Tag Archives: poverty

Mass Incarceration follow up

1 Jun

A number of our readers felt the previous post on mass incarceration was incomplete or didn’t have enough facts to support the claim that mass incarceration is fundamentally about policing the underclass. They were not convinced that mass incarceration is therefore not analogous to Jim Crow, which was not only explicitly racial, but about creating a docile agricultural proletariat, not policed underclass. In a quest for more facts we scoured the Bureau of Justice Statistics and Department of Justice websites, as well as independent websites, and discovered that statistics on incarceration based on race, and to a lesser degree gender, are a dime a dozen. BJS is drowning in them. But class-based statistics, or even weak proxies for class, like income and/or education, are much more difficult to come by. That alone tells us something about how our consciousness is shaped and continues to shape the gathering of information about this social problem.

Nevertheless, after a few emails to the Bureau of Justice Statistics, we turned up the following information, based on survey data from 2004 (raw data is available here). In 2004:

- 28% of state and federal prisoners were unemployed in the month before their arrest. The national unemployment rate at the time was 5.5%. So the inmate rate was six times the national average.

- 88% of state prisoners and 80% of federal prisoners had a high school education or less. The national average for adults (over 18 years of age) was half that – 48%. Inmates are twice the national average.

- 70% of state and 58% of federal prisoners had an income of less than $2000 in the month prior to arrest. That means they had an annual income of less than $24000. Median personal income in 2004 was about $34,000. So about 2/3 of prisoners had incomes that were at least 1/3 below the median. By any reasonable measure (though not by unreasonable official measures) that is real poverty for households, and just scraping by for an individual.

In other words, the poor, uneducated, and un/deremployed are the targets of mass incarceration. The surplus population. Racial factors undoubtedly play a role, especially in likelihood of conviction and length of sentencing, but far less than the ‘New Jim Crow’ thesis implies. Moreover, there is at least one way in which the present mass incarceration is importantly not a system of racial control. The data suggests that middle and upper class Blacks – like the rest of the middle and upper class – are much more immune to incarceration. One likely reason is that, like the rest of the upper and middle class, they can do their drugs in the privacy and much less heavily policed environs of their middle class homes and suburbs. This class cleavage, moreover, is one strong reason why, despite the much greater social and political influence of Black voters and leaders than in the Jim Crow era, mass incarceration gets little play in mainstream politics, and much less attention than other (middle class) ‘racial justice’ concerns like affirmative action.

What Middle Class?

11 May

Is the middle class doing worse or better since the 1970s? Depends, but if so, just barely. Is this the right question to ask? No. Let us explain.

Recently, a number of commentators have begun pushing back against the claim that the past thirty years have seen stagnating fortunes for the middle class. The claim comes from a variety of sources, perhaps most prominently from Piketty and Saez’s work on inequality. They have argued that median incomes have stagnated and that, from 1979-2007, the median income is up just 3% in real terms. But other mainstream economists think the data answers a poorly framed question. Meyer and Sullivan, two mainstream economsits, argue that “material well-being” for poor and middle income households has increased. Burkhauser et al. claim that if we look at post-tax and transfer household income, rather than pre-tax and transfer individual tax unit income, then the median household had seen a gain of 36.7% in their overall income.

Can everyone be right? Oddly, yes. The reason is that the difference here is not about the data – which we for the moment assume is more or less accurate – but the interpretation of the data. It is true that, as P-S say, the median, pre-tax and transfer individual median income is up just 3%. It is also true that, as Burkhauser et al. say, the median household post-tax and transfer income is up 37%, and that it is also true, as Meyer and Sullivan argue, that the material well-being of the poor is better than it was thirty years ago. That everyone can be right is only the beginning of the story.

Let’s take Meyer and Sullivan first. Note that material well-being or ‘standard of living’ can improve even as the poor take home a decreasing share of the overall social product. It is perfectly reasonable for Meyer and Sullivan to point out that economic growth over the past thirty years has made more high quality goods and certain amenities (like air conditioning) cheaper, and thus available to those who couldn’t afford them. It would be hard to imagine capitalism surviving if it did not improve material conditions. But this improvement in the standard of living is perfectly compatible with increasing exploitation of workers. At least since Marx we have known that immiseration is not an absolute but relative process. We can have increasing living standards for many, while those same many control less of their time than before. If $100 used to buy a black and white TV and now it buys an HDTV, then that qualitative improvement in material human well-being is perfectly consistent with stagnating compensation, declining bargaining power and more injustice. It might take only three hours for society to produce all the things I can buy with $100 rather than the four hours it used to. And so, if all I have is $100, my overall claims on society have been reduced, even if the quality of my goods have improved. Put another way, if originally I had $100 and GDP was $10000, and now I have $100 but GDP is $20000, then just because I have higher quality goods doesn’t mean that my fortunes are increasing.

It would of course be wonderful if we organized production for the sake of human needs, not profits. But it is pretty clear that is not Meyer and Sullivan’s interest in offering material human well-being rather than income and wealth as the measure of growth. Terry Eagleton once said that ideology works by being true in what it affirms but false in what it denies. It is true that standards of living have improved since 1970s, but it is false to think that refutes the concerns people have regarding inequality and growth.

Burkhauser et al. are taking a different tack. They argue that, if we want to know how the poor and middle class (whatever exactly the ‘middle class’ is) are doing, then we need to look at “real compensation.” We have to factor in not just pre-tax and transfer ‘market income’ but all the sources of compensation. After all, why should we care about what people take home before they pay taxes and claim benefits? Surely we care what households take home all things considered. And the real compensation by household has grown over the past 30 years, by about 37%. In fact, even in the worse period, from 2000-2007, while individual market income (pre-tax and transfer) declined by 5.5%, real compensation still grew by 4.8% because of elements of the tax code and public benefits, like welfare, earned income tax credit, unemployment benefits, and so on. Burkhauser supplies the following graph to illustrate his point:

Again, his own terms, Burkhauser is right. Real compensation has grown. Though note, two things. First, real compensation has grown very slowly: 1% per year, and has slowed to a near stop in the past decade. Further, “real compensation” has grown mainly because redistributive state measures have been large enough to cancel out declining individual wages and stagnating household wages. In other words, the market has been unable to produce jobs at the median level that compensate any better than they did thirty years ago (and below the median, real wages are decidedly worse.) Without progressive taxation and redistribution, real compensation would be down. In fact, the implication of Burkhauser’s data is that, for most people, the market has not created better jobs than thirty years ago. The bottom end is hanging on through transfers, not bargaining power and quality work. So when Burkhauser says “the notion that we as a society are not doing as well as we were 30 years ago, I think by virtually any reasonable measure, is just false,” this is not even true by his own measures. It’s certainly not true by the conventional conservative standard that people not be dependent on the state.

So far, we have just been considering the arguments on their own terms. In both cases, the authors do not prove that the economic situation over the past thirty years has been desirable or improving, which was their central intent. But that does not mean that the mainstream, default focus on median market income is still the right way to evaluate economic development. The median unit, whether it is an individual or household, is a narrow concern. It says nothing about class structure, how the worst off are doing, nor about economic possibilities and alternatives. For one, changes in wealth, not just compensation, are better indicators of class structure and advantage. In our society, it is wealth, especially financial wealth, more than income that confers security, greater bargaining power, and overall social power. And by that measure, our society is more unjust and exploitative. Recall this graph, showing decline in wealth for the lowest 60% of the population:

When we combine this graph, with some data on the actual distribution of financial (non-real estate) wealth, we are reminded why ‘median’ and ‘middle class’ are more ideological than they are analytical concepts.

Those who have no reasonable alternative but to sell their labor, as diverse a group as they are, still constitute roughly 80% of the population. These statistics suggest that behind ‘median’ income and compensation there is a much different distribution of wealth, and thus a different class structure than concepts like ‘middle class’ can make sense of.

We can ask even further questions – what kinds of jobs are being created, or could be created? Who controls job creation? Who has the freedom to ‘innovate’ and ‘create,’ and who serves the creators? An economy, after all, is never just about making new things, it is always about making new things under specific social conditions. Those social relationships always have to be reproduced, along with the goods and services that get produced. These are concerns about class structure and social power that mainstream economists are rarely interested in, but which cannot be dismissed by gesturing at living standards and compensation.

Economists, stop talking like that for God’s sake!

10 Apr

Today, we publish a guest post by Ivan Manokha. Lecturer of international political economy at Sciences Po, Paris, and Vice Dean of the graduate school at Sciences Po, Manokha’s post unpicks the rarefied language with which economists speak of daily life and takes issue with the presumption of choice that is made in mainstream economic theory to explain people’s behaviour.

By Ivan Manokha

How is it that the unemployed are still able to consume? The answer is found on page 45 of Olivier Blanchard’s famous textbook on Macroeconomics. Their ‘consumption cycle’, argues Blanchard, carries on simply because in order to subsist they opt to ‘dissave’, i.e. spend the money that they have on their savings account. Saving in the good times thus nicely offsets dissaving in the bad times.

This kind of statement is symptomatic of a number of problems that characterize the science of Economics and which, I would argue, account in part for its failure to understand the current crisis and to come up with solutions to deal with it.

First, the statement of Blanchard is symptomatic of a total disconnect between the assumptions and models of economists and social reality. Indeed, in their world, rational individuals, even when they fall into the category of ‘liquidity constrained households’ (read:  the poor) always enjoy the liberty of arbitrating between employment and leisure. Unemployment is voluntary and those who do not have a job find themselves unemployed because they have arbitrated in favour of leisure (because, the argument of the Real Business Cycle theory goes, wages are currently not high enough and these rational individuals wait for the job market to become ‘tighter’ when they will accept to work). Well, I suggest they go and speak to all the existing jobless, whose number has increased dramatically since 2008, in order to find out why is it that they still choose leisure over employment.

Second, and even more importantly, there are no social antagonisms or conflicts in the dream world of Economics. Indeed, all Economics textbooks will tell you that there are people who have capital, there are those who have land, and there are those who do not have either of the two, but, don’t worry, they have … ‘human capital’. The inequality of possessions is thus rationalized away by the very categories used to describe social reality and is never itself explained. To be fair, the classical economists who came up with these assumptions felt that this state of affairs could not be left unexplained and tried to offer some justification. Adam Smith, for instance, stated that “more industrious and prudent persons, rather than spending the full produce of their labour, ‘saved’ part of it and gradually accumulated capital.” Out of these individual choices the social fabric of inequality was made. This was more fiction than fact but at least Smith was compelled to say something, an urge that is completely foreign to modern day Economics. Now, all these proprietors of different ‘factors of production’ – capital, land and ‘human capital’ – meet in the place of ‘freedom and opportunity’ and enter into an exchange relation from which they all benefit (they all ‘maximize their utility’). In other words, for lucky owners of ‘human capital’ there is no compulsion to look for employment in order to survive. They do so willingly because they will obtain a net gain from it.

There is one major obstacle to the functioning of the ‘invisible hand’ – the State. This structure does not act as economists might predict. Instead of simply providing for the security of private possessions of capital and land and concentrating on national defense,  it intervenes in the economy in order to ‘de-commodify’ certain things (e.g. health and education) and to establish certain rules for labour markets (minimum wage, conditions for making people redundant, etc.). There are also these damn unions because of which wages exceed ‘the market clearing wage’… As a result, we are told there is inefficiency and waste; state spending, given the fact that there is a limited amount of money in the economy, necessarily ‘crowds out’ private investment. We can guess that it is because of such ‘crowding out’ that big corporations like Apple are sitting on so much cash and are not investing it back into the economy… Fortunately for us, there is the current crisis which has exposed the fact that certain accounting identities are not in fact accounting identities at all. State spending in Greece went down 20% but did private investment go up by 20%?

It is time for Economists to realize that the absolute majority of the world’s population does not have a choice between leisure and work but is compelled to look for a job; that not all of those who do not find a job will be able to ‘dissave’; that when those lucky ones who are employed are told that they have to accept cuts in wages and benefits and that their contracts have to be changed to make their firing easier (that the labour market has to be made more ‘flexible’) there is a chance that they will go to the streets and rebel. The real world is not characterized by a harmony of interests but it is a world of inequality of possessions, of inequality of opportunity, of inequality of power. So long as our thinking continues to be dominated by the fiction of Economics, we will not be able to deal with the crisis.

The Unholy Alliance of Monetary Expansion and Fiscal Austerity: More for those who have, less for those who don’t

16 Jan

Anyone observing the course of macro-economic policy in industrial countries over the past few years cannot help but notice an over-riding pattern: monetary expansion, fiscal austerity. This is an unholly alliance, in which the most regressive form of stimulus tacitly underwrites a fiscal contraction that punishes the least well off for the financial crisis and subsequent economic stagnation. (Skip the next two paragraphs if you already know the basic facts.)

Consider first some well-known facts. In the United States, the Federal Reserve has pushed interest rates about as low as they will go, and says it will keep them at the lower bound until 2013. It has also engaged in two rounds of quantitative easing, first buying in 2008-2009 over $1 trillion worth of MBS (Mortgage Backed Securities) and agency securities, then in 2010 it bought $600 billion worth of Treasury bonds, as well as the less significant Operation Twist. These measures have, in a narrow sense, been somewhat successful, with the Fed making profits on its original asset purchases, recently returning $77 billion to the Fed. The easing of the 2008-2009 credit constraints has acted as a kind of stimulus to the US economy by increasing the money supply, though strong doubts persist as to any further marginal improvements the Fed can make (e.g. Here and here). Meanwhile, while the Fed has pumped like crazy, state spending has come under serious attack. To be sure, there was the initial roughly $800 billion stimulus in late 2008, but this was almost entirely offset by contractions at the state and local level. The contractionary trend continued in 2011 such that government employment was “down by 280,000 over the year. Job losses in 2011 occurred in local government; state government, excluding education; and the U.S. Postal Service.” And then there is the whole super-committee, trillions of dollars in savings issue waiting in the wings.

We find a similar story in Europe. There have been in some cases multiple rounds of austerity in Greece, Portugal, Spain, Italy, Ireland, United Kingdom, France, Germany, and so on, despite record level Eurozone unemployment and economic economic stagnation, verging on recession. Meanwhile, despite initial recalcitrance, the ECB not only has pushed interest rates low, it has begun quietly expanding its balance sheet, offering nearly $500 billion in cheap 3-year loans, and after the recent success of Italian and Spanish bond auctions, has suggested it will loan more money in February. Fiscal austerity, monetary expansion.

Now one perfectly reasonable response to this relationship between central banks expanding the money supply and central governments contracting demand is to say “thank God for the Fed/ECB! At least there is one sane institution left intervening in the economy.” And as a response to those banging the drums of austerity, who believe in ‘expansionary austerity’, or to those who think the Fed is the root of all evil, this is a perfectly reasonable response. Austerity makes things worse, and displaces the costs of the crisis onto the worst off; the Fed, though it is not a progressive institution, is not the root of all evil. However, there is more going on here than that.

For one, in the European case, the tradeoff has been explicit. Draghi held out for as long as he could, on the grounds that Europe had to get its fiscal house in order before the ECB would become more adventurous. Moreover, as Henry Farrell has pointed out, while the raison d’etre of central banks to be insulated from political pressure, what this really means is that they are insulated from the kinds of political pressure felt by elected representatives, i.e. democratic political pressure. They are not from political pressure tout court. Instead, they are influenced by those like them, who speak their language of expertise and money. This makes it much easier for them to propose ‘solutions’ that hurt the majority – who do not so easily understand financial matters, nor tend to produce expert knowledge about it. Which is why it is easy for them to be so nonchalant about fiscal austerity, and why one hears very little about how regressive stimulus through loose monetary policy is relative to fiscal policy.

Just a refresher on that last point because it is relevant. Those best able to take advantage of low interest rates are those with positive net worth, not to mention financial savvy, which is for the most part the wealthy. And it does so without forcing them to invest in any particular way (one of the reasons why it can be of limited use as stimulus – borrowers can just park their money in T-bills, Swiss francs, or some other safe asset, rather than invest in job-creating enterprises). Additionally, it indirectly helps the wealthies by boosting the stock market, and thus those who gain most from increases in stock values (regardless of the underlying employment situation.) Moreover, as Doug Henwood has pointed out, monetary stimulus does the least to disrupt the existing class structure. It increases the ability of private borrowers to spend without actually altering the ability of average workers to earn or increasing their bargaining power with employers. Fiscal policy, on the other hand, especially something like jobs programs, puts a floor under wages, increases demand for labor, and thus changes labor-capital relations. On top of which, it challenges employers’ claims that they should possess exclusive control over investment.

The unholy alliance between monetary expansion and fiscal austerity is more intricate yet. A further response to those who want to present central banks right now as the only sane actors is that their expansionary activity deadens the impact of the insanity. That is to say, even when central bankers argue there should be more fiscal expansion, as Bernanke is reputed to want, their expansionary monetary policy conceals the full damage of the fiscal policy. It gives even greater room for fiscal irrationality. In all, the unholy alliance amounts in practice to a kind of policy combination that serves to redistribute upwards: fewer social services and public benefits for majority, alongside a monetary policy that directly or indirectly benefits the wealthy. And this combination does little to address the underlying sources of the crisis and continued lack of employment/stagnating wages.

Finally, and this is the most difficult part of the unholy alliance to tease out, there is a deep-seated, tacit ideological dimension here. The willingness of central banks to engage in massive pump-priming seems to us to be conditional in certain ways on a certain balance of class forces. The balance is one in which working class demands are weak, expressed not just in more passive unions with lower membership, but in the wider ideological defeat of the idea that public power could be used to meet the basic needs of all and even to socialize investment. Central bankers, once called in to lower the American standard of living by raising interest rates, have been freely keeping interest rates low now that weak labor bargaining power practically eliminates fears about inflation (a reality to which German bankers have yet fully to adjust.) It is harder to imagine an expansionary monetary policy, at least of the magnitude that we have seen, in the midst of a more robust fiscal response by the state to protect the bargaining power and living standards of workers, not to mention in the midst of significant labor militancy. Insofar as the absence of strong political support for expansionary fiscal policy registers the wider political weakness of the Left, the unholy alliance speaks to the ideological hegemony of conservative economic views (despite the hand-wringing of certain Austrians and ‘end-the-Fed’ Randians.) While the credit crunch was supposed to have discredited economic orthodoxy, in fact it seems to have created the conditions for its consolidation. The result: easier money for those who have, less for those who don’t.

Who are they?

9 Sep

After Obama’s speech last night, Corey Robin pointed us to this article by Katha Pollit, which argues that, for the most part, liberals have given up talking about the poor. Pollit has a point. Relative to almost no discussion of poverty and unemployment, Obama’s speech said something. But it took the minimal approach of addressing the fate of the unemployed, rather than the overall structure of options available in the economy. And it is indeed noticeable that the old, diseased welfare-state liberalism has been feeble, especially relative to the politically ascendant progessive-neoliberalism of the Democratic leadership.

However, we’re not so sure ‘the poor’ is a better way talking about the relevant constituency. For one, ‘the poor’ are still a minority – a somewhat different one from the unemployed, it is true – but they are 14%. (Well, according to the official measure, which considerably undermeasures poverty). As such, it is not clear to us that talking about ‘the poor’ escapes any of the political problems we discussed in our post Tuesday. It creates a separate minority, with distinct interests from the many who might not be poor, but who ultimately would also benefit from a different economic order than this one. Why carve up an already fragmented electorate that ought to be organized on the basis of shared, majority interests? Why isolate the interests of the poor from those of the middle?

The other problem is that ‘the poor’ is a fairly passive category. To be sure, there are ‘poor people’s movements’ – though they seem pretty weak in the US. And there are those who use the category poor not because they seem as the objects of charity, but as groups that should or could act to help themselves. But for the most part, it is still a category connected to liberal charity and philanthropy. ‘They need our help.’

Why not say working class instead? It covers the unemployed, the poor, and many of those in the ‘middle’ who have a decent, if fragile and often debt-financed, standard of living. The working class is potentially a majority, not one amongst a number of minorities struggling for recognition of its interests. It is, moreover, an active political and social agent, at least in theory.

Of course, the background problem is that, no matter the category pundits use, the relevant group is more talked about – ‘the unemployed’ ‘the poor’ ‘the working class’ – than making its own claims. ‘They’ have only sporadically (i.e. Wisconsin) made their own claims – and for the most part seem to lose when they do. That real political problem is reflected in the way ‘they’ get talked about – fluid categories, specious identification of interests, and political half-measures as bribes for votes.

Productivity, Inequality and Poverty Revisited

23 Aug

We would like to respond to some criticisms of last week’s post on productivity, inequality and poverty. One reader felt that the post confused two issues because “the dynamics that keep wages down seem different to those responsible for hunger.” The causes of hunger can be addressed “without the ruling class having to make any direct sacrifice. That’s not the case with wages vs. profits.” While we agree with this reader’s comments, at least up to a point, there was a broader purpose to the previous week’s post. Perhaps we were unclear, so let us try to do better.

The broadest claim of last week’s point was to attack the argument that simply increasing productivity wall that is necessary to address either the problem of stagnating wages in rich countries (‘inequality’) or the problem of absolute poverty (basic malnutrition) in poor countries.  The persistence of malnutrition, despite the world being awash in food, suggests hunger is no mere technical problem of the ability to produce food. As we noted, there is enough wheat to give 1 1/3 loaves of bread to every person on the planet. That is just one staple. The reader feels that our claim is misleading because “undernourishment has fallen from 24% in 1970 to 15% in 2009.” That is an important achievement, though quite paltry relative to potentiality. Even in 1970 there was no technical world food shortage. Nor does it prove that this decline in hunger had anything to do with improved food production as opposed to distribution.

In fact, as the reader notes, the reasons for continuing undernourishment do not have to do with factors related to the production but the distribution of food: “the leading cause of hunger is conflict and lack of roads.” We would like to see the data behind this claim, but let us accept it for the sake of argument. In the reader’s view, ‘roads and conflict’ are distinct variables from the claim we made in the previous point that the problem had to do with ‘power.’ However, we are not persuaded. For one, the question would be why is there a lack of roads in certain areas and not others? Roads are produced by public investment, and public investment tends to follow lines of power. Poor, rural peasants, especially when identified as minority groups, are often least able to persuade governments to take their claims as seriously as other citizens, and thus resort to living on the margins of subsistence.

As the reader notes, the food question is complex – a complexity we cannot fully address in a single post. We simply wish to stress that a) our first point was about how productivity alone is not the problem, and not even the major problem, when it comes to absolute poverty nor stagnating wages – it is a matter of the ability to claim to what is produced. And b) while the reader is correct that the increasing wages requires the sacrifice of profits in a way that is not necessarily the case regarding absolute poverty, that does not mean that the explanation of malnutrition is not a question of power.

Two final points. One, by arguing that lack of productivity is not the reason behind stagnating wages or absolute poverty, we do not mean to suggest in any way that productivity is a bad thing. It is on the whole a good thing – we ought to seek not just subsistence but abundance. However in some circles of public debate, productivity becomes a kind of fetish, distracting from the lines power running through the economy. Second, an important reason for the increasing gap between compensation and productivity is declining unionization rates (see this report by the Atlanta Fed) but, as that report makes clear, unionization is only a part of an overall weakening of the average worker’s bargaining power. The limited empirical effect of unionization rates alone suggests that what is going on is something broader and deeper – the absence of a commitment to social and political equality, and the absence of movements able to make those commitments real.

Productivity, Inequality, Poverty

18 Aug

Obama made waves two days ago when he asked public employees for “shared sacrifice and burden sharing,” on the grounds that they were somehow doing better off than private employees. Daily Kos showed that average compensation for public employees is less than private ones, but that comparison isn’t really the point, or at least the only point. The real howler of Obama’s speech is the implication that there has not been “shared sacrifice and burden sharing” up until now. It’s not just that public workers, even in states with Democratic governors, like New York, have already had to accept yet another round of wage and benefits cuts. The point is that, since the late 1960s, workers in general have been keeping hold of less and less of what they produce. Doug Henwood’s ‘productivity wedge’ shows the growing gap between productivity and compensation:

Henwood’s graph shows the gap in terms of overall compensation (wages plus benefits). As the graph below demonstrates, the gap between productivity and compensation is largely in terms of flatlining real wages:

Asking workers to sacrifice benefits, on top of stagnating wages, is just piling on. And it misses the point that most workers have been “burden and sacrifice sharing” for more than thirty years. Obama’s typically tone deaf appeal used almost exactly the same language as managers and CEOs used during the labor battles of the 70s and 80s. The promise then, of course, was that, if workers worked harder, increased their productivity, and sucked it up then, then they would reap gains sometime in the future.

We can find a similar mismatch between productivity and real gains on a global scale. Consider the relationship between food production and malnourishment. Below is data showing the enormous increase in productivity in wheat. It shows that the amount of land dedicated to world wheat production has remained flat, while wheat production dramatically increased:

In 2011, enough wheat was produced to make 405 loaves of bread per person per year. Or, just over one loaf per person per day (our calculations, and graph based on data taken from the USDA). Yet, as this graph from the UN Food and Agriculture Association shows, during the same time span global undernourishment has increased:

We have more than enough to feed the global population, yet about one in six does not get enough to eat. Wheat production is a very crude measure of the ability to meet global food needs generally. But it speaks to the basic point: increased productivity has not gone hand in hand with the satisfaction of human needs.

What holds together the facts about food/absolute poverty and the facts about wages/compensation is the story they tell about productivity and power. The burden sharing and shared sacrifice of the past thirty to forty years has been decidedly one-sided. Increased productivity has come at the price of belt-tightening by those who can least afford it. The real story of the past decades, then, is not increased productivity so much as the declining ability of workers and those in need to capture even a decent share of what is so efficiently produced. Perhaps a further lesson is that one should distrust a request for sacrifice today in the name of future gains. All that seems to translate into is a long-run weakening of a worker’s ability to lay claim to what he or she produces.

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