Monday, May 12, 2014

Monday Afternoon Links

Miscellaneous material for your Monday reading.

- Alyssa Battistoni writes that a universal basic income could go a long way toward solving environmental and economic problems alike by placing a focus on sustainable quality of life rather than increasing consumer consumption:
If overconsumption is actually the problem, we can’t fix it by consuming more, however eco-certified the products. Indeed, the very idea that green jobs will drive economic recovery is closely tied to notions of continued American hegemony: green tech is the next big thing, the rhetoric goes, and America needs to get ahead in the global race to innovate. But nearly every country in the world harbors similar hopes. That the wealthiest country in the world is so panicked at the prospect that others might catch up reveals the fallacy of the notion that continued growth will somehow reach an endpoint in which everyone enjoys a decent standard of living.

Continued growth isn’t the only way to get there. The mythology surrounding the New Deal often obscures the fact that labor’s response to the Depression was not to make more work, but to share existing work more broadly by shifting to a thirty-hour workweek; Keynes himself famously predicted we’d be down to a fifteen-hour workweek by the end of the century. The decision to use fiscal policy to stimulate consumption instead was a way of avoiding deeper structural changes — to grow the pie rather than ask who was eating most of it. Since then, instead of increasing leisure time, productivity gains have largely increased private consumption for an increasingly small number of people. These days, of course, people are having leisure forced on them — it’s employers who are cutting hours and workers who are desperate for more. It’s clear that we can meet needs with vastly less labor than will support a population dependent on stagnating wages. While neoclassical economists pose the consumption-leisure tradeoff as a choice made by individuals, whether or not people work in the first place is clearly determined by decisions made at a society-wide level.

It’s beginning to look like we should have taken the other New Deal. We need to explicitly shift toward working less — to reorient the consumption-leisure tradeoff towards the latter on a social level — and share the work that remains more evenly.
Basic income won’t, in and of itself, solve environmental problems; it won’t replace coal plants with solar panels or ease pressure on depleted aquifers. If instituted as a justification for cuts to other social programs, it would be disastrous both socially and environmentally; robust public services are necessary if we’re to live on less. But it marks a critical starting point in rethinking the relationship between labor, production, and consumption, without which environmental hand-wringing will go nowhere.

More pragmatically, in providing an alternative to dependence on destructive industries and removing the threat of job blackmail from communities desperate for livelihoods, it makes change a real option, giving workers and communities more power to demand protections against environmental harms. It can start to reorient social focus away from an eternal game of consumption catch-up toward the good life.

It admittedly won’t do much to curb the upper bounds of consumption, at least not right away. But it might point in that direction. Environmentalists like to point to World War II for evidence that people will accept restrictions on consumption for the sake of a shared cause, but the so-called Greatest Generation didn’t exactly accept rations with a patriotic grin. What that experience does demonstrate, however, is that while people don’t like limiting consumption under any circumstances, what they really don’t like is cutting back if everyone else isn’t doing the same.
- And Paul Krugman takes a look at the upper end of the U.S.' income spectrum to test whether outsized incomes reflect any useful contribution to the world at large:
(M)odern inequality isn’t about graduates. It’s about oligarchs. Apologists for soaring inequality almost always try to disguise the gigantic incomes of the truly rich by hiding them in a crowd of the merely affluent. Instead of talking about the 1 percent or the 0.1 percent, they talk about the rising incomes of college graduates, or maybe the top 5 percent. The goal of this misdirection is to soften the picture, to make it seem as if we’re talking about ordinary white-collar professionals who get ahead through education and hard work.

But many Americans are well-educated and work hard. For example, schoolteachers. Yet they don’t get the big bucks. Last year, those 25 hedge fund managers made more than twice as much as all the kindergarten teachers in America combined. And, no, it wasn’t always thus: The vast gulf that now exists between the upper-middle-class and the truly rich didn’t emerge until the Reagan years.

Second, ignore the rhetoric about “job creators” and all that. Conservatives want you to believe that the big rewards in modern America go to innovators and entrepreneurs, people who build businesses and push technology forward. But that’s not what those hedge fund managers do for a living; they’re in the business of financial speculation, which John Maynard Keynes characterized as “anticipating what average opinion expects the average opinion to be.” Or since they make much of their income from fees, they’re actually in the business of convincing other people that they can anticipate average opinion about average opinion.

Once upon a time, you might have been able to argue with a straight face that all this wheeling and dealing was productive, that the financial elite was actually providing services to society commensurate with its rewards. But, at this point, the evidence suggests that hedge funds are a bad deal for everyone except their managers; they don’t deliver high enough returns to justify those huge fees, and they’re a major source of economic instability.

More broadly, we’re still living in the shadow of a crisis brought on by a runaway financial industry. Total catastrophe was avoided by bailing out banks at taxpayer expense, but we’re still nowhere close to making up for job losses in the millions and economic losses in the trillions. Given that history, do you really want to claim that America’s top earners — who are mainly either financial managers or executives at big corporations — are economic heroes?
- Meanwhile, Becky Sweger highlights how the U.S.' tax system continues to be biased in favour of corporate giants. Jim Stanford discusses how needless austerity has contributed to pitiful Canadian employment numbers. And Andrew Langille points out that Tim Hudak wants to make matters much worse for workers in Ontario.

- Robert Reich offers a few populist principles which are finding support among prominent members of both major U.S. political parties, while also serving as important checks on the mindset that power exists only to serve those who already wield it. And Jeffrey Simpson rightly questions whether elites can be expected to meaningfully deal with inequality.

- Finally, Aleksandra McHugh writes about the corporate takeover of education policy. And Robert Bostelaar exposes the Cons' shadow civil service made up of a low-paid, temporary workforce.

1 comment:

  1. Anonymous3:12 p.m.

    Sitting tantalizingly in a warehouse in Winnipeg are 2,000 boxes of information about one of the most fascinating social policy experiments in Canadian history.

    The experiment began in 1974. It was designed to test the concept of a guaranteed annual income in a small, fairly typical, community. Dauphin, a rural municipality of 13,000 midway between Winnipeg and Regina, was chosen at the behest of former Manitoba premier Ed Schreyer.

    The city’s low-income residents were lifted and kept out of poverty, using a negative income tax. (Canada Revenue Agency topped up their income if it fell below the poverty line.) They could use the money as they chose.


    Here is what Forget’s research has already shown:

    • During the GAI experiment, Dauphin had a dramatically lower rate of hospital admissions than similar communities in Manitoba.

    • Its high-school dropout rate fell and stayed down for a generation.

    • It had fewer accidents, serious injuries, arrests and convictions.

    • Consultations for mental illness declined.

    • And, contrary to policy-makers’ fears, people in Dauphin did not stop working or reduce their hours to get “free” money from the government.

    “In all of the indicators I could find for quality of life, people did better,” Forget says.

    But she can’t do a proper cost-benefit analysis. “Someone needs to estimate the savings associated with reduced bureaucracy, better education and health outcomes and probably lower costs associated with crime and special education,” she told The Uniter, a student newspaper at the University of Winnipeg.