CHOICE MORSELS
IS A SELECTION OF SHORT EXCERPTS FROM RECENT POSTS, COLUMNS, COMMENTARY THAT WILL GIVE THE READER AN IDEA OF WHAT WE DO HERE. NOT EXACTLY “THE BEST OF:”, BUT SOMETHING CLOSE. IT’S A SORT Of “here’s what we can do that may interest you, without your having to scroll through acres of comments.” David Lawrence on July 20, 2013 at 11:30 am said: I am a person that was subject to the pitfalls of life, but did not fall victim! I don’t want and did not receive charity, food stamps or any government provided program until I left the service and utilized the GI bill. I never desired for someone else to subsidize my progress through life and would not now force someone who has struggled to achieve success to support those unwilling to sacrifice for success. I know this does not apply to all, because some are born into great wealth, and some stuck in the peril of poverty, but we are all in possession of abilities to rise out of bad circumstance….especially when living in the US where opportunity is so available. No one has to fall to drug use, that is a poor excuse for failure and tenacity will prevail, as we all witness with the current rise in socialism! We should never fail to the point of depending on the government to subsidize or force excess tax of labor on one to the other within society! Equal justice under the law limits the disparity of taxation, but does not equally distribute wealth. The Constitution does not dictate equal wealth but equal protection, as even the poor will not be victimized by the government. That should not be changed to victimize those that have found success.
fshiels on July 20, 2013 at 12:19 pm said:
David,
This is thought provoking and I hope others will react. A few questions: 1. what about people who Didn’t struggle, particularly, to achieve success– I mean most of us struggle– but many successful folk (less than half) were handed a whole lot from their family fortunes, born with silver spoons so to speak; and what about those who have worked very hard but, because of a combination of luck, or color, or gender, or circumstance simply were not able to provide for their own needs or those who depended upon them?,
2. Opportunity in the USA is indeed available, but did you read the piece on opportunity as experienced by a wealthy Pittsburgh youth v. that of a child of a single parent in a run down ghetto?, does the latter deserve a leg-up, help from somewhere, or is it all just about the luck of the draw?,
3. can you think of some names of people or categories of people who have been “victimized,” having found success? do you mean here high taxes?
When you speak of the current rise of socialism, to you realize that corporate and personal income taxes were far higher in the 1950s and 1960s than today– for the very rich? Are you aware that the fabulously wealthy qualify for as much or more social security (from the Government) as the modest secretary or school teacher retiring? And that If you pay into social security and retire in 2010, that all of the money you paid into the program between, say, 1960 and 2010 will be used up by the time you are 69 or 70 years old? So after that age, what you are getting is welfare, money redistributed to you from other people. You may have worked hard, but it’s still Welfare after what you put in has been exceeded. You may have served nobly in the military, but the GI Bill is still a form of transfer payment. Sharecroppers, ghetto kids, American Indians, etc. get a bit of welfare, but the programs that help them to not, on a per capita basis, approach the GI bill benefits. I could go on, but…!
Thanks for writing, feel free to respond
fshiels 
Art’ Lerman’s recent post!
GUEST COLUMN BY PROF. ART LERMAN: Paying the Workers to Become Customers
Posted on August 18, 2013
The Original Reason for Economic Liberalism/Progressivism
This book is presaged on prediction—the next wave of U.S. politics will be liberal/progressive.
But it also has an advocacy element: That’s a good thing.
Why?
Because the challenges we face are not to be engaged by current conservative policies:
a. Simply depending on free markets—laissez-faire. Indeed, the whole role of liberal/progressive policy came into being in reaction to the early industrial revolution resulting from free markets. Left to itself the free market produced great numbers of products, but provided no way for the producers to access these products. Their pay was too low to buy them.
The result was impoverished workers who could not afford to buy anything, well stocked warehouses with no demand to meet, and businesses with no sales going bankrupt. (Classical Marxian analysis.)
It took liberal policy to impose wage standards, so that business paid its workers enough to buy its products.
It was necessary for government to do this for all society. If only one business paid its workers enough, other businesses would sell their products at lower rates, and the well-paying business would fail. So all businesses had to be compelled to pay the minimum, saving businesses from themselves. (Yes. The issue is who has the authority to do this in today’s globalized marketplace?)
b. The more nefarious conservative policy—gardez-nous: big government, but for the rich–welfare for the rich—skewing policies so that the rich benefit more than others. This, of course, makes the above worse. The rich are protected from not paying enough by government subsidizing them. They don’t have to worry about their workers not being able to buy their products. They can fill up warehouses, have low sales, and still get rich from government largess.
What are the challenges? Newspaper headlines give us the list: lack of opportunity and inadequate outcomes —in education, employment, healthcare, retirement, access to resources—water/air/fuel/food/safety.
Outsourcing: A New Example
Outsourcing has been a long term problem. It has been seen nationally and internationally.
Nationally we see firms and governments getting around union rules and legal contracts for workers by hiring outside firms for their work.
Typically they will outsource cleaning services and security—hiring low paying firms to do the job for less money than their contracts say they must pay their own workers. Governments (and the voters) have followed private employers in these practices. First it was private business that outsourced, but now, governments (backed by taxpayer ballots) are doing the same.
And it went international. If the work can be done by even lower paid workers outside of the country, that’s where the jobs were sent—even cleaning and security are being done this way—by siting whole factories/business offices abroad.
This has given rise to two problems and a boon.
a. First problem: Lower pay to U.S. workers again makes it hard for workers to buy their own products—restricting the market and making it hard for businesses to sell products.
b. Second problem: Low payment of workers outside of the U.S. makes it next to impossible for U.S. workers to buy anything—they’re unemployed. And the foreign workers are paid too little to take up the slack.
The boon? The businesses are making money. Yes, they’ve insured that a large population of underpaid and unemployed workers cannot buy their products. But there are enough employed people who can buy–especially in positions that cannot (yet) be outsourced—especially services, many governmental. (Though, recently, with the fiscal challenges to state/local governments, we’ve been thinning their ranks too.)
And, there is always government to buy—and give them subsidies—to help.
So we have the development of great wealth–some very rich businessmen, including major stockholders. This has been noted (2012-13) in terms of high U.S. business profits.
Robosourcing: The Next Step
But now, we may be going further. The trend is the development of robots, to replace even low paid foreign workers. It’s not outsourcing, it’s robosourcing.
So now we have the possibility of making products with few wages paid at all. Businesses can make large amounts of products at low cost. The point is, who will be out there to buy them— since so many will be unemployed?
Yes, there will always be enough customers to keep some factories going—though perhaps in declining numbers—since there are a minimum of people who society cannot do without—even as robots take over more and more employment positions.
This possibility continues, with a vengeance, the current trend toward more income inequality—a few people, managers and stockholders, making a fortune, and everyone else struggling.
This is not just the possibility of massive unemployment. It also raises the issue of who is to fund public services and those jobs not yet robotized—doctors, nurses, classroom teachers, scientific researchers, police and firefighters.
Solution?
Yes, there are solutions—it’s again a (democratic) Marxian analysis. Society has great wealth. But that wealth is bottled up in the back accounts of the few employed and owning class. The resources are there if applied to society as a whole, to fund all the positions that are not subjected to robotization, as well as making for early , well-funded, retirement for everyone else.
The key is to transfer the wealth from the few to the rest of society. One answer would be taxation, leaving the wealthy with plenty, but taking enough for the rest of us.
Another: the rest of society becoming a/the stockholder—i.e., like pension funds writ large.
Unfair? After all, it’s the wealthy that produced the wealth. No? Here we go to Obama’s “You did not build that.” How much do the wealthy depend on the broad backing of society—police, fire, hospitals, subsidies?
And how much do they have to lose if their wealth is not reinvested in the rest of society? For one, sales would go up if the rest of us could buy their goods. And investments in schooling, scientific research, community development, would give them a more supportive environment to prosper even further.
The idea is that with robots, great wealth can be produced for everyone, and society can move forward for all. But the robot owners must share the wealth—or end up living in fortified mansions, surrounded by electrified barbed wire and robot guards. They also may need their own oxygen masks to access breathable air and have their own robotized water purifiers.
Remember Marx’s ultimate vision. Most people will be materially supported by factories, turning out what everyone needs, in more than enough quantities. These factories would be tended by everyone on a part-time basis, since they wouldn’t need that much oversight.
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My reply to art Lerman’s recent post!
–There is a lot of insight here. It’s all about fair distribution and sane distribution of opportunity and resources. REDISTRIBUTION used to be a word taken for granted (the rich give some things to the poor, a global historical tradition, though inadequately applied). Now it seems to have a bad name among Gilded Age types. Reich, Krugman, Frank, and more than 1 Nobel Prize for economics (more than Krugman!)– say Stiglitz, has pointed out that money bottled up at the top damages the whole society, and even people at the top! It’s all about people having work and money in their pockets to consume, consume, Consume!
Under-consumption was the biggest factor, arguably leading to the Depression of the 1930s. Inequality of income like we have today is always dysfunctional, and especially dysfunctional at times like the 2008 great recession. What is amazing is that the economic downturns caused DO NOT HELP THE RICH, although they may be affected less. They probably lose more money by the imbalance in consumption and the shakiness of the middle/working classes than they ever would by ponying up taxes and community grants without whining.
It is just AMAZING, again, that the 1 %, the 5%, and–even more– the conservative elements that carry the banner for those wealthy folks even though They do not have much income themselves act the way the do. You do not have to follow Marx, to understand this. But Marx, Keynes, and for that matter most American Presidents from 1933 to 1981, realized this, with different ideas about What To Do About It.
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NOT A REPLY BUT AN EXCHANGE WITH BRUCE KRELL UNDER THE THOMAS FRANK BOOK DISCUSSION. WORTH READING:
1. Bruce Krell on August 26, 2013 at 2:43 pm said: Edit
While I don’t agree with everything on this site, the tone of the site is very impressive to me. This site is trending towards enlightened public discourse — people debate various positions. The positions are justified based on facts, data, and philosophy, rather than name calling.
I do disagree with some of the statements made on this site by some of the authors.
For instance, some of the authors talk about the widening gap between the rich and the poor. I don’t think I agree with this. The founders of the country were all pretty rich. A wide gap existed between rich and poor at that time. However, the poor could become rich based on their own efforts, not aid by government.
That condition still exists today. Lots of people go from poor to rich by their own efforts and not through transfer payments from governments. Don’t believe me — look at all the very wealthy hip hop artists. Many of them started our dirt poor in ghettos. They focused their anger into non-destructive forms of income generation. They are among those extreme wealthy rich.
A person can help himself up from the ranks of the poor to the ranks of the rich. He may need help in the form of financial aid for education, but the rising out of the ghetto is accomplished by his OWN EFFORTS of obtaining an education in a useful subject, then getting a job, not by continuous and unending transfer payments of private wealth.
Not only is this how I feel, but this is an example of rational public discourse. I am not calling anyone names, I am not taking a party line. I am using specific examples to show that the barriers to wealth really do not exist, as claimed by posters to this blog.
Just so you know, I have a PhD in Applied Math. I have a rigorous traditional economics background. I have worked in my own small businesses, and medium and large businesses in positions of control. I am self made and independent. In order to get my degrees and whatever wealth I have accumulated. I STARTED WITH NOTHING, I took some scholarships, some loans, but mostly worked. I paid back ALL of the loans with interest. Everyone who has hired me over the years has made far more off my efforts that I made. I focus on issues and their solutions, not rhetoric.
My response, also August 26, 2013:
Welcome aboard, Bruce. Now if I could just get more of my other friends and colleagues, and eventually other “higher level of discourse” folks to join the party, I’d be satisfied. I get what you say here about a lot of traditional and even current evidence of class mobility being part of the American way of doing things. What I think Frank, Reich, Krugman, and I (impressive company!) are worried about is the trending toward actual numbers showing movement toward dramatically increased shares of the wealth moving into the top 1% or 10% and emptying out of the bottom 50 rpt 50%.
My favorite numbers that underscore this are often cited– I’m not going to document them here, but it’s not hard to do– that the top 1% of the population have about 20% of the wealth and the top 10% between 40 and 45% of the US wealth (not just income). The bottom 50% have about 13% of the wealth. These disparities have not been witnessed in this century nor the one preceding. You have to go back to the late 19th C.
And by this standard, incidentally, the NINE % of the TEN% wealthiest not in the ONE% might be a little irritated (only theoretically) that THEIR share of the income is about 50-50 even though they are 90% of the top TEN%!!!… That said, there are certainly still a lot of individual success stories– more here than most places, of people making not only the rags to riches move, but the more modest “several rungs on the economic ladder” move.
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