Thursday, June 18, 2015

Unemployment and the Environment

Richard Wolff had some interesting comments on his radio show recently. I've transcribed them and shifted them around slightly so that they flow better for clarity:

5-14-2015 [31:10]
I want to spend a little bit of time talking about two topics that you might not put together but really are very well linked. One is the problem of unemployment, a perennial difficulty of capitalist economic systems, and ecology…So let’s start with unemployment and then I’ll show you its link to ecology. 
The way modern capitalist societies generally handle unemployment is the height of unfairness and irrationality. Let me explain. In general, when [mass] unemployment…descends on a capitalist economy, which is every few years in what those folks who like capitalist economies tend to refer as recessions… Mass unemployment usually descends on millions of people, more or less, at the same time. For example in 2008 it descended across the world practically, and we were talking about hundreds of millions of people thrown out of work. 
Clearly in those situations it isn’t the fault of the unemployed. They didn’t suddenly lose their skills and they didn’t suddenly become less productive. Rather they were caught up in an economic system that had no use for them. Now the proper way to handle a social problem like that…would be to share the pain. Because it’s no particular group which you can blame for the unemployment, even though Lord knows there are folks who try. It is really a social phenomenon of a capitalist system… 
Why don’t we blame a particular group? Well, let’s see where we would go if we did that…Who causes unemployment? The logical answer to that is whoever tells another person that they won’t be paid anymore, and their services are not wanted. In other words, employers cause unemployment by firing people. That’s what happened in 2008. Tens of thousands of employers told tens of millions of workers not to come back to work because they weren’t wanted and they wouldn’t be paid. 
So if you’re looking for the group that caused unemployment, the first place for you to look would be the private employers, and then also the public employers who laid workers off – who fired them. 
But of course a sophisticated economic analysis would ask the question 'why would these employers suddenly fire these people?' Why did they cause unemployment? And I would be the first to show it's because either their profits are falling, or threatened, or in some way their economic viability as enterprises was in trouble, and they resolved that problem…by laying off workers because then they wouldn’t have to pay them, which wouldn’t make much sense unless they had trouble selling what they paid those workers to produce. 
So I understand it isn’t really the fault of those who fired those workers; it’s really a system problem. The employer was caught up in a system that made him do something that caused millions of people to lose their jobs. 
Well if it isn’t the fault of the employer who fired you and it is the fault of the system, than why is the burden of unemployment put only on some people rather than being shared? If the employers have to share the pain, in lowered profits, lowered business, poorer conditions they all face, than workers ought to be able to share the pain too. And that would mean reducing the work week for all workers for as long as the economic downturn lasts. 
So the proper way to handle this crisis would be for everybody to share the pain, we’ll get through this together, teamwork and all that. How would that happen? Simple. You don’t take one part of the population and plunge them into the disaster of having no work and no income. For example at the height of the 2008 and 2009 crisis here in the United States, we had in excess ten percent of our people unemployed….Sharing would mean that instead of saying to ten percent of the people, ‘your life is now a disaster, you have no job, you have no income, and all the problems that go with it,’ and saying to the other ninety percent of the people, ‘it’s not your problem.’ We could instead say, 'everybody works ten percent less than they did before.' That means we share the unemployment. Instead of firing some people, we reduce the work week for everybody, then everybody would share. 
Why isn’t this done, this fairer, more equitable, more democratic, way of handing the unemployment flaw of capitalism as it recurrently revisits this disaster upon us?
The answer is here, I think, a political one. If all workers were periodically told …you’re going on 90 percent time rather than 100 percent time; we’re only going to pay you 9/10ths of your salary because you’re only going to be working 9/10ths the hours because everybody’s sharing the 10 percent unemployment, guess what would happen. 
ALL of the workers, being affected by unemployment, would all become much more interested and much more critical of an economic system that dumps this unemployment problem on them periodically and recurrently. That would be dangerous for capitalism.
It’s much easier to sustain a capitalist system if you keep singling out a small section of the population and really dump unemployment on them and exempt others from it. It’s a kind of scapegoat economics. Even better if you can make it the same people who get dumped into unemployment first. You know, the last ones hired and the first ones fired – those folks. And if they’re different from others – ethnically, skin color, gender, doesn’t really matter, then you can begin to suggest to the ninety percent who have no unemployment that it isn’t really about a system that can’t provide work, it’s a flaw in those people. And then you have unemployment rationalized by something well on its way to racism.
It makes sense if you think about – why give a small segment of the population zero hours where they earn nothing at all, while the majority of the population gets to pretend like nothing has happened? It’s structuring the jobs market like a game of musical chairs, as I’ve often pointed out. But I hadn’t considered the political angle. In this way, the people who lose their jobs are singled out and blamed for the economic situation they did nothing to cause. The people who didn’t get laid off can blame the unemployed for their own plight.

In  fact we all know it’s worse than that – when layoffs occur ,the people who still have their jobs are forced to work extra-hard to compensate for the loss of people – “I’m now working two jobs – me and they guy who got laid off,” is the popular refrain. And usually it’s not that companies are threatened or not profitable, they just aren’t profitable enough for Wall Street—they “missed their target” in the jargon, so they lay off people for a slight uptick in profits to satisfy the shareholder class while plunging many people into destitution. And the decimation tactics work just like they did in ancient Rome – they terrify the rest of the unit into behaving properly.

It’s an amazing form of social control.

It reminds me of the TV show Survivor – which is great training for capitalist ethics. Rather than cooperate, people are voted off the island one by one. This forces the people into a situation where they are forced into constantly manipulating, schmoozing, back-biting, gossiping, etc., basically playing office politics, to single out who stays and who goes, until no one is left. It’s basically a personality contest, just like corporate America. And survival is not really in question – nobody’s going to die here because of a lack of food or medical care. Instead, contestants are forced to play ridiculous and arbitrary games that serve no useful purpose to anyone (running through obstacle courses, etc.) to earn their keep. It’s the tropical Eden constructed along capitalist lines – which is to say a nightmare.

Singling out people to dump unemployment on is something I’m sure American readers are familiar with.

We dumped the effects of technological unemployment in this country almost exclusively onto the African-American community, allowing the white community (and economists) to pretend that nothing happened, and deindustrialization worked out OK. The black community bore the brunt of the first wave of technological unemployment due to deindustrialization. This is ironic, since as Jeremy Rifkin pointed out in The End of Work, the African-American community migrated to northern industrial cities because they lost their sharecropping livelihoods due to the invention of the mechanical cotton-picker (not to be confused with the cotton gin). The effects of technological unemployment on the black community were ignored and instead focused entirely on the personal behavior of “those people”, who were just determined by evolution to have children out of wedlock, drop out of school, shoot each other, and get addicted to drugs.

What’s interesting is how you’re seeing the exact same arguments applied to white people now!  Coincidence, or part of the plan? Thus today’s working-class whites are just assumed to be less “moral” than their parents by the pundit class, despite lowered crime rates and higher secondary school attendance than in 1970. Great American cities became collapsed no-go zones filled with gang violence, hopelessness, hunger and poverty, and we just pretended it didn’t happen because the “official” unemployment rate was low and, hey, New York looks great, doesn’t it? If you want to pretend deindustrialization worked out okay, you have to just forget the fact that major American cities like Detroit, Baltimore, Cleveland and Chicago were transformed from prosperous, industrious cities to post-collapse hellholes, quite a feat. But, of course, for economists whatever does not show up in “official statistics” does not, in fact, exist.

A popular book about this phenomenon was called “When Work Disappears” by William Julius Wilson. But why did it disappear? According to economists, it didn’t disappear! Than why do those cities look the way they do? The decimation of the Industrial Midwest was enabled by racism.
Let’s go back to this idea of sharing unemployment. Because now I can draw the bridge between an analysis of unemployment on the one hand, and the ecology or environmental considerations on the other. 
Let’s suppose we had a rational society that decided not only what it wanted to have produced, goods and services, housing, food, clothing, transportation, entertainment, whatever, but also took ecological and environmental considerations seriously. Then it might be decided, democratically, one hopes, to put to the mass of people the question. Can we find ways to be more respectful, to be better able to preserve that natural environment we depend on than we have been, and what are the implications for work? And such a deliberation could decide, yes, we can get by very well with much less stuff. And that will preserve our energy resources, that will preserve the health and well-being of our natural environment. And it has another benefit. If we produce less, and use up less of our earth, we will also therefore have to work less. And this would become appealing to the American people if they knew that the benefit of ecological consciousness would include sharing more leisure. Let me explain very concretely. 
In the United States…we move people around by means of automobiles to an extraordinary extent. And private automobiles are notorious for the deaths and injuries they cause in traffic accidents, for the enormous waste of energy that is involved in moving one person I one vehicle, as opposed to 20 30 or 40 people in a bus or a train et cetera. The pollution caused by a private automobile far exceeds what public transportation would provide. Were we to decide to save on the energy waste, and the pollution, and the death and injury that the private automobile more of transportation entails, and if we were to move instead to beautiful, well-prepared, high-quality frequent public transportation in all the urban and suburban areas where most people in most advanced countries now live, we would be able to give everybody several hours a week less work. We wouldn’t be making those care anymore because we wouldn’t need them. We would be making-and it takes many fewer hours, we would be making trains, buses and vans instead. If that cut in the production of automobiles was accomplished by sharing the benefit that we don’t need to spend umpteen million hours producing the cars e no longer rely on, if that were shared, then the mass of people would be able by the same decision to save on the waste of energy involved in the car. To save on the death and injury involved in a car-based transportation system, to save on the pollution of air and water that wasteful car production has always meant, and at the same time, give themselves fewer hours of labor which would be shared across ALL industries and not just the automobile [industry]. 
Therefore, everybody would continue to work, they’d have less hours, and because of the savings in money from going from a private to a public transportation system, even the fact that the fewer hours you worked meant you got a little bit less pay, it wouldn’t impact your standard of living because, if you think about it, you would be saving a fortune moving to high quality, mass produced, mass transportation from the enormous expenses of your private car, with its private insurance, and its private excessive fueling, etc. etc. Our dependence upon oil, all of it could be changed. 
I don’t want to get lost in the specifics; I want the big point to be made. In a rational society, here’s how the economic system would be planned. Figure out how much stuff we as a society want. Take into account our needs our wants our pleasures. Take account of the economic and the ecological environment they’re in. figure out how many hours of work it would take to produce the goods and services it would take to reflect our respect for our individual needs and wants and our collective dependence on nature, and then divide the work equally among all the able-bodied adults so we all participate in doing the work that we altogether decided we as a community want. That’s a better way; it’s a more rational way. What it doesn’t allow for is a tiny group of people to make decisions based on their own profits even if they flaunt the needs and desires of a democratic society… 
Sharing unemployment is not only something we should do as we cope with the irrational instability of capitalism. Its’ also a way we can understand how we will win the majority of our fellow citizens to a program to make ecological preservation a central part of our political future, because we can go to the people and say, 'environmental protection is not a threat to your job. Not protecting is a threat.' Going in that direction, finding a way to produce less and to use up less of our natural resources is also a way to increase leisure as we share, for the first time, really, the benefits of a more rational economic system.
The problem with Wolff’s second point is that capitalists will be quick to point out that this democratic decisionmaking of what to produce is actually accomplished via the Market. The Market decides what to produce by the signals it sends, because nobody is able to know and anticipate what everyone’s needs will be. Centralized planning of what to produce leads shortages like in Russia. And since the Market is a distributed, bottom-up system, it aggregates peoples’ needs, wants and preferences through coordination measures like prices and profits without anyone having to exert central control, which inevitably leads to tyranny in any case. The Market is democratic, far more democratic than any government, they argue. Companies can only produce what people want.

I wish Wolff had addressed this because it’s such an easy criticism, and I would say the common-sense belief. While debunking it would take a book practically, I’ll just point out a few things. If corporations just produce what people want, how come they spend billions on advertising to tell people what they want? In the real world, corporations decide which products will maximize their profits, and then spend millions convincing us that we need them. And we always must purchase more than the year before, despite all the existing products already out there.

Secondly, if corporations produce only what the market signals, then how do we get the boom and bust cycles of overproduction and scarcity? These actually used to be worse when there was less central control. Since producers don’t know what other producers are doing, to maximize profits they overproduce, since there is no central coordination. Thus you get slumps. You also get gluts where goods pile up on shelves without the income to buy them. Free-market anarchy has its downsides too, we just pretend they don’t exist due to propaganda.

Wolff’s last point – greater oversight of what to produce and sharing work is actually greener, is one I’ve tried to make often. If were able to spend money for the public purpose without being hamstrung by debt, we could construct a more resilient economy.

Which is to say, government policy affects the how the decline plays out. This is why it’s sad that some people just believe that we should disengage completely, cry "we’re doomed," and do nothing whatsoever to influence government policy, and just watch the collapse play out.

Related: http://hipcrime.blogspot.com/2015/01/against-basic-income.html

4 comments:

  1. You'd think the Invisible hand, being all-knowing, and being utterly uniquely qualified to solve the ineffable Coordination Problem, would be able to come up with a load-balancing algorithm. But noooooooooooooooooooooooo!

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    1. The Market has decided we want twelve different kinds of peanut butter, laundry detergent with fabric softener, and Axe body spray.

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  2. The market can't decide what we want when it only offers goods, and not information about what it took to produce them. The people who think they want Axe body spray--and prove it by buying the stuff--don't know about the toxins that may affect their health if they use it, the river being polluted by its manufacture, the hazards to workers, the payoffs to government agencies to ignore the pollution of the river, etc. The logic of the marketplace is fine within a very narrow spectrum of reality. Thus you get neoclassical economists arguing that the environment is a subset of the economy, or that it doesn't matter if climate change destroys agriculture because agriculture is only 3% of the economy.

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  3. "This is why it’s sad that some people just believe that we should disengage completely, cry "we’re doomed," and do nothing whatsoever to influence government policy, and just watch the collapse play out."

    Well some of us believe that our views and votes do not influence government policy in any way, and that protest movements (like Occupy for example) will be crushed before they can effect any real change.

    That said, thank you for writing, and hope you're doing better than a few weeks ago ("A Reflection On Mortality").

    geoff

    ReplyDelete

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