Sunday, June 15, 2014

Sunday Morning Links

This and that for your Sunday reading.

- Margaret Somers and Fred Block write about Karl Polanyi's critique of the free-market myth and its increased relevance today:
(F)ree-market rhetoric is a giant smokescreen designed to hide the dependence of business profits on conditions secured by government. So, for example, our giant financial institutions insist that they should be free of meddlesome regulations while they depend on continuing access to cheap credit—in good times and bad—from the Federal Reserve. Our pharmaceutical firms have successfully resisted any government limits on their price-setting ability at the same time that they rely on government grants of monopolies through the patent system. And, of course, the compliance of employees with the demands of their managers is maintained by police, judges, and an elaborate structure of legal rules.

Polanyi effectively brings the role of government and politics into the center of the analysis of market economies. And in doing so, he opens up possibilities that are often obscured in other currents of left thought. If regulations are always necessary to create markets, we must not discuss regulation versus deregulation but rather what kinds of regulations we prefer: those designed to benefit wealth and capital, or those that benefit the public and common good? Similarly, since the rights or lack of rights that employees have at the workplace are always defined by the legal system, we must not ask whether the law should organize the labor market but rather what kind of rules and rights should be entailed in these laws—those that recognize that it is the skills and talents of employees that make firms productive, or those that rig the game in favor of employers and private profits?
There is too much public discourse, even within the Democratic Party, that accepts and even propagates the right-wing propaganda that a restoration of economic growth requires austerity and greater deference to the needs of business. The reality is that austerity usually results in rent-seeking behavior, with the consequence of further stagnation and crises rather than productive investment. Polanyi teaches us that periods of prosperity and rising living standards, by contrast, were a direct result of democratic gains in politics and civil society. The greatest prosperity in living memory in Europe and the United States came during the social democratic moment—in the 1950s and 1960s—when the constraints on business were the greatest. In short, more democracy and more economic justice are the necessary foundations for the path to socialism and a more vibrant, prosperous, and sustainable economy.
- And Elias Isquith interviews Shar Habibi about the role of privatization in simultaneously eroding public services and linin the pockets of the wealthy:
What did you find when you examined privatization/government outsourcing?

What this report really looked [at] was the effects of government outsourcing, at the local and state levels, on jobs and the impacts it has on the community and ultimately on the issue of income inequality. What we see is that … when state or local government outsources, these jobs are no longer good, public-sector jobs that provide a decent wage and benefits, but instead become jobs for a contractor that pay very low wages and typically have very few or no benefits. And really what is kind of alarming about this is [that] outsourcing public services sets off a downward spiral in which reduced worker wages and benefits can hurt the local economy and the overall stability of middle- and working-class communities. By paying family-supporting wages and providing important benefits like health insurance and sick leave, governments have historically created what we’re calling “intentional ladders of opportunity” to allow workers and their families to reach the middle class. And this has been especially true for women and African-Americans, for whom the public sector has been a source of stable, middle-class careers. Unfortunately low-road government contracts reverse this dynamic. So while corporations rake in increasing profits through taxpayer dollars and while CEO compensation continues to soar, the examples in our report show that the workers employed by state and local government contractors receive those low wages and few benefits.
How big of a role do you think privatization plays in the larger phenomenon of growing inequality?

I think that it’s often overlooked, but it’s a sizable piece of the puzzle … We don’t have exact numbers of how many workers this affects because state and local governments aren’t keeping good, systematic records of this (and fixing that is one of our recommendations in the report) but … we do know on the federal level there are three times as many contract workers as civil-service workers and so we also know that there are about 14.5 million full-time, and almost 5 million part-time, state and local government workers. So if the proportion is anything near the federal ratio of contract-to-direct-government-worker, that’s millions of jobs that we’re talking about. There’s also some very rough estimates that total state and local procurement can be valued around $1-1.5 trillion — that’s a very crude estimate. But contracting anywhere approaching that fiscal magnitude means millions of jobs are being created through state and local contracting. So when states and local governments use low-road contractors that slash wages and benefits and create low-wage jobs, this is really a factor in growing income inequality and the disappearing middle class. It’s often overlooked, but it’s very significant.
- Meanwhile, Paul Krugman discusses how the U.S.' corporate elite has lost control of the movement it set up to take political power, then follows up with the ultimate sign of establishment desperation:
Corporations and plutocrats had a good deal going: they bankrolled politicians who talked cultural populism during campaigns, but more or less ignored all that and focused on tax cuts and deregulation after the polls closed. And Cantor fit that profile perfectly.

But now the big money has lost control; the base is demanding politicians who don’t just talk the crazy talk, but walk the crazy walk. For a couple of months the story line was that the money was regaining control, but between Cantor and Cochran that narrative has been blown out of the water.
How bad is it? So bad that some establishment Republicans — which means people who work for the corporate side — are pining for another run by, yes, Mitt Romney.
- But if the business sector may be having trouble controlling its political puppets, it's having rather better luck avoiding any accountability to the public at large - as David Atkins highlights how corporations are going to greater and greater lengths to avoid having to answer for the injuries they inflict on others.

- Finally, Jessica McDiarmid offers a prime example, pointing out how the rail industry is demanding that governments across Canada and the U.S. keep the public in the dark about the risk it's creating. And Andrew Nikiforuk discusses how abandoned oil wells are doing severe environmental damage by releasing methane and other gases.

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