Tag: Marx

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Canada Technology Workers

Robots, migration and the future of work (Briarpatch Magazine)

I have a longer read in the newest issue of Briarpatch Magazine, which is dedicated to the world of work. If you don’t know Briarpatch, be sure to check out the other articles in this issue and consider subscribing; this is one of Canada’s oldest independent left publications and definitely worth supporting. My piece has the rather grand title “Robots, Migration and the Future of Work” but it’s really about trying to see how we are often pitted against one another and encouraged to see external threats, like machines and migrants, to our well-being rather than working together in solidarity against systemic causes.

The past several decades have not been kind to workers, as most of us know only too well. Those making minimum wage are making a penny more in real terms than they were in 1976, union membership continues to fall, and wage growth for most has been anemic – far outstripped by rising productivity. And this is to say nothing about how unfulfilling the jobs that swallow the waking hours of our lives can be. Yet when workers speak out, whether about our own crappy working conditions or the absurd enrichment of those at the top, we’re greeted by a familiar chorus that is often loudest inside our own heads: just be happy that you have a job at all.

For some, the implied culprit in the background of this story is the much poorer worker in the Global South, whether at a maquiladora in Mexico, a sprawling electronics factory in China, or a call centre in India. As Canadian workers have been integrated into a globalized economy, the story goes, they can be kept in check by what happens halfway across the world. Labour discipline isn’t just – or perhaps even mostly – a function of globalization, however. There are many domestic pressures keeping workers in line and the economy unkind.

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Economic theory Value

Aristotle contra the math stick: Magic numbers redux

In the last post I explored how magic numbers, such as a 90% debt-to-GDP ratio or a 2% inflation target, at once over-simplify and stifle economic policy debate. The role of magic numbers raises more general questions about “the rule of number” in economics. The math stick used to browbeat those who enter economic policy debates can be so effective in part because quantity has primacy over quality and means have primacy over ends in economic debate. Bear with me here, but to see this more clearly we should go all the way back to Aristotle. Things might get a bit abstract, but I’ll try my best to reign them in.

Aristotle asked what seem to be fairly naïve questions. For example, he ruminated on why it is that a particular number X pairs of shoes trades for one house. How is that two very different things – one for walking in and one for living in – are brought into a very specific quantitative relationship through human trade? Sometime towards the end of the 19th century, economics stopped asking such questions, precisely deeming them naïve and nonsensical in the process. A house “costs” five pairs of shoes because someone is willing to offer five pairs of shoes for another’s house. The first will get as much out of the house as the second from the shoes and exchange, usually via money, in a particular ratio allows them to come to this conclusion – simple and pat. End of story.

Not quite, says Scott Meikle, author of Aristotle’s Economic Thought. Ending the story here actually leaves ends completely out of the picture:

The consequence [of this commensurability is] that the question of ends cannot be formulated within economics. It is perhaps the most important question that can be asked in respect of economic matters, and whatever answer may be favoured, it does not reflect well on a theory if that theory is incapable of even formulating the question.

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Economic theory

The facts are capitalist

There has been a curious debate in the past week within the world of economics blogging. It started with a post by Chris House on the contrast between a “well-known liberal bias” within the academy generally and the decidedly more conservative bent of most members of economics departments. House attributes this contrast to a conservative bias in economic facts – by this he means that much of mainstream economic theory agrees with a more right-wing view of the world. Take, for example, the view that minimum wages lower employment or that government regulation has negative effects on business efficiency. Noah Smith answered this  provocation by arguing that the positions taken by most economists are actually closer to the beliefs of the American centre-left, by which he means that much attention is focused on the trade-offs between efficiency and equity. And the debate has moved on from there.

Smith concludes his post by making explicit the key assumption behind both pieces: that there are facts and then there is the ideological perception of those facts – that the facts are in some way neutral, but can conform to one point of view better than another. There is a long line of social theory and philosophy that challenges this assumption of independence. Here, it is tempting to quote Gramsci on ideology, or Foucault on power, or a host of other authors. That would, however, take the conversation into a space completely alien to House and Smith. So nevermind Gramsci, here is mainstream Anglo-American philosopher of science Hilary Putnam on the relation between facts and values:

I argued that the picture of our language in which nothing can be both a fact and value-laden is wholly inadequate and that an enormous amount of our descriptive vocabulary is and has to be ‘entangled’… for example, to draw the distinction between courageous behaviour and behaviour that is merely rash or fool-hardy…depends precisely on being able to acquire a particular evaluative point of view. ‘Valuation’ and ‘description’ are interdependent.

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Categories
Canada Crisis Economic theory

Demand or destruction: Two ways out of the profitability puzzle

In my previous post, I outlined the disconnect between profitability and investment in Canada’s private sector.  While businesses are doing well and profits have rebounded quickly after the global financial crisis of 2007, investment has continued its slow and steady 20-year decline.  This decline is especially visible when investment is related directly to profits. Slightly more than 60% of gross profits are currently being re-invested, down by a third relative to just two decades ago.  Such a gap between strong profitability and dismal investment does not correspond with standard accounts of how the economy functions.  According to standard accounts, strong profitability should encourage investment, not depress it further.  This theoretical relationship is not borne out in recent Canadian experience.

While the last post also examined a few factors that could have been at play in creating this odd state of affairs, here I want to move in the opposite direction and look at two competing pictures of how to revive low private-sector investment.  The first picture comes from Keynes, the second from Marx.  I am particularly indebted to Michael Roberts, who has written extensively on the crisis from a UK perspective and who used a similar framework in a recent article (on the adoption of the idea of a permanent slump by mainstream Keynesians).

The two pictures agree on a diagnosis of on-going stagnation – with low investment being just one feature.  Indeed, the lack of sustained recovery across much of the developed world has led increasing numbers of mainstream economists to declare that the current slowdown is permanent.  Paul Krugman, likely the most prominent Keynesian economist, recently wrote that we may have entered a “permanent slump.”  Even the more hawkish Larry Summers has added his voice to the chorus, referring in a recent speech at the IMF to a period of “secular stagnation”.  Many Marxist and other radical economists have, of course, been making the same point for years, citing a variety of structural changes and imbalances in the economy, particularly those that characterize the neoliberal period that began in the 1970s when the great post-war boom lost steam.

While their diagnosis may be similar, Keynesian and Marxian economists see the way out of the current long-term slump rather differently.

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