The carefree society (14 Dec 2010)

I attended this lecture at the New School yesterday given by economist Nancy Folbre about how capitalism has transformed patriarchy and how this has helped bring on the employment crisis. It wasn't a discussion so much of the much-reported mancession of 2008-09 as it was a broader look at how the domestic and affective work long performed by women for nothing has increasingly become waged work, and also how such work continues to be performed by women who are also working other jobs. Women have gained "self-ownership" thanks in some part to the logic of capitalist individualism -- they have been granted the opportunity to sell their labor power and hold property. This increased agency threatens the way capitalist societies have relied on women to do the work of social reproduction outside of the markets that are assumed to be natural to and rule all other forms of production and exchange. As women gain self-ownership, their view of the domestic work they perform becomes more capitalistic -- they want to be paid for it, or rather pay other women to do it. The wages for such work is low, because the work itself is easily commodifiable and requires no formal education and can be performed by members of the underclasses.

In neoliberal ideology, it's regarded as better to privatize welfare than use the state to pool risks associated with social reproduction. American society in particular has fostered an every-family-for-itself environment that intensified risks for everyone -- if your parents lose the Alzheimer's lottery, and you have to put them in a home, well, tough break for you. Don't expect your neighbor's tax dollars to help you out. If your company pulls out of the U.S. and lays everyone off, don't expect anyone else to help put food in your kids' mouths until you can't find new work. Instead, you are presumably supposed to think about what gave you the right to have kids in the first place, if you couldn't guarantee you could afford them.

As capitalism internalizes or subsumes more and more of everyday experience -- as more and more of the traditionally unpaid work of social reproduction becomes reconceived as commodified, exploitable wage work -- there's less reason to want to do any of that for other ideological reasons (because it is fulfilling in one's social role; because it's morally satisfying; because it is pleases God; etc.). But someone's got to do it, or else the system as we know it will inevitably end. The key question is who does this work, and for what reasons, for what sort of recognition. Capitalism -- flying in the face of patriarchy, to some extent -- tells us that money is the only form of recognition that matters.

In the neoliberal world, where the costs of social reproduction are not defrayed by the state but instead show up as costs carried unequally by every family (unless they can outsource it to cheap workers), affective labor -- caring for children, the elderly, spouses, etc.; anyone other than yourself -- becomes a sucker's game unless you get some sort of payment for it. It represents an opportunity cost, especially since connectivity makes it so that we always can be working: domestic work is performed at the expense of the more lucrative work that is available to women with more-marketable skills. So the logic implies that the more mothering you do -- the more time you spend parenting instead of something else -- the poorer you will be. And birth rates drop. It's easy to extrapolate these trends to a global capitalist world in which no one wants to be a mother and we all become inadvertent Shakers.

Of course, we may also try to get by with as little of this caring work as possible -- to have a society where "caring" is automated in social networks as sharing self-broadcasts and pseudo-connection, but we spend as little time as possible actually caring for others in person. The friction of everyday life, ordinarily smoothed over by care work, could just ramp up and up, particularly if the online mediation of our productive lives sufficiently isolates us so that the friction doesn't impede productivity. That is to say, there is no absolute amount of caring required to make capitalist society; it can always be squeezed, reduced, rationed with the price mechanism. As more care work becomes paid work and becomes priced, the more incentive we all have to economize on it. If caring is work -- as capitalism's logic encourages us to see it -- then we have too much incentive to end it, and bring about a society in which no one cares about anything except themselves.

The unemployed and the unemployable (3 Dec 2010)

Continuing the theme from yesterday's post, the habitual, ideological association of employment with social and self-worth makes reports like the most recent from the BLS completely unacceptable. This NYT piece by Catherine Rampell details some of the reasons. European data has shown that "people who become disconnected from the work force have more trouble getting hired, probably because of some combination of stigma, discouragement and deterioration of their skills." This leads to their complete segregation from the mainstream of life. Rampell's piece ends on this cheerful note:

“After a while, a lot of European countries just got used to having 8 or 9 percent unemployment, where they just said, ‘Hey, that’s about good enough,’ ” said Gary Burtless, a senior fellow at the Brookings Institution. “If the unemployment rates here stay high but remain relatively stable, people may not worry so much that that’ll be their fate this month or next year. And all these unemployed people will fall from the front of their mind, and that’s it for them.”

That's "it" for them? What does that even mean? They just become a permanent disenfranchised derelict class, ghosts among us reminding us of our doom if we fall afoul of the nation's HR departments? (Because we certainly want the warm, compassionate people in "human resources" controlling our social destiny.) And who are these people? Via Twitter, Mike Konczal (@rortybomb) notes that in the latest report, unemployment for people with a bachelor's degree jumped 0.4% over last month to 5.1%. Maybe these people will come to resemble the Japanese "herbivores" Rebecca Allen describes in this Semionaut post. The opposite of the self-reliant entrepreneurial ideal, these are passive Japanese men noted for their extreme narcissism, their fussy grooming habits, and their paralyzing risk aversion. Perhaps there will be hipster Hoovervilles in America once unemployability becomes an even more common outcome for those just graduating. Maybe this is already happening.

As Chris Dillow points out here, job insecurity is something of a constant, and recessions just amplify the volatility slightly. But this doesn't mean we should accept the fact that "even in the best of times, many of those in work are living lives of fear and insecurity" as the natural order of things. Dillow argues that "macroeconomic policy alone is a weak tool for reducing the individual, idiosyncratic risks that workers face," which means tinkering at the fiscal edges is an extremely roundabout way of trying to massage unemployment figures. Different kinds of action in a different realm of policy are perhaps required.

If the current level of unemployment in the U.S. is "structural" and is truly going to be persistent and cannot be ameliorated by state action, then other efforts must be made to shift ideological notions about the unemployed to ease the psychological damage -- to shift to a post-work welfare state that is justified by technological improvements that have made more jobs superfluous. (This is not so far-fetched; Gluskin Sheff's David Rosenberg points out that already "a record near 20% of personal income is now being derived from government transfer payments" in the U.S.) But it just doesn't seem to be the case that there is an actual shortage of tasks that we would want done as a society; it seems more that the economy has fallen under the direction of those who see more profitability in maintaining a reserve army of the unemployed than in finding new goods and services to produce. And everybody ultimately suffers then as the country inevitably stagnates. Think I'll take a cue from the herbavores and go pout in a mirror somewhere.

"Hipster on food stamps" (2 Nov 2010)

I haven't posted for a while, so I thought something with an SEO-friendly title would be a good idea. And I thought this was a pretty interesting essay by the Jacobin's Peter Frase, about misguided hatred for the "hipster on food stamps" discussed in this Salon piece from March. He points out how that phraseology invites contempt, because it trades on the idea that anyone who is arty and "creative" obviously has cultural capital and other ideological resources that should prevent him from being poor. Therefore the impoverished hipster must simply be a slacker (to reference a 90s-era proto-hipster archetype) who is voluntarily destitute, slumming it for hipster cred, thereby abusing a system designed to help the deserving poor, i.e. those social disadvantaged folks who, as Neil Young put it, "never go to school, never get to fall in love, never get to be cool".

Frase thinks working-class people who were enraged by "hipsters on food stamps" should stop scapegoating them and start, like Duke in Repo Man, blaming society. Frase writes:

People see others whom they perceive to have lives that are easier, cooler or more fun than theirs, and instead of questioning the society that gave them their lot, they demand conformity and misery out of others. But why? ... Even if creative and enjoyable lives are only accessible to the privileged, that’s not a damning fact about them so much as it is an indictment of a society that has so much wealth and yet only allows a select few to take advantage of it, while others are forced to waste their lives chained to their useless jobs and bloated mortgages.

The working-class Joe's hatred for the hipster, Frase argues, stems from an ideology that perverts the work ethic and regards art-making as worthless and working-class drudgery as a heroic embrace of duty or something. Maybe so. The working class suspicion toward the would-be bohemian fringe certainly has a long history. For example, check out the end of this clip from the 1968 film Psych Out, where the hippies are mocked and menaced by Reagan Democrat types. And as Mark Greif of n+1 reminds us in this essay, the 2000s vintage hipster began by appropriating motifs from poor-white culture. "Let me recall a string of keywords: trucker hats; undershirts called 'wifebeaters,' worn alone; the aesthetic of basement rec-room pornography, flash-lit Polaroids, and fake-wood paneling; Pabst Blue Ribbon; 'porno' or 'pedophile' mustaches; aviator glasses; Americana T-shirts from church socials and pig roasts; tube socks; the late albums of Johnny Cash; tattoos." No wonder there's some skepticism toward the "hipster on food stamps," who can be understood as merely taking this appropriational logic to its endpoint.

Obviously, those thefts belittle and caricature an entire social group's lived experience, ironizing it, cutting away whatever integrity members of that group might feel about what they do from beneath their feet. Not only do hipsters seem to be playing at being poor (which may or may not be true) but they add insult to injury by seeming to make fun of working class culture, treating it like a costume. At play in such appropriations is the kind of capital that allows various folk practices (for lack of a better term) to become suddenly recognized as creative or hip when a non-native adopts them and exports them out of the ignored niche and into "society" -- the realm recognized by the media. The culture is then understood as a fashion choice, not the product of social realities.

What that process does is make "creativity" something that by definition is not accessible to the working class. The appropriators are lauded as "creative" (that is, they seize upon the symbolic usefulness of deracinated practices and bring that meaning value to a broader public), not the poor whites, who are treated as though they are some anthropological artifact, as though they fundamentally lack the ability to be reflexive about what they do. They are, as workers always are, a resource to be exploited. As a result of that, hipsters and the working class are mutually exclusive; by definition, you can't belong to both sets. Starving artists are not proles. The very ability to be recognized as "creative" already sets one apart and above. Rich or poor, hipsters everywhere are a sign of social expropriation, of the semiotic value of denying full humanity to certain social groups.

Frase wants to resolve the opposition between artists and proles by positing a sort of post-work future beyond the alienation of wages, where all will receive a social wage: "Against the invidious politics of the work ethic, it's time to argue that some things should be granted to everyone, simply by virtue of their humanity. Even hipsters."

Interestingly, he doesn't take this argument to the next level: free from having to do work that is necessary merely for capital's valorization, workers are liberated to pursue meaningful, socially necessary work, which all will appreciate and understand as a kind of social art. In such conditions, with no basis for connoisseurial superiority in how one lives and works (which would become synonymous), hipsters would necessarily cease to exist.

(A better title for this post, I think, would be "Artists only.")

Financial innovation for suckers (2 Oct 2009)

A reader of Felix Salmon's blog named Chris seems to have written the comment heard 'round the blogosphere, about financial innovation and risk:

The person most willing to take on risk is the one unaware he is doing so. He charges no risk premium…
The resulting market equilibrium is that the guy who is unaware of the risk ends up loaded with it. Then the music stops.

Salmon's gloss on this is that it serves to explain investment banks' profits during the recent bubble: "They charge their clients a lot of money to take risk off their hands, and then they transformed that risk, using sophisticated financial engineering, into instruments which didn’t, on their face, look risky at all, and which could easily be sold to risk-averse investors. Bingo, massive profits." This means that financial innovation had become a matter of making risk disappear, not managing it better, as was so often insisted a few years ago (all that talk about how CDOs spread risk and made everyone safer, etc.). Financial innovations had become, as Salmon notes, "tools of obfuscation" in the hands of investment bankers. Further proof that the market for financial products is a market for lemons.

One might argue further that the innovation was designed to trick not gullible investors but the rating agencies those investors relied upon, only it's probably true that the rating agencies were in on the scam all along and didn't need deceiving -- they got paid when the instruments become AAA rated, and they helped the banks figure out how to make them pass muster.

It seems obvious that regulation should aim to prevent hiding risk from being a profitable business. If there is to be an overseer of systemic risk, that regulator's main function would be precisely to ensure that risk is visible and not tucked away in the shadow-banking system. The larger question is whether there is any way to direct innovation efforts toward things that actually help society rather than destroy it in the name of private gain.

Jobless recovery (21 July 2009)

At The Week Brad DeLong has an essay about the current jobless recovery, which appears to be a repeat of the denouement of the previous few downturns. Why jobless recoveries all of a sudden? DeLong argues that it has to do with a change in how employers regard labor as more fungible now.

Manufacturing firms used to think that their most important asset was skilled workers. Hence they hung onto them, "hoarding labor" in recessions. And they especially did not want to let go of their prime productive asset when the recovery began. Skilled workers were the franchise. Now, by contrast, it looks as though firms think that their workers are much more disposable—that it's their brands or their machines or their procedures and organizations that are key assets. They still want to keep their workers happy in general, they just don't care as much about these particular workers.

A few thoughts on this:

1. This would seem to fly in the face of the various paeans to the "skill-biased technological change" that is presumed to responsible for growing income inequality. That thesis presumes that changes in technology have made an individual's skills more valuable and capable of being leveraged more efficiently. What if technological change in the aggregate disempowers labor by deskilling it (as Marx generally assumed)? As a result, it's easier to find and train workers capable of filling positions, and easier to offer them only part-time work. If workers are wise, they will start hoarding information about the procedures in their office and try to make themselves indispensable, even though this is sure to gum up productivity. Perhaps this is the form modern labor actions will take -- employee resistance to codifying their function, to standardizing procedures, to training others, to cooperating with the process of making themselves replaceable.

2. No wonder people have suddenly begun worrying so much about their "personal brand" -- brand equity has become more important to a firm, conceptually, than loyalty to employees. Employees, to make themselves less expendable, may also need to work to integrate themselves with a company's brand, to merge the personal with corporate brand if possible, make them inseparable. The personal brand becomes far more important, too, in a labor market full of otherwise interchangeable parts. And with globalization and companies emphasizing their own flexibility rather than a paternalistic approach to workers -- no more company men, or lifelong job security -- we all can expect to be returned to the labor market repeatedly. So we will begin to need something more than a resume, something more comprehensive, like a personal brand. Depressing.

3. (added on 23 July) If this weren't already the case before, we now have more incentive to work on polishing our personal brand than improving our skills.

The brotherhood of hobos (10 Dec 2008)

Social services in America are probably sufficient to prevent a noticeable outburst of nouveau hoboism, no matter how long the recession lasts. We probably won't again see lean, bearded men riding the rails from agricultural day-laboring gig to gig, pleading for an honest day's wage for an honest day's work. Socially necessary labor isn't as fungible anymore, and the newly unemployed are not manual laborers so much as information processors who would be useless on a farm or in a factory anyway. And unemployment benefits are probably sufficient to prevent people from having to abandon their families and migrate aimlessly in search of employment.

But if we did have a return of the itinerant worker (who was not a Mexican immigrant), it might put to rest the myth of the hobo brotherhood that tends to crop up in Hollywood depictions. I have in mind one particular hobo trope, which I suspect is highly overrepresented: the way in which hobos carved fence posts with special symbols to share with other hobos important information about who lived there. This most recently popped up in Mad Men, where young Donald Draper has an encounter with a hobo who marks his family as evil.

Interestingly, the NSA, of all institutions, has a page detailing the history of this phenomenon.

The origin of the signs, like the Hobo name, is lost to history, but some of the symbols and their meanings have been documented. Carl Liungman’s Dictionary of Symbols makes a connection between the hobo signs in the U.S. with those in England and the gypsy signs used in Sweden. A few of the symbols are the same. Several look the same, but have a different meaning. And still more are completely different, even if the information being relayed is similar. Like any language, written or spoken, over time it develops independently to meet the needs of those using it.
What’s interesting to note, as Liungman points out, is that the system developed at all. Hobos, in general, travel alone and enjoy their independence. And yet, they still congregate in hobo jungles or travel with an occasional partner only to split when they decide to go a different way. Despite this preference for solitude, they still feel a certain camaraderie with their fellow hobos, an obligation to assist their brethren – thus, the creation of the signs and symbols.

I guess I am too cynical to believe in this mysterious camaraderie among the hobo brethren, or at least believe it was as widespread as you'd think from the movies. Hollywood producers and writers must find this romantic image of hobo communication irresistible; it perfectly captures the idea of their leading a secret life of adventure and all working together to subvert square, straight life. It makes it seem as though hobos have a code of honor, like knights errant or repo men. It almost encourages us to regard hoboism as something one volunteers for rather than something one is driven to by economic misery, anomie, or the stultifying conditions of everyday life.

Still, you wouldn't think drifters would be so cooperative. Their incentive to help other drifters doesn't seem particularly high, as the more drifters there are, the more they will be regarded negatively. Marking a fence post to indicate that the getting is good would probably alienate those who have helped hobos before, once they are inundated with new ones. And you'd think the choice to drift would indicate an inability to cooperate with social norms, with the ethic of cooperation that getting along with world requires. These are people who can't integrate -- I know that we are supposed to regard this as proof of their purity, their inability to get along in a corrupt system and deal with all the plasticity and checking out of the rat race. Kind of like how the crazy people are the ones who are really sane.

Consuming and the safety net (8 Dec 200)

As part of my ongoing preoccupation with Chinese consumer demand, I felt obliged to link to this editorial from today's FT. The editors raise a claim frequently asserted in evaluating China's consumer behavior, that "China's citizens save because they fear nobody will look after them in bad times -- and bad times are coming." You'd think that the People's Republic would have a more robust safety net in place for the people. It may be that one needs cash on hand to distribute the bribes and make the black-market purchases to get something of a standard that we can find straightforwardly on the market (though affording it is becoming more and more of a problem).

Anyway, the rationale implied here is that in Western countries the state supplies extends much-greater security to its citizens; in effect, it saves for them and covers their emergency needs. This the populace can go out and spend as much as it would like on luxuries much more comfortably. So a good way to stimulate the economy would be to strengthen the social safety net -- more unemployment benefits, affordable health insurance, more generous social security benefits, and so on. Under such a regime, we would work to earn the money for the frivolous stuff that we use to define ourselves and shape our identity -- the markers of distinction that have preoccupied us throughout the consumerist boom. But the state would assure that our subsistence needs are met.

This seems the implicit promise of consumer capitalism -- that society is so prosperous that we can concentrate all our efforts on self-fashioning (even if these ultimately make us insecure and existentially angsty). But of course "we" means "middle class and up"; there remains the strata of lower class workers who have little margin for error with money, for whom identity creation in the hipster mode remains unthinkably. These are the people our society chooses to motivate with blunter incentives -- starvation, homelessness, etc. And safety-net improvements will most likely not be made for lower-income people in practice (except incidentally), since in helping them, no extra cash is freed up to buy baubles and prop up demand. Some might even argue that allowing the lower-income people to play at homeownership through subprime mortgages caused the crisis in the first place -- a distortion that puts the cart before the horse. Financial engineers needed loans to work with to manufacture more exciting securities; unthinkable loans were then extended to meet this need (not the "need" of poor people to own McMansions).

I wonder whether the degree to which the middle class must rely on the state safety net is the degree to which it must be withdrawn from the lower classes from whom the middle class must remain distinct. They can't be standing in the same welfare line -- that would be a scandal. Better not to extend welfare to the lower classes at all.

Greenspan's principal-agent problem (24 Oct 2008)

Former Fed chairman Alan Greenspan testified in Congress yesterday on his contributions to the current financial crisis. To the surprise of virtually everyone, he admitted fault. House Oversight Committee chairman Henry Waxman basically told him that he was making decisions ideologically and that his ideology was inadequate; Greenspan admitted it was true.

“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms,” Mr. Greenspan said. Referring to his free-market ideology, Mr. Greenspan added: “I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.” Mr. Waxman pressed the former Fed chair to clarify his words. “In other words, you found that your view of the world, your ideology, was not right, it was not working,” Mr. Waxman said. “Absolutely, precisely,” Mr. Greenspan replied. “You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.”

This is flabbergasting, most of all Greenspan's claim that he believed that the "self-interest of organizations" would protect shareholders. It's almost as if he'd never heard of the principal-agent problem. Bankers make big bonuses when they take big risks and increase revenue; those risks are in the interests of their bonuses, not in the shareholders' long-term interests. And what's more, shareholders had even less idea of what was happening on trading floors with respect to derivatives and securitizations and the whole alphabet soup of financial arcana. Management was making bets with shareholder's equity. Incentives were misaligned. It was only a matter of time before the whole system melted down. But this isn't the failure of the "free market," at least how your average free-market ideologue would understand it. Dean Baker explains how Greenspan's testimony makes him a faux Randian. Ayn Rand would say be as greedy as possible and let shareholders look out for themselves, if they can. And the fee market ideologue would say those who fail, fail; they don't get bailed out. But that is not what was happening on Wall Street, which is not the "free market". It's not free because the government and taxpayers were tacitly paying for it all along:

The banks were able to get access to vast amounts of capital because everyone had faith in the "too big to fail" doctrine. In other words, all the people who lent Bear Stearns, Lehman, AIG, Goldman and the rest money felt secure because they thought the government would come to the rescue at the end of the day if the hotshots messed up big time.
With the exception of Lehman Brothers, these folks were right. The Wall Street hotshots were gambling not only with their shareholders' money, but they could also count on the security blanket of a government bailout if they really got into trouble. In other words, they were gambling with the taxpayers' money also.
This is important because the Wall Street hotshots didn't have and don't want a free market. They want to be able to take big risks with other people's money, both their shareholders and the taxpayers.

The point, as always, is that talk of "free markets" is a disguise for trying to slant the markets in your favor. The same goes for "spreading the wealth," as Will Wilkinosn explains: "democratic politics just is a wealth-spreading exercise, and there’s no avoiding it. If you’re gonna pick sides, you’re just picking your favorite redistributive poison."

Judging by what has happened to income distributions over the past eight years, Republicans want to spread it up, concentrate it in the hands of the established and already well-connected. Democrats -- I hope -- intend to spread it around.

The lost culture of thrift (22 July 2008)

David Brooks has been on a kick lately of denouncing consumers for their addiction to shopping and how they have lost touch with the "great bourgeois virtues." In his most recent effort in this vein, he is responding to a Gretchen Morgenson piece about personal debt, and in particular one woman, Diane McLeod, who's in way over her head. Who is to blame? Borrowers or lenders? Brooks says neither, and instead posits a "third way" of explaining how people get in over their head:

people are driven by the desire to earn the respect of their fellows. Individuals don’t build their lives from scratch. They absorb the patterns and norms of the world around them.
Decision-making -- whether it’s taking out a loan or deciding whom to marry -- isn’t a coldly rational, self-conscious act. Instead, decision-making is a long chain of processes, most of which happen beneath the level of awareness. We absorb a way of perceiving the world from parents and neighbors. We mimic the behavior around us. Only at the end of the process is there self-conscious oversight.
According to this view, what happened to McLeod, and the nation’s financial system, is part of a larger social story. America once had a culture of thrift. But over the past decades, that unspoken code has been silently eroded.

That sounds reasonable enough, but as Tanta at Calculated Risk points out, it's always a little bogus to preach a return to a nonexistent golden age.

This nostalgia for the lost "culture of thrift" always gets on my nerves. America has always had both a "culture of thrift" and a "culture of conspicuous consumption." We have had our Gilded Ages before the year 1992. The "BankAmericard" (which became the Visa) was invented back in the "thrify fifties," about ten years after economist James Duesenberry first popularized the phrase "keeping up with the Joneses." Collapsing the history of America into a lost golden age of thrift contrasted to a degenerate present of consumption excess is a reliable sign you're in the presence of ideology.

Of course, that's a given with Brooks that you are in the presence of ideology, though to be fair, it's safe to say ideology is present in any sort of opinion piece. Brooks wants to pin our fall from thrifty grace on housing wealth and changing norms.

Some of the toxins were economic. Rising house prices gave people the impression that they could take on more risk. Some were cultural. We entered a period of mass luxury, in which people down the income scale expect to own designer goods. Some were moral. Schools and other institutions used to talk the language of sin and temptation to alert people to the seductions that could ruin their lives. They no longer do.
Norms changed and people began making jokes to make illicit things seem normal. Instead of condemning hyper-consumerism, they made quips about “retail therapy,” or repeated the line that Morgenson noted in her article: When the going gets tough, the tough go shopping.

Brooks probably wants to temper Morgenson's thesis that lenders have deployed sophisticated marketing techniques to encourage more people to take on more debt and pin the blame those who some reactionaries have called "predatory borrowers". But oddly enough, Brooks's account roughly fits the leftist theory that Western countries entered into a late-capitalism phase after World War II, in which the economic emphasis shifted from producing to consuming. Since then, the theory goes, the populace of mass consuming sheep have perpetually had new needs induced in them to keep GDP growing for its own sake, regardless of whether or not that actually improves society's living conditions. (Which is not far off from what I think -- that consumerism in our society is the way to secure social approval and communicate our sense of self to others. Other routes to recognition have been systematically sealed off, so it's harder to summon the wherewithal to derive esteem or even self-knowledge from any actions other than shopping. Hence, the ownership society -- we are what we own. And this happens to nicely fit the lenders' incentives. They profit through the myriad transactions required to keep the money needed for all these self-fashioning ownership projects circulating.) You'd think Brooks would adopt the conservative tack that consumer goods have democratized luxury, making income inequality irrelevant, but here he is, like a latter-day Carlyle, faulting "mass luxury" as a kind of moral failing.

So what's his game? Retro-conservatism? He implies (somewhat risibly) that he's a Burkean conservative in his op-ed. But I think Tanta has him pegged when she argues that he is trying to divert blame for our decadent social mores away from the media establishment he is a part of:

Brooks, writing in that influential arbiter of taste the New York Times, somehow fails to notice the role of the media in constructing popular standards for "risk" and "normal" consumption patterns. In Brooks' weird little world, Americans responded to "rising home prices" that they apparently directly perceived, without media intervention. It was those house prices that "gave people the impression that they could take on more risk," not the reporting on house prices or the columnists who solemnly opined that these prices meant that people weren't taking on more risk by buying or refinancing. How incredibly convenient that line is.

Indeed. So when Brooks writes, "In a community, behavior sets off ripples. Every decision is a public contribution or a destructive act," he ought to look in the mirror and think about what sort of contribution his own books celebrating bourgeois bohemia and living on "Paradise Drive" in suburbia have made.

Flexible labor utopia (14 August 2007)

In its most recent issue, BusinessWeek has a package of articles on the future of work, and not surprisingly, these mostly adopt the viewpoint of management, regarding labor as a data stream of productivity and costs. This is a common euphemistic practice, to conceal the pain of workers behind dehumanizing terminology -- empowered workers become "a tight labor market" that's responsible not for a improved standard of living for workers (for that all credit must go to management's brilliant efforts to extract more productivity from said labor market without increasing costs) but only inflationary pressure and macroeconomic danger. This damned tight labor market is keeping the Fed from cutting interest rates and giving the stock market a boost; if only more workers would be laid off and the reserve army of the unemployed were beefed up a little bit, then we'd have ripe conditions for the good kind of growth -- get more of the fruits of economic growth in the hands of passive investors rather than the workers producing it.

It's enough to make one want to dream of a world without a parasitic management stratum, and interestingly enough, the BusinessWeek package offers a hint of one form such a world might take. One article described Amazon's Mechanical Turk program, which seeks to match people with free time with simple jobs that can be done on computers but only with human guidance. The name Mechanical Turk is a reference to the famed hoax where a little chess genius hid inside a cabinet and pretended to be a machine. In other words, one got from the Mechanical Turk human expertise in the guise of a machine. So Amazon calls it artificial artificial intelligence -- it allows corporations to use computer networks to harness uniquely human skill sets. But the crux of Amazon's program is to liberate work from the managerial structures in which it is customarily contained -- rather than show up at an appointed time and labor for a set number of hours for a by and large inflexible wage on the same tasks over and over again, the Mechanical Turk system portends relations of production in which workers would elect to work only as much as they chose to on tasks and for wages they basically select from a menu that takes into account their particular skills. This is how Amazon describes it (and I apologize in advance for the surfeit of business-ese in this excerpt):

Humans are much more effective than computers at solving some types of problems, like finding specific objects in pictures, evaluating beauty, or translating text. The Amazon Mechanical Turk web service gives developers a programmable interface to a network of humans to solve these kinds of problems and incorporate this human intelligence into their applications.
For businesses and entrepreneurs who want tasks completed, the Amazon Mechanical Turk web service solves the problem of getting work done in a cost-effective manner by people who have the skill to do the work. The service provides access to a vast network of human intelligence with the efficiencies and cost-effectiveness of computers. Oftentimes, the cost of establishing a network of skilled people to do the work outweighs the value of completing it. By turning the fixed costs into variable costs that scale with business needs, the Amazon Mechanical Turk web service eliminates this barrier and allows work to be completed that before was not economical.
For people who want to earn money in their spare time, the Amazon Mechanical Turk web site solves the problem of finding work that they can do wherever and whenever they want.

I bolded what seems to me the key notion here, that capital can thrive by getting rid of the overhead costs of committing to maintaining a workforce. That sounds like a bad thing unless you are enamored of the utopian possibility that this will mean much more flexibility for labor as well as producers. If you are sufficiently optimistic, you can see in work distributed over the internet an end to the sites of exploitation, the factories and offices where surplus value is extorted. And with surplus value remaining with the worker, we effortlessly move out of the era of capitalist relations into something new.

Needless to say, there is reason to be skeptical of this revolution-free path to greater egalitarianism and better quality of life for workers. Turning the internet into a giant worldwide labor market is likely to cause massive amounts of "dislocation" Currently, a class divide exists between those who have access to a feel comfortable in the internet environment, and those who are afraid of breaking the entire computer by pressing the wrong button and erasing everything. The divide is in part generational but is also a matter of income and autonomy -- the income to have access to the latest technological innovation, and the autonomy to teach oneself how to use it successfully. That autonomy may come from higher education, or it may be part of the apparatus that comes with a bourgeois upbringing. At any rate, the technological dispersal of work will only benefit those equipped to navigate the system, and the amount of work to be dispersed in this way will likely remain a scarce commodity, as a larger and larger bulk of jobs in the future will consist of face-to-face services -- care for the elderly, processing food, nursing, etc.

Still, it's pleasant to dream about being able to log on for a few hours to replenish your account doing whatever task that's available that looks intriguing and then spending the rest of your time furthering your own projects, perhaps generating tasks you'd be willing to pay someone else for help with. We could all be middle managers, grunt workers and entrepreneurs all at once, depending on the time of day and the energy we're inclined to invest.

Bourgeois blues (19 June 2007)

With poor people literally lining up at paycheck loan kiosks, it can seem distinctly whiny to fret about middle-class suffering, as law professor Elizabeth Warren did in this testimony to the Senate Finance Committee from May. But I found it pretty persuasive, at least for its insight into what Americans are consuming. Routine critiques of consumerism -- my own included -- tend to focus on frivolous overconsumption of branded products or status goods, but Warren points out that spending is trending downward for clothing, food, appliances and cars. Spending on electronics is up, but understandably so, considering recent technological changes. Instead, spending is going increasingly to what Warren labels as fixed costs -- housing, taxes, health care, child care, education and transportation expenses. These costs are exacerbated by the fact that both parents in a child-rearing household have to work, in part to keep up with these very expenses, creating a self-perpetuating cycle. (It also left me wondering why anyone chooses to raise children -- from a rational-economics standpoint, the incentives are all wrong; I suppose the desire for the music of children's laughter is an exogenous variable.)

Warren then offers some middle-class friendly policy prescriptions: subsidies for education, better health insurance, universal preschool, and more-stringent regulations on credit markets, which she details further in this piece for the journal Democracy. These seem like wise political ideas, since they are likely to appeal to voters in contested districts and battleground states. And they would probably help alleviate what Jacob Hacker has dubbed the Great Risk Shift, the recent tendency of government rescinding the safety net it once promised. Above all, such prescriptions would assure that the middle class lifestyle would appear as an entitlement to those already possessing it, but they may not do much to give hope to those on the outside that they ever might enjoy such privilege. Directing entitlements at the middle class may only help the middle class guard its turf, to build the walls higher, or help them maintain a safe distance from the lower classes they are trying to differentiate themselves from.

Desperation as business model (8 June 2007)

A few days ago, Amanda Marcotte wrote an astute entry regarding this BusinessWeek story about subprime lending and other poverty exploiting rackets. The general gist of the article is that the poor are often in tenuous and desperate situations that make them easy to exploit with usurious interest rates, rent-to-own ripoffs, exorbitant mark-ups and other opportunistic schemes. Just go into a ghetto "grocery store" or check the storefronts in a rundown shopping center on the wrong side of town and you'll get the picture. Paycheck loans, rent-to-own outfits, dollar stores, Chinese takeout, etc -- businesses that set high margins on small-ticket transactions. As Marcotte points out, desperation is an opportunity, as long as you lack the requisite scruples. You can take advantage of the lack of social capital in poor neighborhoods and present your exploitative behavior as a service. Without social capital, without the education to understand complex financial transactions, without legal protections being enforced for them or the political clout to see their interests protected, without the potentially powerful word-of-mouth networks or plain old money to smooth over life's frictions, the poor have no leverage over the businesses that deign to serve them, and the result is they are served only on vulturous terms. (One of the many ways disparate power among participants distorts the workings of the market, one of the heterodox views of the economists Chris Hayes considers in this Nation story.)

Insecurity in general is the basis of a lot of retail business, which is why so many ads are designed to generate feelings of insecurity and inadequacy. The poor, of course, don't need ads to make them feel insecure, which makes them a cost-effective target -- though ads are part of the discourse that establishes what is culturally normal, defining what it means to be impoverished. The bogus premise of equal opportunity is widely enough held in America that the poor must keep up appearances lest it seem that their poverty is their own personal fault. Of course, to keep up, they must take on risks and terms that sink them in debt traps and assure their continued failure to achieve the bourgeoisdom the signals normalcy -- that allows you to feel that you are the target of so much of the media's messages. The added bonus is that the working poor assume responsibility for their poverty as a kind of personal, moral failure -- this is what The Hidden Injuries of Class, by Sennett and Cobb, is all about.

We can fault business for following their incentives to profit at the expense of those with little defense and no social safety net, but it seems the counterveiling power of government is more likely to correct the problem then a sudden and complete change of heart among competitive firms. But politicians rely on business contributions to finance their campaigns, which leads to legislation that rewards business (the recent bankruptcy bill exemplifies this). So without any institutional power, the working poor has no reason not to seize the only form of power left to them. From Marcotte's entry:

Charles H. Green points out that this untenable exploitation of the working poor has become such a morally troubling issue that up-and-coming capitalists are beginning to turn on the system.

"One healthy sign: my 30th reunion at Harvard Business School last fall. The most heavily attended lecture was by Professor Bruce Scott, who spoke about the global trend toward concentration of wealth. We’re moving toward looking like Rio de Janeiro—armed gated communities surrounded by violent gangs. Scott’s lecture got a standing ovation—both in his lecture room, and in the audio-connected overflow room, hastily put together to accommodate the crowd. This from the old school crowd at HBS—the West Point of capitalism. There is hope."

It’s an interesting dilemma, from the capitalist point of view. Keeping the poor living from paycheck to paycheck and in constant debt serves two purposes. From the article, you can see that it’s actually quite profitable, especially in a deregulated era like ours. Second of all, desperation breeds complacency, to a degree. Workers who are constantly treading water and robbing Peter to pay Paul are likely to suffer all sorts of indignities to keep their jobs, including taking lower pay than they’re really worth if it means securing the jobs that much more quickly. But it has to be controlled desperation—there’s a tipping point where the poor are so much in debt to the rich that they simply can’t pay it all back and the system could collapse on itself. It’s happened before in history, many times, and it can happen again. Opposition to usury isn’t just about morals, but protecting a system that ultimately benefits the rich by keeping a check on the excesses that threaten the entire situation.

Very depressing, that, and the classic dilemma of all ameliorating, incrementalist approaches to social change: You end up perpetuating systems of oppression, making them more tolerable for the oppressed. But then you consider how much misery, chaos, and evil the typical revolution unleashes, and it's hard to think of any course of action worth advocating.

What's left (14 May 2007)

Zygmunt Bauman offers two defining principles of Leftism, something that seemed pertinent after the detour into Hegemony and Socialist Strategy over the weekend.

The first assumption is that it is the duty of the community to insure its individual members against individual misfortune. And the second is that, just as the carrying capacity of a bridge is measured by the strength of its weakest support, so the quality of a society should be measured by the quality of life of its weakest members. These two constant and non-negotiable assumptions set the left on a perpetual collision course with the realities of the human condition under the rule of capitalism; they necessarily lead to charges against the capitalist order, with its twin sins of wastefulness and immorality, manifested in social injustice.

In other words, leftist politics are a matter of supplying a social safety net and inverting the assumption that socioeconomic benefits trickle down from the top, after the wealthiest of society are given the leeway to pursue their greed to the utmost. Wealth provides a wider latitude of opportunity, and those on the Right tend to argue that inhibiting those opportunities compromises possibilities for everyone on down the totem pole.

But if Bauman's principles are respected, we must consider the person in society with the least social and financial and human capital as the focus of our concerns. Capitalist society's failure to enhance these people's capital is what makes it guilty of "wastefulness and immorality" -- strange charges when you consider capitalism's heedless drive for efficiency is generally its operating principle. Capitalism tends to concentrate wealth in the hands of the few, who then use their enlarged opportunities to continue to consolidate their advantages. Political disagreements often revolve around whether this process generates opportunities for everyone else, has no particular net effect on opportunity, or positively harms those left behind. That in turn hinges on how one views the problems of relative wealth, egalitarianism, environmental risk, community solidarity, ambition's place in meritocracy, the danger of moral hazard in social protections, and so on. To my mind, the most compelling argument regarding the dangers of economic inequality is that it yields political inequality; the wealthy are able to seize control of government and use it to protect their interests at the expense of opportunity for others -- social mobility is inhibited and democratic processes devolve into sham practices, with consumer choice masquerading as political choice, and prosperity of the "look how many flat-screen TVs Americans bought" sort supplanting freedom. So in a statement like this...

Unless closely watched and checked, markets tend to produce a lot of waste and lead to the deepening polarisation of human conditions and life prospects. They also generate insecurity, promoting and reinforcing feelings of abandonment, alienation and loneliness.

...I would want the remark about waste clarified, given some kind of measure. It may be that capitalism's hostility to waste, its tendency to label nonproductive behavior as inefficient and wasteful, that yields the polarization, the alienation, the loneliness. Capitalism's view of waste needs to be set against a leftist version that's persuasive, a definition of waste that hinges on a sense of a wasted life, of insecurity as wasted, counterproductive and socially corrosive mental energy.

Bauman translates his two defining principles into this definition:

The left is best described as a stance of permanent criticism of the realities of social life, which always fall short of the values a society professes and promises to serve. The left is not committed to any specific model of human togetherness: the sole model it refuses to tolerate is a regime that deems itself perfect - or at least the best of all possible worlds - and therefore immune to questioning.

This definition shows Bauman has assimilated of Laclau and Mouffe's point of there being no given, natural inevitable constituency for socialism, and it hearkens to the notion of permanent revolution. He seems to elevate critical thinking to the level of an end in itself, not necessarily because critical thinking is a practice commensurate with the dignity of humankind (which is why I'd advocate it for its own sake) but because of a realist assessment of what's possible. This is akin to Zizek's prescription for "pessimistic leftism", touched on in this brief interview.

But ultimately he conceives of Leftism's mission to promulgate the "social state" -- something like Sweden. Which means the left must come up with an answer to the ammunition provided by stories like this one, which suggests the incentives in the Swedish system are creating freeloaders rather than the fully dignified humans we leftists would like to see.

Cost of children (23 October 2006)

Economic determinism at work: My disinclination to start a family has always seemed to me a deeply personal decision based on my gut reactions to things like baby talk and steaming piles of human feces. But it may be that my reactions are colored by economic realities: In this LA Times editorial, Jacob Hacker applies the argument he presents in The Great Risk Shift, which is summarized in a series of posts on the Washington Monthly's blog, to the costs of raising children and the fact that households of single people now outnumber those of marrieds.

The family used to be a refuge from risk. Today, it is the epicenter of risk. And, increasingly, families are a source of risk as well. Because it takes more work and more income to maintain a middle-class standard of living, financial shocks are more threatening for families. What happens when a woman leaves the workforce to have children? What happens when a child is chronically ill? What happens when a spouse loses his or her job? And what happens when families fall apart?
We are not used to thinking of children as an economic liability, but the facts are clear. According to 2005 calculations by the U.S. Department of Agriculture, raising a child to age 18 will cost almost $237,000 for a middle-income family. And that leaves out the upward-spiraling college tuition that is now a required ticket for admission into the middle class. Fully one-quarter of "poverty spells" — periods in which family income drops below the federal poverty line — begin with the birth of a child.
Spouses, of course, do not equally share the investment of time and money that raising children entails. Women still mostly care for the child — and bear the greatest cost. Their careers are most likely to be disrupted by family events. If they work, their jobs are most likely to be low-paying and with poor benefits. And they are most disadvantaged when families fall apart.

In short, raising a kid is expensive and extremely risky and could result in your spending many sleepless nights wondering how to pay bills and avoid the dire poverty you've set a course for. Perhaps if we had a society that truly valued family, we'd have governmental protections like they have in France, where they also have a rising birth rate and are free from hyperbolic worry of demographic disaster.

Of course we are encouraged to embrace the ideology that families are made by love, not money (which even a cursory knowledge of the history of the family disproves), and that it's callous to think of the expense of a child, to put a price tag on the miracle of life. People who prefer to treat themselves -- with free time, hobbies, solid nights of sleep, financial security, the luxuries of dining out or taking in cultural events without the stress of penny-pinching or baby-sitter hunting -- instead of make sacrifices for children are regarded suspiciously as selfish monsters (probably liberals and hence hedonistic sybarites) whose lives will ultimately lack meaning. Women are suspected of ignoring their "biological clock" and suppressing their natural maternal instinct, though as Brad Plumer explores here the maternal instinct is something of a recent invention. "In her new book, Laura Kipnis points to a related concept—the idea that mothers and infants 'bond' at birth. According to Diane Eyer, the whole notion is actually something of a scientific fiction, first pushed in the 1970s, when a large number of women where entering the labor market for the first time and messing up cultural conceptions of a woman's place in society. Many people still believe that mother-infant "bonding" exists—articles are still cropping up in the news about how painkillers and the like affect the process—but to a large extent it appears to be invented." Plumer cites this passage from Kipnis's book, The Female Thing:

With the industrial revolution, children's economic value declined: they weren't necessary additions to the household labor force, and once children started costing more to raise than they contributed economically to the household, there had to be some justification for having them. Ironically, it was only when children lost economic worth that they become the priceless little treasures we know them as today. On the emotional side, it also took a decline in infant-mortality rates for parents to start treating their offspring with much affection—when infant deaths were high (in England prior to 1800 they ran between 15 and 30 percent for a child's first year), maternal attachment ran low. With smaller family size… the emotional value of each child increased; so did sentimentality about children and the deeply felt emotional need to acquire them.

As children become more expensive, the more acute becomes our need to feel that they are worth it emotionally. The amount we love children, then, may be correlated to how much hardship they give us, how gratuitous they are to our material well-being. To use a totally trivializing comparison, this is like when I blew my allowance money on a copy of the truly awful Frankie Goes to Hollywood double album Welcome to the Pleasure Dome because I swallowed the hype about it. (I learned some hard lessons about the British music press and the costs of juvenile Anglophilia, but that's another story). I had to pretend I liked it harder and longer because I spent so much ($14 in mid 1980s teenage dollars) on it.

But if Hacker's right, the ideology of treasuring children and yearning for them only goes so far; for bourgeois folk like me, it may stop when children are no longer merely a personal inconvenience but a threat to our accustomed station, when having a kid means surrendering our class prerogatives. In response to the threat children pose, we may begin to exaggerate the other nuisances they present to solidify our resolve.