Posts Tagged ‘democracy’


Special mention

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One way of thinking about workers’ happiness is to measure the extent to which it contributes to higher stock returns for the corporations in which they work. That’s exactly what Alex Edmans, Lucius Li, and Chendi Zhang did and the result is not particularly surprising: employee satisfaction is, in fact, associated with positive abnormal stock returns. But there’s a caveat: the positive relationship really only holds in countries that have “flexible” labor markets (such as the United States and the United Kingdom), that is, where it is relatively easy to hire and fire workers. In other countries (such as Germany), where “regulations already provide a floor for worker welfare,” there’s very little effect.

As Mark Thoma explains,

Why might this be the case? One suggestion is that when a company spends money to make workers happier in a flexible market, it can then attract the most productive workers from other firms. But when labor markets are less flexible, it’s harder for workers to change employers, and the payoff from spending on worker satisfaction is much lower.

The U.S. has a relatively flexible labor market, and one reason for that is the “commodification” of labor. Increasingly, labor has come to be treated like any other input to the production process. All that matters is the contribution to the bottom line.

Of course, another way would be to move beyond the choice between flexible and not-so-flexible labor markets: by eliminating the commodification of labor power, letting workers themselves democratically decide how to increase their happiness, and ultimately changing what the bottom line means.


Special mention

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Brazil WCup Soccer Murals

The 2014 World Cup finals start tomorrow and I can’t wait. I can’t wait to watch the beautiful game, as played by the footballers of 32 nations across the globe—without forgetting about the dirty business the FIFA games have become.

At least that much the Economist gets right. But, not surprisingly, for the editors—”deep-dyed internationalists,” as they see themselves—it’s all about the benefits of globalization on the game of football, which are only hampered by the corruption surrounding FIFA president Sepp Blatter. Nothing, however, about the corporate sponsors of the tournament and the conditions in Brazil that led one of the residents of the Copa do Povo (People’s Cup) flash camp to conclude, “The World Cup is for those in helicopters.”

That’s certainly true for the tiny group of people running—and profiting from—the World Cup. They’ll certainly be crisscrossing the city and arriving at their luxury boxes in the stadia by helicopter. The millions of the rest of us will be watching the matches on television, looking forward to being witness to the unpredictable moments of footballing magic (and, inevitably, frustration and agony) individuals and teams will certainly offer us.

But what would a different World Cup look like? As it turns out, Brazil offers an alternative in its own history, in the form of one of its own brilliant footballers. No, not Pelé. I’m thinking of Sócrates (Sócrates Brasileiro Sampaio de Souza Vieira de Oliveira was his full name), who was the captain of the Selecão and of Corinthians and the leader of the Corinthians Democracy movement. (He died in 2011.)

Eric Cantona presents the story of Sócrates’ attempt to create an alternative to dirty business and to practice democracy within the beautiful game:


Robert Jacob Hamerton, illustration from Punch, 29 July 1843

No, I haven’t had a chance to read Thomas Piketty’s book yet. But I’ve just finished my end-of-semester grading. So, soon…

In the meantime, Thomas Frank [ht: ra] offers a few things to look out for, such as:

1. Piketty’s critique of the discipline of economics.

One of the best things about Piketty’s masterwork is his systematic demolition of his own discipline. Academic economics, especially in the United States, has for decades been gripped by a kind of professional pretentiousness that is close to pathological. From time to time its great minds have grown so impressed by their own didactic awesomeness that they celebrate economics as “the imperial science”— “imperial” not merely because economics is the logic of globalization but because its math-driven might is supposedly capable of defeating and colonizing every other branch of the social sciences. Economists, the myth goes, make better historians, better sociologists, better anthropologists than people who are actually trained in those disciplines. One believable but possibly apocryphal tale I heard as a graduate student in the ’90s was that economists at a prestigious Midwestern university had actually taken to wearing white lab coats—because they supposedly were the real scientific deal, unlike their colleagues in all those soft disciplines.

Piketty blasts it all to hell. His fellow economists may have mastered the art of spinning abstract mathematical fantasies, he acknowledges, but they have forgotten that measuring the real world comes first. In the book’s Introduction this man who is now the most famous economist in the world accuses his professional colleagues of a “childish passion for mathematics and for purely theoretical and often highly ideological speculation”; he laughs at “their absurd claim to greater scientific legitimacy, despite the fact that they know almost nothing about anything.” In a shocking reversal, he calls on the imperial legions of economic pseudo-science to lay down their arms, to “avail ourselves of the methods of historians, sociologists, and political scientists”; the six-hundred-page book that follows, Piketty declares, is to be “as much a work of history as of economics.”

2. His lack of knowledge of U.S. history.

Whenever Piketty moves away from numbers and tries to describe life in the United States, things go wrong in a hurry. The worst example first: Piketty tells us that, unlike the French, Americans feel “no nostalgia for the postwar period” because our economy didn’t grow rapidly in those years. In fact, American GDP often grew by 5 and 6 percent in the ’50s and ’60s and Americans have felt intense sweet wistfulness for those days ever since “American Graffiti” came out in 1973. To be fair, Piketty corrects himself several hundred pages on, but then not because he’s looked around and noticed the four decades of ’50s-revival crap Americans have so eagerly consumed, but because of a stray nostalgic remark by his fellow economist Paul Krugman. It’s all moot, I guess, because before long and without any explanation he reverts to his original position of nostalgia denialism.

Piketty’s command of American political history is, quite simply, abysmal. He announces that the U.S. “never became a colonial power,” which would be news to the people of the Philippines, not to mention the Sioux. He describes Herbert Hoover as a “liquidationist” though that was Hoover’s own term for the policies that Hoover rejected. About the presidency of Franklin Roosevelt—ordinarily an important period for students of inequality—Piketty seems to know almost nothing, except that FDR used wage and price controls during World War II. At one point, he comes close to denying the existence of Rooseveltian liberalism altogether, writing that for we benighted Americans “the twentieth century is not synonymous with a great leap forward in social justice.” As for the great right turn of the Eighties, he asserts repeatedly and with virtually no documentary evidence that it happened because America was falling behind Germany and Japan in economic growth—in other words, that the galaxy of nutty anxieties that fuel modern right-wing politics can be easily deduced from a few lines on a graph.

3. And Piketty’s blind spot when it comes to unions.

Turning to the problem of income inequality here in the United States, there is an even simpler solution, by which I mean a more realistic solution, a solution that builds on familiar American traditions,that works by empowering average people, that requires few economists or experts, that would involve a minimum of government interference, and that proceeds by expanding democracy and participation rather than by building some kind of distant and unapproachable global tax authority: Allow workers to organize. Let people have a say on the basic issues affecting their lives.

Piketty’s biggest blind spot is that he has virtually nothing to say about labor unions. He starts Chapter 1 of “Capital” with an anecdote about a bloody strike in South Africa and he returns to that same tragic episode at the very end of the book, but in between he addresses the matter almost not at all. Piketty talks a good game about democracy, but like other economists who have made inequality their subject, he prefers solutions that are handed down from the lofty heights of expertise.

The best remedy for inequality, however, is the one that comes up from below. Economists may not think very highly of those hardened people in SEIU t-shirts—some of them smoke too much, some are suspicious of “free trade,” some of them (gasp!) didn’t go to college—but the fact remains that in nearly every particular they represent the obvious and just about the only social force on the ground in America that might bend the inequality curve the other way.

In all honesty, one can go even further than Frank. Letting people have a say on the basic issues affecting their lives means more than forming unions. It means letting them having a say in the way the surplus is appropriated and distributed in their workplaces. Now, that’s a solution to the battle between capital and labor that has been going on since the mid-nineteenth century.


Special mention

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Gabriel Garcia Marquez, the Colombian writer and political activist, in Mexico City in 1976.

During all those years I spent working in and on Latin America, reading the works of Colombian novelist Gabriel García Márquez (along with those of a few others, such as Mário de Andrade, José María Arguedas, and Carlos Fuentes) helped me understand what was going on—from the real effects of colonialism and the wielding of power by corrupt dictators to the magic contained in everyday life.

Now that we are beginning to understand that the United States is an oligarchy, not a democracy, where is our own García Márquez?