Michael Roberts & Monetarism

(Source)

Economist Michael Roberts pens a piece posted in Left Voice entitled Monetary Tightening, Inflation and Bank Failures. The article is about all those things, but the subtext is an argument against monetarism--and that is the aspect I wish to address. I think Mr. Roberts gets it wrong.

Monetarism (for our purposes, at least) can be summed up by Milton Friedman's famous dictum,

Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.

This is undoubtedly true, but it is frequently misinterpreted by many commentators. Especially on my side of the aisle, it is often claimed that the "Fed" is just "printing money" as fast as it can--one helicopter drop after the other. In fact, the Federal Reserve Bank can't print money--all it can do is add money to bank reserves. Those may eventually leak out into the economy, but such leakage depends not on the Fed, but on the economy's demand for money. 

While the Fed can't print money, the Treasury certainly can. The former is supposed to be politically independent (and to some extent it surely is) and is responsible for so-called monetary policy. The latter--responsible for fiscal policy--is very much beholden to the president and Congress (i.e., inherently political), and isn't allowed to spend anything without legislative authorization. Given that authorization, it can effectively print money.

As Mr. Friedman's suggests, inflation doesn't just depend on how much money is being created (or "printed," if you prefer that term), but also on how much money is needed by the economy. That is, if the supply of money ("printing") is balanced by the demand for money, then there will be no inflation (or deflation). Conversely, if the supply of money exceeds the demand, or the demand for money is less than the supply, then there will be inflation. (The reverse will lead to deflation.)

And this is where I think Mr. Roberts makes his most fundamental mistake: he confuses the supply of money with the supply of goods and services. He writes (link in original),

        And in a recent post, I recounted a long study by Joseph Stiglitz that offered comprehensive data showing that inflation was caused by supply-side shortages not ‘excessive demand.
        Since then, more evidence has appeared backing up the supply story.  One recent paper found that when the economy came out of the COVID pandemic lockdowns and slump there was a shift into buying more goods.  However, producers were unable to deal with this surge.

In the linked post, he compares the "supply story" with the demand story (here referring to the supply and demand of goods and services, not money). In the former, it's because of pandemic-driven snafus in the supply chain that caused price rises, and hence inflation. A variant of the "supply story" is the so-called wage-price spiral. In this case it is the labor supply that's causing the snafu, and the economy responds by raising prices.

Contrary to the supply story, it could be higher demand that's causing inflation. People want to buy more stuff, the stuff is not being produced at sufficient volume, the price of stuff goes up, so people empty out their bank accounts to buy the stuff anyway, even at the inflated prices. That is, inflation is caused because demand has outstripped supply. 

Mr. Roberts does not subscribe to the demand story--he believes that it's supply snafus that have caused inflation. The solution, therefore, is not to curtail demand (e.g., by raising interest rates), but instead to augment supply. In Mr. Stiglitz's opinion this is to be done by more regulation of the market.

I think both analyses are wrong. There is no question but that the pandemic made us poorer. It reduced the supply of a large number of goods and services--driving many businesses out of business altogether. Governments around the world made (in varying degrees) many things illegal, e.g., eating in restaurants, riding on airplanes or cruise ships, working in an office or factory, sending your children to school, etc. Increased poverty was the order of the day.

But poverty does not cause inflation--nor does inflation automatically cause poverty. Inflation is caused by variations in the money supply. Misters Roberts and Stiglitz err in conflating the money supply with supply and demand in the goods economy. They are not the same thing. And we're back at Mr. Friedman's dictum--inflation results when the supply of money (not goods) exceeds the demand for money (not goods).

The Fed purports to moderate the money supply by using two tools: 1) open market transactions to keep overnight interest rates within a certain range; and 2) varying the size of total bank reserves by various tricks including quantitative easing (QE), etc. These are very blunt instruments, and they've gotten blunter with time. The link between overnight interest rates (that the Fed controls) and longer term interest rates (such as your home mortgage) looks to have broken down. The effectiveness of the other tools is dubious at best.

More, there are too many other players in the monetary game besides the Fed. There's the whole shadow banking network (including money market funds) that exists outside of the Fed's direct reach. And then the Eurodollar market (dollars housed outside the US, uncontrolled by the Fed) is huge and clearly has an impact on the domestic money supply. So the Fed is, in significant measure, a paper tiger. 

However little control the Fed has over the money supply, it does regulate and backstop the banking system (see Bagehot's Rule). This job is as important as ever, especially right now.

But even if the Fed can't control the money supply, it is still possible for the Treasury to "print" money. So they don't actually print it, but instead they borrow it. Through its QE programs the Fed dramatically increased the levels of bank reserves. This allows the banks to lend way more money if there is a market for the loans. There was a huge market--between Trump and Biden, the government borrowed $3 trillion for so-called "Covid relief." This had absolutely no effect on the supply of goods--not a single supply snafu was straightened out as a result. But it had a huge impact on the money supply.

Mr. Roberts seems to think this had no effect on inflation. He writes,

...that increased money supply is associated with rising house prices and stock prices – no mention of the prices of goods and services.  And that is the point.  Strong money supply growth and low interest rates up to the point of the pandemic did not lead to rising prices and accelerating inflation in the shops.  Instead, money supply fuelled a credit boom expressed in a boom in real estate and financial assets.

He's right, of course. The immediate effect of the Covid Relief windfall was to increase savings--after all, with pandemic restrictions there were no easy ways to spend the money. So it went into the stock market, high-end real estate, bitcoin and other crypto assets, and collectables. Mr. Roberts doesn't count this as "inflation" because it's not measured by the CPI. But it surely is a way to store money for later use.

And later arrived with the end of the pandemic rules. All that money was pulled out of storage and poured into the goods and services economy. Accordingly, asset prices tumbled, but inflation in goods and services soared--and we're confronted with the inflation problem we have today. Like all inflation, it's caused by too much money chasing too few goods--and it has nothing to do with a wage-price spiral or a supply snafu or some such.

What to do about it? The Fed will have to raise interest rates and engage in quantitative tightening to soak back up the extra cash. But it won't work very well--it is obviously breaking the banking system before it's ending inflation. So I'm not optimistic that inflation will go down anytime soon.

The bottom line is inflation is a function of government deficit spending. When the government spends money faster than the economy is growing, inflation will ensue. Only when the government cuts the deficit will inflation slow down. Cutting the deficit means cutting social security, Medicare, Medicaid, and the defense budget. This is politically and socially impossible.

Have a nice day.

Further Reading:

• Labor Notes 2022: Starbucks
• The China Beat
• The Declining Rate of Profit

Socialist Action's Political Report

Vanguard Man (source)

Socialist Action (SA) split from the Socialist Workers Party (SWP) back in 1983. It has been helmed by Jeff Mackler since its founding. He was SA's presidential candidate for both the 2016 and 2020 elections, running failed and unprofessional campaigns on both occasions. The man is 82 or 83 years old. It remains to be seen if he'll be the SA's candidate in 2024.

In 2019 SA underwent a split, with a large number (perhaps even a majority) of its members leaving. Notably, the very talented editor of their newspaper, Michael Schreiber, was among the leavers, as was Mr. Mackler's vice presidential running mate, Heather Bradford. How humiliating!

Some of the splitters went on to form the new and short-lived Socialist Resurgence movement. Other leaders of SA, e.g., Erwin Freed and Ernie Gotta (frequent coauthors), formed the core nucleus.

In 2022, Socialist Resurgence merged with a group called Workers' Voice with the new group assuming the latter name. This was hailed as an historic event, which I described as

The "two historic divisions" represent two versions of the Fourth International (FI): that of the United Secretariat, which purports to be the original FI, and the International Workers' League-Fourth International  (IWL-FI), which claims a mission to "reconstruct" the original FI. (A more useless mission is hard to imagine.)

So Mr. Mackler remains leader of SA's remnant husk, which I suggest is now down to about two dozen members. Since the first of the year their webpage has posted four (4!) articles--three of which are by Jeff Mackler, and one by that old Pol Pot supporter, Barry Sheppard. Apparently, apart from Mr. Mackler, nobody with any literary skills remains in the sect. Going back further in time, besides Mr. Mackler the website contains articles by others cribbed off the web. Only Marty Goodman, an SA comrade, occasionally contributes content.

Nevertheless, the "Party" held a convention last November. Insofar as it wasn't a Zoom meeting, it likely took place in Mr. Mackler's living room. The conclave issued a document: Fighting for the Socialist Future Today: Socialist Action Political Resolution. We're told that "[t]he following resolution was approved by Socialist Action’s 20th National Convention in November 2022." Approved it may have been, but the author is undoubtedly Mr. Mackler himself--so I'll give him credit here and not let him hide behind a Zoom meeting fig leaf.

I've taken to calling Mr. Mackler the "Vanguard Man." Normally, in Trotsky-talk, one speaks of the "Vanguard Party," which organization is the custodian of revolutionary tradition and which aspires to lead us toward a socialist utopia. But SA is so small and so depleted of talent that this awesome responsibility now rests on the shoulders of one octogenarian man: Jeff Mackler. Pity the poor proletariat, whose future hangs on such a thin reed.

Anyway, Mr. Mackler is a good writer, and that's the only reason I keep reading this stuff. But in this case he falls down on the job. There are too many typos, e.g., he writes "...right of return of all disposed Palestinians... ." Disposed is obviously the wrong word; perhaps he means dispossessed or dispersed? Not sure. Compare, e.g., with the SWP Political Report that I recently reviewed, in which I didn't find a single typo. It's not a big deal, but it indicates that the talent stack at SA is too small to support a proofreader.

The report is 15,000 words long, or the same length as the SWP's. I'll confess I skimmed through parts of it--much of it doesn't interest me, though perhaps that says more about me than Mr. Mackler.

The document discusses two big issues and several less important ones. The big issues concern "imperialism," especially the American variety, and then "[t]he global warming climate catastrophe."

Mr. Mackler subscribes to a theory known as campism, which I have dubbed American Brezhnevism. That post explains what that means in more detail, but briefly, campism maintains that the chief villain in the world is something called "American imperialism." We're never told what that is or how that operates, but it is apparently responsible for every war casualty anywhere in the world today. Mr. Mackler, for example, blames "American imperialism" for all the war deaths in Syria, and then also in Ukraine. Nobody else is responsible for anything. 

Because of "American imperialism," it is necessary for Vanguard Man to support any and all opponents of said imperialism, no matter how vile. Thus Mr. Mackler lends support to Assad in Syria,  Putin in Russia, and the Taliban in Afghanistan. This is, of course, exactly the same argument that Barry Sheppard made in supporting Pol Pot and his murderous Khmer Rouge regime in Cambodia--no wonder Mr. Sheppard is an avid contributor to SA's webpage. However evil those regimes are, they're a lesser evil compared to "American imperialism."

To my mind, it's all a giant conspiracy theory. "American imperialism" does not exist in reality and is present only as a figment of Vanguard Man's overheated imagination.

Mr. Mackler is also a leader of the United National Antiwar Coalition (UNAC). Actually, it's not antiwar, but instead pro-war on the other side. They're rooting for Assad, Putin, the Taliban, Kim Jong-un, and China's Xi. Obviously this is not a popular position in the United States, especially since most sane people realize that "American imperialism" doesn't even exist.

Here is something funny. Vanguard Man admits that

With the exception of revolutionary Cuba, a healthy workers state with some inevitable bureaucratic distortions, there are no deformed or degenerated workers’ states in the world today.*

So, but for Cuba, we're all capitalist, imperialist running-dogs these days, the most evil of whom deserve support from those opposed to "American imperialism." But the humor comes from the asterisk, which footnote states,

*Tentative statement pending NC/PC discussion in the class nature of North Korea

As Shakespeare says, "uneasy is the head that wears a crown." Vanguard Man has a weighty decision to make: Is N. Korea a deformed workers' state, or instead only another imperialist, capitalist running-dog? The fate of the global proletariat depends on his answer.

Or not. Vanguard Man will support the Norks over the United States regardless of what their "class character" supposedly is.

I can't let Mr. Mackler's obvious antisemitism pass unremarked. He does say that "Anti-Zionism Is NOT Anti-Semitism." This is true--but the near-converse statement is also true: anti-Semites are always anti-Zionist. Thus anti-Zionism is an unprincipled coalition between those who support a constructive Palestinian nationalism, and those who simply hate the Jews. Vanguard Man is in that latter category because of his "...recognition of the illegitimacy of the racist, Zionist, colonial settler, apartheid state of Israel is today widespread, ..." Nobody but an antisemite could talk about Israel in such angry, vituperative terms. If he really were merely anti-Zionist, he'd use more conciliatory language.

The second big issue is climate change, where he opines:

Here, despite the uncontested facts, the world’s major powers press on to increase fossil fuel production in the face of ever-intensifying killer heat waves, deadly floods and hurricanes, inundation of low lying land masses, drying up and poisoning of major water supplies – all accompanied by unprecedented environmental destruction across the board. Forests are decimated, oceans and rivers are irreversibly polluted, air is poisoned, nature is torn asunder, with no end in sight. 2,000 people died in a single week from the recent heat wave in Spain and Portugal alone! All of the above are the undeniable reality everywhere.

This is just nonsense on stilts. He's cherry-picked random factoids that add up to nothing. He obviously knows nothing about science or scientists. Any legit climate scientist of whatever persuasion will be ashamed to be associated with our Vanguard Man.

I'm not a climate scientist, but I've spent my career as a professor of chemistry with a special interest in thermodynamics. So while I claim no expertise in climate science, I know a hell of a lot more than Vanguard Man. Which isn't hard, because he knows zilch.

The rest of the Report is about topics that are either irrelevant or unimportant: abortion, LGBTQIA+ rights, "Latinx" issues, etc. I don't have time or space, so see the links below if you're interested.

Further Reading:

• American Rights and Trans Rights
• It's Not Just About Abortion
• Cuba Needs More Communism!

Tech Workers vs. Google

Left Voice author Rose Lemlich pens a piece entitled Tech Layoffs Are About Punishing Workers and Driving Down Wages that is a breath of fresh air compared to what the magazine usually covers. It's actually about the real economy, as opposed to the mostly inconsequential travails of academics, or the generally irrelevant concerns of the 0.1% of the population that is legitimately trans. Beyond which Ms. Lemlich is a talented writer--a trait she shares with many of her colleagues.

That said, her understanding of how capitalism really works is abysmal. She really does need to learn some basic economics--even if it's only the Marxist sort. The very title of her article represents a misconception--that tech firms are all in cahoots to drive down wages and "punish" workers. The former is impossible. The firms are in competition with each other to hire the best workers, and thus compete to offer the highest wages possible. That's why Silicon Valley tech workers typically earn well into the six figures. The latter is ridiculous. Why would any firm want to "punish" its own employees? That's hardly a strategy to improve morale or increase productivity.

Ms. Lemlich quotes a Twitter person (@CubicleApril):

Pretty incredible that Google is trying to get away with blaming macroeconomic conditions for their layoffs, when over the last year they’ve spend 57.36B on stock buybacks.

That’s enough to support the 12,000 laid off engineers at their median engineer compensation for 23 years.

It is Ms. Lemlich's opinion that the $57.36B would be better invested in featherbedding Google's workforce rather than "wasted" on stock buybacks. She's wrong on several counts.

To begin, she misunderstands who the owners of Google are. She writes,

This is because capitalism is not altruistic: major shareholders don’t buy shares because they want to invest in these companies’ visions or provide startup capital for them to become more productive. They buy shares because they believe those shares will be worth more money in the future; this is their only pursuit as capitalists; it is the only way they make money.

Of course this is true--capitalists want to make money. But so do workers--otherwise why go out on the picket line demanding more wages and bennies. And how many workers will remain long at a particular job when a neighboring employer is offering a 10% higher salary? Like workers, capitalists are people, too.

But then her image of the capitalist is wrong--she obviously imagines some Monopoly game banker in a top hat who uses money for nothing more than wallowing around in a pool of gold coins. But that's wrong. According to Investopedia

The top individual insider shareholders of Google are Larry Page, Sergey Brin, and Sundar Pichai, and the top institutional shareholders are Vanguard Group Inc., BlackRock Inc. (BLK), T. Rowe Price Associates Inc., and FMR LLC.

Misters Page and Brin each own about 3% of the company. Mr. Pichai owns 0.1% of outstanding shares. Ownership by the institutional owners (Vanguard, Blackrock, & T. Rowe Price) is more complicated, but looks to be between 4% to 7% each. Total institutional ownership of Google stands at 78.4%.

The point here is institutions serve mostly pension funds and individual savers like you and me. Anybody who owns either a mutual fund or an ETF likely has money invested in one or more of those institutions. Pension funds obviously need to maximize returns on their investments--they're greedy like everybody else. But they're not the greedy capitalists of Ms. Lemlich's overheated imagination.

More, Ms. Lemlich apparently believes stock buybacks are just an exercise in frivolity--merely used for buying fancy yachts or custom lattes. 

Stock buybacks reduce the number of shares in circulation, making them rarer and more valuable. Buying back stock does nothing to boost the productivity of a company, and it does nothing for the social good. The cost of these stock buybacks alone would’ve paid the salaries of every laid-off worker for decades. The executives are just using rising inflation and expectations of a recession as a propaganda tool to justify their greed.

She is correct that Google buying back stock does nothing to boost the productivity of Google. Stock buybacks are instead a way of returning money to shareholders. It is an admission that Google is no longer worth the investment. Indeed, Ms. Lemlich quotes an article in Business Insider that claims as much (links omitted).

But while Pichai, who made $280 million in compensation in 2019, said he took "full responsibility for the decisions that led us here," he failed to elucidate those choices. He didn't mention that during his time at the helm Google has been hit with billions of dollars' worth of antitrust fines, been left in the dust by OpenAI's ChatGPT despite "pivoting the company to be AI-first," and seen its core search product get steadily worse.

If Mr. Pichai really is that bad a CEO, then reallocating money away from Google is indeed a good strategy. It's an argument for more stock buybacks rather than fewer.

I can't judge the quality of Mr. Pichai's leadership. But I will say that Google has cornered the online advertising market and is unlikely to increase its market share. It is, therefore, no longer a growth company in the way it has been over the past few decades. So hiring on the expectations of future growth such as before the pandemic were likely not warranted. It is much better that the extra capital be reinvested elsewhere.

There are two ways that capital can be reinvested. One is that Google itself reinvest the capital in its own businesses--this is what Ms. Lemlich suggests should happen. Or the money can be returned to shareholders so they can individually decide where to reinvest it. The first option suggests that Mr. Pichai knows best where to reinvest all capital and never makes mistakes. The second option suggests that shareholders will, on average, make better investment decisions than Mr. Pichai.

Of course "reinvesting capital" is a rather bloodless way of saying that social resources generally should be reinvested. In particular, if Google is maxed out, then not only capital, but also labor should be reallocated to where it provides the most social utility. And that's what is happening: if talented people are being laid off from Google, they will in short order be hired by other companies that need both the investment and labor from talented employees. This is to the benefit of all concerned, especially including consumers.

Here is Ms. Lemlich's closing sentence:

Tech workers — because of their high wages, key place in the economy, and (until now slightly more certain) job security — are in a unique position to organize with workers in other sectors and coordinate actions in solidarity around issues facing the entire class in the face of a recession.

I'm not so certain. The whole tech industry--labor and capital alike--is now threatened by so-called artificial intelligence (AI), such as ChatGPT and its successors. These tools can now write programs better than most human beings, and do so a whole lot cheaper with a whole lot less capital. Tech jobs the world over are now at risk, the current holders of which will likely have to seek out new careers rather than just new jobs.

Further Reading:

• The Harm Reduction Team
• Labor Notes 2022: Starbucks
• Lost in the Amazon

Book Review: The Low Point of Labor Resistance is Behind Us

Authored by Jack Barnes, Mary-Alice Waters and Steve Clark, The low point of labor resistance is behind us is the political report adopted by the 49th Constitutional Convention of the Socialist Workers Party (SWP), held on December 12th, 2022. The authors (whom I've dubbed the "Troika") are the long-time (going on five decades now) leaders of the Party. Comrades Barnes and Waters are over 80, while comrade Clark is about 70.

The premise is that the union movement has reached bottom, and because of economic misery workers are becoming more militant and more likely to organize and rebel. This, if true, will reverse a decades long trend that began in the 1970s.

Except I don't think it's true. Just today, in an editorial, the WSJ writes

Union members made up only 10.1% of the workforce last year, down from 10.3% in 2021, according to data released recently by the Labor Department. For a long time the prototypical union shop hasn’t been a private steel plant but a public school, yet the unionized share of government employees also fell.

Though the annual changes look small, they add up: The workforce in 2012 was 11.3% unionized, and in 2002 it was 13.3%. Organized labor hasn’t been able to stop the trend, despite frantic unionization drives, including many aimed at nontraditional members, such as the university graduate students who march under the United Auto Workers banner. Private workers are 6% unionized, down from 8.6% two decades ago. For public workers, it’s 33.1%, down from 37.3%.

Last week ZeroHedge reported similar statistics, along with this rather depressing gem:

The most unionized occupations are public safety (34.6%) and education (33.7%). The lowest are sales (3.0%) and computer and math jobs (3.3%). 

Bad news for Trotskyists, who don't consider cops to be part of the working class.

The Troika might concede that union membership hasn't yet recovered, but they'd insist that the trajectory has changed. Unions, they'd claim, are becoming more militant and better organized, which will be reflected in the overall statistics soon enough. They provide no data for that belief, but are concentrating their efforts in two unions: the bakery workers (BCTGM) and the rail workers. Among the bakery workers, 160 of them have gone on strike in recent months (120 at Ingredion, 40 at Corn Nuts). Both strikes have been settled. This does not auger a surge in labor activism.

The fact is that unions are increasingly irrelevant. There is a serious labor shortage for workers in blue collar professions, and those employees are getting raises. For example, Walmart recently raised starting salaries across the board from $12 to $14 per hour. That's a near 17% raise, for which no strike was required. They're doing this because they need the workers.

The Report consists of 27 sections, ranging in length from a paragraph to a page or two, organized within four chapters. The whole document (not counting prefatory material or illustrations) is about 60 pages long, or approximately 15,000 words. I read it in about three hours.

The first chapter is entitled Opposing US rulers' assaults on freedoms protected by the Constitution and their use of the political police. It describes in detail the unconstitutional persecution of Donald Trump and so-called "MAGA Republicans" by "the government's political police, first and foremost the FBI." It must be noted that the Party has had its own run-ins with the FBI before, notably the COINTELPRO lawsuit in which the Party won $264,000 in damages. Opposing the FBI is consistent with Party history, as the Report discusses at some length.

More, the Party notes that a majority of blue collar workers voted for Trump in 2016 and in 2020. Trump earned the vote of record numbers of Hispanics and Blacks (though the latter was still a small percentage). Therefore supporting civil rights in this case is in solidarity with the people whom they hope to represent. They cast themselves as being on the side of the "deplorables" and the "bitter clingers."

In their defense, the Report cites Leon Trotsky himself:

"Under conditions of the bourgeois regime, all suppressions of political rights and freedom, no matter whom they are directed against in the beginning, in the end inevitably bear down upon the working class, particularly its most advanced elements."

They are also very clear about who their opponents are.

Democrats, liberals, the "left," and "woke," so-called social justice warriors--not rightist or other reactionary forces--have led the assault against constitutional protections and freedoms in recent decades.

Trotskyists have always opposed the Democratic Party and all it stands for. The Report strongly reiterates that position.

While standing up for civil rights, the Report does not explicitly make clear their opposition to Trump and the Republican Party as agents of the bourgeoisie. Trump's name is mentioned in the Report only in passing, and the Republicans are not mentioned at all. This may lead to some confusion as to whether the Party still is part of the Left. I think they unambiguously are, but the Report would be better if they made that case explicitly.

The second chapter is entitled Capitalism's erosion of the family and the working-class road to women's emancipation. This includes some standard boilerplate:

Central to any communist program is a union-led fight for employment, with wage rates, work schedules, and job conditions necessary for families to live. ...

Jobs, not dependence on welfare programs, open a road forward. ...

Class-conscious workers call for a shorter workweek with no cut in pay, with regular hours.

So they're in favor of full employment, but then, after all that, they come out in favor of a comprehensive welfare program: "What is needed is a floor for all families--an income that's sufficient for workers..." to pay for all the bennies. The standard label for such a policy is universal basic income, and was championed by Andrew Yang in 2020.

The weirdest part of the Report concerns abortion. They claim that (boldface mine)

...we fight for women's right to reproductive and maternal health care, sex education (not gender indoctrination), as well as access to the safest and most reliable contraceptive methods and safe and legal abortion.

There is then a long section on how they supported Roe v Wade back in the 1970s, but have now come to regret that choice. The argument isn't entirely convincing. Summarizing in my own words, Roe v Wade short-circuited a national debate on abortion, depriving the working class of an opportunity to come to a decision on their own.

What the current Supreme Court has done, in the Dobbs v Jackson ruling, is simply return decisions about abortion to people in the individual states. They didn't rule on abortion one way or the other. The Party supports this move, and assumes that abortion will eventually be legal everywhere.

But now comes the truly mysterious part (in section 15; boldface mine):

The Socialist Workers Party unconditionally supports the decriminalization of abortion and joins others in fighting for it.

Decriminalization? Why that instead of legalization, as suggested in the prior quote? There is a difference, I suppose, but we're never told what it is.

A hint might be this:

...our communist program has nothing in common with bourgeois and middle-class forces--whether feminists, or campaigners for population control--who in fact advocate abortion as a means of contraception. We reject the pseudoscientific views of those who deny that the issue of human life, a profound moral question for all working people, is always involved in abortion decisions and procedures.

That second sentence is a bit hard to follow because of the double negative (...reject...deny...). It could be more simply written, but I think the mealy-mouthedness is on purpose.

I interpret the Party's position as pro-natalist, i.e., they want workers to have more babies. I think they're right--I describe myself using that word (and not just for workers). It's hard to square pro-natalism with unequivocal support for birth control and abortion. Therefore they equivocate.

The third chapter is entitled The Cuban socialist revolution and our communist continuity. It's much shorter than the first two, and in my opinion is completely wrong. Indeed, I think the Party's whole international analysis is wrong--I'll refer readers to books by Peter Zeihan for a clearer understanding. I'm going to skip over that here.

The fourth chapter--shortest of all--is Forging a proletarian party and educating its cadre. They claim, with no evidence whatsoever, that

The SWP is forging a proletarian party in the United States--a revolutionary political instrument of the working class, whose purpose, as our constitution asserts...is "to educate and organize the working class in order to establish a workers and farmers government, which will abolish capitalism in the United States and join in the worldwide struggle for socialism."

That's a tall order for a Party of about a hundred souls, with an average age in the 60s. The majority of comrades are at or nearing retirement age. Their current leading spokeswoman is Ilona Gersh, who is in her mid-seventies. The leaders are a pair of octogenarians.

What I am most disappointed with is that the Party has not brought in new, younger leadership. While I don't support the Party's goal of revolution and socialism, I have no fear of that ever happening even in my grandchildren's lifetime. But I'm sentimentally attached to my former comrades, and I want the Party to continue to exist. Having the same leadership for 50 years is not healthy. Presuming that the organization will have a meaningful voice when lead by octogenarians is fanciful.

I don't think Jack Barnes, Mary-Alice Waters, or Steve Clark are serious about the World Revolution. They're just concerned for their own sinecures--and what happens after that let the devil take the hindmost.

I enjoyed reading the Report. It's well written, entertaining, and not too long. The illustrations are silly--they're mostly pictures of people standing around holding placards, such as shown on the front cover. But the book is professionally produced. I didn't find any typos--if there are some in what I've quoted here, they are mine. Apologies in advance.

Further Reading:

• Oberlin, 2017 (about the 48th Convention)
• Labor Notes 2022: Starbucks
• Has the SWP Moved Right? Or the Republicans Left?

 

ChatGPT and Artificial Intelligence

                                    (2100 words long. I have borrowed many ideas from Arnold Kling's substack.)

I've been doing a lot of thinking and reading about ChatGPT (GPT). For those of you living under a rock, GPT represents a major milestone in so-called artificial intelligence (AI). It's free for public use here, though you will need to register with a legit email address. I urge you to try it.

While GPT is the talk of the town on college campuses these days, its intersection with Trotskyism is minimal. For example, I asked GPT to

Give a brief biography of the SWP's Jack Barnes.

It replied

Jack Barnes is a political figure and a longtime leader of the Socialist Workers Party (SWP) in the United States. He joined the SWP in the 1960s and has been a central leader of the party since the 1970s. Barnes has written extensively on a wide range of political and theoretical topics, and has been a central figure in the SWP's efforts to build a revolutionary socialist movement in the United States. He has also been involved in various international socialist organizations and campaigns. Despite some controversies, Barnes is widely respected within the socialist movement for his commitment to building a revolutionary party and his contributions to socialist theory. 

I learned nothing from this--it's boilerplate bordering on balderdash. I got a better answer when I substituted in "Mary-Alice Waters" for Jack Barnes. I will note that you will likely get a different answer every time you enter a prompt.

Of the blogs on my Beat, the comrades over at Left Voice will probably care the most about GPT. That's because they're mostly college professors or aspire to become so. GPT threatens to upend their business model and their career plans, so I suspect they won't like it. But they most need to take my advice and learn how to use it. Consider this a brief tutorial.

So what is GPT?

Perhaps most important, GPT is not actually "intelligent", artificial or otherwise. It has no consciousness, it isn't creative, and it can only reorganize and spit out what one feeds in to it. It won't, for example, ever replace a journalist's job as it can't interview anybody, or observe what's happening in real time. At the end of the day it's just a large linear algebra processor, in many ways very similar to Google.

So what is different about GPT? I suggest it is analogous to a new graphical user interface (GUI). Point & click is a much easier way to navigate a webpage than typing in text in response to a ">" prompt. Now the point & click computer is not really any more intelligent than the ">" computer (though it probably does have more RAM and a better graphics card), but it really is a whole lot easier to use. Its construction required a whole new way of thinking about software--and so object-oriented programming was born.

A Google search is the analogue to the ">" prompt. You will get a list of links--perhaps thousands of them--and it will be up to you to find the ones most suited for your purpose. Google uses a linear algebra solver based on counting the number of links to any given webpage. So Google scours the web 24/365 to look and see which pages link to what other pages.

On the other hand, if you type a query into GPT (the "point & click" analogue), the computer doesn't do that. Yes, it still has a database of all the world's webpages (or soon will have that database), but it is no longer looking for links. Instead it is searching for words and phrases. Words and phrases that happen more frequently rise to the top, while those of less frequency sink to the bottom. Eg, "the red barn" will occur more often than "the red epistemology," and thus when asked to illustrate "red", GPT will cite "barn" rather than "epistemology." (Example borrowed from somewhere.) It's still a linear algebra machine, but it's now described as a "neural network" and supposedly is "artificial intelligence." Instead, it's just extremely clever software, just as object-oriented was extremely clever software.

But there is an additional twist. GPT can borrow phrases from across the web, and can put them together to make a coherent sentence and paragraph. That is, it has been taught the rules of English grammar, syntax and (to some extent) style. This is natural language processing, and I'm not sure how the computer learns how to do that. But it's not really saying anything original--it is merely piecing together bits of language that it's cribbed off the web.

In the Google world, you got a list of links, hopefully in order of declining relevance. In the GPT world, you get a list of words and phrases put together in paragraph form, constructed by a natural language processor. There is no fundamental difference--GPT isn't any more intelligent than Google and draws from the same dataset. But it organizes the data differently and allows for free form queries, and presents the results in a different format (written paragraphs), just as a GUI alters the input/output of graphical data.

Needless to say, the business most disrupted by GPT is Google, and my impression is that company is now sweating bricks. GPT was designed by OpenAI, which has received $billions in investment from Microsoft, which now proposes to invest billions more. In the search world this gives Microsoft a new killer app--or perhaps it's a Google-killer. Google is responding by accelerating its own investment in AI (an acronym that should be in scare quotes).

So could GPT have written this essay? Right now, No. That's because GPT is, as far as I know, trained only on data current thru 2021. The data I'm drawing from is much more recent than that, so therefore GPT has no access to my sources. But that's a short-term limitation; surely within the next few weeks or months there will be AI that searches the entire web. In that case GPT and I have access to exactly the same information. Or actually, not--for I have only accessed a dozen or so pages, while GPT has looked at billions. GPT knows way more than I do.

So why can't GPT write my essay better than I can? Because my essay reflects my personality just as much as it is about web pages. I come with a prejudice against AI--that is, I don't think it's intelligent, and I doubt it ever will be. Then, as will be apparent later, I have a bias against higher education. These biases (among others) reflect inputs into my essay that GPT will never have access to--and therefore it can't write my essay. It never will be able to. (If I were famous perhaps it could get closer. I can ask GPT to write an essay about inflation in the style of Paul Krugman, and what I'd get will be an imitation of Paul Krugman. Though were I to ask the real Paul Krugman for such an essay, it would likely be very different. But I'm not famous enough for GPT to imitate me.)

It appears that GPT can pass both the Medical Boards and the Bar Exam. Of course a person using Google could also pass those exams, but it would take them a lot longer. By searching for words and phrases rather than links, GPT greatly expedites the search process. It is not because GPT is more intelligent. Nevertheless, GPT is a very important new step in technology--at least as important as the modern graphical user interface. Mr. Kling suggests that GPT is as important as the founding of Netscape in 1994. That sounds about right to me.

If GPT can pass the Boards and the Bar, then it certainly can do a lot of the work that doctors and lawyers now do. Doctors' jobs are likely safer because they have to talk to, look at, and touch their patients. GPT can't do any of that. But once the doctor (or the nurse or PA) has accumulated a list of symptoms, then GPT can probably narrow down the diagnosis pretty quickly, and then also the recommended treatment. While GPT probably won't outright eliminate jobs, it will become an important medical coworker.

Lawyers, on the other hand, are at greater risk. I'll suggest that the work entry level lawyers do today will increasingly be done by GPT. If a legal practice is simply constructing wills and managing estates, I think they may be substantially out of business rather soon. Or at least have many fewer employees.

I read that GPT is an excellent programmer. Mr. Kling suggests that a million Indians, now working in Bangalore writing routine code, will soon be replaced by GPT.

Higher ed is both behind the eight ball and in the catbird seat. If they were smart they'd own GPT. But they're not smart--which is where the eight ball comes in. From lurking on my campus email, it seems the faculty's first response is just to ban the platform and assume all it's good for is cheating. I suspect that will be the go-to opinion of the Left Voice crowd. First, I'm shocked that they think so poorly of their students. Yes, some of them will cheat, but most of them won't. Second, this is a fool's errand--you will never be able to ban GPT. And I don't know why you'd want to (except perhaps on a few specific assignments). GPT will change the way higher ed works in very dramatic ways. I suggest it will make online education much cheaper and more effective. The benefits of a residential college will decline in relative terms. Since GPT will radically change the workplace, it must perforce change what higher ed teaches.

I believe (and have believed for some time now) that educating students in STEM fields is not useful, and I deplore the huge funds that governments and philanthropies are investing in STEM education. Because computers can already do math better than you can. And now GPT can program computers better than you can. GPT can probably do science and engineering better than you can, and learn to design experimental apparatus or an organic synthesis faster and better than any human. Of course there will always be a need for very high-end scientists and engineers--but much less need for the more mediocre sorts educated at smaller, public institutions like where I worked.

College algebra is a nearly useless subject. Calculus is even less useful. Yes, they're beautiful, and people who are interested in those disciplines for their own sake should be encouraged. But to require hundreds of students to take algebra and calculus because they're useful (when they're not) strikes me as not sensible. Calculus probably needs to go the way of Latin.

The careers of the future will not be in STEM. Instead they'll be in the arts and humanities. The scientist and engineer were careers for the 20th Century. Today they're increasingly automated away. The careers of the 21st Century are the artist, musician, storyteller, preacher, counselor, sex worker, nurse, teacher*, comedian, chef, hotelier, etc., along with the all-important skilled trades. Those are where the jobs will be. And those are the jobs that cannot be done any computer, much less GPT.

So how is higher ed in the catbird seat? That's because nobody really knows how to use GPT yet. How does one use the platform effectively? Ethically? How do you cite GPT sources? This is all very unclear, and it seems to me that the best people to work out some answers to those questions might be college faculty. Or, at least, should be if they weren't such ostriches about it. College faculty need to spend a lot of time using GPT, and need to give their students assignments using it, and play around with what "effective and ethical GPT use" actually means. There will certainly be some false starts, but for the most part I think it would be an adventure.

*By "teacher," I don't mean the college professor type who went to grad school and thinks she's smart enough to ban GPT. I mean something like the Bennington College model where the faculty are practicing artists who take a year-long sabbatical from their careers (art, music, theater, creative writing) to mentor young people who want to learn, only to go back to their careers after a year (or two). 

Further Reading:

• Electric Cars
• Book Review: Life After Google
• Future STEM Employment (probably written in 2013)

Brief Comments on SWP Convention

From the article entitled The Low Point of Labor Resistance Is Behind Us, by Mary-Alice Waters, we learn that

The heart of the book, from which the title is taken, is the political resolution adopted December 12, 2022, by the 49th Constitutional Convention of the Socialist Workers Party. It sets forth the course of action that has guided the party’s work and will continue to do so — the course necessary today to forge mass proletarian parties and an international communist movement able to lead the struggle to end capitalist rule.

I have ordered said book--just published--and am told by the USPS that it will arrive on Jan 30th. I will comment substantively on the political content of the report after I've read it. Parenthetically, Pathfinder is a very professional organization. Ordering was a snap. My only complaint was that shipping charges were very high. (I usually buy my books used on Amazon, or better yet, on Kindle.)

Regards specifics, we don't know where the convention was held (I suggest it was a Zoom meeting), how long it lasted (perhaps over a weekend; 12/12 was a Monday), or how many people were present. It was clearly for members only (true Worker-Bolsheviks). The size of the Party is likely between 100 and 120. Given that conventions are delegated (in my time it was one delegate per five comrades), likely 30-odd people had speaking privileges. The remaining 90 or so comrades could listen in. A Zoom call (or slightly more sophisticated software) would work fine.

I'm very disappointed that there is no hint of a change in leadership. The octogenarian troika will not be able "to forge mass proletarian parties and an international communist movement able to lead the struggle to end capitalist rule." Even worse, the Party is very (small-c) conservative, and has reverted to an ancient, timeworn version of Trotskyism. It will not attract a younger generation. I'll likely have more to say about this after reading the book.

I wish they'd also publish the Organizational Report. I'd like to know how the Party intends to change its tactics. (I suspect there will be no changes.)

Commenter Andrew Chebuhar helpfully links to two Youtube videos starring SWP comrades (Koppel and Britton, plus his own comment here). They're too long for me to listen to them all, but I did partake of the talk by Joel Britton (beginning at 13:47). I recall Comrade Britton as speaking very deliberately, and the intervening 50 years hasn't speeded him up any. But his remarks are brief and his point is clear, so it's worth listening to. But I can read 20x faster than he can talk, so I'll just wait for the book.

The SWP looks doomed. I'll probably die before they do, but it will be a close-run thing.

Further Reading:

• Wittenberg, 2022
• Wittenberg, 2021
• Oberlin, 2019

Academic Workers on the Rampage

Photo: JULIETTE HUY, Voice of OC, via Left Voice

NYC's Homeless Go On Strike

Refuse to sleep on subways until demands are met

It's an impossible headline--the lumpen proletariat can't go on strike. That's because they perform no useful labor and create no value. Instead, what they do is deprive others of their comfort. Honest citizens will be overjoyed if the homeless refrained from sleeping on subways.

But what about the lumpen intelligentsia, i.e. people who work for our academic institutions? These are folks who think they work hard, but they produce little or nothing of value and receive in return what amounts to a welfare check. Wouldn't the rest of us be better off if they all went on strike?

Olivia Wood, a journalist at Left Voice, reports on that issue in an article entitled The Higher Ed Labor Movement Runs Full Speed Ahead into 2023.

Ms. Wood, a PhD student in English Composition and also a lecturer, inadvertently tells us in one very long, run-on sentence what she thinks about all day.

While higher education is not the most strategically placed sector of the labor movement (like logistics or transportation), these struggles do take on extra weight in the context of the student debt crisis, public divestment from education, and right-wing attacks on “critical race theory” (by which they mean any discussion of racism), queer people in general and trans people more specifically (including teaching about these topics), and all forms of “wokeness” (defined in Florida as any acknowledgement of systemic oppression).

Her first clause ("...not the most strategically placed...") is absolutely correct. Unlike truck drivers, if college professors the world over all went on strike, by the end of the first semester nobody would miss them at all. The bright students can learn on-line, and the really bright students can teach themselves. As for the others, there are lots of folks out there who could substitute in for the professoriate (scabs, if you will), and would be happy to do so. A strike by the professoriate is about as feasible as a strike by homeless people.

The second clause ("...debt...divestment...") is a whine for more money. The student debt crisis is wholly the fault of the higher education establishment. Per the Education Data Initiative (Hanson, Melanie. “College Tuition Inflation Rate” EducationData.org, August 10, 2022),

• College tuition inflation averaged 4.63% annually from 2010 to 2020.
• The cost of tuition at public 4-year institutions increased 31.4% from 2010 to 2020.
• After adjusting for currency inflation, college tuition has increased 747.8% since 1963.
• The most extreme decade for tuition inflation was the 1980s, when tuition prices increased 121.4%.

This results from the collective greed of the entire academic establishment--faculty, staff and administrators alike. It is recently augmented by colleges now turning themselves into full-service social welfare institutions, increasingly responsible not just for education, but also for food and housing insecurity and student mental health.

Finally, the last clause ("...critical race theory...queer...trans...wokeness...") is a guide to what she wants to "teach." This is straight-up propaganda and has no relationship to actual teaching. A teacher maintains scholarly distance and is not trying to proselytize students. It's an attempt to indoctrinate students into a very particular world view that champions infertility, poverty and self-pity. There is nothing here of value to anybody trying to raise children, establish a career, save for a successful retirement, and hopefully have some money left over to leave to one's grandchildren.

There is no reason for taxpayers to subsidize this, and even less reason for students to pay exorbitant tuition or go into debt over it.

She considers two strikes in detail: at the University of California system where 

The striking scholars included teaching assistants, researchers, tutors and other graduate student instructors at all 10 UC campuses and the Lawrence Berkeley National Laboratory.

And at The New School, where

The sizable walkout had left the school at a near standstill. Classes were canceled because nearly 90 percent of the faculty is made up of untenured adjunct professors and lecturers. The school had also been facing a lawsuit from irate parents, who had threatened to withhold payment or force their children to transfer to other institutions. 

Both strikes were settled before Christmas.

Ms. Wood never really tells us who the strikers were striking against. The closest she comes is the word "management," which I suppose is a synonym for "the administration." The problem is that the administration is on the same side as the "workers." Nobody in the administration is against giving everybody raises--5%, 10%, 200%--it doesn't matter. Administrators favor them all.

The problem is not the administrators' will--it's their lack of money. Beyond their own salaries (often quite meager, eg, for assistant directors), they have no resources to contribute to the cause. For them, therefore, it's a zero-sum game. The more money they give to one group (eg, English adjuncts), the less money they'll have for another group (eg, childcare workers).

Extra money only comes from off-campus. There are three major sources:

• Tuition: As noted, tuition has already gone up way more than inflation. Asking students to pay more tuition in today's environment is a non-starter. Colleges have already priced themselves out of the market. It's ironic that the people striking for more money are many of the same people who will have to pay higher tuition.
  
• Taxpayers: Most tax dollars at the state level are already paid out as charity: Medicaid, housing allowances, prisons, hospitals, mental institutions, public schools, etc. These expenditures--while arguably necessary at some level--produce no new wealth for society. In economic terms they're a dead-weight loss. Higher ed used to justify itself that they prepared students for life and for the workplace. But Ms. Wood's list of priorities puts a lie to that. It seems higher ed is a waste of money.
• Philanthropy: Private colleges, especially elite ones, depend on philanthropy. It's not clear to me why anybody will want to contribute to Ms. Wood's list of sorry causes.

Then there is this:

At The New School, part time faculty (UAW Local 7902) voted down management’s “last, best, final offer” and eventually won their contract shortly after students began an occupation of the main academic building, students’ parents began a lawsuit against the university, and full-time faculty demanded the university rescind its plan to begin docking pay and benefits.

The relevant clause is "...students' parents began a lawsuit against the university...". To what end? Did they demand the university end the strike and volunteer to pay the additional tuition? Or did they demand the opposite: that the university defeat the strike and not raise tuition? It's odd that Ms. Wood doesn't tell us.

Students at fancy schools like the University of California and The New School aspire to join the elite. Some of them will succeed, and themselves become tenured professors at elite institutions, or rise to leading roles in business, government, or media. Others (like me) will get tenure, but only at Podunk State. Many will only get jobs at adjuncts--but that assumes that colleges have enough money to hire adjuncts at the inflated salaries.

There is a word for this: elite overproduction. We're producing way too many elite aspirants than there are elite jobs. And with the skills being taught by Ms. Wood, no other jobs will be available to them.

 Further Reading:

• Left Voice and the SWP
• "Pedagogy of the Oppressed"
• Book Review: The Future of Higher Education