Yves here. Cynics may argue that neoliberalism works just fine for the small slice of winners who get to cut and keep a super big slice of the cake. But that’s not the full picture. Lots of cake is bad for you. Even people at the top of highly unequal societies pay a price in terms of health and longevity.
By Richard (RJ) Eskow, a blogger and writer, a former Wall Street executive, a consultant, and a former musician. Originally published at Alternet
If a picture’s worth a thousand words, what’s the value of a single word?
If you’re a Democratic Party leader and the word is “compete,” the answer may be: more than you can afford.
Much of the Democratic Party’s rhetoric has been ‘Uberized’ by a creeping free-market ideology that treats workers as lone competitors in a survival-of-the-toughest economy.
The time has come to reject this language as well as the thinking behind it. The notion that people must compete with each for low-paying jobs undermines worker solidarity and weakens our sense of national community.
Better Than What?
When the Democratic Party rolled out its “Better Deal” language in July, Senate Democratic Leader Chuck Schumer and House Minority Leader Nancy Pelosi each wrote op-eds promoting an agenda whose subtitle is, “Better Jobs, Better Wages, Better Future.”
An earlier version of that slogan – “Better Skills, Better Jobs, Better Wages” – was roundly criticized when it was leaked to a reporter, and rightly so. That phrase first appeared in an op-ed by Sen. Tim Kaine, who wrote:
Better skills in our people and communities … will make us more competitive in a world where talent is now the most precious resource. We need to double down on retraining people whose jobs are destroyed by shifts in trade.
Those words offer nothing new to the American people. They could have been lifted from a speech Bill Clinton gave in 1993, when he declared that “workers in advanced countries must become ever more productive to deal with competition from low-wage countries on the one hand, and high-skilled, high-tech countries on the other.”
Since those words were spoken more than a quarter-century ago, millions of American jobs have been lost to bad trade deals that shifted work overseas and wealth upward.
Misguided government policies and greedy business practices ended a thirty-year period in which wages kept pace with productivity growth, resulting in soaring inequality and stagnating wages for American workers. Increasingly wealthy individuals in corporations have, in turn, used their money to hijack the political process.
No retraining program on Earth can prepare workers for jobs that don’t exist. And, as long as inequality remains the highest it’s been since the 1920s, “competitive” education strategies will do little to improve wages or social mobility. To beleaguered workers, the phrase “better skills” reinforces the perception that an out-of-touch elite would rather blame the victims of its policies than take responsibility for its actions.
Better jobs, better wages, better luck next time.
Better Than That
The finished slogan was a notable improvement from the beta version. The phrase “better skills” was gone, replaced by the noncommittal “better future.”
It was a welcome surprise to see Democrats taking on corporate monopolies and the rapaciousness of Big Pharma as they rolled out the “Better Deal” platform.
Those fights can energize voters if they’re properly framed and presented – as in,“these corporations are so big they think they can do what they want, but we’re gonna stop ‘em” – especially if they’re complemented by strong stands on labor, trade, Medicare and Social Security expansion, and other populist issues.
But it was disappointing to see both Sen. Schumer and Leader Pelosi echo Kaine’s unsupportable claims for worker retraining in their respective op-eds. Schumer wrote that “millions of unemployed or underemployed people particularly those without a college degree, could be brought back into the labor force or retrained to secure full-time, higher-paying work.”
The only concrete proposal he offers, however, is a training tax credit for businesses that’s unlikely to make a dent in unemployment. It won’t reduce inequality, either. As economist Lawrence Mishel wrote in 2011: “… workers face a wage deficit, not a skills deficit.”
The Ideology of Competition
For her part, Leader Pelosi promises a “fresh vision” from the Democratic leadership before saying, “It is time to ignite a new era of investment in America’s workers, empowering all Americans with the skills they need to compete in the modern economy.”
Compete? Democrats need to reject the idea that workers should “compete” with each other for jobs. That ideologically charged concept gained momentum in the 1990s, as the party’s institutional fundraising shifted its emphasis from unions to corporate donors.
Today we see the logical end-point of that ideology in the “Uberization” of American labor, as increasing numbers of workers are forced to scrabble like crabs in a barrel for low-paying piece work – or worse, as with Uber, are pressured to go into debt for car loans they must assume in order to “compete”
It’s no coincidence that high-ranking Democratic operatives have been associated with both Uber and its major competitor, Lyft.
The ideology of competition owes a great deal to “new economy” popularizers like Thomas Friedman and economists like Tyler Cowen, both of whom proclaim that “average is over.” It’s a cold-blooded ideology.
In his book of the same name, Cowen argues that we will be led by an elite he calls the “hyper-meritocracy” (he seems to use “merit” and “income” interchangeably), while a majority of people miss out on the benefits of the new economy.
Gone are the days when popular culture celebrated the “average Joe” or “average Jane.” In the world of worker-on-worker competition, only those who are exceptionally talented at making money will get ahead. Forget the folks who work for a living, love their kids, and serve their communities.
This ideology demands that we make heroes out of the billionaires who earned their wealth from the Internet, a government-created technology. The merely “average,” those heroes and heroines of mid-twentieth century films and TV, are left to fight over scraps from the “hyper-meritocracy’s” table.
The Language of Community
To be fair, there’s every likelihood that Nancy Pelosi was using the political language of her party without considering its origins or rhetorical baggage. She may not have intended to embrace that language’s ideological overtones. But language shapes thought, and it must be changed when it bends thought in the wrong direction.
“Compete”? Candidates compete when they’re applying for jobs, of course. But once they’re hired the competition should end. The history of organized labor – once the bedrock of the Democratic Party – is founded on the realization that individual workers cannot compete with powerful corporations in the fight for economic justice.
It’s not a perfect history. But it’s no accident that the greatest period of shared prosperity in our nation’s modern history coincided with its highest percentage of unionized workers. Or that, conversely, inequality grew as union membership fell.
Instead of training workers to “compete” for non-existent jobs, Democrats should create those jobs – by investing in infrastructure, by renegotiating bad trade deals, and by making the government the employer of last resort. And they should do more: they should call us together, by working with outside activists to form a broad coalition for economic and social justice.
Americans are a highly individualistic people in many ways. But we are also a nation with strong communitarian values. Those values can be found in our admiration for those who make sacrifices in times of war. They can be found in our willingness to help one another when disaster strikes. They can be seen in Fourth of July parades, or in clothing drives at the local fire station.
There is a yearning in this country – a yearning to belong to something greater than one’s self. Rather than asking workers to “compete” with each other, the new leaders of the American left should ask them to collaborate – in labor negotiations, in new forms of public service, in acts of selfless devotion to one another and the nation as a whole.
The Democrats should fill out the hazy language of the “better deal” with concrete proposals to improve people’s lives. Repeating the phrase like a mantra will hurt, not help, unless there is substance behind it. Voters have been burned by vague promises before. They’ll need clear commitments this time around.
But Democrats should also be brave enough to call Americans together again – as working people, as a movement, and as a community. After all, nobody can really offer us a “better deal” unless they ask us to give our best in return.
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I think this image of two moose frozen to death in mid-fight sums up Neoliberalism & its belief in dog-eat-dog competition
http://www.chron.com/sports/outdoors/article/Moose-found-frozen-in-Alaskan-stream-locked-at-10622843.php
It’s disturbingly similar to Neil Gorsuch and the case of the frozen trucker:
https://www.theguardian.com/law/2017/mar/23/neil-gorsuch-supreme-court-frozen-trucker-alphonse-maddin
None of the other judges were nominated to the Supreme Court, so I guess Neil Gorsuch’s reprehensible self-serving strategy worked for him.
If you live in a society that does not provide food, housing, health care, employment, and education to everyone who wants them, you live in a failed state.
If you live in a society that does not provide those things to everyone who wants them while some live with a level of wealth that would make Solomon blush, you live in an immoral state.
Time for Roosevelt’s Second Bill Of Rights.
Much of the potential increases in employee wages have been diverted into employer-provided healthcare insurance costs. Healthcare insurance is also chewing up an increasing percentage of federal, state, and local budgets. The Democrats have been fighting a rear-guard action to defend Obamacare for 7 years now. They need to go on the offensive now that the Republicans have been shown to be bereft of any ideas in healthcare beyond simply returning to the 1950s when America was still great (as long as you were a white male).
If we could reduce per capita healthcare costs in the US by a third to simply drop to the top level of the rest of the OECD countries, it would free up an amount roughly equivalent to the entire US military budget for other investment purposes in people, infrastructure, corporate R&D etc. Instead, we are allowing the various healthcare lobbyists to slowly crush our competiveness around the world.
The Democrats are not going to cut the profits of those they are defending and serving. Especially with the 2018 performance reviews coming up.
Nonsense, Pelosi knows exactly what kind of crap she is peddling.
and will deny knowing this until her dying day.
Gosh! The author of this post is so nice to Nancy Pelosi: “To be fair, there’s every likelihood that Nancy Pelosi was using the political language of her party without considering its origins or rhetorical baggage.”
The Democratic Party and its new slogan is fast becoming a very bad joke. The use of the ‘compete’ word to beat up labor and the unemployed is older than the neoliberal thought collective that — as convenience prompts — adopted this word along with other inane arguments from neoclassical and libertarian apologists. [However — I would hesitate equating neoliberalism in any way with these slowly eclipsing schools of thought.]
And strange how competition is such a good thing for labor — at all skill and education levels … the unskilled-manufacturing-jobs horse is already well-beaten — but isn’t good for business. The Wolf-Street post in today’s links seems to offer clear evidence competition is bad for the stock market.
Michael Lind argues that there are two visions of the American Dream, an older one based on rising standards of living for everyone and another that is based on so-called meritocracy. Lind argues that the rise of the meritocracy argument coincides with the increase in the number of college-educated Americans. Here is the quote:
Full article: https://thesmartset.com/which-american-dream/
I think Lind’s theory about the rise of the credentialed class explains why the Democrats hold on to these failed theories about competition and the skills deficit. If you obtained your relative status from academic achievement and obtaining credentials you start to think that everyone must do what you did because hey it worked for you and the people in your social circle! It is the epitome of bubble thinking.
There are Republicans who have the same problem only they are often less enthusiastic about education and more enthusiastic about making everyone an entrepreneur since so many conservatives are small or medium-sized business owners. Instead of sending everyone to college to get STEM degrees they think people need to become “job creators.” I think these types likely made up a good chunk of Trump’s base of relatively affluent people who didn’t have a college education.
Good points.
I’ve lived it, seen it, and I think that you are on to something.
There has been a socially corrosive effect of academic testing that has permeated the culture and the economy.
Instead of ‘how smart are you?’ we need to ask, “what kind of smart are you?”
Then we need to set up better systems for mentoring and learning on the job — for plumbers, cabinet makers, electricians… oh wait. Maybe that’s called a trade union…?
There was an earlier interpretation of The American Dream.
https://www.nytimes.com/2017/08/04/upshot/the-transformation-of-the-american-dream.html
There are many small companies that are looking for “trades” people to fill jobs and allow them to increase hiring and revenue. As a result there are long waits for simple repairs and jobs.
There is at least one generation that was “forced” to go to college, when a trades job and the training necessary would have been fine. These people would have made a good living that kept pace with inflation and NOT incurred high college debt levels. They then could afford to start a family and buy a house, thus driving the economy.
We need to start evaluating the benefits of education beyond a good basic 12 years of school. But the quality of those 12 years will need to be made better. But you won’t hear this from any Democrat–that might imply that the Teacher’s Union was not doing an excellent job….
Sure the democrats are staunch defenders of the teachers union. They have been dismantling teachers unions with charter schools for many years.
> There are many small companies that are looking for “trades” people to fill jobs
There are plenty of small companies who want tradespeople with the exact right technical skills and job history, and can’t afford to pay a living wage with benefits, and aren’t willing to provide any training or flexibility.
I have my doubts about “can’t afford”. The press regularly quotes people who make that claim, but to invoke the famous quote from the Profumo affair, “They would say that, now wouldn’t they?” Corporate profits are at a record level relative to GDP. And that includes small and medium sized business profits.
I recall reading an interview with one of those. She claimed that she was offering what the Bureau of Labor statistics listed as the “market wage” for the skills she was looking for (roofing, IIRC) and would not consider offering more. That was the “fair” wage, you see. I suspect that is a very widespread attitude. It’s too bad we don’t see more interviews like that. The reporter rarely asks why the businessman claims he/she can’t find people with the skills they want, and almost never follows up with, “Why do you think that’s so?”
This change came about chiefly as the result of the expansion of Americans with a B.A. or greater.
Sorry but this is correlation without causation. The change came about because the U.S. economy stopped creating good jobs for ordinary working people. Thus, the only way to (try to)maintain the fiction of an economy that works for all is to insist that all become “skilled.” It’s rationalization, not causation.
Not Teddy Roosevelt vs FDR … we need both.
Well, you aren’t going to get any of Teddy’s trust-busting until you close the revolving door between the Justice Department and the huge white-shoe law firms that defend the oligarchs.
The idea of competition is that you compete with outsiders but cooperate with insiders (family, in-group, etc.). (Do we ask our kids who did best in school today and then allow the best to eat dinner? The others have to go hungry and work harder tomorrow. Right?) We need to stop looking at each other in this country as “competition.” Creating “winners and losers” inside of our country is not a benefit to the country.
Steve, while I agree with your comment in general I find that circumscribing the abhorrence of competition to exclude “competition with outsiders” can, in and of itself, be insidious. I see this “competition is ok as long as it’s with outsiders” sentiment being perverted to sow divisions amongst people/genders/nations/racial groups etc. Psychopaths (countries/corporations/people) could constrict or extend their understanding of the limits of their definition of “in-group” on a whim to justify all manner of twisted motives. Imho ruthless competition should be disavowed on all fronts and consigned to the scrapheap of history.
Nicely put.
Remember how Obama’s Dept of Education titled its program “Race to the Top”? Some will be “at the top”/winners, while the rest will be losers.
A buddy of mine got the “better skills” for the “jobs of the future” – you know the tech industry jobs that were supposed to be high paying and take the place of the rapidly disappearing blue collar union jobs.
He got laid off and all the jobs on offer are somehow paying less than the one he just had. He’s now driving for Lyft to make ends meet.
They can start by calling for the elimination of the H1-B visa program that forces American workers who have skills and training to compete with “guest” workers indentured to foreign labor brokers, undercuts their wage, job security and working conditions and feeds age and gender discrimination in high tech industries. But since that would piss off their Silly-Con Valley donors I’m not going to hold my breath.
The bigger problem that I see are the EB-5 visas, which are a national joke and disgrace.
Why would anyone think that excellence matters, or that social cohesion matters, if all they have to do is write a check to buy their way in?
The H1-B’s are working; they have skills and those that I know work hard and add to a community.
But the EB-5 is an absolute disaster, and attracts the worst of the worst.
You’d better get yourself a new set of tea leaves to read pal.
The vast majority of H1-B workers have only ordinary (not exceptional) skills, are paid less and have less (or no) leverage in their relationships with their employers. This undercuts American workers as has been documented over and over again. The largest holders (by far) of these visas are employed by Indian-owned outsourcing companies (Tata, Infosys,Cognizant) that use their workforce to entice the outsourcing and eventual off-shoring of tech jobs.
How hard H1-Bs work or what they contribute to their communities is absolutely irrelevant. Its not about them, its about the systematic undercutting of wages, working conditions and job security for American citizens who do have technical skills. We have no need for “guest” workers (actually indentured servants) in a country where many actual citizens with skills employers supposedly have difficulty finding are un- or underemployed.
Take off the Clintonite/Obama-bot/globalist rose-colored glasses and grasp reality.
I agree that EB-5s are a disgrace and should be eliminated but how large is their impact compared to H1-Bs, particularly in the tech sector?
+1 The corporate media and politicians have turned the H1 debate into a pro/anti immigrant debate at the behest of their masters when in reality it is a working class vs globalist elite debate.
Yes, but as Norm Matloff has pointed out, U.S. companies such as Intel, Microsoft, Google, and others also abuse the H-1B system:
https://normsaysno.wordpress.com/2017/07/12/convergence-on-intels-good-infosyses-bad-as-the-guiding-principle-for-legislation/
Say, does anybody remember the story a few years ago (maybe only a couple)? It turns out the Department of Justice had a vast amount of evidence that a dozen or so of the biggest Silicon Valley companies had colluded (there’s that word again) with each other to suppress wages in the tech industry. There was talk at the time of possible prosecution, and then the sound of crickets.
As long as elites can import educated labor from elsewhere on the cheap they will never invest in education here.
The metamorphosis of the Democratic Party from a labor party to a pro-corporate party has been at the root of the problem. Bill Clinton, protégé of Robert Rubin, was happy to sign the trade deals that allowed corporations to move to low wage countries without penalty. Thus did the democrats write off the blue-collar working class. This caused a corresponding drop in union jobs, which the corporations had been seeking for years. Corporations usually hate when workers make good money. The ideological sell-out of the Democrats and the destruction of the manufacturing base with the devastation of the way of life of working communities has brought on the Age of Trump. So we have the bizarre situation of a Republican promoting U.S. jobs while the Democrats insist on pushing their “centrist” corporate candidates. Before Clinton, I would have never believed what has happened.
I’m currently reading Al From’s “The NEW Democrats and the Return to Power,” describing the founding and early years of the DLC/Blue Dogs/New Democrats/Third Way. They really believed, back in the early ’80s, that the New Deal was “dated” and “outmoded.” They purposely undercut unions and cultivated relations with Wall Street. These are the people who still have control of the DNC/DCCC/DSCC.
Contradictions:
– we need mega profits to fund retirements, pushing us into equities.
– but we want competition which drives down margins/profits and the value of equities.
So can we expect a system with 2 competing goals to generate a good outcome?
Not a contradiction at all. The first one is false, and transparently so. Mega profits do not now, and have never in the past, funded retirements. In fact, they detract from retirements. Use logical thinking rather than sound bite mantras and that will become obvious.
There is a twisted thread running through out western civilization. It goes back to the Greek celebration of Arete..excellence….fulfilling your potential. We have expanded the meaning of arete from self fulfillment to besting everyone else. We idealize “winning” on a grand scale. Kill one man and you are a murder. Kill scores in another land and you are a heroic conqueror. Of all our societal misfits there is great admiration for the psychopath….the ultimate predator. We have designed our culture to accommodate their methods and goals through carnivorous institutions such as capitalism, social Darwinism and religion’s prosperity gospel. The traits of psychopaths are the same ones a person needs in order to “win.” — ruthlessness, fearlessness, charm, persuasiveness, egocentricity, impulsivity, and the absence of conscience and empathy. One problem though with psychopaths is they are easily bored and find it hard to stay at task…they tend to lack perseverance. Our education system in its efforts to produce the perfect predators (as well as submissive prey) have zeroed in on “grit” which has a nice chew-it-between-your-teeth ring to correct this character flaw.
Our values are based on scarcity which has prevailed throughout most of humanity.
Over the last few decades, thanks to nature’s bounty and new technological developments, abondance has prevailed but the underlying values have not changed.
The question now is whether this was short term abundance leading us back to scarcity.
“Our values are based on scarcity which has prevailed throughout most of humanity.”
What separated us from the rest of the animals was our ability to share with each other and form societies where we cared for those who couldn’t feed or care for themselves, especially in times of scarcity. When we look at actual societies in the past and not just at their rulers, we see something very different than when we just look at what high school history teaches us. Most societies did have a sharing economy where people shared with each other. I look at Neanderthal sites, where it is obvious that they cared for people who were too old or too disabled to hunt for themselves. I look at the average people in early Egypt who worked together as a society to survive in spite of the greed of the pharoahs and the priests – they collectively saved grain for times of scarcity – that wasn’t the doing of the elite. I look at the communes under feudalism where the people worked together to survive in spite of what their lords were doing. And I could go on and on…..
I would also add that those people who are the greediest and the most power hungry are usually those who have never ever faced scarcity – so “scarcity” is hardly a reason for what they do.
I think it is time to stop trying to evaluate the “values” of people based on the bad behavior of a few…..perhaps then we would remember how we as a species survived……
“Our values are based on scarcity which has prevailed throughout most of humanity.”
Nope. This is a myth. Talk to the Marshall. https://libcom.org/files/Sahlins%20-%20Stone%20Age%20Economics.pdf
When I visited Jamestown years ago, it was explained that the native tribes in the area would thrive and then would collapse as the land would not be able to support the growth numbers over time. And every so often (100-200 years) the settlement would move to a new untouched or regrown area.
I just recently read a book that showed how, in the dead of winter, some elderly natives would sacrifice themselves and leave for the woods when there weren’t enough animals to feed the clan.
A lot of our scarcity has been man made but scarcity has always been a threat: Mother Nature or theft.
Meritocracy is social Darwinism re-branded.
In my neck of the woods, quite a few of those who got rich also got side-lined, never getting the real recognition they needed and ended up dying young. Sacrificing their best years, spending these with people who did not care about them and people they should not have trusted. But the millions were on the top of their list.
This has shaped my aspirations.
Generally an astute analysis. But I no longer (if I ever did) see evidence that Americans are “individualistic.” I see a lot of snarling in the wreckage of solidarity. Any hint of solidarity in the U S of A has always been beaten to smithereens by the political parties and the rich, who all insist they know how to organize the commonwealth.
So “individualism”? In a country where people spend time posing trash? All of those Starbucks cups carefully put down on the sidewalks. The beer cans carefully placed on windowsills. To me, that’s a symptom of what is left of so-called individualism.
About 20 years ago I visited a friend in Denver. We went out to Red Rocks. He made an interesting observation that everybody claimed to be individualistic, but you could very quickly identify which “tribe” they belonged to by how they dressed. He was pointing them out as we walked along, the roller bladers, the cyclists, the organic food people, the avid hikers, the potheads, etc. So even most individualists will clump into tribes.
“tribes” designated by corporate labels?
Yes, it is called branding, and was perfected by US marketing “I’m a Ford buyer” or “Marlboro is my Cigarette.”
My point of view was such statements are make by people who are unthinking and ignorant, but that is unfair. I’m now thinking that their weaknesses were exploited.
Which shifts the objects of my scorn, disdain and contempt to the Corporations and their paid lackeys, the advertising industry.
I believe the phrase which applies is “Get an Honest Job.”
Certainly corporations have appropriated this very human behaviour, but I think it’s basically just breeding plumage.
All around the world the neoliberal narrative has cast a spell that has proven very difficult to break. Using a combination of plausibly sounding false promises (e.g. if you only work harder blahblahblah), fearmongering, obfuscation, orwellian doublespeak and outright lying, the general public has had a massive charm offensive unleashed on them, the likes of which Hitler’s propaganda machine would have been proud. Meanwhile, smitten and wide eyed, we wait for the crumbs to trickle down to us, blissfully unaware that the bad parts of all this (the inequality, the dwindling prospects etc) are features and not bugs of the system. Thanks NC for deconstructing all this…
when workers “compete” for a piece of the pie, what a joke. the crumbs are being sopped up now before they even get to the table
Kamala Harris, recently elected senator, fresh from her failure to prosecute mortgage fraudsters as attorney general of California, is in the Hamptons “competing” for billionaires funding so that she can defend the interests of migrant brown people who will compete for low wage jobs with poor white and black Americans. Maybe Chelsea could be her V.P.?
https://townhall.com/tipsheet/jennifervanlaar/2017/07/16/kamala-harris-n2355560
Chuck Schumer’s Line (w/ apologies to Meredith Wilson)
1st politican: Cash for the merchandise, cash for the button goods
3rd politican: Cash for the campaign goods, cash for the server goods
1st politician: Cash for the TV ads
2nd politician: cash for the writers and consultants the ad men
3rd politician: Cash for the offices, friends and lobbyists. Cash for the transport and the signs and the media
4th politician: Look whatayatalk. Whatayatalk, whatayatalk, whatayataalk, whatayatalk?
5th politician: Weredayagitit?
4th polician: Whatayatalk?
1st poltician: Ya can talk, ya can talk, ya can bicker ya can talk, ya can talk talk talk talk bicker, bicker bicker ya can talk all ya wanna
But it’s different than it was.
Chuck: No it ain’t, no it ain’t, but WE NEED TO GET THE MESSAGE RIGHT.
Rail car: Shh shh shh shh shh shh shh
3rd Politician: Why it’s the internet news made the trouble, made the people wanna read, wanna think, wanna change, wanna ask for better pols
Seven eight, nine, ten, twelve, fourteen, twent-two, twenty-three miles to the county seat
1st Politcian: Yes sir, yes sir
3rd Poltician: Who’s gonna patronize a main street type politician anymore?
4th Poltician: Whaddaya talk, whaddaya talk.
5th Poltician: Where do you get it?
3rd Politician: Gone, gone
Gone with the good job hopes and benefits, gone with the new deal, safety net helping hand, gone with the mill and the plant and the fierce
…
Chuck: I don’t know how we do it. But we can live like kings while we dally
And we gather and we pluck and shine and when we all dance, certainly boys, what else? Why Wall St. pays us! Yes sir, yes
Sir, yes sir, yes sir, when we pols dance, certainly boys, what else? Why Wall St pays us! Yessssir, Yessssir
But WE NEED TO GET THE MESSAGE RIGHT.
Better than what? How about just saying good jobs and good wages?
Government does not create jobs….only welfare
Tell that to the WPA or the military.
The idea:
If the wealthy are taxed less they will invest and create jobs and wages.
The reality:
This is exactly what happened.
BUT:
The jobs and wages were created in the East, which is far more dynamic, wages are lower and profits are higher.
The investor gets the best returns on his investments almost anywhere apart from the West due to its high costs of living with rent, healthcare (US) and student loan repayments. A high cost of living necessitates high wages.
The Consequence:
The hard work of the West produced profits that were taken by the wealthy and invested in the East.
The balance of power shifted from West to East.
The West started to worry about the powerful China Western investors had created (commonly known as “shooting yourself in the foot”).
Western capital had created a new multi-polar world (more “shooting yourself in the foot”).
In the hollowed out and decaying West the populists started to rise and social unrest followed (we have now blown the other leg off).
The Solution:
Get the money off the wealthy before they can invest it in the East and further shift the balance of power away from the West.
The US has fallen into a trap laid by the early neoclassical economists.
The cost of living = housing costs + healthcare costs + student loan costs + food + other costs of living
The minimum wage must cover the cost of living.
“I am investing in Asia, US labour is too expensive. What a dump, I am going to have to cover their housing, healthcare and student loan costs in wages.” the international investor
Asian century coming up.
The importance of the cost of living was known by Adam Smith and the Classical Economists but not now, what happened?
They lived in a free trade world with a parasitic aristocracy, it was obvious to them.
The rentiers gains had to be paid by business in wages.
The early neoclassical economists hid it at the end of the 19th Century and the beginning of the 20th Century.
The distinction between “earned” income (wealth creation) and “unearned” income (wealth extraction) disappears and the once separate areas of “capital” and “land” are conflated.
The problems with rentier activity in the economy are hidden in economics.
These things disappeared so long ago everyone forgot about them, but a free trade world required a low cost of living to pay internationally competitive wages.
“Income inequality is not killing capitalism in the United States, but rent-seekers like the banking and the health-care sectors just might” Nobel-winning economist Angus Deaton
The brighter economists in the 21st century are starting to realise what was hidden.
(Austrian aristocrats are going to be parasites too, they keep it hidden or are unaware it has been hidden. The Aristocracy are the traditional enemy of productive capitalism; Austrian economics could only ever be a joke).
*better future*??? How about COMPENSATING those who have been sodomized by the system for the last umpteen years. Better future means *wait a little longer*
Really good article. There’s lots more to say about this, of course…