Saturday, April 27, 2013

Labor's Giant Step Backwards

This post is about the precipitous decline of the union movement, and is based on three articles--two in this week's Militant (by Alyson Kennedy and Frank Forrestal), and the third by Harold Meyerson in the American Prospect.

Kennedy continues to report on the mineworker's pension problems, about which I blogged last week. Patriot Coal Company has declared bankruptcy and is asking to be excused from paying pensions to 10,000 retired miners (along with 13,000 dependents), when only 1600 Patriot employees are members of the United Mineworkers (UMWA). Most of the retirees never worked for Patriot--instead they were employed by Peabody Coal or Arch Coal. In that post I incorrectly implied that Peabody Coal had gone out of business. That's not true--it is alive and well, presumably as a non-union company. It has completely divested itself of Appalachian mines, operating only in the Midwest and the Rockies. The UMWA's claim is that the Patriot Coal spin-off was set up to fail from the git-go.

I don't know if that last claim is true, and in any event it doesn't matter. The Marxist (and union) conceit is that capitalists keep some large stash of cash that they could pass out to the workers if they just wanted to. It's the Scrooge McDuck image of capitalism, and it's totally false. In reality, a commodity business like coal operates on very tight margins--likely only pennies on the dollar--and that's all the money they've got to play with.

So the union tacitly acknowledges that Patriot doesn't have the resources to make good on the pension promises--that's why they're also picketing Peabody's headquarters in St. Louis. That's the primary topic of Kennedy's current article. Peabody is a somewhat larger company, with 8300 employees in both the US and Australia. Without the illusory stash of cash, the only place Peabody could get the money to pay off the union pensions is from either its customers or current employees. The customers won't bite--the coal market is shrinking. And the current employees--non-union and not from Appalachia--won't be inclined to contribute to pensions more generous than anything they themselves have been promised. From Ms. Kennedy's report, it appears that none of Peabody's current workforce is participating in these protests--why should they?

The union will lose this fight. They can't strike against a bankrupt company in a weak market--then everybody is unemployed. And they can't strike against Peabody because they don't work for Peabody. Neither unions nor companies can produce cash out of thin air--the union contracts are a fraud. The workers have been consistently lied to for decades.

Frank Forrestal's article is about the lockout of sugar workers in North Dakota. The lockout by American Crystal Sugar Company lasted 20 months, and Forrestal now reports that the workers ratified a contract  just like what they'd been offered at the beginning. In the meantime they're numbers have dwindled, and it looks as though the returning unionists will be a minority in the workforce. The union has been comprehensively defeated.

A second union conceit is that unions increase the wages of the entire working class. During the 1950s and 1960s this appeared to be true. Wages were increasing across the board, and unions just took a little bit more than their share of the extra gravy. Their wealth grew slightly faster than everybody else's, making it look like they were leading the way. But by the mid 70s productivity increases slowed down, and with it also the increase in per capita GDP. Hence there wasn't enough extra gravy to go around, and as a result the union bennies came out of everybody else's hide. People don't really mind if extra gravy gets spread out unfairly, but we hate to lose ground when the gravy runs out.

So just as the non-union miners aren't going to subsidize their colleague's pensions, neither will sugar workers or consumers subsidize union work rules. Unlike Peabody Coal of yore, American Sugar told their employees the truth--you work at market rates or you don't work at all. No false promises, and in the end everybody will be better off.

Marxists will claim that union workers are not in competition with other workers, but rather with capitalists. This simply isn't true. Capitalists cannot set wages--those are subject to the market. There is a separate market for capital, which also is determined by supply and demand (or at least should be, though the government is now artificially lowering the cost of capital). A capitalist needs to make a market return on investment in order to justify taking the money out of the bank. Capital and labor are mostly separate markets and not in competition with each other--rather like cars and avocados. Few people say "I'm not going to buy a car today because I'd rather buy an avocado."

So that brings us to Harold Meyerson's piece, entitled How Unions Are Getting Their Groove Back. In other words, Mr. Meyerson wouldn't buy a word of what I've just told you. In his view unions have turned the corner and are on the rebound. His lede paragraph:
Yesterday—April 24th--a red-letter day in the annals of worker mobilization in post-collective-bargaining America. In Chicago, hundreds of fast-food and retail employees who work in the Loop and along the Magnificent Mile called a one-day strike and demonstrated for a raise to $15-an-hour and the right to form a union. At more than 150 Wal-Mart stores across the nation, workers and community activists called on the chain to regularize employees’ work schedules. And under pressure from an AFL-CIO-backed campaign of working-class voters who primarily aren’t union members, the county supervisors of New Mexico’s Bernalillo County voted to raise the local minimum wage.
So Walmart workers are at the opposite end of the economic food chain from coal miners. Miners are in a basic resource industry, and if the world really were Wobbly-friendly, then in principle  they could shut the whole thing down. Retail workers--one step away from the consumer--have no such power. The best they can do is shut the store down. If the miners can't pull off a successful strike, then surely Walmart employees won't be able to, either.

Walmart is impossible to organize. The retail trade is so disperse and varied that shutting down one store just won't make any difference. Indeed, Walmart has clearly indicated that it will simply shut down if forced to unionize. Walmart is a labor-intensive business, unlike mining, which is capital-intensive. That means that Walmart can just walk away from the business at relatively little cost. Walmart employees know this--that's why they've never voted to unionize.

And one really has to laugh at the economic ignorance of the Bernalillo county supervisors. They think they're all powerful--by the flick of a pen they can raise the standard of living of everybody in the county. I'd like to know why they are so chintzy--why didn't they raise the minimum to $100/hour, or even $10,000/hour? I mean if it's that easy to make everybody rich, then by all means, let's go for it.

Of course it's all a fraud. The minimum wage no more increases wealth than do the fraudulent pension benefits promised union workers. Employees with defined benefit pensions--be they in the public or private sector--are victims of a huge Ponzi scheme. They will never see more than pennies on what they expect. I think that's very sad.

Anyway, kudos to The Militant for honest and informative reporting.

Further Reading:

Wednesday, April 24, 2013

Be Afraid--The End Is Nigh!

The very word ecosocialism just makes me depressed.

So when Louis Proyect gives us a report on the New York's Ecosocialism Conference, I just want to curl up into a fetal position and go back to bed. The term connotes a series of ideas that all contain a grain of truth, but lead to gross exaggerations if not outright falsehoods.

Ecosocialism suggests a beneficial connection between socialism and environmental quality. There is no evidence for any benefit. The former communist countries all have a very poor record of environmental stewardship. China, famously, has been unable to reform its Maoist-era apparat--the air quality in Beijing proves that. Centralized control over the economy leads to crony capitalism and corruption on a massive scale--along with ecosocialist-scale pollution.

Both environmentalists (at least the radical ones) and socialists ascribe religious urgency to their crusade. One of Mr. Proyect's correspondents puts it well:
Joel Kovel’s talk brought in an absolutely necessary, albeit uncomfortable recognition that the ultimate stakes of climate change are meta-economic, meta-social, and meta-political, which is to say they are transcendental or, to use his vocabulary, spiritual.
They believe the world is in do-or-die crisis--if we don't stop greenhouse gas emission right now, then the planet is doomed.

It's a very self-serving theology. Environmentalists and socialists alike want to run your life for you. They arrogantly presume to tell you what kind of car you're allowed to drive (if any), where you can live, what you're allowed to eat, and whether or not you can smoke or drink. They want to ration your electricity, your gasoline, and your home heating and cooling. They will tax anything and everything you do, all for the sake of saving the planet. Ecosocialists have pure hearts--but that means it's all your fault.

They get away with this using four strategies. One is they exaggerate everything out of proportion. Fossil fuel burning won't just result in some incremental change in the climate (with both positive and negative consequences), but instead augers immediate and irreversible catastrophe. Fortunately, most of the world no longer believes this stuff--even the Real Climate crowd has stepped back from the imminent disaster theory. But catastrophe is a major justification for the dictatorship of the ecosocialists, so they scream that from the rooftops.

Second, they make liberal use of the for the children argument, as in If it saves one child's life, it is worth banning all automobiles now. The argument is a non-starter because it makes any rational cost/benefit analysis impossible. Everything involves risks. Perhaps tripling the cost of gasoline would benefit the environment some how, but it would also hugely raise the cost of fresh fruits and vegetables. Ecosocialists claim to know all the answers to these trade-offs. I suggest they've got no clue.

Now the ecosocialists' real beef is with people like you and me--we're supposed to sacrifice our livelihoods, lifestyles, and enjoyments so that the all-wise, all-seeing, pure-hearted ecosocialists can save the planet for our great-great-great-great grandchildren. But we, being the selfish bastards that we are, don't readily volunteer for a life of poverty, misery, boredom and servitude.

So the ecosocialists have a third trick up their sleeve--namely it's all the rich people's fault. That's right--in the new, ecosocialist paradise only millionaires and billionaires will have to live in mud huts with no heating. The rest of us will use solar magic-powered electricity to drive around in earth-friendly Priuses manufactured out of thin air by free unicorns.

Mr. Proyect reports
Jill Stein, the Green Party presidential candidate in 2012, spoke at the morning plenary. She is really dynamite, using Powerpoint slides to illustrate how fucked the system was. ... She really knows how to speak to working people using concrete examples like people and loaves of bread. With the current income disparities in the USA, there is one person at the top with fifty loaves of bread and at the bottom fifty people to share one loaf.
That some people are richer than others is unfair, to be sure, but only in the sense that life is unfair. This is the old Marxist meme: We're poor because the rich people stole all the money. But it's simply not true--the rich people created the money (or, more accurately, wealth). Capitalism makes everybody richer, and rich people are better for the environment. The ecosocialists are not just against rich people--they're against wealth in general. They think poverty and slavery are good for the environment. They're wrong.

Fourth, ecosocialists slander anybody who disagrees with them. They think people like me are opposed to any environmental regulation. And further, they think we're just motivated by money, i.e., Exxon or somebody is buying us off. I wish. But I guess that's true in the sense that I'm not willing to sacrifice my standard of living just to make a bunch of ecosocialists happy. I don't feel too guilty--I've just googled a couple of Mr. Proyect's correspondents, and they're not living in mud huts without electricity, either.

And for the record, I support appropriate environmental regulation. Unfortunately there is no sharp definition of the word "appropriate," but clear and present danger does seem like a reasonable standard.

  • I support taking lead out of the consumer environment, with lead-free paints and unleaded gasoline. This has had dramatic and provable health benefits.
  • I support catalytic converters. Unburned fuel is a major pollutant and air toxin. This rule has greatly reduced smog in Los Angeles, for example.
  • As a chemistry professor, I support the existing rules for the safe disposal of chemical waste. As far as I can tell they seem quite sensible, and they're not that expensive to comply with.
But I can't support laws that are based on hokey computer models, and that even if the models were correct, would do nothing to correct the problem (if there is a problem). Thus I'm opposed to carbon taxes or carbon cap and trade laws. All those do is give ecosocialist bureaucrats more power and money than they deserve.

There is an argument to be made against banning fine particulates from emissions. There are benefits, but the costs are extremely high. My sense is that the costs outweigh the benefits, and we should not pass such regulations. I am opposed to giving the EPA a blank check to "save the environment," regardless of cost, as is now their mandate. The EPA should have its wings clipped.

Nuclear power has been irrationally over-regulated. As a result it is too expensive, and innovation has been forbidden. So today nuclear energy is neither as cheap nor as safe as it would be if the regulators used a lighter touch.

Likewise, fracking has both risks and benefits, but the benefits are huge. The industry does need to be regulated, but innovation has to be allowed and costs have to stay low. In the long run that will lead to cheaper gas more safely procured.

In a word, environmental regulation has to serve people and the economy, not the other way round.

Further Reading:

Saturday, April 20, 2013

Book Review: The Three Languages Of Politics

Convention has it that there are two major political parties in America: The Evil Party and The Stupid Party. Now comes Arnold Kling to tell us convention is wrong.

Mr. Kling's goal, in his short e-book, is to enhance conversation among people of different political opinions. Too often, we write off our opponents as either stupid or evil because they appear not to understand even simple political or economic facts. Kling proposes a framework that will at least let us talk to each other, even if we never reach agreement.

Given this blog's purpose to serve both Trotskyists and Republicans at the same time, Kling's topic is of great interest to me. This isn't just talking across the aisle--I'm trying to talk across the class line. So if Mr. Kling has some advice for how to pull off that trick, I'm all ears. It is so easy for Republicans to dismiss Trotskyists as "stupid." Indeed, in this blog's first incarnation I routinely referred to the SWP (Socialist Workers Party) as the Stupid Workers Party. And I know from my time in the SWP that comrades see Republicans as intrinsically evil (think Richard Nixon).

Now I've set some ground rules for myself--nobody is going to listen to me if I just insult them. Hence I take Trotskyism seriously--I do not believe that comrades are mentally ill, or members of a cult. But Mr. Kling offers some insight beyond rules for civil discourse, and they're worth paying attention to.

Kling suggests that there are three political ideologies in America, which he roughly labels as Progressive, Conservative and Libertarian. These three groups use different languages--that Kling calls heuristics--and from this he derives a three-axis model. Progressives organize ideas around an oppressor/oppressed axis. Hence they are primarily interested in social justice, and in righting historical wrongs. Conservatives think in terms of a civilization/barbarism axis. Accordingly they emphasize stable institutions (church, family, law), and tend to resist sudden changes. Finally, Libertarians orient according to a freedom/coercion axis. They're worried about big government, too much taxation, gun control, and too much environmental regulation.

Mr. Kling provides a nine-point quiz that will roughly place you somewhere within this space. His test correctly puts me half way between the Libertarian and Conservative axes. Accordingly, I could never vote for Ron Paul, but I'm also somewhat uncomfortable with true conservatives such as Rick Santorum or Mike Huckabee. Herman Cain's message really resonated with me. I'm a Republican, though one that leans toward the Libertarian end.

Mr. Kling points out that some languages are more suitable for some topics than others. His examples include the civil rights movement, where the Progressive heuristic looks to work best. Blacks really were oppressed, and defining the struggle as oppressed vs. oppressor was accurate. Compare that with the Libertarian response: Goldwater thought that any equal accommodations law was an unjustified infringement on individual freedom. Private business should be able to discriminate if they want to. Needless to say, Libertarians didn't get very far with that argument.

Conversely, on economic issues Libertarians usually win. That economic freedom enhances well-being is an almost indisputable fact, and casting economic policy along the freedom/coercion axis will lead to a richer society.

Trotskyists align very much along the progressive axis. The difference between oppressor and oppressed widens into the unbridgeable class line. The Marxist meme is we're poor because the rich people stole all the money, which is as progressive a phrase as one could possibly have.

Mr. Kling quotes Stephen Covey: "seek first to understand, then to be understood." Since Trotskyists are mostly concerned with social justice, they are unlikely to be persuaded by any rising tide lifts all boats argument. Efficiency, for them, is not important. Equality in outcomes is essential. We do not have to agree with them (I don't), but before we can talk to them we need to know where they are coming from. With that understanding, they will neither seem evil nor stupid. They're still wrong.

So far, so good. The second half of Mr. Kling's book is less satisfying. He distinguishes between motivated reasoning and constructive reasoning. Motivated reasoning is what most humans do most of the time: that is, we try to marshal data in support of our invested opinion. Contrary data leads to cognitive dissonance, which is painful. For reasons of ego, or for reasons of group affiliation, we choose our opinion first, and then cherry pick data to support it.

Constructive reasoning is the reverse, i.e., we discover the facts and then form an opinion based on those. This is how Mr. Spock in Star Trek behaves, and needless to say he isn't fully human. Most people can't behave that way. Still, one can approach constructive reasoning, and Mr. Kling argues that people who are serious about political discourse should strive for that goal.

To see how well we do, Mr. Kling picked three prominent columnists, each partial to an axis, and compared notes. The examples he chose were E. J. Dionne (progressive), Victor Davis Hanson (conservative) and Nick Gillespie (libertarian). Predictably, they all failed his test of being constructive thinkers--each defended his own point of view without indicating any understanding of the other.

And yet I don't think that's completely fair. First, Kling sampled only columns, which by design are short, propaganda pieces. He'd have done better if he'd looked at longer writing in journals like The New Republic or National Review. Second, while I've never met any of these people, I'm fairly certain that they all read each other's work. They talk to each other. I don't believe that Mr. Kling's schema will come to them as a surprise. They're as close to constructive thinkers as we're likely to find among non-Vulcans.

Compare that with my fellow faculty at the college where I'm a professor. They are all progressives--at faculty meetings it's just assumed that everybody is a Democrat. But despite their theatrical, political grandstanding, they know much less about politics than any of Kling's columnists. They have probably never even heard of either Hanson or Gillespie, and all they ever read is The New York Times. They live in an echo chamber, and are an excellent example of what Kling calls group affiliation. College faculty are Lefties because that's how you establish your credentials as part of the group. If you're not part of the group, you won't be successful and you won't get tenure.

There's no point in talking to these people. As I get older and closer to retirement I don't need to group-affiliate any more. I think that's why I'm writing letters to Trotskyists. Despite being wrong, they are at least honest and committed people--neither stupid nor evil.

I disagree with how Mr. Kling brings social science to his argument--I think he overstates the importance of Jonathan Haidt. But I’m out of space for now, so that discussion will have to wait for another time.

Further Reading

Wednesday, April 17, 2013

Marxism Without The Leninism

When I first joined the Young Socialist Alliance (YSA) in 1969, we encountered a group of very old (they must have been at least fifty!) socialists. They were members of the Socialist Labor Party (SLP), and they met monthly at the public library in downtown Portland. Occasionally we'd talk to them and even buy a copy of their newspaper, The Weekly People.

If you've read one issue of The Weekly People, you've read them all. The SLP's political program had almost nothing to do with current events, so there was little news in the paper. Instead, it read very much like some Jehovah's Witness tract--the Truth laid bare for all to see if only you have eyes.

The Party is based on the ideas of Daniel DeLeon (interesting Wikipedia article here), who combined Marxist theory with Wobbly sensibilities. The SLP believes in One Big Union, but instead of the IWW, it is the Socialist International Union (SIU). The key, according to every issue of The Weekly People, is to show how the SIU can be organized to effect workers taking over the means of production.

And that led directly to the most prominent feature of every issue of The Weekly People--organization charts (pdf). That's it--with a perfectly constructed organization chart, utopia can be achieved in America today. It's that simple.

It's important to point out that the SLP are not Leninist revolutionaries. They foresee no violence. It's not that they're pacifists, but they think the properly organized SIU will simply vote the capitalists out of the factory. No vanguard Party is necessary, nor is overthrowing the state, but instead the masses need to be properly organized.

The SLP comrades were nice people. How could it be otherwise? They proposed a simple, democratic, non-violent route to a socialist society. "Marxism without the Leninism" is the way I recall them describing themselves. Indeed, Leninism is the totalitarian doctrine--eliminate that and all that's left is a feel-good, harmless, free-unicorns-for-everybody sect. I have argued before that Marxism will never die--the we're poor because the rich people stole all the money meme is so easy to believe. But Leninism (and hence, Trotskyism) will die. So why isn't the SLP more popular?

Partly that's because they're just so easy to make fun of. We, being young and self-righteous, teased them mercilessly. They weren't happy with us, but they didn't run away, either.

And then partly it's because they've aged out of activity. They were middle aged in the 70s, which puts them into their 80s today. Once an organization passes a certain demographic, it becomes impossible for them to recruit younger people. That fate was obvious to us looking at the SLP in the 1970s, and it appears that the Socialist Workers Party is going the same direction. Indeed, I think that's what will happen to all so-called vanguard Parties.

I don't know when The People ceased to be a weekly. They first started publishing on-line in 1999, and by that point it was a monthly. In 2008 they dropped print publication and it became an internet quarterly. The last issue of that appeared in Spring, 2011. Apparently anybody with any journalism skills has since passed away.

Their website contains this very interesting document, entitled Technology & Job Loss. (Indeed, that topic also concerns the last published issue (pdf) of The People, in a letter exchange between a member and National Secretary Robert Bills.)  What the document demonstrates is how and why socialism is inherently Luddite.

The document's lede:
Computers, cell phones and the Internet are just a few of the technological marvels created over the last few decades that have brought tremendous changes into our lives. Now we can communicate with our families, friends and coworkers from anywhere at anytime just by picking up a cell phone or connecting to the Internet. 
These and other new “consumer” technologies unquestionably have eased the lives of millions of people in many ways. New technology, however, has not been restricted to consumer items. Industry also has seen its share of advances with effects that have devastated the lives of millions of workers.
Further along, they say
Labor-displacing technology is becoming more evident even in our everyday lives. Self-service grocery checkout lanes are replacing clerks, ATM machines are replacing bank tellers and automated airline kiosks are replacing ticket agents. The driving force behind these technological advances is the elimination labor. You know it, we know it and the ruling class that “earns” its living by destroying yours knows it too.
 So let's reduce the argument to bullet points:

  • Automation is good for consumers.
  • Automation is bad for workers because it leads to unemployment.
  • The capitalists want to save on labor expenses.
  • To save on labor, capitalists invest in automation.
  • Their savings comes out of your hide.
  • Therefore workers should oppose automation.
Now the first point--automation is good for consumers--is true because automation lowers the cost of doing business. It's convenient for consumers to be able to use a cell phone, and it saves money to use automated check-out lanes. What Marxists fail to notice is that all economy exists for the benefit of consumers--what's good for consumers is good for people.

The second point is unproven, but historically it's false. The rise of the automobile certainly increase unemployment amongst blacksmiths, but it didn't increase unemployment overall. Likewise, the demise of the checkout clerk will lead to a smaller retail workforce, but the consumer savings will result in money being spent on something else. For the current, very drastic round of automation, it is not clear whether the historical precedent will hold. (I think it will.)

The third and fourth points are also true, but the capitalists are not the primary beneficiaries. In the long term (not very long), price competition will lower prices to account for the cheaper labor costs. Thus the capitalist benefits by remaining competitive, but he doesn't make any extra profit. Walmart, for example, admits that upfront, and automatically passes any labor savings directly on to the consumer.

The fifth point is true for workers narrowly construed. The benefits of the automobile certainly came out of the blacksmiths' hide. But it dramatically raised the standard of living for everybody else in society, including, eventually, former blacksmiths.

And the last point is just a silly example if you carry things to illogical extremes. At what point do we turn off new technology? Will we really be richer if we reinstate human telephone operators as opposed to automatic switching? The Amish have chosen this path--they have turned off innovation at the end of the nineteenth century. Of course the Amish are correspondingly poor.

By ignoring benefits to the consumer, socialists completely lose any value in innovation. Workers and capitalists are not the only economic actors. The most important actor is the consumer, because it is by the consumer that we measure the standard of living.

Anyway, I'm sorry to see the Socialist Labor Party go. Unlike Trotskyists, they are an honorable and harmless sect. They're the oldest socialist party in the US, dating from 1876. They represent a unique part in American history. I'll miss them.

Maybe I should put my money where my mouth is? After all, I'm almost old enough to join them.

Further Reading:

Saturday, April 13, 2013

Women's Lib

Feminism comes in a variety of flavors, ranging from the laudable (even heroic, as in the case of Ayaan Hirsi Ali), to the harmlessly silly (Slutwalks), to the downright malign (e.g., academic feminism). But the Marxist version of feminism occupies its own little circle of hell, and that's where we now turn our attention. The reason is this excerpt from the Oppression of Women resolution presented at Socialist Action's 2012 convention. The author is Christine Marie.

I guess it shouldn't surprise anyone that Marxists regard labor as the epitome of humanity--that trait that most distinguishes us from animals. It is our ability to work for a living that drives civilization, creates wealth and culture, and enables freedom. If only it weren't for those &*#% capitalists stealing the value of our labor and exploiting us, then all would be well.

I suppose the more academic Marxists have mellowed a bit, and acknowledge that there are other values in human life besides labor, and hence work is only first among equals in the pantheon of good things. But Socialist Action (SA), being a political organization, simplifies things for us masses. By their lights, we don't work to live, we live to work. Our work is all that counts.

The goal, therefore, is to put as much of human activity into the paid labor force as possible. Parents shouldn't take care of their own children. Instead, they should send the poor dears to paid daycare centers, where union-scale workers (gender-neutral, of course) will raise them in a professional, politically correct, and loving manner, all supervised by the workers and farmers government.

But the poor dears are themselves a problem. Procreation, unfortunately, distinguishes between male and female, and so inhibits the free movement of women into the paid labor force. Thus birth control and abortion are to be championed. There is, after all, no better baby than a dead baby--how can you get any work done with those little tykes yammering and whining all day long. Eventually I suppose we'll refine the art of test tube babies to the point where both women and men are rendered redundant.

In the meantime, the people who get women pregnant are men, those evil bastards. It's precisely that kind of discrimination that dooms women to earn only 76 cents for every man's dollar. To remedy this egregious fact of life a comprehensive affirmative action plan for women is needed. Some sort of equal pay for equal work scheme has to be devised, so even though a woman takes a six month maternity leave, she should earn just as much as the guy laying bricks. Or something like that.

So I'm not going through this article bullet by bullet--it's too boring, and you can read it yourself if you really want to. It's all the same Trotskyist boilerplate that I remember from my youth. I'll limit this post to two topics: abortion and affirmative action.

The abortion issue has been decided in this country. Even if Roe v. Wade were overturned tomorrow, by the end of the year all fifty state legislatures will craft laws that basically reestablish the status quo. Nobody apart from some Taliban-style fundamentalists wants to ban abortion outright. And likewise, very few are comfortable with expanding abortion "rights" beyond the first three months of pregnancy. A large majority of the American people support the existing framework, however reluctantly.

I am part of that majority. I reject the facile equation between abortion and murder. Aborting a ten-week old fetus is just not the same thing as murdering a ten-year old child. It just isn't--get over it. By the same token, I reject the facile equation between abortion and health care. Unlike standard medical care, abortion is fraught with moral choices and competing interests between woman, child, and family. Abortion is not the same thing as gall bladder surgery. It just isn't--get over it.

So I agree with Bill Clinton--abortion should be safe, legal, and rare. I'll add another term to that list: shameful. My wife and I have a friend who, under great pressure from her husband of the time, chose to abort her second child. I thought that was tragic then, and I think our friend thinks so now (though I have not discussed it with her). Her daughter has no siblings, and her grandchildren will have no cousins or aunts or uncles. I find that terribly sad. People who have abortions have failed in a fundamental human activity. I realize it's sometimes necessary and one shouldn't cast blame, but it's never a good thing. To abort a child because of some short term financial exigency as our friend did, is, I think, deeply shameful.

SA casts it in terms of "reproductive freedom." They mean a freedom to engage in the paid labor force on terms equal with men. They accompany this with some very bizarre economic reasoning arguing that capitalists oppose reproductive freedom because it hurts their profits. The reasoning falls short, but I'll have to save that for some future post. Personally, I think "reproductive freedom" (at least regards abortion) is true only in the Janis Joplin sense: "Freedom's just another word for nothing left to lose."

I used to get very upset by affirmative action. University campuses are ground zero for the effort, and there is no question that affirmative action has affected my career negatively. Not disastrously, mind you, for I am now a full professor with a six figure salary, who served in academic administration for a decade. But were I female I would be at a more prestigious institution, would have advanced further through the ranks, and would have had a much easier time finding jobs.

I resented it partly because it hurt my career, but also because I didn't see why I should be blamed for every body else's problems just because I'm a white male. I am no more responsible for slavery than you are (regardless of your race or gender), and I've never beaten my wife. I have tried to treat all my colleagues and subordinates as fairly and honestly as possible--and I think most college administrators make that same effort. It's bizarre that one third of the population (white males) should be collectively forced to sacrifice for the remaining two thirds of supposedly oppressed people.

SA maintains that "[a]n effective working-class program ... for affirmative action to achieve gender equality in all trades and professions that we are fighting to maintain" is necessary. I don't see how affirmative action enhances gender equality at all. All it does is breed resentment and promotion by gender rather than merit.

Further Reading:

Wednesday, April 10, 2013

Collapsing Pensions

What a difference forty years makes.

When I was a Trotskyist I found articles about pensions and benefits boring. Who cares about all that stuff? I thought to my twenty-year-old self. Now I care, though I'm still afraid the topic will put my younger readers to sleep.

This post is based on three recent articles. The first, from The Militant by Alyson Kennedy, is an account of a demonstration in Charleston, WV, by United Mine Workers (UMWA) retirees surviving on a pension from the bankrupt Patriot Coal Co. The second, from Socialist Viewpoint, is by the irrepressible Gregg Shotwell and concerns Michigan's new Right To Work For Less law. And finally, is an article in today's Wall Street Journal by Andy Kessler on the Pension Rate-Of-Return Fantasy.

Frankly, the retired mine workers are mostly screwed--either them or the taxpayers. Kennedy does a pretty good job in laying out the problems:
In 2007 Peabody Energy spun off most of its union mines to form Patriot Coal Corp. A year later Patriot bought Magnum Coal Co., an Arch Coal spinoff. More than 90 percent of “Patriot” retirees today never actually worked for Patriot.
Of course Patriot's first obligation is to shareholders, and not to retirees. So naturally the miners get the short end of the stick. But it gets worse:
Both the number of coal miners and the proportion who are members of the UMWA has declined dramatically over recent decades. Only about one-quarter of working miners are members of the UMWA today, down from 43 percent in 1994. Today there are about 82,000 active miners in the U.S., down from some 89,000 in January of last year and from 175,000 30 years ago.
Kennedy says that Patriot is responsible for 10,000 UMWA retirees with 13,000 dependents, many of whom suffer from black lung-related illnesses. She doesn't say that Patriot Coal Co. today employs a grand total of 4,100 people, only 1,600 of whom are in the UMWA. So Patriot is responsible for six times as many retirees as current employees--there is no way in Hades that this is going to end well.

The only bright note in Kennedy's article is

Sen. Jay Rockefeller, in a videotaped message, promised to press for the Coalfield Accountability and Retired Employee Act, which would transfer money from the Abandoned Mine Lands fund, a government fund for restoration of mined land based on taxing coal production, to the UMWA 1974 Pension Plan.
The CARE Act is supposed to prop up the union’s pension plan — which faces insolvency as a result of declining unionization and funds lost through speculative investments — as well as cover retirees who lose benefits when coal bosses file for bankruptcy and reduce taxes on employer payments to benefit plans.
Ah yes--those funds lost through "speculative investments," as if Patriot had taken the pension funds to Las Vegas for vacation. And that brings us to Kessler's article:
In June of 2012, Calpers lowered the expected rate of return on its portfolio to 7.5% from 7.75%. Mr. Milligan suggested 7.25%. Calpers had last dropped the rate in 2004, from 8.25%. But even the 7.5% return is fiction. Wall Street would laugh if the matter weren't so serious.
The right number is probably 3%.
For the past 30 years the rate of return on investments has averaged about 8% annually. Pension plans have invested with that number in mind--at that rate your money doubles in about eight years. But since 2008 the rate of return is only about 3%, and doubling your money takes more than 20 years. Naturally all kinds of pension plans are now underfunded.

The common solution for this touted by the "bourgeois media" (Trotsky-talk for non-Communist newspapers) is a defined contribution plan rather than a defined benefit plan. This puts pension fund risk on the backs of the employee rather than the company, and unions tend to oppose it accordingly. After all, if the rate of return declines to 3%, that's going to affect the defined contribution plan just as much.

But I will argue that on average, employees will be better off with a defined contribution plan. There are three reasons:

  1. Employees will pay more attention to their investments than some hired pension manager will. They are less likely to follow the herd. In some cases they'll make big mistakes and lose a lot of money, but in most cases they'll come out ahead. Professional managers can lose their jobs by not following the herd, even if the know the herd is wrong. They won't buck the trend.
  2. My defined contribution pension plan is mostly invested in TIAA-CREF (a fund for teachers). TIAA-CREF's fiduciary responsibility is to its investors. This is different from Patriot Coal, who a) has a primary fiduciary responsibility to shareholders, and b) doesn't really know how to manage a pension plan to begin with. They're going to screw it up.
  3. Defined benefit plans give everybody an incentive to lie. This is most evident for the public employee unions. The union bigwigs want to brag about their bargaining chops and will negotiate the biggest pension deal they can, even if the math makes it totally impossible. And elected politicians are always generous with taxpayers money, especially since the taxpayers won't get the bill until twenty years later. Thus both the unions and the politicians have every reason to make promises that can't possibly be kept. To a lesser extent, that's true in negotiations between the UMWA and Peabody Coal. Whoever did the negotiation for the company is long since retired (or deceased) and completely out of the loop. The workers are left out to dry. Indeed, Peabody Coal doesn't even exist anymore.
The promises in defined benefit plans are not worth the paper they're printed on. Especially in the public sector, a large number of plans are simply going to default. It looks to me like the UMWA pensions are headed in the same direction. Think Cyprus, folks.

In a slightly different vein, Mr. Shotwell writes a totally depressing article about what he calls the Right To Work For Less law in Michigan. Its real moniker is the Right To Work law, but Mr. Shotwell's addendum is accurate. Wages will go down. But wages will go down anyway. The union scale is just unaffordable, and those jobs will be either out-sourced or automated or both. 

I think Mr. Shotwell pretty much throws in the towel in this article. His purpose is to justify paying union dues in a Right-to-Work state. He can't really give a good reason. The best he comes up with is this:
A union is forged in trust and camaraderie. If a union stands for anything other than fellowship between workers, it’s probably a front for a commercial enterprise.
That's just it. All a union can provide these days is trust and camaraderie. That's something, but it won't pay the bills.

Further Reading

Saturday, April 6, 2013

The Decline of American Trotskyism

Where were you on April 30th, 1975?

That was the day Saigon fell. For reasons I no longer recall, I was by myself in some fleabag motel in rural Utah. As I watched the TV news, including the now iconic footage of the last American helicopter leaving the embassy, I stood up and cheered. Hooray for the end of the war. Hooray for the Vietcong and the heroic Vietnamese people. Hooray for the victory of world socialism.

That was the day I started my trajectory towards the Republican Party. And, I believe that day represented the high water mark for global Trotskyism.

Another red letter day in my life was April 24th, 1971. Along with 300,000 other people, I demonstrated against the war in San Francisco. Add the 500,000 who marched in Washington, it was the largest antiwar demonstration ever in US history. The effort was organized in large part by the Socialist Workers Party (SWP) and the Young Socialist Alliance (YSA), albeit with many allies. April 24th represents the short-lived apogee of Trotskyist influence in the US, a fact noted by none other than J. Edgar Hoover.

After the April 24th demonstration, the YSA may have had 2,000 members or more. Most of them, like me, were to leave the Movement in a few years. Why?

Now Trotskyist dogma has it that success breeds more success. The Party took significant credit for forcing the US out of Vietnam, and further, if the American defeat was an anti-imperialist victory, then this should lead to a bigger Movement and a greater radicalization. On this theory, the Party initiated "The Turn," that is an all-out effort to engage the American working class. Beginning in 1975, we were all pressed to get jobs organized by industrial trade unions. Also at this time the Party physically relocated to "working class" areas--thus was founded the Hyde Park branch on Chicago's South Side, where I was assigned.

The Turn was an abysmal failure, and the SWP gradually became the politically irrelevant organization it is today. Conventional wisdom has it that The Turn was based on a prediction--the "inevitable" radicalization of the working class--rather than any reality. On the basis of this prediction the Party suddenly abandoned the campus movement. By the time reality intervened, the Party had lost whatever momentum it had obtained.

After the fall of Saigon, the campus movement just died. Before that date I was part of world history--a movement much bigger than just my comrades and me. After that date, I felt like I was a member of a tiny sect, rather like the Hare Krishnas. Far from being inspired by the victory of the Vietcong, instead it was very demoralizing. We learned that, while we may have tapped into antiwar sentiment, our sympathies for the Khmer Rouge were well out of the mainstream. The news from Indochina didn't help--reports of mass murder in Cambodia and the boat people exodus from Vietnam rather dampened enthusiasm. Even The Militant issued a halfhearted retraction of its long-time support for the Khmer Rouge, blaming US bombing for the setback.

So the Party was faced with 2,000 YSA members with nothing to do. Further, we were no longer recruiting from campuses, which means comrades were getting older. I turned 24 in 1975; my days as a campus radical were surely numbered. One can fake it at 25, but by age 30 it becomes harder to imitate a student. All those people would fade away. Something had to be done, and quickly. And hence the fast and very deliberate turn to the "working class." It didn't work, but then doing nothing wouldn't have worked, either.

The Turn was very controversial within the Party. Many thought that simply abandoning the campus movement (after all that hard work) was a big mistake. At this point I am no longer an eyewitness, but I gather that Socialist Action (SA) split from the SWP around this issue in 1983. (They say that it's because the SWP "abandoned" Trotskyism, but I think that's a rationalization.) The nice thing is we have something that historians have always dreamed of--a controlled experiment. One Party (SWP) turned toward the unions, and the other Party (SA) kept a foot on campus. How have their fates differed?

The SWP has certainly gotten the worst of it. Despite enormous efforts the Turn simply didn't work. There was no radicalization among the working class, at least as represented by industrial unions. Ronald Reagan defeated the Air Traffic Controllers, and the Eastern Airlines Machinist's strike ended in a major defeat. Local P-9 of the United Food and Commercial Workers Union went on strike against Hormel in Austin, MN. That led to some exciting times, but ultimately the strike was defeated.

I can't think of a single successful strike in which the SWP participated. Needless to say, they got demoralized, which led to their de facto withdrawal from active union work. No wonder the Party started just "talking socialism." They have not recruited new members. Today comrades have aged out of union activism, with most of them being in their 60s. Unsurprisingly union work has largely disappeared from The Militant. 

Socialist Action appears to have done better. With the end of the war, they had to find a new connection to campus radicals--and hence their turn to radical environmentalism. Indeed, there isn’t an environmentalist wheeze that they haven't bought in to, from genetically modified foods, to global warming, to anti-fracking. This is the primary political difference between SA and the SWP. The SA embraces environmentalism, while the SWP views it as a petty bourgeois movement. The former is appealing to students (who didn't used to care about jobs); the latter tries to win workers, who very much care about the jobs that radical environmentalism kills.

It is very difficult to estimate the demographics of Socialist Action. They no longer publish a list of chapters or branches, and they are very coy about their membership. But searching their web page for "ysa" (here standing for "Youth for Socialist Action") yields only a few hits from the recent past. It appears that SA's YSA is nearly as moribund as that from the SWP. So long term, they suffer from the same demographic problems as the SWP.

Nevertheless, it is clear that SA is younger than the SWP. They have an impressive list of 30-somethings in their movement, which the SWP lacks. So it will be awhile before they age out of activity in the way the SWP has. That said, I think their long term future is bleak. It certainly is not obvious that socialism is a cure for environmental problems, and postponing such a cure until after the World Revolution won't appeal to student radicals who want a more immediate solution. And further, environmentalism does compete with economic growth, and students today are much more interested in jobs than they used to be. I don't think it's a winning cause.

There are other things that work against world Trotskyism, like the collapse of Soviet and Chinese communism. In the early 70s, in an effort to talk me out of my folly, my dad said that Trotsky was an historical figure, rather like Robbespierre, and not a relevant model for a modern political movement. That may not have been true in 1970, but it is certainly true today. So if I had to bet on one of these Parties being successful, I'd put my money on the SWP, if only because they've "abandoned Trotskyism,"

But I don't think any of these organizations will have any impact on America's future.

Further Reading:

Friday, April 5, 2013

Seeking The MRS Degree

Susan Patton recently wrote a now infamous letter to the Daily Princetonian urging young, female Princetonians to make sure they find a husband before they graduate. It brings to mind an essay I wrote some years back but never published. OK--it's off topic for this blog, but I'll have something up about Trotskyism before the weekend is out. Meanwhile, this might just entertain...

There’s a college near where I live whose name you would all recognize. I withhold it to protect my privacy. It used to be a women’s school, but some decades ago it generously agreed to admit men. Perhaps 25% of students are male. This is a very elite, expensive, private school. I recently spoke with a faculty member there, a charming woman named Carole who teaches classical Greek and Latin. These topics, as you all know, are in high demand on today’s marketplace.

Why? Why would a young woman, or her parents, spend $50K/year to study, among other things, Greek or Latin? Not that there’s anything wrong with learning that; I briefly thought about studying Latin myself once. But as EduBubble never tires of pointing out, the price is just too damn high. So either the young woman is stupid, or her parents are even dumber, or there are a lot of really, really clueless employers out there who put just ordinary stupidity to shame.

Or not. I have mockingly referred to this college as “a finishing school for young ladies.” It was a sexist joke that I’d tell to my friends, and not intended seriously. But as I talked to Carole it dawned on me that it’s true. This name-brand college - post-modern, ultra-feminist, career-woman pretensions notwithstanding - is, indeed, a finishing school for young ladies. And as such it is likely worth every penny in tuition it charges.

Suppose you are a not-exceptionally-beautiful young woman from an upper-middle-class family who prefers not to get her hands dirty. Bravado talk notwithstanding, she needs to show that she will be an excellent wife and mother for a man of some substance - a doctor, say. Such gentleman - our lady can only hope - will not be attracted to the bimbo, and if she can establish her credential as a piano-playing, Latin-spouting, tasteful and classy young woman, then she has a chance. Latin may have no purchase in the marketplace, but when it comes to educating a doctor’s son or daughter, it is a very valuable skill indeed. In the marriage market Latin rules over C++ any day.

And so there it is. As a finishing school for young ladies it’s a very good one. This is nothing to be ashamed of, and they should be ashamed of being ashamed of it. There is nothing wrong with the business model, and this college will never go bankrupt.

Wednesday, April 3, 2013

Barry Sheppard: A Wasted Life

Like many elderly people, Barry Sheppard has written his memoirs (here and here).

My grandfather did the same, though unless you share his passion for lumber mill technology from 1910 through 1940, it will not long detain you. My mother also wrote a memoir--she is a much better writer than either my grandfather or Mr. Sheppard, and while her life was unusual, it isn't significant. I once read the reminiscences of a very modestly successful businessman--also insignificant, but spellbindingly written. Only a few in this genre have more than sentimental value--Sam Walton's ghostwritten effort comes to mind. With all of these books--whether significant or not--my closing thoughts are usually this was a life well lived.

But not so with Mr. Sheppard's opus, to which my reaction is pathetic. Instead of admiration, I feel sorry for him.


It's not for technical reasons. Mr. Sheppard is a capable, if pedestrian, writer. The book is not uneventful--Mr. Sheppard did interesting things, including two round-the-world trips back when such were relatively rare. And it certainly isn't for lack of detail--quite the opposite. Indeed, it comes in two volumes, and I must now admit that I haven't read the second one. I have read the comprehensive review here.

Instead, unlike most memoirists, Mr. Sheppard suffers from a very weird form of megalomania. It's not that he exaggerates his own abilities, but he hugely overstates the importance of his work. His goal, after all, is to overthrow the existing world order and replace it with something different. He is simply delusional. His delusions result in a boring book, and a life's work utterly devoid of wisdom, moral purpose, or meaning.

Mr. Sheppard, born in New Jersey in 1937, graduated with a degree in mathematics from MIT. There he met Peter Camejo, a fellow student, and together they gravitated toward Trotskyism. Mr. Sheppard played a lead role in the founding of the Young Socialist Alliance (YSA) in 1960, and then advanced to a leadership role in the Socialist Workers Party (SWP). He became National Organization Secretary (sort of like senior vice president) of the SWP in 1970. The SWP was loosely aligned with the world Trotskyist movement, called the Fourth International, and Mr. Sheppard represented the Party at the International headquarters in Brussels for several years.

A key indicator of the book's weakness is that nearly all the references in the bibliography are from The Militant, or from other publications of the SWP, or related organizations. In other words, Mr. Sheppard reads only what he or his colleagues have themselves written. There is no critical distance, no contrary opinion, indeed, no knowledge whatsoever. He's spent his entire life inside an echo chamber. This leads to some wacko statements that are just assumed to be self-evident. For example, on a visit to Calcutta in 1969, he writes

In Calcutta in Bengal on the east coast of India, there was even more poverty and worse living conditions than in Bombay. I met Silan Banerjee, the leader of the group there, and we traveled around the city by taxi. I was astounded when we went around a huge traffic circle around a park, the centerpiece of which was a statue of Queen Victoria seated on her throne. There she was in all her regal splendor in the midst of so much squalor for which the British were responsible.
Now how are the British responsible for the squalor in Calcutta? Was Calcutta a fabulously wealthy city prior to the British arrival? Hardly--it was the British that founded the city in the 18th Century. People moved there for the same reasons people move to cities today--for jobs and opportunities. Kolkata, as it's now known, has 14 million inhabitants. Further, 1969 was more than 20 years after independence. If the Indians wanted to tear down Queen Victoria's statue, they had plenty of opportunities to do so. The fact that she still sits there, in front of Victoria Memorial Hall, says something about the Indian view of the British. It is obvious that Mr. Sheppard never read anything, nor did he even talk to anybody before forming his silly opinion.

The whole book is like that--a mile wide and an inch deep--full of ill-considered opinions about which Mr. Sheppard knows nothing.

Mr. Sheppard clearly believes his own propaganda. Indeed, he must be guided by the Holy Spirit or something, because in the entire first volume it is impossible for him to make an important mistake. We read about the Schactmanites, and the Burnhamites, and the Cochranites, the Swabeck group, the Robertsonites and the Wohlforthites, not to mention the Weiss clique. Those are just factions within the SWP. In the larger Left were various splinters of SDS, the Progressive Labor Party, and the Communist Party (known collectively as "opponents.") Through all this hubbub and turmoil, Mr. Sheppard keeps a firm hold on the Truth. To him and his close friends, and to them alone, is True Revolutionary Doctrine revealed.

And indeed, that is the whole purpose of the memoir. Younger comrades are supposed to read these words and learn how Truth was maintained for twenty five years in the SWP.

Unlike with my ancestors, there is no sentimental purpose. And unlike Mr. Walton, Sheppard accomplished precisely nothing. And that's what makes it so pathetic. Here's a guy who actually believes he's got a stranglehold on Truth, but over his entire career has absolutely nothing to show for it. There is no mass political movement. The organization to which he has dedicated his life is today irrelevant (he bitterly refers to it as a cult). The Fourth International is in disarray. At no time and in no place has Trotskyism ever been an important actor on the world stage. It's a total waste.

Few of us lead important lives. Mr. Sheppard has led an unimportant life, though he thinks he's made some huge contribution. He hasn't. The guy's a loser. But that's not the worst of it. He writes
The paper [Boston Globe] wrote, the SWP “flies Vietcong flags and roots for a Cong victory in Vietnam.” The first of these assertions was generally not true, but the second one certainly was — and we were now far from alone in this opinion among opponents of the war.
And that's just it. The SWP and the YSA were never anti-war. They were very much pro-war, but just for the other side. For twenty years, Mr. Sheppard and the Party supported the Vietcong and the Khmer Rouge. I don't blame Mr. Sheppard for the killing fields--he's not important enough to bear any responsibility. I don't even blame Jane Fonda. But how can one go through a long life and say I supported the organization responsible for the mass slaughter of two million innocent people. In my own little way, I helped that organization win their war. Is this something to be proud of?

I pity Mr. Sheppard. What a wasted life.

Update: You can download the first volume of Mr. Sheppard's book in pdf format here for free. Don't worry--it's legal. The second volume is not for free and is overpriced, which is why I haven't read it yet. I do wish both books were available on Kindle (I would pay for that).