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There is perhaps no more cherished an idea within mainstream economics than that everyone benefits from free trade and, more generally, globalization. They represent the solution to the problem of scarcity for the world as a whole, much as free markets are celebrated as the best way of allocating scarce resources within nations. And any exceptions to free markets, whether national or international, need to be criticized and opposed at every turn.

That celebration of capitalist globalization, as Nikil Saval explains, has been the common sense that mainstream economists, both liberal and conservative, have adhered to and disseminated, in their research, teaching, and policy advice, for many decades.

Today, of course, that common sense has been challenged—during the Second Great Depression, in the Brexit vote, during the course of the electoral campaigns of Bernie Sanders and Donald Trump—and economic elites, establishment politicians, and mainstream economists have been quick to issue dire warnings about the perils of disrupting the forces of globalization.

I have my own criticisms of Saval’s discussion of the rise and fall of the idea of globalization, especially his complete overlooking of the long tradition of globalization critics, especially on the Left, who have emphasized the dirty, violent, unequalizing underside of colonialism, neocolonialism, and imperialism.*

However, as a survey of the role of globalization within mainstream economics, Saval’s essay is well worth a careful read.

In particular, Saval points out that, in the heyday of the globalization consensus, Dani Rodrick was one of the few mainstream economists who had the temerity to question its merits in public.

And who was one of the leading defenders of the idea that globalization had to be celebrated and it critics treated with derision? None other than Paul Krugman.

Paul Krugman, who would win the Nobel prize in 2008 for his earlier work in trade theory and economic geography, privately warned Rodrik that his work would give “ammunition to the barbarians”.

It was a tacit acknowledgment that pro-globalisation economists, journalists and politicians had come under growing pressure from a new movement on the left, who were raising concerns very similar to Rodrik’s. Over the course of the 1990s, an unwieldy international coalition had begun to contest the notion that globalisation was good. Called “anti-globalisation” by the media, and the “alter-globalisation” or “global justice” movement by its participants, it tried to draw attention to the devastating effect that free trade policies were having, especially in the developing world, where globalisation was supposed to be having its most beneficial effect. This was a time when figures such as the New York Times columnist Thomas Friedman had given the topic a glitzy prominence by documenting his time among what he gratingly called “globalutionaries”: chatting amiably with the CEO of Monsanto one day, gawking at lingerie manufacturers in Sri Lanka the next. Activists were intent on showing a much darker picture, revealing how the record of globalisation consisted mostly of farmers pushed off their land and the rampant proliferation of sweatshops. They also implicated the highest world bodies in their critique: the G7, World Bank and IMF. In 1999, the movement reached a high point when a unique coalition of trade unions and environmentalists managed to shut down the meeting of the World Trade Organization in Seattle.

In a state of panic, economists responded with a flood of columns and books that defended the necessity of a more open global market economy, in tones ranging from grandiose to sarcastic. In January 2000, Krugman used his first piece as a New York Times columnist to denounce the “trashing” of the WTO, calling it “a sad irony that the cause that has finally awakened the long-dormant American left is that of – yes! – denying opportunity to third-world workers”.

The irony is that Krugman won the Nobel Prize in Economics in recognition of his research and publications that called into question the neoclassical idea that countries engaged in and benefited from international trade based on given—exogenous—resource endowments and technologies. Instead, Krugman argued, those endowments and technologies were created historically and could be changed by government policies, including histories and policies that run counter to free trade and globalization.

Krugman was thus the one who gave theoretical “ammunition to the barbarians.” But that was the key: he considered the critics of globalization—the alter-globalization activists, heterodox economists, and many others—”barbarians.” For Krugman, they were and should remain outside the gates because, in his view, they were not trained in or respectful of the protocols of mainstream economics. The “barbarians” could not be trusted to understand or adhere to the ways mainstream economists like Krugman analyzed the exceptions to the common sense of globalization. They might get out of control and develop other arguments and economic institutions.

But then the winds began to shift.

In the wake of the financial crisis, the cracks began to show in the consensus on globalisation, to the point that, today, there may no longer be a consensus. Economists who were once ardent proponents of globalisation have become some of its most prominent critics. Erstwhile supporters now concede, at least in part, that it has produced inequality, unemployment and downward pressure on wages. Nuances and criticisms that economists only used to raise in private seminars are finally coming out in the open.

A few months before the financial crisis hit, Krugman was already confessing to a “guilty conscience”. In the 1990s, he had been very influential in arguing that global trade with poor countries had only a small effect on workers’ wages in rich countries. By 2008, he was having doubts: the data seemed to suggest that the effect was much larger than he had suspected.

And yet, as Saval points out, mainstream economists’ recognition of the unequalizing effects of capitalist globalization has come too late: “much of the damage done by globalisation—economic and political—is irreversible.”

The damage is, of course, only irreversible within the existing economic institutions. Imagining and enacting a radically different way of organizing the economy would undo that damage and benefit those who have been forced to have the freedom to submit to the forces of capitalist globalization.

But Rodrik and Krugman—and mainstream economists generally—don’t seem to be interested in participating in that project, which would give the “barbarians” a say in creating a different kind of globalization, beyond capitalism.

 

*Back in 2000—and in a series of articles, book chapters, and blog posts since then—I have attempted to rethink the relationship between capitalist globalization and imperialism. Marxist economist Prabhat Patnaik has also made the case for the continuing relevance of imperialism as an analytical construct for understanding and challenging effectively the logic and dynamics of contemporary capitalism.

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It’s about time someone pointed out the obvious: “Bosses are dictators, and workers are their subjects.”

We generally don’t talk that way, of course. However, as Elizabeth Anderson [ht: ja] explains, contemporary workplaces are like private governments, in which employers have dictatorial powers over their workers—and workers have almost no say in how they are governed.

Like Louis XIV’s government, the typical American workplace is kept private from those it governs. Managers often conceal decisions of vital interest to their workers. Often, they don’t even give advance notice of firm closures and layoffs. They are free to sacrifice workers’ dignity in dominating and humiliating their subordinates. Most employer harassment of workers is perfectly legal, as long as bosses mete it out on an equal-opportunity basis. (Walmart and Amazon managers are notorious for berating and belittling their workers.) And workers have virtually no power to hold their bosses accountable for such abuses: They can’t fire their bosses, and can’t sue them for mistreatment except in a very narrow range of cases, mostly having to do with discrimination.

Dictatorship in the workplace—after workers are forced to freely sell their ability to work in the labor market—seems obvious to me and many other heterodox economists. But it’s certainly not obvious to mainstream economists, who like their classical predecessors continue to celebrate the freedom and mutual benefit of wage contracts and the efficiency of firms that are ruled by the representatives of the property owners.*

What is even more interesting, at least to me, is the way Anderson mentions the issue of time and then seems to let it slide.

Here’s how she begins her essay:

Consider some facts about how American employers control their workers. Amazon prohibits employees from exchanging casual remarks while on duty, calling this “time theft.” Apple inspects the personal belongings of its retail workers, some of whom lose up to a half-hour of unpaid time every day as they wait in line to be searched. Tyson prevents its poultry workers from using the bathroom. Some have been forced to urinate on themselves while their supervisors mock them.

But then Anderson, after mentioning “time theft,” moves on to the various ways employers exercise dictatorial control over their workers and forgets about time. But isn’t time what the employer-worker relationship is all about—the reason that employers act like dictators and workers are forced to surrender almost all their rights while they are working?

What is mostly absent from Anderson’s analysis is time, especially the distinction between necessary labor-time and surplus labor-time. During part of the workday, employees—whether at Walmart, GM, or Google—work for themselves, and thus receive a wage equal to the value of their ability to work. But they continue working and during those extra hours they aren’t working for themselves, but for their employers. That’s time that’s stolen from the workers, which forms the basis of their employers’ profits.

So, the real “time theft” is not what workers do to their employers, exactly the opposite, what employers do to their workers—when, after necessary labor-time is completed, workers are forced to have the freedom to engage in surplus labor-time.

Thus, when Amazon workers exchange casual remarks while on duty, they’re cutting into the surplus labor-time due to their employers. The half-hour Apple workers wait in line to be searched, for which they are not paid, is a way of making sure that particular activity doesn’t cut into the surplus-time due to their employers. By the same token, when Tyson prevents its’ poultry workers from using the bathroom, who are then forced to urinate on themselves, less time is being spent engaged working for themselves and more for their employers.

In other words, under conditions of workplace dictatorship, time is stolen from workers to  benefit their employers.

Furthermore, because employers, and not workers, are the ones who appropriate the benefits of surplus labor-time, it puts workers in the position of continuing to be forced to have the freedom to sell their ability to work and to submit to the dictates of their employers.

Thus, “time theft” is both a condition and consequence of the private dictatorship of employers in the workplace.

A whole book could in fact be written about this idea of “time theft,” inside and outside the workplace.

For example, inside the workplace, new technologies have the effect both of allowing time to slip out of employers’ grasp—as, for example, when workers appear to be working at their desks but, in fact, are surfing the internet or catching up with friends and family members on Facebook—and allowing employers to tighten their grip—especially when it permits control over the pace of work and new forms of surveillance. Technology seems to cut both ways when it comes to “time theft” in the workplace.

But “time theft” is also important outside the workplace. Consider, for example, the standardization of time—which robs many of us of local traditions of time—as well as the fact that there is a large and growing gap in life expectancy between those at the top and bottom of the economic scale—which means time is being stolen from the poor and distributed to the rich.

I could go on. The important point is “time theft” is an ongoing problem of contemporary capitalism, both within the dictatorship of the workplace and in the seeming democracy of our lives outside of work.

It’s time someone wrote that book.

 

*In fact, Oliver Hart and Bengt Holmstrom were awarded the 2016 Nobel Prize in Economics for “proving” that capitalist firms (and not, e.g., worker-owned enterprises) represent the most efficient way to organize production.

 

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Posted: 20 July 2017 in Uncategorized
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