Wednesday, June 7, 2017

Abandoning the Working Class!

As of about three weeks ago I've been retired. True, I'm still on the College's payroll until September 1st, but that's because as a professor I get paid over the summer anyway. My work obligations are finished.

We moved into a new house--much more suitable for an older couple, and closer to the City where our daughter and her family live. I've spent my time settling in, tending our new (much smaller) garden, and assisting my wife in downsizing our possessions. My ambitions are to learn Python programming, to start baking bread, to take up gardening more seriously, and to write more (including this blog), perhaps even a book.

And to do more reading. So far I've read The Count of Monte Cristo, Tyler Cowen's The Complacent Class (which I reviewed here), and I'm halfway through Sebastian Mallaby's excellent biography of Alan Greenspan, The Man Who Knew. I guess this betrays my continued interest in economics.

But the key question--one of political import--is what happens to my class character? By abandoning the working class have I become declassed? Am I now a member of the lumpen proletariat, what not having to set an alarm clock anymore (one of the biggest unsung benefits of retirement)? Or do I retain my prior class affiliation, which is at least nominally working class?

And since one's political opinion is supposedly a function of class character, will my political views now shift in some way? Will I, for example, break down and join that bastion of liberal stupidity, the AARP? (God I hope not!)

I don't think Marx, Engels or Lenin had much to say about retirement. It wasn't much of a thing prior to the 1930s--life expectancy wasn't that long, and productivity wasn't high enough to support a life of leisure. People worked until they dropped dead.

By the 1970s nobody questioned retirement, but instead mandatory retirement became the issue. Should people be forced to retire at age 65? As best as I can gather from bits of this book available on-line, former Congressman Claude Pepper led the effort to abolish any mandatory retirement age for tenured college faculty. So I have colleagues who have kept working long past their sell-by date, much to the detriment of the institution and to the disadvantage of students. As a former college administrator and as a citizen I do think colleges should be allowed to revoke tenure at age 65 or 70, retaining the option to keep employees on via annual contracts. (Actually, I'm not in favor of tenure at all, which renders the question moot.)

As for my Trotskyist friends, they are astonishingly silent on the retirement question. This is odd given that their median age is probably over sixty, and may even be approaching 70. In a word, they're mostly retired.

The most forthcoming is Louis Proyect, who retired back in 2012. Given that he was born in 1945 (three years younger than Prince Charles), he is six years older than me. He reports that he enjoyed his job, relished his colleagues, and especially respected his boss--odd things for an unrepentant Marxist to own up to. Though he admits he'd rather be retired. Beyond a discussion of benefits packages (and the shortcomings of Medicare), he has nothing political to say about his new status.

Like me, Mr. Proyect was at least nominally working class--he worked for a paycheck. That said, many (including me, mostly just to tease) have accused him of being petty bourgeois. Certainly our former comrades in the Socialist Workers Party (SWP) would call him that, what with his interest in Syrian politics, philosophical disputation, and obscure histories.

Jeff Mackler, the leader of Socialist Action (SA), is (like me) a retired teacher. From this picture he looks to be about seventy years old. When I joined in 1969 (at age 18) I was among the youngest comrades. Mr. Mackler, already in the Movement, is certainly older than I am.

So California teachers can retire with a full (very generous) pension after 30 years of service. If he started teaching when he was 25, he retired at age 55, or fifteen years ago. No wonder he can spend full time proselytizing for SA.

Mr. Mackler almost certainly receives a state pension. I'm different in that I opted for a 401(K) instead, which puts us on different sides of an important issue--what I term the worker/parasite divide. Let's not make too big a deal out of this: Mr. Mackler and I were both public employees and lived off the taxpayers' nickel (though my institution also charged tuition). In that sense we were both parasites. But Jeff continues to receive a check from the State of California, drawing on their woefully underfunded pension system, which means he's depriving today's women and children of much needed social benefits.

I, on the other hand, have saved for my own retirement, albeit with considerable help from the state. But as of now the State of New York owes me not a penny. Were their pension plan to go broke (less likely than in California, but still possible) I will remain whole (or at least as whole as the economy). So unlike Mr. Mackler, I benefit from lower taxes and less money spent on public employees, whereas he's in the other camp. He's a parasite--I'm a "worker."

Mr. Mackler, as far as I know, has never commented on retirement--either his own or on the political status of retirees.

Dianne Feeley is an editor of Solidarity's paper Against the Current. I commented (favorably) on one of her articles here (the link to her article is dead). She describes herself as a retired auto worker, which I remarked was the best kind of auto worker to be. Ms. Feeley is definitely older than I am--she's a former partner of Barry Sheppard, who turns 80 this year.

If anybody is working class, it's Ms. Feeley. I don't know what the rules for retirement are through the UAW, but if it's longer than 30 years I'd be surprised. And that's deserved--auto workers have a physically demanding job. Ms. Feeley's pension is not publicly financed, but is instead a private plan. The problem is that very few private pensions are fully funded, which means her future benefits depend on the fortunes of today's workers, who will have to pony up money for her. So, as happened with mine workers' pensions, her plan could go belly-up. But most private pension plans are insured by the federal government, who promises to make good on any debt--we'll see if that happens. (I think, but am not sure, that my retirement savings are similarly insured.) In the event, Ms. Feeley and I are on the same side of the parasite/worker line--we both benefit from lower taxes and less spending on public employees.

That leaves Jack Barnes, National Secretary of the SWP, who hasn't retired yet, despite turning 77 this year. He became National Secretary in 45 years ago and has been living off his comrades' nickel ever since, sometimes quite luxuriously. (See here and here.) I guess that's fine as long as the comrades are willing to put up with that.

But this guy has never had a job (at least not since his twenties), and therefore has no real pension. Though who knows what he's saved up.

None of these people have said anything about the class nature of retirees.

Further Reading:

Wednesday, May 31, 2017

Book Review: The Complacent Class

Don't get me wrong--I thoroughly enjoyed reading Tyler Cowen's recent book, The Complacent Class. It's full of facts, figures, recent trends, and conversation that is all food for thought, presented in a lively and entertaining style. As usual, Mr. Cowen takes a relatively pessimistic view of our current circumstance, but unlike with some of his previous books, I am more willing to accept it.

Still, I got issues, the first being the title. The word class (especially coming from an economist) implies some kind of socioeconomic status, or perhaps one of the poles in a dialectical struggle. David Brooks, in his classic Bobos in Paradise, describes just such a group, bourgeois bohemians, whom he could have dubbed complacent if he'd wanted to.

But not so in Mr. Cowen's book. Never does he define who belongs to this class, nor do we meet any doughty dynamicists who stand in opposition. We're all more or less happy with the status quo, regardless of social position. It's not so much a class that he's talking about, but more an era or a zeitgeist. I'll happily concede that The Complacent Zeitgeist doesn't trip off the tongue, so I don't totally blame Mr. Cowen for his moniker. But let's be clear: it's a literary conceit, and not a term or category to be taken seriously.

Another (unwieldy) title Mr. Cowen could have chosen is The Herrnstein Centrifuge Goes Into Overdrive. For his book describes more or less precisely what Richard Herrnstein and Charles Murray predicted back in 1994 in The Bell Curve. Mr. Herrnstein forecast that people with high IQs would marry other people with high IQs, they would have really smart children and then segregate themselves into neighborhoods with other people with really smart children. This is what has happened, as documented by Mr. Cowen, and also by Charles Murray himself in Coming Apart.

Arguably The Bell Curve oversimplified things a bit by emphasizing only IQ. In reality, social segregation depends on lots of personality traits, not just IQ. As Mr. Cowen says,
For instance, intelligence, ambition, conscientiousness, and some personality traits all seem to possess some degree of heritability or at least intergenerational transmission. We have perhaps the best estimates for intelligence, and there the degree of heritability seems to run in the range of 40 to 60 percent, depending on which studies you consult.
Mr. Cowen takes Herrnstein's idea and generalizes it into what he calls matching. The Internet allows us much greater choice, not just in marriage partners, but in all sorts of other things--where to live, schools, restaurant choices, even pets. The net result is that people are more segregated than ever, with ever more power to select their friends, neighbors, and lifestyles--the centrifuge on steroids.

He has some new (to me) things to say about matching. It is well known that measured total factor productivity has declined markedly since 1970. Why? Mr. Cowen treats matching not just as a social phenomenon, but also as an economic one. He cites the usual litany of improvements in our lives that the statistics may not capture, e.g., the ready availability of free search engines. But then he suggests that the ability to match is much more important than anything on that usual list. If there really is an improvement in productivity, it likely shows up in better matching as much as anyplace else.

I think this is an important point. Thus a very important new aspect to our lives--arguably the most important new aspect to our lives--contributes nothing to GDP. So economic statistics don't catch the important consequences of the IT revolution.

But perhaps Mr. Cowen doesn't take his insight as far as he could. For example, Google-Waze technology has noticeably improved my life by sparing me many hours sitting in traffic jams. I pay (nearly) nothing for this service. But by participating in Waze, my data is used to to help other people match their travel to available roadways--I'm trading my information (my location and speed in traffic) for their information (fastest possible route to my destination). So this is in effect a direct consumer to consumer exchange, albeit with no money changing hands. It is a form of barter.

Similar statements can be made about Yelp, TripAdvisor, and even Match.com. All of these are direct economic trades from one consumer to another, unmediated by money. We pay only a small amount to support the platform, which is the only bit that shows up in the statistics. The value of these trades must be enormous, which implies that productivity statistics are woefully short of the mark.

I'm not sure complacent is the appropriate adjective for this. Revolutionary might be a better description. I'm grateful to Mr. Cowen for the insight.

Mr. Cowen maintains that however much we may enjoy good matches as individuals, there is net harm to society as a whole in the form of Herrnstein's centrifuge. Call this a market failure. No doubt there are winners and losers from the centrifuge. The poor are losers precisely because they get centrifuged out. But then the poor can't buy Mercedes-Benz cars either, and nobody calls that a market failure. I'm not at all convinced that society as a whole is worse off. Matching makes (most) people both happier and richer, and less reason for the government to come in and regulate it. (Which is no reason not to help the poor.)

The weakest chapter in the book is “Why Americans Stopped Rioting and Legalized Marijuana.” The obvious problem is that the word marijuana is never mentioned in the chapter at all besides the title. So it doesn’t deliver. I would have enjoyed learning about Mr. Cowen’s take on the opioid epidemic--surely as complacent a drug as can be imagined.

Then he attributes the stunning decline in the crime rate since 1970 to "complacency," suggesting that other explanations (incarceration, better policing, eliminating lead from the consumer environment, etc.) can’t explain the phenomenon. I’m not sure I believe him--I don’t know how one can measure the magnitude of a hypothetical with any precision. Then later in the book he refutes his own argument, suggesting that crime isn’t down as much as it has changed. Today we’re afflicted with cybercrime instead of street crime.

Another point he could have made is that street crime is less lucrative today--neither people nor stores carry as much cash as they used to. I think in this chapter he carries his complacency theme a bit too far.

The most compelling section of the book comes at the end, on the topic of global affairs. I’ll rephrase his point in my own words:

We, being complacent and rich, have absolutely no desire to go to war. After all we have the most to lose. North Korea has nearly nothing to lose--it would be hard to knock out their non-existent electricity system. So psychopath Kim Jong-un is using that asymmetry to blackmail us, knowing full well that all-out war will hurt us far more than it would hurt him (assuming he can save his own skin).

Our very complacency is leading us (nearly) inevitably toward war.

Nothing I say here should deter you from reading Mr. Cowen’s book. It’s a wonderful read, you’ll learn a lot, and you’ll probably reach different conclusions from me. Enjoy.

Further Reading:



Thursday, May 18, 2017

North Korea


Image result for north korea from space

North Korea appears as a black expanse of sea between neighbouring China (left) and South Korea (right) NASA/Reuters (The Independent, 2015)
The A-bombs—the bombs that the U.S. dropped on Hiroshima and Nagasaki in 1945—were soon supplanted by hydrogen or H-bombs, whose destructive power was 5000 times greater. Scientists at that time warned that 10 such bombs dropped in key urban areas across the U.S. could obliterate much of the U.S, population, while reducing the country to an uninhabitable radioactive nightmare.
So writes Jeff Mackler in a Socialist Action (SA) article entitled Nuclear insanity: US threatens North Korea. Odd then that he's not bothered by North Korea's development of nuclear weapons.

But he's not. Instead the nuclear villain is the United States.
Yet this insanity is routinely contemplated by U.S. imperialism’s chief representatives, whether they be Bill Clinton, Barack Obama, or Donald Trump—none of whom has declared that the use of these doomsday weapons is unthinkable. To the contrary, President Obama authorized the development and production of a “modernized” nuclear weapons program at a cost of $1 trillion over the course of the next 30 years.
Nowhere does Mr. Mackler even mention North Korea's ballistic missile and nuclear weapons program, which are obviously intended as offensive weapons. The US is certainly not going to reduce its own cities to "an uninhabitable radioactive nightmare." But Kim Jong-un has explicitly threatened that outcome on numerous occasions. For the moment he lacks the capability, but he is certainly working on fast acquiring it.

The Norks already have the power to reduce metropolitan Seoul (24 million people) to rubble. One supposes Mr. Mackler thinks that's a good thing.

He devotes only one paragraph to describing North Korea.
North Korea is once again in U.S. gunsights, including endless caricatures of the “boy dictator” head of state, Kim Jong-un, not to mention the never-denied U.S. cyberwar directed at North Korean military installations. (North Korea is ruled by a repressive Stalinist regime that oversees a fundamentally capitalist economy with the military bureaucracy at its center, but it is the task of the Korean people, not the United States, to overthrow it.)
The parenthetical comment is bizarre, to say the least. By what strange definition is North Korea a "fundamentally capitalist economy?" And were that true then why is Mr. Mackler and his ilk so strongly rising to its defense? However weird, that one sentence is the sole place in the entire piece remotely critical of the Kim regime.

Most of the article is a litany of American sins, beginning with Hiroshima and Nagasaki. We're apparently exclusively responsible for ("Princeton educated") Syngman Rhee, South Korea's first postwar dictator, along with whatever massacres he committed. Then the Korean War was entirely our fault.
The insightful Washington, D.C. journalist I.F. Stone authored a valuable book, “The Hidden History of the Korean War 1950-51,” that refutes the U.S. McCarthy-era pretext that the Korean War began only with the invasion of 50,000 North Korean troops. Actually, the attempt by Northern forces to re-unify the country had great popular support in the South.
Of course the South Korean masses wanted nothing more than to be ruled by a bunch of psychopathic dictators. Only the USA prevented that utopian outcome from occurring.

The litany continues, with evil US imperialism spreading darkness over India, Guatemala, Philippines, Syria, and (of course) "the racist, colonial settler state of Zionist Israel." Nothing like a little antisemitism to spice up an article about Korea.

The Militant (published by the Socialist Workers Party (SWP) ) takes a very similar position on North Korea (albeit minus the antisemitism). Mary Martin, SWP candidate for mayor of Seattle (which position undoubtedly includes a North Korea portfolio) states the case plainly in the lede paragraph of her campaign statement.
The Socialist Workers Party calls for an immediate end to Washington’s economic and financial sanctions against the Democratic People’s Republic of Korea. We demand that the U.S. government withdraw its more than 28,000 troops from the Korean Peninsula, and U.S. planes and ships from Korea’s skies and waters. We stand in solidarity with the more than 70-year-long struggle to reunify Korea, ripped apart by U.S. imperialism at the end of World War II, as well as the Korean people’s aspirations for a nuclear free Korean Peninsula and Pacific.
Then follows a brief recount of the litany described above, which concludes with this paragraph.
Washington’s campaign that North Korea get rid of nuclear weapons, and insistence that Tehran renounce them, is both cynical and hypocritical, to say the least. But the development of nuclear arms and delivery systems by these governments weakens the defense of the Korean and Iranian people against Washington. It saps the fighting capacities of the toilers in face of imperialism’s dictates, depriving them of the political and moral high ground in the eyes of working people worldwide. The leadership of 
Cuba’s socialist revolution provides an example to emulate.
Unlike SA's piece, this at least mentions the Nork's weapons program, and critically, too. Still, in any showdown between the US and North Korea it is pretty clear where the SWP will stand: Pyongyang.

Steve Clark wrote a 3-part series on Korean history originally published in 2013, and reprinted here. Unlike Mr. Mackler, he at least provides some source references for his conclusions, which means one can have a civilized discussion. But the litany is much the same--the US is singlehandedly and unequivocally at fault for any bad things that ever happened in Korean history since 1945. In his view the true history of the Korean peninsula has been kept carefully under wraps by the bourgeoisie and is only gradually coming to light. Indeed...
Aside from the pages of the Militant, one of the few places factual information could be found in those years, much of the truth about what had happened in Korea only began to come out under the impact of the fight for national reunification by the Vietnamese people in the 1960s and 1970s, and the worldwide movement against the U.S. war there.
Of course all this history is irrelevant. Most of it ends by 1960, with only a few riots and murders extending in the 1980s. But my Trotskyist friends are strong believers in by any means necessary, also known as the end justifies the means. By this measure we only need to look at what exists now, namely the picture at the top of this article.

Can any of my Trotskyist friends look at that picture and say, with a straight face, that the so-called Democratic People's Republic of Korea represents a path to human happiness and well-being?

Of course not! So that begs the question--why do they keep claiming that when it's so impossible to believe?

I think it's a very weird form of virtue-signalling. Both the SA and SWP proclaim themselves as radicals, and radicals necessarily must take radical positions. Their positions have nothing to do with happiness for the Korean people, but are entirely about reinforcing their self-image as bad-assed revolutionaries.

And as long as Kim Jong-un remains a remote figure in a hermit kingdom far away, they can get away with that. But if--may heaven forbid--there really is a war between the US and North Korea, and Seoul or even an American city is reduced to "an uninhabitable radioactive nightmare," then the political calculus becomes much different.

After all, nuclear destruction falls on the just and unjust alike--both bourgeois and proletarian.

I don't think the American people will look very favorably on grouplets that advocate mass murder of American citizens and the wholesale destruction of American cities.

Further Reading:

Sunday, April 2, 2017

Louis Proyect and the Pro-Poverty Girl

In one of the small incongruities of our age Louis Proyect used to work for Goldman-Sachs, though unsurprisingly only for a short time. Nevertheless, he's on CEO Lloyd Blankfein's mailing list, receiving the annual missive to shareholders. To which Mr. Proyect responds with an open letter.

Goldman-Sachs is in the financial services industry. A brief account of what they do is presented on their webpage here. It is highly specialized. Just as the science literature is mostly opaque to people outside of the discipline, much of what Goldman-Sachs does is unintelligible to the layman. As Adam Smith pointed out over two centuries ago, specialization is a good thing. It creates more different kinds of jobs and more opportunities for trade. Indeed, specialization is the mark of rich societies--people working in large, deep, complex markets will be wealthier than those living in simple, subsistence-level economies.

Still, opacity leads to paranoia, and especially on the Left (but also on the Right), Goldman-Sachs has come to represent surreptitious villainy and corruption. That the firm's alumni populate the Trump administration is apparently proof-positive the fix is in. Without in any way excusing actual corruption  (which undoubtedly exists), I simply don't believe it is the major problem with our government, and I think these fears are way over-wrought.

Mr. Proyect objects that Goldman alumni Gary Cohn and Steve Bannon now hold high positions in the Trump administration. He just assumes that these gentlemen's ambition is solely to make the world right for Goldman-Sachs. In particular, he condemns them for supporting the repeal of Dodd-Frank.

I don't understand Dodd-Frank--it's a very complicated bill regulating an industry that is to me opaque. I don't think Mr. Proyect understands it either. But I have it on authority from people I trust that it is a highly intrusive, expensive, and vague set of rules that if completely followed would destroy most financial institutions. It is not followed, and is substantially unfollowable. It's purpose is to prevent a repeat of the financial crisis in 2008. Unfortunately, the world's next financial crisis will not remotely resemble 2008, and hence won't be prevented at all. So the primary effect of Dodd-Frank is simply to inhibit business and make people poorer.

Either way, men from Goldman-Sachs know more about Dodd-Frank than either me or Mr. Proyect. And they are no more in favor of a financial crisis than anybody else. So I'm generally inclined to defer to their judgment. Plus I distrust regulations--they hardly ever work as intended.

Then comes the quote that Mr. Proyect reports as being the takeaway:
(Mr. Proyect quoting Mr. Blankfein) Putting aside one’s individual politics, the outcome of the U.S. election raises the possibility of more stimulative tax and regulatory policies, as well as plans for more infrastructure spending. This represents a substantial change in direction for the U.S., and offers many investors and companies a reason for optimism.
So what is it that makes Mr. Blankfein optimistic? Obviously more money for Goldman-Sachs, but not only that. It also means more investment (in capital goods and equipment), more employees, more consumer products, and even more infrastructure. Why is this bad? Mr. Proyect give us a really silly reason:
A reason for optimism? My god, are you are out of your mind, Mr. Blankfein? Scientists have concluded that climate change is threatening a sixth extinction. You really need to read Naomi Klein or even watch Al Gore’s documentary. By seeing everything through the cash nexus, you are losing the thread.
We all know that Mr. Proyect loses sleep because of the apocalypse du jour. Yesterday's hypothetical disasters have conveniently been forgotten: an asteroid hitting the earth, a new ice-age, peak oil, nuclear war, a global pandemic, or perhaps a population explosion. Scientists, who have and will warn us about lots and lots of things that have never happened, are no better at predicting the future than common undergraduates. Mr. Blankfein--long familiar with failed financial forecasts--rightly dismisses such Luddite fever dreams.

(Mr. Proyect could have cited a truer criticism. If all the good things Mr. Blankfein lists are bought from borrowed money, then it probably is bad. For however much it helps us now, we'll have to pay it back in the future.)

But Mr. Proyect is not alone in his criticism. He has a powerful new ally: a little girl. Or at least the statue of a little girl who stands athwart the ambitions of Wall Street's bull in Lower Manhattan.
Image result for little girl statue wall street             Image result for little girl statue wall street

There she stands--in tailored dress and bespoke shoes--steadfast against wealth and prosperity. Odd, because she's as much a beneficiary as Mr. Proyect.

Perhaps these are her shoes, available from Zappos for $60.
Timberland Kids Ramble Wild Canvas Lace Chukka (Little Kid)
Or maybe she's a more petty bourgeois consumer--akin to Mr. Proyect--and shops at Saks Fifth Avenue, where these can be had for around $400.

I couldn't find her dress on-line (maybe I just don't know where to look), but it's obviously store-bought and fits perfectly. If it cost more than $100 I'd be astonished.

Little Miss Statue lives very well at low prices because of the miracle of modern capitalism. Facilitated in part by the people at Goldman-Sachs.

She is no more inclined to live off the land on an eco-friendly subsistence farm than Mr. Proyect is. The odd thing about her statue is that she doesn't have a cell phone. How many well-dressed little girls in Lower Manhattan do you see who don't own a cell phone? Even Mr. Proyect owns a cell phone! Personally I think she's just trying to fake poverty.

So here she is--she and Mr. Proyect--standing firm for poverty for everybody else besides themselves. Not on purpose, but just because they don't understand that a modern economy needs capital to be efficiently allocated. And such allocation is non-trivial--it requires many very specialized employees doing complicated jobs. What the little girl doesn't comprehend is that her shoes and her dress and her cell phone, along with the electricity at her house and the subway that brought her to Wall Street, all depend on finance (among many other things).

On second thought, maybe I give her too much credit. Maybe she knows all to well that her efforts will make the world poorer. Perhaps she's envious, or evil, or selfish, or stupid. I don't know. Whatever the case, there she is, standing fearlessly in front of the bull demanding her welfare check.

The bull knows what's going on. He's raging for a reason. He doesn't see a little girl. What he sees is the poverty devil in disguise.

Down With Poverty!

Further Reading: