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Friday, December 14, 2018

CONTINUING THE DISCUSSION


My continuing reflections on the essay by Piketty et al. have elicited a number of interesting and suggestive responses, including those of S. Wallerstein and Jerry Fresia.  Rather than respond to their comments, with which I largely agree, I should like to add to the discussion by going into several matters that may help us to advance our thinking about the present situation.  By the way, I am well aware that major developments are unfolding in many parts of the world, including China, India, and a number of European nations, but I simply do not know enough about these matters to form or to express intelligent opinions.  My silence is not at all a judgment on their significance, simply a consequence of my ignorance.

First of all, let us keep in mind that there are three elementary facts about any society that, more than anything else, determine its economic and political trajectory.  The first is the proportion of the working age population in agriculture.  The second is the proportion of the total population of working age.  The third is the rate of growth of the population.  The first determines how many people of working age are freed up to engage in manufacture or services or other productive activities.  The second determines how heavy the burden is on the working age population of supporting the non-working age share of the population in addition to supporting itself.  The third determines [or at least shapes] the rate of social saving required to expand the total output to accommodate the additional people.

The so-called Neolithic Revolution took humanity from a hunting/gathering or foraging stage of existence, by means of the invention of agriculture and the domestication of animals, into a productive stage that freed up people to build cities, form governments, muster armies, fight large scale wars, build places of worship, and also, most important of all, write philosophy books.

The Industrial Revolution dramatically reduced the share of the population engaged in agriculture and ushered in the world in which virtually everyone on earth lives.  In my view, far and away the most consequential revolutionary change of the past half century has been the transformation of China and India [and other smaller nations] from primarily agricultural to primarily industrial or post-industrial economies.

This interactive chart shows the percentage of the population of working age, by country, over the past forty-eight years.  The United States is in the middle of the pack with Korea at the top and Israel at the bottom.  The working age share of the U. S. population has risen and fallen between 62% and 66% [roughly] over that time.

The next thing we need to know is the proportion of the working age population in the labor force.  This requires some explanation, as it is not obvious what that means.  [In my multi-part tutorial, entitled “The Study of Society,” accessible via the box.net link at the top of this blog, I talk for a bit about how this notion changes for pre-capitalist, capitalist, and socialist societies.]

The U. S. Bureau of Labor Statistics [BLS], as you probably know, keeps track of monthly and yearly changes in the unemployment rate, defined simply as the proportion of the population in the labor force that is not employed full time.  To determine this, it selects a carefully crafted sample of 50,000 households, and sends people out each month to ask of the working age people in each household, “How many working age persons are there in this household, and of those, how many were employed full time last month?”  According to this chart, 73.3% of America’s working age population is in the labor force.  [Once again, the U. S. is more or less in the middle range among nations in this regards]

Now the BLS is well aware that there are people who would like to work but have given up looking because they cannot find jobs.  It dubs these folks “discouraged workers,” and it keeps track of them by asking, in its monthly surveys, “Have you looked for work in the previous twelve months.”

Needless to say, in every conceivable category, things are worse for African-American and Hispanic workers.

Why does all of this matter?  Because the people not in the labor force are people, as are the unemployed and the discouraged workers, and they are mostly part of what I have been calling the Bottom Half.  [Obviously, wives of rich men are not, but an ever larger proportion of working age women are in the labor force, and as you would expect, they are disproportionately at the lower end of the income spectrum.]  If we are trying to think through policies designed to alter the steeply unequal [and unjust] shape of the income distribution, we need to figure out how to bring more working age unemployed men and women into the labor force and prepare them for and offer them decent jobs.  This is not the same thing as lowering the official unemployment rate, which is currently at a multi-decade low.

Mind you, I do not have viable, politically feasible proposals in my back pocket, but I think it helps to set the scene in this way for our thinking, so that we can move beyond the usual proposals, admirable as they may be.

I will close by saying that I agree both with S. Wallerstein that it will be extremely difficult to build solidarity between those in the Bottom Half and those in the 50/90 range, and with Jerry Fresia that we must look at the bipartisan corporate neo-liberal consensus on which America’s party politics have rested since Carter [I would have said “since Reagan,” but there is only a few years’ difference there, and I bow to his superior memory.]



6 comments:

David Palmeter said...

Just for the record, I want to record my frustration at not being able to follow this discussion, as I think Piketty has some very important things to say. I'm on post-op pain killers and when I'm not sleeping, I'm on cloud nine. I do plan on reading all of it in a few days.

Jerry Brown said...

I'm not sure why OECD reports US labor force participation rate at 73.3% but BLS reports it at 62.9%. Which is down from the pre-recession peak of 66.4% in December 2006. Since most of the media reported labor statistics are from BLS (and because it shows your point more clearly), you might consider using their stats.
https://www.bls.gov/charts/employment-situation/civilian-labor-force-participation-rate.htm

For a fairly in depth analysis of the current US labor market from a labor friendly perspective you might be interested in this link-
http://bilbo.economicoutlook.net/blog/?p=41099

And I of course am interested in your proposals, whether they are politically feasible and viable or not. I'm not even sure what the 'usual' proposals would be anymore. Most people look at the headline U-3 rate and think there is no problem. I'm happy you are looking beyond that.

s. wallerstein said...

When did the sense of cultural affinity between the bottom half and the middle 40% end?

Growing up in the U.S. in the 50's, it seemed to be there. As a kid from the middle 40%, I went to high school with lots of kids from the bottom half and while I knew that I was going to the university and they were not, I didn't feel the cultural gap between them that people younger than me feel nor did I feel superior to them because I probably was going to earn more money and have a higher social status than them. By the way, that feeling of affinity was not due to any leftism on my part because I felt it before I began to become politically aware and politically leftist.

My father's generation, the ones who lived through the depression and served in the army in World War 2, did not seem to feel that cultural difference or a sense of superiority towards the lower 50% at all. My father was very ambitious and not especially leftist (he voted for the Democrats), but he and the people from his generation (from the middle 40%) did not see themselves as different from the lower 50%, just as more successful or
better at playing the game. Maybe it was because they had all served in the army together.

However, when I talk to younger relatives (from the middle 40%), they see themselves as different than and superior to the lower 50%, even though they may also see themselves as progressives. They're all in favor of gay marriage, trans gender rights, etc., by the way.

Dean said...

"When did the sense of cultural affinity between the bottom half and the middle 40% end?"

Google's Ngram viewer tells a tale with the ngram "wrong side of the tracks": https://bit.ly/2UKbolf The sudden appearance and increase of the term occurs around 1929. Its use climbs steeply until the mid-'40s, then drifts downwards until 1980. Arguably, then, it appears the cultural affinity was at least ruptured thanks to the Depression. I myself grew up on what in my suburban community of the '60s and '70s was "the wrong side of the [literal] tracks," yet my family more likely was from the middle 40%.

Jerry Fresia said...

Interesting. I hadn't know of those three measures. Makes sense.

Hardly a superior memory; living in a small village with no leftist within 100 miles, I spend a regrettable amount
of time clicking through youtube videos. In this one we find Carter running through his list of deregulation accomplishments (at the 3:17 mark): https://bit.ly/2qPVhHs

Also, the consensus around neoliberalism has multiple roots, but one was the success of "excessive" democracy of the 60s. So was stagflation which frightened leaders of the rising finance captial sector. Elites then hurried, in the mid-70s, to come up with a plan to thwart "state overload" ("excessive" democracy) and do whatever it took to liberate capital. It is interesting because we generally mark the take-off point of neoliberalism with the regimes of Thatcher and Reagan - which is correct - because what this demonstrates is how party realignments (of which the election of Reagan may have been one) first require transformations in the economy - the rise of finance capital in this case, and then and only then the successful capturing of the state with new political alignments which can propel the new doctrine forward.

Howie said...

Jerry:

I'm not crazy about Neo Liberalism either, and your account for the tighter social controls, which I've noticed but without an explanation, are enlightening- but and this is a big but, just as we can't predict the future, we can't predict the past either. Perhaps confidence goes along with being a revolutionary, and if Trump is the poster child of Neo Liberalism, I'm marching in the trenches with you. But back to that big but, we can't predict the past and we can't always control the future, simply because we can't control other actors or events on the ground, which get out of hand and slip from our grip.
If you want to make a better world, Jerry, go for it, but be ready for a mess