Posts Tagged ‘history’
Tags: African American, cartoon, Comcast, history, merger, oligopoly, potholes, race, Time Warner, winter
Tags: 1 percent, chart, history, inequality, United States
As Niraj Chokshi explains,
In each state in the nation, the top 1 percent of earners saw its share of the income pie grow between 1979 and 2007, according to a new 50-state study of income inequality. The change was starkest in Wyoming, where 9 percent of income belonged to the top 1 percent in 1979. By 2007, that top slice of earners laid claim to 31 percent of all income.
It hasn’t always been the case, though. As the GIF above [shows], the top 1 percent saw its share of all income shrink between 1928 and 1979. Over that half-century, the income pie was shared a little more equally. But since 1979, that trend reversed in every state.
Tags: capital, history, inequality, labor, Thomas Piketty
Thomas Piketty’s new book, Le capital au XXIe siècle (which is supposed to be released soon in English as Capital in the 21st Century), is creating quite a stir. It is the subject of the latest column by Thomas B. Edsall and was recently reviewed by Branco Milanovic [pdf].
In fact, the chart above is taken from Milanovic’s review. It shows the growing gap between (as Piketty defines them) the rate of growth of world production (g) and the rate of return to capital (r) during the nineteenth century and, after the “special period,” from the mid-1970s onward. For Piketty, that gap is the source of growing inequality in both the functional (capital-labor) and size (top 1 percent) distributions of income.
I’ll refrain from further commentary until I’ve had a chance to read the book (which, if all goes well, I’ll probably end up adding to my Topics in Political Economy reading list in the fall). But, I’ll admit, I am both intrigued (by the model and data) and somewhat wary (especially concerning the definition of capital) of Piketty’s approach. Still, given Milanovic’s summary, Piketty’s methodological reflections alone warrant further attention:
Appropriately for such a wide-ranging book, Piketty closes his book with an essay on the method to be used in economics. He regards economics as a social science (where the emphasis is on “social”) that can flourish only if (i) it asks important, and not trivial, questions (so adieu Freakonomics and randomistas), and (ii) uses empirical and historical methods instead of sterile model-building. These issues have been debated ad nauseum by the economists, and Piketty has nothing new to add to that, except perhaps in a most important way—namely, by showing in his own work how these two desiderata should be combined to create economic works of durable importance.
Tags: capitalism, history, Lyndon Baines Johnson, poverty, United States, War on Poverty
Clearly, the War on Poverty hasn’t worked. Not when the official poverty rate has only fallen to 15 percent from 19 percent since Lyndon Baines Johnson’s landmark State of the Union address, and when in 2012 46 million Americans still lived in households that fell below the poverty line.*
But the problem is not that government tax and transfer programs don’t work. It’s that they simply can’t work, not when the U.S. economy continues to force people to try to survive in such miserable conditions.
Recent research (by both Liana Fox et al. and Christopher Wimer et al. [pdf]) on historical trends using the Supplemental Poverty Measure has shown that, in fact, government policies have played an important and growing role in reducing poverty. For example, the national poverty rate fell from about 26 percent in 1967 to 16 percent today.
But their research also indicates how difficult it is to decrease, let alone eliminate, poverty—when nothing has been done to transform an economy that continues to generate such high levels of poverty. That’s the real war on war on poverty.
The U.S. economy continues to force almost a third of Americans to try to survive on low private-sector jobs and incomes—which, in the absence of government programs, would leave them below the poverty line. If anything, things have gotten worse since the war on poverty was first declared: about a quarter of Americans would have been poor in 1967, and that number has climbed to over thirty percent in 2011.
The real reason the War on Poverty hasn’t worked is that U.S. capitalism continues to generate such high levels of poverty in the first place.
*Those numbers are only slightly modified by the Census Bureau’s Supplementary Poverty Measure [pdf], which indicates a poverty rate of 16 percent and a total poor population of 49.7 Americans.
Tags: anticommunism, Catholic Church, Cold War, history, labor, Marx, pope, United States
Pope Francis offered the only possible response to his being accused of being a Marxist. First, that the “Marxist ideology is wrong.” (How could an official of the Catholic Church, much less the Bishop of Rome, assert otherwise?) And then:
“But I have met many Marxists in my life who are good people, so I don’t feel offended.”
That really is the only way to respond to the kinds of outrageous insults right-wing commentators and business pundits have hurled at him after the publication of Evangelii Gaudium.
And Priyamvada Gopal gets it:
The use of “Marxist” as a slur – along with kindred terms such as “socialist” and “communist” – is not a uniquely American phenomenon but is most familiar to us from the era of the infamous House Un-American Activities Committee, established in 1938 and, later, Joseph McCarthy’s committee.
In that context, and during the “red scares” which followed it during the cold war, these were appellations used to identify and punish any criticism of capitalism, however sympathetic or merely reformist. Indeed, any dissent from mainstream dogma was “un-American”.
As we all know, in the United States, any criticism of individual capitalists or capitalism as an economic and social system still is considered to be associated with Marxism or communism, long after the Fall of the Wall.
But I do need to correct Gopal’s rendering of the long tradition of American anticommunism on one point: the first “red scare” wasn’t in 1918 but earlier, in the nineteenth century, in response to the upsurge of union organizing and the related hunger demonstrations and then in reaction to the Paris Commune.
News sources, especially in America, were becoming increasingly worried about the rise of what they perceived as a Communist movement in Paris. This ‘red fear’ was based on both fascination and anxiety over the ideology. Because of the Commune’s close ties with labor unions, the International Working Men’s Association, socialists, and Karl Marx and Friedrich Engels, the Commune thus “further reinforced the bourgeois notion of class war,” as Gay Gullickson notes. “Journalists regularly referred to the ‘Reds’ in Paris and used ‘communist’ as a synonym for ‘communard’….” Some journalists even used all three terms interchangeably. Both American newspapers and periodicals followed a similar path in criticizing the Commune and exposing it to the rest of the world. One historian notes that, “[t]he chorus of abuse in the American press quickly mounted as the Commune unfolded, and after its destruction it was frequently used to epitomize all the horrors of ‘communist’ philosophy….The Commune [brought] out [people’s] worst anxieties about the family, religion, property, and social order.” The Paris Commune became the great fear of anti-Communist Americans who saw the actions of the working class in Europe as a major threat.
So, yes, the “red menace” attacks on the pope have a long lineage in the United States, which stretch back to the nineteenth century—and have clearly outlasted the Cold War.
Tags: chart, history, minimum wage, United States, wages, workers
As Arindrajit Dube explains,
As a result of legislative inaction, inflation-adjusted minimum wages in the United States have declined in both absolute and relative terms for most of the past four decades. The high-water mark for the minimum wage was 1968, when it stood at $10.60 an hour in today’s dollars, or 55 percent of the median full-time wage. In contrast, the current federal minimum wage is $7.25 an hour, constituting 37 percent of the median full-time wage. In other words, if we want to get the minimum wage back to 55 percent of the median full-time wage, we would need to raise it to $10.78 an hour.
Tags: economics, Europe, history, history of economic thought, macroeconomics, mainstream, unemployment, United States, youth
They never give up. But no matter how much lipstick they put on a pig, it’s still a pig.
Ross Douthat did it back in February, by painting a rosy picture of the drop in the employment-population ratio.
Now, we have Zachary Karabell expressing his optimism about the youth unemployment crisis (16 percent in the United States, more than 50 percent in countries like Spain and Greece). Based on a single anecdote, he concludes that young people, at least college graduates, are not really unemployed. They’re just choosing to look for better options.
many college-educated young people are choosing not to take low-paying service-level jobs if they don’t absolutely have to. Because they can live with their parents (and as many as 45 percent of recent grads do) and because they rarely have much in the way of fixed costs such as homes and children, they can hold out for a job that matches their ambitions. They can also retool their skills as they discover that their college degree in marketing and communications may not leave them in the best position to get the type of job that they want.
This type of unemployment is one of choice — rational, legitimate choice — not of systemic failure. It is a challenge to find a meaningful job, but that hasn’t stopped people from trying. A youth cohort determined to create meaningful work should not be seen as lazy, lost or in dire straits. Instead it could be exactly the type who might actually lead the transition of our economy away from the making-stuff economy of the 20th century to an ideas economy of the 21st. . .
In the United States, youth unemployment is not quite what it seems. It is not a simple sign of how bad the economy is. Youth unemployment is actually a sign of ambition and expectation. Young people aren’t part of a generation of despair, but rather a generation determined not to settle. That may not always be realistic, but it is a vital fuel to propel our society forward.
If it looks like a pig, smells like a pig, no matter how much lipstick you put on it, it’s still a pig.
And, while we’re on the topic (of porcine cosmetics, not unemployment), there’s Simon Wren-Lewis, who so desperately wants to tell us, notwithstanding the spectacular failures of mainstream economics in recent years, that all is well. Everything we need is right there in the textbooks, he argues. Like the “the proposition that austerity was a crazy thing to try in this recession.” Well, on that one point he’s right: all you need is some basic Keynesian economics to criticize austerity. But, no matter how hard you look, you’re not to going to find the appropriate tools for analyzing a whole host of other crisis-related issues, such as the role of inequality in creating the conditions for crisis or the tendencies within capitalism to endogenously produce such crises. Sure, the ideas are there to push back against the austerians but, nowhere in mainstream macroeconomics—whether in the textbooks or in the most advanced areas of research—are you going to find a theory of capitalist dynamics that explains how we got into the current mess, much less how to get out of it. Wren-Lewis wants to blame partisan concerns (and, sure, there’s plenty of that) but not the basic theory.
To give credit where credit is due, Wren-Lewis sincerely wants to do the right thing and take the ideological lipstick off the pig. But then, even after adding a bit of economic history and the history of economic thought, he’s still left with the same old pig.
Tags: economics, history, history of economic thought, markets, neoliberalism, Philip Mirowski
Philip Mirowski’s latest, Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown, has been getting quite a bit of play since publication. Antipode has published a review symposium and Mirowski himself has participated in an exchange at the FDL Book Salon and been interviewed by the New Books Network, Estudios de la Economía, and by Nathan Tankus for Naked Capitalism.
Here’s an excerpt from the interview conducted by Tankus:
NT: Given this context, what are the salient features of Neoliberalism that have generally been preserved over time? What are the origins of the Neoliberal Thought Collective and how has it changed?
PM:The origins were surprisingly transnational, given the mistaken widespread impression that Neoliberalism is predominantly an American fascination. It began with some tentative meetings of the Colloque Walter Lippmann in Paris in the 1930s, and became consolidated with the Mont Pèlerin Society in the 1940s. I try and demonstrate in the book that it has grown ever more cosmopolitan over time, although my own deficiencies in foreign languages and non-Western history thwarts my realization of that ambition. Throughout the decades, the thought collective has maintained a productive tension between its American-flavored Chicago wing and its continental Austrian/Ordo tendency.
Although some on the left have suggested that the thought collective displays no substantial continuity across time and space, in the book I attempt to summarize some of its more enduring attributes. One telltale complex encompasses some of the things Michel Foucault first drew our attention to, such as the image of ideal human life as becoming the ultimate entrepreneur of your own flexible self, but one where the putative Self as captain of your own fate deliquesces into a moral and intellectual vacuum. This explains why Neoliberals are so contemptuous of Isaiah Berlin’s ‘positive freedom’, since there can be no enduring Self that demands fealty: you need to be an infinitely pliable entity in order to adequately respond to the demands of the marketplace. Various technologies like Facebook serve to teach the masses how to maintain the outward appearances of this empty self.
Because the book is focused on the crisis, I devote far more effort to enumerating and summarizing the Neoliberal approach to political economy. It starts from the premise (contrary to their public PR) that they reject classical liberalism, because they don’t believe in a traditional circumscribed sphere for the state separate from that of The Market. Instead they are constructivists, redefining and building a strong state to institute and maintain the kinds of markets they think will not come about on their own. For the collective, the most propitious time to make such bold interventions is during a crisis, when they are mobilized to define ‘exceptions’ to previous rules. Their prescription for apparent market failures is always more new-fangled markets. Hence, as they have often explicitly written, they are not ‘conservatives’ in any meaningful sense of the term. They often vent their distrust of democratic structures, hoping to reconcile them with their interventions by portraying voting itself as a kind of hobbled marketplace. Democracy therefore needs to be contained and neutralized by a strong state.
For Neoliberals, The Market is the only ultimate arbiter of Truth. Their problem is that most people still resist this fundamental tenet, because they persist in believing in quaint notions of justice, including the notion that rewards should be proportionate to effort, or else hoping sustenance be apportioned according to basic needs. Because The Market is smarter than anyone, the poor need to capitulate to whatever The Market currently bequeaths them. The rich, of course, have no problem with their lot. This unequal distribution of wealth is a necessary structural feature of capitalism. Market discipline should also extend to corporations; the Neoliberals have long proselytized for the extension of market-like incentives within corporate boundaries. Outsourcing and outsized CEO recompense are direct corollaries. Gargantuan firms are not a serious problem, since they merely are a reflection of fleeting market success; antitrust should be jettisoned, and there is no long-term problem of Too Big to Fail.
The Neoliberals have changed over time primarily by sloughing off progressively more of their classical liberal heritage. It began with Chicago rejecting the very idea of corporate power as a problem for capitalism in the 1950s; it continued with rejection of the prior Austrian tendency to distrust the destabilizing potential of the finance sector. (Gold bugs and 100% money cranks no longer get much respect from the Neoliberals.) They have abandoned all classical liberal aspirations to improve the lot of the working classes through education; rather, they now seek to undermine all public education by subjecting every credentialing process to the marketplace of ideas. They dismiss the classical liberal suspicions concerning intellectual property, since inventing new property rights is an effective way to defeat their opponents. Finally, the thought collective has managed to string along their useful fellow-travelers, the true libertarians, without once admitting that they share little more in common than some vain posturing over freedom.
Tags: democracy, despotism, fascism, history, inequality, Only in America, power, Red Scare, United States
This is a 1946 film on democracy and despotism [ht: ra] from the Encyclopedia Britannica, featuring political scientist and propaganda theorist Harold Lasswell. The discussion of respect, power, economic distribution, and freedom of information was clearly made after the victory over fascism and before the Red Scare commenced.
N.b., aside from the body hanging from the noose, everyone in the film is white.
Tags: capitalism, Gavyn Davies, Great Depression, history, Jared Bernstein, Larry Summer, Paul Krugman, Paul Sweezy, stagnation, WWII
It’s a sad commentary on contemporary economics that Larry Summers’s belated, poorly thought-out, population-driven “discovery” of the possibility of secular stagnation continues to receive such accolades. Paul Krugman gives him credit for “forcefully” offering such a “radical” idea at “at the most ultrarespectable of venues, the I.M.F.’s big annual research conference.” Jared Bernstein, for his part, finds it “compelling.” And then there’s Gavyn Davies, who considers Summers’s speech “a tour de force that demands to be watched.”
Let’s give credit where credit is due, starting with Paul Sweezy, who offers an appropriate history lesson, explaining how and why the issue of secular stagnation was raised during the First Great Depression and then “so abruptly interrupted by the outbreak” of WWII. And while I’ve never been entirely convinced by Sweezy’s own explanation of the stagnationist tendencies of “monopoly capitalism,” he certainly offers much more food for thought than we’ll find in the present discussion. In fact, Sweezy’s observation about the state of the debate, offered in 1982, is even more accurate today:
I have the feeling that if you ask an economist how we got into the mess we are in, he or she, while not denying that it is indeed a mess, will reply by giving advice as to how to get out of it but will not have anything very enlightening to say about how we got into it.
For my part, I’m all in favor of resuming the long-interrupted debate over capitalism and stagnation, especially about how we got into the current mess. But, if we’re going to take the discussion seriously, let’s open up the terms of debate, in terms of both the history of economic thought and the range of ideas that exist today, which Summers and his colleagues have worked so long and hard to keep on the “radical fringe.”