Where to Invade Next – social progress and a productive economy

WhereToInvadeNextI have ‘enjoyed’ (if that is the appropriate word) much of the work of US filmmaker Michael Moore. He tirelessly aims through this work and beyond it to campaign for a more progressive society and politics. He tries to entertain, inform and persuade. I often get the feeling when watching his films that he is preaching to the converted, but I still find myself learning something new.

His 2015 offering Where to Invade Next sees him visiting various countries around the world, mainly in Europe but also elsewhere, exploring aspects of their culture which as an American ‘liberal’ he admires more than the home-grown alternative. For each aspect, he plants the stars and stripes, indicating his ‘invasion’, and vows to steal the particular idea and take it back to the US. Continue reading

Conflict between the market and society

“[Karl Polanyi] identified a tension between what he considered to be the two organising principles of modern market society: “economic liberalism” and “social interventionism”, each with their own objectives and policies as well as support from the groups within society whose interests they are seen to serve. The aim of economic liberalism is to establish or restore the self-regulation of the system by eliminating interventionist policies that obstruct the freedom of markets for land, labour and capital. Through laissez-faire and free trade, social relationships are embedded within the economic system and subjected to unregulated market forces with support from the propertied classes, finance and industry. By contrast, the aim of social interventionism is to embed the economy within social relationships, thereby safeguarding human beings and nature through market regulation, with support from those adversely affected by the destabilising consequences of economic liberalisation and the self-regulating market – notably the working classes.

Polanyi argued that there is a conflict between the interest of capital in freeing itself from the constraints of society – and society’s interest in protecting itself from the social dislocation of the market (particularly that of finance). This generates a “double-movement” of counter-reactions by both capital and society, mediated by politics and the legal process. Without compensating social intervention, Polanyi contended that the pressure on vulnerable individuals and groups within society, arising from attempts at market self-regulation, would generate resistance in the form of labour, civic, social and political movements. If these become widespread – and discontent with the damaging effects of the self-regulating market intensifies – social order becomes more difficult to maintain; and in an effort to safeguard the existing system, political leaders may attempt to deflect dissatisfaction by scapegoating. However, at some point, the state is likely to be put in the position of having to decide whether to intervene on behalf of those affected or to risk social breakdown. In turn, the impairment of market forces associated with protective regulatory measures could set into motion a counter-movement on the part of capital to attempt to protect its own interests by freeing itself from social and political constraints. In response, the state would have to decide the degree to which laissez-faire should be restored and social protections and market regulations relaxed.”

Suzanne J. Konzelmann, Simon Deakin, Marc Fovargue-Davies and Frank Wilkinson (2018), Labour, Finance and Inequality, p.5-6

Harder or smarter? Work intensification and reforming capitalism

stress_at_workBritish workers are suffering, with little to show for it. As Sarah O’Connor writes in last Wednesday’s FT: “[they] are working harder than at any time in the past 25 years, to tighter deadlines and with less autonomy. Medical research shows a link between “high strain” jobs, which combine high pressure with a lack of control, and cardiovascular disease, musculoskeletal problems, stress and depression.” She notes that the recent World Mental Health Day brought news of employer initiatives to combat workplace exhaustion. But will this be enough? Continue reading

Inequality in the OECD: causes and policy responses

Inequality has become a ‘big’ topic in recent years, of concern both to economists and the public at large. This is exemplified by the popularity of Thomas Piketty’s Capital in the Twenty-First Century, and many other works. I have written on some of these studies here.

They continue to be churned out: in the July issue of the heterodox Cambridge Journal of Economics, Pasquale Tridico of Roma Tre University analyses the determinants of income inequality in 25 OECD countries between 1990 and 2013. He finds that ‘financialisation’, increased labour market flexibility, the declining influence of trade unions and welfare state retrenchment have been key to its rise.

When other factors such as economic growth, technological change, globalization and unemployment are taken into account, the above four causes remain important, and, to the extent that they can be changed as a matter of policy, they can mitigate inequality without harming economic growth. They are therefore not the full story but, for example, the negative effects of rising unemployment on inequality can be reduced if there is a strong social safety net in place. Continue reading

Mark Blyth on Bernie and Scandinavian welfare

Another clip from the engaging Professor Mark Blyth. Here he shares his thoughts on taxes, public spending and welfare in Scandinavia. He paints a positive picture, but admits that he wouldn’t want to live there and finds it ‘boring’, because ‘everything works!’

Equality of opportunity may not be fair (Ha-Joon Chang’s Thing 20)

23-things-they-don-t-tell-you-about-capitalism“Equality of opportunity is the starting point for a fair society. But it’s not enough. Of course, individuals should be rewarded for better performance, but the question is whether they are actually competing under the same conditions as their competitors. If a child does not perform well in school because he is hungry and cannot concentrate in class, it cannot be said that the child does not do well because he is inherently less capable. Fair competition can be achieved only when the child is given enough food – at home through family income support and at school through a free school meals programme. Unless there is some equality of outcome (ie., the incomes of all the parents are above a certain minimum threshold, allowing their children not to go hungry), equal opportunities (ie., free schooling) are not truly meaningful.

…We cannot, and should not, explain someone’s performance only by the environment in which he has grown up. Individuals do have responsibilities for what they have made out of their lives.

However, while correct, this argument is only part of the story. Individuals are not born into a vacuum. The socio-economic environment they operate in put serious restrictions on what they can do. Or even on what they want to do. Your environment can make you give up certain things even without trying. For example, many academically talented British working-class children do not even try to go to universities because universities are ‘not for them’.  This attitude is slowly changing, but I still remember seeing a BBC documentary in the late 1980s in which an old miner and his wife were criticizing one of their sons, who had gone to a university and become a teacher, as a ‘class traitor’.

While it is silly to blame everything on the socio-economic environment, it is equally unacceptable to believe that people can achieve anything if they only ‘believe in themselves’ and try hard enough, as Hollywood movies love to tell you. Equality of opportunity is meaningless for those who do not have the capabilities to take advantage of it.”

Ha-Joon Chang (2010), 23 Things They Don’t Tell You About Capitalism, p.210-211, 217.

Unions need a reinvention

workersThe Observer’s Will Hutton calls for the reinvention of trade unions in the UK (article link below). The labour market continues to change, and workers need effective representation. The balance of power between capital and labour is a key relationship in a capitalist economy, and the dramatic rise of self-employment and the gig economy demand that unions respond.

If unions are to stay relevant in the new workplace, they must change