen before" or net worth is going to have to come back down to earth.

Somewhere between 20 and 30 TRILLION dollars of net worth will evaporate within the span of perhaps two years.

When will that happen? Who knows? There is one notable regularity in the data, though -- the one that screams "Ponzi!"

When the net worth bubble stops going up...
...it goes down.

[Nov 22, 2017] Unemployment is Miserable and Doesn't Spawn an Upsurge in Personal Creativity

Notable quotes:
"... By Bill Mitchell, Professor in Economics and Director of the Centre of Full Employment and Equity at the University of Newcastle, NSW, Australia. Originally published at billy blog ..."
"... The overwhelming importance of having a job for happiness is evident throughout the analysis, and holds across all of the world's regions. ..."
"... The pattern of human concerns ..."
"... The pattern of human concerns ..."
"... Journal of Happiness Studies ..."
"... The results show the differences between having a job and being unemployed are "very large indeed" on the three well-being measures (life evaluation, positive and negative affective states). ..."
"... Psychological Bulletin ..."
"... 1. "unemployment tends to make people more emotionally unstable than they were previous to unemployment". ..."
"... 2. The unemployed experience feelings of "personal threat"; "fear"; "sense of proportion is shattered"; loss of "common sense of values"; "prestige lost in own eyes and as he imagines, in the eyes of his fellow men"; "feelings of inferiority"; loss of "self-confidence" and a general loss of "morale". ..."
"... in the light of the structure of our society where the job one holds is the prime indicator of status and prestige. ..."
"... Psychological Bulletin ..."
"... Related studies found that the "unemployed become so apathetic that they rarely read anything". Other activities, such as attending movies etc were seen as being motivated by the need to "kill time" – "a minimal indication of the increased desire for such attendance". ..."
"... In spite of hopeless attempts the unemployed continually look for work, often going back again and again to their last place of work. Other writers reiterate this point. ..."
"... The non-pecuniary effects of not having a job are significant in terms of lost status, social alienation, abandonment of daily structure etc, and that has not changed much over history. ..."
"... I think what is missing from this article is the term "identity." If you meet new people, often the conversation starts with what you do for a living. Your identity, in part, is what you do. You can call yourself a plumber, a writer, a banker, a consultant, a reporter but the point is this is part of your identity. When you lose your job long term, your identity here loses one of its main anchor points. ..."
"... This is a crucial point that UBI advocates often ignore. There is a deeply entrenched cultural bias towards associating our work status with our general status and prestige and feelings of these standings. ..."
"... When unemployed, the stress of worry about money may suppress the creative juices. Speaking from experience. People may well 'keep looking for jobs' because they know ultimately they need a job with steady income. The great experience of some freelancers notwithstanding, not all are cut out for it. ..."
"... When considering the world's population as a whole, people with a job evaluate the quality of their lives much more favorably than those who are unemployed. ..."
"... Data like that provided by Mitchell is important to demolishing the horrid "economic anxiety" frame much beloved by liberals, especially wonkish Democrats.* It's not (a) just feelings , to be solved by scented candles or training (the liberal version of rugged individualism) and (b) the effects are real and measurable. It's not surprising, when you think about it, that the working class is about work . ..."
Nov 22, 2017 | www.nakedcapitalism.com

Posted on November 21, 2017 by Yves Smith Yves here. Reader UserFriendly sent this post with the message, "I can confirm this." I can too. And before you try to attribute our reactions to being Americans, note that the study very clearly points out that its finding have been confirmed in "all of the world's regions".

By Bill Mitchell, Professor in Economics and Director of the Centre of Full Employment and Equity at the University of Newcastle, NSW, Australia. Originally published at billy blog

Here is a summary of another interesting study I read last week (published March 30, 2017) – Happiness at Work – from academic researchers Jan‐Emmanuel De Neve and George Ward. It explores the relationship between happiness and labour force status, including whether an individual is employed or not and the types of jobs they are doing. The results reinforce a long literature, which emphatically concludes that people are devastated when they lose their jobs and do not adapt to unemployment as its duration increases. The unemployed are miserable and remain so even as they become entrenched in long-term unemployment. Further, they do not seem to sense (or exploit) a freedom to release some inner sense of creativity and purpose. The overwhelming proportion continually seek work – and relate their social status and life happiness to gaining a job, rather than living without a job on income support. The overwhelming conclusion is that "work makes up such an important part of our lives" and that result is robust across different countries and cultures. Being employed leads to much higher evaluations of the quality of life relative to being unemployed. And, nothing much has changed in this regard over the last 80 or so years. These results were well-known in the 1930s, for example. They have a strong bearing on the debate between income guarantees versus employment guarantees. The UBI proponents have produced no robust literature to refute these long-held findings.

While the 'Happiness Study' notes that "the relationship between happiness and employment is a complex and dynamic interaction that runs in both directions" the authors are unequivocal:

The overwhelming importance of having a job for happiness is evident throughout the analysis, and holds across all of the world's regions. When considering the world's population as a whole, people with a job evaluate the quality of their lives much more favorably than those who are unemployed. The importance of having a job extends far beyond the salary attached to it, with non-pecuniary aspects of employment such as social status, social relations, daily structure, and goals all exerting a strong influence on people's happiness.

And, the inverse:

The importance of employment for people's subjective wellbeing shines a spotlight on the misery and unhappiness associated with being unemployed.

There is a burgeoning literature on 'happiness', which the authors aim to contribute to.

They define happiness as "subjective well-being", which is "measured along multiple dimensions":

life evaluation (by way of the Cantril "ladder of life"), positive and negative affect to measure respondents' experienced positive and negative wellbeing, as well as the more domain-specific items of job satisfaction and employee engagement. We find that these diverse measures of subjective wellbeing correlate strongly with each other

Cantril's 'Ladder of Life Scale' (or "Cantril Ladder") is used by polling organisations to assess well-being. It was developed by social researcher Hadley Cantril (1965) and documented in his book The pattern of human concerns .

You can learn more about the use of the 'Cantril Ladder' HERE .

As we read, the "Cantril Self-Anchoring Scale consists of the following":

Please imagine a ladder with steps numbered from zero at the bottom to 10 at the top. The top of the ladder represents the best possible life for you and the bottom of the ladder represents the worst possible life for you. On which step of the ladder would you say you personally feel you stand at this time? (ladder-present) On which step do you think you will stand about five years from now? (ladder-future)

[Reference: Cantril, H. (1965) The pattern of human concerns , New Brunswick, Rutgers University Press.]

Christian Bjørnskov's 2010 article – How Comparable are the Gallup World Poll Life Satisfaction Data? – also describes how it works.

[Reference: Bjørnskov, C. (2010) 'How Comparable are the Gallup World Poll Life Satisfaction Data?', Journal of Happiness Studies , 11 (1), 41-60.]

The Cantril scale is usually reported as values between 0 and 10.

The authors in the happiness study use poll data from 150 nations which they say "is representative of 98% of the world's population". This survey data is available on a mostly annual basis since 2006.

The following graph (Figure 1 from the Study) shows "the self-reported wellbeing of individuals around the world according to whether or not they are employed."

The "bars measure the subjective wellbeing of individuals of working age" by employment status .

The results show the differences between having a job and being unemployed are "very large indeed" on the three well-being measures (life evaluation, positive and negative affective states).

People employed "evaluate the quality of their lives around 0.6 points higher on average as compared to the unemployed on a scale from 0 to 10."

The authors also conduct more sophisticated (and searching) statistical analysis (multivariate regression) which control for a range of characteristics (gender, age, education, marital status, composition of household) as well as to "account for the many political, economic, and cultural differences between countries as well as year-to-year variation".

The conclusion they reach is simple:

the unemployed evaluate the overall state of their lives less highly on the Cantril ladder and experience more negative emotions in their day-to-day lives as well as fewer positive ones. These are among the most widely accepted and replicated findings in the science of happiness Here, income is being held constant along with a number of other relevant covariates, showing that these unemployment effects go well beyond the income loss associated with losing one's job.

These results are not surprising. The earliest study of this sort of outcome was from the famous study published by Philip Eisenberg and Paul Lazersfeld in 1938. [Reference: Eisenberg, P. and Lazarsfeld, P. (1938) 'The psychological effects of unemployment', Psychological Bulletin , 35(6), 358-390.]

They explore four dimensions of unemployment:

I. The Effects of Unemployment on Personality.

II. Socio-Political Attitudes Affected by Unemployment.

III. Differing Attitudes Produced by Unemployment and Related Factors.

IV. The Effects of Unemployment on Children and Youth.

On the first dimension, they conclude that:

1. "unemployment tends to make people more emotionally unstable than they were previous to unemployment".

2. The unemployed experience feelings of "personal threat"; "fear"; "sense of proportion is shattered"; loss of "common sense of values"; "prestige lost in own eyes and as he imagines, in the eyes of his fellow men"; "feelings of inferiority"; loss of "self-confidence" and a general loss of "morale".

Devastation, in other words. They were not surprised because they note that:

in the light of the structure of our society where the job one holds is the prime indicator of status and prestige.

This is a crucial point that UBI advocates often ignore. There is a deeply entrenched cultural bias towards associating our work status with our general status and prestige and feelings of these standings. That hasn't changed since Eisenberg and Lazersfeld wrote up the findings of their study in 1938.

It might change over time but that will take a long process of re-education and cultural shift. Trying to dump a set of new cultural values that only a small minority might currently hold to onto a society that clearly still values work is only going to create major social tensions. Eisenberg and Lazarsfeld also considered an earlier 1937 study by Cantril who explored whether "the unemployed tend to evolve more imaginative schemes than the employed".

[Reference: Cantril, H. (1934) 'The Social Psychology of Everyday Life', Psychological Bulletin , 31, 297-330.]

The proposition was (is) that once unemployed, do people then explore new options that were not possible while working, which deliver them with the satisfaction that they lose when they become jobless. The specific question asked in the research was: "Have there been any changes of interests and habits among the unemployed?" Related studies found that the "unemployed become so apathetic that they rarely read anything". Other activities, such as attending movies etc were seen as being motivated by the need to "kill time" – "a minimal indication of the increased desire for such attendance".

On the third dimension, Eisenberg and Lazersfeld examine the questions – "Are there unemployed who don't want to work? Is the relief situation likely to increase this number?", which are still a central issue today – the bludger being subsidized by income support.

They concluded that:

the number is few. In spite of hopeless attempts the unemployed continually look for work, often going back again and again to their last place of work. Other writers reiterate this point.

So for decades, researchers in this area, as opposed to bloggers who wax lyrical on their own opinions, have known that the importance of work in our lives goes well beyond the income we earn. The non-pecuniary effects of not having a job are significant in terms of lost status, social alienation, abandonment of daily structure etc, and that has not changed much over history. The happiness paper did explore "how short-lived is the misery associated with being out of work" in the current cultural settings.

The proposition examined was that:

If the pain is only fleeting and people quickly get used to being unemployed, then we might see joblessness as less of a key public policy priority in terms of happiness.

They conclude that:

a number of studies have demonstrated that people do not adapt much, if at all, to being unemployed there is a large initial shock to becoming unemployed, and then as people stay unemployed over time their levels of life satisfaction remain low . several studies have shown that even once a person becomes re-employed, the prior experience of unemployment leaves a mark on his or her happiness.

So there is no sudden or even medium-term realisation that being jobless endows the individual with a new sense of freedom to become their creative selves, freed from the yoke of work. To bloom into musicians, artists, or whatever.

The reality is that there is an on-going malaise – a deeply entrenched sense of failure is overwhelming, which stifles happiness and creativity, even after the individual is able to return to work.

This negativity, borne heavily by the individual, however, also impacts on society in general.

The paper recognises that:

A further canonical finding in the literature on unemployment and subjective wellbeing is that there are so-called "spillover" effects.

High levels of unemployment "increase fear and heighten the sense of job insecurity". Who will lose their job next type questions?

The researchers found in their data that the higher is the unemployment rate the greater the anxiety among those who remain employed.

Conclusion

The overwhelming conclusion is that "work makes up such an important part of our lives" and that result is robust across different countries and cultures.

Being employed leads to much higher evaluations of the quality of life relative to being unemployed.

The unemployed are miserable and remain so even as they become entrenched in long-term unemployment. They do not seem to sense (or exploit) a freedom to release some inner sense of creativity and purpose.

The overwhelming proportion continually seek work – and relate their social status and life happiness to gaining a job, rather than living without a job on income support.

Modern Monetary Theory (MMT) allows us to understand that it is the government that chooses the unemployment rate – it is a political choice.

For currency-issuing governments it means their deficits are too low relative to the spending and saving decisions of the non-government sector.

For Eurozone-type nations, it means that in surrendering their currencies and adopting a foreign currency, they are unable to guarantee sufficient work in the face of negative shifts in non-government spending. Again, a political choice.

The Job Guarantee can be used as a vehicle to not only ensure their are sufficient jobs available at all times but also to start a process of wiping out the worst jobs in the non-government sector.

That can be done by using the JG wage to ensure low-paid private employers have to restructure their workplaces and pay higher wages and achieve higher productivity in order to attract labour from the Job Guarantee pool.

The Series So Far

This is a further part of a series I am writing as background to my next book with Joan Muysken analysing the Future of Work . More instalments will come as the research process unfolds.

The series so far:

  1. When Austrians ate dogs .
  2. Employment as a human right .
  3. The rise of the "private government .
  4. The evolution of full employment legislation in the US .
  5. Automation and full employment – back to the 1960s .
  6. Countering the march of the robots narrative .
  7. Unemployment is miserable and does not spawn an upsurge in personal creativity .

The blogs in these series should be considered working notes rather than self-contained topics. Ultimately, they will be edited into the final manuscript of my next book due in 2018. The book will likely be published by Edward Elgar (UK).

That is enough for today!

divadab , November 21, 2017 at 6:11 am

Perhaps I'm utterly depressed but I haven't had a job job for over 5 years. Plenty of work, however, more than I can handle and it requires priorisation. But I am deliberately not part of the organized herd. I stay away from big cities – it's scary how managed the herd is in large groups – and I suppose that unemployment for a herd animal is rather distressing as it is effectively being kicked out of the herd.

Anyway my advice, worth what you pay for it but let he who has ears, etc. – is to go local, very local, grow your own food, be part of a community, manage your own work, and renounce the energy feast herd dynamics. "Unemployment", like "recession", is a mechanism of control. Not very practical advice for most, I realize, trapped in the herd as they are in car payments and mortgages, but perhaps aspirational?

The Rev Kev , November 21, 2017 at 6:35 am

I think what is missing from this article is the term "identity." If you meet new people, often the conversation starts with what you do for a living. Your identity, in part, is what you do. You can call yourself a plumber, a writer, a banker, a consultant, a reporter but the point is this is part of your identity. When you lose your job long term, your identity here loses one of its main anchor points.

Worse, there is a deliberate stigma attached with being long term unemployed. In that article you have seen the word bludger being used. In parts of the US I have read of the shame of 'living off the county'. And yes, I have been there, seen that, and got the t-shirt. It's going to be interesting as mechanization and computers turn large portions of the population from workers to 'gig' workers. Expect mass demoralization.

nonclassical , November 21, 2017 at 10:24 am

yes the lives many of us have lived, no longer exist though we appear not notice, as we "can" live in many of same "ways" ..rather well known psychologist defined some 40 years ago, best to "drop through cracks"

jrs , November 21, 2017 at 12:13 pm

Well, you also lose money, maybe you become homeless etc. as you have nowhere else to turn (if there are kids involved to support it gets even scarier though there are some programs). Or maybe you become dependent on another person(s) to support you which is of course degrading as you know you must rely on them to live, whether it's a spouse or lover when you want to work and bring in money, or mom and dads basement, or the kindest friend ever who lets you sleep on their couch. I mean these are the things that really matter.

Privileged people whose main worry in unemployment would be losing identity, wow out of touch much? Who cares about some identity for parties, but the ability to have a stable decent life (gig work hardly counts) is what is needed.

sgt_doom , November 21, 2017 at 2:20 pm

I believe your comment sums up the situation the best -- and most realistically.

jgordon , November 21, 2017 at 7:08 pm

I normally wouldn't comment like this, but you have brought up some extremely important points about identity that I would like to address.

Recently I had the most intense mushroom experience of my entire life–so intense that my identity had been completely stripped and I was left in a formless state, at the level of seeing my bare, unvarnished animal neural circuitry in operation. Suddenly with a flash of inspiration I realized that the identity of everyone, all of us, is inextricably tied up in what we do and what we do for other people.

Following from that, I understood that if we passively rely on others for survival, whether it be relying on friends, family, or government, then we do not have an identity or reason for existing. And the inner self, the animal core of who we are, will realise this lack of identity (even if the concious mind denies it), and will continually generate feelings of profound depression and intense nihilism that will inevitably destroy us if the root cause is not addressed.

Before this experience I was somewhat ambivalent about my politics, but immediately after I knew that the political right was correct on everything important, from attitudes on sex to economic philosophy. People need a core of cultural stability and hard work to grow and become actualized. The alternative is rudderless dissatisfaction and envy that leads nowhere.

On the topic of giving "out of kindnes and goodwill", giving without demanding anything in return is a form of abuse, as it deprives those who receive our feel-good generosity the motivation to form a coherent identity. If the parents of a basement-dweller were truly good people, instead of supporting said dweller they'd drag her out by the ear and make her grow food in the yard or some such. Likewise, those who have supported you without also giving concrete demands and expecations in return have been unkind, and for your own good I hope that you will immediately remove yourself from their support. On the other hand, if you have been thoughtlessly giving because it warms the cockles of your heart, then stop it now. You are ruining other people this way, and if your voting habits are informed by this kind of malevolence I'd encourage you to change those as well.

Anyway the original poster is right about everything. Working and having a purpose in life is an entirely different animal from making money and being "successful" in the government-sponsored commercial economy. Society and government deliberately try to conflate the two for various reasons, primarily graft of labor and genius, but that is only a deliberate mis-framing that needlessly harms people when the mainstream economic system is in catastrophic decline, as ours is today. You should try to clear up this misconception within yourself as a way of getting better.

Well, I hope this message can give you a few different thoughts and help you find your way out of the existential angst you're caught in. Don't wallow in helplessness. Think of something useful to do, anything, whether it earns you money or not, and go out and start doing it. You'll be surprised at how much better you feel about yourself in no time.

skippy , November 22, 2017 at 12:45 am

The problem is you said – I – had an extreme experience [burning bush], the truth was reviled to – I – and I alone during this extreme chemically altered state. Which by the way just happens to conform to a heap of environmental biases I collected. This is why sound methodology demands peer review. disheveled some people think Mister Toads Wild ride at Disneyland on psychotropics is an excellent adventure too.

Jeremy Grimm , November 21, 2017 at 12:33 pm

I think your observation about the importance of work to identity is most perceptive. This post makes too little distinction between work and a job and glosses over the place of work in defining who we are to ourselves and to others. I recall the scene in the movie "About a Boy" when the hero meets someone he cares about and she asks him what he does for a living.

I believe there's another aspect of work -- related to identity -- missing in the analysis of this post. Work can offer a sense of mission -- of acting as part of an effort toward a larger goal no individual could achieve alone. However you may regard the value in putting man on the moon there is no mistaking the sense of mission deeply felt by the engineers and technicians working on the project. What jobs today can claim service to a mission someone might value?

Henry Moon Pie , November 21, 2017 at 7:00 am

Agreed on your points. Wage slavery is nothing to aspire to. Self-determination within a context of an interdependent community is a much better way to live. We do our thing in the city, however.

ambrit , November 21, 2017 at 8:29 am

Finding that "interdependent community" is the hard part. My experience has been that this endeavour is almost chance based; Serendipity if you will.
Here Down South, the churches still seem to have a stranglehold on small and mid scale social organization. One of the big effects of 'churching' is the requirement that the individual gave up personal critical thinking. Thus, the status quo is reinforced. One big happy 'Holy Circlejerk.'

UserFriendly , November 21, 2017 at 10:10 am

from the article

This is a crucial point that UBI advocates often ignore. There is a deeply entrenched cultural bias towards associating our work status with our general status and prestige and feelings of these standings.

That hasn't changed since Eisenberg and Lazersfeld wrote up the findings of their study in 1938. It might change over time but that will take a long process of re-education and cultural shift. Trying to dump a set of new cultural values that only a small minority might currently hold to onto a society that clearly still values work is only going to create major social tensions.

FelicityT , November 21, 2017 at 3:07 pm

I would agree about the entenched cultural norms, etc. But not the pessimism and timeline for change. An individual can communicate a complex idea to millions in seconds, things move fast these days.

For me, it seems that what we (we being UBI/radical change proponents) are lacking is a compelling easily accessible story. Not just regarding UBI (as that is but one part of the trully revolutionary transformations that must occur) but encompassing everything.

We have countless think pieces, bits of academic writing, books, etc that focus on individual pieces and changes in isolation. But we've largely abandoned the all-encompassing narrative, which at their heart is precisely what religion offers and why it can be so seductive, successful, and resilient for so long.

The status quo has this type of story, it's not all that compelling but given the fact that it is the status quo and has inertia and tradition on its side (along with the news media, political, entertainment, etc) it doesn't have to be.

We need to abandon the single narrow issue activism that has become so prominent over the years and get back to engaging with issues as unseparable and intimately interconnected.

Tinkering around the edges will do nothing, a new political religion is what is required.

Yves Smith Post author , November 21, 2017 at 4:23 pm

Sorry, I disagree vehemently. Deeply held cultural attitudes are very slow to change and the study found that work being critical to happiness examined a large number of societies.

Look at feminism. I was a half-generation after the time when women were starting to get a shot at real jobs. IIRC, the first class that accepted women at Harvard Law School was in the 1950 and at Harvard Business School, 1965. And the number of first attendees was puny. The 1965 class at HBS had 10 8 women out of a graduating class of over 800; my class in 1981 had only 11% women.

In the 1980s, you saw a shift from the belief that women could do what men could do to promotion of the idea that women could/should be feminine as well as successful. This looked like seriously mixed messages, in that IMHO the earlier tendency to de-emphasize gender roles in the workplace looked like a positive development.

Women make less than 80% of what men do in the US. Even female doctors in the same specialities make 80% of their male peers.

The Speenhamland in the UK had what amounted to an income guarantee from the 1790s to 1832. Most people didn't want to be on it and preferred to work. Two generations and being on the support of local governments was still seen as carrying a stigma.

More generally, social animals have strongly ingrained tendencies to resent situations they see as unfair. Having someone who is capable of working not work elicits resentment from many, which is why most people don't want to be in that position. You aren't going to change that.

And people need a sense of purpose. There are tons of cases of rich heirs falling into drug addiction or alcoholism and despair because they have no sense of purpose in life. Work provides that, even if it's mundane work to support a family. That is one of the great dissservices the Democrats have done to the citizenry at large: sneering at ordinary work when blue-collar men were the anchors of families and able to take pride in that.

FelicityT , November 21, 2017 at 5:11 pm

So a few points.

Regarding the large number of societies, we often like to think we're more different than we actually are focusing on a few glaringly obvious differences and generalizing from there. Even going back a few hundred years when ideas travelled slower we were still (especially the "west" though the "east" wasn't all that much more different either) quite similar. So I'm less inclined to see the large number of societies as evidence.

Generally on societal changes and movements: The issue here is that the leadership has not changed, they may soften some edges here or there (only to resharpen them again when we're looking elsewhere) but their underlying ideologies are largely unchanged. A good mass of any population will go along to survive, whether they agree or not (and we find increasing evidence that many do not agree, though certainly that they do not agree on a single alternative).

It may be impossible to implement such changes in who controls the levers of power in a democratic fashion but it also may be immoral not implement such changes. Of course this is also clearly a similar path to that walked by many a demonized (in most cases rightfully so) dictator and despot. 'Tread carefully' are wise words to keep in mind.

Today we have a situation which reflects your example re: social animals and resentment of unfairness: the elite (who falls into this category is of course debatable, some individuals moreso than others). But they have intelligently, for their benefit, redirected that resentment towards those that have little. Is there really any logical connection between not engaging in wage labor (note: NOT equivalent to not working) and unfairness? Or is it a myth crafted by those who currently benefit the most?

That resentment is also precisely why it is key that a Basic income be universal with no means testing, everyone gets the same.

I think we should not extrapolate too much from the relatively small segment of the population falling into the the inherited money category. Correlation is not causation and all that.

It also seems that so often individuals jump to the hollywood crafted image of the layabout stoner sitting on the couch giggling at cartoons (or something similarly negative) when the concept of less wage labor is brought up. A reduction of wage labor does not equate to lack of work being done, it simply means doing much of that work for different reasons and rewards and incentives.

As I said in the Links thread today, we produce too much, we consume too much, we grow too much. More wage labor overall as a requirement for survival is certainly not the solution to any real problem that we face, its a massively inefficient use of resources and a massive strain on the ecosystems.

Yves Smith Post author , November 21, 2017 at 8:34 pm

I am really gobsmacked at the sense of entitlement on display here. Why are people entitled to an income with no work? Being an adult means toil: cleaning up after yourself, cleaning up after your kids if you have them, if you are subsistence farmer, tending your crops and livestock, if you are a modern society denizen, paying your bills and your taxes on time. The idea that people are entitled to a life of leisure is bollocks. Yet you promote that.

Society means we have obligations to each other. That means work. In rejecting work you reject society.

And the touting of "creativity" is a top 10% trope that Thomas Frank called out in Listen, Liberal. It's a way of devaluing what the bottom 90% do.

WobblyTelomeres , November 21, 2017 at 8:53 pm

My argument with the article is that, to me, it smacks of Taylorism. A follow-on study would analyze how many hours a laborer must work before the acquired sense of purpose and dignity and associated happiness began to decline. Would it be 30 hours a week of backbreaking labor before dignity found itself eroded? 40? 50? 60? When does the worker break? Just how far can we push the mule before it collapses?

The author alludes to this: "The overwhelming proportion relate their social status and life happiness to gaining a job"

Work equals happiness. Got it.

But, as a former robotics instructor, and as one who watches the industry (and former students), I see an automated future as damn near inevitable. Massive job displacement is coming, life as a minimum wage burger flipper will cease, with no future employment prospects short of government intervention (WPA and CCC for all, I say). I'm not a Luddite, obviously, but there are going to be a lot of people, billions, worldwide, with no prospect of employment. Saying, "You're lazy and entitled" is a bit presumptuous, Yves. Not everyone has your ability, not everyone has my ability. When the burger flipping jobs are gone, where do they go? When roombas mop the floors, where do the floor moppers go?

flora , November 21, 2017 at 9:38 pm

"WPA and CCC for all, I say. "

+1

We could use a new Civilian Conservation Corps and and a Works Progress Administration. There's lots of work that needs doing that isn't getting done by private corporations.

nihil obstet , November 21, 2017 at 10:05 pm

The outrage at non-work wealth and income would be more convincing if it were aimed also at owners of capital. About 30% of national income is passive -- interest, rents, dividends. Why are the owners of capital "entitled to an income with no work?" It's all about the morality that underlies the returns to capital while sugaring over a devaluation of labor. As a moral issue, everyone should share the returns on capital or we should tax away the interest, rents, and dividends. If it's an economic issue, berating people for their beliefs isn't a reason.

WobblyTelomeres , November 21, 2017 at 10:14 pm

Why are the owners of capital "entitled to an income with no work?"

THIS!!!! So much, THIS!!!! But, what else is a Wobbly to say, eh?

Yves Smith Post author , November 22, 2017 at 2:27 am

The overwhelming majority do work. The top 0.1% is almost entirely private equity managers who are able to classify labor income as capital gains through the carried interest loophole. Go look at the Forbes 400.

The 1% are mainly CEOs, plus elite professionals, like partners at top law and consulting firms and specialty surgeons (heart, brain, oncology). The CEOs similarly should be seen as getting labor income but have a lot of stock incentive pay (that is how they get seriously rich) which again gets capital gains treatment.

You are mistaking clever taking advantage of the tax code for where the income actually comes from. Even the kids of rich people are under pressure to act like entrepreneurs from their families and peers. Look at Paris Hilton and Ivanka as examples. They both could have sat back and enjoyed their inheritance, but both went and launched businesses. I'm not saying the kids of the rich succeed, or would have succeed to the extent they do without parental string-pulling, but the point is very few hand their fortune over to a money manager and go sailing or play the cello.

IsotopeC14 , November 22, 2017 at 2:58 am

Isn't the brother of the infamous Koch duo doing exactly that? Actually, if all the .001%ers were like him, we'd all be better off

IsotopeC14 , November 22, 2017 at 1:34 am

What's your take on Rutger Bergman's ted talk? i think most jobs aren't real jobs at all, like marketing and ceo's. why can't we do 20 hour work weeks so we don't have huge amounts of unemployment? Note, I was "unemployed" for years since "markets" decide not to fund science in the US. Yay Germany At least I was fortunate enough to not be forced to work at Walmart or McDonalds like the majority of people with absolutely no life choices. Ah the sweet coercion of capitalism.

flora , November 21, 2017 at 9:09 pm

Your hopes for a UBI are undone by some of the real world observations I've made over many years, with regard to how a guaranteed income increase, of any measure, for a whole population of an area, affects prices. Shorter: income going up means prices are raised by merchants to capture the new income.

Your assumption that any UBI would not be instantly captured by raised prices is naive, at best. It's also naive to assume companies would continue to pay wages at the same level to people still employed, instead of reducing wages and letting UBI fill in the rest. Some corporations already underpay their workers, then encourage the workers to apply for food stamps and other public supports to make up for the reduced wage.

The point of the paper is the importance of paid employment to a person's sense of well being. I agree with the paper.

Andrew Dodds , November 22, 2017 at 2:48 am

For the vast majority, a UBI would be income-neutral – it would have to be, to avoid massive inflation. So people would receive a UBI, but pay more tax to compensate. The effect on prices would be zero.

The advantage of a UBI is mostly felt at the lower end, where insecure/seasonal work does now pay. At the moment, a person who went from farm labourer to Christmas work to summer resort work in the UK would certainly be working hard, but also relentlessly hounded by the DWP over universal credit. A UBI would make this sort of lifestyle possible.

jsn , November 21, 2017 at 11:28 am

Davidab, Good for you, but your perspicacity is not scalable. People are social animals and your attitude toward "the herd", at least as expressed here, is that of a predator, even if your taste doesn't run toward predation. Social solutions will necessarily be scalable or they won't be solutions for long.

Lambert Strether , November 22, 2017 at 1:44 am

> the organized herd a herd animal trapped in the herd

I don't think throwing 80% to 90% of the population into the "prey" bucket is especially perspicacious politically (except, of course, for predators or parasites). I also don't think it's especially perspicacious morally. You write:

Not very practical advice for most, I realize, trapped in the herd as they are in car payments and mortgages, but perhaps aspirational?

Let me translate that: "Trapped in the herd as many are to support spouses and children." In other words, taking the cares of the world on themselves in order to care for others.

BJ , November 21, 2017 at 6:37 am

Unemployed stay at home dad here. My children are now old enough to no longer need a stay at home dad. Things I have done: picked up two musical instruments and last year dug a natural swimming pond by hand. Further, one would need to refute all the increased happiness in retirement (NBER). Why social security but not UBI? I get being part of the precariat is painful and this is a reality for most the unemployed no matter where you live in the world. A UBI is unworkable because it will never be large enough to make people's lives unprecarious. Having said that, I am almost positive if you gave every unemployed person 24 k a year and health benefits, there would be a mass of non working happy creative folks.

divadab , November 21, 2017 at 7:41 am

UBI seems to me to encourage non-virtuous behavior – sloth, irresponsibility, fecklessness, and spendthriftness. I like the Finnish model – unemployment insurance is not limited – except if you refuse work provided by the local job center. Lots of work is not being done all over America – we could guarantee honest work to all with some imagination. Start with not spraying roundup and rather using human labor to control weeds and invasive species.

I do agree that universal health insurance is necessary and sadly Obamacare is not that.

ambrit , November 21, 2017 at 8:34 am

The crux of this problem is the definition used for "non-virtuous behaviour." A new CCC is a good place to start though. (Your Tax Dollars At Work! [For some definition of tax dollars.]) As for BJ above, I would suppose that child rearing was his "employment" for years. good so far, but his follow-up is untypical. The 'Empty Nester' mother is a well known meme.

a different chris , November 21, 2017 at 9:19 am

Spendthriftness on 24K a year? Seriously? If we are disgorging unprofessional opinions, I will add my own: sloth and irresponsibility are more signs of depression rather than freedom from having to work. In fact, I believe (and I think much of the stuff here) supports the idea that people want to be seen as useful in some way. Doesn't include me! :) .. unfortunately, I have the charmingly named "dependents" so there you have it.

BJ , November 21, 2017 at 11:18 am

I lived 6 years as a grad student on 24k a year and would say it was easy. Only thing I would have to had worried about was awful health insurance. A two household each with 24k would be even easier, especially if you could do it in a low cost area. So I am not sure what you mean by spendthrift. But again it will never happen, so we will be stuck with what we have or most likely an even more sinister system. I guess I am advocating for a JG with unlimited number of home makers per household.

roadrider , November 21, 2017 at 9:23 am

except if you refuse work provided by the local job center

And who's to say that the local "job center" has work that would be appropriate for every person's specific talents and interests? This is no better than saying that you should be willing to go work for some minimum-wage retail job with unpredictable scheduling and other forms of employer abuses after you lose a high-paying job requiring special talents. I have to call bullshit on this model. I went through a two-year stretch if unemployment in no small part because the vast majority of the available jobs for my skill set were associated with the MIC, surveillance state or the parasitic FIRE sector. I was able to do this because I had saved up enough FY money and had no debts or family to support.

I can also attest to the negative aspects of unemployment that the post describes. Its all true and I can't really say that I'e recovered even now, 2.5 years after finding another suitable job.

Jesper , November 21, 2017 at 10:55 am

The job center in the neighbouring Sweden had the same function. Had is the important word. My guess is that the last time someone lost their unemployment insurance payout due to not accepting a job was in the early 1980s. Prior to that companies might, maybe, possibly have considered hiring someone assigned to them – full employment forced companies to accept what was offered. Companies did not like the situation and the situation has since changed.

Now, when full employment is a thing of the past, the way to lose unemployment insurance payouts is by not applying to enough jobs. An easily gamed system by people not wanting to work: just apply to completely unsuitable positions and the number of applications will be high. Many companies are therefore overwhelmed by applications and are therefore often forced to hire more people in HR to filter out the unsuitable candidates.
People in HR tend not to know much about qualifications and or personalities for the job so they tend to filter out too many. We're all familiar with the skills-shortage .
Next step of this is that the companies who do want to hire have to use recruitment agencies. Basically outsourcing the HR to another company whose people are working on commission. Recruiters sometimes know how to find 'talent', often they are the same kind of people with the same skills and backgrounds as people working in HR.

To even get to the hiring manager a candidate has to go through two almost identical and often meaningless interviews. Recruiter and then HR. Good for the GDP I suppose, not sure if it is good for anything else.

But back on topic again, there is a second way of losing unemployment insurance payout: Time. Once the period covered has passed there is no more payouts of insurance. After that it it is time to live on savings, then sell all assets, and then once that is done finally go to the welfare office and prove that savings are gone and all assets are sold and maybe welfare might be paid out. People on welfare in Sweden are poor and the indignities they are being put through are many. Forget about hobbies and forget about volunteering as the money for either of those activities simply aren't available. Am I surprised by a report saying unemployed in Sweden are unhappy? Nope.

nonclassical , November 21, 2017 at 10:42 am

meanwhile NYTimes testimonials Friday, show average family of 4 healthprofit costs (tripled, due to trump demise ACA) to be $30,000. per year, with around $10,000. deductible end of any semblance of affordable access, "murKa"

https://www.nytimes.com/2017/11/16/us/politics/obamacare-premiums-middle-class.html

Jeremy Grimm , November 21, 2017 at 1:53 pm

What do you mean by virtuous behavior?

Where does a character like Bertie Wooster in "Jeeves" fit in your notions of virtuous behavior? Would you consider him more virtuous working in the management of a firm, controlling the lives and labor of others -- and humorously helped by his his brilliant valet, Jeeves, getting him out of trouble?

For contrast -- in class and social status -- take a beer-soaked trailer trash gentleman of leisure -- and for sake of argument blessed with less than average intelligence -- where would you put him to work where you'd feel pleased with his product or his service? Would you feel better about this fellow enjoying a six-pack after working 8 hours a day 5 days a week virtuously digging and then filling a hole in the ground while carefully watched and goaded by an overseer? [Actually -- how different is that from "using human labor to control weeds and invasive species"? I take it you're a fan of chain-gangs and making the poor pick up trash on the highways?]

What about some of our engineers and scientists virtuously serving the MIC? Is their behavior virtuous because they're not guilty of sloth, irresponsibility [in executing their work], fecklessness, and spendthriftness? On this last quality how do you feel about our government who pay the salaries for all these jobs building better ways to kill and maim?

Bill Smith , November 21, 2017 at 8:01 am

How big is the swimming pool and how long did it take? Where did you put the dirt?

BJ , November 21, 2017 at 11:07 am

It is a design by David Pagan Butler. It is his plunge pool design, deepend is 14 by 8 by 7 deep. I used the dirt to make swales around some trees. Win win all around.

tegnost , November 21, 2017 at 9:32 am

curious to know whether you are married to someone with a job?

BJ , November 21, 2017 at 11:25 am

The answer is yes my spouse works. So I do have a schedule of waking up to make her lunch everyday, meeting her at lunch to walk, and making dinner when she gets home, but we do all those things on her days off so .

But again we would need to explain away, why people who are retired are happier? Just because they think they payed into social security? Try explaining to someone on the SS dole how the government spends money into existence and is not paid by taxes or that the government never saved their tax money, so there are not entitled to this money.

David Kane Miller , November 21, 2017 at 6:55 am

I hated working for other people and doing what they wanted. I began to feel some happiness when I had a half acre on which I could create my own projects. Things improved even more when I could assure myself of some small guaranteed income by claiming Social Security at age 62. To arise in the morning when I feel rested, with interesting projects like gardens, fences, small buildings ahead and work at my own pace is the essence of delight for me. I've been following your arguments against UBI for years and disagree vehemently.

a different chris , November 21, 2017 at 9:23 am

I feel I would behave the same as you, if I had the chance. *But* no statements about human beings are absolute, and because UBI would work for either of us does not mean it would work for the majority. Nothing devised by man is perfect.

Mel , November 21, 2017 at 9:42 am

It's not you; it's not me. It's those deplorable people.

tegnost , November 21, 2017 at 9:37 am

first you had to buy the half acre in a suitable location, then you had to work many years to qualify for social security, the availability of which you paid for and feel you deserve. You also have to buy stuff for fences gardens and small buildings. At most that rhymes with a ubi but is significantly different in it's make up.

Lambert Strether , November 22, 2017 at 1:56 am

> when I had a half acre on which I could create my own projects

That is, when you acquired the half acre, which not everyone can do. It seems to me there's a good deal of projecting going on with this thread from people who are, in essence, statistical outliers. But Mitchell summarizes the literature:

So for decades, researchers in this area, as opposed to bloggers who wax lyrical on their own opinions, have known that the importance of work in our lives goes well beyond the income we earn.

If the solution that works for you is going to scale, that implies that millions more will have to own land. If UBI depends on that, how does that happen? (Of course, in a post-collapse scenario, the land might be taken , but that same scenario makes the existence of institutions required to convey the UBI highly unlikely. )

Carla , November 21, 2017 at 7:16 am

Very glad to hear that Bill Mitchell is working on the "Future of Work" book, and to have this post, and the links to the other segments. Thank you, Yves!

Andrew , November 21, 2017 at 7:25 am

I don't agree with this statement. Never will. I'm the complete opposite. Give me more leisure time and you'll find me painting, writing, playing instruments and doing things that I enjoy. I recall back to when I was a student, I relished in the free time I got (believe me University gave me a lot of free time) between lectures, meaning I could enjoy this time pursuing creative activities. Sure I might be different than most people but I know countless people who are the same.

My own opinion is that root problem lies in the pathology of the working mentality, that 'work' and having a 'job' is so engrained into our society and mindset that once you give most people the time to enjoy other things, they simply can't. They don't know what to do with themselves and they eventually become unhappy, watching daytime TV sat on the sofa.

I recall back to a conversation with my mother about my father, she said to me, 'I don't know how your father is going to cope once he retires and has nothing to do' and it's that very example of where work for so many people becomes so engrained in their mindset, that they are almost scared of having 'nothing to do' as they say. It's a shame, it's this systemic working mentality that has led to this mindset. I'm glad I'm the opposite of this and proud by mother brought me up to be this way. Work, and job are not in my vocabulary. I work to live, not live to work.

I_Agree , November 21, 2017 at 11:26 am

I agree with Andrew. I think this data on the negative effects says more about how being employed fundamentally breaks the human psyche and turns them into chattel, incapable of thinking for themselves and destroying their natural creativity. The more a human is molded into a "good worker" the less they become a full fledged human being. The happiest people are those that have never placed importance on work, that have always lived by the maxim "work to live, not live to work". From my own experience every assertion in this article is the opposite of reality. It is working that makes me apathethic, uncreative, and miserable. The constant knowing that you're wasting your life, day after day, engaged in an activity merely to build revenue streams for the rich, instead of doing things that help society or that please you on a personal level, is what I find misery inducing.

nycTerrierist , November 21, 2017 at 12:18 pm

I agree. If financial insecurity is removed from the equation -- free time can be used creatively for self-actualization, whatever form that may take: cultivating the arts, hobbies, community activities, worthy causes and projects. The ideology wafting from Mitchell's post smells to me like a rationale for wage slavery (market driven living, neo-liberalism, etc.)

jrs , November 21, 2017 at 12:48 pm

Besides how are people supposed to spend their time "exploring other opportunities" when unemployed anyway? To collect unemployment which isn't exactly paying that much anyway, they have to show they are applying to jobs. To go to the movies the example given costs money, which one may tend to be short on when unemployed. They probably are looking for work regardless (for the income). There may still be some free time. But they could go back to school? Uh in case one just woke up from a rock they were under for 100 years, that costs money, which one may tend to be short on when unemployed, plus there is no guarantee the new career will pan out either, no guarantee someone is just chomping at the bit to hire a newly trained 50 year old or something. I have always taken classes when unemployed, and paid for it and it's not cheap.

Yes to use one's time wisely in unemployment in the existing system requires a kind of deep psychological maturity that few have, a kind of Surrender To Fate, to the uncertainty of whether one will have an income again or not (either that or a sugar daddy or a trust fund). Because it's not easy to deal with that uncertainty. And uncertainty is the name of the game in unemployment, that and not having an income may be the pain in it's entirety.

FelicityT , November 21, 2017 at 3:18 pm

Sadly this breaking down into a "good worker" begins for most shortly after they begin school. This type of education harms society in a myriad of ways including instilling a dislike of learning, deference to authority (no matter how irrational and unjust), and a destruction of a child's natural curiosity.

Yves Smith Post author , November 21, 2017 at 5:21 pm

I don't buy your premise that people are "creative". The overwhelming majority do not have creative projects they'd be pursuing if they had leisure and income. Go look at retirees, ones that have just retired, are healthy, and have money.

Yves Smith Post author , November 21, 2017 at 4:29 pm

You are really misconstruing what the studies have found and misapplied it to your situation. Leisure time when you have a job or a role (being a student) is not at all the same as having time when you are unemployed, with or without a social safety net.

Summer , November 21, 2017 at 6:25 pm
jrs , November 21, 2017 at 6:37 pm

one often has a role when unemployed: finding work. But it's not a very fulfilling one! But if one is trying to find work, it's not exactly the absence of a role either even if it still leaves significantly more free time than otherwise, maybe winning the lottery is the absence of a role.

But then it's also not like we give people a UBI even for a few years (at any time in adult life) to get an education. Only if they take out a student loan approaching the size of a mortgage or have parents willing to pony up are they allowed that (to pay not just for the education but to live because having a roof over one's head etc. is never free, a UBI via debt it might be called).

Lambert Strether , November 22, 2017 at 2:00 am

> Give me more leisure time and you'll find me painting, writing, playing instruments and doing things that I enjoy.
Nothing to breed resentment of "the creative class" here! Blowback from Speenhamland brought on the workhouses, so be careful what you wish for.

Jesper , November 21, 2017 at 7:47 am

Again the UBI vs JG debate .

UBI won't happen and JG has been tried (and failed).

The argument that JG would allow the public sector to hire more people is demeaning to people already employed in the public sector and demonstrably false – people are hired into the public sector without there being a JG. It is most certainly possible to be against a JG while wanting more people working in the public sector.

The way forward is to have a government acting for people instead of for corporations. Increase the amount of paid vacations, reduce the pension age and stop with the Soviet style worship of work: While some people are apparently proud of their friends and relatives who died while at work it is also possible to feel sad about that.

diptherio , November 21, 2017 at 10:00 am

JG has been tried (and failed).

When and where? The NCCC seemed to work pretty good here in the Western US.

Jesper , November 21, 2017 at 10:27 am

The JG was tried in Communist countries in Europe, Asia and Americas. The arguments then and there were the same as here and now, made by the same type of social 'scientists' (economists).

Would a JG be different here and now as the Republicans and Democrats are representing the best interests of the people? Or are they representing the same kind of interests as the Communist parties did?

Yves Smith Post author , November 21, 2017 at 4:39 pm

Data, please. The USSR fell because it was spending on its military to keep up with the US, a much larger economy. Countering your assertion we have this:

tegnost , November 21, 2017 at 10:00 am

As long as people argue that "it's not fair" to fix the inequality issue and employ things like debt jubilee or student loan forgiveness, or if we fix the ridiculous cost of health care what will all those insurance agents do then we will wind up with the real kind of class warfare, rather than the current punching from the top down, the punching will come from the bottom, because the situation is not fair now, it's just TINA according to those who profit from it. In my own life there is a balance of creativity and work, and I find work enables my creativity by putting some pressure on my time, i.e., I get up earlier, I practice at 8:30 am instead of sleeping til 10 and winding up with S.A..D., I go to bed rather than watch tv or drink to excess.. in other words i have some kind of weird schedule, I have days off sort of When I've been unemployed I feel the way s described in the article. I find the arguments in favor of ubi tend to come from people who already have assets, or jobs, or family who they take care of which is actually a job although uncommonly described as such. The only truth I see in real life is that the unemployed I am intimately familiar with first are mentally oppressed by the notion that to repair their situation will require they work every waking hour at substandard wages for the rest of their life and that is a major barrier to getting started, and that is a policy choice the gov't and elite classes purposefully made which created the precariat and will be their undoing if they are unable to see this.

tegnost , November 21, 2017 at 10:15 am

Hey look, even the msm is looking at it
https://www.seattletimes.com/seattle-news/is-uprising-the-only-way-out-of-gross-inequality-maybe-so/

j84ustin , November 21, 2017 at 10:08 am

As someone who works in the public sector I never quite thought of it like that, thanks.

hunkerdown , November 21, 2017 at 7:53 am

Disappointing that there's no analysis in this context of less employment, as in shorter work weeks and/or days, as opposed to merely all or none.

nonclassical , November 21, 2017 at 10:45 am

see – hear

(but no possibility without healthcare access, rather than healthtprofit)

Vatch , November 21, 2017 at 11:31 am

Interesting point. I read a science fiction story in which the protagonist arrives for work at his full time job at 10:00 AM, and he's finished for the day at 4:00 PM. I can't remember the name of the story or novel, unfortunately.

jrs , November 21, 2017 at 1:04 pm

Agreed. And they already have it in places like Denmark. Why don't we talk about that? It actually exists unlike utopian schemes for either total UBI or total work guarantee (government job creation is not utopian, but imagining it will employ everyone is, and I would like the UBI to be more widely tried, but in this country we are nowhere close). Funny how utopia becomes more interesting to people than actual existing arrangements, even though of course those could be improved on too.

The Danish work arrangement is less than a 40 hour week, and mothers especially often work part-time but both sexes can. It's here in this country where work is either impossibly grueling or you are not working. No other choice. In countries with more flexible work arrangements more women actually work, but it's flexible and flexible for men who choose to do the parenting as well. I'm not saying this should be for parents only of course.

Lambert Strether , November 22, 2017 at 2:02 am

Because the JG sets the baseline for employment, which private companies must meet, the JG (unlike the UBI) can do this.

Otis B Driftwood , November 21, 2017 at 7:58 am

My own situation is that I am unhappy in my well-paying job and would like nothing more than to devote myself to other interests. I'm thirty years on in a relationship with someone who grew up in bad financial circumstances and panics whenever I talk about leaving my job. I tell her that we have 2 years of living expenses in the bank but I can't guarantee making the same amount of money if I do leave my job. She has a job that she loves and is important and pays barely 1/2 of my own income. So she worries about her future with me. She worries about losing her home. I suppose that makes me the definition of a wage slave. And it makes for an increasingly unhappy marriage. I admire those who have faced similar circumstances and found a way through this. Sorry to vent, but this topic and the comments hit a nerve with me and I'm still trying to figure this out.

ambrit , November 21, 2017 at 8:38 am

Otis; We are presently going through a period where that "two year cushion" has evaporated, for various reasons. We are seeing our way through this, straight into penury and privation. Take nothing for granted in todays' economy.

jrs , November 21, 2017 at 1:11 pm

yes find the lower paying job that you like more first. If you just quit for nothing in the hopes of finding one it might not happen. Of course unemployment also happens sometimes, whether we want it or not.

bronco , November 21, 2017 at 12:47 pm

The newer generations are worse when it comes to lifestyle. Those of that are older can at least remember a time without cellphones internet streaming services leasing a new car every 2 years etc.

What about the young? My niece and her husband should be all set , his mom sunk money into a home on the condition she moved into a mother in law apartment. So far so good right? 2 years in they are imploding even with the free child care she provides. Combined their wireless bill a month is over $300. The sit on the couch side by side and stream netflix shows to dueling iphones in front of a 65 inch tv that is not even turned on. Wearing headphones in silence.

Both driving new vehicles , both have gym memberships they don't use . They buy lattes 3 or 4 times a day which is probably another 500 a month.

My uncle passed away recently and my niece asked if she was in the will. It was literally her only communication on the subject. They are going under and could easily trim a few thousand a month from the budget but simply won't. No one in the family is going to lift a finger for them at this point they burned every possible bridge already. I have seen people living in cars plenty lately but I think these will be the first I see to living in brand new cars .

Somewhere along the line they got the impression that the american dream was a leased car a starbucks in one hand and an iphone in the other .

Confront them with the concept of living within a paycheck and they react like a patient hearing he has 3 months to live.

Lambert Strether , November 22, 2017 at 2:03 am

Ah. Reagan's "welfare queens" updated. Kids these days!

JBird , November 22, 2017 at 3:00 am

Yeah being poor, never mind growing up poor, just well and truly sucks and it can really @@@@ you up. Gives people all sorts of issues. I'm rather like her, but I have had the joy of multi-hour commutes to unexciting soul crushing work. Happy, happy, joy, joy! However don't forget that with the current political economy things are likely to go bad in all sorts of ways. This whole site is devoted to that. My suggestion is to keep the job unless you have something lined up. Not being able to rent has it own stresses too. Take my word for it.

Thuto , November 21, 2017 at 8:00 am

I may be engaging in semantics but I think conflating work and jobs makes this article a bit of a mixed bag. I know plenty of people who are terribly unhappy in their jobs, but nonetheless extract a sense of wellbeing from having a stable source of INCOME to pay their bills (anecdotally speaking, acute stress from recent job losses is closely linked to uncertainty about how bills are going to be paid, that's why those with a safety net of accumulated savings report less stress than those without). Loss of status, social standing and identity and the chronic stress borne from these become evident much later I.e. when the unemployment is prolonged, accompanied of course by the still unresolved top-of-mind concern of "how to pay the bills".

As such, acute stress for the recently unemployed is driven by financial/income uncertainty (I.e. how am I going to pay the bills) whereas chronic stress from prolonged unemployment brings into play the more identity driven aspects like loss of social standing and status. For policy interventions to have any effects, policy makers would have to delineate the primary drivers of stress (or lack of wellbeing as the author calls it) during the various phases of the unemployment lifecycle. An Unemployment Insurance Fund (UIF) like we have here in South Africa appears to address the early stages of unemployment, and the accompanying acute stress, quite well by providing the income guarantee (for six months) that cushions the shock of losing a job. What's still missing of course are interventions that promote the quick return to employment for those on UIF, so maybe a middle of the road solution between UBI and a jobs guarantee scheme is how policy makers should be framing this, instead of the binary either/or we currently have.

TroyMcClure , November 21, 2017 at 9:19 am

Lots' of people think they're unhappy with their jobs. Let them sit unemployed for 9 months and ask them if they want that job back. The usual parade of anecdata is on display here in the comments. Mitchell's real data and analysis in the article above still stand.

Thuto , November 21, 2017 at 10:06 am

If you'd read through my comment, and not rushed through it with a view of dishing out a flippant response, you'd have seen that nowhere do I question the validity of his data, I merely question how the argument is presented in some areas (NC discourages unquestioning deference to the views of experts no??). By the way, anecdotes do add to richer understanding of a nuanced and layered topic (as this one is) so your dismissal of them in your haste to invalidate people's observations is hardly helpful.

jrs , November 21, 2017 at 1:15 pm

Yes people many not like their jobs but prefer the security of having them to not. Yes even if the boss sexually harasses one (as we are seeing is very common). Yes even if there is other workplace abuse. Yes even when it causes depression or PTSD (but if one stays with such a job long term it ruins the self confidence that is one prerequisite to get another job!). Yes even if one is in therapy because of job stress, sexual harassment or you name it. The job allows the having health insurance, allows the therapy, allows the complaining about the job in therapy to make it through another week.

Lambert Strether , November 22, 2017 at 2:04 am

> The usual parade of anecdata is on display here in the comments. Mitchell's real data and analysis in the article above still stand.

Ding ding ding!

Democrita , November 21, 2017 at 8:13 am

When unemployed, the stress of worry about money may suppress the creative juices. Speaking from experience. People may well 'keep looking for jobs' because they know ultimately they need a job with steady income. The great experience of some freelancers notwithstanding, not all are cut out for it.

I would love to see some more about happiness or its lack in retirement–referenced by stay-at-home dad BJ , above.

I wonder, too, about the impact of *how* one loses one's job. Getting laid off vs fired vs quitting vs involuntary retirement vs voluntary, etc feel very different. Speaking from experience on that, too. I will search on these points and post anything of interest.

jrs , November 21, 2017 at 1:40 pm

There are also other things that are degrading about the very process of being unemployed not mentioned here. What about the constant rejection that it can entail? One is unemployed and looking for work, one sends out resumes, many of them will never be answered, that's rejection. Then if one is lucky they get interviews, many will never lead to jobs, yet more rejection. Does the process of constant rejection itself have a negative effect on a human being whether it's looking for jobs or dates or whatever? Isn't it learned helplessness to if one keeps trying for something and keeps failing. Isn't that itself demoralizing entirely independent of any doubtful innate demoralizing quality of leisure.

freedeomny , November 21, 2017 at 10:23 am

I am not so sure if I agree with this article. I think it really depends on whether or not you have income to support yourself, hate or love your job, and the amount of outside interests you have, among other things. Almost everyone I know who lives in the NYC area and commutes into the city .doesn't like their job and finds the whole situation "soul-crushing".

Those that live in Manhattan proper are (feel) a bit better off. I for one stopped working somewhat voluntarily last year. I write somewhat because I began to dislike my job so much that it was interfering with my state of well being, however, if I had been allowed to work remotely I probably would have stuck it out for another couple of years.

I am close enough to 62 that I can make do before SS kicks in although I have completely changed my lifestyle – i.e. I've given up a materialistic lifestyle and live very frugally.

Additionally I saved for many years once I decided to embark on this path. I do not find myself depressed at all and the path this year has been very enriching and exciting (and scary) as I reflect on what I want for the future. I'm pretty sure I will end up moving and buying a property so that I can become as self sufficient as possible. Also, I probably will get a job down the line – but if I can't get one because I am deemed too old that will be ok as well. The biggest unknown for me is how much health insurance will cost in the future .

Yves Smith Post author , November 21, 2017 at 5:15 pm

The article made clear that the studies included "unemployed but with income" from government support. It is amazing the degree to which readers ignore that and want to make the findings about "unemployed with no income".

JBird , November 22, 2017 at 3:30 am

That's because we Americans all have work=good=worthy=blessed by God while workless=scum=worthless=accursed by God engraved into our collective soul. Our politics, our beliefs, are just overlays to that.

Even when we agree that the whole situation just crushes people into paste, and for which they have no defense regardless of how hard they work, how carefully they plan, or what they do, that underlay makes use feel that this is their/our fault. Any suggestions that at least some support can be decoupled from work, and that maybe work, and how much you earn, should not determine their value, brings the atavistic fear of being the "undeserving poor," parasites and therefore reprobated scum.

So we don't hear what you are saying without extra effort because it's bypassing our conscious thoughts.

Jamie , November 21, 2017 at 10:43 am

Add my voice to those above who feel that forced labor is the bane of existence, not the wellspring. All this study says to me is that refusing to employ someone in capitalist society does not make them happy. It makes them outcasts.

So, I say yes to a JG, because anyone who wants work should be offered work. But at the same time, a proper JG is not forced labor. And the only way to ensure that it is not forced labor, is to decouple basic needs from wage slavery.

Left in Wisconsin , November 21, 2017 at 12:02 pm

I am critical of those who distinguish between the job and the income. Of course the income is critical to the dignity of the job. For many jobs, it is the primary source of that dignity. The notion that all jobs should provide some intrinsic dignity unrelated to the income, or that people whose dignity is primarily based on the income they earn rather than the work they do are deluded, is to buy in to the propaganda of "passion" being a requirement for your work and to really be blind to what is required to make a society function. Someone has to change the diapers, and wipe the butts of old people. (yes, I've done both.) It doesn't require passion and any sense of satisfaction is gone by about the second day. But if you could make a middle class living doing it, there would be a lot fewer unhappy people in the world.

It is well known that auto factory jobs were not perceived as good jobs until the UAW was able to make them middle class jobs. The nature of the actual work itself hasn't changed all that much over the years – mostly it is still very repetitive work that requires little specialized training, even if the machine technology is much improved. Indeed, I would guess that more intrinsic satisfaction came from bashing metal than pushing buttons on a CNC machine, and so the jobs may even be less self-actualizing than they used to be.

The capitalist myth is that the private sector economy generates all the wealth and the public sector is a claim on that wealth. Yet human development proves to us that this is not true – a substantial portion of "human capital" is developed outside the paid economy, government investment in R&D generates productivity growth, etc. And MMT demonstrates that we do not require private sector savings to fund public investment.

We are still a ways from having the math to demonstrate that government investment in caring and nurturing is always socially productive – first we need productivity numbers that reflect more than just private sector "product." But I think we are moving in that direction. Rather than prioritize a minimum wage JG of make-work, we should first simply pay people good wages to raise their own children or look after their elderly and disabled relatives. The MMT JG, as I understand it, would still require people to leave their kids with others to look after them in order to perform some minimum wage task. That is just dumb.

jrs , November 21, 2017 at 1:31 pm

Maybe it's dumb, it's certainly dumb in a system like the U.S. where work is brutal and often low paid and paid childcare is not well remunerated either. But caretakers also working seems to work in countries with greater income equality, good job protections, flexible work arrangements, and a decent amount of paid parental leave – yea Denmark, they think their children should be raised by professionals, but also work-life balance is still pretty good.

Whiskey Bob , November 21, 2017 at 1:34 pm

My take is that capitalism has made the benefits and malus of having a job so ingrained into culture and so reinforced. Having a job is so closely linked to happiness because it gives you the money needed to pursue it.

A job affords you the ability to pursue whatever goals you want within a capitalist framework. "Everything" costs money and so having a job gives you the money to pay for those costs and go on to fulfill your pursuit of happiness.

Analyzing whether people are happy or not under these conditions seem apparent that it is going to lead to results heavily biased towards finding happiness through employment.

The unemployed are often living off someone else's income and feel like an undeserving parasite. Adults are generally ingrained with the culture that they have to grow up and be independent and be able to provide for a new family that they will start up. Becoming unemployed is like being emasculated and infantile, the opposite of what is expected of adults.

There's also that not having a job is increasingly being punished especially in the case of America. American wages have stayed either largely static or have worsened, making being unemployed that much more of a burden on family or friends. Unemployment has been demonized by Reaganism and has become systematically punishable for the long term unemployed. If you are unemployed for too long, you start losing government support. This compounds the frantic rush to get out of unemployment once unemployed.

There is little luxury to enjoy while unemployed. Life while unemployed is a frustrating and often disappointing hell of constant job applications and having many of them lead to nothing. The people providing support often start to become less so over time and become more convinced of laziness or some kind of lack of character or willpower or education or ability or whatever. Any sense of systemic failure is transplanted into a sense of personal failure, especially under neoliberalism.

I am not so sure about the case of Europe and otherwise. I am sure that the third world often has little or no social safety nets so having work (in exploitative conditions in many cases) is a must for survival.

Anyways, I wonder about the exact methodologies of these studies and I think they often take the current feelings about unemployment and then attempt to extrapolate talking points for UBI/JG from them. Yes, UBI wouldn't change culture overnight and it would take a very, very long time for people to let down their guard and adjust if UBI is to be implemented in a manner that would warrant trust. This article seems to understand the potential for that, but decides against it being a significant factor due to the studies emphasizing the malus of unemployment.

I wonder how different the results would be if there were studies that asked people how they would feel if they were unemployed under a UBI system versus the current system. I know a good number of young people (mostly under 30) who would love to drop out and just play video games all day. Though the significance of such a drastic demographic shift would probably lead to great political consequences. It would probably prove the anti-UBI crowd right in that under a capitalist framework, the capitalists and the employed wouldn't tolerate the unemployed and would seek to turn them into an underclass.

Personally I think a combination of UBI and JG should be pursued. JG would work better within the current capitalist framework. I don't think it is without its pitfalls due to similar possible issues (with the similar policy of full employment) either under Keynesianism (e.g. Milton Friedman sees it as inefficient) or in the USSR (e.g. bullshit jobs). There is the possibility of UBI having benefits (not having the unemployed be a burden but a subsidized contributer to the economy) so I personally don't think it should be fully disregarded until it is understood better. I would like it if there were better scientific studies to expand upon the implications of UBI and better measure if it would work or not. The upcoming studies testing an actual UBI system should help to end the debates once and for all.

redleg , November 21, 2017 at 2:28 pm

My $0.02: I have a creative pursuit (no money) and a engineering/physical science technical career (income!). I am proficient in and passionate about both. Over the last few years, the technical career became tenuous due to consolidation of regional consulting firms (endemic to this era)- wages flat to declining, higher work stress, less time off, conversation to contact employment, etc.- which has resulted in two layoffs.

During the time of tenuous employment, my art took on a darker tone. During unemployment the art stopped altogether.

I'm recently re-employed in a field that I'm not proficient. Both the peter principle and imposter syndrome apply. My art has resumed, but the topics are singular about despair and work, to the point that I feel like I'm constantly reworking the same one piece over and over again. And the quality has plummeted too.

In some fields (e.g. engineering), being a wage slave is the only realistic option due to the dominance of a small number of large firms. The big players crowd out independents and free lancers, while pressuring their own employees through just-high-enough wages and limiting time off. Engineering services is a relationship- based field, and the big boys (and they are nearly all boys) have vastly bigger networks to draw work from than a small firm unless that small firm has a big contact to feed them work (until they get gobbled up). The big firms also have more areas of expertise which limits how useful a boutique firm is to a client pool, except under very narrow circumstances. And if you are an introvert like most engineering people, there's no way to compete with big firms and their marketing staff to expand a network enough to compete.

In that way, consulting is a lot like art. To make a living at it you need either contacts or a sponsor. Or an inheritance.

ChrisPacific , November 21, 2017 at 5:30 pm

I would be interested to know what the definition of unemployment was for the purpose of this study (I couldn't find it in the supplied links). If it's simply "people who don't have a job," for example, then it would include the likes of the idle rich, retirees, wards of the state, and so on. Binary statements like this one do make it sound like the broad definition is the one in use:

When considering the world's population as a whole, people with a job evaluate the quality of their lives much more favorably than those who are unemployed.

The conclusion seems at odds with results I've seen for some of those groups – for example, I thought it was fairly well accepted that retirees who are supported by a government plan that is sufficient for them to live on were generally at least as happy as they had been during their working life.

If, on the other hand, the study uses a narrow definition (e.g. people who are of working age, want a job or need one to support themselves financially, but can't find one) then the conclusion seems a lot more reasonable. But that's a heavily loaded definition in economic and cultural terms. In that case, the conclusion (people are happier if they have a job) only holds true in the current prevailing model of society. It doesn't rule out the possibility of structuring society or the economy differently in such a way that people can be non-working and happy. The existence of one such population already (retirees) strongly suggests that outcomes like this are possible. A UBI would be an example of just such a restructuring of society, and therefore I don't think that this study and its result are necessarily a valid argument against it.

nihil obstet , November 21, 2017 at 6:07 pm

Which makes a person happier -- being considered worthless by one's society or valuable? How many studies do we need to answer that question? Apparently, a lot, because studies like this one keep on going. The underlying assumption is that jobs make one valuable. So if you don't have a job you're worthless. Now, who's happier on the whole, people with jobs or the unemployed? That's surely good for a few more studies. Did you know that members of socially devalued groups (minorities, non-heteros, and the like) have higher rates of dysfunction, rather like the unemployed? Hmm, I wonder if there's maybe a similar principle at work. And my solution is not to turn all the people of color white nor to change all the women to men nor to "cure" gays. Well, maybe a few more conclusive studies of this kind will convince me that we must all be the same, toeing the line for those whom it has pleased God to dictate our values to us.

I am convinced that we shouldn't outlaw jobs, because I believe the tons of stories about happy people in their jobs However, I also believe we shouldn't force everyone into jobs, because I know tons of stories about happy people without jobs. You know, the stories that the JG people explain away: parents caring for their children (JG -- "oh, we'll make that a job!"), volunteers working on local planning issues (JG -- "oh, we'll make that a job, too. In fact, we'll make everything worth doing a job. The important thing is to be able to force people to work schedules and bosses, because otherwise, they'll all lie around doing nothing and be miserable"), the retired (JG -- "that's not really the same, but they'd be better off staying in a job"). And this is all before we get to those who can't really hold a job because of disability or geography or other responsibilities.

I support the JG over the current situation, but as to what we should be working for, the more I read the JG arguments, the more paternalistic and just plain narrow minded judgmental they seem.

Summer , November 21, 2017 at 6:52 pm

If someone else gives you a sense of purpose and takes it away what was the purpose?

Lambert Strether , November 22, 2017 at 1:24 am

Data like that provided by Mitchell is important to demolishing the horrid "economic anxiety" frame much beloved by liberals, especially wonkish Democrats.* It's not (a) just feelings , to be solved by scented candles or training (the liberal version of rugged individualism) and (b) the effects are real and measurable. It's not surprising, when you think about it, that the working class is about work .

* To put this another way, anybody who has really suffered the crawling inwardness of anxiety, in the clinical sense, knows that it affects every aspect of one's being. Anxiety is not something deplorables deploy as cover for less than creditable motives.

[Nov 08, 2017] Labour coercion and outside options

Notable quotes:
"... Coercion of the worker can be quite simply introduced into this setup by allowing firms to pay a 'negative wage' if the bad outcome occurs. This is simply the more cost-effective flipside of paying a higher wage if the good outcome occurs. Negative wages describe a world in which workers can be 'punished' (i.e. a world with coercion). ..."
www.theamericanconservative.com

Christian Dippel, Daniel Trefler 05 November 2017

One way employers can compel workers to accept contracts they otherwise would not accept is by limiting the outside options for those workers...

Related

Labour coercion is arguably as old human civilisation. In the words of Acemoglu and Wolitzky (2011), "the majority of labour transactions throughout much of history and a significant fraction of such transactions in many developing countries today are coercive".

Indeed, labour coercion is at the heart of much of the literature on long run development and institutional change (Domar 1970, Acemoglu et al. 2001, Engerman and Sokoloff 2002, Nunn 2008, Dell 2010, Naidu and Yuchtman 2013, Bobonis and Morrow 2014, Ashraf et al. 2017). Despite this, rigorous empirical evidence on labour coercion is scarce and is mostly focused on relating present-day outcomes to historical labour coercion.

The term 'labour coercion' is used quite broadly to describe the use of, or threat of, force in convincing workers to accept labour contracts they otherwise would not.

However, labour coercion can take two quite distinct forms, and this important distinction is often not well articulated. The distinction is best seen by imagining a standard principal-agent framework. In broad terms, a firm (the principal) offers a labour contract to a worker (the agent). If effort is not observable, it can only be inferred from the outcome, which can be 'good' or 'bad' (e.g. high output or low output). The firm can incentivise its workers to exert effort by offering them a higher wage if the good outcome materialises. The difference in the wages the firm pays in the good and bad state needs to be sufficiently high that workers exert effort (i.e. the 'incentive compatibility constraint' binds). The second constraint on the contract is that workers may walk away from it if they can earn a higher expected wage elsewhere. The expected wage (averaging over the effort-dependent outcome probabilities) thus needs to exceed the worker's outside option (i.e. the 'participation constraint' binds).

Coercion of the worker can be quite simply introduced into this setup by allowing firms to pay a 'negative wage' if the bad outcome occurs. This is simply the more cost-effective flipside of paying a higher wage if the good outcome occurs. Negative wages describe a world in which workers can be 'punished' (i.e. a world with coercion). In this way, slavery, serfdom, or indenture can be nested inside a standard economic framework and, indeed, there is a long tradition in economics that does this (Chwe 1990). However, the participation constraint still binds when there is coercion. Even in the extreme case of slavery, outside options were usually not zero so long as slaves could run away and had a chance of evading capture. The interaction of the two constraints implies that there is complementarity in coercive activities – firms can punish workers more severely if they can also reduce their outside options.

In many modern-day labour markets, it may be entirely impossible for a firm to reduce a worker's outside options and the complementarity between coercion that punishes workers and coercion that reduces outside options can therefore safely be ignored. However, for countries at the early stages of structural transformation – where workers' outside options are not to work for a different firm or in a different sector, but to be self-employed in the informal sector as a yeoman farmer or artisan (a state that describes most of modern economic history and many developing countries today) 1 – coercion that reduces workers' outside options was and still is critical.

This was recognised by early development economists, as attested, for example, by Arthur Lewis' famous quote that "the fact that the wage level in the capitalist sector depends upon earnings in the subsistence sector is of immense political importance, since its effect is that capitalists have a direct interest in holding down the productivity of the subsistence workers. Thus the owners of plantations, if they are influential in government, are often found engaged in turning the peasants off their lands" (Lewis 1954).

[Oct 31, 2017] The threat of offshored jobs and outsourced supply chains is wielded to discipline the domestic workforce in the United States, and Zucman points out that tax havens have effectively allowed the wealthy to choose their own tax system and regulatory regime

Oct 31, 2017 | www.nakedcapitalism.com

Class Warfare

"The Unseen Threat of Capital Mobility" [ The Boston Review ]. "Two new books link rising inequality to unseen forces: tax havens in economist Gabriel Zucman's case, and overseas labor and environmental exploitation in historian Erik Loomis's. The adverse consequences of the free movement of capital suffuse both narratives. Loomis recognizes that the threat of offshored jobs and outsourced supply chains is wielded to discipline the domestic workforce in the United States, and Zucman points out that tax havens have effectively allowed the wealthy to choose their own tax system and regulatory regime. They each question received wisdom and ideologically charged models in which "globalization" is an inexorable force innocent of politics or power, which operates to either universal benefit or at worst whose ill effects can be compensated. In fact, thanks to globalization, the economic body -- what its ideological affiliates call 'The Market' -- is able to transcend the national body politic, to the benefit of multinational corporations and the wealthy individuals who own them."

"Why You're Not Getting a Raise" [ The Minskys ]. "A sure way to speed up wage growth again is fiscal stimulus. Government spending lifts aggregate demand directly and effectively. If enough spending is injected into the economy, it will create enough jobs to bring full employment. The momentum and labor scarcity created by the stimulus will force wages up and give workers and labor unions more bargaining power. A Job Guarantee Program , if ever implemented, would effectively set a wage floor in the economy, since any person working at a lower wage than the Job Guarantee offers will be given work in the public sector.:

"One of Arkansas' top politicians relies on unpaid workers from a local drug rehabilitation center at his plastics company, which makes dock floats sold at Home Depot and Walmart" [ Review News ]. "Hendren Plastics, owned by Arkansas State Senate Majority Leader Jim Hendren, partners with a rehab program under scrutiny for making participants work grueling jobs for free, under the threat of prison, according to interviews with former workers and a new lawsuit." That reminds me of something

"What makes me tired when organising with middle class comrades" [ Guardian ].

"What I've observed over and over again is this inherent need for middle class people to censor, control and mediate emotions. There's a deep fear of conflict, loosing status and control. I've been told to be less angry on demos, less emotional at events and more serious. Stop telling me how to feel. When you've had a life of teachers, social workers and probation officers telling you how you should act, you don't need the same mediating middle class behaviour in your collectives."

[Oct 27, 2017] Freelancing Isn't Feminist -- It's Badly Negotiated Wage Labor for $5 an Hour

Notable quotes:
"... By Sophie Linden, an editorial assistant at AlterNet's office in Berkeley, CA. Originally published at Alternet ..."
"... HoneyBook's research is just one insight into wage gaps. As a largely deregulated economy with unparalleled growth, it is important to make visible the economic and social divides embedded in the independent workforce. We can start by debunking the claim that freelancing is a more equitable field to work in, and with it, the idea that any economy is without prejudice. ..."
"... I would also argue that so called 'regular' employment is trending towards a "freelance" structure. Job tenures are supposedly shrinking and often going away completely. Now, that salaryman window tribe dweller is often outside of that window, washing it on a piecework basis, with no safety line. The underlying rationale for the rise of the 'freelance' work structure is to first crapify the freelance 'experience,' with lower wages a must, and then, second, extend the 'neo-crapified' work rules into the previously "safe" 'regular' work world. ..."
"... Freelancers driving the price of their labor down to $5 per hour because they have to compete against all the other people who can't find steady work is not a feminist issue– its a class issue. And that is no less true if males make $2 more per hour because of sexual discrimination. The real enemy is the billionaire who owns the corporation, the politicians, and the enforcers that grind workers down into virtual servitude. ..."
"... When a fat pig movie director pushes you down on the "casting couch" there has always been the choice to reach for the Mace or the revolver in the purse. Submitting is prostitution, choice is rejecting greed for riches and fame and joining with others to throw the boot off your neck. ..."
"... When they turn 50, if they survive that long, they'll be replaced by younger cheaper labor. Nothing really changes, except the words we use to describe our sad condition and the lower and lower age at which we're discarded. ..."
"... Freelancing is much like entrepreneurship in that it has been way oversold to the public. Most people don't do well either as freelancers or as entrepreneurs and would likely be better off as normal employees. The emphasis on "alternative" work arrangements has taken public attention away from improving the lot of traditional employees and contributes to the devaluation of ordinary workers by suggesting that they are lazy or stupid because they didn't become freelancers or gigsters or entrepreneurs of some sort. ..."
Oct 27, 2017 | www.nakedcapitalism.com

Yves here. Holey moley. One of the good things about working for fancy firms early in my professional life was I saw how much they charged, even when the work was often pedestrian or even dubious. So I was never shy about setting a healthy price for my time. But regardless, how could anyone bid under the minimum wage?

The only time I could see that making any kind of sense would be if you were breaking into a new area and would have reason to expect the client would give you a very valuable reference, or better yet, referrals, if they liked what you did. But my experience has always been that clients who go cheap never appreciate the work done for them.

By Sophie Linden, an editorial assistant at AlterNet's office in Berkeley, CA. Originally published at Alternet

Surround yourself with positivity, exploit all marketing outlets, choose a specialized skill -- this is the repetitive wisdom passed on to every budding creative entrepreneur. Less often do we hear advice like, "increase the price of an invoice," or "make it non-negotiable," especially as it relates to the gendered wages within self-employment.

The freelance market is arguably trending across industries, with some figureheads going so far as to say " freelance is feminist ," mainly because women make up a slight majority. Unfortunately, before feminists get too heady on the issue, we need to look at whether the freelance market is any more "freeing" to the women in it, or if it is liberating any of its entrepreneurial workforce. Right now, it's just another deregulated economy in which workers are underpaid and largely invisible.

A recent study published by HoneyBook gives some visibility to the subject, showing that women in the "creative economy" are actually paid significantly less than their male counterparts, sometimes taking in an average of $5 an hour .

There are many reasons for concern about this wage discrepancy. Not only because HoneyBook found that 63% of men and women believed they were earning equal pay, but also because of the growing workforce within the world of freelance, where there are already 57.3 million freelancers in the U.S .

Industry data from UpWork and the Freelance Labor Union suggests that freelancers will be the majority by 2027, growing three times faster than the U.S. workforce overall, and contributing over $1.4 trillion to the U.S. economy annually. While scenes of cramped coffee shops may be an indicator of this burgeoning workforce, these numbers are still astounding. Without sites like UpWork and HoneyBook, they would also be hard to track.

HoneyBook is the self-employed's business management tool, hosting clients similar to those in the aforementioned study. Labeled under the guise of "creative entrepreneurs," they are working professionals navigating gigs in industries like photography, graphic design and writing. With its niche data, the site analyzed over 200,000 client invoices from October 2016-2017 to look at wage discrepancy, finding that on average women made 32% less than their male competitors . This gap is even larger than the national average, where women earn 24% less than men nationally , 76 cents to the dollar. Troubling news for the largest, opportunist workforce around: that is, women in freelance.

In 2015, women made up 53% of the freelance market . This slight dominance encouraged Sara Horowitz, founder of the Freelance Labor Union, to preemptively call freelancing "feminist." Horowitz argued that the lifestyle of a freelancer was more palatable to the roles women desired, whether that was co-careers or gendered domestic labor. She also argued that freelance work allowed women to avoid male privilege in the workplace, notably the boys club at board meetings .

While some of Horowitz's arguments hold value, we can clearly see how freelance work is still an unequal field, at least if pay is any measure of equality among genders. Women who do enter the field already consider themselves to have less bargaining power . Meanwhile, the majority of invoices in HoneyBook's study quoted a non-negotiable price, meaning women are more likely to charge less for the job. Clearly, the reasons for the gender pay gap are embedded and multi-layered. Nevertheless, the study shows that freelance is not entirely the liberated, equal rights, equal pay landscape Horowitz claims it to be.

Asked why they enter the market, freelancers often cite the flexibility of the work in a number of terms: the ability to be their own boss, as well as the ability to choose their projects and work location. In essence, men and women draw upon idealistic dreams of escaping workplace power-dynamics to find economic independence in their pajamas -- a depiction that has been repeatedly critiqued . Freelancers still enter a labor force that has few congressional protections and is arguably as successful as the social networks you were economically born into. Essentially it is prey to the same laissez-faire ideals that have manipulated structural inequity across generations of workers in the U.S. It just imagines itself differently -- now under the guise of "creative" entrepreneurship.

HoneyBook's research is just one insight into wage gaps. As a largely deregulated economy with unparalleled growth, it is important to make visible the economic and social divides embedded in the independent workforce. We can start by debunking the claim that freelancing is a more equitable field to work in, and with it, the idea that any economy is without prejudice.

ambrit , October 27, 2017 at 8:04 am

I would also argue that so called 'regular' employment is trending towards a "freelance" structure. Job tenures are supposedly shrinking and often going away completely. Now, that salaryman window tribe dweller is often outside of that window, washing it on a piecework basis, with no safety line.
The underlying rationale for the rise of the 'freelance' work structure is to first crapify the freelance 'experience,' with lower wages a must, and then, second, extend the 'neo-crapified' work rules into the previously "safe" 'regular' work world.

The only rational response to managements' claim that "we can get someone to replace you if you do not agree to our demands," is to simply walk away from the "golden opportunity." Sooner or later, all exploitative systems fall apart due to their own internal contradictions. It can be painful, but: No pain (economic micro-dislocation,) no gain (guillotines in Town Square.)

On the feminism front, and please remember that this is an older man writing, I would find any situation where the individual allows outside forces to define said individuals self definition, as the opposite of "liberating." Except in rare cases, what else is 'freelancing' but a "race to the bottom?" If one is to accept the 'freelancing' ethos as presently presented, one may as well embrace the 'contemplative life' and accept fasting and privation as a path to communion with the godhead.

Crazy Horse , October 27, 2017 at 5:22 pm

Freelancers driving the price of their labor down to $5 per hour because they have to compete against all the other people who can't find steady work is not a feminist issue– its a class issue. And that is no less true if males make $2 more per hour because of sexual discrimination. The real enemy is the billionaire who owns the corporation, the politicians, and the enforcers that grind workers down into virtual servitude.

There is always choice. There are always drugs to be transported and sold, money to be laundered, or accounting fraud to be fabricated. There is always choice even if the consequences are severe. It's long been known that the fastest (and only) way for a woman to become a movie star is on her back.

When a fat pig movie director pushes you down on the "casting couch" there has always been the choice to reach for the Mace or the revolver in the purse. Submitting is prostitution, choice is rejecting greed for riches and fame and joining with others to throw the boot off your neck.

Arizona Slim , October 27, 2017 at 8:57 am

There is no organization called the Freelance Labor Union. Horowitz's organization is called the Freelancers Union and it is little more than a buyers club. It has yet to call a strike or organize a picket line. Nor does it call out the companies that exploit freelancers.

Robert Murphy , October 27, 2017 at 9:14 am

$583,283.25 – using the annuity formula from Stewart's 4th edition precalc book (it is surely the same formula in all his books ) & taking that 5 bucks an hour TIMES 2080 hours of pay in a year (40*52) = amount to save every year, for 30 years, at 4% interest.

Now, realistically, whoever underpaid you just bought a few more trinkets for today's mansion, jet, yacht or mistress but you could have saved that money!

rmm.

agkaiser , October 27, 2017 at 9:33 am

When they turn 50, if they survive that long, they'll be replaced by younger cheaper labor. Nothing really changes, except the words we use to describe our sad condition and the lower and lower age at which we're discarded.

Arizona Slim , October 27, 2017 at 11:56 am

Which is why I summarize fifty-plus freelancing this way: Too old to get a job and too young and broke to retire.

Livius Drusus , October 27, 2017 at 9:55 am

Freelancing is much like entrepreneurship in that it has been way oversold to the public. Most people don't do well either as freelancers or as entrepreneurs and would likely be better off as normal employees. The emphasis on "alternative" work arrangements has taken public attention away from improving the lot of traditional employees and contributes to the devaluation of ordinary workers by suggesting that they are lazy or stupid because they didn't become freelancers or gigsters or entrepreneurs of some sort.

Many young people seem to have fallen into the trap of putting too much emphasis on work flexibility over a steady paycheck. These kinds of alternative work arrangements might be fun and cool when you are in your 20s but not so much after 30 and especially if you want to start a family and need a steady and reliable source of income.

DJG , October 27, 2017 at 10:38 am

I was a free lance in publishing for about twenty-five years. The tell here is the mention of pajamas: Are we still in the world of people who want to work in their pajamas? One thing I learned right away is that you have to get up each morning, dress like an adult, schedule the number of billable hours that you want to charge for, and send in invoices regularly. The successful free lances, male and female, did so. The people who started work at three in the afternoon, after cocoa with marshmallows all day, didn't succeed.

I suspect that hourly charges among free lances are falling: That is part of our friend "right to work," which keeps wages down. It is also part of the massive amount of outsourcing going on. In publishing, responsibilities that always were kept in house and should remain in house are being outsourced.

I'll also note that one of the reasons that I became a free lance, besides knowing what I could charge for my work, is that many offices are toxic environments socially and politically. There is a lot of stress on conformity. There is no concern for original thinking. Inventing the wheel is considered original.

And as someone who has worked in publishing for many years and knows many talented and powerful women in publishing, I left my last job shortly after the head of the division introduced the new editor in chief for books as a woman. That's right. The first words: M.K. is a woman.

M.K. turned out to be a nonentity who exploited the organization for personal ends. She was a great absentee manager! And I no longer had a desire to be around the endless re-runs of resentments of fellow employees.

Arizona Slim , October 27, 2017 at 12:04 pm

DJG, you're on to something.

I can remember meeting freelancers in the 1980s and 1990s. The good ones were GOOD. As in, they had waiting lists -- you had to book them a couple of months in advance. And they charged accordingly.

These days, that seldom happens. Why? Because there are too many people who can't find jobs, or they only get hired for part-time work, and they have to fill the rest of their time. Such trends do not make for increasing hourly rates.

DJG , October 27, 2017 at 12:34 pm

Arizona Slim: My dance card was always filled. But as you mention above, after age 50, I kept thinking, Am I a daring American entrepreneur and sole proprietor, or am I just terminally unemployed (and unemployable)?

Ned , October 27, 2017 at 10:42 am

OK, what's to stop women from charging higher rates? Lower self esteem? Are their lower wages for each hour worked? Or, do they work fewer hours?

"they are working professionals navigating gigs in industries like photography, graphic design and writing ." Clean, no lifting, paid to create gigs where you don't get your hands dirty, or put your body in perilous exhausting situations.

If women want to earn money, learn to be a plumber. Yes, you will get a face full of shit occasionally, will bleed, get burned and will earn $75 an hour, often in cash.

There's a shortage of linepersons to install power lines. Up on that lift bucket, 80 feet in the air, leaning out and ratcheting in 10,000 volt live wires covered with a rubber shock cloth, you can make astounding amounts of money. Why aren't more women up there? Companies go out of their way to hire women.

No mention of the free labor slave pit called "internships." How many of us have gone through that
voluntary servitude?

Arizona Slim , October 27, 2017 at 12:01 pm

I have training in the trades and have worked as a bike mechanic. On the positive side, there's a pride of workmanship that you do not get from office work or from freelancing while sitting at a computer. And there's the camaraderie. I never experienced anything like it -- except in that hot, greasy, dirty bike shop.

On the negative side, you can get too old and broken down to do the work. OTOH, you can be a sit-down freelancer until you die.

FluffytheObeseCat , October 27, 2017 at 12:27 pm

What stops women from negotiating male-equivalent wages varies. Timidity and poor negotiating skills is part of it. As Yves said above, it helps immensely to have been exposed to the billing practices of real winners in this game. And they are disproportionately men, specifically, men who operate like real machers.

The biggest factor is IMO, information deficit. Professional class people throughout many industries are idiots when it comes to freely discussing remuneration with their fellow wage slaves. Everyone acts as though their compensation package were as private and faintly dirty as .. another package.

It's idiotic. The vast majority of us would be better off if we blurted it out over lunch ever few months. And walking away a few tifmes is key. It's good for you. Likewise, if you do need to take a poorly paid gig some times, treat it as slightly less than full time. Keep lining up others. Create the bare minimum of deliverables as swiftly as you can, and get out. Those who underpay you do not deserve your maximum effort, and they're invariably shitty references, so do not anguish over doing only the job they've paid for.

Just don't stiff or cheat anyone lower down the line if you take an underpaid gig. I watched a guy do that recently on a contract job that put him into contact with me, an under-remunerated grad student. He didn't cheat me, he cheated the agency I worked for of some small use fee. Right in front of me. His consulting firm is not one I'll be looking to work for any time soon.

Also, always write a late charge fee in your contract. 120 day "billing cycles" are abusive garbage in the age of computers. After thirty days, the price goes up.

Women who let themselves get stiffed all the time are a real danger to the interests of the guys in their line of work, not just themselves. I wish more guys could see that.

DJG , October 27, 2017 at 12:39 pm

Fluffy: Yes. Know rates, and have a group of friendly free lances who will tell you what they are being offered these days. And what hourly they will turn down.

Firing clients is a necessity. I learned that from a sole proprietor who I worked for in a small typesetting / editorial / graphic design shop. The customer isn't always right. There are psychic benefits to firing a bad customer. And word sort-a gets around that there are people who / companies that you refuse to take work from.

cnchal , October 27, 2017 at 12:48 pm

. . . Why aren't more women up there?

Pajamas?

I went through an apprenticeship. It was the only time I was trapped by an employer.

D , October 27, 2017 at 1:51 pm

I suspect it's utter mythology that women do not attempt to attain far better paying manual labor jobs than they do.

Speaking of high voltage wires, I know a woman who was in the International Brotherhood of Electrical Workers Union (Brotherhood says it all!). She worked on large commercial construction, such as the NUMI Plant (now Tesla). While she endured it through to her retirement she had a horridly abusive (and life threatening on one occasion) go of it. Sexual harassment (made worse by the fact that she had an hourglass figure), an actual physical threat, knife included, while being locked in a room with someone she had already reported as having harassed her, but was forced to work with him anyway; utter resentment of women on the job; and stunning racism (the black males in that Brotherhood , did not fare much better as to the racism) in the tolerant Bay Area.

As to plumbing, the bay area has current and frequent plumbing school ads on TV which feature no women at all, and a real bro-bro atmosphere which all women who've been sexually harassed are familiar with. At one point in my life, despite having a licensed profession, I offered to apprentice to a plumber who just laughed at me (at the time, I was able to do twenty chin-ups).

And, my experience (pre putting myself through college to attain a livable wage), trying to get a job doing manual labor that actually paid a decent wage was utterly unsuccessful. I did have a nursery job, and a very brief job at a thoroughbred stable (the owner was a horrid human being so I quit). At both of those jobs, the only males were illegal immigrants from Mexico, and the wages in both jobs were under regular minimum wage ag wages.

Further, to imply that 'sit' down jobs don't have their fair share of health damage, is like saying that emotional abuse does not exist, and is not deadly when one's spirit is killed in a situation where the other wields far more economic and social power.

Many, unfortunately too many woman included, still feel that a white or non-black male will do a better job, no matter what that job is. For instance (and I don't know what it's like now) I recollect while waitressing that only males were offered high end, far better tipping, jobs in pricier restaurants. At the time, I never saw a female waitress in a high end restaurant.

[Oct 27, 2017] Why didn't Democrats pass legislation in 2009 to eliminate the right to work legislation by states? The answeer is they want Wall street money.

Oct 27, 2017 | www.nakedcapitalism.com

DJG , October 27, 2017 at 2:34 pm

Portside article about NAFTA, unions, and Canadian unions: Here is a paragraph from the underlying article at New York Magazine about the three sponsors:

On Wednesday, Democratic senators Elizabeth Warren, Sherrod Brown, and Kirsten Gillibrand announced their agreement -- and introduced legislation to ban "right-to-work" laws throughout the United States.

[NY Mag article is dated 20 Sept 2017]

The sooner we collectively kill off the feudal idea of "right to work," the better. Right now, though, we're only what -- sixty, seventy–years too late?

Scott , October 27, 2017 at 3:41 pm

Why didn't Democrats pass legislation in 2009 to eliminate it?

It was one of the few policies that I could think of what would actually, you know, help the win elections. But then I realized the the purpose of the DNC isn't actually to win elections, it's to raise money from Wall Street, Hollywood and Silcon Valley to pay for consultants.

Huey Long , October 27, 2017 at 5:06 pm

Why didn't Democrats pass legislation in 2009 to eliminate it?

Yeah, Captain Hope'N-Change failed to deliver labor any meaningful legislation during his eight years in office.

Labor was essentially told "We put some friendly faces on the NLRB and in the judiciary. Be thankful, and forget about card check or right to work preemption."

Sid_finster , October 27, 2017 at 7:40 pm

" the purpose of the DNC isn't actually to win elections, it's to raise money from Wall Street, Hollywood and Silcon Valley to pay for consultants."

Money.

Henry Moon Pie , October 27, 2017 at 4:25 pm

Good luck with that. The Rs ads write themselves.

And it's a bad look anyway. With the basically insurmountable barriers to organizing under the Wagner Act these days, a focus on making sure the money keeps flowing, much of it ending up in the Ds campaign coffers. How about repealing Taft-Hartley?

Maybe unions would be better off with less bureaucracy and more member participation. Do it like the Wobs: you come to the meeting, you pay your dues, you voice your opinion and you vote.

Huey Long , October 27, 2017 at 5:16 pm

How about repealing Taft-Hartley?

Here here!

Repealing Taft-Hartley would bring back:

The Closed Shop
Jurisdictional Strikes
Secondary Boycotts
Common Situs Picketing
A Ban on Right-to-Work
A Ban on presidential interventions in strikes
Supervisor's Unions
Employer Nuetrality

Hopefully this happens before I die. I would absolutely love to see the yacht and learjet owning class in tears!

a different chris , October 27, 2017 at 6:06 pm

>The Rs ads write themselves.

They not only write themselves they've already been written and burned into the brain. True or not, there they are. So what are you risking?

The thing is the D-time is well past the point (no House, no Senate, no Pres, vanishing amount of Govs, vanishing amount of State leges..) where saying "That's not true!!" can be considered a winning strategy, even if you could show me what you've won by saying it.

How about "hell yeah that's how we feel, America rocked (when we had strong labor)". Stand up to the bully for once, again whaddya got to lose now. I often wonder what Steve Gilliard would say at this point, he always made sure that us white people realized that something was better than nothing when you were looking at absolutely nothing at all . but things have sunk so low would he still feel that what has become nothing more than an orderly, but continuous retreat should be sustained? Or is it time to dig in and really declare full throated opposition?

(like the rest of your post, just think the time to avoid things is past)

DJG , October 27, 2017 at 6:13 pm

Henry Moon Pie: So? Let's repeal the Wagner Act and Taft-Hartley. And let's not pre-defeat ourselves.

Just as Lambert keeps reminding us, Who would have though five years ago that the momentum is now toward single-payer health insurance even if the current couple of bills don't pass? For years, John Conyers carried on the fight almost single-handedly. And now we have influential physicians stumping for single-payer.

[Oct 17, 2017] Agents of Neoliberal Globalization Corporate Networks, State Structures, and Trade Policy by Michael C. Dreiling, Derek Y. Darve

Notable quotes:
"... Amid the global financial crisis of 2008, a new chapter in the history of neoliberal globalization emerged. Simple assumptions about markets as pure and neutral arbiters of economic transactions faced new challenges from beyond the pages of economic history and sociology. ..."
"... The apparent triumph of global capitalism came into temporary question, and with it, the reigning economic paradigm of neoliberalism. ..."
"... The specter of the Occupy movement in 1011, with its sweeping critique of corporate power, took root in ways not seen in the United States since the 1999 World Trade Organization protests in Seattle. ..."
"... In response, proponents of neoliberalism heightened their demands for a market-governed society, further tax cuts, deregulation, trade liberalization, and more. From the GOP and Tea Party's politics of austerity arose a fresh defense of free market politics in the United States, as well as a rcinvigorated denial of class as a structuring force in US society. These social tensions persist even as neoliberalism, as an ideology and a model for institutional restructuring, exhibits remarkable resilience. ..."
"... From the early 1980s onward, it provided the basic policy framework for "structural adjustment" in the global south, for "rescuing" the welfare state in the global north, and as a vision for a global economy unbound from centrally planned markets, dying industries, or rent-seeking interest groups. ..."
"... One cornerstone of this paradigm that remains mostly unchallenged among political elites is the principal of "free trade." Broadly speaking, neoliberalism and free trade have provided the ideological framework for most reciprocal trade agreements since the early 1980s, when President Reagan initiated a wave of new trade policies in February 1982 during a speech to the Organization of American States (OAS). ..."
"... This formulaic discourse of free markets, free trade, and personal liberty - hallmark features of Reagan's popular rhetoric - also captured what would later be acknowledged as core principles of an incipient neoliberal ideology that promised a restoration of US economic hegemony (Mudge 2008). Domestically and internationally, neoliberal trade proposals were generally presented in tandem with calls for privatization, deregulation, and a reduction in the size of government spending as a share of GDP. ..."
"... Was it the fever pitch of a new' policy ideology acted out by government partisans and policy makers committed to its mantra? Or did the very economic actors benefitting from market liberalization act politically and concertedly to unleash it? And if so, did this coordinated corporate political campaign arise from a reorganized and newly emboldened economic class, or simply through ad hoc alignments created by shared organizational interests? Specifically, can we detect class political signatures on the wave of free trade policies, like the CBI, the North American Free Trade Agreement (NAFTA), or the World Trade Organization (WTO), that erected the institutional framework of neoliberal globalization? 6 ..."
"... We believe that our approach, rooted in the "elite studies" and "power structure" research traditions, expands (and, in some areas, corrects) conventional explanations of neoliberal trade and globalization that emphasize market, institutional, and ideological factors, while neglecting to incorporate a concept of class political action ..."
Oct 17, 2017 | www.amazon.com

Amid the global financial crisis of 2008, a new chapter in the history of neoliberal globalization emerged. Simple assumptions about markets as pure and neutral arbiters of economic transactions faced new challenges from beyond the pages of economic history and sociology.

The apparent triumph of global capitalism came into temporary question, and with it, the reigning economic paradigm of neoliberalism. From the left wing of US politics, a newly invigorated discourse of class and income inequality began to challenge corporate power with calls for greater accountability on Wall Street. The specter of the Occupy movement in 1011, with its sweeping critique of corporate power, took root in ways not seen in the United States since the 1999 World Trade Organization protests in Seattle.

In response, proponents of neoliberalism heightened their demands for a market-governed society, further tax cuts, deregulation, trade liberalization, and more. From the GOP and Tea Party's politics of austerity arose a fresh defense of free market politics in the United States, as well as a rcinvigorated denial of class as a structuring force in US society. These social tensions persist even as neoliberalism, as an ideology and a model for institutional restructuring, exhibits remarkable resilience.

Neoliberalism - which promises to efficiently generate wealth while disciplining states and bureaucracies with market forces - took shape over the course of decades. As a kind of governing philosophy, it has been offered, variously, as a remedy for economic stagnation, bureaucratic bloat, corruption, inflation, and more (Bourdieu 1999; Mirowski and Plehwe 2009; Mudge 2008). From the early 1980s onward, it provided the basic policy framework for "structural adjustment" in the global south, for "rescuing" the welfare state in the global north, and as a vision for a global economy unbound from centrally planned markets, dying industries, or rent-seeking interest groups.

One cornerstone of this paradigm that remains mostly unchallenged among political elites is the principal of "free trade." Broadly speaking, neoliberalism and free trade have provided the ideological framework for most reciprocal trade agreements since the early 1980s, when President Reagan initiated a wave of new trade policies in February 1982 during a speech to the Organization of American States (OAS). There, Reagan unilaterally called for a Caribbean Basin Initiative (CBI) that would "make use of the magic of the marketplace of the Americas, to earn their own way toward self-sustaining growth" (quoted in Polanyi-Levitt 1985: 232)/ This formulaic discourse of free markets, free trade, and personal liberty - hallmark features of Reagan's popular rhetoric - also captured what would later be acknowledged as core principles of an incipient neoliberal ideology that promised a restoration of US economic hegemony (Mudge 2008). Domestically and internationally, neoliberal trade proposals were generally presented in tandem with calls for privatization, deregulation, and a reduction in the size of government spending as a share of GDP. 5

Although a large and varied group of economists, policy wonks, and government leaders supported the general principles of neoliberal globalization, the "market fever" of the 1980s did not spread simply because certain individuals espoused free trade and domestic deregulation. The fact that many of these noncorporate actors assume a central role in many popular and academic accounts of this era does not reduce the many empirical problems with this view.

In particular, the problem with this "triumphant" vision of neoliberal history is the manner in which the very engines of capital behind the market mania - globalizing corporations appear as liberated historical agents acting out their market freedoms, not as class political actors foisting new institutional realities on the world. We contest this prevailing view and instead ask who liberated, or in Blyth's (2001) terminology, "disembedded," these markets from national social and political institutions?

Was it the fever pitch of a new' policy ideology acted out by government partisans and policy makers committed to its mantra? Or did the very economic actors benefitting from market liberalization act politically and concertedly to unleash it? And if so, did this coordinated corporate political campaign arise from a reorganized and newly emboldened economic class, or simply through ad hoc alignments created by shared organizational interests? Specifically, can we detect class political signatures on the wave of free trade policies, like the CBI, the North American Free Trade Agreement (NAFTA), or the World Trade Organization (WTO), that erected the institutional framework of neoliberal globalization? 6

The answer to these questions and, in particular, the role of class agency within these macroeconomic shifts, is not simply a question of whether one likes Karl Marx or Adam Smith. Notwithstanding the recent tendency to equate the mention of class with "class warfare," it is our contention that removing class from accounts of recent economic history creates, at best, a narrow and distorted perspective on this important era. The primary purpose of this book, then, is to introduce and empirically validate a concept of class agency that deepens our understanding of both the trade policy-making apparatus as well as the neoliberal globalization "project" more generally.

We believe that our approach, rooted in the "elite studies" and "power structure" research traditions, expands (and, in some areas, corrects) conventional explanations of neoliberal trade and globalization that emphasize market, institutional, and ideological factors, while neglecting to incorporate a concept of class political action .

Our general line of argument historicizes US trade policy and neoliberal globalization, highlighting the active and at times contradictory processes that shape the state and class relationships responsible for propelling institutions, like the WTO, into existence. Following McMichael (2001: 207), we concur that globalization is best understood as a "historical project rather than a culminating process." Treating neoliberal trade policies as part of a much larger historical project - made and remade by collective actors - offers a more realistic and empirically grounded framework for exploring the intersection of class and state actors in the political articulation of globalization.

Whereas much of the literature on globalization assigns an important role to the economic activity of multinational corporations, the force of their collective political agency in pressuring states to ratify trade agreements and enact institutional reforms is mostly attributed to narrow sectoral interests, like factor mobility', economies of scale, or various industry-specific characteristics...

[Oct 11, 2017] The corporate state embraced identity politics

Notable quotes:
"... There is a big difference between shills for corporate capitalism and imperialism, like Corey Booker and Van Jones, and true radicals like Glen Ford and Ajamu Baraka. The corporate state carefully selects and promotes women, or people of color, to be masks for its cruelty and exploitation. ..."
"... The feminist movement is a perfect example of this. The old feminism, which I admire, the Andrea Dworkin kind of feminism, was about empowering oppressed women. This form of feminism did not try to justify prostitution as sex work. It knew that it is just as wrong to abuse a woman in a sweatshop as it is in the sex trade. The new form of feminism is an example of the poison of neoliberalism. It is about having a woman CEO or woman president, who will, like Hillary Clinton, serve the systems of oppression. It posits that prostitution is about choice. What woman, given a stable income and security, would choose to be raped for a living? Identity politics is anti-politics. ..."
Oct 11, 2017 | www.unz.com

DN: What about the impact that you've seen of identity politics in America?

CH: Well, identity politics defines the immaturity of the left. The corporate state embraced identity politics. We saw where identity politics got us with Barack Obama, which is worse than nowhere. He was, as Cornel West said, a black mascot for Wall Street, and now he is going around to collect his fees for selling us out.

My favorite kind of anecdotal story about identity politics: Cornel West and I, along with others, led a march of homeless people on the Democratic National Convention session in Philadelphia. There was an event that night. It was packed with hundreds of people, mostly angry Bernie Sanders supporters. I had been asked to come speak. And in the back room, there was a group of younger activists, one who said, "We're not letting the white guy go first." Then he got up and gave a speech about how everybody now had to vote for Hillary Clinton. That's kind of where identity politics gets you. There is a big difference between shills for corporate capitalism and imperialism, like Corey Booker and Van Jones, and true radicals like Glen Ford and Ajamu Baraka. The corporate state carefully selects and promotes women, or people of color, to be masks for its cruelty and exploitation.

It is extremely important, obviously, that those voices are heard, but not those voices that have sold out to the power elite. The feminist movement is a perfect example of this. The old feminism, which I admire, the Andrea Dworkin kind of feminism, was about empowering oppressed women. This form of feminism did not try to justify prostitution as sex work. It knew that it is just as wrong to abuse a woman in a sweatshop as it is in the sex trade. The new form of feminism is an example of the poison of neoliberalism. It is about having a woman CEO or woman president, who will, like Hillary Clinton, serve the systems of oppression. It posits that prostitution is about choice. What woman, given a stable income and security, would choose to be raped for a living? Identity politics is anti-politics.

[Oct 11, 2017] The effects of opioids and heroin in Huntington, W.Va

Oct 11, 2017 | www.unz.com

republic, October 11, 2017 at 4:14 pm GMT

@Issac Nothing could be more laughable than to suggest sixty years of deck-stacking against middle and working class whites was a design that favored them over minorities. Hedges clearly hates those elites, but appears to share the majority of their biases. re: working class whites

Brilliant documentary by Louis Theroux, first aired last Sunday on BBC2

https://www.youtube.com/watch?v=OQ1tszdWoTs

It shows the effects of opioids and heroin in Huntington, W.Va

[Oct 08, 2017] Profiting Without Producing How Finance Exploits Us All by Costas Lapavitsas

Notable quotes:
"... the lives of people in the Western world have reached levels of unprecedented material well-being and there is a middle class who are not emiserated materially. ..."
"... So the surplus value ( profit ) which is socially produced by a community gets appropriated and its potential productive value is turned to the use and benefit of a very tiny percentage of the population who produce the wealth socially, rather than redistributed into the community according to the wishes of the community. ..."
Oct 07, 2017 | www.amazon.com
Introduction

The 2000s were an extraordinary period for finance in terms of prices, profits, and volume of transactions, but also in terms of influence and arrogance. By the middle of the decade a vast bubble had been inflated in the US and the UK, the bursting of which could not be reliably timed but whose aftermath was likely to be devastating. Trivial as this point might seem in 2013, it was almost impossible to convey it at the time to spe- cialists and students of finance, and even to activists and socialists. Public perceptions were dominated by the so-called expert skills of the financial system in 'slicing and dicing' risk, and by the putative wisdom of the 'Great Moderation' in inflation policy. Structural crises were a thing of the past, or of the developing world, not of mature countries, where institutions were strong and economists well trained. It seemed that finance had discovered the perpetuum mobile of profit making.

By the middle of the first decade of the new century, it was also apparent that the processes under way amounted to more than financial excess. The bubble reflected profound changes in the conduct of non-financial enterprises, banks, and households. Alter years of financial ascendancy, the agents of capitalist accumulation assigned to financial operations a weight that was historically unprecedented. Finance was pivotal to profit making and to organizing everyday life, but also to determining economic policy as a whole. Mature capitalism had become financialized.

This book was initially conceived in that context, and its aim was to analyse the ascendancy of finance and the concomitant financialization of capitalism. By bringing to bear previous work on money and finance, the intention was to develop a theoretical analysis of financialization with clear Marxist characteristics. It was to be a book that would draw on Anglo-Saxon political economy and Japanese Uno Marxism, while being familiar with mainstream theory of money and finance. It would thus contribute to filling the hole still gaping in political economy in this field.

As is often the case with plans of this sort, reality intervened. In August 2007 the US money market had a heart attack, and in August-September 2008 the global financial system had a near-death experience. The bubble had indeed burst and a catastrophe was in the offing. The destructive influence of finance on the rest of the economy had become evident, as had the role of the state in supporting and promoting financialization. More than that, however, it soon became clear that this was a structural crisis that would not go away quickly. The bursting of the bubble had ushered in a crisis of financialization that cast fresh light on the historic transformation of mature capitalism during the preceding decades. It became necessary to re-examine the underlying tendencies of financialization, focusing in particular on the sources of financial profit. The book would have to be delayed.

And then in 2010-2012 the crisis took an even more dangerous turn. States had become perilously exposed to debt because recession had reduced tax revenues, while rescuing finance had imposed fresh costs on the exchequer. A bubble inflated by private capital had resulted in a crisis of public finance. Rising state indebtedness created turmoil of extraordinary ferocity in the eurozone, bringing into sharp relief the split between core and periphery, pushing several peripheral countries toward default, and threatening a break-up of the monetary union. The spectre of a gigantic crisis hung over the world economy. It became clear that financialization would have to be rethought still further in view of its monetary dimension, particularly the precariousness of its domestic and international monetary underpinnings.

The crisis was far from over at the time of writing this book. However, the temptation had to be resisted to delay publication still further in the expectation that other important features of financialization would emerge. It was time to submit to the public sphere the analysis of the structural and historical content of financialization, even if that meant trying to hit a moving target. The monetary and financial aspects of the transformation of capitalism during the last four decades have been increasingly discussed by political economy, particularly its Marxist strain. This book has a distinctive argument to make regarding financialization, including particularly the predatory and expropriating character of financial profit and its implications for social stratification. Light could thus be shed on the tendency to crisis that has characterized financialization since its inception.

kievite on October 8, 2017

Insightful book on "financialization"

The concept of "casino capitalism" which was put forward by Susan Strange in her 1983 book is closely related to the concept of "financialization". So this is not new and not the first attempt to analyze this aspect of neoliberalism. But the author managed to write a very interesting and insightful book.

Again, the fact that financialization is at the core of neoliberalism (as the term "Casino Capitalism" implies) is well established, but the details of how this mechanism works and how finance institutions position themselves under neoliberalism as universal intermediaries of almost any economic and even social activity: education (via student loans), pensions (via 401k Plans), heath (via heath insurance), consumption (via credit cards), extracting rents from each of them is not well known or understood.

This is the area in which this book provide some deep insights. Brief overview of the book from the author can be found in his lecture on YouTube (Profiting Without Producing How Finance Exploits Us All -- A lecture by Costas Lapavitsas ) and in his Guardian article "Finance's hold on our everyday life must be broken ".

Converting the whole economy into one giant casino where you can bet on almost anything, commodities prices, interests rate and even volatility of the market has profound social effects. And those effects are different on large enterprises and small enterprises and population at large.

The author argues that "Financialization represents a historic and deep-seated transformation of mature capitalism. Big businesses have become "financialised" as they have ample profits to finance investment, rely less on banks for loans and play financial games with available funds. Big banks, in turn, have become more distant from big businesses, turning to profits from trading in open financial markets and from lending to households. Households have become "financialised" too, as public provision in housing, education, health, pensions and other vital areas has been partly replaced by private provision, access to which is mediated by the financial system. Not surprisingly, households have accumulated a tremendous volume of financial assets and liabilities over the past four decades. "

When like in casino sheer luck begins to determine more and more of what happens to financial well-being of people due to their exposition to stock markets (hypertrophied under neoliberalism into some incredible monster due to 401K plans participation) , and skill, effort, initiative, determination and hard work count for less and less, then inevitably faith and confidence in the social and political system quickly fades.

That's what happened with casino capitalism in the USA and that's why Trump was elected.

Paradoxically, as people more and more play in stock market (including with their 401K money) then respect the system less and less. In a way neoliberalism brings with is 'casino capitalism" mentality" its own demise. Frustration and anger become sharper and prone to be violently expressed when the realm of inequality becomes too large and when the system seems to operate so very unequally and biased toward the top 1% or, more correctly, the top 0.01%. While many people find themselves without jobs and without any opportunity to earn a decent living. Thrown out of "economy for winners." That's the problem Pope Francis "LAUDATO SI" was devoted to.

As author states "This book has a distinctive argument to make regarding financialization, including particularly the predatory and expropriating character of financial profit and its implications for social stratification. Light could thus be shed on the tendency to crisis that has characterized financialization since its inception."

Highly recommended.

merjet December 2, 2014

Clear and informative but a Marxist bias

I discovered this book by chance. The title looked intriguing and I have seen very few books about financialization, so I decided to read it. It was good enough to keep my interest, despite the influence by the distorting lens of Marxist thought. It doesn't live up to its title of showing how financial people profit without producing and exploit us all. (I make an exception for those in government who do that.) Indeed, despite "exploit" in the subtitle, it appears in the book only two other places, which likely helped hold my interest. Also, the writing was good.

The author makes a fundamental distinction between productive capital and financial capital. Add '-ist' to each to denote the people. I think it's safe to say the book implicitly says:

1. The former are capital providers who also work in the productive business. The business produces non-financial products, e.g. food, or services, e.g. transportation.

2. The latter provide the non-financial business capital but don't work in said business, like outside stockholders, bondholders and lenders.

Lenders are mostly banks. The author is not critical of productive capital, but, as a Marxist, he regards financial capitalists as expropriators who profit without producing. The fact that many of these financial capitalists are individuals who worked productively for decades and are now retired and depend on income from said capital for living expenses is conveniently omitted.

Marx's notions of money and exchange value are flawed. Firstly, money is the medium of _indirect_ exchange, which Marx didn't recognize and Lapavitsas's reference to Carl Menger didn't recognize. Also, Austrians like Menger realize that indirect exchange increases with the division of labor. Despite its huge significance, division of labor is an idea barely worth mention by Marx, and then only negatively. Also, indirect exchange encompasses more than just "spot market" exchanges. It includes X now for Y later, like in a forward or futures contract. It also includes both X and Y being money and Y is indeterminate when X occurs. X and Y may even be in different currencies and utilize a financial mediator.

Page 200 says, "the financial system is an intermediate entity that does not produce value." Page 201 says the financial system's services include creation of credit money, safekeeping of funds, money transfers, facilitating foreign exchange, mobilization of loanable capital, and turning that into loans. "The financial, consequently, acts as the nerves and brains of the capitalist economy." Extending his metaphor, what he considers the productive part of the economy must be the bones, muscle, and other organs. If that isn't a bad analogy, it's an amazing contradiction of Marxist thought unrecognized by the author. It implies that the nerves and brains of an animal's body provide no value to the rest of the body.

Marxist thought cherry-picks who is a producer or worker. Those in roles readily visible to making products or providing services, and roles easy to understand rank high. Roles less visible and understandable like research and development, executive-level decision-making, marketing, and especially financial people rank low and may even be considered expropriators. Union leaders and organizers whose livelihood is extracted from union dues? Many government employees? While the author gives a significant role to governments (states) and central banks in financialization, Lapavitsas blames mostly financial capitalists. Governments and central banks are more like their assistants. However, what people typically call "capitalist economies" are more properly called "mixed economies" with extensive government control well beyond prevention and punishment for coercion and fraud. So assigning all blame to capitalism is quite biased.

Interest is often not simply exploitation of labor. It is mainly a reward for savings and the cost of borrowing. The author occasionally refers to savings with the perjorative term "hoarding." Consider those retirees mentioned above again.

The author often attributes to surplus value predation and exploitation, as if all surplus value does is put money in the financial capitalist's pocket and extracts from labor. Not so. Surplus value, i.e. profit, is often the source of funds for growth, upgrades, and replacement of old capital. The author himself acknowledges this when he writes about 'internal' financing, along with graphs showing 'internal' financing over time averaging about 100% in the U.S. He does not integrate these two things, which shows an incoherence in Marxist thought. Surplus value can also be the reward from entrepreneurship.

About mortgages the author says: "In short, the money revenue of workers is transformed into loanable capital at a stroke, allowing financial intermediaries to absorb parts of it as financial profit by trading securities that are based on future wage payments. The path is thus opened for financial institutions to bring to bear predatory practices reflecting the systematic difference in power and outlook between financial institutions and workers" (p. 167).

My comments:

1. Loanable capital doesn't arise simply because a worker wants a mortgage. Unless the money is newly created "out of thin air" by government-backed banks, loanable capital is the result of somebody saving, the saver not spending the money on something else.

2. The worker's future wages are in fact a condition for obtaining the mortgage. Rather than being exploited, the worker is given the opportunity to become a homeowner at the stroke of a pen.

3. Regarding working people you know who have purchased a house with a mortgage, which may include you, have they felt elated or exploited?

4. All or most working people living in many of the poorer countries of the world can't even get a mortgage. There is not enough savings to offer loanable capital to support a mortgage market.

5. Granted, there have been victims of predatory practices by lenders, but lenders also become victims if the borrower defaults on the mortgage. Also, such predatory practices by lenders is a recent phenomena for a _part_ of the market for mortgages, hardly characteristic of the mortgage market generally.

Chapter 9 is a pretty good description of the recent financial crisis. It also covers different Marxist theories about how crises develop. All typically claim that capitalism is inherently unstable due to 'contradictions' in production. Unlike free market advocates, they hardly ever cite government intervention as a cause of instability. They don't distinguish between a capitalist economy and mixed economy.

The final chapter, Controlling Finance, addresses what has been done and what the author wishes can be done. It makes an interesting distinction between market-negating and market-conforming regulation. I don't agree with the author's utopian visions about government ownership and/or control of finance. Indeed, I found it puzzling to see after (1) his earlier saying elected politicians are plain dishonest (p. 195), (2) describing how much states and central banks have aided financial capitalists in recent decades with deregulation and bailouts, and (3) his saying "there are no clear paths to regulatory change" (p. 324). By the way, a good way to avoid such utopian visions is to compare East and West Germany, North and South Korea, and the USSR and the USA.

7 comments 22 people found this helpful.

Stergios D. Marangos 1 year ago

This reviewer is more concerned with trying to critique Marx than this book. Needless to say, the second someone says surplus value = profit ( not to mention the muddle that surplus value can come from entrepreneurship) you know there is something wrong...

merjet 2 years ago (Edited) In reply to an earlier post Robert Fenton 2 years ago

Fenton: "The contradictions of money are fairly evident from this point."

A thing having more than one attribute does not make a "contradiction." I suggest you learn some logic.

Fenton: "Difference between capitalist and mixed economy makes no sense."

I suppose the difference between voluntary and coerced, or non-political versus political, makes no sense to you either.

Fenton: "For Marx, who lived in the 19th century, the idea of a "free market" made no sense at all."

No wonder he was so confused and fabricated nonsense about it.

Fenton: "The USA practiced protectionism to build up its industrial capacity, the USSR directed production from central committee."

The consequence of USSR's centrally-directed agricultural production was millions dying by starvation. Ditto for China. Perhaps you should read the histories of countries that have implemented Marxist ideas. While I don't approve of protectionism, it is paltry compared to millions dying by starvation.

Fenton: "This review ... is laden with ideological positions."

The pot calls the kettle black.

Robert Fenton 2 years ago (Edited)

People without an intimate knowledge of Marxism should probably refrain from commenting on it like they know what they are talking about. First of all, Marx's theory of money does account for "indirect" exchange: this is key to his entire dialectical edifice. Prices do not equal values, they are merely representations of value (i.e., exchange value). But Marx's theory of money is even more complex, and rests on a three-fold determination of money as 1.) measure of value, 2.) means of circulation and exchange (your "indirect" means), and 3.) store of value. The contradictions of money are fairly evident from this point. The Austrians assume the problematic position by conflating the value of money with its price: it is what it is. Their wholesale acceptance of Say's Law is troubling too, considering they accept money as "indirect" means of exchange. But by failing to recognize money's other determinations, they basically treat it as direct exchange in theorem.

Secondly, to claim that the division of labor is an afterthought for Marxist thought is asinine. It is literally at the core of his entire Critique. Marx actually has a rosier interpretation of it than Adam Smith (see book 3 Wealth of Nations). Marx's entire critique of political economy (read: critique of economic science and practice) is that capitalists need to extract surplus value from nominally free workers. How do they do this? Both absolutely, by extending duration of work day, and relatively, buy increasing productivity (in practice, Marx acknowledges that we can see a combination of both). This is not visible in the wage or in the act of exchange, but in the relations of production and the dual character of the commodity "labor-power." But the division of labor is actually the basis for new forms of "Co-operation" (perhaps the best chapter in Capital Vol. I) and solidarity. It is dialectical. If you only see the negative in Marx it is because you have an ideological predisposition to dislike his work, or you don't understand how dialectics work--I would say it is probably both.

M-C-M' (circuit of expanded production); M-M' (fictitious capital arising from speculative credit economy). You need to read about this on your own. Central to the entire argument in Capital.

I don't think you understand Marx's notion of "exploitation," which I have briefly summarized above. It is not treating someone badly, it is not some morally repugnant slavery, per se. It is a legal means of covering the ways in which surpluses are generated in capitalist society. Workers make things but never receive the values they produce back as wages. There is a temporal issue at play, but it is all highly predicated on how capitalists must work: they need to constantly expand their capital (increase profits and invest those profits into expanding production, etc., accumulation for accumulation's sake). A capitalist pays a worker a certain wage, the worker works as the capitalist wants him/her to, the worker produces something they don't have control over, the capitalist receives (if the product can find a market) money back from that product that needs to be more than the outlays in fixed capital (buildings, supplies, equipment) and variable capital (labor) he originally spent to produce. This is exploitation. Mortgaging and other consumption-based loans are basically a means of recouping surpluses that were paid to workers in wages. Marx clearly does not buy into any these of material immiseration (Ricardo's Iron law of wages), nor does he deny the productive capabilities of capitalist economies. He says workers can get paid more for labor-power than the value of labor, it is in Capital. This is part of the entire business cycle theory Marx develops.

Difference between capitalist and mixed economy makes no sense. It is a product of ridiculous bifurcation of economic and political spheres prevalent in bourgeois (liberal) thought, hence economic liberalism and political liberalism. Capitalist economies are characterized by the generalization of the commodity, wage labor, and private (i.e., not collective, which a class of government bureaucrats certainly aren't) ownership of the means of production (factories, tools, etc.). Marx and later Marxist show exactly how something like a welfare state is untenable, the law of value prohibits it. This goes back to your issue understanding what productive laborers are for Marx (btw, research and development is part of productive labor). For Marx, who lived in the 19th century (read Karl Polanyi's Great Transformation), the idea of a "free market" made no sense at all. The political and economic forces were aligned, forcing peasants from their lands and into towns and factories ("On so-called Primitive Accumulation"). But why should we avoid utopian visions by comparing "mixed economies" with "mixed economies"? Perhaps you should read the histories about the countries you listed. The USA practiced protectionism to build up its industrial capacity, the USSR directed production from central committee. South Korean had a capitalist dictator who controlled the entire country and murdered anyone with communist sympathies, the North did roughly the same thing. Two sides of the same coin. The real utopia is the "free market." It never has and never will exist because there are too many factors that impinge upon it. If you want to see something approximating a "free market" come down to Latin America. Even in "socialist" Ecuador things are more laissez-faire.

I have not read this book yet, but I plan to. This review shows an utter lack of understand, however, for even the most basic points of Marxist critiques. It is laden with ideological positions and insinuates a variety of banalities about Marxism and communism which don't hold true on close scrutiny of Marx's work. Please educate yourself.

Frank 2 years ago (Edited)

There is a critical response to your example of house ownership. Again that gets very complex but, just a part of that response, to your 2nd point:
"2. The worker's future wages are in fact a condition for obtaining the mortgage. Rather than being exploited, the worker is given the opportunity to become a homeowner at the stroke of a pen."

This could be described as a bargain with the devil. The worker has to work extra to pay 3 times the current market value of the home due to the interest. The capitalist makes a good profit out of that.

Frank 2 years ago (Edited)

So what I think you miss here is a connection between capitalism criticised as a means of exploitation and capitalism described as a working economic system with its own character and good and bad points.

So what is being gotten at, amongst other points, in Marxist critiques of capitalism is that:

  1. Capitalism is a very productive system
  2. Its productivity has to do with the division of labour and refinements of productive activity which is linked into supply and demand
  3. But Marx's point, amongst others, was that this would lead to a polarisation into a class of capitalists who became richer through appropriation of surplus value (including its redeployment in further profit producing enterprises) and those "workers" who produce by transforming the raw materials into actual goods and services who become or remain emiserated over time. The rich get richer and the poor get poorer.
  4. This last point 3 is quite possibly historically inaccurate in the sense that capitalism is enormously productive and has produced increasing levels of material well being through this increased production. Hence the lives of people in the Western world have reached levels of unprecedented material well-being and there is a middle class who are not emiserated materially.

But there is some sort of residual truth in that given the increasing levels of inequality on the one hand and global impoverishment on the other. In respect of global impoverishment it is credible to propose that the billions who live in poverty can't attain to the levels of affluence in the West due to the ecological limits of capitalism - that the western lifestyle of the wealthy is a phantasmorgoria to them. So its arguable that an alternative means that might be more socialist might in fact be needed for that relief of impoverishment to happen. That proposal needs to be moderated by the fact that there is a lot that can be done through refinements of production without coming into conflict with those ecological limits. For instance cities could be made a lot more liveable without increasing ecological damage.

So the main point that you miss (in an otherwise clear critical statement) is that a tiny percentage of the global population own and control a huge percentage of the world's wealth.

In part this is done through the translation of the production of goods and services into financial ie monetary equivalents which is distributed through private ownership and systems thereof into further capitalist enterprise. That seems to me what the book is actually getting at.

So I would think that "exploitation" would need to be conceived of as some sort of taking of an undeserved share of the productive potential of a social project ie the surplus value that is produced (surplus to whatever is needed for production or reproduction) then that becomes exclusively available to the capitalist entrepreneur who then reinvests it unlocking further profitability and production. So its the productive potential for further deployment that is expropriated by the capitalist entrepreneur.

This surplus value is produced by all those who work in the enterprise, in other words socially, but then that is leveraged into further productive activity which in turn increases the financial wealth of the capitalist. The entrepreneurial capitalist is also, initially, a participating worker, eg an organiser, co-ordinator, innovator and even sometimes an inventor but once enough surplus value is realised the system begins to work for him instead of his own activity being responsible so he makes a transition himself. Eventually the entrepreneurial capitalist is virtually free from the necessity of work.

So the surplus value ( profit ) which is socially produced by a community gets appropriated and its potential productive value is turned to the use and benefit of a very tiny percentage of the population who produce the wealth socially, rather than redistributed into the community according to the wishes of the community.

Most of these comments of mine are, I know, just partial thoughts needing to be made more adequate rather than completed. I am not a committed Marxist but neither am I in love with capitalism as a system. In fact I wouldn't claim much authority here just a partial understanding at a preliminary sort of level of something complex that I don't understand fully. The mixed modes that you talk about seem to me part of a continuing search for ways of reconciling socialism and capitalism. Hence my way of expressing this as what he or Marx is "trying to get at".

[Oct 05, 2017] How Billionaires become Billionaires - The Unz Review

Notable quotes:
"... Billionaires in the commercial conglomerates, like Walmart, exploit workers by paying poverty wages and providing few, if any, benefits. Walmart earns $16 billion dollar a year in profits by paying its workers between $10 and $13 an hour and relying on state and federal assistance to provide services to the families of its impoverished workers through Medicaid and food stamps. ..."
"... Inequality is not a result of 'technology' and 'education'- contemporary euphemisms for the ruling class cult of superiority – as liberals and conservative economists and journalists like to claim. Inequalities are a result of low wages, based on big profits, financial swindles, multi-trillion dollar public handouts and multi-billion-dollar tax evasion. ..."
"... Workers pay disproportional taxes for education, health, social and public services and subsidies for billionaires ..."
"... First and foremost, billionaires and their political, legal and corporate associates dominate the political parties. They designate the leaders and key appointees, thus ensuring that budgets and policies will increase their profits, erode social benefits for the masses and weaken the political power of popular organizations ..."
"... As a result, wage and salary workers are less organized and less influential; they work longer and for less pay, suffer greater workplace insecurity and injuries – physical and mental – fall into decline and disability, drop out of the system, die earlier and poorer, and, in the process, provide unimaginable profits for the billionaire class ..."
"... The bulk of repatriated profits are directed to buy back stock to increase dividends for investors; they are not invested in the productive economy. Lower taxes and greater profits for conglomerates means more buy-outs and greater outflows to low wage countries. In real terms taxes are already less than half the headline rate and are a major factor heightening the concentration of income and power – both cause and effect. ..."
"... In other words, the capitalist class as a whole, globalist and domestic alike, pursues the same regressive policies, promoting inequalities while struggling over shares of the profits. One hundred and fifty million wage and salaried taxpayers are excluded from the political and social decisions that directly affect their income, employment, rates of taxation, and political representation. ..."
"... However, worker hostility and despair is directed against 'immigrants' and against the 'liberals' who have backed the import of cheap skilled and semi-skilled labor under the guise of 'freedom'. This 'politically correct' image of imported labor covers up a policy, which has served to lower wages, benefits and living standards for American workers, whether they are in technology, construction or production. ..."
"... The pro and anti-immigrant issue avoids the root cause for the economic exploitation and social degradation of the working class – the billionaire owners operating in alliance with the political elite. ..."
Oct 05, 2017 | www.unz.com

Billionaires in the commercial conglomerates, like Walmart, exploit workers by paying poverty wages and providing few, if any, benefits. Walmart earns $16 billion dollar a year in profits by paying its workers between $10 and $13 an hour and relying on state and federal assistance to provide services to the families of its impoverished workers through Medicaid and food stamps. Amazon plutocrat Jeff Bezos exploits workers by paying $12.50 an hour while he has accumulated over $80 billion dollars in profits. UPS CEO David Albany takes $11 million a year by exploiting workers at $11 an hour. Federal Express CEO, Fred Smith gets $16 million and pays workers $11 an hour.

Inequality is not a result of 'technology' and 'education'- contemporary euphemisms for the ruling class cult of superiority – as liberals and conservative economists and journalists like to claim. Inequalities are a result of low wages, based on big profits, financial swindles, multi-trillion dollar public handouts and multi-billion-dollar tax evasion. The ruling class has mastered the 'technology' of exploiting the state, through its pillage of the treasury, and the working class. Capitalist exploitation of low paid production workers provides additional billions for the 'philanthropic' billionaire family foundations to polish their public image – using another tax avoidance gimmick – self-glorifying 'donations'.

Workers pay disproportional taxes for education, health, social and public services and subsidies for billionaires.

Billionaires in the arms industry and security/mercenary conglomerates receive over $700 billion dollars from the federal budget, while over 100 million US workers lack adequate health care and their children are warehoused in deteriorating schools.

Workers and Bosses: Mortality Rates

Billionaires and multi-millionaires and their families enjoy longer and healthier lives than their workers. They have no need for health insurance policies or public hospitals. CEO's live on average ten years longer than a worker and enjoy twenty years more of healthy and pain-free lives.

Private, exclusive clinics and top medical care include the most advanced treatment and safe and proven medication which allow billionaires and their family members to live longer and healthier lives. The quality of their medical care and the qualifications of their medical providers present a stark contrast to the health care apartheid that characterizes the rest of the United States.

Workers are treated and mistreated by the health system: They have inadequate and often incompetent medical treatment, cursory examinations by inexperienced medical assistants and end up victims of the widespread over-prescription of highly addictive narcotics and other medications. Over-prescription of narcotics by incompetent 'providers' has significantly contributed to the rise in premature deaths among workers, spiraling cases of opiate overdose, disability due to addiction and descent into poverty and homelessness. These irresponsible practices have made additional billions of dollars in profits for the insurance corporate elite, who can cut their pensions and health care liabilities as injured, disabled and addicted workers drop out of the system or die.

The shortened life expectancy for workers and their family members is celebrated on Wall Street and in the financial press. Over 560,000 workers were killed by opioids between 1999-2015 contributing to the decline in life expectancy for working age wage and salary earners and reduced pension liabilities for Wall Street and the Social Security Administration.

Inequalities are cumulative, inter-generational and multi-sectorial.

Billionaire families, their children and grandchildren, inherit and invest billions. They have privileged access to the most prestigious schools and medical facilities, and conveniently fall in love to equally privileged, well-connected mates to join their fortunes and form even greater financial empires. Their wealth buys favorable, even fawning, mass media coverage and the services of the most influential lawyers and accountants to cover their swindles and tax evasion.

Billionaires hire innovators and sweat shop MBA managers to devise more ways to slash wages, increase productivity and ensure that inequalities widen even further. Billionaires do not have to be the brightest or most innovative people: Such individuals can simply be bought or imported on the 'free market' and discarded at will.

Billionaires have bought out or formed joint ventures with each other, creating interlocking directorates. Banks, IT, factories, warehouses, food and appliance, pharmaceuticals and hospitals are linked directly to political elites who slither through doors of rotating appointments within the IMF, the World Bank, Treasury, Wall Street banks and prestigious law firms.

Consequences of Inequalities

First and foremost, billionaires and their political, legal and corporate associates dominate the political parties. They designate the leaders and key appointees, thus ensuring that budgets and policies will increase their profits, erode social benefits for the masses and weaken the political power of popular organizations .

Secondly, the burden of the economic crisis is shifted on to the workers who are fired and later re-hired as part-time, contingent labor. Public bailouts, provided by the taxpayer, are channeled to the billionaires under the doctrine that Wall Street banks are too big to fail and workers are too weak to defend their wages, jobs and living standards.

Billionaires buy political elites, who appoint the World Bank and IMF officials tasked with instituting policies to freeze or reduce wages, slash corporate and public health care obligations and increase profits by privatizing public enterprises and facilitating corporate relocation to low wage, low tax countries.

As a result, wage and salary workers are less organized and less influential; they work longer and for less pay, suffer greater workplace insecurity and injuries – physical and mental – fall into decline and disability, drop out of the system, die earlier and poorer, and, in the process, provide unimaginable profits for the billionaire class . Even their addiction and deaths provide opportunities for huge profit – as the Sackler Family, manufacturers of Oxycontin, can attest.

The billionaires and their political acolytes argue that deeper regressive taxation would increase investments and jobs. The data speaks otherwise. The bulk of repatriated profits are directed to buy back stock to increase dividends for investors; they are not invested in the productive economy. Lower taxes and greater profits for conglomerates means more buy-outs and greater outflows to low wage countries. In real terms taxes are already less than half the headline rate and are a major factor heightening the concentration of income and power – both cause and effect.

Corporate elites, the billionaires in the Silicon Valley-Wall Street global complex are relatively satisfied that their cherished inequalities are guaranteed and expanding under the Demo-Republican Presidents- as the 'good times' roll on.

Away from the 'billionaire elite', the 'outsiders' – domestic capitalists – clamor for greater public investment in infrastructure to expand the domestic economy, lower taxes to increase profits, and state subsidies to increase the training of the labor force while reducing funds for health care and public education. They are oblivious to the contradiction.

In other words, the capitalist class as a whole, globalist and domestic alike, pursues the same regressive policies, promoting inequalities while struggling over shares of the profits. One hundred and fifty million wage and salaried taxpayers are excluded from the political and social decisions that directly affect their income, employment, rates of taxation, and political representation. They understand, or at least experience, how the class system works. Most workers know about the injustice of the fake 'free trade' agreements and regressive tax regime, which weighs heavy on the majority of wage and salary earners.

However, worker hostility and despair is directed against 'immigrants' and against the 'liberals' who have backed the import of cheap skilled and semi-skilled labor under the guise of 'freedom'. This 'politically correct' image of imported labor covers up a policy, which has served to lower wages, benefits and living standards for American workers, whether they are in technology, construction or production. Rich conservatives, on the other hand, oppose immigration under the guise of 'law and order' and to lower social expenditures – despite that fact that they all use imported nannies, tutors, nurses, doctors and gardeners to service their families. Their servants can always be deported when convenient.

The pro and anti-immigrant issue avoids the root cause for the economic exploitation and social degradation of the working class – the billionaire owners operating in alliance with the political elite.

In order to reverse the regressive tax practices and tax evasion, the low wage cycle and the spiraling death rates resulting from narcotics and other preventable causes, which profit insurance companies and pharmaceutical billionaires, class alliances need to be forged linking workers, consumers, pensioners, students, the disabled, the foreclosed homeowners, evicted tenants, debtors, the under-employed and immigrants as a unified political force.

Sooner said than done, but never tried! Everything and everyone is at stake: life, health and happiness.

conatus > , October 5, 2017 at 9:02 am GMT

Ronald Reagan can be blamed for the excess of billionaires we now have. His lauding of the entrepreneurial spirit and how we are all brave individual risk takers makes it seem you are an envious chickensh$t if you advocate against unlimited assets.

But even Warren Buffet has come out for the estate tax saying something like now the Forbes 400 now possesses total assets of 2.5 trillion in a 20 trillion economy when 40 years ago they totaled in the millions. The legal rule against perpetuities generally used to limit trusts to a lifetime of 100 years, now some states offer 1000 year trusts which will only concretize an outlandishly high Gini coefficient(a measure of income inequality).
The rationale for lowering taxes and the untouchable rich is usually the trickle down theory but, as one of these billionaires said, "How many pairs of pants can I buy?" It takes 274 years spending 10,000 a day to spend a billion dollars.
Better Henry Ford's virtuous circle than Ronald Reagan's entrepreneur.
Ban all billionaires. Bring back the union label. Otherwise .. what do we have to lose?

http://nobillionairescom.dotster.com/

jacques sheete > , October 5, 2017 at 2:29 pm GMT

@Wally "According to the US Internal Revenue Service, billionaire tax evasion amounts to $458 billion dollars in lost public revenues every year – almost a trillion dollars every two years by this conservative estimate."

No, it's $458 billion that the government has not managed to steal.

https://www.ronpaul.com/taxes/


An income tax is the most degrading and totalitarian of all possible taxes. Its implementation wrongly suggests that the government owns the lives and labor of the citizens it is supposed to represent.

Tellingly, "a heavy progressive or graduated income tax" is Plank #2 of the Communist Manifesto, which was written by Karl Marx and Friedrich Engels and first published in 1848.
To provide funding for the federal government, Ron Paul supports excise taxes, non-protectionist tariffs, massive cuts in spending

"We could eliminate the income tax, replace it with nothing, and still fund the same level of big government we had in the late 1990s. We don't need to "replace" the income tax at all. I see a consumption tax as being a little better than the personal income tax, and I would vote for the Fair-Tax if it came up in the House of Representatives, but it is not my goal. We can do better."

https://youtu.be/qI5lC4Z_T80

No, it's $458 billion that the government has not managed to steal.

There was a time that I would have agreed with that, and technically still get the point, but what it really means is that the government merely allows the corporations which they favor, subsidize, and bail out to keep the chump change they've stolen from the workers, besides that which the government steals from the workers and hands to the corporations.

Corporations and government work hand in hand to fleece the herd and most of the herd apparently think it's just fine.

Never forget that thanks to government, corporations socialize risk while privatizing profit. They are partners in gangsterism.

advancedatheist > , October 5, 2017 at 2:53 pm GMT

Private, exclusive clinics and top medical care include the most advanced treatment and safe and proven medication which allow billionaires and their family members to live longer and healthier lives.

Sorry, I don't buy the notion that billionaires have access to some super-healthcare that the rest of us don't know about. In the real world rich people notoriously waste a lot of money on quackery, like the current fad of receiving plasma transfusions from young people as a phony "anti-aging" treatment.

More likely the kinds of men who become billionaires just enjoy better health and longevity for genetic reasons. They tend to have higher IQ's, for example, and some scientists think that IQ correlates with "system integrity" in their bodies which just make higher IQ people more resilient. Look up the growing body of research on cognitive epidemiology.

anonymous > , Disclaimer October 5, 2017 at 3:05 pm GMT

I'm disappointed there was no mention of the "Billionaires" use of social media. They've always controlled the press of course: startin' wars, hatin' on those guys, gettin' the blood up, jailin' the 'bad guys', preaching an empty delusion of social justice propaganda, payin' Ken Burns to propagandize and put a new coat of paint on the industrial scale killing of Vietnam. Probably just in time for more violence.

Let's face it, many of the workin' stiff will blow a hedge fund manager and kneel before the so-called free market corpse of Sam Walton but most importantly they'll grab their guns outa' patriotic fervor and social media will be right there with 'em. "I love Elon Musk!"

It's a great thing we're watched and datamined for our own good – information is how billionaires became billionaires along with a lot of help from the Government they usually encourage you to dislike. Keep posting!

MarkinLA > , October 5, 2017 at 3:29 pm GMT

Rich conservatives, on the other hand, oppose immigration under the guise of 'law and order' and to lower social expenditures – despite that fact that they all use imported nannies, tutors, nurses, doctors and gardeners to service their families. Their servants can always be deported when convenient.

BZZZZ – wrong. Rich conservative support massive immigration so they can get cheap labor while simutaneously virtue signaling. I thought you just got done sayiong they don't pay for the costs of the working poor? The middle class is who is against immigratioin. They bear the burden and pay the taxes that support it.

[Oct 04, 2017] Nothing damage the interests of financial oligarchy more than restricting immigration labor supply and creating a more homogeneous politi that has a greater sense of ownership of the nation

Unrestricted immigration is form of war on labor.
Notable quotes:
"... Nothing does more to damage to the interests of runaway Capital than restricting immigration labour supply and creating a more homogeneous politi that has a greater sense of ownership of the nation. ..."
"... Nothing solidifies neo-liberalism like mass migration. ..."
Oct 04, 2017 | www.unz.com

Altai > , October 4, 2017 at 1:36 pm GMT

Nothing does more to damage to the interests of runaway Capital than restricting immigration labour supply and creating a more homogeneous politi that has a greater sense of ownership of the nation.

Nothing solidifies neo-liberalism like mass migration.

Brazil will never be Denmark. Icelanders young and old, mothers with their small children were able to assemble and demand justice, they actually got it and a few of the bankers were jailed because they were a highly cohesive, homogeneous community with a sense of ownership of their nation. (For a little while anyway, mass pressure from the US and other governments to do away with any unpleasant examples lead to appallingly early releases)

There is nothing else to discuss at this point. Tax rates and regulations can be changed and will be changed back and forth.

If Chomsky wants to play pretend that it's 1968 that's his business, but if he has himself fallen so deep into the very elitist narratives he professes to challenge and advocate essentially open borders (A position even the likes of Sanders not too long ago were very much aware was the greatest threat to reducing inequality and social democracy.) for socialism, there is no hope.

Sadly Chomsky seems to relish the idea of ethnic cleansing of whites in opposition to everything he claimed he stood for for decades. In doing so, for (((no apparent reason))), he simply becomes another alt-right meme.

[Oct 02, 2017] Techs push to teach coding isnt about kids success – its about cutting wages by Ben Tarnoff

Highly recommended!
IT is probably one of the most "neoliberalized" industry (even in comparison with finance). So atomization of labor and "plantation economy" is a norm in IT. It occurs on rather high level of wages, but with influx of foreign programmers and IT specialists (in the past) and mass outsourcing (now) this is changing. Completion for good job positions is fierce. Dog eats dog competition, the dream of neoliberals. Entry level jobs are already paying $15 an hour, if not less.
Programming is a relatively rare talent, much like ability to play violin. Even amateur level is challenging. On high level (developing large complex programs in a team and still preserving your individuality and productivity ) it is extremely rare. Most of "commercial" programmers are able to produce only a mediocre code (which might be adequate). Only a few programmers can excel if complex software projects. Sometimes even performing solo. There is also a pathological breed of "programmer junkie" ( graphomania happens in programming too ) who are able sometimes to destroy something large projects singlehandedly. That often happens with open source projects after the main developer lost interest and abandoned the project.
It's good to allow children the chance to try their hand at coding when they otherwise may not had that opportunity, But in no way that means that all of them can became professional programmers. No way. Again the top level of programmers required position of a unique talent, much like top musical performer talent.
Also to get a decent entry position you iether need to be extremely talented or graduate from Ivy League university. When applicants are abundant, resume from less prestigious universities are not even considered. this is just easier for HR to filter applications this way.
Also under neoliberalism cheap labor via H1B visas flood the market and depresses wages. Many Silicon companies were so to say "Russian speaking in late 90th after the collapse of the USSR. Not offshoring is the dominant way to offload the development to cheaper labor.
Notable quotes:
"... As software mediates more of our lives, and the power of Silicon Valley grows, it's tempting to imagine that demand for developers is soaring. The media contributes to this impression by spotlighting the genuinely inspiring stories of those who have ascended the class ladder through code. You may have heard of Bit Source, a company in eastern Kentucky that retrains coalminers as coders. They've been featured by Wired , Forbes , FastCompany , The Guardian , NPR and NBC News , among others. ..."
"... A former coalminer who becomes a successful developer deserves our respect and admiration. But the data suggests that relatively few will be able to follow their example. Our educational system has long been producing more programmers than the labor market can absorb. ..."
"... More tellingly, wage levels in the tech industry have remained flat since the late 1990s. Adjusting for inflation, the average programmer earns about as much today as in 1998. If demand were soaring, you'd expect wages to rise sharply in response. Instead, salaries have stagnated. ..."
"... Tech executives have pursued this goal in a variety of ways. One is collusion – companies conspiring to prevent their employees from earning more by switching jobs. The prevalence of this practice in Silicon Valley triggered a justice department antitrust complaint in 2010, along with a class action suit that culminated in a $415m settlement . Another, more sophisticated method is importing large numbers of skilled guest workers from other countries through the H1-B visa program. These workers earn less than their American counterparts, and possess little bargaining power because they must remain employed to keep their status. ..."
"... Guest workers and wage-fixing are useful tools for restraining labor costs. But nothing would make programming cheaper than making millions more programmers. ..."
"... Silicon Valley has been unusually successful in persuading our political class and much of the general public that its interests coincide with the interests of humanity as a whole. But tech is an industry like any other. It prioritizes its bottom line, and invests heavily in making public policy serve it. The five largest tech firms now spend twice as much as Wall Street on lobbying Washington – nearly $50m in 2016. The biggest spender, Google, also goes to considerable lengths to cultivate policy wonks favorable to its interests – and to discipline the ones who aren't. ..."
"... Silicon Valley is not a uniquely benevolent force, nor a uniquely malevolent one. Rather, it's something more ordinary: a collection of capitalist firms committed to the pursuit of profit. And as every capitalist knows, markets are figments of politics. They are not naturally occurring phenomena, but elaborately crafted contraptions, sustained and structured by the state – which is why shaping public policy is so important. If tech works tirelessly to tilt markets in its favor, it's hardly alone. What distinguishes it is the amount of money it has at its disposal to do so. ..."
"... The problem isn't training. The problem is there aren't enough good jobs to be trained for ..."
"... Everyone should have the opportunity to learn how to code. Coding can be a rewarding, even pleasurable, experience, and it's useful for performing all sorts of tasks. More broadly, an understanding of how code works is critical for basic digital literacy – something that is swiftly becoming a requirement for informed citizenship in an increasingly technologized world. ..."
"... But coding is not magic. It is a technical skill, akin to carpentry. Learning to build software does not make you any more immune to the forces of American capitalism than learning to build a house. Whether a coder or a carpenter, capital will do what it can to lower your wages, and enlist public institutions towards that end. ..."
"... Exposing large portions of the school population to coding is not going to magically turn them into coders. It may increase their basic understanding but that is a long way from being a software engineer. ..."
"... All schools teach drama and most kids don't end up becoming actors. You need to give all kids access to coding in order for some can go on to make a career out of it. ..."
"... it's ridiculous because even out of a pool of computer science B.Sc. or M.Sc. grads - companies are only interested in the top 10%. Even the most mundane company with crappy IT jobs swears that they only hire "the best and the brightest." ..."
"... It's basically a con-job by the big Silicon Valley companies offshoring as many US jobs as they can, or "inshoring" via exploitation of the H1B visa ..."
"... Masters is the new Bachelors. ..."
"... I taught CS. Out of around 100 graduates I'd say maybe 5 were reasonable software engineers. The rest would be fine in tech support or other associated trades, but not writing software. Its not just a set of trainable skills, its a set of attitudes and ways of perceiving and understanding that just aren't that common. ..."
"... Yup, rings true. I've been in hi tech for over 40 years and seen the changes. I was in Silicon Valley for 10 years on a startup. India is taking over, my current US company now has a majority Indian executive and is moving work to India. US politicians push coding to drive down wages to Indian levels. ..."
Oct 02, 2017 | www.theguardian.com

This month, millions of children returned to school. This year, an unprecedented number of them will learn to code.

Computer science courses for children have proliferated rapidly in the past few years. A 2016 Gallup report found that 40% of American schools now offer coding classes – up from only 25% a few years ago. New York, with the largest public school system in the country, has pledged to offer computer science to all 1.1 million students by 2025. Los Angeles, with the second largest, plans to do the same by 2020. And Chicago, the fourth largest, has gone further, promising to make computer science a high school graduation requirement by 2018.

The rationale for this rapid curricular renovation is economic. Teaching kids how to code will help them land good jobs, the argument goes. In an era of flat and falling incomes, programming provides a new path to the middle class – a skill so widely demanded that anyone who acquires it can command a livable, even lucrative, wage.

This narrative pervades policymaking at every level, from school boards to the government. Yet it rests on a fundamentally flawed premise. Contrary to public perception, the economy doesn't actually need that many more programmers. As a result, teaching millions of kids to code won't make them all middle-class. Rather, it will proletarianize the profession by flooding the market and forcing wages down – and that's precisely the point.

At its root, the campaign for code education isn't about giving the next generation a shot at earning the salary of a Facebook engineer. It's about ensuring those salaries no longer exist, by creating a source of cheap labor for the tech industry.

As software mediates more of our lives, and the power of Silicon Valley grows, it's tempting to imagine that demand for developers is soaring. The media contributes to this impression by spotlighting the genuinely inspiring stories of those who have ascended the class ladder through code. You may have heard of Bit Source, a company in eastern Kentucky that retrains coalminers as coders. They've been featured by Wired , Forbes , FastCompany , The Guardian , NPR and NBC News , among others.

A former coalminer who becomes a successful developer deserves our respect and admiration. But the data suggests that relatively few will be able to follow their example. Our educational system has long been producing more programmers than the labor market can absorb. A study by the Economic Policy Institute found that the supply of American college graduates with computer science degrees is 50% greater than the number hired into the tech industry each year. For all the talk of a tech worker shortage, many qualified graduates simply can't find jobs.

More tellingly, wage levels in the tech industry have remained flat since the late 1990s. Adjusting for inflation, the average programmer earns about as much today as in 1998. If demand were soaring, you'd expect wages to rise sharply in response. Instead, salaries have stagnated.

Still, those salaries are stagnating at a fairly high level. The Department of Labor estimates that the median annual wage for computer and information technology occupations is $82,860 – more than twice the national average. And from the perspective of the people who own the tech industry, this presents a problem. High wages threaten profits. To maximize profitability, one must always be finding ways to pay workers less.

Tech executives have pursued this goal in a variety of ways. One is collusion – companies conspiring to prevent their employees from earning more by switching jobs. The prevalence of this practice in Silicon Valley triggered a justice department antitrust complaint in 2010, along with a class action suit that culminated in a $415m settlement . Another, more sophisticated method is importing large numbers of skilled guest workers from other countries through the H1-B visa program. These workers earn less than their American counterparts, and possess little bargaining power because they must remain employed to keep their status.

Guest workers and wage-fixing are useful tools for restraining labor costs. But nothing would make programming cheaper than making millions more programmers. And where better to develop this workforce than America's schools? It's no coincidence, then, that the campaign for code education is being orchestrated by the tech industry itself. Its primary instrument is Code.org, a nonprofit funded by Facebook, Microsoft, Google and others . In 2016, the organization spent nearly $20m on training teachers, developing curricula, and lobbying policymakers.

Silicon Valley has been unusually successful in persuading our political class and much of the general public that its interests coincide with the interests of humanity as a whole. But tech is an industry like any other. It prioritizes its bottom line, and invests heavily in making public policy serve it. The five largest tech firms now spend twice as much as Wall Street on lobbying Washington – nearly $50m in 2016. The biggest spender, Google, also goes to considerable lengths to cultivate policy wonks favorable to its interests – and to discipline the ones who aren't.

Silicon Valley is not a uniquely benevolent force, nor a uniquely malevolent one. Rather, it's something more ordinary: a collection of capitalist firms committed to the pursuit of profit. And as every capitalist knows, markets are figments of politics. They are not naturally occurring phenomena, but elaborately crafted contraptions, sustained and structured by the state – which is why shaping public policy is so important. If tech works tirelessly to tilt markets in its favor, it's hardly alone. What distinguishes it is the amount of money it has at its disposal to do so.

Money isn't Silicon Valley's only advantage in its crusade to remake American education, however. It also enjoys a favorable ideological climate. Its basic message – that schools alone can fix big social problems – is one that politicians of both parties have been repeating for years. The far-fetched premise of neoliberal school reform is that education can mend our disintegrating social fabric. That if we teach students the right skills, we can solve poverty, inequality and stagnation. The school becomes an engine of economic transformation, catapulting young people from challenging circumstances into dignified, comfortable lives.

This argument is immensely pleasing to the technocratic mind. It suggests that our core economic malfunction is technical – a simple asymmetry. You have workers on one side and good jobs on the other, and all it takes is training to match them up. Indeed, every president since Bill Clinton has talked about training American workers to fill the "skills gap". But gradually, one mainstream economist after another has come to realize what most workers have known for years: the gap doesn't exist. Even Larry Summers has concluded it's a myth.

The problem isn't training. The problem is there aren't enough good jobs to be trained for . The solution is to make bad jobs better, by raising the minimum wage and making it easier for workers to form a union, and to create more good jobs by investing for growth. This involves forcing business to put money into things that actually grow the productive economy rather than shoveling profits out to shareholders. It also means increasing public investment, so that people can make a decent living doing socially necessary work like decarbonizing our energy system and restoring our decaying infrastructure.

Everyone should have the opportunity to learn how to code. Coding can be a rewarding, even pleasurable, experience, and it's useful for performing all sorts of tasks. More broadly, an understanding of how code works is critical for basic digital literacy – something that is swiftly becoming a requirement for informed citizenship in an increasingly technologized world.

But coding is not magic. It is a technical skill, akin to carpentry. Learning to build software does not make you any more immune to the forces of American capitalism than learning to build a house. Whether a coder or a carpenter, capital will do what it can to lower your wages, and enlist public institutions towards that end.

Silicon Valley has been extraordinarily adept at converting previously uncommodified portions of our common life into sources of profit. Our schools may prove an easy conquest by comparison.

See also:

willyjack, 21 Sep 2017 16:56

"Everyone should have the opportunity to learn how to code. " OK, and that's what's being done. And that's what the article is bemoaning. What would be better: teach them how to change tires or groom pets? Or pick fruit? Amazingly condescending article.

MrFumoFumo , 21 Sep 2017 14:54
However, training lots of people to be coders won't automatically result in lots of people who can actually write good code. Nor will it give managers/recruiters the necessary skills to recognize which programmers are any good.

congenialAnimal -> alfredooo , 24 Sep 2017 09:57

A valid rebuttal but could I offer another observation? Exposing large portions of the school population to coding is not going to magically turn them into coders. It may increase their basic understanding but that is a long way from being a software engineer.

Just as children join art, drama or biology classes so they do not automatically become artists, actors or doctors. I would agree entirely that just being able to code is not going to guarantee the sort of income that might be aspired to. As with all things, it takes commitment, perseverance and dogged determination. I suppose ultimately it becomes the Gattaca argument.

alfredooo -> racole , 24 Sep 2017 06:51
Fair enough, but, his central argument, that an overabundance of coders will drive wages in that sector down, is generally true, so in the future if you want your kids to go into a profession that will earn them 80k+ then being a "coder" is not the route to take. When coding is - like reading, writing, and arithmetic - just a basic skill, there's no guarantee having it will automatically translate into getting a "good" job.
Wiretrip , 21 Sep 2017 14:14
This article lumps everyone in computing into the 'coder' bin, without actually defining what 'coding' is. Yes there is a glut of people who can knock together a bit of HTML and JavaScript, but that is not really programming as such.

There are huge shortages of skilled developers however; people who can apply computer science and engineering in terms of analysis and design of software. These are the real skills for which relatively few people have a true aptitude.

The lack of really good skills is starting to show in some terrible software implementation decisions, such as Slack for example; written as a web app running in Electron (so that JavaScript code monkeys could knock it out quickly), but resulting in awful performance. We will see more of this in the coming years...

Taylor Dotson -> youngsteveo , 21 Sep 2017 13:53
My brother is a programmer, and in his experience these coding exams don't test anything but whether or not you took (and remember) a very narrow range of problems introduce in the first years of a computer science degree. The entire hiring process seems premised on a range of ill-founded ideas about what skills are necessary for the job and how to assess them in people. They haven't yet grasped that those kinds of exams mostly test test-taking ability, rather than intelligence, creativity, diligence, communication ability, or anything else that a job requires beside coughing up the right answer in a stressful, timed environment without outside resources.

The_Raven , 23 Sep 2017 15:45

I'm an embedded software/firmware engineer. Every similar engineer I've ever met has had the same background - starting in electronics and drifting into embedded software writing in C and assembler. It's virtually impossible to do such software without an understanding of electronics. When it goes wrong you may need to get the test equipment out to scope the hardware to see if it's a hardware or software problem. Coming from a pure computing background just isn't going to get you a job in this type of work.
waltdangerfield , 23 Sep 2017 14:42
All schools teach drama and most kids don't end up becoming actors. You need to give all kids access to coding in order for some can go on to make a career out of it.
TwoSugarsPlease , 23 Sep 2017 06:13
Coding salaries will inevitably fall over time, but such skills give workers the option, once they discover that their income is no longer sustainable in the UK, of moving somewhere more affordable and working remotely.
DiGiT81 -> nixnixnix , 23 Sep 2017 03:29
Completely agree. Coding is a necessary life skill for 21st century but there are levels to every skill. From basic needs for an office job to advanced and specialised.
nixnixnix , 23 Sep 2017 00:46
Lots of people can code but very few of us ever get to the point of creating something new that has a loyal and enthusiastic user-base. Everyone should be able to code because it is or will be the basis of being able to create almost anything in the future. If you want to make a game in Unity, knowing how to code is really useful. If you want to work with large data-sets, you can't rely on Excel and so you need to be able to code (in R?). The use of code is becoming so pervasive that it is going to be like reading and writing.

All the science and engineering graduates I know can code but none of them have ever sold a stand-alone software. The argument made above is like saying that teaching everyone to write will drive down the wages of writers. Writing is useful for anyone and everyone but only a tiny fraction of people who can write, actually write novels or even newspaper columns.

DolyGarcia -> Carl Christensen , 22 Sep 2017 19:24
Immigrants have always a big advantage over locals, for any company, including tech companies: the government makes sure that they will stay in their place and never complain about low salaries or bad working conditions because, you know what? If the company sacks you, an immigrant may be forced to leave the country where they live because their visa expires, which is never going to happen with a local. Companies always have more leverage over immigrants. Given a choice between more and less exploitable workers, companies will choose the most exploitable ones.

Which is something that Marx figured more than a century ago, and why he insisted that socialism had to be international, which led to the founding of the First International Socialist. If worker's fights didn't go across country boundaries, companies would just play people from one country against the other. Unfortunately, at some point in time socialists forgot this very important fact.

xxxFred -> Tomix Da Vomix , 22 Sep 2017 18:52
SO what's wrong with having lots of people able to code? The only argument you seem to have is that it'll lower wages. So do you think that we should stop teaching writing skills so that journalists can be paid more? And no one os going to "force" kids into high-level abstract coding practices in kindergarten, fgs. But there is ample empirical proof that young children can learn basic principles. In fact the younger that children are exposed to anything, the better they can enhance their skills adn knowlege of it later in life, and computing concepts are no different.
Tomix Da Vomix -> xxxFred , 22 Sep 2017 18:40
You're completely missing the point. Kids are forced into the programming field (even STEM as a more general term), before they evolve their abstract reasoning. For that matter, you're not producing highly skilled people, but functional imbeciles and a decent labor that will eventually lower the wages.
Conspiracy theory? So Google, FB and others paying hundreds of millions of dollars for forming a cartel to lower the wages is not true? It sounds me that you're sounding more like a 1969 denier that Guardian is. Tech companies are not financing those incentives because they have a good soul. Their primary drive has always been money, otherwise they wouldn't sell your personal data to earn money.

But hey, you can always sleep peacefully when your kid becomes a coder. When he is 50, everyone will want to have a Cobol, Ada programmer with 25 years of experience when you can get 16 year old kid from a high school for 1/10 of a price. Go back to sleep...

Carl Christensen -> xxxFred , 22 Sep 2017 16:49
it's ridiculous because even out of a pool of computer science B.Sc. or M.Sc. grads - companies are only interested in the top 10%. Even the most mundane company with crappy IT jobs swears that they only hire "the best and the brightest."
Carl Christensen , 22 Sep 2017 16:47
It's basically a con-job by the big Silicon Valley companies offshoring as many US jobs as they can, or "inshoring" via exploitation of the H1B visa - so they can say "see, we don't have 'qualified' people in the US - maybe when these kids learn to program in a generation." As if American students haven't been coding for decades -- and saw their salaries plummet as the H1B visa and Indian offshore firms exploded......
Declawed -> KDHughes , 22 Sep 2017 16:40
Dude, stow the attitude. I've tested code from various entities, and seen every kind of crap peddled as gold.

But I've also seen a little 5-foot giggly lady with two kids, grumble a bit and save a $100,000 product by rewriting another coder's man-month of work in a few days, without any flaws or cracks. Almost nobody will ever know she did that. She's so far beyond my level it hurts.

And yes, the author knows nothing. He's genuinely crying wolf while knee-deep in amused wolves. The last time I was in San Jose, years ago , the room was already full of people with Indian surnames. If the problem was REALLY serious, a programmer from POLAND was called in.

If you think fighting for a violinist spot is hard, try fighting for it with every spare violinist in the world . I am training my Indian replacement to do my job right now . At least the public can appreciate a good violin. Can you appreciate Duff's device ?

So by all means, don't teach local kids how to think in a straight line, just in case they make a dent in the price of wages IN INDIA.... *sheesh*

Declawed -> IanMcLzzz , 22 Sep 2017 15:35
That's the best possible summarisation of this extremely dumb article. Bravo.

For those who don't know how to think of coding, like the article author, here's a few analogies :

A computer is a box that replays frozen thoughts, quickly. That is all.

Coding is just the art of explaining. Anyone who can explain something patiently and clearly, can code. Anyone who can't, can't.

Making hardware is very much like growing produce while blind. Making software is very much like cooking that produce while blind.

Imagine looking after a room full of young eager obedient children who only do exactly, *exactly*, what you told them to do, but move around at the speed of light. Imagine having to try to keep them from smashing into each other or decapitating themselves on the corners of tables, tripping over toys and crashing into walls, etc, while you get them all to play games together.

The difference between a good coder and a bad coder is almost life and death. Imagine a broth prepared with ingredients from a dozen co-ordinating geniuses and one idiot, that you'll mass produce. The soup is always far worse for the idiot's additions. The more cooks you involve, the more chance your mass produced broth will taste bad.

People who hire coders, typically can't tell a good coder from a bad coder.

Zach Dyer -> Mystik Al , 22 Sep 2017 15:18
Tech jobs will probably always be available long after your gone or until another mass extinction.
edmundberk -> AmyInNH , 22 Sep 2017 14:59
No you do it in your own time. If you're not prepared to put in long days IT is not for you in any case. It was ever thus, but more so now due to offshoring - rather than the rather obscure forces you seem to believe are important.
WithoutPurpose -> freeandfair , 22 Sep 2017 13:21
Bit more rhan that.
peter nelson -> offworldguy , 22 Sep 2017 12:44
Sorry, offworldguy, but you're losing this one really badly. I'm a professional software engineer in my 60's and I know lots of non-professionals in my age range who write little programs, scripts and apps for fun. I know this because they often contact me for help or advice.

So you've now been told by several people in this thread that ordinary people do code for fun or recreation. The fact that you don't know any probably says more about your network of friends and acquaintances than about the general population.

xxxFred , 22 Sep 2017 12:18
This is one of the daftest articles I've come across in a long while.
If it's possible that so many kids can be taught to code well enough so that wages come down, then that proves that the only reason we've been paying so much for development costs is the scarcity of people able to do it, not that it's intrinsically so hard that only a select few could anyway. In which case, there is no ethical argument for keeping the pools of skilled workers to some select group. Anyone able to do it should have an equal opportunity to do it.
What is the argument for not teaching coding (other than to artificially keep wages high)? Why not stop teaching the three R's, in order to boost white-collar wages in general?
Computing is an ever-increasingly intrinsic part of life, and people need to understand it at all levels. It is not just unfair, but tantamount to neglect, to fail to teach children all the skills they may require to cope as adults.
Having said that, I suspect that in another generation or two a good many lower-level coding jobs will be redundant anyway, with such code being automatically generated, and "coders" at this level will be little more than technicians setting various parameters. Even so, understanding the basics behind computing is a part of understanding the world they live in, and every child needs that.
Suggesting that teaching coding is some kind of conspiracy to force wages down is well, it makes the moon-landing conspiracy looks sensible by comparison.
timrichardson -> offworldguy , 22 Sep 2017 12:16
I think it is important to demystify advanced technology, I think that has importance in its own right.Plus, schools should expose kids to things which may spark their interest. Not everyone who does a science project goes on years later to get a PhD, but you'd think that it makes it more likely. Same as giving a kid some music lessons. There is a big difference between serious coding and the basic steps needed to automate a customer service team or a marketing program, but the people who have some mastery over automation will have an advantage in many jobs. Advanced machines are clearly going to be a huge part of our future. What should we do about it, if not teach kids how to understand these tools?
rogerfederere -> William Payne , 22 Sep 2017 12:13
tl;dr.
Mystik Al , 22 Sep 2017 12:08
As automation is about to put 40% of the workforce permanently out of work getting into to tech seems like a good idea!
timrichardson , 22 Sep 2017 12:04
This is like arguing that teaching kids to write is nothing more than a plot to flood the market for journalists. Teaching first aid and CPR does not make everyone a doctor.
Coding is an essential skill for many jobs already: 50 years ago, who would have thought you needed coders to make movies? Being a software engineer, a serious coder, is hard. IN fact, it takes more than technical coding to be a software engineer: you can learn to code in a week. Software Engineering is a four year degree, and even then you've just started a career. But depriving kids of some basic insights may mean they won't have the basic skills needed in the future, even for controlling their car and house. By all means, send you kids to a school that doesn't teach coding. I won't.
James Jones -> vimyvixen , 22 Sep 2017 11:41
Did you learn SNOBOL, or is Snowball a language I'm not familiar with? (Entirely possible, as an American I never would have known Extended Mercury Autocode existed we're it not for a random book acquisition at my home town library when I was a kid.)
William Payne , 22 Sep 2017 11:17
The tide that is transforming technology jobs from "white collar professional" into "blue collar industrial" is part of a larger global economic cycle.

Successful "growth" assets inevitably transmogrify into "value" and "income" assets as they progress through the economic cycle. The nature of their work transforms also. No longer focused on innovation; on disrupting old markets or forging new ones; their fundamental nature changes as they mature into optimising, cost reducing, process oriented and most importantly of all -- dividend paying -- organisations.

First, the market invests. And then, .... it squeezes.

Immature companies must invest in their team; must inspire them to be innovative so that they can take the creative risks required to create new things. This translates into high skills, high wages and "white collar" social status.

Mature, optimising companies on the other hand must necessarily avoid risks and seek variance-minimising predictability. They seek to control their human resources; to eliminate creativity; to to make the work procedural, impersonal and soulless. This translates into low skills, low wages and "blue collar" social status.

This is a fundamental part of the economic cycle; but it has been playing out on the global stage which has had the effect of hiding some of its' effects.

Over the past decades, technology knowledge and skills have flooded away from "high cost" countries and towards "best cost" countries at a historically significant rate. Possibly at the maximum rate that global infrastructure and regional skills pools can support. Much of this necessarily inhumane and brutal cost cutting and deskilling has therefore been hidden by the tide of outsourcing and offshoring. It is hard to see the nature of the jobs change when the jobs themselves are changing hands at the same time.

The ever tighter ratchet of dehumanising industrialisation; productivity and efficiency continues apace, however, and as our global system matures and evens out, we see the seeds of what we have sown sail home from over the sea.

Technology jobs in developed nations have been skewed towards "growth" activities since for the past several decades most "value" and "income" activities have been carried out in developing nations. Now, we may be seeing the early preparations for the diffusion of that skewed, uneven and unsustainable imbalance.

The good news is that "Growth" activities are not going to disappear from the world. They just may not be so geographically concentrated as they are today. Also, there is a significant and attention-worthy argument that the re-balancing of skills will result in a more flexible and performant global economy as organisations will better be able to shift a wider variety of work around the world to regions where local conditions (regulation, subsidy, union activity etc...) are supportive.

For the individuals concerned it isn't going to be pretty. And of course it is just another example of the race to the bottom that pits states and public sector purse-holders against one another to win the grace and favour of globally mobile employers.

As a power play move it has a sort of inhumanly psychotic inevitability to it which is quite awesome to observe.

I also find it ironic that the only way to tame the leviathan that is the global free-market industrial system might actually be effective global governance and international cooperation within a rules-based system.

Both "globalist" but not even slightly both the same thing.

Vereto -> Wiretrip , 22 Sep 2017 11:17
not just coders, it put even IT Ops guys into this bin. Basically good old - so you are working with computers sentence I used to hear a lot 10-15 years ago.
Sangmin , 22 Sep 2017 11:15
You can teach everyone how to code but it doesn't necessarily mean everyone will be able to work as one. We all learn math but that doesn't mean we're all mathematicians. We all know how to write but we're not all professional writers.

I have a graduate degree in CS and been to a coding bootcamp. Not everyone's brain is wired to become a successful coder. There is a particular way how coders think. Quality of a product will stand out based on these differences.

Vereto -> Jared Hall , 22 Sep 2017 11:12
Very hyperbolic is to assume that the profit in those companies is done by decreasing wages. In my company the profit is driven by ability to deliver products to the market. And that is limited by number of top people (not just any coder) you can have.
KDHughes -> kcrane , 22 Sep 2017 11:06
You realise that the arts are massively oversupplied and that most artists earn very little, if anything? Which is sort of like the situation the author is warning about. But hey, he knows nothing. Congratulations, though, on writing one of the most pretentious posts I've ever read on CIF.
offworldguy -> Melissa Boone , 22 Sep 2017 10:21
So you know kids, college age people and software developers who enjoy doing it in their leisure time? Do you know any middle aged mothers, fathers, grandparents who enjoy it and are not software developers?

Sorry, I don't see coding as a leisure pursuit that is going to take off beyond a very narrow demographic and if it becomes apparent (as I believe it will) that there is not going to be a huge increase in coding job opportunities then it will likely wither in schools too, perhaps replaced by music lessons.

Bread Eater , 22 Sep 2017 10:02
From their perspective yes. But there are a lot of opportunities in tech so it does benefit students looking for jobs.
Melissa Boone -> jamesbro , 22 Sep 2017 10:00
No, because software developer probably fail more often than they succeed. Building anything worthwhile is an iterative process. And it's not just the compiler but the other devs, oyur designer, your PM, all looking at your work.
Melissa Boone -> peterainbow , 22 Sep 2017 09:57
It's not shallow or lazy. I also work at a tech company and it's pretty common to do that across job fields. Even in HR marketing jobs, we hire students who can't point to an internship or other kind of experience in college, not simply grades.
Vereto -> savingUK , 22 Sep 2017 09:50
It will take ages, the issue of Indian programmers is in the education system and in "Yes boss" culture.

But on the other hand most of Americans are just as bad as Indians

Melissa Boone -> offworldguy , 22 Sep 2017 09:50
A lot of people do find it fun. I know many kids - high school and young college age - who code in the leisure time because they find it pleasurable to make small apps and video games. I myself enjoy it too. Your argument is like saying since you don't like to read books in your leisure time, nobody else must.

The point is your analogy isn't a good one - people who learn to code can not only enjoy it in their spare time just like music, but they can also use it to accomplish all kinds of basic things. I have a friend who's a software developer who has used code to program his Roomba to vacuum in a specific pattern and to play Candy Land with his daughter when they lost the spinner.

Owlyrics -> CapTec , 22 Sep 2017 09:44
Creativity could be added to your list. Anyone can push a button but only a few can invent a new one.
One company in the US (after it was taken over by a new owner) decided it was more profitable to import button pushers from off-shore, they lost 7 million customers (gamers) and had to employ more of the original American developers to maintain their high standard and profits.
Owlyrics -> Maclon , 22 Sep 2017 09:40
Masters is the new Bachelors.
Maclon , 22 Sep 2017 09:22
So similar to 500k a year people going to university ( UK) now when it used to be 60k people a year( 1980). There was never enough graduate jobs in 1980 so can't see where the sudden increase in need for graduates has come from.
PaulDavisTheFirst -> Ethan Hawkins , 22 Sep 2017 09:17

They aren't really crucial pieces of technology except for their popularity

It's early in the day for me, but this is the most ridiculous thing I've read so far, and I suspect it will be high up on the list by the end of the day.

There's no technology that is "crucial" unless it's involved in food, shelter or warmth. The rest has its "crucialness" decided by how widespread its use is, and in the case of those 3 languages, the answer is "very".

You (or I) might not like that very much, but that's how it is.

Julian Williams -> peter nelson , 22 Sep 2017 09:12
My benchmark would be if the average new graduate in the discipline earns more or less than one of the "professions", Law, medicine, Economics etc. The short answer is that they don't. Indeed, in my experience of professions, many good senior SW developers, say in finance, are paid markedly less than the marketing manager, CTO etc. who are often non-technical.

My benchmark is not "has a car, house etc." but what does 10, 15 20 years of experience in the area generate as a relative income to another profession, like being a GP or a corporate solicitor or a civil servant (which is usually the benchmark academics use for pay scaling). It is not to denigrate, just to say that markets don't always clear to a point where the most skilled are the highest paid.

I was also suggesting that even if you are not intending to work in the SW area, being able to translate your imagination into a program that reflects your ideas is a nice life skill.

AmyInNH -> freeandfair , 22 Sep 2017 09:05
Your assumption has no basis in reality. In my experience, as soon as Clinton ramped up H1Bs, my employer would invite 6 same college/degree/curriculum in for interviews, 5 citizen, 1 foreign student and default offer to foreign student without asking interviewers a single question about the interview. Eventually, the skipped the farce of interviewing citizens all together. That was in 1997, and it's only gotten worse. Wall St's been pretty blunt lately. Openly admits replacing US workers for import labor, as it's the "easiest" way to "grow" the economy, even though they know they are ousting citizens from their jobs to do so.
AmyInNH -> peter nelson , 22 Sep 2017 08:59
"People who get Masters and PhD's in computer science" Feed western universities money, for degree programs that would otherwise not exist, due to lack of market demand. "someone has a Bachelor's in CS" As citizens, having the same college/same curriculum/same grades, as foreign grad. But as citizens, they have job market mobility, and therefore are shunned. "you can make something real and significant on your own" If someone else is paying your rent, food and student loans while you do so.
Ethan Hawkins -> farabundovive , 22 Sep 2017 07:40
While true, it's not the coders' fault. The managers and execs above them have intentionally created an environment where these things are secondary. What's primary is getting the stupid piece of garbage out the door for Q profit outlook. Ship it amd patch it.
offworldguy -> millartant , 22 Sep 2017 07:38
Do most people find it fun? I can code. I don't find it 'fun'. Thirty years ago as a young graduate I might have found it slightly fun but the 'fun' wears off pretty quick.
Ethan Hawkins -> anticapitalist , 22 Sep 2017 07:35
In my estimation PHP is an utter abomination. Python is just a little better but still very bad. Ruby is a little better but still not at all good.

Languages like PHP, Python and JS are popular for banging out prototypes and disposable junk, but you greatly overestimate their importance. They aren't really crucial pieces of technology except for their popularity and while they won't disappear they won't age well at all. Basically they are big long-lived fads. Java is now over 20 years old and while Java 8 is not crucial, the JVM itself actually is crucial. It might last another 20 years or more. Look for more projects like Ceylon, Scala and Kotlin. We haven't found the next step forward yet, but it's getting more interesting, especially around type systems.

A strong developer will be able to code well in a half dozen languages and have fairly decent knowledge of a dozen others. For me it's been many years of: Z80, x86, C, C++, Java. Also know some Perl, LISP, ANTLR, Scala, JS, SQL, Pascal, others...

millartant -> Islingtonista , 22 Sep 2017 07:26
You need a decent IDE
millartant -> offworldguy , 22 Sep 2017 07:24

One is hardly likely to 'do a bit of coding' in ones leisure time

Why not? The right problem is a fun and rewarding puzzle to solve. I spend a lot of my leisure time "doing a bit of coding"

Ethan Hawkins -> Wiretrip , 22 Sep 2017 07:12
The worst of all are the academics (on average).
Ethan Hawkins -> KatieL , 22 Sep 2017 07:09
This makes people like me with 35 years of experience shipping products on deadlines up and down every stack (from device drivers and operating systems to programming languages, platforms and frameworks to web, distributed computing, clusters, big data and ML) so much more valuable. Been there, done that.
Ethan Hawkins -> Taylor Dotson , 22 Sep 2017 07:01
It's just not true. In SV there's this giant vacuum created by Apple, Google, FB, etc. Other good companies struggle to fill positions. I know from being on the hiring side at times.
TheBananaBender -> peter nelson , 22 Sep 2017 07:00
You don't work for a major outsourcer then like Serco, Atos, Agilisys
offworldguy -> LabMonkey , 22 Sep 2017 06:59
Plenty of people? I don't know of a single person outside of my work which is teaming with programmers. Not a single friend, not my neighbours, not my wife or her extended family, not my parents. Plenty of people might do it but most people don't.
Ethan Hawkins -> finalcentury , 22 Sep 2017 06:56
Your ignorance of coding is showing. Coding IS creative.
Ricardo111 -> peter nelson , 22 Sep 2017 06:56
Agreed: by gifted I did not meant innate. It's more of a mix of having the interest, the persistence, the time, the opportunity and actually enjoying that kind of challenge.

While some of those things are to a large extent innate personality traits, others are not and you don't need max of all of them, you just need enough to drive you to explore that domain.

That said, somebody that goes into coding purelly for the money and does it for the money alone is extremely unlikelly to become an exceptional coder.

Ricardo111 -> eirsatz , 22 Sep 2017 06:50
I'm as senior as they get and have interviewed quite a lot of programmers for several positions, including for Technical Lead (in fact, to replace me) and so far my experience leads me to believe that people who don't have a knack for coding are much less likely to expose themselves to many different languages and techniques, and also are less experimentalist, thus being far less likely to have those moments of transcending merely being aware of the visible and obvious to discover the concerns and concepts behind what one does. Without those moments that open the door to the next Universe of concerns and implications, one cannot do state transitions such as Coder to Technical Designer or Technical Designer to Technical Architect.

Sure, you can get the title and do the things from the books, but you will not get WHY are those things supposed to work (and when they will not work) and thus cannot adjust to new conditions effectively and will be like a sailor that can't sail away from sight of the coast since he can't navigate.

All this gets reflected in many things that enhance productivity, from the early ability to quickly piece together solutions for a new problem out of past solutions for different problems to, later, conceiving software architecture designs fittted to the typical usage pattern in the industry for which the software is going to be made.

LabMonkey , 22 Sep 2017 06:50
From the way our IT department is going, needing millions of coders is not the future. It'll be a minority of developers at the top, and an army of low wage monkeys at the bottom who can troubleshoot from a script - until AI comes along that can code faster and more accurately.
LabMonkey -> offworldguy , 22 Sep 2017 06:46

One is hardly likely to 'do a bit of coding' in ones leisure time

Really? I've programmed a few simple videogames in my spare time. Plenty of people do.

CapTec , 22 Sep 2017 06:29
Interesting piece that's fundamentally flawed. I'm a software engineer myself. There is a reason a University education of a minimum of three years is the base line for a junior developer or 'coder'.

Software engineering isn't just writing code. I would say 80% of my time is spent designing and structuring software before I even touch the code.

Explaining software engineering as a discipline at a high level to people who don't understand it is simple.

Most of us who learn to drive learn a few basics about the mechanics of a car. We know that brake pads need to be replaced, we know that fuel is pumped into an engine when we press the gas pedal. Most of us know how to change a bulb if it blows.

The vast majority of us wouldn't be able to replace a head gasket or clutch though. Just knowing the basics isn't enough to make you a mechanic.

Studying in school isn't enough to produce software engineers. Software engineering isn't just writing code, it's cross discipline. We also need to understand the science behind the computer, we need too understand logic, data structures, timings, how to manage memory, security, how databases work etc.

A few years of learning at school isn't nearly enough, a degree isn't enough on its own due to the dynamic and ever evolving nature of software engineering. Schools teach technology that is out of date and typically don't explain the science very well.

This is why most companies don't want new developers, they want people with experience and multiple skills.

Programming is becoming cool and people think that because of that it's easy to become a skilled developer. It isn't. It takes time and effort and most kids give up.

French was on the national curriculum when I was at school. Most people including me can't hold a conversation in French though.

Ultimately there is a SKILL shortage. And that's because skill takes a long time, successes and failures to acquire. Most people just give up.

This article is akin to saying 'schools are teaching basic health to reduce the wages of Doctors'. It didn't happen.

offworldguy -> thecurio , 22 Sep 2017 06:19
There is a difference. When you teach people music you teach a skill that can be used for a lifetimes enjoyment. One might sit at a piano in later years and play. One is hardly likely to 'do a bit of coding' in ones leisure time.

The other thing is how good are people going to get at coding and how long will they retain the skill if not used? I tend to think maths is similar to coding and most adults have pretty terrible maths skills not venturing far beyond arithmetic. Not many remember how to solve a quadratic equation or even how to rearrange some algebra.

One more thing is we know that if we teach people music they will find a use for it, if only in their leisure time. We don't know that coding will be in any way useful because we don't know if there will be coding jobs in the future. AI might take over coding but we know that AI won't take over playing piano for pleasure.

If we want to teach logical thinking then I think maths has always done this and we should make sure people are better at maths.

Alex Mackaness , 22 Sep 2017 06:08
Am I missing something here? Being able to code is a skill that is a useful addition to the skill armoury of a youngster entering the work place. Much like reading, writing, maths... Not only is it directly applicable and pervasive in our modern world, it is built upon logic.

The important point is that American schools are not ONLY teaching youngsters to code, and producing one dimensional robots... instead coding makes up one part of their overall skill set. Those who wish to develop their coding skills further certainly can choose to do so. Those who specialise elsewhere are more than likely to have found the skills they learnt whilst coding useful anyway.

I struggle to see how there is a hidden capitalist agenda here. I would argue learning the basics of coding is simply becoming seen as an integral part of the school curriculum.

thecurio , 22 Sep 2017 05:56
The word "coding" is shorthand for "computer programming" or "software development" and it masks the depth and range of skills that might be required, depending on the application.

This subtlety is lost, I think, on politicians and perhaps the general public. Asserting that teaching lots of people to code is a sneaky way to commodotise an industry might have some truth to it, but remember that commodotisation (or "sharing and re-use" as developers might call it) is nothing new. The creation of freely available and re-usable software components and APIs has driven innovation, and has put much power in the hands of developers who would not otherwise have the skill or time to tackle such projects.

There's nothing to fear from teaching more people to "code", just as there's nothing to fear from teaching more people to "play music". These skills simply represent points on a continuum.

There's room for everyone, from the kid on a kazoo all the way to Coltrane at the Village Vanguard.

sbw7 -> ragingbull , 22 Sep 2017 05:44
I taught CS. Out of around 100 graduates I'd say maybe 5 were reasonable software engineers. The rest would be fine in tech support or other associated trades, but not writing software. Its not just a set of trainable skills, its a set of attitudes and ways of perceiving and understanding that just aren't that common.
offworldguy , 22 Sep 2017 05:02
I can't understand the rush to teach coding in schools. First of all I don't think we are going to be a country of millions of coders and secondly if most people have the skills then coding is hardly going to be a well paid job. Thirdly you can learn coding from scratch after school like people of my generation did. You could argue that it is part of a well rounded education but then it is as important for your career as learning Shakespeare, knowing what an oxbow lake is or being able to do calculus: most jobs just won't need you to know.
savingUK -> yannick95 , 22 Sep 2017 04:35
While you roll on the floor laughing, these countries will slowly but surely get their act together. That is how they work. There are top quality coders over there and they will soon promoted into a position to organise the others.

You are probably too young to remember when people laughed at electronic products when they were made in Japan then Taiwan. History will repeat it's self.

zii000 -> JohnFreidburg , 22 Sep 2017 04:04
Yes it's ironic and no different here in the UK. Traditionally Labour was the party focused on dividing the economic pie more fairly, Tories on growing it for the benefit of all. It's now completely upside down with Tories paying lip service to the idea of pay rises but in reality supporting this deflationary race to the bottom, hammering down salaries and so shrinking discretionary spending power which forces price reductions to match and so more pressure on employers to cut costs ... ad infinitum.
Labour now favour policies which would cause an expansion across the entire economy through pay rises and dramatically increased investment with perhaps more tolerance of inflation to achieve it.
ID0193985 -> jamesbro , 22 Sep 2017 03:46
Not surprising if they're working for a company that is cold-calling people - which should be banned in my opinion. Call centres providing customer support are probably less abuse-heavy since the customer is trying to get something done.
vimyvixen , 22 Sep 2017 02:04
I taught myself to code in 1974. Fortran, COBOL were first. Over the years as a aerospace engineer I coded in numerous languages ranging from PLM, Snowball, Basic, and more assembly languages than I can recall, not to mention deep down in machine code on more architectures than most know even existed. Bottom line is that coding is easy. It doesn't take a genius to code, just another way of thinking. Consider all the bugs in the software available now. These "coders", not sufficiently trained need adult supervision by engineers who know what they are doing for computer systems that are important such as the electrical grid, nuclear weapons, and safety critical systems. If you want to program toy apps then code away, if you want to do something important learn engineering AND coding.
Dwight Spencer , 22 Sep 2017 01:44
Laughable. It takes only an above-average IQ to code. Today's coders are akin to the auto mechanics of the 1950s where practically every high school had auto shop instruction . . . nothing but a source of cheap labor for doing routine implementations of software systems using powerful code libraries built by REAL software engineers.
sieteocho -> Islingtonista , 22 Sep 2017 01:19
That's a bit like saying that calculus is more valuable than arithmetic, so why teach children arithmetic at all?

Because without the arithmetic, you're not going to get up to the calculus.

JohnFreidburg -> Tommyward , 22 Sep 2017 01:15
I disagree. Technology firms are just like other firms. Why then the collusion not to pay more to workers coming from other companies? To believe that they are anything else is naive. The author is correct. We need policies that actually grow the economy and not leaders who cave to what the CEOs want like Bill Clinton did. He brought NAFTA at the behest of CEOs and all it ended up doing was ripping apart the rust belt and ushering in Trump.
Tommyward , 22 Sep 2017 00:53
So the media always needs some bad guys to write about, and this month they seem to have it in for the tech industry. The article is BS. I interview a lot of people to join a large tech company, and I can guarantee you that we aren't trying to find cheaper labor, we're looking for the best talent.

I know that lots of different jobs have been outsourced to low cost areas, but these days the top companies are instead looking for the top talent globally.

I see this article as a hit piece against Silicon Valley, and it doesn't fly in the face of the evidence.

finalcentury , 22 Sep 2017 00:46
This has got to be the most cynical and idiotic social interest piece I have ever read in the Guardian. Once upon a time it was very helpful to learn carpentry and machining, but now, even if you are learning those, you will get a big and indispensable headstart if you have some logic and programming skills. The fact is, almost no matter what you do, you can apply logic and programming skills to give you an edge. Even journalists.
hoplites99 , 22 Sep 2017 00:02
Yup, rings true. I've been in hi tech for over 40 years and seen the changes. I was in Silicon Valley for 10 years on a startup. India is taking over, my current US company now has a majority Indian executive and is moving work to India. US politicians push coding to drive down wages to Indian levels.

On the bright side I am old enough and established enough to quit tomorrow, its someone else's problem, but I still despise those who have sold us out, like the Clintons, the Bushes, the Googoids, the Zuckerboids.

liberalquilt -> yannick95 , 21 Sep 2017 23:45
Sure markets existed before governments, but capitalism didn't, can't in fact. It needs the organs of state, the banking system, an education system, and an infrastructure.
thegarlicfarmer -> canprof , 21 Sep 2017 23:36
Then teach them other things but not coding! Here in Australia every child of school age has to learn coding. Now tell me that everyone of them will need it? Look beyond computers as coding will soon be automated just like every other job.
Islingtonista , 21 Sep 2017 22:25
If you have never coded then you will not appreciate how labour intensive it is. Coders effectively use line editors to type in, line by line, the instructions. And syntax is critical; add a comma when you meant a semicolon and the code doesn't work properly. Yeah, we use frameworks and libraries of already written subroutines, but, in the end, it is all about manually typing in the code.

Which is an expensive way of doing things (hence the attractions of 'off-shoring' the coding task to low cost economies in Asia).

And this is why teaching kids to code is a waste of time.

Already, AI based systems are addressing the task of interpreting high level design models and simply generating the required application.

One of the first uses templates and a smart chatbot to enable non-tech business people to build their websites. By describe in non-coding terms what they want, the chatbot is able to assemble the necessary components and make the requisite template amendments to build a working website.

Much cheaper than hiring expensive coders to type it all in manually.

It's early days yet, but coding may well be one of the big losers to AI automation along with all those back office clerical jobs.

Teaching kids how to think about design rather than how to code would be much more valuable.

jamesbro -> peter nelson , 21 Sep 2017 21:31
Thick-skinned? Just because you might get a few error messages from the compiler? Call centre workers have to put up with people telling them to fuck off eight hours a day.
Joshua Ian Lee , 21 Sep 2017 21:03
Spot on. Society will never need more than 1% of its people to code. We will need far more garbage men. There are only so many (relatively) good jobs to go around and its about competing to get them.
canprof , 21 Sep 2017 20:53
I'm a professor (not of computer science) and yet, I try to give my students a basic understanding of algorithms and logic, to spark an interest and encourage them towards programming. I have no skin in the game, except that I've seen unemployment first-hand, and want them to avoid it. The best chance most of them have is to learn to code.
Evelita , 21 Sep 2017 14:35
Educating youth does not drive wages down. It drives our economy up. China, India, and other countries are training youth in programming skills. Educating our youth means that they will be able to compete globally. This is the standard GOP stand that we don't need to educate our youth, but instead fantasize about high-paying manufacturing jobs miraculously coming back.

Many jobs, including new manufacturing jobs have an element of coding because they are automated. Other industries require coding skills to maintain web sites and keep computer systems running. Learning coding skills opens these doors.

Coding teaches logic, an essential thought process. Learning to code, like learning anything, increases the brains ability to adapt to new environments which is essential to our survival as a species. We must invest in educating our youth.

cwblackwell , 21 Sep 2017 13:38
"Contrary to public perception, the economy doesn't actually need that many more programmers." This really looks like a straw man introducing a red herring. A skill can be extremely valuable for those who do not pursue it as a full time profession.

The economy doesn't actually need that many more typists, pianists, mathematicians, athletes, dietitians. So, clearly, teaching typing, the piano, mathematics, physical education, and nutrition is a nefarious plot to drive down salaries in those professions. None of those skills could possibly enrich the lives or enhance the productivity of builders, lawyers, public officials, teachers, parents, or store managers.

DJJJJJC , 21 Sep 2017 14:23

A study by the Economic Policy Institute found that the supply of American college graduates with computer science degrees is 50% greater than the number hired into the tech industry each year.

You're assuming that all those people are qualified to work in software because they have a piece of paper that says so, but that's not a valid assumption. The quality of computer science degree courses is generally poor, and most people aren't willing or able to teach themselves. Universities are motivated to award degrees anyway because if they only awarded degrees to students who are actually qualified then that would reflect very poorly on their quality of teaching.

A skills shortage doesn't mean that everyone who claims to have a skill gets hired and there are still some jobs left over that aren't being done. It means that employers are forced to hire people who are incompetent in order to fill all their positions. Many people who get jobs in programming can't really do it and do nothing but create work for everyone else. That's why most of the software you use every day doesn't work properly. That's why competent programmers' salaries are still high in spite of the apparently large number of "qualified" people who aren't employed as programmers.

[Oct 01, 2017] Neoliberalism Is a Political Project

Notable quotes:
"... I've always treated neoliberalism as a political project carried out by the corporate capitalist class as they felt intensely threatened both politically and economically towards the end of the 1960s into the 1970s. They desperately wanted to launch a political project that would curb the power of labor. ..."
"... In many respects the project was a counterrevolutionary project. It would nip in the bud what, at that time, were revolutionary movements in much of the developing world ..."
"... So in that situation there was, in effect, a global threat to the power of the corporate capitalist class and therefore the question was, What to do?. The ruling class wasn't omniscient but they recognized that there were a number of fronts on which they had to struggle: the ideological front, the political front, and above all they had to struggle to curb the power of labor by whatever means possible. Out of this there emerged a political project which I would call neoliberalism. ..."
"... The ideological front amounted to following the advice of a guy named Lewis Powell . He wrote a memo saying that things had gone too far, that capital needed a collective project. The memo helped mobilize the Chamber of Commerce and the Business Roundtable. ..."
"... Ideas were also important to the ideological front. The judgment at that time was that universities were impossible to organize because the student movement was too strong and the faculty too liberal-minded, so they set up all of these think tanks like the Manhattan Institute, the Heritage Foundation, the Ohlin Foundation. These think tanks brought in the ideas of Freidrich Hayek and Milton Friedman and supply-side economics. ..."
"... This process took a long time. I think now we've reached a point where you don't need something like the Heritage Foundation anymore. Universities have pretty much been taken over by the neoliberal projects surrounding them. ..."
"... With respect to labor, the challenge was to make domestic labor competitive with global labor. One way was to open up immigration. In the 1960s, for example, Germans were importing Turkish labor, the French Maghrebian labor, the British colonial labor. But this created a great deal of dissatisfaction and unrest. ..."
"... Instead they chose the other way -- to take capital to where the low-wage labor forces were. But for globalization to work you had to reduce tariffs and empower finance capital, because finance capital is the most mobile form of capital. So finance capital and things like floating currencies became critical to curbing labor. ..."
"... At the same time, ideological projects to privatize and deregulate created unemployment. So, unemployment at home and offshoring taking the jobs abroad, and a third component: technological change , deindustrialization through automation and robotization. That was the strategy to squash labor. ..."
"... It was an ideological assault but also an economic assault. To me this is what neoliberalism was about: it was that political project ..."
"... I think they just intuitively said, We gotta crush labor, how do we do it? And they found that there was a legitimizing theory out there, which would support that. ..."
Oct 01, 2017 | www.jacobinmag.com

I've always treated neoliberalism as a political project carried out by the corporate capitalist class as they felt intensely threatened both politically and economically towards the end of the 1960s into the 1970s. They desperately wanted to launch a political project that would curb the power of labor.

In many respects the project was a counterrevolutionary project. It would nip in the bud what, at that time, were revolutionary movements in much of the developing world -- Mozambique, Angola, China etc. -- but also a rising tide of communist influences in countries like Italy and France and, to a lesser degree, the threat of a revival of that in Spain.

Even in the United States, trade unions had produced a Democratic Congress that was quite radical in its intent. In the early 1970s they, along with other social movements, forced a slew of reforms and reformist initiatives which were anti-corporate: the Environmental Protection Agency , the Occupational Safety and Health Administration, consumer protections, and a whole set of things around empowering labor even more than it had been empowered before.

So in that situation there was, in effect, a global threat to the power of the corporate capitalist class and therefore the question was, What to do?. The ruling class wasn't omniscient but they recognized that there were a number of fronts on which they had to struggle: the ideological front, the political front, and above all they had to struggle to curb the power of labor by whatever means possible. Out of this there emerged a political project which I would call neoliberalism.

BSR Can you talk a bit about the ideological and political fronts and the attacks on labor? DH The ideological front amounted to following the advice of a guy named Lewis Powell . He wrote a memo saying that things had gone too far, that capital needed a collective project. The memo helped mobilize the Chamber of Commerce and the Business Roundtable.

Ideas were also important to the ideological front. The judgment at that time was that universities were impossible to organize because the student movement was too strong and the faculty too liberal-minded, so they set up all of these think tanks like the Manhattan Institute, the Heritage Foundation, the Ohlin Foundation. These think tanks brought in the ideas of Freidrich Hayek and Milton Friedman and supply-side economics.

The idea was to have these think tanks do serious research and some of them did -- for instance, the National Bureau of Economic Research was a privately funded institution that did extremely good and thorough research. This research would then be published independently and it would influence the press and bit by bit it would surround and infiltrate the universities.

This process took a long time. I think now we've reached a point where you don't need something like the Heritage Foundation anymore. Universities have pretty much been taken over by the neoliberal projects surrounding them.

With respect to labor, the challenge was to make domestic labor competitive with global labor. One way was to open up immigration. In the 1960s, for example, Germans were importing Turkish labor, the French Maghrebian labor, the British colonial labor. But this created a great deal of dissatisfaction and unrest.

Instead they chose the other way -- to take capital to where the low-wage labor forces were. But for globalization to work you had to reduce tariffs and empower finance capital, because finance capital is the most mobile form of capital. So finance capital and things like floating currencies became critical to curbing labor.

At the same time, ideological projects to privatize and deregulate created unemployment. So, unemployment at home and offshoring taking the jobs abroad, and a third component: technological change , deindustrialization through automation and robotization. That was the strategy to squash labor.

It was an ideological assault but also an economic assault. To me this is what neoliberalism was about: it was that political project, and I think the bourgeoisie or the corporate capitalist class put it into motion bit by bit.

I don't think they started out by reading Hayek or anything, I think they just intuitively said, We gotta crush labor, how do we do it? And they found that there was a legitimizing theory out there, which would support that.

[Sep 19, 2017] Boston Startups Are Teaching Boats to Drive Themselves by Joshua Brustein

Notable quotes:
"... He's also a sort of maritime-technology historian. A tall, white-haired man in a baseball cap, shark t-shirt and boat shoes, Benjamin said he's spent the last 15 years "making vehicles wet." He has the U.S. armed forces to thank for making his autonomous work possible. The military sparked the field of marine autonomy decades ago, when it began demanding underwater robots for mine detection, ..."
"... In 2006, Benjamin launched his open-source software project. With it, a computer is able to take over a boat's navigation-and-control system. Anyone can write programs for it. The project is funded by the U.S. Office for Naval Research and Battelle Memorial Institute, a nonprofit. Benjamin said there are dozens of types of vehicles using the software, which is called MOOS-IvP. ..."
Sep 19, 2017 | www.msn.com

Originally from: Bloomberg via Associated Press

Frank Marino, an engineer with Sea Machines Robotics, uses a remote control belt pack to control a self-driving boat in Boston Harbor. (Bloomberg) -- Frank Marino sat in a repurposed U.S. Coast Guard boat bobbing in Boston Harbor one morning late last month. He pointed the boat straight at a buoy several hundred yards away, while his colleague Mohamed Saad Ibn Seddik used a laptop to set the vehicle on a course that would run right into it. Then Ibn Seddik flipped the boat into autonomous driving mode. They sat back as the vessel moved at a modest speed of six knots, smoothly veering right to avoid the buoy, and then returned to its course.

In a slightly apologetic tone, Marino acknowledged the experience wasn't as harrowing as barreling down a highway in an SUV that no one is steering. "It's not like a self-driving car, where the wheel turns on its own," he said. Ibn Seddik tapped in directions to get the boat moving back the other way at twice the speed. This time, the vessel kicked up a wake, and the turn felt sharper, even as it gave the buoy the same wide berth as it had before. As far as thrills go, it'd have to do. Ibn Seddik said going any faster would make everyone on board nauseous.

The two men work for Sea Machines Robotics Inc., a three-year old company developing computer systems for work boats that can make them either remote-controllable or completely autonomous. In May, the company spent $90,000 to buy the Coast Guard hand-me-down at a government auction. Employees ripped out one of the four seats in the cabin to make room for a metal-encased computer they call a "first-generation autonomy cabinet." They painted the hull bright yellow and added the words "Unmanned Vehicle" in big, red letters. Cameras are positioned at the stern and bow, and a dome-like radar system and a digital GPS unit relay additional information about the vehicle's surroundings. The company named its new vessel Steadfast.

Autonomous maritime vehicles haven't drawn as much the attention as self-driving cars, but they're hitting the waters with increased regularity. Huge shipping interests, such as Rolls-Royce Holdings Plc, Tokyo-based fertilizer producer Nippon Yusen K.K. and BHP Billiton Ltd., the world's largest mining company, have all recently announced plans to use driverless ships for large-scale ocean transport. Boston has become a hub for marine technology startups focused on smaller vehicles, with a handful of companies like Sea Machines building their own autonomous systems for boats, diving drones and other robots that operate on or under the water.

As Marino and Ibn Seddik were steering Steadfast back to dock, another robot boat trainer, Michael Benjamin, motored past them. Benjamin, a professor at Massachusetts Institute of Technology, is a regular presence on the local waters. His program in marine autonomy, a joint effort by the school's mechanical engineering and computer science departments, serves as something of a ballast for Boston's burgeoning self-driving boat scene. Benjamin helps engineers find jobs at startups and runs an open-source software project that's crucial to many autonomous marine vehicles.

He's also a sort of maritime-technology historian. A tall, white-haired man in a baseball cap, shark t-shirt and boat shoes, Benjamin said he's spent the last 15 years "making vehicles wet." He has the U.S. armed forces to thank for making his autonomous work possible. The military sparked the field of marine autonomy decades ago, when it began demanding underwater robots for mine detection, Benjamin explained from a chair on MIT's dock overlooking the Charles River. Eventually, self-driving software worked its way into all kinds of boats.

These systems tended to chart a course based on a specific script, rather than sensing and responding to their environments. But a major shift came about a decade ago, when manufacturers began allowing customers to plug in their own autonomy systems, according to Benjamin. "Imagine where the PC revolution would have gone if the only one who could write software on an IBM personal computer was IBM," he said.

In 2006, Benjamin launched his open-source software project. With it, a computer is able to take over a boat's navigation-and-control system. Anyone can write programs for it. The project is funded by the U.S. Office for Naval Research and Battelle Memorial Institute, a nonprofit. Benjamin said there are dozens of types of vehicles using the software, which is called MOOS-IvP.

Startups using MOOS-IvP said it has created a kind of common vocabulary. "If we had a proprietary system, we would have had to develop training and train new employees," said Ibn Seddik. "Fortunately for us, Mike developed a course that serves exactly that purpose."

Teaching a boat to drive itself is easier than conditioning a car in some ways. They typically don't have to deal with traffic, stoplights or roundabouts. But water is unique challenge. "The structure of the road, with traffic lights, bounds your problem a little bit," said Benjamin. "The number of unique possible situations that you can bump into is enormous." At the moment, underwater robots represent a bigger chunk of the market than boats. Sales are expected to hit $4.6 billion in 2020, more than double the amount from 2015, according to ABI Research. The biggest customer is the military.

Several startups hope to change that. Michael Johnson, Sea Machines' chief executive officer, said the long-term potential for self-driving boats involves teams of autonomous vessels working in concert. In many harbors, multiple tugs bring in large container ships, communicating either through radio or by whistle. That could be replaced by software controlling all the boats as a single system, Johnson said.

Sea Machines' first customer is Marine Spill Response Corp., a nonprofit group funded by oil companies. The organization operates oil spill response teams that consist of a 210-foot ship paired with a 32-foot boat, which work together to drag a device collecting oil. Self-driving boats could help because staffing the 32-foot boat in choppy waters or at night can be dangerous, but the theory needs proper vetting, said Judith Roos, a vice president for MSRC. "It's too early to say, 'We're going to go out and buy 20 widgets.'"

Another local startup, Autonomous Marine Systems Inc., has been sending boats about 10 miles out to sea and leaving them there for weeks at a time. AMS's vehicles are designed to operate for long stretches, gathering data in wind farms and oil fields. One vessel is a catamaran dubbed the Datamaran, a name that first came from an employee's typo, said AMS CEO Ravi Paintal. The company also uses Benjamin's software platform. Paintal said AMS's longest missions so far have been 20 days, give or take. "They say when your boat can operate for 30 days out in the ocean environment, you'll be in the running for a commercial contract," he said.

... ... ...

[Sep 17, 2017] The last 25 years (or so) were years of tremendous progress in computers and networking that changed the human civilization

Notable quotes:
"... To emulate those capabilities on computers will probably require another 100 years or more. Selective functions can be imitated even now (manipulator that deals with blocks in a pyramid was created in 70th or early 80th I think, but capabilities of human "eye controlled arm" is still far, far beyond even wildest dreams of AI. ..."
"... Similarly human intellect is completely different from AI. At the current level the difference is probably 1000 times larger then the difference between a child with Down syndrome and a normal person. ..."
"... Human brain is actually a machine that creates languages for specific domain (or acquire them via learning) and then is able to operate in terms of those languages. Human child forced to grow up with animals, including wild animals, learns and is able to use "animal language." At least to a certain extent. Some of such children managed to survive in this environment. ..."
"... If you are bilingual, try Google translate on this post. You might be impressed by their recent progress in this field. It did improved considerably and now does not cause instant laugh. ..."
"... One interesting observation that I have is that automation is not always improve functioning of the organization. It can be quite opposite :-). Only the costs are cut, and even that is not always true. ..."
"... Of course the last 25 years (or so) were years of tremendous progress in computers and networking that changed the human civilization. And it is unclear whether we reached the limit of current capabilities or not in certain areas (in CPU speeds and die shrinking we probably did; I do not expect anything significant below 7 nanometers: https://en.wikipedia.org/wiki/7_nanometer ). ..."
May 28, 2017 | economistsview.typepad.com

libezkova , May 27, 2017 at 10:53 PM

"When combined with our brains, human fingers are amazingly fine manipulation devices."

Not only fingers. The whole human arm is an amazing device. Pure magic, if you ask me.

To emulate those capabilities on computers will probably require another 100 years or more. Selective functions can be imitated even now (manipulator that deals with blocks in a pyramid was created in 70th or early 80th I think, but capabilities of human "eye controlled arm" is still far, far beyond even wildest dreams of AI.

Similarly human intellect is completely different from AI. At the current level the difference is probably 1000 times larger then the difference between a child with Down syndrome and a normal person.

Human brain is actually a machine that creates languages for specific domain (or acquire them via learning) and then is able to operate in terms of those languages. Human child forced to grow up with animals, including wild animals, learns and is able to use "animal language." At least to a certain extent. Some of such children managed to survive in this environment.

Such cruel natural experiments have shown that the level of flexibility of human brain is something really incredible. And IMHO can not be achieved by computers (although never say never).

Here we are talking about tasks that are 1 million times more complex task that playing GO or chess, or driving a car on the street.

My impression is that most of recent AI successes (especially IBM win in Jeopardy ( http://www.techrepublic.com/article/ibm-watson-the-inside-story-of-how-the-jeopardy-winning-supercomputer-was-born-and-what-it-wants-to-do-next/ ), which probably was partially staged, is by-and-large due to the growth of storage and the number of cores of computers, not so much sophistication of algorithms used.

The limits of AI are clearly visible when we see the quality of translation from one language to another. For more or less complex technical text it remains medium to low. As in "requires human editing".

If you are bilingual, try Google translate on this post. You might be impressed by their recent progress in this field. It did improved considerably and now does not cause instant laugh.

Same thing with the speech recognition. The progress is tremendous, especially the last three-five years. But it is still far from perfect. Now, with a some training, programs like Dragon are quite usable as dictation device on, say PC with 4 core 3GHz CPU with 16 GB of memory (especially if you are native English speaker), but if you deal with special text or have strong accent, they still leaves much to be desired (although your level of knowledge of the program, experience and persistence can improve the results considerably.

One interesting observation that I have is that automation is not always improve functioning of the organization. It can be quite opposite :-). Only the costs are cut, and even that is not always true.

Of course the last 25 years (or so) were years of tremendous progress in computers and networking that changed the human civilization. And it is unclear whether we reached the limit of current capabilities or not in certain areas (in CPU speeds and die shrinking we probably did; I do not expect anything significant below 7 nanometers: https://en.wikipedia.org/wiki/7_nanometer ).

[Sep 17, 2017] The best technique of obtaining soundbytes and posturing for neoliberal elite is based on so-called wedge issues by Piotr Berman

Notable quotes:
"... 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 ..."
"... 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. ..."
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.

[Sep 17, 2017] Joy Reids Politics of Tribalism and Punching Sideways

Sep 13, 2017 | www.nakedcapitalism.com

(Never mind that if Thomas Frank is correct, and the Democrats are the party of the professional classes, the Democrats cannot possibly be the party of "marginalized" people.) Being the sort of person I am, my first thought was to ask myself what the heck Reid could mean by "tribe," and how a "tribe" can act as a political entity.[1] Naturally, I looked to the Internet and did a cursory search; and it turns out that, at least at the scholarly level, the very notion of "tribe" is both contested and a product of colonialism. David Wiley, Department of Sociology and African Studies, Michigan State University, 2013

Tribe, a concept that has endeared itself to Western scholars, journalists, and the public for a century, is primarily a means to reduce for readers the complexity of the non-Western societies of Africa, Asia, Latin America and the American plains. It is no accident that the contemporary uses of the term tribe were developed during the 19th-century rise of evolutionary and racist theories to designate alien non-white peoples as inferior or less civilized and as having not yet evolved from a simpler, primal state. The uses and definitions of 'tribe' in the sociological and anthropological literature are varied and conflicting. Some authors appear to define tribe as common language, others as common culture, some as ancestral lineages, and others as common government or rulers. As anthropologist Michael Olen notes, "The term tribe has never satisfied anthropologists, because of its many uses and connotations. Societies that are classified as tribal seem to be very diverse in their organization, having little in common." Morton H. Fried and this author contend that "the term is so ambiguous and confusing that it should be abandoned by social scientists."

Even more striking is the invention of ethnic (labeled tribal) identities and their varied and plastic salience across the African continent. In some cases, "tribal identifies" have been invented in order to unite colonial and post-colonial clerical workers or other occupational and social groups to serve the interests of the members even though they were not bound together by language or lineage.

In the United States, where similar derogatory language of tribe has been used to characterize and stereotype Native American or First Nations peoples, the identity has been reified in federal legislation that requires "tribes," formerly under the Bureau of Indian Affairs, to accept that formal tribal identification in order to access the hunting, fishing, farming, and casino rights of reservations. Almost humorously, the Menominee peoples of Wisconsin decided to decline that nomenclature because many members lived in Milwaukee and other non-reservation sites; however, they then learned they must reverse that vote and re-declare themselves as "a tribe" in order to regain their reservation rights.

So, from the 30,000 foot level, it seems unlikely that what scholars mean (or do not mean) by "tribe" is the same as what Reid means, simply because there is no coherent meaning to be had.[2] My second thought was to try to fit "tribe" into the framework of identity politics, where tribes would be identities, or possibly bundles of allied[3] identities. Here's a handy chart showing the various ways that identity can be conceptualized, from Jessica A. Clarke*, "Identity and Form," California Law Review , 2015:

(Clarke gives definitions of ascriptive, elective, and formal identity -- for Adolph Reed on ascriptive identity, see here -- but I think the definitions are clear enough for our purposes from the examples in the table.) However, if we look back to Reid's quote, we see that she conflates ascriptive identity ("black or brown") with elective identity ("the sort of Pabst Blue Ribbon voter, the kind of Coors Lite-drinking voter")[4], and also conflates both of those with formal identity (if one's ethnicity be defined by one's own citizenship papers, or those of one's parents, or a changed surname; one thinks of Asian cultures putting the family name last in American culture, for example). So there is no coherence to be found here, either.

Let's return then to Reid's words, and look to her operational definition:

which party goes out and find more people who are like them

It's not clear to me whether Reid conceptualize parties as tribes, or as meta-tribes of tribes bundled together; I'm guessing the latter. Here is an example of Reid's conceptualizations ("like" each other) in action. From Teen Vogue , "Amandla Stenberg and Janelle Monαe Open Up About Racism and Where They Were During the Election" (2017). Somewhat too much of this, but the build-up is important:

AMANDLA STENBERG: Janelle frigging Monαe!?

JANELLE MONΑE: Hi, sweetie. You know I love, love, love you. First: pronouns! I want to make sure that I'm being respectful of how I'm referring to you. I know that the way we view ourselves and how we want to be addressed can change depending on where we are in life.

AS: I love that you asked me! Thank you. I have felt at times that she/her pronouns weren't entirely fitting, but I've never felt uncomfortable with them. It's more important for me to open up that conversation around pronouns and how gender itself is a construct that doesn't make much sense in our society.

JM: Got it. I remember seeing you for the first time in Colombiana, and then, like many people, I was drawn to your character in The Hunger Games as Rue. I'm a huge sci-fi nerd, so just seeing this little black girl in a dystopian world being a hero for an oppressed community, I was intrigued! The way you embodied this character felt like you were mature enough to understand how important she was to the movie but also how important the Rues all over the world are to our society.

AS: That's one of the best compliments that I've received! I remember we saw each other at the Tyler, the Creator show; we took a picture with Solange. You were wearing a jacket that said "black girl magic" on it, and I flipped out.

JM: Me, too! I was like, I am right between you and Solange, two people who are the epitome of black girl magic! I saw you later on, and you had just shot Everything, Everything, which, by the way, you are incredible in. The original story was written by a black woman [NicolaYoon], and your director [Stella Meghie] is also a black woman. What was going through your mind as you were considering the role?

AS: I kind of wrote it off initially because I figured it was one of those instances where I was receiving a script for a YA romance project that was intended for a white actress. I thought maybe they'd float the idea of casting it in a more diverse manner but that ultimately it wouldn't end up going that direction, because that's happened to me a lot. Then I realized that this project was based on a book written by a black woman and that the casting was intentionally diverse. I'd never seen a story like this made for an interracial couple. I'm not someone who generally has a pop or mainstream sensibility, but I see the incredible power of infiltrating these larger movies that show a lot of people who we are and how diverse and beautiful our community is. I thought it would be really powerful to see a black girl [lead] character like Maddy who is joyous and creative and dimensional specifically marketed to teenagers and young adults. We don't always get to see black women carrying that energy. That's one of the reasons why I respect and love you so much!because I feel like you perpetuate such whimsy and joy!

JM: Aw! Well, whenever I see you doing your thing, I feel like we're from the same tribe because I take a similar approach when I'm choosing projects. With the roles of Teresa in Moonlight and Ms. Mary Jackson in Hidden Figures , they're two women of color from totally different backgrounds and eras!from the hood to NASA, these black women were the backbones of their communities. I thought it was so important to let the rest of the world know that we're not monolithic. And with Hidden Figures in particular, I was so proud to be a part of exposing that if it were not for these women, we would not have gone to space. That's American history! Black history is part of American history, and it should be treated as such.

(Note in passing that I loathe the phrase "open up," which I define as "carefully engineered for a celebrity by public relations professionals." ) Of course, both actors are -- and rightly -- proud of their work, but note the carefully calibrated ways they establish that they are (as Joy Reid says) "like" each other. Oh, and do note the caption: "Miu Miu dress, price upon request." Class snuck in there, didn't it? In fact, we might go so far as to formalize Reid's definition of "tribe" as follows:

Tribes are people who are "like" each other when class is not taken into account

With that, let's take an alternative approach to conceptualizing tribes and tribalism, one that incorporates class. From former Arab Spring activist Iyad El-Baghdadi , I present the following charts, taken from the Twittter . (I'll present each chart, then comment briefly on it.) There are five:

Figure 1: Tribal Divisions

Comment: I'm taking El-Baghdadi's "ethnic affiliation," as a proxy for Reid's "tribe"; the verticality is clearly the same.)

Figure 2: Class Divisions

Comment: El-Baghdadi's representation of class divisions is fine as a visual shorthand, but I don't think it's an accurate representation. I picture the class structure of the United States not as a "normal distribution" with a fat "middle class" (I don't even accept "middle class" as a category) but as a power curve with a very few people at the head of the curve ( the "1%," more like the 0.01% ), followed by a steep shoulder of the 10% (white collar professionals, from Thomas Frank's Listen, Liberal ), and trailed by a long tail of wage workers (and unwaged workers, as I suppose we might call the disemployed, unpaid caregivers, System D people like loosie-selling Eric Garner, and so on). If you want to find who hasn't had a raise in forty years, look to the long tail, which I would call l "working class," rather than "lower class."

Figure 3: Privilege Divisions

Comment: Taking once again El-Baghdadi's "ethnic affiliation," as a proxy for Reid's "tribe," and conceptualizing WASPs as a tribe, it's clear to me, if I look at my own history, that I'm more likely ti have good luck than some other tribes. I'm more likely to have intergenerational wealth in the form of a house, or even financial assets, more likely to be highly educated, more likely to have the markers and locutions that enable me to interact successfully with bureaucratic functionaries, etc. I didn't earn any of those advantages; I would have had to have chosen to be born to different parents to avoid them. I think we can agree that if we were looking for an operational definition of justice, this wouldn't be it.

Figure 4: Punching Sideways

Comment: Classically, we have owners following Gould's maxim by bringing in (mostly black) scabs to break the Homestead Strike in 1892, with a resulting "tribal" conflict -- although those scabs might protest -- and rightly -- that (a) they were only trying to provide for their families and (b) that the Jim Crow system had denied them the "good jobs" that in justice would have given them (leaving aside the question of who implemented Jim Crow, and for what material benefits). In modern times we have "tribes" (white, black, Asian, at the least) battling on the field of "affirmative action" having weaponized their ascriptive identities. Here again, representatives of some "tribes" would protest -- and rightly -- that systems like "legacy admissions" give some "tribes" unjust advantage over others, but the hidden assumption is one of resource constraint; given a pie of fixed size, if Tribe A is to have more, Tribe B must have less. Note that programs like "tuition-free college" tend to eliminate the resource constraint, but are "politically feasible" only if Tribes A and B solve their collective action problem, which is unlikely to be done based on tribalism.

Figure 5: Punching Up

Comment: This diagram implies that the only "legitimate" form of seeking justice is vertical, "punching up." This eliminates clear cases where justice is needed within and not between classes, like auto collisions, for example, or the household division of labor. More centrally, the nice thing about thinking vertically is that it eliminates obvious absurdities like "Justice for black people means making the CEO of a major bank black (ignoring the injustices perpetrated using class-based tools disproportionately against black people in, say, the foreclosure crisis, where a generation's-worth of black household wealth was wiped out under America's first black President). Or obvious absurdities where justice is conceived of as a woman, instead of a man, using the power of office to kill thousands of black and brown people, many of them women, to further America's imperial mission.

* * *

Concluding a discussion on politics and power that has barely begun -- and is of great importance if you believe, as I do, that we're on the midst of and ongoing and highly volatile legitimacy crisis that involves the break-up and/or realignment of both major parties -- it seems to me that El-Baghdadi visual representation, which fits tribalism into a class-driven framework, is both analytically coherent (as Reid's usage of "tribe" is not) and points to a way forward from our current political arrangements (as Reid's strategy of bundling "punching sideways" tribes into parties while ignoring class does not). More to come .

NOTES

[Sep 11, 2017] Neoliberalism is creating loneliness. That's what is wrenching society apart by George Monbiot

Highly recommended!
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 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 ..."
"... All powerful institutions have a vested interest in keeping us atomized 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 ..."
"... 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 ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... 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 labor. ..."
"... 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. ..."
"... Has it occurred to you that the collapse in societal values has allowed 'neo-liberalism' to take hold? ..."
"... 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. ..."
"... 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. ..."
"... You can make a reasonable case that 'Neoliberalism' expects that every interaction, including between individuals, can be reduced to a financial one. ..."
"... 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 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 remainder (I love the wit of the term 'Remoaner') , Brexit can be better understood in the context of the death-knell of neoliberalism. ..."
"... Criticism of his hypotheses on this thread (where articualted at all) focus on the existence of solitude and loneliness 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. ..."
"... 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 minimized. 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 that's entitled to benefits, the front of the queue or bumped into first because its our birthday! ..."
"... 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. ..."
"... 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 wanted 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. ..."
"... 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. ..."
"... Quality of life is far more important than GDP I agree but it is also far more important than inequality. ..."
"... Thatcher was only responsible for "letting it go" in Britain in 1980, but actually it was already racing ahead around the world. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... . 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. ..."
"... 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 . ..."
"... 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 ..."
"... 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. ..."
"... "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. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... 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. ..."
"... 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? ..."
"... 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 Neoliberalism 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'. ..."
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 d