Our love affair with capitalism

February 25, 2019

Bernie reopened a national debate about capitalism and socialism. I think we need to understand that no economic system carried to the limit produces justice. We’ve been most successful using mixed systems to gain the advantages and smooth the problems created by both capitalism and socialism.

Actually socialism is hiding in plain sight: the post office, libraries, public schools, the water supply, fire and police protection, highways, roads and streets. We buy our capitalist cell phones on an internet system that government created for military and academic use before turning it over to private systems.

Capitalism has a fraught relationship with workers. It can and often does enlarge the total economy, the whole pie. But it doesn’t distribute that pie among the workers. It distributes the pie to those who make the decisions, and they keep what they can for themselves.

Workers and farmers have every right to be dissatisfied with the impact of capitalism on their lives. Capitalism makes farm prices unpredictable. I’m convinced the programs could be tweaked for the benefit of both the environment and of family farmers, but government programs nevertheless make prices for farm produce sufficiently predictable for farmers to stay in business.

The crumbling safety net leaves workers at the whim of other people’s investment decisions. The disruptions capitalism causes are well illustrated by the argument over the Amazon plant in Queens. There were several appropriate solutions, but the problems were clear – capitalism was preparing to push people out and their fate depended on government. Unemployment insurance and the social safety net were never enough or well attuned to the needs of families who work for others for their living. And the social safety net has been weakened considerably in the last decades along with weakening the legal position of unions. So, government has a job to do.

That doesn’t mean that we should abandon capitalism, but it does mean that capitalism is not the answer to every problem, and it’s not a sufficient answer to our economic problems. Nor are incentives for decision makers adequate answers. Capitalism is well described by the board game Monopoly. It’s so familiar, I wonder if you realized it was created to teach people what capitalism does. As its name implies, the effective object of capitalism is monopoly. Even though the holders of that monopoly change in real-world capitalism as we experience it, ordinary folks are constantly squeezed out. If our objective is the welfare of the people, capitalism is not a sufficient answer. We cannot and must not be ideological purists. Our country has been most successful when we have implemented a mixed system – capitalism as an essential disruptor, and public planning to smooth the impact for workers and communities.

There is a huge difference between saying that capitalism is valuable and the conclusion that socialism is useless, and vice versa. The truth is that both are useful, and we have to be ready, willing and able to reap the advantages of both without losing sight of their limitations.

It was my pleasure, years ago, to meet Robert A. Dahl, one of the intellectual giants of our era. He and Charles E. Lindblom teamed up to prepare a wonderful book, Politics, Economics and Welfare, to show us the different advantages of public and private action. Those of you who frequently listen to my commentary know that I often try to break the ideological mindset that only private action solves problems.

So, I’m looking for candidates this year whose answers are not ideological knee jerks for one system or the other, but who are pragmatically open to the best solutions from whatever source. Bernie is certainly right that some socialist solutions are necessary and important. Some candidates are staying clear of the word but nevertheless get the point. Any candidate who doesn’t get that point deserves a reeducation at public expense beginning with kindergarten where they might finally learn to share.

—  This commentary is scheduled for broadcast on WAMC Northeast Report, February 26, 2019.

 

 

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Stop Dumping All the Risks on Blue Collar Workers

June 5, 2018

I have been thinking about all the blue-collar workers who believed that Donald Trump would do a great deal for them.

We often talk about the risks that entrepreneurs face but capitalism does its best to outsource risk to blue-collar workers. If there are environmental problems, poisons in the air or water, blue-collar workers and their children will be the first to become sick – they are the canaries in the coal mines. But the irony is that they are also the first to be affected by any attempt to remedy the situation. Prohibitions may force their workplaces to shut down or lay them off.

Liberals often respond by saying that new methods will create jobs. But blue-collar workers have good reason to assume that any jobs created will probably be for other people. Liberals also argue that the proper method for creating jobs is with public works, renovating American infrastructure, etc. But who’ll get the infrastructure jobs? And even more important, no one has been able to promise those jobs. Obama tried but Congress blocked much of what he wanted to do. Trump promised a huge infrastructure program but he put it in the budgets of the states, not his own budget. In effect American politics has not been able to deliver on that jobs promise for the people whose jobs are at risk.

Other relief programs are more automatic: Except for Puerto Rico, we regularly protect people flooded by major storms even when they should have known better than to build on flood plains. The farm program, whatever its shortcomings, protects farmers with formulas that can be calculated in advance. Unemployment insurance is statutory but often grossly inadequate. Social security and Medicare have been reliable though they have become political footballs. Obamacare still exists despite Republican attempts to kill it. But you can’t feed and house a family on medical care. The earned income tax credit comes annually after April 15.

All of this suggests political winners and losers – we like some folks and we don’t trust others with whatever we might do for them. Government has not been willing to become the employer of last resort, so that there are always jobs and wages, although some candidates are urging it now. A negative income tax has been deemed too expensive. And Trump has spent huge tax dollars on enriching the super rich instead of reducing or eliminating the payroll tax in order to encourage hiring more workers for jobs that pay well. There’s lots that could be done if we have the will.

The result is that our political system has not been willing to care for workers. They are not the only ones our politics has left to hang in the breeze. Our unwillingness to insist on decent, honest and ethical behavior for everything from payday lending to mortgage loans, from manufacturing to toxic waste, leaves masses of people at risk, unable to protect themselves or their families.

We need statutes that protect all workers when employers reduce their workforce. Protections need to be reliable so that people don’t have to fear for their jobs when they demand safe working conditions and decent contractual terms that don’t shift all the risks to the people who are most vulnerable and least able to protect themselves. We need reliable worker protection so that people needn’t fear for their jobs when we demand safe products and safe byproducts of business activity. We need to rethink how we protect American workers so that they don’t become the losers whenever we try to improve the American environment and working conditions for everyone.

— This commentary posted by WAMC on their website on June 5, 2018 but the audio was pre-empted by the Pledge Drive. It was broadcast in its usual spot the following week on WAMC Northeast Report, June 12, 2018.


Unions, Anarchy and the Court

February 27, 2018

The Supreme Court, the one in Washington, heard argument Monday in Janus v. American Federation of State, County and Municipal Employees. The case challenged whether unions, elected by a majority of the workers as their bargaining agent, can charge what are called agency fees, that is, fees for the work they do negotiating for better wages and working conditions. The argument against the unions is that the unions might advocate things that some workers disagree with and, therefore, worker dues are being used in a way that violates their freedom of speech.

The question is how far the Court majority is likely to take us toward anarchy. But first, three short paragraphs of explanation of the terms involved. Unions are selected in a carefully supervised process to be the exclusive bargaining agent for the workers in the shop. The union officers are elected in turn by the membership. The officers are always on those electoral hooks. The union can be decertified if people conclude that the workers no longer support that choice. And the officers can be defeated at the next election.

Unions are exclusive bargaining agents because a plurality of competing unions can’t represent the workers as effectively. Employers could just deal with compliant unions and leave the others out on strike. The responsibility to share the cost of the bargaining unit is necessary because without it, workers can be “free riders,” getting the benefits of their unions’ efforts while refusing to pay for it. That would undermine the unions’ ability to do their work.

From the perspective of the challengers to the part of union dues that supports collective bargaining and handling of grievances, those expenses are as political as lobbying and candidate support. For them, elections don’t matter, just whether union leaders say and act in ways that individual workers dislike. Their argument is that they shouldn’t have to pay.

So now I want to talk about the next case. Obviously many people object to the use of their tax dollars by President Trump to say things that they believe are horrendous, not to mention all the things he does that many taxpayers object to. Can they demand freedom from paying for his press officers and for any portion of his salary which is used for the purpose of making speeches, twits or statements. The logic is similar. The question is how far this union case can take us toward anarchy?

The same argument can be extended to the statements of whichever party opposes their own beliefs. Can taxpayers sue to defund all the press offices, and all the speechwriters, and the congressional TV studio?

There are problems with taxpayer suits. The Supreme Court might bar the door, but the principle is the same. And there are organizations and other parties who could probably make arguments that they are more injured than an ordinary taxpayer.

The same issues come up on the state and local levels too.

We might also raise the same questions about the Court itself. It is taking American law in directions many Americans strongly disagree with. There are costs involved in preparing opinions and publishing them. Do they also violate taxpayers’ First Amendment rights?

The Founders believed that elections solved the speech problem. But the Court views it differently. For the Court, corporations have First Amendment rights to speak for a majority of their boards, with the funds of their consumers. The dissenting board members, shareholders and purchasers, however, have no right to object to the use to which their funds are put.  Unions, by contrast, can’t speak for a majority of their members, despite the fact that they have available to them an electoral process that consumers don’t.

The logic of where the Court appears to be going is not law and order. Instead it is about anarchy. There is no law or government if each of us is a law unto ourselves, including those uses of speech that are necessary to the various jobs that officials and representatives have. There are anarchists in this country, and the gun owning, self-proclaimed “sovereign citizens,” are among them. The Republican Party, however, is anything but. Their party stands for social control. The issue for them is not authority itself but who controls what. Anarchy is anathema to majorities of both major parties and inconsistent with democratic government. But the Court may not understand the connection and the implications of what they are doing.


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