How Much Exploitation? : Labor's Share of Income

Source:  http://www.federalreserve.gov/econresdata/notes/feds-notes/2015/gifjpg/figura-ratner-fig3-20150608.png

 

 

 

Even though the pie has been growing, the worker's share of the pie has been shrinking - under presidents of both parties. Capitalism: Broken and getting brokener. The chart is labor's share of national income.

The best is if you look at the chart, every gray bar is a recession. The labor share drops right around every recession. Now remember, this isn't in absolute dollars, but in the share of income. This means that capital owners use recessions to eliminate labor expenses. This is not labor expenses lowered in proportion to the downturn, but labor shed in excess of the downturn. If the recession was 3% of GDP decrease and the labor income decreased by 3%, there would be no decrease on the chart. Instead GDP dropped 3% and labor costs were decreased 6%, say. And with wage stickiness (people will not accept an absolute decrease in their take-home pay from the same employer) people lost their jobs and it was pocketed by capital.

Now, some people may point to technology as the driving factor - there is capital deepening as there are investments to technology and less people are needed to make the same amount of goods. The problem here is that even this is missing the point. Even when capitalism was working, labor gave up 30% of their working day for the owners. Now it is 40%. This is important, but it is just being conscious of your greater exploitation, not coming to terms with the fact of the exploitation.

Ice-9 of the Economic System: Ellen Meiksins Wood's "The Origin of Capitalism"

I had only just discovered Wood when she died, and had some passionate sharing about her writings with a  friend and it was like discovering a band no one had hear of.  But now she died and it’s like becoming a Sublime fan in 1996 – too late to go to one of those conferences where’s she’s talking and listen to her talk and then ask her a twenty-minute question that is 90% the thing you think and then realize that you have to tie it in to the thing she was there talking about at the very end to your great embarrassment.

So there’s a lot to like here. The best thing is that she sets capitalism aside. The classical Marxist view is to think of capitalism as some sort of evolution. This makes it an inevitability and then communism is its own sort of proclaimed inevitability. What she does is instead look at the start of capitalism as a historical accident, one that started in one place and then spread.

This isolates the system, into one that has a definite start. What makes a definite start good is that it creates an idea of an ending. It isn’t inevitable. It is just a thing that happened that could be overcome. But the problem is that once settled in one country, it spread with its own “imperative” in each new country as Wood described (195). This puts me to mind of Vonnegut’s description of Ice-9, one where once it started; every water molecule knew how to form the new crystal. The problem is melting all the crystals so that the water (read: economic system) forgets what structure it once took so that it can take on less destructive to the human race. This book doesn’t take us all the way, but it shows the monster can be slain.

Reflections on this census-taker and other thoughts of China Mieville

Like, I have read some books, man.

I’ve read some that have given people problems like Kafka and a Lot of Pynchon and Infinite Jest and even that Olipo stuff. I read Joyce, but never finished the Wake.

So I know for hard books. The books written by men that are not meant to be enjoyable but may be a bit of an enigma.  I studied Joyce, reading books about his books and his bragging that in a century the professors would be stroking their chins over his stuff.

That’s just where this book falls.

It’s not really bad. But it’s not good. The book is a problem, waiting to be solved.

I don’t think I know the moves.

I may be too old to learn.

Karen Ho's "Liquidated": Amongst the Wild of Wall Street

Ho writes the book that I think I would have written, had I been born in different circumstances. She was a graduate student in the Ivy League and she saw her peers go into the Street, so she did what any good anthropologist would do – she went native to study the flora and fauna of Wall Street.

In it, she looks at the prevailing orthodoxies of the natives and tries to debunk them, amongst these are shareholder value and the benefit of so many hours at your desk (free food and a car service help these brave souls). Ho was able to take the job because of her pedigree, and she used it to build connections –she was an excellent networker, I bet she has all the hot LinkedIn connections. In the book, she goes through the process from recruitment to disillusionment, She was able to do this since her own job was made redundant at a point before she wanted it to be, but then she did fieldwork to learn more about the natives.

What this book reminds me of most of all is the book by Kevin Roose from a couple of years that got a lot of notice, “Young Money”.  That book lacked in its breadth since it only really examined the situations of five or six people, where Ho tries to generalize her experience, and in my reading, she is much more effective than Roose was. The problem is that Roose had experience writing for a popular audience every day. Though this book has been through edits, it is still very much an academic book in the soft sciences / arts. I had seen the word “problematize” several times and it was only about half way through I thought I should keep track of that word as a proxy for how “Academic” the book was. A skilled editor could have cut half the book and made it a much more effective popular book. Ho could have done the press and maybe even had a TED talk. Talk about a missed opportunity! But for what it is, the book is very successful and very compelling for catching a brief period in time that will probably only differ in degree of the levels of tech for the next generation, no matter the humiliations that come about from recessions not foreseen or even caused by the financial sector.

Srnicek and Williams invent the future: A Source for Hope

When I was reading this, lying in bed my wife asked me what I was reading now – the format of the book is enough that it shook her out of the idea that it was just another book and instead made her ask.

I told her it might be the most important book I ever read. So many books that strike a criticism of the existing world and a future that can come through the mechanisms recommended in the book just have so many holes and they leave me feeling hopeless. But I keep reading them, both in the “Destroy Capitalism” and the “Reform Capitalism” genres. But the authors here have a smart take that make me optimistic view of how we get from here to there. We need a party moving forward the invented future. We need emancipation, a universal income, and we need to watch the rise of the robots. But we need to leverage that rise. The program is incomplete, but it is a foundation. And it is a source for optimism. The kids are all right.