Saturday, September 14, 2013

State and Firm: the transition from predation

As governments become more democratic and accountable, do workplaces?

The classic interpretation of the state is that of gradual transition (hopefully progress!) from the Hobbesian war of all against all, to organized banditry, to stationary banditry, to feudalism & aristocracy, and ultimately, by degrees, to increasing regard and accommodation to the populous subjects of the state, to the point where in a democracy, the ruled are, and control, the rulers for the broadest interest of all. A nice story, though the current rule by Wall Street looks like a step backwards in some respects. Corruption serves as another method of predation, more or less organized, available to individuals and state organizations at most levels of the progression.

The firm could be viewed similarly, coming from a Marxist perspective (thanks to Bill Mitchell for a couple of blogs on the topic). As feudalism wore down, its forms of control split between the public state and private capitalism. A transitional example of the latter was the plantation economy of the American South. Capitalists need to exploit labor, as the feudal lords exploited their serfs and other subjects. How is this done, other than through management? Management wears the two faces of, on the one hand, guiding and facilitating the work of the firm, putatively something salable on the open market, and thus of positive social value both to customers and to the workers who create it (assuming they are voluntarily employed). The other face is that of guardian of the interests of capital, extracting as much surplus value as possible from the workers, and paying as little as possible. Making use of the labor market, such as it is, and the political system, and any other tools, including in the not too distant past, physical violence, to keep labor powerless, subservient, and poor. Additionally, other resources than labor are  treated similarly. Public goods are expropriated or destroyed for private profit, patents poached, public officials corrupted, public institutions coopted, and media blanketed with disinformation, for any possible advantage.

My question is whether the predation of the firm has replicated the more or less progressive trajectory of the state, or whether progress in that relationship has stagnated over recent decades. For the state, the world has been swept by democracy. Even the Arab world has caught wind of this trend, though it is ending in tears in some precincts. Civil rights have expanded, to ethnic minority populations, to women, and to sexual and other minorities. Even with the sclerosis and backsliding we see in the US political system, with the top-heavy security state and war establishment, the people, in their media-addled state, are in control when they want to be.

To the original question, one would have to say, no. Death is no longer a routine part of predatory capitalism- workplaces have become safer for most workers. But the economic divide between workers and those they work for has grown enormously, which shows heightened predation over the last few decades. All labor productivity gains have gone to capital, and none to labor. Peonage has made a comeback in the form of predatory lending. This is hard to defend on any rational or moral basis, and one has to conclude that, through the many tools of politics, media, corporate governance, and ideology, capital has grown more predatory rather than less, contrary to the trend of lower predation by the public state.

Ironically, the ideologues of the capital have used the language of civil rights, equal play, and freedom from the evil public predatory state to defend the capacity of capital and employers to predate on workers. The entrepreneur is celebrated as the free spirit who brings immeasurable value to the masses, and whose freedom to organize must not be impinged. Yet the worker's freedom to organize and create a counter-capital power structure that, among other things, raises pay - that is a different story! Collusion in the boardroom, to pay each other in crony capitalist terms and evade accountability ... no problem there. But collusion among the cubicles is not to be tolerated. The irony continues as labor gets paid less, and can buy less, leading to a seizure of the macro-economic cycle that the entrepreneur was supposed to be leading by his miraculous "supply-side" efforts. Which only serves to unmask the whole exercise as one of simple greed by the top end of town.

Of course the Marxist question is whether this whole setup was fair in the first place. Does the mere possession of money entitle a person to the perpetual future flow of more money, via rents and profit streams? Is this truly consistent with human values and just deserts? Back when capital was scarce, this practice / ideology may have made more sense. But today, when capital is not at all scarce, (as shown by the level of interest rates), the economic and political machinations required to keep & even grow power in the hands of capital appear to be an unseemly anachronism, counter to the public interest.

But putting aside the deservedness of the capitalist and the managerial class, and assuming that private firms do work that serves the public interest, (or could be appropriately regulated to do so), perhaps a more fundamental question is on the labor side. How many workers need the specter of poverty, low-wage jobs, and social stigma to be lashed to work? Could our society function if everyone who works was paid decently by their employer, and not forced to collect extra money from the government to relieve their employer of the burden? Could our society function with public service jobs offered to everyone wanting to work at a decent floor wage, and with a lower maintenance payment to those unable to meet even a basic work standard? Could private employers function having to pay more for labor? Would having fewer fast food establishments and other services, and higher food prices be an acceptable price for having everyone live in dignity? Would the number forsaking the private workforce for public service jobs exceed the number that has been involuntarily thrown out of work by the business cycle? And if so, would that be a bad thing?

Most people want to work. They want to be useful and not on any dole. But the current system, controlled for the interests of capital, (and also by the blind vagaries of the free market, leading to highly damaging booms and busts), generates a large army of unemployed and underemployed. Which in turn leads to immediate waste and disgruntlement, and long-term generational dysfunction. We can build a better system, and with a modicum of management in the public interest, which our government has proven itself capable of in the past, we can create not only a far more compassionate country, but one with higher prosperity and economic well-being for the vast majority of citizens.

  • Rich people in a democracy.. the use of idiot populism.
  • Stiglitz chimes in- inequality is engineered, and poisonous.
  • Just who gets to collude / organize in the modern economy?
  • Poverty is still very high.
  • Brainwashing and Christianity. Sort of a system of terror. Especially in Texas.
  • Hell:  the psychology is way too strong to just do away with it.
  • Carbon and business as usual- not a happy future.
  • Let's get rid of coal.
  • Renewables are still approaching parity.
  • The Taliban is now using clear-and-hold.
  • Those selfless non-prosecutors, non-regulators at the SEC. And derelict reporters into the bargain. And why isn't the NSA snooping at the real evil-doers?
  • We still need that Tobin tax.
  • Subprime is right back in the saddle.
  • Chemical corruption in the US.
  • Economic quote of the week, from Paul Krugman
"So what can be done? For the moment, the kind of transformation that took place under the New Deal — a transformation that created a middle-class society, not just through government programs, but by greatly increasing workers’ bargaining power — seems politically out of reach. But that doesn’t mean we should give up on smaller steps, initiatives that do at least a bit to level the playing field..., for example,... universal prekindergarten education, paid for with a small tax surcharge on those with incomes over $500,000. ... For extreme inequality is still on the rise — and it’s poisoning our society."
  • Economic graph of the week, showing the trillions of output and income (roughly 5 to 10 trillion at current count) that have been stolen / lost due to the economic debacle caused by our leading financial institutions, including derelict regulatory officers and instutions. All to keep the casino going for the top end.

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