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!

Book Review: By the People

The terms ultraright and ultraleft are not symmetric concepts.

Ultraright typically denotes neo-fascist groups, such as Golden Dawn, or France's National Front. The closest American analog might be whatever it is that surrounds David Duke. I have no kinship with these groups. I believe in individual liberty and small government--ultrarights instead assert the fascist meme: We're poor because the foreigners stole all the money. A synonym for ultraright might be far right.

Ultraleft is a more technical term of art, described by Lenin in his famous book "Left-Wing" Communism: An Infantile Disorder. Ultraleftism, far from being a different ideology than mainstream Marxism, instead differs primarily on tactics. Ultraleftists favor terrorism or direct action instead of basic political work. People whose idea of political action is to trash Seattle during trade agreement meetings are ultraleftists. Insofar as it had any political content, the Occupy movement was ultraleftist.

The ur-ultraleftist was Lenin's brother, who was executed for an assassination attempt against the czar. In response to that searing event, Lenin rejected terrorism as a tactic, and indeed, for most of his life opposed political violence altogether. Not because he was a pacifist, but because he thought it was ineffective. In this he agreed with Mahatma Gandhi and Martin Luther King.

The key point is that, unlike my principled disagreement with ultrarightists, the mainstream far Left is distinguished from the ultraleft only by tactics. The Socialist Workers Party (SWP) of my day agreed with groups like the Weathermen and SDS in terms of outcome--a socialist revolution is necessary to overthrow capitalism and to create a better world. But we radically rejected their tactics, which we viewed as not merely ineffective, but downright counterproductive.

More tendentiously, the SWP expanded the definition of ultraleft to include the silly sectarian groups, e.g., the Spartacist League. While they didn't advocate violence or terrorism, they also wanted to short circuit the hard political work of building a revolutionary Party. They'd come to antiwar demonstrations carrying banners proclaiming Socialist Revolution Now, as though that were realistic. (Not that the SWP was any more realistic, but back in the day we thought we were.)

So now comes Charles Murray with his marvelous little book entitled By the People. It is addressed to those of us in the Conservative/Libertarian movement who Murray dubs Madisonians, and presents a tactical way forward for our movement. Mr. Murray's book is one of several that have appeared recently, including Kurt Schlichter's Conservative Insurgency (which I reviewed here), and Charles C.W. Cooke's The Conservatarian Manifesto.

To compare these books, I'd like to redefine the term ultraright in a Leninist sense, to be symmetric with ultraleft. That is, an ultrarightist is a person who subscribes to Madisonian ideals, but who advocates radical, uncompromising (stupid) tactics in the pursuit of those ideals. By this definition the neo-fascist groups are excluded because they are not Madisonians. We don't include by the term wackos like Timothy McVeigh, or the racist militias that supposedly occupy northern Idaho.

A synonym for ultraright (in our Leninist sense) might be Breitbartism, after the late Andrew Breitbart.

The first obvious point is that nobody on the ultraright subscribes to terrorism as a tactic. There is no Madisonian analog to the Weather Underground or SDS. Even the Tea Party fringe, represented by Glenn Beck's Taxpayer March on Washington that drew as many as half a million people, was extraordinarily orderly, to the point of cleaning up after themselves after the march was over. Try as they might, the Leftist media couldn't pin terrorism on the Tea Party, apart from a few ill-chosen signs in defense of the Second Amendment.

So that leaves only the sectarians--i.e., people who demand an instantaneous return to a Constitutional order. This is the Madisonian analog to the Spartacist League. These people are preaching to the choir. They inspire us Madisonians--who among us cannot warm to Sarah Palin's oratory or Andrew Breitbart's courage? But at the end of the day we're only 20% of the electorate. We can't win without finding allies outside of our movement.

And that is the message of Mr. Murray's book. His is a polemic against the ultraright (again, in our Leninist definition). He argues persuasively that Constitutional Governance Now is not a practical or reasonable demand. Too much has changed, both in our society and in the world.

For example, Social Security is manifestly unconstitutional. The enumerated powers of Congress does not permit the establishment of a Social Security system. And yet in a country where life expectancy is now 80 years, and human beings who are not capable of planning that far into the future, something like Social Security is inevitable. Mr. Murray suggests that FDR could have asked for a constitutional amendment, similar to what was done for the income tax or prohibition. That would have been a good idea. But today it is simply impossible to roll back Social Security, along with all the unconstitutional precedents it established.

Similarly, the abolition of the regulatory state is impossible. There are too many institutional barriers to dismantling the EPA, OSHA, and the EEOC, ranging from corporate stakeholders, corrupt politicians (in both parties), a sclerotic court system, and an army of lobbyists. The Constitution as James Madison and Thomas Jefferson envisioned it is gone and buried, never to come back in its original form.

While I think Mr. Murray is too pessimistic, he is certainly correct in saying that electing, say, Ted Cruz as president is not going to make any difference. The problem is both more difficult and more complicated than that. What is required, instead, is something more...Leninist...for lack of a better word. Mr. Murray's strategy has three legs.

• Compromise. We will have to come to terms with those aspects of the nanny/regulatory state that make sense. This includes Social Security, and some bits of the EPA, etc.
• Alliances. We will have to find points of agreement with non-Madisonians. We can, for example, unite with Liberals on certain states rights issues, e.g., drug legalization.
• Discipline. We will need to pick our battles very carefully. Mr. Murray proposes a form of lawfare, but one where the targets are very carefully chosen. For example, he excludes a battle against the tax regime, first because the income tax is constitutional, and second because it reduces our cause to pecuniary issues.

The ultraright approach is represented by Kurt Schlichter's book, Conservative Insurgency. Mr. Schlichter proposes a take-no-prisoners approach that would work wonderfully if we Madisonians were in fact a majority of the population. But since we're not and likely never will be, this is just wishful thinking.

In my review of Mr. Schlichter's book I argued why I believe the welfare state has to grow. I am not in favor of a growing welfare state, but I predict that it will happen. I mention this because Mr. Murray shares my analysis--modern technology will render large numbers of people unemployable. Madisonians have to come to terms with this reality, as unpleasant as it may be.

Oddly, Mr. Murray barely mentions immigration issues. I support relatively free immigration. Mr. Schlichter opposes it, as does Mr. Cooke. I am sympathetic to their arguments, nor do I doubt their Madisonian bonafides. But I will point out that fascist groups (we're poor because the foreigners stole all the money) all oppose immigration, mostly for racist reasons. Unfortunately, arguing against immigration allies us with people I don't want to be allied with, which is one of the many reasons I am pro-immigrant. I surmise that Mr. Murray shares my concern.

Further Reading:

• The SWP Defends Civilization
• Book Review: Lih's Biography of Lenin
• Book Review: Nigel Farage

Book Review: The Frackers

I really enjoyed this book.

The Frackers, by Gregory Zuckerman, is an excellent account of the short history of fracking. It's a spellbinding description of the over-sized personalities that have made the phenomenon happen.

Unlike Silicon Valley, fracking is not the preserve of youth. Indeed, most leaders were older people. The modern founder of the art was a fellow named George Mitchell (not to be confused with the clown politician from Maine), who started work on the idea in his sixties back in the 1980s. He kept doggedly at it until his dying day--at age 94 in 2013.

Mr. Mitchell was born to Greek immigrant parents. His father's name was Savvas Paraskevopoulos, whose first job in America was working on the railroad. The Irish paymaster could neither pronounce nor spell his name, declaring from now on your name is the same as mine: Mike Mitchell. Son George married another Greek immigrant, siring ten children of his own, and settling in Galveston, Texas.

He went on to build Mitchell Energy & Development, turning it into a Fortune 500 company. The development part included Houston's planned community of The Woodlands, a successful suburb. But the money came from oil and gas. For most of his career he was a classic wildcatter.

Perhaps as a retirement activity, Mr. Mitchell became obsessed with the Barnett shale, a geologic feature that underlies Dallas. It was long known that there was natural gas in shale rock, but nobody besides Mr. Mitchell thought it could be profitably extracted. In the beginning he was a minority of one, but already being a billionaire he had some cash to invest in the hobby.

There are three ingredients to fracking's success. First was the use of explosives to crack open an oil well and get the oil flowing. Mr. Zuckerman tells us this practice began during the civil war. Second, in order to successfully remove gas from tight shale, fracking fluid had to be used to open up cracks in the rock, and then to prop them open so that the gas would continue to flow. Mr. Mitchell was the man who put these two concepts together, so we can rightly consider him the father of the industry.

The third key to fracking's success, which Mr. Mitchell did not initiate, was horizontal drilling. This is a practice where a well is drilled down to the gas-bearing layer, and then horizontally drilled along the layer. Mr. Zuckerman reports that this practice originated in a government lab, probably the only positive contribution of the federal government to the industry. It was later refined to a high art by Harold Hamm, founder of Continental Resources.

A second difference between fracking and Silicon Valley is that, in the latter, most of the participants graduated or attended elite schools, Stanford and Harvard being the most prominent. That's much less evident with the frackers. Mr. Mitchell's alma mater was Texas A&M; another common choice was the University of Oklahoma.

Still, generalizations are made to be broken. Aubrey McClendon graduated from Duke University, co-founding Chesapeake Energy at age 28. He comes from a distinguished family, sharing his heritage with a former Oklahoma governor, and the founders of the Kerr-McGee Corporation. Still, as his mother often pointed out, illustriousness didn't translate into a trust fund--Mr. McClendon would have to earn his own way in the world. Despite lacking for money, he did inherit blinding charisma, capacious intelligence, and single-minded drive. He's since made and lost a fortune, and made it again. Today he's a billionaire--again.

His partner was a fellow named Tom Ward, one of 13 children of an alcoholic, hardscrabble farmer from rural Northwestern Oklahoma. He grew up in Grapes of Wrath country. Interested in oil from the beginning, he majored in petroleum land management at the University of Oklahoma. No famous pedigree there, but Mr. Ward also came with a high IQ and a prodigious work ethic.

Chesapeake Energy (founded by McClendon & Ward in 1989) was named for Mr. McClendon's pleasant vacations along Chesapeake Bay--it was always an Oklahoma company. They added horizontal drilling to the tools inherited from Mr. Mitchell. Instead of the Barnett Shale, the company branched out to other fields such as the Austin Chalk and the Bakken. Mr. McClendon raised money and leased drilling-rights acreage. It was left to Mr. Ward to turn those assets into a revenue stream by producing natural gas.

They were successful beyond their wildest dreams--too successful in fact. Mr. McClendon, suave and charming, was an ace on Wall Street and brought in money by the bucket. He used that to buy up drilling rights in odd places where nobody else expected there'd be natural gas. He got it cheap. Through the 1980s people assumed that the US was running out of oil and gas. Through the 1970s gas prices had slowly risen, reaching $2.71 in 1984 (worth $6.28 today). Mr. McClendon assumed he'd make a killing selling gas, which he did.

But Mr. Ward (along with others) was too successful. Fracking was so productive that by the late 1980s gas prices began to go down. By 2012 they reached a low of $1.89. Fracking was no longer profitable, but Mr. McClendon couldn't stop. He kept buying drilling rights and going deeper in debt. Mr. Ward, who didn't like the debt, quit. And eventually Mr. McClendon got fired (only to come back again in a different company).

A third difference between the frackers and Silicon Valley is that no women are involved. Silicon Valley supposedly excludes women, but at least there they make up 10-15% of the leadership--most famously Sheryl Sandburg. But amongst the frackers there are zero women. The men are all highly driven, single-minded, workaholic, and extraordinarily intelligent. In many respects they are all very far out on the bell curve--not just in terms of intelligence. Few women are to be found amongst those very unusual people.

Silicon Valley was and remains an important driver of technological progress. But so far in the 21st Century fracking is the most important new technology. Government played only a very small positive role (along with a somewhat larger negative one). The major oil companies (ExxonMobil, et al.) also ignored the business until it was too late--they remain bit players. This was an industry founded by wildcatters, using their own money and following their own dreams. It is a true, American success story.

Mr. Zuckerman gives a balanced and (I believe) correct account of the environmental hazards. The industry has mostly underplayed those (Mr. Mitchell being a notable exception), an attitude that now hurts them. The environmental critics, on the other hand, have hugely exaggerated the risks involved. Fracking is much better for the environment than any alternatives, especially coal. I'd argue it's cleaner than solar power given the current state of that technology.

Panic-mongering aside, fracking is here to stay. And eventually the technology will spread around the globe. The world is not running out of fossil fuels any time soon.

Further Reading:

• Working on the Railroad
• Book Review: A Troublesome Inheritance
• Book Review: The Second Machine Age

How to Change the Climate

Back in 2005, in the aftermath of the disastrous, Indian Ocean tsunami, The Militant coined a phrase that shouldn't need to be said: "Geology indisputably played a role." As though anybody argued with that. But The Militant thought geology played a rather small role, as the rest of the paragraph makes clear.

The staggering loss of life produced by the tsunami’s wrath, though, was largely due to the absence of any warning system—including in places such as India where the waves struck the shores four hours after the quake. Resources on hand—from communications, to roads, transportation, electrical grids, medical care, and food supplies—have also been scarce to respond to the disaster in its immediate aftermath. These are the products of the plunder of the region’s resources and labor over decades by the wealthy imperialist states—whose governments are now tripping over each other to paint themselves as generous benefactors—aided and abetted by the local capitalist regimes.

The claim--that capitalism bears most of the fault for the disaster--is silly. I argued as much in this blog's past incarnation, here. Still, at least The Militant granted some role for geology, or more generically, for acts of God. Not every problem can be laid at the feet of capitalism.

Not so with Socialist Action. They have gone from the plausible hypothesis that human activity has some influence on the climate, directly to the claim that the climate is completely within human control. It is only because of the greed of the bankers and capitalists that we have bad weather at all. The opening sentence of Andrew Pollack's article on Hurricane Sandy makes the point. "By now the scientific consensus is clear: the fury of Hurricane Sandy was greatly magnified by human-caused climate change." No room left for natural causes.

Far from being a scientific consensus, the sentence is a crackpot idea, arrived at by taking literally the most exaggerated fever dreams of extremist climateers. But our task here is not to argue with them, but rather to take the statement as a given. Assume, therefore, that the future climate (and not the distant future, either) depends sensitively on how we as a society organize our means of production.

The relevant question then becomes How do we change the climate?

That brings us to the speech by the South African activist, Patrick Bond, delivered in Tunis in March (reprinted in Socialist Action). The event was an organizing meeting in preparation for the COP21 United Nations shindig to be held later this year in Paris. Mr. Bond discussed different strategies that the Left might pursue. Socialist Action makes it clear they don't agree with either of his alternatives, and instead in a lengthy preface propose a third.

The first option (which I'll dub the reformist strategy) is to work "inside." That means collaborating with governments and NGOs to find practical solutions to curb CO2 and methane emissions, ideas such as carbon taxes, carbon capture, or more nuclear power.

Both Mr. Bond and Socialist Action reject the reformist strategy. First, it in no way rises to the urgent challenge of rescuing the planet from imminent disaster. Minor fiddling with CO2 output is drastically insufficient. Second, reformists will inevitably get bought off, making deals with the capitalists for small (albeit lucrative) favors that don't benefit the climate. Trotskyists have always opposed reformism as being class-collaborationist, which in their view always fails. (No doubt in terms of making revolutions it always does fail, but then so does Trotskyism.)

Mr. Bond supports the second alternative, that I'll dub the ultraleft approach. It can be summarized as shut the mother down. The template is the protests in Seattle around the WTO conference in 1999. Those did manage to short circuit the WTO meetings, but otherwise seemed to have rather little impact. It is not clear how similar events in Paris are going to modify the climate. Throwing a temper tantrum is rarely a constructive solution.

Socialist Action poses a third solution, which I'll call the mass movement strategy. This is always Trotskyists' favorite solution, since ultimately organizing the masses is the only way to effect revolutionary change. Their model is the People's Climate March in New York, last Fall, in which 400,000 people marched for--just what exactly? Socialist Action raises the slogan System change; Not climate change, which presumably is the modern analog of the Vietnam war era slogan, Out Now.

But the slogan is completely empty. First, system change is much more ambitious that simply changing the climate (though that seems hard enough). It requires a root and branch change in the very way we organize everything. Climate activists--i.e., people who are actually seriously interested in problems related to climate change--will be unwilling to make their task oh so much harder and more complicated. Rather than simplifying the problem for them, Socialist Action's slogan makes it sound impossible.

Second, system change is not obviously connected to climate change. What guarantee is there that changing the system will improve the climate? Certainly it didn't work in the former Soviet Union or Maoist China. The only evidence that it will work in the future are vague promises from Andrew Pollack, Bill Onasch, and Carl Sack. And activists are supposed to stake their cause on that? Not likely.

And finally, system change is completely disconnected from any individual effort. This, too, is a Trotskyist theme, because they maintain that all social problems are because of capitalism, not because of any individual cupidity.

So, for example, Socialist Action never asks how Patrick Bond got from Durban to Tunis. Presumably he took an airplane, which is not very environmentally conscious of him. Socialist Action will claim that this is irrelevant, because until we change the system, nothing Mr. Bond can personally do will change the climate. But after system change, then the airplane ride will be OK. Because--don't you know--pilots working for the working class pollute much less than pilots flying planes for capitalists. Go figure.

The problem with Socialist Action is they moralize everything. The climate is a moral issue, capitalism is immoral, and therefore capitalism must be bad for the climate. The argument doesn't even work as a syllogism even if you're willing to grant the premises. It's completely nutty, as I suspect the folks at Socialist Action realize. Their involvement in the climate fight is merely tactical--to recruit members to their cause--rather than any heartfelt seriousness about the urgency of climate change.

The climate movement is ultimately doomed. First, the catastrophe predicted by the likes of Socialist Action is unlikely to come true. So facts will eventually prove them wrong. But more importantly, solving the climate problem ultimately means forcing everybody into poverty. The marchers in New York believe themselves exempt from that fate. They are all part of the rich world, comfortably middle class, even by American standards. They can afford to ask other people to forfeit their comforts and livelihoods.

But poor people--people in China, India, Bangladesh--depend much more directly on world trade and fossil fuels for what little prosperity they have. The climateers--unwittingly to be sure--are condemning billions of people to utter destitution, forced back to scratching out a living as subsistence farmers. Poor people are smart enough to realize that the climate movement does not have their back.

That's why India, for example, is simply rejecting the whole movement. PM Narendra Modi speaks for the vast majority of his countrymen when he refuses to accept poverty as an outcome. I agree with him.

Down with poverty!

Further Reading:

• Socialist Action's Convention
• Trotskyists Down on the Farm
• Red-Baiting the Climate

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?

Labor Strategy for the Coming Period

This post begins with an article in Socialist Action by Carl Sack, entitled 'Right to Work' Battle in Wisconsin. The scare quotes imply that "right to work" is anything but. Indeed, Mr. Sack claims that "Median wages for workers in states with Right-To-Work laws are almost $6000 a year lower than in states without them."

Of course that's the wrong metric. The true measure of government policy is the relative size of the total payroll--not the pay per worker. Even if the median salary is lower, but many more people are employed growing the total payroll, then both workers and society are better off.

The article (well-written and informative) reports on Wisconsin becoming the 25th state to pass a right-to-work (rtw) law. That means that workers in that state may join a union if they wish, but are not forced to do so if they don't wish. It is a right to disassociate. The so-called "battle" was a bit of a dud. There were a few demonstrations around the state, but the law passed with surprisingly little controversy.

The big brouhaha occurred in 2011 when the newly elected Republican governor and legislature defanged the public employee unions, essentially imposing rtw-light on them. Accordingly, as Mr. Sack reports, this "...has decimated the membership of the state’s public worker unions and the wages and benefits of public workers here."

So that begs the question. If unions are so valuable to workers, why don't they flock to join even without the legal obligation? The reason is pretty obvious--unions are no longer able to deliver benefits to their members commensurate with the union dues. Thus most workers simply choose to stop paying dues. I'm forced to pay dues to the professors' union, even though I don't think I derive any benefit from it.

Mr. Sack suggests that the public employees back in 2011, and private sector unions today, should have called for a general strike rather than fight the changes through the political process. Of course that wouldn't work. Public employees are not popular people these days. (Scott Walker has won three elections in four years, all by substantial margins.) Going on strike would simply have meant they'd all be fired.

The college professors wouldn't even be missed if they went on strike.

An article in North Star (whose new page design is vastly improved) by Ben Smiff is entitled In Search of Workers' Power. This engaging piece is about "deindustrialization," and attempts an analysis about how the labor movement should respond to the phenomenon.

Deindustrialization has two parts: 1) an increasing percentage of labor is working in so-called service industries, and 2) manufacturing has moved to rural places in the Southeast, far from any union influence.

Mr. Smiff recounts the efforts of workers in Minneapolis sandwich chain called Jimmy John's to organize a union. They eventually failed--by narrowly losing an NLRB vote. Why--if a union were such a slam-dunk good thing--would the election even be close? Because there is no money in fast food. The union would never be able to keep its promises. The only "benefit" accruing to the employees is the right to pay union dues.

Mr. Smiff notes that manufacturing remains a major part of the American economy, still employing 9% of the labor force. {Emphasis mine}

What’s more, as Kim Moody and Charlie Post point out in a recent article in Socialist Register 2015, despite overall losses in manufacturing jobs over the past several decades, as it stands today, “the United States produces more goods… than ever”:  ... 

The reason for this, Moody and Post note, relates to “enormous productivity increases since the early 1980s[…].” This stems from unceasing speed-ups imposed upon workers through the introduction of new machinery and, most significantly, through the social reorganization of production along more-efficient lines – so-called “lean production” techniques. {Emphasis mine}

Speed-ups is surely the wrong word. Automation, globalization, and above all, logistics, are more accurate descriptors. Manufacturers are able to deliver more products of higher quality to more people at ever cheaper prices. Only a Marxist can complain about that.

Mr. Smiff does us a good turn by citing an important article by Jasper Bernes entitled Logistics, Counterlogistics, and the Communist Prospect. Mr. Bernes is among the few Marxists who actually takes deindustrialization seriously.

Today’s supply chains are distinguished not just by their planetary extension and incredible speed but by their direct integration of manufacture and retail, their harmonisation of the rhythms of production and consumption. Since the 1980s, business writers have touted the value of “lean” and “flexible” production models, in which suppliers maintain the capacity to expand and contract production, as well as change the types of commodities produced, by relying on a network of subcontractors, temporary workers, and mutable organisational structures, adaptations that require precise control over the flow of goods and information between units.

Mr. Bernes describes accurately the dense connectivity of the modern economy, which he labels logistics. In such an environment it is almost impossible to go on strike. There exists another plant somewhere on the planet that can replace your output almost instantaneously.

Yet, as Mr. Bernes mentions, there are still a few choke points where labor holds the edge. One of these is the huge container ports, through which almost all freight must flow. He (writing in Sept., 2013) cites the Occupy blockade of the Port of Oakland. An even better example is the recently concluded work slowdown at the Port of Los Angeles. There a small group of longshoremen held a knife to the throat of the entire economy, extorting for themselves yet another large salary increase. They can get away with that as long as they don't overplay their hand. (It seems to me they've been very skillful.) For if they raise costs too high, then public pressure will eventually force their ouster, or somehow the Port of Los Angeles will be bypassed.

Mr. Bernes makes two claims--one which I think is factually wrong, and the second which makes me angry.

The first is that the new logistics is centralizing. He implies that it only works for big companies, such as Walmart. While it is true that Sam Walton was a leader in establishing the new logistics, it is not true that only Walmart-sized firms benefit from the technology. Indeed, even Ma & Pa shops use container shipping. Every product is assigned an SKU (store keeping unit), represented by the little barcode on the box. There are on the order of trillions of SKU numbers. Amazon (as best I can determine from the web) stocks 125 million SKUs. Walmart only carries around 300,000 SKUs. So of all the millions and (maybe) billions of different products out there, Walmart only sells a tiny fraction.

Most of the rest are sold by small firms. Amazon is less and less a store, and more a platform for third party vendors. My immigrant wife's employers sell products from the old country via Amazon, imported by container ship. And theirs is a small business indeed. So Mr. Bernes is wrong about how logistics favors big firms.

His second claim is even worse. He writes,

Much of the machinery of contemporary logistics aims to streamline the circulation of commodities and not use-values, to produce not the things that are necessary or beneficial but those that are profitable: individually packaged boxes of cereal, for instance, whose complex insignia distinguish them from the dozens of varieties of nearly identical cereals (sold and consumed in sizes and types that reflect certain social arrangements, such as the nuclear family).

So there it is--Marxism's dedication to poverty is laid bare. You want Cheerios for breakfast? Why you petty bourgeois scumbag! How dare you decide you want to eat something that has no use-value! After all, Jasper Bernes knows much better than you do what you should eat for breakfast. After all, he teaches poetry at UC Berkeley. He is much, much smarter than you are.

North Korea, Cuba and Venezuela are not poor because of some evil, imperialist plot. No--they are poor by design. Communism can't deal with too many SKUs. Everything has to be filtered through poetry professors. You little shits just need to get with the program.

Or face the firing squad.

Further Reading:

• The North Star
• Left Labor's Lost Cause
• Labor's Final Step

Walmart's Wages

Perhaps it's not surprising that The Militant is the only Trotskyist paper I follow that bothered to cover the news about Walmart raising it's wages. An article by Glova Scott states the facts clearly in her lede.

The Feb. 19 announcement that Walmart will increase starting wages to $9 an hour in April and for current “associates” to $10 next February puts wind in the sails of all of us fighting for better pay, a 40-hour workweek, union representation and dignity.

The Militant has long done a superb job of covering labor market issues, for which I commend them. I'm not sure that makes them more "revolutionary" (whatever that means), but it does make the paper more interesting for me to read.

Ms. Scott's explanation for Walmart's new found generosity is predictable. She credits the "...years of protests, including recent actions by OUR Walmart, backed by the United Food and Commercial Workers union." Wages are set from the bottom up, she maintains, and through struggle Walmart workers have done us all a favor by forcing more pennies from their employer.

I find this story unlikely. Very few OUR Walmart participants work at Walmart, and likely they're not even Walmart customers. Why Walmart should raise wages by a billion dollars on their account defeats reason. OUR Walmart is an irrelevant nuisance.

Some argue (not Ms. Scott) that Walmart is anticipating raises in the minimum wage, preempting the event. This might be more of a factor, but Walmart's core business is in low-wage states away from the coasts. So this does not look to be an important criterion--though surely more significant than OUR Walmart. (h/t Megan McArdle)

The CNBC crowd has yet another explanation, namely the imminent return of inflation. Their theory is that labor markets are becoming increasingly competitive, and therefore wages are being bid up. When this happens the Fed will inevitably raise interest rates to prevent a price spiral. And we should all quiver in our boots. Ms. Scott mentions this theory in passing, mostly as a reason why OUR Walmart's campaign was now successful.

I find the CNBC theory implausible. Labor market participation is still very low, and a relatively large number of workers are employed only part time. There remains a lot of slack in the labor market writ large, though for skilled workers it is much tighter than it used to be. Still, I don't think inflation is anywhere on the horizon. Everything from a glut of oil, to the rise of the dollar, to slowing economies elsewhere in the world argues against it. I see no evidence of wages generally being bid up anytime soon.

I actually think Megan McArdle has hit on the truth. She summarizes her case nicely in her closing paragraph.

I’ve written before that a company’s labor model is its business model, and Wal-Mart is no exception. If Wal-Mart is making a radical shift in one, it’s likely that you can expect at least a modest change in the other.

That is, Walmart doesn't need more employees, but rather different employees. It wants skilled workers who are willing to commit to the company for the long term. Walmart is by far the largest grocery store chain in the country. As Ms. McArdle points out, you can't run a produce or meat department with casual labor. When we used to live in Indiana we bought most of our groceries at Walmart. But since moving to New York we've found Walmart completely unsatisfactory. Shoddy merchandise, empty shelves, and terrible service made shopping in the store unpleasant. I haven't been in the store for several years now.

Walmart caught a lot of flak for its poor performance, and it's earnings have stagnated accordingly. You can't fix this without the right kind of workforce. The wage hike is the start of a new business model.

There are other clues. Fortune reports that Walmart is building a career path for its employees.

The company is also piloting a training program to help employees move out of entry-level positions and potentially make $15 an hour and more with increased responsibilities.

I'll take issue with one statement from Ms. McArdle. She says

Wal-Mart’s business model is, as my old entrepreneurship professor used to say, “Big Stores in Small Towns.” Its core value proposition is, as the slogan goes, “everyday low prices.” Its core demographic is the lower middle class. For a long time, this was a recipe for rapid growth. But the heartland is pretty much full of Wal-Marts, the lower middle class is struggling harder and spending less, and there’s more competition on the “low price” front than there used to be.

I'm not sure the lower middle class is struggling as much she says. Contrary to popular opinion, everybody in this country is getting richer. While incomes for lower middle class households might be decreasing, it's only because there are fewer people per household. Fewer people means money goes around further, and even those shoppers have more discretionary income. Walmart has competition from Target and TJMaxx. Accordingly, it has to move upscale.

Upgrading its workforce means that some current Walmart employees just won't cut it. Indeed, it is likely that they'll be hiring fewer employees overall. The folks most likely to be let go are those with the lowest skills. They may be forced out of the labor market.

John Tamny grapples with this problem in a recent piece.

About those choices, it once again needs stressing that the employment possibilities today aren't the same as they were in the mid ‘80s, late ‘90s, or as recently as 2003. Work opportunities have surely shrunk since then, and were particularly dire back in 2008-2009. There's no flippancy here despite a more unconventional attempt to explain unemployment. The main reason the latter remains high is due to government barriers to growth that have reduced the number of quality of jobs on offer.

I don't think he appreciates the difficulty. The redundant Walmart workers will join my neighbor's son, a man in his early 30s who has never had a job. He clearly has a below average IQ (though not retarded). I don't think he's ever been in serious trouble with the law. Obviously he made bad decisions back when he was 18 or 19 (drugs). You can blame him for that if you want, not that it helps any now.

How is he ever going to be employed? He'd need $2/hour just to cover the expense of working (gas, clothes, laundry, lunch). There's no way his labor is worth that much. So all he does is live off his mother's social security check.

There are lots and lots of former Walmart workers who are going to join him. So I think Mr. Tamny underestimates the barriers to full employment. Short of massive government subsidies these people will never find jobs.

The welfare state, far from shrinking, is likely going to grow. I see no way around that.

Further Reading:

• Working on the Railroad
• Robots of the World, Unite!
• Book Review: Conservative Insurgency