Tag Archives: capitalism

Unemployment and revolution. Part 2: What ‘normally’ causes unemployment?

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What “normally” causes unemployment? (continuation of research paper prepared by Albert Langer in 1981).

– The Labour Market

– The Unemployment Pool

– Changes in the Level of Unemployment

2. WHAT “NORMALLY” CAUSES UNEMPLOYMENT?

We shall argue that conservative economists are correct to stress that unemployment plays an essential regulatory role in a market economy. This contrasts with the usual “left” calls for government action to “create jobs”. But we will go on to show that “wage restraint” will not solve the problem either.

Such “restraint” would be unnecessary to keep “normal” unemployment within limits, because the unemployment itself would regulate wages. Something must have changed so that unemployment and wages are not regulated in the way they used to be.

A common way to look at unemployment is that there is a certain fixed number of jobs and a certain fixed number of people available to fill them, and some sort of mismatch has occurred. The suggestion here is that the unemployed are simply those workers who cannot be fitted into the jobs available for them. This idea leads to “commonsense” proposals to reduce the number of workers, or provide a better match between specific workers and specific jobs.

Solutions aimed at restricting the number of job applicants have historically had a powerful appeal. Discrimination against women, migrants, blacks and so on, can be in the immediate interests of men, native born, or whites, in the competition for a place at the front of the jobs queue.

Obviously such “solutions” cannot reduce unemployment, but they can determine who gets the jobs, and for the individual on the dole, that can be just as important. Efforts are already being made to promote these objective divisions of interest within the working class. Those efforts are serious and should be fought seriously. They can succeed.

There are always vacancies as well as people unemployed, so “solutions” which emphasise re-training and so forth are still popular. So is the idea that there are really plenty of jobs available, but “dole bludgers” are just refusing to fit into them because they want something better.

School leavers do have access to advice about how to be well groomed for a job interview and so on, although only cretins could imagine that if all the unemployed were better groomed, any more of them would get jobs quicker! This simply confirms that who gets the jobs is pretty important for the school leaver. Advice about how to find a job can be somewhat helpful in evening out the duration of unemployment and reducing the numbers who miss out on jobs altogether. But quite obviously it cannot reduce unemployment.

A lot of energy in left wing propaganda and agitation is spent trying to combat the above ideas but without attacking the underlying concept that there is a fixed number of jobs and workers. The “left-wing” and “right-wing” analyses are therefore just two sides of the same coin, sharing the same basic assumptions.

So we should not be surprised that the left makes no progress against the dominant right wing ideology.
What is the difference between saying there are too many workers or not enough jobs? These really amount to exactly the same thing. Yet that is all the left does say. The “not enough jobs” line is sterile, boring, and will get nowhere because it is just not true.

These ideas are wrong because neither the number of workers nor the number of jobs is at all rigid.

Under normal circumstances, the number of jobs adapts flexibly to the number of workers available to do them. In fact there is always plenty more work that needs doing, than the labour available to do it.
As capital is accumulated and society develops its productive forces, jobs that were previously left undone get attended to. The limitation is always the social labour time available to do things, rather than the number of “jobs”.

When the number of jobs fails to adapt to the number of available workers, this must mean that something has changed in the adaptive mechanism itself, and we must find out what. Just trying to “create jobs” would still leave us with an adaptive mechanism that was not working and that could recreate a new pool of unemployed.

This more sophisticated understanding of job creation in a market economy, lies at the heart of conservative arguments for wage restraint. Those arguments have never been satisfactorily answered from the labour movement, and are gradually being accepted by the trade union bureaucracy. There is thus an urgent need for them to be answered. Let us first consider how the adaptive mechanism is supposed to work.

The Labour Market

The workforce in modern industrial countries is extremely mobile. It is the product of centuries of capitalist development in which the technique and structure of production have changed so rapidly that people expect to change jobs many times during their working lives.

Nowadays many firms are so large that a good deal of movement between jobs takes place within the same firm. Some even have regular career services with a defined system for recruitment, promotion and transfer. There is also a certain amount of transfer between firms, directly from one job to another. But a great deal of movement between jobs still takes place via the pool of unemployment.

“Labour Turnover” includes workers changing jobs while searching for a better situation. It also includes the replacement of workers who have died or retired or otherwise left the labour force, by new workers entering the labour force for the first time.

These movements have no net effect on unemployment although many workers will pass through unemployment on their way between jobs, or on their way into the labour force. In addition to this however, there is a continuous process of new jobs being created and old jobs being destroyed. This does have a net effect on employment, and therefore on unemployment, although the effect can be in either direction.

In existing establishments, expansion or contraction of demand will create new vacancies or produce redundancies. Changes in demand may also result in new establishments being set up as an industry expands, or old ones being closed down as it contracts.

New techniques will be introduced with expansion, or when it is time for old plant and equipment to be replaced. Old techniques will be phased out with contraction, or when they have become so obsolete that it is more profitable to introduce the new technique immediately.

Investment in new production techniques requires a reorganisation of the labour process. Vacancies will be created for new positions that previously did not exist. Old staff positions no longer required will be abolished. Some workers will be transferred from old positions to new ones. Others will be retrenched, or not replaced when they leave. New workers, perhaps with different skills, will be recruited. New raw materials and components will replace those previously used. Work previously done “in house” when the volume was lower and the need for specialisation was less, will either be farmed out to new outside contractors or subsidiary establishments set up for the purpose.

Generally the new technique is introduced to increase productivity. The new team of workers will be able to turn more of their “inputs” into “outputs” at a lower cost and using less labour. There may be an increased demand for new inputs used by the new process, with a decrease in demand for the old inputs used by the old process. This may produce some net effect on total employment in the suppliers (and in their suppliers…)

If the output is relatively cheapened as productivity increases, then there may be a further increase in demand, which will again increase the demand for the products of the firms or departments that supply the inputs.

Expansion of markets is generally a consequence of relative cheapening through increased productivity, and at the same time a condition for new techniques to be introduced. “The division of labour is determined by the extent of the market”. Often within the same establishment, there will simultaneously be expanding demand which increases employment, and reorganisation that decreases it. The total staff size may either grow or shrink as a result.

This sort of thing is happening all the time, and may not even be noticed as “labour saving technological change”. Especially if the change only increases output with the same size workforce, instead of leading to redundancies.

However labour productivity and the real gross national product per worker are able to grow each year only because of these changes. Growth rates have been very high in the whole post-war period, because these changes have been taking place very rapidly.

The long term tendency has been for the total labour force to grow more rapidly than the population. Labour saving technological change has meant more output per worker together with more employment overall. However this simply implies the overall rate of economic growth has been faster than the rate of productivity increase. Any particular change may result in either more or less total employment, and there is no guarantee that changes in employment taking place simultaneously throughout the economy will automatically balance each other in any way.

Both changes in demand and changes in technique can produce a net change in total employment. If there was no unemployment pool, there would be no leeway for changes in total employment to occur as a result of job creation and destruction. There must be leeway, so there must be an unemployment pool.But its size is another question.

The Unemployment Pool

As well as the normal labour turnover, there is a continuous stream pouring into the pool of unemployment as a result of positions that have become redundant (whether their previous occupants were sacked, or the position was just not filled when they left).. There is also a continuous stream emptying the pool of unemployment as a result of new vacancies that have been created.

In fact there are a number of interconnected pools and streams for different occupations, industries and localities. And these are also interconnected with the pools of people in the education system or otherwise not in the labour force as well as with the flows of migrants to and from other countries.

The effect of changing demand on the numbers of jobs available for people of various skills and occupations in various localities, is reflected in the filling and emptying of their unemployment pools. People who cannot find a job in one pool are forced to transfer to another by doing things such as changing their usual occupation or residence, acquiring new skills that are more in demand, and so on.

The pools of people “not in the labour force” can also be forms of “hidden” or “latent” unemployment. Women for example, are drawn into wage labour more extensively during periods of peak labour shortage, and pushed back into “home duties” when unemployment is growing. Likewise people may stay on at school longer, or retire earlier, as a result of unemployment.

On a world-wide scale, the movement of people off the land and away from petty production into industrial wage labour jobs is accelerated by labour shortages.

This movement is retarded or even reversed during a depression. Thus countries like Australia which normally absorb immigrants from agricultural areas like southern Europe, will put up barriers to immigration when there is unemployment at home. People left marginally employed, on or off the land in the agricultural areas are also part of the unemployment problem.

The modern capitalist economy is very flexible and has a number of mechanisms for adapting to changes in the level of economic activity and consequent changes in the demand for labour. Thse include adjustments in overtime hours worked, part-time and casual employment, wage rates, labour turnover, work intensity, production techniques and so so.

Only when the other adjustment mechanisms have already been stretched considerably, do substantial unemployment or labour shortages appear directly. Both unemployment and labour shortages are therefore signs of some relatively severe disproportion which must be stretching things. Since each firm hires and fires independently and plans its investment program independently, there is no reason why at any given time the total numbers pouring into the pool of unemployed should be equal to the numbers drained out of it. Some other mechanism must therefore maintain the balance.

After all, why should the number of jobs created in the tertiary sector, just happen to balance the number of jobs lost in manufacturing, plus the additional numbers of women entering the labour force, and so on? Nevertheless, these independent statistics did balance for many years, and we must find out why they did, before we can find out why they now do not.

As will be explained later, the expansion and contraction of unemployment is itself part of the mechanism that regulates the price of labour power, the rate of profit and the balance between production, consumption and investment.

There just is not any government authority that can regulate the number of new jobs being created, or the number of old jobs being destroyed each year – and there cannot be such regulation in a market economy.

Therefore there is not any way that the government can directly determine the number of unemployed.

Changes in the Level of Unemployment

It is difficult to separate job creation and destruction from other labour turnover, and difficult to separate the effects of new technology from expansion and contraction of demand. But labour turnover is very high, and some of it is the result of jobs being created and destroyed.

If people change their jobs an average of once every four years, then the number of job changes each year is equal to a quarter of the entire workforce. If the average duration of unemployment is six months, then twice as many people pass through unemployment each year on their way to a job (or on their way out of the labour force due to discouragement), as the number of unemployed at any given time. Only a small proportion of labour turnover needs to be due to job creation and destruction, for any imbalance between the two to have a rapid effect on net employment and unemployment.

One would naturally tend to think that if all those who happen to be out of work at the moment were to go abroad, or had jobs specially created for them, then there would be no unemployment. But the above analysis suggests that only a slight mismatch between the numbers of jobs being created and destroyed, would very quickly recreate a large pool of unemployed. Just to keep the number of unemployed static, whether at twenty thousand or two million, there would have to be perfect equality between the large number of jobs being destroyed each year, and the large number being created.

It follows that one should not just think in terms of a match between the numbers of jobs and workers, but also a match between the rates of job creation and destruction. In fact, when there is no dramatic continuing change in the level of unemployment, there must be just such a nearly perfect match between job creation and destruction.

How is it brought about? Why does not the number of unemployed fluctuate wildly, all the time? Only if we know how unemployment is normally regulated can we find out why that regulation is not working the same way now.

(Next instalment: What regulates unemployment?)

Unemployment and Revolution (Part 1) – by Albert Langer, written in 1981

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Unemployment and Revolution

First published in August 1981 as an Australian Political Economy Movement conference paper by Albert Langer (Adelaide 8-9 August.1981). It was republished subsequently by the Red Eureka Movement. (REM).

It holds up very well, given that it was written more than 30 years ago.

Brief Synopsis

Conservative economists and politicians generally argue that unemployment and inflation in Australia are the result of changes in the international economy, and that Australia has to adapt to those changes or things will get even worse. They say government economic policies must promote more rapid economic growth by stimulating profits and investment at the expense of real wages and social welfare.

Labour movement opponents of the current Liberal government have proposed a series of sometimes contradictory arguments in opposition to this line. Explicitly or by implication they suggest that unemployment is at least made worse by the present government’s economic policy, and could be improved if different policies were followed. Various proposals are advanced – such as:

for shorter working hours

redistribution of wealth from the rich

protection of Australian industry

limitations on technological change

nationalisation

government job creation schemes

improvements in the lot of the unemployed

measures to stimulate economic growth without attacking living standards

and so on.

These proposals have had little impact on public opinion. Given the manifest failure of its economic policies, there has been nothing like the mobilisation against the government that might be expected.

The reason is that these proposals do not make sense. They ignore fundamental facts about how capitalism works, and about recent economic and political history.

The capitalist system is not capable of restoring full employment in any of the ways suggested from the labour movement, and it is silly to pretend that it can. The only alternative to conservative policies will be communist revolution. That alternative must be made realistic.

Introduction

Before deciding what could – and what could not – reduce unemployment, we first need to look at what causes unemployment. I am not very clear on that myself, but I still feel confident enough to reject various commonly accepted views on the subject. I will state my own provisional understanding rather baldly. Others can then point out its inadequacies, and we can go on from there.

This paper is thus a preliminary attempt, necessarily half-baked, and partly written for the purpose of self-clarification. It examines an issue that really needs to be considered in close connection with many other economic and social questions. It would have been better to have provided more facts and figures, examples and other evidence for the assertions below, as well as more explicit reference to other views. But we have to start somewhere.

Hopefully feedback will result in refinements and modifications of the arguments. Please do send comments.

Part 1. Emphasises that unemployment is specifically a problem connected with market economies. Then it gets slightly distracted to talk about science fiction and jellyfish.

Parts 2., and 3. Analyse the economic mechanisms that regulate “normal” unemployment, in order to explain the conservative arguments for “wage restraint” and why such arguments are wrong.

Part 4. Examines “technological” unemployment and shows that the increased unemployment now is not “technological”.

Part 5. Attempts an explanation of “overproduction” and “cyclical” unemployment (without great success).

Part 6.Considers various “solutions” from the labour movements, in the light of the earlier analysis, and rejects them all, but cheerfully, in view of part 7.

Part 7. Tries to give some concrete content to the idea that “the only solution is revolution”.

1. WHAT IS “UNEMPLOYMENT”

First, let us be clear about what unemployment actually means. Unemployment and employment are two sides of the same coin. Capitalism is based on wage labour. Workers sell their labour power to employers for money wages. They are “employed”, that is “used”, or “exploited”, to produce profits. They do not work for themselves, but are “employed” by others. Inherent in this is the possibility that some workers will be unable to find a buyer who is willing to purchase their labour power when it is offered for sale.

In fact unemployment is not only possible, but inevitable, in a capitalist or market economy. The labour market, like the other commodity and financial markets, is an essential mechanism regulating production and consumption by balancing supply and demand through price movements. Even at the height of prosperity there has to be some pool of unemployed for employers expanding their operations to recruit from. Otherwise they could only recruit from other employers by offering higher wages.

“Full employment” actually means “very little unemployment” – say 1% or 2% – just enough to stop a “wages explosion”. Any less unemployment than that is not “full employment” but a “labour shortage”.

The very term “market economy” implies an economy in which commodities, including labour power, may be offered for sale with no buyer. If there was a guaranteed buyer, then the transfer would be some sort of allocation, rather than a free market exchange.

So in a market economy, goods and services may be left unsold, capacities for production may be under-utilised, and workers may be unemployed. It all depends on the market – ie on whether somebody is willing to pay money for them.

For additional workers to be employed, an employer has to be able to make a profit out of employing them, by selling what they produce on the market at a price higher than their wages. If this is possible, then some employer, whether government or private, will do it. But on the other hand, if no profit can be made from employing additional workers, directly or indirectly, then they cannot be employed.

The government can pay them unemployment benefits, and it can call these benefits “wages”, but if the work done does not pay for itself on the market, it is not “employment”, and will require a continuing subsidy from revenue obtained by taxing real employment.

If there were any commodities with guaranteed buyers in a free market, then those commodities would be in short supply and their price would go up until there were no longer guaranteed buyers. That is actually what happens to wages when unemployment falls below a certain minimum. This is perfectly normal and completely unavoidable.

Most proposals for reducing unemployment lose sight of this essential fact. If it was possible to reduce unemployment by some simple measure to increase the number of jobs immediately available, then it would theoretically be possible to eliminate unemployment entirely by pursuing the same measures more vigorously.

However the basic nature of a market economy does not permit that. In fact it regenerates unemployment as part of its normal functioning. “Job creating” measures might work in some other kind of society, where work is done because a job needs doing, rather than because someone is willing to pay for it. But in a market economy, jobs are “created” by the market, and only by the market. Somebody has to pay.

In order to confirm that unemployment really is just the other side of employment and only occurs where work takes the form of wage labour, we can examine some societies which do not have a market economy.

Employment is so “normal” in our society that one tends to take it for granted and to look elsewhere for the explanation of unemployment. So it is worth reminding ourselves that employment and unemployment are characteristic features of only one kind of society – the capitalist or market economy.

Other Societies

Primitive Communism

Savage society was characterised by a primitive form of communism in which people worked together as a tribe. There were no employers and there was no question of finding or losing a job. You could starve to death, or get eaten, but you could not become unemployed. The fact that it’s quite common to hear modern society compared unfavourably with primitive society says something about how disgruntled people are with capitalism. In reality however the life of the “noble savage” (including the Australian Aboriginals) was, as Hobbes famously said, “nasty, brutish and short”. Nevertheless there was absolutely no reason why everybody in the tribe could not work at once. Unemployment was just not a possibility for people living in these societies.

Slave and feudal societies

Slave society marked a considerable improvement, for civilisation, culture and so forth. This was so even for slaves since captives were no longer killed and eaten. There was still no unemployment. Even as recently as feudal society, for most of the population there was no such thing as employment and unemployment. A peasant or serf did not have to find a job. They simply worked the land and engaged in household industry. They could suffer from wars and famines, but not from unemployment. An artisan might have difficulty selling goods, but could not become unemployed. Again, reactionary romantics, including many supposed to be “left”, often look back on the cramped, narrow lifestyle of those times, as though it was some sort of “golden age” compared with modern society.

Modern society based on wage labour has opened up much wider horizons than anything that existed before it. But unemployment is part of the deal. Nevertheless it is a good deal compared with tribalism, or slavery, or being tied to the land.

Freedom to sell one’s labour power on an open market is an enormous advance over previous social systems in which people were born into their jobs and were therefore stuck with them for life. This freedom is the basis for all other freedoms.

However the deal is no longer good enough. We want more freedom and we will have to move beyond a market economy to get it. The current concern about unemployment is just one sign that the social system we have now is no longer good enough.

Future society

In future communist society people will not work for wages, but for social needs, as was the case in primitive communist society. They will not buy their requirements in exchange for money received as wages or profits, but will be given an allocation in accordance with their needs. Again, as in primitive communist society.

Unlike primitive communist society, people will not be ruled by “necessity” but will use their knowledge of natural laws to attain freedom from the blind working of “nature” or “fate”. Work as an obligation, and consumption as a right will not need to be enforced through commodity exchange, any more than they will need to be enforced through tribal sanctions.

Distribution will be “from each according to their ability, to each according to their needs”. The state as an apparatus of coercion will wither away since the government of people will give way to the administration of things. The free development of each will be the condition of the free development of all, and the long dark ages of the pre-history of humanity will have ended.

Science Fiction

It is worth reminding ourselves that this is what the progressive movement is ultimately all about – something that often gets forgotten in the midst of day to day struggles.

Even some science fiction stories take it for granted that humanity is headed towards a sort of communistic society. Sci fi characters tend not to be looking for jobs, receiving wages, or buying things with money. In these stories people do various jobs and obtain supplies of accommodation, food, and other things they need, without buying and selling. Although social relations specific to capitalism are often imposed on sci-fi societies quite inappropriately, there is still no “private enterprise” in many of these visions of future society. Likewise “nations” often seem to disappear.

Needless to say, in such a future society there would be no question of unemployment, since there would be no labour market. Despite this there could be plenty of other problems – just check out the sci-fi literature for examples.

Further along, or for alien life-forms, the very concept of “society” gives way to a single organic whole, where there is no question of distribution “from” or “to” any separate individuals. This reminds us of the way in which single celled creatures first gathered into colonies and then evolved into jellyfish -like creatures and eventually some went on to develop into highly complex organisms.

But returning to the present millennium – communism will still not be a good enough deal once we have it! People will then be ready to demand something along the lines of “From each according to their inclination, to each according to their wildest dreams” – and other more radical proposals.

There will still be struggles and the need for revolutions. We cannot predict what new problems will arise as humanity continues transforming itself and eventually changes into, or gives way to something quite different from the present species.

But unemployment will certainly be a problem over and done with, once employment is over and done with. It is not a permanent problem and one day we will not have to worry about it, just as today in most advanced countries we do not have to worry about starvation.

Coming right back now to the present day, communism is long overdue and we still have unemployment – and it is growing. However in recent times we have actually seen examples of modern societies where unemployment was not a problem. These were societies that had consciously set out on the road towards a communist society and had begun abolishing the market economy. They had no difficulty controlling and then eliminating unemployment. This was despite the fact that they had started with extremely backward economies and first had to deal with even bigger problems such as starvation. There was not any unemployment in the Soviet Union when it was socialist, even at the height of the 1930’s Great Depression.

However today there is unemployment in some sectors of the Soviet economy and labour shortages in others (apparently with an overall labour shortage as existed in most western capitalist economies in the 1960’s.) Since Soviet economists admit there are labour shortages, there must be a labour market, and that implies the shortages will later be followed by surpluses, just as in the West.

In China the connection between a market economy and unemployment is more dramatically obvious. There was no unemployment at all in China from the 1950’s until recently. There may be arguments about how efficiently people were employed, but nobody seriously suggests there was actual unemployment.

Within a few years of the restoration and expansion of market relations (ie since 1977), mass unemployment exceeding 20 million people has become a major social problem. Previously investment was planned and regulated by a socialist state, with each enterprise responsible to the state plan and having no independent right to hire and fire. Now enterprises are “free” to take their own independent investment decisions and to hire and fire while at the same time, workers are “free” to be unemployed.

All this suggests that we must examine every proposal for reducing unemployment, according to its implications for a market economy. Unemployment is a problem specific to capitalism and it is no use looking at solutions that ignore the specific features of market economies. We need to figure out how the labour market actually works in a capitalist economy.

(Next instalment: WHAT “NORMALLY” CAUSES UNEMPLOYMENT?)

Freedom, Privacy AND Transparency

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I wish to thank ‘Tom-b’ for the following post. It is timely because Transparency International has just released a report revealing that almost 80 per cent of the world’s largest multinationals do not adequately report their finances.

* * * *

Transparency is important for freedom. If you don’t know what is going on then you can’t comment on it and definitely can’t make decisions. Transparency allows people to be informed and make informed choices. Today in advanced capitalist countries choices are made based on what the media says or who advertises most.

The president of the USA is decided by who raises the most money. The congressional elections are similar. The recent congress elections were won by the Republicans who until recently had been outspent by the Democrats but this year business was behind the Republicans and gave them in excess of 60% of their donations to the political parties.

It is unfortunate that advertising can move people to vote in a certain way. A proposition in California to monitor insurance price increases was defeated because the insurance companies spent $60 million opposing it. People believe what they read in papers or see on the TV, be it advertisements or opinion pieces.

We can’t be too critical of this occurrence, however, as there is no easy way for people to find out the facts. Everything is hidden in secrecy so you have to assume journalists get it right or politicians are telling the truth. We know neither is true.

We can’t expect people to take responsibility and get involved in decision making if they are excluded from the facts.

Transparency should include everything eventually but needs a starting point. Some people are scared of transparency as they see it as an encroachment on their privacy and freedom. This is a myth created by rich people. If you are not rich you have nothing to hide so should not be so precious about your minimal earnings and wealth. With transparency this fact becomes obvious.

The rich don’t want anyone to know how rich they are and where their money is, let alone the fact that they pay minimal tax, how much money they spend on political parties, etc. Criminals, of course, would not want any transparency.

Income transparency already exists in some countries such as Norway and has for many years. This would be a start. Total transparency of local government could be done now. This would increase efficiency and deter corruption and there is no reason why everyone should not know everything local government does. Government departments, such as health, education, transport, etc, could also be opened up now.

The only people who fear transparency are those who have something to hide!! Unfortunately there are too many people with nothing to hide who think they do have something.

_ _ _ _ _

Alarmism is the problem, not science

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Alarmism: the excessive or exaggerated alarm about a real or imagined threat.

* * *

Australia’s Chief Scientist says we’ve got five years to save the world from disastrous global warming. Who can argue with a Chief Scientist? Well, given that the Chief Scientist made that claim nearly five years ago, and there has not been disastrous warming but on the contrary no significant temperature increase for around 16 years, I’d say the answer is anyone who can read and think!

The then Chief Scientist, Prof Penny Sackett, made the remark in December 2009.

The Intergovernmental Panel on Climate Change (IPCC) fifth assessment report says that the mean temperature of the planet has increased by 0.8 of a degree since the late nineteenth century. Therefore, the climate is warming. Moderately.

What then is with the continuation of exaggerated and alarmist claims and predictions? Why does the mainstream media generally give them so much publicity? (Rhetorical question, I know: the sensational headline sells papers and attracts viewers).

The IPCC’s most recent report accepts that there has been a pause or hiatus but does not see this as indicative of a reversal of the warming trend long-term.

The way to explain the pause is to allow scientific debate and argument, free of vilification. It may be that the increase of CO2 emissions to record levels and the lack of significant increase in warming do indeed point to a flaw in the original hypothesis that sees greenhouse gases caused by human industrial activity as the main driver of the warming since the 1880s. Or maybe not.

Perhaps there is something to be said for the new hypothesis that the heat is being absorbed by the oceans. This is plausible and testable; though according to a recent NASA study based on satellite observation and direct temperature measurement of the upper ocean (the deep ocean is difficult to measure, say the scientist authors): “The combination of satellite and direct temperature data gives us a glimpse of how much sea level rise is due to deep warming. The answer is – not much”.

* * *

Al Gore’s sci-fi ‘documentary’ ‘An Inconvenient Truth’ was screened in just about every primary school, high school and town hall in Australia – and in many other countries too. Counterpoints were rarely, if ever, offered. But his iconic portrayal of huge tidal waves swamping Manhattan was utterly unscientific, mere alarmism. They find no basis in the IPCC assessments, which put sea level rises at 0.26-0.55 meters (10-22 inches) by 2100 under a low emissions scenario and 0.52-0.98 meters (20-39 inches) under a high emissions scenario. Is this really headline grabbing and catastrophic? Why can’t policies of adaptation be effective and the most practicable response?

The former Chief Scientist should feel embarrassed at what she said nearly five years ago.

Having said that, fossil fuels really are so C19th and C20th. But that still makes them more up-to-date than medieval windmills.

* * *

The left looks to the future. That’s what attracted me to it more than 40 years ago. You know, stuff like flying cars and holidays on the moon. Karl Marx meets the Jetsons. No, I mean it!

The problem is that pure research hardly happens any more because the needs of capital come first. There’s no profit in mucking around with ideas and experiments with no short- or medium-term marketable objective.

Change this system to one in which social need, fun and fantasy are the raison d’etre and who knows what humans will come up with?

* * * *

Capitalism Bad for Economic Growth

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Government funding of research, development, demonstration and initial deployment (RDD&D) needs to increase dramatically. We need real breakthroughs in a raft of areas. Energy, agriculture, medicine and new materials come immediately to mind.

The following post is from David McMullen* :

* * * *

The slowness of technological progress is an issue that a genuine left can grab and run with. This interview with Peter Thiel co-founder of PayPal in the MIT Technology Review entitled ‘Technology Stalled in 1970’ highlights some of capitalism’s failures in this regard. He believes that technological progress has been stagnant for decades, that we need technologies that take us to the next level. We need flying cars not just Twitter or Facebook.

He says that large successful companies benefit from things not changing:

“You have to think of companies like Microsoft or Oracle or Hewlett-Packard as fundamentally bets against technology. They keep throwing off profits as long as nothing changes. Microsoft was a technology company in the ’80s and ’90s; in this decade you invest because you’re betting on the world not changing. Pharma companies are bets against innovation because they’re mostly just figuring out ways to extend the lifetime of patents and block small companies. All these companies that start as technological companies become antitechnological in character. Whether the world changes or not might vary from company to company, but if it turns out that these antitechnology companies are going to be good investments, that’s quite bad for our society.”

Ted Nordhaus and Michael Shellenberger from the Breakthrough Institute in this article point to the overwhelming role that government has played when it comes to developing general purpose breakthrough technologies.

Examples include computers, the Internet, jet engines, satellite communications, fracking technology, nuclear power and gas turbines. Indeed, all the important feature of the Apple iPhone were the result of Department of Defense funded research. They also make the point that 80 per cent of economic growth comes from innovation.

They say that capitalists generally do research and development on the less important stuff:

“Firms still spend a lot on research and development in the aggregate, but it is mostly spent on incremental product or process innovations, not long-term research to develop new disruptive technologies with the potential to radically transform existing markets and create entirely new ones.”

Government funding of research, development, demonstration and initial deployment (RDD&D) needs to increase dramatically. We need real breakthroughs in a raft of areas. Energy, agriculture, medicine and new materials come immediately to mind.

Hammering this point should allow us to hit out at both the free-market utopian-capitalists who think that the market can deliver everything and the pseudo left who simply hate technology.

We can also point out how this extremely critical aspect of economic development and human progress is often undertaken wastefully in the current social order. There is always gaming and corruption among researchers as they scramble to get their slice of the funding cake and further their careers. Such important activity would be better performed in a society where people are sufficiently at one with the world to simply do the right thing.

* David’s blog is The Economics of Social Ownership.

ALIENATION: From Karl Marx to Merle Travis and beyond…

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Originally published at Strangetimes.lastsuperpower on November 27, 2009

Sixteen tons
Whadaya get?
Another day older
And deeper in debt
Saint Peter don’t you call me
‘coz I can’t go
I owe my soul to the company store.

‘Sixteen tons’ is one of many songs about alienation under capitalism. The song was recorded in the USA in 1946 by Merle Travis, whose father had worked in the mines of Kentucky. Merle’s father often used the phrase “another day older and deeper in debt” around the house. The song has been covered by many country artists, as well as blues and rock performers – my favourite version is by Eric Burdon.

Merle Travis’ version is here:

Check out Eric’s too:

The ‘sixteen tons’ refers to work, specifically in the coal mines during the era of the ‘truck system’ (under which workers in company towns were paid with vouchers recognized only by the local store rather than paid in cash). This may seem to date the song, even make it irrelevant to the current time. However, I think ‘sixteen tons’ can mean any kind of work people do for wages under a system in which wealth is socially produced yet privately appropriated. It’s certainly true that mechanization and automation continue to reduce the numbers of people doing such work; the kind of toil that my father always referred to in my youth as ‘dirty work’. (He worked in factories and used to nag me: “Son, study hard and go to uni and then you’ll be able to become a school teacher. Don’t end up in a dirty job.”).

There’s nothing romantic about working in the dirty jobs and, as technological changes continue to reduce many of the more mind-numbing tasks, then it becomes more likely that more people will seek even greater freedom to decide what they do and how and why they do it. Multi-skilling is another example. The more it occurs, so too the greater the likelihood that workers will start wondering why they can’t strive to fully develop their many interests and desires. We are rarely these days just a machinist, just a waitress or just a teacher, and within a lifetime we can be all the above and more. But this multi-skilling occurs within the framework of capitalist social relations: we are multi-skilled in the interests of a capitalist class. But were the producers to one day control production, why would there need to be social limits to what we want to be and, indeed, to our satisfaction in striving toward achieving our goals and desires? This would be free enterprise in the best possible sense.

Capitalist enterprises that experiment with ‘worker participation’ seek to create a sense of ‘belonging’ yet cannot reduce alienation because it is rooted in the very economic system that allows the capitalist class to appropriate socially produced wealth. But, again, such experiments raise the question: why can’t the workers take over for ourselves? Why can’t we be the ‘board of directors’ and the owners? Do we really need ‘them’ to do it for us?

When I was in the communist party during the 1970s, the old veterans often talked about the ‘big one’ coming; that is, that one day, there would be a major global crisis for capitalism that would be so severe the system would not survive. They seemed to believe that without such a crisis, there would be no revolution. Later, after I quit the party and started thinking more for myself, I started to wonder why a revolution should occur from a crisis like the one experienced in the 1930s. Economic depressions hardly create optimism. Why shouldn’t people, as they did, mostly just want the system to work again as it had when they were in jobs? Of course, communist activists back then succeeded, to a point, in linking the economic crisis to its root cause, capitalism, but capitalism has clearly not continued a downward spiral in terms of living conditions and working conditions for most people. In absolute terms, working conditions and living conditions have improved since the 1930s in the advanced industrial societies. So, is it really about inevitable economic crisis? Is there any other fundamental reason for wanting to overthrow capitalism and replace it with social ownership?

I think there is. And, while I’m no expert when it comes to theory, I think it’s clear that, regardless of the condition of the economy, an excellent reason for wanting fundamental change in the social relations is because our human potential is so undermined by the wages system. We are alienated from the basic process of production (because we have no control over it as workers) and from other important aspects of our humanity. In his 1844 Economic and Philosophical Manuscripts, Marx argued that in addition to being alienated from the process of production, the workers are also alienated from its product (as this is owned by the owner of the means of production, the capitalist) and we are alienated from one another, our fellow workers (as labour becomes a commodity rather than a social relationship because we are only an extension of the means of production that the owners of capital buy).

Of particular importance, in my opinion, is Marx’s notion that the worker is also alienated from his or her individual humanity or ‘species essence’. It’s worth quoting Marx on this:

“In creating a world of objects by his personal activity, in his work upon inorganic nature, man proves himself a conscious species-being, i.e., as a being that treats the species as his own essential being, or that treats itself as a species-being. Admittedly animals also produce. They build themselves nests, dwellings, like the bees, beavers, ants, etc. But an animal only produces what it immediately needs for itself or its young. It produces one-sidedly, whilst man produces universally. It produces only under the dominion of immediate physical need, whilst man produces even when he is free from physical need and only truly produces in freedom therefrom. An animal produces only itself, whilst man reproduces the whole of nature. An animal’s product belongs immediately to its physical body, whilst man freely confronts his product. An animal forms only in accordance with the standard and the need of the species to which it belongs, whilst man knows how to produce in accordance with the standard of every species, and knows how to apply everywhere the inherent standard to the object. Man therefore also forms objects in accordance with the laws of beauty.

“It is just in his work upon the objective world, therefore, that man really proves himself to be a species-being. This production is his active species-life. Through this production, nature appears as his work and his reality. The object of labor is, therefore, the objectification of man’s species-life: for he duplicates himself not only, as in consciousness, intellectually, but also actively, in reality, and therefore he sees himself in a world that he has created. In tearing away from man the object of his production, therefore, estranged labor tears from him his species-life, his real objectivity as a member of the species and transforms his advantage over animals into the disadvantage that his inorganic body, nature, is taken from him”.

While technologies, management techniques and living standards have changed since Marx’s time and since the end of World War Two, capitalism itself hasn’t changed in any fundamental sense. It remains a socio-economic system where social relations are based on commodities for exchange, in particular private ownership of the means of production and on the exploitation of wage labour.

So the ‘sixteen tons’, the symbol of production based on the exploitation of wage labour, remains as relevant as ever. The song is also valid today when it suggests drudgery – we work, we get older, we generally go deeper into debt. Our greatest achievement in countries like Australia is paying off the house. Yet we spend the better part of our lives doing so. And even in Australia, with comparatively high home-ownership rates, most of us do not own our own homes outright.

In ‘Sixteen Tons’, Merle Travis was referring to the ‘store system’ in the geographically isolated mining towns of Kentucky whereby the company – the owners of the mines – also owned the stores which had a monopoly over the provision of goods and services. Workers frequently went into debt to the company store and were thereafter ‘trapped’ into working at the particular place to pay off their debts. The truck system ensured they could not save cash. Today, for ‘company store’, I suppose one can substitute the word ‘bank’.

The ‘company store’ is also very important to an understanding of alienation because it symbolizes, in the song, the physical expression of the wages system as experienced by the workers. Workers in any industry rarely see the real boss – the owners of the company. We talk often about ‘the bosses’ – the boss did this, or the boss said that – but usually this refers to those we see and meet and experience at work each day. These are managers rather than bosses and, despite their high salaries, are usually as dependent as the rest of us on the wages system. When trade union leaders urge the ‘bosses’ to be fairer or speak angrily against unfair bosses, they are missing the point unless these bosses are linked directly back to the owners of whatever the means of production happens to be. Invariably, such militant rhetoric merely seeks longer chains and bigger cages for the workers, and is part of the problem rather than part of the solution.

The company store might be pressured into lowering some prices, giving more credit or deferring some repayments, it might replace stern and impersonal counter staff with the happy smiling faces of staff with diplomas in ‘human relations’ – but still the source of exploitation will exist. Once the truck system was abolished, workers were paid in cash – but no less exploited, no less alienated from their work.

The worker in the advanced economies is rarely trapped into the company store system today. Indeed, the individual worker is able to leave one job in pursuit of another at any time: but the new job will still be based on the wages system. And the debts, to the bank, will still need to be repaid. Someone will own the show – ‘the mine’ and ‘the store’ – other than the workers who produce goods and/or provide services. It is true that leaving one job for another is easier in good times, when labour is in demand, but this misses the point that wherever the worker goes, they will end up working for wages, the work is not voluntarily performed but only performed because individual workers cannot survive without those wages. The entire class, the working class, is thus defined by its relationship to the owners and the wages system keeps us locked into what is in essence wage slavery.

The Marxist notion that alienation denies us our true humanity and potential, the enjoyment and fulfilment of our ‘species essence’, brings me back to the song. For, in my view, the most important lyric relates to the ‘soul’. The worker, in the song, owes not just money but pretty much EVERYTHING – the best hours of his awakened day – to the company store. Which is really saying he owes it to the company. Which means the class of owners.

I know that Marx was an atheist, and it’s not possible to embrace a materialist philosophy and also believe in God. But as an atheist myself, I do think the notion of the human ‘soul’ should not be dismissed in any discussion of alienation. No, I’m not suggesting for one moment that there’s a thing called a soul that exists independently of our sensual reaction to the material world. But there is something that separates us from the rest of the animal kingdom and, again, it is what Marx called our ‘species being’. Were it not for this quality of humanity, we could not feel or sense our alienation. We would just work like the spider that weaves its complex web without any sense of what else we could be doing that would be more fulfilling, more efficient, more liberating, more beautiful and useful. We would not imagine the new things and new ways of doing things that precede achievement and progress and are nurtured by it.

Given that 99% of the population don’t spend any time studying theories of alienation, it becomes something that is felt rather than understood, and expressed through a desire for greater meaning in life. In the 1960s, the counter-culture movement gained enough followers to set up experimental communes in rural areas based on the principle of self-sufficiency. This too was an expression of alienated people seeking something better, but in reality doing little more than expressing their alienation rather than seeking to change the system that causes it.

Unlike production in medieval times, self-sufficiency proved impossible in a modern industrial society and the hippies left themselves wide open to stand-up comedians who saw dependence on the dole cheque or wealthy parents or drugs – or all the above – as being necessary to the experiment. Besides, the great majority of people didn’t want to drop out; they rightly wanted the benefits and material advantages of life in an advanced industrial society. But this too has its down-side, in that people tend to seek happiness through objects. And while I will never say anything sacri-religious about my Plasma TV, I certainly want greater freedom as well as more stuff. The struggle against alienation is a quest for greater freedom and self-actualisation, regardless of whether capitalism is going through periodic economic crisis or not.

The expression of alienation that seeks greater meaning in life usually has a religious form, including the quasi-religious green outlook in which Nature is God. I’m always stumped as to why so many people support or sympathize with green ideology (by which I mean the idea that we must develop some kind of subservient harmonious and ‘sustainable’ relationship with the natural environment rather than continue to actively change it in our collective interests). But perhaps alienation offers an explanation. We all sense our ‘powerlessness’, our disconnect from the way social relations are structured, and, arising from that, many of us seek some sense of control over life. A few people go in for things like growing their own vegetables or becoming self-sufficient in domestic energy. Those who do get into this, really take it very seriously. They are not just growing their own veggies but ‘Saving the planet’ no less.

Marx certainly saw religion as an expression of alienation, with humans creating gods as a reflection of themselves but believing them to be separated from and external to themselves. Everyone knows Marx’s statement about the ‘opium of the masses’ but in the same discussion in his Introduction to A Contribution to the Critique of Hegel’s Philosophy of Right (1843) he describes religion as “the soul of soulless conditions”, the “sigh of the oppressed creature, the heart of a heartless world”. He is not endorsing religion, but seeking to understand it. There is no suggestion that religion solves the problem of alienation – far from it – for “To abolish religion as the illusory happiness of the people is to demand their real happiness. The demand to give up illusions about the existing state of affairs is the demand to give up a state of affairs which needs illusions.”

The solution to alienation lay not with seeking meaning somewhere other than the material conditions of existence or of making people feel better so they can cope, or new management techniques in the workplace that make us work better and happier and more effectively, but rather the solution is to change the economic basis of the problem. Anything else keeps us on a merry-go-round. But that is a bad example, for merry-go-rounds are usually fun, whereas the wages system generally isn’t. Proof of this is found in the oft-repeated expression in the workplace: “I just work here”. Or in the enthusiastic lunch-break discussions about winning the lottery. Few people who win the lotto return to work on a voluntary basis. Rather, they start doing what they want to do. They seek to make the most of their freedom from wage slavery. It’s not about ‘the money’ or waiting for ‘the big one’; it’s about freedom and fulfilment or what Marx (in The German Ideology) called “self-activity” (self-actualisation), the opposite of alienation. This self-actualization, or “development of individuals into complete individuals and the casting-off of all natural limitations” cannot possibly occur under capitalism but, to Marx, only through communism when “self-activity coincides with material life”.

Without the overthrow of capitalist social relations and their replacement by social ownership of social wealth, people will remain alienated, the best years of their lives being organised to produce someone else’s profit or servicing that system. Under a system in which the workers are the ruling class, production could be geared to social need and the desires of imagination rather than to the profit of the few.

‘Sixteen tons’ is a heavy weight but nothing compared to the creative power of human beings when freed and unleashed from the constraints of capitalist social relations.