Wednesday, March 22, 2017

The Global Industrial Working Class [feedly]

The Global Industrial Working Class
http://triplecrisis.com/the-global-industrial-working-class-2/

Immanuel Ness is a professor of political science at Brooklyn College the City University of New York and the author of Southern Insurgency: The Coming of the Global Working Class (Pluto Press, 2015). In November 2016, he talked with D&S co-editor Alejandro Reuss about the present and future of the world's industrial working class. News of its death, Ness argues, is greatly exaggerated—in fact, the global industrial proletariat is bigger than ever—and he expects larger and more political struggles to come. (The audio version of the interview, previously posted on Triple Crisis, is available here.)

Alejandro Reuss: You've written that there are more industrial workers in the world today than ever before. Can you explain how that growth has occurred and how it has reshaped the world's industrial working class in recent decades?

Immanuel Ness: Yes, there are two major factors. The first is the deindustrialization of the traditional industries in North America and Western Europe—garment manufacturing, electronics, automobiles and other heavy industry—and the relocation of those industries in the global South—Africa, South Asia, and South East Asia, as well as to some extent Latin America. As a consequence, the latter regions have become major centers of production and export. And as part of that, the number of manufacturing workers there has grown dramatically.

The second factor is that, within industrializing countries like India, China, Bangladesh, and Indonesia, there has been a dramatic urbanization forced by the end of productive farming in rural areas. Many of the working peasants have been moving into urban centers where there are concentrations of industry. So while many in North America and Western Europe would say "the industrial working classes is virtually dead," I would make the case that there are in fact more industrial workers on the planet today than anytime in human history.

Roughly speaking, the industrial working class has grown over the last 50 years from somewhere around 200 million to nearly a billion people. Of course, that doesn't include other workers outside of manufacturing. The process has been unrelenting, and is bringing a number of Marxist arguments about capitalist globalization to fruition: Workers are engaged in very significant industrial struggles in places like New Delhi, Shenzhen, Cairo, and beyond.

Reuss: You've described this transformation in the context of what you call the "unrelenting significance of modern imperialism." Can you describe what you see as the main characteristics of imperialism today and the way that those enter into your analysis?

Ness: There are many different theorists who study global industrialization and capitalist expansion from Immanuel Wallerstein, to Giovanni Arrighi, to William I. Robinson and others. Robinson has described the current world economic system as being focused on the expansion of capital through the support of "deterritorialized" nation-states.

I would argue that there are leading imperialist powers—the United States, especially—that engage in economic forms of imperialism and ensure that it takes place through military expansion and intervention. But the nature of this form of imperialism is financialization. I think that very clearly, something critical has happened—where financial institutions have penetrated transnational corporations. At one time, corporations had subsidiaries around the world, now they are investing, on a global scale, in firms that are contractors. Much of the foreign direct investment from global financial centers like Wall Street, the City of London, Tokyo, Hong Kong, and Frankfurt are to places like the Pearl River Delta of China, around Hong Kong, major industrial centers in India, including the Delhi region as well as Chennai, South Africa, Egypt, Vietnam, and to some extent Brazil and Indonesia. These are major developments of industrialization.

This capital flows, as the Marxist geographer David Harvey points out, in a molecular fashion, to places where they are most profitable and where accumulation can take place at the fastest rate. And so, one major feature is that transnational corporations have become "deterritorialized" in the sense that they really don't care where they produce. They're willing to invest, or to pull out investments and reinvest elsewhere, on the basis of profitability. The traditional firms, as the writer and activist Naomi Klein has argued, are just logos. They don't produce much of anything, but they are determining what will be produced and how it will be produced—based on extremely low wages—in Africa, Asia, and Latin America. This is a major factor in understanding modern imperialism, which has a capitalist economic form. It is an extension of classical theories of imperialism, from J.A. Hobson to Lenin. There is a form of financialization that starts from the early 20th century, when German banks were investing in Russia, and now we have this taking place on a global scale. And in many ways, it is contributing to a politicization of working-class people around the world.

Reuss: Can you take us through some of the ways that you see labor struggles playing out in the global South in this context, especially in the countries that you focus much of your research on—China, India, South Africa?

Ness: I think one general theme across the countries in the global south—China, India, South Africa, Indonesia, Egypt, Brazil, Mexico, etc.—is that there is an extreme level of contingency. We don't have, in the global South, the traditional "Fordist" factory. Of course, you have some very large industrial installations, but workers are cycled in and out of these industries. More than ever before, the industrial working class today is more like the tinker, tailor, and candlestick maker of the past. Workers are typically not guaranteed jobs for very long periods of time. Their value as workers largely that takes place over a five or ten year period and then they become expendable. They come in and out of industry on a regular basis, so they may actually work one day in a steel mill and then the next day as a peddler on the streets. And this is something that takes place especially in the poorest regions in the global South—in India, Africa, and elsewhere.

Also, you have to focus on the labor struggles themselves as industrialization grows and becomes formalized. There has been widespread growth in strike activity. Sociologist Beverly Silver documented these strikes taking place in the 1990s, and continued to do that in her work Forces of Labor: Workers' Movements and Globalization since 1870 (2003).

This level of industrial militancy is seen in factories in China, for instance, where workers have gone on mass strikes. Thousands of strikes take place in China every year. It has more strikes without question than anywhere else in the world, even with a single union—a state dominated union, the All-China Federation of Trade Unions (FTU). The largest strike in the private sector in China took place in the city of Dongguan not too far from Hong Kong, in the Pearl River Delta, the manufacturing hub of China outside of Hong Kong. There you had 40,000 workers who were making athletic shoes for Adidas and other companies, who went on a strike that lasted about a month between May and June 2014. That was a very important transformation.

Many people outside of China would say, "Well, you know, the Chinese workers are completely oppressed and they don't really engage in activity because of the single state union, the FTU." But in fact, there is a lot of grassroots organizing that's going on which tangibly improves conditions, because in China wages, especially minimum wages, are negotiated on a municipal level. So, major changes are taking place in China, which is leading to higher wages, improved working conditions, improved healthcare. A lot of people don't want to admit it, but this is a very important development even within a single-party union.

Of course, in South Africa, we had the epic experience—also in early 2014, the entire period from January to June 2014—where mine workers in the platinum sector went on strike demanding dramatic increases in wages. Of course, workers lost a lot going on strike for such an extended period, in terms of non-payment of wages. But, wages have gone up appreciably, over a period that I would say started around 2009 and is continuing to this day. In the platinum sector, this contributed to the formation of a major union, the Association of Mineworkers and Construction Union (AMCU), which went from literally no workers to 1,000 workers and now probably represents well over 100,000 workers. And probably growing dramatically in the years to come.

One aspect of this is, of course, economism [labor struggles focused on economic demands like higher wages], but there are also demands for political change. In South Africa, there is a challenge to the Tripartite Alliance government—composed of the African National Congress, South African Communist Party, and Congress of South African Trade Unions—which came into existence in 1994. It did allow democratic freedoms, but did not at all allow for any kind of redistribution of wealth, so whites continued to maintain the vast majority. And perhaps this will lead to a major movement in the years to come.

In India, this is taking place a lot more slowly, but there are interesting formations of unions across different industries and different models of unionization that are extremely interesting—even though many would argue that the conditions of Indian workers are actually worsening in the contemporary era. But, no question, workers are going on strike and are also protesting. There's just a need for a political vehicle for that to take place.

Reuss: Of course, people in the global North are acutely aware of the changes of the composition of employment away from manufacturing, away from industry into services and so forth. Do you see a possibility of revitalization of labor movements, presumably now centered outside of manufacturing, in the global North? And are there lessons to be learned by workers and the labor movements in the global North from workers, often struggling under highly unfavorable conditions, in the global South today?

Ness: Well, I'd like to preface this by saying that I actually think that the major movements of the future will take place in the global South, where 85% of the working class is situated. In the global North we are, in some ways, beneficiaries of the exploitation of global South workers. But there is no question that the new industries that are being formed in services, technology, and so forth are creating high levels of exploitation. This exists, for instance, in the restaurant and retail sectors, in telecommunications, where you have call-center workers in the global North that are highly exploited, and so forth. And certainly with respect to the rise of "for-hire" transportation. The growth of companies like Uber is ostensibly turning workers into owners, when in fact it forces workers to expend even more in working for these companies.

I think the lesson is that, in the global South, the major feature of struggle is spontaneity. For instance, in many unions in the global South—in China, India, South Africa, Indonesia, and so forth—you have a lot of strike activity going on. You have a lot of militancy taking place. And the real lesson that we can learn is that, for instance, Uber drivers can go on a strike by not picking up passengers for a period of time.

In the global South, these are spontaneous movements and, as a consequence, it's really important to recognize there's a need to build institutional power. These spontaneous movements in places like South Africa and India are taking place inside and outside unions—even in China to some degree, though we don't know what can happen with respect to the internal functioning of the FTU in China. Workers are willing to form new unions, or switch from one union to another. For instance, you have, in both South Africa and India, a lot of unions that are vying for leadership over the auto sector. The same thing is true with respect to South Africa, where you have workers who have switched from the National Union of Mine Workers to the AMCU in the mining belt. So that, the one lesson would be that you need to take this spontaneous power and turn it into some kind of mobilization. There are lessons that still need to drawn in the global South as well as the North because—while unions are good—many of them are ossified and represent, in most cases, older struggles that took place generations ago.

Reuss: Finally, you alluded to some of the struggles that are taking place today as basically economistic in their demands, by which we mean centered on questions like wages, benefits, hours, and so forth. You also posed the question of the possibilities of broader politicization of labor struggles. What do you see as the potential for labor movements to develop a broader political agenda up to and including questions of challenging on a systemic level imperialism, financialization, and capitalism itself?

Ness: That's a very broad question, certainly. I would go back to the point that unions are forming. There's no shortage of worker militancy. You have that happening every day. Workers will always rebel, workers will always form their own assemblies, engage in struggles even without unions—that's something that's always a given. And in fact that's growing as we are seeing a larger industrial workforce on a global level. The point would be, I would argue, that there is a great need for the trade unions that are interested in organizing to actually stand for something other than these kinds of economistic objectives, and that they fight for political systems that are more equitable, and actually have a plan for what that will look like in the years to come.

I think that with the failures over the last century or so, many argue that socialism is no longer valid. In fact, I think it is probably more necessary today than any time in history. And in fact many unions, for instance the National Union of Medical Workers in South Africa, are engaging in political education. They're educating their workers in Marxism, they're educating their workers in political struggles, in this case outside of the electoral domain. They're educating their workers and, as a result, workers are demanding equality with respect to housing, with respect to education, with respect to healthcare—and these are all very important struggles that workers are engaged in. There is growing opposition to policies of free trade, neoliberalism, and so forth. Of course, we haven't really seen the fruits of these struggles in any specific place, except for minor examples over the last decade or two. But in fact, we're now seeing—there's no question about it—the beginnings of trade unions and political movements forming around socialism, which could happen maybe in a region or maybe in a country. It would have to be a very large country—I think that's the only way to have that happen. For instance, in South Africa there will be regional struggles of workers throughout the mining belt, throughout industry, throughout agriculture, and in urban areas as well. So that there are a lot of movements that are building formations that have not necessarily consolidated as yet, but there's no question that they will.

I think that this is something that we need in the global North as well—unions that are in fact anti-capitalist. While there are very few—most unions are rooted in economistic policies—I think that we should certainly learn to fight against the system. I think that the Battle in Seattle [protest against the World Trade Organization (WTO)] that took place in 1999 was a good start, but again it was in some ways spontaneous. Traditional trade unions, existing ones, are opposed to any kind of comprehensive policy. We have to recognize that, given the globalization of the entire capitalist world, we need to fight in solidarity on an internationalist level, global North-global South, South-South, and so forth.

Triple Crisis welcomes your comments. Please share your thoughts below.

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Bernstein: You know the full-employment productivity multiplier I’m always going on about? [feedly]

You know the full-employment productivity multiplier I'm always going on about?

Jared Bernstein interviews Josh Bivens



Josh Bivens directs research at the Economic Policy Institute, is a great economist, an old friend, and the author of an excellent new paper I wanted folks to know about. Here he is, answering a bunch of my questions about his new work.

Q: Tell us about the slowdown in productivity growth and why it's so important?

A: Productivity is a measure of how much income (or output) is generated in an average hour of work in the U.S. economy. Over the long-run, the only way economies can generate higher standards of living, at least on average, is if productivity grows. In the near-term, productivity puts a limit on how fast wages can rise without putting so much upward pressure on prices that we start seeing price inflation rise above the Fed's comfort zone. At the moment, price inflation is still below the Fed's 2 percent target and has been for a long time now. But wage growth has picked up a bit over the past year. Whether it's running fast enough to push price growth above 2 percent or not crucially depends on whether the underlying rate of productivity growth is 0.5 percent or 1.5 percent. In recent years, it's been close to 0.5 percent, but my paper argues that this should be seen as temporary so long as we continue to try to push the economy hard toward full employment.

Q: You find that slower growth in investment in productive capital (e.g., machines, structures, R&D) is a key factor in the productivity slowdown. Can you explain how that works? And given such low borrowing costs in recent years, wouldn't we expect a lot more investment?

A: Productivity grows for essentially three reasons: workers get better-educated and experienced, technological advance leads to new ways of producing things, or workers are given more and better machines and equipment to do their jobs. Investment — spending more on plant and equipment — has grown very slowly in this recovery relative to previous ones. This has radically decreased the contribution that such investment usually makes to productivity growth. 

This is pretty mechanical — invest in less capital and capital contributes less to productivity growth. Less mechanical but likely at-play is slow growth in investment in research and development accompanied by slow growth in technological advances. It makes sense that if firms are deciding to not invest much in physical capital that they're probably also pulling back on research. And, it also makes sense that spending less on R&D could slow the pace of technological advance.

(Courtesy Josh Bivens)

Q: I'd have to say that my favorite sentence in your paper is: "A 'high-pressure economy' that eliminates the remaining demand shortfall in the U.S. economy and leads to low rates of unemployment and rapid wage growth would likely induce faster productivity growth." Unpack that for our readers.

A: One spur to firms to invest in more capital goods is more expensive workers. Capital investment is often undertaken to partially replace workers. And workers are more valuable to replace when they're expensive. So, if we managed to drive unemployment low enough (create a "high-pressure" labor market) to spark some rapid wage-growth as workers now have real bargaining power vis-à-vis employers scrambling to recruit and retain employees, then firms might also realize that investing in labor-saving capital is a good deal.

Over the last seven years, there has been no wage pressure like this — workers have been cheap and have mostly stayed cheap (again, the last year has seen some wage pickup). This has likely reduced the urgency to invest in productivity-enhancing capital. Often, the threat of investing in labor-saving technology is used as a cudgel against efforts to demand higher wages (like when the first Trump labor secretary nominee and fast-food chief executive Andy Puzder argued that boosting minimum wages would just have workers replaced with kiosks in his restaurants). But from a macroeconomic perspective this isn't a threat, this is just another benefit of the higher wages!

Q: Hold up, dude! It sounds like you're advocating for robots taking jobs. That's got a lot of people spooked these days. Is that really what you're suggesting?

A: Actually, yes! We need more robots in the short-run, not fewer. Yes, particular workers displaced by the automation will have to find new jobs, but in a high-pressure economy, they'll be able to. And just to be really clear, anybody who is genuinely worried about the effect of automation on jobs should be screaming their head off against interest rate increases in the near-term. The point of these increases is to slow the pace the job-growth. If you think robots are taking jobs and leading to a labor glut, you really need to be on our side in arguing to run the economy even hotter.

Q: Figure J in your paper shows a pretty tight correlation between lagged wage growth and investment growth. Why should wage growth yesterday lead to investment growth today?

Source: Bivens

A: The process described above where wage-pressure spurs firms to spend money on labor-saving technology likely comes with a lag. How do firms know that it'd be good to have more machines tomorrow to economize on labor costs? They know this when labor costs are rising rapidly today.

Also, causality between wage-growth and productivity growth is clearly two-way; in the near-term when the economy has slack, faster wage growth leads to more investment. But in the long-run, to the degree that more investment leads to higher productivity, this can lead to higher potential wage-gains. This figure isolates the causality a bit, since it would be slightly odd for investment tomorrow to affect wage-growth today.

Q: I take it you'd like Chair Janet L. Yellen of the Federal Reserve to read this paper and reconsider tapping the interest rate brakes, right?

A: Yeah. It's a bit analogous to the "missing workers" issue. When labor-force participation (even of non-retirement age people) tanked early in the recovery, policymakers had a choice: write this off as a permanent change, or continue to try to boost economic growth and hope some of these potential workers came back in response to a better labor market. The last year has vindicated the strategy of keeping monetary policy accommodative — participation has greatly firmed up. They should apply the same logic to productivity — experiment aggressively with trying to fix some of the damage done by running the economy too cold for a long time with a period of running the economy hot. Given the stakes, it's definitely worth trying. 

Q: EPI was the first to document the now well-known split between productivity growth and middle-class wages and incomes. While we're all for faster productivity growth, don't we have to worry that it won't reach most working families?

A: For sure. Productivity growth is a necessary but not sufficient condition for boosting wages across the board. In the case of spurring this growth by running a high-pressure economy, however, you really are killing two birds with one stone: you're boosting productivity and boosting the bargaining power of those low- and moderate-wage workers who really need low rates of unemployment to get any traction in looking for raises.


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Robots and Inequality: A Skeptic's Take [feedly]

Robots and Inequality: A Skeptic's Take
http://economistsview.typepad.com/economistsview/2017/03/robots-and-inequality-a-skeptics-take.html



NOTES

Add note

Douglas Campbell:

Robots and Inequality: A Skeptic's Take: Paul Krugman presents "Robot Geometry" based on Ryan Avent's "Productivity Paradox". It's more-or-less the skill-biased technological change hypothesis, repackaged. Technology makes workers more productive, which reduces demand for workers, as their effective supply increases. Workers still need to work, with a bad safety net, so they end up moving to low-productivity sectors with lower wages. Meanwhile, the low wages in these sectors makes it inefficient to invest in new technology.
My question: Are Reagan-Thatcher countries the only ones with robots? My image, perhaps it is wrong, is that plenty of robots operate in Japan and Germany too, and both countries are roughly just as technologically advanced as the US. But Japan and Germany haven't seen the same increase in inequality as the US and other Anglo countries after 1980 (graphs below). What can explain the dramatic differences in inequality across countries? Fairly blunt changes in labor market institutions, that's what. This goes back to Peter Temin's "Treaty of Detroit" paper and the oddly ignored series of papers by Piketty, Saez and coauthors which argues that changes in top marginal tax rates can largely explain the evolution of the Top 1% share of income across countries. (Actually, it goes back further -- people who work in Public Economics had "always" known that pre-tax income is sensitive to tax rates...) They also show that the story of inequality is really a story of incomes at the very top -- changes in other parts of the income distribution are far less dramatic. This evidence also is not suggestive of a story in which inequality is about the returns to skills, or computer usage, or the rise of trade with China. ...

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Inequality and the Lake Wobegon Effect [feedly]

Inequality and the Lake Wobegon Effect
http://economistsview.typepad.com/economistsview/2017/03/inequality-and-the-lake-wobegon-effect.html

From an interview of F. M. Scherer (Professor Emeritus in the John F. Kennedy School of Government at Harvard, and former chief economist at the Federal Trade Commission) at ProMarket:

"Our Efforts to Deal With Tech Firms' Market Dominance in the U.S. Have Been an Abject Failure": ...Q: The five largest internet and tech companies—Apple, Google, Amazon, Facebook, and Microsoft—have outstanding market share in their markets. Are current antitrust policies and theories able to deal with the potential problems that arise from the dominant positions of these companies and the vast data they collect on users?
Our efforts to deal with the problems in the United States have been an abject failure. ...I might note that Facebook's dominant position in the market is due in part to its role as an innovator and partly to "network externalities"... Microsoft's dominant position is also attributable in part to network externalities... 
But the antitrust agencies have not taken sufficient measures to remedy abuses of this advantage.
Q: Is there a connection between the growing inequality in the U.S. and concentration, dominant firms, and winner-take-all markets?
I believe there is. The evidence of rising wealth inequality, especially through the work of Piketty and co-authors, is compelling. Less well known is evidence compiled at M.I.T. of strongly rising inequality of compensation, especially at the top executive levels. The nexus has not to my knowledge been fully articulated.
Here's my hypothesis: In recent decades, most publicly-traded corporations, at least in the United States, have embraced executive compensation consultants to advise the board of directors on executive compensation levels. Those consultants provide data on compensation averages and distributions for companies in peer industries. But then the Lake Wobegon effect goes to work. The boards say, "Surely, our guy isn't below average," to the average reported by the compensation consultants becomes the minimum standard for compensation. If each top executive receives at least the minimum reported pay and often more, the average rises steadily. 
Indeed, and here I tread on weaker ground, those compensation costs are built into the costs considered by companies in their product pricing decisions (in a kind of rent-seeking model), and so price levels rise to accommodate rising compensation. I might note that this dynamic applies not only for chief executives, but trickles down to embrace most of companies' management personnel. ...

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Eastern Panhandle Independent Community (EPIC) Radio:The ARe You Crazy Show, Resistance Radio, Food! Food!

John Case has sent you a link to a blog:



Blog: Eastern Panhandle Independent Community (EPIC) Radio
Post: The ARe You Crazy Show, Resistance Radio, Food! Food!
Link: http://www.enlightenradio.org/2017/03/the-are-you-crazy-show-resistance-radio.html

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Monday, March 20, 2017

Fwd: Democracy Calls



Sent from my iPhone

Begin forwarded message:

From: Stewart Acuff <acuff.stewart@gmail.com>
Date: March 20, 2017 at 8:45:02 AM EDT
To: Stewart <acuff.stewart@gmail.com>
Subject: Democracy Calls


Another night finds me

In morning's tiny hours

Coffee waiting, waking to see

What has befallen what we thought ours

I watch and wait those tiny hours the next assault to see

On what was once free

Our lives, for instance, target of attacks by would be tyrants

Our lives lived for our kids, our families, our community

We once acted for ourselves and others in a constant effort to balance

Now we must act to protect what is no longer sure , certainly

Freedom has never been without cost

Always a struggle in the open or in the dark watching the wolves,
now he

In whose madness of evil would be boss

In whose narcissism and insanity is only meanness and chaos

Watching no longer enough , waiting democracy

Calls us again to the bastions of truth and liberty

Watching others fight for me ?

No more

We cannot protect what we can't fight for.

Sent from my iPhone

Fwd: Democracy Calls



Sent from my iPhone

Begin forwarded message:

From: Stewart Acuff <acuff.stewart@gmail.com>
Date: March 20, 2017 at 8:45:02 AM EDT
To: Stewart <acuff.stewart@gmail.com>
Subject: Democracy Calls


Another night finds me

In morning's tiny hours

Coffee waiting, waking to see

What has befallen what we thought ours

I watch and wait those tiny hours the next assault to see

On what was once free

Our lives, for instance, target of attacks by would be tyrants

Our lives lived for our kids, our families, our community

We once acted for ourselves and others in a constant effort to balance

Now we must act to protect what is no longer sure , certainly

Freedom has never been without cost

Always a struggle in the open or in the dark watching the wolves,
now he

In whose madness of evil would be boss

In whose narcissism and insanity is only meanness and chaos

Watching no longer enough , waiting democracy

Calls us again to the bastions of truth and liberty

Watching others fight for me ?

No more

We cannot protect what we can't fight for.

Sent from my iPhone