Tag Archives: unemployment

The effects of QE

21 Oct

Of all the new terms that have been invented since the beginning of the crisis in 2008, quantitative easing is perhaps the most bizarre. A purely technical term, it has entered into everyday language as ‘QE’. Monetary policy has taken centre stage as the main tool governments have to do something about growth and QE is it.

Tucked away in the small money supplement of the FT weekend was a long piece on QE. Its discussion of the effects of quantitative easing is worth commenting on. QE is basically a monetary stimulus programme, where central banks create money and use it to buy assets from banks and other financial institutions. The main thing central banks have bought are government bonds. Holders of bonds have therefore exchanged them for cash and that cash is what the governments hope will be spent in ways that stimulate the economy. QE was dreamed up at a time when interests were so low that they couldn’t really go any lower, making a traditional monetary policy response to an economic downturn impossible. The standard approach had been to cut interest rates in a downturn, raise them when the economy seemed to be overheating. Unable to do that with rates so low, QE was the radical alternative.

QE has been striking by its ubiquity: it has been the key policy response of the US Federal Reserve, the Bank of England, the European Central Bank and the Bank of Japan. What is surprising is how prevalently it has been used but how sceptical people are of its effects. The idea is that cash injected into the economy would generate new economic activity. There is little evidence, however, that QE has done that. Banks have tended to use the money to boost their capital ratios rather than to increase lending to businesses. Companies have sat on increasing piles of cash. QE in general is seen as having had little effect on the real economy.

Where has its impact been felt? After all, the US Federal Reserve has been buying $85bn a month of US government bonds since it started its QE. Intervention on such a huge scale cannot be free of effects. According to the FT, the main impact of QE has been on asset prices rather than on the real economy as such. These prices have risen considerably, boosting the wealth of those who own such assets. Predictably enough, that means the already very wealthy. The FT cites a Bank of England study that finds that in the UK, the top 5% of households hold 40% of the assets whose price has risen most because of QE. The central banks’ policy of printing money has inflated some asset prices, to the great benefit of those that hold them.

For everyone else, the effect has been more mixed. By keeping interest rates at very low levels, QE has obviously favoured the lenders over the savers. All those hoping to earn some return on their savings have been disappointed. Home owners, especially those with big mortgages, have been happy.  This view of QE helps us understand some of the curious features of this current economic downturn: as the real economy data continues to give cause for real concern (unemployment remains high, growth is anaemic, business investment remains very low), the price of fine art, the best wines and the high end properties in London, Paris and New York have all soared. With low interest rates and with central banks injecting so much liquidity into the bond markets, investors are looking for some return wherever they can. And that includes in a Monet or a large house in Neuilly or Richmond.

The best defence of QE cited by the FT was that things could have been worse without it. It returned confidence to markets and investors, and so helped us avoid the complete collapse that could have occurred in 2008 or 2009. As the FT admits, this argument is difficult to prove: “we just don’t know what would have happened without QE”. It is surprising that a policy with such obvious distributional effects has not been the subject of greater debate or disagreement. This is perhaps because the term itself is so euphemistically technical. Or because it has been carried out by central banks whose place is somewhat outside the terrain of partisan politics. It may also be that governments have been good at convincing people that there is no alternative to QE, which is tantamount to saying that they have no way of tackling problems in the real economy directly but can only work through asset prices.

This, of course, is not true. Governments could intervene far more directly in the economy. However, QE sits alongside the view that governments are fiscally constrained and need to reduce their outgoings as much as possible. Fiscal austerity combined with QE gives us the policy mix for the current period: a massive boost in the prices of assets owned by the wealthiest section of society and extensive cuts in government spending on public services. However technical it may sound, there is nothing ideologically neutral about QE and its effect.

 

The meaning of Merkel’s victory

2 Oct

Originally published in the October issue of Le Monde Diplomatique

Angela Merkel and her Christian Democrat party (CDU/CSU) have won a resounding victory in Germany’s general election. Merkel has broken what had become an established rule of European politics since the beginning of the crisis: incumbents don’t get re-elected.

Merkel had seen this at first hand as close working relationships with other European politicians were felled by electoral fortunes. The peculiar alliance of France and Germany (“Merkozy” to the European press) was undone as Nicolas Sarkozy lost out in the 2012 French presidential election to his Socialist challenger, François Hollande. Mario Monti, another favourite partner of Merkel, was routed in Italy’s election earlier this year by the comedian-cum-blogger Beppe Grillo and his Five Star movement. Incumbents have lost out across southern Europe — Spain, Greece, Portugal — as voters hope that a change in government might mean a change in fortunes. There has been no decisive shift left or right, just a broad and sweeping dissatisfaction with existing governments. Apart from Germany.

Merkel’s re-election doesn’t mean that nothing has changed in Germany or that it has been blissfully untouched by the Eurozone crisis. Looking at the substance rather than at the party labels, we see shifts. The more dogmatically free-market FDP, Merkel’s coalition partner in the outgoing government, failed to secure any parliamentary representation at all. The Left Party, Die Linke, a persona non grata for mainstream German politicians because of its roots in East German Stalinism and its opposition to NATO, now has more parliamentary seats than the German Greens. If the Social Democrats (SDP) enter into a coalition with Merkel’s party, then Die Linke will lead the opposition within the Bundestag.

The policies of Merkel herself have steadily drifted leftwards as she has taken on ideas first floated by the SDP. From military conscription to a minimum wage and rent controls, Merkel has adopted policies that first came from the left. This had the effect of emptying much of the campaign of any traditional ideological conflict. German voters have not been divided by the politics of left and right, given the vastly similar programmes adopted by the main parties. Merkel has even given up on nuclear power, in a move that pulled out from under the feet of the Green Party their most distinctive policy position. Instead, the campaign was fought around the language of risk and of personality. Germans preferred Merkel’s low-key, homely aspect to Steinbrück’s debonair image and, seeking reassurance in the widespread depoliticisation, voted for Merkel’s motherly, risk-averse approach.

Political stability in Germany reflects its unique position in Europe as the country that has survived the crisis. Not unscathed, as the leftwards shift suggests, but markedly better off than any other country. Having reformed itself in the early 2000s, German industry rode an export-led boom that continues today. As trading partners in Europe — from Eastern Europe through to southern Mediterranean economies — crashed and burned from 2009 onwards, Germany compensated by expanding sales in non-European export markets. What it lost by way of demand in Europe it has gained in emerging markets, especially in Asia. Germany’s current account surplus, at $246bn over the last year (6.6% of GDP), is greater than China’s. Along with a more flexible labour market that is keeping unemployment low (but part-time employment high), we have the material foundation for Merkel’s victory. But though this foundation is solid, Germany is not booming. Since the early 2000s, German wage growth has been very limited. Moreover, few Germans own their own homes, meaning that they have not experienced the same wealth effects of rising house prices felt by a chunk of the British middle- and upper-middle class, the Dutch, Italians and Spaniards. They have been saved from the effects of collapsing property prices but have not known the heady days of year-on-year price rises. Merkel’s cautious optimism reflects the attitude of a large part of the German working and middle class who feel that their relative prosperity is precarious and needs to be closely guarded.

The meaning of Merkel’s victory for the rest of Europe is mixed. It is possible that Merkel will soften her stance to some extent now the election is over, though we should not expect any sudden U-turns on something like Eurobonds. A slow recalibration of the Eurozone economy is more likely, as crisis-hit countries like Spain and Ireland regain some competitiveness via internal adjustments to wages and prices. Where Merkel may compromise is on measures to boost domestic demand. If Germans were to consume a little more rather than save so much, that would help pull other Eurozone economies out of their deep depression. Though something like this may happen, any recalibration will still occur within the context of a Eurozone marked by massive disparities in wealth and spatially organised around a clear logic of centre and periphery.

The Future of Work

20 Jun

TCM editor, Alex Gourevitch, will be speaking with Kathi Weeks, author of The Problem With Work, about ‘The Future of Work‘ this Sunday at PS1. It is part of Triple Canopy’s ‘Speculations on the Future‘ program. In advance of this event, we thought it worth laying out a few facts relevant to the discussion. While we have spoken about some of the political questions at stake in the work/anti work debate (here, here, and here), those were relatively fact free speculations. And necessarily so. The issue at stake was hopes and desires for the future, and the organizing aspirations for a possible left. These discussions, however, can always do with a small dose of vulgar empiricism. A brief look at some relevant facts suggests that the most likely, if not most desirable, future of work is roughly that of increasing dependence on the labor market and lower quality work for most people. One word of caution: the data is limited to the US and Europe, entirely because that is our area of expertise and where the data is most readily available.

Although every so often there are breathless declarations of the end of workthe collapse of work, and that technology is leading to a world without work, the historical trend is the opposite. Ever since the 1970s, an increasing share of the population has been working. For instance, the graph below shows the employment to population ratio in the United States. Notably, even after the dramatic post-2008 decline, a higher percentage of Americans still work in the formal labor market than anytime before the mid 1970s. Slide1Similar survey data from Eurostat of all people between ages 15 and 64 shows, wherever data is available, that there have been dramatic or gradual declines in ‘inactivity‘ or non-participation in the labor market. In Germany, 35.9% of 15 to 64 year olds were inactive in 1983 while in 2012 that number had sunk to 22.9%. In Spain the drop was from 44.1% in 1986 to 25.9% in 2012. For France, 31.6% (1983) to 29% (2012), and the UK 29.1% (1983) to 23.7% (2012). The Netherlands saw the largest decline from 1983 to 2012, from 41.4% to 20.7%. The most likely future of work in the US and Europe is that more people will be working for wages or salaries than ever before, as absolute numbers and as a percentage of the population.

Three recent changes to the political economy suggest not only increased participation in, but greater dependence on, wage-labor, especially by those on the bottom end of the labor market. These are a) stagnation or reduction of welfare benefits, b) stagnation or decline of wealth and c) stagnant wages and precarious employment. Welfare and wealth are alternatives to wages as sources of consumption; lower wages and precarious employment increases insecurity of and need for employment.

For instance, in the case of welfare, the stagnation or reduction of welfare benefits means that states offer the same or worse benefits to those who cannot find or live off a job. This is consistent with increased numbers taking advantage of these benefits. For instance, recent reports made much of the 70% increase in Americans using food stamps, which represents a doubling of the amount spent on food stamps, since 2008. But food stamps alone are hardly enough to live off, and their increased use reflects the increase in unemployment. More broadly, American welfare benefits are not enough for most people to live off, many states recently cut benefits, and the welfare system is famously designed to spur labor market participation, not provide an alternative to it. Moreover, in Europe, where welfare benefits are more generous and less conditional, the consequence of austerity policies is, at best, to limit the growth of any such programs and in various countries to reduce or even eliminate them. Cuts to public employment and hiring freezes, increases in retirement age, and other measures mean the reserve army of labor will be larger, and most people will have fewer/poorer state provided alternatives to finding a job.

Finally, the increase in part-time, low-wage work, alongside stagnant or declining wealth at the bottom, further entrenches labor market dependence. We were unable to find longitudinal wealth data on Europe, but in the United States we have seen net declines in wealth for the bottom 60% of the population.

Share Total Wealth 1983-2009

Since wealth assets are not only an alternative source of income, but also, in the US especially a source of retirement income, this means greater dependence on the labor market for the working age population, as well as postponement of retirement, further swelling the ranks of the labor market. On top of which, wages remain stagnant and full-time work harder to find. Jobs are low-paying, part-time, and insecure and once one starts looking not at median but bottom quintiles, the situation is only worse. These trends are equally evident in Europe, where part-time, less secure employment has increased in places like the UK and Netherlands, alongside the more often commented increases in unemployment in places like Greece, Spain and Portugal.

In all, then, we can say that alternatives to employment have gotten worse or disappeared for the majority of people in the US and Europe, while the available jobs pay, on average, less than they used to and offer less security. There is every reason to think that the most likely near future of work will give us strong reasons to think about a different way of organizing work – about a better, if less likely, future.

Making the best of a good crisis?

17 May

A recent debate has emerged around the use European elites can make of the Eurozone crisis. According to the Naomi Klein theory of social change, backed up recently by Paul Krugman, crises are used by capitalists as opportunities to reform economies in their favour. Whether such crises, or “disasters” to use Klein’s turn, are wars provoked by outside interventions (Iraq) or financial crises of the kind we are seeing today in Europe and elsewhere, the point is that crises are good for those who favour neoliberal policies.

In the context of the austerity versus stimulus debate, Krugman suggests that the reason why austerity is preferred is not that it works (it clearly isn’t working) but it is because stimulus might work. If European economies begin to grow again, then the window of opportunity to replace “social Europe” with a neoliberal alternative will have gone. Successful stimulus will only strengthen the case against deeper structural reform. Krugman notes that this view is already entering into the evaluation of Japan’s recent attempt at monetary stimulus: cautious voices are pointing out that if this works, then there will be no incentive to tackle the country’s underlying problems.

There is quite a bit wrong with this explanation for austerity, however compelling it may seem at the intuitive level. Everyone likes to bash those far-sighted capitalists – the elusive 1% – who conspire behind closed doors to get what they want at the expense of everyone else, the 99%. But this is more a conspiracy theory than it is an explanation of why governments are committed – for the time being – to the austerity agenda. Profiting from a crisis is one thing. Creating a crisis in order to implement a cunning plan is another. In Europe, there is no doubt that authors of the bail-outs have tried to calibrate carrot and stick, using the difficulties of the present crisis in countries like Greece and Portugal as a way of encouraging structural reform. They have also cautioned against any suggestion that the crisis is over, believing that such talk will undermine the commitment of national elites to the reform programme. All this, however, is a far cry from the notion that crises are manufactured as opportunities for neoliberally inspired reforms.

Krugman makes the added point that elites chose austerity over stimulus because they feared the latter could be too successful. He invokes the work of the Polish Marxist Michal Kalecki and his notion of the political business cycle. According to Krugman, Kalecki’s idea explains why businessmen don’t like Keynesian economies. In fact, Kalecki argues something much more specific. At issue for Kalecki is not the ability of Keynesian deficit spending to return crisis-ridden capitalist economies to the status quo ante, which is what Krugman and others imply. Kalecki’s point is not about the stabilizing effects of Keynesianism but rather about its transformative and radical political effects. These are not internal to Keynesianism itself – Keynes was far from being a radical on this point – but are part of the political consequences of Keynesian policies (hence the title of Kalecki’s famous 1943 essay, ‘Political Aspects of Full Employment’).

Kalecki argues that full employment, as a policy goal, is both feasible and attainable. However, politically, the problem with maintaining full employment is that it empowers the working class to the point that it begins to challenge the basic contours of the capitalist economy itself. Full employment has a creative effect by way of ideas and actions that threatens the fabric of capitalist society. It holds up the prospect of a better society and stimulates people to think about how that alternative could be achieved. Kalecki’s point is that stimulus makes a return to the status quo ante more difficult and that is why owners of capital will do everything to frustrate governments who identify full employment as their main goal.

In today’s context, what is striking is that the austerity versus stimulus debate is had against a backdrop of consensus around the nature of the economic system. Both are means to an agreed end and Krugman’s argument for stimulus is that it works better than austerity in this regard. Kalecki’s point about stimulus was that it throws open, because of the mobilisation and politicisation of workers, the question of what the ends are and of what kind of economic system we would like. If we want to bring back Kalecki to the present discussion, it is this aspect that we should emphasize. And to resist Krugman and Klein’s conspiratorial accounts of intended crises and infinitely cunning capitalist elites.

Work is (potentially) one good thing: A response to Livingston and other post-workists

14 Mar

In today’s post, TCM co-editor Alex Gourevitch replies to Jim Livingston and other anti-workists, a debate that heated up after Ross Douthat’s op-ed on the subject. For the earlier iterations of this discussion see our earlier post, along with Peter Frase, Evan Burger, and Jim Livingston’s – and some older posts by Seth Ackerman, Chris Maisano, and Kathi Weeks.

Leisure is one good thing, but work is another

Leisure is a good thing. But it is not everything. That is one problem with the post-workists. The other problem is that they have a very one-sided view of work, one that, ironically, comes from adopting rather than overcoming a distinction that the constraints of this society impose on us: the distinction between production and consumption.

Consider Jim Livingston’s most recent foray into the work debate, in which he argues that work is culturally obsolete. The “renunciation of desire,” which Jim sees as the hallmark of work, was once useful insofar as it led to massive increases in human productivity. Once it became possible for machines to do the work of humans, however, the historical mission of the work ethic was exhausted:

“What if the deferral of desire is no longer the condition of life because the socially necessary labor of the proletarian has receded?  What if the realization of desire (yes, the consumption rather than the production of values) has become the condition of life as such—of human development, as Hegel would say?  Then the morality of the slave, the Stoic, the worker—the repression of desire—becomes a constraint on human development, a fetter on the growth of the forces of production.”

The real possibility available to us, if we overcome our inner compulsion to work and free our desires, is that “man is able to step aside and install machines in his place (Hegel).”

Jim offered these thoughts in the name of “trying to slow us all down,” but he was far too quick. First, the identification of work with the “renunciation of desire” is just wrong. Second, discipline and desire are not opposites. And third there are many different kinds of discipline, some good some bad. If we get our thinking straight about this we’ll see that we should not be seeking to “abolish work” but to change it.

To begin with, to condemn work as the “renunciation of desire” is slipshod. After all, if the very renunciation of desire, whatever exactly that means, were the thing that was bad about work, work would not be the only bad thing. Many activities people engage in during their free time would be bad – like training for a sport or practicing music. It is hard to think of anything but purely non-instrumental activities – like playing games, hobby-painting, revelry, hanging out, and maybe religious worship – as having any value if all renunciation of desire is bad. All purposeful activities require some discipline. So one problem is that the abolish work position, by attacking “discipline” or the “renunciation of desire” isn’t really identifying something specific to work, at least as Livingston defines it. But there’s more.

Livingston wants to celebrate rather than renounce desires, forgetting that the development of many desires is only possible over the course of a life in which there is also discipline. Livingston’s delight in the razzle-dazzle of textual interpretation, his desire to synthesize Hegel-Marx, has required decades of disciplined study; indeed, mere reading itself requires years of discipline and development. It is only after we have developed an ability that we desire its skillful exercise and enjoy its realization.

One would think someone with a fondness for Hegel would be sensitive to this fact, but Livingston’s world is weirdly techno-primitivist. On the one hand, society is brimming with machines, which are a product of a very advanced stage of historical development that presumes a radical transformation and expansion in human needs and relationships. People in this modern society are not born into their occupations and, for that same reason, do not have a fixed or given set of needs defined by hereditary social roles. We define our needs, and have the relative freedom to do so both because our roles are not fixed and because of the massive increase in the technical ability to do so. Further, our way of organizing our desires is stamped by this historical development. The very conception of leisure as free time starkly opposed to productive activity, upon which post-workists lean so heavily, is not a natural one. It is the product of the capitalistic organization of work, in which daily work is radically separated from the satisfaction of needs. The average worker gains access to a wage on condition that she gives up control over her work to a boss – her free time is time spent consuming. Thus our very way of relating to work, leisure and desire is the unwitting and not immediately visible product of a long historical process and specific social constraints. Livingston’s celebration of machines would seem to require acknowledgement of this, and to develop an argument for consumption out of these historical facts.

Yet, on the other hand, though Livingston knows all this, his argument approaches desires as spontaneous and ‘natural,’ not impulses that we develop and refine over a lifetime and a history. Desires have an odd, childlike immediacy for Livingston – direct impulses that we either repress or satisfy. Somehow, in Livingston’s world, we at once heroically bestride the world, consuming with unreflexive gusto all of the amazing technological outputs, yet do so with the simplicity and innocence of a child, for whom any and all constraint is the “renunciation of desire,” the oppressive residue of a bygone era holding us back like a stern father. It is not even clear how Livingston suggests we will maintain just that level of know-how to keep machines running (they do break down!), let alone why this is a way of thinking about desire and consumption that is in any way appropriate for us modern creatures. Alternatively, we could acknowledge that we are reflexive about our desires, that we shape and define them – which involves a more complex dialectic between discipline and development than Livingston’s “renunciation of desire” allows.

Though Livingston pretends to a kind of romanticism, the actual Romantics suffered for their art.  They sometimes exercised quite intense discipline (and took exquisite, often perverse, pleasure in it). Balzac wrote every day for hours at a time, denying himself food and sleep, just to improve and develop his art, even if he then discarded that day’s labor. What he strived for, what he most desired, was the virtuosic display of his abilities, not just any old verbal expression. Nor is this just a point about artists and writers. All human skills, from engineering to teaching to cooking, require patience and discipline to develop. Once developed, they produce in us a host of new desires for their skillful exercise, and we take real pleasure in that. Surely a great part of the pleasure in exercising these abilities is the satisfaction of a job well done, of having achieved something that was difficult, which took foresight, effort and directed energy.

Though the examples so far have been individualistic, we can say the same for collective activity: achieving collective aims requires discipline, and the satisfaction and joy in achievement is related to that discipline. Post-workists frequently mention painting and other artistic activities as the truly creative, free activities, but why not also see, say, the design and execution of a mass transit system as an act of collective creativity? True, it will require certain restraints, like at least a temporary division of labor among participants, and thus a certain amount of individual discipline in order to achieve that long-term end. And there are many undesirable ways for that discipline to be organized (more on that below). But the very fact that discipline is required can’t be what’s bad about them. Surely, one of the things that people find satisfying about cooperative work is that each person restricts some personal desires to one side to participate in and realize a shared a project. If the aim of designing a mass transit system is a democratically defined purpose, and participants can exercise equal control in the design and execution of this work, why not see it as a collective work of art? A full expression of human creativity and productive powers? True, it may only be possible to find pleasure in such activities if we have developed certain ideas about the nature and necessity of social cooperation, about the value of creating and recreating the world around us, about recognition of others as a condition for the exercise of our own powers. But I can see nothing slave-like in any of that. Moreover, those ideas and values already exist in all kinds of work, even those kinds of work shot through with domination and injustice. And that enjoyment of collective endeavors is, among other things, the source of some of that solidarity that has formed the necessary basis of left wing movements.

That we train, refine and expand our impulses is evident even in those desires that Livingston favors: the non-productive or passive desires. I love watching soccer, but I most love watching good soccer. If nobody makes the effort to become a good soccer player, there will be little to appreciate. That desire simply goes unsatisfied. We can say the same thing about a movie, a meal, or anything else we passively consume. Further, when I used to play soccer, a wholly unproductive activity, I got the greatest pleasure from playing well. But to get there, I had to put in hours of training. It was not productive, and what I consumed was the activity of playing. But I could only get that full pleasure after a long period of training my body and mind. In fact, it was only through the process of training that I gained a full appreciation for and desire to play well. Once again, the relevant desire that seeks satisfaction depends upon prior discipline. Discipline is not necessarily or inherently the “renunciation of desire.” It is, or at least can be, the restriction and shaping of impulse, and one that can produce a whole new set of refined and novel desires.

There are many kinds of discipline

I can hear the post-workists sharpening their knives, ready to thrust all kinds of contemporary examples, from creepy workplace surveillance to inhuman working conditions, into the heart of my argument. How could I ignore all the oppression and coercion in so much actually existing work? What good is all that restriction of desire? Why put people in conditions where, in order to satisfy basic needs they have to take shitty jobs, thereby renouncing their deeper longings and desires. And they are right, those are terrible forms of discipline.

But they are right in a way that identifies a problem with Livingston’s post-workism, not my position. The forms of worker coercion and social discipline that are most objectionable are not eternal facts about work but specific to the organization of work under capitalism. It is Livingston who naturalizes many of the negative features of work under capitalism, thereby backhandedly displacing criticism from historically specific relations of political and economic power. Livingston turns a social problem into a problem with, in Livingston’s words, “the ontology of work.”

In fact, some of the absurdity of the position that identifies work with the “renunciation of desire” comes from this unwillingness  to differentiate among different kinds of discipline. The discipline that economic need exercises on a poor worker and the discipline that a boss exercises on an employee are not inherent features of work. Surely we can imagine a society in which people’s basic consumption needs are unconditionally satisfied, and in which all possess equal control over work. But this would not be a society that had “abolished work”; it would be a society that had abolished the class relationships that condemn people to a lifetime of economic need, crappy bosses, and stultifying work. The abolition of the ‘working class’ is not, as the post-workists believe, the abolition of work. It is the reorganization of control over work, and the machines and materials we use to work, so that everyone has the chance for self-developing, better work, should they want it. It is perfectly reasonable to imagine people needing high quality work to feel fulfilled; that it be a central desire in a highly productive society. That is not something a basic income and mechanization of thoroughly unpleasant work could satisfy. There is no obstacle to defending the value of work while still criticizing many forms of worker coercion and social discipline (see here for a piece that I co-authored on just that subject with Corey Robin and Chris Bertram).

Work will not set you free. It is not the only good thing in life. But opportunities for self-developing work are one good thing in life, just as unproductive free time is another good thing. Post-workists, however, tend to be single-minded and therefore one-sided in their conception of a free society. That is why they gravitate towards things like basic income and mechanization, but put less emphasis on the value of collectively controlling the aims and organization of work. Rather than give us a picture of the future, they just take one side of the present and use it beat up on the other side. That is what Livingston does when he argues for the “consumption rather than the production of values.” Surely there are many sides to a full and flourishing existence. In a future society we would not replace producers with consumers but would see the expansion and transformation of both in a way that would see a dissolving, or at least easing, of the contrast between the two things. Work would be something less instrumental and less frequently limiting, but rather freer and self-developing – a productive activity that we can consume. Leisure would be more experimental and wide-ranging, less dominated than it is now by the requirements of recharging for another day at a bad job.

This is not just an argument over utopian ethical ideals. As post-workists themselves have recognized, there is a political problem with the ‘abolition of work.’ As Peter Frase says, “by asking workers to give up not just their chains but their identities as workers, anti-work theorists relinquish the forms of working class pride and solidarity that have been the glue for many left movements.” This problem is clearest in Livingston’s own position, which condemns the desire to work as a slave morality, and which sees discipline as the renunciation of desire, rather than also as the path to achievement and further self-development. If I am right, or even in the ballpark, then there is no reason to discard outright these important sources of solidarity. Nor is there reason to see the kinds of personality required to engage in sustained and organized political struggle as, at best, regrettable necessity, and at worst, slaves on the march. Unless, of course, the post-workists really believe that radical social change is mere child’s play.

The Persistence of Work

25 Feb

The breathless announcement of ‘the end of work’ has been a feature of capitalism almost from its inception. It has featured especially prominently during every capitalist crisis of the twentieth century. From Keynes’ ‘Economic Possibilities for Our Grandchildren’ (1930) and Bertrand Russell’s ‘In Praise of Idleness’ (1932),* to Clive Jenkins and Barrie Sherman’s The Collapse of Work (1979) and Andre Gorz’s Farewell to the Working Class (1980), to Jeremy Rifkin’s (seriously mistimed) The End of Work (1995), we have seen some variety of the claim that there is a tendency for the working class to be replaced by machines. The most recent entrant to this motley crew is Ross Douthat, whose recent column in the New York Times carried the title ‘A World Without Work.’

The rhetorical thrusts and parries of Douthat’s op-ed make it difficult to follow, though his bottom line appears to be that the ‘end of work’ is a secular trend that represents a wider cultural malaise: it is “of a piece with the broader turn away from community in America — from family breakdown and declining churchgoing to the retreat into the virtual forms of sport and sex and friendship.” In other words, it is the product of a series of voluntary individual choices to withdraw from social life. This social disintegration is a threat to human well being – “it’s our fulfillment, rather than the satisfaction of our appetites, that’s threatened by the slow decline of work” – and this is because, while it appears it is easier to survive without working (“steady work is less necessary to human survival than ever before”), we lose all of the personal benefits of work. These benefits are everything from ambition (“it poses a much greater threat to social mobility than to absolute prosperity. [A nonworking working class may not be immiserated; neither will its members ever find a way to rise above their station.]), to “structure” “a place to meet friends and kindle romances” and “a path away from crime and prison for young men.”

Douthat is worth paying attention to because he is not giving us the run-of-the-mill concern with unemployment but rather raising the specter of the rejection of employment. He thinks the voluntary withdrawal from the labor market is the defining feature of our economy: “the decline of work isn’t actually some wild Marxist scenario. It’s a basic reality of 21st-century American life, one that predates the financial crash and promises to continue apace even as normal economic growth returns. This decline isn’t unemployment in the usual sense, where people look for work and can’t find it. It’s a kind of post-employment, in which people drop out of the work force and find ways to live, more or less permanently, without a steady job. So instead of spreading from the top down, leisure time — wanted or unwanted — is expanding from the bottom up.”

The conflation of “wanted and unwanted” leisure is already something of a black-eye for Douthat’s argument. To the degree most current ‘leisure’ is unwanted, it is forced idleness, not voluntary withdrawal. People know that it would, under current circumstances, be better to have a job, but they despair at finding one. Despite record high profit rates, corporations sit on huge loads of cash instead of investing it, and since that is the only source of job growth in this economy, those who want a job but can’t find one are helpless. Unwanted leisure is not expanding from the bottom up, it is forced from the top down.

But let’s put this to one side for now because, at another level of facts, Douthat is lost in a mirage. What Douthat calls “work-force participation” has declined only relative to the highs of the early 2000s and is still significantly above the halcyon days of this nation-of-joiner’s post-war boom. Here is the Bureau of Labor Statistics’ graph of labor-force participation rates going back to 1948, the earliest data point.

latest_numbers_LNS11300000_1948_2013_all_period_M01_data-1

Before 1973 the labor-force participation rate never beat 60% while now, though below its 2000 peak of 67%, it is still at a steady 63-64%. There is no end of work, but rather a one-off decline and then plateau. Even with this decline we continue to labor-force rates plateauing higher than back in the good old days. (Employment-to-population figures tell the same story.) So the historical trend of increasing participation in the labor market, due to the entry of women in the work force, is what still dominates our political economy. Work persists.

Worse yet for Douthat, is his claim that “the decline in work-force participation is actually being made possible by material progress.” Let’s say that Douthat is actually talking about this one-off decline after the recession – since that is the only actual economic fact that conforms to his story. Douthat never explains how material prosperity suddenly lead to a 4% decline in labor-force participation, but there are two options: welfare benefits and ‘getting by.’ Why those two options would suddenly and spontaneously be attractive to people in 2008 he never says, but that is because he can’t. The problem is not the lack of demand for jobs due to superior alternatives, which is what Douthat’s claim amounts to, but rather the persistent lack of supply, which has led especially new entrants to the labor market to temporarily withdraw or postpone entry (ie go to college). This shows up, for instance, in the steep decline in household formation among young people who, lacking adequate income or job security, have fallen back on living with their parents or group housing. In other words, the ‘problem’ registered in the post 2008 numbers, is not material prosperity and government benefits but, rather, economic stagnation. This may be a prosperous society but it is not a dynamic one, nor is it one in which people are unaware of the social disadvantages of getting a job.

The issue here is not just that Douthat gets his facts wrong but that his facts are (mis)assembled to tell a particular kind of story. Like many end of workists before him, Douthat gives the strong impression that the natural tendency of capitalist economy is to bring about an end of work. These statements are always over-reactions to one aspect of capitalist development that miss a larger whole. The natural tendency of the capitalist economy is to generate immense material prosperity alongside unemployment and over-work. While there are fantastic machines, which generate material wealth and replace human workers, this is only one-side of the coin – not evidence that “we’ve gained a world where steady work is less necessary to human survival than ever before.” In fact, a supermajority remain dependent on the labor market for satisfaction of needs, and will remain so unless the political economy is radically transformed. And, further, it is a serious mischaracterization of the situation to say that those who have decreased their dependence on the labor market have done so voluntarily.

That there is no natural tendency towards a leisure society, and that much leisure is in fact forced idleness, is important because it means a society based on free time is one that will require political struggle. It will not naturally evolve through more machines and cultural changes. Moreover, it means that instead of thinking we face some kind of social disintegration due to a cultural shift away from work, community and church, we face a problem of power and control in economic life. Only Douthat’s lack of imagination, combined with mischaracterization of historical trends, lead him to present us with two alternatives – present underemployment (and overwork) or a return to “a grinding job” and all its auxiliary social benefits. Nobody thinks that unemployment is a good thing, least of all those of us who think escaping crappy jobs and nasty bosses is a good thing. Douthat seems to think that “the right not to have a boss” can only take the form of withdrawal from the labor market – a retreat from the world of work itself. But that presumes a current structure of ownership over means of production that there is no good reason to assume. Some jobs may necessarily be grinding, but many of the undesirable aspects of work have to do with subjection to someone else’s will. Change ownership and control and work itself can change. And while drudgery may not disappear, it need not define anyone’s life. There is no reason why we cannot have both more free time and better, more self-developing jobs. The obstacles to that world are social and political, not natural. Douthat, however, wants to leverage on obvious point about the social advantages of the world of work to limit our expectations and lower our horizons.

It is true that the immense wealth, and remarkable, labor-saving machines, of our society make a leisure society possible. But that world of freedom, in which we can be both free at work and free from work, is not one that will naturally appear. It is something people will have to fight for.

*To be fair to Russell, he doesn’t quite belong in this crowd because he appreciated that the leisure society was not something we were naturally approaching so much as a possibility that could only be achieved through political change.

Interview with Hillel Ticktin

5 Apr

Following up on last year’s Current Moment interviews, today we are publishing an interview with Hillel Ticktin, Emeritus Professor of Marxist Studies at the University of Glasgow. An internationally renowned Marxist scholar, Professor Ticktin co-founded in the early 1970s the journal Critique.  He has published numerous books and articles over the years. In 2010, Critique published a special issue on the current crisis to which Ticktin and others contributed.

Eurozone leaders are going on record saying that the worst of the sovereign debt crisis is over. Are they right to be so optimistic?

No. But then, the Eurozone country politicians are not going to tell the truth as to what they think, as it would spook the markets. Without growth, it will be impossible to solve the indebtedness problem, and Germany is insisting on harsh terms for giving loans, so harsh that there will be negative growth. This is clear in the case of Greece, where the newspapers are talking of the need for a future Third Bailout. But in reality it is highly likely that other countries will require further substantial loans. While Portugal will not be too much of a problem, a Spanish or Italian bailout cannot be financed on present Eurozone funds.

Yields have fallen on sovereign debt as the European Central Bank (ECB) has injected over 1 trillion Euros of liquidity into the European banking system in the form of longer-term refinancing operations. How has the crisis changed the ECB and has the ECB been the saviour of the situation?

The ECB has clearly put off the day when the crisis will have to be faced down. Banks have acquired sufficient liquidity to avoid problems and have invested money in their governmental bonds. The rational solution would have been the issuance of sufficient Eurobonds which would be used to fund the various countries involved. Since the Eurobonds would be backed by the successful Eurozone countries, investors will buy them. The ECB has produced a temporary measure but the amount of money involved is insufficient. Until the ECB can act as the Central Bank of an independent country in order to issue as much liquidity as it sees fit, and can help to issue Eurobonds, it is not fit for purpose.

The European approach has combined the backdoor provision of liquidity to its banking system with a frontdoor assault on government budget deficits and on national labour markets. What is your assessment of this approach overall?

Crazy. It is not really a European approach so much as a Conservative policy supported by the UK Conservative party, the Christian Democrats and Free Democrats in Germany, the Republican Party in the USA etc. It is not supported by the social democrats in France or Germany. Hollande has made that very clear. Of course in practice the social democrats do not live up to their promises, but they would ease the situation and might be pushed further by popular pressure. The question is why such a policy is being adopted at all, given that it cannot possibly work, and indeed is not working. It looks as if a section of the bourgeoisie has decided to take the opportunity to attack the working class so far that they would end up with a 19th century approach to social relations. That, in turn, would ultimately destroy the social democratic parties and replace them with revolutionary left wing parties. Whom the Gods would destroy they first make mad.

A feature of the politics of the Eurozone crisis has been the replacement of democratically-elected governments with technocrats. This occurred in both Italy and Greece. Does this signal a trend of some kind, that economic imperatives are being placed above political ones for instance? And does it suggest that European integration today is really about preserving the Euro?

This is an inevitable feature of the present. Once the majority of the population began to turn to the left, as in Greece, the capitalist system itself began to be threatened. The use of the army is not possible at the present time. Nor is a far right popular movement based on the so-called ‘middle class’, So they have had the ingenuity to invent a new undemocratic category of a non-political government,  which makes a mockery of the Parliamentary system.  This is much like the idea that US judges of the Supreme Court are above politics when they pronounce on political measures, even though they have been specifically appointed for political reasons. It does not fool the working class but people may be grateful that it is not worse. Since it will not work, there will have to be even more undemocratic solutions. In the UK during the Great Depression, there was a National Government. In effect a coalition of all the large parties. The fact is that the Parliamentary system was already cracking, so this is another stake in its heart.

There is no question that ‘economics is being placed above politics’. The only rational way to run a union with a common currency is to accept that the richer areas will help fund the poorer areas, in order both to help them catch up but also to maintain cohesion, based on principles of human rights. European countries usually accept such obligations, unless they accept that parts of their country will break away. After all, Germany taxed the West Germans to help the absorption of East Germany. Today, however, the ruling parties in Germany, the Netherlands and Finland appear to reject such an approach. The reason ultimately lies in the fear of instability in those countries. So, economics is not really being placed above politics, depending on one’s definitions of politics and economics. Instead one politics is replacing another. The reason is discussed in the answer to the next question.

Is there an alternative to this approach of national budgetary austerity combined with a pan-European fund intended to offset any threats to Europe’s banking system.

As the current approach is being widely applied and is widely distrusted, and can only fail, there has to be another alternative if humanity is to survive, whether in or out of the Eurozone.

We are in a downturn of depression proportions. The last Great Depression only ended with the World War. War, on that scale, is however, excluded at the present time. The only way out of the present impasse is for a rationally planned economic reconstructive process, with governments playing a leading role. As the ruling class supports small government and the extension of private enterprise, it will oppose any such move. On the contrary, it is afraid that any attempt to go for reflation with government participation will lead to a political upheaval. In my view, they are right that the population will demand increased economic and political participation under conditions of full employment. That is in effect the immediate alternative, which is why the ruling class wants to take the opportunity, instead, to achieve a defeat of the working class of epochal proportions. Looked at this way, the policy of austerity is a defensive measure to preserve capitalism. Seen this way the policy is not crazy but rational, even if its application is mad.

The future is not as apocalyptic as it might seem from that last sentence, since the most likely result for the present is that the austerity policy will be pulled back, even if only by social democrats. Growth will be low, poverty increasing and discontent rising. Ultimately there will be a denouement, but when is not yet clear.

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