Affirmative Action

This article is inspired in part by a piece by Louis Proyect, here. We reach the same conclusion, but his reasoning seems illogical to me.

I've never been a huge fan of affirmative action. True, I never strongly objected to a racial preference for African-Americans. At least in that case one could justify the policy as a remedy for past discrimination. My problems begin mainly when it extends well beyond African-Americans to include other minorities and--especially--women. Hispanics, for example, were never enslaved or put-upon any more than any other ethnic group--e.g., the Irish. Women are completely undeserving of the benefit.

On net, I think affirmative action is harmful at non-elite institutions like mine. The resulting feminization of college life diminishes the institution. (Note that at elite institutions the gender balance is rigorously kept at 50/50.) And partly because of affirmative action, identity politics now dominates campus life to a destructive degree.

So now an organization called Students for Fair Admissions is suing Harvard University for discriminating against Asian-Americans. And discrimination it certainly is. Based on test scores only, Asians should make up 43% of Harvard's freshman class, yet they're only granted 19% of the spots. By contrast, African-Americans get 10%, vs. only 1% in a test-only world.

Looks damning, doesn't it? It is often compared to the similar discrimination against Jews in the 1920s and 1930s, in that case giving a strong preference to gentile white students. Yet I don't think Harvard was antisemitic back in the 1930s, and I don't think they're anti-Asian today. In both cases I believe they acted for perfectly valid, honest reasons.

Harvard--and all other elite institutions--strives for a meritocracy. As The Hill points out,

Imagine a world where every student has their SAT score emblazoned on their forehead. Imagine one where a person’s worth is determined by their ACT score.

Indeed, merit based solely on test scores would be a very desiccated, narrow standard. No real college or university will want to use such a system (Cal Tech perhaps being an exception). Unsurprisingly, they come up with a lot of other relevant criteria--legacy students, athletics, special circumstances, and, sotto voce, ethnicity. Which leads to a conversation--just what is merit, anyway? And how is it supposed to be judged?

I can tell you how Harvard judges merit: by estimating how a student will enhance Harvard's brand. At very least Harvard depends on alumni contributions; I've read that Asian alums are relatively chintzy (don't know if that's true). Yankee blue bloods from New England are a safer bet.

And more, the College wants to maximize its influence on the larger culture--Asians, only 6% of the population, will never contribute 43% of the influence, no matter what the test scores say. Blacks, meanwhile, despite being only 12% of the population, have a disproportionate effect on our political, musical and cultural life.

That last paragraph suggests that Harvard wants a student body that roughly mirrors the nation--that's not affirmative-action-speak, but instead brass-tacks reality for a school that wants to lead American society. Of course they're inconsistent: they ignore the Scots-Irish, have relatively little use for Catholics, and frankly, disproportionately preference Asians. But over all, the goals of Harvard and affirmative action are roughly aligned.

I have no problem with Harvard's admissions policy. Indeed, I agree with the headline in The Hill:

Every college — even Harvard — has a right to build its own community.

This, of course, is simply an assertion of the First Amendment right to free association.

And that brings us to Barry Goldwater justifying his vote against the 1964 Civil Rights bill.

I wish to make myself perfectly clear. The two portions of this bill to which I have constantly and consistently voiced objections, and which are of such overriding significance that they are determinative of my vote on the entire measure, are those which would embark the Federal Government on a regulatory course of action in the area of so-called "public accommodations" and in the area of employment--to be precise, Titles II and VII of the bill. I find no constitutional basis for the exercise of Federal regulatory authority in either of these areas.

Mr. Goldwater was among very few Republicans to vote against the measure, and of course he was indelibly tarred as a racist because of that, despite making himself "perfectly clear." And let's face it--the times were against him. Jim Crow was such an egregious offense against the Constitution that no fair-minded American could oppose either fair accommodations or fair employment provisions.

And yet, Mr. Goldwater turns out to be right. Today institutions--and not just Harvard--are denied freedom of association, and are forced into all kinds of legal contortions to accomplish their perfectly reasonable (and non-racist) goals. The irony is that Harvard is trying to benefit--for its own reasons, and not out of charity--the very people whom the civil rights movement sought to protect.

Ideally, the Civil Rights Act of 1964 will be repealed (at least the offending sections) and First Amendment Rights will be restored. Fat chance.

There are plenty of other government agencies, that like the Civil Rights Act were a good idea at the time, have long since outlived their usefulness. A good example is the USDA inspection regime. At the turn of the last Century, meat sold in stores was of abysmal quality. Refrigeration was rare and expensive, so much of it was rotten. Then it was often adulterated with chalk--adding to the weight without adding to the nutrition. Finally, the meat processing plants were filthy, as documented by Upton Sinclair's novel, The Jungle.

No wonder government regulators stepped in.

But today they should step out again--the whole inspection regime is ridiculous. Refrigeration is today both cheap and ubiquitous--no consumer will buy meat improperly kept. Beyond which social media keeps an hourly watch on any grocery or restaurant selling meat--the slightest offense, or even rumor of an offense, will bring instant retribution. The annual USDA inspection adds nothing to consumer safety while contributing significantly to costly bureaucracy.

I feel the same about municipal restaurant inspectors. Again, social media does a much better job at enforcing restaurant cleanliness than any semi-annual inspection regime. All the latter does is prevent poor people from selling street food, and provide many opportunities for corrupt income to the bureaucrats involved. I suggest getting rid of the entire enterprise.

Harvard's goals can in no way be considered racist--their very self-interest prevents that. There are perhaps 100,000 students in the USA in a given year who can benefit from a Harvard education. These can be identified by test scores by rendering applicants below a certain minimum ineligible. Beyond that minimum, I doubt a specific test score makes much difference. Given that Harvard only admits 2,000 students, surely they can find enough qualified members from any ethnic minority they want. Unlike the implicit premise of the Students for Fair Admissions, Harvard isn't accepting any unqualified students.

So I generally oppose Affirmative Action. I even oppose the Civil Rights Act of 1964! But I do support Harvard's legitimate claim to freedom of association, and believe they should be allowed to admit whomever they want for whatever reason they want. I hope the courts reject the claims of Students for Fair Admissions.

Further Reading:

• Book Review: The Rise & Fall of American Growth
• The Demise of the Academy
• Why the Academy Sucks

Trade Wars

My friends over at Socialist Action (SA) deserve credit for penning a serious editorial about a potential trade war. To the paper's credit the article contains real facts and arguments--it is not just a throwaway rhetorical piece. Serious it may be, but it is wrong, as the headline proves: Working people have no stakes in a trade war. It deserves closer analysis.

Here, in bullet points, are what I see as the article's main takeaway messages.

• The US economy is in relative decline as other countries (notably China) have grown market share.
• Trump represents a segment of the ruling class that wants to reverse that decline.
• Trump also represents union bureaucrats who want to bring back old-fashioned, blue-collar jobs.
• Globalization leads to a "declining rate of profit" for capitalists, which is the ultimate source of all their difficulties.
• Capitalists respond to the "declining rate of profits" by taking out of their workers' hides.
• Or alternatively, capitalists try to restrain profit rates from declining by rolling back globalization, which is where Trump comes in.

The errors SA makes are common to all Marxists, so it is worth considering them in detail. There are fundamentally two things wrong with their argument.

1)  "Declining rate of profit," in SA's usage, is just wrong, if not completely meaningless.

2)  They completely ignore the consumer in their analysis. Since most consumers are workers, the major benefit to workers from globalization is entirely unrecognized.

There are two ways to measure profits. The most common way (used in the stock market) is Return on Investment (ROI--often expressed as the price/earnings ratio). Investors want to make a risk-adjusted return on their investment, and won't put money into a project where that's unlikely to pan out. There is no evidence that "profit" in this sense is declining at all. Indeed, the recently famous economist, Thomas Piketty, maintains that inflation-adjusted ROI has remained roughly constant at about 5% over the past couple centuries.

Indeed, there can't be any secular decline in ROI. If profits go down, then the stock price goes down, which lowers the total capital invested thereby raising the ROI. By this measure, a steadily "declining rate of profit" implies continuously declining stock prices, which has obviously not been the case.

The alternative definition of "profit", which is the definition I think SA actually intends, is as a fraction of operating cost, also known as profit margin. Margins vary widely from industry to industry and from company to company. Some companies--e.g., Walmart--have very low margins, but then make it up on volume. Indeed, since its very founding Walmart has set its margins at 3%. which is only pennies on the dollar. But multiplied over $500 billion in revenue it adds up to a lot--about $15 billion. Walmart's margins are fixed--they have been neither growing nor declining since the company was founded. It's one of their core business principles.

Other industries--like pharmaceuticals and technology companies--have very high margins. In the case of pharmaceuticals it is because research costs are very high and also unpredictable--the high margins compensate for risk. Apple, on the other hand, charges $1000 for an iPhone because they can get away with it.

There is no long term decline in profit margins. There can't be. If the margin gets too small then capitalists won't invest any more money in that industry. American television manufacturing is an example where the margins shrank to zero--and televisions are no longer manufactured in the US.

So I don't know what SA means by "declining rate of profit." I think they take a phrase from Marx completely out of context and then repeat it endlessly as though it actually meant something. But it's just a rhetorical flourish--nothing more.

More substantively, SA describes the alleged demerits of capitalism in great detail, while completely ignoring any of the benefits.

In their desperate struggle to fight the falling rate of profit, capitalists try to reduce costs by attacking trade unions and workers’ rights, by attacking pay and benefit levels, by attacking general social benefits such as education, medical, and pension benefits, by refusing to accept any responsibility for the massive environmental damage caused by cutthroat capitalist competition, and by transferring production to low-wage, unregulated areas both within and outside their own countries.

This paragraph is approximately correct as far as it goes. (I'd take issue with the "massive environmental damage" phrase, but that's another topic.) It is true that capitalists are in "cutthroat competition," and will do what they can to gain an edge on their competitors by lowering costs, specifically the cost of labor.

But what SA doesn't tell us is what all those capitalists are competing for. They're competing for market share--i.e., they want to sell as many goods to as many people as possible. Every time the cash register rings at Walmart, shareholders pocket 3%. Of course they want that cash register to ring as often as possible.

The very definition of capitalism is a system that wants to maximize consumption--that's how capitalists earn money.

So take Walmart as an example. By sourcing their products in China they were able to lower their costs. Since margins are fixed at 3%, that means the savings are passed directly on to the customer in the form of lower prices. Here are the consequences--all of them good:

• Chinese manufacturing workers earn much more than they would back at the farm.
• Walmart employees--despite generally being low-skilled labor--earn higher wages and enjoy better working conditions than they would if they worked at the Mom & Pop down the street.
• Walmart's volumes increase, yielding more money for shareholders.
• Walmart's customers get more and better products at cheaper prices.

That last item is what SA neglects to mention, and it's a really important point. Walmart has substantially raised the standard of living of most Americans, especially those at the bottom of the income distribution. 

It's best expressed by Sam Walton's original mission statement: "to give common folks the chance to buy the same things as rich people." Their current motto--"Everyday Low Prices"--renews the promise to keep margins at 3% and to pass all cost savings on to the consumer. That's what Walmart does.

What's wrong with that? Only my Trotskyist friends can object, and they do so only by ignoring the huge difference that stores like Walmart make in improving people's lives.

Trump and my Trotskyist friends essentially agree about trade--they both see it as a zero-sum game. For Trump if the Chinese sell something to us, they win and we lose. For SA, if the Chinese sell something to us, capitalists win and everybody else loses. Both of you are wrong--trade is always win-win, and free trade is good thing!

That said, there is something awry when the US runs huge trade deficits for multiple decades in a row. Something is out of balance. While I think Trump is addressing it in the wrong way, he is quite right to bring the issue to the fore.

Further Reading:

• What Marxists Don't Understand About Economics
• Tradable vs. Non-Tradable Goods
• Book Review: Walmart

Mary-Alice Waters' Religious View of History

Photo from The Militant, June 11, 2018

Mary-Alice Waters gave a speech in Havana last April, where she described life in West Virginia as follows:

West Virginia today has the lowest median household income of all fifty states in the union save one, Mississippi. In only three states — Oklahoma, South Dakota, and Mississippi — do teachers earn less than in West Virginia. 

Measured by official US government figures that include so-called “discouraged workers” — those who haven’t been able to find a job for so long that they’ve temporarily given up — unemployment in West Virginia is one of the highest in the country: more than 10 percent in 2017. 

The state is a center of the drug addiction crisis in the US — it has the highest opioid overdose rate in the country.

Her Cuban audience must have been astonished. The people in the picture are well-dressed and well-fed far beyond the dreams of the average Cuban. They're rich enough that they can even afford bespoke t-shirts manufactured just for their union. It's hardly a picture of "carnage" and "devastation" as described by Ms. Waters.

Yet the impoverishment of the working class is not really what the example is supposed to prove. Ms. Waters asks this question:

Did the 2016 electoral victory of Donald Trump register a rise in racism, xenophobia, misogyny, and every other form of ideological reaction among working people in the US? Is that why tens of millions of workers of all races voted for him?

 And offers this answer:

The clearest and most demonstrative answer to the [above] question is being given right now from West Virginia to Oklahoma, from Kentucky to Arizona and beyond by tens of thousands of teachers and other public workers in states Trump carried by a large margin in 2016.

While I share Ms. Waters' opinion that Trump voters are no more racist than the rest of society, surely this picture doesn't make that case. It's a group of middle-aged, middle class, lily-white women demanding more bennies for themselves. West Virginia school children are 91% white. Please, Ms. Waters, tell us how this demonstrates the progressive virtues of the working class.

For all we know, the pictured ladies weren't Trump supporters at all, but are among the 27% of West Virginian voters who cast their ballots for Clinton, who counted teachers among her strongest supporters.

In my title I refer to Ms. Waters' view as "religious." I have hesitated using that term because my Trotskyist friends view it as both disrespectful and insulting--I don't wish to be either. And admittedly, the "religion" analogy doesn't fit perfectly. Trotskyists don't believe in supernatural beings, nor do they acknowledge any benefit in prayer. But (especially having just read and reviewed An Anxious Age) her piece is such a wonderful example of religious argument that it's hard to ignore.

Ms. Waters asks a second question:

Is a socialist revolution in the US really possible? Or are those like ourselves, who answer with an unhesitating “Yes,” a new variety of utopian socialist fools, however well meaning?

I'd replace the (needlessly demeaning) word "fools" with "believers," but otherwise I concur with that second choice.

We in the Socialist Workers Party are certainly among a small minority, even among those who call themselves socialists, who say without hesitation, “Yes, socialist revolution is possible in the United States.” And no liberating movement of millions can ever be imposed “from the outside” on any country.  

We say not only is socialist revolution in the US possible. Even more important, revolutionary struggles by the toilers are inevitable. They will be forced upon us by the crisis-driven assaults of the propertied classes — as we’ve just seen in West Virginia. And they will be intertwined, as always, with the example of the resistance and struggles of other oppressed and exploited producers around the globe.  

What is not inevitable is the outcome. That is where political clarity, organization, prior experience, discipline, and, above all, the caliber and experience of proletarian leadership are decisive.

What Ms. Waters describes here is her "railroad track" view of history. The historical train is moving relentlessly down the track, pulled inevitably forward by capitalist "contradictions" and "crises." Ahead lies a switch, and unless the switch is thrown we're headed off a cliff--toward catastrophe and World War III--eternal damnation. But, follow the "political clarity" of the Vanguard Party (i.e., the Socialist Workers Party) then redemption is at hand and we'll all live happily ever after.

It's a heaven and hell story, albeit with both outcomes existing here on this earth. The outcome depends only on the success of the Vanguard Party to throw the switch in time. While Ms. Waters is the movement's most explicit theologian, pretty much the same dogma is held by all the Trotskyist grouplets I cover, with slight denominational differences.

No religion is complete without a notion of sin. Sin is the one great empirical fact of all religion--all normal people (excepting only small children and psychopaths) understand that there is evil, both in the world and in the individual heart. Religion offers a path to defeat sin: in Hinduism it is reincarnation until Nirvana is reached; in Christianity it will happen when Christ comes again to redeem his world. And so on.

For Trotskyists, the principle sin is inequality--of income, education, health, immigration status, etc. All humans are created equal; any variation amongst us is the result of sin. As Ms. Waters puts it,

The point is that without understanding the devastation of the lives of working-class families in regions like West Virginia (and there are many more) — without understanding the vast increase since the 2008 financial crisis in class inequality, including the accelerating inequality within classes — you won’t be able to understand what’s happening in the United States.

Per Trotskyism, the important sins are not personal (e.g., thou shalt not commit adultery), but rather social (thou shalt not be a bigot). They are, in fact, the same sins put forward by Walter Rauschenbusch, the founder of  the social gospel. (See An Anxious Age for more about this.) Indeed, I'll suggest that the American Trotskyist movement depends as much on Rauschenbusch's thought as it does on Karl Marx.

Finally, please note the style of Ms. Waters' argument. She cites neither statistics nor any historical progression. Instead she lists a series of totemic events--the 1930s Teamsters' strike, the fight against Jim Crow, and the Vietnam-era antiwar movement. And, yes, the recent Red-State teachers' strikes, even though those are already yesterday's news.

There is no logical connection between any of these events, and they have only minimal impact on what happens today. Instead, they represent prophetic fulfillment. For just as Christians draw prophecy from the Old Testament pointing to the death and resurrection of Christ, Trotskyists prophesy from old labor history and the Russian Revolution. The working class really is awakening! The End Times are being foretold!

One can't criticize religion for being not true. I think even devout believers know in their heart of hearts that what they believe in isn't true. But, however false, religion is incredibly useful. It allows one to orient one's life, to find meaning, and to establish reassuring connections with a global community. It's all bound together by ritual and dogma.

Trotskyism isn't true, but unlike Christianity and other world religions, it also isn't particularly useful.

Further Reading:

• Book Review: An Anxious Age
• Sex and the Alpha Male
• Louis Proyect and the Pro-Poverty Girl