Trotskyists on Reopening

Reopening?

Generally they're against it.

The case is succinctly made by Socialist Action in a piece by Steve Johnson entitled Reopening schools: A dangerous threat to children and teachers. The lede paragraph:

Plans to reopen schools are being questioned by the international working class as the novel coronavirus COVID-19 continues to spread across the world. These plans are part of the mad rush of capitalist nations to re-open their economies, disregarding the health of the children and the working class of their respective societies.

Absent perfect safety and the once-and-for-all defeat of the virus, nothing should be allowed to reopen. Anything less than that "demonstrates the lack of scientific planning these nations possess in tackling the pandemic."

Despite claiming to represent the "international working class," not even the teachers' union (AFT) agrees with Mr. Johnson.

AFT president Randi Weingarten announced the union’s “Plan to Safely Reopen America’s Schools and Communities” wherein the AFT linked the re-opening of the economy to the re-opening of schools. The AFT’s proposal repeated the false notion that “To gradually reopen, we need to maintain physical distancing until the number of new cases declines for at least 14 consecutive days.” ...

The AFT’s criteria, essentially matched by the Trump administration’s and major U.S. corporations, for “gradually re-opening” public schools and businesses more generally, would undoubtedly place teachers, other school workers, and students in unimaginable danger.

I think the AFT understands that closed schools mean unemployed teachers, and most teachers are willing to take some risk to go back to work. (It's not like by staying home they're necessarily at lower risk.)

Socialist Resurgence (SR) holds a similar position. Author Andy Barns comes down hard on Elon Musk for opening the Tesla plant in Fremont, CA. In the process he defends such august, bourgeois institutions as the Alameda County health department--presumably because they're "scientists." But Mr. Musk opened up anyway, daring the petty fascists to come and arrest him. Needless to say they backed down.

To which Mr. Barns responds:

Supervisor Haggerty seems confused. That Musk is actively endangering 10,000 people during a pandemic should present cooler heads with the obligation to arrest Mr. Musk! And this should be easy since he is literally breaking the law!

Mr. Musk didn't endanger anybody--no Tesla employee was forced to return to work, and some undoubtedly stayed home. But like teachers, most autoworkers need jobs and want to go to work. It's bizarre that a supposed tribune of the working class is so keen on enforcing bourgeois law against them.

SR's Adam Ritscher is the only comrade on my Beat who's done some actual reporting. In a post entitled COVID-19: Farmers slaughter hogs as pork-processing plants close down he tells us how the meatpacking supply chain actually works. I learned something--the article is well worth reading. He points out that meatpacking facilities have gotten much bigger as the process has been relentlessly optimized. Obviously that benefits consumers in normal times.

But these times are not normal. If one link breaks then lots of other things go haywire as well. "And many processing plants are so huge that they alone process a couple of percentage points of the nation’s pork. So when just one of these plants closes down, it has a huge impact." For all its efficiency, the supply chain has become increasingly brittle.

And he does have a point. But his closing paragraph makes no sense.

Today’s industry was designed around the sole goal of maximizing profits. What we need is an industry that is designed for human needs, and that takes the environment into account. Let’s use this horrible crisis to redouble our efforts to help make such a more just and rational society a reality!

Wrong! The industry's goal of "maximizing profits" also includes getting as much meat into consumer's mouths as quickly and as cheaply as possible. That's meeting human needs! "Redoubling our efforts" to solve hopelessly vague, hypothetical, and very expensive problems will simply keep people hungry.

Better is the solution at the Smithfield Pork plant (also reported by Mr. Ritscher), which offered $500 bonuses to employees willing and able to come to work.

Shifting gears a bit, Socialist Viewpoint reproduces an article by James Dennis Hoff, entitled Get Militant or Die: Labor unions in the age of crisis. The piece originally appeared in something called Left Voice, published by a collective of New York City college professors virtue-signalling their revolutionary socialism.

While Mr. Hoff's article was published on April 3rd--too soon to pass judgement on any reopening--he was staunchly in favor of the shutdown.

However, it is most important, in the short term at least, that unions fight to protect the immediate health of working people by demanding that all non-essential production be halted and that productive resources be repurposed in order to face the crisis, ...

So much for the lower-middle class--waitresses, retail employees, beauticians, hotel maids and flight attendants should all be thrown out of work because they're "non-essential." But no fear--they can all be "repurposed," just like recycled garbage.

Meanwhile, college professors--e.g., Mr. Hoff--who have never been laid off because they're apparently "essential", should now urge their unions to be more militant. No more playing footsie with Mr. Cuomo--the professoriate should demand "adequate funding for public services," even to the point of going on strike.

"Adequate funding," in Mr. Hoff's view, requires taxing the rich.

Meanwhile the Governor has made it clear that he has zero intention of raising taxes and has repeatedly argued that any new taxes on the wealthy or on Wall Street would lead to capital flight, a claim that doesn’t seem to be supported by any actual evidence, but which nonetheless shows where the governor’s priorities are and just how much political power capital wields in Albany when compared to working people.

There is plenty of evidence of capital flight. New York state lost more than 180,000 people to net domestic migration in 2019. Those weren't poor people--those were middle and upper middle class folks who don't want to pay New York taxes.

Because of the virus, the billionaires have already fled Manhattan for their second and third homes in Florida. Will they ever return as New York residents? Maybe not--there's no income tax in Florida. If the billionaires leave, then the millionaires leave, too. Indeed, many of them are already working from home in New Jersey. Will they return to Manhattan so they can pay more taxes? Probably not. And when the millionaires leave, so do the restaurateurs and the Uber drivers--people who need to work near their customers.

The only people left in Manhattan will be college professors, the welfare crowd and homeless people. All fine people, to be sure, but none of them pay taxes. Piss poor future that will be. But go for it, Mr. Hoff. Have fun on your strike--just don't count on having a job when it's over.

I'll close with an official statement from the Socialist Workers Party (SWP) entitled Fight for gov’t-funded public works program to create jobs. They have two demands: one (apropos nothing in particular) is for full amnesty for undocumented workers. The second (relevant to jobs) is

A massive government-funded public works program to put millions to work at union-scale wages to build the hospitals, schools, affordable housing and all the other things we sorely need. We need to get workers back to work to strengthen our class consciousness and fighting capacity.

We have more than enough hospitals--they weren't even full during the height of the pandemic. We surely don't need any more schools--birthrates continue to decline, along with school enrollments. There's plenty of affordable housing--just not in places like Manhattan or San Francisco. The solution is to move more jobs and people to the suburbs. (For an interesting take see this article by John Sanphilippo.)

I'm all for getting workers back to work! But why can't they do useful things instead of stupid, make-work projects? What's wrong with restaurants, hotels, airlines, churches, beauty salons, meatpacking plants--hell, even college campuses? Why is it that Democrats and Socialists alike are so much against people being allowed to earn an honest living?

Down With Poverty!

Further Reading:

• Trotskyists on the Pandemic
• The Pro-Poverty Crowd
• Louis Proyect and the Pro-Poverty Girl

"Primacy of the Working Class"

The current issue of Socialist Viewpoint contains a wonderful article by Susan Roberts, entitled Primacy of the Working Class. It's long and not an easy read--I actually printed it out and went at it with a sharp pencil. The effort was rewarded.

(I am unable to find any biographical information about Ms. Roberts. It appears she's British, and she's obviously an academic of some sort. But I don't know where.)

She begins with a strange but useful redefinition of the word politics, which becomes "the contestation of power." Specifically, "it contests the balance of power wielded by different class interests." The contrast is with the apolitical--"concerned more with ameliorating the excesses of capitalism than with challenging the system itself."

These new [apolitical--ed] players comprise a panoply of “Global Social Justice Movements,” (GSJMs) and “Non-Governmental Organizations,” (NGOs) which impose themselves on inchoate civil society all over the globe. Whilst the range of their particularistic interests is vast, they are generally united in the denigration of working class politics. These movements, which tend to be managed by western, middle class personnel, and are very often funded, directly or indirectly by western corporate interests and unelected bodies, eschew the representational demands of the “old” class politics, insisting instead that their “individualistic” agenda wields a higher moral authority. In the eyes of these new global players, “collective” politics, with its demands of representation, constituency and even democracy are discredited artifacts of a broken system, which needs to be superseded by a more moral form of global governance. [Footnotes deleted--ed]

Ms. Roberts elaborates on the themes of this paragraph. The denigration of working class politics is, in her opinion, purposeful. There's a whiff of a conspiracy theory in the plot--the ruling class has purposely substituted apolitical action precisely for that reason. That funding comes from "western corporate interests and unelected bodies" is evidence, along with "western, middle class personnel" hired to do the dirty work.

I think this is the weakest part of her argument. Such a conspiracy would be impossible to keep secret; would require impossible unity among the myriad ruling class actors; and implies an ability to predict and manage an exceedingly complex future from 1970 to the present to ensure that the outcome comes out just right.

There is no conspiracy, and nobody is doing the bidding of the ruling class in any intentional way.

A second argument is more profound. The apolitical movements are principally concerned with moral arguments rather than power relationships. Traditional working class movements were ultimately about money and power, and not about saving whales or eliminating malaria. (The implausible conceit is that proletarians will successfully take on these important issues after they get power.)

The apolitical movements are aided by post-modernism, which suggests that

...a range of social interest groups, (e.g., feminism, anti-racism, environmentalism, etc.) can, through “moral and intellectual” leadership, (as opposed to mere “political” leadership) combine to effect such a challenge. Workers remain relevant to that amalgamation of interest groups, but only through their lived, concrete experience and not because of the historicity of their position.

The rejection of historicity strikes at the heart of Marxism. Post-modernism denies the objective truth of any history--including Marxist history--substituting instead "lived" fables and tales.

Ms. Roberts recalls the bygone days of working class politics:

In the UK of the 1970s strikes, sit-ins, worker occupations and even work-ins (most famously perhaps at the Upper Clyde Ship Building works (UCS) were common events. Angry grey men, huddled around braziers, were a regular sight on the nightly news, and everyone seemed to be locked in debate about the economic and political future of the country.

Today those angry, grey, faceless men are replaced by climate demonstrators, women's marchers, and pleas to close Guantanamo. A demand for power has yielded to middle class, moral lobbying.

She faults the apolitical organizations.

By elevating a spurious moral leadership above class politics a platform has been created for an open-ended plurality of apolitical causes. The effect of which has been to radically depoliticize democracy by removing from its preserve the defining issues of working class contestation.

In her view, the social justice movements and NGOs have killed off the working class--and given the supposed conspiracy theory that was precisely the point.

She's quite right about the effect--and that's what makes her article so interesting. But I think she's got cause and effect wrong. I think the NGOs, etc., are as much a symptom as is the decline of working class politics. The causes of both phenomena are to be found in automation, globalization, and social media.

The decades since 1970 have largely put paid to the angry grey men. The Upper Clyde Ship Building Works were closed for good in 2001. A similar transition has occurred in American manufacturing. For example, Peabody Coal Company--still the largest coal company in the US--only employs 7,100 people total, including white collar workers. Membership in the United Automobile Workers has declined from 1.5 million in 1979 to under 400,000 today. Even retail companies like Walmart, McDonalds, and Starbucks are shrinking their work forces (along with raising the pay of their remaining employees). The era of cashierless stores is nearly upon us.

Globalization has mostly ended the labor strike as a useful weapon. Production can be sourced anywhere in the world. If the UAW strikes against General Motors, it may lead to the bankruptcy of the company, but it will have minimal impact on the ability of consumers to buy cars. The vehicles will be manufactured elsewhere by other people.

The result of these trends has (so far) not been higher unemployment, but rather different employment. Unskilled labor is devalued in this new world. The angry, grey, faceless men are no longer needed. Instead, one wants smiling, skilled, customer-friendly women. These new employees, far from being faceless, are required to invest their personality into their jobs.

When I was a cab driver back in the 70s, my colleagues were 99% male. And for good reason--cab driving was a dangerous job back then, especially for women. We were faceless, unskilled labor.

Today, with Uber, it's quite different. The app mostly ensures safety for both passenger and driver, and accordingly many drivers are today women. Customers and drivers are rated by each other, with consequences for both. A smiling woman is much more likely to get a high rating and a big tip than an angry, grey, faceless man. He's gonna get left by the side of the road.

So one reason one doesn't see "angry grey men huddled around braziers" anymore is that such gentlemen are no longer employed. It's got nothing to do with any conspiracy theory.

I strongly commend to Ms. Roberts' attention the book by Martin Gurri entitled The Revolt of the Public. Mr. Gurri explores in great detail the effect of social media on our politics. In the past people had no good way to communicate with like-minded folks around the world. The best they could do was listen to the nightly news and latch on to some lowest-common-denominator mass movement--e.g., opposition to Thatcherite economics. Just as there were only three channels on television, there were also only a handful of opportunities for political activism.

Social media changes all of that. This blog, for example, reaches people interested in the residue of Trotskyism, including many on the Right. It's a very small audience, but it is global. Such an effort is impossible absent social media.

Martin Gurri argues that social media empowers the "public," under which he includes all the "particularistic interests" that "impose themselves on inchoate civil society all over the globe." In the 1970s one had a mass movement--called Earth Day. But that has fractured, and today there are undoubtedly Facebook pages devoted to saving whales. And more--there are likely Facebook pages devoted to saving specifically Blue whales.

Each tiny cause attracts its own public, and each public sees its particular cause as reason for revolt. The publics, cumulatively, have buried mass movements. When it's so easy to create an association to promote the specific interests of trans females, for example, it's much harder to maintain a unified LGBTQ community against the rise of all the narrower publics.

We've ceased being a mass movement of angry, grey, faceless men, and instead become members of a myriad of angry, colorful, Facebooked men and women. Politics, as Ms. Roberts notes, is fractured beyond repair.

There is much more to Ms. Roberts' essay than I've discussed here. It is well worth reading. Make sure your pencil is sharp.

Further Reading:

• Book Review: Tomorrow 3.0
• Abandoning the Working Class
• Where Have All the Workers Gone?
• What Would Lenin Do?

Black Dispersal from Cities

Glen Ford, executive editor of Black Agenda Report, often has his work reprinted in Socialist Viewpoint. The post that caught my attention today is entitled Great, Bloody Black Dispersal from the Cities. It's typical of Mr. Ford--always one to take the most extreme, radical position possible, facts and logic be damned.

It is true that, since 2000, Blacks are gradually moving away from large cities, reversing a trend from the prior several decades.

The rapidly unfolding dispersal of Blacks from the cities, like the white invasion of the surrounding hinterlands in the previous era, is the result of deliberate state policies, dictated by finance capital. But, this time, the demographic makeover has been effectuated and politically finessed with the active collaboration of a Black misleadership class that, paradoxically, owes its existence to the concentration of Black populations during the Sixties and Seventies.

True to form, Mr. Ford sees it as a giant conspiracy, where some all-powerful racist/capitalist/government yokel has, for mysterious reasons, decided to depopulate America's cities.

He cites no real data, so I'll take data from Chicago, which I have close at hand. According to the Chicago Tribune, the city lost 186,000 Black residents between 2000 and 2010. The same article reports that the Chicagoland area lost 46,000 Black residents since 2010.

Mr. Ford speculates this is due to the destruction of housing projects. He writes

The de-Blackening of urban America is a wrenchingly painful and bloody amputation-in-progress. In a frenzy of demolition, the U.S. has lost a quarter-million units of public housing since the mid-1990s, only a small fraction of which has been replaced with new public housing, according to the Center on Budget and Policy Priorities. Black mayors and heavily Black city councils have, typically, bought into the notion that concentrations of poor Black people are, by definition, vectors of pathology, while concentrations of affluent whites are the indispensable ingredients of urban “renaissance.” It is the logic of apartheid, cloaked in phony economics.

Chicago's Robert Taylor Homes were the infamously inhumane high-rises alongside the Dan Ryan Expressway, containing 4,415 units. They were demolished between 1998 and 2007, replaced by 2,300 low-rise homes and apartments. (Wikipedia) So while Mr. Ford is correct that on net public housing was destroyed, the fraction that was replaced was more than 50%. Not really a "small fraction," especially if you consider that many apartments in the original towers weren't habitable.

Does Mr. Ford really think Chicago's Black citizens were better off living in the Robert Taylor Homes? The crime was building them in the first place--not their destruction.

He claims that Blacks have been forced out of the cities into the suburbs. "No mayor has been more intent on driving Blacks from his city than Chicago’s Rahm Emanuel," he says. But I think he's wrong.

1) Like whites, Black folks are richer than they were 40 years ago--they have more choices. Nobody with any money at all is gonna want to live anywhere close to the Robert Taylor Homes. Much better is a house and yard in the 'burbs. Like whites before them, Blacks want to lead civilized, suburban lives.

2) We're all getting older, and Black demographics are only slightly younger than us white folks. Old people, living on social security, want low prices, low crime, and quiet neighborhoods. One can live in Mississippi or Alabama quite comfortably on social security and a small pension. No wonder folks are leaving Illinois in droves (and not just Blacks).

3) Chicago has the highest sales taxes of any jurisdiction in the nation. And the city is so hard-up for revenue that they've resorted to stupid things, like soda taxes and red-light cameras. Of course these penalize poor people more than rich ones. Again, for people of modest means the suburbs or Mississippi look really good by comparison.

Then Mr. Ford condemns the city for closing 50 public schools. He never tells us about the drop in enrollment, described by the Sun-Times.

Chicago Public Schools on Friday announced another five-figure enrollment drop, counting 371,000 students in the country’s third largest school district. ...

CPS has lost about 21,000 students from its rolls in the last two years and now has just about 26,000 more students than the fourth largest, Miami-Dade County Public Schools in Florida.

Why should schools stay open when the district is losing 10,000+ pupils annually? Mr. Ford gives us a really silly reason.

The result [of school closings--ed] was catastrophic, as students were forced to transit unfamiliar gang turf to attend schools that were often no better than the shuttered ones in the old neighborhoods. Many kids died. “What people don’t understand is that if you are 16 years old and get on a bus, when you get off that bus you are gang-affiliated whether you are gang-affiliated or not,” said activist Jitu Brown.

Mr. Brown is certainly right--we whites don't understand that. I've never been in a gang, nor do I have any friends who have ever been in a gang. Gang membership is just one of those things we white people don't do (mostly). But now Mr. Ford will have the government enforce turf boundaries established by street gangs! Is that supposed to be the job of the school district? Are we taxpayers (people in housing projects don't generally pay taxes) now required to subsidize gang warfare by keeping unnecessary schools open?

Mr. Ford will likely respond by saying that gangs are the result of poverty/racism/capitalism, etc. He's sorta right, but he's got the causal arrow backwards. By coincidence there's an article in The Atlantic about "Brastell Travis, a 21-year-old who lives in the city’s Englewood neighborhood." He did all the things a young man is supposed to do--went to school to learn a trade: welding. But he can't find a job, "...because of where he went to high school, he can’t apply for jobs in certain neighborhoods, because he could become a target of violence if he goes to the wrong areas of town, he said." So in this case gangland crime causes poverty, not the other way round.

Mr. Travis should move to the suburbs. To do that he'd need a car (which he doesn't have) and money for a deposit on an apartment (which he doesn't have). His parents apparently have saved up zero capital to help get him started on life. And that's the real problem--no capital accumulation by Black families. (I'm not talking millions here--a couple thousand dollars would solve a lot of problems.) So he's screwed.

Mr. Ford's real concern is to maintain a majority Black population in large cities, such as St. Louis, where Blacks became a minority this century. He wants to use this majority to enact far-reaching reforms, one of which is the "Right to free education through post-graduate level."

I can't think of a stupider idea. Surely more education is not something that Mr. Travis, for example, actually needs right now. At best it would be a waste of time. And nothing is more a waste of time than "post-graduate" schooling. All it does is postpone becoming an adult until one turns 30. I think we're already waaaay over-invested in education at all levels. But apparently Mr. Ford thinks higher sales taxes and soda taxes are a fair price to pay for yet more silly schoolwork.

Further Reading:

• If Everybody is a Racist, Then Nobody is a Racist
• Charlottesville
• 63rd & Halsted

China & the United States

There are two extreme but commonly held opinions about China. The China Bulls, typified by NYT columnist Thomas Friedman (e.g., here), believe that China will leap from strength to strength, eventually far surpassing the United States in both wealth and power.

The China Bears, meanwhile (represented ably by Peter Zeihan, whose work I have reviewed here, here and here), think China is approaching a precipice beyond which lies disastrous decline. Mr. Zeihan, for example, thinks the country is unstable as a unitary state.

Lynn Henderson (who often writes for Socialist Viewpoint) sent an Open Letter to Dave Gilbert, kindly including me on the copy list. The full text of the letter is posted at Louis Proyect's site, here. Despite its length, it is cogent, well-written, and very much worth the read.

Mr. Henderson did not title his piece. Mr. Proyect headlines it as Trump, Russia vs China and China Industrialization. Fair enough, but I'd prefer another: China's Threat to American Capitalist Hegemony. That reveals him as a China Bull, and further, he subscribes to the common corollary: that the United States is in secular decline (a view shared by Mr. Friedman).

Mr. Henderson tells a history of Chinese-American relations that doesn't make much sense to me. The 1949 revolution threw the imperialists out of China, but then in 1980 Deng Xiaoping invited them back in as foreign direct investment*. My take is that China wasted 30 years murdering tens of millions of its own people before they finally got their economic act together. Somehow Mr. Henderson sees the "revolution" as an advantage.

He attributes too much credit to Nixon and Kissinger--figures who were bit players in the whole drama. The real stars were people like Malcom McLean and Sam Walton. The former "invented" the shipping container, reducing the cost of freight transport by 90%--a technology that came to full fruition by 1970. The latter (who in 1970 owned a few stores in NW Arkansas) took advantage of that savings, along with cheap labor availability in China, to build the world's largest retail chain.

Mr. Henderson gets that last point. A key paragraph is this.

Handed down from the pre-revolutionary past, the new China possessed a gigantic peasantry numbering in the hundreds of millions accustomed to a very low standard of living and hard manual labor. This peasantry served as the source for an industrial proletariat willing to put up with a much higher rate of surplus value than the workers of North—and even Latin—America, Western Europe or modern Japan. Huge amounts of foreign investment, especially U.S. investment flowed into China. What the United States—or rather the United States capitalists—wanted most of all from China was the lion’s share of the surplus value produced by the Chinese working class. Russian workers produce very little surplus value compared to what the U.S. capitalists could appropriate from Chinese workers in the form of profit, interest and dividends.

Let's ignore the unnecessary term "surplus value" and acknowledge that trade with China was hugely profitable--for both Americans and Chinese. We got everything from toys to hand tools to smartphones at sharply reduced prices. Indeed, though Mr. Henderson credits Paul Volcker with ending inflation, it's just as likely that cheap imports from China did the trick. China, initially through Walmart, dramatically raised the standard of living of every American, especially poorer ones.

In return 400 million Chinese were pulled out of poverty and became part of the global middle class. They used the proceeds of their labor to buy grain (there's no more starvation in China), airplanes (jumbo jets fly hourly schedules between Shanghai and Beijing), and the construction of superhighways and bullet trains (Tom Friedman's favorite toys), among many other things.

Though somehow Mr. Henderson thinks this is a problem.

The problem from the viewpoint of the U.S. capitalist class and its political representatives—the Party of Order of both Democrats and Republicans and the emerging Trump America First gang—is that the U.S. capitalists in squeezing huge amounts of surplus value out of the Chinese have been forced to develop China’s productive forces at the same time.

Mysteriously, he thinks we'd be better off if China remained poor. Just how are those poor, starving Chinese supposed to buy grain, airplanes, and everything else from the USA? They have to sell something to us first--as I said in a previous post, it's all about trade. The USA can't trade with countries that have nothing to sell. Fortunately for all of us, Sam Walton enabled China to sell lots of stuff to Americans.

Mr. Henderson buttresses his argument with one big factual error. He claims that because production increased in China, US industrial production has been declining.

In order to make the empire last for even 70 years—a very short period historically—the U.S. had to give up much of its domestic industrial production.

But this is manifestly not true--US industrial production has more than doubled since 1980! Don't believe me? Then listen to that Marxist economist of (deserved) renown, Kim Moody (my review here):

The problem with trade-based explanations [for the decline in manufacturing employment--ed] is that manufacturing output hadn’t shown a decline, but had grown in real terms by 131% from 1982 to 2007 just before the Great Recession reduced output. At an annual average of 5% this is only slightly less than the 6% annual growth of the 1960s.

So both China and the USA were successful from 1980 through 2010. But the world moves on; this is how Mr. Henderson sees the future.

China on the other hand, as the world’s most rapidly expanding manufacturing power, is now its strongest proponent for globalization, “free trade”, open markets and multinational trade agreements. Under China’s “One Belt, One Road” initiative, which is aimed at creating a modern version of the Silk Road, a network of trading routes from China to Africa and Europe, it has launched a massive economic outreach dwarfing even the Marshall Plan of U.S. imperialism following WWII.

Let's take this apart.

• China is not "the world's most rapidly expanding manufacturing power." The United States is, by far. Robots and AI have reduced the value of low-wage labor, and sharply increased the advantage of cheap electricity. Thanks to fracking, the US has by a good margin among the cheapest electricity prices of any country in the world.
• OBOR ain't gonna work--see my previous post. The only advantage is it gives China a back door to Persian Gulf oil. Though shipping oil over the top of the world won't be cheap.
• Yes--China is a strong proponent of globalization and free trade, for obvious reasons. But see my reviews of Peter Zeihan's books for more about that.

I tend to be a China Bear, though not as pessimistic as Mr. Zeihan. Here are some of the important problems China faces.

• Chinese population growth is slowing, and the size of its labor force is actually shrinking. Since labor force growth is the biggest component in overall economic growth, this will severely limit the Chinese economy going forward.
• The economy is too big to be primarily export-oriented. Global markets simply can't absorb all that stuff. Exports will have to decline as a fraction of GDP.
• China is dependent on foreign oil, which will put it at a significant disadvantage to the US.
• Increasing personal consumption--and therefore income--is absolutely crucial to sustain the economy. That means Chinese citizens have to get a lot richer, which means productivity has to increase--dramatically. I'm not sure they can do that.
• China has a huge debt burden, which is a drag on future growth.

So I think the best case scenario for China is growth at global rates, i.e., around 2%. Personally, I'm skeptical if they can sustain that. Then it becomes an issue of whether or not the country remains politically stable.


*Not sure I buy the "foreign investment" argument. I don't believe the US ever ran a trade surplus with China, which means net foreign investment must have flowed toward the US, not toward China.

Further Reading:

• Tradable vs. Non-Tradable Goods
• Lynn Henderson on Donald Trump
• Book Review: The Rise & Fall of American Growth

What Marxists Don't Understand About Economics

This post is inspired by, but not directly in response to, an Open Letter by Lynn Henderson and Cindy Burke (H&B), posted on Louis Proyect's website. Their misconceptions are so common on my Beat that I think a post pointing them out is useful.

Growth

In 1956 Robert Solow and Trevor Swan published a model for economic growth that is both simple and fits real world data fairly well. Economic growth is the sum of three terms: 1) growth in the skills-adjusted labor supply; 2) growth in capital invested; and 3) growth in productivity due to technological advancement.

In today's world (unlike the future world of robots), the availability of skilled labor is the most important factor. A proxy for that is population growth, especially of the working-age population. In the US our population growth is less than 1%. During the first 60 years of the last century it was closer to 2 or 3%. Obviously fewer workers will result in a lower GDP, so it should be no surprise that our growth rates have declined from 3-4% historically to about 2% today. Absent a new baby boom or a sharp increase in immigration, our economy will not grow as fast as it did before.

Japan's workforce has been in absolute decline for several decades. So it should be no shock that their economy is barely growing at all. This has nothing to do with a "crisis" of capitalism or malfeasance by Mr. Abe, but is a matter of simple demographics.

Note that we Trumpkins will be disappointed with our president's stated immigration policy. Economically we are much better off with more immigrants rather than fewer.

Capital behaves differently, obeying the law of diminishing returns. When a company with 1000 employees buys their first computer, there is a huge jump in productivity. But after they buy the 1000th computer, productivity will barely budge. That is, initial investment in a new technology is highly profitable, but as more and more money is invested the returns diminish. Eventually the maintenance and upkeep on all those computers costs more than any profit, at which point the firm is fully capitalized. There is no point in investing more money in more computers.

It's roughly the same for national economies. In my opinion the United States is fully capitalized--there are relatively few places where investing new money makes sense. That means we have a savings glut, which implies that interest rates are low and will remain low for a very long time. This is why asset prices are being bid up--houses, art, antique cars, bitcoin, stocks & bonds, etc.--as there are no other good places to put money.

Note that we Trumpkins will be disappointed with tax reform. The stated goal is to repatriate trillions of offshore dollars and thus recapitalize and dramatically grow our economy. Sorry--it won't work. We've already got too much capital sloshing around. But it will secure very low interest rates for even longer, and people who own real estate or bitcoin will do very well. (I am generally in favor of the tax reform proposals, but not for that reason.)

Finally, productivity growth is the implementation of new technology, e.g., replacing the horse with the internal combustion engine, or the abacus with a computer. For whatever reason (there's no agreement on why) productivity growth has declined since about 1970. Robert Gordon wrote a whole book on that subject, which I reviewed here.

That our economy is growing faster than demographics is likely due entirely to productivity growth.

Trade

Money is earned only by trade and in no other way. I can buy something from you only if I have money. And the only way I can get money is by selling something to you or somebody else. Or put another way, only people with something to sell are able to buy the things I sell. A homeless, unemployed bum has no marketable skill or product to sell, and therefore has no money to buy anything from me or anybody else.

It's the same with countries. We buy toys from China, paying them in dollars. That only works if China can buy airplanes from us, also paid for in dollars. If we didn't manufacture airplanes then China would not sell us their toys since we'd have no money. (A trade deficit just means China doesn't need an airplane today, but will buy one in the future. Meanwhile it keeps its dollars invested in US Treasury bills.)

China is America's largest trading partner. That means China manufactures things that we want to buy, which perforce means that we manufacture things that they want to buy (today or in the future). So Marxists are wrong (and specifically H&B are wrong): we do not benefit from manufacturing all products in the United States. We should only manufacture those items for which we have a comparative advantage. Everything else we should buy from other countries.

This explains why our biggest trading partners are mostly rich countries. Rich countries produce things we want to buy, which means they have money to buy the things we have to sell. A country with nothing to sell also can't buy anything, and therefore is not a market for our products. Our trade with Haiti is next to zero--they've got nothing to sell to us. So Marxists have it precisely wrong: we do not want to impoverish the world. Quite the opposite--we only trade with countries that can produce valuable goods and so can afford our products.

The Marshall Plan and OBOR

The Marshall Plan was a program of loans to war-ravaged Europe after World War II. The purpose was to rebuild the European economy so that Europeans could sell into the US market, enabling them to buy things from the United States. That trade was hugely profitable to both sides of the Atlantic, generating way more than enough to pay back all the loans.

Had the Plan been a failure then US taxpayers would have been on the hook for all the loan defaults, and Europe would never have become a major trading partner to the US. As it is our total trade to European Union countries combined is larger than our trade with China.

OBOR (One Belt, One Road) is--according to H&B--a Chinese version of the Marshall Plan. That means China is lending to other countries in the hopes that they can produce something that China wants to buy, which will enable those countries to pay back the loans. So compare and contrast: during the Marshall Plan we lent money to Germany, Holland, the UK, France, etc. China is lending money to Kyrgyzstan, Uzbekistan, Azerbaijan, Greece, and Venezuela. Let me know how promising you think Chinese investments are likely to be. Hint: they've already written off Venezuela.

There are certainly geopolitical calculations in China's OBOR project, but as an economic effort it's doomed to fail. H&B, for example, point to the Greek port of Piraeus, which they claim is now the largest port in the Eastern Mediterranean. But it's a lost cause--Piraeus has no industrial or agricultural hinterland, and transport to/from the more productive parts of Europe is hopelessly difficult and expensive.

China

Henderson & Burke's letter is mostly about China. I will have more to say about that in a future post.

Further Reading:

• Where Have All The Workers Gone?
• Invention
• Immigration? Si!

100 Years After October Revolution

Three articles have recently appeared celebrating the centennial of the 1917 Russian Revolution. Socialist Viewpoint publishes a piece by Chris Kinder, The North Star highlights an article by Roger Silverman, and finally, Socialist Action posts a feature written by their national leader, Jeff Mackler. Mr. Mackler promises a second installment which I fear may not appear for several more weeks.

All three articles cover pretty much the same territory, which we can summarize with three questions:

1. What was the significance of the Russian Revolution in 1917?
2. How can the success or failure of the Revolution be assessed?
3. What is the relevance of 1917 to our present day?

Significance

All three authors hold the Russian Revolution in very high regard. Chris Kinder, in his opening paragraph, phrases it in utopian terms.

Long disparaged and denounced as it is, the Russian Revolution of 1917 still demands our attention today. No event in history was quite like the Russian Revolution, because no other event before or since has attempted to change the motive force of history in the fundamental way that this event did. By forming the world’s first and only lasting (if only for a few years) workers’ state, this revolution alone offered the promise of a world without the endless class conflict that defined all previous history: a world based on genuine human cooperation; free of exploitation, war, racism, sexism and national, ethnic and religious oppression. The promise of the Russian Revolution embodied the true goals of the vast majority of humanity then, and yes, of humanity today. The fact that this revolution soon was unraveled, betrayed and eventually destroyed only makes the lessons it holds for us today more important to understand.

Mr. Silverman perceives the Revolution as a specter that still haunts the globe.

November 7th, 2017 marks the centenary of an event whose impact still today reverberates throughout the world. The Russian revolution remains a constant spectre at the feast of the rich, its shadow falling across all subsequent history. Since its lessons lie buried in a century of sludge by all those determined to malign its meaning, it is the duty of socialists to unearth them and bring them back to light.

Mr. Mackler credits the Bolshevik Party.

To this day, 100 years after Lenin’s Bolshevik Party led the world’s first socialist revolution, no party has matched its record of social, political, theoretical, organizational, military, cultural, and moral contributions to the advancement of the interests of the working-class masses.

He sees Socialist Action as following in the Bolshevik's footsteps (though he's too modest to suggest that he is himself the reincarnation of Lenin).

Assessment

Trotskyists have a problem. Unlike Communist parties, they are not willing to sweep the Stalinist crimes under the rug. They freely admit to the purges and mass murders of the 1930s, though those events are not explicitly mentioned in any of the articles. And contrary to Conservative critics (like me) they are even more adamantly insistent that the Revolution was ultimately a success. After all, why celebrate it otherwise. It is a high wire act to rescue something of enduring value from an event that otherwise appears disastrous.

Mr. Silverman is the most explicit in tabulating accomplishments, citing economic data.

It is worth remembering that in earlier days, for all its devastating burdens, the planned economy had boasted miracles of economic transformation. To take a measure of what was then achieved, in the fifty years starting from 1913 (the highest point of the Russian pre-revolutionary economy), Russia’s share of total world industrial output had soared from 3% to 20%, and total industrial output had risen more than 52 times over. (The corresponding figure for the USA was less than six times.) In the same period, industrial productivity of labour had risen by 1,310%, compared to 332% in the USA, and steel production from 4.3 million tons in 1928 (at the start of the first Five Year Plan) to 100 million tons. Life expectancy had more than doubled and child mortality dropped nine times. Soviet Russia in its heyday produced more scientists, technicians and engineers every year than the rest of the world put together.

This paragraph illustrates a fundamental problem with Marxist economics, which renders their comparisons irrelevant. That's because they weigh measures of what workers produce much higher than what consumers buy. Producing something (e.g., refrigerators that don't work or cars that break down within 5000 miles or warehouses full of rotting produce) is not important if people don't want or need to buy it. Increasing industrial output by 52 times, or even by a million times, has no value if it serves no need for consumers, i.e., people. That's why sales data is more important than production data.

Mr. Kinder recounts some (in his view) admirable Bolshevik policies without commenting on how successful they were. The most radical was the Decree on Land, which forbade landlords from collecting rent or evicting tenants. He tells in loving detail of the political intrigue this dramatic move caused, though nowhere does he say anything about the economic outcome, which we know was awful.

Mr. Mackler also comments on land reform, writing,

Aside from revolutionary Cuba, no nation since then has implemented a land reform-distribution of that scope. Indeed, today in Latin America every so-called revolutionary or “popular” regime, from Venezuela to Bolivia, Ecuador and Uruguay to Nicaragua and Argentina, has failed to accomplish even a modest land reform. To do so would entail a break with the capitalist system of private property that none of the above dared to contemplate.

Beyond Cuba, he fails to consider Zimbabwe, which implemented a land reform at least as catastrophic as the Soviets. And then also China, unless he is revisiting the existence of the Chinese Revolution. Beyond which it beggars imagination to think that Cuba has an effective agricultural industry.

The problem with transferring all property rights to the poorest citizens is that they, almost by definition, lack the capital (both human & financial) and the access to markets to be meaningful producers. If the goal is to improve agricultural output, this strategy will inevitably fail, as it always has.

Then Mr. Kinder talks about Soviet housing policy. The paragraph is long and hard to excerpt, but here goes.

However, to judge by the numerous critiques of Soviet housing that emerged in modern times, one would think that problems such as these were the whole story, as they repeat endless horror stories about inadequate housing in the USSR. Yet, how many homeless people were there in the Soviet Union?....Russians find it odd that Americans call themselves ‘homeowners’ from the day they close on a mortgage loan. For Russians, ownership only begins after all debts are paid off.” How true that was for millions of so-called “homeowners” in the U.S. who lost their homes in the mortgage fraud-induced crash of 2008!

There was no homelessness in the Soviet Union because it was illegal to be homeless. The alternative was internment in a mental hospital (or worse). And surely Mr. Kinder will acknowledge that almost all Americans had housing far better than all but the Soviet's nomenklatura.

Relevance

None of our correspondents are very specific about the relevance of Russia's revolution on today's world, beyond claiming that it's earthshaking and exemplary.

We've quoted Mr. Kinder at the top of this post. Presumably Mr. Mackler will have something to say in his next installment. That leaves Mr. Silverman, who simply asserts that it continues to be important.

And now more than ever, another world is necessary. In every continent today, a new generation is waking up to the reality that the only future it faces under capitalism is one of poverty, homelessness, hopelessness, discrimination, environmental destruction and war. Millions of people are in revolt, casting around for alternatives, sometimes seduced by false demagogues, but increasingly determined to find a road to change. Those commentators who used to scoff at the idea of revolution are today falling silent. In a recent Greek opinion poll, 33% called for “revolution”. And last year in the USA, 54% of respondents voted yes to the idea of a “political revolution to redistribute money from the wealthiest Americans”. That included 68% of Afro-Americans, 65% of Hispanics, and 68% of 18-29 year-olds.

It is time to rescue the Russian revolution from the history books and return it to its rightful place as a guide to action.

I think if you'd asked those poll respondents "Would you like to live in country like the Soviet Union?" I suspect the answers would have been far different.

My view is that the Russian Revolution has faded into history and has nearly no relevance for the modern world outside of Russia. Within Russia, the Revolution was a cataclysmic event that destroyed their country, culture, and peoples, and from which they will never recover.

Further Reading:

• Book Review: Is Socialist Revolution in the United States Possible?
• Book Review: Trotsky
• Book Review: Lih's Biography of Lenin

Principled Presidential Campaigns

Trotskyists put great store on principle. It shouldn't come as a surprise, therefore, that all of the grouplets I follow are principled in their attitudes toward the 2016 presidential election campaign. Despite the invective they'd likely throw at each other, all of them are loyal to the ideals of the Socialist Workers Party (SWP) of my youth.

In 1936 the SWP took the French Turn, imitating a tactical innovation first used by comrades in France. This entailed joining the Socialist Party (SP), an organization that today has evolved into the Democratic Socialists of America, among other splinter groups. But in the 1930s the SP was the premier, non-Stalinist exponent of Marxism.

The SWP maintained this was a tactic to recruit cadre to revolutionary socialism, which is what I always believed as a comrade. Hence this claim comes as a surprise:

Although party leader Jim Cannon later hinted that the entry of the Trotskyists into the Socialist Party had been a contrived tactic aimed at stealing "confused young Left Socialists" for his own organization, it seems that at its inception, the entryist tactic was made in good faith.

Whatever the truth, The Militant suspended publication for a couple years until the Party reemerged as an independent organization in 1937, having doubled its membership.

In the interim my ancestral comrades must have supported and/or voted for Norman Thomas for President in 1936. Or at least not opposed him.

I recite this history because the modern analog to Norman Thomas is either Bernie Sanders or Jill Stein, or both. What is unprincipled is support for the candidate of a bourgeois party, e.g., the Democratic Party. But none of the grouplets advocate a vote for Hillary Clinton.

My friends in Solidarity are the most consistent in following the former SWP's lead. In a recent editorial they strongly endorse Jill Stein. The piece contains a stunningly clear statement of Trotskyist principles:

Looking not only toward November but also beyond, especially to Bernie Sanders’ supporters who reject the dead-end option of Hillary Clinton, we urge you to consider that you need more than a different candidate: you need a different party. Hillary Clinton, after all, did not “hijack” the Democratic Party. She represents exactly what the Democratic Party really is: Wall Street connections, militarism, and all. There was no way that Bernie Sanders was going to be the Democratic nominee.

A way to phrase this is that Solidarity is making a French Turn into the Green Party. There is certainly nothing unprincipled about this, nor is it inconsistent with Trotskyist history.

Solidarity was certain that Bernie would never be the nominee, and it turns out they were right. In their editorial they go out of their way to be as friendly to Bernie supporters as they can be, e.g., in the lede:

Bernie Sanders' campaign for a “political revolution” lit up the 2016 primary election season like a meteor across the sky. Contrary to conventional wisdom that he’d peak and fade early, Sanders’ challenge to the Democratic party machine lasted throughout the primaries. Surpassing all expectations, he won 23 primary and caucus contests, raised an astonishing $222 million almost exclusively in small donations, and gathered over 1800 pledged delegates.

Louis Proyect (not a grouplet, but a blogger of some renown) gives no credit to Mr. Sanders.

After it became clear that the Sanders Political Revolution was history, the pro-Clinton propagandists redirected their fire at Jill Stein. The contrast between Sanders and Stein could hardly be greater but that made little difference to those who not only favored the two-party system but the hegemonic role of ruling class politicians like the Bushes, the Clintons and Barack Obama within it. Even though Sanders never had any intention of making a breach with corporatist Democrats, he was considered a trouble-maker for pointing out the obvious, namely that the system was rigged in favor of Wall Street.

It's not clear to me what the programmatic differences were between Bernie and Jill--indeed, Jill even offered to give up her candidacy if Bernie would run on the Green Party ticket. Bernie's sin was never programmatic--instead it was his commitment to the Democratic Party.

Solidarity understood this, and may even have supported Mr. Sanders during the primary. However confident they were he would lose, had he won they would've dropped him like a hot potato. Fighting for socialism and supporting the Democratic Party are incompatible no matter what flavor of Trotskyism you subscribe to.

Socialist Viewpoint, very oddly, has almost nothing to say about the 2016 election. The only relevant article in the July/August issue is a very weird piece by Robert Meeropol, entitled Trumpophobia. He is completely convinced that Trump is the second coming of Hitler, but nevertheless he can't bring himself to support Hillary.

A willingness to vote for the status quo because Trump is worse is also a subtle form of cognitive dissonance. It is a refusal to acknowledge, or to act on the knowledge, that we are about to run out of time and so must make climate change the number one priority. Instead of confronting a longer-term, but qualitatively deadlier, environmental impact, some progressives propose we vote for Clinton, a candidate whose policies make that end result more likely, in order to avoid the more immediate sociopolitical threat of Trump. I admit this is not an easy choice, but choosing the latter over the former could be our worst mistake.

Fine. That is consistent with Trotskyism. But nowhere does he tell us who he will vote for--there is no endorsement of Jill Stein or anybody else. And while I have not read every article in the magazine, I detect nothing but abstentionism.

So if Solidarity and Louis Proyect advocate a French Turn into the Green Party, then Socialist Action (SA) and the SWP do not. Of course the French Turn decision is totally tactical--there are no principles at stake. So I accuse nobody of violating their historical consciences.

The SWP's strategy is perhaps a riff on the French Turn theme. They certainly are not supporting Donald Trump, but they are cozying up to his supporters. Their candidates, Alyson Kennedy and Osborne Hart, are specifically addressing the concerns of White, working-class Americans. For the Left this is a very unusual and risky strategy, but the potential payoff could be large. The risk is that they cross a line of principle, though I see no indication of that happening. At least they have a more accurate assessment of what the Trump campaign actually represents, unlike, say, Mr. Meeropol.

The SWP has an advantage in that it's the only grouplet to disown the climate crackpottery enthusiastically embraced by the other comrades. And further, they've rejected antisemitism, which is more than you can say for Jill Stein.

The silliest instantiation of Trotskyism (perhaps barring Mr. Meeropol) is the tactic followed by SA. They are running their own fearless leader as president. This is doubling down on being a really tiny, little, insignificant sect. No intelligence. No leverage. No outreach. It's a complete zero.

Further Reading:

• Old White Man Runs For President
• Which Side Are You On, Boys?
• Good Trump, Bad Trump

The Minimum Wage

Recent articles in the Trotskyist press and elsewhere have covered the Fight for $15, a serious effort to raise the minimum wage. Let's review.

An early report appeared in Socialist Viewpoint, in April 2013. That article covered the demonstration by fast food workers in Chicago demanding a near doubling in the minimum wage to $15/hour. The march set the tone for the fight as it spread nationwide. While the marchers included some fast food employees, the organizers and majority of attendees appeared to be members of already existing unions, notably the SEIU.

At the time I didn't think anything would come of it--the very idea of doubling the minimum wage seems outlandish. But I confess it's gotten more traction than I expected. Since then, Seattle, San Francisco, and most recently Los Angeles have agreed to raise wages to $15/hour. Chicago will raise its to $13, and other cities are making lesser pledges.

In addition, Walmart, McDonalds, and Target have all agreed to give their employees a raise, albeit not to $15. So something is going on. The Militant reported on this last March, which elicited my comments here. What gives?

The Militant revisits the issue again with a recent report by Alyson Kennedy and Dan Fein, two reporters for whom I have considerable respect. Entitled McDonald's Workers' Fight 'Getting Stronger', it's an account of the demonstrations in front of the company's headquarters in Oakbrook, IL.

“I make around 30 meals per hour and earn $7.25 per hour. I can’t even afford to buy one of the meals I make,” Amy Petite, 21, who works at Wendy’s in Knoxville, Tennessee, told the Militant. 

Demonstrators said that as the movement grows, gains are being made. “We won better hours and five days a week where I work,” said Connie Bennett, a Chicago McDonald’s worker. “Before we were getting three or four days a week.”

Socialist Action highlights the campaign of Kshama Sawant, the socialist Seattle City Councilwoman now running for re-election.

Since her election in 2013, Sawant fulfilled her campaign promise to make Seattle the first major city to pass a $15 an hour minimum wage. And she has taken on a number of other issues that are important to working people. In the city with the fastest rising rents in the country, she has championed the fight for rent control, a Tenant’s Bill of Rights, and the demand that the city build thousands of quality apartments to be rented at below-market rates.

The most substantive article comes from Socialist Viewpoint's contributer, Arun Gupta. He reveals Fight for $15 as astroturf, staged by the SEIU.

For example, one fast-food protest in 2013 was run like a military campaign. The staffing plan included the local organizing leadership, four different media workers, half-a-dozen “diffusers” to soothe any trouble, a photographer, videographer, police liaison, chant leader and energizer, a supply team, drivers, onsite legal, a criminal lawyer on standby, breakfast and lunch coordinators, and people designated to hand out signs, flags, t-shirts, and water. A spreadsheet mapped out protests by the minute, noting times and location for loading vans, picking up workers, talking points for press conferences, skits, prayers, dancing in the streets, and “walk backs” of workers the next day to minimize retaliation. Insiders say to maximize turnout, Fight for 15 will sometimes rent hotel rooms for workers the night before a protest, rent vans to drive them to the start point, and provide meals.

 Mr. Gupta, while a staunch supporter of the effort, is skeptical about its chances of success.

A fundamental goal of labor organizing is to take labor out of competition with itself. But that is nearly impossible when low-skilled, low-wage workers have few rights and number in the tens-of-millions. Fight for 15’s approach is unorthodox, but it is constrained by organized labor’s history. Class-struggle unionism has been abandoned by labor leaders who act as junior partners to corporations, like SEIU and Kaiser Permanente, the UAW and auto companies, the machinists union and Boeing, and the building trades and real-estate developers. Many union leaders are also in the pocket of the Democratic Party despite it being in the pocket of Wall Street.

As said, I share Mr. Gupta's skepticism, and that begs the question. Why has Fight for $15 been as successful as it has? I count several reasons.

1)  I am willing to give the SEIU some credit. Their well-organized public relations campaign has surely had some effect, albeit mostly as public relations. The victories in city councils are probably due mostly to this effort.

2)  $15 per hour has passed in cities that have lots of billionaires, and even more millionaires. These are places where the added costs can be passed on to consumers. That won't work in less fortunate towns, such as Fayetteville, NC or Kokomo, IN. So far from starting a trend, the SEIU has just picked the low-hanging fruit.

3) McDonald's and Walmart are both reevaluating their business models. They need a different kind of workforce to make that happen. So I think the pay raises they offer probably won't go to their current employees, but rather to future employees who will have different skills. The lowest-skilled, least educated people will be laid off.

4) McDonald's is shrinking--this year they are closing more stores than they are opening. Further, all the stores in San Francisco will be closing. While high real estate prices are probably the culprit, the fact is that $15/hour will have no effect on McDonald's there.

My socialist friends all make one important mistake. They implicitly assume that raising wages to $15/hour will have no effect anywhere else in the economy. Only the Wall Street Banksters will suffer negative consequences--their endless stash of cash will be slightly diminished because of higher salaries.

But of course that's not true. Mr. Gupta at least points out that profits are shrinking at McDonald's. There is no stash of cash, and the Banksters will not be the ones who pay the bill. So who's the patsy? There are only two choices: customers or other employees.

Except in billionaire cities, customers simply won't pay up. They don't have the money, and/or they have too many other choices.

That leaves the employees. For everybody that gets a pay raise, somebody else is going to be either unemployed or paid less. That's obviously what is happening at McDonald's and Walmart--both companies are looking to trim their workforces. They can afford to give the remaining people raises.

So I'll stick to my original prediction: The Fight for $15 will fail. It is impossible to nearly double the pay of low wage workers in a low-inflation world where everybody else's salaries are flat. It won't happen.

Further Reading:

• Paul Le Blanc and the Minimum Wage
• Robots of the World, Unite!
• Collapsing Pensions

Capitalism Just Won't Sit Still

The lead article in Socialist Viewpoint, by Joe Allen, is entitled The Power of Logistics Workers (reprinted from Jacobin). It's a marvelous article--well written, nicely researched, and well worth the read. It has inspired me to purchase the book by Nelson Lichtenstein on The Retail Revolution--with any luck I'll review it here soon.

Mr. Allen's thesis is that logistics, embodied by companies like FedEx and UPS, represents a choke point in the US economy, and therefore an opportunity for working class activism. Logistics workers today have a power that was once held by auto and steel workers. Of course he has a point, and it's odd in this context that he doesn't mention the recent port disruptions on the West Coast. There a few hundred workers put the screws on the entire global economy.

Still, as Mr. Allen admits, organizing FedEx is not going to be easy. A large percentage of the employees are part-time and the turnover rate is very high. At UPS the problem is slightly different--while the full-time employees are all Teamsters, the 1997 strike against the company ended in a draw. Since then not much has happened. Also, the large number of casual, seasonal workers are non-union.

Mr. Allen takes an expansive view of logistics:

Sociologists Edna Bonacich and Khaleelah Hardie argue that logistics has two interrelated meanings. The first is the “nuts-and-bolts distribution function” that we generally associate with the word. But the other refers to “the management of the supply chain, including the relations between retailers, their producers/suppliers, and their carrier/transportation providers.”

While it used to be that manufacturers determined what got sold and when, now it is the retailer who makes those decisions. Mr. Allen accurately credits Walmart with this revolution

Wal-Mart, from its world headquarters in Bentonville, Arkansas, “cut out a raft of salesmen, jobbers, and other supply chain middlemen, squeezed the manufacturers by shifting every imaginable cost, risk, and penalty onto their books [and has] taught the entire retail world,” according to historian Nelson Lichtenstein, “how the bar code and data warehouse could finally put real money on the bottom line.”

Mr. Allen should go on to say that ultimately it is consumers who benefited--they got better products delivered in a timely fashion at cheaper prices. Always Low Prices, as the saying goes.

That, however, is not the major flaw with Mr. Allen's thesis. A hint to the real issue is found in this excerpt.

The production of capital goods (machines and tools for manufacturing) and consumer goods (for personal consumption) has been and will be central to the capitalist system. Every generation or so, however, capital reorganizes its methods of production and circulation (what bourgeois economists call distribution) and in the process remakes the composition of the industrial working class. 

These changes can be painful and disorienting, and it can take a significant amount of time for socialists and other working-class activists to reorient themselves. This remaking includes modernization of production techniques (the means of production), the organization of production and labor management, the methods of transporting goods to the market, and how goods are actually sold to the consumer.

Two glaring problems stand out. First, that events are cyclic--every generation or so. Capitalists do this out of boredom, we suppose, or perhaps because Mars is in Sagittarius. Mr. Allen forgets that capitalists don't like these painful and disorienting changes any more than workers do--just ask Eddie Lampert, owner of the now combined Sears and K-Mart chains. Bourgeois economists call it creative destruction.

The second problem is the belief that the disorienting changes are behind us for this generation. Mr. Allen just assumes that the logistics revolution of the 1990s and the aughts is over, and now we workers have time to readjust, unionize FedEx, and fight for our fair slice of the pie.

How quaint. And how wrong. For the logistics revolution that Mr. Allen describes--goods manufactured in China shipped just-in-time to your local Walmart store--is as passe as last year's Christmas tree.

Has he not heard that manufacturing is booming in these United States? Textiles, in particular, are coming back. Instead of being assembled by low wage workers in China or Bangladesh, instead they're sewn together by robots in North Carolina. Why? Not just because it's cheaper, though that, too. The cost of shipping the product halfway round the world is saved.

Rather, clothes can be made just-in-time and to order. I don't mean orders from Walmart--I mean the order from Kathy in Pocatello. You know--the lady with the big butt and the tiny feet. The old logistics revolution (i.e., from a decade ago) cut out a raft of salesmen, jobbers, and other supply chain middlemen. But now the retailer is getting squeezed out--products move one at a time from the manufacturer direct to the consumer.

So much for that big, FedEx operation in Memphis, moving mass-market merchandise from one continent to the other. No, not anymore. Today it's the small, contract manufacturer in Boise shipping products all the way to Pocatello. Kathy will get her new, custom-designed, perfectly-tailored dress by tomorrow morning.

Mr. Allen informs us that UPS has 395,000 employees. FedEx employs about 300,000. Does he believe that either of these companies will hire as many people ten years from now? While logistics will still be important, it will look very different than it does today. It won't be organized around a central location in Memphis, relatively easy to unionize.

So Mr. Allen and his doughty band of union organizers better get hopping. They've got at most a decade to organize that Memphis facility before it goes extinct. Because creative destruction isn't a generational thing. Indeed, you ain't seen nothing yet. Our economy and our world is changing faster than Mr. Allen can keep up.

Further Reading:

• Labor Strategy for the Coming Period
• Trotskyists Down on the Farm
• Robots of the World, Unite!

Paul Le Blanc & the Minimum Wage

Paul Le Blanc is surely one of today's leading Marxist theologians, as an article reprinted in Socialist Viewpoint proves. He will surely object to the noun, preferring instead to be known as a theoretician. And with some justification, since many (including me) use the religious term as a pejorative.

Yet the term fits, typically for two reasons. First, Marxist academics are known for their turgid, unreadable prose, presumably imitating the master himself. This, sadly, is a trait they share with other academics, especially those who call themselves post-modernists. Incoherence leads to nonsense, and accordingly these people are not worth reading.

But on this score Mr. Le Blanc is not typical. He is a limpid, clear-thinking writer who actually has something to say, unlike the reputed theologians of yore.

On the second point, however, I count Mr. Le Blanc as guilty. His article, entitled Explorations in Plain Marxism, is typical of the genre, being a Talmudic exegesis on ancient texts and commentaries. Actual data is used only for decoration, by way of example to illustrate some point. Marxists apparently have never heard of Big Data. Concepts such as statistical significance or correlation are completely foreign to them, as is, for that matter, any kind of mathematical relationship. For a discipline that claims to be scientific, it sure pays short shrift to empirical data.

So Mr. Le Blanc's current essay begins with a commentary on sundry descriptions of capitalism. He eventually settles on a baroque, four-part definition that ultimately says that capitalism is pretty much everything we encounter in today's society. Of course, being a Marxist, he misses capitalism's essential feature, so let me enlighten him with simpler language: Capitalism is an economic order that strives to maximize opportunities for consumption.

That's it. Capitalists (along with their employees) want people to buy things. They all work tirelessly to put more, better, and cheaper products and services on the market. They want people to be rich, happy, healthy, and acquisitive. Shop till you drop! So what's wrong with that?

Mr. Le Blanc's next exegetical effort is to define the working class. Here he acknowledges that the proletarian of yore--the brute laborer--is no longer a relevant part of the economy. Instead, skilled labor, people with some autonomy over their working conditions, and people who are part of the "labor aristocracy," have to be included in the working class, broadly understood. Otherwise the Marxist audience shrinks to the vanishing point.

Further, the relatively petty bourgeois layers of the working class are, in fact, most likely to be the class leaders. Mr. Le Blanc cites Engels as a source, as opposed to more modern authors such as Erik Olin Wright.

And then we get to the most interesting part of the article, under the post-modern heading Identity & Intersectionality. The problem is that workers lack class consciousness. This isn't because they are stupid, but because there are so many other ways for them to identify themselves. Or, as Mr. Le Blanc puts it,

One can begin an understanding of this conception by reflecting on the fact that each of us is conscious of having many different identities that are important to defining who we are. Among the variety of such identities—some of which seem more vibrant to us than others—are (in no particular order): our place within a particular family; our gender; our race and/or ethnicity; our nationality; our age; our religious orientation; our attitude toward specific political ideas; our sexual orientation and preferences; the foods we like; our musical preferences, the clothes we choose to wear, and other cultural inclinations; our favorite hobbies and pastimes; organizations that we happen to belong to; whether we live in a city, a small town, or a rural area; our income level; our particular economic occupation and skill level within that occupation; and the socio-economic class we happen to belong to.

Far from having the contradictions of capitalism driven home--as might have happened during the industrial revolution when workers were just workers pure and simple--today they're Sikhs, Jehovah's Witnesses, Koreans, Masons, Veterans, Grandfathers, bloggers, etc., etc. Being an employee of some company is just not the defining feature of life.

The classical Marxist view is that un-class conscious workers are simply stupid, befuddled by bourgeois trickery into believing unimportant nonsense. But Mr. Le Blanc is wise enough to realize that workers are people, too, and have the freedom to associate with whom they please. It will be impossible to squeeze workers back into a Marxist mold, from whence they'll emerge as identical and interchangeable proletons.

Instead,

[w]e are many, but our success will be dependent upon a sufficient degree of class-consciousness among a substantial number of us. This class-consciousness, in our own time, must incorporate insights that reflect the realities associated with notions of identity and intersectionality. It must be said that this approach is not entirely new. “The Social-Democrat’s ideal should not be the trade union secretary, but the tribune of the people, who is able to react to every manifestation of tyranny and oppression, no matter where it appears, no matter what stratum or class of the people it affects,” Lenin insisted.

So let's see how Mr. Le Blanc's Plain Marxism survives an encounter with the struggle du jour, namely the Fight for $15 (an effort to raise the minimum wage). His point that labor aristocrats are the leadership of the movement is true--the leaders are the traditional unions such as the SEIU. Indeed, the actual fast food workers are barely represented.

Second, the movement has had some apparent success--both Walmart and McDonalds have raised wages for their hourly employees. This is probably not because of activism, but rather because both companies have been losing market share. Even poor people--the folks who shop at Walmart and eat at McDonalds--demand high quality products and good service. Neither company has been able to meet that standard recently, and so they need to upgrade their workforce. Rather than hiring casual labor, they want to ditch the "dead-end" job label. They're building a career track for their workers.

This compounds Mr. Le Blanc's problem, creating yet another layer of "privileged" workers who have something to lose if the company goes bankrupt. Yet another layer of "intersectionality."

Richer people--including richer workers--can indulge more interests. They can afford to be Jehovah's Witnesses if they want to. They don't have to work two full-time jobs to earn a living. The problems of "intersectionality" get worse. We're all petty bourgeois now. Organizing a proletarian revolution becomes more and more like herding cats.

More, it is impossible to see how Walmart employees benefit from going on strike. A strike confronts the company with two choices: defeat the union or go out of business. Neither alternative benefits the workers. The Marxists template, that assumes that capitalists and workers are irrevocably opposed, is just wrong. Both of them depend on customers being happy and buying more products. Going on strike doesn't help at all.

So I think Mr. Le Blanc lives in a make-believe land. Admittedly, it's a fun one, with many intelligent participants. But, detached from empirical reality as it is, modern Marxism is more and more akin to a game of Dungeons & Dragons, rather than a true understanding of the world.

Further Reading:

• Walmart's Wages
• Trotskyists Down on the Farm
• What Would Lenin Do?

Working on the Railroad

This post is inspired by Guy Miller's reminiscence reprinted (from Counterpunch) in Socialist Viewpoint, entitled Blood on the Tracks. The title is misleading. Despite Mr. Miller's efforts to be angry at capitalists like Warren Buffett, I sense more an overwhelming pride in his profession. This fellow loves the railroads and all they stand for.

I knew Mr. Miller--more an acquaintance than a friend--back in the days when the Chicago branch was at 180 N. Wacker. I vaguely recall a conversation I had with him after he first got a job with the Chicago & Northwestern. I was one of those College Boys who didn't know too much about real work, so he and I didn't have much in common. But I was genuinely curious what railroad guys did all day.

I confess that I underestimated him. I thought his getting a union job was just a political ruse and that eventually he'd get tired of it and go back to college like the rest of us. So I'm pleased to read that he retired 37 years later from the Union Pacific. That actually squares with my impression of him back then. Mr. Miller was a man you could trust.

You don't work for the railroad for 37 years unless you're trustworthy, reliable, and sober. The best thing the Socialist Workers Party (SWP) ever did for me was the drug discipline--its absolute prohibition on using any illegal drugs. No doubt that was true for Mr. Miller as well. Even today, a primary criterion for employment at the Union Pacific is that you be drug-free. How many children of the 60s could meet that standard?

Railroading is not like working in a factory. It's a skilled job that requires close attention. There is little room for error (as the accident at Lac-Megantic, Quebec, illustrates, where 42 people died). Mr. Miller describes it nicely.

You’re given a stack of track bulletins, each one with specific, complicated instructions. Each one of these bulletins can be a question of life and death. In the course of your run you are constantly interacting with dispatchers, train masters, yardmasters, track foremen, control operators, other trains and emergency personnel. Many of these radio conversations require exact wording, and a long ritualized formula: “Engineer on UP7215 East calling foreman Brown in charge of track bulletin 624 issued on September 24, between mile post 281.6 to mile post 285.7, over.” And so on back and forth the exchanges go over and over, with every word repeated exactly.

It's like being an airline pilot.

Or at least it was like being an airline pilot. For as in that profession much of the work is being computerized and automated. Voice radio communication is what we, today, would call low bandwidth. Much more efficient is the high speed, digital communication from computer to computer. Both the track bulletins and the operator's response can be computerized, and you can take humans out of the equation. Just as the military flies drones all over the world piloted from a bunker outside Las Vegas, so the Union Pacific could drive trains from a control room in Omaha.

Mr. Miller recounts how train crews have gradually been shrinking over the years. Firemen got off in the 1960s. Apprentice engineers disappeared with the shift from steam to diesel. Brakemen and helpers left the tracks with the caboose. Today trains are run by two-man crews: an engineer and a conductor.

Recently the union signed a tentative agreement with BNSF to move to one-man crews--just an engineer. The conductor would work from an office off the train. The company added all kinds of bennies to sweeten the pot, buying off the union negotiators. But, as Mr. Miller reports, it wasn't good enough. The union rank & file voted down the deal, so BNSF is stuck with the two-man crews for the moment.

But only for the moment. Automating trains is a compelling project. Most accidents are caused by human error, so taking humans out of the loop will surely improve safety. No longer will one need to worry about misunderstanding static-filled radio lingo, fatigue, or lack of complete information. A computer can track sensors on every wheel every second--no human could do that. Engineers will stay on board for a few more years as a sentimental relic, but soon they, too, will be gone.

Factory jobs are increasingly done by robots. Over-the-road truck drivers will be displaced within a decade. Airline pilots have ever less and less to do (though they're furthest from redundancy). That railroads should be exempt is impossible.

And now the rot spreads into the white collar workforce as well. Us College Boys can't sleep well anymore, either. Computers have eliminated my dad's old profession--travel agent. Human lawyers are increasingly unemployed because of computers. IBM is working hard to displace the doctor. And we professors are finding our jobs increasingly automated.

So Mr. Miller, retired, speaks fondly about the job he did in the past. And his pride is well-placed. He is an honorable man who did an honorable job. And judging from his article he must have done it very well. But the times they are a changing, and the job that Mr. Miller did doesn't need to be done anymore. That's sad, but that's the way it is.

Further Reading:

• Robots of the World, Unite!
• Your Future Job: Building a Career in the New Normal
• Book Review: The Second Machine Age