19
Apr

 

 

 

Previous technological innovation has always delivered more long-run employment, not less. But things can change

The Economist, Jan 18th 2014

IN 1930, when the world was “suffering…from a bad attack of economic pessimism”, John Maynard Keynes wrote a broadly optimistic essay, “Economic Possibilities for our Grandchildren”. It imagined a middle way between revolution and stagnation that would leave the said grandchildren a great deal richer than their grandparents. But the path was not without dangers.

One of the worries Keynes admitted was a “new disease”: “technological unemployment…due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.” His readers might not have heard of the problem, he suggested—but they were certain to hear a lot more about it in the years to come.

For the most part, they did not. Nowadays, the majority of economists confidently wave such worries away. By raising productivity, they argue, any automation which economises on the use of labour will increase incomes. That will generate demand for new products and services, which will in turn create new jobs for displaced workers. To think otherwise has meant being tarred a Luddite—the name taken by 19th-century textile workers who smashed the machines taking their jobs.

For much of the 20th century, those arguing that technology brought ever more jobs and prosperity looked to have the better of the debate. Real incomes in Britain scarcely doubled between the beginning of the common era and 1570. They then tripled from 1570 to 1875. And they more than tripled from 1875 to 1975. Industrialisation did not end up eliminating the need for human workers. On the contrary, it created employment opportunities sufficient to soak up the 20th century’s exploding population. Keynes’s vision of everyone in the 2030s being a lot richer is largely achieved. His belief they would work just 15 hours or so a week has not come to pass.

When the sleeper wakes

Yet some now fear that a new era of automation enabled by ever more powerful and capable computers could work out differently. They start from the observation that, across the rich world, all is far from well in the world of work. The essence of what they see as a work crisis is that in rich countries the wages of the typical worker, adjusted for cost of living, are stagnant. In America the real wage has hardly budged over the past four decades. Even in places like Britain and Germany, where employment is touching new highs, wages have been flat for a decade. Recent research suggests that this is because substituting capital for labour through automation is increasingly attractive; as a result owners of capital have captured ever more of the world’s income since the 1980s, while the share going to labour has fallen.

At the same time, even in relatively egalitarian places like Sweden, inequality among the employed has risen sharply, with the share going to the highest earners soaring. For those not in the elite, argues David Graeber, an anthropologist at the London School of Economics, much of modern labour consists of stultifying “bullshit jobs”—low- and mid-level screen-sitting that serves simply to occupy workers for whom the economy no longer has much use. Keeping them employed, Mr Graeber argues, is not an economic choice; it is something the ruling class does to keep control over the lives of others.

Be that as it may, drudgery may soon enough give way to frank unemployment. There is already a long-term trend towards lower levels of employment in some rich countries. The proportion of American adults participating in the labour force recently hit its lowest level since 1978, and although some of that is due to the effects of ageing, some is not. In a recent speech that was modelled in part on Keynes’s “Possibilities”, Larry Summers, a former American treasury secretary, looked at employment trends among American men between 25 and 54. In the 1960s only one in 20 of those men was not working. According to Mr Summers’s extrapolations, in ten years the number could be one in seven.

This is one indication, Mr Summers says, that technical change is increasingly taking the form of “capital that effectively substitutes for labour”. There may be a lot more for such capital to do in the near future. A 2013 paper by Carl Benedikt Frey and Michael Osborne, of the University of Oxford, argued that jobs are at high risk of being automated in 47% of the occupational categories into which work is customarily sorted. That includes accountancy, legal work, technical writing and a lot of other white-collar occupations.

Answering the question of whether such automation could lead to prolonged pain for workers means taking a close look at past experience, theory and technological trends. The picture suggested by this evidence is a complex one. It is also more worrying than many economists and politicians have been prepared to admit.

The lathe of heaven

Economists take the relationship between innovation and higher living standards for granted in part because they believe history justifies such a view. Industrialisation clearly led to enormous rises in incomes and living standards over the long run. Yet the road to riches was rockier than is often appreciated.

In 1500 an estimated 75% of the British labour force toiled in agriculture. By 1800 that figure had fallen to 35%. When the shift to manufacturing got under way during the 18th century it was overwhelmingly done at small scale, either within the home or in a small workshop; employment in a large factory was a rarity. By the end of the 19th century huge plants in massive industrial cities were the norm. The great shift was made possible by automation and steam engines.

Industrial firms combined human labour with big, expensive capital equipment. To maximise the output of that costly machinery, factory owners reorganised the processes of production. Workers were given one or a few repetitive tasks, often making components of finished products rather than whole pieces. Bosses imposed a tight schedule and strict worker discipline to keep up the productive pace. The Industrial Revolution was not simply a matter of replacing muscle with steam; it was a matter of reshaping jobs themselves into the sort of precisely defined components that steam-driven machinery needed—cogs in a factory system.

The way old jobs were done changed; new jobs were created. Joel Mokyr, an economic historian at Northwestern University in Illinois, argues that the more intricate machines, techniques and supply chains of the period all required careful tending. The workers who provided that care were well rewarded. As research by Lawrence Katz, of Harvard University, and Robert Margo, of Boston University, shows, employment in manufacturing “hollowed out”. As employment grew for highly skilled workers and unskilled workers, craft workers lost out. This was the loss to which the Luddites, understandably if not effectively, took exception.

With the low-skilled workers far more numerous, at least to begin with, the lot of the average worker during the early part of this great industrial and social upheaval was not a happy one. As Mr Mokyr notes, “life did not improve all that much between 1750 and 1850.” For 60 years, from 1770 to 1830, growth in British wages, adjusted for inflation, was imperceptible because productivity growth was restricted to a few industries. Not until the late 19th century, when the gains had spread across the whole economy, did wages at last perform in line with productivity (see chart 1).

Along with social reforms and new political movements that gave voice to the workers, this faster wage growth helped spread the benefits of industrialisation across wider segments of the population. New investments in education provided a supply of workers for the more skilled jobs that were by then being created in ever greater numbers. This shift continued into the 20th century as post-secondary education became increasingly common.

Claudia Goldin, an economist at Harvard University, and Mr Katz have written that workers were in a “race between education and technology” during this period, and for the most part they won. Even so, it was not until the “golden age” after the second world war that workers in the rich world secured real prosperity, and a large, property-owning middle class came to dominate politics. At the same time communism, a legacy of industrialisation’s harsh early era, kept hundreds of millions of people around the world in poverty, and the effects of the imperialism driven by European industrialisation continued to be felt by billions.

The impacts of technological change take their time appearing. They also vary hugely from industry to industry. Although in many simple economic models technology pairs neatly with capital and labour to produce output, in practice technological changes do not affect all workers the same way. Some find that their skills are complementary to new technologies. Others find themselves out of work.

Take computers. In the early 20th century a “computer” was a worker, or a room of workers, doing mathematical calculations by hand, often with the end point of one person’s work the starting point for the next. The development of mechanical and electronic computing rendered these arrangements obsolete. But in time it greatly increased the productivity of those who used the new computers in their work.

Many other technical innovations had similar effects. New machinery displaced handicraft producers across numerous industries, from textiles to metalworking. At the same time it enabled vastly more output per person than craft producers could ever manage.

Player piano

For a task to be replaced by a machine, it helps a great deal if, like the work of human computers, it is already highly routine. Hence the demise of production-line jobs and some sorts of book-keeping, lost to the robot and the spreadsheet. Meanwhile work less easily broken down into a series of stereotyped tasks—whether rewarding, as the management of other workers and the teaching of toddlers can be, or more of a grind, like tidying and cleaning messy work places—has grown as a share of total employment.

But the “race” aspect of technological change means that such workers cannot rest on their pay packets. Firms are constantly experimenting with new technologies and production processes. Experimentation with different techniques and business models requires flexibility, which is one critical advantage of a human worker. Yet over time, as best practices are worked out and then codified, it becomes easier to break production down into routine components, then automate those components as technology allows.

If, that is, automation makes sense. As David Autor, an economist at the Massachusetts Institute of Technology (MIT), points out in a 2013 paper, the mere fact that a job can be automated does not mean that it will be; relative costs also matter. When Nissan produces cars in Japan, he notes, it relies heavily on robots. At plants in India, by contrast, the firm relies more heavily on cheap local labour.

Even when machine capabilities are rapidly improving, it can make sense instead to seek out ever cheaper supplies of increasingly skilled labour. Thus since the 1980s (a time when, in America, the trend towards post-secondary education levelled off) workers there and elsewhere have found themselves facing increased competition from both machines and cheap emerging-market workers.

Such processes have steadily and relentlessly squeezed labour out of the manufacturing sector in most rich economies. The share of American employment in manufacturing has declined sharply since the 1950s, from almost 30% to less than 10%. At the same time, jobs in services soared, from less than 50% of employment to almost 70% (see chart 2). It was inevitable, therefore, that firms would start to apply the same experimentation and reorganisation to service industries.

A new wave of technological progress may dramatically accelerate this automation of brain-work. Evidence is mounting that rapid technological progress, which accounted for the long era of rapid productivity growth from the 19th century to the 1970s, is back. The sort of advances that allow people to put in their pocket a computer that is not only more powerful than any in the world 20 years ago, but also has far better software and far greater access to useful data, as well as to other people and machines, have implications for all sorts of work.

The case for a highly disruptive period of economic growth is made by Erik Brynjolfsson and Andrew McAfee, professors at MIT, in “The Second Machine Age”, a book to be published later this month. Like the first great era of industrialisation, they argue, it should deliver enormous benefits—but not without a period of disorienting and uncomfortable change. Their argument rests on an underappreciated aspect of the exponential growth in chip processing speed, memory capacity and other computer metrics: that the amount of progress computers will make in the next few years is always equal to the progress they have made since the very beginning. Mr Brynjolfsson and Mr McAfee reckon that the main bottleneck on innovation is the time it takes society to sort through the many combinations and permutations of new technologies and business models.

A startling progression of inventions seems to bear their thesis out. Ten years ago technologically minded economists pointed to driving cars in traffic as the sort of human accomplishment that computers were highly unlikely to master. Now Google cars are rolling round California driver-free no one doubts such mastery is possible, though the speed at which fully self-driving cars will come to market remains hard to guess.

Brave new world

Even after computers beat grandmasters at chess (once thought highly unlikely), nobody thought they could take on people at free-form games played in natural language. Then Watson, a pattern-recognising supercomputer developed by IBM, bested the best human competitors in America’s popular and syntactically tricksy general-knowledge quiz show “Jeopardy!” Versions of Watson are being marketed to firms across a range of industries to help with all sorts of pattern-recognition problems. Its acumen will grow, and its costs fall, as firms learn to harness its abilities.

The machines are not just cleverer, they also have access to far more data. The combination of big data and smart machines will take over some occupations wholesale; in others it will allow firms to do more with fewer workers. Text-mining programs will displace professional jobs in legal services. Biopsies will be analysed more efficiently by image-processing software than lab technicians. Accountants may follow travel agents and tellers into the unemployment line as tax software improves. Machines are already turning basic sports results and financial data into good-enough news stories.

Jobs that are not easily automated may still be transformed. New data-processing technology could break “cognitive” jobs down into smaller and smaller tasks. As well as opening the way to eventual automation this could reduce the satisfaction from such work, just as the satisfaction of making things was reduced by deskilling and interchangeable parts in the 19th century. If such jobs persist, they may engage Mr Graeber’s “bullshit” detector.

Being newly able to do brain work will not stop computers from doing ever more formerly manual labour; it will make them better at it. The designers of the latest generation of industrial robots talk about their creations as helping workers rather than replacing them; but there is little doubt that the technology will be able to do a bit of both—probably more than a bit. A taxi driver will be a rarity in many places by the 2030s or 2040s. That sounds like bad news for journalists who rely on that most reliable source of local knowledge and prejudice—but will there be many journalists left to care? Will there be airline pilots? Or traffic cops? Or soldiers?

There will still be jobs. Even Mr Frey and Mr Osborne, whose research speaks of 47% of job categories being open to automation within two decades, accept that some jobs—especially those currently associated with high levels of education and high wages—will survive (see table). Tyler Cowen, an economist at George Mason University and a much-read blogger, writes in his most recent book, “Average is Over”, that rich economies seem to be bifurcating into a small group of workers with skills highly complementary with machine intelligence, for whom he has high hopes, and the rest, for whom not so much.

And although Mr Brynjolfsson and Mr McAfee rightly point out that developing the business models which make the best use of new technologies will involve trial and error and human flexibility, it is also the case that the second machine age will make such trial and error easier. It will be shockingly easy to launch a startup, bring a new product to market and sell to billions of global consumers (see article). Those who create or invest in blockbuster ideas may earn unprecedented returns as a result.

In a forthcoming book Thomas Piketty, an economist at the Paris School of Economics, argues along similar lines that America may be pioneering a hyper-unequal economic model in which a top 1% of capital-owners and “supermanagers” grab a growing share of national income and accumulate an increasing concentration of national wealth. The rise of the middle-class—a 20th-century innovation—was a hugely important political and social development across the world. The squeezing out of that class could generate a more antagonistic, unstable and potentially dangerous politics.

The potential for dramatic change is clear. A future of widespread technological unemployment is harder for many to accept. Every great period of innovation has produced its share of labour-market doomsayers, but technological progress has never previously failed to generate new employment opportunities.

The productivity gains from future automation will be real, even if they mostly accrue to the owners of the machines. Some will be spent on goods and services—golf instructors, household help and so on—and most of the rest invested in firms that are seeking to expand and presumably hire more labour. Though inequality could soar in such a world, unemployment would not necessarily spike. The current doldrum in wages may, like that of the early industrial era, be a temporary matter, with the good times about to roll (see chart 3).

These jobs may look distinctly different from those they replace. Just as past mechanisation freed, or forced, workers into jobs requiring more cognitive dexterity, leaps in machine intelligence could create space for people to specialise in more emotive occupations, as yet unsuited to machines: a world of artists and therapists, love counsellors and yoga instructors.

Such emotional and relational work could be as critical to the future as metal-bashing was in the past, even if it gets little respect at first. Cultural norms change slowly. Manufacturing jobs are still often treated as “better”—in some vague, non-pecuniary way—than paper-pushing is. To some 18th-century observers, working in the fields was inherently more noble than making gewgaws.

But though growth in areas of the economy that are not easily automated provides jobs, it does not necessarily help real wages. Mr Summers points out that prices of things-made-of-widgets have fallen remarkably in past decades; America’s Bureau of Labour Statistics reckons that today you could get the equivalent of an early 1980s television for a twentieth of its then price, were it not that no televisions that poor are still made. However, prices of things not made of widgets, most notably college education and health care, have shot up. If people lived on widgets alone— goods whose costs have fallen because of both globalisation and technology—there would have been no pause in the increase of real wages. It is the increase in the prices of stuff that isn’t mechanised (whose supply is often under the control of the state and perhaps subject to fundamental scarcity) that means a pay packet goes no further than it used to.

So technological progress squeezes some incomes in the short term before making everyone richer in the long term, and can drive up the costs of some things even more than it eventually increases earnings. As innovation continues, automation may bring down costs in some of those stubborn areas as well, though those dominated by scarcity—such as houses in desirable places—are likely to resist the trend, as may those where the state keeps market forces at bay. But if innovation does make health care or higher education cheaper, it will probably be at the cost of more jobs, and give rise to yet more concentration of income.

The machine stops

Even if the long-term outlook is rosy, with the potential for greater wealth and lots of new jobs, it does not mean that policymakers should simply sit on their hands in the mean time. Adaptation to past waves of progress rested on political and policy responses. The most obvious are the massive improvements in educational attainment brought on first by the institution of universal secondary education and then by the rise of university attendance. Policies aimed at similar gains would now seem to be in order. But as Mr Cowen has pointed out, the gains of the 19th and 20th centuries will be hard to duplicate.

Boosting the skills and earning power of the children of 19th-century farmers and labourers took little more than offering schools where they could learn to read, write and do algebra. Pushing a large proportion of college graduates to complete graduate work successfully will be harder and more expensive. Perhaps cheap and innovative online education will indeed make new attainment possible. But as Mr Cowen notes, such programmes may tend to deliver big gains only for the most conscientious students.

Another way in which previous adaptation is not necessarily a good guide to future employment is the existence of welfare. The alternative to joining the 19th-century industrial proletariat was malnourished deprivation. Today, because of measures introduced in response to, and to some extent on the proceeds of, industrialisation, people in the developed world are provided with unemployment benefits, disability allowances and other forms of welfare. They are also much more likely than a bygone peasant to have savings. This means that the “reservation wage”—the wage below which a worker will not accept a job—is now high in historical terms. If governments refuse to allow jobless workers to fall too far below the average standard of living, then this reservation wage will rise steadily, and ever more workers may find work unattractive. And the higher it rises, the greater the incentive to invest in capital that replaces labour.

Everyone should be able to benefit from productivity gains—in that, Keynes was united with his successors. His worry about technological unemployment was mainly a worry about a “temporary phase of maladjustment” as society and the economy adjusted to ever greater levels of productivity. So it could well prove. However, society may find itself sorely tested if, as seems possible, growth and innovation deliver handsome gains to the skilled, while the rest cling to dwindling employment opportunities at stagnant wages.

From the print edition: Briefing

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Category : Capitalism | Keynes | Technology | Working Class
17
Apr

James Dean. Photo: Hulton Archive/Getty Images

A life mesmerizingly truncated, James Dean left behind only three films, and the gaping absence of the career that might have been.

Even though he only made three films, James Dean introduced Hollywood to a new kind of man: Photo above: Hulton Archive/Getty Images

by India Ross

New Statesman

17 April, 2014 – In Rebel Without A Cause, from 1955, a 24-year old James Dean, red-jacketed and tight-jeaned, climbs behind the wheel of an old black Mercury. To his right, the opponent he will race to the edge of a cliff hangs out of his driver-side window for a last slug of bravado: “Hey Toreador!”, he jeers. “First man who jumps is a chicken.” Re-inserting a trademark cigarette, Dean flicks on his headlights and hits the gas, and the two cars accelerate towards the brink. Frames from the edge, Dean glances right, grabs for the door and rolls out onto the turf. His adversary, jacket sleeve caught on his door handle and jammed into his driver’s seat, slips wrenchingly over the edge with his car.

Less than a year later, the real life James Dean, whose legacy is the subject of an upcoming retrospective at the BFI, was to die in an echoing event, flipping a race-car on a bend on a California highway. A life mesmerisingly truncated, he left behind only three films, and the gaping absence of the career that might have been. It was a sequence of events morbidly inkeeping with the themes of doomed youth his characters embodied.

The word “iconic” is tossed around ad nauseum, but if ever it were to apply, in the sense of an individual and a star whose off-screen persona outshines the sum of their roles, who bends the fabric of the society in which they live, Dean would surely qualify. In life, and even more so in death, the bee-stung darling of early Technicolor has held the awe of the movie-going public.

But facial anatomy and excellent hair were not the traits for which Dean was influential. Hollywood does not suffer a shortage of cheekbones. He slotted into a blurry interlude following the second world war but before the flowering of the Beat movement, in which the role of a man in society was under sudden and unsuspected dispute. A generation primed for combat found itself at a loss of purpose, and gender roles that were without meaning overnight began to merge and reconfigure themselves.

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Category : Culture | Gender | Youth
15
Apr

By Julia Ott

Publicseminar.org

April 9th, 2014

Family of African American slaves on Smith's Plantation, Beaufort, South Carolina, circa 1862. © Timothy H. O'Sullivan | learnnc.org

Family of African American slaves on Smith’s Plantation, Beaufort, South Carolina, circa 1862. © Timothy H. O’Sullivan | learnnc.org

Racialized chattel slaves were the capital that made capitalism. While most theories of capitalism set slavery apart, as something utterly distinct, because under slavery, workers do not labor for a wage, new historical research reveals that for centuries, a single economic system encompassed both the plantation and the factory.

At the dawn of the industrial age commentators like Rev. Thomas Malthus could not envision that capital — an asset that is used but not consumed in the production of goods and services — could compound and diversify its forms, increasing productivity and engendering economic growth. Yet, ironically, when Malthus penned his Essay on the Principle of Population in 1798, the economies of Western Europe already had crawled their way out of the so-called “Malthusian trap.” The New World yielded vast quantities of “drug foods” like tobacco, tea, coffee, chocolate, and sugar for world markets. Europeans worked a little bit harder to satiate their hunger for these “drug foods.” The luxury-commodities of the seventeenth century became integrated into the new middle-class rituals like tea-drinking in the eighteenth century. By the nineteenth century, these commodities became a caloric and stimulative necessity for the denizens of the dark satanic mills. The New World yielded food for proletarians and fiber for factories at reasonable (even falling) prices. The “industrious revolution” that began in the sixteenth century set the stage for the Industrial Revolution of the late eighteenth and nineteenth centuries.

But the “demand-side” tells only part of the story. A new form of capital, racialized chattel slaves, proved essential for the industrious revolution — and for the industrial one that followed.

Book cover of Sweetness and Power: The Place of Sugar in Modern History by Sidney W. Mintz © Penguin Books | Amazon.com

Book cover of Sweetness and Power: The Place of Sugar in Modern History by Sidney W. Mintz © Penguin Books | Amazon.com

The systematic application of African slaves in staple export crop production began in the sixteenth century, with sugar in Brazil. The African slave trade populated the plantations of the Caribbean, landing on the shores of the Chesapeake at the end of the seventeenth century. African slaves held the legal status of chattel: moveable, alienable property. When owners hold living creatures as chattel, they gain additional property rights: the ownership of the offspring of any chattel, and the ownership of their offspring, and so on and so forth. Chattel becomes self-augmenting capital.

While slavery existed in human societies since prehistoric times, chattel status had never been applied so thoroughly to human beings as it would be to Africans and African-Americans beginning in the sixteenth century. But this was not done easily, especially in those New World regions where African slaves survived, worked alongside European indentured servants and landless “free” men and women, and bore offspring — as they did in Britain’s mainland colonies in North America.

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Category : Capitalism | Marxism | Racism | Slavery
8
Apr

Youth rebellion in the ‘banlieues’ of Paris

Contemporary Politics and the Crisis of the Negative

Interview by Filippo Del Lucchese and Jason Smith

FILIPPO DEL LUCCHESE and JASON SMITH: We would like to begin by asking you to clarify the relation between philosophy and politics. What do you mean when you speak, for example, of a militant philosophy?

ALAIN BADIOU: Since its beginnings, philosophy’s relationship to the political has been fundamental. It’s not something invented by modernity. Plato’s central work is called The Republic, and it is entirely devoted to questions of the city or polis. This link has remained fundamental throughout the history of philosophy. But I think there are two basic ways of structuring this relationship.

The first way assigns philosophy the responsibility for finding a foundation for the political. Philosophy is called upon to reconstruct the political on the basis of this foundation. This current argues that it is possible to locate, for every politics, an ethical norm and that philosophy should first have the task of reconstructing or naming this norm and then of judging the relation between this norm and the multiplicity of political practices. In this sense, then, what opens the relation between philosophy and politics is the idea of a foundation as well as an ethical conception of the political. But there is a second orientation that is completely different. This current maintains that in a certain sense politics is primary and that the political exists without, before, and differently from philosophy. The political would be what I call a condition of philosophy. In this case, the relation between philosophy and politics would be, in a certain sense, retroactive. That is, it would be a relation in which philosophy would situate itself within political conflicts in order to clarify them. Today, in the extremely obscure situation that is the general system of contemporary politics, philosophy can attempt to clarify the situation without having any pretense to creating it. Philosophy has as its condition and horizon the concrete situation of different political practices, and it will try, within these conditions, to find instruments of clarification, legitimation, and so on. This current takes seriously the idea that politics is itself an autonomy of thought, that it is a collective practice with an intelligence all its own.

It is quite clear that today the question is particularly difficult because we are no longer in a situation in which there is a clear distinction between two opposed political orientations—as was the case in the twentieth century. Not everyone agreed on what the exact nature of these opposed politics was, but everyone agreed there was an opposition between a classical democratic bourgeois politics and another, revolutionary, option. Among the revolutionaries, we debated spiritedly and even violently what, exactly, the true way was but not the existence itself of this global opposition. Today there is no agreement concerning the existence of a fundamental opposition of this sort, and as a result the link between philosophy and politics has become more complex and more obscure. But, fundamentally, it’s the same task. Philosophy tries to clarify what I call the multiple situation of concrete politics and to legitimate the choices made in this space.

DEL LUCCHESE and SMITH: So you see your own philosophical interventions as taking place within this new situation that you describe as “more complex and more obscure” than the classical confrontation between two opposed political orientations?

BADIOU: Definitely. As a result, I see my philosophy as an inheritor of the great contestatory movements of the sixties. In fact, my philosophy emerged out of these movements. It is a philosophy of commitment, of engagement, with a certain fidelity to Sartre, if you like, or to Marxism.

What counts is that the intellectual is engaged in politics and commits to or takes the side of the people and the workers. I move in that tradition. My philosophy tries to keep alive, as best it can (it is not always easy), the idea that there is a real alternative to the dominant politics and that we are not obliged to rally around the consensus that ultimately consists in the unity of global capitalism and the representative, democratic state. I would say, then, that I work under the condition of the situation of political actuality, with the goal of keeping alive, philosophically, the idea of the possibility or opening of a politics I would call a politics of emancipation—but that could also be called a radical or revolutionary politics, terms that today are debatable but that represent all the same a possibility other than the dominant one.

DEL LUCCHESE and SMITH: You mention Sartre in this context where the name Althusser might have been expected. What is your relation to the Althusserian tradition?

BADIOU: The Althusserian tradition is extremely important, and I’ve devoted several texts to Althusser. If I mention Sartre it is simply because my philosophical youth was Sartrean before my encounter with Althusser. I think the Althusserian current was a particularly important one because it gave a new life and force to the link between philosophy and politics and in a less idealist mode—that is, a relation that no longer passed through the form of consciousness. In Sartre, of course, we still find the classical model of the intellectual understood primarily in terms of consciousness—an intellectual must make contact with the struggle and the workers’ organizations, be they the unions or the communist parties. Althusser’s greatness is found in the fact that he proposed a new schema in which the relation between philosophy and politics no longer passed through the psychology of the form of consciousness as it still did with Sartre. Althusser begins with the conviction that philosophy intervenes in the intellectual space of politics. When he proposes the formula “philosophy is the organization of class struggle in theory,” what does he mean? That class struggle exists and that philosophy certainly didn’t invent it. It exists and cuts across intellectual choices. Within the struggle between these choices, philosophy has a special role. It is to intervene and therefore to name, norm, classify, and finally choose in the field of intellectual or theoretical class struggle. Sartre and Althusser are very different, even opposed. But you can reconcile them on one point, namely, that philosophy is nothing if it is not linked to political commitment.

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Category : Intellectuals | Marxism | Organizing | Philosophy
7
Apr

Reforming China’s State-Market Balance

 

Joseph Stiglitz, ChinaBy Joseph Stiglitz

Social Europe Journal

March 3, 2014- No country in recorded history has grown as fast – and moved as many people out of poverty – as China over the last thirty years. A hallmark of China’s success has been its leaders’ willingness to revise the country’s economic model when and as needed, despite opposition from powerful vested interests. And now, as China implements another series of fundamental reforms, such interests are already lining up to resist. Can the reformers triumph again?

In answering that question, the crucial point to bear in mind is that, as in the past, the current round of reforms will restructure not only the economy, but also the vested interests that will shape future reforms (and even determine whether they are possible). And today, while high-profile initiatives – for example, the government’s widening anti-corruption campaign – receive much attention, the deeper issue that China faces concerns the appropriate roles of the state and the market.

When China began its reforms more than three decades ago, the direction was clear: the market needed to play a far greater role in resource allocation. And so it has, with the private sector far more important now than it was. Moreover, there is a broad consensus that the market needs to play what officials call a “decisive role” in many sectors where state-owned enterprises (SOEs) dominate. But what should its role be in other sectors, and in the economy more generally?

Many of China’s problems today stem from too much market and too little government. Or, to put it another way, while the government is clearly doing some things that it should not, it is also not doing some things that it should.

Worsening environmental pollution, for example, threatens living standards, while inequality of income and wealth now rivals that of the United States and corruption pervades public institutions and the private sector alike. All of this undermines trust within society and in government – a trend that is particularly obvious with respect to, say, food safety.

Such problems could worsen as China restructures its economy away from export-led growth toward services and household consumption. Clearly, there is room for growth in private consumption; but embracing America’s profligate materialist life-style would be a disaster for China – and the planet. Air quality in China is already putting peoples’ lives at risk; global warming from even higher Chinese carbon emissions would threaten the entire world.

There is a better strategy. For starters, Chinese living standards could and would increase if more resources were allocated to redress large deficiencies in health care and education. Here, government should play a leading role, and does so in most market economies, for good reason.

America’s privately-based health-care system is expensive, inefficient, and achieves far worse outcomes than those in European countries, which spend far less. A more market-based system is not the direction in which China should be going. In recent years, the government has made important strides in providing basic health care, especially in rural areas, and some have likened China’s approach to that of the United Kingdom, where private provision is layered atop a public base. Whether that model is better than, say, French-style government-dominated provision may be debated. But if one adopts the UK model, the level of the base makes all the difference; given the relatively small role of private health-care provision in the UK, the country has what is essentially a public system.

Likewise, though China has already made progress in moving away from manufacturing toward a service-based economy (the GDP share of services exceeded that of manufacturing for the first time in 2013), there is still a long way to go. Already, many industries are suffering from overcapacity, and efficient and smooth restructuring will not be easy without government help.

China is restructuring in another way: rapid urbanization. Ensuring that cities are livable and environmentally sustainable will require strong government action to provide sufficient public transport, public schools, public hospitals, parks, and effective zoning, among other public goods.

One major lesson that should have been learned from the post-2008 global economic crisis is that markets are not self-regulating. They are prone to asset and credit bubbles, which inevitably collapse – often when cross-border capital flows abruptly reverse direction – imposing massive social costs.

America’s infatuation with deregulation was the cause of the crisis. The issue is not just the pacing and sequencing of liberalization, as some suggest; the end result also matters. Liberalization of deposit rates led to America’s savings and loan crisis in the 1980’s. Liberalization of lending rates encouraged predatory behavior that exploited poor consumers. Bank deregulation led not to more growth, but simply to more risk.

China, one hopes, will not take the route that America followed, with such disastrous consequences. The challenge for its leaders is to devise effective regulatory regimes that are appropriate for its stage of development.

That will require the government to raise more money. Local governments’ current reliance on land sales is a source of many of the economy’s distortions – and much of the corruption. Instead, the authorities should boost revenue by imposing environmental taxes (including a carbon tax), a more comprehensive progressive income tax (including capital gains), and a property tax. Moreover, the state should appropriate, through dividends, a larger share of SOEs’ value (some of which might be at the expense of these firms’ managers.)

The question is whether China can maintain rapid growth (though somewhat slower than its recent breakneck pace), even as it reins in credit expansion (which could cause an abrupt reversal in asset prices), confronts weak global demand, restructures its economy, and fights corruption. In other countries, such daunting challenges have led to paralysis, not progress.

The economics of success is clear: higher spending on urbanization, health care, and education, funded by increases in taxes, could simultaneously sustain growth, improve the environment, and reduce inequality. If China’s politics can manage the implementation of this agenda, China and the entire world will be better off.

© Project Syndicate

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Category : China | Green Economy | Marxism | Socialism
2
Apr

The economics of immiseration would be impossible without the politics of seduction, and capitalism’s appeal to our unconscious will to power and domination is not easily countered.

"The domain of seduction is the sacred horizon of appearances."
Jean Baudrillard, On Seduction

" ‘[I]mmiseration’ concerns not just the wages workers’ receive, but how long and how hard they have to work in order to get them."
Frances Wheen, Marx’s Das Kapital: A Biography

"[C]apitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based."
Thomas Piketty, Capital in the Twenty-First Century

By Joseph Natoli

Truthout Cultural Analysis

March 31, 2014 – The genius of the internal combustion engine engineered by Etienne Lenoir in 1860 was to release the pressure of such combustion to pistons, rotation and movement. Explosion was controlled and detoured; ignition could be repeated and catastrophe avoided each time. Rising pressure and calibrated release equals relief. Psychology responds to this analogy, as does politics. Increased pressure on low-wage workers makes headlines: "The Walls Close In: Low Wage Workers Finding It’s Easier to Fall into Poverty, and Harder to Get Out." But all wage earners, underclass or middle class, are feeling the pressure. Thom Hartmann reports, "wages have gone down almost seven percent since the recession. And, that decline followed more than three decades of stagnant wages thanks to Reaganomics."

Mutual sharing and aid has no seductive power in our elemental level of being – but domination does.

Neoliberals, moderate or immoderate, pragmatic or crazed, attribute this sorry state of affairs to a number of variables that Liberals agree with, mostly referring to a transition from a low-tech society to a high-tech society, from a manufacturing base to a financial base, from a hunting, farming and manufacturing economy to an information economy. None of this has any drawing power. But the neoliberal steady refrain, from Reagan’s Welfare Queen to Romney’s 47 percent, has seductive power with that pivotal, crucial, voting middle class. The seductive spin is well-known: "The slow degeneration of working-class family life and the creation of a ‘moocher’ class too lazy and indulged to get a job results from ‘big government’ nurturing and coddling." There is a seductiveness also to other neoliberal reasons as to why immiseration is like the wolf now at every door but those of an elite few. Each "reason" touches a hot spot already fully charged within us. The collapse of a "nuclear family" is the collapse of a patriarchal order that is itself an order preserving male desire. The bureaucracy of public education is no more than the resistance of what is public, governmental and socialist to personal choice and individual freedom. The power of unions resides in a communist-like solidarity that obstructs the free and competitive play of business.

To read more articles by Joseph Natoli and other authors in the Public Intellectual Project, click here.

All of these briefs are seductive spins within the American cultural imaginary, not because they rest on uncontested fact and evidence, but because they rest on seductions and repressions already deeply embedded in that imaginary. In other words, the way we think now is so heavily layered in fantasies and illusions that the argument that wins the day does not appeal to rationality but rests on those fantasies and illusions. As I have suggested before, this imaginary and its accompanying fantasies and illusions are not partisan, there being no politics ruling imagination. But there is a political use of the imaginary, what I call the politics of seduction, and that arises from an economics of immiseration. There would be little need for the former if such an economics had not led, as it has, to immiseration for an increasing number and the anxieties that emerge from a fear of inevitable immiseration for many more. 

Every rule and restraint made on society’s behalf is never as real as our instinctual appetites and our personal will to power.

There are numerous varieties of seduction, from Eve’s in the garden to Baudrillard’s sense that we seduce by enacting a weakness that we see in ourselves as well as others. We all harbor a never-fulfilled appetite to eat the world whole, and we choose an individual freedom, a supremacy of self-interests and desires, that urges us, like Milton’s Satan, to rule in hell rather than serve in heaven. The fantasies of desire are Janus-faced – as are the illusions of power. They have their weaker side – an impotency of desire, a feckless command and a captured will. Romney’s 47 percent of the population would eat up the world if they could but are totally impotent and cannot do so. The totalizing power that the elite seek can never be blocked by the feckless command of unions. Big government is no more than a ridiculed domain of power, not our own, that presumes to rule us. The fantasy links to male desire and personal choice are too transparent to require exegesis.

Seductions work because the appeal is to what is in us, both the desires and the fears, and therefore connections are made and recognition ensures response. And while both appeal and recognition are felt, they are unthought and pre-discursive. We do not think what is unthinkable. We do not express what we fear to think. Nevertheless, power remains here. Eden’s garden is no more than a confinement we need to go beyond, explore what’s outside; God’s one law, call it regulation, blocks our libertine and liberty-seeking nature. We do not need to be tempted to bite the apple; as unthinkable as this may sound, we were made to bite it. And much more. We have an appetite to possess and not to share. All that we have never quells a desire to have yet more. Mutual sharing and aid has no seductive power in our elemental level of being – but domination does. All other species, according to Genesis, awaited Adam’s naming, their identity and place in the world forever held within the province of human need and desire. Global warming can be conquered just as we have conquered nature all along the way. Global ecology movements thus have little seductive attraction as the rational arguments, especially in regard to human-caused climate change, have not been able to deactivate the seductiveness of what is irrational.

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Category : Capitalism | Hegemony | Racism | Working Class
12
Mar

‘China is not an East Germany writ large awaiting a color revolution, as perceived by many in the West. Rather, it is a civilizational state, an amalgam of the world’s longest continuous civilization with a huge modern state, which is also a product of hundreds of states amalgamated into one over its long history’

 
 
By Zhang Weiwei
China Daily, March 12, 2014

 

Is China’s extraordinary rise a model of economic reform without political reform? Is China’s Achilles’ heel its political system? Is China’s one-party governance doomed in the face of mounting challenges from a more diversified economy and demanding society?

China’s political governance, adapting itself constantly to new challenges through many minor reforms, has proven crucial for China’s economic success.

These are questions in many Western minds whenever China is mentioned. But the assumptions behind these questions may be misplaced, as one’s understanding of China could be vastly different if a Chinese perspective were adopted. China’s political governance, adapting itself constantly to new challenges through many minor reforms, has proven crucial for China’s economic success. The following five aspects of China’s political governance merit special attention:

First, one-party governance. In fact, there is nothing new about one-party governance in China: in most of the past two millennia since its first unification in 221 BC, China almost always practiced a kind of one-party rule, or rule by a unified Confucian ruling elite selected through public exams (the Keju), claiming to represent — or genuinely representing — most if not all under heaven. Furthermore, in most of the one-party-rule era, China was arguably a better governed country and a more prosperous economy than Europe of the same epoch. China only began to lag behind Europe when it closed its door to the outside world and missed the Industrial Revolution of the 18th century, but the country is now catching up fast.

The Communist Party of China has to a great extent followed this tradition and built an impressive system of selecting its leaders based on merit and performance. For instance, its top decision-makers (6 out of 7 Politburo’s Standing Committee members) all worked at least twice as much as party secretaries or governors at the provincial level, which means they have on average administered a population of about 100 million before being promoted to their current positions in Beijing.

The CPC today, like its predecessors in China’s long past, also claims to represent the whole nation, but with a mission to restore the country’s premier world-class status. Key independent surveys, including those by the Pew or the Asian Barometer over the past decade, show a consistent pattern in which the Chinese central authorities command a high degree of respect and support (above 75 percent) within the country. Depicting China’s polity as being on the verge of collapse, as appears so often in the Western media, is out of touch with China’s reality.

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Category : Capitalism | China | Socialism