Scapegoating Trade Deals
January 25, 2017 2:12 PM Subscribe
NAFTA and other trade deals have not gutted American manufacturing — period. "...here in America, you can, as you definitely can elsewhere, mobilize a great deal of populist energy by identifying foreigners as the enemy. I do not think this is an impulse that it is healthy for any part of this country. I do not think this is something any political movement that seeks to do anything other than destroy can dare to encourage."
"Yes, America has been losing manufacturing job share at a furious rate. Yes, the spread between the incomes of the non-college-educated and the college-educated has widened massively. Yes, the spread between the incomes of even the college-educated and our overclass has exploded.
But this is not due to NAFTA. This is not due to bringing China into the WTO rather than keeping it out. This is not due to the not-yet-completed — and now never-to-be-completed — TPP....
Try to calculate the share that those three “bad trade agreements” played in the processes of manufacturing job loss, of widening income inequality, and the coming of the overclass of the Second Gilded Age, and — as long as you calculate honestly — you get a share of responsibility of less than 5 percent, and usually less than 1 percent.
This is what caused a populist backlash?"
"Yes, America has been losing manufacturing job share at a furious rate. Yes, the spread between the incomes of the non-college-educated and the college-educated has widened massively. Yes, the spread between the incomes of even the college-educated and our overclass has exploded.
But this is not due to NAFTA. This is not due to bringing China into the WTO rather than keeping it out. This is not due to the not-yet-completed — and now never-to-be-completed — TPP....
Try to calculate the share that those three “bad trade agreements” played in the processes of manufacturing job loss, of widening income inequality, and the coming of the overclass of the Second Gilded Age, and — as long as you calculate honestly — you get a share of responsibility of less than 5 percent, and usually less than 1 percent.
This is what caused a populist backlash?"
This is something nearly every economist and political economist knows. There's also a lot of research that determinants to trade attitudes aren't driven by being hurt from trade. It's something else, with various hypotheses offering answers to what that could be. Anti free trade attitudes, or course, are prevalent on the far left. One interesting question is if free trade attitudes are being "partisanized" because of Trump.
posted by MisantropicPainforest at 2:21 PM on January 25, 2017 [2 favorites]
posted by MisantropicPainforest at 2:21 PM on January 25, 2017 [2 favorites]
Also, NAFTA did cause mass displacement of farmers in Mexico, and sparked a civil war. there's a lot to dislike about NAFTA outside of the exclusionary box of "economics"
posted by eustatic at 2:24 PM on January 25, 2017 [18 favorites]
posted by eustatic at 2:24 PM on January 25, 2017 [18 favorites]
The evidence that trade agreements cause civil wars is fairly thin, what is less thin is the evidence that trade agreements cause interstate peace.
posted by MisantropicPainforest at 2:33 PM on January 25, 2017 [1 favorite]
posted by MisantropicPainforest at 2:33 PM on January 25, 2017 [1 favorite]
Bit fucking late now.
posted by Artw at 2:37 PM on January 25, 2017 [5 favorites]
posted by Artw at 2:37 PM on January 25, 2017 [5 favorites]
The weirdness over trade deals like NAFTA, the now defunct TPP, and free trade in general has been one of the biggest self discrediting attitudes many on the left have curiously clung to. Sadly, it takes a dangerous ignoramus like Trump espousing those same beliefs for some to rethink those attitudes. Now that it's too late.
posted by 2N2222 at 2:41 PM on January 25, 2017 [4 favorites]
posted by 2N2222 at 2:41 PM on January 25, 2017 [4 favorites]
Also, NAFTA did cause mass displacement of farmers in Mexico, and sparked a civil war. there's a lot to dislike about NAFTA outside of the exclusionary box of "economics"
Mmm yeah, not really. Farming had been mired in a pretty antiquated system for many decades when NAFTA came around, and it's been to Mexico's great benefit overall. Having experienced a great deal of economic growth and prosperity in that time.
posted by 2N2222 at 2:45 PM on January 25, 2017
Mmm yeah, not really. Farming had been mired in a pretty antiquated system for many decades when NAFTA came around, and it's been to Mexico's great benefit overall. Having experienced a great deal of economic growth and prosperity in that time.
posted by 2N2222 at 2:45 PM on January 25, 2017
"No. I will say, we will opt out of NAFTA unless we renegotiate it. And we renegotiate it on terms that are favorable to all of America. "
There's a lot to dislike about NAFTA. That's why it was such a big topic in the primary debates. The Democratic primary debates. In 2008. (Transcript here.)
I'm also surprised that people are now defending the TPP. The trade deal whose drafts were closely guarded. There are multiple news sites that linked to leaks and eventually drafts of the deal and nobody was happy with it. Here's a piece by Elizabeth Warren regarding it.
posted by I-baLL at 2:59 PM on January 25, 2017 [32 favorites]
There's a lot to dislike about NAFTA. That's why it was such a big topic in the primary debates. The Democratic primary debates. In 2008. (Transcript here.)
I'm also surprised that people are now defending the TPP. The trade deal whose drafts were closely guarded. There are multiple news sites that linked to leaks and eventually drafts of the deal and nobody was happy with it. Here's a piece by Elizabeth Warren regarding it.
posted by I-baLL at 2:59 PM on January 25, 2017 [32 favorites]
Counterargument (mostly) from Erik Loomis.
posted by clew at 3:00 PM on January 25, 2017 [2 favorites]
posted by clew at 3:00 PM on January 25, 2017 [2 favorites]
In the same way that we have to draw a thick line between well regulated capitalism and whatever we have now, we've got to draw a line between well-written trade agreements and whatever the TPP was going to be.
Everybody took freshman economics, everybody knows that the graphs work out, free trade is the rising tide that lifts all boats.
But an agreement, like the TPP, being worked on by the corporations it would benefit and kept secret not only from the publics of its member countries but their legislatures, is not the same as a well-written trade agreement.
Naomi Klein and everybody who worked on Periphery Theory and a ton of other folks have pointed out that "free trade" has gone on to perpetuate poverty and siphon wealth upwards as often as it's worked towards all of our goods.
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Last and maybe least from the Far Left: when you look at what the US has gained overall from trade expansion in the last fifty years (access to MORE STUFF that comes out, per capita, which is NOT how it's been distributed, to a few hundred bucks a year) versus what it's lost (meaningful, well-paying jobs where you make things with your hands), it's not a slam dunk that free trade has been a total win win all around the graphs go up na mean
posted by TheProfessor at 3:01 PM on January 25, 2017 [21 favorites]
Everybody took freshman economics, everybody knows that the graphs work out, free trade is the rising tide that lifts all boats.
But an agreement, like the TPP, being worked on by the corporations it would benefit and kept secret not only from the publics of its member countries but their legislatures, is not the same as a well-written trade agreement.
Naomi Klein and everybody who worked on Periphery Theory and a ton of other folks have pointed out that "free trade" has gone on to perpetuate poverty and siphon wealth upwards as often as it's worked towards all of our goods.
---
Last and maybe least from the Far Left: when you look at what the US has gained overall from trade expansion in the last fifty years (access to MORE STUFF that comes out, per capita, which is NOT how it's been distributed, to a few hundred bucks a year) versus what it's lost (meaningful, well-paying jobs where you make things with your hands), it's not a slam dunk that free trade has been a total win win all around the graphs go up na mean
posted by TheProfessor at 3:01 PM on January 25, 2017 [21 favorites]
At the risk of being rude, I wouldn't trust J. Bradford DeLong — a guy who co-wrote his last book with Larry Summers and who wrote an article about "What Milton Friedman Can Teach Progressives" — to explain a Best Buy® coupon circular to me. The fact that this was a Vox article only makes it worse.
If you can't find it in your heart to be concerned about the "investor-state dispute settlement" provisions that were in the TPP, or the anti-democratic character of the WTO as a policy making body, or the environmental and labor impact NAFTA had in Mexico, then good luck to you.
posted by ProfLinusPauling at 3:02 PM on January 25, 2017 [25 favorites]
If you can't find it in your heart to be concerned about the "investor-state dispute settlement" provisions that were in the TPP, or the anti-democratic character of the WTO as a policy making body, or the environmental and labor impact NAFTA had in Mexico, then good luck to you.
posted by ProfLinusPauling at 3:02 PM on January 25, 2017 [25 favorites]
And insofar as those who profited from the TPP then turned around and employed workers in the US, which to a great extent they would have...The part after the comma is questionable. Employing more workers with excess profits is something that hasn't been acceptable since the triumph of the shareholder rights movement. Hoping that will magically happen is a throwback to a postwar "jobs for the boys who saved the free world" attitude that shows zero sign of returning.
The author also plays the usual tricks with his graphs when comparing US manufacturing job losses to German manufacturing job losses: The graphs look the same, but the US went from ~25% in 1970 to ~8% in 2015, while Germany went from ~40% to ~20%. The trend is in the same direction, yes, but the magnitude is very different. Don't be fooled by the graphs.
And the attempt to say that the same thing is happening to manufacturing jobs that happened to agricultural jobs is mostly wrong. In manufacturing, there are now millions of people in low-wage countries doing the jobs that he says have disappeared. Most of those jobs have not disappeared; they have moved, and we are importing the manufactured products. This is very different from the situation in agriculture, where the jobs have disappeared. We are not importing grain harvested in low-wage countries by low-wage agricultural workers. (Tomatoes and the like are a different story, but, again, those are jobs that have merely moved, not disappeared.)
And in order to run that trade surplus, the US should be facilitating manufacturing production and exports by following not a strong-dollar policy but an appropriate-dollar policy.Good luck weakening the value of the world's reserve currency. And, funny enough, in the story posted earlier today about austerity, that author points out that devaluation only works when it's "devaluation of a sovereign currency at the same time as the expansion of a much larger trading partner" and it works by giving "exports a short-term boost". It's not the magic that he's hoping for.
We have not done our proper job in cushioning the incomes of and providing opportunities to those people and communities that have found themselves behind the eight-ball...This is a standard mantra of neoliberal economists, of whom the author is one. "Completely free trade is great, because all we have to do to mitigate the inequalities it creates is raise taxes and redistribute income." And then, when asked a different question, "Raising taxes hurts growth, so we shouldn't do it." Guess what the outcome is when you combine those two things? Free trade and low taxes and inevitable "austerity".
I'm glad to trade with nations with protection for workers and the environment and generous social safety nets. Converting to neoliberalism isn't something we need to do just because Trump thinks parts of neoliberalism are a bad idea.
posted by clawsoon at 3:05 PM on January 25, 2017 [23 favorites]
The flaw with NAFTA and similar deals is that it didn't include freedom of transit between signatories. Free trade zones that enable capital to be hyper mobile need similar provisions that allow labor freedom to relocate to the jobs.
This is what is good about things like the Schengen Area.
posted by vuron at 3:09 PM on January 25, 2017 [25 favorites]
This is what is good about things like the Schengen Area.
posted by vuron at 3:09 PM on January 25, 2017 [25 favorites]
Factories shut, shedding workers and releasing them for other, more societally productive uses elsewhere in the economy.Right, and with a handgun and a few scalpels, I could probably "release" a bunch of surplus kidneys, freeing them for "more societally productive uses elsewhere in the economy." And I'm sure I could find a way to make it seem like a net win—as long as it wasn't your kidneys getting reallocated. (It's okay, I'll start with the Chicago-school economists.) Ugh.
The whole free-trade assumption that it's better, in the sense of more preferable, to have cheaper import goods even if it leads to unemployment is false, in the sense that when people realize what's going on they almost always try to stop it from happening. It is unsupported by the evidence. The claim, made over and over, that somehow the people on the losing end of the equation, who end up without jobs, will be made whole again — the "job retraining" and all that other shit — is a lie. It's always a lie. The fact that it could, hypothetically, in some redistributionist fantasyland happen is irrelevant, because it typically doesn't; it didn't happen in post-Soviet Europe and it didn't happen in the US. Furthermore, it shouldn't be taken as a given that even if it could, that citizens would necessarily find that outcome — slightly closer to Pareto efficiency as it might be — to actually be desirable.
And that's the rub: the free-trade economist sees maximizing economic efficiency as the holy grail, but it is not at all clear that most people actually want that.
The article says:
An East Germany that was only 40 percent as well off as West Germany in 1989 is now 80 percent as well off as West Germany. It is very hard to say that the shedding of inefficient, unproductive, and low-wage manufacturing jobs was a minus for East Germans.Has he ever actually been to eastern Germany? Because a hell of a lot of East Germans find it pretty easy to say that the shedding of those jobs, inefficient though they might have been, was really fucking bad for them. Same with a lot of people in a lot of other ex-Soviet countries. Germany hasn't gotten their Putin or Orbán or Trump, but it's not inconceivable that they might still in the future, depending on the breaks. Even still, they're the success story from free-market deindustrialization, the kid who made it, and it's pretty weird to focus on them and ignore the countries where significant numbers of people are basically sitting around drinking themselves to death and, more ominously, voting for leaders who seem alarmingly likely to distract everyone from their diminished expectations with a splendid little war.
The problem with economic analysis is that there are certain things that it just doesn't value. It doesn't place a value on having intact communities; it doesn't place a value on not having to leave your family and friends in search of work; it doesn't place a value on knowing you'll have a job and being able to plan your life accordingly, unless that affects investment. It doesn't value suffering, or being told that your skills are obsolete, or realizing that you're too old to keep up in school again. Except in the very narrow senses in which those things can be projected down onto the money economy and measured. But largely, those things don't count when the "overwhelming" case for free trade is made. But, of course, they do.
If you could somehow magically give people in 2016 America the option of stepping into an alternate universe where flatscreen TVs were the province of EPCOT, and the closest thing to the iPhone was in Star Trek, and clothing still cost enough that it was worth mending — but in exchange you could support a family on a highschool education and jobs came with healthcare and half-pay pensions after 20 years; basically the postwar-to-1974 era but with less racism and sexism ... I think a lot of people would take that. (A lot of people, judging by the recent election, would take it even with the racism and sexism, and perhaps might consider that a bonus, but a lot of that is driven directly by resentment at what they either feel they've lost, or were entitled to and didn't receive.)
The efficiency-maximized world of global trade and continuous disruption and a constant hamster-wheel of job training to stay ahead of everyone else and preserve your personal and your country's national competitive advantage... that might be heaven for a particular type of economist, not to mention a particularly nasty type of opportunist would-be robber baron, but it's the apartment next door to Hell for a lot of other people.
There is more to life than being rich, and there is more to building a country that's not a hellhole than maximizing GDP or even PPP. Mr DeLong seems predictably numb to that; perhaps it comes with the territory.
posted by Kadin2048 at 3:18 PM on January 25, 2017 [88 favorites]
I don't know why DeLong and the rest seem so perplexed by this reaction on the left. The people may be wrong, but their logic is straightforward enough: forcing Americans to compete against low-wage labor should reasonably decrease wages. The fact that people believe this shows that they do, in fact, understand basic economic logic. The fact that this logic appears to be empirically wrong in this case is not something they can really be blamed for, because it takes high-tech analysis like DeLong's to show it, and furthermore economics has become so politicized (starting from the right) that many people are quite reasonably skeptical of economists proving that X or Y liberalizing policy benefits society in some roundabout way that is contrary to basic intuition. The fact that DeLong is both more trustworthy and actually left-leaning makes this an unusual case, compared to the usual story of economists endlessly pushing for deregulation and efficiency in the name of pareto optimality. So even if people are wrong in this (which remains arguable), being surprised at that is silly.
It also misses the fact (and this is especially noticable with Drum's recapitulation) that many of the objections these days are about the ISDS courts, intellectual property rules blocking generic drugs and the like, and the general obsessive secrecy with the whole process. As far as I can tell, while it's hard to show much economic harm from NAFTA, the evidence of its economic benefits are also ambiguous -- so one might as well judge on second-order concerns like the harm done (especially to smaller countries) by undemocratic courts, intellectual property controls, and secrecy. Certainly that's what many people talk about at least as much as the economic effects if you go to the WTO and other trade protests or listen to what Warren or Sanders say.
posted by chortly at 3:20 PM on January 25, 2017 [16 favorites]
It also misses the fact (and this is especially noticable with Drum's recapitulation) that many of the objections these days are about the ISDS courts, intellectual property rules blocking generic drugs and the like, and the general obsessive secrecy with the whole process. As far as I can tell, while it's hard to show much economic harm from NAFTA, the evidence of its economic benefits are also ambiguous -- so one might as well judge on second-order concerns like the harm done (especially to smaller countries) by undemocratic courts, intellectual property controls, and secrecy. Certainly that's what many people talk about at least as much as the economic effects if you go to the WTO and other trade protests or listen to what Warren or Sanders say.
posted by chortly at 3:20 PM on January 25, 2017 [16 favorites]
NAFTA doesn't mean "shipping jobs to other countries." It's all about trade integration. Slapping on a border tax is just going to make goods and services more expensive. It's not going to bring back jobs to the United States. Slapping a border tax on everything is just going to raise prices. Maybe your wage will rise, if you work in the construction industry -- the sector of the economy, besides defense, that is poised to do the best over the next four years. Interestingly, construction was also booming before the foreclosure crisis. It's not sustainable.
The road back to middle class prosperity is not protectionism, it's massive investment in education. I don't understand why we have to wall off our borders and our economies.
posted by My Dad at 3:26 PM on January 25, 2017 [7 favorites]
The road back to middle class prosperity is not protectionism, it's massive investment in education. I don't understand why we have to wall off our borders and our economies.
posted by My Dad at 3:26 PM on January 25, 2017 [7 favorites]
The bad things about the TPP from my non-US perspective were the extension of US intellectual property regime to my country (which has an approach I find better) and the ability for companies to sue countries if those countries pass laws that affect their business. The fact that while we would have to accept these things, we would probably never get the US agricultural trade barriers lowered, which is the only good bit for us, made it all the more obnoxious.
posted by i_am_joe's_spleen at 3:28 PM on January 25, 2017 [11 favorites]
posted by i_am_joe's_spleen at 3:28 PM on January 25, 2017 [11 favorites]
I'm kind of confused about the whole "gutting of manufacturing" thing. If you have the certifications needed to be a CAM operator, or a welder, or a drafter, or a medical device tech, you'll have no trouble getting a 50K full-time job in any metro area in the country. Those are all things you can learn in 2 years or less. Sure, there are no giant car factories anymore who will hire anyone with a pulse, but there is a ton of high-margin niche manufacturing if you have the skills to do it. People have left manufacturing because they can get paid more elsewhere, not because there are no jobs.
posted by miyabo at 3:37 PM on January 25, 2017
posted by miyabo at 3:37 PM on January 25, 2017
Slapping on a border tax is just going to make goods and services more expensive. It's not going to bring back jobs to the United States.
That's just not true. There's a good argument to be had over the extent of the effect of a border tax, but it absolutely does make imports more expensive relative to domestically-produced products. That weakens the case for an import vs. a domestic product, or for outsourcing or offshoring vs. domestic production. In some cases, the business cases for offshoring aren't that strong to begin with—lots of US companies offshored for 5% net savings or less in the end, factoring in less productive labor and transportation costs and other expenses. (There are some industries where the offshoring case is a lot higher, of course. But a border tax would be a sea change for a lot of industries where they're continuously optimizing the shit out of every step in their supply chain for a few basis points overall.)
Even if you were in a desert island economy with no natural resources, such that everything in the economy was imported, the implementation of a border tax would encourage more of the value-add to happen domestically vs. offshore. (In other words, if you have a 10% border tax, suddenly it becomes preferable to bring in $100 of raw steel on which you pay $10 in tax, instead of $1000 of machine parts on which you pay $100 in tax. That $90 difference can go towards the additional shipping costs and towards basically subsidizing doing the steel-to-parts production domestically. Maybe that's enough to make the machining worthwhile to do onshore, maybe not, but in a very competitive landscape it's going to tip the balance for someone.)
Of course, you have to set the tax rate pretty carefully such that it actually does tip the scales enough to bring back the jobs you want to bring back — if that's the goal. If it's set too low, and that's what I suspect will happen in the US, then it's not enough to actually bring back the desired number of jobs and the costs just get passed through. In the end you just have a national VAT on imported goods, though, and likely some supply chain shifts.
But anyway, it's almost irrelevant because it's still the wrong lens to be looking at it through. The real question is what tradeoff do people actually prefer, which may or may not be the one that is economically optimal. A fully-functioning, perfectly representative, absolutely democratic government might vote for an outcome that's economically suboptimal (e.g. for a policy that keeps a portion of the supply chain onshore even though it would be more cost-effective to do it offshore in terms of final goods prices and PPP) because the social costs of disrupting that part of their economy and the people in it outweigh the minor benefits of having somewhat cheaper widgets or higher PPP. The hard-nosed tax-rate analysis has to happen, but the outcome of the analysis shouldn't be taken to dictate the which-is-preferable process.
posted by Kadin2048 at 3:46 PM on January 25, 2017 [10 favorites]
That's just not true. There's a good argument to be had over the extent of the effect of a border tax, but it absolutely does make imports more expensive relative to domestically-produced products. That weakens the case for an import vs. a domestic product, or for outsourcing or offshoring vs. domestic production. In some cases, the business cases for offshoring aren't that strong to begin with—lots of US companies offshored for 5% net savings or less in the end, factoring in less productive labor and transportation costs and other expenses. (There are some industries where the offshoring case is a lot higher, of course. But a border tax would be a sea change for a lot of industries where they're continuously optimizing the shit out of every step in their supply chain for a few basis points overall.)
Even if you were in a desert island economy with no natural resources, such that everything in the economy was imported, the implementation of a border tax would encourage more of the value-add to happen domestically vs. offshore. (In other words, if you have a 10% border tax, suddenly it becomes preferable to bring in $100 of raw steel on which you pay $10 in tax, instead of $1000 of machine parts on which you pay $100 in tax. That $90 difference can go towards the additional shipping costs and towards basically subsidizing doing the steel-to-parts production domestically. Maybe that's enough to make the machining worthwhile to do onshore, maybe not, but in a very competitive landscape it's going to tip the balance for someone.)
Of course, you have to set the tax rate pretty carefully such that it actually does tip the scales enough to bring back the jobs you want to bring back — if that's the goal. If it's set too low, and that's what I suspect will happen in the US, then it's not enough to actually bring back the desired number of jobs and the costs just get passed through. In the end you just have a national VAT on imported goods, though, and likely some supply chain shifts.
But anyway, it's almost irrelevant because it's still the wrong lens to be looking at it through. The real question is what tradeoff do people actually prefer, which may or may not be the one that is economically optimal. A fully-functioning, perfectly representative, absolutely democratic government might vote for an outcome that's economically suboptimal (e.g. for a policy that keeps a portion of the supply chain onshore even though it would be more cost-effective to do it offshore in terms of final goods prices and PPP) because the social costs of disrupting that part of their economy and the people in it outweigh the minor benefits of having somewhat cheaper widgets or higher PPP. The hard-nosed tax-rate analysis has to happen, but the outcome of the analysis shouldn't be taken to dictate the which-is-preferable process.
posted by Kadin2048 at 3:46 PM on January 25, 2017 [10 favorites]
the US went from ~25% in 1970 to ~8% in 2015, while Germany went from ~40% to ~20%. The trend is in the same direction, yes, but the magnitude is very different. Don't be fooled by the graphs
Well, given that this is one of the rare occasions we should look at differences and not ratios, the magnitude of the fraction of the workforce that net moved out of manufacturing is 3 percentage points higher in Germany than the US, so you're not making the point you think you are here.
posted by PMdixon at 3:55 PM on January 25, 2017 [3 favorites]
Well, given that this is one of the rare occasions we should look at differences and not ratios, the magnitude of the fraction of the workforce that net moved out of manufacturing is 3 percentage points higher in Germany than the US, so you're not making the point you think you are here.
posted by PMdixon at 3:55 PM on January 25, 2017 [3 favorites]
Those are all things you can learn in 2 years or less.
A lot of people losing their jobs to industrialization and lowered import costs haven't had the savings to support themselves for two years while they got a certification.
posted by Candleman at 3:56 PM on January 25, 2017 [12 favorites]
A lot of people losing their jobs to industrialization and lowered import costs haven't had the savings to support themselves for two years while they got a certification.
posted by Candleman at 3:56 PM on January 25, 2017 [12 favorites]
Huh. I'm actually glad Trump scrapped TPP, because it looked to be a shit deal for Chile, imposing the US's twisted version of 'intellectual property rights' on us, for example.
posted by signal at 4:19 PM on January 25, 2017 [5 favorites]
posted by signal at 4:19 PM on January 25, 2017 [5 favorites]
The weirdness over trade deals like NAFTA, the now defunct TPP, and free trade in general has been one of the biggest self discrediting attitudes many on the left have curiously clung to.
Many of these deals allowed, or proposed to allow, a race to the bottom, where the country with the least employee rights, the laxest environmental standards, the most toothless regulation, gets to decide the standards for everyone else, and give corporations the power to sue foreign governments if they enact policies that interfere with that race.
The flaw with NAFTA and similar deals is that it didn't include freedom of transit between signatories. Free trade zones that enable capital to be hyper mobile need similar provisions that allow labor freedom to relocate to the jobs.
This is what is good about things like the Schengen Area.
Yes, and it's great to see the EU stand up for the four freedoms of movement in the wake of Brexit and tell Britain that it can't pick and choose. You give corporations the opportunity to move money, goods, head offices, etc. barrier-free within a trading zone, you give ordinary people the same freedom to live, work, retire, get healthcare, etc., within the same zone. Btw the Schengen Area just means you don't get your passport checked by border guards - freedom of movement (including freedom to live and work) for EU citizens applies to the whole EU, including non-Schengen countries.
posted by kersplunk at 4:19 PM on January 25, 2017 [8 favorites]
Many of these deals allowed, or proposed to allow, a race to the bottom, where the country with the least employee rights, the laxest environmental standards, the most toothless regulation, gets to decide the standards for everyone else, and give corporations the power to sue foreign governments if they enact policies that interfere with that race.
The flaw with NAFTA and similar deals is that it didn't include freedom of transit between signatories. Free trade zones that enable capital to be hyper mobile need similar provisions that allow labor freedom to relocate to the jobs.
This is what is good about things like the Schengen Area.
Yes, and it's great to see the EU stand up for the four freedoms of movement in the wake of Brexit and tell Britain that it can't pick and choose. You give corporations the opportunity to move money, goods, head offices, etc. barrier-free within a trading zone, you give ordinary people the same freedom to live, work, retire, get healthcare, etc., within the same zone. Btw the Schengen Area just means you don't get your passport checked by border guards - freedom of movement (including freedom to live and work) for EU citizens applies to the whole EU, including non-Schengen countries.
posted by kersplunk at 4:19 PM on January 25, 2017 [8 favorites]
American society can't be stable like it has been in the past if everybody has to move and reinvent themselves in new careers constantly. This mindset puts all the risk and cost for disruptive innovations that really only serve to increase profitability and shareholder value onto broader society and the labor force.
We're all increasingly in the position of always having to prioritize our increasingly challenging and unstable new economic realities over whatever we might really care about and want for our lives. For many, many years, that's not what it was like to be middle class in America. The middle class had the most clout, politically, until the Reagan revolution began and that power balance began to shift.
Some were hoping we might see the balance of power tilt back more toward the lower end of the wealth spectrum again, but this election has given everything up. Real power is real power. You can't theorize or argue your way around it, and fighting it comes with real costs and pain and the current admin isn't going to surrender even a scrap of it without secretly grabbing more through some other mechanism, and unfortunately, the establishment Dems don't seem willing or able to mount a truly principled, passionate defense of democracy either. So I'm still having trouble finding a patch of blue sky anywhere overhead. The other big long term risk here is further shifting of the Overton window to the far right. Already, some more good natured liberals are trying to make their peace with conservative ideas as if not being enough like Republicans is what costs us year after year. No, it's just that the Republican pols don't care about or believe in anything more than pursuing power, personal accomplishment, and social dominance as ends in themselves, and there are liberals who secretly and not so secretly think that's an admirable and respectable worldview, too.
posted by saulgoodman at 4:23 PM on January 25, 2017 [14 favorites]
We're all increasingly in the position of always having to prioritize our increasingly challenging and unstable new economic realities over whatever we might really care about and want for our lives. For many, many years, that's not what it was like to be middle class in America. The middle class had the most clout, politically, until the Reagan revolution began and that power balance began to shift.
Some were hoping we might see the balance of power tilt back more toward the lower end of the wealth spectrum again, but this election has given everything up. Real power is real power. You can't theorize or argue your way around it, and fighting it comes with real costs and pain and the current admin isn't going to surrender even a scrap of it without secretly grabbing more through some other mechanism, and unfortunately, the establishment Dems don't seem willing or able to mount a truly principled, passionate defense of democracy either. So I'm still having trouble finding a patch of blue sky anywhere overhead. The other big long term risk here is further shifting of the Overton window to the far right. Already, some more good natured liberals are trying to make their peace with conservative ideas as if not being enough like Republicans is what costs us year after year. No, it's just that the Republican pols don't care about or believe in anything more than pursuing power, personal accomplishment, and social dominance as ends in themselves, and there are liberals who secretly and not so secretly think that's an admirable and respectable worldview, too.
posted by saulgoodman at 4:23 PM on January 25, 2017 [14 favorites]
The graphs look the same, but the US went from ~25% in 1970 to ~8% in 2015, while Germany went from ~40% to ~20%. The trend is in the same direction, yes, but the magnitude is very different. Don't be fooled by the graphs.
I am beginning to feel like a lot of Vox articles on economics could be simply retitled "Everything is Great. You Are Just Too Stupid to Notice (As Explained With This Highly Misleading Infographic)"
posted by joechip at 4:35 PM on January 25, 2017 [2 favorites]
I am beginning to feel like a lot of Vox articles on economics could be simply retitled "Everything is Great. You Are Just Too Stupid to Notice (As Explained With This Highly Misleading Infographic)"
posted by joechip at 4:35 PM on January 25, 2017 [2 favorites]
Ya know, a lot of my neighbors are dumb, if the economy can't provide a way for them to live besides serving up bad haircuts or blow jobs, it ain't working right.
posted by ridgerunner at 4:46 PM on January 25, 2017 [4 favorites]
posted by ridgerunner at 4:46 PM on January 25, 2017 [4 favorites]
Your income over the next 20 years turns out to be about 10 percent lower than the income of similarly situated people who are not caught in a mass layoff.
Brad, your classism is showing here. 10% is life or death for many, many people these days.
posted by Strange_Robinson at 4:48 PM on January 25, 2017 [10 favorites]
Brad, your classism is showing here. 10% is life or death for many, many people these days.
posted by Strange_Robinson at 4:48 PM on January 25, 2017 [10 favorites]
The road back to middle class prosperity is not protectionism, it's massive investment in education.
Positing education as the solution seems to assume that there would be middle-class jobs available for people who are currently struggling if only they were sufficiently educated, and that all those people have the ability to complete that education and do those jobs if they are available. I don't think I buy either one of those premises - investment in education is good because it can improve equality of opportunity and help smooth transitions for people in waning industries, but it can't fix the systemic issue. Especially not if automation proceeds space. Or maybe I'm not accurately representing what you are actually arguing.
(Note that this does not necessarily support the argument that protectionism is the road to middle class prosperity either...)
posted by atoxyl at 5:27 PM on January 25, 2017 [6 favorites]
Positing education as the solution seems to assume that there would be middle-class jobs available for people who are currently struggling if only they were sufficiently educated, and that all those people have the ability to complete that education and do those jobs if they are available. I don't think I buy either one of those premises - investment in education is good because it can improve equality of opportunity and help smooth transitions for people in waning industries, but it can't fix the systemic issue. Especially not if automation proceeds space. Or maybe I'm not accurately representing what you are actually arguing.
(Note that this does not necessarily support the argument that protectionism is the road to middle class prosperity either...)
posted by atoxyl at 5:27 PM on January 25, 2017 [6 favorites]
The road back to middle class prosperity is not protectionism, it's massive investment in education.
No it's making sure that the person who works the world's shittiest job can receive enough income to eke out a middle class existence.
In a real social democracy you'd have a combination of high minimum wage, the welfare state stuffing money back into the lower and middle class families by way of tax refunds and direct transfer payments, and high luxury taxes on things like high end vehicles.
But instead we get the guts ripped out of TANF because some uppity black person might get a dollar and god forbid that happens in the United States.
posted by Talez at 5:50 PM on January 25, 2017 [20 favorites]
No it's making sure that the person who works the world's shittiest job can receive enough income to eke out a middle class existence.
In a real social democracy you'd have a combination of high minimum wage, the welfare state stuffing money back into the lower and middle class families by way of tax refunds and direct transfer payments, and high luxury taxes on things like high end vehicles.
But instead we get the guts ripped out of TANF because some uppity black person might get a dollar and god forbid that happens in the United States.
posted by Talez at 5:50 PM on January 25, 2017 [20 favorites]
it can't fix the systemic issue. Especially not if automation proceeds space.'
History shows the exact opposite, though. A hundred years ago something like 90% of the American population worked in agriculture. Now it's something like 3%. A hundred and fifty years ago, the Luddites (and I am not using the term pejoratively, here) smashed the looms that were taking their jobs... the same jobs we are now afraid will be lost due to automation.
Look at women in work over the past century. At one time it took a staff of five clerks, often women, to support one lawyer. Now one clerk or secretary, typically a woman, supports five lawyers (my sister is a lawyer, a federal prosecutor). That's an increase in productivity.
There is just not a finite number of jobs... if people can be educated. I do agree that trucking -- one of the largest employers in the States -- could be hit hard by automation, though.
posted by My Dad at 5:55 PM on January 25, 2017 [4 favorites]
History shows the exact opposite, though. A hundred years ago something like 90% of the American population worked in agriculture. Now it's something like 3%. A hundred and fifty years ago, the Luddites (and I am not using the term pejoratively, here) smashed the looms that were taking their jobs... the same jobs we are now afraid will be lost due to automation.
Look at women in work over the past century. At one time it took a staff of five clerks, often women, to support one lawyer. Now one clerk or secretary, typically a woman, supports five lawyers (my sister is a lawyer, a federal prosecutor). That's an increase in productivity.
There is just not a finite number of jobs... if people can be educated. I do agree that trucking -- one of the largest employers in the States -- could be hit hard by automation, though.
posted by My Dad at 5:55 PM on January 25, 2017 [4 favorites]
In a real social democracy you'd have a combination of high minimum wage, the welfare state stuffing money back into the lower and middle class families by way of tax refunds and direct transfer payments, and high luxury taxes on things like high end vehicles.
Sure, and I don't disagree, but this has nothing to do with free trade.
Anyway, I am from Canada, and we have benefitted a lot from free trade over the past twenty-five years. We have helped Americans benefit from free trade (the US has **always** been America-first, by the way; you never get something for nothing). I have seen my city, on an island north of Seattle, transformed because of free trade. I now have the opportunity to work with anyone anywhere in the world (and I am not particularly cheap), and this ability has helped me support my family.
Free trade is not just an abstract concept to me.
posted by My Dad at 5:59 PM on January 25, 2017 [2 favorites]
Sure, and I don't disagree, but this has nothing to do with free trade.
Anyway, I am from Canada, and we have benefitted a lot from free trade over the past twenty-five years. We have helped Americans benefit from free trade (the US has **always** been America-first, by the way; you never get something for nothing). I have seen my city, on an island north of Seattle, transformed because of free trade. I now have the opportunity to work with anyone anywhere in the world (and I am not particularly cheap), and this ability has helped me support my family.
Free trade is not just an abstract concept to me.
posted by My Dad at 5:59 PM on January 25, 2017 [2 favorites]
I've lived on that island for a good while too (unless you're from Saltspring). I've seen it go from a place where a man with a mid level civil service job and a woman who worked part time for a non-profit could afford a nice house in a leafy suburb to a place where I read the real-estate listings and want to kill myself. Free trade is not just an abstract concept for me either.
posted by Grimgrin at 6:15 PM on January 25, 2017 [10 favorites]
posted by Grimgrin at 6:15 PM on January 25, 2017 [10 favorites]
Yes, housing prices are bad here in Victoria... but Vancouver is much worse. I don't think the rise of the tech sector (there is a lot of manufacturing here, specifically in the remote sensing and IoT space) is responsible, though. We live on an island. We are constrained by geography (ocean on three sides, mountains directly to the north). It is a nice place to live. People stay here, and have kids who stay here. More people move here. There is no density. The stock market hasn't performed all that well, so real estate becomes a good investment vehicle (I'm thinking of my parents; I rent).
I actually left Victoria in the mid-90's. You could not get a job as a cook without lining up to submit a resume. Now restaurants are closing down because of a labour crunch.
/yyjfilter
posted by My Dad at 6:31 PM on January 25, 2017 [2 favorites]
I actually left Victoria in the mid-90's. You could not get a job as a cook without lining up to submit a resume. Now restaurants are closing down because of a labour crunch.
/yyjfilter
posted by My Dad at 6:31 PM on January 25, 2017 [2 favorites]
I'm another Canadian affected by NAFTA. I work on the NAFTA professional visa and have been living and working in the US for ~10 years. It's pretty great because there are few jobs in my field in Canada. It's not great because all these jobs have to be temporary so I don't get to set down roots or invest in my community (or even feel like it's my community).
Before I left Canada, I had negative feelings about NAFTA like most Canadians. Now I appreciate the rare ability it gives (gave?) me to work in a foreign country doing the work I love with very little hassle. Especially when I compare myself with citizens of other countries who have a much harder time getting a working visa (and pay a lot more). It was a good run.
posted by hydrobatidae at 6:51 PM on January 25, 2017 [3 favorites]
Before I left Canada, I had negative feelings about NAFTA like most Canadians. Now I appreciate the rare ability it gives (gave?) me to work in a foreign country doing the work I love with very little hassle. Especially when I compare myself with citizens of other countries who have a much harder time getting a working visa (and pay a lot more). It was a good run.
posted by hydrobatidae at 6:51 PM on January 25, 2017 [3 favorites]
My Dad: Would housing be going as insane as it is, if there wast so much money looking for a return, either directly, or by lending it to people? And would there be that much money sloshing around without the changes to international trade? I've seen articles that say yes, no and maybe. Personally I agree with you, Victoria in particular and the Lower Mainland in general was always going to appreciate due to climate and geography. That said however, the housing market's appreciation has continued unconstrained by average income or, lets face it, reason; something else may be at work. Though as an alternative explanation, the powers that be here seem committed not just to ride this particular beast, but to apply spurs.
As for Canada and NAFTA: We're already signalling hard that hey, Mr. President, you wanna fuck up Mexico, we're not going to kick up a fuss. As much as I love my country, this is us in a nutshell.
posted by Grimgrin at 7:11 PM on January 25, 2017
As for Canada and NAFTA: We're already signalling hard that hey, Mr. President, you wanna fuck up Mexico, we're not going to kick up a fuss. As much as I love my country, this is us in a nutshell.
posted by Grimgrin at 7:11 PM on January 25, 2017
the implementation of a border tax would encourage more of the value-add to happen domestically vs. offshore.
Granted, but what will that benefit Joe Average?
Will the goods be manufactured by a vast array of blue collar workers as was the case in the '50s, or will they be manufactured in a highly automated robo-factory employing just a few admin staff & technicians?
Now Joe Average is paying more for the goods [be they imported or manufactured domestically], and still doesn't have a decent job.
Maybe the factory owners will get super rich and the wealth with trickle down?
posted by HiroProtagonist at 8:09 PM on January 25, 2017 [6 favorites]
Granted, but what will that benefit Joe Average?
Will the goods be manufactured by a vast array of blue collar workers as was the case in the '50s, or will they be manufactured in a highly automated robo-factory employing just a few admin staff & technicians?
Now Joe Average is paying more for the goods [be they imported or manufactured domestically], and still doesn't have a decent job.
Maybe the factory owners will get super rich and the wealth with trickle down?
posted by HiroProtagonist at 8:09 PM on January 25, 2017 [6 favorites]
That's some great spin. Too bad it flies in the face of what the working class is seeing with their own two eyes, and it won't politically matter how disastrous Trump is on everything else, he's going to be reelected unless Democrats embrace job protection.
posted by Beholder at 8:36 PM on January 25, 2017 [5 favorites]
posted by Beholder at 8:36 PM on January 25, 2017 [5 favorites]
I'm more pro-trade than the typical MeFite (or at least the typical one who expresses an opinion) but here's my beef with the technocratic attitude:
I would even so go far as to say there is a shell game in the "economic consensus." First, when you're discussing trade they'll point to theory that "on average" people are better off, so we have the money to more than compensate the losers and still leave everyone better off. But when you discuss actually compensating the losers after a deal the consensus view will switch to political economy research and talk about not wanting to encourage rent-seeking or how subsidies tend to last long after their intended purpose. Both points are true (think of farm policy if you don't believe the second) and it's not like that many individual economists are that hypocritical. But if my job were at risk from globalization I sure as hell wouldn't trust things to work out and would want guarantees built into the deal, not promised later.
Which is a problem because the international deal is not about domestic compensation policies.
I do wonder if the left could use leverage around trade deals as an opportunity to ratched up the safety net options in return for their vote on each one. Probably not; I don't think the most vocal opponents to an deal would make that sort of tactical compromise.
I'm also surprised that people are now defending the TPP.
That is roughly like being surprised anyone would defend Obamacare. People have always defended trade in the abstract, as the second post in this makes clear. Many people also like specific trade deals, though often in the "a lot sucks but it's probably the best we can do in practice" (as de Long does here, or a lot of the Obamacare supporters did.)
posted by mark k at 8:49 PM on January 25, 2017 [5 favorites]
We have not done our proper job in cushioning the incomes of and providing opportunities to those people and communities that have found themselves behind the eight-ball, in sectors flooded by imports as other countries industrialize (especially China).I'm glad he admits it, but I would add we're not going to start cushioning those incomes either, because in the American political culture people who lose their jobs have no clout.
I would even so go far as to say there is a shell game in the "economic consensus." First, when you're discussing trade they'll point to theory that "on average" people are better off, so we have the money to more than compensate the losers and still leave everyone better off. But when you discuss actually compensating the losers after a deal the consensus view will switch to political economy research and talk about not wanting to encourage rent-seeking or how subsidies tend to last long after their intended purpose. Both points are true (think of farm policy if you don't believe the second) and it's not like that many individual economists are that hypocritical. But if my job were at risk from globalization I sure as hell wouldn't trust things to work out and would want guarantees built into the deal, not promised later.
Which is a problem because the international deal is not about domestic compensation policies.
I do wonder if the left could use leverage around trade deals as an opportunity to ratched up the safety net options in return for their vote on each one. Probably not; I don't think the most vocal opponents to an deal would make that sort of tactical compromise.
I'm also surprised that people are now defending the TPP.
That is roughly like being surprised anyone would defend Obamacare. People have always defended trade in the abstract, as the second post in this makes clear. Many people also like specific trade deals, though often in the "a lot sucks but it's probably the best we can do in practice" (as de Long does here, or a lot of the Obamacare supporters did.)
posted by mark k at 8:49 PM on January 25, 2017 [5 favorites]
Has anybody thought that the focus on NAFTA, WTO, and TPP by Donald Trump might be a convenient bait-and-switch to keep attention away from fraudulent domestic financiers and bankers who still have yet to pay any penalty for their role in the 2008 financial collapse? NAFTA didn't experience as much of a political backlash in the 1990s when employment rates were higher. The financial collapse of 2008 is a much more consequential proximate cause of Brexit, Trump, etc. than a ten-year lag effect from NAFTA and WTO. Unless you want to claim that NAFTA and WTO caused the 2008 financial crisis, those two trade deals have less to do with our current crisis than the failure to curb Wall Street speculation and the failure to punish those who fraudulently profited off the bubble & the crisis that followed.
posted by jonp72 at 8:53 PM on January 25, 2017 [8 favorites]
posted by jonp72 at 8:53 PM on January 25, 2017 [8 favorites]
I have NAFTA to thank for getting me the hell out of the US for good. I came to Canada on the NAFTA professional visa and went through the fairly complicated and bureaucratic process of getting Canadian permanent residency. Just in the nick of time, it looks like.
posted by makonan at 9:15 PM on January 25, 2017
posted by makonan at 9:15 PM on January 25, 2017
Has anybody thought that the focus on NAFTA, WTO, and TPP by Donald Trump might be a convenient bait-and-switch to keep attention away from fraudulent domestic financiers and bankers who still have yet to pay any penalty for their role in the 2008 financial collapse?
Whose attention is he diverting? It's not like Clinton or Obama or Trump's Republican opponents were calling for bankers' heads on platters for 8 year old crimes. Sanders was anti banker, but Sanders was also strongly anti-TPP.
I think Trump is a simple man and opposing trade is a simple thing. I wouldn't say anything he does is sincere exactly but I don't think he had subtle, hidden motivations in this.
posted by mark k at 10:03 PM on January 25, 2017 [1 favorite]
Whose attention is he diverting? It's not like Clinton or Obama or Trump's Republican opponents were calling for bankers' heads on platters for 8 year old crimes. Sanders was anti banker, but Sanders was also strongly anti-TPP.
I think Trump is a simple man and opposing trade is a simple thing. I wouldn't say anything he does is sincere exactly but I don't think he had subtle, hidden motivations in this.
posted by mark k at 10:03 PM on January 25, 2017 [1 favorite]
Bit fucking late now.
But it was a great cudgel with which to beat the competent female candidate over the head, no?
posted by tully_monster at 10:38 PM on January 25, 2017 [1 favorite]
But it was a great cudgel with which to beat the competent female candidate over the head, no?
posted by tully_monster at 10:38 PM on January 25, 2017 [1 favorite]
Sure am looking forward to liberals demonstratively falling in love with global capitalism for four years and calling it progressive just because Trump accidentally said a right thing for the wrong reason.
posted by regicide is good for you at 11:09 PM on January 25, 2017 [7 favorites]
posted by regicide is good for you at 11:09 PM on January 25, 2017 [7 favorites]
NAFTA, specifically, was a good campaign issue for Trump because it could be used as a cudgel against Clinton. (President Clinton signed the enabling legislation that actually implemented NAFTA in the US, and presided over the period in which most of the job losses attributed to it -- rightly or wrongly -- happened.) It's also one of the only trade deals that a large percentage of Americans are aware of and can name; it's sort of the symbolic face of globalization's effect on American industry.
Particularly in places that had been decimated by the steel industry collapse in the mid/late 80s, NAFTA was basically the nail in the coffin of more than a few well-planned lives; it was a giant "fuck you, we'll make sure the plant never reopens" from both parties, one after the other. (The timing, 8 years after the biggest steel plant closures, was just brutal: some people who'd finally managed to get into new manufacturing jobs with Ford or GE or other big Rust Belt industrials suddenly ended up kicked in the nuts again, by having the plants suddenly move to Mexico after NAFTA.) Some of those people have been waiting 22 years to vote for someone, anyone, who would -- given that the plants mostly can't reopen because they've mostly been demolished -- at least get rid of the agreement. Trump, admittedly somewhat ironically for a personal friend of Carl Icahn, the scourge of the steel industry himself, probably got more than a few votes for promising to do just that.
posted by Kadin2048 at 12:44 AM on January 26, 2017 [7 favorites]
Particularly in places that had been decimated by the steel industry collapse in the mid/late 80s, NAFTA was basically the nail in the coffin of more than a few well-planned lives; it was a giant "fuck you, we'll make sure the plant never reopens" from both parties, one after the other. (The timing, 8 years after the biggest steel plant closures, was just brutal: some people who'd finally managed to get into new manufacturing jobs with Ford or GE or other big Rust Belt industrials suddenly ended up kicked in the nuts again, by having the plants suddenly move to Mexico after NAFTA.) Some of those people have been waiting 22 years to vote for someone, anyone, who would -- given that the plants mostly can't reopen because they've mostly been demolished -- at least get rid of the agreement. Trump, admittedly somewhat ironically for a personal friend of Carl Icahn, the scourge of the steel industry himself, probably got more than a few votes for promising to do just that.
posted by Kadin2048 at 12:44 AM on January 26, 2017 [7 favorites]
There was one clear-headed Trump voter on TV who said something like "I do get that the world is getting better, and there is less poverty and more people are getting food on the table and an education. It's just that wealth is being redistributed from people like me to brown and black people in America and all over the world. I don't like that".
In my opinion, by agreeing with this by also opposing trade agreements, the Democrats and the left aided Trump and the right in obfuscating the more important redistribution issue: the increasing accumulation of wealth of the very rich. Wether Trump is a billionaire or not, he has a personal interest in blaming the problems of the middle class on international trade rather than on the kleptocracy of the 1%. And he got away with it, because everyone seemed to agree that NAFTA and TPP are the boogiemen, across the aisle.
When I was young, the left led the opposition to the Common Market / now EU. But over the years, they realized that the agreements were not set in stone. They could be changed and adapted, and eventually the EU became a guarantor of labor rights, of consumer safety, of public safety, of environmental protection, and even to some extent of democracy (not the strongest point). Now it is the far right who are opposing the EU - they don't want workers to have rights, they don't want food safety, they really don't want environmental protection.
Writing this, I suddenly get what bothers me about both Sanders and Corbyn: they are the old left, fighting fights from the 70's and 80's while the world is a completely different place. And a lot of their supporters are too young to recognize what is being said, they hear it as a fresh new resistance to the world order. To me that is even worse than rehashing the Clinton and Blair politics (as if that isn't sad enough). At least the 90's had good economy.
posted by mumimor at 2:19 AM on January 26, 2017 [9 favorites]
In my opinion, by agreeing with this by also opposing trade agreements, the Democrats and the left aided Trump and the right in obfuscating the more important redistribution issue: the increasing accumulation of wealth of the very rich. Wether Trump is a billionaire or not, he has a personal interest in blaming the problems of the middle class on international trade rather than on the kleptocracy of the 1%. And he got away with it, because everyone seemed to agree that NAFTA and TPP are the boogiemen, across the aisle.
When I was young, the left led the opposition to the Common Market / now EU. But over the years, they realized that the agreements were not set in stone. They could be changed and adapted, and eventually the EU became a guarantor of labor rights, of consumer safety, of public safety, of environmental protection, and even to some extent of democracy (not the strongest point). Now it is the far right who are opposing the EU - they don't want workers to have rights, they don't want food safety, they really don't want environmental protection.
Writing this, I suddenly get what bothers me about both Sanders and Corbyn: they are the old left, fighting fights from the 70's and 80's while the world is a completely different place. And a lot of their supporters are too young to recognize what is being said, they hear it as a fresh new resistance to the world order. To me that is even worse than rehashing the Clinton and Blair politics (as if that isn't sad enough). At least the 90's had good economy.
posted by mumimor at 2:19 AM on January 26, 2017 [9 favorites]
The 90s didn't have a good economy, though, not really, not fundamentally. We've been maintaining the illusion of economic prosperity by letting big boom and bust cycles that aren't conducive to social stability and various investment bubble scams that try to squeeze more value out of existing wealth rather than growing the common wealth by creating real social and economic value as ends in themselves. Our economy has been working like a salvage reclamation system or private equity takeover for a few decades now, with the private sector rushing in eager to liquidate the people's corporation that created the social and regulatory environment that brought all these competing private governments into existence (that's how I tend to think of corporations now, as little mini, wannabe sovereign powers).
posted by saulgoodman at 4:51 AM on January 26, 2017 [6 favorites]
posted by saulgoodman at 4:51 AM on January 26, 2017 [6 favorites]
Our economy has been working like a salvage reclamation system or private equity takeover for a few decades now, with the private sector rushing in eager to liquidate the people's corporation that created the social and regulatory environment that brought all these competing private governments into existence (that's how I tend to think of corporations now, as little mini, wannabe sovereign powers).
I can agree with that, a long way. And the only organization in the world today that can go up against those private governments is the EU, a complex, multilayered and often flawed trade organization.
I was worried about the TTIP, because I felt the US was getting too much of a say, and it's probably a good thing it won't come into being now, but for American consumers, it would have been an improvement, because a lot of EU regulations on food quality and safety would have been applied in US laws and regulations.
posted by mumimor at 5:34 AM on January 26, 2017 [2 favorites]
I can agree with that, a long way. And the only organization in the world today that can go up against those private governments is the EU, a complex, multilayered and often flawed trade organization.
I was worried about the TTIP, because I felt the US was getting too much of a say, and it's probably a good thing it won't come into being now, but for American consumers, it would have been an improvement, because a lot of EU regulations on food quality and safety would have been applied in US laws and regulations.
posted by mumimor at 5:34 AM on January 26, 2017 [2 favorites]
Writing this, I suddenly get what bothers me about both Sanders and Corbyn: they are the old left, fighting fights from the 70's and 80's while the world is a completely different place. And a lot of their supporters are too young to recognize what is being said, they hear it as a fresh new resistance to the world order.
This is my concern as well. It seems obvious to me that "free trade" in and of itself doesn't deserve the boogeyman status is has, even if specific agreements like NAFTA have been poorly, undemocratically-conceived and had bad results.
Really, the "undemocratic" part is the hardest sell for me personally. I understand that secrecy is, in fact, a negotiation tactic, but its utility as a tactic does not in any sense outweigh the fact that it prevents citizens of the negotiating countries from weighing in appropriately through their elected representatives.
(My hope regarding the Sandersistas is that they'll pay enough attention to the way that Trump intends to renegotiate trade deals on a one-on-one basis and realise that it's actually not any more open or pro-worker than the TPP was. But my fear is that they won't and they'll reward Trump for axing TPP even if the trade deals he replaces it with are objectively worse.)
posted by tobascodagama at 5:39 AM on January 26, 2017 [4 favorites]
This is my concern as well. It seems obvious to me that "free trade" in and of itself doesn't deserve the boogeyman status is has, even if specific agreements like NAFTA have been poorly, undemocratically-conceived and had bad results.
Really, the "undemocratic" part is the hardest sell for me personally. I understand that secrecy is, in fact, a negotiation tactic, but its utility as a tactic does not in any sense outweigh the fact that it prevents citizens of the negotiating countries from weighing in appropriately through their elected representatives.
(My hope regarding the Sandersistas is that they'll pay enough attention to the way that Trump intends to renegotiate trade deals on a one-on-one basis and realise that it's actually not any more open or pro-worker than the TPP was. But my fear is that they won't and they'll reward Trump for axing TPP even if the trade deals he replaces it with are objectively worse.)
posted by tobascodagama at 5:39 AM on January 26, 2017 [4 favorites]
Funny thing is that NAFTA is one of the best trade deals we (in the US) have in terms of allowing for labor mobility and providing benefits like retraining for displaced workers. Nobody ever talks about those parts of the agreement, though.
It isn't free trade that is killing the middle class. It is automation. Manufacturing jobs only went overseas because labor in China and Vietnam and, in the past, Mexico, was literally cheaper than robots. Robots cost less and less each year, which has been driving a large onshoring of manufacturing capacity in the last decade or so. They aren't the plants of yesteryear, though, having maybe 10% of the workers per unit volume they used to. What jobs remain are rarely union, and even when they are unions are so desperate for the jobs, wages for all but the most skilled workers are nothing like what they used to be.
The vast increase in productivity due to both those factors is accruing almost entirely to owners, not workers. Financialization has done a lot more to drive wealth inequality, but even things that many on the left are agitating for are also now driving inequality. At least when the jobs were going overseas we were pulling a billion people out of extreme poverty in exchange for our sacrifice.
The only thing to be done is a universal basic income. There is no other way, aside from population control, to handle the massive earthquake we are experiencing with automation extending farther and farther up the chain. First assembly, then finishing, and on and on until now office jobs that people have long assumed would be safe from automation are also being automated, just like dedicated typing pools and switchboard operators have been nearly driven out of existence in previous waves of automation.
Some will be able to find new jobs, but the fact is that we soon will simply not have the need for a large fraction of the current working population to provide the productive output we have today or will need in the future. We are at a crossroads. We can either decide that these surplus people will be left starving in the street to die or we can allow them some basic dignity by providing for them. Or we can reduce work hours at what jobs remain so that more people can be employed, which will stave off the real crisis for a while longer at least, but that seems even less likely to me than a UBI.
posted by wierdo at 7:25 AM on January 26, 2017 [7 favorites]
It isn't free trade that is killing the middle class. It is automation. Manufacturing jobs only went overseas because labor in China and Vietnam and, in the past, Mexico, was literally cheaper than robots. Robots cost less and less each year, which has been driving a large onshoring of manufacturing capacity in the last decade or so. They aren't the plants of yesteryear, though, having maybe 10% of the workers per unit volume they used to. What jobs remain are rarely union, and even when they are unions are so desperate for the jobs, wages for all but the most skilled workers are nothing like what they used to be.
The vast increase in productivity due to both those factors is accruing almost entirely to owners, not workers. Financialization has done a lot more to drive wealth inequality, but even things that many on the left are agitating for are also now driving inequality. At least when the jobs were going overseas we were pulling a billion people out of extreme poverty in exchange for our sacrifice.
The only thing to be done is a universal basic income. There is no other way, aside from population control, to handle the massive earthquake we are experiencing with automation extending farther and farther up the chain. First assembly, then finishing, and on and on until now office jobs that people have long assumed would be safe from automation are also being automated, just like dedicated typing pools and switchboard operators have been nearly driven out of existence in previous waves of automation.
Some will be able to find new jobs, but the fact is that we soon will simply not have the need for a large fraction of the current working population to provide the productive output we have today or will need in the future. We are at a crossroads. We can either decide that these surplus people will be left starving in the street to die or we can allow them some basic dignity by providing for them. Or we can reduce work hours at what jobs remain so that more people can be employed, which will stave off the real crisis for a while longer at least, but that seems even less likely to me than a UBI.
posted by wierdo at 7:25 AM on January 26, 2017 [7 favorites]
A sector of the economy that provided three out of 10 nonfarm jobs at the start of the 1950s and one in four nonfarm jobs at the start of the 1970s now provides fewer than one in 11 nonfarm jobs today.
A contender for worst verbal presentation of quantitative information of the year, and it's only January.
Second, with the domestication of the horse around 2000 BC, we started the process of losing the jobs that involved dragging heavy things around: Horses could pull more and could be largely paid in grass. (A bonus: They found the grass themselves.)
Wrong in almost every particular. Oxen drawn ploughs have existed since ca. 3500 BC (so he's off by 1500 years) but horses were not used for ploughing until much later.
Third, the arrival of first practical and then theoretical understanding of what was up with nitrogen in the soil and plant growth started the process of losing jobs in agriculture: Each farmer could do more.
I thought that he just said that this process started with the domestication of the horse? Anyway, this is also not really correct. The mechanisation of agriculture is actually a much better example of capital displacing labour than that caused by understanding the nitrogen cycle.
Notably he doesn't actually mention the Haber-Bosch process which made nitrogen fertilisers much cheaper, the selective breeding for high yields, or other aspects of the global green revolution.
posted by atrazine at 7:31 AM on January 26, 2017 [3 favorites]
A contender for worst verbal presentation of quantitative information of the year, and it's only January.
Second, with the domestication of the horse around 2000 BC, we started the process of losing the jobs that involved dragging heavy things around: Horses could pull more and could be largely paid in grass. (A bonus: They found the grass themselves.)
Wrong in almost every particular. Oxen drawn ploughs have existed since ca. 3500 BC (so he's off by 1500 years) but horses were not used for ploughing until much later.
Third, the arrival of first practical and then theoretical understanding of what was up with nitrogen in the soil and plant growth started the process of losing jobs in agriculture: Each farmer could do more.
I thought that he just said that this process started with the domestication of the horse? Anyway, this is also not really correct. The mechanisation of agriculture is actually a much better example of capital displacing labour than that caused by understanding the nitrogen cycle.
Notably he doesn't actually mention the Haber-Bosch process which made nitrogen fertilisers much cheaper, the selective breeding for high yields, or other aspects of the global green revolution.
posted by atrazine at 7:31 AM on January 26, 2017 [3 favorites]
Fair enough, but the point he's making isn't wrong. The process of automation taking over human labor started when the first human used a tool that let them do a task a little faster and a little better than everyone else. Every advancement since then has been another step on the path to all labor being automated.
posted by VTX at 7:55 AM on January 26, 2017
posted by VTX at 7:55 AM on January 26, 2017
Grimgrim:
I agree with you about the causes of a real estate bubble in YVR and YYJ. What's also never mentioned is a massive intergenerational transfer of wealth as Boomers lend their kids money for a down payment (fwiw, income inequality... at the moment... is not as severe in Canada as it is in the States, and median household incomes have increased in real terms since about 1990).
posted by My Dad at 7:59 AM on January 26, 2017
I agree with you about the causes of a real estate bubble in YVR and YYJ. What's also never mentioned is a massive intergenerational transfer of wealth as Boomers lend their kids money for a down payment (fwiw, income inequality... at the moment... is not as severe in Canada as it is in the States, and median household incomes have increased in real terms since about 1990).
posted by My Dad at 7:59 AM on January 26, 2017
As for Canada and NAFTA: We're already signalling hard that hey, Mr. President, you wanna fuck up Mexico, we're not going to kick up a fuss. As much as I love my country, this is us in a nutshell.
Yes, I am disappointed and ashamed that Canada is looking the other way while Trump puts the boots to Mexico, notably talking about ripping up NAFTA. There is going to be a tremendous amount of economic pain in Mexico over the next four years, and for what?
But I guess Canada is doing everything it can to protect itself against a bunch of borderline fascists in the White House.
posted by My Dad at 8:02 AM on January 26, 2017 [1 favorite]
Yes, I am disappointed and ashamed that Canada is looking the other way while Trump puts the boots to Mexico, notably talking about ripping up NAFTA. There is going to be a tremendous amount of economic pain in Mexico over the next four years, and for what?
But I guess Canada is doing everything it can to protect itself against a bunch of borderline fascists in the White House.
posted by My Dad at 8:02 AM on January 26, 2017 [1 favorite]
VTX: Every advancement since then has been another step on the path to all labor being automated.
That's a very Whig history. Let me suggest an alternative: There have been many times when power has become concentrated enough, and labour has become cheap enough, that there have been massive intensifications of the labour demanded from the average person. You can think of Roman slaves, or Zola's coal miners, or Foxconn workers assembling iPhones. Human labour can be made very cheap. Our labour can be made very cheap; technological advance does not magically protect us from losing our power to the point that we're cheaper than machines.
And often the automation of one part of a production process will greatly increase the human labour coerced out of another part of the process: Cotton-spinning machines clamour for African-American slaves. Cotton-weaving machines clamour for Bangladeshi sweatshop workers. Clear-cutting and high-throughput sawmills clamour for construction workers with their hammers and nailguns. Refrigeration and long-distance trucking clamour for strawberry pickers.
Technological advancements have the potential to reduce labour, but they often don't have that result.
posted by clawsoon at 8:49 AM on January 26, 2017 [8 favorites]
That's a very Whig history. Let me suggest an alternative: There have been many times when power has become concentrated enough, and labour has become cheap enough, that there have been massive intensifications of the labour demanded from the average person. You can think of Roman slaves, or Zola's coal miners, or Foxconn workers assembling iPhones. Human labour can be made very cheap. Our labour can be made very cheap; technological advance does not magically protect us from losing our power to the point that we're cheaper than machines.
And often the automation of one part of a production process will greatly increase the human labour coerced out of another part of the process: Cotton-spinning machines clamour for African-American slaves. Cotton-weaving machines clamour for Bangladeshi sweatshop workers. Clear-cutting and high-throughput sawmills clamour for construction workers with their hammers and nailguns. Refrigeration and long-distance trucking clamour for strawberry pickers.
Technological advancements have the potential to reduce labour, but they often don't have that result.
posted by clawsoon at 8:49 AM on January 26, 2017 [8 favorites]
I'm a pro-union far left sort of person and I don't have any really deep opposition to free trade in principle. Lower or eradicate tariffs? Sure thing, let's get that done!
As others have noted though, of late "free trade" agreements have been about a whole hell of a lot more than just trade, and that freeing up capital to move without freeing people to do the same is awful.
I opposed TPP not because I've got a love for tariffs on goods made in Korea, but because I hated the way it mandated other nations adopt America's awful copyright system, that it forced participating nations to engage in internet censorship, because I hated the idea of corporations being able, in secret "courts" with no real judge or jury and damn sure no pubic input, to quickly and with no difficulty dismantle laws protecting labor and the environment that took real blood and tears to pass.
Free trade with Mexico? Sure, let's do that!
NAFTA which allowed a Canadian oil company to demolish California environmental regulations? No. Let's not do that.
The only thing Trump has done so far that I've agreed with was scrapping TPP. Not because I hate or fear trade, but because I hate and fear all the non-trade stuff that was in that "trade" treaty.
And yes, this is something the Democrats are going to have to do real work on. They've been hoping all the wonkish "well, if you take it over average trade is great and only uneducated xenophobes object" stuff would convince voters to go with them. It won't.
You tell a person who saw their job move to Mexico that, on average, America will do better, that person is going to tell you to fuck off. People don't care about on average, people care about themselves personally and their friends and family.
And yes, automation was and is a bigger job killer than trade, but it's a mostly invisible job killer that goes all but unnoticed, while factories closing to move to Mexico is big and obvious.
*******************
Education won't be enough to get us through the coming age of automation. It's all well and good to say that we've seen shifts in human labor before and that therefore the rise of automation is just the same sort of thing and **of course** there will always be jobs for everyone so worry is just foolhardy. But that attitude reflects, I think, a lack of understanding of both history and technology.
Even if it were true that the looming age of automation won't ultimately end the need for human labor (and it will, I'll address that in a moment), that doesn't mean we've got nothing to worry about.
Yes, there's still tailors, in that sense Ludd was wrong. But guess what? They're now low skill, low pay, labor and Ludd and his followers were right in that they got economically abused. The job they'd spent their whole life learning how to do, the job that gave them a better life than they'd find elsewhere, suddenly found themselves either unemployed or working for vastly lower wages in a stifling, low status, factory job. That's no a gain for them even if society in general did produce jobs to replace the ones they lost.
So even if the optimists are right and we'll find, post automation, that there really is a deep need for human labor in an unanticipated field, that wont' help the people who are being thrown under the bus in the short term.
We've got a massive crisis coming in 5 to 10 years, 15 at the outside, just with the coming end of all trucking and driving jobs. That's 8% of US GDP we're talking about, and around 3% of the workforce.
Those truckers mostly won't be seeing jobs that pay as well replacing their trucking jobs. they're going to be looking at working as a Wal-Mart greeter for a huge pay cut and that's if they're lucky.
Furthermore, we've got a much better understanding of economic shifts these days than Ludd did, and that understanding shows that this time there really doesn't look to be a new industry waiting to absorb the displaced workers. During industrialization the educated, the researchers, could see that eventually (despite godawful problems and starvation during the transition), displaced farm labor would find work in factories producing goods beyond any of the dreams of avarice in an agricultural economy.
Today economists, futurists, scientists, they look to the post-automation future and they're not seeing a new industry for the displaced to work in. The jobs automation produces tend to have very high skill requirements, and there aren't very many of them. You simply don't need 50% of your population working as engineers, or programmers, or even robot maintenance techs, to keep up the robots needed to do the rest of the labor. True automation really does appear to be a new thing, something different from what we'd been doing before in a deep and essential way.
Societies generally don't handle economic transitions well. The shift from hunter/gatherer to agriculture was generally accompanied by genocide. The shift from agrarian to industrial was usually accompanied by widespread poverty, starvation, child labor, and viciously exploitative labor practices that were only corrected with a long and hard struggle by unions, and still not resolved planetwide.
So even if we accept the foolishly optimistic view that somehow, despite all evidence to the contrary, jobs will somehow appear, that won't fix the short term problems.
Democrats need to strongly get on board with some form of job protection. Not in the sense of opposing trade, but either through a Universal Basic Income, or a vastly expanded social welfare system, or through legislation keeping weekly wages the same but cutting hours by 20% (or 40% or whatever it takes to maintain full employment). Or something.
But if the Democrats just retreat into technocratic handwaving about how, in the long run, it'll all turn out ok they will lose and lose badly. Even if they don't accept the idea that jobs will simply vanish and never be replaced, they need to at least deal with the fallout from the transition. If they don't they'll be replaced by a party that will.
posted by sotonohito at 10:33 AM on January 26, 2017 [8 favorites]
As others have noted though, of late "free trade" agreements have been about a whole hell of a lot more than just trade, and that freeing up capital to move without freeing people to do the same is awful.
I opposed TPP not because I've got a love for tariffs on goods made in Korea, but because I hated the way it mandated other nations adopt America's awful copyright system, that it forced participating nations to engage in internet censorship, because I hated the idea of corporations being able, in secret "courts" with no real judge or jury and damn sure no pubic input, to quickly and with no difficulty dismantle laws protecting labor and the environment that took real blood and tears to pass.
Free trade with Mexico? Sure, let's do that!
NAFTA which allowed a Canadian oil company to demolish California environmental regulations? No. Let's not do that.
The only thing Trump has done so far that I've agreed with was scrapping TPP. Not because I hate or fear trade, but because I hate and fear all the non-trade stuff that was in that "trade" treaty.
And yes, this is something the Democrats are going to have to do real work on. They've been hoping all the wonkish "well, if you take it over average trade is great and only uneducated xenophobes object" stuff would convince voters to go with them. It won't.
You tell a person who saw their job move to Mexico that, on average, America will do better, that person is going to tell you to fuck off. People don't care about on average, people care about themselves personally and their friends and family.
And yes, automation was and is a bigger job killer than trade, but it's a mostly invisible job killer that goes all but unnoticed, while factories closing to move to Mexico is big and obvious.
*******************
Education won't be enough to get us through the coming age of automation. It's all well and good to say that we've seen shifts in human labor before and that therefore the rise of automation is just the same sort of thing and **of course** there will always be jobs for everyone so worry is just foolhardy. But that attitude reflects, I think, a lack of understanding of both history and technology.
Even if it were true that the looming age of automation won't ultimately end the need for human labor (and it will, I'll address that in a moment), that doesn't mean we've got nothing to worry about.
Yes, there's still tailors, in that sense Ludd was wrong. But guess what? They're now low skill, low pay, labor and Ludd and his followers were right in that they got economically abused. The job they'd spent their whole life learning how to do, the job that gave them a better life than they'd find elsewhere, suddenly found themselves either unemployed or working for vastly lower wages in a stifling, low status, factory job. That's no a gain for them even if society in general did produce jobs to replace the ones they lost.
So even if the optimists are right and we'll find, post automation, that there really is a deep need for human labor in an unanticipated field, that wont' help the people who are being thrown under the bus in the short term.
We've got a massive crisis coming in 5 to 10 years, 15 at the outside, just with the coming end of all trucking and driving jobs. That's 8% of US GDP we're talking about, and around 3% of the workforce.
Those truckers mostly won't be seeing jobs that pay as well replacing their trucking jobs. they're going to be looking at working as a Wal-Mart greeter for a huge pay cut and that's if they're lucky.
Furthermore, we've got a much better understanding of economic shifts these days than Ludd did, and that understanding shows that this time there really doesn't look to be a new industry waiting to absorb the displaced workers. During industrialization the educated, the researchers, could see that eventually (despite godawful problems and starvation during the transition), displaced farm labor would find work in factories producing goods beyond any of the dreams of avarice in an agricultural economy.
Today economists, futurists, scientists, they look to the post-automation future and they're not seeing a new industry for the displaced to work in. The jobs automation produces tend to have very high skill requirements, and there aren't very many of them. You simply don't need 50% of your population working as engineers, or programmers, or even robot maintenance techs, to keep up the robots needed to do the rest of the labor. True automation really does appear to be a new thing, something different from what we'd been doing before in a deep and essential way.
Societies generally don't handle economic transitions well. The shift from hunter/gatherer to agriculture was generally accompanied by genocide. The shift from agrarian to industrial was usually accompanied by widespread poverty, starvation, child labor, and viciously exploitative labor practices that were only corrected with a long and hard struggle by unions, and still not resolved planetwide.
So even if we accept the foolishly optimistic view that somehow, despite all evidence to the contrary, jobs will somehow appear, that won't fix the short term problems.
Democrats need to strongly get on board with some form of job protection. Not in the sense of opposing trade, but either through a Universal Basic Income, or a vastly expanded social welfare system, or through legislation keeping weekly wages the same but cutting hours by 20% (or 40% or whatever it takes to maintain full employment). Or something.
But if the Democrats just retreat into technocratic handwaving about how, in the long run, it'll all turn out ok they will lose and lose badly. Even if they don't accept the idea that jobs will simply vanish and never be replaced, they need to at least deal with the fallout from the transition. If they don't they'll be replaced by a party that will.
posted by sotonohito at 10:33 AM on January 26, 2017 [8 favorites]
It isn't free trade that is killing the middle class. It is automation.
I think I'd broaden this from "automation" to "productivity". The example of legal secretaries came up above. You could maybe squint and say that word processors, spreadsheets, and OCR scanners are "automation", but why fudge like that when a more accurate term is available?
The important thing is that we have tools and processes now that allow a single person to produce what it took five people to produce before. And, while the details are different for different industries, the productivity trend itself seems to hold true across almost all of them, even ones that haven't been "automated" in the sense that factory jobs have.
I also think the "productivity" framing is more useful because it provides a better hook for arguing in favour of things like minimum wage hikes, UBI, etc. If each individual worker has become more productive, why shouldn't they take home more? If we can meet or exceed 100% productivity with less than 100% employment, why not share that productivity with the people we've put out of work? Etc., etc.
posted by tobascodagama at 11:03 AM on January 26, 2017 [4 favorites]
I think I'd broaden this from "automation" to "productivity". The example of legal secretaries came up above. You could maybe squint and say that word processors, spreadsheets, and OCR scanners are "automation", but why fudge like that when a more accurate term is available?
The important thing is that we have tools and processes now that allow a single person to produce what it took five people to produce before. And, while the details are different for different industries, the productivity trend itself seems to hold true across almost all of them, even ones that haven't been "automated" in the sense that factory jobs have.
I also think the "productivity" framing is more useful because it provides a better hook for arguing in favour of things like minimum wage hikes, UBI, etc. If each individual worker has become more productive, why shouldn't they take home more? If we can meet or exceed 100% productivity with less than 100% employment, why not share that productivity with the people we've put out of work? Etc., etc.
posted by tobascodagama at 11:03 AM on January 26, 2017 [4 favorites]
People always talk about "automation" as killing jobs, but "automation" is never defined. What are some concrete examples?
And I can think of a variety of ways in which automation has improved our quality of life in material ways.
And declining union membership has nothing to do with automation.
posted by My Dad at 11:34 AM on January 26, 2017
And I can think of a variety of ways in which automation has improved our quality of life in material ways.
And declining union membership has nothing to do with automation.
posted by My Dad at 11:34 AM on January 26, 2017
"This is something nearly every economist and political economist knows. There's also a lot of research that determinants to trade attitudes aren't driven by being hurt from trade. It's something else, with various hypotheses offering answers to what that could be. Anti free trade attitudes, or course, are prevalent on the far left. One interesting question is if free trade attitudes are being "partisanized" because of Trump."
It's a bunch of things together, from nationalism to residual Marxism, to unfair scapegoating.
Around the turn of the century, I was dating a girl who was majoring in sustainable development, and I remember that we had big fights over things like the WTO and Bretton Woods organizations. She was against having any WTO at all, as well as any IMF, etc. I thought, and still think, that the existence of international institutions to deal with things like trade are good, in general (if often not in the specific), and that protectionism and rejection of foreign trade are both economically unrealistic and something that precipitated WWI.
But our current system is kind of the worst of both worlds. We have unfettered movement of capital, without unfettered movement of labor (it's not like Pennsylvania steel workers are moving to China, where the cost of living is lower, to work in the plants there, let alone letting people from less-developed nations come to the US to get a better return on their labor). We compound that with trade agreements that are almost entirely written with the idea of superseding local authority in labor and environmental issues, leading to tragedy-of-the-commons effects, where countries get an advantage by not having to adhere to Western regulations on e.g. pollution that do improve our way of life but are also an economic cost.
We also — and unions, with their protectionist and nationalist orientations are partly to blame — have done an absolutely shitty job of using trade agreements to give teeth to Western safety and labor organization norms. One of the most just and sustainable ways to improve the lots of American workers is to improve the lots of Mexican workers, but union organizers are still frequently murdered there. Americans might be sore if an auto plant moves to Windsor from Detroit, but there's not a sense that it's because of Canada's unfair competition on labor. But both unions and American politicians have been terrible at internationalizing union representation and strength. As a semi-baseless supposition, I'd bet that if we funded prosecution of anti-labor crimes the way we do of drug crimes, we could probably make significant improvements in both immigration and narcotics policy.
posted by klangklangston at 12:31 PM on January 26, 2017 [6 favorites]
It's a bunch of things together, from nationalism to residual Marxism, to unfair scapegoating.
Around the turn of the century, I was dating a girl who was majoring in sustainable development, and I remember that we had big fights over things like the WTO and Bretton Woods organizations. She was against having any WTO at all, as well as any IMF, etc. I thought, and still think, that the existence of international institutions to deal with things like trade are good, in general (if often not in the specific), and that protectionism and rejection of foreign trade are both economically unrealistic and something that precipitated WWI.
But our current system is kind of the worst of both worlds. We have unfettered movement of capital, without unfettered movement of labor (it's not like Pennsylvania steel workers are moving to China, where the cost of living is lower, to work in the plants there, let alone letting people from less-developed nations come to the US to get a better return on their labor). We compound that with trade agreements that are almost entirely written with the idea of superseding local authority in labor and environmental issues, leading to tragedy-of-the-commons effects, where countries get an advantage by not having to adhere to Western regulations on e.g. pollution that do improve our way of life but are also an economic cost.
We also — and unions, with their protectionist and nationalist orientations are partly to blame — have done an absolutely shitty job of using trade agreements to give teeth to Western safety and labor organization norms. One of the most just and sustainable ways to improve the lots of American workers is to improve the lots of Mexican workers, but union organizers are still frequently murdered there. Americans might be sore if an auto plant moves to Windsor from Detroit, but there's not a sense that it's because of Canada's unfair competition on labor. But both unions and American politicians have been terrible at internationalizing union representation and strength. As a semi-baseless supposition, I'd bet that if we funded prosecution of anti-labor crimes the way we do of drug crimes, we could probably make significant improvements in both immigration and narcotics policy.
posted by klangklangston at 12:31 PM on January 26, 2017 [6 favorites]
tobascodagama gave a few examples of what I'd classify as automation just before your comment.
I used to work in a law firm, and I heard about it from lawyers who had been there for decades. Time was each lawyer needed at least one, and depending on caseload and ability up to three paralegals working for them, and also a secretary or sometimes more than one secretary. Each lawyer required somewhere between 2 and 6 support staff.
When I was working there 2 support staff people (1 paralegal, 1 secretary) generally supported 3 lawyers, sometimes you'd get 2 support staff supporting 4 lawyers.
Likewise the profession of law librarian died at my firm while I was working there. It had survived far past the time it should have been ended, once the law librarian was a necessary and vital part of the firm. The firm I worked for had the biggest, most comprehensive, law library in the city and as a point of pride and sort of noblesse oblige permitted lesser firms to send lawyers to their library for research. All that's done by a Lexis/Nexis search now, and the library was dismantled to make room for more lawyers.
We also see automation in manufacturing. Auto manufacturing is some of the more advanced you'll find, and they've been reducing the number of people working on the assembly line from the beginning. Cars are assembled more by robots than by humans these days.
Mining too. In Canada they've got a mine where humans never go underground, a few gamer types run mining machinery remotely on PC's in an air conditioned office. Fewer workers, more efficiency.
Amazon is eliminating warehouse jobs with robots, they've been steadily reducing staff size.
Likewise computer and electronics assembly. Dell is cutting human workers by using more automation in their factories. And Apple is getting out of their human rights problems by switching to a factory that will employ almost no humans.
The proper question is: what industry isn't losing jobs to automation, and the answer tends to be "clothing and some farm jobs".
posted by sotonohito at 1:05 PM on January 26, 2017 [2 favorites]
I used to work in a law firm, and I heard about it from lawyers who had been there for decades. Time was each lawyer needed at least one, and depending on caseload and ability up to three paralegals working for them, and also a secretary or sometimes more than one secretary. Each lawyer required somewhere between 2 and 6 support staff.
When I was working there 2 support staff people (1 paralegal, 1 secretary) generally supported 3 lawyers, sometimes you'd get 2 support staff supporting 4 lawyers.
Likewise the profession of law librarian died at my firm while I was working there. It had survived far past the time it should have been ended, once the law librarian was a necessary and vital part of the firm. The firm I worked for had the biggest, most comprehensive, law library in the city and as a point of pride and sort of noblesse oblige permitted lesser firms to send lawyers to their library for research. All that's done by a Lexis/Nexis search now, and the library was dismantled to make room for more lawyers.
We also see automation in manufacturing. Auto manufacturing is some of the more advanced you'll find, and they've been reducing the number of people working on the assembly line from the beginning. Cars are assembled more by robots than by humans these days.
Mining too. In Canada they've got a mine where humans never go underground, a few gamer types run mining machinery remotely on PC's in an air conditioned office. Fewer workers, more efficiency.
Amazon is eliminating warehouse jobs with robots, they've been steadily reducing staff size.
Likewise computer and electronics assembly. Dell is cutting human workers by using more automation in their factories. And Apple is getting out of their human rights problems by switching to a factory that will employ almost no humans.
The proper question is: what industry isn't losing jobs to automation, and the answer tends to be "clothing and some farm jobs".
posted by sotonohito at 1:05 PM on January 26, 2017 [2 favorites]
And some farm jobs are growing, because organic food is growing, not just in the West.
Things change in ways that are difficult to predict, and the big mainstream predictors have not seen farm work as a growth area for decades, but now it is. In the West, because of food trends, in China, because of multiple food scandals. More and more people want good products. These new types of farm work give reasonable wages.
This is really just an example of something bigger: as society changes and occupations become obsolete, others appear. It is really hard to predict which jobs will die out and which will come forward.
My city was a big industrial city when I was a kid, and before I turned twenty, it had gone bankrupt and failed. Now it is one of the most successful cities in the world. Everything has changed, and I can't convince my kids or my students that it was ever different. I could probably have predicted we would be big on biotech. That was clearly in the cards. But how did we become huge on food? Nobody could have guessed and it was really up to a core group of entrepreneurs.
There will no longer be car factory or shipyard jobs here, but there are tons of well-paying jobs, and the children of those welders and machinists are doing fine.
I agree with TFA that it is essential to support knowledge and development, not only for the entrepreneurs but for everyone. Cutting up vegs for school lunches is a low-education job, but in our city, it has grown out of the high-class foodie movement. And it gives fair pay.
posted by mumimor at 1:33 PM on January 26, 2017 [3 favorites]
Things change in ways that are difficult to predict, and the big mainstream predictors have not seen farm work as a growth area for decades, but now it is. In the West, because of food trends, in China, because of multiple food scandals. More and more people want good products. These new types of farm work give reasonable wages.
This is really just an example of something bigger: as society changes and occupations become obsolete, others appear. It is really hard to predict which jobs will die out and which will come forward.
My city was a big industrial city when I was a kid, and before I turned twenty, it had gone bankrupt and failed. Now it is one of the most successful cities in the world. Everything has changed, and I can't convince my kids or my students that it was ever different. I could probably have predicted we would be big on biotech. That was clearly in the cards. But how did we become huge on food? Nobody could have guessed and it was really up to a core group of entrepreneurs.
There will no longer be car factory or shipyard jobs here, but there are tons of well-paying jobs, and the children of those welders and machinists are doing fine.
I agree with TFA that it is essential to support knowledge and development, not only for the entrepreneurs but for everyone. Cutting up vegs for school lunches is a low-education job, but in our city, it has grown out of the high-class foodie movement. And it gives fair pay.
posted by mumimor at 1:33 PM on January 26, 2017 [3 favorites]
I find the entire article disingenuous.
AFAIK, for free trade to work the additional efficiencies MUST be redistributed.
The steps are:
1. The work is off shored
2. Labor is completely effed
2. Capital profits at greater than 100%
3. All profits are redirected back to labor via taxation and labor is now non-effed and every one is happy
Our ruling class has performed steps 1, 2, 3 and then technocrats like this bozo wonder why labor is pissy. Oh gee Mr Fancy Pants, I cannot imagine why, except that they got boned in step 2.
While I am being pissy, I'd like to point out that the action for wages is at the margins. Saying that free trade is only 5% of the screwage completely ignores that it reduces the marginal demand and wages.
Again, while pissy. The education thing is such baloney I have a hard time imaging that anyone takes it seriously. These are people in their 40s. They were never terribly bright to begin with. They know how to turn a wrench and push a button. They have frickin chronic health conditions.
You are going to take that population, sprinkle some BS community college remedial classes on them, and what? Produce doctors? Top flight engineers? Ballerinas?
No, you are going to produce a bunch of pissed off hopeless people that are going to vote for the effing fascists!
Christ! and then you are going to write a BS article that wonders where it all went wrong. And why are the democrats effed, and why are the American workers scared and afraid?
Oh, eff off.
posted by pdoege at 7:32 PM on January 26, 2017 [6 favorites]
AFAIK, for free trade to work the additional efficiencies MUST be redistributed.
The steps are:
1. The work is off shored
2. Labor is completely effed
2. Capital profits at greater than 100%
3. All profits are redirected back to labor via taxation and labor is now non-effed and every one is happy
Our ruling class has performed steps 1, 2, 3 and then technocrats like this bozo wonder why labor is pissy. Oh gee Mr Fancy Pants, I cannot imagine why, except that they got boned in step 2.
While I am being pissy, I'd like to point out that the action for wages is at the margins. Saying that free trade is only 5% of the screwage completely ignores that it reduces the marginal demand and wages.
Again, while pissy. The education thing is such baloney I have a hard time imaging that anyone takes it seriously. These are people in their 40s. They were never terribly bright to begin with. They know how to turn a wrench and push a button. They have frickin chronic health conditions.
You are going to take that population, sprinkle some BS community college remedial classes on them, and what? Produce doctors? Top flight engineers? Ballerinas?
No, you are going to produce a bunch of pissed off hopeless people that are going to vote for the effing fascists!
Christ! and then you are going to write a BS article that wonders where it all went wrong. And why are the democrats effed, and why are the American workers scared and afraid?
Oh, eff off.
posted by pdoege at 7:32 PM on January 26, 2017 [6 favorites]
I find the entire article disingenuous.
De Long is unpopular as a center-left traditional economist. He's exactly the sort of person who'd defend the hated TPP, so he's taking a beating here and that won't change. But I don't think he deserves to be called disingenuous.
He spent years of the early Obama administration beating the drum for a massive stimulus package to get people to work. (Basic argument and tone: "People are literally paying the government to borrow money, and we have millions of Americans who want a job, and infrastructure that needs repairing. But we aren't spending money to create jobs to repair infrastructure. Are we living in an alternate universe?") He sincerely thinks trade is good and sincerely wants wealth redistributed.
If by disingenuous you just meant wrong, of course that's fine. I wasn't as categorically opposed but I had similar complaints upthread.
posted by mark k at 10:16 PM on January 26, 2017 [5 favorites]
De Long is unpopular as a center-left traditional economist. He's exactly the sort of person who'd defend the hated TPP, so he's taking a beating here and that won't change. But I don't think he deserves to be called disingenuous.
He spent years of the early Obama administration beating the drum for a massive stimulus package to get people to work. (Basic argument and tone: "People are literally paying the government to borrow money, and we have millions of Americans who want a job, and infrastructure that needs repairing. But we aren't spending money to create jobs to repair infrastructure. Are we living in an alternate universe?") He sincerely thinks trade is good and sincerely wants wealth redistributed.
If by disingenuous you just meant wrong, of course that's fine. I wasn't as categorically opposed but I had similar complaints upthread.
posted by mark k at 10:16 PM on January 26, 2017 [5 favorites]
If you could somehow magically give people in 2016 America the option of stepping into an alternate universe where flatscreen TVs were the province of EPCOT, and the closest thing to the iPhone was in Star Trek, and clothing still cost enough that it was worth mending — but in exchange you could support a family on a highschool education and jobs came with healthcare and half-pay pensions after 20 years; basically the postwar-to-1974 era but with less racism and sexism ... I think a lot of people would take that.
Liberalism: the technology and alienation that rich assholes want, for the price of the families and parties that most people want.
posted by eustatic at 10:54 PM on January 26, 2017 [1 favorite]
word processors, spreadsheets, and OCR scanners are "automation", but why fudge like that when a more accurate term is available?
It isn't a fudge. Word Processors literally automated away the job of typesetting (and by reducing the necessary skill, eliminated typists and stenographers). Spreadsheets literally automated the job that tabulators (and to a lesser degree even some programmers) used to do. OCR is slowly automating the transcriptionist role.
Computers have wholly automated away an enormous amount of low(ish) skill office labor just since the 80s, vastly more since the 60s, and somewhere between 50 and 90% pre-WWII, depending on the industry. There was a slow attrition before electronic computing, that got faster with minicomputers and networking, and blew through the fucking roof with the rise of microcomputers on everyone's desk. Some of that was redistributed to higher skill IT jobs, but those are now themselves being automated (and outsourced, which only works because automation allows the likes of Amazon to run server farms at enormous scale cheaply) away.
posted by wierdo at 4:13 AM on January 27, 2017 [7 favorites]
It isn't a fudge. Word Processors literally automated away the job of typesetting (and by reducing the necessary skill, eliminated typists and stenographers). Spreadsheets literally automated the job that tabulators (and to a lesser degree even some programmers) used to do. OCR is slowly automating the transcriptionist role.
Computers have wholly automated away an enormous amount of low(ish) skill office labor just since the 80s, vastly more since the 60s, and somewhere between 50 and 90% pre-WWII, depending on the industry. There was a slow attrition before electronic computing, that got faster with minicomputers and networking, and blew through the fucking roof with the rise of microcomputers on everyone's desk. Some of that was redistributed to higher skill IT jobs, but those are now themselves being automated (and outsourced, which only works because automation allows the likes of Amazon to run server farms at enormous scale cheaply) away.
posted by wierdo at 4:13 AM on January 27, 2017 [7 favorites]
releasing them for other, more societally productive uses elsewhere in the economyWith a single-word change, this is perfect. He should say "freeing". You're "freeing them for more productive uses elsewhere in the economy." Forget downsizing or rightsizing. Use the language of freedom.
Note: You don't have to close factories and fire people in order to "release" them for more productive work. If there's more productive work to be had, it'll pay more. People will "release" themselves, thankyouverymuch.
If it doesn't pay more, it's probably not more productive. It's probably only more "productive" of profits as a result of weakened worker power, not actually more productive.
posted by clawsoon at 9:29 AM on January 27, 2017 [4 favorites]
"If you could somehow magically give people in 2016 America the option of stepping into an alternate universe where flatscreen TVs were the province of EPCOT, and the closest thing to the iPhone was in Star Trek, and clothing still cost enough that it was worth mending — but in exchange you could support a family on a highschool education and jobs came with healthcare and half-pay pensions after 20 years; basically the postwar-to-1974 era but with less racism and sexism ... I think a lot of people would take that. (A lot of people, judging by the recent election, would take it even with the racism and sexism, and perhaps might consider that a bonus, but a lot of that is driven directly by resentment at what they either feel they've lost, or were entitled to and didn't receive.) "
The thing is, people would say that they would take that, and would prefer it in the abstract, broad view, but would still individually prefer having the iPhone, cheap t-shirts and flatscreen tvs. People are really bad at linking their individual, specific decisions to broader frameworks that they might abstractly prefer. Most people would prefer to lose 10 pounds to eating a cookie, but because the consequences of the cookie are abstract, people would prefer to eat a cookie now than to lose weight maybe sometime in the future. It's one of the reasons we have government, but then people resent being told that they can't eat a cookie unless there's a really broad social norm of immediate, specific sacrifice for abstract, long-term social good. In America, the pro-cookie-eating ethos is even more extreme and pronounced than in most other countries.
posted by klangklangston at 11:18 AM on January 27, 2017 [2 favorites]
The thing is, people would say that they would take that, and would prefer it in the abstract, broad view, but would still individually prefer having the iPhone, cheap t-shirts and flatscreen tvs. People are really bad at linking their individual, specific decisions to broader frameworks that they might abstractly prefer. Most people would prefer to lose 10 pounds to eating a cookie, but because the consequences of the cookie are abstract, people would prefer to eat a cookie now than to lose weight maybe sometime in the future. It's one of the reasons we have government, but then people resent being told that they can't eat a cookie unless there's a really broad social norm of immediate, specific sacrifice for abstract, long-term social good. In America, the pro-cookie-eating ethos is even more extreme and pronounced than in most other countries.
posted by klangklangston at 11:18 AM on January 27, 2017 [2 favorites]
Productivity increases wouldn't be especially bad if not for two things: (1) we've allowed capital to achieve political/regulatory capture to the point where it can gobble up all the increases in profitability that happen as a result of those productivity increases, and virtually none of them accrue to workers; and (2), there's been very little management of productivity increases so as to slow or blunt the effect on workers, which is probably because of point 1. (In other words, if you fix point 1, point 2 probably resolves itself.)
I don't know that the law office example is an especially good one, because in that industry you also need to consider the effect that changes in the legal education system over the past half-century or so have had on the labor market. It used to be that a lawyer's time was very expensive compared to a paralegal's or a secretary's, so each attorney got a lot of support staff. But then the law schools started turning out a lot more lawyers, probably in excess of demand, and salaries dropped relative to support staff. Now, if you factor in both the direct and opportunity costs of going to law school, it's probably not even economically rational to go to law school. I know people who, having done the math, have made careers out of being specialized paralegals and legal assistants, and are probably better-off financially than if they'd gone for their J.D. and passed the Bar. That itself is a pretty interesting situation and there are some parallels in other fields (although cf. medicine, where the AMA has acted as a pretty effective supply cartel on MDs).
But if we just look at some generic white-collar office, say an engineering firm perhaps (since that's something that's existed in more-or-less the same form, for at least a century or so) there are definitely jobs that have been lost to automation. Most engineering firms don't have rooms full of draughtsmen, because one guy with AutoCAD can do the work that might have taken one engineer and several of them. But that guy with AutoCAD doesn't work in a vacuum; that modern office probably has an internal IT department that didn't previously exist, plus a bunch of new departments that might not have either (Human Resources departments tend to be bigger than old-time Personnel offices; Regulatory Compliance is now a thing; etc.) The person who might at one point have come into the firm as an entry-level draughtsman with a technical education now might come in as a Tier 1 at the helpdesk with a similar level of training. It's not all job losses.
The problem is when the guy doing AutoCAD work is only making as much, in real terms, as the engineer who previously would have had 3 draughtsmen helping him, and now the draughtsmen are gone, and the company has just absorbed the "productivity dividend" into profits. Those profits, of course, go out to investors, and from there they just tend to drive wealth inequality, rather than hiring. If they went to the more-productive employees themselves in salaries, then they'd be a lot more likely to drive consumption.
People have unlimited wants, and thus there should be an unlimited demand for labor, even as productivity increases. If I'm the engineer and suddenly I'm making 4x more because of productivity increases, I'm going to stash some of that for retirement (which is just deferred consumption), but I'm probably going to go out and start buying more stuff. Somebody has to make that stuff. And that should drive more job creation. That's the economic cycle that we've basically short-circuited, because we've allowed the benefits of productivity to be kept out of the consumption-focused levels of the economy.
Admittedly, even if you did fix the "productivity dividend" issue, you could still have a lot of disruption due to increased productivity, and I'd personally be supportive of measures that might intentionally slow down productivity growth so that it wouldn't ruin people's lives. If rolling out AutoCAD results in an engineer making 4x more, but 3 draughtsmen losing their job, that's a pretty shitty social tradeoff. But if we could manage that over a longer timescale, just not training as many draughtsmen anymore and then letting them attrit out of the workforce (and no, "job training" programs are shitty, that's not a solution; you don't take someone who's spent 30 years learning a skill and tell them to jump into an entry-level job in some other field, ffs) without replacement, or letting them elect early retirement via buyouts—aka the Harry Bridges strategy—I think you'd be a lot closer to a win-win. You're not going to get 100% confidence that your job isn't going to be affected by automation or productivity gains, but you can at least have confidence that you're not going to have your life ruined.
But, of course ... this requires labor to have a lot more power, relative to capital, than it currently has. And one of the reasons that capital has much more power than labor, at least in the US, is because trade deals have been used to basically open up an unlimited supply of labor onto the market, giving capital a permanent structural advantage over the past several decades. I think this was pretty clearly intentional (Nixon and others hated the unions and opening up trade with low-cost countries was undoubtedly in part a way of attacking them indirectly), but it's become a feedback loop: when capital is more powerful than labor, capital introduces more labor in order to make itself more powerful, which then lets it introduce more labor, etc. Such has been the fuel for the race-to-the-bottom that has defined the labor market in the US since, depending on your exact circumstances, the mid 70s to perhaps mid 90s, whenever the wheels came off your particular industry.
posted by Kadin2048 at 11:44 AM on January 27, 2017 [3 favorites]
I don't know that the law office example is an especially good one, because in that industry you also need to consider the effect that changes in the legal education system over the past half-century or so have had on the labor market. It used to be that a lawyer's time was very expensive compared to a paralegal's or a secretary's, so each attorney got a lot of support staff. But then the law schools started turning out a lot more lawyers, probably in excess of demand, and salaries dropped relative to support staff. Now, if you factor in both the direct and opportunity costs of going to law school, it's probably not even economically rational to go to law school. I know people who, having done the math, have made careers out of being specialized paralegals and legal assistants, and are probably better-off financially than if they'd gone for their J.D. and passed the Bar. That itself is a pretty interesting situation and there are some parallels in other fields (although cf. medicine, where the AMA has acted as a pretty effective supply cartel on MDs).
But if we just look at some generic white-collar office, say an engineering firm perhaps (since that's something that's existed in more-or-less the same form, for at least a century or so) there are definitely jobs that have been lost to automation. Most engineering firms don't have rooms full of draughtsmen, because one guy with AutoCAD can do the work that might have taken one engineer and several of them. But that guy with AutoCAD doesn't work in a vacuum; that modern office probably has an internal IT department that didn't previously exist, plus a bunch of new departments that might not have either (Human Resources departments tend to be bigger than old-time Personnel offices; Regulatory Compliance is now a thing; etc.) The person who might at one point have come into the firm as an entry-level draughtsman with a technical education now might come in as a Tier 1 at the helpdesk with a similar level of training. It's not all job losses.
The problem is when the guy doing AutoCAD work is only making as much, in real terms, as the engineer who previously would have had 3 draughtsmen helping him, and now the draughtsmen are gone, and the company has just absorbed the "productivity dividend" into profits. Those profits, of course, go out to investors, and from there they just tend to drive wealth inequality, rather than hiring. If they went to the more-productive employees themselves in salaries, then they'd be a lot more likely to drive consumption.
People have unlimited wants, and thus there should be an unlimited demand for labor, even as productivity increases. If I'm the engineer and suddenly I'm making 4x more because of productivity increases, I'm going to stash some of that for retirement (which is just deferred consumption), but I'm probably going to go out and start buying more stuff. Somebody has to make that stuff. And that should drive more job creation. That's the economic cycle that we've basically short-circuited, because we've allowed the benefits of productivity to be kept out of the consumption-focused levels of the economy.
Admittedly, even if you did fix the "productivity dividend" issue, you could still have a lot of disruption due to increased productivity, and I'd personally be supportive of measures that might intentionally slow down productivity growth so that it wouldn't ruin people's lives. If rolling out AutoCAD results in an engineer making 4x more, but 3 draughtsmen losing their job, that's a pretty shitty social tradeoff. But if we could manage that over a longer timescale, just not training as many draughtsmen anymore and then letting them attrit out of the workforce (and no, "job training" programs are shitty, that's not a solution; you don't take someone who's spent 30 years learning a skill and tell them to jump into an entry-level job in some other field, ffs) without replacement, or letting them elect early retirement via buyouts—aka the Harry Bridges strategy—I think you'd be a lot closer to a win-win. You're not going to get 100% confidence that your job isn't going to be affected by automation or productivity gains, but you can at least have confidence that you're not going to have your life ruined.
But, of course ... this requires labor to have a lot more power, relative to capital, than it currently has. And one of the reasons that capital has much more power than labor, at least in the US, is because trade deals have been used to basically open up an unlimited supply of labor onto the market, giving capital a permanent structural advantage over the past several decades. I think this was pretty clearly intentional (Nixon and others hated the unions and opening up trade with low-cost countries was undoubtedly in part a way of attacking them indirectly), but it's become a feedback loop: when capital is more powerful than labor, capital introduces more labor in order to make itself more powerful, which then lets it introduce more labor, etc. Such has been the fuel for the race-to-the-bottom that has defined the labor market in the US since, depending on your exact circumstances, the mid 70s to perhaps mid 90s, whenever the wheels came off your particular industry.
posted by Kadin2048 at 11:44 AM on January 27, 2017 [3 favorites]
"It isn't a fudge. Word Processors literally automated away the job of typesetting (and by reducing the necessary skill, eliminated typists and stenographers). Spreadsheets literally automated the job that tabulators (and to a lesser degree even some programmers) used to do. OCR is slowly automating the transcriptionist role.
Computers have wholly automated away an enormous amount of low(ish) skill office labor just since the 80s, vastly more since the 60s, and somewhere between 50 and 90% pre-WWII, depending on the industry. There was a slow attrition before electronic computing, that got faster with minicomputers and networking, and blew through the fucking roof with the rise of microcomputers on everyone's desk. Some of that was redistributed to higher skill IT jobs, but those are now themselves being automated (and outsourced, which only works because automation allows the likes of Amazon to run server farms at enormous scale cheaply) away."
One place that this often gets overlooked in a broader discussion is in media, journalism specifically. The deregulation of media ownership happened at the same time as a massive, massive improvement in productivity based largely on computerization. The number of people required to run a news organization wildly decreased, as things like typesetting, copy editing, layout, filing, archiving, etc. all became digitized, which led to things like newspapers becoming really profitable really quickly, giving insane returns on investor cash. That led to a lot of consolidation and buyers from outside of the media world, who would then expect to continue the pattern of productivity increases while massively slashing staff. But, similar to the music industry, they didn't recognize that these surges in profitability were related to a limited transition period — people weren't going to need to buy their old LPs on CD twice; you couldn't digitize a typesetter twice. So they cut content production jobs to the bone (and sometimes deeper) at the same time that digital distribution was undercutting their traditional advertising model. One thing that gets overlooked in a lot of newspaper doom stories was that for a long time — at least well into the first decade of the century — profits didn't fall, but rather profit growth slowed. And even when profits did start to fall, many of the outlets with the worst cuts were places that remained profitable, just not profitable enough to support a place in a broader corporate portfolio, hurting share value. And since share value growth has superseded operational profitability for a lot of shareholders, the corporate overlords responded with more labor cuts, since labor is the biggest cost in producing media.
Hopefully, the rise of Trump will convince some folks to actually pay for the media we need, helping to defray the loss of the classifieds market.
posted by klangklangston at 11:46 AM on January 27, 2017 [6 favorites]
Computers have wholly automated away an enormous amount of low(ish) skill office labor just since the 80s, vastly more since the 60s, and somewhere between 50 and 90% pre-WWII, depending on the industry. There was a slow attrition before electronic computing, that got faster with minicomputers and networking, and blew through the fucking roof with the rise of microcomputers on everyone's desk. Some of that was redistributed to higher skill IT jobs, but those are now themselves being automated (and outsourced, which only works because automation allows the likes of Amazon to run server farms at enormous scale cheaply) away."
One place that this often gets overlooked in a broader discussion is in media, journalism specifically. The deregulation of media ownership happened at the same time as a massive, massive improvement in productivity based largely on computerization. The number of people required to run a news organization wildly decreased, as things like typesetting, copy editing, layout, filing, archiving, etc. all became digitized, which led to things like newspapers becoming really profitable really quickly, giving insane returns on investor cash. That led to a lot of consolidation and buyers from outside of the media world, who would then expect to continue the pattern of productivity increases while massively slashing staff. But, similar to the music industry, they didn't recognize that these surges in profitability were related to a limited transition period — people weren't going to need to buy their old LPs on CD twice; you couldn't digitize a typesetter twice. So they cut content production jobs to the bone (and sometimes deeper) at the same time that digital distribution was undercutting their traditional advertising model. One thing that gets overlooked in a lot of newspaper doom stories was that for a long time — at least well into the first decade of the century — profits didn't fall, but rather profit growth slowed. And even when profits did start to fall, many of the outlets with the worst cuts were places that remained profitable, just not profitable enough to support a place in a broader corporate portfolio, hurting share value. And since share value growth has superseded operational profitability for a lot of shareholders, the corporate overlords responded with more labor cuts, since labor is the biggest cost in producing media.
Hopefully, the rise of Trump will convince some folks to actually pay for the media we need, helping to defray the loss of the classifieds market.
posted by klangklangston at 11:46 AM on January 27, 2017 [6 favorites]
Re productivity, this chart may be of interest. Since 1973, there has not only been significant productivity growth almost every year, but the first derivative of the rate was also positive (i.e. the rate of productivity growth was itself increasing, which implies that economic output was going up by a function with a time-squared term).
So we should have seen huge wage increases. We did not, IMO because our friendly corporate overlords were able to use foreign labor to break the unions and keep wages stagnant during what might have been, under different conditions, a golden age for the American worker, at the end of which we'd all be sitting on ridiculous pensions, contemplating the rarefied air at the top of Maslow's hierarchy.*
When you consider what those productivity increases could have amounted to, if they'd not just gone to fueling the portfolios of a small number of tremendously rich people, it actually becomes surprising that electing Trump is the closest to a populist uprising that the US has had. I think that in retrospect, future historians will be amazed at how effectively the elites kept the population at bay with bread and circuses (credit, mostly) in order to paper over what was being siphoned off.
Since 2007 (through 2015), though, the productivity growth rate has fallen, and that parabolic increase in output is no longer happening. It remains to be seen whether we'll pick back up at some point, or if the 1974-2015 growth regime was a sort of one-time hit of transistorized economic heroin, like the advent of mechanization or fertilizer to farming.
* In fairness, the Chinese economy would probably be worse off, but the fate of Chinese workers (or Brazilian, or Indian, or Mexican, or...) has always seemed like an ex post facto rationalization for US policy, certainly not a motivation. Trump didn't invent "America First", he just said it out loud.
posted by Kadin2048 at 12:41 PM on January 27, 2017 [4 favorites]
So we should have seen huge wage increases. We did not, IMO because our friendly corporate overlords were able to use foreign labor to break the unions and keep wages stagnant during what might have been, under different conditions, a golden age for the American worker, at the end of which we'd all be sitting on ridiculous pensions, contemplating the rarefied air at the top of Maslow's hierarchy.*
When you consider what those productivity increases could have amounted to, if they'd not just gone to fueling the portfolios of a small number of tremendously rich people, it actually becomes surprising that electing Trump is the closest to a populist uprising that the US has had. I think that in retrospect, future historians will be amazed at how effectively the elites kept the population at bay with bread and circuses (credit, mostly) in order to paper over what was being siphoned off.
Since 2007 (through 2015), though, the productivity growth rate has fallen, and that parabolic increase in output is no longer happening. It remains to be seen whether we'll pick back up at some point, or if the 1974-2015 growth regime was a sort of one-time hit of transistorized economic heroin, like the advent of mechanization or fertilizer to farming.
* In fairness, the Chinese economy would probably be worse off, but the fate of Chinese workers (or Brazilian, or Indian, or Mexican, or...) has always seemed like an ex post facto rationalization for US policy, certainly not a motivation. Trump didn't invent "America First", he just said it out loud.
posted by Kadin2048 at 12:41 PM on January 27, 2017 [4 favorites]
Re productivity, this chart may be of interest. Since 1973, there has not only been significant productivity growth almost every year, but the first derivative of the rate was also positive .
This is so at odds with how I think about it that I had to re-read what you said and look at the chart again. I get what you're saying now, but I think it's a misleading perspective.
If you look at your link again I think the better description is there was a steep decline in growth rate in the '70s (from 2.8% to 1.2%) and then a partial recovery, but things are bad enough that there hasn't been a recent decade in which we could sustain even average postwar (1947 to 1973) growth levels. It was the decades before 1973, not after, that should've been the golden age.
This is salient I think because people alive in the '70s did perceive a problem and the breakdown in the postwar consensus on how to share gains is at least partially due to this decline. There were fewer gains to distribute year in and year out.
That capital was able to seize all the gains, as opposed to sharing them with labor, is not in doubt.
posted by mark k at 7:51 PM on January 27, 2017
This is so at odds with how I think about it that I had to re-read what you said and look at the chart again. I get what you're saying now, but I think it's a misleading perspective.
If you look at your link again I think the better description is there was a steep decline in growth rate in the '70s (from 2.8% to 1.2%) and then a partial recovery, but things are bad enough that there hasn't been a recent decade in which we could sustain even average postwar (1947 to 1973) growth levels. It was the decades before 1973, not after, that should've been the golden age.
This is salient I think because people alive in the '70s did perceive a problem and the breakdown in the postwar consensus on how to share gains is at least partially due to this decline. There were fewer gains to distribute year in and year out.
That capital was able to seize all the gains, as opposed to sharing them with labor, is not in doubt.
posted by mark k at 7:51 PM on January 27, 2017
Well, in that chart they've lumped together 1947-1973 into one bar, which is difficult to compare to the rest of the chart. There was (apparently; you have to view the text to really get the correct labeling), 2.8% average annual productivity growth during the 1947-73 time period but since it's averaged over such a long time period that it's not a great indicator of how that time period "felt".
I suspect pretty strongly that quite a bit of that average was frontloaded in the early part of that period, due to the postwar "peace dividend", consisting of significant deferred productivity gains from the wartime period when there wasn't any significant investment in civilian industry, plus the application of all the wartime technology to civilian manufacturing, etc.
It looks like you can get more granular data from the BLS web interface, by setting the range back to 1947 and then requesting annual numbers. (Although I think what they are giving is the average of the quarterly change numbers, which is not the same as the net change that year.) But anyway, you can see that there were some years — 1950 and 1955 in particular — that had huge productivity jumps, which I think are probably attributable to the WWII and potentially Korean War peace dividends. And then things seemed to level out as you get close to the 70s.
At any rate, though, I'm not really disagreeing with you that much. Perhaps what I should have said is that "what might have been, under different conditions, a second golden age for the American worker...", given that workers did pretty darn well in the postwar period, and in fact this period is what Trump et al tend to refer to (explicitly or implicitly) when they talk about making America great again. That said, I have some trouble saying that with a straight face, since there are clearly big sections of the population for whom that was anything but a pleasant time.
But certainly workers did better at capturing productivity gains during the pre-73 period than afterwards, and I think this is also related to the decline in unions and other indicators of labor power in the latter quarter of the century. My theory—and I'm open to alternatives, but it seems to fit with the data—is that there was a pretty clear effort on the part of conservative business interests in the US to break the power of labor generally and the big unions particularly, by permanently increasing the labor supply through trade and essentially by forcing labor competition between US workers and their lower-cost international counterparts. And that this effort was tremendously successful, in terms of achieving its objectives, starting sometime in the mid-70s.
posted by Kadin2048 at 1:21 PM on January 30, 2017
I suspect pretty strongly that quite a bit of that average was frontloaded in the early part of that period, due to the postwar "peace dividend", consisting of significant deferred productivity gains from the wartime period when there wasn't any significant investment in civilian industry, plus the application of all the wartime technology to civilian manufacturing, etc.
It looks like you can get more granular data from the BLS web interface, by setting the range back to 1947 and then requesting annual numbers. (Although I think what they are giving is the average of the quarterly change numbers, which is not the same as the net change that year.) But anyway, you can see that there were some years — 1950 and 1955 in particular — that had huge productivity jumps, which I think are probably attributable to the WWII and potentially Korean War peace dividends. And then things seemed to level out as you get close to the 70s.
At any rate, though, I'm not really disagreeing with you that much. Perhaps what I should have said is that "what might have been, under different conditions, a second golden age for the American worker...", given that workers did pretty darn well in the postwar period, and in fact this period is what Trump et al tend to refer to (explicitly or implicitly) when they talk about making America great again. That said, I have some trouble saying that with a straight face, since there are clearly big sections of the population for whom that was anything but a pleasant time.
But certainly workers did better at capturing productivity gains during the pre-73 period than afterwards, and I think this is also related to the decline in unions and other indicators of labor power in the latter quarter of the century. My theory—and I'm open to alternatives, but it seems to fit with the data—is that there was a pretty clear effort on the part of conservative business interests in the US to break the power of labor generally and the big unions particularly, by permanently increasing the labor supply through trade and essentially by forcing labor competition between US workers and their lower-cost international counterparts. And that this effort was tremendously successful, in terms of achieving its objectives, starting sometime in the mid-70s.
posted by Kadin2048 at 1:21 PM on January 30, 2017
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a surge in Trump voters from middle class whites is properly referred to as a racist backlash.
posted by eustatic at 2:19 PM on January 25, 2017 [29 favorites]