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Atomization and oppression of workforce

News Neoliberalism as a New Form of Corporatism Recommended Links The neoliberal myth of human capital Audacioues Oligarchy and Loss of Trust Neoliberal rationality Neoliberalism war on organized labor
Scapegoating and victimization of poor and unemployed Destruction of the New Deal Glass-Steagall repeal Think Tanks as Enabler of Neoliberal Coup d'ιtat  Identity politics as diversion of attention from social inequality Identity politics as divide and conquer Class Struggle In The USA
Attack of Think Tanks Ayn Rand and her Objectivism Cult Amorality and criminality of neoliberal elite The Deep State Predator state Lewis Powell Memo The Essential Rules for Dominating Population
New American Militarism Neoconservatism Neo-fashism National Security State Propaganda  Inverted Totalitarism  Totalitarian Decisionism
Neoliberalism and Christianity Pope Francis on danger of neoliberalism The Iron Law of Oligarchy Anglican Church on danger of neoliberalism Animal Farm   Neoconservatism as an attack dog of neoliberalism
The Great Betrayal: "Soft" neoliberals as Vichy Left Crowd manipulation Agenda-setting theory Manufacturing Consent Jingoism of the US neoliberal elite Media-Military-Industrial Complex War is Racket
Small government smoke screen "Starving the beast" bait and switcht Bill Clinton, the man who sold Democratic Party to Wall Street and helped FIRE sector to convert the country into casino Over-consumption of Luxury Goods as Market Failure Two Party System American Imperialism, Transnational Capitalist Class and Globalization of Capitalism The Grand Chessboard
Ethno-linguistic and "Cultural" Nationalism as a reaction to Neoliberalism induced decline of standards of living American Exceptionalism Anatol Leiven on American Messianism Machiavellism Skeptic Quotations Humor Etc

Atomization of workforce and establishment of national security state after 9/11 so far prevented large organized collective actions (recent riots were not organized, and with the current technical capabilities of the three letter agencies any organization is difficult or impossible). I think that conversion of the state into national security state was the key factor that saved a couple of the most notorious neoliberals from being hanged on the electrical posts in 2008 although I remember slogan "Jump suckers" on the corner of Wall Street.

But neoliberal attacks on labor and especially organized labor started much earlier with Ronald Reagan and then continued under all subsequent presidents with Bill Clinton doing the bulk of this dirty job. Clinton's creation of the "New labor" (read neoliberal stooges of Wall Street masked as Democratic Party) was based on explicit betrayal or workers (" they have nowhere to go") .  And for several election cycles that was true.

But eventually that changes. Vichy left, represented by "Clintonized" Democratic Party got a crushing defeat in 2016 Presidential elections. Does not mean that Trump is better or less neoliberal, but it does suggest that working class does not trust Democratic Party any longer. 

2008 was the time of the crisis of neoliberal ideology, much like Prague spring signified the crisis of Communist ideology. While there was some level of harassment, individual beatings of banksters in 2008 were non-existent.


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Old News ;-)

[Jun 06, 2018] N>eoliberal language allows powerful groups to package their personal preferences as national interests systematically cutting spending on their enemies and giving money to their friends

Neoliberals are a flavor of Trotskyites and they will reach any depths to hang on to power.
Jun 06, 2018 | discussion.theguardian.com
meticulousdoc , 3 Jun 2018 16:16

Just as conservative Christian theology provides an excuse for sexism and homophobia, neoliberal language allows powerful groups to package their personal preferences as national interests – systematically cutting spending on their enemies and giving money to their friends.

And when the conservative "Christians" form a neoliberal government, the results are toxic for all, except themselves and their coterie.

Nothing short of a grass roots campaign (such as that waged by GetUp!) will get rid for us of these modern let-them-eat-cake parasites who consider their divine duty to lord over us.

An excellent article, we need more of them.

[Apr 24, 2018] Class and how they use words to hide reality

Highly recommended!
Notable quotes:
"... For example, when a Republican talks about "freedom" they don't mean "freedom from want". They mean "freedom from government oppression", but only government oppression. ..."
"... Democrats act the same way about different things. When a Democrat says "diversity", they only mean diversity of race, gender, or sexual orientation. Diversity of ideas? Diversity of class? Not so much. When a Democrat says "privilege" it refers to "white" and "male". Privilege of wealth? (i.e. like the dictionary definition) That generally gets forgotten. ..."
"... -- Preamble to the Constitution of the Industrial Workers Of The World (IWW) ..."
"... @thanatokephaloides ..."
"... -- Preamble to the Constitution of the Industrial Workers Of The World (IWW) ..."
"... @longtalldrink ..."
"... @longtalldrink ..."
"... @Lily O Lady ..."
"... @Lily O Lady ..."
"... @longtalldrink ..."
"... @lizzyh7 ..."
"... @dkmich ..."
Apr 24, 2018 | caucus99percent.com

gjohnsit on Wed, 04/18/2018 - 11:45pm

I've come to realize that there's a lot of confusion out there due to people using words with very specific definitions.

For example, when a Republican talks about "freedom" they don't mean "freedom from want". They mean "freedom from government oppression", but only government oppression.

Private oppression? Republicans will either deny it exists, or justify it. When a Republican is "pro-life" it only refers to birth. Because those very same pro-life people are generally pro-war and pro-death penalty.

Democrats act the same way about different things. When a Democrat says "diversity", they only mean diversity of race, gender, or sexual orientation. Diversity of ideas? Diversity of class? Not so much. When a Democrat says "privilege" it refers to "white" and "male". Privilege of wealth? (i.e. like the dictionary definition) That generally gets forgotten.

And then there is the bipartisan misuse of words, which revolves around war and wealth.
When they say "humanitarian war" they mean, um, some contradictory concepts that are meaningless, but are designed to make you feel a certain way.
When they say "socialism" they really mean "state oppression" regardless of the economic system.
As for the many version of socialism with minimal or non-existent central governments? Or when socialist programs work? No one talks about them.

Let's not forget substituting or mixing up "middle class" for "working class".
"Working class" now equals "poor", which isn't right.
They use "working class" as a smear too.
When you say "working class" some people automatically insert certain words in front of it, as if it's generally understood.

When many hear discussion of outreach to "working class" voters, they silently add the words "white" and "male" and all too often imagine them working on a factory floor or in construction. They shouldn't. According to another analysis by CAP from late last year, just under 6 in 10 members of the working class are white, and the group is almost half female (46 percent).

The topic of the needs and interests of the working class is usually race and gender neutral. Only the dishonest or indoctrinated can't wrap their minds around that fact.This is important because working class values don't require a race or gender lens.

a new report released today by the Center for American Progress makes a convincing argument, using extensive polling data, that this divide does not need to exist. As it turns out, in many cases, voters -- both college educated and working class, and of all races -- are in favor of an economic agenda that would offer them broader protections whether it comes to work, sickness or retirement.
"The polling shows that workers across race support similar views on economic policy issues," said David Madland, the co-author of the report, entitled "The Working-Class Push for Progressive Economic Policies." "They support a higher minimum wage, higher taxes on the wealthy, and more spending on healthcare and retirement. There is broad support among workers for progressive economic policy."

This shows that it's possible to make economic issues front and center in a campaign platform in a way that doesn't just talk to working class whites and dismisses the concerns of female and minority voters. It also shows that the oft-discussed dilemma among Democrats -- whether to prioritize college educated voters or working class ones -- may be a false choice.

Propaganda is all about false choices. To accomplish this, the media has created a world in which the working class exist only in the margins .

With the working class largely unrepresented in the media, or represented only in supporting roles, is it any wonder that people begin to identify in ways other than their class? Which is exactly what the ruling class wants .

I can't believe I used to fall for this nonsense! It takes a stupendous level of cognitive dissonance to simultaneously celebrate the fortunes of someone from a specific identity while looking past the vast sea of people from said identity who are stuck in gut-wrenching poverty. We pop champagnes for the neo-gentry while disregarding our own tribulations. It's the most stunning form of logical jujitsu establishment shills have successfully conditioned us to accept; instead of gauging the health of the economy and the vitality of our nation based on the collective whole, we have been hoodwinked to accept the elevation of a few as success for us all.
Diversity has become a scam and nothing more than a corporate bamboozle and a federated scheme that is used to hide the true nature of crony capitalism. We have become a Potemkin society where tokens are put on the stage to represent equality while the vast majority of Americans are enslaved by diminishing wages or kneecapped into dependency. The whole of our politics has been turned into an identity-driven hustle. On both sides of the aisle and at every corner of the social divide are grievance whisperers and demagogues who keep spewing fuel on the fire of tribalism. They use our pains and suffering to make millions only to turn their backs on us the minute they attain riches and status.

It's only when you see an article written by the ruling elite, or one that identifies with the ruling elite, that you realize just how out-of-touch they can be. The rich really are different - they are sociopaths. They've totally and completely bought into their own righteousness, merit and virtue .

Class ascendance led me to become what Susan Jacoby classifies in her recent New York Times Op-Ed "Stop Apologizing for Being Elite" as an "elite": a vague description of a group of people who have received advanced degrees. Jacoby urges elites to reject the shame that they have supposedly recently developed, a shame that somehow stems from failing to stop the working class from embracing Trumpism. Jacoby laments that, following the 2016 election, these elites no longer take pride in their wealth, their education, their social status, and posits that if only elites embraced their upward mobility, the working class would have something to aspire to and thus discard their fondness for Trump and his promises to save them.

That level of condescension just blows my mind. It occurred to me some time ago that I have much more in common with a working class slob in France, or Mexico, or Brazil, or Russia, than I do with the wealthy elite in my own country. Don't think that the wealthy haven't figured that out too.

Pricknick on Thu, 04/19/2018 - 12:03am
Condescension.

That is the only word you need pay attention to.
I am inferior therefore expendable.
How the lofty will fail. They will succumb to those who are lessor in their minds.
Nice post gjohn.

Wink on Thu, 04/19/2018 - 4:11pm
And posted as a pod,

sort of, at... Patreon.com/C99
@Pricknick

That is the only word you need pay attention to.
I am inferior therefore expendable.
How the lofty will fail. They will succumb to those who are lessor in their minds.
Nice post gjohn.

thanatokephaloides on Thu, 04/19/2018 - 12:13am
the working class and the employing class have nothing in common

It occurred to me some time ago that I have much more in common with a working class slob in France, or Mexico, or Brazil, or Russia, than a do with the wealthy elite in my own country.
Don't think that the wealthy haven't figured that out too.

The working class and the employing class have nothing in common.
There can be no peace so long as hunger and want are found among
millions of the working people and the few, who make up the employing
class, have all the good things of life.

-- Preamble to the Constitution of the Industrial Workers Of The World (IWW)
source

QMS on Thu, 04/19/2018 - 8:17pm
over generalized

@thanatokephaloides I have been a worker and an employer for most of my career. I associate with many of the same ilk. None of us working / employer types can afford to hire the millions of under employed. Maybe a few here and there. We are not wealthy, nor are we taking advantage of the poor. Try to put this lofty idealism into perspective.

It occurred to me some time ago that I have much more in common with a working class slob in France, or Mexico, or Brazil, or Russia, than a do with the wealthy elite in my own country.
Don't think that the wealthy haven't figured that out too.

The working class and the employing class have nothing in common.
There can be no peace so long as hunger and want are found among
millions of the working people and the few, who make up the employing
class, have all the good things of life.

-- Preamble to the Constitution of the Industrial Workers Of The World (IWW)
source

earthling1 on Thu, 04/19/2018 - 12:18am
Their heads will look real fine

on a pike.

Meteor Man on Thu, 04/19/2018 - 12:30am
The Working-Class Push for Progressive Economic Policies

Somebody at CAP may be out of a job. I tried to find the report and came up empty. Can you provide the link? Thx.

The Aspie Corner on Thu, 04/19/2018 - 7:56am
But 'Murica is a classless society..../s

My ass. Class was a huge factor in 2016 (And still is) and working class issues were utterly ignored.

https://www.youtube.com/embed/-jjrSWCgJus?modestbranding=0&html5=1&rel=0&autoplay=0&wmode=opaque&loop=0&controls=1&autohide=0&showinfo=0&theme=dark&color=red&enablejsapi=0

longtalldrink on Thu, 04/19/2018 - 2:25pm
And let us not forget Occupy Wallstreet

was the continuation of the Poor People's Campaign. We are all still in dire straights.

Lily O Lady on Thu, 04/19/2018 - 11:09am
I up-voted you but

@longtalldrink @longtalldrink
that's " dire ." Sorry, I couldn't help myself.

was the continuation of the Poor People's Campaign. We are all still in dire straights.

thanatokephaloides on Thu, 04/19/2018 - 1:33pm
dyer

@Lily O Lady

I up-voted you but that's "dire." Sorry, I couldn't help myself.

A "dyer" is one who applies dyes.

"Dire" is a synonym for desperate. And it applies to our situation.

#6 #6
that's " dire ." Sorry, I couldn't help myself.

longtalldrink on Thu, 04/19/2018 - 2:21pm
Ugh

@Lily O Lady I saw that after I posted it and knew the grammar police would get me...yikes.

#6 #6
that's " dire ." Sorry, I couldn't help myself.

lizzyh7 on Thu, 04/19/2018 - 5:40pm
I just assumed it was

@longtalldrink a play on Dyer Straights...!

#6.1 I saw that after I posted it and knew the grammar police would get me...yikes.

longtalldrink on Thu, 04/19/2018 - 8:36pm
Actually

@lizzyh7 they were one of my favorite groups...so maybe subconsciously, this is what I was doing?

#6.1.2 a play on Dyer Straights...!

dkmich on Thu, 04/19/2018 - 12:37pm
So pay more taxes if you make more than 250K, BUT

pay $125K per kid for college if you earn more than 125K. That makes zero sense. A parent has no legal obligation to a child after age 18, but the 18 year old must include parental income if they apply for PELL. If they are included in their parents family, then the family must be legally obligated to pay for college. 18 can legally die, go to war, be incarcerated, and contractually bound, but they can't have a drink or be legally entitled to the same rights and benefits as everyone else.

Since the college-educated express less support at any price, it reeks of pettiness and tit for tat. "I paid for mine, you pay for yours." It is no wonder there is so much resentment at all levels and an economic coalition can't be formed. Somebody is always measuring who mom loves best. At no time did Bernie say a word about means testing a GD thing. It is why he was able to transcend labels.

thanatokephaloides on Thu, 04/19/2018 - 1:42pm
paid for

@dkmich

Since the college-educated express less support at any price, it reeks of pettiness and tit for tat. "I paid for mine, you pay for yours."

Especially when one considers the chances of that being true are really quite small.

Contrary to the Randian beLIEf, they didn't build what they have all by themselves. Society carried quite a bit of the freight here.

pay $125K per kid for college if you earn more than 125K. That makes zero sense. A parent has no legal obligation to a child after age 18, but the 18 year old must include parental income if they apply for PELL. If they are included in their parents family, then the family must be legally obligated to pay for college. 18 can legally die, go to war, be incarcerated, and contractually bound, but they can't have a drink or be legally entitled to the same rights and benefits as everyone else.

Since the college-educated express less support at any price, it reeks of pettiness and tit for tat. "I paid for mine, you pay for yours." It is no wonder there is so much resentment at all levels and an economic coalition can't be formed. Somebody is always measuring who mom loves best. At no time did Bernie say a word about means testing a GD thing. It is why he was able to transcend labels.

Snode on Thu, 04/19/2018 - 2:01pm
Thomas Edsall has an article

That starts out on disparities in housing, but rounds abouts to the "Elite Class" and the urban gentrification by corporatist democrats. It points out how the democratic party caters to this elite wing, and how the NIMBY-ism of the elites blocks affordable housing laws. It ends up with some observations:

"Taking it a step further, a Democratic Party based on urban cosmopolitan business liberalism runs the risk not only of leading to the continued marginalization of the minority poor, but also -- as the policies of the Trump administration demonstrate -- to the continued neglect of the white working-class electorate that put Trump in the White House."

https://www.nytimes.com/2018/04/19/opinion/democrats-gentrification-citi...

Lenzabi on Thu, 04/19/2018 - 2:48pm
We Can't

We really can't afford the wealthy parasite class anymore nor should we suffer their think tanks that make folks worship them and their lifestyles of indulgence and greed!

[Apr 24, 2018] Class and how they use words to hide reality

Notable quotes:
"... -- Preamble to the Constitution of the Industrial Workers Of The World (IWW) ..."
"... @thanatokephaloides ..."
"... -- Preamble to the Constitution of the Industrial Workers Of The World (IWW) ..."
"... @longtalldrink ..."
"... @longtalldrink ..."
"... @Lily O Lady ..."
"... @Lily O Lady ..."
"... @longtalldrink ..."
"... @lizzyh7 ..."
"... @dkmich ..."
Apr 24, 2018 | caucus99percent.com

gjohnsit on Wed, 04/18/2018 - 11:45pm

I've come to realize that there's a lot of confusion out there due to people using words with very specific definitions.

For example, when a Republican talks about "freedom" they don't mean "freedom from want".
They mean "freedom from government oppression", but only government oppression.
Private oppression? Republicans will either deny it exists, or justify it.
When a Republican is "pro-life" it only refers to birth.
Because those very same pro-life people are generally pro-war and pro-death penalty.

Democrats act the same way about different things.
When a Democrat says "diversity", they only mean diversity of race, gender, or sexual orientation.
Diversity of ideas? Diversity of class? Not so much.
When a Democrat says "privilege" it refers to "white" and "male".
Privilege of wealth? (i.e. like the dictionary definition) That generally gets forgotten.

And then there is the bipartisan misuse of words, which revolves around war and wealth.
When they say "humanitarian war" they mean, um, some contradictory concepts that are meaningless, but are designed to make you feel a certain way.
When they say "socialism" they really mean "state oppression" regardless of the economic system.
As for the many version of socialism with minimal or non-existent central governments? Or when socialist programs work? No one talks about them.

Let's not forget substituting or mixing up "middle class" for "working class".
"Working class" now equals "poor", which isn't right.
They use "working class" as a smear too.
When you say "working class" some people automatically insert certain words in front of it, as if it's generally understood.

When many hear discussion of outreach to "working class" voters, they silently add the words "white" and "male" and all too often imagine them working on a factory floor or in construction. They shouldn't. According to another analysis by CAP from late last year, just under 6 in 10 members of the working class are white, and the group is almost half female (46 percent).

The topic of the needs and interests of the working class is usually race and gender neutral. Only the dishonest or indoctrinated can't wrap their minds around that fact.This is important because working class values don't require a race or gender lens.

a new report released today by the Center for American Progress makes a convincing argument, using extensive polling data, that this divide does not need to exist. As it turns out, in many cases, voters -- both college educated and working class, and of all races -- are in favor of an economic agenda that would offer them broader protections whether it comes to work, sickness or retirement.
"The polling shows that workers across race support similar views on economic policy issues," said David Madland, the co-author of the report, entitled "The Working-Class Push for Progressive Economic Policies." "They support a higher minimum wage, higher taxes on the wealthy, and more spending on healthcare and retirement. There is broad support among workers for progressive economic policy."

This shows that it's possible to make economic issues front and center in a campaign platform in a way that doesn't just talk to working class whites and dismisses the concerns of female and minority voters. It also shows that the oft-discussed dilemma among Democrats -- whether to prioritize college educated voters or working class ones -- may be a false choice.

Propaganda is all about false choices. To accomplish this, the media has created a world in which the working class exist only in the margins .

With the working class largely unrepresented in the media, or represented only in supporting roles, is it any wonder that people begin to identify in ways other than their class? Which is exactly what the ruling class wants .

I can't believe I used to fall for this nonsense! It takes a stupendous level of cognitive dissonance to simultaneously celebrate the fortunes of someone from a specific identity while looking past the vast sea of people from said identity who are stuck in gut-wrenching poverty. We pop champagnes for the neo-gentry while disregarding our own tribulations. It's the most stunning form of logical jujitsu establishment shills have successfully conditioned us to accept; instead of gauging the health of the economy and the vitality of our nation based on the collective whole, we have been hoodwinked to accept the elevation of a few as success for us all.
Diversity has become a scam and nothing more than a corporate bamboozle and a federated scheme that is used to hide the true nature of crony capitalism. We have become a Potemkin society where tokens are put on the stage to represent equality while the vast majority of Americans are enslaved by diminishing wages or kneecapped into dependency. The whole of our politics has been turned into an identity-driven hustle. On both sides of the aisle and at every corner of the social divide are grievance whisperers and demagogues who keep spewing fuel on the fire of tribalism. They use our pains and suffering to make millions only to turn their backs on us the minute they attain riches and status.

It's only when you see an article written by the ruling elite, or one that identifies with the ruling elite, that you realize just how out-of-touch they can be. The rich really are different - they are sociopaths. They've totally and completely bought into their own righteousness, merit and virtue .

Class ascendance led me to become what Susan Jacoby classifies in her recent New York Times Op-Ed "Stop Apologizing for Being Elite" as an "elite": a vague description of a group of people who have received advanced degrees. Jacoby urges elites to reject the shame that they have supposedly recently developed, a shame that somehow stems from failing to stop the working class from embracing Trumpism. Jacoby laments that, following the 2016 election, these elites no longer take pride in their wealth, their education, their social status, and posits that if only elites embraced their upward mobility, the working class would have something to aspire to and thus discard their fondness for Trump and his promises to save them.

That level of condescension just blows my mind. It occurred to me some time ago that I have much more in common with a working class slob in France, or Mexico, or Brazil, or Russia, than I do with the wealthy elite in my own country. Don't think that the wealthy haven't figured that out too.

Pricknick on Thu, 04/19/2018 - 12:03am
Condescension.

That is the only word you need pay attention to.
I am inferior therefore expendable.
How the lofty will fail. They will succumb to those who are lessor in their minds.
Nice post gjohn.

Wink on Thu, 04/19/2018 - 4:11pm
And posted as a pod,

sort of, at... Patreon.com/C99
@Pricknick

That is the only word you need pay attention to.
I am inferior therefore expendable.
How the lofty will fail. They will succumb to those who are lessor in their minds.
Nice post gjohn.

thanatokephaloides on Thu, 04/19/2018 - 12:13am
the working class and the employing class have nothing in common

It occurred to me some time ago that I have much more in common with a working class slob in France, or Mexico, or Brazil, or Russia, than a do with the wealthy elite in my own country.
Don't think that the wealthy haven't figured that out too.

The working class and the employing class have nothing in common.
There can be no peace so long as hunger and want are found among
millions of the working people and the few, who make up the employing
class, have all the good things of life.

-- Preamble to the Constitution of the Industrial Workers Of The World (IWW)
source

QMS on Thu, 04/19/2018 - 8:17pm
over generalized

@thanatokephaloides I have been a worker and an employer for most of my career. I associate with many of the same ilk. None of us working / employer types can afford to hire the millions of under employed. Maybe a few here and there. We are not wealthy, nor are we taking advantage of the poor. Try to put this lofty idealism into perspective.

It occurred to me some time ago that I have much more in common with a working class slob in France, or Mexico, or Brazil, or Russia, than a do with the wealthy elite in my own country.
Don't think that the wealthy haven't figured that out too.

The working class and the employing class have nothing in common.
There can be no peace so long as hunger and want are found among
millions of the working people and the few, who make up the employing
class, have all the good things of life.

-- Preamble to the Constitution of the Industrial Workers Of The World (IWW)
source

earthling1 on Thu, 04/19/2018 - 12:18am
Their heads will look real fine

on a pike.

Meteor Man on Thu, 04/19/2018 - 12:30am
The Working-Class Push for Progressive Economic Policies

Somebody at CAP may be out of a job. I tried to find the report and came up empty. Can you provide the link? Thx.

The Aspie Corner on Thu, 04/19/2018 - 7:56am
But 'Murica is a classless society..../s

My ass. Class was a huge factor in 2016 (And still is) and working class issues were utterly ignored.

https://www.youtube.com/embed/-jjrSWCgJus?modestbranding=0&html5=1&rel=0&autoplay=0&wmode=opaque&loop=0&controls=1&autohide=0&showinfo=0&theme=dark&color=red&enablejsapi=0

longtalldrink on Thu, 04/19/2018 - 2:25pm
And let us not forget Occupy Wallstreet

was the continuation of the Poor People's Campaign. We are all still in dire straights.

Lily O Lady on Thu, 04/19/2018 - 11:09am
I up-voted you but

@longtalldrink @longtalldrink
that's " dire ." Sorry, I couldn't help myself.

was the continuation of the Poor People's Campaign. We are all still in dire straights.

thanatokephaloides on Thu, 04/19/2018 - 1:33pm
dyer

@Lily O Lady

I up-voted you but that's "dire." Sorry, I couldn't help myself.

A "dyer" is one who applies dyes.

"Dire" is a synonym for desperate. And it applies to our situation.

#6 #6
that's " dire ." Sorry, I couldn't help myself.

longtalldrink on Thu, 04/19/2018 - 2:21pm
Ugh

@Lily O Lady I saw that after I posted it and knew the grammar police would get me...yikes.

#6 #6
that's " dire ." Sorry, I couldn't help myself.

lizzyh7 on Thu, 04/19/2018 - 5:40pm
I just assumed it was

@longtalldrink a play on Dyer Straights...!

#6.1 I saw that after I posted it and knew the grammar police would get me...yikes.

longtalldrink on Thu, 04/19/2018 - 8:36pm
Actually

@lizzyh7 they were one of my favorite groups...so maybe subconsciously, this is what I was doing?

#6.1.2 a play on Dyer Straights...!

dkmich on Thu, 04/19/2018 - 12:37pm
So pay more taxes if you make more than 250K, BUT

pay $125K per kid for college if you earn more than 125K. That makes zero sense. A parent has no legal obligation to a child after age 18, but the 18 year old must include parental income if they apply for PELL. If they are included in their parents family, then the family must be legally obligated to pay for college. 18 can legally die, go to war, be incarcerated, and contractually bound, but they can't have a drink or be legally entitled to the same rights and benefits as everyone else.

Since the college-educated express less support at any price, it reeks of pettiness and tit for tat. "I paid for mine, you pay for yours." It is no wonder there is so much resentment at all levels and an economic coalition can't be formed. Somebody is always measuring who mom loves best. At no time did Bernie say a word about means testing a GD thing. It is why he was able to transcend labels.

thanatokephaloides on Thu, 04/19/2018 - 1:42pm
paid for

@dkmich

Since the college-educated express less support at any price, it reeks of pettiness and tit for tat. "I paid for mine, you pay for yours."

Especially when one considers the chances of that being true are really quite small.

Contrary to the Randian beLIEf, they didn't build what they have all by themselves. Society carried quite a bit of the freight here.

pay $125K per kid for college if you earn more than 125K. That makes zero sense. A parent has no legal obligation to a child after age 18, but the 18 year old must include parental income if they apply for PELL. If they are included in their parents family, then the family must be legally obligated to pay for college. 18 can legally die, go to war, be incarcerated, and contractually bound, but they can't have a drink or be legally entitled to the same rights and benefits as everyone else.

Since the college-educated express less support at any price, it reeks of pettiness and tit for tat. "I paid for mine, you pay for yours." It is no wonder there is so much resentment at all levels and an economic coalition can't be formed. Somebody is always measuring who mom loves best. At no time did Bernie say a word about means testing a GD thing. It is why he was able to transcend labels.

Snode on Thu, 04/19/2018 - 2:01pm
Thomas Edsall has an article

That starts out on disparities in housing, but rounds abouts to the "Elite Class" and the urban gentrification by corporatist democrats. It points out how the democratic party caters to this elite wing, and how the NIMBY-ism of the elites blocks affordable housing laws. It ends up with some observations:

"Taking it a step further, a Democratic Party based on urban cosmopolitan business liberalism runs the risk not only of leading to the continued marginalization of the minority poor, but also -- as the policies of the Trump administration demonstrate -- to the continued neglect of the white working-class electorate that put Trump in the White House."

https://www.nytimes.com/2018/04/19/opinion/democrats-gentrification-citi...

Lenzabi on Thu, 04/19/2018 - 2:48pm
We Can't

We really can't afford the wealthy parasite class anymore nor should we suffer their think tanks that make folks worship them and their lifestyles of indulgence and greed!

[Apr 13, 2018] Neolineralism and exploitation of part time workers at DuckDuckGo

Apr 13, 2018 | duckduckgo.com

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More results COSATU and NACTU memorandum on labour brokering Your browser indicates if you've visited this link ... the working class in this country continues to reel under the pressure of neoliberalism ... of exploitation of workers . ... part-time employees from ... cosatu.org.za /show.php?ID=5917 More results The Dynamics of Forced Neoliberalism in Nigeria Since the 1980s Your browser indicates if you've visited this link The Dynamics of Forced Neoliberalism in Nigeria ... Part of theAfrican Languages and Societies ... value while at the same time negating the social rights of its ... encompass.eku.edu /cgi/viewcontent.cgi?article=1010&context=... More results The Politics of Capitalism | Ellen Meiksins Wood | Monthly Review Your browser indicates if you've visited this link Our choice of political strategies clearly depends in large part on what we think is ... The Politics of Capitalism. by Ellen ... mean the exploitation of workers , ... https://monthlyreview.org /1999/09/01/the-politics-of-capitalism/ More results Neoliberalism and the Social Contract: A Historical ... Your browser indicates if you've visited this link (This is the first part of the essay. Two more will follow in the next few weeks) Abstract Analyzing aspects of the tide of rightwing populism arising from the pluralistic-diversity model of neoliberalism, this essay examines the evolving social contract that normalizes systemic exploitation and repression in the name cesran.org /neoliberalism-and-the-social-contract-a-h... More results Public Theology: Foucault, Neoliberalism, and Current Social ... 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Your browser indicates if you've visited this link Public Banks as the Antithesis of Neoliberalism. ... hire employees on part-time contracts so they ... away from extraction and exploitation . Public banks work. publicbankinginstitute.org /public_banks_as_the_antithesis_of_neolibe... More results Neoliberalism and Revolution in Egypt - E-International Relations Your browser indicates if you've visited this link Various theoretical underpinnings of neoliberal policy have created the ideal conditions ... Neoliberalism and Revolution in Egypt ... At the time of the ... e-ir.info /2015/04/24/neoliberalism-and-revolution-i... More results Universities Are Relying On Exploitation Of Part-Time Labor ... Your browser indicates if you've visited this link Universities Are Relying On Exploitation Of Part-Time ... their workers to a very extreme level. And they've also-- and this has helped lead to global neoliberalism. therealnews.com /t2/index.php?option=com_content&task=view... 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Your browser indicates if you've visited this link This chapter addresses debilitating impacts of neoliberal academia and ways to resist it; and it does so through critical analysis of disability studies. With insights of disability studies, it... https://link.springer.com /chapter/10.1007/978-94-017-9984-3_10 More results Employment rights of part-time workers Your browser indicates if you've visited this link Part-time workers have certain employment rights under the Protection of Employees ( Part-Time Work) Act 2001. citizensinformation.ie /en/employment/types_of_employment/employm... More results Stopping Exploitation of Migrant Workers Essay - 758 Words Your browser indicates if you've visited this link Stopping Exploitation of Migrant Workers ... but at the same time , many migrant workers suffer poor ... Farm Workers Cultural Activities Project - Part III I ... studymode.com /essays/Stopping-Exploitation-Of-Migrant-W... 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(low paid and part-time ) ... https://www.sciencedirect.com /science/article/pii/S0016718515301342 More results Resistance Rising: Socialist Strategy in the Age of Political ... Your browser indicates if you've visited this link A summary of Democratic Socialists of America ... and we face a political landscape more favorable than perhaps at any time ... and the exploitation of workers by ... dsausa.org /resistance_rising_socialist_strategy_in_t... More results Class exploitation , racial oppression are the dominant ... Your browser indicates if you've visited this link To flush out the University Currently Known as Rhodes' brutal system of worker exploitation , ... Class exploitation , racial oppression are the ... Toli was part of ... https://www.dailymaverick.co.za /opinionista/2017-06-01-class-exploitation... More results Increasing exploitation from Taylorism to Toyota and Lean ... 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More results Work Hours in Retail: Room for Improvement Your browser indicates if you've visited this link Work Hours in Retail: Room for Improvement ... years, part-time work has spread to new parts of retail and can entail very low guaranteed weekly research.upjohn.org /cgi/viewcontent.cgi?article=1011&context=... More results PDF Revised Laws of Mauritius - MCCI Your browser indicates if you've visited this link Revised Laws of Mauritius E9B - 5 [Issue 5] "officer" means an officer designated by the Permanent Secretary; " part-time worker " means a worker whose normal hours of work are https://www.mcci.org /media/35813/employment-rights-act.pdf More results PDF Reality TV, or the secret theater of neoliberalism Your browser indicates if you've visited this link REALITY TV, OR THE SECRET THEATRE OF NEOLIBERALISM ... the division between work time and leisure time ... In the contemporary neoliberal economy workers are facing ... eprints.lse.ac.uk /52405/1/Couldry_Reality_TV_secret_theater... More results The closing of American academia | Poland | Al Jazeera Your browser indicates if you've visited this link I am listening to the speaker bemoan the exploitative practices of the neoliberal model when ... faculty, a part-time employee on a ... work means" and ... https://www.aljazeera.com /indepth/opinion/2012/08/20128201027492464... More results The Free Market Experiment in Latin America: Assessing Past ... Your browser indicates if you've visited this link The Free Market Experiment in Latin America: Assessing Past Policies ... a time when neoliberal policies were in place ... Part Two will explore the social ... coha.org /the-free-market-experiment-in-latin-ameri... More results Articles about Exploitation - tribunedigital-sunsentinel Your browser indicates if you've visited this link Exploitation News. 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Your browser indicates if you've visited this link The Marxist, XXVII 4, October-December 2011 Prakash Karat Marxism in the 21st Century: Alternative to Neoliberal Capitalism and Imperialism* I Two decades after the fall of the Soviet Union, the mood of capitalist triumphalism that existed then, has vanished. cpim.org /content/marxism-21st-century-alternative-... More results PDF Neoliberalism As Spectacle: Economic Theory, Development and ... Your browser indicates if you've visited this link corporate exploitation . "Neoliberalism as spectacle" ... neoliberalism is part of a set of projects separating commodity ... analysis should at this time leave https://www.researchgate.net /profile/Nicholas_Jackson2/publication/234... 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Your browser indicates if you've visited this link Revisiting environmental concern: the role of the United ... where exploitation and aid are ... work- time reduction and structural economic change all have a part ... jpe.library.arizona.edu /volume_22/Santanu.pdf More results Neoliberalism as neocolonialism: A collection of multi ... Your browser indicates if you've visited this link Click here for Part 2: Neoliberalism, climate change, and the ... the foreign economic exploitation or coercive political domination of ... workers and their ... https://grimeandreason.wixsite.com /cscomplexity/single-post/2017/05/02/Neoli... 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Your browser indicates if you've visited this link Most relevant to emergence of the neoliberal ... temporary and part time work; ... policy to increase exploitation of immigrant workers from the ... basicsnews.ca /the-emergence-of-the-neoliberal-containme... More results Workers Quotes (54 quotes) - Goodreads Your browser indicates if you've visited this link "Both political parties have moved to the right during the neoliberal ... "During my time in high ... nitrogen and helium gas as part of their daily work ... https://www.goodreads.com /quotes/tag/workers More results What is exploitation ? - socialistworker.co.uk Your browser indicates if you've visited this link The term " exploitation " typically conjures up images ... Therefore the capitalist is stealing from workers some of the value that ... it is part of the normal ... https://socialistworker.co.uk /art/15188/What is exploitation More results Strategies for resistance under neoliberalism: lessons from ... Your browser indicates if you've visited this link This essay examines the Zapatista Army of National Liberation and the Landless Workers' Movement and the ways that these movements have been able to persist for decades and surpass frequent limitations of revolutionary action under neoliberalism. https://libcom.org /blog/strategies-resistance-under-neoliber... More results PDF Economic Transitions to Neoliberalism in Middle-Income ... Your browser indicates if you've visited this link Neoliberalism in Middle ... has successfully managed to increase the exploitation of the workers . ... Part-time and half- time employment has increased from ... https://vallebaeza.files.wordpress.com /2011/11/valle_baeza_economic_transition_s... More results Neoliberal Globalization - Is There an Alternative to ... Your browser indicates if you've visited this link Is there an alternative to plundering the earth? Is there an alternative to making war? Is there an alternative to destroying the planet? No one asks these questions because they seem absurd. bibliotecapleyades.net /sociopolitica/sociopol_globalization82.htm More results PDF SCHOOL OF GRADUATE STUDIES - Addis Ababa University Your browser indicates if you've visited this link A THESIS SUBMITTED TO THE SCHOOL OF GRADUATE STUDIES OF ... The central question of this research is "does neoliberalism work in ... over the exploitation of ... etd.aau.edu.et /bitstream/123456789/3563/3/Tewodros Reta.pdf More results The architecture of contestion : neoliberalism and public ... Your browser indicates if you've visited this link THE ARCHITECTURE OF CONTESTION: NEOLIBERALISM AND PUBLIC ... work ethic, and skills. Neoliberalism has altered the role ... and not infrequently, the exploitation , ... arminda.whitman.edu /cgi/viewcontent.cgi?article=1217&context=... More results

[Apr 13, 2018] Domestic Work, Neoliberalism, and Transforming Labor by Premilla Nadasen

Jan 01, 2013 | sfonline.barnard.edu

Neoliberalism has created a new political, economic, and cultural context through deregulation, privatization, securitization, and the dismantling of the welfare state. These changes have had a contradictory impact on women. Proponents of neoliberalism have praised the benefits of an unfettered, market-driven economy, extolled the virtues of personal choice and economic individualism as the keys to freedom, and argued that these ostensibly gender-blind economic structures offer opportunities for the agency and empowerment of women. Women's human rights have been part of the discursive and ideological justification for the implementation of neoliberalism in many parts of the world. Some women, especially economically better-off, educated women have benefitted from the dismantling of the old patriarchal order. However, as many authors have argued, because neoliberalism promotes the idea of a rational individual exercising free will while eroding social democracy, it has made life harder for most women and has widened the race/class divide among women. I suggest that, despite the many negative repercussions of neoliberal economic changes, these dramatic disruptions of the social order may offer avenues for poor women's collective mobilization and progressive political transformation.

Neoliberalism has reversed the benefits of social welfare citizenship that were a hallmark of the twentieth-century Fordist state. Neoliberalism's dismantling of the economic safety net, trend toward privatization, and rise of the security state have increased the burden on women. The reduction or elimination of welfare benefits for the poor, cutback of social services, reliance on market strategies, and mass incarceration have led to a crisis of social reproduction and a corresponding increase in women's workloads. With a decline in social rights and publicly-funded support services, women have access to fewer economic resources and must either turn to the private sector or increase their own unpaid labor. In this way, neoliberalism has intensified women's oppression and exploitation.

The rights of social citizenship instituted in the United States in the 1930s, however, were far from egalitarian. They created and institutionalized a racialized and gendered hierarchy with welfare policies that controlled and regulated women's behavior and reinforced the male breadwinner/family wage model. Women were more likely to receive social benefits as dependents rather than as independent individuals, and their benefits were stigmatized and less generous. In addition, protective labor legislation excluded occupations such as agricultural, domestic, part-time, and temporary work filled largely by women and people of color. These exclusions not only left these workers in a precarious situation, but they circumscribed the very definition of "work." Although some exclusions were eventually remedied, they had a long-lasting impact by shaping Americans' notion of "real" work, which was most closely associated with the factory floor, and excluded many women workers. And mainstream labor unions were only marginally interested in organizing excluded sectors. The New Deal and other social reforms of the mid-twentieth century naturalized a racial and gender hierarchy and established firm boundaries for the rights of labor citizenship, which was tied to full-time, largely male employment. Women and people of color were subordinated in this form of state-organized capitalism.

Despite its claims of race- and gender-neutrality, neoliberalism is replacing the old hierarchies with new patterns of racism and sexism. There has been an increase in low-paid, part-time contingent service sector and outsourced manufacturing work that relies disproportionately on immigrant women of color. While women of color have always worked in low-wage devalued occupations, the dramatic expansion of a low-wage service and manufacturing sector on a global scale has intensified their exploitation and reshaped the labor market. This has been coupled with new forms of discipline and control rooted in heightened xenophobia and border control. These growing employment sectors tend to be without benefits or labor protections, while full-time, well-paid, mostly male manufacturing jobs are on the decline. This shift in the labor market has resulted in women increasingly carrying the burden of financially supporting the family. The average American worker today is experiencing working conditions similar to those experienced by workers excluded from the rights of labor citizenship in the mid-twentieth century.

While the new political climate has made it more difficult for many women, it has also generated activism among low-wage women workers at the grassroots level. The activism has been most visible among immigrant day laborers, domestic workers, guest workers, farm workers, and other sectors historically excluded from the protections of labor law. Neoliberalism's dismantling of the New Deal's structured race/gender hierarchy has created an opening for worker mobilization and may offer opportunities for rethinking work and justice. Because of their exclusions, these workers out of necessity have developed innovative strategies for organizing. I will draw on examples from domestic worker organizing to analyze how it offers one model for grassroots, feminist labor organizing under neoliberalism.

New forms of domestic worker activism are flourishing outside the framework of the modern welfare state. During the 1930s, domestic workers were excluded from New Deal social benefits such as minimum wage, social security, unemployment compensation, and the right to organize and bargain collectively. While they won certain of these benefits over the course of the twentieth century, they still do not have the right to unionize and are not protected by civil rights and occupational health and safety laws. Because they work in isolated settings in the privacy of the home and often have multiple employers, domestic workers have generally been considered "unorganizable."

The inability to organize into traditional unions has fostered alternative methods of organizing. Domestic worker activists have organized by geography, rather than solely by occupation; demanded state-based, rather than employer-based rights; developed democratic grassroots political support, rather than relying on a union hierarchy and model of representation and collective bargaining; and cultivated public support, rather than speaking only to their constituency. They seek to revalue care work and regard it as legitimate work that is entitled to the same rights and protections as other kinds of labor. Domestic worker organizers employ an intersectional analysis that takes into account race, class, gender, culture, and nationality that speaks to the particular needs of their immigrant, women-of-color constituency. Through their organizing, domestic workers are challenging the neoliberal premise of market fundamentalism and asserting the need for state regulation and protection of labor.

In addition, domestic worker activists are modeling a notion of rights that is not citizenship-based. Many social movements over the course of the twentieth century -- including the civil rights and women's movements -- advocated inclusion in or expansion of the rights of citizenship. Neoliberalism has led to population displacement and migration, and relies on immigrant, especially undocumented immigrant, workers. These workers are usually denied citizenship rights or state-based labor protections either because of their immigration status or their occupation. Through organizing, however, they are pushing back against neoliberal disciplinary mechanisms and offering new conceptualizations of justice outside the framework of the nation-state. They seek state protections, but insist that these protections be extended even to those outside the boundaries of state-based citizenship and, thus, may offer a way to reconceptualize the role of the state. They organize both the documented and the undocumented and make claims for these workers regardless of citizenship status. They have also developed alliances with domestic workers in other parts of the world, further illustrating the way in which their struggle is not solely a national one.

Neoliberalism's reversal of the social democratic gains of the mid-twentieth century has created a need to consider the value of alternative strategies. As the state-protected benefits of labor citizenship diminish, more traditional workers -- who are increasingly finding themselves without a safety net -- are looking to previously excluded sectors as a possible model of organizing. By breaking down the Fordist assumptions of gender and work, neoliberalism is creating openings for a new feminist praxis and for new ways for thinking about gender, justice, and social change.

[Apr 13, 2018] NEOLIBERALISM THRHOUGH THE EYES OF WOMEN by Joo-Yeon Jeong & Seung-Min Choi

Nov 22, 2001 | focusweb.org

Joo-Yeon Jeong & Seung-Min Choi, PICIS*

There is no place on Earth where neo-liberalism has not poisoned. It has allowed a handful of private interests to control as much as possible of social life in order to maximize personal profit. It has poisonous effects especially in the Third World, where imperial powers continue to pirate natural and human resources to fill the pockets of transnational capitalists. Initiated by Reagan and Thatcher, for the last two decades, neo-liberalism has become the dominant economic and political trend for much of the leftist (so they identify themselves) governments as well as the right.

However, as women fighting against global capitalism and its new phase, as women yearning for a better world where we will not be exploited and abused, we must go a step further into looking into this 'neo-liberalism' through the experiences of women. And it is not just about how women linearly experience it - we must go into the depths to manifest how neo-liberalism operates in a very gender-biased way.

WO MEN WORKERS AS SCAPEGOATS


In Korea, the process of being absorbed into global capitalism began earlier than the economic crisis, during the economic 'hyper '-development era of military dictatorship of Park Jung-Hee, with quite a bit of help from the US. Fluctuating together with global economic crises, the Korean economy started to show signs of a recession from the early 90s, as rate of profit decreased. Thus, capitalists started to adopt policies of introducing flexibility to the labour market. It was 'experimented' on women workers first before taking full force on the entire working class at the end of the millennium.

Jobs where women were predominant started to be transformed in the 1980s, beginning in the form of dispatch labour and eventually expanding to generalisation of irregular labour. However, this process was mainly targeted at women workers and the male-oriented labour movement did not give much importance to it, even though women worker's movement consistently called for the address of the issue.

Although the incorporation of Korean economy into the global capitalist system had already started around a decade ago, Korean people came to experience its destructive nature during and after the economic crisis of 1997. The structural adjustment program of the IMF shook the labour market and massive lay-offs were implemented. In particular, women workers were laid off first, and the working conditions of women workers fell to the ground.

The methods that the management used was subcontracting or abolishing those production lines and business sectors where women were predominant. Women in these places were usually typists or clerical assistants, who were considered not important and cumbersome, and thus provided the logic and justification for the lay-offs. Many companies would lay-off these women, and instead employ workers from dispatch companies - thus providing the management with ways in which to decrease labour costs and evade provision of insurances and benefits. Or in the case of banks, the same worker would be reemployed, but on a contract basis as irregular workers, again to decrease labour costs. Another method of laying off women workers or transforming them into irregular workers, was targeting foremost women who were married to someone in the same workplace, and also those who were pregnant or were on their maternal leave. They provided the management with strong justifications based on patriarchal values of 'women's place is at home'. This process of unjust and discriminatory lay-offs at the onset of the economic crisis saw the deterioration of maternal protection and women worker's rights in general. The achievements that the women worker's movement had accomplished over the last couple of decades were undermined.

"FLEXIBILITY" OF WOMEN WORKERS


The massive lay-offs that occurred after 1997 was obviously not 'inevitable' on the part of the management, but was a calculated process of increasing the rate of profit through flexibility of the labour market. Because the need for lay-offs did not come simply from decrease in production, workers who were laid off were re-employed, but as irregular workers. And because flexibility measures were implemented foremost on women, women were also absorbed again in masses into the labour market, but this time as irregular workers with low wages and low protection.

Attaining flexibility of women workers was backed up by the patriarchal ideology of 'male as breadwinner' 1 . Through this ideology, women workers are considered not really as workers, but as 'assistant income providers', the ideology that contributes to devaluation of women's work. And this in turn provided the justification for the primary lay-offs of women and transforming women's jobs into irregular jobs - a justification that quelled the possibility of resistance from the working class. Recently, capitalist institutions and mainstream media elaborate that the rate of women's employment is increasing faster that the rate of men. On one hand, this is due to the increase in absolute number of jobs-irregular jobs for women, but also due to the fact that women do not have much choice than take up highly unstable jobs without any hesitation to earn a living, whereas men can afford to be more 'selective'.

Now, the percentage of irregular workers is risen to higher levels than regular workers. In analyzing a census on the economically-active workforce implemented by the Korean Statistical Office in August 2001, the Korea Labor & Society Institute (www.klsi.org) estimated the number of irregular workers to be 7.37 million, constituting 55.7% of the total workforce 2 .According to studies made in 2000, out of entire irregular workers, the percentage of women is higher than that of men at 53%, and within the entire women workforce irregular workers take up 70%. These official statistics exclude specially employed labour (for example, the type of jobs that capitalists characterise as self-employment) such as private tutors, insurance sales, golf caddies etc., so if these jobs are included, the rate of irregular women workers will definitely rocket.

Irregular work pertaining to capital's flexibility measures has brought deterioration of working conditions and impoverishment for workers of both genders. But it has affected women workers more severely. At the moment, most of irregular women workers are employed in small enterprises of less than 10 employees. It has driven women's work into the ditches and has also increased mental stress from lack of self-confidence and the fear of losing their jobs. One feminist scholar was interviewing irregular women workers and told of how the interviewees were in constant fear of being seen throughout the interview. Many social psychologists point out that the increase of irregular work and the mental stress that comes from it is becoming a serious social problem that is bound to affect the whole society.

Moreover, with the automation of production lines and transfer of factories in capital's constant search for cheaper labour, many women workers who had originally constituted a large proportion of the workforce in the manufacturing sector are now being absorbed into the service sector - in areas such as the so-called 'entertainment' businesses and as domestic workers. The service sector has rapidly expanded over the last few years in Korea, and many women are being employed as narrator models, telemarketers, and as servers and entertainers in bars. These jobs are not only unstable, low waged and physically strenuous, but they also enforce the use of 'femininity' and sexuality to raise sales, making women more vulnerable to possibilities of sexual abuse and exploitation. Also, because the service sector has always shared a very thin borderline with the sex industry, it is not very surprising that more and more women workers, both young and aged, are being drawn into the sex industry. For example, many married women in their 30's and 40's are employed in the so-called 'telephone rooms (jeon-hwa-bang)' and are forced to have phone sex with men. Many other married women were employed as 'pager women', who are paged to come to bars to 'entertain' men. This became a very heated issue when Daewoo Motors unionists went to a bar, paged women, and came face to face with familiar faces. When Daewoo workers were laid-off, the wives had to find jobs to sustain their families and the only ones available were as 'pager women'. The ruling elite and the conservative media are enthusiastically deploring the moral collapse of Korean women, but the reality is that it is the capitalist system that is corrupting the people.

The situation is not much different on the international arena. Neo-liberal globalisation has paved the way for increase in migrant women workers, international trafficking and enforced sex work in the Third World. In Korea, many women from the Philippines and Russia come to Korea as domestic workers and 'entertainers', and then are tricked into providing sexual services to Korean men and the US military.

WIDENING GAP BETWEEN WOMEN


Neo-liberal globalisation has also impeded the widening of gap between different classes of women. The living standard between women in the developed countries and those in the Third World is now incomparable, as is the situation inside Korea. Rich women of the bourgeoisie can afford to wear fur coats that cost tens of million won, shop in department stores in their imported cars, buy US produced baby food, send their children to expensive private English language schools so that they are reproduced as the minority elite who rule the world of globalisation, and employ women from South-east Asia as housemaids. This is how the minority of women in Korea live, and furthermore, they are not living on the wealth that they had accumulated themselves, but on the wealth accumulated by their husbands. And this in turn is the wealth accumulated from exploiting women workers in Korea and elsewhere in the Third World. In contrast to the minority of women who enjoy the outcome of neo-liberal domination in a good part of the world, majority of women cannot find a proper job no matter how hard they try, and when they do find a job, it is an unstable job in slave-like conditions that can get snatched away from them. They cannot afford domestic help or a nanny - they work for long tiring hours outside and then come home to find piles of dishes to be washed and children to be fed. Also, studies by women's organizations have found that domestic abuse has increased, as husbands and fathers who have lost jobs turn to expressing their anger at their daughters and wives, and resort to violence.

CULTURAL AND IDEOLOGICAL BACKLASH


To quell mass resistance against economic globalisation that has brought about increase in unemployment, decrement of public services, downfall in wages and deterioration of quality of life, the ruling elite has manipulated cultural conservatism to solidify its dominance over society. Cultural conservatism in Korea is represented by Confucian patriarchy. The economic crisis of 1997 saw the rise of this ideology that came together with the capitalist form of 'male as breadwinner' model, and acted to cover up the oppression of women while highlighting the need for women to make more sacrifices for the sake of saving the crumbling economy. In the meanwhile, unemployment of men was highlighted as a serious social problem. Thus the role of women was limited to that of 'comforting' the suffering man in the family, while the sufferings of women both as wage workers and non-wage workers were ignored. The Korean mainstream media and the conservative ruling elite alike have neglected the seriousness of women suffering from sexual abuse on the basis that women should have perseverance, but has spotlighted those desperate women who left home after losing all hopes as destructors of family values. Women who had replaced their husbands as the breadwinners end up in the sex industry, after being rejected from any other type of work, but then are stigmatised as being morally corrupt. The severity of unemployment of male youths appear in the news everyday, whereas female students are not only ignored but are blocked altogether from the labour market. Many right-wing sociologists and economists actually suggested that marriage for women should be more emphasized by the government so as to block women from entering the labour market - and thus lowering the official unemployment rate. The media focuses evermore on the fantasies of marriage, and the 'marriage business' is now enjoying its 'Belle Epoque'.

A CRITIQUE OF KIM DAE-JUNG'S POLICIES ON WOMEN


Kim Dae-Jung's government has been portrayed as being democratic and pro-feminist in and outside of Korea. There were high hopes for this president with his long history of fighting for democracy, and from the beginning, many civil and women's organizations decided to give him 'critical' support. However, his promise of establishing a ministry specific on women's issues was replaced by the Special Committee On Women's Affairs with no legislative powers, much to the disappointment of women's groups. As his presidential term is coming to an end, he did launch the Ministry of Gender Equality during the first half of this year, with a prominent figure from a major women NGO seated as the Minister. However, the policies that the Ministry is adopting are those that will hardly benefit majority of women suffering at grassroot levels.

This was recently manifested in the revisions that were made to the maternity clauses in the Standard Labour Laws in June. The Ministry had announced that it will expand public childcare so as to decrease the burden on working women. With support from major women NGOs 3 , the Ministry proposed revisions to maternity-related clauses in the Standard Labour Laws, and the clauses were changed for the first time since 1953. There were basically two major improvements - maternity leave was increased from the present 60 days to 90 days, and prohibition on employment of women in hazardous workplaces was expanded. This may seem like a big step, but the fact of the matter is, these laws came in exchange for further flexibility of women's labour. In exchange for increase of maternal leave, the Ministry also agreed to abolish the clauses restricting overtime work and night work, paid familycare leave and menstruation leave.

In a situation where 70% (or perhaps even higher and ever increasing) of women workers are irregular workers, how many women workers will actually benefit from the revision? The majority of working class women are outside legal boundaries. The Ministry and women NGOs argue that they will fight for the application of the laws to irregular workers, but without questioning the neo-liberal characteristics behind the legislation, there is really no chance that this will actually take place. Many women activists had fought hard for these laws for the last decade and they are congratulating themselves in finally achieving their objective, but in the meantime, a vast majority of women workers have fallen into the ditches of irregular work and the demands of the majority have been neglected to benefit a few. Capitalists have learnt to 'sacrifice' a few laws for the sake of obtaining further flexibility. Despite the argument that these revisions will open new opportunities for women, without questioning the essence of Kim's government and its support for neo-liberalism, the revisions that were recently made will only expedite the flexible usage of women workers and thus further deteriorate the working conditions of irregular women workers. The Ministry and the NGOs do not realize that the laws, along with others that were made during the recent years 4 , are all in compliance with neo-liberalism.

It has only been one year since the Ministry of Gender Equality took off, but those benefiting from it are middle-class, elite women, and only the minority of women workers who are lucky enough to be in a regular job. The presidential elections take place next year. Despite that the Ministry is conforming to neo-liberal policies and trying to confuse the workers about the essence of its policies, it does have some significance amidst the severely patriarchal political scene of Korea - which may well be undermined by any of the major right-wing political parties that take office - including the ruling New Millenium Democratic Party of Kim Dae-Jung, which still receive a lot of support from NGOs. This will merely lead to more lack of hope for state-led labour policies.

FIGHTING AND ORGANISING


Neo-liberalism was not something that hit Korea suddenly in 1997, but is a historical development of capitalism that has gradually taken form during the last few decades. It had been women workers who had felt the effects of globalisation first and thus were the first ones to resist. It was the women workers of Korea, who fought militantly during the 70s and early 80s for a democratic union and worker's rights. Women workers formed the foundation for the modern labour movement, although this fact often tends to be forgotten. During the late 80's, the Korean economy reconstructed itself into focusing on export-oriented heavy industries, whose workers were predominantly men, and women workers were left behind.

The onslaught of neo-liberal globalisation and the impoverishment that came with it was also felt first by women workers. Just after the economic crisis, the women worker's movement moved a big step forward when independent women's trade unions began to beformed 5 . The unions came out of the need to address the specific issues of women workers that could not be properly dealt with in a general union -organising irregular workers, the unemployed, domestic workers and those women who worked in small companies where there are no unions. The percentage of women participating in unions still remain at a meagre 5%, due to the fact that general unions do not accommodate workers who are not regular workers. It was only in 1997, when the IMF enforced austerity measures and structural adjustment programs also affected male workers, that the people's movement in Korea fully realised the destructive nature of neo-liberalism. From then on, flexibility of labour has become the main target of struggle for the working class. Spotlight was finally thrown on the fact that neo-liberalism attack women workers foremost, but unfortunately the longtime demands and struggles of women workers are being put aside, as the struggles against 'irregular labour' is again being organised in a male-oriented fashion.

The establishments of these unions are very significant in the history of the Korean labour movement and also in the women's movement. Just as the strategies of capitalists change, the organisation of the working class also much change to resist effectively. The essence of neo-liberalism and its gender-bias cannot be resisted through the traditional method of organization concentrating on male, regular workers from big enterprises.

However, these newly formed women's unions still have further developments to make and many obstacles to overcome, in their struggles against national and international capital. The unions must question the role of neo-liberal globalisation and its strategy of incorporating flexibility measures into the labour market, for a full understanding of the situation of women workers and organizing of more radical struggles that go into the fundamental core. And at the same time, the worker's movement of Korea must go through structural changes to accommodate the ever increasing irregular workers, and must also make more effort into overcoming the patriarchal values that are still prevalent inside people's movement. Many women activists and unionists have started to address the issues of gender discrimination and sexual violence inside the people's movement, which up until now had been covered up. Over the years, many fervent and militant women activists have had to leave the movement because of discrimination and violence. It was always considered women's fault, or victimized women were forced to 'forgive' for the 'greater cause'. Many women activists, workers and unionists are uniting themselves and are calling upon the movement to tackle the problem of hierarchy, discrimination and violence.

TOWARDS ORGANIZING GLOBAL RESISTANCE OF WOMEN


As we have seen, neo-liberal globalisation affects all areas of society, to attain flexibility of the labour market solely for the interests of transnational capital. In the case of Korea, this process of enforcing structural adjustment and flexibility has devastated the lives of the people, especially women. Capitalist industrialisation has brought about the rise of the women's proletariat and neo-liberal globalisation has further feminised the proletariat while at the same time impoverishing the proletariat into the verge of slavery.

This is not a matter of women merely being affected 'more' - we must look at the mechanisms of neo-liberalism that operate in a gender-biased way. Indeed, neo-liberal globalisation itself feed upon gender discrimination and effectively use traditional patriarchal values to exploit women further. Patriarchal ideologies act to crush any attempts of women to politicize and form resistance.

However, the essence of neo-liberalism is slowly being manifested and women have begun to fight back. Feminisation of labour and feminisation of poverty signify increased exploitation of women, but precisely because of that, provide the possibility for organization and resistance, nationally and internationally. Women must now go forth as subjects in uniting the people in our fight against neo-liberal globalisation. Instead of being incorporated into a ready-made movement of men or middle-class elite women, instead of taking the problems of discrimination for granted, women workers, farmers, indigenous peoples, migrants and other grassroot peoples of the Third World must form a broad solidarity. We must analyse globalisation from women's perspective, plan strategies that conform with the particular needs of women, propose alternatives that include women as equal subjects, keep to the principle of internationalism, and unite with other oppressed groups in the mass resistance in the fight against neo-liberalism - and go beyond in creating a world based on equality.

* Joo-Yeon Jeong & Seung-Min Choi are with the Policy & Information Center for International Solidarity (PICIS), Korea. This paper was presented at the International South Group Network (ISGN) Asian Workshop on Women and Globalisation, 22-24 November, Manila.

[1] This is merely an 'ideology', because despite the fact that the state supports this perspective, in reality many men had lost their jobs during the economic crisis and many women are now the sole income providers in their families.
[2] The interesting thing is that government funded institutions analysed the same statistics and came up with the percentage of 27-28%.
[3] This refers to Korea Women Associations United, an umbrella organization of women NGOs. They identify themselves as being 'progressive' but after Kim Dae-Jung came into power, they participated enthusiastically in his policies and have become more middle-class oriented than ever.
[4] In Korea, already a whole series of revisions were made to the Standard Labour Laws after the economic crisis, more than any other time in Korean history. The illegitimate passage by ruling party members of the bill allowing layoffs and the introduction of transformational working time system in December of 1997 was first in the series that forecasted massive neo-liberal attacks on labour. The passage was so explicitly impudent that Korean workers went on a massive general strike and militantly struggled throughout the winter. Now capitalists are willing to throw a few carrots while pushing forth their interests. Then came the maternity-related clauses, and now another revision is about to take place that will exchange reduction of working hours for more deterioration of working conditions.
[5] Three unions were formed almost at the same time: Korean Women's Trade Union, Seoul Women's Trade Union and Seoul Regional Women's Trade Union

[Apr 02, 2018] The Class Struggle in the Old West by Louis Proyect

Mar 30, 2018 | www.counterpunch.org
Against the overall political pall cast by the Trump administration, there are hopeful signs. Despite the problems I have with the DSA's failure to make a clean break with the Democratic Party, my spirits remain lifted by their rapid growth. I also take heart in the ability of filmmakers to produce outstanding critiques of our social system in defiance of the commercial diktats of Hollywood. Finally, there is a bounty of radical historiography that through the examination of our past sheds light on our present malaise.

The New Historians of Capitalism (NHC) are just one indication of this trend. Within this school, Walter Johnson, Edward Baptist and Sven Beckert have all written about slavery and capitalism from the perspective of how the "peculiar institution" has shaped American society to this day. Despite their focus on the 19 th century, all are sure to "only connect" as E.M. Forster once put it. In an article for the Boston Review titled " To Remake the World: Slavery, Racial Capitalism, and Justice ", Walter Johnson put it this way:

The Movement for Black Lives proposal, "A Vision for Black Lives," insists on a relationship between the history of slavery and contemporary struggles for social justice. At the heart of the proposal is a call for "reparations for the historic and continuing harms of colonialism and slavery." Indeed, the ambient as well as the activist discussion of justice in the United States today is inseparable from the history of slavery.

While not a school in the same exact way as the NHC, the historians grouped around the Labor and Working Class History Association (LAWCHA) website have set themselves to the task of promoting "public and scholarly awareness of labor and working-class history through research, writing, and organizing." Among its members is Chad Pearson, whose " Reform or Repression: Organizing America's Anti-Union Movement " helps us understand the threat posed by Janus today even if the period covered in the book is over a century ago.

Pearson's LAWCHA colleague Mark A. Lause, a civil war era historian just like the NHC'ers, has just come out with a new book titled " The Great Cowboy Strike: Bullets, Ballots, & Class Conflicts in the American West " that should be of keen interest to CounterPunch readers. Since American society is guided by notions of "rugged individualism" embodied in the old West, it is high time for that mythology to be put to rest. Reading Lause's magisterial account will leave you with only one conclusion: Billy the Kid had more in common with Occupy Wall Street than he did with faux cowboys like Ronald Reagan chopping wood and George W. Bush clearing bush in their respective ranches. In fact, he was more likely to put a bullet in their counterparts way back then.

Pat Garrett, the lawman who killed Billy the Kid and who was characterized as a hero in most Hollywood movies, mostly functioned as a hired gun for the big cattle ranchers who considered small-time rustlers like Billy as the class enemy.

Like Billy, most cowboys were super-exploited. In many ways, working for a rancher was not much different than doing stoop labor for a big farmer. Riding 12 to 16 hours a day in the saddle at low pay -- often in the Texas panhandle's bitter cold–was not what you'd see in most cowboy movies, especially those made by John Ford who romanticized their life.

In the 1880s, there was a series of cowboy strikes that were never dramatized by John Ford, Howard Hawks, William Wellman or any other Hollywood director. In 1883, a virtual General Strike swept across the Texas panhandle that one newspaper described as the natural outcome of cowboys having some knowledge of the "immense profits" some bosses were making. Wasn't it to be expected that they would "ask for fair wages for what was the hardest of hard work"?

As he does throughout his book, Lause digs deep into the historical archives and discovers that one of the leaders was a forty-year-old Pueblo Indian from the Taos Agency named Juan Antonio Gomez. The cowboys had no union but according to the Commissioner of Labor, they were well organized and prepared for the strike by building a strike fund in advance. As we have seen recently from the West Virginia teachers strike, there is no substitute for militancy and organization. Strike headquarters was in Jesse Jenkins's saloon in Tascosa. Jenkins was sympathetic to the Greenback movement in Texas that eventually led to the formation of a party committed to a farmer-labor alliance that challenged the two-party system. As has generally been the case with militant labor struggles, the bourgeois press regarded the cowboys in much the same way that the West Virginia press viewed the teachers. The Las Vegas Gazette harrumphed that the strikers were "using unlawful means to compel their employers to grant their request" and added that the strikes "always result in evil and no good".

Unlike most recent strikes, the cowboys were not easy to push around. One newspaper reported that the bosses "imported a lot of men from the east, but the cowboys surrounded the newcomers and will not allow them to work". Of course, it also helped that, according to the Fort Collins Courier, the strikers were "armed with Winchester rifles and six-shooters and the lives of all who attempt to work for less than the amount demanded, are in great danger".

Another strike wave took place between 1884 and 1886. This time the cattle bosses were better prepared. They brought in Pat Garrett to head up the strike-breaking machinery. He was implicitly also the agent of the "Redeemer" Democrats, those politicians that supported terrorism to break the back of Reconstruction. He led a raid on the house of strike leader Tom Harris that led to the arrest of two strike leaders but not Harris. He and another cowboy striker came to the jailhouse later that night and broke them out.

Get the idea? This is material for a "revisionist" movie that could shake Hollywood and the mainstream film critics to their foundations. In fact, one was once made along these lines -- the vastly underrated 1978 "Heaven's Gate" by Michael Cimino that was widely viewed as Marxist propaganda. The N.Y. Times's Vincent Canby was beside himself:

The point of "Heaven's Gate" is that the rich will murder for the earth they don't inherit, but since this is not enough to carry three hours and 45 minutes of screentime, "Heaven's Gate" keeps wandering off to look at scenery, to imitate bad art (my favorite shot in the film is Miss Huppert reenacting "September Morn") or to give us footnotes (not of the first freshness) to history, as when we are shown an early baseball game. There's so much mandolin music in the movie you might suspect that there's a musical gondolier anchored just off-screen, which, as it turns out, is not far from the truth.

"Heaven's Gate" is something quite rare in movies these days – an unqualified disaster.

A passage on the Johnson County War, upon which "Heaven's Gate" was based (as well as "Shane"), can be found in chapter 8 of "The Great Cowboy Strike". This was essentially an armed struggle between wealthy ranchers and those trying to scratch out a living in Wyoming between 1889 to 1893 that Lause aptly describes as illustrating "the connections between cowboy discontent, range wars, and political insurgency."

This go-round the bosses' enforcer was Sheriff Frank Canton (played by Sam Waterston in "Heaven's Gate"), another cold-blooded killer like Pat Garrett. Anybody who defied the big ranchers was immediately dubbed a "rustler" and met the same fate as a cowboy named Jim Averill and his companion Ellen Watson who dared to defend their homestead against Johnson County's elite. Canton led his thugs into a raid on their cabin and strung them up on a short rope, as Lause put it.

For the final assault on the cowboys and the small homesteaders, a small army of men from Texas was recruited. An attack party was launched on April 5 th , 1890 against Nate Champion's Kaycee Ranch (played by Christopher Walken in "Heaven's Gate"). Surrounded by a much larger force, Champion was fearless. Lause writes, "To the unwanted admiration of those closing in on the cabin, the door flew open and Champion stormed out, a Winchester rifle in his left hand and a large pistol in the other. Even those who riddled him with bullets expressed their admiration for a man who had died 'game'".

If you want to mix solid class-oriented history with stirring tales of cowboy rebels, check out "The Great Cowboy Strike: Bullets, Ballots, & Class Conflicts in the American West". It is a reminder that once upon a time in America the Red States were really Red.

[Mar 24, 2018] Since 2010, the Census Bureau has reported that married couples have made up less than half of all households

Mar 24, 2018 | www.theatlantic.com

...he decline of marriage is upon us. Or, at least, that's what the zeitgeist would have us believe.

In 2010, when Time magazine and the Pew Research Center famously asked Americans whether they thought marriage was becoming obsolete, 39 percent said yes.

That was up from 28 percent when Time asked the question in 1978.

Also, since 2010, the Census Bureau has reported that married couples have made up less than half of all households; in 1950 they made up 78 percent.

Data such as these have led to much collective handwringing about the fate of the embattled institution.

[Mar 01, 2018] What is the vision, what is the historic goal our elites offer to inspire and enlist our people?

Notable quotes:
"... The globalists envision the earth as a plantation with oligarchs (stateless corporate monopolists) as planters, former national governments as overseers and the people of earth as niggers. ..."
Mar 01, 2018 | www.unz.com

WorkingClass , February 27, 2018 at 12:24 pm GMT

what is the vision, what is the historic goal our elites offer to inspire and enlist our people?

The globalists envision the earth as a plantation with oligarchs (stateless corporate monopolists) as planters, former national governments as overseers and the people of earth as niggers.

[Feb 21, 2018] The Corporation and Radicalism A Bad Partnership by Carl Horowitz

Notable quotes:
"... The two factions differ by motive. Businessmen act out of material self-interest. They want to hire people from abroad at much lower wages and benefits than most people here would accept. And they want to sell in untapped markets. Radicals, by contrast, act out of emotional self-interest. They crave total multiculturalism in one nation. ..."
"... Where these camps converge is the belief that national identity is outdated and must be replaced by an elaborate system of global coordination. A nation ought to have no right to define itself in terms of race, language or collective memory. In the world of information technology, in fact, business and radicalism now mean almost the same thing. America, in this view, has an obligation to accommodate the crush of people from abroad wanting in. We cannot discriminate. We shouldn't even ask about their motives . America is a global sanctuary, a coast-to-coast UN General Assembly. ..."
"... Mass immigration is a global way of saying "diversity." And that refers not to a diversity of opinion , but to a diversity of demography holding identical opinions. Some have likened this to a cultural equivalent of Marxism, hence the common term "cultural Marxism." Whatever one's preferred term, it is now the coin of the realm in the world of big business. ..."
Nov 23, 2017 | www.unz.com

(The following is based on a speech presented by Carl Horowitz at the most recent annual meeting of the H.L. Mencken Club, Baltimore, Maryland, November 3-4, 2017. It was orginally posted at NLPC.org )

Why are corporations, especially those that provide information technology, promoting radical politics? It's a question one increasingly hears these days. And it's a necessary question. For it is a fact: The corporation as an institution, partly out of self-interest and partly out of conviction, is allying itself with the hard Left. And the consequences could be devastating for our nation.

Now when I speak of "radicalism," I'm not referring to the tradition of businessmen using the State to achieve and maintain market advantage. Monopoly in this country is a more than a century-old tradition, and it is anything but radical. Nor am I referring to the more recent tradition of corporations paying radical accusers a "diversity tax" in hopes of shooing them away. That's capitulation, not commitment. No, what I'm referring to is the arms-length alliance between corporations and far-Left activists to subvert deeply ingrained human loyalties, especially those related to national identity. Most corporate executives today see America's future as post -national, not national.

The two factions differ by motive. Businessmen act out of material self-interest. They want to hire people from abroad at much lower wages and benefits than most people here would accept. And they want to sell in untapped markets. Radicals, by contrast, act out of emotional self-interest. They crave total multiculturalism in one nation.

Where these camps converge is the belief that national identity is outdated and must be replaced by an elaborate system of global coordination. A nation ought to have no right to define itself in terms of race, language or collective memory. In the world of information technology, in fact, business and radicalism now mean almost the same thing. America, in this view, has an obligation to accommodate the crush of people from abroad wanting in. We cannot discriminate. We shouldn't even ask about their motives . America is a global sanctuary, a coast-to-coast UN General Assembly.

Mass immigration is a global way of saying "diversity." And that refers not to a diversity of opinion , but to a diversity of demography holding identical opinions. Some have likened this to a cultural equivalent of Marxism, hence the common term "cultural Marxism." Whatever one's preferred term, it is now the coin of the realm in the world of big business.

Examples:

The Alarmist , November 23, 2017 at 5:56 am GMT

AirBnB, like Uber et al, is a company that built its fortunes by operating outside the laws that constrained its more conventional competition why should we be surprised that immigration law doesn't matter one whit to them?
utu , November 23, 2017 at 6:12 am GMT
Mind you, they haven't given up on class struggle.

Really? Have you seen any class struggle recently that would be detrimental to the top class? Marxists are the tools of neoliberal capitalist world order. They are perfectly happy with the system as long as it gives them a chance to join the top class.

Heros , November 23, 2017 at 9:39 am GMT

"While the influence of the Frankfurt School of Marxism can't be ignored here, I find it vastly overstated. The crucial game-changers have been black authors, for the most part home-grown Americans. "

Reading Horowitz is like reading gatestone institute articles. They can be very convincing, but the always miss the target because Jews are seeped in willful blindness. It starts with the dual passports and allegiances. How in any sane world should dual citizen neocons be allowed to steer foreign policy? But then it continues with the never ending kvetching about "anti-semitism" which is used to stifle any discussion that becomes uncomfortable for them, like how the October Revolution was little more than a jewish coup d'etat and a succeeding genocide of millions of Christians. Why should the US be forced to pay $3b on Oct. 1 of every fiscal year to Israel? What about the murder of the Czar by a gang of Ashkenazi? Or the Liberty or the King David Hotel? What about 70 years of Palestinian genocide? What about their bullying and extortion of governments and individuals to prevent BDS?

I could go on and on, but the point I am making is that Jews know this, but outwardly they are ignorant, at least when writing for the benefit of stupid goyim. Among themselves the truth is often alluded to in public, and that is why reading the Jewish press is so important. Eventually they will try to prevent goyim from accessing it, probably by claiming its all a lie just as with the Protocols of the Elders of Zion.

This jewish facade of plausible deniability has to be maintained at all costs, and this is why we always hear how jews are so persecuted, why every city is forced to have a holocaust museum and why every few years another holocaust or nazi-genocide movie comes out. It is all about jews maintaining this Potemkin lie and pretending its true.

Which brings me to one of their biggest lies: That Jews are semitic, that they are white and that they are not white, all simultaneously. If every component of US culture was forced to track the number jews receiving benefit alongside the number of "whites" and other races, then the country would really learn what true racism and patriarchy is. That is why this is just another part of the massive jew lie that they all pretend not to see.

Grandpa Charlie , November 23, 2017 at 11:48 am GMT
Ay, PF, awesome, rad! I like it, here in the wee hours, for some reason I couldn't sleep, but you know, I'm a old f*rt and I don't do skype, just like I don't FB, but maybe tomorrow I'll see a granddaughter or two, and they do all that stuff. Don't worry about a slow start, opening nights can be like that and then Boom!

Well done! Strong!

– grandpa

Malla , November 23, 2017 at 11:51 am GMT
I have always considered Capitalism and Communism as false oppositions to each other. People in power use whichever of the two is useful for a particular situation, place and time to attain certain long term aims. The future of the world is moving towards Corporate Communism where the worst of capitalism and communism are blended to rule over and exploit the masses. This explains why many Western crony companies had invested in the the Soviet Union in it's earlier days of , they could never had got a more slave labour population. The same with China recently. Crony Capitalism and Communism seem to go well together just like how big corporations and big governments go well together. This also explains why big corporations still hire their workforce from Western Universities which are hot beds of leftist propaganda. On one level, it never makes any sense. But when you see the bigger picture, it makes sense.
Besides, the false left vs right paradigm keeps the common man on the streets busy infighting and wasting their time without realizing the big schemes being played over them.

Cultural Marxism (probably) emerged much later then economic Marxism of Karl Marx. It was a solution to a pressing problem of why Western populations were resistant to Communism. The problem was narrowed down to traditional Western civilization, the White race and to some extent traditional Christianity. Cultural Marxism is a 'slow boil the frog' method unlike the shock method unleashed on Russia and China. It also uses the tactic of communists and communism infusing in every part of a country's institutions like blood capillaries around muscles.

m___ , November 23, 2017 at 11:54 am GMT
A "Chomsky" amass of evidencies, a drunk display of conclusions. This is what should be called the bend of intellectuals, what an agenda, it hangs out on all sides. Sully, irrelevant, cheatacious in it's intend. And yet, "let's fall for it"?
jacques sheete , November 23, 2017 at 11:59 am GMT

I now briefly will sum up.

Would that that have occurred about 3000 words prior.

wayfarer , November 23, 2017 at 12:54 pm GMT
"The mind of one free thinker can possess a million ideas. A million fanatics can have their minds, possessed by a single idea ." – unknown
Malla , November 23, 2017 at 1:40 pm GMT
@wayfarer

Excellent post.

fnn , November 23, 2017 at 1:56 pm GMT

While the influence of the Frankfurt School of Marxism can't be ignored here, I find it vastly overstated. The crucial game-changers have been black authors, for the most part home-grown Americans. Urtexts include Frantz Fanon's The Wretched of the Earth, James Baldwin's The Fire Next Time, Malcolm X's Autobiography and Richard Hamilton & Stokely Carmichael's Black Power. Over the next several years, as the Black Panthers turned up the heat, Eldridge Cleaver's Soul on Ice, Bobby Seale's Seize the Time and Huey Newton's Revolutionary Suicide became must-reads. Recent additions to the canon have been Derrick Bell's Faces at the Bottom of the Well, Michelle Alexander's The New Jim Crow, and Cornel West' s Race Matters.,

Arguably, none of the above books by black authors would have become influential had it not been for the intellectual framework created in the postwar period by the Frankfurt School "study," The Authoritarian Personality :

http://www.amnation.com/vfr/archives/007815.html

Paul Gottfried writes:
You should read my last three books, all of which stress that The Authoritarian Personality profoundly affected American political thinking. It was essential to the postwar reconstruction of German "civic culture' and the work was deeply admired by SM Lipset, the sponsors of Commentary, and scads of Cold War liberals. It was not necessarily viewed as the post-Marxist leftist source of moral corruption that I suggest it was in The Strange Death of Marxism. What made The Authoritarian Personality particularly insidious is that it was widely seen as a blueprint for non-totalitarian democracy both here and in Europe; and leaders in government and in universities read the book in that way. The fact that Adorno and Horkheimer (who later backed away from the implications of the work he had co-edited) were at the time Soviet sympathizers did not dampen the enthusiasm of the anti-Stalinist secularist intellectuals who tried to defend the study. Although the Jewish identity of the Frankfurt School may not have been the only factor leading to their anti-Christian, anti-fascist pseudo-science, denying its influence on the formation of Frankfort School ideas is simply silly.

Christopher Lash's True and Only Heaven includes a long section detailing the mainstream liberal support for The Authoritarian Personality in the 1950s and 1960s. Lipset, Hook, Daniel Bell, Arthur Schlesinger, Richard Hofstadter and the members of American Jewish Committe, who sponsored Adorno and Commentary magazine, were among the anti-Communist liberals who admired TAP and who thought that it had relevance for our country. Although you and I may be to the right of these celebrants, it would be hard to argue that no anti-Communist had any use for Adorno's ideas.

Hank Rearden , November 23, 2017 at 1:59 pm GMT
America, that shining city upon a hill (Matthew 5:14), has forsaken its own blood and soil (Luke 14.26, Matthew 19:27-30), and fully implemented the International Jew's globalist vision (Matthew 28:19) of Communist Freaqualism (Acts 4:32, Galatians 3:28), including acceptance of rapefugees (Matthew 25:35-36), placing blacks in leadership (Acts 13:1), condemning normal male behavior (Mark 9:47), and promoting male castration (Matthew 19.11-12) in favor of a androgynous utopia (Matthew 22:30).

John Gray once noted that liberal humanist values are a "hollowed-out version of a theistic myth," but as I've shown from the Christian Holy Book , they're actually Judeo-Christianity on sterioids.

"The liberal belief in the free and sacred nature of each individual is a direct legacy of the traditional Christian belief in the free and eternal souls. Without recourse to eternal souls and a Creator God, it becomes embarrassingly difficult for liberals to explain what is so special about individual Sapiens The idea that all humans are equal is a revamped version of the monotheist conviction that all souls are equal before God." p. 231

Yuval Harari, Sapiens: A Brief History of Humankind (Harper Collins, 2015)

Again, I'll point out that liberal humanist Freakqualism is not a "direct legacy" of Christianity, but an intensification.

Michael Kenny , November 23, 2017 at 2:03 pm GMT
I was born in Europe. Except for a few years in the 1960s, I have lived all my life in Europe. I have never come across anybody in Europe "rejecting their identity". Quite the contrary indeed! European national identities are alive and well, and thriving in the European Union. The article itself is the usual VDare anti-EU propaganda and the article linked to (by Pat Buchanan) doesn't support the author's argument. I don't really see why Americans are getting so steamed up about Marxism. Nobody has taken Marxism seriously since the collapse of the communist dictatorships 25 years ago. And, of course, I'm always amused at the way the people who shout "America First" keep telling us Europeans how to run our countries!
JackOH , November 23, 2017 at 2:23 pm GMT
Mr. Horowitz makes good points, but many of us here have made similar observations along the same path to understanding the world around us. Corporations have a whatever-it-takes ethos, and if they can make money by hanging on to eternal verities, they'll hang on to them, and if they can calculate that dumping eternal verities will serve them, they'll do that. Happy Thanksgiving Day all, and thanks to Ron for hosting this site, and many good commenters for illuminating our America a bit..
SimplePseudonymicHandle , November 23, 2017 at 3:26 pm GMT
OMG this article is all over the map.

Companies do what is politically expedient because the people who govern them make a rational choice to decide to the bottom line – or any short-term definition thereof – as opposed to standing up to the mob.

Period. End of story.

Imagine you are a minimum wage employee in the neighborhood laundromat and you're 16 and naive and you notice the kindly owner/manager pays protection money to the mob. In all other facets he is a kindly man, a good person, a good manager, a good businessperson. You wonder why he doesn't call the police, make a report to the FBI, call on politicians, or stand up to the mob himself.

Of course he can do any of those things. He chooses not to.

Why does he choose not to?

Well, duh.

Priss Factor , Website November 23, 2017 at 3:36 pm GMT
Boomer-Rang

http://justnotsaid.blogspot.com/2017/11/the-revenge-of-shiksas.html

Priss Factor

[Feb 18, 2018] In Raging Tweetstorm, Trump Says Russians Laughing Their Asses Off, Mocks Leakin' Monster Schiff Zero Hedge

Feb 18, 2018 | www.zerohedge.com

Zhaupka Sun, 02/18/2018 - 14:08 Permalink

PSYOPS are interesting.

GENERAL PSYOPS:
PSYOPS control U.S. Citizens who have nothing to lose; yet, U.S. Citizens deeply believe they have everything to lose when the only "objects" they truly own in this world is debt.

Look Around - Which Class were you birthed?

Which Class shall you and your family of relatives die?

Labor - Lower Class - Working Class - Get Paycheck / Job Class
Lower Lower Class - Retail / wholesale workers / laborers
Lower Middle Class - engineers, computer workers, doctors
Lower Upper Class - C-Level Managerial workers, sports celebrities, High-Net-Worth workers, etc.

Trading - Middle Class - Business Class - Get a Deal Class
Lower Middle Class - Owns business in an industry
Middle Middle Class - Operates 1 or more business in an industry
Upper Middle Class - Operates 1 or more businesses in 1 or more industries

Leisure - Upper Class - Investor Class - Let's Go Have Fun! Class
Lower Upper Class - New Billionaires.
Middle Upper Class - Multi-Billionaires invested in or own vast businesses in 1 or more vast industries
Upper Upper Class - Kings / Queens, Owners of Vast Tracts of Land on The Planet, Wealthy Post-Empire Families,

Goals of Working Class: Job, House and Car - loans, credit, debt for basics: food, shelter, clothing, transportation.

Goals of Trading Class expansion of business.

Goals of Leisure Class Enjoy Human Life. "Let's take the personal jets out for a spin today. Meet you at [Insert place on planet]."

Middle Classes (Business) and Upper Classes (Leisure) give "Vacations" and Time Off to Lower Labor Classes.

Working Classes do not have the money to associate, travel, and dine with the Trading Class (Middle).

Trading Classes do not have the money to Empire Trot with the Leisure Classes.

Income has co-relation neither to wealth, power, nor prestige. The vast majority of wealthy have little or zero income.

Common in debt U.S. Citizens stand back gawking at the great great-great-great-great-grand children of the Middle Class and Upper Class Families who have re-bequeathed and re-inherited family wealth through the centuries enjoying a life of leisure that for each generation the Common U.S. Citizens have never moved up in family wealth. General PSYOPS.

SIMPLE PSYOPS:
2005, prior to O elections all U.S. governments were directed by federal law to disclose their health insurance payments, fees, etc. to the U.S. Federal Government. U.S. governments Employees were also given a copy stating exactly how much the State, County, Town, City is paying for the employee. O is elected. Look at the amount spent. Nationalized Health Insurance. Simple PSYOPS.

SOPHISTICATED PSYOPS:

Key: Any criticism moving this Political Operative Donna Brazille around is considered racist.

PBS and NBC, ABC, SeeBS (CBS), etc. studios featured Donna Brazille doing the political-talk show circuit.

Donna Brazille, Editor of Atlanta newspaper was shown, based on after show retakes, cameo's, script tweeking, etc., to be clear minded, fair, and articulate.

Donna Brazille had a Social Debt and Final Payment Due.

The Clintons collected Final Payment during the Presidential Elections from Donna Brazille who made payment by smuggling U.S. Presidential Debate Questions to The Clintons.

PSYOPS is interesting and work especially well with a small group of wealthy who can hire and pay for PSYOPS either in the immediate term or longer term as with Donna Brazille.

Marketing is PSYOPS all day.

United States President Trump is Not:
an ex-bureaucrat
an ex-lawyer
An ex-government employee
Not Poor <- Very Important as Big Cash is involved.

United States President Trump has a marked distain for both Factions of the State Political Party – republicans and democrats – and wonder if any other U.S. Citizens have the same feelings and thoughts.

Trump came forward as an American United States Citizen.

Democrats gave all the Benefits the Labor Unions fought for during the 1930's and 1940's to Illegal Aliens.

Republicans gave all the industry and jobs to foreign countries and imported pre-trained foreigners into American Jobs.

When Trump threatened to watch every polling station in the United States, if he had to, to make sure no voter fraud, at least during the one and only election he participated, State Political Party faction's democrats and republicans laughed.

The State Political Party Factions colluded to Stop Trump while running the usual rigged fake fraudulent election.

The usual United States Media Channels using the United States National Emergency Broadcast System entrusted to individual caretaker / quasi-owners to manage and maintain premises, power level, and towers, began the usual selling broadcast time to the highest bidder. The usual war over the airwaves time and again. The Hearts and Minds Meme is the warring struggle between republicans and democrats to control United States Media Channels broadcasts before, during, and after a United States Election. The usual.

24/7 PSYOPS using the owners of ABC, BBC, NBC, CBS, PBS, NPR, The New York Times, The Washington Post, The Los Angeles Times, The Chicago Tribune, Reuters, U.K. Guardian, Associated Press, etc. broadcast State Party PSYOPS obfuscating Trump is winning, announced No Path to 270, and broadcast Common Citizens Protesting.

The Clintons had the White Females and the new meme: People of Color.

United States Media Channels using the United States National Emergency Broadcast System (EBS) showed White males violently protesting TRUMP one day and Black Males shown violently protesting TRUMP another day to PSYOPS Cobble Black and White Males as kin, long shot, similar voters. Don't say it, show it, persuasively.

Republicans all signed Pledges declaring in Media Channels they shall not vote for Trump and encouraged everyone to do the same. Democrats against Trump is a given. PSYOPS. Political PSYOPS.

After the election, United States President Trump asked to examine the voting rolls. The State Political Party (r&d) denied the request threatening using courts to tie up the matter and cause great usd expense through the Corrupt U.S. Judicial. SOPHISTICATED PSYOPS.

The Entire United States is Corrupt.

1. The Lawyer Amended Constitution, Bill of Rights, Declaration of Independence - the originals of which are all now in the dustbin of history - have successfully created these Criminal Enterprises according to the Founders:
the Corrupt House of Representatives,
the Corrupt U.S. Senate,
the Corrupt U.S. Judicial,
the Corrupt U.S. Military and its Corrupt 17 Intelligence Agencies,
the Corrupt U.S. Media (except for the 5 Independent newspapers that did support U.S. President Trump),
the Corrupt For Sale Ivy League "there is a tailored study FOR SALE PROVING [insert desire outcome here]. . . " Universities,
the Corrupt States, the Corrupt Counties, and the Corrupt Cities,
the Corrupt Republican Political Party, and
the Corrupt Democrat Political Party.

U.S. Political Government "Investigations" show the Perp Walk: Perjury after Perjured Testimony in U.S. Supreme Courts, U.S. House of Representatives, Senate Testimony. Fraud all. Only the most frightened horrified have cognitive dissonance belief remaining in U.S. Federal Government(s).

Overthrowing Governments is not done by those who work, commoners posting on internet websites, walking the streets with Pitchforks, Fire and Ropes, Protesting, carrying Placards, placing Posters, and Marching with Banners; those people in Life Long Debt Servitude (hovel&cart/house&car) usually come to gawk at the result.

Overthrowing Governments is done by extremely wealthy for differing reasons as in the Overthrowing the Government of Britain/ England / U.K. in the New World - the Free World - during the late 1700's Early 1800's with Thomas Jefferson.

Thomas Jefferson knew Representative Government eventually becomes corrupt; a New Lawyered Governed Tyranny is formed.

Lawyered Representative Government Corrupts; Absolute Lawyered Representative Governments Corrupts Absolutely.

When Citizens are indebted to, fearful of, dependent on, lied to, [INSERT YOURS HERE], with government guns pointed at U.S. Citizens and Surveillance by their "elected" Representatives for each AOR using U.S. Militarized Collusive State, County, and City First Responders Type Government Patrolling Enforcement, a New Type of Governed Tyranny is formed (see 1 afore)

All U.S. Citizens are given a Legal Right and a Legal Duty.

When Lawyered Representative Governments do not do the will of the people (hint: U.S.).

". . . it is their right, it is their duty, to throw off such Government."
- Thomas Jefferson, Declaration of Independence, 2nd paragraph

The world is very different than ZH Heavy and MSM disclose.

Recent and periodic school shootings are the work of the two U.S. Political Factions democrats and republicans PSYOPS in the U.S. Political Party System.

Disclosing the real story could be considered Top Secret National Intelligence information especially with the fake social media account: Zhaupka.

- Viva De Zhaup!

[Feb 14, 2018] Making America Great Through Exploitation, Servitude and Abuse by James Petras

Notable quotes:
"... Capitalist exploitation is based on a rigid hierarchy with its private prerogatives, which enables the oligarchs to demand their feudal privileges, their seigniorial sexual predations. ..."
"... Today, 93% of US private sector workers have no organized representation. Moreover, many of the 7% who are in unions are controlled and exploited by their corrupt union officials – in league with the bosses. ..."
"... The more egregious immorality exposes itself one time too often and is condemned, while the victims are temporality lionized for their courage to protest. The worst predators apologize, resign to their yachts and mansions and are replaced by new avatars with the same power and structures in place which had facilitated the abuse. Politicians rush to embrace the victims in a kind of political and media 'Munchausen Syndrome by Proxy' when one considers their own role as enablers of this dehumanization. ..."
"... The problem is not merely corrupt and perverted individual miscreants: It is the hierarchy of inequality which produces and reproduces an endless supply of vulnerable workers to exploit and abuse. ..."
"... Sexual abuse of an individual in the workplace is just part of a chain that begins with exploitation of workers in general and can only be stopped through collective worker organization. ..."
"... Can anyone say with a straight face that the US remains a nation of free and autonomous citizens? Servitude and moral degradation are the outcome of an atomized, impotent laboring class who may change one boss for another or one vulgar president for a moralizing hypocrite. We hope that the exposés will start something but without class conscious organizations we don't know what will arise. ..."
Feb 08, 2018 | www.unz.com

The public denunciation by thousands of women and a few men that they had been victims of sexual abuse by their economic bosses raises fundamental issues about the social relations of American capitalism.

The moral offenses are in essence economic and social crimes. Sexual abuse is only one aspect of the social dynamics facilitating the increase in inequality and concentration of wealth, which define the practices and values of the American political and economic system.

Billionaires and mega-millionaires are themselves the products of intense exploitation of tens of millions of isolated and unorganized wage and salaried workers. Capitalist exploitation is based on a rigid hierarchy with its private prerogatives, which enables the oligarchs to demand their feudal privileges, their seigniorial sexual predations.

US capitalism thrives on and requires unlimited power and the capacity to have the public treasury pay for its untrammeled pillage of land, labor, transport systems and technological development. Capitalist power, in the United States, has no counterpart; there are few if any countervailing forces to provide any balance.

Today, 93% of US private sector workers have no organized representation. Moreover, many of the 7% who are in unions are controlled and exploited by their corrupt union officials – in league with the bosses.

This concentration of power produces the ever deepening inequalities between the world of the billionaires and the millions of low-wage workers.

The much-celebrated technological innovations have been subsidized by the state and its educational and research institutions. Although these are financed by the taxpayers, the citizen-workers are marginalized by the technological changes, like robotics, that they originally funded. High tech innovations flourish because they concentrate power, profits and private privilege.

The hierarchical matrix of power and exploitation has led to the polarization of mortality rates and moral codes. For the working poor, the absence of competent health care has led to the massive use and abuse of prescription opioids and other addictive drugs. For the upper class, it has led to the flagrant physical and psychological abuse of vulnerable employees, especially, but not exclusively young working women. The prestigious bourgeois media blur the class polarization by constant reference to what they term 'our shared traditional democratic values.'

The pervasive and growing vulnerability of workers of both sexes coincides with the incorporation of the latest technological innovations in production, distribution and promotion. This includes electronic and digital advances, artificial intelligence, robotics and extensive surveillance on workers, which incorporate high profits for the investors and long hours of demeaning monotonous work for those who manufacture and transport the 'products'.

The proliferation of new technology has grown in direct relation with the abject debasement of labor and the marginalization and trivialization of workers. Amazon and Walmart approach trillions of dollars in revenue from mass consumption, even as the Chaplinesque speed-up of robotized humans race to fill the overnight delivery orders. The entertainment industry amuses the population across class lines with increasingly vulgar and violent offerings, while the moguls of film entertain themselves with their young workers – who are depersonalized and even raped.

The more egregious immorality exposes itself one time too often and is condemned, while the victims are temporality lionized for their courage to protest. The worst predators apologize, resign to their yachts and mansions and are replaced by new avatars with the same power and structures in place which had facilitated the abuse. Politicians rush to embrace the victims in a kind of political and media 'Munchausen Syndrome by Proxy' when one considers their own role as enablers of this dehumanization.

The problem is not merely corrupt and perverted individual miscreants: It is the hierarchy of inequality which produces and reproduces an endless supply of vulnerable workers to exploit and abuse.

The most advanced forms of entertainment thrive in an environment of absolute impunity in which the occasional exposé of abuse or corruption is hidden behind a monetary settlement. The courage of an individual victim able to secure public attention is a step forward, but will have greater significance if it is organized and linked to a massive challenging of the power of the bourgeois entertainment industry and the system of high tech exploitation. Sexual abuse of an individual in the workplace is just part of a chain that begins with exploitation of workers in general and can only be stopped through collective worker organization.

Can anyone say with a straight face that the US remains a nation of free and autonomous citizens? Servitude and moral degradation are the outcome of an atomized, impotent laboring class who may change one boss for another or one vulgar president for a moralizing hypocrite. We hope that the exposés will start something but without class conscious organizations we don't know what will arise.

[Feb 11, 2018] The opioid epidemic, alcohol abuse and suicides are leading causes of death in the US. The rate of fatal drug overdoses rose by 137 percent from 2000 to 2014

Notable quotes:
"... The opioid epidemic, alcohol abuse and suicides are leading causes of death in the US. The rate of fatal drug overdoses rose by 137 percent from 2000 to 2014. In 2015 alone, more than 64,000 people died from drug overdoses, exceeding the number of US fatal casualties in the Vietnam War. The suicide rate rose by a staggering 24 percent between 1999 and 2014. ..."
"... These "deaths of despair" have disproportionately affected white Americans, including adults aged 25-59, those with limited education, and women. The sharpest increases have been in rural areas. ..."
"... As to why the rise in mortality has been greatest among white, middle-aged adults and some rural communities, the editorial points to possible factors, which all relate to class issues. They include "the collapse of industries and the local economies they supported, the erosion of social cohesion and greater social isolation, economic hardship, and distress among white workers over losing the security their parents once enjoyed." ..."
Feb 11, 2018 | consortiumnews.com

weilunion , February 9, 2018 at 5:44 pm

As the people protest, they might wish to read about how the SF police department worked with fascists to ID antifascists.

https://www.theguardian.com/world/2018/feb/09/california-police-white-supremacists-counter-protest

The cognitive dissonance is deafening. The FBI is a criminal organization. Trump and his cohorts are here to stay. If you think you can change the direction of failing America, best to organize a socialist party.

What is Mueller going to do about this?"

The opioid epidemic, alcohol abuse and suicides are leading causes of death in the US. The rate of fatal drug overdoses rose by 137 percent from 2000 to 2014. In 2015 alone, more than 64,000 people died from drug overdoses, exceeding the number of US fatal casualties in the Vietnam War. The suicide rate rose by a staggering 24 percent between 1999 and 2014.

These "deaths of despair" have disproportionately affected white Americans, including adults aged 25-59, those with limited education, and women. The sharpest increases have been in rural areas.

As to why the rise in mortality has been greatest among white, middle-aged adults and some rural communities, the editorial points to possible factors, which all relate to class issues. They include "the collapse of industries and the local economies they supported, the erosion of social cohesion and greater social isolation, economic hardship, and distress among white workers over losing the security their parents once enjoyed."

http://www.wsws.org/en/articles/2018/02/09/pers-f09.html

Nothing. The problem is capitalism. Wake up from a sorry nightmare.

This is the cost of the ruling elite's doing business.

[Feb 07, 2018] When the rest of the world's wages go up to six dollar per hour and the USA come down to six dollar per hour, globalization will end

Notable quotes:
"... Things "should" be made locally. There's no reason, especially with declining energy resources, that a toaster should be shipped from thousands of miles away by boat, plane, truck, rail. That's simply ridiculous, never mind causing a ton of extra pollution. We end up working at McDonald's or Target, but, yay, we just saved $5.00 on our toaster. ..."
"... I don't know how you know about the so-called safety net. I know because I had to use it while undergoing treatment for 2 types of stage 4 breast cancer the past 4 years. It is NOT what people think. It beats the already vulnerable into the ground -- -- this is not placating -- -- it is psychological breaking of human minds until they submit. The paperwork is like undergoing a tax audit -- - every 6 months. "Technicians" decide one's "benefits" which vary between "technicians". ..."
"... Food stamps can be $195 during one period and then $35 the next. The technicians/system takes no responsibility for the chaos and stress they bring into their victims' lives. It is literally crazy making. BTW: I am white, a member of Phi Beta Kappa, have a masters' degree, formerly owned my own business and while married lived within the top 10%. ..."
"... In addition, most of those on so-called social programs are children, the elderly, chronically ill, veterans. You are correct that the middle class is falling into poverty but you are not understanding what poverty actually looks like when the gov holds out its beneficial hand. It is nothing short of cruelty. ..."
Feb 07, 2018 | consortiumnews.com
Cold N. Holefield , February 5, 2018 at 4:09 pm

Yes, but increasingly there is no "working class" in America due to outsourcing and automation.

I hear that Trump wants to reverse all of that and put children to work in forward-to-the-past factories (versus back-to-the-future) and mines working 12 hours a day 7 days a week as part of his Make America Great Again initiative.

With all the deregulation, I can't wait to start smoking on airplanes again. Those were great times. Flying bombs with fifty or more lit fuses in the form of a cigarette you can smoke. The good old days.

backwardsevolution , February 5, 2018 at 5:50 pm

Cold N. Holefield -- it's like Ross Perot said re NAFTA and globalization: "When the rest of the world's wages go up to $6.00/hour and our's come down to $6.00/hour, globalization will end." That's what's happening, isn't it? Our wages are being held down, due in large part to low-skilled labor and H-1B's flooding into the country, and wages in Asia are rising. I remember Ross Perot standing right beside Bill Clinton when he said this, and I also remember the sly smile on Bill Clinton's face. He knew.

Our technology was handed to China on a silver platter by the greedy U.S. multinationals, technology that was developed by Western universities and taxpayer dollars, technology that would have taken decades for China to develop on their own.

Trump is trying desperately to bring some of these jobs back. That's why he handed them huge corporate tax breaks and cut some regulations.

Things "should" be made locally. There's no reason, especially with declining energy resources, that a toaster should be shipped from thousands of miles away by boat, plane, truck, rail. That's simply ridiculous, never mind causing a ton of extra pollution. We end up working at McDonald's or Target, but, yay, we just saved $5.00 on our toaster.

Trump is trying to cut back on immigration so that wages can increase, but the Left want to save the whole world, doing themselves in in the process. He wants to bring people in with skills the country can benefit from, but for that he's tarred and feathered.

P.S. I remember sitting behind a drunk on a long flight, and I saw him drop his cigarette. It rolled past me like it knew where it was going, and I couldn't find it. I called the stewardess, and she and I searched for a few anxious seconds until we found it. Yes, the good old days.

Diana Lee , February 6, 2018 at 3:16 pm

I don't know how you know about the so-called safety net. I know because I had to use it while undergoing treatment for 2 types of stage 4 breast cancer the past 4 years. It is NOT what people think. It beats the already vulnerable into the ground -- -- this is not placating -- -- it is psychological breaking of human minds until they submit. The paperwork is like undergoing a tax audit -- - every 6 months. "Technicians" decide one's "benefits" which vary between "technicians".

Food stamps can be $195 during one period and then $35 the next. The technicians/system takes no responsibility for the chaos and stress they bring into their victims' lives. It is literally crazy making. BTW: I am white, a member of Phi Beta Kappa, have a masters' degree, formerly owned my own business and while married lived within the top 10%.

In addition, most of those on so-called social programs are children, the elderly, chronically ill, veterans. You are correct that the middle class is falling into poverty but you are not understanding what poverty actually looks like when the gov holds out its beneficial hand. It is nothing short of cruelty.

backwardsevolution , February 6, 2018 at 4:48 pm

Diana Lee -- I hope you are well now. It breaks my heart what you went through. No, I cannot imagine.

I didn't mean the lower class were living "well" on food stamps and welfare. All I meant was that it helped, and without it all hell would break loose. If you lived in the top 10% at one point, then you would surely notice a difference, but for many who have been raised in this environment, they don't notice at all. It becomes a way of life. And, yes, you are right, it is cruelty. A loss of life.

[Feb 07, 2018] Whole Foods Employees Miserable Seeing Someone Cry At Work Is Becoming Normal Zero Hedge

Feb 07, 2018 | www.zerohedge.com

Whole Foods' new inventory management system aimed at improving efficiency and cutting down on waste is taking a toll on employees, who say the system's stringent procedures and graded "scorecards" have crushed morale and led to widespread food shortages, reports Business Insider .

The new system, called order-to-shelf, or OTS, "has a strict set of procedures for purchasing, displaying, and storing products on store shelves and in back rooms. To make sure stores comply, Whole Foods relies on "scorecards" that evaluate everything from the accuracy of signage to the proper recording of theft, or "shrink."

Some employees, who walk through stores with managers to ensure compliance, describe the system as onerous and stress-inducing . Conversations with 27 current and recently departed Whole Foods workers, including cashiers and corporate employees -- some of whom have been with the company for nearly two decades -- say the system is seen by many as punitive. - BI

Terrified employees report constant fear over losing their jobs over the OTS "scorecards," which anything below 89.9% can qualify as a failing score - resulting in possible firings. Whole Foods employees around the country thought that was hilarious. One such disaffected West Coast supervisor said "On my most recent time card, I clocked over 10 hours of overtime, sitting at a desk doing OTS work," adding "Rather than focusing on guest service, I've had team members cleaning facial-care testers and facing the shelves, so that everything looks perfect and untouched at all times."

Many Whole Foods employees at the corporate and store levels still don't understand how OTS works, employees said.

"OTS has confused so many smart, logical, and experienced individuals, the befuddlement is now a thing, a life all its own," an employee of a Chicago-area store said. "It's a collective confusion -- constantly changing, no clear answers to the questions that never were, until now."

An employee of a North Carolina Whole Foods said: " No one really knows this business model, and those who are doing the scorecards -- even regional leadership -- are not clear on practices and consequently are constantly providing the department leaders with inaccurate directions. All this comes at a time when labor has been reduced to an unachievable level given the requirements of the OTS model. "


peddling-fiction -> SloMoe Feb 6, 2018 9:52 PM Permalink

Have they been Amazoned?

Robots will soon pick up the slack...

BabaLooey -> peddling-fiction Feb 6, 2018 9:58 PM Permalink

Dr. EvilBezos strikes again!

The shit fuck......

IH8OBAMA -> Cognitive Dissonance Feb 6, 2018 10:32 PM Permalink

From Amazon workers, delivery drivers and now Whole Foods workers, it sounds like the Beezer is a real tyrant to work for. I'm surprised unions haven't been able to penetrate that organization. It is certainly big enough.

erkme73 -> JimmyJones Feb 6, 2018 11:11 PM Permalink

Wife is an ER MD. The physician leasing firm that employs her, which has the contract at the local hospital, recently got bought out by a new group. Suddenly she has a new director who assigns quotas to everything, and grades every aspect of her performance. It is quite stressful, and takes much of what little joy there was in her profession, and flushes it away. She is actively entertaining head hunters' calls again.

A Nanny Moose -> erkme73 Feb 6, 2018 11:57 PM Permalink

Just finished a two-year project building a hospital's Information Security Program....everything heading toward performance metrics measured against some horseshit ticketing system. Such systems only encourage throwing of horseshit over the fence, by incapable amateurs, to the people who actually know how to think. This program was put in place by a CIO who was former Air Farce.

It now takes 5 fucking hours of bureaucratic horseshit to perform 1/2 hour of actual engineering/technical work. The next step is to automate technical work from within the change control and IT automation systems.

Mark my words....just wait until the vulnerabilities in these change control, and Information Security Automation systems are exploited. Wait for the flaws in the code used to automate creation of entire networks, sever farms, security policies, etc.

I don't want to be within 100 miles of anything modern when this all goes to shit.

[Feb 03, 2018] Whole Foods Becomes Amazon Hell Foods as Employees, Managers Quit, Cry on the Job....and These People Want to Run Your Healthca

Notable quotes:
"... Cooks at restaurants routinely work in similar heat with similar levels of exertion. I know, because I was a cook at multiple restaurants. ..."
"... The reason OSHA doesn't care is because working people in extreme heat is SOP for scores of industries that you may not even realize. ..."
"... In an earlier generation, that would be an excellent question. But since then, we've seen the distribution and adoption of the neoliberal memo that such things are always and everywhere bad. Nor would they be high on the current administration's to do list. ..."
"... Amazon doesn't employ the workers. It employs temp agencies who supply the workers. This is a standard procedure these days for high-turnover workplaces, because in the end no one is responsible for what happens to the workers. ..."
"... A service business that gives crappy service will not prosper. ..."
"... I spent 25 years in the grocery business with 20 of them in management. The expectations stated above were industry standards (except the minutiae of sales goals). Only in Whole Foods was this model ignored. When the industry wide profit margin of grocers is less the 3cents on the dollar you have to be a TIGHT operator to turn a profit or you are doomed. As a department manager my entire job depended on how I managed my P&L report on a quarterly basis .. if I was over on payroll hours I DAMN well better be cutting back on other areas such as shrink, supplies or payroll mix (high paid FT vs low paid PT) ..."
"... Thanks for bringing up the industry baseline! Bezos' intense exploitation of labor merits a spotlight, but what's happening off in the shadows in other corporations? I recall seeing Costco held up as a + example, but what about others? ..."
"... It seems to me that Amazon are a one trick company (albeit, a very good trick), and they are likely to get burned very badly if they extend their predatory model to high value brands.. ..."
"... "When the industry wide profit margin of grocers is less the 3cents on the dollar" This figure is complete nonsense. It means nothing. It's the "profit margin" after paying themselves rent, which is where the profits in grocery stores end up.. No one is in business for a 3% return. It does make good for PR though. ..."
"... Its not clear to me that OTS originated with Amazon. Amazon only completed the Whole Foods purchase around Labor Day in 2017. It usually takes more than a month or two to come up with an entire computer-based software system and roll it out company-wide. ..."
"... Corporate America is capable of coming up with bone-headed implementations of what could be good ideas without the need to get Amazon, Google, Facebook, or Apple to push them to it. Wells Fargo was able to come up with "Eight is Great" for new account generation even with the guidance of Warren Buffet instead of Jeff Bezos. ..."
"... At any rate, I won't be frequenting Whole Foods any longer as I find worker abuse nauseating. ..."
"... So much paperwork that there's no time to deliver the food, hence empty shelves. A situation instantly recognizable to anyone who ever lived in the USSR. ..."
"... You didn't hear it from me, but from a friend who was a cashier at a grocery store, a small way to fight back against self checkout is to be creative in naming your produce to get a 95% discount ..."
"... Wal-Mart can man-up with a new ad campaign – Our Employees Don't Cry, they get food stamps. ..."
"... "I'm amazed at how many people choose to simply ignore the fate of Amazon's employees in order to receive free shipping." ..."
"... (Suggesting that AMZ is a sh*t business.) ..."
"... fast forward 1-2 years ..."
"... fast forward 1-2 more years . ..."
"... Rinse. Repeat. Ad nauseum, ad infinitum . ..."
"... the first time in my life ..."
Feb 03, 2018 | www.nakedcapitalism.com

Posted on February 2, 2018 by Yves Smith As we've said, Jeff Bezos clearly hates people, except as appendages to bank accounts. All you need to do is observe how he treats his workers.

In a scoop, Business Insider reports on how Amazon is creating massive turnover and pointless misery at Whole Food by imposing a reign of terror impossible and misguided productivity targets.

Anyone who has paid the slightest attention to Amazon will see its abuse of out of Whole Foods workers as confirmation of an established pattern. And even more tellingly, despite Whole Foods supposedly being a retail business that Bezos would understand, the unrealistic Whole Foods metrics aren't making the shopping experience better.

As we'll discuss below, we'd already expressed doubts about how relevant Bezos' hyped Amazon model would be to Whole Foods. Proof is surfacing even faster than we expected.

But first to Bezos' general pattern of employee mistreatment.

It's bad enough that Bezos engages in the worst sort of class warfare and treats warehouse workers worse than the ASPCA would allow livery drivers to use horses. Not only do horses at least get fed an adequate ration, while Amazon warehouse workers regularly earn less than a local living wage, but even after pressure to end literal sweatshop conditions (no air conditioning so inside temperatures could hit 100 degrees; Amazon preferred to have ambulances at ready for the inevitable heatstroke victims rather than pay to cool air ), Amazon warehouse workers are, thanks to intensive monitoring, pressed to work at such a brutal pace that most can't handle it physically and quit by the six month mark. For instance, from a 2017 Gizmodo story, Reminder: Amazon Treats Its Employees Like Shit :

Amazon, like most tech companies, is skilled at getting stories about whatever bullshit it decides to feed the press. Amazon would very much prefer to have reporters writing some drivel about a discount code than reminding people that its tens of thousands of engineers and warehouse workers are fucking miserable. How do I know they're miserable? Because (as the testimony below demonstrates) they've told every writer who's bothered to ask for years.

Gawker, May 2014 – "I Do Not Know One Person Who Is Happy at Amazon"

.

The New York Times, August 2015- " Inside Amazon: Wrestling Big Ideas in a Bruising Workplace "

..

The Huffington Post, October 2015 – " The Life and Death of an Amazon Warehouse Temp "

For a good overview of the how Amazon goes about making its warehouse workers' lives hell, see Salon's Worse than Wal-Mart: Amazon's sick brutality and secret history of ruthlessly intimidating workers .

Mind you, Amazon's institutionalized sadism isn't limited to its sweatshops. Amazon is also cruel to its office workers. The New York Times story that Gizmodo selected, based on over 100 employee interviews, included:

Bo Olson lasted less than two years in a book marketing role and said that his enduring image was watching people weep in the office, a sight other workers described as well. "You walk out of a conference room and you'll see a grown man covering his face," he said. "Nearly every person I worked with, I saw cry at their desk."

While that paragraph was the most widely quoted from that story, some reporters reacted strongly to other bits. For instance, from The Verge :

Perhaps worst of all is Amazon's apparent approach when its employees need help. The Times has uncovered several cases where workers who were sick, grieving, or otherwise encumbered by the realities of life were pushed out of the company. A woman who had a miscarriage was told to travel on a business trip the day after both her twins were stillborn. Another woman recovering from breast cancer was given poor performance rankings and was warned that she was in danger of losing her job.

The Business Insider story on Amazon, 'Seeing someone cry at work is becoming normal': Employees say Whole Foods is using 'scorecards' to punish them , is another window on how Bezos thinks whipping his workers is the best way to get results from them:


voteforno6 , February 2, 2018 at 6:21 am

I have yet to hear of anyone who has actually enjoyed working for Amazon. I know several people who have worked on building out their data centers, and it's the same type of experience – demanding, long hours, must be responsive to calls and emails 24×7. Even people who are otherwise highly skilled, highly competent workers are treated as disposable items. It's no surprise that they treat grocery workers the same.

Collapsar , February 2, 2018 at 7:45 am

According to this Business Insider article the OTS inventory management system was something brought in by whole foods management; not amazon. Employees are actually hoping amazon fixes the issues created by OTS.

Things are definitely bad when workers are hoping things will get better with Bezos in charge.

I can't remember where I read an article in which an amazon employee said people at the company joked that amazon is where overachievers go to feel bad about themselves.

David Carl Grimes , February 2, 2018 at 7:54 am

If working conditions are so bad at the warehouses (heatstrokes from lack of air conditioning), then why hasn't the Department of Labor gone after them? Surely the DoL or some local labor bureau most have gotten hundreds if not thousands of complaints?

Left in Wisconsin , February 2, 2018 at 10:37 am

Where are the unions? The Teamsters or UFCW should be all over this. Their complete absence from the story is telling. When the first three conclusions to be drawn from this story are:
1. That boss (and company culture) are awful
2. Why doesn't the government do something?
3. Maybe the workers can do a class action
then it's really not surprising that things are this bad.

Ransom Headweight , February 2, 2018 at 1:05 pm

Where are the unions? They've been systematic eradicated or are being led by "pro-business" stooges. About the only union worth a damn and bucking the system is the Nurses Union led by Rose Ann DeMoro. If you have the inclunation, take a look at labor during the first Gilded Age (late 1800s early 1900s) to see what it took to get the modest reforms of the New Deal enacted -- the very policies that are almost extinct now.

jrs , February 2, 2018 at 1:35 pm

Well even trying to unionize fast food failed badly is my impression. So often the laws make it hard but the workers also have to *WANT* to unionize.

Anon , February 2, 2018 at 1:53 pm

An article in The Atlantic provides an explanation for the absence of unions:

Efforts to get Amazon to change its labor practices have been unsuccessful thus far. Randy Korgan, the business representative and director of the Teamsters Local 63, which represents the Stater Brothers employees, told me that his office frequently gets calls from Amazon employees wanting to organize. But organizing is difficult because there's so much turnover at Amazon facilities and because people fear losing their jobs if they speak up. Burgett, the Indiana Amazon worker, repeatedly tried to organize his facility, he told me. The turnover was so high that it was difficult to get people to commit to a union campaign. The temps at Amazon are too focused on getting a full-time job to join a union, he said, and the full-time employees don't stick around long enough to join. He worked with both the local SEIU and then the Teamsters to start an organizing drive, but could never get any traction. He told me that whenever Amazon hears rumors of a union drive, the company calls a special "all hands" meeting to explain why a union wouldn't be good for the facility. (Lindsey said that Amazon has an open-door policy that encourages associates to bring concerns directly to the management team. "We firmly believe this direct connection is the most effective way to understand and respond to the needs of our workforce," she wrote, in an email.)

This is a common anti-union trick among low-wage jobs these days -- intentionally abuse your workers as much as possible to ensure the highest possible turnover (and even better, turnover in the form of voluntary quits, which do not qualify for unemployment benefits or impact the employer's UI tax). Workers who have zero investment in their jobs and who intend to quit at the earliest possible opportunity are less likely to go through the trouble and risk of supporting a union effort.

As a bonus, the high turnover results in many of the workers not ever becoming eligible for benefits. Most common tax-advantaged benefit plans, like health insurance and 401(k), are required to be offered to all employees with only a few limited exceptions. The permitted exceptions differ depending on the benefit type, but usually include criteria like length of service (often no more than 12 months or so) and in some cases, minimum work hours. The plan will lose its tax-advantaged status if it excludes more employees than the law permits, which can cost the employer back taxes and penalties. Firing employees for the purpose of interfering with their ERISA-regulated benefits is illegal , but treating them so poorly from day 1 that they are unlikely to last long enough to qualify for benefits is not.

From a policy perspective, we need to realize the instability created by high-turnover and fissured work environments and penalize it accordingly. A beneficial side effect of this is that it would likely incentivize employers to train and promote low-level workers upwards; low-level jobs like warehouse workers probably inherently have higher turnover than average, just because most workers don't want to do that for the rest of their lives (and some are successful in finding a way out), but when there's a path for the janitor to become CTO you can reduce that turnover.

flora , February 2, 2018 at 11:21 am

When you own the politicians' trade newspaper – WaPo – why would the politicians attack you?

Fraibert , February 2, 2018 at 9:09 am

Pretty sure, at least at the federal level, it would be OSHA jurisdiction issues. With that said, OSHA has received complaints, and done investigations: e.g., https://www.osha.gov/news/newsreleases/region3/01122016 ; https://www.recode.net/2017/11/9/16629412/amazon-warehouse-worker-killed-deaths-osha-fines-penalties

I found these just by Googling "OSHA amazon". Keep in mind, the low amounts of the fines doesn't necessarily reflect the severity of the underlying issues–my understanding is that OSHA has relatively weak abilities to fine violators in the first place.

Pespi , February 2, 2018 at 4:02 pm

OSHA has been neutered. If you're lucky enough to get someone to come without also being fired, they'll fine the business an ant's eyelid and be gone.

maria gostrey , February 2, 2018 at 9:38 am

the salon article referenced above perhaps is indicative of regulators' attitude toward those we expect them to regulate:

june 2, june 10 & july 25 – the days OSHA received complaints about the 100+ weather in the Allentown warehouse.

nothing about any sort of OSHA response.

Adam , February 2, 2018 at 2:07 pm

Cooks at restaurants routinely work in similar heat with similar levels of exertion. I know, because I was a cook at multiple restaurants.

Now I am a machinist, and temps like this are routine during the summer in most shops I worked.

The reason OSHA doesn't care is because working people in extreme heat is SOP for scores of industries that you may not even realize.

Big River Bandido , February 2, 2018 at 10:00 am

The regulatory agencies were captured decades ago by the industries they purport to regulate.

EoH , February 2, 2018 at 11:27 am

Government regulation and enforcement? In an earlier generation, that would be an excellent question. But since then, we've seen the distribution and adoption of the neoliberal memo that such things are always and everywhere bad. Nor would they be high on the current administration's to do list.

Elizabeth Burton , February 2, 2018 at 2:54 pm

Amazon doesn't employ the workers. It employs temp agencies who supply the workers. This is a standard procedure these days for high-turnover workplaces, because in the end no one is responsible for what happens to the workers.

Mikerw , February 2, 2018 at 8:18 am

To quote: "the beatings will continue until morale improves"

A service business that gives crappy service will not prosper. There is a high touch rate between customers and employees in this industry. Also, this is an industry with many options and competition; unlike airlines for example. We shop at WF from time to time, partly due to the experience being more pleasant. We have no issue moving (and no love of Amazon).

visitor , February 2, 2018 at 8:34 am

A service business that gives crappy service will not prosper.

if and only if there are preferable alternatives. If that business is cheaper, a monopoly, or if all other businesses deliver crappy service too, then it may well prosper. Case in point: the telecommunications market in the USA.

Fraibert , February 2, 2018 at 9:24 am

This is an important reason why the notion that market competition will increase social welfare isn't inherently true. It's long been understood that in concentrated markets (oligopolies) the market actors might implicitly coordinate their prices without a price increase. For example, Companies A, B, and C sell widgets; Company A announces a price increase via press release; B and C follow with similar increases a week later.

But companies can also implicitly coordinate on the quality of goods. If Company A pursues crapification, that can cover B and C for doing the same.

It's akin the the Greesham's Dyamic that Professor Black has written about extensively on this blog and in other places in connection with finance creating a criminogenic environment. Under the right circumstances, cheap bad quality can drive out good quality, leaving only bad.

EoH , February 2, 2018 at 11:41 am

Indeed. A "market" focusing solely on profitability would consider human values an inefficiency. It would remove them, along with what produced them, from the system, using routine failure modes and effects analysis. (An interesting point for promoters of AI.)

California witnessed considerable consolidation in its grocery business ten years or so ago. Similar, if somewhat less draconian conditions, resulted. I don't believe the "market" will generate a different result this time.

In addition, there's the question of Jeff Bezos's purposes in buying WF. It would not be to learn from another industry; I don't imagine Bezos values that concept. It would more likely be to expand his own methodologies and priorities to another industry, one that gives him access to a human activity outside the already extensive reach of his current business.

WF may be an experiment, whose survival might not be dictated by immediate notional profitability. Besides, the utility and profitability of the data flow from this experiment might never be visible.

Wisdom Seeker , February 2, 2018 at 2:03 pm

This is an important reason why the notion that market competition will increase social welfare isn't inherently true. It's long been understood that in concentrated markets (oligopolies) the market actors might implicitly coordinate their prices without a price increase.

I agree, except that the situations you describe are not "market competition". Any marketplace with fewer than about 7 truly independent competitors is not a competitive market.

But as you say, when there are few participants there is a lot of implicit signaling and coordination, which work to benefit the few participants at the expense of the general welfare.

We have a lot of faux markets, and a lot of faux competition. This is not helped by the prevalence of multiple "brands" owned by the same small number of large conglomerates. You could shut down just 2 or 3 companies in each product line and the supermarket shelves would lose 90% of their items. That ain't a competitive marketplace, even though the proliferation of brands provides the illusion of freedom of choice.

We need a populist wave to take back our democracy.

jrs , February 2, 2018 at 2:10 pm

Yes it's not textbook competition, but while textbook competition with many small players may be good for the consumer, there is no evidence that it is good for the worker. In fact I suspect it's bad for the worker as super competitive industries will nearly kill their employees just to stay in business. I'd rather work for an oligopoly (but it all depends on which one) as the freedom from relentless competition enables better working conditions in theory (again does not always materialize).

Dave , February 2, 2018 at 8:22 am

I spent 25 years in the grocery business with 20 of them in management. The expectations stated above were industry standards (except the minutiae of sales goals). Only in Whole Foods was this model ignored. When the industry wide profit margin of grocers is less the 3cents on the dollar you have to be a TIGHT operator to turn a profit or you are doomed. As a department manager my entire job depended on how I managed my P&L report on a quarterly basis .. if I was over on payroll hours I DAMN well better be cutting back on other areas such as shrink, supplies or payroll mix (high paid FT vs low paid PT)

I guess the Whole Foods employees are learning this now.

hemeantwell , February 2, 2018 at 8:42 am

Thanks for bringing up the industry baseline! Bezos' intense exploitation of labor merits a spotlight, but what's happening off in the shadows in other corporations? I recall seeing Costco held up as a + example, but what about others?

pretzelattack , February 2, 2018 at 8:48 am

if the industry standards decimate the work force and make customers unhappy, maybe it's the standards that are at fault.

Fraibert , February 2, 2018 at 9:15 am

To me, it doesn't make sense to penny pinch if you're a quasi-monopolistic supplier due to a special brand position. Whole Foods was associated with high quality goods, and was clearly able to charge a substantial price premium. Changing its operations as described above appears to reduce the justification for the price premium and destroy the company's unique market position.

It is almost like McDonald's deciding that beef patties cost too much, and that it would only serve chicken going forward.

PlutoniumKun , February 2, 2018 at 9:36 am

It seems to me that in the grocery business (like many), you either make money by being more efficient and cheaper than your competitors, or by having a unique selling point that allows you charge a premium (high quality, great service, etc).

If you look at the car industry, when mass market brands have bought high value brands (for example, Ford buying Jaguar), the sensible companies have been very cautious about ensuring that the brand aura (and hence high profit margin per car) is not tarnished by crudely cutting costs. Mercedes made that mistake in the 1980's with excessive cost cutting and it took them more than a decade, and billions of DM in investment, to win back their brand value when it became apparent that their cars were often less reliable than cheap Asian compacts.

It seems to me that Amazon are a one trick company (albeit, a very good trick), and they are likely to get burned very badly if they extend their predatory model to high value brands..

EoH , February 2, 2018 at 11:45 am

In scale, WF is a hobby business for Bezos, little more than a personal tax deduction. If it does not go as Bezos intends, it is not likely to have an effect on his primary business.

bob , February 2, 2018 at 9:19 am

"When the industry wide profit margin of grocers is less the 3cents on the dollar" This figure is complete nonsense. It means nothing. It's the "profit margin" after paying themselves rent, which is where the profits in grocery stores end up.. No one is in business for a 3% return. It does make good for PR though.

Chuck W , February 2, 2018 at 11:12 am

A 3% margin isn't the same thing as a 3% return. Maybe think about it this way, 26 turns on a 3% margin (once every 2 weeks). Without compounding that's a 78% return on average inventory level, before fixed and variable costs, interest expense and equity returns. You're right nobody is in the business for a 3% return!

bob , February 2, 2018 at 11:44 am

"A 3% margin isn't the same thing as a 3% return." I know this. But the way that figure is trotted out, relentlessly, is to leave the masses, and employees, with the idea that they only 'make' 3%, which is nonsense. Whatever they "make" is carefully chosen in accounting fairytale land.

The point about rents still stands. Most grocery stores/chains are REITs with captive retailers. No one ever sees the REIT side of things. Rite Aid is well know for being the captive retailer in this practice. Rite Aid doesn't 'make' any money (118M 'income' over 25 billion in sales = .004 Less that half a percent).. They 'make' the landlord LOTS of money. Tax dodge or money laundering, which does it better fit the definition of?

Chuck W , February 2, 2018 at 12:31 pm

Agreed. I think they trot out the 3% meme so nobody pushes them too hard on their "providing a public good" nature.

And on rent and landlord's, I absolutely agree. Regrettably it seems most of us are making our commercial landlords a lot of money (before we ever get to equity returns). So many small business owner's would loose their minds if they thought about that thoroughly. And to answer your last question, "I'll take Tax Dodge for $500, Alex"

Mel , February 2, 2018 at 12:40 pm

The way I read it way back when was that that 3% markup is on fresh produce and what not. So the turnover is necessarily high. So their return on invested capital might get as high as 3%/day, if they're lucky.

Jean , February 2, 2018 at 9:46 pm

Chuck W, please explain the "26 turns comment", don't assume people understand business jargon.

cnchal , February 3, 2018 at 12:26 am

Assumes stock turns over every two weeks, so 26 times per year.

Dave , February 2, 2018 at 10:41 pm

bob, can you direct me to an article and/or site which backs your claims. I would be most interested to read it. Perhaps my information is incorrect, but multiple Google searches have articles in which independent grocery business analysts confirm my number.

rd , February 2, 2018 at 3:43 pm

Its not clear to me that OTS originated with Amazon. Amazon only completed the Whole Foods purchase around Labor Day in 2017. It usually takes more than a month or two to come up with an entire computer-based software system and roll it out company-wide.

My guess is that Whole Foods was able to conceive of this all by themselves and since it fits into the Amazon way of doing things, they didn't stop them.

Corporate America is capable of coming up with bone-headed implementations of what could be good ideas without the need to get Amazon, Google, Facebook, or Apple to push them to it. Wells Fargo was able to come up with "Eight is Great" for new account generation even with the guidance of Warren Buffet instead of Jeff Bezos.

Kurtismayfield , February 2, 2018 at 3:44 pm

Does this 3% margin count the rent that is extracted from manufacturers for prime real estate in the stores? ( End caps for example). Slotting fees are rent extraction. Customers pay for this with higher prices for the items.

Whiteylockmandoubled , February 2, 2018 at 4:57 pm

Oh please. I shop at two of the major branded grocery chains, and while the staff is generally good and competent, they exhibit none of the hyper-awareness expected under OTS.

If you run into an employee and ask them where certain items can be found, they'll usually know and usually direct you to an aisle that has the item. But they will generally not know the exact location in the aisle, shelf, blah blah.

And the stupidity of corporate management is beyond belief. Due to niche marketing, items can be found in 3, 4 or even 5 different places. (My favorite is canned beans – organic and other high-end brands in the specialty fancy food aisle, a bunch in the Mexican/international/Spanish aisle, run of the mill murican brands and the same Goya brands that are in the international aisle in the general canned vegetable aisle, sale displays at the end of any random aisle. And dont even get me started on gluten-freeness).

At stop and shop they replaced the end of the checkout counters with a carousel for bagging, meaning a) that checkers had to bag each item as they went, b) no more baggers c) customers couldn't help bag stuff, and, my favorite, d) making it nearly impossible to use reusable bags. Talking to workers about it is simultaneously hilarious and enraging. "They said it was supposed to make it easier for us, but *shrug*". Everyone understands that it's designed to fail, slow things to a crawl, and piss customers off so they'll use the self-check line.

So spare us the tight-ship, low margin Whole-Foods-and-Amazon-are-just-just-learning-how-intense-the-business-really-is-and-too-bad-for-those-whiney-workers old school macho bullshit. Yes, it's not the most profitable industry in the world. But amazon is a whole other level of abusive monitoring of workers everywhere it goes.

Tony Wikrent , February 2, 2018 at 8:29 am

Makes me wonder what's happening at Washington Post. Quick search results are that Post has been "revived." Note that Bezos stays out of editorial process, but is heavily involved in tech ops.

Huey Long , February 2, 2018 at 8:29 am

I happened to stop by the Whole Foods in Columbus Circle, NYC yesterday for some produce and something is definitely different there.

It was around 4 pm, the store was packed, and apparently management had people out there with brooms and dustpans sweeping up what appeared to be clean floors. Between the crowds, the sweeping employees, and the boxes of stock on the floor it was much harder to move in there.

After navigating the aisles, I grabbed a bottle of cold beer for my subway ride home, and then proceeded to the in-house ramen/draft beer spot. The employees there seemed absolutely miserable and kept wandering away to talk in hushed voices about what was clearly some sort of work problem in the store from what I could gather. To the employees' credit however, they treated me with courtesy and respect even though their body language and demeanor screamed misery.

Following my mediocre Ramen and yummy draft beers, I wandered back over to the beer aisle to exchange my now warm subway subs for a cold bottle. I was shocked to find that the entire cold reach-in beer shelves had been re-stocked while I was in the ramen bar. After several moments of digging through freshly stocked warm beer I found a cold one, paid, and departed Whole Foods.

Thanks for this article, as it ties together all the oddities I observed today. It is really sad what happened to Whole Foods, particularly that location. I used to work on the Time Warner Center maintenance staff and frequently interacted with employees in that particular store and they used to be a jolly bunch.

At any rate, I won't be frequenting Whole Foods any longer as I find worker abuse nauseating.

SufferinSuccotash , February 2, 2018 at 8:37 am

So much paperwork that there's no time to deliver the food, hence empty shelves. A situation instantly recognizable to anyone who ever lived in the USSR.

The Rev Kev , February 2, 2018 at 8:56 am

Funny that. It was only a coupla months ago that a big story making the rounds was that Walmart shelves ( http://theweek.com/articles/466144/why-walmarts-shelves-are-empty ) were constantly empty. I suppose you have to be a mega-corporation to make blunders like this but still get away with it for a few months running.

Wyoming , February 2, 2018 at 9:56 am

Interesting you mention Wallmart. I live in central AZ and our local Wallmarts (3 ea) for several years had empty shelves, few workers – and they did not know where anything was, the greeters were gone, literally 1-2 actual cashiers – they were trying to force you to the self-checkout. Recently the stores are almost like they used to be with more workers, greeters back, still not enough cashiers though, and better stocking.

Has anyone else noticed this. It does seem to coincide with the Amazon purchase of WF. Correlation is not causation and all that but it might be a reaction to some extent.

Carolinian , February 2, 2018 at 1:23 pm

I'm probably one of the few people around here that shops at Walmart and yes they have cleaned up their act although it depends on the store. I'd say the thing people don't get about Walmart is that they are responsive to public opinion and customer gripes even if they supposedly treat their employees like disposable parts, easily replaced (but then they have lots of company in that department). For example a few years ago they took the clutter out of the aisles and did away with the craft/sewing section–trying to be more like Target -- and then reversed all those changes because their customers hated it.

Seems to me Bezos is taking on a much bigger challenge trying to reinvent brick and mortar than he did by innovating mail order. Here's betting he's not up to it. Perhaps his top honchos–meditating in their new waterfall equipped Seattle biosphere–will prove me wrong.

Pespi , February 2, 2018 at 4:07 pm

You didn't hear it from me, but from a friend who was a cashier at a grocery store, a small way to fight back against self checkout is to be creative in naming your produce to get a 95% discount

diptherio , February 2, 2018 at 10:01 am

Just FYI, that article is 5 years old. I remember discussing it here on NC. Unfortunately, it didn't portend the end of Wally World.

The Rev Kev , February 2, 2018 at 7:52 pm

Yeah, that one was 5 year old but I chose it because it gave a bit more info in it. There are plenty more from last year. Just go to Google and punch in the search term Wal-Mart shelves empty and see what come back, especially Google images. This means that this problem is not a one-off but has been a running theme for at least a four year period. Amazing.

Eureka Springs , February 2, 2018 at 8:47 am

People who shop at Whole Foods want to look at employees with that NPR vegan faux-hippy gaze. Not a lot of difference from the evangelical gaze, imo. Some sort of self hypnosis involved? Now that gaze will be replaced with the look of a desperate near homeless employee all Wal-Mart shoppers have grown accustomed to ignoring, Wal-Mart can man-up with a new ad campaign – Our Employees Don't Cry, they get food stamps.

If I were a rich man I would give everyone of these people a T-shirt which says – I am not a robot.

Fraibert , February 2, 2018 at 9:18 am

I wonder if Wal-Mart will discover increasing in-store staff, as well as an upgraded store experience, will actually improve its competitive position versus online retailers. That's pretty much what Best Buy has to do.

SufferinSuccotash , February 2, 2018 at 10:06 am

Or maybe pay the help more. falls out of chair laughing

Marco , February 2, 2018 at 10:32 am

Is this just an Amazon/WF issue or something larger for grocer chains? I find myself shopping at a Meijers (big Midwest chain) superstore whilst visiting my mother and noticed the same kind of strangeness with not just employee morale (they are clearly miserable) but stocking issues. Items that were ALWAYS available are no longer there. I needed pasta shells the other day. They had none. How can a super grocer NOT have pasta shells. Larger than normal sections of shelves are bare. Pallets haphazardly placed. Meijors used to be a somewhat pleasant and orderly experience with happy workers now approaching a WalMart experience.

oh , February 2, 2018 at 1:43 pm

Vegan faux-hippy-Hillary Obamba-gaze?

Adar , February 2, 2018 at 3:34 pm

Re the NPR vegan faux-hippy gaze, The WF near me in suburban Philadelphia, has a very upscale clientele. Once, in the produce section, they had set up a booth where a Hispanic woman would mix guacamole using just the ingredients the customers wished, without any extraneous chatter on her part. Wow! Your guac would be mixed by an ACTUAL MEXICAN PERSON! Just gotta be good, eh? Conservatives might say she was happy to have such a nice job. I thought it was downright creepy, like those catalogues where people beam as they demonstrate expensive vacuum cleaners. Yuk.

lakecabs , February 2, 2018 at 9:16 am

Our Soviet style master planners hard at work. At least the Soviets had 5 year plans that they would abandon after 5 years. How many years of failure can we tolerate? What ever happened to profit?

McWoot , February 2, 2018 at 9:47 am

Not a fan of Bezos, Amazon, or their practices, but strict planogram scorecarding is not uncommon in grocery, auto parts and similar retail orgs. The only part of that section of the article that strikes me as out of the ordinary is the employee's reaction to it.

diptherio , February 2, 2018 at 10:04 am

Translation: "Employee abuse is the norm, so I don't see what everyone is complaining about. Back to work, peasants!"

McWoot , February 2, 2018 at 10:16 am

The framing of the article suggests this is Amazon-ian behavior. Just pointing out that I don't believe that's accurate because the practice is commonplace in the industry.

diptherio , February 2, 2018 at 1:54 pm

I've got more than a few friends who have worked in grocery stores recently, and while they had many complaints, having to know last week's best selling item or this week's sales goals weren't among them. Just sayin' .

Harry , February 2, 2018 at 10:00 am

DE shaw culture spread by its alumni

Chuck , February 2, 2018 at 10:05 am

Thank you for highlighting Amazon's continued abuse of its employees. I'm amazed at how many people choose to simply ignore the fate of Amazon's employees in order to receive free shipping. My favorite people are the type that by books on late stage capitalism and plutocracy through their Amazon prime accounts.

Bukko Boomeranger , February 2, 2018 at 6:12 pm

"I'm amazed at how many people choose to simply ignore the fate of Amazon's employees in order to receive free shipping."

Sad but true, Chuck. My daughter, who's a total Social Justice Warrior type (speaking as a progessive, I'm proud of her for that) and her long-time boyfriend are proud Amazon customers. They have Amazon technobuttons on the walls of the house they bought so that all they have to do to re-order toilet paper and kitty litter is touch the device. (Suggesting that AMZ is a sh*t business.) A day or two later, it's delivered, for free, because they are Primes! Daughter's BF, who luuuuuvs him some tech, revels in this because it's so futuristic. When I suggest going to the store to buy some -- it's quicker -- or simply thinking ahead and purchasing stuff before they run out, I get the eye-roll given to Olds who old-splain oldways. They're Jellbylically concerned about the plight of abused North Koreans and the like. When I mentioned why I was buying their Christmas book gifts via Barnes & Noble rather than Amazon due to its mistreatment of workers, their ears glazed over. I'll forward this post to her, but I doubt it will get read, since it wasn't on her Fakebook feed.

J-Mann , February 2, 2018 at 7:41 pm

heh

I like the cut of your jib: " to Olds who old-splain oldways."

Grampa Simpson classic – One trick is to tell 'em stories that don't go anywhere – like the time I caught the ferry over to Shelbyville. I needed a new heel for my shoe, so, I decided to go to Morganville, which is what they called Shelbyville in those days. So I tied an onion to my belt, which was the style at the time. Now, to take the ferry cost a nickel, and in those days, nickels had pictures of bumblebees on 'em. "Give me five bees for a quarter," you'd say.

Now where were we? Oh yeah: the important thing was I had an onion on my belt, which was the style at the time. They didn't have white onions because of the war. The only thing you could get was those big yellow ones

Simple Life , February 2, 2018 at 10:35 am

Find a local co-op market. if you can't find one, start one!

Louis Fyne , February 2, 2018 at 12:13 pm

Local co-ops are a great idea but (sorry for the but) in much of the country wholesale food distribution has been decimated or wiped out over the years due to competition from Wal-Mart, Target, Whole Foods, the legacy grocers or Sysco (on the restaurant side).

Geographically, few areas in the US are fortunate enough to have an independent and thriving food/produce wholesale market which helps bring down price and bring up quality to be competitive with the vertically integrated big boys.

Arizona Slim , February 2, 2018 at 12:14 pm

Well, here's Slim from drought-stricken AZ. And I'm about to rain on that co-op parade. When I lived in Pittsburgh, I worked at a food co-op that was the lone survivor after its main competitor went under. And we got REAL busy. We also had a bit of a management problem. Ours was a drunk who often came to work hungover. All the better way to abuse the rest of us. After a staff revolt (yes, I took part in it), he left and took a job as manager of the regional co-op warehouse in Columbus, Ohio. Where he treated the warehouse gals as his harem and got one of them pregnant.

To our utter and total amazement back in Pittsburgh, he took responsibility for his son and tried to be the best father he could. I have no idea what happened with the drinking problem.

The manager who succeeded him was even worse. He even called himself a martinet, and he was. After less than a year of his BS, I bailed out of the co-op and got a sit-down job in an office. Yeah, there was another lousy boss there, and I've talked about her on other threads.

But there was further fun and merriment back at the co-op. I was still friendly with the people who worked there, and guess what? Another staff revolt! They ran Mr. Martinet outta there too! Go staff! Mr. Martinet went to a yuppie grocery store in North Carolina. From there, he went on to become one of the original senior executives in Whole Foods.

diptherio , February 2, 2018 at 3:32 pm

Bummer about the food co-op, Slim. Some of us "in the movement" are trying to work out how to provide accountability for guys like the drunk manager you mention, so that they don't end up doing like he did, and just sliding around from one co-op to another. Open to suggestions

Unfortunately, the co-op name doesn't necessarily imply that everything is groovy for the workers. Hence, REI workers in Seattle trying to unionize, and why UFCW has had such success in organizing every single food co-op in Minneapolis-St. Paul (and there are quite a few). The history of consumer co-ops seems pretty clear – workers in them need union representation just as much as workers in regular businesses.

Pespi , February 2, 2018 at 4:13 pm

Hahaha, an excellent story, well told. I have fond memories of the little local co-op from when I was a kid.

jrs , February 2, 2018 at 1:54 pm

it failed.

rd , February 2, 2018 at 3:46 pm

Or a Wegmans. https://www.wegmans.com/

https://www.democratandchronicle.com/story/money/business/2010/05/14/alec-baldwins-mom-really-really-likes-wegmans/2195927/

EoH , February 2, 2018 at 4:00 pm

For those who need examples, there is an excellent co-op in Ocean Beach, San Diego. Its customer/members are devoutly loyal. By design, each is small and adapted to its local culture and food ecosystem. Michael Pollan is a good resource for ideas on this topic and on real food in general.

American businesses might prefer home runs, but singles and bunts are more common and sustainable. Besides, co-ops are harder to buy up or put out of business in the manner reputed to be practiced by, say, some retail coffee companies.

EoH , February 2, 2018 at 10:35 am

Jeff Bezos. John Galt. No difference.

Louis Fyne , February 2, 2018 at 12:58 pm

Except Jeff Bezos has sold the Ayn Rand way of life to the 'progressive' intelligensia who would happily rant over John Galt if you gave them your ear and a glass of Bordeaux.

HotFlash , February 2, 2018 at 1:05 pm

Didn't John Galt go away?

cnchal , February 2, 2018 at 4:18 pm

I don't know, did he?. I didn't finish the stupid book to find out.

Jeff N , February 2, 2018 at 10:38 am

Not just at Amazon, but I'm seeing an anecdotal trend of "get people to quit within a year or two of starting". Not just with ridiculous requests from above, but even with good ol' passive-aggressiveness. I can't remember if this article was tipped off to me by NC but here it is anyway:
https://www.ft.com/content/356ea48c-e6cf-11e6-967b-c88452263daf
(paywall, or websearch for "how employers manage out unwanted staff")

Croatoan , February 2, 2018 at 10:42 am

Don't you all get it? First they took away their freedom to form unions with others. Now they want to take away your freedom to form a union with you own bodies actions. This will crush the idea of sabotage and work slowdowns as an expression of labor power.

The Rev Kev , February 2, 2018 at 7:59 pm

Of course there is always this simple WW2 manual-https://www.cia.gov/news-information/featured-story-archive/2012-featured-story-archive/simple-sabotage.html

Jeff Z , February 2, 2018 at 10:57 am

OSHA is a part of the DOL. https://www.dol.gov/general/topic/safety-health

EoH , February 2, 2018 at 11:04 am

Waste is inherent to selling fresh food. Trimmings, dry, damaged meats, fish, fruits, vegetables, breads, prepared foods. That's especially true of anything organic and not engineered to be harder, more colorful, durable and less tasty than their natural analogs. Whole Paycheck's intended customers – really, most shoppers anywhere – do not want to buy adulterated, processed versions of eggs, beakless turkeys, caged hens, and drugged industrially raised cows and pigs.

Fresh food, especially organic, does not last as long as industrial bread, fruits and vegetables or highly sugared packaged foods. It is the antithesis of such foods. The reason chicken soup made the way it was c.1940 is tastier and nutritionally better than soup made from a caged, medicated, neurotic fowl today is not great Grandma's recipe: it's the chicken.

Local sourcing, environmentally safe, animal friendly methods of raising require a wider supplier net. What Michael Pollan would call real food costs more. It should. But real food and real people are ripe for the cruel "more efficient" methods of production, distribution and sale that seem part of Jeff Bezos's DNA. Besides, what he really wants is probably the data flow. WF is simply a way to get it.

rd , February 2, 2018 at 3:52 pm

https://www.democratandchronicle.com/story/money/business/2017/03/03/wegmans-looks-cut-food-waste-with-new-state-regulations-coming/98049694/

Trey N , February 2, 2018 at 11:19 am

Typical uber-"capitalist" idiocy -- seen this happen in a lot of different industries over the years (esp techs):

CEO: "Our product sucks. We've grown too big, lost our innovative edge, we need to get back to our roots!"

Toady: "Uh, tried that already, boss. No can do. Too much bureaucracy now."

CEO: "Shit! Any ideas?"

Toady: "Actually, yes! We can buy out and take over one of the smaller competitors that's eating our lunch now, and steal their latest ideas and projects."

CEO: "Brilliant! Make it so!"

fast forward 1-2 years

CEO: "How's that takeover working out?"

Toady: "Well, it's taken a while, but we've fully integrated the company in with ours -- all of our corporate policies and procedures etc etc are in place there now."

CEO: "Excellent!"

fast forward 1-2 more years .

CEO: "Our product sucks! What happened to all those great ideas coming from that company we took over?"

Toady: "Well, most everyone working there when we bought it out are gone now. The founders and senior management cashed out the takeover premium and bailed immediately, and everybody else got frustrated with our corporate style and policies and eventually quit. Our people took over their projects, and promptly fucked them up beyond all belief. Instead of a cash cow, we got a dead cow on our hands now."

CEO: "Shit! Any ideas?"

Toady: "Yeah. We can either spin it off to the public again or just shut the whole fucking thing down and take a huge earnings write-off."

CEO: "Hmmm,..decisions, decisions . By the way, are there any other small competitors out there that we can buy out to rejuvenate our stale product line, toady?

Rinse. Repeat. Ad nauseum, ad infinitum .

Jeff N , February 2, 2018 at 4:41 pm

haha that's my place!

Sean , February 2, 2018 at 11:20 am

Amazon corporate sounds like a sweatshop. Their treatment of warehouse staff is nothing short of an abomination. But I can't help feeling that some of the employee comments at WholeFoods are less about bad management and work conditions and more about Millenials and a lack of ability handle criticism and work pressure. (The average age of a Whole Food employee at my store is easily 28yo.)

To call working on an inventory system "punitive". It's called business, and yes, it is difficult and takes a lot of effort. Punitive, though. To use an inventory system. Sorry. Not buying the whole story.

JBird , February 2, 2018 at 12:35 pm

If it's common for people to actually cry at work, and to have nightmares, with massive turnover, decreasing quality of service, product, and cleanliness blaming millennials is an inadequate response. Apparently Amazon wants to run Whole Foods with inadequate staff, fails to reward good good work, unfailingly punish not only poor work, but honest mistakes, and makes no allowance within the system for reality. If you did animal training this way, you would see the same results, I promise. The management "techniques" described will destroy any company, or at least reduce productivity massively.

Yves Smith Post author , February 2, 2018 at 3:11 pm

You are straw manning the post and the underlying article. The staff is grilled very frequently and graded, and much of what they are graded on isn't relevant to customer service. The shelves are supposed to be "leveled" all day, which is a ridiculous standard. The testing and insane shelf appearance standards are not normal to the industry and minor deviations are the basis for firing.

RMO , February 3, 2018 at 12:11 am

I have yet to met a single "Millennial" that fits that ridiculous stereotype – and I know a lot of people in that age bracket even though I was born in 1970. The very few who even seem to have tendencies in those directions seem more influenced by being from wealthy families than by their year of birth and I can think of at least as many Boomers and Gen X'ers that are like that too.

When I think of the high-school age or university age jobs the people I grew up with had and compare them to the jobs I've seen my "Millennial" friends doing the younger people have had it substantially worse over all.

Anarcissie , February 2, 2018 at 11:54 am

According to my browser, the word 'union' does not exist in this article.

Jonathan Holland Becnel , February 2, 2018 at 12:40 pm

#Famazon

Also theres an Ad for the 'United States Secret Service' that wants to recruit me. Lol Not with my Reenlistment Code (RE4)!!!!!

Arizona Slim , February 2, 2018 at 1:09 pm

A college friend of my mother went on to run the Secret Service detail for the White House. Very demanding position, but one that Mom's friend was quite proud of.

Eclair , February 2, 2018 at 12:41 pm

Lordy, Yves, please put a warning sign on that video! It's still breakfast time here in Seattle, and I clicked on it. No, it didn't offend my 'sensibilities.' But it encapsulated all the frustration and anger and helplessness I feel against our system. As well as being a powerful metaphor for 'late stage capitalism.'

Chauncey Gardiner , February 2, 2018 at 3:32 pm

Share your sentiments, Eclair. Having breakfast? The observations about employee abuse also pair well with a video of a 10 minute bike ride through the homeless encampments along the Santa Ana River near Angels Stadium and Disneyland in Anaheim:
https://mobile.twitter.com/Dalrymple/status/953739188050059265

Fear is part of their toolkit.

Pelham , February 2, 2018 at 1:16 pm

Whole Foods employees still outnumber these Amazon creatures checking up on them, I presume. If the WF workers and others at Amazon are so universally tormented and humiliated, shouldn't they be taking some kind of collective action?

Twice during WWII German officers tried to get rid of Hitler. I guess American workers don't measure up to even that standard.

Oregoncharles , February 2, 2018 at 1:59 pm

Those places are begging for union organizers – but are likely to fight back ruthlessly.

EoH , February 2, 2018 at 3:37 pm

I suspect Jeff Bezos would view unions at WF or Amazon the way Reagan viewed unionized Air Traffic Controllers. Or Wal-Mart, which has abandoned markets whose employment laws provide for unions or simply too many protections for employees.

Bezos is extracting resources from his employees with the same thought and in the same manner that early California hard rock miners used massive water hoses (monitors) to liquidate mountains in search for a few gold nuggets. (h/t Gray Brechin)

Petter , February 2, 2018 at 1:31 pm

Why don't they quit? If you allow yourself to be treated as and act as a slave, you become complicit in your own slavery.

Arizona Slim , February 2, 2018 at 1:53 pm

Which is why I Q-U-I-T the food co-op job mentioned above. Did the same in that office job, which was my second-to-last full-time job.

Have I ever had a good job? Yup. Working in a hot, dark, and greasy bike shop. Place closed in 2000 and I still miss the camaraderie with my fellow mechanics -- and the pride of accomplishment that came with fixing the customers' bikes.

Oregoncharles , February 2, 2018 at 1:58 pm

Because, like most Americans, they have no savings and no fallback if they lose their job.

Yves Smith Post author , February 2, 2018 at 3:13 pm

The article said many are quitting. Of course, the better employees will probably have the best options and be able to leave faster.

Craig H. , February 2, 2018 at 2:16 pm

From The Atlantic:

What Amazon Does to Poor Cities

Mostly about their warehouse in San Bernardino. The employees describe working there as The Hunger Games.

Punxsutawney , February 2, 2018 at 2:51 pm

Decades ago I worked in retail,

When arguing with my boss about crap we were required to do, he finally got frustrated and told me "Shit flows downhill", "DEAL WITH IT!". To which my response was "Yep, right onto the customer!"

It made him so angry I was lucky I wasn't fired on the spot, though in hindsight it would have been a blessing. Looks like nothing has changed 30 years later.

JBird , February 2, 2018 at 7:06 pm

I think it's gotten worse as the whole retail industry specifically and perhaps most industries gradually, have had the slowly MBA'd management reorganized, streamlined, outsourced and efficiencied it into a monetized Hades.

I was lucky to work in a couple of well run, or at competently run, businesses. So I know one can be profitable without brutalizing people. It's depressing to see what has happened.

Synoia , February 2, 2018 at 6:42 pm

I imaging the quickest route to being fired is:

Hi, my name is Jeff Bezos, and I'm a union organizer!

Well maybe not the Bezos part.

Jean , February 2, 2018 at 10:03 pm

Wonder what would happen if a customer started handing out union brochures to Whole Foods employees in one of their stores. What are they going to do? Kick you, a customer, out of the store?

Yves Smith Post author , February 2, 2018 at 10:29 pm

They probably would. It's private space. But it would make for good news stories. You would need to actually shop in fact handing them out to all the cashiers when you are checking out would be the best move, since you'd be out the store before management would catch on.

Dongo , February 2, 2018 at 8:51 pm

As the articles in the Business Insider series explicitly point out, this hated new system preceded the acquisition by Amazon.

Amazon is terrible. The way Whole Foods is now treating its workers is terrible. But Amazon simply did not develop or implement the policies at Whole Foods that this article is ascribing to it.

Jean , February 2, 2018 at 9:37 pm

OTS, What is that?

I know two Whole Foods employees who have quit in the last week.

The new name for the store is "Asswhole Foods".

The game is to sabotage as much as possible and give away and undercharge customers for as much as possible in the weeks before you quit.

A walkout strike on a busy Saturday would be a beautiful thing to see and would really get the public's attention.

Yves Smith Post author , February 2, 2018 at 10:39 pm

Good for your saboteurs! Amazon is trying to stop shrinkage but they'll lose more through deliberately missed scans. Oh, and a freezer door left open or temperature mysteriously reset would wreak even more havoc.

lentilsoup , February 2, 2018 at 10:40 pm

I was in a Whole Foods last night, where I shop a few times per month, here in central California. Lots of unfamiliar faces working there. Produce section definitely looking worse than usual -- empty shelves, low quality items. At checkout, the cashier was a young woman I'd never seen before, who looked tired and dispirited. I asked how she was doing that evening. Smirking wearily, she said, "Hangin' in there " (Which is about how I feel these days, too.) When it came time to pay, it was the first time in my life that the total at Whole Foods was less than I was expecting. Wow, I thought, I didn't think Amazon changed the prices that much? After I got home and looked at the receipt, I realized why -- she hadn't charged me for all the items! Bless her.

I don't believe Amazon and Whole Foods were ever a good match for each other, and with unhappy employees and other problems, I expect this particular branch of WF to be gone in a few years. And I really couldn't care less. There are other good places to shop.

[Jan 30, 2018] Perfect worker on the cheap by Dan Crawford

Jan 29, 2018 | angrybearblog.com

Via Bloomberg Obsession for the Perfect Worker Fading in Tight U.S. Job Market points to an issue in hiring that has been discussed here at AB:

This is a problem because, at 4.1 percent last month, U.S. unemployment is at the lowest level since 2000 and companies from Dallas to Denver are struggling to find the right workers. In some cases this is constraining growth, the Federal Reserve reported last week.

Corporate America's search for an exact match is "the number-one problem with hiring in our country," said Daniel Morgan, a recruiter in Birmingham, Alabama, who owns an Express Employment Professionals franchise. "Most companies get caught up on precise experience to a specific job," he said, adding: "Companies fail to see a person for their abilities and transferable skills."

U.S. employers got used to abundant and cheap labor following the 2007-2009 recession. Unemployment peaked at 10 percent in October 2009, and didn't return to the lows of the previous business cycle until last year. Firms still remain reluctant to boost pay or train employees with less-than-perfect credentials, though recruiters say that may have to change amid a jobless rate that's set to dip further.


Bill H , January 29, 2018 9:53 am

The way the article is cut off with the wage gains chart makes it seem that the article is on the Dean Baker theme of "pay higher wages and they will come," in which he argues that there is no shortage because you can hire workers away from your competitor, thereby merely moving the deficit from one place to another without eliminating it and unintentionally suggesting that there is actually is a shortage after all.

Immediately after that chart, however, the article segues into a pretty intelligent discussion of employers learning to ascertain "how can your experience be used in my application," making it unclear why the wage chart is even there.

The "lack of trained workers" complaint has long annoyed me, with its implication that it is the public sector's responsibility to train workers for the private sector. Why? If a company needs welders, why should that company not train its own welders?

J.Goodwin , January 29, 2018 11:39 am

Last week we were reviewing a job description we were preparing for a role in Canada. It was basically a super senior description, they wanted everything, specific experience, higher education, what amounts to a black belt project management certification but also accounting and finance background.

At the bottom it says 5 years experience.

I almost fell off my chair. That's an indicator of the pay band they were trying to fill at (let's say 3, and the description was written like a 10-15 years 6).

I tried to explain it to the person who wrote it and I said hey if we put this out there, we will get no hits. There is no one with this experience who will take what you are offering. I'm afraid we're going to end up with another home country expat instead. They're often not up the same standard you could get with a local if you reasonably scoped the job and gave a fair offer.

I think companies have forgotten how to compete for employees, and the recruiters are completely out of touch. Or maybe they are aware of the conditions and HR just won't sign on to fair value.

Mona Williams , January 29, 2018 1:09 pm

Before I retired 12 years ago, on-the-job training was much more common. Borders Books (remember them?) trained me for a week with pay for just a temporary Christmas-season job. Employers have gotten spoiled, and I hope they will figure this out. Some of the training programs I hear about just make me sigh. Nobody can afford to be trained while not being paid.

axt113 , January 29, 2018 1:26 pm

My Wife works as a junior recruiter, the problem she says is with the employers, they want a particular set of traits, and if there is even a slight deviation they balk

She says that one recent employer she worked with wanted so many particulars for not enough pay that even well experienced and well educated candidates she could find were either unwilling to accept the offer, or were missing one or two traits that made them unacceptable to the company.

rps , January 29, 2018 3:58 pm

This is exciting news for many of us who've been waiting for the pendulum to swing in favor of potential employees after a decade of reading employers help wanted Santa wish list criteria for a minimum wage job of 40+ hours. I'd argue the unemployment rate is not 4.1%; rather, I know of many intelligent/educated/experienced versatile people who've been cut out of the job market and/or chose not to work for breadcrumbs.

HR's 6 second resume review rule of potential candidates was a massive failure by eliminating candidates whose skills, experience and critical thinking abilities could've cultivated innovation across many disciplines. Instead companies looked for drone replacement at slave wages. HR's narrow candidate searches often focused on resume typos or perceived grammatical errors (highly unlikely HR recruiters have an English Ph.D), thus trashing the resume. Perhaps, HR will be refitted with critical thinking people who see a candidate's potential beyond the forgotten comma or period.

[Jan 06, 2018] More Power to the Workers Seymour Melman on Extraction by the Military, Managers, and Finance

Notable quotes:
"... By Jon Rynn, the author of Manufacturing Green Prosperity: The power to rebuild the American Middle Class, and many other writings available at JonRynn.com . His twitter handle is @JonathanRynn. Originally published at Economic Reconstruction ..."
"... *This article is meant as a wide-ranging, 'high-altitude' look at Melman's work, not as an exhaustive survey. Please see SeymourMelman.com for more of Melman's work, as well as his many books and articles. ..."
"... perhaps the most glaring example being the Soviet Union ..."
"... Somehow he also got an audience with Secretary of Defense Robert McNamara as the Vietnam War heated up. Melman blamed McNamara, formerly head of Ford Motor Company, for rationalizing and systematizing the military industrial complex. After McNamara got through with it, the Department of Defense had turned into the headquarters of the military industrial complex, with the contractors as virtual divisions of the Pentagon. Melman was concerned that the military industrial complex was siphoning off much of the best and the brightest engineers and scientists, and that there was a surfeit of engineering talent available for civilian firms. "Where are the engineers?! Where are the engineers?!" Melman remembers McNamara screaming at him. It is a question we can continue to ask to this day. ..."
Jan 05, 2018 | www.nakedcapitalism.com
Yves here. Get a cup of coffee. This is a meaty and important post.

While I agree overwhelmingly with the main points, I have a few quibbles. One is that Rynn attributes the dollar's role as reserve currency to oil being denominated in dollars. As we've discussed, the requirements of being a reserve currency is running persistent trade deficits so that there is a lot of the reserve currency in foreign hands so it is tradable. The reason foreigners are so happy to have the US run trade deficits is that pretty much everyone but us runs mercantilist trade policies. The US is effectively exporting jobs to these countries. They can have a higher savings rate and our exporting jobs alleviates the employment cost. What's not to like from their perspective?

By Jon Rynn, the author of Manufacturing Green Prosperity: The power to rebuild the American Middle Class, and many other writings available at JonRynn.com . His twitter handle is @JonathanRynn. Originally published at Economic Reconstruction

Seymour Melman was one of the most important political economists and peace activists of the 20th century. He would have been 100 years old on December 30, 2017 (he died in 2004), therefore this is a good time to consider his legacy, and more importantly from his point of view, to think about how his writings can help us achieve a more just world.

Melman always had a two-track intellectual focus, writing about both the military and the economy. The two concepts were intertwined in his books about the deleterious economic effects of military production, for instance, in 'Pentagon Capitalism', 'The Permanent War Economy', and 'Profits without Production'. He sought to decrease military spending, not just because American wars after World War II were unjust, but also because that spending constituted missed opportunities to improve the public sphere of life, and even more fundamentally, because military spending destroyed the core competence in manufacturing that Melman saw as the basis of economic life.

This integration of peace activism and economics crystallized after the 1950s. In the 1950s, Melman was involved with what became known as the 'ban the bomb' movement. There was a great deal of concern at the time that nuclear war of any sort could lead to the destruction of most if not all mankind, and it took quite a bit of activist effort to eventually lead to, for instance, a ban on testing nuclear weapons overground. Melman and others, such as another political economist born in 1917, Barry Commoner, argued that trying to survive a nuclear strike in fallout shelters and the like was madness, and that the aftereffects of nuclear war would make affected areas unlivable. Melman made the term 'overkill' popular, as a reference to the idea that you only need a small number of nuclear weapons to wipe out your enemy, and any more than that is a complete waste of money. Melman, and others such as Marcus Raskin, founder of the Institute for Policy Studies, helped create a movement for global nuclear disarmament.

At the same time that Melman was addressing the issue of nuclear war, academically Melman was pursuing a production-centered understanding of the economy, as opposed to the exchange-centered approach of mainstream economics that was then beginning to dominate economics departments. As a professor of industrial engineering at Columbia University from 1948 on, his bread-and-butter expertise concerned how to increase productivity on the factory floor. While he was best known for critiquing the military economy, his critiques were based on his intimate knowledge of how things are produced.

Production and Worker Centered Economics

To understand his critique of the role of the military in the economy, therefore, it is critical to understand his understanding of political economy. Much of his framework can be summed up thus: the more decision-making power is given to factory workers, the better the factory and the economy performs. In addition, the more the engineers and managers of industrial firms are competent to organize production, the better the economy of the country-as-a-whole performs. Military production and financial domination interfere with both processes, and divert resources from the infrastructure, another critical part of the production economy.

However, before we can understand why he came to these conclusions, we need to attempt an even more fundamental question, which when answered will make the other hypotheses easier to explore: how does an economy work? What creates economic growth? You may be thinking 'that's what economic departments are there to explain', or, 'I took some economics courses, so I know the answer to that question'. From Melman's perspective, mainstream economics cannot adequately answer these questions. Actually, from my perspective as well, since I spent 20 years working closely with Melman, and wrote a dissertation, book, and articles based on his world view.

The problem revolves around the concept of production. Usually, the concept of production boils down to manufacturing, or 'industrial production', which also involves things like construction and electricity generation. The epochal ideological problem, if you will, as far as I have been able to figure it out, is this: for most of the 19th and 20th centuries, the spectacular increases in growth and standards of living that manufacturing and other industry provided were glaringly obvious to most people, and in particular to intellectuals and urban folk. Most people lived through big technological transformations, for instance, to an electrical society or to one using trains, then cars, then planes . The role of manufacturing and other industry was obvious -- maybe a little too obvious. Economics grew, not to explain this technological explosion, but mainly to explain the market mechanisms that enveloped this system of productive machinery.

It was into this industrial environment that people like Seymour Melman, Barry Commoner, John Kenneth Galbraith, John Maynard Keynes, and other, what I would call, 'production-oriented' economists grew up. Indeed, Karl Marx and prewar Marxists also experienced manufacturing transformations. What none of them developed, including Melman, was an explicit argument or framework that manufacturing is the foundation of a wealthy economy. It was obvious. For instance, Melman simply wrote in several books that 'In order to survive, a society must produce'. True enough, but in the current society in which the urban population, and professionals and intellectuals as a whole, have as much exposure to manufacturing as they have to other exotic and remote ecosystems, this doesn't explain much. However, Melman's writings offer a set of principles that can help us grasp the true nature of the political economy.

Let's actually start all the way at the beginning. Humans dominate the planet because we have hands and a brain that cooperatively are able to use tools to make other tools that then make things that we want. This was always our advantage over other animals, and has allowed us to create our own environments (houses and infrastructure in cities, for example), instead of going along with whatever the ecosystem happened to provide.

I said that we make tools that are used to make other tools, not that we simply make tools. The key to human success is ability to use a set of tools together, as a system, and to use one set of tools to make another set. So for instance in the modern economy, there are tools called machine tools that make all kinds of metal parts that are then used to make the machinery that we see in factories, and more machine tools, and which eventually make the goods that we use and the services that use those goods.

What we make depends critically, then, on what kinds of tools and machinery we use to make them. The production machinery may be out of sight, but without it we won't have anything we need. For instance, smart phones would not be possible without all kinds of very sophisticated machinery that makes the small parts that go into the phone. And those machines were made using other machines, in conjunction with workers. So let us explore a list of ten principles that we may glean from Melman's writings.

Melman's Principles of Political Economy

  1. The goods we use and their final price depend on what kind of tools/machinery are available to make them. Advances in tool/machine making is basically what drives economic growth -- you don't get electricity in your society because the market is set free, you get electricity because the machinery is available to generate electricity, and the tools/machines are available to make the machinery that generates the electricity. Melman was a world-leading expert in the production of machine tools.
  2. In order to put this machinery together, and to use the machinery in the best way possible, engineers and managers have to have 'the competence to organize production', as Melman put it. This is the basic stuff of industrial engineering -- how do you design a factory, or any other workplace, so that you get the most output with the least input. If you do this better than other companies, then you can charge less for your product, and presumably get a bigger market share and make more profit. If the country as a whole is doing is organizing work competently, then it will do better than other countries, economically.
  3. In order to maximize the usability of this critical production machinery, you need to maximize the 'productivity of capital', that is, you need to keep the machinery running (maximizing 'uptime'). If you have a car factory and the assembly line keeps breaking down, you will get less output in a particular period of time, just as most people can't be productive now if particular websites are 'down'. This 'uptime' is crucial to a well-functioning factory and indeed an economy. One of the reasons that the Soviet Union collapsed, according to Melman's analysis, is that the Soviets were so focused on making military equipment that they let their industrial machinery literally fall apart, and so they were experiencing a production crisis when Gorbachev entered the scene and decided he needed to shake things up.
  4. The more decision-making power you give workers on the shop floor, the better the machinery will perform, that is, you will maximize the productivity of capital, because well-trained and well-motivated workers will be able to prevent problems in the machinery from happening in the first place, and will react quickly if problems arise (for instance, on the famous Toyota assembly line, any worker can stop all production if they see a problem) . When workers are 'dumbed-down' and have no say, machinery breaks down and the entire production process -- the organization of work -- in not as efficient as it could be.
  5. An economic 'virtuous cycle' emerges if you pay workers more, because competent managers will compensate for higher wages by using more and better machinery, and by improving the way work is organized, which will then lead to higher profits, which can lead to higher wages, leading to better machinery/organization of work, and so on. Indeed, Melman even argued that if you have strong unions, management will be forced to figure out more clever ways of organizing work than just trying to decrease wages.
  6. When wages go up faster than the price of the machinery that is being produced by workers, then this 'virtuous cycle' is reinforced. Melman followed this ratio in various countries starting in the 1950s. For instance, in his last published book 'After Capitalism' he noted that the Japanese and Germans were increasing wages at a higher rate than the increase in their machinery prices, and their machinery industries were world-leading and their workers made more than their American counterparts. In America, on the other hand, machinery prices were going up faster than wages. So cutting or stagnating wages reverses the 'virtuous cycle' of increasing wages leading to better machinery and organization of work. This dynamic was one of the themes of Melman's first book, 'Dynamic Factors in Industrial Productivity'.
  7. A well-functioning management and concomitant organization of work is the basis of a thriving middle class, particularly if unions are strong, that is, workers have decision-making power in the firm. Basically, by generating more wealth, the society becomes richer, but if you generate more wealth by at the same time increasing wages, you not only keep the virtuous cycle of better productivity going, you obviously have a richer working class.
  8. Management, instead of contributing to a country's economic wealth by competently organizing production -- including giving workers more decision-making power -- usually instead divert resources to their own 'administrative overhead', as Melman put it in his dissertation in 1948. He continued to track this society-wide diversion of resources from production to administration until his last book, and found that the ratio of administrative overhead to production continued to increase (and was even worse in the Soviet Union).
  9. Melman agreed with my hypothesis that in order to thrive, a manufacturing sector needs to encompass a full suite of industries. A region's economy will thrive most if all the parts of the manufacturing economy are present in some form. In other words, national manufacturing specialization does not work. You can't be the best in making cars if someone else is making the machine tools that you use to make the cars, or if your country isn't making its own steel. There are relationships of positive reinforcement that occur among the various manufacturing industries. The economy is an ecosystem (a concept Melman's mentor used and I developed further in my writings), the important point being that you can't rip various parts of the regional manufacturing ecosystem apart, sending them willy nilly to other countries, and expect the surviving industries to thrive. This goes against the deification of David Ricardo and his theory of comparative advantage in economics, which is used to justify globalization and many trade treaties which have helped to devastate American manufacturing.

Tenth and finally for our purposes here, the United States has perhaps already reached a 'point of no return' where the managerial class has become so incompetent that the only way they understand to increase profits is to decrease labor costs by moving factories overseas. Not only does this rob the US of its production base, it decreases global growth by discouraging the use of better machinery and organization of work inside the factory. The virtuous cycle is broken. Part of the reason companies offshore factories is because they want to break the power of unions. Melman stressed that management pursues greater power as much as or more than they pursue greater profits -- and unions decrease managerial power. He called this dynamic 'power extension', which he considered more important than simply the drive for profits.

Consequences of Melman's Principles

If we apply these principles broadly, we can see that they collectively offer an alternative to mainstream economics. In the worldview of most economists, growth magically appears if you decrease government intervention. In the real world, economic growth appears if you create better machinery, organize work better, and pay your workers more. In the mainstream economics view, military production is just like anything else, in fact, any production or economic activity is just as important as any other, whether it's providing for tourists, creating machine tools, or making a tank. In the real world, there is a hierarchy of importance of economic activity, and manufacturing, and in particular manufacturing machinery, is at the top of that hierarchy. In the world of the economist, lower wages is equivalent to improving machinery, as long as the short-term profit is the same; in the real world, cutting wages leads to lower productivity which leads to a poorer country overall. In the view of economists, machinery is viewed as a replacement for workers; as I hope these principles have illustrated, machinery actually makes worker participation and decision-maker power more important, and in a well-functioning economy, machinery innovation brings better wages and more jobs.

Since Melman was generally at least a decade or two ahead of his time, we may need to dwell a bit on the following conundrum: in the economists' world, automation means less work, which means less people are needed to work in an economy. In the real world, automation has been going on since the start of the Industrial Revolution, but because of the actions of the managerial class to outsource production and the attendant increase in inequality, in the last few decades the standard of living of the working/middle class has stagnated or even declined.

There has been quite a bit of discussion about automation and inequality recently. Bernie Sanders made the problem of inequality the basis of an almost-successful run for the Presidency, and Thomas Piketty wrote a very well reviewed book about inequality. On the other hand, on the right (and neoliberal center), it has become an article of faith that automation will wreak havoc on the concept of work as we have known it, and maybe a 'basic income' policy will become necessary so that the hordes of unemployed at least can survive without work.

The problem with all of these ideas about automation, and in fact a problem with the progressive agenda as a whole (not to mention the conservative one), is that they ignore 'production', or what I have described as Melman's principles of production (Melman would often use the shorthand of 'they don't understand production' to dismiss someone's argument, a problem I hope to alleviate here). If production is the central way that a society creates wealth, and if that function is removed from an economy, then clearly you are going to have a lot less wealth. If one quarter of the working population in the 1960s was in manufacturing and one tenth is now, and the lost employment went into low-paying services while the income went into finance, then no wonder there has been an increase in inequality. The part of the economy that was producing material wealth, and that supported the backbone of the middle class, was ripped out and thrown away. The society became poorer, and with it most of its people, except the top 1%. (see http://www.globalteachin.com/ for a further explanation)

The astute reader might remember his or her intellectual betters explaining that we are now in a 'post-industrial' society -- a phrase that drove Melman crazy -- because most people work in the service economy. Manufacturing has been 'solved', according to this line of thinking, and is 'less advanced', so it naturally migrates to 'less advanced' countries like China -- ignoring the fact that more advanced countries like Germany and Japan have wealthier middle classes than we do because they have much larger manufacturing sectors. But let's look at the service economy a bit closer.

Services are what you do with goods that are manufactured, for the most part. For instance, the retail and wholesale service sectors retail and wholesale goods. Marketers are generally marketing goods. Airlines run a service based on the use of machinery (jets), and computers are, well, machines. The health industry is very dependent on machinery and goods like drugs, and the restaurant business can actually be considered a kind of manufacturing facility. The real estate industry is based on the construction industry, which uses machinery and goods produced in the manufacturing sector. Just about wherever you look, services mean using goods.

If services are the act of using goods, then it should be clear that a big country can't pay for most of its imported goods by exchanging them for services -- there simply aren't enough exportable services to exchange for all the goods. Any other country besides the US would have had a rude awakening of a decline in their currency had they had the level of trade deficits the US has, that is, the amount of goods and services that are imported vs. the amount exported. The US survives because other countries use the dollar as a medium of exchange and need dollars to buy oil. But this state of affairs will not last forever.

Manufacturing has always contributed the bulk of productivity growth in an economy. In fact, manufacturing productivity increases at about 3%, year after year, at least for the last 100 years. Technological improvements are made to machinery and the organization of work, year after year. The same does not happen in services, generally, because services require human intervention. Ah, but pundits will proclaim that artificial intelligence will replace much human service work. The problem is that the statistics on productivity don't show it, that is, the same amount of labor is still needed for the same amount of work, in almost all service industries. But there is 'technological unemployment' as machines take over some jobs, as they have been doing for almost two centuries, and often those people, unlike other decades, have not been able to find new work. What went wrong?

The Rise and Decline of the Virtuous Cycle

This is what happened in the two decades certainly after World War II, when about the same level of growth of automation (and mechanization) was occurring then as now: when a factory could output more goods with the same work force (because the machinery was better or the organization of work was improved), then the manager could offer the good for a lower price, or he could offer a better product for the same price (common in the electronics industry). By offering the good at a lower price or offering a better product at the same price, consumers would want more, that is, demand would go up. In order to meet the higher demand, the manager would actually hire more workers. In addition, some other workers would be employed in the industries making the automation machinery. So when consumers have enough disposable income to take advantage of advances in technology, automation actually leads to more employment, not less. The history of industrial growth between the end of the Civil War and the 1960s are a testament to this continually occurring (interrupted occasionally by terrible depressions).

This is the process Melman advances in his first book in the 1950s, "Dynamic Factors in Industrial Productivity". This process breaks down when consumers are not being given their fair share of the national income. That is, as more and more of the wealth of what is being generated by the economy winds up with the very rich, there is less and less for the rest of the society to spend on ever-increasing opportunities to buy stuff. Thus we have the phenomenon of all kinds of ways for your self-respecting highly-paid professional to spend money, including fancy goods, food, and housing, while the vast majority of the population is worried about making it to the end of the month and can't take advantage of cheaper or better goods -- and therefore, automation now leads to less employment, instead of more employment.

John Maynard Keynes basically laid out this problem in the 1930s. I called Keynes 'production-centered' because his logic assumed that most economic activity occurred in factories, as did most pre-WWII economists. But he also saw that warping income distribution would lead to lower levels of production. That is, the economy produces a certain amount of wealth, and it needs most people to have enough money in order to buy that produced wealth. When much of that wealth winds up with the very rich, the very rich don't spend that wealth on the produced wealth of the economy. Some goods go unbought, or what is the same thing, are never produced in the first place, and therefore, less people are needed to produce that wealth. Eventually, Keynes argued, the economy spins out of control and works its way into a depression, like the Great Depression. Only the government can kick start the economy, by supplying the demand that was sucked out by the very rich.

Although Melman did not explicitly use Keynes' formulations, he studied Keynes carefully and Keynes' ideas inform Melman's ideas. Melman also was enamored about another theory as to causes of depressions, one that has been mostly ignored, promulgated by the economist Leonard Ayres in a tract called 'The chief cause of this and other depressions', written in 1935. Briefly, Ayres argued that when the growth of consumer goods slows, then managers stop buying new factory machinery. When they stop buying factory machinery, the factory machinery managers start laying off factory machinery workers. When that happens, demand for all goods lessens because now less people are employed, consumer goods managers lay off more workers, and the economy goes into a death spiral. Since the 1960s the US economy has many fewer machinery jobs than it used to, the US doesn't even have much of the demand from those job holders that it used to have, and the economy becomes more brittle. But the effect Ayres writes about has a similar effect to the one Keynes describes: there is not enough demand for all the goods people are employed to produce, and the economy teeters toward depression.

As the rich get richer and the middle class and poor get poorer, the society-wide benefits of productivity increase -- automation -- break down, and actually make things worse. In an economy like the US that now imports much of its factory machinery, automation doesn't even create many new jobs in the US, like it used to. However there is an additional problem that Keynes could not have foreseen, that is, the decreasing competence of the American managerial class to produce, partly because of the effects of military production. Military production leads to a management that is not trained to produce for the civilian market, that is, it doesn't know how to increase the quality of goods or decrease the price by improving machinery or the organization of work, it only knows how to increase profits, often by making goods more expensive and less reliable. Since profits are assured, much of the manufacturing sector gravitate toward military production. The extreme case of this was the Soviet Union, whose manufacturing prowess was almost completely destroyed by the time of its collapse.

So the problem, contra much of progressive thinking, is not simply the lack of demand or the inequality of wealth (which leads to lack of demand). The problem in the US has gotten to the point where supply is a problem, that is, American management doesn't know how to compete globally. Whether the need is for industrial machinery, which mostly now comes from places like Germany or Japan, or the demand is for mass produced consumer goods, where China currently excels, the US is being squeezed from both the high and low quality sides, because management has given up its historic function of organizing work and creating better machinery.

The Role of the Military Industrial Complex

For much of the 1960s and 1970s, Melman laid the most blame for the deterioration of American manufacturing competence at the feet of the military industrial complex. His arguments became an important part of the arsenal of progressive forces in their attempt to reign in the military and the military industrial complex. The military did not harm the economy solely through a creeping incompetence in the economy, however. The military also wasted a huge amount of resources in their bloated budgets. Taking the cue from Eisenhower's famous 'Iron of Cross' speech, in which he lamented all of the schools, roads, and other infrastructure that could be built with the money spent on arms, Melman widely published charts and articles on the equivalence between, say, the cost of a bomber and how many schools could be built instead. Seconding John Kenneth Galbraith's concern about 'private opulence and public squalor', Melman wrote the books 'Peace Race' and 'Our Depleted Society' in the first half of the 1960s in an effort to alert the public to the fact that America had enduring social and infrastructural problems that needed much more resources, while at the same time the monies were being wasted on useless military equipment that was often making the US less secure. When Martin Luther King and other civil rights leaders talked to LBJ about the problems of the cities, they brought Melman with them to explain the spreading deterioration of urban public works.

Somehow he also got an audience with Secretary of Defense Robert McNamara as the Vietnam War heated up. Melman blamed McNamara, formerly head of Ford Motor Company, for rationalizing and systematizing the military industrial complex. After McNamara got through with it, the Department of Defense had turned into the headquarters of the military industrial complex, with the contractors as virtual divisions of the Pentagon. Melman was concerned that the military industrial complex was siphoning off much of the best and the brightest engineers and scientists, and that there was a surfeit of engineering talent available for civilian firms. "Where are the engineers?! Where are the engineers?!" Melman remembers McNamara screaming at him. It is a question we can continue to ask to this day.

The frustration and suffering caused by the Vietnam War buildup made a bad situation worse for the economic fortunes of the country. Martin Luther King and other progressives were furious that money was being taken from worthwhile domestic programs to fund the war. Melman became deeply involved with anti-war activity along with other leading intellectuals such as Noam Chomsky, with whom he began a long, productive friendship. As in the case of arguing for nuclear disarmament, Melman's main public image was as an important peace activist.

This combination of concern for war and the preparation for war was complementary to his economic thought. Indeed, the entire field of economics was formerly referred to as political economy, because it was recognized that the state (government) was a vital actor, both good and bad, in the economy. Thorstein Veblen founded the Journal of Political Economy (which now only concentrates on economics), and Melman's mentor, the important industrial engineer Walter Rautenstrauch, worked with Veblen (and also with Frederick Winslow Taylor). The economists and sociologists that Melman encountered at Columbia and at CCNY in the 1930s and 1940s, such as Robert Lynd and John Maurice Clark, were a more eclectic group of thinkers than would emerge in the 1950s. Melman also worked with C. Wright Mills, whose 'Power Elite' were composed of corporate, government, and military officials, and with Paul Goodman and non-mainstream economists.

The Answer: More Democracy

The problem, in both economics and war, are similar: a group of elites attempt to exploit the working people of a country, either by denying workers power over their paychecks and working conditions, on the one hand, or by forcing them to be instruments of elite power extension in the form of war, on the other. In both cases, the answer to Melman was clear: more democracy.

In the case of war, democracy meant forcing the government, whether through protest or voting, to stop an enterprise that the vast majority of people opposed. On the economic front, the answer is to extend democracy to the level of the firm, that is workplace democracy, or a bit more formally, employee-owned-and-operated firms. Workplace democracy is what would come 'After Capitalism', the title of his last published book.

Melman's interest in self-management was kindled in the 1930s, by the temporary success of anarcho-syndicalists in Spain (before Franco brutally suppressed them) and by the example of the kibbutz in what would become Israel. Melman was part of a radical Zionist group at CCNY, and he briefly lived on a kibbutz. His second academic book in 1958, 'Decision-making and productivity', concentrated on the Standard Motor Company in England, which gave an unusual amount of work floor power to the union (he almost got fired from Columbia for the affront of singing the praises of unions, until some eminent professors came to his defense). By the 1980s, he again focused on workplace democracy, exploring the Mondragon system of cooperatives in the Basque region of Spain and the Emilia-Romagna cooperative system in Italy. In 'After Capitalism', he devoted a great deal of space to the problem of constructing a democratic alternative to the hierarchical, managerial structure of most firms.

His last Ph.D. student, in fact, wrote up a comparison of two shops at Ford, one in which the workers were given a great deal of authority and training in the operation of machine tools, and one in which they were only allowed to press an on and off button. His student found that the shop with greater worker decision-making was much more productive, and this finding can be found in numerous other studies.

Full-blown democracy within the firm is perhaps the ultimate manifestation of giving more power to workers. Many of Melman's economic principles are encouraged when managers do not have dictatorial control over the firm. The virtuous cycle, of salaries increasing more than the prices of the produced goods, can be easily enforced, because employees will want to distribute the income of the firm among themselves, not vacuum up most of it for the top managers and absentee owners. Higher wages will lead to greater consumer spending in the economy as a whole, leading to more employment and more spending. Administrative overhead will be minimized, freeing up resources for innovation and rising wages. Employees will not allow their factories (or service companies) to be shut down and moved abroad if they own the company (and can't sell it, as in the Mondragon system). In no case did Melman find, in the 1980s and 1990s, that a factory that had been closed had not been profitable. In other words, had (miraculously) all factories been owned and operated by their workers at the start of the 1980s, no (or very few) factories would have been shut down in the last 30 plus years, and we would have many millions more factory jobs, a strong middle class, and my guess is, no Trump.

This last consideration was very important to Melman, although of course he did not see Trump himself coming (who did?). Melman was very concerned, even by the 1990s, that we were arriving at a 'Weimar moment', as he wrote about in 'The Demilitarized Society'. That is, like 1920s Germany, a large 'lumpenproletariat' appeared, to use Karl Marx's phrase, that is, a large segment of the population who had been excised from the economy -- much of the manufacturing working class -- and that such a group would naturally be open to the ramblings of a demagogue -- like Trump.

By the 1980s, it was clear to Melman that the military industrial complex was not the only major sector that was hurtling manufacturing over a cliff. In 'Profits without Production', he linked the financial sector to the worsening situation of manufacturing. The early 1980s were marked by disastrously high interest rates, which he worried would be the nail in the coffin of American manufacturing exports, and he was right. About that time the Japanese came roaring into the American market, the result of decades of American military industrial spending, financial shenanigans, and the attempted destruction of the American working class. The financial sector, like the military industrial complex, sucked resources out of the manufacturing system, which was the source of the wealth, and gave nothing in return. Money would make more money much more quickly (eventually, in nanoseconds) than building a factory ever could. Global trade treaties, in conjunction with cheaper digital communications, would by the 1990s lead to a rapidly sinking prognosis for manufacturing. Something had to be done, but what?

Having witnessed Melman's attempts to start a manufacturing renaissance first hand, I can say that 'we' (including scholars like Jonathan Feldman) tried a number of things. By the late 1980s, Melman had convinced the Speaker of the House, Jim Wright, to make what Melman called 'economic conversion' a top priority in the House. Economic conversion, as Melman conceived it, would involve requiring every military factory to create a plan to convert that factory to some useful civilian production. Then, if the military budget should be cut, factory workers would not have to fear for their jobs, as they could pull out a plan to succeed in civilian markets. This would also include training engineers and workers in civilian production techniques. Of course, this was not something the Pentagon favored, since the great source of their power is not the defense of the country, but the political machine for creating jobs known as the military industrial complex. Consequently, the Representative from the defense contractor Martin Marietta's home district, Newt Gingrich, plotted to and eventually was able to bring down Jim Wright, torpedo economic conversion, and begin his march to right-wing Republican domination of Congress in the 1990s.

Well, we thought, when the Soviet Union fell, since the main excuse for a large military budget had disappeared, perhaps the American public would be open to arguments for a well-deserved 'peace dividend', that is, the government could finally divert some of the money the Pentagon was using to upgrade the infrastructure. We organized a 'National Town Meeting', involving many cities and progressive politicians. But by this time, the Left as a whole had undergone over 10 years of Reagan politics, and they didn't seem up to the challenge.

Melman also tried various ways of encouraging the unions to take a more innovative path, that is, to work toward a reindustrialization of the US. But they, too, were doing their best to survive the relentless assaults of offshoring and deindustrialization. Looking back on the early 1990s, perhaps if the gravity of global warming had been clearer, it would have been easier to formulate a framework that Melman and I evolved, but unfortunately only shortly before he died. The formulation was the following: To rebuild the economy, rebuild manufacturing, and to rebuild manufacturing, rebuild the infrastructure. With global warming and all the other ecological catastrophes looming on the horizon -- warnings that Barry Commoner and others had been broadcasting for a couple of decades -- it should be clear that the entire infrastructure, transportation, water, energy, urban, and other systems, need to be redesigned in order for global civilization to survive into the 22nd century (I have written a book on this subject, " Manufacturing Green Prosperity ", and article in an edited volume and a sample Federal budget, GreenNewDealPlan.com ).

The idea is that by spending trillions on constructing new infrastructure systems such as high-speed rail and national wind systems, new transit systems and walkable neighborhoods, and fixing old infrastructure, the government would supply the kind of long-term demand for domestic manufacturing that would revive American manufacturing. This effort, in turn, could make unemployment a thing of the past, and that kind of policy would negate the 'Weimar moment' and bring with it enthusiastic support from the entire working class, white, African-American, Latino, of whatever ethnicity or gender. Oh, and the oceans would not rise and wipe out all coastal cities and turn the rest of the land into deserts.

In the 'Demilitarized Society', Melman warned that fear was not a sustainable motivation for progressive activism. Eventually, fear turns to right-wing paranoia and the easy solution of demagogues, a situation we more and more find ourselves in today. Instead, a concrete set of solutions must be advanced at the same time that analysis and warnings are given.

I'm afraid that progressives are still toiling the fields of fear instead of constructing a structure of solutions. Climate activists are warning us of frightening futures, but they have not put forth solutions that fit the scope of the problem, such as spending trillions on infrastructure. The Resistance to Trump and the Republicans is doing an excellent job of rallying people to vote and protest, but they have not put forward a program, such as spending trillions of infrastructure that would create tens of millions of jobs and rebuild manufacturing, that would deal a death blow to the 1920s-style right-wing political revival. Instead of simply decrying the greed and overreach of the large corporations, we should be thinking about how to create an economic system in which employees own and operate their enterprises (Brian D'Agostino has proposed ways to make workplace democracy society-wide in his book 'The Middle Class Fights Back')

Melman would have urged us to understand the importance of production in the economy, of the inner workings of manufacturing, factories and machinery, why workplace democracy leads to greater prosperity, and how a middle class forms out of the virtuous cycle of increasing wages. Using this understanding of the economy as a foundation, we can then propose solutions to our biggest problems -- inequality, climate change, right-wing nationalism, militarism, and others -- that can capture the imaginations of the world's peoples.

*This article is meant as a wide-ranging, 'high-altitude' look at Melman's work, not as an exhaustive survey. Please see SeymourMelman.com for more of Melman's work, as well as his many books and articles.

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SoCal Rhino , January 5, 2018 at 9:50 am

Ran across this a few days back – strikes me as a more fruitful line of argument for political communication than MMT (very challenging to persuade with counterintuitive arguments).

JCC , January 5, 2018 at 9:51 am

Thanks for this. As someone who worked for one of the few ongoing successful machine tool manufacturers in this country as a field service engineer, I got the chance to work in factories across the US and also got the chance to watch them shutdown throughout the eighties and nineties. I also watched the progress of exactly what this article discusses, bloated administrations and fewer workers, most relegated to button-pusher employment.

After 3 years of no raises at all while watching Management wages increase substantially, I finally took heed to the writing on the wall and bailed out (luckily just in time for me) for a better line of work within the M.I.C.

My preference would have been to stick with the factories, but unfortunately they no longer exist at numbers that would have assured a decent working life (the Factory Service Dept. of the company I worked for is now less than 25% of the size it was – most of it off-loaded to low-wage distributorships and/or off-shored.

From the perspective of long-term society goodness, it was not the best decision, but from my perspective of personal goodness – food on my table, affordable health insurance, and a working furnace in the winter – it was my only choice of employment with decent wages that this country offered someone with my skills.

As hedge fund managers like to say relative to the long haul, IBGYBG, but it's a crappy philosophy to live by, especially considering that at the rate we're going, I might not be gone.

Jon Rynn , January 5, 2018 at 10:00 am

JCC, Melman once announced to me that as far as he could tell, all machine tool companies in the US were either foreign or foreign-owned -- although I think there were a few American owned, like Haas. The machine tool industry is the 'canary in the coal mine', if that goes, the rest of manufacturing competence is not far behind.

I think you and millions of others like you are making the rational decision to either get out or not to get in in the first place, and now there is skills shortage. This will require a strong industrial policy from the Federal government, in my opinion.

JCC , January 5, 2018 at 4:43 pm

Mr. Rynn,

The company I worked for is still operating as an American owned company located in NY State. It is still considered a premier Machine Tool Company (they build what are known as Super Precision Machine Tools) and unlike many other smaller American Machine Tool Mfgs. it actually bought some foreign companies as well as what was left of Bridgeport and one or two others instead of being bought. There was a close call a few years ago, if I remember correctly, when they were being courted by what I seem to recall was a foreign-owned Hedge Fund.

I have my regrets and I still consider it to be a good company, but from a financial standpoint, I'm also glad I left. My years there were a major wake-up call to what was happening to Mfg., as well as large businesses in general, across the country during the late 80's through the 90's. I have a very negative attitude towards Accounting/Financial Departments completely taking over the Management of business because of what I saw and experienced. They've gutted the best parts of what these companies provide to their respective communities and stake-holders, and the country.

Your article pointed out that particular problem as well as a few more of the more obvious issues. Thanks for that. It needs wide distribution.

McWatt , January 5, 2018 at 10:34 am

Having experienced all this as a manufacturer in the 70's and 80's Melman's concepts ring true to me. I'd love to hear Michael Hudson comment on Melman's theories.

Ed , January 5, 2018 at 11:19 am

I've not encountered Melman before, and he seems like someone who I should read directly. This site provides a real service.

However, I'll admit I just skimmed the article. My interest is history, not economics, and the same dynamic occurs again and again and again throughout history. And there is even an economics term that could be used for this, "the Dutch disease".

Basically, national economies over time will increasingly specialize in what is most profitable at the moment. Other sectors will gradually be starved of capital since investment will go to the most profitable sector, with less influence in the government, and in some cases be plundered to provide capital for the profitable sector. This creates a cycle as eventually even talented people who don't want to work in the specialized sectors will have to.

The classic example of this is Hapsburg Spain. Castille in fact had a pretty diverse economy in the 15th century, but increasingly specialized in producing soldiers and priests, and this was widely noted in commentary at the time. Personally, having grown up in New York City, I went into finance pretty much because it was either that or retail. New York City actually had a diverse economy before I was born and for a little bit afterwards.

The same process occurred in early 20th century Britain, with finance being the main specialized sector, but it was mild compared to Spain. The British wound down their empire after mid-century. That is a key point. Empires will increasingly specialize in priests, soldiers, and bureaucrats (financiers are are a sort of bureaucrat), finance by overt or implied tribute, because that is what is most profitable at the center. The hollowing out of Italian industry and agriculture was widely noted during the Roman Empire, even as people flocked to Rome. And the only way to fix the damage caused to the center in this way is to get rid of the empire.

WobblyTelomeres , January 5, 2018 at 11:51 am

IANAE. And I took macro 45 years ago, so I most likely have only the vaguest gauzy notion of the following.

Keynes suggested that trade imbalances, which occur when A is able to produce goods more efficiently than B will self correct as the currency of B will be devalued over time wrt the currency of A.

When the currency of B is the global reserve currency (which, I believe, Keynes did not address), this may result in a real constraint on this self-balancing, right? So, in this sense, your statement:

And the only way to fix the damage caused to the center in this way is to get rid of the empire.

might be rephrased as:

And the only way to fix the damage caused to the center in this way is to get rid of the global reserve currency.

Is this accurate?

Mikkel , January 5, 2018 at 4:09 pm

Actually Keynes addressed this very clearly. He knew that various policies can prevent currencies from self regulating and so believed that supranational regulation was required.

He argued for the IMF to be founded with the primary purpose of providing this regulation, including the creation of a global trade currency called the Bancor

Here is a summary of the idea and why things fell apart -- leading to the IMF instead becoming a capo for the creditor nations.

https://www.theguardian.com/commentisfree/2008/nov/18/lord-keynes-international-monetary-fund

WobblyTelomeres , January 5, 2018 at 4:13 pm

Thank you!

Jon Rynn , January 5, 2018 at 12:20 pm

I would add that you can narrow down the causes of decline to two main sectors: the military and finance. Basically, if manufacturing is the most important source of wealth -- or manufacturing and infrastructure more generally -- then the state will often divert the surplus from manufacturing in order to become imperial, that is, they will take the surplus and build a military establishment in order to further empire. This certainly happened in Britain, and can be applied to France, Rome, etc., with perhaps the most glaring example being the Soviet Union.

Finance also diverts resources from manufacturing, because the surplus from manufacturing usually takes the form of money, and finance controls the money. But more importantly, the finance sector can increase its economic power faster than manufacturing because money makes more money much more quickly than factories can be built to create real wealth. We saw that in Britain, and the US.

HotFlash , January 5, 2018 at 2:11 pm

perhaps the most glaring example being the Soviet Union

Oooh, I can think of at least one other country

Boeing, Lockheed-Martin, Raytheon. How odd that mfg in the US these days is less about making life better than about making it short.

Jonathan Holland Becnel , January 5, 2018 at 3:45 pm

I worked on General Dynamics and Raytheon equipment as an ATC Equipment repairer in the Army a few years back. Lol

Thx for the article, JR. Manufacturing is THE ISSUE of 2018 as far as im concerned.

a different chris , January 5, 2018 at 1:32 pm

This was good except for this one glaring mishmash of a paragraph, which needs to be either fixed or removed:

Somehow he also got an audience with Secretary of Defense Robert McNamara as the Vietnam War heated up. Melman blamed McNamara, formerly head of Ford Motor Company, for rationalizing and systematizing the military industrial complex. After McNamara got through with it, the Department of Defense had turned into the headquarters of the military industrial complex, with the contractors as virtual divisions of the Pentagon. Melman was concerned that the military industrial complex was siphoning off much of the best and the brightest engineers and scientists, and that there was a surfeit of engineering talent available for civilian firms. "Where are the engineers?! Where are the engineers?!" Melman remembers McNamara screaming at him. It is a question we can continue to ask to this day.

Why was McNamara the one screaming about not having engineers, when the rest of the paragraph says he was the engineering sink? To a lesser extent, why did Melman ("somehow" is not satisfying) have an audience with McNamara, and was it during this audience that he "blasted" McNamara?

I'm thinking Melman told McNamara that he (McNamara) had all the engineers, and McNamara was denying it, but it's really hard to parse out and I don't even know why it's worth a sitting duck paragraph in a humongous post anyway.

Jon Rynn , January 5, 2018 at 4:28 pm

Point taken. I know it's unclear, and to the best of my recollection, Melman didn't know how to respond either. I guess the point is, McNamara didn't know how to handle what Melman was telling him. And also I have to admit I don't have the total context. Occassionally Melman would be invited by the military to give a talk, because they figured he knew what he was talking about and they actually wanted to know. I just thought it was an interesting anecdote, but maybe it's a bit too confusing.

Synoia , January 5, 2018 at 1:49 pm

Selling to the Military is easy, when one employs a few ex Generals. Number of salespeople low, and costs controlled.

Selling to the public, hard, costs orders of magnitude higher, and there is that pesky "marketing risk and cost"

What a surprise that the MIC is the easy way ..

sivalenka , January 5, 2018 at 3:50 pm

As a trained Industrial Engineer who worked in the midwest in the 90s , I can vouch for the science behind productivity gains that come from more worker freedoms. As a untrained economist, I can also confirm what I saw was the slow but steady destruction of rust belt and it's middle class from globalization.

Finally, it is also evident that these same laid off workers voted for leaders who both expanded the militiary industrial complex and globalization. Sad.

[Dec 31, 2017] Anti-Populism Ideology of the Ruling Class by James Petras

Highly recommended!
Notable quotes:
"... ' Anti-populism' is the simple ruling class formula for covering-up their real agenda, which is pro-militarist, pro-imperialist (globalization), pro-'rebels' (i.e. mercenary terrorists working for regime change), pro crisis makers and pro-financial swindlers. ..."
"... The economic origins of ' anti-populism' are rooted in the deep and repeated crises of capitalism and the need to deflect and discredit mass discontent and demoralize the popular classes in struggle. By demonizing ' populism', the elites seek to undermine the rising tide of anger over the elite-imposed wage cuts, the rise of low-paid temporary jobs and the massive increase in the reserve army of cheap immigrant labor to compete with displaced native workers. ..."
"... Demonization of independent popular movements ignores the fundamental programmatic differences and class politics of genuine populist struggles compared with the contemporary right-wing capitalist political scarecrows and clowns. ..."
"... The anti-populist ideologues label President Trump a 'populist' when his policies and proposals are the exact opposite. Trump champions the repeal of all pro-labor and work safety regulation, as well as the slashing of public health insurance programs while reducing corporate taxes for the ultra-elite. ..."
"... The media's ' anti-populists' ideologues denounce pro-business rightwing racists as ' populists' . In Italy, Finland, Holland, Austria, Germany and France anti-working class parties are called ' populist' for attacking immigrants instead of bankers and militarists. ..."
"... In other words, the key to understanding contemporary ' anti-populism' is to see its role in preempting and undermining the emergence of authentic populist movements while convincing middle class voters to continue to vote for crisis-prone, austerity-imposing neo-liberal regimes. ' Anti-populism' has become the opium (or OxyContin) of frightened middle class voters. ..."
Jul 07, 2017 | www.unz.com

Introduction

Throughout the US and European corporate and state media, right and left, we are told that ' populism' has become the overarching threat to democracy, freedom and . . . free markets. The media's ' anti-populism' campaign has been used and abused by ruling elites and their academic and intellectual camp followers as the principal weapon to distract, discredit and destroy the rising tide of mass discontent with ruling class-imposed austerity programs, the accelerating concentration of wealth and the deepening inequalities.

We will begin by examining the conceptual manipulation of ' populism' and its multiple usages. Then we will turn to the historic economic origins of populism and anti-populism. Finally, we will critically analyze the contemporary movements and parties dubbed ' populist' by the ideologues of ' anti-populism' .

Conceptual Manipulation

In order to understand the current ideological manipulation accompanying ' anti-populism ' it is necessary to examine the historical roots of populism as a popular movement.

Populism emerged during the 19 th and 20 th century as an ideology, movement and government in opposition to autocracy, feudalism, capitalism, imperialism and socialism. In the United States, populist leaders led agrarian struggles backed by millions of small farmers in opposition to bankers, railroad magnates and land speculators. Opposing monopolistic practices of the 'robber barons', the populist movement supported broad-based commercial agriculture, access to low interest farm credit and reduced transport costs.

In all cases, the populist governments in Latin America were based on a coalition of nationalist capitalists, urban workers and the rural poor. In some notable cases, nationalist military officers brought populist governments to power. What they had in common was their opposition to foreign capital and its local supporters and exporters ('compradores'), bankers and their elite military collaborators. Populists promoted 'third way' politics by opposing imperialism on the right, and socialism and communism on the left. The populists supported the redistribution of wealth but not the expropriation of property. They sought to reconcile national capitalists and urban workers. They opposed class struggle but supported state intervention in the economy and import-substitution as a development strategy.

Imperialist powers were the leading anti-populists of that period. They defended property privileges and condemned nationalism as 'authoritarian' and undemocratic. They demonized the mass support for populism as 'a threat to Western Christian civilization'. Not infrequently, the anti-populists ideologues would label the national-populists as 'fascists' . . . even as they won numerous elections at different times and in a variety of countries.

The historical experience of populism, in theory and practice, has nothing to do with what today's ' anti-populists' in the media are calling ' populism' . In reality, current anti-populism is still a continuation of anti-communism , a political weapon to disarm working class and popular movements. It advances the class interest of the ruling class. Both 'anti's' have been orchestrated by ruling class ideologues seeking to blur the real nature of their 'pro-capitalist' privileged agenda and practice. Presenting your program as 'pro-capitalist', pro-inequalities, pro-tax evasion and pro-state subsidies for the elite is more difficult to defend at the ballot box than to claim to be ' anti-populist' .

' Anti-populism' is the simple ruling class formula for covering-up their real agenda, which is pro-militarist, pro-imperialist (globalization), pro-'rebels' (i.e. mercenary terrorists working for regime change), pro crisis makers and pro-financial swindlers.

The economic origins of ' anti-populism' are rooted in the deep and repeated crises of capitalism and the need to deflect and discredit mass discontent and demoralize the popular classes in struggle. By demonizing ' populism', the elites seek to undermine the rising tide of anger over the elite-imposed wage cuts, the rise of low-paid temporary jobs and the massive increase in the reserve army of cheap immigrant labor to compete with displaced native workers.

Historic 'anti-populism' has its roots in the inability of capitalism to secure popular consent via elections. It reflects their anger and frustration at their failure to grow the economy, to conquer and exploit independent countries and to finance growing fiscal deficits.

The Amalgamation of Historical Populism with the Contemporary Fabricated Populism

What the current anti-populists ideologues label ' populism' has little to do with the historical movements.

Unlike all of the past populist governments, which sought to nationalize strategic industries, none of the current movements and parties, denounced as 'populist' by the media, are anti-imperialists. In fact, the current ' populists' attack the lowest classes and defend the imperialist-allied capitalist elites. The so-called current ' populists' support imperialist wars and bank swindlers, unlike the historical populists who were anti-war and anti-bankers.

Ruling class ideologues simplistically conflate a motley collection of rightwing capitalist parties and organizations with the pro-welfare state, pro-worker and pro-farmer parties of the past in order to discredit and undermine the burgeoning popular multi-class movements and regimes.

Demonization of independent popular movements ignores the fundamental programmatic differences and class politics of genuine populist struggles compared with the contemporary right-wing capitalist political scarecrows and clowns.

One has only to compare the currently demonized ' populist' Donald Trump with the truly populist US President Franklin Roosevelt, who promoted social welfare, unionization, labor rights, increased taxes on the rich, income redistribution, and genuine health and workplace safety legislation within a multi-class coalition to see how absurd the current media campaign has become.

The anti-populist ideologues label President Trump a 'populist' when his policies and proposals are the exact opposite. Trump champions the repeal of all pro-labor and work safety regulation, as well as the slashing of public health insurance programs while reducing corporate taxes for the ultra-elite.

The media's ' anti-populists' ideologues denounce pro-business rightwing racists as ' populists' . In Italy, Finland, Holland, Austria, Germany and France anti-working class parties are called ' populist' for attacking immigrants instead of bankers and militarists.

In other words, the key to understanding contemporary ' anti-populism' is to see its role in preempting and undermining the emergence of authentic populist movements while convincing middle class voters to continue to vote for crisis-prone, austerity-imposing neo-liberal regimes. ' Anti-populism' has become the opium (or OxyContin) of frightened middle class voters.

The anti-populism of the ruling class serves to confuse the 'right' with the 'left'; to sidelight the latter and promote the former; to amalgamate rightwing 'rallies' with working class strikes; and to conflate rightwing demagogues with popular mass leaders.

Unfortunately, too many leftist academics and pundits are loudly chanting in the 'anti-populist' chorus. They have failed to see themselves among the shock troops of the right. The left ideologues join the ruling class in condemning the corporate populists in the name of 'anti-fascism'. Leftwing writers, claiming to 'combat the far-right enemies of the people' , overlook the fact that they are 'fellow-travelling' with an anti-populist ruling class, which has imposed savage cuts in living standards, spread imperial wars of aggression resulting in millions of desperate refugees- not immigrants –and concentrated immense wealth.

The bankruptcy of today's ' anti-populist' left will leave them sitting in their coffee shops, scratching at fleas, as the mass popular movements take to the streets!

[Dec 16, 2017] Indirect Effects of Unfair Employer Behavior on Workplace Performance by Matthias Heinz ,

Notable quotes:
"... Originally published at VoxEU ..."
"... Any organisation that needs to restructure, cut wages, or make layoffs needs to know how the employees who are not affected will respond. This column presents a field experiment which revealed that the perception that employers are unfair – in this case, as a result of layoffs – reduces the performance of employees who have not been not directly affected. As part of the experiment, experienced HR managers were able to successfully anticipate the consequences of unfair employer behaviour on unaffected workers. ..."
Dec 16, 2017 | www.nakedcapitalism.com

Sabrina Jeworrek , Vanessa Mertins , Heiner Schumacher , and Matthias Sutter .

Originally published at VoxEU

Yves here. There has been much gnashing of teeth in the US about lackluster productivity growth, with the citied culprits ranging from lack of fundamental breakthroughs to cheap labor costs discouraging investment. Almost entirely absent from consideration is poor management demotivating worker. This article helps fill that gap.

Any organisation that needs to restructure, cut wages, or make layoffs needs to know how the employees who are not affected will respond. This column presents a field experiment which revealed that the perception that employers are unfair – in this case, as a result of layoffs – reduces the performance of employees who have not been not directly affected. As part of the experiment, experienced HR managers were able to successfully anticipate the consequences of unfair employer behaviour on unaffected workers.

Management matters for the success and profitability of companies. We know that simple management practices – including the regular maintenance of machines, optimisation of inventory, or recording types of quality problems – can improve the productivity of companies substantially (Bloom et al. 2013). Many of these management practices relate to the structure of an organisation, in particular its workflow and how it is controlled. But the relationship between managers and workers is also important. This relationship is characterised by both the wage paid to a worker as an incentive to work hard, but also by the worker's perception that he or she is being treated fairly (Akerlof 1982).

If workers believe that their employer is acting unfairly towards them, this can greatly reduce their performance at work. For example, Mas (2008) demonstrated that the conflict between Caterpillar and its workforce in the 1990s led to lower production quality. It is not clear, though, whether workers react to employer behaviour that they think is unfair only if they are directly affected (for example, through wage cuts or reorganisation), or also if they are not directly affected (their colleagues suffer, but they do not). This distinction is important for any organisation that reorganises or lays off some of its workers.

Random Layoffs

In our new study, we set up a field experiment to measure how unaffected workers react to unfair employer behaviour (Heinz et al. 2017). We rented a call centre and hired 195 employees to conduct a telephone survey in two shifts. Overall, our organisation was very employee-friendly – we paid a generous hourly wage, offered flexible work times, a pleasant work atmosphere, and full discretion to workers how to perform their job. We measured individual performance precisely by the number of calls each worker made during a shift.

We used three treatments to identify the effect of unfair employer behaviour on the performance of unaffected workers:

To keep the remaining workers' prospects constant (in the only remaining shift), we made explicit that there would be no future employment possibilities in our organisation. We also paid the wage upon arrival for each shift. This meant that workers in the 'layoff' treatment knew at the beginning of the second shift that the layoffs of their co-workers could not have any consequences for them.

The Effect of Layoffs on Survivors

We found that the layoff announcement decreased the remaining workers' performance by 12% (Figure 1). In the 'layoff' treatment, workers took a longer break at the beginning of the second shift, and they left their workplace earlier than in the other treatments. The layoff announcement also lowered the quality of workers' output.

In contrast, there was no significant difference in performance between our 'no-layoff' and 'quasi-layoff' treatments. The reduction in staff size per se had no effect on performance. Further robustness checks revealed that our treatment differences were not driven by a change in beliefs about the importance of the job, or changes in perceptions of the management's competence. Since our employees worked in single offices, and few of them had social ties to employees from other treatments, we can largely rule out peer effects.

Figure 1 Difference in performance (number of calls made) between the first and second shift in the 'no layoff', 'quasi-layoff' and 'layoff' treatment

Source : Heinz et al. (2017).

After the field experiment, we conducted surveys with our workers. Overall, workers in all treatments were quite satisfied with their salary, the management's behaviour towards them, and the atmosphere in the call centre. The remaining workers in the 'layoff' treatment, however, were significantly less satisfied with management behaviour towards their colleagues than the workers in the other treatments. We also asked workers from the 'layoff' treatment which parts of the layoff announcement they considered anti-social. Their answers indicate that they saw the layoffs per se, and the random selection of workers, as particularly unfair.

To back up our interpretation of the data, we conducted a prediction experiment with 43 professional human resource managers from medium-sized and large companies in Germany (they had, on average, eight years of professional experience). We explained our call centre setting and our treatment variation to them, and then asked them to predict the change in workplace performance between the first and second shifts.

The HR managers' predictions were remarkably accurate, in the aggregate. They predicted that performance in the 'layoff' treatment would drop significantly between the first and second shift, and that would drop only slightly in the other treatments. A large majority of the HR managers mentioned fairness concerns as the main reason for the performance reduction.

Maintaining Productivity During Layoffs

Our results imply that unfair behaviour towards workers can be costly for the employer, even if the only workers who are directly affected have quit the firm. This is important for any organisation that has to accommodate economic shocks by reducing labour costs.

To reduce or mitigate the costs of supposedly unfair acts, organisations could apply a number of HR practices. They could use HR practices that avoid layoffs (for example using natural fluctuation in the workforce). They could provide severance pay or outplacement services. They might shift the blame to interim managers or business consultants. They could also separate profitable and unprofitable business units, and downsize only the unprofitable units. These practices may help employers to maintain a productive relationship with their workforce.

[Dec 15, 2017] Rise and Decline of the Welfare State, by James Petras

Highly recommended!
Petras did not mention that it was Carter who started neoliberalization of the USA. The subsequent election of Reagan signified the victory of neoliberalism in this country or "quite coup". The death of New Deal from this point was just a matter of time. Labor relations drastically changes and war on union and atomization of workforce are a norm.
Welfare state still exists but only for corporation and MIC. Otherwise the New Deal society is almost completely dismanted.
It is true that "The ' New Deal' was, at best, a de facto ' historical compromise' between the capitalist class and the labor unions, mediated by the Democratic Party elite. It was a temporary pact in which the unions secured legal recognition while the capitalists retained their executive prerogatives." But the key factor in this compromise was the existence of the USSR as a threat to the power of capitalists in the USA. when the USSR disappeared cannibalistic instincts of the US elite prevailed over caution.
Notable quotes:
"... The earlier welfare 'reforms' and the current anti-welfare legislation and austerity practices have been accompanied by a series of endless imperial wars, especially in the Middle East. ..."
"... In the 1940's through the 1960's, world and regional wars (Korea and Indo-China) were combined with significant welfare program – a form of ' social imperialism' , which 'buy off' the working class while expanding the empire. However, recent decades are characterized by multiple regional wars and the reduction or elimination of welfare programs – and a massive growth in poverty, domestic insecurity and poor health. ..."
"... modern welfare state' ..."
"... Labor unions were organized as working class strikes and progressive legislation facilitated trade union organization, elections, collective bargaining rights and a steady increase in union membership. Improved work conditions, rising wages, pension plans and benefits, employer or union-provided health care and protective legislation improved the standard of living for the working class and provided for 2 generations of upward mobility. ..."
"... Social Security legislation was approved along with workers' compensation and the forty-hour workweek. Jobs were created through federal programs (WPA, CCC, etc.). Protectionist legislation facilitated the growth of domestic markets for US manufacturers. Workplace shop steward councils organized 'on the spot' job action to protect safe working conditions. ..."
"... World War II led to full employment and increases in union membership, as well as legislation restricting workers' collective bargaining rights and enforcing wage freezes. Hundreds of thousands of Americans found jobs in the war economy but a huge number were also killed or wounded in the war. ..."
"... So-called ' right to work' ..."
"... Trade union officials signed pacts with capital: higher pay for the workers and greater control of the workplace for the bosses. Trade union officials joined management in repressing rank and file movements seeking to control technological changes by reducing hours (" thirty hours work for forty hours pay ..."
"... Trade union activists, community organizers for rent control and other grassroots movements lost both the capacity and the will to advance toward large-scale structural changes of US capitalism. Living standards improved for a few decades but the capitalist class consolidated strategic control over labor relations. While unionized workers' incomes, increased, inequalities, especially in the non-union sectors began to grow. With the end of the GI bill, veterans' access to high-quality subsidized education declined ..."
"... With the election of President Carter, social welfare in the US began its long decline. The next series of regional wars were accompanied by even greater attacks on welfare via the " Volker Plan " – freezing workers' wages as a means to combat inflation. ..."
"... Guns without butter' became the legislative policy of the Carter and Reagan Administrations. The welfare programs were based on politically fragile foundations. ..."
"... The anti-labor offensive from the ' Oval Office' intensified under President Reagan with his direct intervention firing tens of thousands of striking air controllers and arresting union leaders. Under Presidents Carter, Reagan, George H.W. Bush and William Clinton cost of living adjustments failed to keep up with prices of vital goods and services. Health care inflation was astronomical. Financial deregulation led to the subordination of American industry to finance and the Wall Street banks. De-industrialization, capital flight and massive tax evasion reduced labor's share of national income. ..."
"... The capitalist class followed a trajectory of decline, recovery and ascendance. Moreover, during the earlier world depression, at the height of labor mobilization and organization, the capitalist class never faced any significant political threat over its control of the commanding heights of the economy ..."
"... Hand in bloody glove' with the US Empire, the American trade unions planted the seeds of their own destruction at home. The local capitalists in newly emerging independent nations established industries and supply chains in cooperation with US manufacturers. Attracted to these sources of low-wage, violently repressed workers, US capitalists subsequently relocated their factories overseas and turned their backs on labor at home. ..."
"... President 'Bill' Clinton ravaged Russia, Yugoslavia, Iraq and Somalia and liberated Wall Street. His regime gave birth to the prototype billionaire swindlers: Michael Milken and Bernard 'Bernie' Madoff. ..."
"... Clinton converted welfare into cheap labor 'workfare', exploiting the poorest and most vulnerable and condemning the next generations to grinding poverty. Under Clinton the prison population of mostly African Americans expanded and the breakup of families ravaged the urban communities. ..."
"... President Obama transferred 2 trillion dollars to the ten biggest bankers and swindlers on Wall Street, and another trillion to the Pentagon to pursue the Democrats version of foreign policy: from Bush's two overseas wars to Obama's seven. ..."
"... Obama was elected to two terms. His liberal Democratic Party supporters swooned over his peace and justice rhetoric while swallowing his militarist escalation into seven overseas wars as well as the foreclosure of two million American householders. Obama completely failed to honor his campaign promise to reduce wage inequality between black and white wage earners while he continued to moralize to black families about ' values' . ..."
"... Obama's war against Libya led to the killing and displacement of millions of black Libyans and workers from Sub-Saharan Africa. The smiling Nobel Peace Prize President created more desperate refugees than any previous US head of state – including millions of Africans flooding Europe. ..."
"... Forty-years of anti welfare legislation and pro-business regimes paved the golden road for the election of Donald Trump ..."
"... Trump and the Republicans are focusing on the tattered remnants of the social welfare system: Medicare, Medicaid, Social Security. The remains of FDR's New Deal and LBJ's Great Society -- are on the chopping block. ..."
"... The moribund (but well-paid) labor leadership has been notable by its absence in the ensuing collapse of the social welfare state. The liberal left Democrats embraced the platitudinous Obama/Clinton team as the 'Great Society's' gravediggers, while wailing at Trump's allies for shoving the corpse of welfare state into its grave. ..."
"... Over the past forty years the working class and the rump of what was once referred to as the ' labor movement' has contributed to the dismantling of the social welfare state, voting for ' strike-breaker' Reagan, ' workfare' Clinton, ' Wall Street crash' Bush, ' Wall Street savior' Obama and ' Trickle-down' Trump. ..."
"... Gone are the days when social welfare and profitable wars raised US living standards and transformed American trade unions into an appendage of the Democratic Party and a handmaiden of Empire. The Democratic Party rescued capitalism from its collapse in the Great Depression, incorporated labor into the war economy and the post- colonial global empire, and resurrected Wall Street from the 'Great Financial Meltdown' of the 21 st century. ..."
"... The war economy no longer fuels social welfare. The military-industrial complex has found new partners on Wall Street and among the globalized multi-national corporations. Profits rise while wages fall. Low paying compulsive labor (workfare) lopped off state transfers to the poor. Technology – IT, robotics, artificial intelligence and electronic gadgets – has created the most class polarized social system in history ..."
"... "The collaboration of liberals and unions in promoting endless wars opened the door to Trump's mirage of a stateless, tax-less, ruling class." ..."
"... Corporations [now] are welfare recipients and the bigger they are, the more handouts they suck up ..."
"... Corporations not only continuously seek monopolies (with the aid and sanction of the state) but they steadily fine tune the welfare state for their benefit. In fact, in reality, welfare for prols and peasants wouldn't exist if it didn't act as a money conduit and ultimate profit center for the big money grubbers. ..."
"... The article is dismal reading, and evidence of the failings of the "unregulated" society, where the anything goes as long as you are wealthy. ..."
"... Like the Pentagon. Americans still don't readily call this welfare, but they will eventually. Defense profiteers are unions in a sense, you're either in their club Or you're in the service industry that surrounds it. ..."
Dec 13, 2017 | www.unz.com

Introduction

The American welfare state was created in 1935 and continued to develop through 1973. Since then, over a prolonged period, the capitalist class has been steadily dismantling the entire welfare state.

Between the mid 1970's to the present (2017) labor laws, welfare rights and benefits and the construction of and subsidies for affordable housing have been gutted. ' Workfare' (under President 'Bill' Clinton) ended welfare for the poor and displaced workers. Meanwhile the shift to regressive taxation and the steadily declining real wages have increased corporate profits to an astronomical degree.

What started as incremental reversals during the 1990's under Clinton has snowballed over the last two decades decimating welfare legislation and institutions.

The earlier welfare 'reforms' and the current anti-welfare legislation and austerity practices have been accompanied by a series of endless imperial wars, especially in the Middle East.

In the 1940's through the 1960's, world and regional wars (Korea and Indo-China) were combined with significant welfare program – a form of ' social imperialism' , which 'buy off' the working class while expanding the empire. However, recent decades are characterized by multiple regional wars and the reduction or elimination of welfare programs – and a massive growth in poverty, domestic insecurity and poor health.

New Deals and Big Wars

The 1930's witnessed the advent of social legislation and action, which laid the foundations of what is called the ' modern welfare state' .

Labor unions were organized as working class strikes and progressive legislation facilitated trade union organization, elections, collective bargaining rights and a steady increase in union membership. Improved work conditions, rising wages, pension plans and benefits, employer or union-provided health care and protective legislation improved the standard of living for the working class and provided for 2 generations of upward mobility.

Social Security legislation was approved along with workers' compensation and the forty-hour workweek. Jobs were created through federal programs (WPA, CCC, etc.). Protectionist legislation facilitated the growth of domestic markets for US manufacturers. Workplace shop steward councils organized 'on the spot' job action to protect safe working conditions.

World War II led to full employment and increases in union membership, as well as legislation restricting workers' collective bargaining rights and enforcing wage freezes. Hundreds of thousands of Americans found jobs in the war economy but a huge number were also killed or wounded in the war.

The post-war period witnessed a contradictory process: wages and salaries increased while legislation curtailed union rights via the Taft Hartley Act and the McCarthyist purge of leftwing trade union activists. So-called ' right to work' laws effectively outlawed unionization mostly in southern states, which drove industries to relocate to the anti-union states.

Welfare reforms, in the form of the GI bill, provided educational opportunities for working class and rural veterans, while federal-subsidized low interest mortgages encourage home-ownership, especially for veterans.

The New Deal created concrete improvements but did not consolidate labor influence at any level. Capitalists and management still retained control over capital, the workplace and plant location of production.

Trade union officials signed pacts with capital: higher pay for the workers and greater control of the workplace for the bosses. Trade union officials joined management in repressing rank and file movements seeking to control technological changes by reducing hours (" thirty hours work for forty hours pay "). Dissident local unions were seized and gutted by the trade union bosses – sometimes through violence.

Trade union activists, community organizers for rent control and other grassroots movements lost both the capacity and the will to advance toward large-scale structural changes of US capitalism. Living standards improved for a few decades but the capitalist class consolidated strategic control over labor relations. While unionized workers' incomes, increased, inequalities, especially in the non-union sectors began to grow. With the end of the GI bill, veterans' access to high-quality subsidized education declined.

While a new wave of social welfare legislation and programs began in the 1960's and early 1970's it was no longer a result of a mass trade union or workers' "class struggle". Moreover, trade union collaboration with the capitalist regional war policies led to the killing and maiming of hundreds of thousands of workers in two wars – the Korean and Vietnamese wars.

Much of social legislation resulted from the civil and welfare rights movements. While specific programs were helpful, none of them addressed structural racism and poverty.

The Last Wave of Social Welfarism

The 1960'a witnessed the greatest racial war in modern US history: Mass movements in the South and North rocked state and federal governments, while advancing the cause of civil, social and political rights. Millions of black citizens, joined by white activists and, in many cases, led by African American Viet Nam War veterans, confronted the state. At the same time, millions of students and young workers, threatened by military conscription, challenged the military and social order.

Energized by mass movements, a new wave of social welfare legislation was launched by the federal government to pacify mass opposition among blacks, students, community organizers and middle class Americans. Despite this mass popular movement, the union bosses at the AFL-CIO openly supported the war, police repression and the military, or at best, were passive impotent spectators of the drama unfolding in the nation's streets. Dissident union members and activists were the exception, as many had multiple identities to represent: African American, Hispanic, draft resisters, etc.

Under Presidents Lyndon Johnson and Richard Nixon, Medicare, Medicaid, OSHA, the EPA and multiple poverty programs were implemented. A national health program, expanding Medicare for all Americans, was introduced by President Nixon and sabotaged by the Kennedy Democrats and the AFL-CIO. Overall, social and economic inequalities diminished during this period.

The Vietnam War ended in defeat for the American militarist empire. This coincided with the beginning of the end of social welfare as we knew it – as the bill for militarism placed even greater demands on the public treasury.

With the election of President Carter, social welfare in the US began its long decline. The next series of regional wars were accompanied by even greater attacks on welfare via the " Volker Plan " – freezing workers' wages as a means to combat inflation.

Guns without butter' became the legislative policy of the Carter and Reagan Administrations. The welfare programs were based on politically fragile foundations.

The Debacle of Welfarism

Private sector trade union membership declined from a post-world war peak of 30% falling to 12% in the 1990's. Today it has sunk to 7%. Capitalists embarked on a massive program of closing thousands of factories in the unionized North which were then relocated to the non-unionized low wage southern states and then overseas to Mexico and Asia. Millions of stable jobs disappeared.

Following the election of 'Jimmy Carter', neither Democratic nor Republican Presidents felt any need to support labor organizations. On the contrary, they facilitated contracts dictated by management, which reduced wages, job security, benefits and social welfare.

The anti-labor offensive from the ' Oval Office' intensified under President Reagan with his direct intervention firing tens of thousands of striking air controllers and arresting union leaders. Under Presidents Carter, Reagan, George H.W. Bush and William Clinton cost of living adjustments failed to keep up with prices of vital goods and services. Health care inflation was astronomical. Financial deregulation led to the subordination of American industry to finance and the Wall Street banks. De-industrialization, capital flight and massive tax evasion reduced labor's share of national income.

The capitalist class followed a trajectory of decline, recovery and ascendance. Moreover, during the earlier world depression, at the height of labor mobilization and organization, the capitalist class never faced any significant political threat over its control of the commanding heights of the economy.

The ' New Deal' was, at best, a de facto ' historical compromise' between the capitalist class and the labor unions, mediated by the Democratic Party elite. It was a temporary pact in which the unions secured legal recognition while the capitalists retained their executive prerogatives.

The Second World War secured the economic recovery for capital and subordinated labor through a federally mandated no strike production agreement. There were a few notable exceptions: The coal miners' union organized strikes in strategic sectors and some leftist leaders and organizers encouraged slow-downs, work to rule and other in-plant actions when employers ran roughshod with special brutality over the workers. The recovery of capital was the prelude to a post-war offensive against independent labor-based political organizations. The quality of labor organization declined even as the quantity of trade union membership increased.

Labor union officials consolidated internal control in collaboration with the capitalist elite. Capitalist class-labor official collaboration was extended overseas with strategic consequences.

The post-war corporate alliance between the state and capital led to a global offensive – the replacement of European-Japanese colonial control and exploitation by US business and bankers. Imperialism was later 're-branded' as ' globalization' . It pried open markets, secured cheap docile labor and pillaged resources for US manufacturers and importers.

US labor unions played a major role by sabotaging militant unions abroad in cooperation with the US security apparatus: They worked to coopt and bribe nationalist and leftist labor leaders and supported police-state regime repression and assassination of recalcitrant militants.

' Hand in bloody glove' with the US Empire, the American trade unions planted the seeds of their own destruction at home. The local capitalists in newly emerging independent nations established industries and supply chains in cooperation with US manufacturers. Attracted to these sources of low-wage, violently repressed workers, US capitalists subsequently relocated their factories overseas and turned their backs on labor at home.

Labor union officials had laid the groundwork for the demise of stable jobs and social benefits for American workers. Their collaboration increased the rate of capitalist profit and overall power in the political system. Their complicity in the brutal purges of militants, activists and leftist union members and leaders at home and abroad put an end to labor's capacity to sustain and expand the welfare state.

Trade unions in the US did not use their collaboration with empire in its bloody regional wars to win social benefits for the rank and file workers. The time of social-imperialism, where workers within the empire benefited from imperialism's pillage, was over. Gains in social welfare henceforth could result only from mass struggles led by the urban poor, especially Afro-Americans, community-based working poor and militant youth organizers.

The last significant social welfare reforms were implemented in the early 1970's – coinciding with the end of the Vietnam War (and victory for the Vietnamese people) and ended with the absorption of the urban and anti-war movements into the Democratic Party.

Henceforward the US corporate state advanced through the overseas expansion of the multi-national corporations and via large-scale, non-unionized production at home.

The technological changes of this period did not benefit labor. The belief, common in the 1950's, that science and technology would increase leisure, decrease work and improve living standards for the working class, was shattered. Instead technological changes displaced well-paid industrial labor while increasing the number of mind-numbing, poorly paid, and politically impotent jobs in the so-called 'service sector' – a rapidly growing section of unorganized and vulnerable workers – especially including women and minorities.

Labor union membership declined precipitously. The demise of the USSR and China's turn to capitalism had a dual effect: It eliminated collectivist (socialist) pressure for social welfare and opened their labor markets with cheap, disciplined workers for foreign manufacturers. Labor as a political force disappeared on every count. The US Federal Reserve and President 'Bill' Clinton deregulated financial capital leading to a frenzy of speculation. Congress wrote laws, which permitted overseas tax evasion – especially in Caribbean tax havens. Regional free-trade agreements, like NAFTA, spurred the relocation of jobs abroad. De-industrialization accompanied the decline of wages, living standards and social benefits for millions of American workers.

The New Abolitionists: Trillionaires

The New Deal, the Great Society, trade unions, and the anti-war and urban movements were in retreat and primed for abolition.

Wars without welfare (or guns without butter) replaced earlier 'social imperialism' with a huge growth of poverty and homelessness. Domestic labor was now exploited to finance overseas wars not vice versa. The fruits of imperial plunder were not shared.

As the working and middle classes drifted downward, they were used up, abandoned and deceived on all sides – especially by the Democratic Party. They elected militarists and demagogues as their new presidents.

President 'Bill' Clinton ravaged Russia, Yugoslavia, Iraq and Somalia and liberated Wall Street. His regime gave birth to the prototype billionaire swindlers: Michael Milken and Bernard 'Bernie' Madoff.

Clinton converted welfare into cheap labor 'workfare', exploiting the poorest and most vulnerable and condemning the next generations to grinding poverty. Under Clinton the prison population of mostly African Americans expanded and the breakup of families ravaged the urban communities.

Provoked by an act of terrorism (9/11) President G.W. Bush Jr. launched the 'endless' wars in Afghanistan and Iraq and deepened the police state (Patriot Act). Wages for American workers and profits for American capitalist moved in opposite directions.

The Great Financial Crash of 2008-2011 shook the paper economy to its roots and led to the greatest shakedown of any national treasury in history directed by the First Black American President. Trillions of public wealth were funneled into the criminal banks on Wall Street – which were ' just too big to fail .' Millions of American workers and homeowners, however, were ' just too small to matter' .

The Age of Demagogues

President Obama transferred 2 trillion dollars to the ten biggest bankers and swindlers on Wall Street, and another trillion to the Pentagon to pursue the Democrats version of foreign policy: from Bush's two overseas wars to Obama's seven.

Obama's electoral 'donor-owners' stashed away two trillion dollars in overseas tax havens and looked forward to global free trade pacts – pushed by the eloquent African American President.

Obama was elected to two terms. His liberal Democratic Party supporters swooned over his peace and justice rhetoric while swallowing his militarist escalation into seven overseas wars as well as the foreclosure of two million American householders. Obama completely failed to honor his campaign promise to reduce wage inequality between black and white wage earners while he continued to moralize to black families about ' values' .

Obama's war against Libya led to the killing and displacement of millions of black Libyans and workers from Sub-Saharan Africa. The smiling Nobel Peace Prize President created more desperate refugees than any previous US head of state – including millions of Africans flooding Europe.

'Obamacare' , his imitation of an earlier Republican governor's health plan, was formulated by the private corporate health industry (private insurance, Big Pharma and the for-profit hospitals), to mandate enrollment and ensure triple digit profits with double digit increases in premiums. By the 2016 Presidential elections, ' Obama-care' was opposed by a 45%-43% margin of the American people. Obama's propagandists could not show any improvement of life expectancy or decrease in infant and maternal mortality as a result of his 'health care reform'. Indeed the opposite occurred among the marginalized working class in the old 'rust belt' and in the rural areas. This failure to show any significant health improvement for the masses of Americans is in stark contrast to LBJ's Medicare program of the 1960's, which continues to receive massive popular support.

Forty-years of anti welfare legislation and pro-business regimes paved the golden road for the election of Donald Trump

Trump and the Republicans are focusing on the tattered remnants of the social welfare system: Medicare, Medicaid, Social Security. The remains of FDR's New Deal and LBJ's Great Society -- are on the chopping block.

The moribund (but well-paid) labor leadership has been notable by its absence in the ensuing collapse of the social welfare state. The liberal left Democrats embraced the platitudinous Obama/Clinton team as the 'Great Society's' gravediggers, while wailing at Trump's allies for shoving the corpse of welfare state into its grave.

Conclusion

Over the past forty years the working class and the rump of what was once referred to as the ' labor movement' has contributed to the dismantling of the social welfare state, voting for ' strike-breaker' Reagan, ' workfare' Clinton, ' Wall Street crash' Bush, ' Wall Street savior' Obama and ' Trickle-down' Trump.

Gone are the days when social welfare and profitable wars raised US living standards and transformed American trade unions into an appendage of the Democratic Party and a handmaiden of Empire. The Democratic Party rescued capitalism from its collapse in the Great Depression, incorporated labor into the war economy and the post- colonial global empire, and resurrected Wall Street from the 'Great Financial Meltdown' of the 21 st century.

The war economy no longer fuels social welfare. The military-industrial complex has found new partners on Wall Street and among the globalized multi-national corporations. Profits rise while wages fall. Low paying compulsive labor (workfare) lopped off state transfers to the poor. Technology – IT, robotics, artificial intelligence and electronic gadgets – has created the most class polarized social system in history. The first trillionaire and multi-billionaire tax evaders rose on the backs of a miserable standing army of tens of millions of low-wage workers, stripped of rights and representation. State subsidies eliminate virtually all risk to capital. The end of social welfare coerced labor (including young mother with children) to seek insecure low-income employment while slashing education and health – cementing the feet of generations into poverty. Regional wars abroad have depleted the Treasury and robbed the country of productive investment. Economic imperialism exports profits, reversing the historic relation of the past.

Labor is left without compass or direction; it flails in all directions and falls deeper in the web of deception and demagogy. To escape from Reagan and the strike breakers, labor embraced the cheap-labor predator Clinton; black and white workers united to elect Obama who expelled millions of immigrant workers, pursued 7 wars, abandoned black workers and enriched the already filthy rich. Deception and demagogy of the labor-

Issac , December 11, 2017 at 11:01 pm GMT

"The military-industrial complex has found new partners on Wall Street and among the globalized multi-national corporations."

"The collaboration of liberals and unions in promoting endless wars opened the door to Trump's mirage of a stateless, tax-less, ruling class."

A mirage so real, it even has you convinced.

whyamihere , December 12, 2017 at 4:24 am GMT
If the welfare state in America was abolished, major American cities would burn to the ground. Anarchy would ensue, it would be magnitudes bigger than anything that happened in Ferguson or Baltimore. It would likely be simultaneous.

I think that's one of the only situations where preppers would actually live out what they've been prepping for (except for a natural disaster).

I've been thinking about this a little over the past few years after seeing the race riots. What exactly is the line between our society being civilized and breaking out into chaos. It's probably a lot thinner than most people think.

I don't know who said it but someone long ago said something along the lines of, "Democracy can only work until the people figure out they can vote for themselves generous benefits from the public treasury." We are definitely in this situation today. I wonder how long it can last.

Disordered , December 13, 2017 at 8:41 am GMT
While I agree with Petras's intent (notwithstanding several exaggerations and unnecessary conflations with, for example, racism), I don't agree so much with the method he proposes. I don't mind welfare and unions to a certain extent, but they are not going to save us unless there is full employment and large corporations that can afford to pay an all-union workforce. That happened during WW2, as only wartime demand and those pesky wage freezes solved the Depression, regardless of all the public works programs; while the postwar era benefited from the US becoming the world's creditor, meaning that capital could expand while labor participation did as well.

From then on, it is quite hard to achieve the same success after outsourcing and mechanization have happened all over the world. Both of these phenomena not only create displaced workers, but also displaced industries, meaning that it makes more sense to develop individual workfare (and even then, do it well, not the shoddy way it is done now) rather than giving away checks that probably will not be cashed for entrepreneurial purposes, and rather than giving away money to corrupt unions who depend on trusts to be able to pay for their benefits, while raising the cost of hiring that only encourages more outsourcing.

The amount of welfare given is not necessarily the main problem, the problem is doing it right for the people who truly need it, and efficiently – that is, with the least amount of waste lost between the chain of distribution, which should reach intended targets and not moochers.

Which inevitably means a sound tax system that targets unearned wealth and (to a lesser degree) foreign competition instead of national production, coupled with strict, yet devolved and simple government processes that benefit both business and individuals tired of bureaucracy, while keeping budgets balanced. Best of both worlds, and no military-industrial complex needed to drive up demand.

Wally , Website December 13, 2017 at 8:57 am GMT
"President Obama transferred 2 trillion dollars to the ten biggest bankers and swindlers on Wall Street " That's twice the amount that Bush gave them.
jacques sheete , December 13, 2017 at 10:52 am GMT

The American welfare state was created in 1935 and continued to develop through 1973. Since then, over a prolonged period, the capitalist class has been steadily dismantling the entire welfare state.

Wrong wrong wrong.

Corporations [now] are welfare recipients and the bigger they are, the more handouts they suck up, and welfare for them started before 1935. In fact, it started in America before there was a USA. I do not have time to elaborate, but what were the various companies such as the British East India Company and the Dutch West India Companies but state pampered, welfare based entities? ~200 years ago, Herbert Spencer, if memory serves, pointed out that the British East India Company couldn't make a profit even with all the special, government granted favors showered upon it.

Corporations not only continuously seek monopolies (with the aid and sanction of the state) but they steadily fine tune the welfare state for their benefit. In fact, in reality, welfare for prols and peasants wouldn't exist if it didn't act as a money conduit and ultimate profit center for the big money grubbers.

Den Lille Abe , December 13, 2017 at 11:09 am GMT
Well, the author kind of nails it. I remember from my childhood in the 50-60 ties in Scandinavia that the US was the ultimate goal in welfare. The country where you could make a good living with your two hands, get you kids to UNI, have a house, a telly ECT. It was not consumerism, it was the American dream, a chicken in every pot; we chewed imported American gum and dreamed.

In the 70-80 ties Scandinavia had a tremendous social and economic growth, EQUALLY distributed, an immense leap forward. In the middle of the 80 ties we were equal to the US in standards of living.

Since we have not looked at the US, unless in pity, as we have seen the decline of the general income, social wealth fall way behind our own.
The average US workers income has not increased since 90 figures adjusted for inflation. The Scandinavian workers income in the same period has almost quadrupled. And so has our societies.

The article is dismal reading, and evidence of the failings of the "unregulated" society, where the anything goes as long as you are wealthy.

wayfarer , December 13, 2017 at 1:01 pm GMT

Between the mid 1970's to the present (2017) labor laws, welfare rights and benefits and the construction of and subsidies for affordable housing have been gutted. 'Workfare' (under President 'Bill' Clinton) ended welfare for the poor and displaced workers. Meanwhile the shift to regressive taxation and the steadily declining real wages have increased corporate profits to an astronomical degree.

source: http://www.unz.com/jpetras/rise-and-decline-of-the-welfare-state/

What does Hollywood "elite" JAP and wannabe hack-stand-up-comic Sarah Silverman think about the class struggle and problems facing destitute Americans? "Qu'ils mangent de la bagels!", source: https://en.wikipedia.org/wiki/Let_them_eat_cake

... ... ...

Anonymous , Disclaimer December 13, 2017 at 1:40 pm GMT
@Greg Fraser

Like the Pentagon. Americans still don't readily call this welfare, but they will eventually. Defense profiteers are unions in a sense, you're either in their club Or you're in the service industry that surrounds it.

Anonymous , Disclaimer December 13, 2017 at 2:43 pm GMT
As other commenters have pointed out, it's Petras curious choice of words that sometimes don't make too much sense. We can probably blame the maleable English language for that, but here it's too obvious. If you don't define a union, people might assume you're only talking about a bunch of meat cutters at Safeway.

The welfare state is alive and well for corporate America. Unions are still here – but they are defined by access and secrecy, you're either in the club or not.

The war on unions was successful first by co-option but mostly by the media. But what kind of analysis leaves out the role of the media in the American transformation? The success is mind blowing.

America has barely literate (white) middle aged males trained to spout incoherent Calvinistic weirdness: unabased hatred for the poor (or whoever they're told to hate) and a glorification of hedge fund managers as they get laid off, fired and foreclosed on, with a side of opiates.

There is hardly anything more tragic then seeing a web filled with progressives (management consultants) dedicated to disempowering, disabling and deligitimizing victims by claiming they are victims of biology, disease or a lack of an education rather than a system that issues violence while portending (with the best media money can buy) that they claim the higher ground.

animalogic , December 13, 2017 at 2:57 pm GMT
@Wally

""Democracy can only work until the people figure out they can vote for themselves generous benefits from the public treasury." We are definitely in this situation today."

Quite right: the 0.01% have worked it out & US democracy is a Theatre for the masses.

Reg Cζsar , December 13, 2017 at 3:08 pm GMT

They elected militarists and demagogues as their new presidents.

Wilson and FDR were much more militarist and demagogic than those that followed.

Reg Cζsar , December 13, 2017 at 3:20 pm GMT
@whyamihere

I don't know who said it but someone long ago said something along the lines of, "Democracy can only work until the people figure out they can vote for themselves generous benefits from the public treasury."

Some French aristocrat put it as, once the gates to the treasury have been breached, they can only be closed again with gunpowder. Anyone recognize the author?

phil , December 13, 2017 at 4:48 pm GMT
The author doesn't get it. What we have now IS the welfare state in an intensely diverse society. We have more transfer spending than ever before and Obamacare represents another huge entitlement.

Intellectuals continue to fantasize about the US becoming a Big Sweden, but Sweden has only been successful insofar as it has been a modest nation-state populated by ethnic Swedes. Intense diversity in a huge country with only the remnants of federalism results in massive non-consensual decision-making, fragmentation, increased inequality, and corruption.

HallParvey , December 13, 2017 at 4:57 pm GMT
@Anonymous

The welfare state is alive and well for corporate America. Unions are still here – but they are defined by access and secrecy, you're either in the club or not.

They are largely defined as Doctors, Lawyers, and University Professors who teach the first two. Of course they are not called unions. Access is via credentialing and licensing. Good Day

Anonymous , Disclaimer December 13, 2017 at 4:57 pm GMT
@Linda Green

Bernie Sanders, speaking on behalf of the MIC's welfare bird: "It is the airplane of the United States Air Force, Navy, and of NATO."

Elizabeth Warren, referring to Mossad's Estes Rockets: "The Israeli military has the right to attack Palestinian hospitals and schools in self defense"

Barack Obama, yukking it up with pop stars: "Two words for you: predator drones. You will never see it coming."

It's not the agitprop that confuses the sheep, it's whose blowhole it's coming out of (labled D or R for convenience) that gets them to bare their teeth and speak of poo.

Anonymous , Disclaimer December 13, 2017 at 5:54 pm GMT
@HallParvey

What came first, the credentialing or the idea that it is a necessary part of education? It certainly isn't an accurate indication of what people know or their general intelligence – although that myth has flourished. Good afternoon.

Logan , December 13, 2017 at 9:10 pm GMT
@Realist

For an interesting projection of what might happen in total civilizational collapse, I recommend the Dies the Fire series of novels by SM Stirling.

It has a science-fictiony setup in that all high-energy system (gunpowder, electricity, explosives, internal combustion, even high-energy steam engines) suddenly stop working. But I think it does a good job of extrapolating what would happen if suddenly the cities did not have food, water, power, etc.

Spoiler alert: It ain't pretty. Those who dream of a world without guns have not really thought it through.

Logan , December 13, 2017 at 9:19 pm GMT
@phil

It has been pointed out repeatedly that Sweden does very well relative to the USA. It has also been noted that people of Swedish ancestry in the USA do pretty well also. In fact considerably better than Swedes in Sweden

[Dec 15, 2017] Paul Krugman: Republicans Despise the Working Class

This is a typical feature of neoliberalism in general, not just Republicans. Democratic Party is the same. And this is not just despite. There is real class war against working class unleashed in the USA since 1980. and neoliberals are winning.
Neoliberals disdain for ordinary working Americans as opposed to investors, heirs, and business owners runs so deep that they can't contain it.
Notable quotes:
"... "Their disdain for ordinary working Americans as opposed to investors, heirs, and business owners runs so deep that they can't contain it": Republicans Despise the Working Class, by Paul Krugman, NY Times : You can always count on Republicans to do two things: try to cut taxes for the rich and try to weaken the safety net for the poor and the middle class. ... ..."
"... PK would probably even tell you that some of his best friends are working class. As a show of his undying love, he even penned opinion pieces on their behalf, promoting the gift of China's ascension the WTO in 2000, saying how great it would be for labor...that was before the great sucking sound of jobs going to China... ..."
"... Britain's opposition Labour leader Jeremy Corbyn warned Morgan Stanley that bankers are right to regard him as a threat because he wants to transform what he cast as a rigged economy that profits speculators at the expense of ordinary people. ..."
"... I have news for you Paul.... the wealthy have always treated labor as second class citizens... what else is new and why are you just now figuring this out? ..."
"... It's interesting that regardless of which party has been in power since the 1960's (e.g. since Johnson) neither have provided any gains in real income to labor's share of income. ..."
"... And regardless of which party has been in power since the 1970's median incomes have grown at a barely perceptible rate while GDP has continued to grow unabated at a very much greater rate... the gap (wedge) has continued to increase without a hitch. ..."
"... Lower prices of goods and services offered to just a small amount above costs of labor in operations and capital. If every business paid 100% of revenue to workers, the taxes owed in profit taxes will be zero. ..."
"... The bizzare result in a corporation pays no taxes for 10 to 15 years when the factory is new and it's productivity means the highest return on investment, until the factory is old and less competitive, and now the loss carry forward is zero so any profit is now taxed, at the time when the factory is old. ..."
"... The point of cutting the profit tax rate is to kill jobs. A profit tax of zero would promote a business trying to create a slave labor force so 100% of revenue is tax free to the owners. A zero profit tax rate means every single dollar paid to workers cuts shareholder income by 100% of those dollars. ..."
"... Maybe only half will end up homeless and hungry, but those will be the ones moving into their kids, or grandkids living rooms, eating their food. In exchange for a $500 tax cut for working class families, these families get to feed and house their grandparent or parent, assuming they were earning enough to move out of their parent's basement. ..."
"... he globalist Democrats despise the working class, but play nice each election cycle while they suck money out of union treasuries. ..."
Dec 15, 2017 | economistsview.typepad.com
"Their disdain for ordinary working Americans as opposed to investors, heirs, and business owners runs so deep that they can't contain it": Republicans Despise the Working Class, by Paul Krugman, NY Times : You can always count on Republicans to do two things: try to cut taxes for the rich and try to weaken the safety net for the poor and the middle class. ...

But ... something has been added to the mix. ...Republicans ... don't treat all Americans with a given income the same. Instead, their bill ... hugely privileges owners, whether of businesses or of financial assets, over those who simply work for a living. ...

The nonpartisan Tax Policy Center has evaluated the Senate bill, which the final bill is expected to resemble. It finds that the bill would reduce taxes on business owners , on average, about three times as much as it would reduce taxes on those whose primary source of income is wages or salaries. For highly paid workers, the gap would be even wider, as much as 10 to one. ...

If this sounds like bad policy, that's because it is. More than that, it opens the doors to an orgy of tax avoidance. ... We're pitting hastily devised legislation, drafted without hearings over the course of just a few days, against the cleverest lawyers and accountants money can buy. Which side do you think will win?

As a result, it's a good guess that the bill will increase the budget deficit far more than currently projected. ...

So why are they doing this? After all, the tax bill appears to be terrible politics as well as terrible policy. ... The ... public overwhelmingly disapproves of the current Republican plan.

But Republicans don't seem able to help themselves: Their disdain for ordinary working Americans as opposed to investors, heirs, and business owners runs so deep that they can't contain it.

When I realized the extent to which G.O.P. tax plans were going to favor business owners over ordinary workers, I found myself remembering what happened in 2012, when Eric Cantor -- then the House majority leader -- tried to celebrate Labor Day. He put out a tweet for the occasion that somehow failed to mention workers at all, instead praising those who have "built a business and earned their own success." ...

Cantor, a creature of the G.O.P. establishment if ever there was one, had so little respect for working Americans that he forgot to include them in a Labor Day message.

And now that disdain has been translated into legislation, in the form of a bill that treats anyone who works for someone else -- that is, the vast majority of Americans -- as a second-class citizen.

Paine , December 15, 2017 at 12:07 PM

Fair play for the ever so many petty wage heads. Out there ! High achieving high dollar earning high altruism embodying.

Our PK. What a guy ! "haut Liberal oblige " at its most glowing

Exploited citizens are indeed like oppressed citizens. Inferior class types
Hillary prefers earning her daily bread. By making humanist speeches to bankers and writing best selling alibi seasoned memoirs for the bibliophilic public. Why oh why does Paul love her so ?
JohnH -> Paine ... , December 15, 2017 at 01:33 PM

PK would probably even tell you that some of his best friends are working class. As a show of his undying love, he even penned opinion pieces on their behalf, promoting the gift of China's ascension the WTO in 2000, saying how great it would be for labor...that was before the great sucking sound of jobs going to China...

Republicans have no monopoly on selling out the working class...but workers have yet to figure out that there are more than two candidates running for President.

Paine -> JF... , December 15, 2017 at 12:40 PM
Labor parties exist in the OECD. But they had a third way fantasy. Where we all dance together. Most have still not shaken off this collaborationist pipe dream despite the fall of 2008. And the ten year doldrums since
Christopher H. said in reply to Paine ... , December 15, 2017 at 03:08 PM
https://www.reuters.com/article/us-britain-politics-banking/british-labour-leader-corbyn-tells-morgan-stanley-were-a-threat-idUSKBN1DV44L

DECEMBER 1, 2017 / 3:23 AM / 14 DAYS AGO

British Labour leader Corbyn tells Morgan Stanley: 'We're a threat'

Guy Faulconbridge

LONDON (Reuters) - Britain's opposition Labour leader Jeremy Corbyn warned Morgan Stanley that bankers are right to regard him as a threat because he wants to transform what he cast as a rigged economy that profits speculators at the expense of ordinary people.

...

Longtooth , December 15, 2017 at 12:16 PM
I have news for you Paul.... the wealthy have always treated labor as second class citizens... what else is new and why are you just now figuring this out?

It's interesting that regardless of which party has been in power since the 1960's (e.g. since Johnson) neither have provided any gains in real income to labor's share of income.

And regardless of which party has been in power since the 1970's median incomes have grown at a barely perceptible rate while GDP has continued to grow unabated at a very much greater rate... the gap (wedge) has continued to increase without a hitch.

So Paul, are you just no noticing this or are you under the impression that it's just the GOP wealthy that have disdain for labor... since it would appear to me that it's the wealthy regardless of party identification -- though there are admittedly a few notable exemptions.... but those are only after they have become among the globes richest persons.

DrDick -> Longtooth... , December 15, 2017 at 01:01 PM
That seems a grotesque misreading of the piece, which never claims this is new, just that it is even worse than before. Krugman has also written extensively about these issues in the past (he lambasted the Bush administration for exactly the same issues).
Longtooth -> DrDick... , December 15, 2017 at 02:30 PM
Dr. Dick,

I've been reading PK probably since before you could even read or perhaps since you graduated from Dick, Jane, Sally, & Spot. I'm even a huge fan except:

  1. I lambast him for not calling a spade a spade (which until just very recently he never did before), and
  2. For intentionally misleading, even though the direction he misleads favors my own positions.

In this case he made a clear statement that in the context of his post is intended to mean the current GOP (as you also were led to believe by your statement "worse then before", or perhaps "recent GOP" as you also believed by your statement "Bush administration...").

You are in fact the direct intent of my comment.. people who believe this GOP is any different than any other GOP. The only difference in this one and any other is that the party has a bullet proof majority in both houses AND a complicit Executive to do their bidding. That just makes it possible for the GOP to carry out its objectives... the objectives have never changed... since Coolidge and Hoover at least.

Krugman's explicit statement inferring and implying this GOP is different is:

"But Republicans don't seem able to help themselves: Their disdain for ordinary working Americans as opposed to investors, heirs, and business owners runs so deep that they can't contain it."

In fact this has been the case all along so why if its not new news does he even mention it? Moreover he neglects entirely to say that it's not just the GOP that has disdain for labor but the entire wealth class, regardless of party. The Dems were persuaded by organized labor to pay attention to labor's issues and preferences .. or else!

Even at that all actual evidence shows quite clearly that labor takes it in the shorts since the 1960's at least, and if you go back to Coolidge and Hoover it was also in clear and obvious evidence at that time as well.

And yet, in all the time since, through all administrations and congress's labor keeps getting the shaft so it's not just the GOP that caters to the wealth, but the Dems as well... and this shouldn't be a surprise (but I'm sure is) because the U.S. gov't is actually run by and to the primarily benefit of the wealthy -- and it always has been in case you haven't much history under your belt yet.

You took Krugman's statement as he intended people like you to take it in his post hook line and sinker.

(my uncle was high up in organized labor in western US in the 1950's through 1970's. I lived with he and my aunt for a summer between college years. He said often and astutely based in his intimate political dealings with Democratic national and State leaders, "The Democrats have nor more back-bone than what Organized Labor provides." The parties aren't really that much different when it comes to the working class."

I was taken aback, and didn't believe him --- after all he was a labor leader --- but I watched over the ensuing decades and sure 'nuff, he was dead on right then and nothing's changed.

To make a difference gov't control has to be taken from the wealthy and has to be shared equally with labor... it doesn't do that nor has it ever done that. Ignore the rhetoric and look at the evidence over time... it's quite obvious and not even remotely vague.

DeDude , December 15, 2017 at 12:20 PM
But even among the predatory capitalists GOP types some are quite angry at the current tax "reform"

https://riabiz.com/a/2017/12/14/why-brent-brodeski-a-6-billion-gop-ria-is-in-a-furious-full-time-fight-against-the-republican-ria-unfriendly-tax-bill

There is likely to be a lot more of that. When some guys get $10 million then others are going to be angry that they only got $1 million. The donor class as a whole will be happy, but some of them will be very unhappy. They may even be willing to support the "Repal the Trump tax cuts" movement and actively support democratic candidates.

Paine -> DeDude... , December 15, 2017 at 12:41 PM
A giant Shark frenzy ? To good to be likely
Patricia Shannon , December 15, 2017 at 12:57 PM
True, but the Democrats do too. When I was active in the local Democratic party, the only concerns were for minorities and the middle-class. The only time the Caucasian working class was mentioned was to put them down.
Patricia Shannon -> Patricia Shannon ... , December 15, 2017 at 12:58 PM
I was referring to attitudes to the low income working class.
mulp -> Fred C. Dobbs... , December 15, 2017 at 02:29 PM
If only Democrats were explaining how corporations can cut their taxes: Hire more workers to increase labor cost tax dodging! Pay workers higher wages to increase labor cost tax dodging. Provide more tax exempt benefits to increase labor cost tax dodges. Pay workers to do more R&D which is expensed. Borrow at low interest rates to pay workers to build a huge costly factory that will generate huge depreciation tax dodges plus interest cost tax dodges.

Lower prices of goods and services offered to just a small amount above costs of labor in operations and capital. If every business paid 100% of revenue to workers, the taxes owed in profit taxes will be zero.

mulp , December 15, 2017 at 02:20 PM
Krugman constantly fails to understand that the GOP, intentionally or not, works to kill jobs.

All businesses can dodge that "highest in the world" 35% corporate PROFITS tax by PAYING MORE TO WORKERS!

The biggest corporate business tax dodge in the US is labor costs.

Granted, the tax dodge of paying labor costs building a factory is spread out over decades, but if you build a billion dollar factory, the revenue after paying workers to operate the plant will almost never come close to a billion dollars. Immediate expensing of the billion dollar factory is likely to result in taxable losses of a billion dollars, that can be carried over to shelter $50-100 million in "profit" as the capital cost of production is zero - the capital costs is fully depreciated if capital is expensed, meaning the factory has a book value of zero.

The bizzare result in a corporation pays no taxes for 10 to 15 years when the factory is new and it's productivity means the highest return on investment, until the factory is old and less competitive, and now the loss carry forward is zero so any profit is now taxed, at the time when the factory is old.

Standard double declining balance depreciation spreads taxes out over the life of the factory, so taxes are flatter. Note that selling the factory after taxes are owed merely triggers capital gains equal to the price because the capital book price is zero.

The point of cutting the profit tax rate is to kill jobs. A profit tax of zero would promote a business trying to create a slave labor force so 100% of revenue is tax free to the owners. A zero profit tax rate means every single dollar paid to workers cuts shareholder income by 100% of those dollars.

To create jobs by lowering profit tax rates, investors must suddenly say "No no don't give me so much in dividends and do not increase the price of my shares by stock buyback! I HAVE TOO MUCH MONEY AND I WANT WORKERS TO GET MY MONEY"

To go a step further, the GOP will next call for killing jobs by ending or cutting SS and Medicare and Medicaid payments which pay workers to feed, cloth, house, care for those getting those benefits.

Maybe only half will end up homeless and hungry, but those will be the ones moving into their kids, or grandkids living rooms, eating their food. In exchange for a $500 tax cut for working class families, these families get to feed and house their grandparent or parent, assuming they were earning enough to move out of their parent's basement.

Economies are zero sum.

One person's costs are another person's 100% income.

Cut costs, you cut income.

As I liberal, I say that, like Newt ordered "death" replace "estate", every mention of "costs" get replaced with "jobs".

On tax and spend, the GOP is focused on killing jobs. Cut taxes to kill jobs. Cut spending to kill jobs.

After all, I never knew any employee going into a corporate meeting on cost cutting expecting to hear of a big hiring program or of company wide wage and benefit hikes, other than mandatory long vacations, at zero pay.

Tom aka Rusty , December 15, 2017 at 02:20 PM
The globalist Democrats despise the working class, but play nice each election cycle while they suck money out of union treasuries.

[Dec 15, 2017] Neoliberalism undermines workers health not only via the financial consequences of un/under employment and low wages, but also through chronic exposure to stress due to insecurity

Neoliberalism as "Die-now economics." "Embodiment into lower class" or "the representation as a member the lower class" if often fatal and upper mobility mobility is artificially limited (despite all MSM hype it is lower then in Europe). So just being a member of lower class noticeably and negatively affects your life expectancy and other social metrics. Job insecurity is the hazard reserved for lower and lower middle classes destructivly effect both physical and mental health. Too much stress is not good for humans. Neoliberalism with its manta of competition uber alles and atomization of the workforce is a real killer. also the fact that such article was published and the comments below is a clear sign that the days of neoliberalism are numbered. It should go.
Notable quotes:
"... In our new book , we draw on an extensive body of scientific literature to assess the health effects of three decades of neoliberal policies. Focusing on the social determinants of health -- the conditions of life and work that make it relatively easy for some people to lead long and healthy lives, while it is all but impossible for others -- we show that there are four interconnected neoliberal epidemics: austerity, obesity, stress, and inequality. They are neoliberal because they are associated with or worsened by neoliberal policies. ..."
"... Neoliberalism operates through labor markets to undermine health not only by way of the financial consequences of unemployment, inadequate employment, or low wages, as important as these are, but also through chronic exposure to stress that 'gets under your skin' by way of multiple mechanisms. Quite simply, the effects of chronic insecurity wear people out over the life course in biologically measurable ways . ..."
"... Oh, and "beyond class" because for social beings embodiment involves "social production; social consumption; and social reproduction." In the most reductive definition of class -- the one I used in my crude 1% + 10% + 90% formulation -- class is determined by wage work (or not), hence is a part of production (of capital), not social consumption (eating, etc.) or social reproduction (children, families, household work ). So, even if class in our political economy is the driver, it's not everything. ..."
"... "Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that "the market" delivers benefits that could never be achieved by planning. ..."
"... Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve." ..."
"... As opposed to being champions of "self-actualization/identity" and "absolute relativism", I always got the impression that they were both offering stark warnings about diving too deeply into the self, vis-a-vis, identity. As if, they both understood the terrifying world that it could/would create, devoid of common cause, community, and ultimately empathy. A world where "we" are not possible because we have all become "I". ..."
"... Wonks like Yglesias love to mock working class concerns as "economic anxiety," which is at once belittling (it's all about f-e-e-e-lings ..."
"... "we have measurable health outcomes from political choices" So True!!! ..."
Dec 12, 2017 | www.nakedcapitalism.com

...Neoliberal epidemics are particular pathways of embodiment. From Ted Schrecker and Clare Bambra in The Conversation :

In our new book , we draw on an extensive body of scientific literature to assess the health effects of three decades of neoliberal policies. Focusing on the social determinants of health -- the conditions of life and work that make it relatively easy for some people to lead long and healthy lives, while it is all but impossible for others -- we show that there are four interconnected neoliberal epidemics: austerity, obesity, stress, and inequality. They are neoliberal because they are associated with or worsened by neoliberal policies. They are epidemics because they are observable on such an international scale and have been transmitted so quickly across time and space that if they were biological contagions they would be seen as of epidemic proportions.

(The Case-Deaton study provides an obvious fifth: Deaths of despair. There are doubtless others.) Case in point for one of the unluckier members of the 90%:

On the morning of 25 August 2014 a young New Jersey woman, Maria Fernandes, died from inhaling gasoline fumes as she slept in her 13-year-old car. She often slept in the car while shuttling between her three, low-wage jobs in food service; she kept a can of gasoline in the car because she often slept with the engine running, and was worried about running out of gasoline. Apparently, the can accidentally tipped over and the vapours from spilled gasoline cost her life. Ms Fernandes was one of the more obvious casualties of the zero-hours culture of stress and insecurity that pervades the contemporary labour market under neoliberalism.

And Schrecker and Bambra conclude:

Neoliberalism operates through labor markets to undermine health not only by way of the financial consequences of unemployment, inadequate employment, or low wages, as important as these are, but also through chronic exposure to stress that 'gets under your skin' by way of multiple mechanisms. Quite simply, the effects of chronic insecurity wear people out over the life course in biologically measurable ways .

... ... ...

Oh, and "beyond class" because for social beings embodiment involves "social production; social consumption; and social reproduction." In the most reductive definition of class -- the one I used in my crude 1% + 10% + 90% formulation -- class is determined by wage work (or not), hence is a part of production (of capital), not social consumption (eating, etc.) or social reproduction (children, families, household work ). So, even if class in our political economy is the driver, it's not everything.

nonclassical , December 11, 2017 at 8:30 pm

L.S. reminiscent of Ernst Becker's, "The Structure of Evil" – "Escape from Evil"? (..not to indicate good vs. evil dichotomy) A great amount of perspective must be agreed upon to achieve "change" intoned. Divide and conquer are complicit, as noted .otherwise (and as indicated by U.S. economic history) change arrives only when all have lost all and can therefore agree begin again.

There is however, Naomi Klein perspective, "Shock Doctrine", whereby influence contributes to destabilization, plan in hand leading to agenda driven ("neoliberal"=market fundamentalism) outcome, not at all spontaneous in nature:

"Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that "the market" delivers benefits that could never be achieved by planning.

Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve."

Amfortas the Hippie , December 11, 2017 at 4:20 pm

Well done, as usual.

On Case-Deason: Sounds like home. I keep the scanner on(local news) ems and fire only since 2006(sheriff got a homeland security grant). The incidence of suicide, overdose and "intoxication psychosis" are markedly increased in the last 10+ years out here in the wilderness(5K folks in whole county, last I looked). Our local economy went into near depression after the late 90's farm bill killed the peanut program then 911 meant no hunting season that year(and it's been noticeably less busy ever since) then drought and the real estate crash(we had 30 some realtors at peak..old family land being sold off, mostly). So the local Bourgeoisie have had less money to spend, which "trickles down" onto the rest of us.:less construction, less eating out even at the cheap places, less buying of gas, and on and on means fewer employees are needed, thus fewer jobs. To boot, there is a habit among many employers out here of not paying attention to labor laws(it is Texas ) the last minwage rise took 2 years to filter out here, and one must scrutinize one's pay stub to ensure that the boss isn't getting squirrelly with overtime and witholding.
Geography plays into all this, too 100 miles to any largish city.

... ... ...

Rosario , December 11, 2017 at 10:55 pm

I'm not well versed in Foucault or Lacan but I've read some of both and in reading between the lines of their writing (the phantom philosophy?) I saw a very different message than that often delivered by post-modern theorists.

As opposed to being champions of "self-actualization/identity" and "absolute relativism", I always got the impression that they were both offering stark warnings about diving too deeply into the self, vis-a-vis, identity. As if, they both understood the terrifying world that it could/would create, devoid of common cause, community, and ultimately empathy. A world where "we" are not possible because we have all become "I".

Considering what both their philosophies claimed, if identity is a lie, and the subject is always generated relative to the other, then how the hell can there be any security or well being in self-actualization? It is like trying to hit a target that does not exist.

All potentially oppressive cultural categorizations are examples of this (black, latino, gay, trans, etc.). If the identity is a moving target, both to the oppressor and the oppressed, then how can it ever be a singular source of political action? You can't hit what isn't there. This is not to say that these groups (in whatever determined category) are not oppressed, just that formulating political action based strictly on the identity (often as an essential category) is impossible because it does not actually exist materially. It is an amalgamation of subjects who's subjectivity is always relative to some other whether ally or oppressor. Only the manifestations of oppression on bodies (as brought up in Lambert's post) can be utilized as metrics for political action.

... ... ...

Lambert Strether Post author , December 11, 2017 at 11:20 pm

I thought of a couple of other advantages of the "embodiment" paradigm:

Better Framing . Wonks like Yglesias love to mock working class concerns as "economic anxiety," which is at once belittling (it's all about f-e-e-e-lings *) and disempowering (solutions are individual, like therapy or drugs). Embodiment by contrast insists that neoliberalism (the neoliberal labor market (class warfare)) has real, material, physiological effects that can be measured and tracked, as with any epidemic.

... ... ...

oaf , December 12, 2017 at 7:11 am

"we have measurable health outcomes from political choices" So True!!!

Thank you for posting this.

[Dec 14, 2017] In defence of the labour theory of value

Actually Marx's "labor theory of value" should be properly called the "theory of surplus value".
Notable quotes:
"... For Marx, value was socially-necessary labour time: David Harvey is good on this. From this perspective, exploitation and alienation are linked. Workers are exploited because they must work longer than necessary to get their consumption bundle. And they are alienated because this work is unsatisfying and a source of unfreedom. Now, I'll concede that many people hate the labour theory of value. One reason for this is that many discussions of it quickly become obscurantist – as if "value" is some mystical entity embodied in commodities. ..."
"... This, though, certainly was not Marx's intention. Quite the opposite. He intended his theory to be a demystification. He wanted to show how what looked like relations between things – the exchange of money for goods or labour-time – were in fact relations between people. And unequal ones at that. ..."
"... I suspect that some of the animosity to Marx's use of LTV arises because of a resistance to the inference that Marx drew from it – that workers are exploited. This issue, however, is independent of the validity of not of the LTV. For example, Roemer thinks workers are exploited without believing in the LTV, and Smith believed the LTV without arguing that workers were exploited. ..."
"... * He seems to be recovering now. The vet is also expected to make a full recovery eventually. ..."
"... Further understanding, which evolved after Marx, is that the LTV is just special case of the principle that what produces a surplus of usefulness is not labour per se, but the energy used in the transformation of a larger quantity of something into a smaller quantity of something else, and muscle power is just one way, even if it was the main one for a very long time, to obtain energy to transform a large quantity of less useful commodities into a smaller quantity of more useful commodities. ..."
"... And this follows into the impression that I have derived from various authors that our high standards of living depend not on the high "productivity" of labour, but on the high "productivity" of fossil fuels, which are the product of the fertility of land ..."
"... the complex process of differentiation in the economy (aka the division of labor) obscures the relationship between the creation of the surplus (work time above that necessary to reproduce consumption bundle) and its utilization by capitalists via investment. Investment is not possible without exploitation of workers, but that relationship is occluded by the mechanics of employment, markets, and property. ..."
"... My impression is that your bearded friend Karl does not use "alienation" in that sense at all, in an economic sense, but in a humanist sense: that by being separated from the means of production proletarians are alienated from the meaning of their work, from work as a human activity, as distinct from an economic activity ..."
"... Practically every "Dilbert" strip is about "alienation". This is my favourite ..."
"... Placing a high value on the frivolous and "useless" has always been the hallmark of those most able to decide the value of anything, because they have no use for economic use (so to speak), but rather social signaling. Broad social respect is an extremely expensive thing to buy with money alone. ..."
Dec 11, 2017 | stumblingandmumbling.typepad.com

Lucius has been poorly recently, which has required some trips to the vet and therefore a bill of a size that only David Davis could negotiate*. This has made me wonder: is there more to be said for the labour theory of value than we like to think?

For a long time, I've not really cared about this theory one way or the other. This is partly because I've not bothered much with questions of value; partly because, as John Roemer has shown, we don't need (pdf) a labour theory of value to suggest workers are exploited; and partly because the main Marxian charges against capitalism – for example that it entails relationships of domination – hold true (or not!) independently of the theory.

As I approach retirement, however, I've begun to change my mind. I think of major expenses in terms of labour-time because they mean I have to work longer. A trip to the vet is an extra fortnight of work; a good guitar an extra month, a car an extra year, and so on.

When I consider my spending, I ask: what must I give up in order to get that? And the answer is my time and freedom. My labour-time is the measure of value.

This is a reasonable basis for the claim that workers are exploited. To buy a bundle of goods and services, we must work a number of hours a week. But taking all workers together, the hours we work are greater than the hours needed to produce those bundles because we must also work to provide a profit for the capitalist. As Marx put it:

We have seen that the labourer, during one portion of the labour-process, produces only the value of his labour-power, that is, the value of his means of subsistence During the second period of the labour-process, that in which his labour is no longer necessary labour, the workman, it is true, labours, expends labour-power; but his labour, being no longer necessary labour, he creates no value for himself. He creates surplus-value which, for the capitalist, has all the charms of a creation out of nothing. This portion of the working-day, I name surplus labour-time.

For Marx, value was socially-necessary labour time: David Harvey is good on this. From this perspective, exploitation and alienation are linked. Workers are exploited because they must work longer than necessary to get their consumption bundle. And they are alienated because this work is unsatisfying and a source of unfreedom. Now, I'll concede that many people hate the labour theory of value. One reason for this is that many discussions of it quickly become obscurantist – as if "value" is some mystical entity embodied in commodities.

This, though, certainly was not Marx's intention. Quite the opposite. He intended his theory to be a demystification. He wanted to show how what looked like relations between things – the exchange of money for goods or labour-time – were in fact relations between people. And unequal ones at that.

What's more, the charge of obscurantism against Marx is an especially weak one when it comes from orthodox economics. Much of this invokes unobservable concepts such as the natural rate of unemployment, marginal productivity, utility, the marginal product of capital and natural rate of interest – ideas which, in the last two cases, might not even be theoretically coherent.

In fact, the LTV is reasonably successful by the standards of conventional economics: we have empirical evidence to suggest that it does (pdf) a decent (pdf) job of explaining (pdf) relative prices – not that this was how Marx intended it to be used.

You can of course, think of counter-examples to the theory. But so what? in the social sciences, no substantial theory is 100% true.

I suspect that some of the animosity to Marx's use of LTV arises because of a resistance to the inference that Marx drew from it – that workers are exploited. This issue, however, is independent of the validity of not of the LTV. For example, Roemer thinks workers are exploited without believing in the LTV, and Smith believed the LTV without arguing that workers were exploited.

By the (low) standards of economic theories, perhaps the LTV isn't so bad.

* He seems to be recovering now. The vet is also expected to make a full recovery eventually.

December 11, 2017 Permalink

Comments

Luis Enrique , December 11, 2017 at 02:09 PM

But the LTV says more than the output of the economy is divided between the workers and the (suppliers and) owners of capital goods, doesn't it? I mean, mainstream econ says that too. And unless ownership of capital inputs to production is distributed equally across society, then some people consume things that other's labour has produced, which means workers must produce more than they consume. But again, that's basic mainstream stuff, not LVT. You end by saying you can believe in exploitation but not LVT, and vice versa, but the main body of this blog seems to be connecting the two. I am confused.

Of course if you have the ability to vary your labour supply, and labour is how you earn your money, then you ask yourself how much you need to work to purchase whatever. But again that's mainstream not LVT.

David Friedman , December 11, 2017 at 06:14 PM

Your version of the labor theory of value is one of Adam Smith's versions. I don't think it is Marx's, but I know Smith better than Marx.

And definitely not Ricardo's.

ConfusedNeoLiberal , December 11, 2017 at 08:51 PM

What about value, in terms of risk among others, that the employers put in starting a new business?

Blissex , December 12, 2017 at 12:23 AM

"Smith believed the LTV without arguing that workers were exploited."

The Marxian approach was interested in, as other commenters have said, in the specific capitalist case, where "capitalism" for him means strictly "labour for hire" by workers alienated from the means of production by their ownership by capitalists.

But the labour theory of value, as understood by what Marx called "classicals", applies also to all labour, and he used it in that sense.

My understanding of the classicals and the LTV is reduced to a minimum this:

Further understanding, which evolved after Marx, is that the LTV is just special case of the principle that what produces a surplus of usefulness is not labour per se, but the energy used in the transformation of a larger quantity of something into a smaller quantity of something else, and muscle power is just one way, even if it was the main one for a very long time, to obtain energy to transform a large quantity of less useful commodities into a smaller quantity of more useful commodities.

And this follows into the impression that I have derived from various authors that our high standards of living depend not on the high "productivity" of labour, but on the high "productivity" of fossil fuels, which are the product of the fertility of land.

Blissex , December 12, 2017 at 12:29 AM

"value, in terms of risk among others, that the employers put in starting a new business?"

If the business produces a surplus, that is value added, than the surplus is the product of the energy/labour expended by all participants

How it is accounted for is one issue, especially over multiple time periods, and how it is shared out is a social relationship.

As to risk, everybody in the business runs the risk of not getting paid at the end of the month, and the opportunity cost of not doing something else, whichever labour they put in.

How risk and opportunity cost are accounted for, especially over multiple time periods, is another issue, and how they are shared is another social relationship.

Blissex , December 12, 2017 at 01:14 AM

"the surplus is the product of the energy/labour expended by all participants"

I'll perhaps further diminish the reputation of my "contributions" this way: perhaps all social relationships of production (at least among males) map closely onto (cursorial) group hunts.

https://78.media.tumblr.com/d4db6631d383cbfc9bd135c799a06e7f/tumblr_n3u8r0eJu01sohvpko1_500.jpg

:-)

Luis Enrique , December 12, 2017 at 08:40 AM

That's a very long winded way of saying that making stuff requires labour.

Blissex , December 12, 2017 at 01:50 PM

"a very long winded way of saying that making stuff requires labour"

Well, that's obvious, but what the classicals thought of as the LTV was not entirely obvious: that "surplus" (rather than "stuff") comes from the fertility of land and the transformation achieved with labour, and that nothing else is needed to achieve "surplus". Because for example capital goods are themselves surplus from fertility or labour, again back to the first blades made from chipping lumps of obsidian.

That's quite a bit more insightful, never mind also controversial, than "making stuff requires labour".

Rich Clayton , December 12, 2017 at 03:35 PM

Love this post. But, being a fellow marxist, I can't help but to disagree with this bit: "And they are alienated because this work is unsatisfying and a source of unfreedom." This is a colloquial use of alienation, and its not wrong.

But Marx is getting at something else: the complex process of differentiation in the economy (aka the division of labor) obscures the relationship between the creation of the surplus (work time above that necessary to reproduce consumption bundle) and its utilization by capitalists via investment. Investment is not possible without exploitation of workers, but that relationship is occluded by the mechanics of employment, markets, and property.

That's the sense in which workers are alienated under capitalism. Socialism could still have boring work, but, in so far as the investment function is brought under collective democratic control, workers would not be alienated in the special sense Marx is using.

Lukas , December 12, 2017 at 03:41 PM

@Luis Enrique

"Where else could stuff come from?" Well, assuming by "stuff" we mean objects of value, nowhere. But the reasons for which we value them are not dependent upon their natural origins or the labor required for their production. I don't value a computer because it's made of plastic and silicon and so forth, nor because of the labor required to produce it. It's useful because of what it does, not what it is; it's sort of Kant's definition of art versus the general conception of tools.

As for the relationship between production functions and the LTV, that seems (at least prima facie) pretty straightforward. If there is a high olefimity ascribed to the surplus provided by the product created by X, Y, then those production functions will, themselves, be assigned greater value, i.e., be worthy of more labor-time to attain. E.g., even if I'm not very good at fishing, if I really like the flavor of fish over other protein sources, I'll spend more time increasing my labor efficiency (be a better fisherman).

Blissex , December 12, 2017 at 05:36 PM

"Everything ultimately derives from nature and the labour of humans. Where else could stuff come from? That's all there is."

Then in theory the cost (not the price) of everything can be measured in terms of physical quantities of primary inputs and of hours of work.

"What's controversial about it?"

What is controversial is that written like that you sound like a Marxist: the alternative approach is to say that *property* creates surplus.
In the standard neoclassical approach "property" is the often forgotten "initial endowments" of the single representative agent.

Anyhow the "narrative" is: as Mr. Moneybags owns the iron mine and the coal mine and the smelter and the ingot roller and spoon press, then he is entitled to the surplus because without his property it is impossible to make spoons. Labour on its own is worthless, wastes away, while property is "valuable" capital.

"And how one gets from a production function (stuff is made from X, Y and Z) to LTV"

Production functions are just not very elaborate scams to pretend that property is the factor of production, rather then the fertility of land and the energy of labour, and land does not exist (after JB Clark "disappeared" it) and labour is just an accessory. Part of the scam is that "X, Y and Z" are denominated in money, not physical quantities.

As I wrote in another answer accounting for the output of land fertility and labour energy and how it is shared are the difficult bits. Welcome to the institutional approach to the political economy. :-)

Blissex , December 12, 2017 at 05:41 PM

"the reasons for which we value them are not dependent upon their natural origins or the labor required for their production"

And here be dragons. Your old bearded acquaintance Karl has something to say about this :-).

"It's useful because of what it does, not what it is"

So cleaning floors which is very useful should have a high value, while Leonardo paintings, that are merely scarce, should have a low value :-).

I though that most people reckoned that "value" depends on scarcity: so there is a scarcity of even not very good promoters of torysm, so G Osborne is entitled to £600,000 a year to edit the "Evening Standard", but there is no scarcity of excellent cleaners, so cleaners gets minimum wage if they are lucky.

:-)

Luis Enrique , December 12, 2017 at 05:43 PM

counting hours of worked is not a measure of cost, it is a tally of hours worked. In mainstream econ, production functions describe a physical production process (to make 1 unit of Y, you combine inputs like so) and are not not denominated in money. e.g. You multiply L by w to get cost.

mulp , December 12, 2017 at 05:46 PM

Economies are zero sum. GDP must be paid for, otherwise it won't be produced. The only source of money comes from labor costs, the money paid to workers to work producing GDP. As conservatives note, all taxes fall on workers by directly taking their pay, or by hiking the prices of what workers buy.

Taxes pay workers, e.g. teachers, and doctors with Medicare and Medicaid, weapons makers and warriors, or pay people to pay workers, Social Security benefits and SNAP.

Capital has value because it is built by paying workers. It gets a cut to repay the payers of workers.

Monopoly rent seeking is unsustainable. If a monoplists takes more from workers than they pay workers, he eventually takes so much money workers can no longer pay for GDP and it falls to zero as workers produce what they consume without buying from the monopolist capital.

Tanstaafl

As Keynes put it:

"I feel sure that the demand for capital is strictly limited in the sense that it would not be difficult to increase the stock of capital up to a point where its marginal efficiency had fallen to a very low figure. This would not mean that the use of capital instruments would cost almost nothing, but only that the return from them would have to cover little more than their exhaustion by wastage and obsolescence together with some margin to cover risk and the exercise of skill and judgment. In short, the aggregate return from durable goods in the course of their life would, as in the case of short-lived goods, just cover their labour costs of production plus an allowance for risk and the costs of skill and supervision.

"Now, though this state of affairs would be quite compatible with some measure of individualism, yet it would mean the euthanasia of the rentier, and, consequently, the euthanasia of the cumulative oppressive power of the capitalist to exploit the scarcity-value of capital. Interest today rewards no genuine sacrifice, any more than does the rent of land. The owner of capital can obtain interest because capital is scarce, just as the owner of land can obtain rent because land is scarce. But whilst there may be intrinsic reasons for the scarcity of land, there are no intrinsic reasons for the scarcity of capital. An intrinsic reason for such scarcity, in the sense of a genuine sacrifice which could only be called forth by the offer of a reward in the shape of interest, would not exist, in the long run, except in the event of the individual propensity to consume proving to be of such a character that net saving in conditions of full employment comes to an end before capital has become sufficiently abundant. But even so, it will still be possible for communal saving through the agency of the State to be maintained at a level which will allow the growth of capital up to the point where it ceases to be scarce."


Economies are zero sum. The value of goods and services must equal the labor costs in the long run. Tanstaaafl

Blissex , December 12, 2017 at 06:01 PM

"Socialism could still have boring work, but, in so far as the investment function is brought under collective democratic control, workers would not be alienated in the special sense Marx is using."

My impression is that your bearded friend Karl does not use "alienation" in that sense at all, in an economic sense, but in a humanist sense: that by being separated from the means of production proletarians are alienated from the meaning of their work, from work as a human activity, as distinct from an economic activity.

Collective ownership does not change at all that kind of alienation: being a cog in the capitalist machinery is no less alienating than being a cog in the collectivist machinery.

I think that our blogger when he talks about distributing control of the production process to workers is far closer to the marxian ideal than a collectivist approach.

Practically every "Dilbert" strip is about "alienation". This is my favourite:

http://dilbert.com/strip/2002-03-09

But these are also good:

http://dilbert.com/strip/1991-12-26
http://dilbert.com/strip/1993-01-05
http://dilbert.com/strip/1993-04-26
http://dilbert.com/strip/1994-11-07
http://dilbert.com/strip/1996-03-03
http://dilbert.com/strip/1996-07-24
http://dilbert.com/strip/1996-10-10
http://dilbert.com/strip/2002-08-10

Luis Enrique , December 12, 2017 at 06:26 PM

That is not what zero sum means

Blissex , December 12, 2017 at 06:53 PM

"counting hours of worked is not a measure of cost"

For a definition of "cost" that is made-up disregarding P Sraffa's work and in general the classics.

"multiply L by w to get cost."

As J Robinson and others pointed out that "w" depends on the distribution of income, on the interest rate, etc., so is an institutional matter.
As I was saying, accounting for the surplus and how to share it is not so easily handwavable.

Luis Enrique , December 12, 2017 at 08:55 PM

sorry, I meant for a money definition of cost that is not just counting inputs, but which is inputs multiplied by their prices.

nobody is hand waving. I think the mainstream view is that 'value' and 'surplus' are not meaningful terms, only prices and profits and subjective value. A production function says nothing about prices, you have to explain them with other stuff, and as you say, institutions and all manner of things could come in the play there.

You can say that that workers produce more in money terms than than they are paid, which is trivial (the wages paid by an employer are less than its gross profits so long as there are non-zero returns to capital, interest on a loan or dividends or whatever) and to my mind it's silly to define that as exploitation because it would apply in situations where the 'capitalist' is getting a small return and workers rewarded handsomely by any standard. Better imo to define exploitation as when capitalists are earning excess returns (and I'd fudge that by differentiating between workers' wages and salaries of top execs). Otherwise you lay yourself open to "the only thing worse than being exploited by capitlists is not beingn exploited by capitalists" which is J Robinson too I believe.

Luis Enrique , December 12, 2017 at 08:57 PM

and i think you only have to look at the income distribution to infer workers are being expoloited

B.L. Zebub , December 13, 2017 at 04:02 AM

@Blissex,

This is a genuine question: what you exposed above is related to or influenced by Steve Keen's ideas, yes? If so, I'd be interested in reading about that in more detail.

Lukas , December 13, 2017 at 04:28 AM

@Blissex

I've always thought that defining value by scarcity was an absurd misdirection, in part because there is no reason that the two should correlate at all. At any point in socioeconomic development beyond subsistence, value is to some extent socially defined, not economically defined. Status ends up being the most "useful" resource, as we see among all those who've never had to worry about their material conditions.

Placing a high value on the frivolous and "useless" has always been the hallmark of those most able to decide the value of anything, because they have no use for economic use (so to speak), but rather social signaling. Broad social respect is an extremely expensive thing to buy with money alone.

@Luis Enrique

Ah, but name for me a production process that doesn't take place over time. There's an infinite amount of time for all of us, but for each of us only so much, and those who fail to value it die full of regret. Surely someone somewhere must have something to say about this.

Luis Enrique , December 13, 2017 at 08:34 AM

I don't know why I wrote the above. Surplus is also a mainstream term. See wages set by bargaing over a surplus. Presume it's based on prices of outputs compared to inputs or if in model with real quantities not prices, then in subjective values.

Lukas production functions are defined over a period of time.

Blissex , December 13, 2017 at 11:43 AM

Ahem, I am trying to explain my understanding of Marx, who wrote both as economist and a philosopher, and a politial theorist.

Alienation, exploitation and inequality are technically distinct concepts, even if in the marxist (view (and that of every business school, that are faithful to marxist political economy) capitalist control of the means of production leads to alienation which leads to exploitation which leads to inequality. In the marxian political economy inequality can exist even with exploitation, for example, and that makes it less objectionable.

"Surplus is also a mainstream term. See wages set by bargaing over a surplus."

Some Economists have not forgotten at least some terminology of political economy and some Departments of Business still have surviving "history of economic thought" courses that some postgrads may still accidentally occasionally wander into and pick up some terms from...

"are not meaningful terms, only prices and profits and subjective value."

But the mainstream focus on prices and profits etc. is the purest handwaving, because it begs the question...

"A production function says nothing about prices"

Ha! This is one of the best examples where mainstream theory handwaves furiously: mainstream production functions switch effortlessly from "capital" as phusical quantities to aggregating "capital" by reckoning it in "numeraire". That is all about prices, and even about future expected prices and future expected rates of discount. Therefore rational expectations, a grand feat of handwaving.

Blissex , December 13, 2017 at 11:51 AM

"defining value by scarcity was an absurd misdirection, in part because there is no reason that the two should correlate at all."

Ahhhhhhh but this is a very political point and not quite agreeable because:

One of the conceits of "microfoundations" is to show that there are "laws" of Economics that are precise, so everybody get exactly their just compensation, so for example demand-supply schedules are always presented, cleverly, as lines and static.

The view of political economists is that instead "everything" lies within boundaries of feasibility, which are dynamic, so for example demand-supply schedules are ribbons that change over time and circumstances, and transactions happens not at uniquely determined points of intersections, but in regions of feasibility, the precise point dependent on institutional arrangements.

So the LTV determines one boundary for "price" and desirability another boundary.

Blissex , December 13, 2017 at 12:03 PM

"exposed above is related to or influenced by Steve Keen's ideas"

Related and independently derived, but also a bit influenced. I had always suspected that the "classicals" used "labour" as a synonym for "muscle power", but various later readings persuaded me that was indeed the case. Later post will have some hopefully interesting detail. Then I looked into the literature and found that obviously this had been figured out before (centuries ago in some cases, like B de Mandeville).

Anyhow for similar approaches some references:

Luis Enrique , December 13, 2017 at 04:33 PM

Blissex if you can come up with a better way of trying to describe total quantities of highly heterogeneous things (i.e. capital) you have a Nobel awaiting. Everybody know that attempts to put a number on the real quantity of capital is always going to be a rough and ready endeavour.

I don't see how working with prices and profits is 'handwaving'. What question does it beg? Much of economics is about trying to explain these things. I would not say economics focuses on prices and profits because many economics models work with real quantities that are high abstract and in theory are made commensurate using subjective value (utility) as the unit of account.

And I don't think this lot
https://www.theguardian.com/business/2010/oct/11/nobel-prize-for-economics-three-winners
picked up the term surplus by accidentally wandering in to the wrong seminar

[Dec 12, 2017] Can Uber Ever Deliver Part Eleven Annual Uber Losses Now Approaching $5 Billion

Notable quotes:
"... Total 2015 gross passenger payments were 200% higher than 2014, but Uber corporate revenue improved 300% because Uber cut the driver share of passenger revenue from 83% to 77%. This was an effective $500 million wealth transfer from drivers to Uber's investors. ..."
"... Uber's P&L gains were wiped out by higher non-EBIDTAR expense. Thus the 300% Uber revenue growth did not result in any improvement in Uber profit margins. ..."
"... In 2016, Uber unilaterally imposed much larger cuts in driver compensation, costing drivers an additional $3 billion. [6] Prior to Uber's market entry, the take home pay of big-city cab drivers in the US was in the $12-17/hour range, and these earnings were possible only if drivers worked 65-75 hours a week. ..."
"... An independent study of the net earnings of Uber drivers (after accounting for the costs of the vehicles they had to provide) in Denver, Houston and Detroit in late 2015 (prior to Uber's big 2016 cuts) found that driver earnings had fallen to the $10-13/hour range. [7] Multiple recent news reports have documented how Uber drivers are increasing unable to support themselves from their reduced share of passenger payments. [8] ..."
"... Since mass driver defections would cause passenger volume growth to collapse completely, Uber was forced to reverse these cuts in 2017 and increased the driver share from 68% to 80%. This meant that Uber's corporate revenue, which had grown over 300% in 2015 and over 200% in 2016 will probably only grow by about 15% in 2017. ..."
"... Socialize the losses, privatize the gains, VC-ize the subsidies. ..."
"... The cold hard truth is that Uber is backed into a corner with severely limited abilities to tweak the numbers on either the supply or the demand side: cut driver compensation and they trigger driver churn (as has already been demonstrated), increase fare prices for riders and riders defect to cheaper alternatives. ..."
"... "Growth and Efficiency" are the sine qua non of Neoliberalism. Kalanick's "hype brilliance" was to con the market with "revenue growth" and signs ..."
Dec 12, 2017 | www.nakedcapitalism.com

Uber lost $2.5 billion in 2015, probably lost $4 billion in 2016, and is on track to lose $5 billion in 2017.

The top line on the table below shows is total passenger payments, which must be split between Uber corporate and its drivers. Driver gross earnings are substantially higher than actual take home pay, as gross earning must cover all the expenses drivers bear, including fuel, vehicle ownership, insurance and maintenance.

Most of the "profit" data released by Uber over time and discussed in the press is not true GAAP (generally accepted accounting principles) profit comparable to the net income numbers public companies publish but is EBIDTAR contribution. Companies have significant leeway as to how they calculate EBIDTAR (although it would exclude interest, taxes, depreciation, amortization) and the percentage of total costs excluded from EBIDTAR can vary significantly from quarter to quarter, given the impact of one-time expenses such as legal settlements and stock compensation. We only have true GAAP net profit results for 2014, 2015 and the 2nd/3rd quarters of 2017, but have EBIDTAR contribution numbers for all other periods. [5]

Uber had GAAP net income of negative $2.6 billion in 2015, and a negative profit margin of 132%. This is consistent with the negative $2.0 billion loss and (143%) margin for the year ending September 2015 presented in part one of the NC Uber series over a year ago.

No GAAP profit results for 2016 have been disclosed, but actual losses likely exceed $4 billion given the EBIDTAR contribution of negative $3.2 billion. Uber's GAAP losses for the 2nd and 3rd quarters of 2017 were over $2.5 billion, suggesting annual losses of roughly $5 billion.

While many Silicon Valley funded startups suffered large initial losses, none of them lost anything remotely close to $2.6 billion in their sixth year of operation and then doubled their losses to $5 billion in year eight. Reversing losses of this magnitude would require the greatest corporate financial turnaround in history.

No evidence of significant efficiency/scale gains; 2015 and 2016 margin improvements entirely explained by unilateral cuts in driver compensation, but losses soared when Uber had to reverse these cuts in 2017.

Total 2015 gross passenger payments were 200% higher than 2014, but Uber corporate revenue improved 300% because Uber cut the driver share of passenger revenue from 83% to 77%. This was an effective $500 million wealth transfer from drivers to Uber's investors. These driver compensation cuts improved Uber's EBIDTAR margin, but Uber's P&L gains were wiped out by higher non-EBIDTAR expense. Thus the 300% Uber revenue growth did not result in any improvement in Uber profit margins.

In 2016, Uber unilaterally imposed much larger cuts in driver compensation, costing drivers an additional $3 billion. [6] Prior to Uber's market entry, the take home pay of big-city cab drivers in the US was in the $12-17/hour range, and these earnings were possible only if drivers worked 65-75 hours a week.

An independent study of the net earnings of Uber drivers (after accounting for the costs of the vehicles they had to provide) in Denver, Houston and Detroit in late 2015 (prior to Uber's big 2016 cuts) found that driver earnings had fallen to the $10-13/hour range. [7] Multiple recent news reports have documented how Uber drivers are increasing unable to support themselves from their reduced share of passenger payments. [8]

A business model where profit improvement is hugely dependent on wage cuts is unsustainable, especially when take home wages fall to (or below) minimum wage levels. Uber's primary focus has always been the rate of growth in gross passenger revenue, as this has been a major justification for its $68 billion valuation. This growth rate came under enormous pressure in 2017 given Uber efforts to raise fares, major increases in driver turnover as wages fell, [9] and the avalanche of adverse publicity it was facing.

Since mass driver defections would cause passenger volume growth to collapse completely, Uber was forced to reverse these cuts in 2017 and increased the driver share from 68% to 80%. This meant that Uber's corporate revenue, which had grown over 300% in 2015 and over 200% in 2016 will probably only grow by about 15% in 2017.

MKS , December 12, 2017 at 6:19 am

"Uber's business model can never produce sustainable profits"

Two words not in my vocabulary are "Never" and "Always", that is a pretty absolute statement in an non-absolute environment. The same environment that has produced the "Silicon Valley Growth Model", with 15x earnings companies like NVIDA, FB and Tesla (Average earnings/stock price ratio in dot com bubble was 10x) will people pay ridiculous amounts of money for a company with no underlying fundamentals you damn right they will! Please stop with the I know all no body knows anything, especially the psychology and irrationality of markets which are made up of irrational people/investors/traders.

JohnnySacks , December 12, 2017 at 7:34 am

My thoughts exactly. Seems the only possible recovery for the investors is a perfectly engineered legendary pump and dump IPO scheme. Risky, but there's a lot of fools out there and many who would also like to get on board early in the ride in fear of missing out on all the money to be hoovered up from the greater fools. Count me out.

SoCal Rhino , December 12, 2017 at 8:30 am

The author clearly distinguishes between GAAP profitability and valuations, which is after all rather the point of the series. And he makes a more nuanced point than the half sentence you have quoted without context or with an indication that you omitted a portion. Did you miss the part about how Uber would have a strong incentive to share the evidence of a network effect or other financial story that pointed the way to eventual profit? Otherwise (my words) it is the classic sell at a loss, make it up with volume path to liquidation.

tegnost , December 12, 2017 at 9:52 am

apples and oranges comparison, nvidia has lots and lots of patented tech that produces revenue, facebook has a kajillion admittedly irrational users, but those users drive massive ad sales (as just one example of how that company capitalizes itself) and tesla makes an actual car, using technology that inspires it's buyers (the put your money where your mouth is crowd and it can't be denied that tesla, whatever it's faults are, battery tech is not one of them and that intellectual property is worth a lot, and tesla's investors are in on that real business, profitable or otherwise)

Uber is an iphone app. They lose money and have no path to profitability (unless it's the theory you espouse that people are unintelligent so even unintelligent ideas work to fleece them). This article touches on one of the great things about the time we now inhabit, uber drivers could bail en masse, there are two sides to the low attachment employees who you can get rid of easily. The drivers can delete the uber app as soon as another iphone app comes along that gets them a better return

allan , December 12, 2017 at 6:52 am

Yet another source (unintended) of subsidies for Uber, Lyft, etc., which might or might not have been mentioned earlier in the series:

Airports Are Losing Money as Ride-Hailing Services Grow [NYT]

For many air travelers, getting to and from the airport has long been part of the whole miserable experience. Do they drive and park in some distant lot? Take mass transit or a taxi? Deal with a rental car?

Ride-hailing services like Uber and Lyft are quickly changing those calculations. That has meant a bit less angst for travelers.

But that's not the case for airports. Travelers' changing habits, in fact, have begun to shake the airports' financial underpinnings. The money they currently collect from ride-hailing services do not compensate for the lower revenues from the other sources.

At the same time, some airports have had to add staff to oversee the operations of the ride-hailing companies, the report said. And with more ride-hailing vehicles on the roads outside terminals,
there's more congestion.

Socialize the losses, privatize the gains, VC-ize the subsidies.

Thuto , December 12, 2017 at 6:55 am

The cold hard truth is that Uber is backed into a corner with severely limited abilities to tweak the numbers on either the supply or the demand side: cut driver compensation and they trigger driver churn (as has already been demonstrated), increase fare prices for riders and riders defect to cheaper alternatives. The only question is how long can they keep the show going before the lights go out, slick marketing and propaganda can only take you so far, and one assumes the dumb money has a finite supply of patience and will at some point begin asking the tough questions.

Louis Fyne , December 12, 2017 at 8:35 am

The irony is that Uber would have been a perfectly fine, very profitable mid-sized company if Uber stuck with its initial model -- sticking to dense cities with limited parking, limiting driver supply, and charging a premium price for door-to-door delivery, whether by livery or a regular sedan. And then perhaps branching into robo-cars.

But somehow Uber/board/Travis got suckered into the siren call of self-driving cars, triple-digit user growth, and being in the top 100 US cities and on every continent.

Thuto , December 12, 2017 at 11:30 am

I've shared a similar sentiment in one of the previous posts about Uber. But operating profitably in decent sized niche doesn't fit well with ambitions of global domination. For Uber to be "right-sized", an admission of folly would have to be made, its managers and investors would have to transcend the sunk cost fallacy in their strategic decision making, and said investors would have to accept massive hits on their invested capital. The cold, hard reality of being blindsided and kicked to the curb in the smartphone business forced RIM/Blackberry to right-size, and they may yet have a profitable future as an enterprise facing software and services company. Uber would benefit from that form of sober mindedness, but I wouldn't hold my breath.

David Carl Grimes , December 12, 2017 at 6:57 am

The question is: Why did Softbank invest in Uber?

Michael Fiorillo , December 12, 2017 at 9:33 am

I know nothing about Softbank or its management, but I do know that the Japanese were the dumb money rubes in the late '80's, overpaying for trophy real estate they lost billions on.

Until informed otherwise, that's my default assumption

JimTan , December 12, 2017 at 10:50 am

Softbank possibly looking to buy more Uber shares at a 30% discount is very odd. Uber had a Series G funding round in June 2016 where a $3.5 billion investment from Saudi Arabia's Public Investment Fund resulted in its current $68 billion valuation. Now apparently Softbank wants to lead a new $6 billion funding round to buy the shares of Uber employees and early investors at a 30% discount from this last "valuation". It's odd because Saudi Arabia's Public Investment Fund has pledged $45 billion to SoftBank's Vision Fund , an amount which was supposed to come from the proceeds of its pending Aramco IPO. If the Uber bid is linked to SoftBank's Vision Fund, or KSA money, then its not clear why this investor might be looking to literally 'double down' from $3.5 billion o $6 billion on a declining investment.

Yves Smith Post author , December 12, 2017 at 11:38 am

SoftBank has not yet invested. Its tender is still open. If it does not get enough shares at a price it likes, it won't invest.

As to why, I have no idea.

Robert McGregor , December 12, 2017 at 7:04 am

"Growth and Efficiency" are the sine qua non of Neoliberalism. Kalanick's "hype brilliance" was to con the market with "revenue growth" and signs of efficiency, and hopes of greater efficiency, and make most people just overlook the essential fact that Uber is the most unprofitable company of all time!

divadab , December 12, 2017 at 7:19 am

What comprises "Uber Expenses"? 2014 – $1.06 billion; 2015 $3.33 billion; 2016 $9.65 billion; forecast 2017 $11.418 billion!!!!!! To me this is the big question – what are they spending $10 billion per year on?

ALso – why did driver share go from 68% in 2016 to 80% in 2017? If you use 68% as in 2016, 2017 Uber revenue is $11.808 billion, which means a bit better than break-even EBITDA, assuming Uber expenses are as stated $11.428 billion.

Perhaps not so bleak as the article presents, although I would not invest in this thing.

Phil in Kansas City , December 12, 2017 at 7:55 am

I have the same question: What comprises over 11 billion dollars in expenses in 2017? Could it be they are paying out dividends to the early investors? Which would mean they are cannibalizing their own company for the sake of the VC! How long can this go on before they'll need a new infusion of cash?

lyman alpha blob , December 12, 2017 at 2:37 pm

The Saudis have thrown a few billion Uber's way and they aren't necessarily known as the smart money.

Maybe the pole dancers have started chipping in too as they are for bitcoin .

Vedant Desai , December 12, 2017 at 10:37 am

Oh article does answer your 2nd question. Read this paragraph:-

Since mass driver defections would cause passenger volume growth to collapse completely , Uber was forced to reverse these cuts in 2017 and increased the driver share from 68% to 80%. This meant that Uber's corporate revenue, which had grown over 300% in 2015 and over 200% in 2016 will probably only grow by about 15% in 2017.

As for the 1st, read this line in the article:-

There are undoubtedly a number of things Uber could do to reduce losses at the margin, but it is difficult to imagine it could suddenly find the $4-5 billion in profit improvement needed merely to reach breakeven.

Louis Fyne , December 12, 2017 at 8:44 am

in addition to all the points listed in the article/comments, the absolute biggest flaw with Uber is that Uber HQ conditioned its customers on (a) cheap fares and (b) that a car is available within minutes (1-5 if in a big city).

Those two are not mutually compatible in the long-term.

Alfred , December 12, 2017 at 9:49 am

Thus (a) "We cost less" and (b) "We're more convenient" -- aren't those also the advantages that Walmart claims and feeds as a steady diet to its ever hungry consumers? Often if not always, disruption may repose upon delusion.

Martin Finnucane , December 12, 2017 at 11:06 am

Uber's business model could never produce sustainable profits unless it was able to exploit significant anti-competitive market power.

Upon that dependent clause hangs the future of capitalism, and – dare I say it? – its inevitable demise.

Altandmain , December 12, 2017 at 11:09 am

When this Uber madness blows up, I wonder if people will finally begin to discuss the brutal reality of Silicon Valley's so called "disruption".

It is heavily built in around the idea of economic exploitation. Uber drivers are often, especially when the true costs to operate an Uber including the vehicle depreciation are factored in, making not very much per hour driven, especially if they don't get the surge money.

Instacart is another example. They are paying the deliver operators very little.

Jim A. , December 12, 2017 at 12:21 pm

At a fundamental level, I think that the Silicon Valley "disruption" model only works for markets (like software) where the marginal cost for production is de minimus and the products can be protected by IP laws. Volume and market power really work in those cases. But out here in meat-space, where actual material and labor are big inputs to each item sold, you can never just sit back on your laurels and rake in the money. Somebody else will always be able to come and and make an equivalent product. If they can do it more cheaply, you are in trouble.

Altandmain , December 12, 2017 at 5:40 pm

There aren't that many areas in goods and services where the marginal costs are very low.

Software is actually quite unique in that regard, costing merely the bandwidth and permanent storage space to store.

Let's see:

1. From the article, they cannot go public and have limited ways to raise more money. An IPO with its more stringent disclosure requirements would expose them.

2. They tried lowering driver compensation and found that model unsustainable.

3. There are no benefits to expanding in terms of economies of scale.

From where I am standing, it looks like a lot of industries gave similar barriers. Silicon Valley is not going to be able to disrupt those.

Tesla, another Silicon Valley company seems to be struggling to mass produce its Model 3 and deliver an electric car that breaks even, is reliable, while disrupting the industry in the ways that Elon Musk attempted to hype up.

So that basically leaves services and manufacturing out for Silicon Valley disruption.

Joe Bentzel , December 12, 2017 at 2:19 pm

UBER has become a "too big to fail" startup because of all the different tentacles of capital from various Tier 1 VCs and investment bankers.

VCs have admitted openly that UBER is a subsidized business, meaning it's product is sold below market value, and the losses reflect that subsidization. The whole "2 sided platform" argument is just marketecture to hustle more investors. It's a form of service "dumping" that puts legacy businesses into bankruptcy. Back during the dotcom bubble one popular investment banker (Paul Deninger) characterized this model as "Terrorist Competition", i.e. coffers full of invested cash to commoditize the market and drive out competition.

UBER is an absolute disaster that has forked the startup model in Silicon Valley in order to drive total dependence on venture capital by founders. And its current diversification into "autonomous vehicles", food delivery, et al are simply more evidence that the company will never be profitable due to its whacky "blitzscaling" approach of layering on new "businesses" prior to achieving "fit" in its current one.

It's economic model has also metastasized into a form of startup cancer that is killing Silicon Valley as a "technology" innovator. Now it's all cargo cult marketing BS tied to "strategic capital".

UBER is the victory of venture capital and user subsidized startups over creativity by real entrepreneurs.

It's shadow is long and that's why this company should be ..wait for it UNBUNDLED (the new silicon valley word attached to that other BS religion called "disruption"). Call it a great unbundling and you can break up this monster corp any way you want.

Naked Capitalism is a great website.

Phil in KC , December 12, 2017 at 3:20 pm

1. I Agree with your last point.

2. The elevator pitch for Uber: subsidize rides to attract customers, put the competition out of business, and then enjoy an unregulated monopoly, all while exploiting economically ignorant drivers–ahem–"partners."

3. But more than one can play that game, and

4. Cab and livery companies are finding ways to survive!

Phil in KC , December 12, 2017 at 3:10 pm

If subsidizing rides is counted as an expense, (not being an accountant, I would guess it so), then whether the subsidy goes to the driver or the passenger, that would account for the ballooning expenses, to answer my own question. Otherwise, the overhead for operating what Uber describes as a tech company should be minimal: A billion should fund a decent headquarters with staff, plus field offices in, say, 100 U.S. cities. However, their global pretensions are probably burning cash like crazy. On top of that, I wonder what the exec compensation is like?

After reading HH's initial series, I made a crude, back-of-the-envelope calculation that Uber would run out of money sometime in the third fiscal quarter of 2018, but that was based on assuming losses were stabilizing in the range of 3 billion a year. Not so, according to the article. I think crunch time is rapidly approaching. If so, then SoftBank's tender offer may look quite appetizing to VC firms and to any Uber employee able to cash in their options. I think there is a way to make a re-envisioned Uber profitable, and with a more independent board, they may be able to restructure the company to show a pathway to profitability before the IPO. But time is running out.

A not insignificant question is the recruitment and retention of the front line "partners." It would seem to me that at some point, Uber will run out of economically ignorant drivers with good manners and nice cars. I would be very interested to know how many drivers give up Uber and other ride-sharing gigs once the 1099's start flying at the beginning of the year. One of the harsh realities of owning a business or being an contractor is the humble fact that you get paid LAST!

Jan Stickle , December 12, 2017 at 5:00 pm

We became instant Uber riders while spending holidays with relatives in San Diego. While their model is indeed unique from a rider perspective, it was the driver pool that fascinates me. These are not professional livery drivers, but rather freebooters of all stripes driving for various reasons. The remuneration they receive cannot possibly generate much income after expenses, never mind the problems associated with IRS filing as independent contractors.

One guy was just cruising listening to music; cooler to get paid for it than just sitting home! A young lady was babbling and gesticulating non stop about nothing coherent and appeared to be on some sort of stimulant. A foreign gentleman, very professional, drove for extra money when not at his regular job. He was the only one who had actually bought a new Prius for this gig, hoping to pay it off in two years.

This is indeed a brave new world. There was a period in Nicaragua just after the Contra war ended when citizens emerged from their homes and hit the streets in large numbers, desperately looking for income. Every car was a taxi and there was a bipedal mini Walmart at every city intersection as individuals sold everything and anything in a sort of euphoric optimism towards the future. Reality just hadn't caught up with them yet .

[Dec 03, 2017] Business Has Killed IT With Overspecialization by Charlie Schluting

Highly recommended!
Notable quotes:
"... What happened to the old "sysadmin" of just a few years ago? We've split what used to be the sysadmin into application teams, server teams, storage teams, and network teams. There were often at least a few people, the holders of knowledge, who knew how everything worked, and I mean everything. ..."
"... Now look at what we've done. Knowledge is so decentralized we must invent new roles to act as liaisons between all the IT groups. Architects now hold much of the high-level "how it works" knowledge, but without knowing how any one piece actually does work. In organizations with more than a few hundred IT staff and developers, it becomes nearly impossible for one person to do and know everything. This movement toward specializing in individual areas seems almost natural. That, however, does not provide a free ticket for people to turn a blind eye. ..."
"... Does your IT department function as a unit? Even 20-person IT shops have turf wars, so the answer is very likely, "no." As teams are split into more and more distinct operating units, grouping occurs. One IT budget gets split between all these groups. Often each group will have a manager who pitches his needs to upper management in hopes they will realize how important the team is. ..."
"... The "us vs. them" mentality manifests itself at all levels, and it's reinforced by management having to define each team's worth in the form of a budget. One strategy is to illustrate a doomsday scenario. If you paint a bleak enough picture, you may get more funding. Only if you are careful enough to illustrate the failings are due to lack of capital resources, not management or people. A manager of another group may explain that they are not receiving the correct level of service, so they need to duplicate the efforts of another group and just implement something themselves. On and on, the arguments continue. ..."
Apr 07, 2010 | Enterprise Networking Planet

What happened to the old "sysadmin" of just a few years ago? We've split what used to be the sysadmin into application teams, server teams, storage teams, and network teams. There were often at least a few people, the holders of knowledge, who knew how everything worked, and I mean everything. Every application, every piece of network gear, and how every server was configured -- these people could save a business in times of disaster.

Now look at what we've done. Knowledge is so decentralized we must invent new roles to act as liaisons between all the IT groups. Architects now hold much of the high-level "how it works" knowledge, but without knowing how any one piece actually does work. In organizations with more than a few hundred IT staff and developers, it becomes nearly impossible for one person to do and know everything. This movement toward specializing in individual areas seems almost natural. That, however, does not provide a free ticket for people to turn a blind eye.

Specialization

You know the story: Company installs new application, nobody understands it yet, so an expert is hired. Often, the person with a certification in using the new application only really knows how to run that application. Perhaps they aren't interested in learning anything else, because their skill is in high demand right now. And besides, everything else in the infrastructure is run by people who specialize in those elements. Everything is taken care of.

Except, how do these teams communicate when changes need to take place? Are the storage administrators teaching the Windows administrators about storage multipathing; or worse logging in and setting it up because it's faster for the storage gurus to do it themselves? A fundamental level of knowledge is often lacking, which makes it very difficult for teams to brainstorm about new ways evolve IT services. The business environment has made it OK for IT staffers to specialize and only learn one thing.

If you hire someone certified in the application, operating system, or network vendor you use, that is precisely what you get. Certifications may be a nice filter to quickly identify who has direct knowledge in the area you're hiring for, but often they indicate specialization or compensation for lack of experience.

Resource Competition

Does your IT department function as a unit? Even 20-person IT shops have turf wars, so the answer is very likely, "no." As teams are split into more and more distinct operating units, grouping occurs. One IT budget gets split between all these groups. Often each group will have a manager who pitches his needs to upper management in hopes they will realize how important the team is.

The "us vs. them" mentality manifests itself at all levels, and it's reinforced by management having to define each team's worth in the form of a budget. One strategy is to illustrate a doomsday scenario. If you paint a bleak enough picture, you may get more funding. Only if you are careful enough to illustrate the failings are due to lack of capital resources, not management or people. A manager of another group may explain that they are not receiving the correct level of service, so they need to duplicate the efforts of another group and just implement something themselves. On and on, the arguments continue.

Most often, I've seen competition between server groups result in horribly inefficient uses of hardware. For example, what happens in your organization when one team needs more server hardware? Assume that another team has five unused servers sitting in a blade chassis. Does the answer change? No, it does not. Even in test environments, sharing doesn't often happen between IT groups.

With virtualization, some aspects of resource competition get better and some remain the same. When first implemented, most groups will be running their own type of virtualization for their platform. The next step, I've most often seen, is for test servers to get virtualized. If a new group is formed to manage the virtualization infrastructure, virtual machines can be allocated to various application and server teams from a central pool and everyone is now sharing. Or, they begin sharing and then demand their own physical hardware to be isolated from others' resource hungry utilization. This is nonetheless a step in the right direction. Auto migration and guaranteed resource policies can go a long way toward making shared infrastructure, even between competing groups, a viable option.

Blamestorming

The most damaging side effect of splitting into too many distinct IT groups is the reinforcement of an "us versus them" mentality. Aside from the notion that specialization creates a lack of knowledge, blamestorming is what this article is really about. When a project is delayed, it is all too easy to blame another group. The SAN people didn't allocate storage on time, so another team was delayed. That is the timeline of the project, so all work halted until that hiccup was restored. Having someone else to blame when things get delayed makes it all too easy to simply stop working for a while.

More related to the initial points at the beginning of this article, perhaps, is the blamestorm that happens after a system outage.

Say an ERP system becomes unresponsive a few times throughout the day. The application team says it's just slowing down, and they don't know why. The network team says everything is fine. The server team says the application is "blocking on IO," which means it's a SAN issue. The SAN team say there is nothing wrong, and other applications on the same devices are fine. You've ran through nearly every team, but without an answer still. The SAN people don't have access to the application servers to help diagnose the problem. The server team doesn't even know how the application runs.

See the problem? Specialized teams are distinct and by nature adversarial. Specialized staffers often relegate themselves into a niche knowing that as long as they continue working at large enough companies, "someone else" will take care of all the other pieces.

I unfortunately don't have an answer to this problem. Maybe rotating employees between departments will help. They gain knowledge and also get to know other people, which should lessen the propensity to view them as outsiders

[Nov 28, 2017] The Stigmatization of the Unemployed

"This overly narrow hiring spec then leads to absurd, widespread complaint that companies can't find people with the right skills" . In the IT job markets such postings are often called purple squirrels
Notable quotes:
"... In particular, there seems to be an extremely popular variant of the above where the starting proposition "God makes moral people rich" is improperly converted to "Rich people are more moral" which is then readily negated to "Poor people are immoral" and then expanded to "Poor people are immoral, thus they DESERVE to suffer for it". It's essentially the theological equivalent of dividing by zero ..."
"... That said, the ranks of the neoliberals are not small. They constitute what Jonathan Schell calls a "mass minority." I suspect the neoliberals have about the same level of popular support that the Nazis did at the time of their takeover of Germany in 1932, or the Bolsheviks had in Russia at the time of their takeover in 1917, which is about 20 or 25% of the total population. ..."
"... The ranks of the neoliberals are made to appear far greater than they really are because they have all but exclusive access to the nation's megaphone. The Tea Party can muster a handful of people to disrupt a town hall meeting and it gets coast to coast, primetime coverage. But let a million people protest against bank bailouts, and it is ignored. Thus, by manipulation of the media, the mass minority is made to appear to be much larger than it really is. ..."
Mar 20, 2011 | naked capitalism

Spencer Thomas:

Very good post. Thank you.

Over the past three decades, large parts of our culture here in the US have internalized the lessons of the new Social Darwinism, with a significant body of literature to explain and justify it. Many of us have internalized, without even realizing it, the ideas of "dog eat dog", "every man for himself", "society should be structured like the animal kingdom, where the weak and sick simply die because they cannot compete, and this is healthy", and "everything that happens to you is your own fault. There is no such thing as circumstance that cannot be overcome, and certainly no birth lottery."

The levers pulled by politicians and the Fed put these things into practice, but even if we managed get different (better) politicians or Fed chairmen, ones who weren't steeped in this culture and ideology, we'd still be left with the culture in the population at large, and things like the "unemployed stigma" are likely to die very, very hard. Acceptance of the "just-world phenomenon" here in the US runs deep.

perfect stranger:

"Religion is just as vulnerable to corporate capture as is the government or the academy."

This is rather rhetorical statement, and wrong one. One need to discern spiritual aspect of religion from the religion as a tool.

Religion, as is structured, is complicit: in empoverishment, obedience, people's preconditioning, and legislative enabler in the institutions such as Supreme – and non-supreme – Court(s). It is a form of PR of the ruling class for the governing class.

DownSouth:

perfect stranger,

Religion, just like human nature, is not that easy to put in a box.

For every example you can cite where religion "is complicit: in empoverishment, obedience, people's preconditioning, and legislative enabler in the institution," I can point to an example of where religion engendered a liberating, emancipatory and revolutionary spirit.

Examples:

•Early Christianity •Nominalism •Early Protestantism •Gandhi •Martin Luther King

Now granted, there don't seem to be any recent examples of this of any note, unless we consider Chris Hedges a religionist, which I'm not sure we can do. Would it be appropriate to consider Hedges a religionist?

perfect stranger:

Yes, that maybe, just maybe be the case in early stages of forming new religion(s). In case of Christianity old rulers from Rome were trying to save own head/throne and the S.P.Q.R. imperia by adopting new religion.

You use examples of Gandhi and MLK which is highly questionable both were fighters for independence and the second, civil rights. In a word: not members of establishment just as I said there were (probably) seeing the religion as spiritual force not tool of enslavement.

Matt:

This link may provide some context:

http://en.wikipedia.org/wiki/Prosperity_theology

In particular, there seems to be an extremely popular variant of the above where the starting proposition "God makes moral people rich" is improperly converted to "Rich people are more moral" which is then readily negated to "Poor people are immoral" and then expanded to "Poor people are immoral, thus they DESERVE to suffer for it". It's essentially the theological equivalent of dividing by zero

DownSouth:

Rex,

I agree.

Poll after poll after poll has shown that a majority of Americans, and a rather significant majority, reject the values, attitudes, beliefs and opinions proselytized by the stealth religion we call "neoclassical economics."

That said, the ranks of the neoliberals are not small. They constitute what Jonathan Schell calls a "mass minority." I suspect the neoliberals have about the same level of popular support that the Nazis did at the time of their takeover of Germany in 1932, or the Bolsheviks had in Russia at the time of their takeover in 1917, which is about 20 or 25% of the total population.

The ranks of the neoliberals are made to appear far greater than they really are because they have all but exclusive access to the nation's megaphone. The Tea Party can muster a handful of people to disrupt a town hall meeting and it gets coast to coast, primetime coverage. But let a million people protest against bank bailouts, and it is ignored. Thus, by manipulation of the media, the mass minority is made to appear to be much larger than it really is.

The politicians love this, because as they carry water for their pet corporations, they can point to the Tea Partiers and say: "See what a huge upwelling of popular support I am responding to."

JTFaraday:

Well, if that's true, then the unemployed are employable but the mass mediated mentality would like them to believe they are literally and inherently unemployable so that they underestimate and under-sell themselves.

This is as much to the benefit of those who would like to pick up "damaged goods" on the cheap as those who promote the unemployment problem as one that inheres in prospective employees rather than one that is a byproduct of a bad job market lest someone be tempted to think we should address it politically.

That's where I see this blame the unemployed finger pointing really getting traction these days.

attempter:

I apologize for the fact that I only read the first few paragraphs of this before quitting in disgust.

I just can no longer abide the notion that "labor" can ever be seen by human beings as a "cost" at all. We really need to refuse to even tolerate that way of phrasing things. Workers create all wealth. Parasites have no right to exist. These are facts, and we should refuse to let argument range beyond them.

The only purpose of civilization is to provide a better way of living and for all people. This includes the right and full opportunity to work and manage for oneself and/or as a cooperative group. If civilization doesn't do that, we're better off without it.

psychohistorian:

I am one of those long term unemployed.

I suppose my biggest employment claim would be as some sort of IT techie, with numerous supply chain systems and component design, development, implementation, interfaces with other systems and ongoing support. CCNP certification and a history of techiedom going back to WEYCOS.

I have a patent (6,209,954) in my name and 12+ years of beating my head against the wall in an industry that buys compliance with the "there is no problem here, move on now" approach.

Hell, I was a junior woodchuck program administrator back in the early 70's working for the Office of the Governor of the state of Washington on CETA PSE or Public Service Employment. The office of the Governor ran the PSE program for 32 of the 39 counties in the state that were not big enough to run their own. I helped organize the project approval process in all those counties to hire folk at ( if memory serves me max of $833/mo.) to fix and expand parks and provide social and other government services as defined projects with end dates. If we didn't have the anti-public congress and other government leadership we have this could be a current component in a rational labor policy but I digress.

I have experience in the construction trades mostly as carpenter but some electrical, plumbing, HVAC, etc. also.

So, of course there is some sort of character flaw that is keeping me and all those others from employment ..right. I may have more of an excuse than others, have paid into SS for 45 years but still would work if it was available ..taking work away from other who may need it more .why set up a society where we have to compete as such for mere existence???????

One more face to this rant. We need government by the people and for the people which we do not have now. Good, public focused, not corporate focused government is bigger than any entities that exist under its jurisdiction and is kept updated by required public participation in elections and potentially other things like military, peace corps, etc. in exchange for advanced education. I say this as someone who has worked at various levels in both the public and private sectors there are ignorant and misguided folks everywhere. At least with ongoing active participation there is a chance that government would, once constructed, be able to evolve as needed within public focus .IMO.

Ishmael:

Some people would say I have been unemployed for 10 years. In 2000 after losing the last of my four CFO gigs for public companies I found it necessary to start consulting. This has lead to two of my three biggest winning years. I am usually consulting on cutting edge area of my profession and many times have large staffs reporting to me that I bring on board to get jobs done. For several years I subcontacted to a large international consulting firm to clean up projects which went wrong. Let me give some insight here.

  1. First, most good positions have gate keepers who are professional recruiters. It is near impossible to get by them and if you are unemployed they will hardly talk to you. One time talking to a recruiter at Korn Fery I was interviewing for a job I have done several times in an industry I have worked in several times. She made a statement that I had never worked at a well known company. I just about fell out of my chair laughing. At one time I was a senior level executive for the largest consulting firm in the world and lived on three continents and worked with companies on six. In addition, I had held senior positions for 2 fortune 500 firms and was the CFO for a company with $4.5 billion in revenue. I am well known at several PE firms and the founder of one of the largest mentioned in a meeting that one of his great mistakes was not investing in a very successful LBO (return of in excess of 20 multiple to investors in 18 months) I was the CFO for. In a word most recruiters are incompetent.
  2. Second, most CEO's any more are just insecure politicians. One time during an interview I had a CEO asked me to talk about some accomplishments. I was not paying to much attention as I rattled off accomplishments and the CEO went nuclear and started yelling at me that he did not know where I thought I was going with this job but the only position above the CFO job was his and he was not going anywhere. I assured him I was only interested in the CFO position and not his, but I knew the job was over. Twice feed back that I got from recruiters which they took at criticism was the "client said I seemed very assured of myself."
  3. Third, government, banking, business and the top MBA schools are based upon lying to move forward. I remember a top human resource executive telling me right before Enron, MCI and Sarbanes Oxley that I needed to learn to be more flexible. My response was that flexibility would get me an orange jump suit. Don't get me wrong, I have a wide grey zone, but it use to be in business the looked for people who could identify problems early and resolve them. Now days I see far more of a demand for people who can come up with PR spins to hide them. An attorney/treasurer consultant who partnered with me on a number of consulting jobs told me some one called me "not very charming." He said he asked what that meant, and the person who said that said, "Ish walks into a meeting and within 10 minutes he is asking about the 10,000 pound guerilla sitting in the room that no one wants to talk about." CEO do not want any challenges in their organization.
  4. Fourth, three above has lead to the hiring of very young and inexperienced people at senior levels. These people are insecure and do not want more senior and experienced people above them and than has resulted in people older than 45 not finding positions.
  5. Fifth, people are considered expendable and are fired for the lamest reasons anymore. A partner at one of the larger and more prestigious recruiting firms one time told me, "If you have a good consulting business, just stick with it. Our average placement does not last 18 months any more." Another well known recruiter in S. Cal. one time commented to me, "Your average consulting gig runs longer than our average placement."

With all of that said, I have a hard time understanding such statements as "@attempter "Workers create all wealth. Parasites have no right to exist." What does that mean? Every worker creates wealth. There is no difference in people. Sounds like communism to me. I make a good living and my net worth has grown working for myself. I have never had a consulting gig terminated by the client but I have terminated several. Usually, I am brought in to fix what several other people have failed at. I deliver basically intellectual properties to companies. Does that mean I am not a worker. I do not usually lift anything heavy or move equipment but I tell people what and where to do it so does that make me a parasite.

Those people who think everyone is equal and everyone deserves equal pay are fools or lazy. My rate is high, but what usually starts as short term projects usually run 6 months or more because companies find I can do so much more than what most of their staff can do and I am not a threat.

I would again like to have a senior challenging role at a decent size company but due to the reasons above will probably never get one. However, you can never tell. I am currently consulting for a midsize very profitable company (grew 400% last year) where I am twice the age of most people there, but everyone speaks to me with respect so you can never tell.

Lidia:

Ishmael, you're quite right. When I showed my Italian husband's resume to try and "network" in the US, my IT friends assumed he was lying about his skills and work history.

Contemporaneously, in Italy it is impossible to get a job because of incentives to hire "youth". Age discrimination is not illegal, so it's quite common to see ads that ask for a programmer under 30 with 5 years of experience in COBOL (the purple squirrel).

Hosswire

Some good points about the foolishness of recruiters, but a great deal of that foolishness is forced by the clients themselves. I used to be a recruiter myself, including at Korn Ferry in Southern California. I described the recruiting industry as "yet more proof that God hates poor people" because my job was to ignore resumes from people seeking jobs and instead "source" aka "poach" people who already had good jobs by dangling a higher salary in front of them. I didn't do it because I disparaged the unemployed, or because I could not do the basic analysis to show that a candidate had analogous or transferrable skills to the opening.

I did it because the client, as Yves said, wanted people who were literally in the same job description already. My theory is that the client wanted to have their ass covered in case the hire didn't work out, by being able to say that they looked perfect "on paper." The lesson I learned for myself and my friends looking for jobs was simple, if morally dubious. Basically, that if prospective employers are going to judge you based on a single piece of paper take full advantage of the fact that you get to write that piece of paper yourself.

Ishmael:

Hosswire - I agree with your comment. There are poor recruiters like the one I sited but in general it is the clients fault. Fear of failure. All hires have at least a 50% chance of going sideways on you. Most companies do not even have the ability to look at a resume nor to interview. I did not mean to same nasty things about recruiters, and I even do it sometimes but mine.

I look at failure in a different light than most companies. You need to be continually experimenting and changing to survive as a company and there will be some failures. The goal is to control the cost of failures while looking for the big pay off on a winner.

Mannwich:

As a former recruiter and HR "professional" (I use that term very loosely for obvious reasons), I can honestly say that you nailed it. Most big companies looking for mid to high level white collar "talent" will almost always take the perceived safest route by hiring those who look the best ON PAPER and in a suit and lack any real interviewing skills to find the real stars. What's almost comical is that companies almost always want to see the most linear resume possible because they want to see "job stability" (e.g. a CYA document in case the person fails in that job) when in many cases nobody cares about the long range view of the company anyway. My question was why should the candidate or employee care about the long range view if the employer clearly doesn't?

Ishmael:

Manwhich another on point comment. Sometimes either interviewing for a job or consulting with a CEO it starts getting to the absurd. I see all the time the requirement for stability in a persons background. Hello, where have they been the last 15 years. In addition, the higher up you go the more likely you will be terminated sometime and that is especially true if you are hired from outside the orgnanization. Companies want loyalty from an employee but offer none in return.

The average tenure for a CFO anymore is something around 18 months. I have been a first party participant (more than once) where I went through an endless recruiting process for a company (lasting more than 6 months) they final hire some one and that person is with the company for 3 months and then resigns (of course we all know it is through mutual agreement).

Ishmael:

Birch:

The real problem has become and maybe this is what you are referring to is the "Crony Capitalism." We have lost control of our financial situation. Basically, PE is not the gods of the universe that everyone thinks they are. However, every bankers secret wet dream is to become a private equity guy. Accordingly, bankers make ridiculous loans to PE because if you say no to them then you can not play in their sand box any more. Since the govt will not let the banks go bankrupt like they should then this charade continues inslaving everyone.

This country as well as many others has a large percentage of its assets tied up in over priced deals that the bankers/governments will not let collapse while the blood sucking vampires suck the life out of the assets.

On the other hand, govt is not the answer. Govt is too large and accomplishes too little.

kevin de bruxelles:

The harsh reality is that, at least in the first few rounds, companies kick to the curb their weakest links and perceived slackers. Therefore when it comes time to hire again, they are loath to go sloppy seconds on what they perceive to be some other company's rejects. They would much rather hire someone who survived the layoffs working in a similar position in a similar company. Of course the hiring company is going to have to pay for this privilege. Although not totally reliable, the fact that someone survived the layoffs provides a form social proof for their workplace abilities.

On the macro level, labor has been under attack for thirty years by off shoring and third world immigration. It is no surprise that since the working classes have been severely undermined that the middle classes would start to feel some pressure. By mass immigration and off-shoring are strongly supported by both parties. Only when the pain gets strong enough will enough people rebel and these two policies will be overturned. We still have a few years to go before this happens.

davver:

Let's say I run a factory. I produce cars and it requires very skilled work. Skilled welding, skilled machinists. Now I introduce some robotic welders and an assembly line system. The plants productivity improves and the jobs actually get easier. They require less skill, in fact I've simplified each task to something any idiot can do. Would wages go up or down? Are the workers really contributing to that increase in productivity or is it the machines and methods I created?

Lets say you think laying off or cutting the wages of my existing workers is wrong. What happens when a new entrant into the business employs a smaller workforce and lower wages, which they can do using the same technology? The new workers don't feel like they were cut down in any way, they are just happy to have a job. Before they couldn't get a job at the old plant because they lacked the skill, but now they can work in the new plant because the work is genuinely easier. Won't I go out of business?

Escariot:

I am 54 and have a ton of peers who are former white collar workers and professionals (project managers, architects, lighting designers, wholesalers and sales reps for industrial and construction materials and equipment) now out of work going on three years. Now I say out of work, I mean out of our trained and experienced fields.

We now work two or three gigs (waiting tables, mowing lawns, doing free lance, working in tourism, truck driving, moving company and fedex ups workers) and work HARD, for much much less than we did, and we are seeing the few jobs that are coming back on line going to younger workers. It is just the reality. And for most of us the descent has not been graceful, so our credit is a wreck, which also breeds a whole other level of issues as now it is common for the credit record to be a deal breaker for employment, housing, etc.

Strangely I don't sense a lot of anger or bitterness as much as humility. And gratitude for ANY work that comes our way. Health insurance? Retirement accounts? not so much.

Mickey Marzick:

Yves and I have disagreed on how extensive the postwar "pact" between management and labor was in this country. But if you drew a line from say, Trenton-Patterson, NJ to Cincinatti, OH to Minneapolis, MN, north and east of it where blue collar manufacturing in steel, rubber, auto, machinery, etc., predominated, this "pact" may have existed but ONLY because physical plant and production were concentrated there and workers could STOP production.

Outside of these heavy industrial pockets, unions were not always viewed favorably. As one moved into the rural hinterlands surrounding them there was jealously and/or outright hostility. Elsewhere, especially in the South "unions" were the exception not the rule. The differences between NE Ohio before 1975 – line from Youngstown to Toledo – and the rest of the state exemplified this pattern. Even today, the NE counties of Ohio are traditional Democratic strongholds with the rest of the state largely Republican. And I suspect this pattern existed elsewhere. But it is changing too

In any case, the demonization of the unemployed is just one notch above the vicious demonization of the poor that has always existed in this country. It's a constant reminder for those still working that you could be next – cast out into the darkness – because you "failed" or worse yet, SINNED. This internalization of the "inner cop" reinforces the dominant ideology in two ways. First, it makes any resistance by individuals still employed less likely. Second, it pits those still working against those who aren't, both of which work against the formation of any significant class consciousness amongst working people. The "oppressed" very often internalize the value system of the oppressor.

As a nation of immigrants ETHNICITY may have more explanatory power than CLASS. For increasingly, it would appear that the dominant ethnic group – suburban, white, European Americans – have thrown their lot in with corporate America. Scared of the prospect of downward social mobility and constantly reminded of URBAN America – the other America – this group is trapped with nowhere to else to go.

It's the divide and conquer strategy employed by ruling elites in this country since its founding [Federalist #10] with the Know Nothings, blaming the Irish [NINA - no Irish need apply] and playing off each successive wave of immigrants against the next. Only when the forces of production became concentrated in the urban industrial enclaves of the North was this strategy less effective. And even then internal immigration by Blacks to the North in search of employment blunted the formation of class consciousness among white ethnic industrial workers.

Wherever the postwar "pact of domination" between unions and management held sway, once physical plant was relocated elsewhere [SOUTH] and eventually offshored, unemployment began to trend upwards. First it was the "rustbelt" now it's a nationwide phenomenon. Needless to say, the "pact" between labor and management has been consigned to the dustbin of history.

White, suburban America has hitched its wagon to that of the corporate horse. Demonization of the unemployed coupled with demonization of the poor only serve to terrorize this ethnic group into acquiescence. And as the workplace becomes a multicultural matrix this ethnic group is constantly reminded of its perilous state. Until this increasingly atomized ethnic group breaks with corporate America once and for all, it's unlikely that the most debilitating scourge of all working people – UNEMPLOYMENT – will be addressed.

Make no mistake about it, involuntary UNEMPLOYMENT/UNDEREMPLYEMT is a form of terrorism and its demonization is terrorism in action. This "quiet violence" is psychological and the intimidation wrought by unemployment and/or the threat of it is intended to dehumanize individuals subjected to it. Much like spousal abuse, the emotional and psychological effects are experienced way before any physical violence. It's the inner cop that makes overt repression unnecessary. We terrorize ourselves into submission without even knowing it because we accept it or come to tolerate it. So long as we accept "unemployment" as an inevitable consequence of progress, as something unfortunate but inevitable, we will continue to travel down the road to serfdom where ARBEIT MACHT FREI!

FULL and GAINFUL EMPLOYMENT are the ultimate labor power.

Eric:

It's delicate since direct age discrimination is illegal, but when circumstances permit separating older workers they have a very tough time getting back into the workforce in an era of high health care inflation. Older folks consume more health care and if you are hiring from a huge surplus of available workers it isn't hard to steer around the more experienced. And nobody gets younger, so when you don't get job A and go for job B 2 weeks later you, you're older still!

James:

Yves said- "This overly narrow hiring spec then leads to absurd, widespread complaint that companies can't find people with the right skills"

In the IT job markets such postings are often called purple squirrels. The HR departments require the applicant to be expert in a dozen programming languages. This is an excuse to hire a foreigner on a temp h1-b or other visa.

Most people aren't aware that this model dominates the sciences. Politicians scream we have a shortage of scientists, yet it seems we only have a shortage of cheap easily exploitable labor. The economist recently pointed out the glut of scientists that currently exists in the USA.

http://www.economist.com/node/17723223

This understates the problem. The majority of PhD recipients wander through years of postdocs only to end up eventually changing fields. My observation is that the top ten schools in biochem/chemistry/physics/ biology produce enough scientists to satisfy the national demand.

The exemption from h1-b visa caps for academic institutions exacerbates the problem, providing academics with almost unlimited access to labor.

The pharmaceutical sector has been decimated over the last ten years with tens of thousands of scientists/ factory workers looking for re-training in a dwindling pool of jobs (most of which will deem you overqualified.)

http://pipeline.corante.com/archives/2011/03/03/a_postdocs_lament.php

Abe, NYC:

I wonder how the demonization of the unemployed can be so strong even in the face of close to 10% unemployment/20% underemployment. It's easy and tempting to demonize an abstract young buck or Cadillac-driving welfare queen, but when a family member or a close friend loses a job, or your kids are stuck at your place because they can't find one, shouldn't that alter your perceptions? Of course the tendency will be to blame it all on the government, but there has to be a limit to that in hard-hit places like Ohio, Colorado, or Arizona. And yet, the dynamics aren't changing or even getting worse. Maybe Wisconsin marks a turning point, I certainly hope it does

damien:

It's more than just stupid recruiting, this stigma. Having got out when the getting was good, years ago, I know that any corporate functionary would be insane to hire me now. Socialization wears off, the deformation process reverses, and the ritual and shibboleths become a joke. Even before I bailed I became a huge pain in the ass as economic exigency receded, every bosses nightmare. I suffered fools less gladly and did the right thing out of sheer anarchic malice.

You really can't maintain corporate culture without existential fear – not just, "Uh oh, I'm gonna get fired," fear, but a visceral feeling that you do not exist without a job. In properly indoctrinated workers that feeling is divorced from economic necessity. So anyone who's survived outside a while is bound to be suspect. That's a sign of economic security, and security of any sort undermines social control.

youniquelikeme:

You hit the proverbial nail with that reply. (Although, sorry, doing the right thing should not be done out of malice) The real fit has to be in the corporate yes-man culture (malleable ass kisser) to be suited for any executive position and beyond that it is the willingness to be manipulated and drained to be able to keep a job in lower echelon.

This is the new age of evolution in the work place. The class wars will make it more of an eventual revolution, but it is coming. The unemployment rate (the actual one, not the Government one) globalization and off shore hiring are not sustainable for much longer.

Something has to give, but it is more likely to snap then to come easily. People who are made to be repressed and down and out eventually find the courage to fight back and by then, it is usually not with words.

down and out in Slicon Valley:

This is the response I got from a recruiter:

"I'm going to be overly honest with you. My firm doesn't allow me to submit any candidate who hasn't worked in 6-12 months or more. Recruiting brokers are probably all similar in that way . You are going to have to go through a connection/relationship you have with a colleague, co-worker, past manager or friend to get your next job .that's my advice for you. Best of luck "

I'm 56 years old with MSEE. Gained 20+ years of experience at the best of the best (TRW, Nortel, Microsoft), have been issued a patent. Where do I sign up to gain skills required to find a job now?

Litton Graft :

"Best of the Best?" I know you're down now, but looking back at these Gov'mint contractors you've enjoyed the best socialism money can by.

Nortel/TRW bills/(ed) the Guvmint at 2x, 3x your salary, you can ride this for decades. At the same time the Inc is attached to the Guvmint ATM localities/counties are giving them a red carpet of total freedom from taxation. Double subsidies.

I've worked many years at the big boy bandits, and there is no delusion in my mind that almost anyone, can do what I do and get paid 100K+. I've never understood the mindset of some folks who work in the Wermacht Inc: "Well, someone has to do this work" or worse "What we do, no one else can do" The reason no one else "can do it" is that they are not allowed to. So, we steal from the poor to build fighter jets, write code or network an agency.

Hosswire:

I used to work as a recruiter and can tell you that I only parroted the things my clients told me. I wanted to get you hired, because I was lazy and didn't want to have to talk to someone else next.

So what do you do? To place you that recruiter needs to see on a piece of paper that you are currently working? Maybe get an email or phone call from someone who will vouch for your employment history. That should not be that hard to make happen.

Francois T :

The "bizarre way that companies now spec jobs" is essentially a coded way for mediocre managers to say without saying so explicitly that "we can afford to be extremely picky, and by God, we shall do so no matter what, because we can!"

Of course, when comes the time to hire back because, oh disaster! business is picking up again, (I'm barely caricaturing here; some managers become despondent when they realize that workers regain a bit of the higher ground; loss of power does that to lesser beings) the same idiots who designed those "overly narrow hiring spec then leads to absurd, widespread complaint that companies can't find people with the right skills" are thrown into a tailspin of despair and misery. Instead of figuring out something as simple as "if demand is better, so will our business", they can't see anything else than the (eeeek!) cost of hiring workers. Unable to break their mental corset of penny-pincher, they fail to realize that lack of qualified workers will prevent them to execute well to begin with.

And guess what: qualified workers cost money, qualified workers urgently needed cost much more.

This managerial attitude must be another factor that explain why entrepreneurship and the formation of small businesses is on the decline in the US (contrary to the confabulations of the US officialdumb and the chattering class) while rising in Europe and India/China.

Kit:

If you are 55-60, worked as a professional (i.e., engineering say) and are now unemployed you are dead meat. Sorry to be blunt but thats the way it is in the US today. Let me repeat that : Dead Meat.

I was terminated at age 59, found absolutely NOTHING even though my qualifications were outstanding. Fortunately, my company had an old style pension plan which I was able to qualify for (at age 62 without reduced benefits). So for the next 2+ years my wife and I survived on unemployment insurance, severance, accumulated vacation pay and odd jobs. Not nice – actually, a living hell.

At age 62, I applied for my pension, early social security, sold our old house (at a good profit) just before the RE crash, moved back to our home state. Then my wife qualified for social security also. Our total income is now well above the US median.

Today, someone looking at us would think we were the typical corporate retiree. We surely don't let on any differently but the experience (to get to this point) almost killed us.

I sympathize very strongly with the millions caught in this unemployment death spiral. I wish I had an answer but I just don't. We were very lucky to survive intact.

Ming:

Thank you Yves for your excellent post, and for bringing to light this crucial issue.

Thank you to all the bloggers, who add to the richness of the this discussion.

I wonder if you could comment on this Yves, and correct me if I am wrong I believe that the power of labor was sapped by the massive available supply of global labor. The favorable economic policies enacted by China (both official and unofficial), and trade negotiations between the US government and the Chinese government were critical to creating the massive supply of labor.

Thank you. No rush of course.

Nexus:

There are some odd comments and notions here that are used to support dogma and positions of prejudice. The world can be viewed in a number of ways. Firstly from a highly individualised and personal perspective – that is what has happened to me and here are my experiences. Or alternatively the world can be viewed from a broader societal perspective.

In the context of labour there has always been an unequal confrontation between those that control capital and those that offer their labour, contrary to some of the views exposed here – Marx was a first and foremost a political economist. The political economist seeks to understand the interplay of production, supply, the state and institutions like the media. Modern day economics branched off from political economy and has little value in explaining the real world as the complexity of the world has been reduced to a simplistic rationalistic model of human behaviour underpinned by other equally simplistic notions of 'supply and demand', which are in turn represented by mathematical models, which in themselves are complex but merely represent what is a simplistic view of the way the world operates. This dogmatic thinking has avoided the need to create an underpinning epistemology. This in turn underpins the notion of free choice and individualism which in itself is an illusion as it ignores the operation of the modern state and the exercise of power and influence within society.

It was stated in one of the comments that the use of capital (machines, robotics, CAD design, etc.) de-skills. This is hardly the case as skills rise for those that remain and support highly automated/continuous production factories. This is symptomatic of the owners of capital wanting to extract the maximum value for labour and this is done via the substitution of labour for capital making the labour that remains to run factories highly productive thus eliminating low skill jobs that have been picked up via services (people move into non productive low skilled occupations warehousing and retail distribution, fast food outlets, etc). Of course the worker does not realise the additional value of his or her labour as this is expropriated for the shareholders (including management as shareholders).

The issue of the US is that since the end of WW2 it is not the industrialists that have called the shots and made investments it is the financial calculus of the investment banker (Finance Capital). Other comments have tried to ignore the existence of the elites in society – I would suggest that you read C.W.Mills – The Power Elites as an analysis of how power is exercised in the US – it is not through the will of the people.

For Finance capital investments are not made on the basis of value add, or contribution through product innovation and the exchange of goods but on basis of the lowest cost inputs. Consequently, the 'elites' that make investment decisions, as they control all forms of capital seek to gain access to the cheapest cost inputs. The reality is that the US worker (a pool of 150m) is now part of a global labour pool of a couple of billion that now includes India and China. This means that the elites, US transnational corporations for instance, can access both cheaper labour pools, relocate capital and avoid worker protection (health and safety is not a concern). The strategies of moving factories via off-shoring (over 40,000 US factories closed or relocated) and out-sourcing/in-sourcing labour is also a representations of this.

The consequence for the US is that the need for domestic labour has diminished and been substituted by cheap labour to extract the arbitrage between US labour rates and those of Chinese and Indians. Ironically, in this context capital has become too successful as the mode of consumption in the US shifted from workers that were notionally the people that created the goods, earned wages and then purchased the goods they created to a new model where the worker was substituted by the consumer underpinned by cheap debt and low cost imports – it is illustrative to note that real wages have not increased in the US since the early 1970's while at the same time debt has steadily increased to underpin the illusion of wealth – the 'borrow today and pay tomorrow' mode of capitalist operation. This model of operation is now broken. The labour force is now being demonized as there is a now surplus of labour and a need to drive down labour rates through changes in legislation and austerity programs to meet those of the emerging Chinese and Indian middle class so workers rights need to be broken. Once this is done a process of in-source may take place as US labour costs will be on par with overseas labour pools.

It is ironic that during the Regan administration a number of strategic thinkers saw the threat from emerging economies and the danger of Finance Capital and created 'Project Socrates' that would have sought to re-orientate the US economy from one that was based on the rationale of Finance Capital to one that focused in productive innovation which entailed an alignment of capital investment, research and training to product innovative goods. Of course this was ignored and the rest is history. The race to the lowest input cost is ultimately self defeating as it is clear that the economy de-industrialises through labour and capital changes and living standards collapse. The elites – bankers, US transnational corporations, media, industrial military complex and the politicians don't care as they make money either way and this way you get other people overseas to work cheap for you.

S P:

Neoliberal orthodoxy treats unemployment as well as wage supression as a necessary means to fight "inflation." If there was too much power in the hands of organized labor, inflationary pressures would spiral out of control as supply of goods cannot keep up with demand.

It also treats the printing press as a necessary means to fight "deflation."

So our present scenario: widespread unemployment along with QE to infinity, food stamps for all, is exactly what you'd expect.

The problem with this orthodoxy is that it assumes unlimited growth on a planet with finite resources, particularly oil and energy. Growth is not going to solve unemployment or wages, because we are bumping up against limits to growth.

There are only two solutions. One is tax the rich and capital gains, slow growth, and reinvest the surplus into jobs/skills programs, mostly to maintain existing infrastructure or build new energy infrastructure. Even liberals like Krugman skirt around this, because they aren't willing to accept that we have the reached the end of growth and we need radical redistribution measures.

The other solution is genuine classical liberalism / libertarianism, along the lines of Austrian thought. Return to sound money, and let the deflation naturally take care of the imbalances. Yes, it would be wrenching, but it would likely be wrenching for everybody, making it fair in a universal sense.

Neither of these options is palatable to the elite classes, the financiers of Wall Street, or the leeches and bureaucrats of D.C.

So this whole experiment called America will fail.

[Nov 27, 2017] This Is Why Hewlett-Packard Just Fired Another 30K

Highly recommended!
Notable quotes:
"... Imagine working at HP and having to listen to Carly Fiorina bulldoze you...she is like a blow-torch...here are 4 minutes of Carly and Ralph Nader (if you can take it): https://www.youtube.com/watch?v=vC4JDwoRHtk ..."
"... My husband has been a software architect for 30 years at the same company. Never before has he seen the sheer unadulterated panic in the executives. All indices are down and they are planning for the worst. Quality is being sacrificed for " just get some relatively functional piece of shit out the door we can sell". He is fighting because he has always produced a stellar product and refuses to have shit tied to his name ( 90% of competitor benchmarks fail against his projects). They can't afford to lay him off, but the first time in my life I see my husband want to quit... ..."
"... HP basically makes computer equipment (PCs, servers, Printers) and software. Part of the problem is that computer hardware has been commodized. Since PCs are cheap and frequent replacements are need, People just by the cheapest models, expecting to toss it in a couple of years and by a newer model (aka the Flat screen TV model). So there is no justification to use quality components. Same is become true with the Server market. Businesses have switched to virtualization and/or cloud systems. So instead of taking a boat load of time to rebuild a crashed server, the VM is just moved to another host. ..."
"... I hung an older sign next to the one saying Information Technology. Somehow MIS-Information Technology seemed appropriate.) ..."
"... Then I got to my first duty assignment. It was about five months after the first moon landing, and the aerospace industry was facing cuts in government aerospace spending. I picked up a copy of an engineering journal in the base library and found an article about job cuts. There was a cartoon with two janitors, buckets at their feet and mops in their hands, standing before a blackboard filled with equations. Once was saying to the other, pointing to one section, "you can see where he made his mistake right here...". It represented two engineers who had been reduced to menial labor after losing their jobs. ..."
"... So while I resent all the H1Bs coming into the US - I worked with several for the last four years of my IT career, and was not at all impressed - and despise the politicians who allow it, I know that it is not the first time American STEM grads have been put out of jobs en masse. In some ways that old saying applies: the more things change, the more they stay the same ..."
"... Just like Amazon, HP will supposedly make billions in profit analyzing things in the cloud that nobody looks at and has no use to the real economy, but it makes good fodder for Power Point presentations. I am amazed how much daily productivity goes into creating fancy charts for meetings that are meaningless to the actual business of the company. ..."
"... 'Computers' cost as much - if not more time than they save, at least in corporate settings. Used to be you'd work up 3 budget projections - expected, worst case and best case, you'd have a meeting, hash it out and decide in a week. Now you have endless alternatives, endless 'tweaking' and changes and decisions take forever, with outrageous amounts of time spent on endless 'analysis' and presentations. ..."
"... A recent lay off here turned out to be quite embarrassing for Parmalat there was nobody left that knew how to properly run the place they had to rehire many ex employees as consultants-at a costly premium ..."
"... HP is laying off 80,000 workers or almost a third of its workforce, converting its long-term human capital into short-term gains for rich shareholders at an alarming rate. The reason that product quality has declined is due to the planned obsolescence that spurs needless consumerism, which is necessary to prop up our debt-backed monetary system and the capitalist-owned economy that sits on top of it. ..."
"... The world is heading for massive deflation. Computers have hit the 14 nano-meter lithography zone, the cost to go from 14nm to say 5nm is very high, and the net benefit to computing power is very low, but lets say we go from 14nm to 5nm over the next 4 years. Going from 5nm to 1nm is not going to net a large boost in computing power and the cost to shrink things down and re-tool will be very high for such an insignificant gain in performance. ..."
"... Another classic "Let's rape all we can and bail with my golden parachute" corporate leaders setting themselves up. Pile on the string of non-IT CEOs that have been leading the company to ruin. To them it is nothing more than a contest of being even worse than their predecessor. Just look at the billions each has lost before their exit. Compaq, a cluster. Palm Pilot, a dead product they paid millions for and then buried. And many others. ..."
"... Let's not beat around the bush, they're outsourcing, firing Americans and hiring cheap labor elsewhere: http://www.bloomberg.com/news/articles/2015-09-15/hewlett-packard-to-cut-up-to-30-000-more-jobs-in-restructuring It's also shifting employees to low-cost areas, and hopes to have 60 percent of its workers located in cheaper countries by 2018, Nefkens said. ..."
"... Carly Fiorina: (LOL, leading a tech company with a degree in medieval history and philosophy) While at ATT she was groomed from the Affirmative Action plan. ..."
"... It is very straightforward. Replace 45,000 US workers with 100,000 offshore workers and you still save millions of USD ! Use the "savings" to buy back stock, then borrow more $$ at ZIRP to buy more stock back. ..."
"... If you look on a site like LinkedIN, it will always say 'We're hiring!'. YES, HP is hiring.....but not YOU, they want Ganesh Balasubramaniamawapbapalooboopawapbamboomtuttifrutti, so that they can work him as modern day slave labor for ultra cheap. We can thank idiot 'leaders' like Meg Pasty Faced Whitman and Bill 'Forced Vaccinations' Gates for lobbying Congress for decades, against the rights of American workers. ..."
"... An era of leadership in computer technology has died, and there is no grave marker, not even a funeral ceremony or eulogy ... Hewlett-Packard, COMPAQ, Digital Equipment Corp, UNIVAC, Sperry-Rand, Data General, Tektronix, ZILOG, Advanced Micro Devices, Sun Microsystems, etc, etc, etc. So much change in so short a time, leaves your mind dizzy. ..."
Sep 15, 2015 | Zero Hedge

SixIsNinE

yeah thanks Carly ... HP made bullet-proof products that would last forever..... I still buy HP workstation notebooks, especially now when I can get them for $100 on ebay .... I sold HP products in the 1990s .... we had HP laserjet IIs that companies would run day & night .... virtually no maintenance ... when PCL5 came around then we had LJ IIIs .... and still companies would call for LJ I's, .... 100 pounds of invincible Printing ! .

This kind of product has no place in the World of Planned-Obsolesence .... I'm currently running an 8510w, 8530w, 2530p, Dell 6420 quad i7, hp printers hp scanners, hp pavilion desktops, .... all for less than what a Laserjet II would have cost in 1994, Total.

Not My Real Name

I still have my HP 15C scientific calculator I bought in 1983 to get me through college for my engineering degree. There is nothing better than a hand held calculator that uses Reverse Polish Notation!

BigJim

HP used to make fantastic products. I remember getting their RPN calculators back in th 80's; built like tanks. Then they decided to "add value" by removing more and more material from their consumer/"prosumer" products until they became unspeakably flimsy. They stopped holding things together with proper fastenings and starting hot melting/gluing it together, so if it died you had to cut it open to have any chance of fixing it.

I still have one of their Laserjet 4100 printers. I expect it to outlast anything they currently produce, and it must be going on 16+ years old now.

Fuck you, HP. You started selling shit and now you're eating through your seed corn. I just wish the "leaders" who did this to you had to pay some kind of penalty greater than getting $25M in a severance package.

Automatic Choke

+100. The path of HP is everything that is wrong about modern business models. I still have a 5MP laserjet (one of the first), still works great. Also have a number of 42S calculators.....my day-to-day workhorse and several spares. I don't think the present HP could even dream of making these products today.

nope-1004

How well will I profit, as a salesman, if I sell you something that works? How valuable are you, as a customer in my database, if you never come back? Confucious say "Buy another one, and if you can't afford it, f'n finance it!" It's the growing trend. Look at appliances. Nothing works anymore.

Normalcy Bias

https://en.wikipedia.org/wiki/Planned_obsolescence

Son of Loki

GE to cut Houston jobs as work moves overseas http://www.bizjournals.com/houston/news/2015/09/15/ge-to-cut-houston-job... " Yes we can! "

Automatic Choke

hey big brother.... if you are curious, there is a damn good android emulator of the HP42S available (Free42). really it is so good that it made me relax about accumulating more spares. still not quite the same as a real calculator. (the 42S, by the way, is the modernization/simplification of the classic HP41, the real hardcord very-programmable, reconfigurable, hackable unit with all the plug-in-modules that came out in the early 80s.)

Miss Expectations

Imagine working at HP and having to listen to Carly Fiorina bulldoze you...she is like a blow-torch...here are 4 minutes of Carly and Ralph Nader (if you can take it): https://www.youtube.com/watch?v=vC4JDwoRHtk

Miffed Microbiologist

My husband has been a software architect for 30 years at the same company. Never before has he seen the sheer unadulterated panic in the executives. All indices are down and they are planning for the worst. Quality is being sacrificed for " just get some relatively functional piece of shit out the door we can sell". He is fighting because he has always produced a stellar product and refuses to have shit tied to his name ( 90% of competitor benchmarks fail against his projects). They can't afford to lay him off, but the first time in my life I see my husband want to quit...

unplugged

I've been an engineer for 31 years - our managements's unspoken motto at the place I'm at (large company) is: "release it now, we'll put in the quality later". I try to put in as much as possible before the product is shoved out the door without killing myself doing it.

AGuy

Do they even make test equipment anymore?

HP test and measurement was spun off many years ago as Agilent. The electronics part of Agilent was spun off as keysight late last year.

HP basically makes computer equipment (PCs, servers, Printers) and software. Part of the problem is that computer hardware has been commodized. Since PCs are cheap and frequent replacements are need, People just by the cheapest models, expecting to toss it in a couple of years and by a newer model (aka the Flat screen TV model). So there is no justification to use quality components. Same is become true with the Server market. Businesses have switched to virtualization and/or cloud systems. So instead of taking a boat load of time to rebuild a crashed server, the VM is just moved to another host.

HP has also adopted the Computer Associates business model (aka Borg). HP buys up new tech companies and sits on the tech and never improves it. It decays and gets replaced with a system from a competitor. It also has a habit of buying outdated tech companies that never generate the revenues HP thinks it will.

BullyBearish

When Carly was CEO of HP, she instituted a draconian "pay for performance" plan. She ended up leaving with over $146 Million because she was smart enough not to specify "what type" of performance.

GeezerGeek

Regarding your statement "All those engineers choosing to pursue other opportunities", we need to realize that tech in general has been very susceptible to the vagaries of government actions. Now the employment problems are due to things like globalization and H1B programs. Some 50 years ago tech - meaning science and engineering - was hit hard as the US space program wound down. Permit me this retrospective:

I graduated from a quite good school with a BS in Physics in 1968. My timing was not all that great, since that was when they stopped granting draft deferments for graduate school. I joined the Air Force, but as an enlisted airman, not an officer. Following basic training, I was sent to learn to operate PCAM operations. That's Punched Card Accounting Machines. Collators. Sorters. Interpreters. Key punches. I was in a class with nine other enlistees. One had just gotten a Masters degree in something. Eight of us had a BS in one thing or another, but all what would now be called STEM fields. The least educated only had an Associate degree. We all enlisted simply to avoid being drafted into the Marines. (Not that there's anything wrong with the Marines, but all of us proclaimed an allergy to energetic lead projectiles and acted accordingly. Going to Canada, as many did, pretty much ensured never getting a job in STEM fields later in life.) So thanks to government action (fighting in VietNam, in this case) a significant portion of educated Americans found themselves diverted from chosen career paths. (In my case, it worked out fine. I learned to program, etc., and spent a total of over 40 years in what is now called IT. I think it was called EDP when I started the trek. Somewhere along the line it became (where I worked) Management Information Systems. MIS. And finally the department became simply Information Technology. I hung an older sign next to the one saying Information Technology. Somehow MIS-Information Technology seemed appropriate.)

Then I got to my first duty assignment. It was about five months after the first moon landing, and the aerospace industry was facing cuts in government aerospace spending. I picked up a copy of an engineering journal in the base library and found an article about job cuts. There was a cartoon with two janitors, buckets at their feet and mops in their hands, standing before a blackboard filled with equations. Once was saying to the other, pointing to one section, "you can see where he made his mistake right here...". It represented two engineers who had been reduced to menial labor after losing their jobs.

So while I resent all the H1Bs coming into the US - I worked with several for the last four years of my IT career, and was not at all impressed - and despise the politicians who allow it, I know that it is not the first time American STEM grads have been put out of jobs en masse. In some ways that old saying applies: the more things change, the more they stay the same.

If you made it this far, thanks for your patience.

adr

Just like Amazon, HP will supposedly make billions in profit analyzing things in the cloud that nobody looks at and has no use to the real economy, but it makes good fodder for Power Point presentations. I am amazed how much daily productivity goes into creating fancy charts for meetings that are meaningless to the actual business of the company.

IT'S ALL BULLSHIT!!!!!

I designed more products in one year for the small company I work for than a $15 billion corporation did throughout their entire design department employing hundreds of people. That is because 90% of their workday is spent preparing crap for meetings and they never really get anything meaningful done.

It took me one week to design a product and send it out for production branded for the company I work for, but it took six months to get the same type of product passed through the multi billion dollar corporation we license for. Because it had to pass through layer after layer of bullshit and through every level of management before it could be signed off. Then a month later somebody would change their mind in middle management and the product would need to be changed and go through the cycle all over again.

Their own bag department made six bags last year, I designed 16. Funny how I out produce a department of six people whose only job is to make bags, yet I only get paid the salary of one.

Maybe I'm just an imbecile for working hard.

Bear

You also have to add all the wasted time of employees having to sit through those presentations and the even more wasted time on Ashley Madison

cynicalskeptic

'Computers' cost as much - if not more time than they save, at least in corporate settings. Used to be you'd work up 3 budget projections - expected, worst case and best case, you'd have a meeting, hash it out and decide in a week. Now you have endless alternatives, endless 'tweaking' and changes and decisions take forever, with outrageous amounts of time spent on endless 'analysis' and presentations.

EVERY VP now has an 'Administrative Assistant' whose primary job is to develop PowerPoint presentations for the endless meetings that take up time - without any decisions ever being made.

Computers stop people from thinking. In ages past when you used a slide rule you had to know the order of magnitude of the end result. Now people make a mistake and come up with a ridiculous number and take it at face value because 'the computer' produced it.

Any exec worht anythign knew what a given line in their department or the total should be +or a small amount. I can't count the number of times budgets and analyses were WRONG because someone left off a few lines on a spreadsheet total.

Yes computer modeling for advanced tech and engineering is a help, CAD/CAM is great and many other applications in the tech/scientific world are a great help but letting computers loose in corporate and finance has produced endless waste AND - worsde - thigns like HFT (e.g. 'better' more effective ways to manipulate and cheat markets.

khnum

A recent lay off here turned out to be quite embarrassing for Parmalat there was nobody left that knew how to properly run the place they had to rehire many ex employees as consultants-at a costly premium

Anopheles

Consultants don't come at that much of a premium becaue the company doesn't have to pay benefits, vacation, sick days, or payroll taxes, etc. Plus it's really easy and cheap to get rid of consultants.

arrowrod

Obviously, you haven't worked as a consultant. You get paid by the hour. To clean up a mess. 100 hours a week are not uncommon. (What?, is it possible to work 100 hours a week? Yes, it is, but only for about 3 months.)

RaceToTheBottom

HP Executives are trying hard to bring the company back to its roots: The ability to fit into one garage...

PrimalScream

ALL THAT Meg Whitman needs to do ... is to FIRE EVERYBODY !! Then have all the products made in China, process all the sales orders in Hong Kong, and sub-contract the accounting and tax paperwork to India. Then HP can use all the profits for stock buybacks, except of course for Meg's salary ... which will keep rising astronomically!

Herdee

That's where education gets you in America.The Government sold out America's manufacturing base to Communist China who holds the debt of the USA.Who would ever guess that right-wing neo-cons(neo-nazis) running the government would sell out to communists just to get the money for war? Very weird.

Really20

"Communist"? The Chinese government, like that of the US, never believed in worker ownership of businesses and never believed that the commerical banking system (whether owned by the state, or private corporations which act like a state) should not control money. Both countries believe in centralization of power among a few shareholders, who take the fruits of working people's labor while contributing nothing of value themselves (money being but a token that represents a claim on real capital, not capital itself.)

Management and investors ought to be separate from each other; management should be chosen by workers by universal equal vote, while a complementary investor board should be chosen by investors much as corporate boards are now. Both of these boards should be legally independent but bound organizations; the management board should run the business while the investor board should negotiate with the management board on the terms of equity issuance. No more buybacks, no more layoffs or early retirements, unless workers as a whole see a need for it to maintain the company.

The purpose of investors is to serve the real economy, not the other way round; and in turn, the purpose of the real economy is to serve humanity, not the other way around. Humans should stop being slaves to perpetual growth.

Really20

HP is laying off 80,000 workers or almost a third of its workforce, converting its long-term human capital into short-term gains for rich shareholders at an alarming rate. The reason that product quality has declined is due to the planned obsolescence that spurs needless consumerism, which is necessary to prop up our debt-backed monetary system and the capitalist-owned economy that sits on top of it.

NoWayJose

HP - that company that sells computers and printers made in China and ink cartridges made in Thailand?

Dominus Ludificatio

Another company going down the drain because their focus is short term returns with crappy products.They will also bring down any company they buy as well.

Barnaby

HP is microcosm of what Carly will do to the US: carve it like a pumpkin and leave the shell out to bake in the sun for a few weeks. But she'll make sure and poison the seeds too! Don't want anything growing out of that pesky Palm division...

Dre4dwolf

The world is heading for massive deflation. Computers have hit the 14 nano-meter lithography zone, the cost to go from 14nm to say 5nm is very high, and the net benefit to computing power is very low, but lets say we go from 14nm to 5nm over the next 4 years. Going from 5nm to 1nm is not going to net a large boost in computing power and the cost to shrink things down and re-tool will be very high for such an insignificant gain in performance.

What does that mean

  1. Computers (atleast non-quantum ones) have hit the point where about 80-90% of the potential for the current science has been tap'd
  2. This means that the consumer is not going to be put in the position where they will have to upgrade to faster systems for atleast another 7-8 years.... (because the new computer wont be that much faster than their existing one).
  3. If no one is upgrading the only IT sectors of the economy that stand to make any money are software companies (Microsoft, Apple, and other small software developers), most software has not caught up with hardware yet.
  4. We are obviously heading for massive deflation, consumer spending levels as a % are probably around where they were in the late 70s - mid 80s, this is a very deflationary environment that is being compounded by a high debt burden (most of everyones income is going to service their debts), that signals monetary tightening is going on... people simply don't have enough discretionary income to spend on new toys.

All that to me screams SELL consumer electronics stocks because profits are GOING TO DECLINE , SALES ARE GOING TO DECLINE. There is no way , no amount of buy backs will float the stocks of corporations like HP/Dell/IBM etc... it is inevitable that these stocks will be worth 30% less over the next 5 - 8 years

But what do I know? maybe I am missing something.

In anycase a lot of pressure is being put on HP to do all it can at any cost to boost the stock valuations, because so much of its stock is institution owned, they will strip the wallpaper off the walls and sell it to a recycling plant if it would give them more money to boost stock valuations. That to me signals that most of the people pressuring the board of HP to boost the stock, want them to gut the company as much as they can to boost it some trivial % points so that the majority of shares can be dumped onto muppets.

To me it pretty much also signals something is terribly wrong at HP and no one is talking about it.

PoasterToaster

Other than die shrinks there really hasn't been a lot going on in the CPU world since Intel abandoned its Netburst architecture and went back to its (Israeli created) Pentium 3 style pipeline. After that they gave up on increasing speed and resorted to selling more cores. Now that wall has been hit, they have been selling "green" and "efficient" nonsense in place of increasing power.

x86 just needs to go, but a lot is invested in it not the least of which is that 1-2 punch of forced, contrived obsolesence carried out in a joint operation with Microsoft. 15 years ago you could watch videos with no problem on your old machine using Windows XP. Fast forward to now and their chief bragging point is still "multitasking" and the ability to process datastreams like video. It's a joke.

The future is not in the current CPU paradigm of instructions per second; it will be in terms of variables per second. It will be more along the lines of what GPU manufacturers are creating with their thousands of "engines" or "processing units" per chip, rather than the 4, 6 or 12 core monsters that Intel is pushing. They have nearly given up on their roadmap to push out to 128 cores as it is. x86 just doesn't work with all that.

Dojidog

Another classic "Let's rape all we can and bail with my golden parachute" corporate leaders setting themselves up. Pile on the string of non-IT CEOs that have been leading the company to ruin. To them it is nothing more than a contest of being even worse than their predecessor. Just look at the billions each has lost before their exit. Compaq, a cluster. Palm Pilot, a dead product they paid millions for and then buried. And many others.

Think the split is going to help? Think again. Rather than taking the opportunity to fix their problems, they have just duplicated and perpetuated them into two separate entities.

HP is a company that is mired in a morass of unmanageable business processes and patchwork of antiquated applications all interconnected to the point they are petrified to try and uncouple them.

Just look at their stock price since January. The insiders know. Want to fix HP? All it would take is a savvy IT based leader with a boatload of common sense. What makes money at HP? Their printers and ink. Not thinking they can provide enterprise solutions to others when they can't even get their own house in order.

I Write Code

Let's not beat around the bush, they're outsourcing, firing Americans and hiring cheap labor elsewhere: http://www.bloomberg.com/news/articles/2015-09-15/hewlett-packard-to-cut-up-to-30-000-more-jobs-in-restructuring It's also shifting employees to low-cost areas, and hopes to have 60 percent of its workers located in cheaper countries by 2018, Nefkens said.

yogibear

Carly Fiorina: (LOL, leading a tech company with a degree in medieval history and philosophy) While at ATT she was groomed from the Affirmative Action plan.

Alma Mater: Stanford University (B.A. in medieval history and philosophy); University of Maryland (MBA); Massachusetts Institute of Technology

==================================================================

Patricia Russo: (Lucent) (Dedree in Political Science). Another lady elevated through the AA plan, Russo got her bachelor's degree from Georgetown University in political science and history in 1973. She finished the advanced management program at Harvard Business School in 1989

Both ladies steered their corporations to failure.

Clowns on Acid

It is very straightforward. Replace 45,000 US workers with 100,000 offshore workers and you still save millions of USD ! Use the "savings" to buy back stock, then borrow more $$ at ZIRP to buy more stock back.

You guys don't know nuthin'.

homiegot

HP: one of the worst places you could work. Souless.

Pancho de Villa

Ladies and Gentlemen! Integrity has left the Building!

space junk

I worked there for a while and it was total garbage. There are still some great folks around, but they are getting paid less and less, and having to work longer hours for less pay while reporting to God knows who, often a foreigner with crappy engrish skills, yes likely another 'diversity hire'. People with DEEP knowledge, decades and decades, have either gotten unfairly fired or demoted, made to quit, or if they are lucky, taken some early retirement and GTFO (along with their expertise - whoopsie! who knew? unintended consequences are a bitch aren't they? )....

If you look on a site like LinkedIN, it will always say 'We're hiring!'. YES, HP is hiring.....but not YOU, they want Ganesh Balasubramaniamawapbapalooboopawapbamboomtuttifrutti, so that they can work him as modern day slave labor for ultra cheap. We can thank idiot 'leaders' like Meg Pasty Faced Whitman and Bill 'Forced Vaccinations' Gates for lobbying Congress for decades, against the rights of American workers.

Remember that Meg 'Pasty Faced' Whitman is the person who came up with the idea of a 'lights out' datacenter....that's right, it's the concept of putting all of your computers in a building, in racks, in the dark, and maybe hiring an intern to come in once a month and keep them going. This is what she actually believed. Along with her other statement to the HP workforce which says basically that the future of HP is one of total automation.....TRANSLATION: If you are a smart admin, engineer, project manager, architect, sw tester, etc.....we (HP management) think you are an IDIOT and can be replaced by a robot, a foreigner, or any other cheap worker.

Race to the bottom is like they say a space ship approaching a black hole......after a while the laws of physics and common sense, just don't apply anymore.

InnVestuhrr

An era of leadership in computer technology has died, and there is no grave marker, not even a funeral ceremony or eulogy ... Hewlett-Packard, COMPAQ, Digital Equipment Corp, UNIVAC, Sperry-Rand, Data General, Tektronix, ZILOG, Advanced Micro Devices, Sun Microsystems, etc, etc, etc. So much change in so short a time, leaves your mind dizzy.

[Nov 27, 2017] The Robot Productivity Paradox and the concept of bezel

This concept of "bezel" is an important one
Notable quotes:
"... "In many ways the effect of the crash on embezzlement was more significant than on suicide. To the economist embezzlement is the most interesting of crimes. Alone among the various forms of larceny it has a time parameter. Weeks, months or years may elapse between the commission of the crime and its discovery. (This is a period, incidentally, when the embezzler has his gain and the man who has been embezzled, oddly enough, feels no loss. There is a net increase in psychic wealth.) ..."
"... At any given time there exists an inventory of undiscovered embezzlement in – or more precisely not in – the country's business and banks. ..."
"... This inventory – it should perhaps be called the bezzle – amounts at any moment to many millions [trillions!] of dollars. It also varies in size with the business cycle. ..."
"... In good times people are relaxed, trusting, and money is plentiful. But even though money is plentiful, there are always many people who need more. Under these circumstances the rate of embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly. ..."
"... In depression all this is reversed. Money is watched with a narrow, suspicious eye. The man who handles it is assumed to be dishonest until he proves himself otherwise. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks ..."
Feb 22, 2017 | econospeak.blogspot.com

Sandwichman -> Sandwichman ... February 24, 2017 at 08:36 AM

John Kenneth Galbraith, from "The Great Crash 1929":

"In many ways the effect of the crash on embezzlement was more significant than on suicide. To the economist embezzlement is the most interesting of crimes. Alone among the various forms of larceny it has a time parameter. Weeks, months or years may elapse between the commission of the crime and its discovery. (This is a period, incidentally, when the embezzler has his gain and the man who has been embezzled, oddly enough, feels no loss. There is a net increase in psychic wealth.)

At any given time there exists an inventory of undiscovered embezzlement in – or more precisely not in – the country's business and banks.

This inventory – it should perhaps be called the bezzle – amounts at any moment to many millions [trillions!] of dollars. It also varies in size with the business cycle.

In good times people are relaxed, trusting, and money is plentiful. But even though money is plentiful, there are always many people who need more. Under these circumstances the rate of embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly.

In depression all this is reversed. Money is watched with a narrow, suspicious eye. The man who handles it is assumed to be dishonest until he proves himself otherwise. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks."

Sanwichman, February 24, 2017 at 05:24 AM

For nearly a half a century, from 1947 to 1996, real GDP and real Net Worth of Households and Non-profit Organizations (in 2009 dollars) both increased at a compound annual rate of a bit over 3.5%. GDP growth, in fact, was just a smidgen faster -- 0.016% -- than growth of Net Household Worth.

From 1996 to 2015, GDP grew at a compound annual rate of 2.3% while Net Worth increased at the rate of 3.6%....

-- Sanwichman

anne -> anne... February 24, 2017 at 05:25 AM

https://fred.stlouisfed.org/graph/?g=cOU6

January 15, 2017

Gross Domestic Product and Net Worth for Households & Nonprofit Organizations, 1952-2016

(Indexed to 1952)

https://fred.stlouisfed.org/graph/?g=cPq1

January 15, 2017

Gross Domestic Product and Net Worth for Households & Nonprofit Organizations, 1992-2016

(Indexed to 1992)

anne -> Sandwichman ... February 24, 2017 at 03:35 PM

The real home price index extends from 1890. From 1890 to 1996, the index increased slightly faster than inflation so that the index was 100 in 1890 and 113 in 1996. However from 1996 the index advanced to levels far beyond any previously experienced, reaching a high above 194 in 2006. Previously the index high had been just above 130.

Though the index fell from 2006, the level in 2016 is above 161, a level only reached when the housing bubble had formed in late 2003-early 2004.

Real home prices are again strikingly high:

http://www.econ.yale.edu/~shiller/data.htm Reply Friday, February 24, 2017 at 03:34 PM anne -> Sandwichman ... February 24, 2017

Valuation

The Shiller 10-year price-earnings ratio is currently 29.34, so the inverse or the earnings rate is 3.41%. The dividend yield is 1.93. So an expected yearly return over the coming 10 years would be 3.41 + 1.93 or 5.34% provided the price-earnings ratio stays the same and before investment costs.

Against the 5.34% yearly expected return on stock over the coming 10 years, the current 10-year Treasury bond yield is 2.32%.

The risk premium for stocks is 5.34 - 2.32 or 3.02%:

http://www.econ.yale.edu/~shiller/data.htm

anne -> anne..., February 24, 2017 at 05:36 AM

What the robot-productivity paradox is puzzles me, other than since 2005 for all the focus on the productivity of robots and on robots replacing labor there has been a dramatic, broad-spread slowing in productivity growth.

However what the changing relationship between the growth of GDP and net worth since 1996 show, is that asset valuations have been increasing relative to GDP. Valuations of stocks and homes are at sustained levels that are higher than at any time in the last 120 years. Bear markets in stocks and home prices have still left asset valuations at historically high levels. I have no idea why this should be.

Sandwichman -> anne... February 24, 2017 at 08:34 AM

The paradox is that productivity statistics can't tell us anything about the effects of robots on employment because both the numerator and the denominator are distorted by the effects of colossal Ponzi bubbles.

John Kenneth Galbraith used to call it "the bezzle." It is "that increment to wealth that occurs during the magic interval when a confidence trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it." The current size of the gross national bezzle (GNB) is approximately $24 trillion.

Ponzilocks and the Twenty-Four Trillion Dollar Question

http://econospeak.blogspot.ca/2017/02/ponzilocks-and-twenty-four-trillion.html

Twenty-three and a half trillion, actually. But what's a few hundred billion? Here today, gone tomorrow, as they say.

At the beginning of 2007, net worth of households and non-profit organizations exceeded its 1947-1996 historical average, relative to GDP, by some $16 trillion. It took 24 months to wipe out eighty percent, or $13 trillion, of that colossal but ephemeral slush fund. In mid-2016, net worth stood at a multiple of 4.83 times GDP, compared with the multiple of 4.72 on the eve of the Great Unworthing.

When I look at the ragged end of the chart I posted yesterday, it screams "Ponzi!" "Ponzi!" "Ponz..."

To make a long story short, let's think of wealth as capital. The value of capital is determined by the present value of an expected future income stream. The value of capital fluctuates with changing expectations but when the nominal value of capital diverges persistently and significantly from net revenues, something's got to give. Either economic growth is going to suddenly gush forth "like nobody has ever seen before" or net worth is going to have to come back down to earth.

Somewhere between 20 and 30 TRILLION dollars of net worth will evaporate within the span of perhaps two years.

When will that happen? Who knows? There is one notable regularity in the data, though -- the one that screams "Ponzi!"

When the net worth bubble stops going up...
...it goes down.

[Nov 27, 2017] Nineteen Ninety-Six: The Robot/Productivity Paradox and the concept of bezel

This concept of "bezel" is an important one
Feb 22, 2017 | econospeak.blogspot.com

Sandwichman -> Sandwichman ... February 24, 2017 at 08:36 AM

John Kenneth Galbraith, from "The Great Crash 1929":

"In many ways the effect of the crash on embezzlement was more significant than on suicide. To the economist embezzlement is the most interesting of crimes. Alone among the various forms of larceny it has a time parameter. Weeks, months or years may elapse between the commission of the crime and its discovery. (This is a period, incidentally, when the embezzler has his gain and the man who has been embezzled, oddly enough, feels no loss. There is a net increase in psychic wealth.)

At any given time there exists an inventory of undiscovered embezzlement in – or more precisely not in – the country's business and banks.

This inventory – it should perhaps be called the bezzle – amounts at any moment to many millions [trillions!] of dollars. It also varies in size with the business cycle.

In good times people are relaxed, trusting, and money is plentiful. But even though money is plentiful, there are always many people who need more. Under these circumstances the rate of embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly.

In depression all this is reversed. Money is watched with a narrow, suspicious eye.

The man who handles it is assumed to be dishonest until he proves himself otherwise. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks."

Sanwichman, February 24, 2017 at 05:24 AM

For nearly a half a century, from 1947 to 1996, real GDP and real Net Worth of Households and Non-profit Organizations (in 2009 dollars) both increased at a compound annual rate of a bit over 3.5%. GDP growth, in fact, was just a smidgen faster -- 0.016% -- than growth of Net Household Worth.

From 1996 to 2015, GDP grew at a compound annual rate of 2.3% while Net Worth increased at the rate of 3.6%....

-- Sanwichman

anne -> anne... February 24, 2017 at 05:25 AM

https://fred.stlouisfed.org/graph/?g=cOU6

January 15, 2017

Gross Domestic Product and Net Worth for Households & Nonprofit Organizations, 1952-2016

(Indexed to 1952)

https://fred.stlouisfed.org/graph/?g=cPq1

January 15, 2017

Gross Domestic Product and Net Worth for Households & Nonprofit Organizations, 1992-2016

(Indexed to 1992)

anne -> Sandwichman ... February 24, 2017 at 03:35 PM

The real home price index extends from 1890. From 1890 to 1996, the index increased slightly faster than inflation so that the index was 100 in 1890 and 113 in 1996. However from 1996 the index advanced to levels far beyond any previously experienced, reaching a high above 194 in 2006. Previously the index high had been just above 130.

Though the index fell from 2006, the level in 2016 is above 161, a level only reached when the housing bubble had formed in late 2003-early 2004.

Real home prices are again strikingly high:

http://www.econ.yale.edu/~shiller/data.htm Reply Friday, February 24, 2017 at 03:34 PM anne -> Sandwichman ... February 24, 2017

Valuation

The Shiller 10-year price-earnings ratio is currently 29.34, so the inverse or the earnings rate is 3.41%. The dividend yield is 1.93. So an expected yearly return over the coming 10 years would be 3.41 + 1.93 or 5.34% provided the price-earnings ratio stays the same and before investment costs.

Against the 5.34% yearly expected return on stock over the coming 10 years, the current 10-year Treasury bond yield is 2.32%.

The risk premium for stocks is 5.34 - 2.32 or 3.02%:

http://www.econ.yale.edu/~shiller/data.htm

anne -> anne..., February 24, 2017 at 05:36 AM

What the robot-productivity paradox is puzzles me, other than since 2005 for all the focus on the productivity of robots and on robots replacing labor there has been a dramatic, broad-spread slowing in productivity growth.

However what the changing relationship between the growth of GDP and net worth since 1996 show, is that asset valuations have been increasing relative to GDP. Valuations of stocks and homes are at sustained levels that are higher than at any time in the last 120 years. Bear markets in stocks and home prices have still left asset valuations at historically high levels. I have no idea why this should be.

Sandwichman -> anne... February 24, 2017 at 08:34 AM

The paradox is that productivity statistics can't tell us anything about the effects of robots on employment because both the numerator and the denominator are distorted by the effects of colossal Ponzi bubbles.

John Kenneth Galbraith used to call it "the bezzle." It is "that increment to wealth that occurs during the magic interval when a confidence trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it." The current size of the gross national bezzle (GNB) is approximately $24 trillion.

Ponzilocks and the Twenty-Four Trillion Dollar Question

http://econospeak.blogspot.ca/2017/02/ponzilocks-and-twenty-four-trillion.html

Twenty-three and a half trillion, actually. But what's a few hundred billion? Here today, gone tomorrow, as they say.

At the beginning of 2007, net worth of households and non-profit organizations exceeded its 1947-1996 historical average, relative to GDP, by some $16 trillion. It took 24 months to wipe out eighty percent, or $13 trillion, of that colossal but ephemeral slush fund. In mid-2016, net worth stood at a multiple of 4.83 times GDP, compared with the multiple of 4.72 on the eve of the Great Unworthing.

When I look at the ragged end of the chart I posted yesterday, it screams "Ponzi!" "Ponzi!" "Ponz..."

To make a long story short, let's think of wealth as capital. The value of capital is determined by the present value of an expected future income stream. The value of capital fluctuates with changing expectations but when the nominal value of capital diverges persistently and significantly from net revenues, something's got to give. Either economic growth is going to suddenly gush forth "like nobody has ever seen before" or net worth is going to have to come back down to earth.

Somewhere between 20 and 30 TRILLION dollars of net worth will evaporate within the span of perhaps two years.

When will that happen? Who knows? There is one notable regularity in the data, though -- the one that screams "Ponzi!"

When the net worth bubble stops going up...
...it goes down.

[Nov 08, 2017] Labour coercion and outside options

Notable quotes:
"... Coercion of the worker can be quite simply introduced into this setup by allowing firms to pay a 'negative wage' if the bad outcome occurs. This is simply the more cost-effective flipside of paying a higher wage if the good outcome occurs. Negative wages describe a world in which workers can be 'punished' (i.e. a world with coercion). ..."
www.theamericanconservative.com

Christian Dippel, Daniel Trefler 05 November 2017

One way employers can compel workers to accept contracts they otherwise would not accept is by limiting the outside options for those workers...

Related

Labour coercion is arguably as old human civilisation. In the words of Acemoglu and Wolitzky (2011), "the majority of labour transactions throughout much of history and a significant fraction of such transactions in many developing countries today are coercive".

Indeed, labour coercion is at the heart of much of the literature on long run development and institutional change (Domar 1970, Acemoglu et al. 2001, Engerman and Sokoloff 2002, Nunn 2008, Dell 2010, Naidu and Yuchtman 2013, Bobonis and Morrow 2014, Ashraf et al. 2017). Despite this, rigorous empirical evidence on labour coercion is scarce and is mostly focused on relating present-day outcomes to historical labour coercion.

The term 'labour coercion' is used quite broadly to describe the use of, or threat of, force in convincing workers to accept labour contracts they otherwise would not.

However, labour coercion can take two quite distinct forms, and this important distinction is often not well articulated. The distinction is best seen by imagining a standard principal-agent framework. In broad terms, a firm (the principal) offers a labour contract to a worker (the agent). If effort is not observable, it can only be inferred from the outcome, which can be 'good' or 'bad' (e.g. high output or low output). The firm can incentivise its workers to exert effort by offering them a higher wage if the good outcome materialises. The difference in the wages the firm pays in the good and bad state needs to be sufficiently high that workers exert effort (i.e. the 'incentive compatibility constraint' binds). The second constraint on the contract is that workers may walk away from it if they can earn a higher expected wage elsewhere. The expected wage (averaging over the effort-dependent outcome probabilities) thus needs to exceed the worker's outside option (i.e. the 'participation constraint' binds).

Coercion of the worker can be quite simply introduced into this setup by allowing firms to pay a 'negative wage' if the bad outcome occurs. This is simply the more cost-effective flipside of paying a higher wage if the good outcome occurs. Negative wages describe a world in which workers can be 'punished' (i.e. a world with coercion). In this way, slavery, serfdom, or indenture can be nested inside a standard economic framework and, indeed, there is a long tradition in economics that does this (Chwe 1990). However, the participation constraint still binds when there is coercion. Even in the extreme case of slavery, outside options were usually not zero so long as slaves could run away and had a chance of evading capture. The interaction of the two constraints implies that there is complementarity in coercive activities – firms can punish workers more severely if they can also reduce their outside options.

In many modern-day labour markets, it may be entirely impossible for a firm to reduce a worker's outside options and the complementarity between coercion that punishes workers and coercion that reduces outside options can therefore safely be ignored. However, for countries at the early stages of structural transformation – where workers' outside options are not to work for a different firm or in a different sector, but to be self-employed in the informal sector as a yeoman farmer or artisan (a state that describes most of modern economic history and many developing countries today) 1 – coercion that reduces workers' outside options was and still is critical.

This was recognised by early development economists, as attested, for example, by Arthur Lewis' famous quote that "the fact that the wage level in the capitalist sector depends upon earnings in the subsistence sector is of immense political importance, since its effect is that capitalists have a direct interest in holding down the productivity of the subsistence workers. Thus the owners of plantations, if they are influential in government, are often found engaged in turning the peasants off their lands" (Lewis 1954).

[Oct 31, 2017] The threat of offshored jobs and outsourced supply chains is wielded to discipline the domestic workforce in the United States, and Zucman points out that tax havens have effectively allowed the wealthy to choose their own tax system and regulatory regime

Oct 31, 2017 | www.nakedcapitalism.com

Class Warfare

"The Unseen Threat of Capital Mobility" [ The Boston Review ]. "Two new books link rising inequality to unseen forces: tax havens in economist Gabriel Zucman's case, and overseas labor and environmental exploitation in historian Erik Loomis's. The adverse consequences of the free movement of capital suffuse both narratives. Loomis recognizes that the threat of offshored jobs and outsourced supply chains is wielded to discipline the domestic workforce in the United States, and Zucman points out that tax havens have effectively allowed the wealthy to choose their own tax system and regulatory regime. They each question received wisdom and ideologically charged models in which "globalization" is an inexorable force innocent of politics or power, which operates to either universal benefit or at worst whose ill effects can be compensated. In fact, thanks to globalization, the economic body -- what its ideological affiliates call 'The Market' -- is able to transcend the national body politic, to the benefit of multinational corporations and the wealthy individuals who own them."

"Why You're Not Getting a Raise" [ The Minskys ]. "A sure way to speed up wage growth again is fiscal stimulus. Government spending lifts aggregate demand directly and effectively. If enough spending is injected into the economy, it will create enough jobs to bring full employment. The momentum and labor scarcity created by the stimulus will force wages up and give workers and labor unions more bargaining power. A Job Guarantee Program , if ever implemented, would effectively set a wage floor in the economy, since any person working at a lower wage than the Job Guarantee offers will be given work in the public sector.:

"One of Arkansas' top politicians relies on unpaid workers from a local drug rehabilitation center at his plastics company, which makes dock floats sold at Home Depot and Walmart" [ Review News ]. "Hendren Plastics, owned by Arkansas State Senate Majority Leader Jim Hendren, partners with a rehab program under scrutiny for making participants work grueling jobs for free, under the threat of prison, according to interviews with former workers and a new lawsuit." That reminds me of something

"What makes me tired when organising with middle class comrades" [ Guardian ].

"What I've observed over and over again is this inherent need for middle class people to censor, control and mediate emotions. There's a deep fear of conflict, loosing status and control. I've been told to be less angry on demos, less emotional at events and more serious. Stop telling me how to feel. When you've had a life of teachers, social workers and probation officers telling you how you should act, you don't need the same mediating middle class behaviour in your collectives."

[Oct 27, 2017] Why didn't Democrats pass legislation in 2009 to eliminate the right to work legislation by states? The answeer is they want Wall street money.

Oct 27, 2017 | www.nakedcapitalism.com

DJG , October 27, 2017 at 2:34 pm

Portside article about NAFTA, unions, and Canadian unions: Here is a paragraph from the underlying article at New York Magazine about the three sponsors:

On Wednesday, Democratic senators Elizabeth Warren, Sherrod Brown, and Kirsten Gillibrand announced their agreement -- and introduced legislation to ban "right-to-work" laws throughout the United States.

[NY Mag article is dated 20 Sept 2017]

The sooner we collectively kill off the feudal idea of "right to work," the better. Right now, though, we're only what -- sixty, seventy–years too late?

Scott , October 27, 2017 at 3:41 pm

Why didn't Democrats pass legislation in 2009 to eliminate it?

It was one of the few policies that I could think of what would actually, you know, help the win elections. But then I realized the the purpose of the DNC isn't actually to win elections, it's to raise money from Wall Street, Hollywood and Silcon Valley to pay for consultants.

Huey Long , October 27, 2017 at 5:06 pm

Why didn't Democrats pass legislation in 2009 to eliminate it?

Yeah, Captain Hope'N-Change failed to deliver labor any meaningful legislation during his eight years in office.

Labor was essentially told "We put some friendly faces on the NLRB and in the judiciary. Be thankful, and forget about card check or right to work preemption."

Sid_finster , October 27, 2017 at 7:40 pm

" the purpose of the DNC isn't actually to win elections, it's to raise money from Wall Street, Hollywood and Silcon Valley to pay for consultants."

Money.

Henry Moon Pie , October 27, 2017 at 4:25 pm

Good luck with that. The Rs ads write themselves.

And it's a bad look anyway. With the basically insurmountable barriers to organizing under the Wagner Act these days, a focus on making sure the money keeps flowing, much of it ending up in the Ds campaign coffers. How about repealing Taft-Hartley?

Maybe unions would be better off with less bureaucracy and more member participation. Do it like the Wobs: you come to the meeting, you pay your dues, you voice your opinion and you vote.

Huey Long , October 27, 2017 at 5:16 pm

How about repealing Taft-Hartley?

Here here!

Repealing Taft-Hartley would bring back:

The Closed Shop
Jurisdictional Strikes
Secondary Boycotts
Common Situs Picketing
A Ban on Right-to-Work
A Ban on presidential interventions in strikes
Supervisor's Unions
Employer Nuetrality

Hopefully this happens before I die. I would absolutely love to see the yacht and learjet owning class in tears!

a different chris , October 27, 2017 at 6:06 pm

>The Rs ads write themselves.

They not only write themselves they've already been written and burned into the brain. True or not, there they are. So what are you risking?

The thing is the D-time is well past the point (no House, no Senate, no Pres, vanishing amount of Govs, vanishing amount of State leges..) where saying "That's not true!!" can be considered a winning strategy, even if you could show me what you've won by saying it.

How about "hell yeah that's how we feel, America rocked (when we had strong labor)". Stand up to the bully for once, again whaddya got to lose now. I often wonder what Steve Gilliard would say at this point, he always made sure that us white people realized that something was better than nothing when you were looking at absolutely nothing at all . but things have sunk so low would he still feel that what has become nothing more than an orderly, but continuous retreat should be sustained? Or is it time to dig in and really declare full throated opposition?

(like the rest of your post, just think the time to avoid things is past)

DJG , October 27, 2017 at 6:13 pm

Henry Moon Pie: So? Let's repeal the Wagner Act and Taft-Hartley. And let's not pre-defeat ourselves.

Just as Lambert keeps reminding us, Who would have though five years ago that the momentum is now toward single-payer health insurance even if the current couple of bills don't pass? For years, John Conyers carried on the fight almost single-handedly. And now we have influential physicians stumping for single-payer.

[Oct 17, 2017] Agents of Neoliberal Globalization Corporate Networks, State Structures, and Trade Policy by Michael C. Dreiling, Derek Y. Darve

Notable quotes:
"... Amid the global financial crisis of 2008, a new chapter in the history of neoliberal globalization emerged. Simple assumptions about markets as pure and neutral arbiters of economic transactions faced new challenges from beyond the pages of economic history and sociology. ..."
"... The apparent triumph of global capitalism came into temporary question, and with it, the reigning economic paradigm of neoliberalism. ..."
"... The specter of the Occupy movement in 1011, with its sweeping critique of corporate power, took root in ways not seen in the United States since the 1999 World Trade Organization protests in Seattle. ..."
"... In response, proponents of neoliberalism heightened their demands for a market-governed society, further tax cuts, deregulation, trade liberalization, and more. From the GOP and Tea Party's politics of austerity arose a fresh defense of free market politics in the United States, as well as a rcinvigorated denial of class as a structuring force in US society. These social tensions persist even as neoliberalism, as an ideology and a model for institutional restructuring, exhibits remarkable resilience. ..."
"... From the early 1980s onward, it provided the basic policy framework for "structural adjustment" in the global south, for "rescuing" the welfare state in the global north, and as a vision for a global economy unbound from centrally planned markets, dying industries, or rent-seeking interest groups. ..."
"... One cornerstone of this paradigm that remains mostly unchallenged among political elites is the principal of "free trade." Broadly speaking, neoliberalism and free trade have provided the ideological framework for most reciprocal trade agreements since the early 1980s, when President Reagan initiated a wave of new trade policies in February 1982 during a speech to the Organization of American States (OAS). ..."
"... This formulaic discourse of free markets, free trade, and personal liberty - hallmark features of Reagan's popular rhetoric - also captured what would later be acknowledged as core principles of an incipient neoliberal ideology that promised a restoration of US economic hegemony (Mudge 2008). Domestically and internationally, neoliberal trade proposals were generally presented in tandem with calls for privatization, deregulation, and a reduction in the size of government spending as a share of GDP. ..."
"... Was it the fever pitch of a new' policy ideology acted out by government partisans and policy makers committed to its mantra? Or did the very economic actors benefitting from market liberalization act politically and concertedly to unleash it? And if so, did this coordinated corporate political campaign arise from a reorganized and newly emboldened economic class, or simply through ad hoc alignments created by shared organizational interests? Specifically, can we detect class political signatures on the wave of free trade policies, like the CBI, the North American Free Trade Agreement (NAFTA), or the World Trade Organization (WTO), that erected the institutional framework of neoliberal globalization? 6 ..."
"... We believe that our approach, rooted in the "elite studies" and "power structure" research traditions, expands (and, in some areas, corrects) conventional explanations of neoliberal trade and globalization that emphasize market, institutional, and ideological factors, while neglecting to incorporate a concept of class political action ..."
Oct 17, 2017 | www.amazon.com

Amid the global financial crisis of 2008, a new chapter in the history of neoliberal globalization emerged. Simple assumptions about markets as pure and neutral arbiters of economic transactions faced new challenges from beyond the pages of economic history and sociology.

The apparent triumph of global capitalism came into temporary question, and with it, the reigning economic paradigm of neoliberalism. From the left wing of US politics, a newly invigorated discourse of class and income inequality began to challenge corporate power with calls for greater accountability on Wall Street. The specter of the Occupy movement in 1011, with its sweeping critique of corporate power, took root in ways not seen in the United States since the 1999 World Trade Organization protests in Seattle.

In response, proponents of neoliberalism heightened their demands for a market-governed society, further tax cuts, deregulation, trade liberalization, and more. From the GOP and Tea Party's politics of austerity arose a fresh defense of free market politics in the United States, as well as a rcinvigorated denial of class as a structuring force in US society. These social tensions persist even as neoliberalism, as an ideology and a model for institutional restructuring, exhibits remarkable resilience.

Neoliberalism - which promises to efficiently generate wealth while disciplining states and bureaucracies with market forces - took shape over the course of decades. As a kind of governing philosophy, it has been offered, variously, as a remedy for economic stagnation, bureaucratic bloat, corruption, inflation, and more (Bourdieu 1999; Mirowski and Plehwe 2009; Mudge 2008). From the early 1980s onward, it provided the basic policy framework for "structural adjustment" in the global south, for "rescuing" the welfare state in the global north, and as a vision for a global economy unbound from centrally planned markets, dying industries, or rent-seeking interest groups.

One cornerstone of this paradigm that remains mostly unchallenged among political elites is the principal of "free trade." Broadly speaking, neoliberalism and free trade have provided the ideological framework for most reciprocal trade agreements since the early 1980s, when President Reagan initiated a wave of new trade policies in February 1982 during a speech to the Organization of American States (OAS). There, Reagan unilaterally called for a Caribbean Basin Initiative (CBI) that would "make use of the magic of the marketplace of the Americas, to earn their own way toward self-sustaining growth" (quoted in Polanyi-Levitt 1985: 232)/ This formulaic discourse of free markets, free trade, and personal liberty - hallmark features of Reagan's popular rhetoric - also captured what would later be acknowledged as core principles of an incipient neoliberal ideology that promised a restoration of US economic hegemony (Mudge 2008). Domestically and internationally, neoliberal trade proposals were generally presented in tandem with calls for privatization, deregulation, and a reduction in the size of government spending as a share of GDP. 5

Although a large and varied group of economists, policy wonks, and government leaders supported the general principles of neoliberal globalization, the "market fever" of the 1980s did not spread simply because certain individuals espoused free trade and domestic deregulation. The fact that many of these noncorporate actors assume a central role in many popular and academic accounts of this era does not reduce the many empirical problems with this view.

In particular, the problem with this "triumphant" vision of neoliberal history is the manner in which the very engines of capital behind the market mania - globalizing corporations appear as liberated historical agents acting out their market freedoms, not as class political actors foisting new institutional realities on the world. We contest this prevailing view and instead ask who liberated, or in Blyth's (2001) terminology, "disembedded," these markets from national social and political institutions?

Was it the fever pitch of a new' policy ideology acted out by government partisans and policy makers committed to its mantra? Or did the very economic actors benefitting from market liberalization act politically and concertedly to unleash it? And if so, did this coordinated corporate political campaign arise from a reorganized and newly emboldened economic class, or simply through ad hoc alignments created by shared organizational interests? Specifically, can we detect class political signatures on the wave of free trade policies, like the CBI, the North American Free Trade Agreement (NAFTA), or the World Trade Organization (WTO), that erected the institutional framework of neoliberal globalization? 6

The answer to these questions and, in particular, the role of class agency within these macroeconomic shifts, is not simply a question of whether one likes Karl Marx or Adam Smith. Notwithstanding the recent tendency to equate the mention of class with "class warfare," it is our contention that removing class from accounts of recent economic history creates, at best, a narrow and distorted perspective on this important era. The primary purpose of this book, then, is to introduce and empirically validate a concept of class agency that deepens our understanding of both the trade policy-making apparatus as well as the neoliberal globalization "project" more generally.

We believe that our approach, rooted in the "elite studies" and "power structure" research traditions, expands (and, in some areas, corrects) conventional explanations of neoliberal trade and globalization that emphasize market, institutional, and ideological factors, while neglecting to incorporate a concept of class political action .

Our general line of argument historicizes US trade policy and neoliberal globalization, highlighting the active and at times contradictory processes that shape the state and class relationships responsible for propelling institutions, like the WTO, into existence. Following McMichael (2001: 207), we concur that globalization is best understood as a "historical project rather than a culminating process." Treating neoliberal trade policies as part of a much larger historical project - made and remade by collective actors - offers a more realistic and empirically grounded framework for exploring the intersection of class and state actors in the political articulation of globalization.

Whereas much of the literature on globalization assigns an important role to the economic activity of multinational corporations, the force of their collective political agency in pressuring states to ratify trade agreements and enact institutional reforms is mostly attributed to narrow sectoral interests, like factor mobility', economies of scale, or various industry-specific characteristics...

[Oct 11, 2017] The effects of opioids and heroin in Huntington, W.Va

Oct 11, 2017 | www.unz.com

republic, October 11, 2017 at 4:14 pm GMT

@Issac Nothing could be more laughable than to suggest sixty years of deck-stacking against middle and working class whites was a design that favored them over minorities. Hedges clearly hates those elites, but appears to share the majority of their biases. re: working class whites

Brilliant documentary by Louis Theroux, first aired last Sunday on BBC2

https://www.youtube.com/watch?v=OQ1tszdWoTs

It shows the effects of opioids and heroin in Huntington, W.Va

[Oct 08, 2017] Profiting Without Producing How Finance Exploits Us All by Costas Lapavitsas

Notable quotes:
"... the lives of people in the Western world have reached levels of unprecedented material well-being and there is a middle class who are not emiserated materially. ..."
"... So the surplus value ( profit ) which is socially produced by a community gets appropriated and its potential productive value is turned to the use and benefit of a very tiny percentage of the population who produce the wealth socially, rather than redistributed into the community according to the wishes of the community. ..."
Oct 07, 2017 | www.amazon.com
Introduction

The 2000s were an extraordinary period for finance in terms of prices, profits, and volume of transactions, but also in terms of influence and arrogance. By the middle of the decade a vast bubble had been inflated in the US and the UK, the bursting of which could not be reliably timed but whose aftermath was likely to be devastating. Trivial as this point might seem in 2013, it was almost impossible to convey it at the time to spe- cialists and students of finance, and even to activists and socialists. Public perceptions were dominated by the so-called expert skills of the financial system in 'slicing and dicing' risk, and by the putative wisdom of the 'Great Moderation' in inflation policy. Structural crises were a thing of the past, or of the developing world, not of mature countries, where institutions were strong and economists well trained. It seemed that finance had discovered the perpetuum mobile of profit making.

By the middle of the first decade of the new century, it was also apparent that the processes under way amounted to more than financial excess. The bubble reflected profound changes in the conduct of non-financial enterprises, banks, and households. Alter years of financial ascendancy, the agents of capitalist accumulation assigned to financial operations a weight that was historically unprecedented. Finance was pivotal to profit making and to organizing everyday life, but also to determining economic policy as a whole. Mature capitalism had become financialized.

This book was initially conceived in that context, and its aim was to analyse the ascendancy of finance and the concomitant financialization of capitalism. By bringing to bear previous work on money and finance, the intention was to develop a theoretical analysis of financialization with clear Marxist characteristics. It was to be a book that would draw on Anglo-Saxon political economy and Japanese Uno Marxism, while being familiar with mainstream theory of money and finance. It would thus contribute to filling the hole still gaping in political economy in this field.

As is often the case with plans of this sort, reality intervened. In August 2007 the US money market had a heart attack, and in August-September 2008 the global financial system had a near-death experience. The bubble had indeed burst and a catastrophe was in the offing. The destructive influence of finance on the rest of the economy had become evident, as had the role of the state in supporting and promoting financialization. More than that, however, it soon became clear that this was a structural crisis that would not go away quickly. The bursting of the bubble had ushered in a crisis of financialization that cast fresh light on the historic transformation of mature capitalism during the preceding decades. It became necessary to re-examine the underlying tendencies of financialization, focusing in particular on the sources of financial profit. The book would have to be delayed.

And then in 2010-2012 the crisis took an even more dangerous turn. States had become perilously exposed to debt because recession had reduced tax revenues, while rescuing finance had imposed fresh costs on the exchequer. A bubble inflated by private capital had resulted in a crisis of public finance. Rising state indebtedness created turmoil of extraordinary ferocity in the eurozone, bringing into sharp relief the split between core and periphery, pushing several peripheral countries toward default, and threatening a break-up of the monetary union. The spectre of a gigantic crisis hung over the world economy. It became clear that financialization would have to be rethought still further in view of its monetary dimension, particularly the precariousness of its domestic and international monetary underpinnings.

The crisis was far from over at the time of writing this book. However, the temptation had to be resisted to delay publication still further in the expectation that other important features of financialization would emerge. It was time to submit to the public sphere the analysis of the structural and historical content of financialization, even if that meant trying to hit a moving target. The monetary and financial aspects of the transformation of capitalism during the last four decades have been increasingly discussed by political economy, particularly its Marxist strain. This book has a distinctive argument to make regarding financialization, including particularly the predatory and expropriating character of financial profit and its implications for social stratification. Light could thus be shed on the tendency to crisis that has characterized financialization since its inception.

kievite on October 8, 2017

Insightful book on "financialization"

The concept of "casino capitalism" which was put forward by Susan Strange in her 1983 book is closely related to the concept of "financialization". So this is not new and not the first attempt to analyze this aspect of neoliberalism. But the author managed to write a very interesting and insightful book.

Again, the fact that financialization is at the core of neoliberalism (as the term "Casino Capitalism" implies) is well established, but the details of how this mechanism works and how finance institutions position themselves under neoliberalism as universal intermediaries of almost any economic and even social activity: education (via student loans), pensions (via 401k Plans), heath (via heath insurance), consumption (via credit cards), extracting rents from each of them is not well known or understood.

This is the area in which this book provide some deep insights. Brief overview of the book from the author can be found in his lecture on YouTube (Profiting Without Producing How Finance Exploits Us All -- A lecture by Costas Lapavitsas ) and in his Guardian article "Finance's hold on our everyday life must be broken ".

Converting the whole economy into one giant casino where you can bet on almost anything, commodities prices, interests rate and even volatility of the market has profound social effects. And those effects are different on large enterprises and small enterprises and population at large.

The author argues that "Financialization represents a historic and deep-seated transformation of mature capitalism. Big businesses have become "financialised" as they have ample profits to finance investment, rely less on banks for loans and play financial games with available funds. Big banks, in turn, have become more distant from big businesses, turning to profits from trading in open financial markets and from lending to households. Households have become "financialised" too, as public provision in housing, education, health, pensions and other vital areas has been partly replaced by private provision, access to which is mediated by the financial system. Not surprisingly, households have accumulated a tremendous volume of financial assets and liabilities over the past four decades. "

When like in casino sheer luck begins to determine more and more of what happens to financial well-being of people due to their exposition to stock markets (hypertrophied under neoliberalism into some incredible monster due to 401K plans participation) , and skill, effort, initiative, determination and hard work count for less and less, then inevitably faith and confidence in the social and political system quickly fades.

That's what happened with casino capitalism in the USA and that's why Trump was elected.

Paradoxically, as people more and more play in stock market (including with their 401K money) then respect the system less and less. In a way neoliberalism brings with is 'casino capitalism" mentality" its own demise. Frustration and anger become sharper and prone to be violently expressed when the realm of inequality becomes too large and when the system seems to operate so very unequally and biased toward the top 1% or, more correctly, the top 0.01%. While many people find themselves without jobs and without any opportunity to earn a decent living. Thrown out of "economy for winners." That's the problem Pope Francis "LAUDATO SI" was devoted to.

As author states "This book has a distinctive argument to make regarding financialization, including particularly the predatory and expropriating character of financial profit and its implications for social stratification. Light could thus be shed on the tendency to crisis that has characterized financialization since its inception."

Highly recommended.

merjet December 2, 2014

Clear and informative but a Marxist bias

I discovered this book by chance. The title looked intriguing and I have seen very few books about financialization, so I decided to read it. It was good enough to keep my interest, despite the influence by the distorting lens of Marxist thought. It doesn't live up to its title of showing how financial people profit without producing and exploit us all. (I make an exception for those in government who do that.) Indeed, despite "exploit" in the subtitle, it appears in the book only two other places, which likely helped hold my interest. Also, the writing was good.

The author makes a fundamental distinction between productive capital and financial capital. Add '-ist' to each to denote the people. I think it's safe to say the book implicitly says:

1. The former are capital providers who also work in the productive business. The business produces non-financial products, e.g. food, or services, e.g. transportation.

2. The latter provide the non-financial business capital but don't work in said business, like outside stockholders, bondholders and lenders.

Lenders are mostly banks. The author is not critical of productive capital, but, as a Marxist, he regards financial capitalists as expropriators who profit without producing. The fact that many of these financial capitalists are individuals who worked productively for decades and are now retired and depend on income from said capital for living expenses is conveniently omitted.

Marx's notions of money and exchange value are flawed. Firstly, money is the medium of _indirect_ exchange, which Marx didn't recognize and Lapavitsas's reference to Carl Menger didn't recognize. Also, Austrians like Menger realize that indirect exchange increases with the division of labor. Despite its huge significance, division of labor is an idea barely worth mention by Marx, and then only negatively. Also, indirect exchange encompasses more than just "spot market" exchanges. It includes X now for Y later, like in a forward or futures contract. It also includes both X and Y being money and Y is indeterminate when X occurs. X and Y may even be in different currencies and utilize a financial mediator.

Page 200 says, "the financial system is an intermediate entity that does not produce value." Page 201 says the financial system's services include creation of credit money, safekeeping of funds, money transfers, facilitating foreign exchange, mobilization of loanable capital, and turning that into loans. "The financial, consequently, acts as the nerves and brains of the capitalist economy." Extending his metaphor, what he considers the productive part of the economy must be the bones, muscle, and other organs. If that isn't a bad analogy, it's an amazing contradiction of Marxist thought unrecognized by the author. It implies that the nerves and brains of an animal's body provide no value to the rest of the body.

Marxist thought cherry-picks who is a producer or worker. Those in roles readily visible to making products or providing services, and roles easy to understand rank high. Roles less visible and understandable like research and development, executive-level decision-making, marketing, and especially financial people rank low and may even be considered expropriators. Union leaders and organizers whose livelihood is extracted from union dues? Many government employees? While the author gives a significant role to governments (states) and central banks in financialization, Lapavitsas blames mostly financial capitalists. Governments and central banks are more like their assistants. However, what people typically call "capitalist economies" are more properly called "mixed economies" with extensive government control well beyond prevention and punishment for coercion and fraud. So assigning all blame to capitalism is quite biased.

Interest is often not simply exploitation of labor. It is mainly a reward for savings and the cost of borrowing. The author occasionally refers to savings with the perjorative term "hoarding." Consider those retirees mentioned above again.

The author often attributes to surplus value predation and exploitation, as if all surplus value does is put money in the financial capitalist's pocket and extracts from labor. Not so. Surplus value, i.e. profit, is often the source of funds for growth, upgrades, and replacement of old capital. The author himself acknowledges this when he writes about 'internal' financing, along with graphs showing 'internal' financing over time averaging about 100% in the U.S. He does not integrate these two things, which shows an incoherence in Marxist thought. Surplus value can also be the reward from entrepreneurship.

About mortgages the author says: "In short, the money revenue of workers is transformed into loanable capital at a stroke, allowing financial intermediaries to absorb parts of it as financial profit by trading securities that are based on future wage payments. The path is thus opened for financial institutions to bring to bear predatory practices reflecting the systematic difference in power and outlook between financial institutions and workers" (p. 167).

My comments:

1. Loanable capital doesn't arise simply because a worker wants a mortgage. Unless the money is newly created "out of thin air" by government-backed banks, loanable capital is the result of somebody saving, the saver not spending the money on something else.

2. The worker's future wages are in fact a condition for obtaining the mortgage. Rather than being exploited, the worker is given the opportunity to become a homeowner at the stroke of a pen.

3. Regarding working people you know who have purchased a house with a mortgage, which may include you, have they felt elated or exploited?

4. All or most working people living in many of the poorer countries of the world can't even get a mortgage. There is not enough savings to offer loanable capital to support a mortgage market.

5. Granted, there have been victims of predatory practices by lenders, but lenders also become victims if the borrower defaults on the mortgage. Also, such predatory practices by lenders is a recent phenomena for a _part_ of the market for mortgages, hardly characteristic of the mortgage market generally.

Chapter 9 is a pretty good description of the recent financial crisis. It also covers different Marxist theories about how crises develop. All typically claim that capitalism is inherently unstable due to 'contradictions' in production. Unlike free market advocates, they hardly ever cite government intervention as a cause of instability. They don't distinguish between a capitalist economy and mixed economy.

The final chapter, Controlling Finance, addresses what has been done and what the author wishes can be done. It makes an interesting distinction between market-negating and market-conforming regulation. I don't agree with the author's utopian visions about government ownership and/or control of finance. Indeed, I found it puzzling to see after (1) his earlier saying elected politicians are plain dishonest (p. 195), (2) describing how much states and central banks have aided financial capitalists in recent decades with deregulation and bailouts, and (3) his saying "there are no clear paths to regulatory change" (p. 324). By the way, a good way to avoid such utopian visions is to compare East and West Germany, North and South Korea, and the USSR and the USA.

7 comments 22 people found this helpful.

Stergios D. Marangos 1 year ago

This reviewer is more concerned with trying to critiqu