Tuesday, March 14, 2017

The 48th SWP Convention

There's nothing like a March blizzard (more than a foot of snow on my doorstep) to make time to complete an unfinished post. I owe my former comrades in the Socialist Workers Party (SWP) some comments on their 48th National Convention, held January 14-16 in New York. The report, by Naomi Craine and John Studer (C&S), lacks some vital statistics, like attendance, etc., but has political substance.

The bottom line is this:
Convention delegates adopted the three reports and summaries, the introduction to the Clintons’ Anti-Working-Class Record, Jack Barnes’ letter to Raúl Castro, and other motions on the party’s political course. They elected a National Committee to lead the implementation of convention decisions.
The Introduction to the Clinton book was written by Steve Clark, and can be found here. The Letter to Raúl is reprinted here. The names of the fifteen National Committee members (along with eight alternates) are posted alongside C&S's article.

I'll reduce the whole thing to bullet points, expressed in my own words.
  • The world is going to hell in a handbasket.
  • Fidel is a saint.
  • The sole alternative to the Democrat and Republican parties is the SWP.
Is the world really going to hell? It can certainly seem that way. The Introduction describes refugee flows, wars, and new diseases. C&S agree with Trump that the country has descended into "carnage," evidenced by "a decline in the size of the working class as jobs disappear, falling real wages, cop brutality, attacks on women’s right to choose abortion, multiple deployments for workers in uniform sent to fight and die in Washington’s wars in Afghanistan, Iraq, and more." The SWP attributes all of this to a "crisis" in capitalism.

They're wrong, and so is Donald Trump. Most of the increased "carnage" is just an illusion, brought on by the rise of social media. That turns everybody into a reporter, meaning that events that never used to catch the public eye now become headlines. Newsfeed from Twitter. Martin Gurri, in his sweet little book The Revolt of the Public, describes this phenomenon very well.

Technology has improved in other ways as well. Disease has always been with us, but today we can identify it in very specific terms, e.g., the scary Zika virus. The proliferation of labels makes it look like disease has gotten worse, which it definitely hasn't. So this, too, is an illusion. Likewise, while wars are more destructive than they used to be, they're hardly more common.

Coincidentally, I am just starting to read Tyler Cowen's latest book, The Complacent Class (I'll likely review it here when I'm finished). His argument is that, far from there being more turmoil, there is in fact much less. Americans are moving less, switching jobs less, going out less, etc. Mr. Cowen promises actual data to back up his case, which whether you agree with him or not, makes for a better argument than the Party's method of piling on cherry-picked anecdotes.

The Party describes all of this as a crisis of capitalism, due to the fact that the ruling class requires ever increasing profits. Accordingly, the rulers are all trying to reduce our standard of living so they can have more for themselves.

This makes no sense. No capitalist can earn a profit unless somebody buys their products. The goal of capitalism, therefore, is to increase consumption, i.e., to make everybody richer. If capitalism has a problem it's not that we're too rich, but rather that we're too poor. The ruling class has absolutely no desire whatsoever to lower our standard of living--quite the contrary. They've lent us money to beat the band, and then convinced us (as if we needed convincing) to lend ourselves even more and more money. The result is that current entitlements are unsustainable, and the world has an incipient debt crisis on its hands.

That may be a crisis, but it's definitely not the one the Party describes. The imminent impoverishment of the world's working class is not in the cards.

Is Fidel a saint? Of course not. Mr. Barnes, in his letter, simply argues by assertion. Any criticism of Fidel is a "slander." What's left are only compliments. So of course he appears rather saintly.

The letter elevates Lenin and Fidel as the two most important figures in 20th Century history. Without them, the only two successful Communist revolutions would never have occurred. Much of this is semantics--it depends on how you define "success", "communism", and "revolution." Deviate from Mr. Barnes' orthodoxy in any way and you'll come to a different conclusion.

For me, it stretches credulity to label either the 1917 or the 1961 revolutions as "successful." The former led directly to Stalin, purges, famine, exile, poverty, and mass murder. Fidel's 1961 version was not quite so disastrous, but has destroyed Cuba's economy, her links with the outside world, and decimated her population. The brightest and most ambitious Cubans now live in Miami, where they are doing very well. They will never go back to Cuba in large numbers. In that sense the Cuban revolution was successful for the United States--we got highly-skilled immigrants.

Both revolutions have left their respective countries far worse off than they were before. That's not a success. Mr. Barnes closes his letter with a quote from Fidel: "There will be a victorious revolution in the United States before a victorious counterrevolution in Cuba." Fat chance.

The SWP, like all the other vanguard grouplets, believes that it and it alone can successfully lead a revolution in the US. Taken seriously (which is hard to do), this means that the future of our country is in the hands of the 15 people elected to the National Committee. These include, among others, Jacob Perasso, whose claim to fame is that his apartment was once burglarized. I've never quite understood how this list is put together--I think Jack Barnes just makes it up. I don't know why Brian Williams isn't on it--he's clearly one of their best people.

And then there's the list of eight alternates, ranked by number, like in a jury. Does the Party really expect that eight of their National Committee members will expire in the next two years? Of course not. This is just a way of passing around extra bennies. Brian Williams isn't on that list, either. Got me hanging.

The Party has about 100 members. If past procedure is still followed, the convention is delegated--one delegate for every five comrades or major fraction thereof--for which alternates are also chosen. So perhaps 40 comrades had some official obligation at the convention. Those delegates elect the National Committee, albeit from a slate proposed by the Political Committee, which itself is a subset of the National Committee.

That's an awful lot of bureaucracy for 100 comrades! The whole thing is silly, and ultimately undemocratic because the entrenched leadership can put its thumb on the scale every step of the way. Not that that matters, because unlike in Cuba or the Soviet Union comrades can quit the organization without being shot.

Further Reading:

Monday, February 20, 2017

Lynn Henderson on Donald Trump

My former comrade, Lynn Henderson, posts a long article at Socialist Action entitled A watershed election for U.S. imperialism. Despite being a well-written, worthwhile read, the piece is a mess.

He posits at least two conspiracy theories. First, he assumes that U.S. Imperialism is actually a thing. It literally sits around and makes conscious decisions about how best to screw the working class. While Mr. Henderson doesn't identify "imperialism" with Jews, it's precisely the same sort of conspiracy supposedly documented in The Protocols of the Elders of Zion. Perhaps the "imperialists" meet in secret organizations such as the Trilateral Commission? Or is it the Bilderberg Group? Or maybe they cavort around naked in the woods at Bohemian Grove in Northern California while plotting their nefarious schemes?

Mr. Henderson never tells us how this conspiracy supposedly transpires, but apparently everybody from George Soros to the Koch brothers to Larry Page to Charlie Hamm are all on the same page about what to do next. Note to Mr. Henderson: these people don't even talk to each other much less agree on how the world should run.

The second conspiracy theory concerns Obama's strategy in Syria. Here Mr. Henderson must have access to information that nobody else possesses. Was he a fly on the wall in the White House situation room? He claims to have the chronology of events in Syria absolutely down flat, without the shadow of any doubt. Here's how it supposedly all transpired:
  • Obama really wanted to go to war in Syria.
  • He used chemical weapons as an excuse, making his infamous "red line" remark.
  • But the British--unreliable bastards that they are--refused to go along with Obama's war. (Apparently British imperialism is not on the same wavelength as US imperialism. Mr. Henderson doesn't explain why.)
  • Because the Brits didn't like it, Congress might not have approved war authorization.
  • Therefore John Kerry made an agreement with the Russians.
I find this incredible. Unsurprisingly Mr. Henderson offers no evidence for his theory at all. A much simpler (and widely accepted) explanation is that Mr. Obama (who never had any intention of getting involved in Syria) was trying to push Assad into making a settlement and the latter called his bluff. The result was another couple hundred thousand dead people.

Mr. Henderson relates a very strange story about the growth of the American middle class. In his telling it's all because of World War II. Apparently the massive destruction of Europe and East Asia enabled US imperialism to conquer the world (at least temporarily) and extract enough wealth to enrich US workers as well.

People earn money by trading goods and services with each other, and capitalism maximizes those trading opportunities. It's really hard to trade with people whose houses and factories have all been destroyed. The US lent Europe money to rebuild it's infrastructure, which fortunately happened successfully. For otherwise American taxpayers would have been on the hook and lost their investment. We'd all have been much poorer.

The real reasons for the development of the American middle class (along with similar populations in Europe, Japan, Korea, and elsewhere) is because of new technology. It's described in great detail in Robert Gordon's book The Rise & Fall of American Growth (which I reviewed here). Here's the list: the electric light bulb, the internal combustion engine, antiseptics, canned food, indoor plumbing, clean running water, air conditioning, airplanes, the department store, interstate highways, modern finance, and more. Mr. Henderson mentions none of this--he nonsensically attributes our modern living standard to WWII.

Finally we get to Mr. Trump, who presumably is the topic of the article. At least Mr. Henderson is smart enough not to call Mr. Trump a fascist, which he manifestly is not. But otherwise he throws the book at him:
... the Republican Party is captured by an extreme right wing, rogue billionaire, an open racist, who brags about his successful sexual assaults on women, banning individuals from entering the country on the basis of their religious affiliation, and among other things, promises to launch a global-wide trade war. The ruling class itself sees Trump as a loose cannon, dangerous and unstable—the kind of president that in this threatening new era for U.S. capitalism, demonstrates every potential for making things dramatically worse.
Much on this list is either false or a gross exaggeration. Trump is definitely not "extreme right wing." Most of the Republican establishment (which includes a significant Libertarian constituency) disowned him. They're in favor of free trade and (relatively) open borders--see Marco Rubio as a clear example. Also Paul Ryan, Mitch McConnell, Jeb Bush, etc. Trump's positions on trade, industrial policy, and even unions, are much closer to the Democrats, which is why he won over blue-collar voters who voted for Obama in 2012. Even on health care he's a Democrat--whatever else Trump-care does, it's not gonna water down Obamacare. Trump agrees with Bernie Sanders on foreign policy, condemning our recent wars with almost as much vitriol as Socialist Action.

Second, he certainly isn't an "open racist." He's been actively courting the Black community since before the election, including most recently touting historically Black colleges. Scott Alexander (a superb post!) describes Trump as not being any more racist than the average 70-year-old white guy. Two acts of "racism" are held against him: his birther campaign against Obama, and that he proclaimed "I love Latinos" while eating a taco bowl in Trump Tower. The former was stupid, not racist. And the latter may not have been politically correct, but hardly qualifies him as a racist. An "open racist" would have said "I hate Latinos." Trump has never said that nor anything remotely similar.

Trump undoubtedly acknowledges the continued existence of racism. But he also maintains (correctly in my view) is that racism is not the central problem in our society. The problem with the police is not that they're racist (though some are), but mostly that they're not preventing crime in Black communities. Thus his promise to crack down on crime is as much a bid for African-American support as it is anything else. Likewise with his championing of school choice.

Trump got more Black votes than either McCain or Romney. And his vote among Hispanics equaled that which Republicans typically get. There is no evidence that he is viewed in those communities as unusually, or "openly" racist.

Third, Trump bragged about assaulting women in a media clip from a decade ago. Mr. Henderson should use the past tense--"bragged." Trump is certainly not bragging about sexual assault today. This sloppy use of language discredits Mr. Henderson's argument.

Trump does not threaten a global-wide trade war. And the US, like any other country, has a right to control who crosses our borders. Mr. Trump has long since backed off barring all Muslims, but he is certainly right that terrorism tends to come from Muslim countries. Again, exaggeration is not Mr. Henderson's friend.

I think accusations that Trump is an unstable, undisciplined loose cannon, while perhaps arguable, are mostly incorrect. His campaign turns out to have been spectacularly well organized. Which is fairly obvious since he won the election while spending only a fraction of the money Hillary wasted. While he certainly has made mistakes, accusing him of stupidity, mental illness, or lack of self-discipline I think are charges very far of the mark.

Further Reading:

Thursday, February 9, 2017

Faction Fight!

Socialist Action (SA) has published a very long document entitled Opposition Formed in the Fourth International. At about 6700 words, it's one of those things I've read so that you don't have to. Authored by a committee, it reads like something out of a Dilbert cartoon. Though much less sensible.

The script is familiar:
  • The leadership of the International is diluting the principles of Trotskyism by crossing the class line.
  • This is a betrayal of the working class.
  • A Left Opposition within the International recognizes the danger and calls it to attention.
  • They attempt to rescue the International. "[W]e will initiate a debate with every FI [Fourth International - ed] comrade and section willing to communicate with us. We intend that this debate be respectful of differences, and for the unfolding process to help reinforce our international in a context of global capitalist crisis."
  • Eventually this will lead to a split, resulting in the creation of yet another iteration of the "Fourth" International. Perhaps this will be variant 4.7.21a.
The primary issue is also a reprise from the past. The lede paragraph:
The FI leadership replaced the strategic goal of building revolutionary parties with the building of “broad parties.” A century after the Russian Revolution, some ask: Is the principle “no revolution without a revolutionary party” outdated? We do not believe it is. Over the last few congresses, the FI leadership has been explicitly aiming at building “broad” parties, without clear programmatic and strategic boundaries. What are the results of this policy?
Broad parties sounds to me like a rough synonym for popular front. In the latter, so-called revolutionaries make temporary alliances with capitalist parties to achieve common goals. This has long been a tactic of the "Stalinist" parties. For example, the CPUSA has supported Bernie Sanders and Hillary Clinton in the most recent election. Trotskyism was founded in part on opposition to popular fronts, preferring instead united fronts which restrict participation only to working class groups.

So the FI leadership is accused of watering down Trotskyism for the cause of expanding the movement beyond a narrow group of sectarians. As a result they supported SYRIZA in Greece, and opposed the nominal Greek section of the FI. I assume that was OKDE-Spartacos, which SA previously highlighted here (and which I lampooned here).

The document claims that the FI strategy was a failure.
In recent times, we’ve seen major failures. In the Spanish state, Anticapitalistas is preparing to form a joint majority with Pablo Iglesias, thus adapting to a bureaucratic leadership that explicitly seeks to govern in the framework of capitalist institutions. By trying to gain electoral or mainstream media influence, we are led to sacrifice our goal — the overthrow of the capitalist system. 
The Syriza experiment was embraced to such an extent that the Greek FI section, which refused to support it, was even accused in the IC of being counterrevolutionary.
SYRIZA is still the governing party in Greece. Antarsya, the united front of which OKDE is a member, got 0.85% of the vote in the 2015 election. Please let me know which strategy was a failure.

Of course accusing the FI leadership of failure is a little rich coming from the likes of Jeff Mackler. Here's a guy--the very personification of pathetic--whose major accomplishment in 2016 was a 5-day campaign swing through southern New England. Clearly SA sets the bar for success very low.

The document attempts a theoretical justification for the strategy of ever more sectarianism. There are two major crises that supposedly confront the capitalist class.

1) "The fundamental problem for capitalists still is the tendency of the rate of profit to fall."

This is a completely meaningless sentence. Does rate mean as a fraction of capital invested? This can't fall almost by definition, since the value of capital fluctuates with return. By this measure the real rate of profit remains nearly constant over centuries (see, e.g., Piketty).

Or does rate mean as a fraction of operating costs? If there's a long term trend here nobody outside of SA is aware of it. They need to produce some data to back up their case.

This "crisis" is just nonsense on stilts.

2) "Fossil and mineral resources are not infinite. The maximum peak of extraction will soon be reached. Capitalism with its structural logic aims always to increase consumption — to utilize more raw materials and energy."

Of course they're right that the world is not infinite. But natural resources will outlast human civilization--we are in no danger of running out for many centuries. No crisis here.

More importantly SA reveals its true colors: they are both Luddite and pro-poverty. Yes, capitalism wants to increase consumption. Indeed, capitalism has successfully pulled two billion people out of poverty--several hundred million in China just within the last 40 years. Yet SA is against that. They valorize living standards in places like Cuba and North Korea. Or Greece if it had followed OKDE's advice and left the Eurozone.

How can you eliminate poverty if you're against consumption?

It's when it proposes alternatives to the FI strategy that the document dissolves into complete incoherence. They revert to the principle: "no revolution without a revolutionary party." Of course the only revolution led by even a semblance of a Bolshevik party was the Bolshevik revolution itself. Nothing since then has duplicated that model: not China, not Cuba, not even North Korea. So on a single data point they generalize for all time by willfully ignoring any counter-examples.

They quote from Lenin's 'Left-Wing' Communism, An Infantile Disorder. This book was written in 1920, after the 1917 revolution, and it was intended as a political polemic rather than an accurate history. Indeed, it significantly exaggerates the role of the "revolutionary party" in the actual revolution. Its appeal for party discipline lays the groundwork for Stalin's later purges (whether Lenin actually intended that or not).

There's much more in this document I could make fun of. For example, they claim to support the Kurds, but are against them receiving any weapons from any "imperialist" country, i.e., anybody except Cuba or North Korea. So how's that supposed to work? Kurdish resistance to reactionary groups like ISIS is to be maintained solely on the strength of solidarity from Jeff Mackler and his gang of kooky clowns?

I'll leave it at that.

Further Reading:

Saturday, January 14, 2017

Book Review: Is Socialist Revolution in the US Possible?

Is Socialist Revolution in the U.S. Possible?

The short answer is no. But that's the title and thesis of this book by Mary-Alice Waters, Olympia Newton and Norton Sandler. Of course they answer Yes.

Published in 2009, the book recounts events at the Venezuela International Book Fair, held in Caracas in 2007, specifically the session on the prospects for socialism in the US. It includes Ms. Water's opening presentation, along with reporting on the entire proceedings by Ms. Newton, and a presentation Ms. Waters gave a year later at another event in Caracas. Mr. Sandler contributes the introduction.

I guess it's human nature to regard our current generation as representing some inflection point in history. People imagine that folks in the future will spend their days thanking/condemning us for what we have or haven't done: saved the climate; prevented nuclear war; stopped an asteroid from hitting the earth; prevented the dystopia of artificial intelligence that's smarter than we are; solved the problem of overpopulation; returned us to the gold standard; etc.

Any of these items could represent the end of civilization as we know it, but they probably won't. Chances are the real threat to human flourishing will be something nobody today has even thought of. What the soothsayers all forget is that life is very contingent; the future depends as much on what side of bed Kim Jong-un wakes up on tomorrow morning as on anything else.

But Mary-Alice takes soothsaying to an extreme. Part of the future is inevitable, and another part of it depends on our choices.

The money quote is actually on the back cover.
To think that a socialist revolution in the U.S. is not possible, you would have to believe not only that the ruling families of the imperialist countries and their economic wizards have found a way to 'manage' capitalism. You would also have to close your eyes to the spreading imperialist wars, civil wars, and economic, financial, and social crises we are in the midst of.
In her world, the bourgeoisie are compelled by their "declining rate of profit" (she never explains what that means) to steal from the rest of us until the entire world order collapses into a catastrophic mess. The rich, despite their wealth, are insatiably hungry and inevitably can act in no other way.

On the other hand, we, the working class, have options, albeit only two of them. We can organize to fight back and defeat the bourgeoisie. For this we will need a vanguard party, which is the unique role of the Socialist Workers Party (SWP). Or, we can allow ourselves to be guided by false prophets who sell us out for a pocketful of change, betraying the working class and leading to the very end of the human civilization.

It's like a train rolling inevitably down a hill, and ahead is a switch between two tracks. Choose the wrong track and you'll head over a cliff. Flip the switch the other way (follow the SWP) and instead you'll reach safe harbor where everybody lives happily ever after.


On matters of fact the above quote is misleading in at least two ways. First, she is quite right that the wizards are unable to 'manage' capitalism--neither the Fed, the Treasury department, nor the White House. Capitalism is, by design, completely unmanageable. But what she doesn't understand is that capitalism is stable--it doesn't need to be managed. Adam Smith's invisible hand works remarkably well.

And second, she is also correct that we have turmoil, strife, and "crises." The Militant always exaggerates every problem into a crisis--today we have an economic crisis, an educational crisis, an ecological crisis, and so on. Mostly these are just the warp and woof of every day life--problems, to be sure, but hardly a crisis. It is true that in 2008 we had a financial crisis, and in 1961 we had a missile crisis. But nothing today rises to anywhere near such a level. History has always been thus.

The most interesting part of the book is the contribution from Olympia Newton reporting on the rest of the conference. Most attendees apparently didn't agree with Mary-Alice, taking a much more pragmatic point of view.

Author Eva Gollinger said she didn't " 'share the same optimism that revolution is possible in the United States.' because 'it's very easy to change the channel. People are not poor and hungry in the U.S. like they were in Venezuela. You get two or three credit cards in the mail every day. There is poverty, but it's only in a few small sectors.' " (Italics mine. The conference took place when optimism about Venezuela still prevailed, hence poverty was spoken of in the past tense. How quaint!)

Ms. Gollinger's view seems more in accord with facts than Mary-Alice's.

Ms. Waters sees the struggle of illegal immigrants as central to the American Revolution. Recall that in 2006 (a year before the conference) there was a flash mob of Mexican high school students who demonstrated by the hundreds of thousands to protest deportations. Ms. Newton reports that Latin Americans were much less tolerant of these people than Ms. Waters would have you believe.
In various ways, several said that Latin Americans living in the United States are simply there to "get a piece of the pie."
"They are only there to get passports," said one participant. "Once they get them they will stop marching." Many spoke with barely concealed contempt for immigrant workers as sellouts who had bought into the "American dream" instead of remaining in Latin America to fight for political, economic, and social change.
This does seem like a truer description of immigrants than Mary-Alice's relentlessly downtrodden workers.

Then there was explicit antisemitism from "Leftist", Amiri Baraka, among others. Mr. Baraka recited one of his so-called poems.
"Who decide Jesus get crucified?" one poem asks. "Who knew the World Trade Center was gonna get bombed? / Who told 4000 Israeli workers at the Twin Towers / To stay home that day? / Why did Sharon stay away?"
Another "participant from Panama had said during the discussion that Jews are the main problem facing working people in the world today because 'they have all the money' and control everything."

Norton Sandler, representing the SWP, demonstrated appropriate courage. "[H]e spoke from the floor the next day and pointed to the deadly danger scapegoating and Jew-hatred posed for the working-class movement."

Whatever their intellectual failings, my former comrades have retained a moral compass.

Further Reading:

Wednesday, January 11, 2017

Book Review: Rise & Fall of American Growth

Robert Gordon's book The Rise and Fall of American Growth certainly doesn't need another review: see here, here, here, and here, for example. But I'm so inspired by reading it that I can't resist.

Whatever you think about Mr. Gordon's conclusions, the book itself is magnificent. He posits a miracle century from 1870 to 1970, beginning with the invention of the electric light, and concluding with the widespread adoption of central air conditioning. Prior to 1870, Americans lived lives more similar to medieval times than to our own. If not necessarily brutish, life was definitely nasty and short. Men's work was dirty and dangerous, while women's toil was unremitting drudgery. Children often died young.

By contrast, a household in 1970 had electricity, indoor plumbing, clean, running water, a car, television and radio, a refrigerator, washer and dryer, a telephone, and more. Nobody needs to share bathwater anymore. While there have been incremental improvements in all those devices, a modern family could move into an unrenovated, 1970s house and live quite normally. The only significant household appliance invented after 1970 is the microwave oven.

Similarly, workers have it much better off than before. They're employed in air-conditioned offices, in ergonomically-designed factories, and stores with break rooms and washrooms with indoor plumbing. Women don't have to sew their own clothes, or launder their husband's filthy clothes by hand, much less cook over an open fire. Today they can go work in the same climate controlled offices where their husbands are employed.

The result is a huge increase in productivity! Mr. Gordon documents it meticulously, and discovers that the largest productivity gain occurred during the decades from 1920 to 1950. That despite the Great Depression and World War II, or perhaps, even because of those events. For example, US manufacturers learned how to build one B-29 bomber every hour. That skill was not forgotten at the end of the war.

The central thesis of the book is that the miracle century can only occur once. The electric light has already been invented--that can't happen again. And likewise with the equally important internal combustion engine. Households can be networked (electricity, water and sewerage, telephone) only once, and while the network can be upgraded, the fundamental productivity change can't happen again.

In other words, we've eaten the low-hanging fruit. Productivity improvements such as occurred during the miracle century are once-off, never to be repeated. Hence economic growth will shrink from ~4% annually during the miracle century, to something around 1% today.

But Mr. Gordon's thesis does not just rely on anecdote and statistics. He brings some solid economic reasoning to the task as well. The growth in GDP is typically decomposed into three terms, which are then added together. Those are 1) the growth in the size of the labor force; 2) the growth in the total capital stock; and finally 3) the growth in TFP, which concerns most of the book.

TFP stands for total factor productivity, but that's really a misnomer. A more apt name is the Solow residual, named after Robert Solow, who invented the concept. But residual is the important label, and that means everything that is left over after you've accounted for the principal factors.

So economic statistics are always a bit dismal--hard numbers are hard to come by. For example, Mr. Gordon demonstrates conclusively that government statistics systematically overstate inflation--not because they're evil, but just that inflation is really hard to measure. Simple concepts such as real GDP growth are fuzzy--beset with uncertainties such as the inflation rate. And likewise with growth in labor and capital investment.

Nevertheless, within some error margin one can estimate growth as a function of labor. Add one additional worker x, and y amount of additional output will be produced. Similarly, buy a new machine for that worker to use, and output will increase all the more. Thus GDP growth as a function of the size of the labor force and as a function of capital investment can be reasonably estimated.

But there are some factors in GDP growth that are not a function of either labor or capital. For example, fine weather will produce a much larger agricultural output, regardless of how many workers or tractors the farmer employs. A change in government regulations may make it cheaper and easier to manufacture widgets, as can also a change in global trading networks. None of these can be expressed by the principal components (labor and capital), but are instead are left over as a residual, aka a fudge factor, known as TFP.

Among other things, TFP collects any errors that accrue in measuring labor and capital investments. I propose that it be renamed TFF: total fudge factor.

But the total factor productivity moniker is longstanding, and not irrational. While nobody denies any of the items that I've designated TFF, most of the residual is attributed to new technology. Buying a new abacus may improve the productivity of your new accountant at the margin, but replacing the abacus with a computer makes for a whole new ball game--productivity will make a giant step upward.

And Mr. Gordon is certainly on solid ground when he attributes to the miracle century to new technology. The rest of the fudge factor is either small or it cancels out. For example, despite the Great Depression, TFP growth continued unabated throughout the 1930s. There is no other reasonable explanation for this other than technology.

He also makes a strong argument about why TFP growth has decreased since 1970: apart from the digital revolution there's been very little new technology. While digital technology (computers, internet, etc.) caused a large spurt in TFP from 1994 to 2004, since then it's petered out--yet another revolution that can no longer be repeated.

So his book is a tour de force in economic history, and well worth reading just for that reason. The problem, insofar as there is a problem, is when he starts predicting the future. He's what might be called a techno-pessimist. I think he's too pessimistic--I believe AI and driverless vehicles will have a much larger impact than what he predicts. But then my crystal ball isn't any better (or worse) than his--we'll just have to wait and see.

Nevertheless, in addition to declining TFP growth he details four headwinds to American economic growth. One of these is rock solid, namely demography. The US labor force is not growing very fast, and soon may actually decline. This is partly because the baby boomers are retiring, partly because men are disproportionately leaving the workforce, and even workforce participation by women is declining slowly. Further, immigration rates will slow down (regardless of what Mr. Trump does).

If labor force growth declines, then economic growth will decline with it. No way around that.

The second headwind is debt. Government has run up huge debts. Not just the federal deficit, though that's bad enough, but social security and Medicare are increasingly burdensome obligations. States and municipalities are committed to pension payments that are unsustainable. Debt has added to economic growth today in exchange for reducing growth in the future. And Mr. Gordon's reasonable prediction is the future economic growth will be reduced. I agree with this conclusion as well.

The third headwind is education--we're no longer making progress in increasing the percentage of high school or college graduates. I think he's just wrong here. Our country invests way too much in education. I've written about that elsewhere.

Finally, he mentions inequality. This is a bit of a category error--he doesn't claim that inequality will per se inhibit growth, but rather that the proceeds will not be evenly distributed. "When we consider the future of American growth, we care not just about the growth of average income per capita, but also about growth of income per capita for the median American household" (p. 612).

I think the inequality problem is overstated. The proper comparison is not income, but rather consumption. The CEO may earn 1000x more than the worker, but he doesn't consume 1000x as much. He certainly doesn't eat much more than the average employee, and he can only drive one car at a time. Maybe he's 10 or 20 times richer than the working stiff. Not a big deal.

In summary, whatever you think about Mr. Gordon's conclusions, this is a superb book and well worth your time.

Further Reading:

Wednesday, January 4, 2017

One State or Two?

In a front page article by Naomi Craine entitled "UN Israel vote registers blow to Palestinian national fight," The Militant (SWP*) opposes the recent UN resolution condemning Jewish settlements on the West Bank.
The resolution states in part that “the establishment by Israel of settlements in the Palestinian territory occupied since 1967, including East Jerusalem, has no legal validity and constitutes a flagrant violation under international law and a major obstacle to the achievement of the two-State solution.” 
The vote in fact registers a blow to the decades-long struggle of the Palestinian people against national oppression. It reinforces the dead-end course of the Palestinian Authority and Hamas leaderships to rely on Washington and other imperialist powers to pressure Tel Aviv, while shackling the Palestinian masses as passive bystanders. It gives a boost to forces in Israel pushing for greater inroads into Palestinian territory.
This odd reasoning is consistent with Trotskyism, which accepts as a given that nothing United States supports can help the working masses, in this case Palestinians. The solution for Palestine is not reliance on the "imperialist powers," but instead mass action on their own account.

The article then wanders far from traditional Trotskyism.
It [the UN resolution--ed] reflects the absence of any Palestinian leadership fighting for a way forward — a negotiated agreement that includes recognition of the state of Israel, coupled with recognition of a Palestinian state, as it exists today, as a stepping-stone to the fight for a single, contiguous homeland for the Palestinian people. Only this fight can provide the basis for advancing the interests of working people of all nationalities in the region today.
Or in other words: The Militant proposes the following plan 1) recognition of the State of Israel by Palestinians; 2) the recognition of a Palestinian state in a two-state solution; and 3) a long-term, utopian goal of a democratic, secular Palestine/Israel from river to sea.

There are many things to criticize here, not least the mere impracticability. But it gets one, huge, thing glaringly right: it is NOT antisemitic.

All the other grouplets I follow argue that the State of Israel should be wiped off the map. Here's how Socialist Action (SA) puts it.
Only a democratic and secular Palestine extending throughout the historic territory of the Palestinian people, with full rights guaranteed for all regardless of nationality or religion, can effectively replace the current system of settler-colonial domination. 
The resolution also ignores and limits the right of Palestinians to resist the illegal occupation. It calls for confiscation of “illegal” weapons and equates the right of Palestinians to self-defense and military resistance to colonial occupation with “terrorism.”
The first paragraph is the usual prophylactic against charges of antisemitism. After all, how can anybody in favor of a "democratic and secular Palestine" be an anti-Semite?

But the second paragraph puts a lie to the illusion. Palestinians, on this telling, are "occupied", and have an unlimited right to resist the occupation. By any means necessary! Which leads inevitably to supporting Hamas--an archetypal antisemitic organization if there ever was one. Indeed, for me it's a litmus test: if you support Hamas, you're an anti-Semite, whatever else you might say. And SA enthusiastically supports Hamas!

The key difference is this: for the SWP the utopian outcome comes last, and only after both Israel and Palestine are recognized. Or put another way, nobody in the SWP is gonna be driving the Jews into the sea.

For SA, the order is reversed--the utopian solution is a prerequisite before anything else can be discussed. And in the meantime Hamas and allies have unlimited authority to drive as many Jews into the sea as possible. Because, occupation, don't you know.

Since we're speculating on utopian outcomes, let me propose one of my own. The model is my own experience. I moved to New York 32 years ago. I was not born here. By SA's lights I am, therefore, an occupier. After all, what right do I have to live here if I wasn't born here? Indeed, I have even less right than an Israeli Jew has to Israel because not only was I not born here, but neither were my parents or my great-grandparents, or any of my ancestors.

Yet New Yorkers accept me as one of their own. They let me buy a house here, and I'm even registered to vote!

Regarding the "occupation", Ms. Craine provides us with some actual data.
Some 580,000 Israeli Jews now live in these areas beyond the 1967 border, in settlements scattered throughout the West Bank and in housing developments built up around eastern Jerusalem, ringing the city’s Arab neighborhoods. These include 123 settlements authorized by Tel Aviv and about 100 unauthorized outposts, carving up Palestinian land right up to the border of Jordan.
Wikipedia breaks it down a bit further. In 2015 the Israeli population in the West Bank excluding East Jerusalem was 388,000 people. In addition, as of 2003 (the most recent data provided by Wikipedia), the Jewish population in East Jerusalem was 176,000.

Also from Wikipedia, the Arab population in the West Bank (in 2012, not including East Jerusalem) was 2.7 million. That means Jews made up about 14% of the total West Bank population. Jews are no demographic threat to the Palestinian people in the West Bank. By comparison, 20% of Israel's population is Arab.

So here's the utopian dream. Draw a boundary between Palestine and Israel--I'd pick the 1967 border with an exception made for East Jerusalem, but whatever. People who live on the Israeli side are Israeli citizens. As just mentioned, approximately 20% of Israeli citizens are Arab. And people who live on the Palestinian side are Palestinian citizens. We just noted that roughly 14% of Palestinian citizens would be Jewish.

So what's the problem? The only issue is that each state--Israel and Palestine--has to guarantee the protection of its minority citizens' rights and property. Israel has mostly done that for its Arab population. Palestine, meanwhile, is still possessed of murderous passions, requiring large portions of the West Bank be reserved for security.

What's wrong with Jewish settlers being citizens of an independent Palestine? If only Palestine joined the civilized world...oh well. We can all dream a utopian dream.

My utopian dream is not substantially different from that of the Socialist Workers Party. And neither of us are antisemitic.

*The Militant is published by the Socialist Workers Party (SWP).

Further Reading:

Sunday, December 25, 2016

Trotskyist Psephology

Psephology -- the study of election returns -- is not in the Trotskyist wheelhouse. For them, apart from the one-and-done variety that elect people like Castro to 50-year terms, elections are "bourgeois," and unimportant. Not worth discussing.

Except this year. Trump's election has upset the apple cart. The standard Leftist line is that a plurality of American voters, especially including the working class slice, are racist/sexist/homophobic/fascist. Of course that's a depressing conclusion, which the grouplets I follow are now trying to walk away from.

Socialist Action (SA) has made the most dramatic retreat. A current article by Mark Ugolini, argues that instead of being racist, etc., workers are just plain stupid. They've been completely bamboozled by Trump's claims to help the working class. Instead he's just a craven capitalist out to stuff the pockets of his own class, determined to betray his supporters by demolishing Obamacare, gutting Medicaid, eliminating pensions, and in general being an all around bastard.

And what of Trump's supposed racism, etc.? Today that gets downplayed. Mr. Ugolini writes:
Despite the virulent expressions of racism and sexism displayed by Trump during the campaign—which gave a swift boost to the ultra-right fringe—and the steady stream of insults, rants, and repulsive behavior, millions responded to his populist-sounding message. These voters viewed Trump as an agent of change—someone capable of shaking things up, who in a distorted way embodied their distrust and hatred of a political system and a news media that ridicules, belittles, and ignores them.
Racism and sexism are today just a sideshow. Trump won "despite" that.

How different that is from what Jeff Mackler wrote back in October, 2015.
No doubt Trump’s rants find fertile soil in a small layer of the overall electorate, but even less in the general population, some half of which increasingly does not bother to vote. 
But Trump’s backwater histrionics are not new to the increasingly polarized and crisis-ridden world capitalist scene. Overtly far-right, if not neo-fascist, views are similarly expressed in France, England, and across Europe. In the former two nations such right-wing parties have, for the first time in nearly a century, outpolled the traditional capitalist stalwart parties of the status quo. 
Trump is the American reflection of overtly racist and neo-fascist ideology— if not a conscious experiment with it. His racist rants in some instances have encouraged the use of violent physical attacks by his disaffected followers, who find his scapegoating of the oppressed to their liking.
Mr. Trump hasn't changed--he wasn't a fascist then and he isn't a fascist now. As Scott Alexander eloquently points out, he's no more racist than the average 70-year-old white guy. He's certainly no more racist than any former president (barring perhaps Mr. Obama).

The American people haven't changed, either. They're no more stupid today than they were ten years ago. By SA's lights they must be true idiots, falling for the same scam every four years as predictably as the sunrise.

Solidarity, having made a French Turn into the Green Party, were fully invested in the Jill Stein campaign. In a statement from the Steering Committee of Solidarity they acknowledge that she was not successful.
Meanwhile, the Green Party--the most visible alternative to the left of the Democrats--seems to have won less than 1% of the vote in the Presidential race; a result both disappointing to those seeking to build the Greens as a party of the left, many of whom named 5% of the vote as a goal, and totally insignificant compared to the numbers of Democrats and independents who either stayed home or, worse, jumped ship to vote for Trump.
While they're still quick to accuse Mr. Trump himself of racism, they try hard to get his supporters off the hook.
The outcome of the election is, no doubt, in part an expression of white supremacy. But it’s more than that: many commenters have already pointed out that the rustbelt battleground states that arguably cost Clinton the election were areas where Obama performed significantly better among white voters in 2008 and 2012 than Clinton did in 2016, complicating any suggestion that the results are simply about the racism of white voters.
This is essentially the same argument as SA makes--the American People were bamboozled into voting against their own self-interest. They're only slightly more specific about why, blaming "neoliberalism"--a catch-all term that is approximately a synonym for all evil.

Scott Alexander provides convincing evidence that white supremacy is not a significant current in American politics. After presenting much data, he concludes
So the mainstream narrative [including Solidarity--ed] is that Trump is okay with alienating minorities (= 118 million people), whites who abhor racism and would never vote for a racist (if even 20% of whites, = 40 million people), most of the media, most business, and most foreign countries – in order to win the support of about 50,000 poorly organized and generally dysfunctional people [white supremacists--ed], many of whom are too young to vote anyway.
As it turns out, Mr. Trump received a larger fraction of the minority vote (both Hispanic & African-American) than either Romney or McCain. Whatever else Trump is, he is not a white supremacist.

The Militant's view is refreshingly different. The paper describes the Trump phenomena as more a split in the ruling class rather than stupidity by the workers. Quoting Steve Clark,
“For the first time in decades, the US rulers and their government have begun to fear the working class,” Clark notes. “More working people are beginning to see that the bosses and political parties have no ‘solutions’ that don’t further load the costs — monetary and human — of the crisis of their system on us.” The rulers “sense that mounting struggle — class struggle — lies ahead.”
So, according to Steve, desperate times call for desperate measures, and a radically different presidential candidate, one which a big part of the Republican establishment disowned, suddenly becomes the tribune of the bourgeoisie.

But The Militant has long insisted that Trump is not a fascist, as Naomi Craine wrote last April.
“Trump’s not a fascist, he’s a demagogic bourgeois politician,” said Naomi Craine, a leader of the Socialist Workers Party here, who spoke along with Kennedy. “He uses crude anti-Mexican and anti-Muslim rhetoric, and there’s a real edge to his comments on women.” 
What he proposes to do is not much different from the other capitalist politicians, however.
The paper argues that Trump accurately reflects the attitudes of most American workers, but the solutions he proposes are straight from the capitalist playbook. Far from being radical, he's just another capitalist candidate dressed up in proletarian clothing.

I think The Militant is closer to the truth than any other grouplet. Donald is certainly no fascist, as can be seen by his "ground game," or lack thereof. It has been assumed that a presidential candidate needs activists on the ground in an organized Get Out The Vote (GOTV) campaign. Hillary certainly had that. But Trump, with a staff only a fraction the size of Hillary's, never assembled a ground game.

Yet a ground game is just an incipient fascist gang if the candidate chooses to use it that way. Indeed, both Bernie and Hillary used their ground game in just that way on occasion. But Donald never did that, in part because he never organized a gang to begin with. So he's not a fascist.

The Militant is also correct that Trump has no "solutions." They're hardly unique in pointing that out. But the reason isn't some betrayal of the working class--rather it's that no solutions exist.

  • There is no solution to the health care problem in America that solves all the problems people want solved.
  • There is no solution to the regulatory state--there will always be both too much and too little regulation.
  • There is no solution to structural unemployment in this country.
  • Etc.
Even in a socialist society--especially in a socialist society--no solution to any of these problems will be found.

Let me end with a little psephology of my own. Why did Trump win the election? Simple. He both out-smarted and out-hustled Hillary.

Hillary is stupid, and I mean that in the literal, IQ sense of the word. Anybody who rises to high office has to be smart, and the 17 candidates who initially graced the Republican stage were mostly brilliant. I need only mention Rand Paul and Chris Christie to make my case. And Trump was smarter than most of them.

But Hillary just isn't in that league. She inherited her position solely by virtue of being Bill's wife. Of course being smart isn't everything--after all, Rand Paul isn't president. But it is a prerequisite, one that Hillary couldn't meet.

That's why she lost the election.

Further Reading: