Polanyi and Clopenings [feedly]

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Polanyi and Clopenings
// Crooked Timber

This piece by Mike Konczal and Patrick Iber on Polanyi's double movement, Trumpism, and the difference between left neo-liberalism and the social democratic left is fantastic. Go read it – I'm not going to try to excerpt from it, and certainly don't think I can improve on it. One of the things that it does, which I've wanted to write about for a little while, is to pick up on Polanyi's notion that labor and land are fictitious commodities – that is, that much of the problem with classical liberalism is that it presumes them to be commodities when really they are not. Konczal and Iber pick out a key quote:

Labor is only another name for a human activity which goes with life itself, which in its turn is not produced for sale but for entirely different reasons, nor can that activity be detached from the rest of life, be stored or mobilized; land is only another name for nature, which is not produced by man; actual money, finally, is merely a token of purchasing power which, as a rule, is not produced at all, but comes into being through the mechanism of banking or state finance

One very good example of how treating labor as a commodity goes wrong is 'clopenings' – near back-to-back shifts, combined with the practice of many employers of requiring their workers to agree to irregular shift work where they may not know until very shortly before when they are supposed to turn up to work. Steven Greenhouse wrote a strong piece on this for the New York Times:

On the nights when she has just seven hours between shifts at a Taco Bell in Tampa, Fla., Shetara Brown drops off her three young children with her mother. After work, she catches a bus to her apartment, takes a shower to wash off the grease and sleeps three and a half hours before getting back on the bus to return to her job. … Employees are literally losing sleep as restaurants, retailers and many other businesses shrink the intervals between shifts and rely on smaller, leaner staffs to shave costs. These scheduling practices can take a toll on employees who have to squeeze commuting, family duties and sleep into fewer hours between shifts. The growing practice of the same workers closing the doors at night and returning to open them in the morning even has its own name: "clopening." … Last summer, Starbucks announced that it would curb clopenings on the same day that The New York Times published an article profiling a barista, Jannette Navarro, mother of a 4-year-old, who worked a scheduled shift that ended at 11 p.m. and began a new shift at 4 a.m. … But several people who identified themselves as Starbucks employees complained on a Facebook private group page that they still were scheduled for clopenings, despite the company's pronouncement. One worker in Texas wrote on Jan. 30, "I work every other Sunday as a closer, which is at 10:30 or really 11-ish, then scheduled at 6 a.m. the next morning." Another worker in Southern California wrote, "As a matter of fact I clopen this weekend." Laurel Harper, a Starbucks spokeswoman, questioned the authenticity of the Facebook posts.

Markets, given that they are what they are, treat labour as a commodity. There are obvious efficiencies for firms if they can require their employees to carry out clopenings, or be available at short notice for unexpected shifts. Perhaps, indeed, one could construct a model demonstrating that consumers will benefit in the aggregate – that their venti half skim lattes with an extra shot will each cost one or two cents less if firms can rely on these kinds of labour models. But labour is performed by actual people, with actual families, which often involve children or dependents relying on them. This is a significant part of Polanyi's point – and modern shift practices in the service economy are an example which should be viscerally tangible to those of us who have had to juggle our work lives and raising kids or looking after other dependents (which is not all of us, but is many of us). Ways of thinking that turn labour into a commodity, divorcing it from the human beings that carry it out, are apt to produce monstrosities.

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Rental Assistance to Families with Children Falling as Need Rises [feedly]

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Rental Assistance to Families with Children Falling as Need Rises
// Center on Budget: Comprehensive News Feed

With homelessness among families with children receiving more public attention, our new report shows that the number of families with children receiving federal rent subsidies has fallen by over 250,000 (13 percent) since 2004 and is at its lowest point in more tha

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Three conceptions of biography [feedly]

Three conceptions of biography
http://understandingsociety.blogspot.com/2016/05/three-conceptions-of-biography.html

A biography is a narrative of a person's life. The biographer wants to tell the story of how the subject made it from childhood to adulthood; how he or she came to undertake certain actions in life; how various personal aspirations and commitments were played out in terms of extended projects with varying levels of success; how the adult's character was formed through specific experiences and influences. The biographer wants to make sense of the subject's life itinerary and character.

A biography necessarily pays attention to both external and internal factors. Externally, the biographer will investigate the nature of the family, the accidents of social class and education to which the subject was exposed, the role models and teachers by whom the subject was influenced, the habits of daily life that had unexpected consequences for the longterm development of the subject's life. Internally, the biographer will be interested in reconstructing the character, personality, and mental life of the subject; the inclinations and motives that drove the subject's choices; the values and commitments that shaped the ways in which the subject interacted with other people and social institutions.

There are several basic frames that the narrative of a biography might take. The biographer may tell a story that suggests that the subject possessed a well-developed conception of what he or she wanted out of life, and set out to take specific steps and strategies to bring about these outcomes. This can be called the "architect's view". The subject's life is understood as the fulfillment of a detailed plan, as direct as the migration pathway of a whooping crane.

At the other extreme, the biographer may find that the subject's life looks to be highly contingent and random. The subject moves from one experience to another, one opportunity and another discouragement, and the route is aimless. Call this the "random walk view." The subject's life may have had singular and valued accomplishments; but there is no overall direction to the life, only a series of stochastic and opportunistic interactions.

image: mathematical simulation of Levy walk foraging behavior (link)

There is a third possibility that incorporates both agency and contingency. The biographer may treat the subject as possessing values and ideas about the future that are guiding signposts as the subject moves through the small stages of life. The subject may have a moral sense that leads him or her to question choices through the lens of questions like "what is the right thing to do?" or "how can I contribute to a more just society?" or "what kind of person do I want to be?". Specific steps and initiatives are the result. The subject may be reflective and reflexive: he or she may consider current states of affairs and opportunities in terms of the ways in which these states of affairs contribute to half-fulfilled values and aspirations; and the subject may undertake to act in ways that give further shape to his or her mental environment -- more committed to a set of moral or spiritual values, more attentive to the satisfactions of family or creative achievement, more attuned to a sense of beauty or aesthetic balance. Call this the "bildungs view".

image: Lewis and Clark journey of discovery

The architect's view of life seems highly implausible for almost any given individual. Surely most people's lives have unfolded with a high degree of contingency, improvisation, and indeterminacy. An individual is exposed to this great teacher or that unfortunate necessity; and future actions and plans take shape partly as a result of those prior chance developments. Further, life contingency seems not to be restricted to moments of high drama, but rather seem to be distributed across the full range of daily life.

The random-walk view has some empirical plausibility as an understanding of the lives of a wide range of people. It is plausible enough to imagine that some people are highly unreflective about the future; they make decisions as necessities and opportunities come along, and they make out a life as a sum of these unrelated choices. Even the complexity introduced by the notion of the "Levy walk" is relevant to the unfolding of a life. As the diagram above indicates, the behavior of the subject is not restricted to a local domain of random choices; instead, the course is interspersed with long hops, taking the subject to a new terrain to explore randomly (link).

But it is the bildungs-view that has the most appeal for anyone who favors reflectiveness and the idea of creating a somewhat coherent whole over a long span of time. Here we are to picture a person always only partially formed, but seeking new personal and situational developments that lead towards a set of goals and values that are themselves only partially articulated. This is a boot-straps understanding of a purposive life: the individual at any given stage of life has reflected on values, goals, purposes, and satisfactions, has pursued plans and opportunities that fit with those values, and has reformulated and refined his or her values and goals as life proceeds. This is what can fairly be called a reflective life, embodying both contingency and direction.

The illustration of the 1804 Lewis and Clark expedition from St. Louis to Fort Clatsop gives a metaphorical idea of the bildungs view of a life. Lewis and Clark had some partially defined goals and plans when they set out on their journey of discovery. But much of the route depended upon contingencies encountered along the way and opportunities that were exploited in an improvisational manner. Their itinerary and changes of direction were often the result of new information, changing weather, unexpected terrain, and the like. The exact course they eventually traversed was not defined in advance; and yet there was a clear directionality to the expedition.

And what about Inspector Clouseau, depicted above in the person of Peter Sellers? The hapless inspector illustrates the random-walk model as he moves through the Pink Panther movies, with a generous amount of bumbling randomness and amazing turns of favorable luck leading to unlikely success in the end. Regrettably, no one can count on cinematic luck in ordinary life, so a bit more caution and planning seem well advised.

In framing this series of posts on rational life plans I have focused on the idea of rationality over time. There is another approach in philosophy that I haven't considered, however, that considers a similar problem from the point of view of the notion of a "meaningful life". What features or conditions make a life "meaningful" to the individual and to others? Susan Wolf's 2007 Tanner lectures provide a useful beginning at trying to analyze the good life in its fullness over time from the point of view of meaning and value (link). Also useful is Thaddeus Metz's article in the Stanford Encyclopedia of Philosophy on "the meaning of life" (link). Finally, the series of posts presented earlier on the topic of "character" is relevant to this topic as well (link). Character is relevant to life plans because it is shaped by the decisions the individual makes, and it provides the cross-temporal fiber needed to persist in a life plan under adversity.

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Bad arguments against Marxism [feedly]

Interesting post from a blogger I have not seen before...

Bad arguments against Marxism
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2016/05/bad-arguments-against-marxism.html

One of the problems with being a Marxist is that one is the subject of silly misunderstandings. Here are a handful of the bad arguments against Marxism I often see, and my replies.

"Don't you realize central planning has failed?"

We do.  But if you want to find people who still believe in central planning today, you should look not among Marxists but in company boardrooms. It's bosses who believe complex systems can be controlled well from the top down, not we Marxists.

In fact, many of us point to the abundant evidence that worker (pdf) ownership and controlincreases (pdf) well-being and productivity (pdf) as evidence that a post-capitalist society is feasible – in the sense of one in which hierarchical inequality is replaced by more egalitarian forms of control and ownership. For me, central planning is not a part of socialism.

"How can you believe guff like the labour theory of value?"

Simple – because as an empirical theory (pdf), it actually (pdf) works well (pdf). Paradoxically, the theory might be true but irrelevant. John Roemer has shown that it is not necessary for the claim that workers are exploited under capitalism. Instead, he says (pdf), we can say that workers are exploited if they would be better off if they could withdraw from capitalism, taking with them their per capita share of the capital stock. On this conception, the question is: does capitalist rule increase wages (by more efficient organization) or depress them (by exploitation).

"You're ignoring the fact that capitalism has lifted millions of people out of poverty."

I don't. It has. And Marx – perhaps more so that his contemporaries – was aware of this. Capitalism, he wrote, "has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals", "has given an immense development to commerce" and caused a "rapid improvement of all instruments of production."

However, to assume that this will remain the case is to commit the fallacy of induction. Marx also thought that there'd come a time when capitalist relations of production would become "fetters" upon growth. It's possible – given the slowdown in growth – that developed economies have reached this point.

 "Marxists are the enemies of freedom."

Let's leave aside the fact that this accusation often comes from supporters of political parties that have created over 5000 new criminal offences since 1997. What this ignores is that there is a big strand of libertarianism within Marxism: Marxists are far more sceptical about the benevolence of the state than social democrats, for example. As Jon Elster has written, Marx "condemned capitalism mainly because it frustrated human development and self-actualization." For us Marxists, one of the nastier features of capitalism is that it forces people – for lack of alternatives – into employment relations which are illiberal,coercive and demeaning. For us one challenge is to find ways of increasing people's real freedom to live fulfilling lives. Such ways might not be compatible with capitalism.

"You want to impose a social engineering dogma onto people."

No. Insofar as government has a role to play in the transition to socialism, it'll be through a form of accelerationism or what Erik Olin Wright calls (pdf) interstitial transformation – encouraging and facilitating democratic libertarian egalitarian alternatives to capitalism. For example, a citizens income combined with a meaningful jobs guarantee would be a step towards real freedom, and might kill off the most exploitative forms of capitalism by allowing workers to reject bad jobs. Preferred bidding status might encourage the growth of coops. Credit unions and P2P lending could be encouraged as alternatives to banks. Forms of civic engagement could be encouraged on the basis that small forms of democracy will lead to demands for more. And so on.

In this sense, socialism might evolve as capitalism did – through an admixture of emergence and state intervention.

 "You're a bunch of utopians."

In the sense that we believe that a better world is possible, we plead guilty. But we are not alone here. Non-Marxists who claim there'll be big gains from managerialist policies are also guilty of a form of utopianism. A big reason why I'm a Marxist is that I'm a sceptic about that sort of utopianism, and doubt how far working people's lives can be improved within the confines of a stagnant late capitalism.

 "Marxism is a pseudo-science."

This accusation often comes from people who believe in a form of mainstream economics which rests upon numerous unobservable entities such as the natural rate of interest, natural rate of employment, marginal utility and marginal product.

I suppose it is true for some definitions of "science" and some definitions of "Marxism".  For me, though, Marxism comprises a set of theories which are reasonably consistent with some facts, for example:

 - Technology affects culture. "The mode of production of material life conditions the general process of social, political and intellectual life" said Marx. This has been confirmed, for example, by the work of Jeremy Greenwood. If you want an example of Marxism at the BBC, the strongest is Radio 4's The Digital Human.

 - Class and power - in the sense of access to the economic surplus – rather than human capital  determine inequality

 - Apparently free markets – what Marx called "the realm of liberty, equality and Bentham" – can disguise rent-seeking and exploitation. Marx had in mind the labour market. Other examples are the markets for CEOs and for many financial "services."

 - Marx thought that capitalism produced a form of false consciousness; people failed to see its exploitative nature. I suspect a lot of the work on cognitive biases is consistent with this.

 - Marx thought there'd come a time when capitalist institutions – what he called the "relations of production" would act to restrain economic growth. "From forms of development of the productive forces these relations turn into their fetters." Secular stagnation might be evidence that this is happening. For example, intellectual property laws might do more to increase incumbents' profits than encourage technical progress. Bosses' opposition to organizational change might mean that the full gains from IT have yet to be realized. And the difficulty of monetizing innovation might help explain the paradox that techno-optimism co-exists with low investment.

In these ways – to mention just a few – Marxism is, to put it at its weakest, at least a useful perspective on today's problems.

You might object here that my Marxism is idiosyncratic. Certainly, it owes more to the Marx described by Jon Elster than to the one portrayed by Leszek Kolakowski. But frankly my dear, I don't give a damn.

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German chemical firm Bayer makes $62-billion offer for Monsanto [feedly]

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German chemical firm Bayer makes $62-billion offer for Monsanto
// L.A. Times - Business

German drug and chemicals company Bayer AG announced Monday that it has made a $62-billion offer to buy U.S.-based crops and seeds specialist Monsanto.

The proposed combination would create a giant seed and farm chemical company with a strong presence in the U.S., Europe and Asia.

Bayer said the...

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The Fed’s next rate hike: what’s the rationale? [feedly]

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The Fed's next rate hike: what's the rationale?
// Jared Bernstein | On the Economy

That's what I struggle with over at today's WaPo, along with connections to impressionist art and goat droppings. Like a number of analyses I've been posting of late, I find little passthrough from wage to price growth, even accounting for slower productivity growth.

The Post piece references a number of sensitivity checks of the finding that wage growth is not obviously nudging up price growth without showing the figures. Here, for OTEers only, are some extra figs.

Using wage growth instead of compensation growth doesn't make any difference:

Source: see data note in Post piece.

What about using quarterly annualized changes instead of year-over-year changes? As these data are considerably noisier, that too ends up showing bupkiss.

Source: see data note in Post piece.

Some colleagues noted that it's a little odd to pick on Lacker because he always wants to raise. Fair point, but I thought the most recent Fed minutes also had moments of MONETary policy versus the more data driven approach:

"Most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labor market conditions continuing to strengthen and inflation making progress toward [their 2 percent inflation] objective," then an increase in June would likely "be appropriate."

Yes, as I show in various places, wages and prices are "firming" a bit. That's both good and totally expected as the job market improves and the price of oil slowly climbs back to more normal levels. The question is all about linkages to inflation, which is what I try to get at in my admittedly simple approach.

Let me leave you with this. It's critical to elevate the role of international dynamics, including capital flows, in one's thinking about these price dynamics. In this regard, I consider this 'graf by Fed governor Brainard to be one of the more important these days:

Recent events suggest the transmission of foreign shocks can take place extremely quickly such that financial markets anticipate and indeed may thereby front-run the expected monetary policy reactions to these developments. It also appears that the exchange rate channel may have played a particularly important role recently in transmitting economic and financial developments across national borders. Indeed, recent research suggests that financial transmission is likely to be amplified in economies with near-zero interest rates, such that anticipated monetary policy adjustments in one economy may contribute more to a shifting of demand across borders than a boost to overall demand. This finding could explain why the sensitivity of exchange rate movements to economic news and to changes in foreign monetary policy appear to have been relatively elevated recently.

I will dive into this in a forthcoming post, as I believe these insights also militate against rate hikes without clear rationales re inflationary pressures, as higher rates exacerbate the flows problem for the US. But in the meantime, here are your reading assignments: the talk from which that 'graf is pulled and one of the papers underlying this important argument.

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Bruce Plante, Tulsa World - Bruce Plante Cartoon: Oklahoma's Legislature has an answer [feedly]

Bruce Plante, Tulsa World - Bruce Plante Cartoon: Oklahoma's Legislature has an answer
http://editorialcartoonists.com/cartoon/display.cfm/151157/

TITLE: Bruce Plante Cartoon: Oklahoma's Legislature has an answer PUBLICATION DATE:Sun, 22 May 2016

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