Home > upward income redistribution > What exactly is all this productivity for?

What exactly is all this productivity for?

from David Ruccio

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It’s a story that could have appeared in the pages of George Packer’s magnificent book, The Unwinding: An Inner History of the New America. Or from the pen of Molly Ivins—which is good, since Esther Kaplan was recently awarded the 2015 MOLLY National Journalism Prize for her article, “Losing Sparta: The Bitter Truth Behind the Gospel of Productivity” [ht: bn]. 

The fact is, while Kaplan’s writing is superb, the story she tells about a plant that made commercial lighting fixtures in Sparta, Tennessee is an all-too-familiar one in contemporary America. Philips,”a multibillion-dollar multinational firm that sells everything from healthcare equipment to home appliances across the globe,” bought the plant in 2008 and then, in 2010, announced the plant was closing, since Philips had decided to outsource most of its production to another of its plants, in Monterrey, Mexico. Unfortunately, the economic and social landscape of the United States is increasingly littered with the broken bodies and spirits of countless workers, their families, and the communities in which they live as a result of such corporate decisions.

What makes Kaplan’s essay so interesting is that it operates at two different but related levels. She tells the story of the widespread devastation caused by Philips’s precipitous decision to close the Sparta plant, especially the difficulties both individual workers and the surrounding community have had attempting to replace the lost jobs. One of the best parts is her analysis of local attempts to purchase the plant and sell the lighting fixtures to Philips.

much in the Sparta story defies the familiar political scripts: Norris, the union-avoidance expert, along with Bailey and Sullivan, of the Chamber of Commerce, joining hands with the IBEW to help save a union plant; small businessmen in Tea Party country championing community ownership. It became clear from my conversations that Philips’s actions had deeply offended people’s sense of decency, from the laid-off workers to what Donna McCurry calls “the big wheels in town,” and that this sense of corporate indecency is what had brought such politically disparate people together.

(Both Packer and Ivins would have been proud to identify such political ironies.)

But Kaplan also thinks and writes at another level, grappling with the problem of productivity at the level of the plant and of the economy as a whole. In the case of the Sparta plant, workers had increased productivity (just as they continue to do, year in and year out, in the U.S. economy) and yet Philips decided to close the plant and relocate most of its production to a plant in Mexico (which had lower productivity but where workers received much lower wages and were not represented by a union).

One might be forgiven for asking what, exactly, all this productivity is for. “We busted our butts to get where we were at,” Ricky Lack [a maintenance worker at the plant] said the first time we spoke. “We got to number one. And it didn’t matter.”

That turns out to be the key question—in individual plants (where, after workers heed the call to increase productivity, they continue to face the threat of plant closures) and in the economy as a whole (in which since the mid-1970s productivity continues to increase but workers’ pay falls increasingly far behind).

Even today, mainstream economists and politicians continue to preach the gospel of productivity. Kaplan’s story is the bitter truth behind that gospel.

  1. guest
    June 16, 2015 at 8:31 am

    From the information you provide here, the Sparta case reported by Kaplan is not an example of the capture of productivity by the what are called “shareholders”, but rather a very clear illustration that in a world where capital (as a production factor) is mobile, absolute advantage reigns supreme and comparative advantage is just an extinct artifact from an era dating back before railways and steamships.

  2. June 16, 2015 at 1:43 pm

    The world has yet to come to terms with the fact that, for the first time in history, a large fraction of humanity is surplus. Our labor is unnecessary. There’s more labor available than is collectively needed to feed, clothe, etc. everyone.

    Maybe not entirely so. If economic incentives were realigned there could be useful work for everyone to do teaching and mentoring, caring, looking after the environment, etc. To a large extent economic development is about finding these realignments, sometimes benign, sometimes less so. The new work connects people into the web of the economy, but it’s not survival work.

    Losing the primacy of labor is too much of a shock for many people to grasp, especially on the left. Capital has an easy time with it, but the left has built its humanist philosophy on an egalitarian resource, labor, that all people produce to sell. While capital merrily concentrates ownership rights, labor attempts to obtain leverage by going on strike and denying the capitalists a commodity that is not missed.

    Increasing productivity is for labor a race for efficiency. Those who become most efficient at something get to continue doing the work, and others need to find new economic connections making espressos or boutique bikes. For capital, though, higher productivity is improving the concentration of ownership and rents.

    The mechanism is not at fault. Well maybe it is. Perhaps the push for productivity is destroying intangible value. Compare for example artisan farming to industrial farming of plants and animals. All other things being equal, higher productivity is a boon. We just need to democratise the share of returns to capital.

    • June 16, 2015 at 2:09 pm

      But Pavlos, Am I mistaken that traditional and ecoagriculture outproduces corporatist agriculture per hectare by almost twice and still produces 70% of the food on Earth?

      Is it not true that corporatists are a criminal class intent on endless war and destruction of Earth? That they actually do not produce profit? Only centralize everyone’s wealth using government force and then transfer the wealth into offshore banks for hoarding and funding ever more cultural damage, war and polluting poisons?

  3. June 17, 2015 at 7:13 am

    The key seems to be the distinction between productivity per worker, shown in the graph, and productivity per dollar of wages, which is Philips’ only interest.

    But still David’s question is the correct one: What is all this productivity for? Is it to feed a mindless automaton (the global economy) that happens to enrich those in charge of it? Or is it to benefit everyone?

    In the present feral market system, remote shareholders profit by exploiting people and trashing the Earth. If Philips had been required to sell to the employees (and/or the town) instead of just junking the plant, then the owners would be local, and their incentives would include retaining a viable and healthy community.

    This illustrates just one way in which markets might be managed for our collective benefit. There are many others already, and creativity could undoubtedly provide many more.

    For the RWER community it suggests forgetting all the arcane debate about arcane theories and Schools, and looking afresh at some rather obvious mechanisms at work in our benighted world.

    See The Nature of the Beast https://betternature.wordpress.com/my-books/nature-of-the-beast/
    or Sack the Economists http://sacktheeconomists.com

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