Socialism for the Information Economy

by John Quiggin on October 9, 2017

I have a long article in the Guardian putting forward some thoughts about a socialist economic policy program for the 21st century. The headline “Socialism with Spine” is a shortening of my observation that:

As it is used today, the term socialism does not reflect a well-worked ideology. Rather it conveys an attitude that could be described as “unapologetic social democracy” or, in the US context, “liberalism with a spine”

The contraction might have led some readers to expect a position more radical than the one put forward in the article. I’m advocating both a restoration of those aspects of 20th century social democracy that are still relevant today and new ideas to turn the 21st information economy to the benefit of the many, not the few.

{ 84 comments }

1

bob mcmanus 10.09.17 at 4:24 pm

I’ll get to our article later, but social democracy or welfare capitalism has shown itself to be too vulnerable and inadequate to the coming challenges. I view the project as a failure, especially after 2008.

The next step or goal should be democratic socialism, wherein the socialization of economic production and distribution is prioritized and economic equality, to whatever degree is democratically accepted, is the primary means to political equality.

2

Phil 10.09.17 at 4:54 pm

Coincidentally, at the end of the lecture I gave this morning I noted a tendency for old-school social democratic demands (“free education”, “healthcare for all”) to merge with something harder-edged (stiffer-spined?) and more ambitious: “free education – no borders”, “healthcare for all – no to profiteers”. There’s a growing sense that the old moderate/gradual reformist answers don’t work any more, and that the system as a whole may be the problem. I look forward to reading your piece – although I’m disappointed to see no reference to fully-automated luxury communism.

3

Peter K. 10.09.17 at 5:31 pm

Excellent, fascinating essay. Yes the ultimate goal could be fully-automated luxury gay space communism that we see on Star Trek. If the ancient forces of fear and greed ultimately prevail we may see the dystopia of Blade Runner where powerful corporations and the profit motive deliver environmental devastation.

I’d quibble that Stiglitz didn’t back or even defend Sanders and Krugman actively opposed Sanders and his supporters, even though both are smart and knowledgeable. There should be a distinction between the left and center left (which PK himself makes) where the center left is more focused on attacking the right than on proposing bold solutions and policies. There is a dearth of popular economists on the Left even if there are many excellent ones interacting on social media.

Young center left Senators who are 2020 hopefuls like Harris, Booker, and Gillibrand recently backed Sanders’s Medicare-for-All legislation seeking support from young voters. This was a good sign even as it was done during one of the Republicans’ failed attempt to repeal Obamacare. A “liberal with a spine” would have beat Trump in 2016.

4

Kurt Schuler 10.09.17 at 6:00 pm

In case you are not aware, the phrase in your title has been current since before the 21st century in Latin American Spanish (socialismo del siglo XXI). Hugo Chávez was an enthusiastic advocate. If you write something more it might therefore be useful to note your points of agreement and disagreement with the socialismo del siglo XXI.

5

nastywoman 10.09.17 at 6:41 pm

– just a suggestion –
to come up with pretty good working ‘Socialism’ for the 21th century you don’t have to do – what Anglo-Americans love to do – use the ‘a-word’ -(austerity)

As your ‘First’ – ”technological change has radically changed the structure of the economy and society” – might be a ‘YES!’ –
BUT
– your ”By contrast, the 21st century economy is dominated by services including health, education and telecommunications, which require different forms of economic organisation” – might lead you to a wrong solution?

As – for example – in a pretty successful ‘socialistic’ or ‘social democratic’ or just ‘social’ economy like the German – the 21 century economy is STILL dominated by manufacturing – and even more so when everything else – from ”services including health, education and telecommunications,” is interconnected with ”producing” – like in any other ”Producing Country” INCLUDING governmental subsidizing – not necessarily noticeable for a US or UK economist.

And so – to reimagine a truly 21st century socialist economy we just need to consider the ”much broader mix of forms of economic activity” a (still) predominant ”Producing Economy” like Germany or even Italy – has – without the mistakes some Producing Economies make by producing the wrong stuff – and the ‘Predominant Consuming Economies’ are any anyway f… – comes stimulus -(for what?) –
or… UHHHH! the scary ‘a-word’…

6

John Quiggin 10.09.17 at 7:04 pm

Kurt @4 I wasn’t aware of that. I only gave minimal thought to the title , mainly to pick something different from the one chosen by the Guardian. So, I’ve changed it again from “Socialism for the 21st Century” to “Socialism for the Information Economy”.

Looking at brief summaries of the Chavez program, it seems very much to be the socialism of the mid-20th, or even 19th century, unsurprisingly perhaps given that Venezuala is a developing country with a resource-based economy. Obviously, I want to recapture important elements of 20th century socialism, but I think we need much more than this. And, while I’ve been a vigorous opponent of austerity, I do recognise the need to pay attention to constraints on natural and human-made resources, which Chavez appears to have wished away.

7

John Quiggin 10.09.17 at 7:14 pm

@5 Certainly, manufacturing has done better in Germany than in Australia. Even so, the percentage of workers employed in manufacturing has fallen from 40 to 20 per cent since the 1970s
https://fred.stlouisfed.org/series/DEUPEFANA

More importantly, I think the industrial economy model where resource industries provide the inputs needed to keep the manufacturing engine going, and the services sector is ancillary has ceased to be relevant. In important respects, IT and communications are now driving manufacturing rather than the other way around. That is, IT tools generate the designs and manufacturing implements them, in a complex global process tied together by telecommunications.

3-D printers, which I mentioned briefly, provide an archetypal example (admittedly still in its early stages). I could be producing goods designed on the other side of the planet a few seconds ago, at the same time as typing this comment (or at least, I could if I knew how to operate my son’s 3-D printer).

8

nastywoman 10.09.17 at 7:37 pm

@7
”In important respects, IT and communications are now driving manufacturing rather than the other way around.”

Residing in an area where Porsche and Mercedes Benz built it’s cars – and having spend quite some times in an area where a company like Ferrari has nearly religious status and also nearly every (service) job in the area – from the IT-dude to the hairdresser – is more or less connected to the success -(of ‘manufacturing) gives one quite a different perspective – and – Yes ‘the percentage of workers employed in manufacturing has fallen from 40 to 20 per cent since the 1970s’ and the British fools who probably had looked at such statistics and then sold nearly their whole auto industry to Germany created their lots and lots of well paying jobs – and not only for manufacturing as manufacturing still has the highest ”quotient” of any ”industry” in creating lots and lots of additional jobs – while so called ”High Tech” – from a workers view have been a very disappointing ‘job creator’.

And for somebody you could call a ”socialist” the needs of ‘worker’ for lots and lots of secure and well paying jobs ALWAYS should come first!

9

Lee A. Arnold 10.09.17 at 7:39 pm

I think we need all hands on deck, to explain the working of a mixed economy. I just finished the following animation, which can help visual systems learners understand the difference between single-payer healthcare (in the U.S., “Medicare for all”) and private insurance. The argument is transferable to other goods and services of essential kinds:

10

Collin Street 10.09.17 at 8:06 pm

The thing is, it was specifically the high capital cost of factories that made industrial unionism work. Before — and apparently after — workers carried the cost of their tools and it was a world of “individual contractors” and piece rates.

[lower capital component means you could start your own factory… but who would you sell to? Either it’s a competitive market and your boss isn’t making money either, or it’s all tied in and rent-heavy and you can’t crack a sale.]

All profit is rent, etc. I’m not sure of the tactical options, but the only plausible strategic goal basically looks like communism.

11

Stephen 10.09.17 at 8:07 pm

Looking at your very thoughtful Guardian article, I find you say “the idea of a universal basic income set at a level comparable to the age pension has considerable appeal. The ultimate goal would be to provide an unconditional payment lower than the return from working but sufficient to sustain decent living standards”.

Old age pension is supposed to be enough to sustain living standards for 1 or 2 fairly immobile people, no children (presumed adult if any), living in accommodation that they own (having paid for in their working lives) or now have paid for by the state, at a level suitable for 1 or 2 people.

UBI would have to cater for 1 or 2 people (or perhaps more, if multicultural polygamy) plus sometimes rather large number of children. Consequences?

Also: is UBI to be made available to all residents, or all citizens? If the first, will you not need rather stringent border controls to stop state finances collapsing? If the second, what happens to non-citizen residents? Underclass, dependent on poorly-paid jobs because they have no UBI?

Also: recurrent complaint, in UK at least, is that the minimum wage, or even the desired living wage, is not in fact “sufficient to sustain decent living standards”. If so, consequences? UBI lower than the return from working: how much lower?

12

Akshay 10.09.17 at 9:35 pm

Thought provoking article!

I don’t understand the recent trend of supporting a Universal Basic Income though. We know pretty well how to create a decent, social-democratic society: the Nordic countries have done it. Other North-West European countries are close. You need lots and lots of policies, not one big panacea like UBI. You need access to child care, education until university level, health care, social insurance incl. unemployment and disability insurance, progressive taxation, a well-designed pension system, social housing, etc.etc.etc. All of these tackle small and large injustices and market failures. John Quiggin certainly supports all of the above.

So why put all that at risk to pay for an expensive, speculative panacea like UBI? I mean, isn’t it slightly suspicious to have Marc Zuckerberg or the Davos WEF discussing UBI? They surely want to use it to break down other forms of social insurance. How else could we here, in large Western European welfare states of >40% of GDP, possibly pay for it? I can picture the oligarchs now: “No education, health care, unemployment or disability benefits? What are you complaining about, we gave you your UBI stipend, right?” Then they will argue that UBI should be low enough to incentivise the poor to work. –> I’ll stick with the Beneluxian welfare state I already enjoy, thanks. (For Americans: You need more than incremental reform, but I think Sanders has the right idea when talking about copying Denmark in much detail. That would most assuredly MAGA. Don’t go for silver bullets.)

On a more constructive note the article deserves. (1) Totally agree about IPR Reform. There has to be a better way than government granted monopoly rights for increasingly silly patents. (2) What about capping inheritance above a certain level? Let’s stop the aristocracy before it begins: no child to inherit enough never to have to work again. Such dynasties are a menace to society. (3) The concept of the Ownership Society might be poisoned by GW Bush, but using pension funds, SWF’s, or more creatively, Roger Farmer’s proposed stock market stabilisation fund, in order to spread asset wealth equally, might be another way to tackle wealth inequality

13

Peter Dorman 10.09.17 at 9:35 pm

There’s no point critiquing JQ’s socialist program for not being the same as mine, so I won’t do that. We need lots of perspectives. I do have a few general thoughts that span specific ideas, however.

I like the centrality of services and information in his vision. This is important, and it amazes me how often I encounter socialists whose starting point is mass production factories. I agree that, being a public good, information needs to be given as much public access as possible; there is a lot more that could be said about a socialist knowledge economy.

Economic security has always been a crucial part of the socialist agenda, and there is a need to rethink what form it should take in the future. Moving from an approach that ties us to specific jobs to one based on mobility and lifelong flexibility is important, but my sense is that the minimalist safety net of UBI combined with guaranteed public employment doesn’t go far enough—too lowest common denominator. Moreover, the security we need is not only individual but collective, including community stability and resilience in the face of technological and ecological change. This is a hard topic, and I don’t know anyone who has gotten on top of it.

I have one suggestion for packaging and one for purpose. Regarding the first, what distinguishes socialism for me is that it is an economic agenda encompassing production as well as distribution and consumption. Social democracy tended toward consumer equality, and only in the north European model (Scandinavia, Germany) was there an important aspect giving workers a say in production. Also, the public and cooperative banking systems of these countries played an essential role in partially democratizing the allocation of capital, something the rest of us can learn from. In any event, I suggest foregrounding changes in productive and financial systems as the differentia specifica of socialism, as against programs that outsource production to lightly regulated capitalism and simply redistribute the output.

The other issue is, why are we doing this? What is socialism for? It is here more than anywhere else that the new century is departing from the old. In developed countries, which I assume is what we’re talking about, a central economic objective has become the rapid and systematic transformation of production systems to be compatible with ecological constraints, especially decarbonization. Markets, which operate on the basis of changes that are expected to be incrementally profitable, do not provide a framework for the radical changes we need to make. How to accomplish this with the least cost to living standards and values of social solidarity is largely what future socialism needs to be about.

14

nastywoman 10.09.17 at 9:37 pm

– and as the classical definition of ”socialism” is:
A political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole – the (”Sozialdemocratic”) German system of putting ”the means of a lot of very important production, distribution, and exchange” not only in the hands of ”private” owners – BUT with regulations like ”Mitbestimmung” of the workers AND often also the government -(directly or indirectly) – ”the community” often is in charge.

15

Aaron Lercher 10.09.17 at 10:12 pm

Very timely! Thank you.
(1) You counter the inevitable attraction of a nostalgic socialism of “productive” workers (those with bygone “good” jobs, and unions) by talking about the economy as it is. This is going to be harder than it might seem on the newly growing left, because the information economy seems not to be the “real” economy. (Meanwhile, as a librarian, I’m currently attaching metadata to information, building a database, with the aim of making the information more valuable by making it more connected.)
(2) You don’t talk about the financial industry that we all fear and hate. Here the attraction is even stronger to wave one’s hands (vigorously) by condemning financial transactions as “non-productive” magic, and not the “real” economy. These are real enough to hurt us, but we prefer to pretend not. I think that as a left economist, you have some sort of obligation to discuss the financial industry if you are going to talk about socialism, but I’m not sure what to suggest.

16

Gareth Wilson 10.09.17 at 10:32 pm

“Neoliberalism has massively enriched the 1%, and particularly the financial sector, while delivering nothing but economic insecurity and stagnant living standards to the great majority of the population. “

Do you see all three of these things as inherently bad? If there’s a system where the great majority of the population is economically secure and has increasing living standards, but the 1% is still massively enriched, would you want it to change?

17

b9n10nt 10.09.17 at 11:30 pm

Peter Dorman @13:

Moreover, the security we need is not only individual but collective, including community stability and resilience in the face of technological and ecological change.

This. Progress can be made collectively, democratically “from the top down” by enacting national policies , but it also must be made “from the bottom up” wherein diverse local communities are empowered to be intentional about their own structures and development.

18

bob mcmanus 10.10.17 at 12:14 am

Good article, but I have two words: Peter Frase

The conditions of the next political economy will likely be abundance (barring climate catastrophe) and under-employment.

Commodities and food will be produced by robots, AI, and robotic agriculture;developed economies have no shortage and prices are dropping.

With very high underemployment services will also become cheap, with service wages low. Butlers are making a comeback after fifty years of non-existence.

Under these conditions, if we are retaining anything like a mixed economy, the only place left for profits and power to come from is artificial scarcities and Rents. As a Marxian, profits and power under in any capitalist system has to come from the exploitation of labor, either in free production (say on the Internet) or in high marginal profitable consumption (big screen tv, SUVs, this years I-Phone), stratification, the creation of status incentives and needs.

Rents will eat a UBI alive*, and a job guarantee will only drive down servant’s wages. Housing, education, healthcare and pharmaceuticals, entertainment (including politics), travel…these and others are already apparent as the new centers of profit and power and should be the points of attack.

*There will be a huge difference between what a basic income is worth in New York or in Des Moines. But Des Moines will not grow because it won’t be NYC

19

bob mcmanus 10.10.17 at 12:23 am

Basically, the premium (s) given to education is still rising, and this premium as shown by pay scales and the consumption of status goods is the source of capitalist profits. The education premium, and artisr, talent, and luck premiums have to be attacked and eliminated. Free housing and free vocational education (and UBI) will just make cheaper servants for actors, designers, software engineers, finance quants.

20

Raven Onthill 10.10.17 at 1:09 am

“It seems to me that much of the reason for industrial capitalism in the first place–the need for huge accumulations in small areas of the tools of production, operated by huge numbers of people working in a highly formalized order–is now a thing of the past. The core of modern production in the USA and Europe, increasingly, are the property of state monopolies (roads), state-regulated monopolies (utilities), or large businesses that are very nearly states themselves (GM, Sony, IBM.) As if this were not enough, the major large-scale technical achievement of recent years–the internet–is the largely the work of a collective consisting of several state-funded research co-operatives and a great many not-particularly well-organized smaller groups. The internet, it appears, is an achievement of socialism by any honest construction of the word.” – 2003, http://www.j-bradford-delong.net/movable_type/2003_archives/001701.html

So are Facebook and Google parasites on the body politic?

21

Raven Onthill 10.10.17 at 1:13 am

“Nanotech will, if it is even half of what is hoped for, obsolete industrial capitalism. It will do so by, for many purposes, obsoleting the need for large, expensive, fixed machinery–industrial capital property–and the vast armies of workers needed to operate such machinery. So nanotechnology will bring us to one of those times of which Marx wrote when the social order of production, and the legal order of property that, will be overturned. The question comes up what the crucial form of property will be–the one which would order a nanotechnological mode of production. I think the answer is information and ideas in physical forms, material, especially biomass, and, as always energy. It is likely that nanotech will make solar energy relatively easy to gather and use for (slow) production–it will become easy to cover large areas with devices which gather solar energy, or perhaps even use biomass directly. The people who own such things–may be groups rather than individuals. The order of such groups, hmmm, good question.” – Dec 2003, http://www.j-bradford-delong.net/movable_type/2003_archives/002838.html

22

Peter T 10.10.17 at 2:48 am

The o/p is a good start. Two thoughts:

One way to think about the socialist impulse is that it sought/seeks to restore a balance between markets and the demands of a functioning society. Historically, markets were a fringe element, with social security, the commons, defense, infrastructure, education and so on dealt with communally (parishes, churches, manor courts, tithes, guilds, cooperatives – the arrangements were endlessly diverse). As states solidified and economies became national, these functions drifted upward to the state level as old forms decayed (or were destroyed) and as the utter inadequacy of markets proved incontestable. As economies have become trans-national, states have trouble controlling their internal economies and extracting enough from the right people to fund these arrangements (privatisation etc might be a semi-conscious attempt to redirect state resources to a middle/upper class whose economic position was being undermined by globalisation and the loss of empire).

This perspective asks whether the state is still the appropriate level? If it is, can it recapture control? If it is not, what is?

Second thought is that any future socialism needs to be an environmental one – directing resources into the repair and maintenance of battered ecosystems. More people on the land, more foresters, more park rangers, much more stringent enforcement of environmental standards. These are all non-profit activities. How do we fund them?

23

Peter T 10.10.17 at 3:02 am

To add,

Bob’s vision of “Commodities and food will be produced by robots, AI, and robotic agriculture” strikes me as unreal. Modern agriculture is basically soil mining. As such it has a limited future. Climate change coupled with overload of environmental sinks coupled with soil degradation is a proposition for a food-less future. One from which the robots will not rescue us.

The nano-tech vision also seems unreal. 3D printers are a thing, but they are a long way from being able to replicate most industrial products, and a longer way from being able to do so at any cost comparable to a factory – especially a factory operated by robots.

24

nastywoman 10.10.17 at 3:56 am

@12
”We know pretty well how to create a decent, social-democratic society…”

How true – but the structural changes – mainly in the US and the UK to economies which are dominated by low paying service industries with just a few well paying jobs in Finance and High Tech has American-Anglo economists all over the place looking desperately how to make ‘the Information Economy’ work (better) for ‘the people’.

As these economists (finally) had realized – if ‘the people’ are NOT happy with the (quite depressing) jobs market of ”service industries dominated Consumer economies” – they vote for ALL kind of crazy F…faces…

25

reason 10.10.17 at 8:07 am

I prefer egalitarianism to socialism.

26

reason 10.10.17 at 8:18 am

Stephen @11
Your two options (residents/citizens) are not comprehensive (you could for instance have a residence qualifying period), and there is no reason children could not also be entitled to a UBI.

Yes, there are always borderline cases that need to be considered, but you should not be so narrow in your view of broad principles.

27

reason 10.10.17 at 8:19 am

P.S (Note UBI is not purely an alternative to work income it is in most cases a supplement.)

28

Ray Vinmad 10.10.17 at 9:23 am

Let me ask this dumb question here. Why is work not a key element of this socialism? You say

“The idea of a socialist economy with unconditional access to basic incomes and greatly expanded provision of free services might seem utopian. But in the aftermath of neoliberal failure, utopian vision is what is needed. To re-engage people with democratic politics, we need to move beyond culture wars and arguments over marginal adjustments to tax rates and budget allocations, necessary as these may be in the short term.”

I have started to wonder why all the action for socialists these days takes place in the space of big economic policy, but doesn’t incorporate much about ensuring everyone has meaningful work to perform, work that connects them to their community, that gives their life a purpose? Maybe you actually mean your program to do this, and I didn’t see this. Union guarantees are great, but given the threat automation poses, we might have to expand the kinds of jobs available or create new sectors to provide work.

For most people, being out of work, even when basic needs are guaranteed is wholly undermining to their well-being. Job security, when the compensation meets needs, is a significant guarantor of well-being, much more than steady income.

The current dystopian fear that so many will be put out of work by automation sounds fantastic–but there’s enough confidence on technocrats that it’s coming perhaps the fear is realistic. People need something to do with their lives. Anticipating the work one will do structures the lives of young people. Having nothing to strive for in front of them, even when there is a guarantee of regular income, can be a calamity. (Consider the Saudi Arabian situation as an example.)

Fortunately, there the number of useful things people can do that benefit others is nearly infinite–but obviously the market as it stands will not ensure that people are paid sufficiently for doing these. If we’re being utopian, my imagined socialist utopia valorizes work that contributes to society, and enables people to acquire meaningful work, have their economic needs met by doing it, and gives them a secure place as a worker isn’t continually threatened by economic turmoil.

29

novakant 10.10.17 at 9:28 am

The education premium, and artisr, talent, and luck premiums have to be attacked and eliminated. Free housing and free vocational education (and UBI) will just make cheaper servants for actors, designers, software engineers, finance quants.

Funny, all my talented, over-educated actor, designer and software engineer etc. friends make a pretty humble living – at best. Most auto-mechanics or plumbers make the same or more. It seems to me your gripe is not actually based on sociological facts, but it rather looks like an outburst of ressentiment.

30

Mario 10.10.17 at 9:31 am

The issue that has held back the implementation of such social programs is that, when it comes to elections, the parties putting forward proposals of this kind also seem to be tone deaf with regards to other things that are also very important to the “unenlightened” masses: cultural and national identity, as well as immigration policy. Nothing of this kind will fly very far if it is accompanied by the usual postgender, open borders side dish. I’m talking about observable facts here, not about my personal preferences.

I think Corbyn only made the enormous gains he made because Brexit was in the bag for the constituency. He could have won, I think, but too many just didn’t trust him enough on that. Real socialism is indeed very appealing to the masses, it just has to have a human component (as in, will be liked by real human beings that keep being obstinately attached to things like Christmas, their football team, and the catch in the throat when the old flag goes by, as opposed to massless spherical abstractions with a convex utility function).

31

nastywoman 10.10.17 at 9:58 am

@28
”Why is work not a key element of this socialism?”

IT IS –
– as you write: ”ensuring everyone has meaningful work to perform, work that connects them to their community, that gives their life a purpose?” – or to say it very simplistically – IT IS probably the only way to stop workers from falling into depressions and getting on pain killers to the extent as in the US – with the Trumpish consequences we all know…

32

nastywoman 10.10.17 at 10:04 am

AND let me stress this point AGAIN –
If you guys ever would witness the pride of a worker – who helps to built a really ”ultimate- not-only-driving-machine” – or bakes a really – really good bread – you would understand how much people need this feeling I had – when I managed the first time to put a Harley motor back together.

33

bob mcmanus 10.10.17 at 11:30 am

Peter T:Climate change coupled with overload of environmental sinks coupled with soil degradation is a proposition for a food-less future

Well, that scenario is not pretty. Peter Frase calls the fourth scenario of robots + scarcity + hierarchy/capitalism…exterminism and if it is at all imminent we all better start using the guillotines right now or prepare to die. Cause the rich and powerful will kill us or let us die.

Like the Rentier economy that is starting to become apparent, the poorest in environmental catastrophes recently are already a leading indicator.

34

Matt 10.10.17 at 12:01 pm

I have started to wonder why all the action for socialists these days takes place in the space of big economic policy, but doesn’t incorporate much about ensuring everyone has meaningful work to perform, work that connects them to their community, that gives their life a purpose?

A lot of work is such that it’s just not going to be “meaningful”. (I know – I’ve done a fair number of such jobs.) This has been so in every economy ever produced, and to some extent is likely to be such, insofar as there are such jobs, and people have to do them. Eliminating that is, I think the hopes of at least some people. If the bad jobs can be done by robots, or whatever, but people can be provided a meas to live anyway (The dream of UBI), then we are on our way.

But, you rightly say, its bad for people to just sit around and subsist at a relatively low level of existence. That’s right! But here, we’re ignoring something that’s possible with UBI (and universal health care and some other safety net provisions.) Here’s an example. I do a lot of whitewater kayaking. I know a fair number of who would, if they had access to a UBI and health care, just kayak (and ski and mountain bike) all the time. Their lives would be fulfilling! But, I know a fair number as well who would do a lot of those things, but also do stuff like river raft guiding, kayaking teaching and guiding, photography (action and otherwise), small-time farming, craft-making, etc. They would love to do these things – but they can’t make a full living on them, at least not without taking a huge gamble. (If you don’t like things like this, you can substitute any other sorts of actions you like – writing, dancing, being in a band, making computer games, etc.) A UBI an universal health care would make these things much more possible. People would have the UBI (etc.) as a base, and then could do things they enjoyed for more. Some people would remain small-scale, and some would be more successful, growing larger (and paying more taxes which would support the UBI for others.) But, many more people would have the chance to find and do things they found meaningful this way, I think than by directly trying to provide them with “meaningful work, whatever it would mean to do that. That, at least to me, seems to be one of the major attractions of the UBI idea. (There are others, too, of course.)

35

Louis Proyect 10.10.17 at 12:13 pm

Nobody could object to the Scandinavian model if it was feasible. The obstacle is competition between rival capitalist countries that requires neoliberalism. After all, how can Peugot compete with VW or Toyota if the owners are forced to put up with France’s generous “socialistic” policies? Macron is the evidence that “socialism”, the “mixed economy”, the “Scandinavian model” or whatever you want to call it is confronted by the underlying laws of capital accumulation. The race to the bottom is not a function of men being inspired by “Atlas Shrugged”. It is driven by competition. It was such competition that led to WWI and WWII. The Trump presidency and those movements like it that are growing such as the AfD in Germany are a sign that the world is moving inexorably toward a new showdown that might culminate in a nuclear apocalypse. The need for “Communism” is as urgent as ever for reasons having less to do with healthcare or universal basic income than it does with the survival of the human race.

36

Lee A. Arnold 10.10.17 at 12:21 pm

One big sticking-point is the psychological transformation from “being forced to work” (which is currently enforced by an artificial scarcity of money, since most real goods and services are no longer necessarily scarce, but could be produced to satiety) and incidentally feeling good about being a self-supporter, to a very different state of “wanting to work” (wanting, because it is gratifying to meet and treat others well). This transformation will include the trust that all other individuals believe the same thing, i.e. there is no free-riding or rent-seeking.

This is a spiritual problem — which is not to say a matter of theological religion (or at least, we are beyond the era when religion was the place it was administered), but rather a matter of fundamental psychological transformation.

Such transformation will also deliver a bill of attainder to pay in the intellectual departments. Economists believe that money is the root of all good. They (and some other academics) are quite stuck in their belief that rent-seeking behavior is a NECESSARY requirement for continuous technological innovation. This is odd, since kids are brilliantly creative, with every thought of fairness and little thought of gain, up until the adult world beats it out of them. It is also very odd because academics themselves start in search of truth, and in love of intellectual system, which is originally about as far from rent-seeking as you can possibly get.

Economists hedge this of course, now in two ways: 1. Theoretically, by saying that rent-seeking is ceteris paribus. So presumably logically, everything ELSE could change, first. (What an intellectual escape clause!) 2. Experimentally, by noting that human players in lab games opt for altruism, really much oftener than they ought to. So, presumably realistically, the real world’s rules — the “institution” — could be a lot more non-market altruistic.

And everybody would be happier, except for the psychopaths, who appear to be incapable of psychological transformation.

37

William Timberman 10.10.17 at 12:55 pm

From my perspective, euthanizing the rentier still looks likely to entangle us in a much uglier and protracted process than thought experiments like this can bring themselves to admit, with outcomes just as uncertain as they proved to be in the aftermath of October 1917. I’m not sure that the information economy changes that much at all. The amount of integration it requires, physical social, and political, makes it extremely fragile. In a serious power struggle, it may well be one of the first casualties.

38

Zamfir 10.10.17 at 1:37 pm

Jq above writes:
“More importantly, I think the industrial economy model where resource industries provide the inputs needed to keep the manufacturing engine going, and the services sector is ancillary has ceased to be relevant. In important respects, IT and communications are now driving manufacturing rather than the other way around. That is, IT tools generate the designs and manufacturing implements them, in a complex global process tied together by telecommunications.”

This makes me wonder about the supposed boundary between “manufacturing” and “services”. After all, manufacturing always involved design work, with IT tools or without. Also planning, sales, lots of other office jobs that could just as well be “services” . And the office jobs are typically in charge of the process. That was just as true in 19th century as in the 21st century, I am skeptical that IT tools are really changing this dynamic.

And on the other side: it’s somewhat arbitrary to count IT as “services”. Some parts of it behave similar to manufacturing firms (tool factories!), others as utilities, or construction firms. It’s no accident that people say they “build” a website. A lot of enterprise software resembles installation work like plumbing, with architects and all. Etc.

39

bruce wilder 10.10.17 at 4:42 pm

The Guardian essay is an interesting and well-written take on this political moment, but I find myself taking a jaundiced view of some of its main theses. I do not understand the anecdotal references to Australian politics, being wholly ignorant of Australian politics in general, so I may well be missing some subtleties. But, along the main lines of the argument, I find many details irritating.

Earlier comments have addressed some of the problems with the main themes of the new socialism, themes that are noted more than promoted or explicated by Quiggin: is a “utopian” proposal for a UBI realistic about the need for work in human psychology? is speculating on an economy of abundance appropriate on the eve of global ecological collapse? I am not sure I could add much along those lines, though those themes are more important than any I take up, so that’s my justification for a narrow focus on certain details and sins of omission.

The main, glaring sin of omission is that Quiggin’s “socialism” lacks an acknowledgment of class or class warfare. Part of this is that Quiggin’s neoliberalism(s) are curiously well-intentioned, albeit misconceived or misdirected in some respects. “The push for privatisation, beginning with the Thatcher government in the 80s, was based on the premise that private ownership and market competition would outperform public-sector provision.” And, JQ offers a technocrat’s pragmatic judgement on outcomes: some successes, many failures. No hint though that neoliberalism might have been aimed at creating a grifter’s paradise of policy entrepreneurship all along. Soft neoliberalism is said to have gone aground on austerity after the GFC, but there’s no mention of the role of soft neoliberalism or the nominally center-left political parties in creating the GFC or preventing effective responses and reforms.

The soft neoliberal politics of Clinton and Blair is scorned as “vaguely humanised capitalism marketed as the third way.” (Really good line by the way.) The new “socialism” is presented as radical and utopian by contrast. (Raising the minimum wage is radical? Not my idea of radical, but ymmv)

But, in general, the frame of analysis harkens back to Milton Friedman’s framing of the politics of economics as concerned not with the eternal struggle over the distribution of income, but with the “size of government” or the proper “role” of government. JQ tells us, “To reimagine a 21st century socialist economy we need to consider a much broader mix of forms of economic activity than those of the 20th century mixed economy.” And, then he follows up with a list of ideal types that would have seemed singularly abbreviated in 1930. It is at least odd, if not downright suspicious, that JQ omits those stand-bys of mid-20th century socialism, trade unions and cooperatives, even while claiming to consider a “much broader mix”. The British Labour Party was founded by and on trade unions and cooperative societies in banking and retail distribution.

Maybe those forms of economic action are archaic now, but it seems to me a decent historical sense ought to acknowledge that, say, destroying the savings and loans and the industrial unions was a major part of the early neoliberal program in the U.S. and Britain. Neoliberalism made the economy institutionally simpler in a way. Instead, JQ gives us the ahistorical declarative, “under financial capitalism, the standard way of providing goods and services is through big business . . . ”

Particularly peculiar to me was the summarization of neoliberal privatization as: “public monopolies have been replaced by regulated private monopolies and oligopolies”. Maybe that is the Australian experience, but here in America, regulation in general has gone by the boards and private monopolies (Google, Amazon, Wal-Mart) and the oligopoly of Big Banks (JPMorgan-Chase, Goldman Sachs and company) seem on the verge of swallowing the economy whole.

I think the American economy is increasingly predatory and I am ready for any “socialism” that is willing to acknowledge that and fight it with righteous conviction. I find this bloodless:

A socialist program would allocate much less economic activity to big business, and more to other forms of organisation. In deciding what kind of economic activity belongs where, a range of considerations are relevant. These include the scale of the activity, the extent to which it is possible and appropriate to charge market prices, the scope for competition and the relative importance of economic and non-economic motives.

Analytically, it is true that a financial reform that reduced the size of the financial sector or (in the U.S. context) a health care reform that reduced the size of the health insurance sector and for-profit provision of medical services would be “allocating economic activity” differently, but does that get at what places a renascent “socialism” at odds with the bosses of financial capitalism? Do we gain any insight into what would make the fight difficult? (Loss of jobs in banking or health care might be a political problem for any effective reform.)

One interesting aspect of the emergence of a new “socialism” at this political moment is that it arises out of a split on the left, as a soft neoliberal establishment fights with idealists of conviction some of whom have taken the “socialist” label. The Guardian editors, knowing their audience, highlighted the drama of that split in its choice of photos and sidebar links. But, I found relatively little reference in the essay itself. Paul Krugman, a conservative economist, is given an approving nod and Cory Booker gets a positive mention, without any acknowledgement that they are the wrong side of the split in the Democratic Party, more enemies than friends of an emergent “socialist” impulse, even if they disguise their hostility.

The essay talks of reversing neoliberalism and the limits to that approach. JQ also cautions, “we can’t simply revive the mid-20th century economy.” Those themes threaten to become code for there is no alternative as neoliberalism stumbles on. I cannot help but suspect this essay is an attempt to lead “socialism” into a political cul-de-sac from which it can never emerge.

40

cassander 10.10.17 at 7:25 pm

When Hugo Chavez died, JQ, you endorsed a Nation article claiming that his was the most democratic country in Latin America. You’ve also claimed that the Bush administration’s stance against Chavez was evidence that it was anti-democracy. I just want to be clear, is that the sort of social democratic spine you’re calling for? The strength of will to drive yet another country into poverty and starvation in search of the glorious socialist dream? Because, sadly, that never seems to be lacking on the left.

I’m curious what, if anything, you or anyone else here has from yet another descent of socialist regime into poverty, starvation, and autocracy exactly as was predicted by those of us on the right. Really a shame you keep running into such bad luck, why, if this happens 20 or thirty more times, you might start to suspect a pattern!

41

Howard Frant 10.10.17 at 8:11 pm

JQ: You know that Hayek was in favor of, or at least not opposed to, a guaranteed annual income? It’s right there, in The Road to Serfdom.

I think it’s problematic, at least for the US, to define socialism through its rejection of neoliberalism. The term has has some meaning in the rest of the world, bn the US, it was never anything but a generalized pejorative. And now it is a prion that is eating away the brains of the left.

In CT, it is “an assumption so deeply ingrained that it is not even recognised as an assumption” that Hillary Clinton is the arch-neoliberal. But neoliberalism’s answer to every problem, JQ tells us at one point, is ‘lower taxes, privatisation and market-oriented “reform”.’ Did HRC advocate those things? Well, no… Was she an advocate of austerity? Well, no… So in what sense was she a neoliberal? Even Bill Clinton is notable for significantly increasing taxes on the 1%.

If anyone doubts that it’s just a meaningless pejorative, please show me show me all the times that it’s been used ro describe Paul Ryan. He’s someone who actually does believe in lower taxes, privatization, and market oriented “reform,” yet in the US it would be thought bizarre to call him a neoliberal.

There’s a perfectly good traditional pejorative available to socialists in the US: liberal.

42

Matt 10.10.17 at 8:43 pm

For most people, being out of work, even when basic needs are guaranteed is wholly undermining to their well-being. Job security, when the compensation meets needs, is a significant guarantor of well-being, much more than steady income.

The current dystopian fear that so many will be put out of work by automation sounds fantastic–but there’s enough confidence on technocrats that it’s coming perhaps the fear is realistic. People need something to do with their lives. Anticipating the work one will do structures the lives of young people. Having nothing to strive for in front of them, even when there is a guarantee of regular income, can be a calamity. (Consider the Saudi Arabian situation as an example.)

It’s hard to convey tone in text, so let me preface my questions: I am genuinely interested in the psychology of work. I’m not just trying to raise “gotcha” questions. But the discussion of these issues I’ve seen in the past has been less than convincing that work qua work is more important than financial comfort and security.

First: what do we mean by work? Is this the prototypical Job of the industrial age — tasks performed under somebody else’s direction, according to somebody else’s schedule, away from home? Anatomically modern humans did not have jobs like this for the vast majority of their existence; it’s hard to believe that it was a psychological hardship all those millennia to be without the factory, the foreman, or the time clock.

Second: the evidence that I have been offered in the past supporting the need for work qua work seems to have significant confounding issues. For example, studies showing that pensioners are less happy after retirement. But a pension doesn’t pay as much as remaining in a job, so I wonder how much of that happiness gap is simply from income loss effects. People who are on long-term disability or welfare are less satisfied than peers with steady employment, but their material condition is worse too.

Socialites and philanthropists do not, by the standards of most people, actually have jobs. They do have plenty of financial security. Are they generally less happy than fellow millionaires and billionaires who are still actively growing their fortunes? That wouldn’t be terribly surprising. Are they generally less happy than people with steady employment in low-income jobs, like long-serving forklift operators? That would surprise me a great deal.

43

John Quiggin 10.11.17 at 12:15 am

@29 I had no memory of ever writing anything about Chavez, about whom I know little. However, a search reveals the following post, reproduced in full, which is presumably the one to which Cassander refers.

http://crookedtimber.org/2013/03/07/open-thread-on-hugo-chavez/

At the request of reader Tim Wilkinson, here’s an open thread, where readers better informed than me, or more willing to argue on the basis of limited knowledge, can offer their thoughts.

As a discussion starter, here’s a piece from The Nation

Having put the post up, I didn’t comment further.

I’ll leave it to others to discuss whether this matches Cassander’s description.

44

Cassander 10.11.17 at 12:26 am

You left out this JQ:

“For those trying to work out whether the Bush Administration’s stated commitment to democracy in the Middle East reflects Wilsonian idealism or just a tactical choice, reflecting the fact that the Administration’s enemies in the region are mostly not democrats, Venezuela provides a useful data.”

http://crookedtimber.org/2004/09/20/vendetta-against-venezuela/

Mostly, though, you dodged the question. If you feel I’ve mis-represented you, then by all means let me know and I’ll retract. But don’t play games if I haven’t.

45

nastywoman 10.11.17 at 12:31 am

– and as my truly ‘Socialistic’ arguments for the (very socialistic) celebration of work – are waiting for getting through… ”moderation” –
(why?) –
Let me double down on a celebration of ”THE WORKERS” – of this world!
-(who seem to need ”great jobs” much more than some ”UBI”?)

46

John Quiggin 10.11.17 at 12:42 am

@44 It’s obvious you misrepresented me, so I will be pleased to receive your retraction. After that, nothing further from you on this thread.

47

nastywoman 10.11.17 at 12:56 am

and about @40
”I’m curious what, if anything, you or anyone else here has from yet another descent of socialist regime into poverty, starvation, and autocracy exactly as was predicted by those of us on the right.”

As long as the European Social-Democracies -(often called by the US right ‘socialistic’ or even ‘communistic’) – provide so much better NON starvation – and livable wages and secure jobs and payable health care and long vacations – exactly as the European eft predicted – let’s NOT worry about some crazy ”Trumpish” system which predicted to be ”socialistic”!

48

nastywoman 10.11.17 at 1:28 am

@42
”But the discussion of these issues I’ve seen in the past has been less than convincing that work qua work is more important than financial comfort and security.”

What convinced a lot of ”socialists” about the importance of work qua work were the absolutely shocking facts about the suicide and misery data of (mainly unemployed) US workers.

49

otpup 10.11.17 at 1:34 am

I think the article fairly good and the proposals for diversifying the types of economic activity sensible. Starting in the 70’s in the US, there developed a left ethic and policy agenda around economic democracy, i.e., reducing the power of capital to impose its agenda whether by economic and extra-economic means. And the chief means of doing this was through new forms of ownership embedded in market relationships, that reflected the interest of workers and communities rather than private owners (in the UK, Alec Nove was moving in the same direction). I’ve been very sympathetic to this viewpoint though there have been some notable defectors (e.g., Sam Bowles). But to some extent, I think the policy question is in some sense secondary to the political question. I.e., the project of thorough-going democratization is more important than specific policies because frankly many economic policy questions shouldn’t be decided in advance by a utopian vision, they should be settled within the near time horizon in democratic deliberation. And that maybe the definition of socialism should be an economic system (of many possible varieties perhaps) that is compatible with a majoritarian democracy. Private ownership, markets, etc., may or may not be compatible with such but the goal shouldn’t be proposing policy that is popular so much as ensuring the populace has the right (and the means) to choose when it has decided what was it is good for them.

50

Landru 10.11.17 at 1:50 am

God’s work, JQ, timely and important and I hope just one among many. I’m on board philosophically, but practically a bit slow, and there are some things I need to understand before even getting to the socialism part. Let me put the first one up as a target, and maybe the responses can provide a public educational service.

From the Guardian piece, cut and pasted:

First, technological change has radically changed the structure of the economy and society. The central role in the industrial economy of the mid-20th century was played by manufacturing, which took the resources produced by mining and agriculture and transformed them into goods to be distributed through transport, wholesale and retail trade systems to consumers.

By contrast, the 21st century economy is dominated by services including health, education and telecommunications, which require different forms of economic organisation.

I don’t understand this statement on hearing it for the 200th time, any better than I did on the first. How can the work that goes on in any large area possibly be “dominated by services”? who’s making all the stuff? While we in the US, or the EU, or Aus, are busy taking care of each other’s health and education, who’s making our cars, houses, lightbulbs, toothbrushes, bedsheets and frying pans? Are robots and poor exploited workers really so cheap to employ, that I can pay them off for a first-world lifestyle using the tips I earn as a valet parking cars?

In the US, where I live, a lot of our consumer goods come from China, and I guess the same is true, to some degree, in the EU and Aus. Statements like the above about the 21st century economy paint a strange picture of reality, whereby:

(1) Americans trade services to each other; while
(2) Boatloads of manufactured stuff are unloaded from China; therefore
(3) American workers cannot be organized as they were in the old days of on-shore manufacturing

Something must be missing here, and something big; but I don’t hear from economists what it is. Or, I could just be under-read, so here’s an Econ 101 student-level question straight up: What are we in America giving to China in exchange for all those container loads of manufactured stuff? I don’t think we’re giving them education or health care or telecom services, not to the tune of hundreds of billions a year. But it must be something that Americans are producing that the Chinese will trade for, in very great quantity.

This gets back to the essential economic question, that one must have a clear view of before being able to discuss how to arrange a society: What is your society doing to generate new wealth? Services are great to have, but food, shelter, clothing, energy and transportation must be provided first. So I’m still stuck back at square one on the track to utopia: before I can discuss how to tailor socialism to “a 21st century economy dominated by services”, I have to understand how such a thing can even exist — and I don’t.

The best I can hope for, it seems, is that my slowness will serve as a useful counter-example to others.

51

TM 10.11.17 at 7:35 am

Re 19 “education premium, and artisr, talent, and luck premiums”

I agree with 29. Very few artists are able to derive a “premium” from their talent, although for the lucky few the premium is indeed substantial. The education premium is also mostly a statistical artifact. High earners are more likely to be educated but it doesn’t follow that educated people are likely to make much money. Some professions that require (often expensive) education, like law and medicine, do carry a premium, due mostly to professional licensing requirements (the same reason why plumbers, where licensure is required, make good livings), but many highly educated people (think adjunct professors) are economically precarious. As always, inequality within the group of highly educated people is much higher than inequality between the higher and less educated groups. And of course, education is a class maker; people born rich or privileged are more likely to have access to education, but their privilege isn’t an effect of their education, it’s the other way round.

52

TM 10.11.17 at 8:05 am

41: I have the impression that the use of “neoliberalism” as a pejorative in leftist circles often reveals illiberal intentions.

53

TM 10.11.17 at 8:07 am

TM 10.11.17 at 7:35 am: “education is a class maker” should be class *marker*. Sorry.

54

Mario 10.11.17 at 8:10 am

I’m curious what, if anything, you or anyone else here has from yet another descent of socialist regime into poverty, starvation, and autocracy exactly as was predicted by those of us on the right. Really a shame you keep running into such bad luck, why, if this happens 20 or thirty more times, you might start to suspect a pattern!

There *are* patterns. For example, foreign meddling, blockade, and sabotage. That right you belong to cannot tolerate a successful leftist experiment, and will do everything in their power to derail it. And they have a hell of a lot of power.

That is also something anyone wanting to implement a socialist agenda has to consider.

55

John Quiggin 10.11.17 at 11:11 am

@50 That’s a natural intuition, but the facts are as I’ve put them, for the world as a whole, and not just for the developed countries. Manufacturing employment in China has been declining (or, on some measures, stationary) since the 1990s

To convince yourself that it’s possible, think about food. The US not only feeds itself but exports a lot of food (same for Australia and Canada). But only 1 or 2 per cent of the population are farmers, down from 70 per cent or so in the 19th century.

http://www.nytimes.com/1988/07/20/us/farm-population-lowest-since-1850-s.html

That’s essentially the result of tractors replacing animal and human power, though there’s a lot more than that to it.

The same processes have gone in manufacturing, with a lag of a century or so.

56

Lee A. Arnold 10.11.17 at 11:49 am

The service economy won’t be big for more than a few decades, either. Artificial intelligence in conjunction with robots is going to replace a lot of it. Artificial intelligence is essentially hyped-up statistical decisionmaking, and it is on-course to wipe-out a lot of white-collar. In the field of medicine, humanity FINALLY has the tool it needs to make it as cheap and laborless as the other technological industries. That “tool” is this following combination: genomics + biotech + nanotech + mass computation + AI + new materials science. And, after many millennia of hit-or-miss medical innovation, it has only just begun, so start watching, it’s amazing. The only thing that can remain “scarce” in the real economic sense is real estate and housing, and so in the future we may see a short and odd, quasi-ancient passage in political economy which returns to the primacy of land. At the moment, there is lots of scarcity, but these are mostly artificial scarcities in the provision of goods and services, imposed by the artificial scarcity of money. In short, there is a surplus of scarcity. There is also a deep-seated psychological inertia inculcated by the modern system (spanning c. 1750’s until now), which places a primary psychological value in self-reliance as rewarded by money and one’s own material advancement in the world. This was inconceivable as a primary social mechanism before that time, so it probably is not an eternal human trait. Indeed it precludes consciousness-expansion, and so to ancients and medievals it was considered sinful, until the perversion that was first described by Max Weber. Now of course everybody is walking around with feverish thumbs up their butts.

57

TM 10.11.17 at 11:50 am

Landru 50: Remember Krugman’s bonmot: “Americans make a living selling each other houses, paid for with money borrowed from the Chinese”.

http://www.nytimes.com/2005/08/12/opinion/safe-as-houses.html

58

nastywoman 10.11.17 at 12:40 pm

@50
”who’s making all the stuff? While we in the US, or the EU, or Aus, are busy taking care of each other’s health and education, who’s making our cars, houses, lightbulbs, toothbrushes, bedsheets and frying pans?”

The so called ”Producing Countries” –

(The ”cheap stuff” – mainly Producing Countries like China, India or Mexico – and the ”High Quality Stuff” countries like Germany, Switzerland, Italy, France and a lot of other European countries)
And if anyone here doubt this fact – she or he just has to do – what once was done for a funny TV show – documenting that for the average US (middle class) Family – the only ”American-Made-Thing” dear to them was the fridge.

And about:
”Something must be missing here, and something big” –
there is this (in)famous theory of Paul Krugman from 1999 – where he writes:

”Well here’s my theory: The real divide between currently successful economies, like the U.S., and currently troubled ones, like Germany…
(Germany then was the so called ”sick man of Europe)
… is not political but philosophical; it’s not Karl Marx vs. Adam Smith, it’s Immanuel Kant’s categorical imperative vs. William James’ pragmatism. What the Germans really want is a clear set of principles: rules that specify the nature of truth, the basis of morality…
Americans, by contrast, are philosophically and personally sloppy: They go with whatever seems more or less to work…
Now, the American way doesn’t always work better. Even today, Detroit can’t or won’t make luxury cars to German standards; Amtrak can’t or won’t provide the precision scheduling that Germans take for granted. America remains remarkably bad at exporting; the sheer quality of some German products, the virtuosity of German engineering, have allowed the country to remain a powerful exporter despite having the world’s highest labor costs…
But the world has changed in a way that seems to favor flexibility over discipline. With technology and markets in flux, not everything worth doing is worth doing well.

And let us repeat what Krugman wrote – and what from a different ”angle” seems to be echoed by economists like JQ –
”With technology and markets in flux, not everything worth doing is worth doing well.”

And I think a lot of Anglo-American economists – and much more important – most Anglo American Industrialists or Investors – took Krugman theory as THE signal to get out of manufacturing – as there was this additional pretty ‘capitalistic’ -(and NOT ”socialistic”) idea – that advanced economies should leave the ”slave production work” to third world countries as ”WE” couldn’t make enough ”winnings” anymore with ”manufacturing”.

What a tragic… ”miscalculation”? –
as the ”Producing Countries” more and more have become ”the winners” in the 21th century – AS ultimately with ”technology and markets in flux” ALWAYS ”everything worth doing” will be worth doing WELL!

59

alfredlordbleep 10.11.17 at 12:54 pm

JQ@55
The US not only feeds itself but exports a lot of food (same for Australia and Canada).
Alas, some of that is down to factory farms’ animal torture as your great Aussie, Peter Singer, has battled most notably.

60

alfredlordbleep 10.11.17 at 1:08 pm

Frant@41
Even Bill Clinton is notable for significantly increasing taxes on the 1%.
Just a footnote. Because the mass media in America aren’t so independent the Republican tax bill W J Clinton signed was highly publicized for upping the top rate on income from labor. But the fat cut on capital gains, not so much—

[semi-private to Frant: I owe you from a previous thread on NYT claim I made there. . . in progress :-)]

61

Layman 10.11.17 at 2:10 pm

TM: “The education premium is also mostly a statistical artifact. High earners are more likely to be educated but it doesn’t follow that educated people are likely to make much money.”

Well, that very much depends on the education in question. Anyone in the business or finance world understands very quickly that there is an education premium, and even a ‘source of education’ premium on top of that. If you want to make money, get the MBA from Harvard, not the PhD in physics from Indiana University.

Landru: “So I’m still stuck back at square one on the track to utopia: before I can discuss how to tailor socialism to “a 21st century economy dominated by services”, I have to understand how such a thing can even exist — and I don’t.”

Well, it’s about automation and robots[*]. It used to be that every single person in the village made food, or they all starved. Then along came tractors, etc, and then only a fraction of the people in the village made food, and the others were free to make other things like make cars and cell phones. Then along came robots, and now very few people in the village need to make food or cars or cell phones (or coal or petrol or dishes or glassware or paper or chairs or light bulbs, etc). Eventually there’s nothing for most people to make. They do other things, like answer phone calls from customers, file purchase orders, etc. Then along comes IVR technology, AI, etc, and now very few people can be employed answering customer inquiries, etc. So Suzy does Gertrude’s hair, while Jane cures Bill’s warts, and Denny pulls mugs of beer for everyone. All of them still have food, cars, cell phones, fuel, etc, because those things are just made, effectively by no one; as long as they can pay for them. But they can’t work; there aren’t any meaningful jobs. And if they can only get money by working, the whole thing comes crashing down.

[*] Note that in some cases the ‘robots’ are actual people, living in far-away lands in dire poverty, who are willing to make things for next to no pay in conditions which routinely kill them. But eventually even they are replaced by actual robots and software packages.

62

nastywoman 10.11.17 at 2:32 pm

@61
”Well, it’s about automation and robots[*]”

And I thought that silly theory had been debunked for good – since a long time – but for late comers google:

”No, That Robot Will Not Steal Your Job – The New York Times”

63

nastywoman 10.11.17 at 2:55 pm

– and referring to the article in the NYT – that robots will not steal our jobs just think about… about the US coffee or cooking craze.
Who could have thunked it – that one time in the US there will be so many jobs openings for Baristas or (good) Cooks will spring up – and who could have thunked it that a relative of mine in LA quit his s…paying ‘service job as a waiter and now produces (excellent) cooking-knives.

And can you guys imagine if the coffee craze will keep on growing – there one time will be even some US manufacturers who will give the Italians some competition in building the ”Ferraris” of Coffee-Machines – and the same goes for so many real visionary ‘manufacturing-possibilties’ -(and truly great and creative jobs) – if the so called advanced countries keep on refining their markets for very sophisticated and high quality stuff…

64

TM 10.11.17 at 3:56 pm

61: “If you want to make money, get the MBA from Harvard, not the PhD in physics from Indiana University.” That makes my point: most of the “education premium” goes to a tiny segment of the educated. It’s hardly education as such that is at a premium.

65

nastywoman 10.11.17 at 5:06 pm

but otherwise @61 might have found the true ”socialistic solution” when he errs that –

”It used to be that every single person in the village made food, or they all starved.”

As in reality in the really well working ”villages” there was every single ”Artisan” – ”Craftsman” and should we say ”type of work and worker” present – that all we have to do is going back to an economy ”where every single type of work and worker” is present – in the right amount – that not one of them – nor the Farmers nor ”Service” or ”Banking” or even ”Manufacturing” is overwhelming or sadly missing.

And so – like these Swiss Alpen Villages who used to die – when their above explained ideal and very well balanced economical structure got… lost – and they had to turn (‘the wheel of fortune’) – BACK – WE might have to find BACK to the structure of a truly ”socialistic” and thusly ”balanced” economical structure?

66

Matt 10.11.17 at 5:47 pm

What convinced a lot of ”socialists” about the importance of work qua work were the absolutely shocking facts about the suicide and misery data of (mainly unemployed) US workers.

US workers who lose employment have suffered a dreadful loss of material prosperity/security too, though, so that doesn’t clarify the share of benefits accountable to the “financial security” component in the bundled unit called “gainful employment.” I understand why a miner who was making $70k per year is devastated when the mine shuts down. I’m willing to acknowledge that part of the loss is the feeling that life has lost purpose, the lack of coming together with others to accomplish a common task. But I would also bet that if you split experienced coal miners, recently disemployed, into two groups, and gave A income equivalent to their old job but no assistance finding a new job, and gave B a guarantee of a new job but at lower wages than the old one, A would fare better. Finding a natural experiment approximating these conditions is difficult, of course.

Misery among the unemployed has multiple causes, but when I was unemployed “I can’t buy anything but the bare necessities, debts are piling up, and I’m fighting with my spouse about money” (all loss-of-income effects) were much more dire than missing e.g. work friendships or having a purpose in life pre-fabbed and delivered via my employment.

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Howard Frant 10.11.17 at 7:10 pm

@60

I’m thinking less about marginal rates,and more about average rates, as shown here;

https://upload.wikimedia.org/wikipedia/commons/8/8c/Average_US_Federal_Tax_Rates_1979_to_2013.png

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nastywoman 10.11.17 at 10:19 pm

@66
”US workers who lose employment have suffered a dreadful loss of material prosperity/security too, though, so that doesn’t clarify the share of benefits accountable to the “financial security” component in the bundled unit called “gainful employment.”

No it doesn’t – but do we really need such a ”clarification” about what is worst – the ”dreadful loss of material prosperity/security” OR the ”dreadful loss of – what you like to call: ”gainful employment”? –
You kind of hint yourself – ”what is worst” – might be more or less subjective and any ”Social Democrats” or let’s call them ”Socialists” – who (already) established ”successful socialistic economical policy programs” in some Northern European Countries – solved the ”dreadful loss of material prosperity problem” by solving the ”dreadful loss of gainful employment” – OR the other way around…

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Efcdons 10.12.17 at 12:30 am

@66

Yeah, you don’t hear Alice Walton complaining about despair and a lack of purpose because she’s unemployed.

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alfredlordbleep 10.12.17 at 1:09 am

Frant@60
OK, we’re talking, of course, about different things. As I like to quote a mid-super-rich predator, Mitt Romney: (or words to the effect) $300K is not that much money for a year’s labor.

(to continue on my separate topical review)
He was referring to his earnings for one year of paid speeches. (Of course, these days Hillary, O, and so forth make that or more in an hour of talk). Meanwhile his “real” income of $20M-$30M annually is income from wealth—capital gains and dividends etc. O and his allies (not) so famously raised the Bush-Cheney rate to 23.8% from 15%—to help finance “Obamacare”—on long term capital gains, to gain the vicious enmity of the Party of the Pious* and righteous momentum for repeal and replace.

*oh, and plutocracy
N. B. Previously Clinton and Republicans brought this rate down from Reagan’s “reform” of 28% to 20%. I don’t have a link to show a plot which obviously is worth thousands of words. Mass market editors find it hard to display this dope or much of anything in the too hot to handle folder.

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alfredlordbleep 10.12.17 at 1:10 am

Ooopphs, Frant@67 of course.

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kidneystones 10.12.17 at 1:21 am

I read the article and enjoyed it and re-read your blurb – ‘liberalism with a spine ” which is definitely catchy.

I’m not an economist and won’t pretend to anything beyond a rudimentary understanding of some of the principals. You raise some great questions and make some solid observations, but it seems to me that BW is, perhaps, correct. There doesn’t seem to be any practical way from A to B.

My own limited understanding of basic economics is that a surplus in labor means more power to employers and (usually) lower wages. I apologize if you’ve addressed this problem concretely and I’ve missed it, but when corporations are expanding and inequality and profits are rising, how exactly do ordinary folks control who is employed, by whom, and under what conditions?

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Joshua Holmes 10.12.17 at 2:24 am

In the interest of social science, Crooked Timber can pool together $50k a year to give me, no strings attached. I promise to sleep 8 hours a night, get into phenomenal physical shape, meditate consistently, finally get fluent in French, participate in and patronize local art, improve my singing, travel, and take my dog to the park every day.

With no need to worry about being employed, a life of even modest means (by First World standards) would be full and richly rewarding.

74

Layman 10.12.17 at 4:09 am

TM: “That makes my point: most of the “education premium” goes to a tiny segment of the educated.”

Fully one-quarter of all master’s degrees in the US go to business majors. One-fifth of all bachelor’s degrees are business majors. It isn’t tiny.

That aside, there does seem to be an earnings premium more or less across the board.

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Layman 10.12.17 at 4:10 am

“And I thought that silly theory had been debunked for good…”

How would an opinion piece in the NYT manage that?

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nastywoman 10.12.17 at 8:30 am

@75
”How would an opinion piece in the NYT manage that?”

It doesn’t – but it just came to mind – as it just a few days ago repeated lots and lots of debunking from before…

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TM 10.12.17 at 8:34 am

Matt 66 and others: I think the major psychological issue for an unemployed person is the worry about the future. They might currently get by on unemployment benefits, even though they are skimpy, but what scares them senseless, especially at a certain age and especially with dependents, is the knowledge how hard it will be to find another adequate job, knowing that without a job they can’t have a decent life in this economic system. They also know that the longer they are unemployed the harder it will be to get back into the system, and the more their current skills will be devalued. Iow I believe it’s all about the loss of economic security.

The “meaningful work” line of argument also misses the fact that meaningfulness in our system is determined by the labor market, not by intrinsic value. Many unemployed people do meaningful work.

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nastywoman 10.12.17 at 8:44 am

and@75 just as a Data reminder –

”The unemployment rate in the developed world is down to 5.5 percent and approaching a 40-year low. This flies in the face of all the dire warnings about a “jobless future.”

There are jobs, jobs everywhere. Unemployment in Germany is now lower than at any point since the country reunified in 1990. It is hitting lows last seen in 1975 in Britain and 1994 in Japan…

One answer is demographics: The world is aging, and the number of people entering the work force every year is slowing sharply. A striking example is Japan, which has one of the oldest and most rapidly aging populations in the world; the economy is barely growing, but the jobs market is booming, and unemployment is now under 3 percent.

And another – perhaps much more ”exciting”? answer:
Predominant Consuming Countries -(like US) consume sooo much – that some ”Producers” hardly can keep up with the supplies. I mean – my cousin in Asheville had to wait 5 month for her new (German) kitchen.

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John Quiggin 10.12.17 at 12:34 pm

Thanks everyone (with notably rare exceptions™ ) for some really valuable discussion. I don’t have time to respond to all the points raised, but I will think about them.

80

Z 10.12.17 at 1:04 pm

Here’s a question which occurred to me reading your piece (perhaps parallel to some observations of Bruce Wilder).

Socialism, in its original incarnation, was, well, a social movement drawing its political and social strength from a specific constituency. Do you expect your socialism for an information age to similarly draw its political strength from a specific part of the social world, and if so from which?

I ask because, to quote you, “Neoliberalism has massively enriched the 1%, and particularly the financial sector, while delivering nothing but economic insecurity and stagnant living standards to the great majority of the population” and yet – somewhat to my surprise I admit – very little organized political force seems to be rising from this great majority of the population while broadly neoliberal platforms conversely regularly manage to garner votes and political support way above the 1% or even the 10% richest people. Trump’s tax plan is only an extreme example.

Incidentally Gareth Wilson @16 Do you see all three of these things as inherently bad? If there’s a system where the great majority of the population is economically secure and has increasing living standards, but the 1% is still massively enriched, would you want it to change?

In the currently prevailing system of ecological and economical imbalance, I would give a positive answer to both questions because I believe 1) that forceful collective actions are required if we are to successfully overcome the perils of environmental destruction and climate destruction, 2) that a very strong democratic sentiment is a precondition to such forceful collective actions and 3) that such a genuine democratic sentiment and accompanying institutions can survive in spirit and not only in letter only if no segment of the population gets an abnormal power of influence on the rest of the society and/or the means to escape statistically normal life experience. At the moment, the 1%, or maybe the 0,1%, certainly have that outsized influence and can very certainly escape the consequences of whatever political choices they make so I guess in theory I would be in favor of diminishing their power, probably by diminishing their wealth, even if that wealth were simply destroyed instead of being redistributed (I say in theory because in practice, it would enough to tax them so that 80% of whatever they own over 20 millions and whatever they make over 500,000 a month goes to everyone else).

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Layman 10.12.17 at 3:36 pm

“There are jobs, jobs everywhere.”

Service jobs. Shitty service jobs. For now, anyway.

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Ogden Wernstrom 10.13.17 at 6:53 pm

@80 Z 10.12.17 at 1:04 pm:

…somewhat to my surprise I admit – very little organized political force seems to be rising from this great majority of the population…

Decades of carefully-crafted and well-coordinated lies messages from well-funded right-wing/reactionary sources, combined with changes in educational standards (which standards have moved away from measuring/requiring so much in the way of Civics, Social Studies, critical thinking skills and such) have created a significant population that will vote against their own individual-and-collective interests for ideologic and emotional reasons… confusion/ignorance about what sort of change will best advance their interests, and despair that no good choice may be made available by the powers-that-be.

Organized political force will be made-a-pariah by the right-wing messaging system (e.g. ACORN), maybe co-opted/infiltrated. In the USofA, funding has become an important factor in getting any message to people, and Pandora’s cashbox is wide open. [With Gorsuch and whomever-else Drumpf will appoint, I worry that I am unlikely to see this improve in the 20 years the actuaries give me.]

Incidentally, I’ll also take this opportunity to respond to Gareth Wilson @16:

Do you see all three of these things as inherently bad? If there’s a system where the great majority of the population is economically secure and has increasing living standards, but the 1% is still massively enriched, would you want it to change?

I see this as an attempt to negotiate-out one factor, probably in order to present that factor as having a neutral effect.

Like Z, my answers are both positive. I think that the imagined everybody- proposed a-great-majority-gains-some-but-a-few-win-massively combination would require ignoring massive externalities, including some remainder of the population. (When it comes to ignoring externalities, the US has long been a world leader.) Usually, the externalities of such situations are theft or environmental destruction, but Z also reminds me that the accumulation brough on by massive enrichment is likely to make the economic security and living standards disappear. (Example…already in progress.)

Also, I think that “the great majority of the population is economically secure” is a weasel-worded way to allow a significant number of people’s suffering to be statistically ignored. How much suffering are we willing to enforce in order to massively enrich the 1%? Each year, about 15% to 20% of the US population lose ¼ or more of their income, one measure of economic insecurity. I don’t know how that might translate into a measure of economic security, though. (Admittedly, my household fit the ¼-loss measure in 2008 – but it did not cause serious deprivation because we were already members of the moderately-enriched. The main consequence is that I suffered from retirement-age insecurity.)

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b9n10nt 10.13.17 at 9:49 pm

Inspired greatly by this book.

What would be the utopian goal of socialism?

We glimpse our abiding social natures in times of acute crisis in which the comforts of civilization are superseded by immediate want. In these moments, across all cultures, people are far more likely to organize themselves collectively for mutual aid and use the eventual surplus for the group’s well-being rather than immediately organize themselves into exploitative packs. (These crises are often paradoxically understood to be the most liberating time in modern people’s lives, for we are forced back into a deeply gratifying mode of caring about others as much as or more than our -conditioned- selves).

The immense efficiencies gained by beaurocratic and material technologies have allowed us to prosper and yet required us to experience profound alienation from our organic collectivism. In our alienation, we are easily drawn into identifying with “imagined communties” that impose on us and only occasionally partially relieve status anxieties. Just as we engage with entertaining stories yet experience real emotion, we identify with imagined communities (nation, race, gender, guild, etc…) yet experience real anger, rage, or joy. But very rarely, peace and contentment.

The job of visionary politics is to first recognize that we can never win by identifying ourselves with artificial, abstract tribes (“I’m an American”) and will always long for sincere communal connection. We must use all our intelligence and insight to build the best of both worlds: to continue to enjoy the material gains of technology, but enjoy them in small, egalitarian, collectivist communities that resonate with our pre-historic social natures.

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b9n10nt 10.13.17 at 10:08 pm

Thus, we can appreciate that the only challenge beyond immediate survival is constructing opportunities for small, egalitarian, collectivist communities.

Unemployment, employment, wealth, poverty: all are impotent to secure or deny our fundamental wellness if we Belong and are willing to sacrifice ourselves for that Belonging. Alice Walton has won status, but this can only be a temporary distraction from lurking anxiety and depression without a deep commitment to and immersion in a real meat-space community.

Who is it that is unemployed? Who is it that is prospering? If it is a local Us, all is well. If it is a delocalized Me, all is fraught.

Democratic socialism is a path forward, but this is the utopian destination.

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