Posts Tagged ‘history’

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When it comes to artificial intelligence and automation, the current White House seems to want to have it both ways.

On one hand, it warns about the potentially unequalizing, “winner-take-most” effects of the economic use of artificial intelligence:

Research consistently finds that the jobs that are threatened by automation are highly concentrated among lower-paid, lower-skilled, and less-educated workers. This means that automation will continue to put downward pressure on demand for this group, putting downward pressure on wages and upward pressure on inequality. In the longer-run, there may be different or larger effects. One possibility is superstar-biased technological change, where the benefits of technology accrue to an even smaller portion of society than just highly-skilled workers. The winner-take-most nature of information technology markets means that only a few may come to dominate markets. If labor productivity increases do not translate into wage increases, then the large economic gains brought about by AI could accrue to a select few. Instead of broadly shared prosperity for workers and consumers, this might push towards reduced competition and increased wealth inequality.

But then it invokes, and repeats numerous times across the report, the usual mainstream economists’ nostrums about the “strong relationship between productivity and wages”—such that “with more AI the most plausible outcome will be a combination of higher wages and more opportunities for leisure for a wide range of workers.”

Except, of course, historically that has not been the case—certainly not in the United States.

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For example, from the early 1970s to the present, workers’ wages have not kept pace with increases in productivity. Not by a long shot. As is clear from the chart above, productivity since 1973 has risen much more than workers’ compensation—72.2 percent, compared to a paltry 9.2 percent.

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And while over the same period hours worked have in fact fallen, the decrease in the United States (a minuscule 5.6 percent) has been far less than the increase in productivity—and much less than in other countries, such as France (24 percent) and Germany (27.3 percent).

So, yes, whether the use of artificial intelligence leads to improvements for U.S. workers—in the form of higher wages and fewer hours worked—”depends not only on the technology itself but also on the institutions and policies that are in place.”

But the experience of the past four decades suggests it will not benefit the American working-class.

And there’s nothing to suggest that trend won’t continue—unless, of course, there is a radical change in economic institutions and policies, which allow workers to have much more of a say in the technologies that are adopted and how wages and hours are set.

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Special mention

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Certainly not by mainstream economists—not if they continue to defend their turf and to attack the new literature on “Slavery’s Capitalism” with the vehemence they’ve recently displayed.

It makes me want to forget I ever obtained my Ph.D. in economics and the fact that I’ve spent much of my life working in and around the discipline.

A recent article in The Chronicle of Higher Education [ht: ja] highlights Edward E. Baptist’s novel book, The Half Has Never Been Told (which I wrote about back in 2014), and some of the outrageous ways it has been criticized by mainstream economists—first in a review in the Economist (which was so over-the-top it was subsequently retracted) and then in a group of reviews published in the Journal of Economic History (unfortunately, behind a paywall).

In my view, this is not a clash between two disciplines (as the Chronicle would have it), but rather a fundamental incompatibility between mainstream economic theory and a group of historians who have refused to adhere to the epistemological and methodological protocols established and defended—with a remarkable degree of ignorance and intolerance—by mainstream economists.

What is at stake is a particular view of slavery in relation to U.S. capitalism—as well as a way of producing economic history (of slavery, capitalism, and much else).

Baptist’s argument, in a nutshell, is that slavery was central to the development of U.S. capitalism (“not just shaping but dominating it”) and systematic torture (a “whipping machine”) was one of the principal means slaveowners used to increase the productivity of cotton-picking slaves and thus boost the surplus they were able to extract from them.

Mainstream economists hold a quite different view—that slavery was an outdated, inefficient system that had little to do with the growth of capitalism in North America, and increased productivity in cotton production was due to biological innovation (improved varieties of seeds that yielded more pickable cotton) not torture in the labor process.

They also use different frameworks of analysis: whereas Baptist relies on slave narratives and contingent historical explanations, mainstream economists fetishize quantitative methods and invoke universal (transcultural and transhistorical) modes of individual decision-making.

Those are the two major differences that separate Baptist (and other “Slavery’s Capitalism” historians) and mainstream economists.

This is how one mainstream economist, Alan L. Olmstead, begins his review:

Edward Baptist’s study of capitalism and slavery is flawed beyond repair.

Olmstead then proceeds to accuse Baptist of being careless with the numbers, of “making things up,” and “misunderstanding economic logic,” all of which leads to “a vast overstatement of cotton’s and slavery’s ‘role’ on the wider economy and on capitalist development.”

He concludes:

All and all, Baptist’s arguments on the sources of slave productivity growth and on the essentiality of slavery for the rise of capitalism have little historical foundation, raise bewildering and unanswered contradictions, selectively ignore conflicting evidence, and are error-ridden.

Baptist, for his part, has responded to Olmstead’s scathing attack (as well as critical reviews by others) in the following fashion:

Some scholars axiomatically refuse to accept the implications of the fact that brutal technologies of violence drove slave labor. They retreat into homo economicus fallacies to resist considering the question of whether in some cases violence increased, or was calibrated over time to enhance production. They evade consideration of survivors’ testimony about those changes, insisting that this data is “anecdotal”—as if the enslavers’ claims on which they build arguments are epistemologically any different.

That’s a problem for those of us who work in and around the discipline of economics: mainstream economists are simply unwilling to give up on homo economicus and doggedly refuse to examine either the economic effects of the brutal system of torture that was central to U.S. slavery or the role slave cotton played in the development of U.S. capitalism. Not to mention their arrogance in responding to the work of anyone who argues otherwise.

And that’s why the other half of the story will never be told by mainstream economists.

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The extensive media coverage since Fidel Castro died has included many different voices—from those of journalists who interviewed him and wrote about him, especially in the early years, through Cold Warriors and Cuban émigrés who did battle with him to political figures whose comments have been crafted to align with contemporary constituencies and goals.* But the media have left out one important group: ordinary people who, over the years, found themselves inspired by and generally sympathetic with (even when critical of many features of) the Cuban Revolution.

I’m referring to people around the globe—students, workers, peasants, activists, and many others, throughout the Americas and across the world—who have understood the significance of the Revolution for Cuba and, as a historical example of anti-imperialism and human development, for their own attempts to enact radical political and economic change.

What we haven’t learned from recent coverage is that re-revolutionary Cuba was under the thumb of the U.S.-backed dictatorship of Fulgencio Batista, who governed a relatively wealthy but highly unequal country in which the majority of people had no voice and suffered from high unemployment, a low level of literacy, poor health, and inadequate housing. And they were exploited in an economy dominated by large landowners, U.S. corporations, and American organized crime. The 26th of July Movement (a name that originated in the failed attack led by Fidel on the Moncada Barracks in 1953) launched an insurrection in 1956, with the landing of small force that found its way to the Sierra Maestra Mountains, and, with the support of an army of volunteers in the countryside and “Civic Resistance” groups in the cities, succeeded in overthrowing Batista. A small revolutionary organization with widespread popular support managed to confront and ultimately defeat a typical authoritarian Washington-backed Latin American regime just 90 miles off the U.S. coast.

And while a great attention has been paid to the growing tensions from early on between the new Cuban government and the United States, which sponsored a series of clandestine invasions and assassination attempts, mainstream accounts have overlooked the tremendously successful campaigns to do what had seemed impossible in Cuba and elsewhere—to eliminate illiteracy, promote health, and improve living and working conditions, especially in the countryside. In fact, one of the reasons Havana became and remained so shabby (as legions of foreign visitors who rarely venture outside the capital city never fail to describe) was the Cuban government’s focus on transforming conditions in rural areas so that, in contrast to many other countries, impoverished agricultural workers and their families would have no need to move en masse into the city.

That’s what I noticed when I traveled to Cuba in the late-1970s during the administration of Jimmy Carter, when U.S. travel restrictions were allowed to lapse. I didn’t see the urban ghettoes I drove through before boarding my flight in Montreal, and nowhere did I come across the poverty and inequality characteristic of rural areas across all the countries where I’d lived and worked in Latin America.

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Thanks to the Revolution, Cuba has achieved enormous progress—not only in comparison to the rest of Latin America and the Third World but even (at least in terms of indicators like infant mortality) the United States. That radical turnaround, and the ability to maintain it in the face of unrelenting U.S.-government opposition over decades, is the major reason Fidel and the Cuban Revolution have been admired around the world.

By the same token, the Cuban Revolution has not been romanticized or supported uncritically, especially as a model for left-wing movements elsewhere. For the most part, the economy has been organized around state ownership, not worker-run enterprises. And a small number of political leaders, including Fidel himself, and a single political party have managed to hold onto power, with little in the way of democratic decision-making beyond the local level—not to mention public antipathy towards and discrimination against LGBT people, the jailing of journalists and political dissidents, and so on. Economically and politically, Cuba is no paradise.

Still, for all its faults and mis-steps, the Cuban Revolution has long served as an example of the ability of people to struggle against the impossible and to win. Fidel was thus on the right side of history.

 

*Including the anti-socialist drivel offered by John McTernan, a former speech writer for Tony Blair.

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The working-class—at least the white working-class—has become the main theme of the post-election narrative in the United States. That’s not surprising since, as Jim Tankersley explained:

Whites without a college degree — men and women — made up a third of the 2016 electorate. Trump won them by 39 percentage points, according to exit polls, far surpassing 2012 Republican nominee Mitt Romney’s 25 percent margin. They were the foundation of his victories across the Rust Belt, including a blowout win in Ohio and stunning upsets in Pennsylvania and Wisconsin.

The last time around, these voters comprised more than one-third of the Americans who voted for Barack Obama—and Hilly Clinton failed to duplicate that success, especially in any state that mattered in the final electoral-college tally.

Clinton’s supporters want to blame their campaign debacle on racism (in addition to sexism and nativism) and, in recent days, have expressed their fear that responding to Trump’s victory by reaching out to the white working-class will lead to people of color being marginalized. It seems they’re returning to and rehashing the old, tired debate of class versus identity politics.

The first thing to keep in mind is that Bernie Sanders managed, however maladroitly, to put together a message of economic populism that challenged mainstream Democratic identity politics. He reiterated that view after the election:

Let’s rebuild our crumbling infrastructure and create millions of well-paying jobs. Let’s raise the minimum wage to a living wage, help students afford to go to college, provide paid family and medical leave and expand Social Security. Let’s reform an economic system that enables billionaires like Mr. Trump not to pay a nickel in federal income taxes. And most important, let’s end the ability of wealthy campaign contributors to buy elections.

In the coming days, I will also provide a series of reforms to reinvigorate the Democratic Party. I believe strongly that the party must break loose from its corporate establishment ties and, once again, become a grass-roots party of working people, the elderly and the poor. We must open the doors of the party to welcome in the idealism and energy of young people and all Americans who are fighting for economic, social, racial and environmental justice. We must have the courage to take on the greed and power of Wall Street, the drug companies, the insurance companies and the fossil fuel industry.

Second, as Ben Casselman has pointed out, it’s far from clear Donald Trump will be able to keep his promises to the white working-class.

Trump, if he sticks to his campaign pledges (a big “if”), will probably do little either to help the working class or to hurt the elites, at least economically. What’s more, this simple dichotomy completely leaves out the people who stand to lose the most, based on what little we know about Trump’s plans: poor and low-income families in urban and suburban areas.

Third, and perhaps most important, there’s no necessary contradiction between identity and class politics. The Democratic establishment and American liberals presume such a contradiction is hardwired into the U.S. polity and electoral politics. But, in order to move forward, we need some fresh thinking about the possibility of a real working-class politics.

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We need to keep in mind that, historically, political movements around identity were also informed by and infused with working-class politics. Consider, for example, International Women’s Day, which was originally called International Working Women’s Day—the earliest observance of which was held in 1909, organized by the Socialist Party of America, in remembrance of the 1908 strike of the International Ladies Garment Workers’ Union. Or the Civil Rights Movement, which in 1963 organized the March on Washington for Jobs and Freedom, one of the largest political rallies for human rights in U.S. history. One of the March’s key demands was “a massive federal program to train and place all unemployed workers—Negro and white—on meaningful and dignified jobs at decent wages.” In both cases, movements for new identity-related rights were based on working-class organizations and class-defined forms of grievance and redress.

We also need to understand, as Chris Dillow has pointed out, “the very notion of a ‘white’ working class plays the ruling class’s game of divide and rule.”

This isn’t just because it pits class politics against identity politics, but also because it imputes a racism to workers which is perhaps just as prevalent – and more damaging – among the boss class. It downgrades the many other genuine problems workers have, such as stagnant wages, insecurity and workplace tyranny. And it has the absurd implication that ethnic minorities aren’t part of the working class too.

The flip side is that the interests of the working-class are—or at least can be, with the appropriate discourses, identities, and forms of political organization—the interests of most people. As I argued in Sydney, the working-class can “challenge the pretensions of capital to become a universal class, by posing its own universal aspirations—not for everyone to become a laborer but to abolish the wages system itself.”

As Dillow succinctly put it,

the working class is not a problem in politics. It’s the solution.

Cartoon of the day

Posted: 26 October 2016 in Uncategorized
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Capitalism has, from the very beginning, generated movements of masses of people, both within and between nations. On one hand, the development of capitalism has disrupted and in many cases destroyed other modes of production and ways of life, and forced workers to have the freedom to sell their ability to work elsewhere—sometimes within their home countries (e.g., by moving from the countryside into small towns and large cities), often in other countries (when, of course, it was possible to assemble the finances to make the journey). On the other hand, the emergence and growth of capitalist enterprises have created the means to hire a larger and larger labor force—a demand that has been met by a changing combination of native-born and immigrant workers. Capitalism, in this sense, has demonstrated its own laws of population, including national and international migration.

And, as people have moved, shouldering the costs of their migrations across regions and national boundaries has been as unevenly distributed as the actual wealth those workers eventually created. It should come as no surprise, therefore, that across the history of capitalism the resulting large-scale movements of people have erupted in intense debates and battles over their effects.

The United States, of course, is no exception to these movements and controversies. The development of capitalism within U.S. borders, as well as the transformations it has simultaneously induced in other territories and countries (within the Americas and across the globe), have had the effect of creating both a mass of people who have no alternative but to sell their ability to work to someone else and a much smaller group of employers who have the capacity and interest to hire them. The result has been an ever-changing demography within the United States—as people of different ethnicities, races, and nationalities have been induced to move between regions and from other countries—as well as sporadic but intense debates about the consequences and costs of that ever-changing “melting-pot.”

That debate has, once again, erupted in the United States, in the midst of the current presidential campaign. While the terms of the debate are often couched (and thus mishandled and manipulated) in other terms, Americans are once again attempting to come to grips with the effects of the history of capitalism’s laws of population, which first concentrated and then abandoned generations of migrant workers in some regions and cities (especially in the now-deindustrialized Midwest), while simultaneously creating the conditions for the immigration of masses of people to work on the industrial farms and increasingly across the economy, from construction to services (everywhere else, both North and South).

Since Americans are encouraged to overlook the actual causes of migration and, in addition, to treat the two—internal and external—migrations as separate, independent processes, they end up concentrating only on the consequences of immigration (and, even then, on only some of the consequences). And that’s exactly the focus of the new study, “The Economic and Fiscal Consequences of Immigration,” by the Panel on the Economic and Fiscal Consequences of Immigration of the National Academies of Sciences, Engineering, and Medicine.

I plan to discuss the Panel’s major findings in a separate post tomorrow.