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Here we go

from Peter Radford

We all thought that this morning’s announcement of the new claims for jobless insurance would be shocking.  The usual scuttle in the financial markets had been that we might see numbers well over 2,000,000, but the actual number soared even beyond that.  At 3,283,000 it is difficult to articulate what this means.  To put it in some sort of perspective, the previous week had seen 282,000 new claims, and the previous all-time record high of 695,000 had been set back in the recession of 1982.

So to say we are in unprecedented territory is something of an understatement.

And yet:

Even as Congress struggles to come to grips with its responsibility there are rumblings of dissent.  The $2 trillion bailout package voted through the Senate yesterday includes a strong addition to unemployment insurance and even extends that insurance to people who work in the so-called “gig” economy.  Gig workers had previously not been qualified for unemployment insurance.  That additional help for the unemployed has drawn a typical right wing Chicago School type of reaction.  Some Senators, including Lindsey Graham and Ben Sasse, are objecting to the  provisions in the legislation that define the new benefits, on the basis that they create disincentives to work.  This is a quote from a Vox article this morning by Li Zhou:

“This bill pays you more not to work than if you were working,” said Sen. Lindsey Graham (R-SC), who along with Republican Sens. Ben Sasse (NE), Tim Scott (SC), and Rick Scott (FL) expressed concerns about the amount of money workers would be able to secure from unemployment insurance. They’re pushing for a vote on an amendment that would cap the amount of unemployment support workers could receive so it’s limited to 100 percent of their previous salaries”

This is, of course, the old Chicago School “there is no such thing as involuntary unemployment” claim being recycled as a cautionary tale and dressed up as a serious concern that big government programs simply encourage laziness in the working class.

Ever since the onset of industrialization our workers have been characterized as naturally lazy and are best motivated by the fear of starvation.  This morality laden ideology lingers on in some corners of economic theory posing as sharp and realistic observation.  It is trotted out at the other end of the income spectrum in order to justify lower taxes on the rich.  Those poor souls will, apparently, fall into fits of laziness, if they see the top end of their incomes being taxed at higher rates.  Only it isn’t called laziness in their case.  The word disincentive sounds so much more polite when one is discussing a rentier.

It seems that the enormity of the problems facing us are only now beginning to dawn on policy makers.  Driven more by re-election prospects than by civic regard, a sense of urgency has suddenly enveloped the Republican party.  Only a week or so ago the Republican leadership saw no reason not to send senators home for the weekend rather than take up a small bailout bill passed by the House.  Now we are treated to seeing Mitch McConnell yelling at the Democrats for slowing things down by all of a few hours.  And why were they slowing things down?  So they could actually read and react to the legislation the Republicans had cobbled together without any reference to them.

At least we now have the bailout/stimulus passed.  It’s a good thing the Democrats took a look at the legislation — all 880 pages of it — before they voted on it.  The bailout aimed at industries like the airlines was a blank check.  At least now, courtesy of Elizabeth Warren’s input, we have quite strong restrictions on what can be done with the bailout cash, and we will all be told who gets what.  Under the original all-Republican version of the legislation we wouldn’t have been told who got what for over six months.

The absurd under-preparation of the United States ought to be a national embarrassment.  Trump’s childish obsession with his predecessor, and his total incompetence — remember he is merely a reality TV star and a failed businessman — has put us all in harms way.  One of his first anti-Obama acts was to abolish the office established to deal with potential pandemics.  The work done by previous presidents to prepare for mass emergencies was shelved as being an example of big government bureaucracy or “deep state” tinkering with the marvels of free markets.  The Trump family disregard for anything remotely educated, technical, or, worse, governmental, which was fun when there was no emergency, has suddenly become a toxic reminder of just how complacent decay has overtaken our elite leadership.

This gradual decay of any respect for expertise or career government employees within the Republican party has left it dangerously exposed to conspiracy theories.  It has deprived us of a government that can actually cope with massive issues.  The republicans don’t want to govern because they simply object to government.  Instead we see a steady stream of hopelessly ill suited people occupying vital positions  at time when we desperately need qualified and calm leadership.  Government agency after government agency is failing us because of the naivety and stupidity emanating from the White House.  And even now, as the pandemic unfolds across the nation, local devout Republicans are still acting as if the entire thing is a hoax designed to upend the Trump presidency.

This decay of expertise is a predictable end result of the Reagan/Thatcher era which produced an extraordinary abandonment by the governing elite of  any sense of public responsibility.  As it zoomed off into its oligarchic bubble, it left behind, for the rest of society, a totally different lived experience.  As the nation cleaved into two, with the elite steadily scarfing up a greater share of wealth and income, it became increasingly difficult to get policy that helped ordinary people.  The erosion of democracy necessary to sustain the elite in its self-regarding glory undermined our ability to respond effectively to crises.  Indeed the only acceptable approach was to denigrate society as a figment of ignorant left-wing minds.  Remember Thatcher’s absurd dictum regarding the non-existence of society?

One component of this decay was a total commitment to faith in marketplace solutions which overwhelmed sensibility.  An obsession with individual incentives expressed purely in economic terms eliminated any sense of humanity.  The idiotic presumptions and axioms of right wing economics were accepted uncritically as eternal truths instead of the ideologically motivated politics that they were.  Political economy was swept away, not by the elimination of politics from economics, but by the suppression of all but one sort of politics.  Economics became a tool to reinforce the deliberate decay of social thought.  Such was the monotonic nature of acceptable thought amongst the elite, that the era of “big government” was declared dead by a president belonging to the erstwhile party of the left.

That the dominant school of economic thought bore no resemblance to reality was an inconvenience brushed under the rug.  Why allow reality to intrude into the elegance of explanation? Or into the justification for elite enrichment?  Economics professors hiding behind the privilege of tenure prattled on about there being no involuntary unemployment and about the evils of intervention in the wondrous workings of the marketplace.  Hypocrisy grew exponentially in academia.

Snake oil was sold as science.

So twice in a decade or so, our political and economic leadership has been found wanting.  Twice, its beliefs have been seen as false.  Twice we have exposed swathes of society to huge uncertainties and financial insecurity because of false doctrine.

Yet this morning, as over 3 million of our fellow citizens stare at unimaginable upheaval, thousands of students will turn on their computers and start a class that teaches them unemployment is always voluntary.

Snake oil indeed.

  1. Ikonoclast
    March 30, 2020 at 10:28 pm

    All economies are really command economies. All that changes is who is giving the commands. In an unfettered capitalist economy it is simply the case that the capitalists and owners are giving the commands. For anyone who has worked for a business you will know that the boss commands you, typically for 40 hours a week and sometimes more. In a way, he (or she) really has command over your whole life. In a marketized society, your rate of remuneration controls what you can and cannot do in your spare time. If you are sacked in a high unemployment environment this changes your whole life.

    This sort of system is a distributed command system, in some senses, with little owners having a little power and big owners having a lot more power. Ultimately, in the modern system, government comes to serve the big owners, the oligarchs or plutocrats. Government commands reinforce oligarchic demands and commands.

    It’s hard to see how we can avoid a massive economic crash like the Great Depression. Typically, socialist or at least Keynesian style welfarist policies have followed major crises. This is the picture Thomas Piketty draws. Inequality increases under capitalist business as usual until internal contradictions, exogenous shocks or both ensure the wealth destruction of great depressions and/or great wars. Then, popular demand for a livable existence again becomes the most important force in politics.

    It is instructive to note how rapidly money and its finance circuits are exposed by a crisis as a game of musical chairs. When the music stops there are not enough chairs because the fat wealthy man sprawls over several while those without chairs are banished to the reject line. Then the rules of the game of chairs have to be changed otherwise those without chairs begin to pull them from under the chair-hogs. Some can even go further and start smashing chairs over the dethroned chair-hogs’ heads. This rapidly gets out of control. It’s better to change the rules of the game of chairs before the smashing starts. This time we must change the rules significantly and permanently.

    A permanent shift to socialism (democratic socialism) is the only tway o address this crisis and then continue on to address our true existential crises of limits to growth, resource depletion, pollution, loss of bio-services, the climate crisis, sea level rise, species extinctions and so on.

    This crisis is the final salutary lesson that neoliberalism (unfettered markets) does not work. It creates ever higher inequality which is economically inefficient and finally an unsustainable contradiction. It unleashes unacceptable levels of externalized damage into society and environment. It pretends that the economy is free-standing and self-contained without dependence on the biosphere.

    The style of command economy required is a democratic socialist economy. The commands must come from all the people Only then can the just needs of all the people be met.

    • Craig
      March 31, 2020 at 12:19 am

      “A permanent shift to socialism (democratic socialism) is the only tway o address this crisis and then continue on to address our true existential crises of limits to growth, resource depletion, pollution, loss of bio-services, the climate crisis, sea level rise, species extinctions and so on.”

      Or better yet a democratic direct monetary distributive economy.

  2. March 31, 2020 at 2:33 pm

    Acording to this site ( https://tradingeconomics.com/country-list/unemployment-rate?continent=europe ), unemployment rate in Europe is not worse.

  3. Ken Zimmerman
    April 13, 2020 at 2:49 pm

    The union of capital and science found its most explicit socio-political expression in social Darwinism, but its most direct manifestation in practice was the Scientific Management movement, known as Taylorism after its chief intellectual, Frederick W. Taylor. Its stated purpose was to apply the methodology of modern science to problems of capitalist enterprise. Although Taylor provided the stimulus, it was “the same economic elites and their business interests” bankrolling the eugenics movement who “introduced scientific management and organizational control into the industrial sector.” (Garland E. Allen, “Is a New Eugenics Afoot?” pp. 59-61). The centerpiece of Taylor’s application of scientific methods to manufacturing processes is time-and-motion study, in which the tasks of manual workers are subjected to close analysis in order to optimize their efficiency. The goal is to increase the productivity of labor, which Taylor insisted was in the common interests of employers and employees. Taylor adorned his proposals with paeans to “harmony between workmen and the management,” and warned that the knowledge obtained by his methods should not be used “as a club to drive the workmen into doing a larger day’s work for approximately the same pay that they received in the past.” (Frederick W. Taylor, Scientific Management, pp. 133-134.) But his moral strictures were unenforceable; they depended on the willingness of employers to heed them. Meanwhile, the subjects of the time-and-motion studies understandably feared a number of unwelcome consequences: forcing them to speed up the rate at which they worked; intensifying the tyranny of the clock; increasing the mind-numbing repetitiveness of their tasks; decreasing their paychecks by reducing piece-rate wages, or even eliminating their jobs altogether. Small wonder that they tended to be hostile toward “efficiency experts” with stopwatches and clipboards who observed and recorded their every movement. A classic anecdote captures the essence of the workers’ attitude:

    “You’re a very good worker,” said the efficiency expert as he watched a carpenter plane a piece of wood. “Now if we can just stick a buffer on your elbow you could plane and buff the wood with the same motion.”
    “Yeah,” the carpenter responded, “and if you’d stick a broomstick up your ass you could take your notes and sweep the floor at the same time.” (Mitchel Cohen. Big Science, the Fragmenting of Work, and the Left’s Curious Notion of Progress)

    These curious dichotomies between workers and theoreticians/bosses, and between manual labor and “work of the mind” goes back thousands of years, as demonstrated by this advice given to a son by an Egyptian father in about 1100 BCE, “give thy heart to letters and thereby avoid manual labor.” (Egyptian Hieratic Papyri in the British Museum, second series (London, 1923); quoted by J. D. Bernal, Science in History, vol. 1, p. 130). A sharply defined social barrier has since the origin of social differentiation been maintained based on the distinction between manual and intellectual work. People who work with their hands have long been looked down upon as inferiors by those who make their livings without getting their hands dirty. This dichotomy spans over five millennia in changing forms. From monarch/subject to aristocrat/peasant to banker/borrower to boss/worker to investor/consumer to evangelical Christian/non-evangelical, to right-to-life/reproductive choice to authoritarian/democrat. And nowhere in this history does the bottom half of the dichotomy enter that position without struggle. The task we face today is ending this dichotomy entirely and beginning the search for solutions that don’t involve a top-bottom choice. The dichotomy from the beginning was not inescapable. It is a choice by humans. It’s time for humans to chose another path.

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