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Chicks by Mail

This week in my American Environmental History class we're talking about Farmers & Agribusiness. I'm having the class watch some pretty bleak undercover animal welfare videos, so I thought I ought to make the point that the way agribusiness currently treats animals is not the only way things could be.

One way things could be different is more people could raise some of the meat they eat. Although I was an Agricultural Economics major as an undergrad, raising animals was as far from my experience as it is from most Americans' until about four years ago. So I thought I'd show what it's like to get a batch of chicks in the mail.


Moyers: Taibbi & Freeland

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As I was reading Chrystia Freeland's Plutocrats, I frequently wondered what Matt Taibbi would say. I read his book The Divide a couple of weeks ago, and like Freeland, Taibbi is a critic of the oligarchs and has worked in Russia. So I was please to discover Bill Moyers had them on his show together. It's a great episode. Freeland begins the interview by observing that talking about inequality is "is still a taboo in American political life and in American cultural life." Taibbi agrees and says "the shift really began with Clinton and the New Democrats…you don't see it in the debates, because neither party is really an advocate for that kind of left behind class anymore."

Freelander makes a good point, that "Okay, technology revolution, we love it. Globalization, I love that too. And I think it's great people are being raised up in India and China and now Africa. But let's think about how our society and our politics need to change to accommodate this. And no one is doing that." Jerry Davis makes the point in
Managed By Markets (which I'm about halfway through) that what we think of as social welfare (health insurance, old-age pensions) was once provided by America's giant corporations. Ford, GM, GE, and US Steel employed hundreds of thousands of people each and provided a lot of these benefits, ironically, to forestall government from getting into the business like the "socialist" European welfare states. The problem, as Freelander says here and Davis agrees, is that these big monolithic corporations no longer employ hundreds of thousands. The corporate welfare has evaporated, leaving big portions of the population out in the cold.

Taibbi describes the feeling of alienation a 22-year old kid in a bad neighborhood feels after being stopped and frisked over 70 times. Freeland agrees, and blames the intellectuals, saying "I think there is a broader cognitive capture of, you know, you might call it the intellectual class, the public intellectuals, around maybe the inevitability of plutocracy. You know, as Matt was saying, this notion that if you're poor, it's your own fault. You're part of this dependent 47 percent. Unions are very bad. All of that sort of stuff."

Taibbi and Freeland both cut their teeth as journalists living in Russia covering its transition to capitalism. Comparing Russia in the 90s with America today, Taibbi says  "that's the key part that I think people don't understand, is that what happened in Russian was really a merger of state and private power that empowered this one tiny little class." How much less do people understand that when it happens in a nominally "free" market like ours?

Moyers mentions that Freeland writes about the plutocrats with empathy and Taibbi writes about them with "complete irreverence." Taibbi agrees that this limits his access to people at the top, but clearly shares my suspicion that these people aren't the geniuses Freeland portrays. He says "I'm hearing a lot from people sort of from the middle on down on Wall Street. And what they're really upset about is corruption. Is this merging of state and private power, where the losers don't lose anymore. I think the people who get really upset are small hedge funds, small banks. And they see companies like, you know, Citigroup and Goldman Sachs and J.P. Morgan Chase make mistake after mistake. And they get rewarded for it what with bailouts and even greater market share than they had before."
Then the conversation moves on to what Taibbi calls a schism within Wall Street and Freeland calls the battle between the millionaires and the billionaires.

Everybody she talked to, Freeland says, was happy to divide the elite into "good plutocrats and bad plutocrats." Of course, everyone insisted they themselves were the good guys. Freeland says " this very sincere, absolutely, absolutely sincere self-justification, I think, is one of the most dangerous things that's happening…you know, what he thinks about how society should be ordered, we should all listen to because he, after all, is the hero of our time, is the hero of capitalist narrative."

The interview concludes with Freeland observing that part of the problem fighting these changes is that they are real economic changes -- we are never going back to the 50s and recovering those manufacturing jobs. But another part is that no one has really articulated a solution. There's no manifesto to get up on the barricades and wave. So, that's part of the job waiting to be done…

The Pitchforks

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I've heard about the Nick Hanauer TED Talk for a while now. Last night I took 20 minutes and watched it. The Talk is called "Beware, fellow plutocrats, the pitchforks are coming." Although a plutocrat himself, Hanauer claims that wealth inequality is reaching pre-Depression or even pre-French Revolution levels, and that the outcome for his class can't be good. But even more interesting, he makes the case that strengthening the middle class would be good for everybody.

Hanauer is proud of his accomplishments, but he seems to understand that they were enabled by the society he lives in. He says many plutocrats know, even if they don't want to admit it, that "
if we had been born somewhere else, not here in the United States, we might very well be just some dude standing barefoot by the side of a dirt road selling fruit. It's not that they don't have good entrepreneurs in other places, even very, very poor places. It's just that that's all that those entrepreneurs' customers can afford.

Hanauer's identification of the middle class as the necessary market for the goods and services that he and his friends produce is a point frequently overlooked by proponents of trickle-down economics. I think it's especially true in the high-tech sector where Hanauer made his money. A
free-market blogger posted a piece from a Tea Party site today, about the capture of "American" jobs by foreigners using Microsoft's new Skype translation software. Although I think it will take some time for the software to get good enough to actually replace people, it's just another step in a globalization of labor that's clearly already happened.

Business apologists say globalization reduces labor costs to businesses. Others argue that although it's painful for American workers, in the long run a global labor market is more just. Why should auto assembly workers in Indiana make more than their counterparts in China? Isn't that just first-world privilege? Well, yeah, it is a bit. But also, as we've seen in the
Guardian reports that have so offended Apple this week, it's much easier to treat workers poorly at a board-stuffing plant in China poorly than it would be in, say, Cupertino. And also, the cost of living in China is roughly half what it is in America. That means, to put it simply, you can pay a Chinese worker half as much to create the same standard of living.

Now we can all wait the painful generation it will take for the cost of living in America to shrink low enough to make our workers competitive. But let's be clear, that will mean house prices will fall in half, food prices, cars. Is the American economy ready for this? Even high tech companies will feel this pain. How many iPhone 6s with $100 per month family data plans do you think the Chinese are buying?

Hanauer reminds us that when Henry Ford instituted $5 per hour wages (twice the average wage at the time), he was doing it not only to pacify his workforce, but to make it possible for the people working on his assembly lines to
buy the product that rolled off it. Hanauer says, "Let's invest enough in the middle class to make our economy fairer and more inclusive, and by fairer, more truly competitive, and by more truly competitive, more able to generate the solutions to human problems that are the true drivers of growth and prosperity. Capitalism is the greatest social technology ever invented for creating prosperity in human societies, if it is well managed, but capitalism, because of the fundamental multiplicative dynamics of complex systems, tends towards, inexorably, inequality, concentration and collapse. The work of democracies is to maximize the inclusion of the many in order to create prosperity, not to enable the few to accumulate money. Government does create prosperity and growth, by creating the conditions that allow both entrepreneurs and their customers to thrive."

This last bit might be a difficult pill for free market proponents to swallow. There's a pile of literature on their shelves claiming not only that capitalism is a better solution than socialism, but that it's actually, structurally infallible (interestingly, it's usually not the first-generation thinkers such as Böhm-Bawerk and Mises who say this type of thing, but the second generation like Rothbard). Capitalism could still be the best possible option, even if we acknowledge and try to correct for its flaws. I'll have more to say about this when I review
Thomas Piketty's book, since his thesis revolves around what a capitalist economy does in different growth scenarios.

Which brings us back around to economics. What it is and who it's for? Hanauer has a different perspective from mine -- a view from the top. But even he says, "
Many economists would have you believe that their field is an objective science. I disagree, and I think that it is equally a tool that humans use to enforce and encode our social and moral preferences and prejudices about status and power, which is why plutocrats like me have always needed to find persuasive stories to tell everyone else about why our relative positions are morally righteous and good for everyone: like, we are indispensable, the job creators, and you are not; like, tax cuts for us create growth, but investments in you will balloon our debt and bankrupt our great country; that we matter; that you don't. For thousands of years, these stories were called divine right. Today, we have trickle-down economics. How obviously, transparently self-serving all of this is. We plutocrats need to see that the United States of America made us, not the other way around; that a thriving middle class is the source of prosperity in capitalist economies, not a consequence of it."

An Antidote for EcoModernism

After a week of reading stuff like the Ecomodernist Manifesto, I was a bit depressed. Then I stumbled onto this video, and it made me feel better. There's a whole Vimeo Channel filled with videos like this one! https://vimeo.com/channels/agendagotsch

Life in Syntropy from Agenda Gotsch on Vimeo.