Posts Tagged ‘poor’

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 George Grosz, "Bürgerliche Welt/ World of the Bourgeoisie" (1922)


George Grosz, “Bürgerliche Welt/ World of the Bourgeoisie” (1922)

Back in 2011, I suggested we move from focusing on the pathologies of the poor to those of the rich. And that’s exactly what psychologists seem now to be doing. We’ve seen studies of “social class as culture,” “sharing the marbles,” and much more.*

The latest is Rael J. Dawtry, Robbie M. Sutton, and Chris G. Sibley on “social sampling—that is, the idea that wealthier people may be less supportive of redistribution than poorer people because they infer society is wealthier than it actually is because they are surrounded by other wealthy people. And that’s exactly what the authors found:

wealthier (relative to poorer) Americans reported moving in wealthier social circles and extrapolated from them when estimating wealth levels across America as a whole. . . In turn, these estimates were associated with the perceived fairness of wealth distribution in America and with opposition to redistribution, a finding that is consistent with theory on normative-justice judgments.

These results suggest that the rich and poor do not simply have different views about how wealth should be distributed across society; rather, they subjectively experience living in societies that have subtle—but important—differences. Thus, in the relatively affluent America inhabited by wealthier Americans, there is less need to distribute wealth more equally.

Dawtry, Sutton, and Sibley are certainly on to something: we often arrive at social judgments based on anecdotal evidence—things we have either heard or seen—and many of our anecdotes are produced or disseminated within our particular social circles. Those circles are our “sample.”

But that’s not enough. Because we also have other knowledges of the world around us—knowledges that come from the news, novels, music, religious sermons, political speeches, and so on. We’re not just limited to what is said and repeated within our narrow social circles.

So, sure, wealthy people might think the rest of society looks like the worlds in which they live and work. But they also know, through other means, that it isn’t really like that. There are many more people earning far lower incomes than they might come across on a daily basis. Grotesque inequalities exist and they’re getting more and more extreme.

If the rich don’t know about those inequalities, given the other knowledges that are widely available, then they are engaged in practices of willful ignorance.

And that’s another pathology we need to take into account.

*Readers will note I find myself always turning to George Grosz to illustrate my discussions of these studies. There must be some other artists I can use. Any suggestions?

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Until recently, we were certain what would happen with an increase in the minimum wage—and that would be the reason to oppose any and all such attempts. Now, it’s a guessing game—and that uncertainty about its possible effects has become reason enough to oppose increasing the minimum wage.

What the hell is going on?

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First, the certainty: neoclassical economists confidently asserted that the minimum wage caused unemployment (because it meant, at a wage above the equilibrium wage, the quantity supplied of labor would be created than the quantity demanded). Therefore, any increase in the minimum wage would cause more unemployment and, despite the best intentions of people who wanted to raise the minimum wage, it would actually hurt the poor, since many would lose their jobs.

But, of course, theoretically, the neoclassical labor-market model was missing all kinds of other effects, from wage efficiencies (e.g., higher wages might reduce labor turnover and increase productivity) to market spillovers (e.g., higher wages might lead to more spending, which would in turn increase the demand for labor). If you take those into account, the effects of increasing the minimum wage became more uncertain: it might or might not lead to some workers losing their jobs but those same workers might get jobs elsewhere as economic activity picked up precisely because workers who kept their jobs might be more productive and spend more of their higher earnings.

And that’s precisely what the new empirical studies have concluded: some have find a little less employment, others a bit more employment. In the end, the employment effects are pretty much a wash—and workers are receiving higher wages.

But that’s mostly for small increases in the minimum wage. What if the increase were larger—say, from $7.25 to $10, $12, or $15 an hour?

Well, we just don’t know. All we can do is guess what the effects might be at the local, state, or national level. But conservatives (like David Brooks, big surprise!) are seizing on that uncertainty to oppose increasing the minimum wage.

And that’s what I find interesting: uncertainty, which was at one time (e.g., for conservatives like economist Frank Knight) the spur to action, is now taken to be the reason for inaction. And those who oppose increasing the minimum wage are now choosing the certainty of further misery for minimum-wage workers over the uncertainty of attempting to improve their lot.

Addendum

They want less of a guessing game?

Then, let’s make the effects of raising the minimum wage more certain. Why not increase government expenditures in areas where raising the minimum wage represents a dramatic increase for workers? Or mandate that employers can’t fire any of the low-wage workers once the minimum wage is increased? Or, if an employer chooses to close an enterprise rather than pay workers more, hand the enterprise over to the workers themselves? Any or all of those measures would increase the certainty of seeing positive effects for the working poor of raising the minimum wage.

But then we’re talking about a different game—of capital versus labor, of profits versus wages. And we know, with a high degree of certainty, the choices neoclassical economists and conservative pundits make in that game.

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The Wall Street Journal is absolutely right: Pope Francis acknowledges the scientific consensus concerning the human/social origins of climate change and argues there is “an urgent need” for policies designed to cut carbon emissions and switch to renewable sources of energy.

But the pope goes further by weaving his signature theme of economic justice and his vehement criticism of capitalism throughout the encyclical.

What the pope does is build on the central economic themes of the apostolic exhortation Evangelii Gaudium, and then extend them to the issue of the natural environment, especially the causes and consequences of climate change. The result is a radical critique of contemporary capitalism.

There are many aspects of the 183-page Laudato Si’ I simply cannot discuss here.* What I want to do in this post is highlight some of the specifically economic themes of the papal encyclical that was officially released yesterday.

Many news stories have already highlighted the pope’s rejection of carbon emission trading as a solution to the problem of climate change:

The strategy of buying and selling “carbon credits” can lead to a new form of speculation which would not help reduce the emission of polluting gases worldwide. This system seems to provide a quick and easy solution under the guise of a certain commitment to the environment, but in no way does it allow for the radical change which present circumstances require. Rather, it may simply become a ploy which permits maintaining the excessive consumption of some countries and sectors. (126)

But there is a great deal more in the economics of Laudato Si’.

Throughout the encyclical, the pope highlights the relationship between climate change and the “economy of exclusion,” particularly the way the continued deterioration in the natural (and, he doesn’t overlook, social) environment affects the poorest, most vulnerable people on the planet.** Here are two examples:

Many of the poor live in areas particularly affected by phenomena related to warming, and their means of subsistence are largely dependent on natural reserves and eco-systemic services such as agriculture, fishing and forestry. They have no other financial activities or resources which can enable them to adapt to climate change or to face natural disasters, and their access to social services and protection is very limited. (20)

And

One particularly serious problem is the quality of water available to the poor. Every day, unsafe water results in many deaths and the spread of water-related diseases, including those caused by microorganisms and chemical substances. Dysentery and cholera, linked to inadequate hygiene and water supplies, are a significant cause of suffering and of infant mortality. (23)

Not surprisingly, this leads to his reiteration of the preferential option for the poor:

In the present condition of global society, where injustices abound and growing numbers of people are deprived of basic human rights and considered expendable, the principle of the common good immediately becomes, logically and inevitably, a summons to solidarity and a preferential option for the poorest of our brothers and sisters. . .We need only look around us to see that, today, this option is in fact an ethical imperative essential for effectively attaining the common good. (117)

And that’s the other side of the focus on the poor: the idea that the natural environment is part of the common good.

Human ecology is inseparable from the notion of the common good, a central and unifying principle of social ethics. The common good is “the sum of those conditions of social life which allow social groups and their individual members relatively thorough and ready access to their own fulfilment [sic]” (116).

So, if it is clear that climate change is a pressing issue, especially for the poor and most vulnerable, what stands in the way of effectively dealing with the problem? Here the pope extends his economic analysis to identify the interests and ideas that represent obstacles to both thinking about and finding appropriate solutions to climate change.

The pope, for example, cites those who stand in the way of making real change:

Many of those who possess more resources and economic or political power seem mostly to be concerned with masking the problems or concealing their symptoms, simply making efforts to reduce some of the negative impacts of climate change. (21)

In the meantime, economic powers continue to justify the current global system where priority tends to be given to speculation and the pursuit of financial gain, which fail to take the context into account, let alone the effects on human dignity and the natural environment. (41)

He also challenges responses that benefit only a tiny minority:

Even as the quality of available water is constantly diminishing, in some places there is a growing tendency, despite its scarcity, to privatize this resource, turning it into a commodity subject to the laws of the market. (23)

In some places, rural and urban alike, the privatization of certain spaces has restricted people’s access to places of particular beauty. . .Frequently, we find beautiful and carefully manicured green spaces in so-called “safer” areas of cities, but not in the more hidden areas where the disposable of society live. (31-32)

In the end, of course, the pope has to confront the problems of profits, markets, and private property.

This is what he writes about profits:

The economy accepts every advance in technology with a view to profit, without concern for its potentially negative impact on human beings. Finance overwhelms the real economy. The lessons of the global financial crisis have not been assimilated, and we are learning all too slowly the lessons of environmental deterioration. (81)

Here he is on markets:

Once more, we need to reject a magical conception of the market, which would suggest that problems can be solved simply by an increase in the profits of companies or individuals. Is it realistic to hope that those who are obsessed with maximizing profits will stop to reflect on the environmental damage which they will leave behind for future generations? Where profits alone count, there can be no thinking about the rhythms of na- ture, its phases of decay and regeneration, or the complexity of ecosystems which may be gravely upset by human intervention. Moreover, biodiversity is considered at most a deposit of economic resources available for exploitation, with no serious thought for the real value of things, their significance for persons and cultures, or the concerns and needs of the poor. (139)

And then on private property:

The principle of the subordination of private property to the universal destination of goods, and thus the right of everyone to their use, is a golden rule of social conduct and “the first principle of the whole ethical and social order”. The Christian tradition has never recognized the right to private property as absolute or inviolable, and has stressed the social purpose of all forms of private property. (69)

Finally, it has been noted that the pope doesn’t offer much in the way of concrete proposals to solve the problem of climate change. But he does mention a number of times the positive effects of a particularly noncapitalist form of economic organization: cooperatives.

Liberation from the dominant technocratic paradigm does in fact happen sometimes, for example, when cooperatives of small producers adopt less polluting means of production, and opt for a non-consumerist model of life, recreation and community. (84)

And

In some places, cooperatives are being developed to exploit renewable sources of energy which ensure local self-sufficiency and even the sale of surplus energy. This simple example shows that, while the existing world order proves powerless to assume its responsibilities, local individuals and groups can make a real difference. (131)

Throughout the encyclical, the pope could not have stated things more clearly: the “maximization of profits” is destroying the natural environment, the “poor, the weak, and the vulnerable” are most at risk of pollution and climate change, and “halfway measures” simply won’t work.

No wonder the Wall Street Journal is concerned about the pope’s “vehement criticism of capitalism throughout the encyclical.” Many more people might actually come to believe him.

 

*What I found particularly interesting, in addition to the themes I write about here, are the pope’s criticisms of modern (scientistic) epistemology and the hyper-individualist (neoliberal) subject.

**To be clear, the pope is not just referring to the people in rich and poor countries: “There are not just winners and losers among countries, but within poorer countries themselves” (129). And, he might have added, within rich countries.

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survey

A new New York Times/CBS poll [pdf] confirms what every other recent poll I’ve seen has shown:

  • Americans overwhelmingly believe current economic arrangements in the United States are fundamentally unfair (because “just a few people at the top have a chance to get ahead,” the distribution of money and wealth “should be more even,” and the gap between the rich and poor is “getting larger”) and
  • something should be done about it (since the gap between rich and poor needs to be “addressed now”,” the government should do more to “reduce gap,” and they “favor” raising taxes on people earning more than $1 million a year).