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Could Uber be Collectivised?


Fun as it is to imagine a worker takeover of the industry-leading (and most infuriating) ride-hailing app company, for a host of reasons, it’s a pipe dream that misses the forest for the trees.

Showtime’s Global Warming Series Ignores the Biggest Way We’re ‘Living Dangerously’


The number one way in which humans contribute to global warming is not mentioned in Showtime’s groundbreaking “Years of Living Dangerously”. Not even when repeatedly highlighting the impacts of climate change on the very industry and way of life causing the lion’s share of warming.

Capitalism: ‘Its Own Worst Enemy’ (And Yours, Too, But Who Cares?)


Two more financial elites join the ranks of those rearranging the deck chairs on the proverbial Titanic that is capitalism. Watch in awe as they execsplain how capitalists can save their beloved system from itself, and the world along with it, but only in order to save itself.

‘Market Leninism’ is Kinda Just Fascism


Neoliberal commentators have long suggested Russia and China are converting to a new mix of market capitalism and communist tyranny… but it looks more like a familiar old-fashioned economic system to me.

Robots Will Waste You

robot advisor

Innovation leads to automation of more complex work, threatening higher-paid jobs more than the traditionally automated rote tasks. Unless you can outthink computers, the robots are coming for you, and the onus will be on you to demonstrate your value.

Left Catastrophism and Its Detractors

The Coming Economic Collapse That Never Was

Sasha Lilley’s “Hoping for the Worst” makes short work of “Left catastrophism”. But continuing to build on strategies that do not include contingencies for collapse is as ill-advised as not backing up your computer files.

Capitalism Makes Us Sick


Harvard economist Kenneth Rogoff exhibits a remarkable ability to see what’s wrong with capitalism and markets, while simultaneously astounding with his capacity to not consider these problems to be fundamental deal breakers.

Could Uber be Collectivised?


A provocative piece in The Nation suggests turning the so-called “ride-sharing” company known as Uber into a worker-owned enterprise. In “Socialize Uber: it’s easier than you think, Mike Konczal and Bryce Covert argue that since Uber owns only the proprietary technology that coordinates the glorified taxi rides and processes payments, and drivers own their own cars, Uber is an excellent candidate for conversion to a worker cooperative.

Collectivisation of Uber is a tempting notion, but the authors’ conclusion that it’s the “obvious transition” for Uber is hard to fathom. First, they curiously fail to note that it would be virtually impossible (in a legal and technical sense) for the drivers to acquire Uber. The company is privately owned, with equity held between the founders, many employees, and a huge array of venture capitalists, individual investors, and other firms. These shareholders have complete legal prerogative to hold their equity until the company goes public or sells off (and beyond). The only way the workers could buy Uber is if they pooled their money and acquired the company, which would cost way more than its current $40 billion valuation. Indeed, due to the special circumstances of needing to acquire every last share and option from current holders, this would constitute, by a factor, the most expensive acquisition in the history of venture capitalism.

But let’s just play make-believe and look at Uber as if the workers could assume the reins overnight. I believe in worker cooperatives, not just as an organizational model for firms, but as a transformational force for our economy. That said, Uber is not merely a bunch of hard-working drivers coordinated by technocratic drones. If Uber establishes itself as a dominant, static force in the taxi economy, it might eventually become nine parts technocracy for every one part human ingenuity. But for now, it’s a new kind of craft in very uncertain conditions; autopilot is not an option.

The authors note, “It takes an entrepreneur to start up ride-sharing, but not to run it as a firm.” In truth, it takes a handful of entrepreneurs as well as venture capital to bring a startup of this kind to scale, and it takes a team with exceptional business sense to see it through the growth stage. Even as a staunch advocate of collectivism, I am willing to concede that successfully introducing a disruptive product into a market of this kind is beyond the reach of collectives or self-funded worker-run enterprises. At the very least, they would have to seek investment capital and empower managers with extraordinary vision to navigate this crucial phase. These are two very problematic necessities.

We all know what happens when workers empower managers to use their exceptional talent—those managers demand exceptional compensation. I’m not saying capable people don’t exist who would do this for humble wages, but they’d be exceedingly hard to find. Anyone with a proven track record has far more lucrative options. So whom would workers hire or promote to steer the company? This is where CEOs and other executives command what appear to be rentier compensation packages. It isn’t the actual scarcity of talent, but the scarcity of pedigree, that they’re leveraging. Even the ones with relatively poor records exercise the terrific advantage of having a resumé that shows they know anything at all about running a big company. While it’s surely far easier than they would have us believe, it’s not perfectly intuitive; not just anybody can pick it up overnight. Leadership isn’t an insurmountable obstacle, but it highlights a major problem and a significant gamble.

And then there’s the capital. Even if they don’t need $100B in up-front cash, Uber would need regular influxes of investment capital in order to grow while competing with other venture-backed companies in the ride-hailing app market (not to mention the main competition: taxis). We’re talking no less than tens of millions of dollars on a semi-regular basis. It’s difficult for worker cooperatives in conventional industries to get loans or other traditional forms of cash infusions; this is basically impossible for venture startups in unproven markets.

You might say, why not reinvest profits as capital for growth? Besides the fact that worker-owners would have to consistently forego dividends to grow the firm (a conventional co-op dilemma) the biggest reason is really that it puts tremendous pressure on creating big margins in the first place. Competitors will meanwhile enjoy the relative breathing room of not having to scrape every ounce of profit out of their model while growing strategically. Some of these companies pay no attention to profits at all as they spend investor money improving their position in the market.

This is why venture capital exists—to take seemingly insane risks seeking commensurate returns on the rare wins. For startups, they provide the ability to grow without cannibalizing revenues. I cannot imagine a VC firm wanting to invest in a labor-managed startup, and it wouldn’t be a cooperative if such a firm did decide to invest.

But why wouldn’t an investor want to back a democratically managed startup? We know a lot of these new Silicon Valley firms are relatively flat. Here we get to Konczal and Covert’s claim that at its core, Uber is just a technocracy:

And these workers [drivers] labor individually, doing the same tasks, so there’s no need for a management class to control their daily operations. The capital owners maintain the phone app, but app technology isn’t the major cost, and it’s getting cheaper and easier by the day.

Developing successful technology isn’t just writing code, and most of the supposedly “flat” tech startups are neither nonhierarchical nor equalized in pay scales. Even if the code and the coders came with the acquisition (which they would), consider that all these years a relative handful of people at Uber have been figuring out what to make all that code do. There’s institutional knowledge and specialized skills behind that, some of which might be maintained beyond collectivisation, though that’s doubtful (why would a CTO or senior engineer or product manager stick around—why even would a junior developer who can start anywhere at $75,000 plus equity?). Could the right workers collectively do this under the right circumstances? I believe so. But not coders who weren’t hired for these propensities, and definitely not overnight.

Okay, so forget Uber (seriously, Uber is awful). What if all the Uber drivers wanted to set up their own competing co-operative? Maybe even do something innovative and offer regular customers shares in the company! Unfortunately, the above problems would persist.

There’s that pesky problem of the technology and infrastructure. The overhead costs for such a venture are not trivial, but replicating the model is conceivable. Uber’s trade secrets would be pretty hard to obtain, protected as they are by nondisclosure agreements that could keep even sympathetic insiders from aiding the dissident worker-owned venture. Still, I think most of the model is in plain view. So they’d have to get the right developers working for the right reasons. It’s theoretically possible, but I’d rank it as highly difficult.

It remains harder still to figure out where the capital would come from, and how the organization would work such that drivers, technologists, and business development workers would be on the same page at equitable wages and equal stakes of ownership and control. The irony, of course, is that this company would be competing with Uber and all its infrastructure and those piles of venture capital. My conclusion is precisely the opposite of Konczal and Covert’s: Uber is among the worst candidates for the cooperative model on a large scale.

Now, all this being said, if someone were to create open-source software for the ride-hailing industry, I bet small collectives of highly motivated driver-owners could perhaps eek out nice livings in the right markets. I would love to see that, and in fact I’d lend my expertise to such a project. But this sadly isn’t the place we’re going to kick capitalism’s ass.

Capitalism Doesn’t Work

payday loans


Showtime’s Global Warming Series Ignores the Biggest Way We’re ‘Living Dangerously’


In many ways, I’m very impressed by what Showtime has done with its in-depth series about climate change and the politics around it. Years of Living Dangerously is very straightforward and unapologetic, and it takes on the various types of folks who disbelieve in anthropogenic climate change without belittling them or their interests. I hope people are watched it, and I hope it is changing minds.

But I couldn’t help noticing that, for all the various investigative segments on a range of topics from the impact of lobbyists to various scientific concepts and back to the mindsets of doubters, one major subject seems to be actively avoided, not just overlooked. How is it possible that a series of such scope and depth could highlight the interests of cattle ranchers on two occasions without so much as noting their massive contribution to greenhouse gases clogging up our atmosphere and ironically harming their industry?


There can be no denying that animal agriculture is the largest single contributor to anthropogenic global warming. Full stop. Because it involves tremendous amounts of energy (which the meat industry simply discounts in its own propaganda), and because its waste products give off dangerous amounts of extremely hazardous methane and nitrous oxide, and because deforestation is a huge and growing factor, the biggest single reason we need a series like Years of Living Dangerously is animal agriculture. That is, our process of raising, slaughtering, and consuming animals on a mass scale is the number one way in which we’ve lived dangerously these last generations.

So how is it that Showtime can highlight the plight of cattle ranchers and meatpacking workers affected by droughts, only to lament that their means of livelihood are at risk, never pointing out how dangerous their businesses are to themselves and the rest of us? The show also notes that deforestation is a major contributor to global warming but fails to explain the number one cause of tropical deforestation is cropland for livestock feed. These ironies are too elegant to not highlight it at least in passing, yet they’re ignored in favor of presenting an innocently idyllic industry at risk due to sinister outside forces.

While I’d argue that the staggering contribution to global warming of the meat and dairy industries deserves its own episode, I must say it’s criminally negligent for this type of program to portray the plight of that dangerous industry without so much as noting its role in the problem. Unless I missed something, the number one way we can all actually do something about global warming is simply not mentioned in the entire series.

Capitalism: ‘Its Own Worst Enemy’ (And Yours, Too, But Who Cares?)


We’ve got a live one!

A pair of corporate CEOs have decided capitalism is ailing. They start their Project Syndicate commentary off in a super original way that isn’t cliche’ed in the field at all, riffing off Churchill’s famous quote about democracy being the worst system “except for all the rest”. The writers opine that capitalism is the worst type of economy, except for all the others they’ve no doubt researched exhaustively.


Paul Polman of Unilever and Lynn Forester de Rothschild of E.L. Rothschild are joining the ranks of liberal capitalists concerned that capitalism, after saving all the poor people from the very poverty it consigned them to, might at long last harm something that really matters: capitalism itself.

Capitalism has guided the world economy to unprecedented prosperity. Yet it has also proved dysfunctional in important ways. It often encourages shortsightedness, contributes to wide disparities between the rich and the poor, and tolerates the reckless treatment of environmental capital.

If these costs cannot be controlled, support for capitalism may disappear – and with it, humanity’s best hope for economic growth and prosperity.

Let’s break this down. First of all, Polman and de Rothschild think two of the most upsetting problems with capitalism are “shortsightedness” and its contribution to “wide disparities between rich and poor”.

The dominant economic system on Earth is apparently just one reason some people are rich and some are poor. The other reasons must be those invisible reallocation pixies that come in the night to transfer wealth to the haves, like reverse Robin Hoods.

Financial disparity is a problem in many ways that are getting lots of deserved attention lately, but I’d have to say the abject poverty that capitalism keeps much of the world in by depriving it of a sensible system for allocating basic goods and services to those most in need (instead sending them to those most able to pay), is a much bigger problem than the wealth gap. That is, a gap between super-rich and comfortable would be one thing; however, the actual canyon we’re saddled with is from a super rich elite to a massive underclass of billions who lack consistent access to basic necessities.

(Polman and de Rothschild do at the end of their article take a stand against extreme poverty in and of itself, but throughout the piece they maintain that capitalism is the savior from, not the cause of, such poverty.)

It’s not entirely obvious what is meant by “shortsightedness”, but in context of the piece, it seems to refer back to the main thesis: that capitalism will engender its own demise. They advise businesses to “look beyond profit and loss to maintain public support for a market economy”. Be less profit-driven in order to make sure the system that drives your profits remains intact.

Capitalism is of course also shortsighted in that the profit motive leads firms to eat their future lunch by eschewing long-term product and market planning to suit short-term returns. This seems to be another of the writers’ concerns, but it’s not inherent to capitalism, as Polman’s Unilever claims to demonstrate. (The other problems – inequality and environmental destruction – are indeed inherent to capitalism.

And, yes, the writers really did cite “reckless treatment of environmental capital” – not devastation and unsustainability, and not the environment per se, but mere mistreatment of that portion of the natural world that is useful to capitalists – as the final of the three things capitalism does wrong.

Problems with markets and capitalism not cited by Polman and de Rothschild, most of them externalities not accounted for in the prices we pay for products and labor:

  • climate change
  • class antagonism
  • inhumane working conditions
  • alienated labor
  • animal exploitation
  • undermining democracy
  • absurd privatizations (schools, prisons, etc)
  • fiat currencies (and black markets)
  • debt
  • un(der)employment
  • intellectual property
  • limitless growth on a finite planet
  • crass consumerism
  • commodification of life

I’m probably missing some.

Anyway, what do Polman and de Rothschild say is the risk of not minding the problems that matter to them?

If these costs cannot be controlled, support for capitalism may disappear – and with it, humanity’s best hope for economic growth and prosperity. It is therefore time to consider new models for capitalism that are emerging around the world – specifically, conscious capitalism, moral capitalism, and inclusive capitalism.

Again, I would love to see the array of noncapitalist alternatives Polman and de Rothschild have familiarized themselves with in order to support their claim that (modified) capitalism is our best hope. It surely is a very dismal hope as it stands, but sure enough, these glass-half-fullers hold out that capitalist elites can save us from the certain disaster that would result from us shedding the yokes of concentrated capital, exploitative markets, and dehumanizing hierarchy.

These preferred “models” all

share the assumption that companies must be mindful of their role in society and work to ensure that the benefits of growth are broadly shared and do not impose unacceptable environmental and social costs.

Polman and de Rothschild don’t go into specifics, but these are basically mindset protocols, not actual economic structures or institutions; they’re not systemic models, just enterprise models. That is, business leaders are supposed to just do the right thing out of the goodness of their heart, with faith that in the long run, their bottom line will reflect the sensibility of prudent past decisions. Nothing to structurally incentivize or enforce changes, aside from a belief that doing the right thing will pay off.

Addressing the failures of modern capitalism will require strong leadership and extensive cooperation between businesses, governments, and NGOs. To begin creating a path forward, we are convening key global leaders in London on May 27 for a conference on inclusive capitalism. Top executives from institutions representing more than $30 trillion in investable assets – one-third of the world’s total – will be in attendance. Their aim will be to establish tangible steps that firms can take to begin changing the way business is done – and rebuilding public confidence in capitalism.

So after noting that the effort will have to involve governments and NGOs, though not necessarily any grassroots representation of civil society or apparently even organized labor, the authors brag that their conference will involve a staggeringly disproportionate representation of wealth. Advocates of “inclusive capitalism” will have the ears of elites representing a massive amount of capital, and presumably those representatives will have the ears of the government and civil-society do-gooders, as well. What could possibly go wrong?

The list of speakers at the conference includes representatives of such humanitarian institutions as the IMF, GlaxoSmithKline, UBS, and Dow Chemical, plus elites like Bill Clinton, Larry Summers, and fellow Titanic deck-chair rearranger, Jeremy Grantham. Apparently just one person from organized labor will be given a microphone, along with nobody from an environmental group or a consumer advocacy organization. The only identifiable progressive on the roster is Chrystia Freeland. But somehow, this meeting is expected to yield progress, without even having key stakeholders represented.

In any case, the argument here is that microeconomic adjustments by concerned CEOs and boards at major corporations, usually fighting the wishes of greedy shareholders every step of the way, will save capitalism from the litany of contradictions and abuses that threaten humanity, the environment, and yes capitalism itself. This notion is quite simply absurd.

But don’t take my word for it – read the Project Syndicate piece, and this one by de Rothschild, and this one on “moral capitalism”, and this one on “conscious capitalism”. Then decide for yourself if they (a) address the full host of problems with capitalism; (b) take the problems they do address seriously enough for the right reasons; and (c) even remotely meet a burden of proof required of a solution to be considered realistic.

Banner reads: "Capitalism isn't working - another world is possible"


Linkage: Soylent, Euro-Fascism, Sharing, ‘Disruption’

Dr diagnoses earth with capitalism

“A terrifying diagnosis”, from Ian Angus’s Ecosocialist Notebook.

It’s made out of… powder?

SoylentGreenisPeopleIf you’re like me, you are instinctively creeped out by this new fad “food” with the dystopian name: Soylent. But I have to admit Adam Ozimek’s assessment of it in Forbes is pretty sober. This bizarre product is certainly not ushering in 1984. But I’m at the same time sad for Ozimek, who doesn’t seem to understand what it’s like to appreciate the quality of every meal. Throw out your microwave and slow the hell down; it will change your life.

Fascism returns to Europe?

Ukrainian ultra-nationalist protestersA lot is being made on the Left of the influence of supposed neo-Nazis operating within the new interim Ukrainian government, as well as on the ground, inside the newly formed National Guard security units. Even after reading innumerable articles on the matter, I honestly cannot verify the extent to which these claims are true, and I suspect opinionmakers on the Left are once again spinning reality somewhat to fit their preferred narrative, just as Russia very obviously is doing. Honestly, I care less about the minutia of Ukrainian politics than the big picture, and I think this New Replublic portrayal of Russia’s fascistic policies and ties to ultra-Right in Western Europe should be eye-opening. It relates to my thesis from last month’s commentary here about Russia’s economy looking an awful lot like 20th Century fascism.

Cities: made for sharing

sharingI haven’t looked very far into the particular notion of the commons offered by On the Commons, which calls itself a “commons movement strategy center”, but this very short excerpt from The Sharing Revolution by Jay Walljasper is pretty cool. It offers a brief history of the atomized suburban dwelling, as well as hopeful remarks about returning to a reduced-consumption state of affairs offered by new technologies and intentional human proximity. I’m adding On the Commons to my resource links list to make sure I investigate further soon.

Disrupt This!

Having one foot firmly planted in the technology startup world, I read/hear the words “disrupt” and “disruptive” used in a fairly asinine way several times daily. It honestly drives me nuts, driveled as it is by greed-addled “serial entrepreneurs” out to “change the world” while getting rich. Someday I’ll write about it myself, but I’m pleased to be able to point you to this thrashing of the fetish concept/term as employed by thoroughly system-reinforcing, for-profit, status-quo enterprise founders and fans today.


Linkage: Oligarchy USA, BitCoin Revolution?, Climate Change, Piketty Illustrated


Just some recommended reading; my favorite recent posts from around the Web looking forward, or giving context to understanding the future of our economic lives.

Is the US an Oligarchy?

A new paper (PDF) by economists from Princeton and Northwestern strongly suggests that the US federal government is effectively controlled by its wealthiest class. This isn’t startling news to you, or probably anyone who isn’t a political scientist or an economist. But it is news that, at long last, a couple of serious economists have taken the time to lay out just how serious elites’ manipulation of the polity, and thereby society, truly is.

Better than slogging through their paper, check out Joe Firestone’s post that’s a little less reserved than the original report, out-and-out calling the United States an oligarchy. The argument is a little bit semantics (never hurt anyone) and a lotta bit damning.

An Overview of Libertarian Socialist Options

anarcho-communist flagWayne Price has put together a survey article touching on most of the prominent contemporary ideas for alternatives to capitalism and authoritarian socialism. Unfortunately, the piece doesn’t live up to the promise of its title (“Worker Self-Directed Enterprises: A Revolutionary Program”), as there’s no strategy or program in sight.

Can Alternative Currency Be Revolutionary?

bitcoin-revolutionJeremy Roos has done a tremendous service in diligently reporting on, and providing insightful, radical observations of, the MoneyLab: Coining Alternatives conference that took place last month in Amsterdam, covering digital currencies and electronic economic platforms. Roos’s review is extensive, but it concisely analyzes numerous topics such as the limitations of BitCoin and the downside of KickStarter. Each commentary is more interesting than the last. Do yourself the favor.

We Just Can’t Win on Climate Change

The hot fledgling news and analysis site Vox has been churning out some decent content. So far, it’s a very refreshing change to the perverse brevity of the clickbait and listicle sites permeating the progressive Web. A piece called “Two Degrees” by Brad Plumer had me shaking my head in disgust — not at the writing, but at what it suggests about humanity. It’s a great primer on climate change, its prospects and implications. If you don’t really know the bad news, start here. It’s time to wake up.

Modeling Piketty’s Immiseration Thesis

piketty-capital-21st-centuryFinally, I’d be remiss at this time if I didn’t make some mention of the most talked about economics book of our time: Thomas Piketty’s Capital in the Twenty-First Century. Unfortunately, I haven’t even opened it yet. Fortunately, Matthew Martin has laid out a really neat hypothetical that illustrates Piketty’s main thesis. I really enjoyed reading the post; it should whet your appetite for the main course.


‘Market Leninism’ is Kinda Just Fascism


Political commentator and Daily Beast managing editor John Avlon has been throwing around a label for the emerging political economies of Russia and China that I think was introduced by Nicholas Kristoff in the New York Times two decades ago. Avlon explains in a Daily Beast commentary that was picked up by several other outlets:

Russia and China, along with some of their old satellite states, have traded Marx and Lenin for Market Leninism. The militaristic one-party state endures with varying degrees of electoral kabuki, but the nomenklatura now attracts global capital, swilling champagne in jet set nightclubs instead of behind dacha walls.

This twist on “Marxism-Leninism” may sound slightly catchy, but if you think about it, they’re basically just becoming fascist economies, and there’s really no need to invent a new term – certainly not one so ridiculous as “Market-Leninism”. The neo-nomenklatura, or the new propertied ruling class, of Russia and China are the freshly christened millionaires and billionaires who parallel the domestic industrialists of fascist European nations in the 1930s. Those outside the Party’s core don’t directly wield tremendous political power, but if they play by the rules, they thrive on the kind of institutionalized corruption and cronyism that marked Italian, German, and Spanish experiments with fascism.

This critique isn’t meant to start a semantics debate; I really just want to take the opportunity to highlight the structural similarities between the post-Communist economies like Russia’s, China’s, and Vietnam’s, with the European fascism of the mid-Twentieth Century. It’s worth noting, due to the frightening prospects for this model influencing contemporary American political economy, which may be far more likely than you’d guess.

We currently define economies with broad strokes based on dominant attributes.* The US is characterized by private ownership of most industry, as well as by market determinants of material and wealth coordination; we call this market capitalism, even though the markets aren’t pure and there are lots of publicly owned enterprises. In the Soviet Union, industrial ownership was nationalized and central planning was the chief method for deciding who made and consumed how much of what goods and services – command socialism.

In fascist countries like Germany and Italy, the model was private ownership of most industry, markets determining most prices, but the state intervening heavily through command to enforce nationalistic priorities and to ensure stability. Basically, Hitler and Mussolini reserved the prerogative to override any market signal with a new directive.

This is a power still out of executive and even governmental reach in modern Western Europe and North America but exercised with regularity in China and Russia today. When contemporary Western governments want to broadly influence industry, they tend to do it through the blunt instrument of legislative policymaking that encourages or discourages certain economic activity for national priorities. Executives can’t command very much in the economic sphere.

The transformation of the past quarter century, in both Russia and China, has involved much greater market influence internally, to be sure. But also a massive privatization of industries, and there’s nothing Leninist about privatization. Avlon even alludes to this being the major variation between the Cold War and now, citing the fact that “the nomenklatura now attracts global capital” in his paragraph defining “Market Leninism”.

Of course, to be clear, that’s not the part that upsets John Avlon or Nick Kristoff. To Western neoliberals, privatization of the means of production is a natural step. They are just upset about the nationalistic tendencies that manifest as the one-party state overriding market forces. Avlon is complaining about the heavy-handed, iron-fisted, one-party domination of these countries’ economies and the refusal of individual civil liberties. That’s where the (quite legitimate) charge of lingering “Leninism” comes from.

Yet if you’re going to mix private ownership with overwhelming government interference in the coordination aspect, aren’t you really talking about fascism? Fascist economics is all about maintaining a small, wealthy capitalist class while enforcing strict adherence to nationalistic principles and service to the state, with the government intervening to both stabilize and reprioritize economic activity.

Writing of then-Chinese ruler Deng Xiaoping, Kristoff noted in 1993 that China’s leadership was post-Marxism-Leninism, with a privatization spree already underway. Deng and his circle had eschewed Marx’s rejection of markets yet retained “a fondness for Leninism, in the sense of highly disciplined one-party rule with centralized decision-making”. Kristoff added, “Their aim, in other words, is Market-Leninism.”

Mussolini, Franco, and Hitler all had similar takes on Marx and Lenin. They were vehemently opposed to using central planning to orchestrate socioeconomic equality, preferring distinctive class divisions as virtuous. So they figured, why not let capitalist markets do the default economic coordination, since as Marx himself had rightly argued, markets and the pursuit of profit will tend to exacerbate those class divisions? But the fascists concluded they should indeed use a strong, unopposed nationalist party and cadre to enforce essential central planning in favor of state power whenever necessary. This was one of Lenin’s highly miscalculated (and vile) contributions to the actual implementation of the Marxian project; it’s what Hitler, Mao, Lenin, and Mussolini all had in common vis-a-vis economics.

The transformations in China and Russia have been very much in this direction and sound exceedingly fascistic. In each:

  1. the means of production are increasingly owned primarily by an elite wealthy class or nationalized to enable graft;
  2. controlled by fiat or regulated in such a way as to sustain rent-seeking among capitalist cronies;
  3. otherwise with market forces doing the basic price-setting and coordinating; and
  4. a state that offers boisterous rhetorical support for the “working class” but deprioritizes worker’s rights and effectively outlaws autonomous organization of labor.

In the case of Russia, in fact, you’d be pretty hard-pressed to draw many significant structural differences between its political economy and those of mid-20th Century fascist states. China maintains more nationalized industries, but this too is changing through a form of liberalization that so far affects capitalist property rights far more than individual political rights.

Avlon’s concern seems to be that economic liberalization has not led to democracy in the formerly communist states, which on one hand undermines hypotheses that capitalism is inherently democratizing, but on the other hand suggests they’re just not doing capitalism right.

What’s worse, some [American] CEOs privately grouse that they would rather invest their capitol [sic] in one-party states, not only because of the potential rate of return, but also because they feel America’s political system is increasingly inefficient and chaotic when it comes to making long-term decisions.

I’m far more concerned that China (more so than Russia, for sure) will demonstrate a more durable version of capitalism during periods of economic tribulation than the relatively laissez faire nations of the world generally have. As crises driven by resource depletion and climate change generate more and more national emergencies, Americans will hopefully begin to realize what a danger markets pose and how weak the various preferred methods of regulating or manipulating them through political means. And you can bet your bald spot China will be responding more assertively and often more effectively to similar challenges on its land and shores.

Avlon continues, about the claims of inefficiency in the capitalism-democracy mix:

We’ve heard these claims before. In the 1930s, the buzz was that liberal capitalist democracy was decadent and declining – that the pluralism and diversity of the USA was our greatest weakness because we could not reason together. … The mirror-image systems of communism and fascism promised to solve problems quickly through command and control.

This is of course true in the long run, and Avlon is right that democratically influenced Western capitalism proved more resilient in peacetime than the even-more-vicious manifestations such as the Soviet and Nazi systems. But what about a softer form of command-and-control capitalism? The new fascism has features that are attractive to capitalists unconcerned about the personal liberties of industrial workers and the poor. And make no mistake, this system is more likely to appeal to liberals than to conservatives.

Note as well, any Western capitalist eyeing the Chinese system with envy is not lusting over any remnant unique to Marxism. He’s not licking his lips over the use of central planning to flatten classes. His nascent drool has nothing to do with high rates of public ownership of industry. He’s looking at private ownership and a government-manipulated market, currency, etc.

Fascist economics is, after all, a form of capitalism. It’s only a couple of steps removed from the American-style cocktail. Classic fascism embraced all of the main elements of the American political economy except (1) fondness for international trade and (2) our less-bilateral influence between industry and polity. Whereas the fascist government reserved the right to control industry (the erstwhile funders of the ruling party) in service to the state, the Western “democracy” observes a largely hands-off policy, behaving more like a puppet on behalf of its funders, with only the pretense of respect for a so-called “national interest” and intervention to avert only the most egregious market failures.

Other characteristics of fascism include fomentation of class antagonism and elimination of effective political opposition. Class antagonism has not reached fascistic levels in the United States by any means, mostly because the working class has not played an active role in the conflict as it did in 1920s Europe. (However, we certainly have the fascist work ethic down!)

With regard to political opposition, as Avlon notes, instead of a command-ready one-party state, US national politics is hobbled by petty divides separating the two branches of the capitalist party (that last bit is my interpretation, not Avlon’s). He obviously yearns for a vibrant two-party dynamic that can compromise decisively, but in truth all of these options are just various ways a polity can relate to its financial backbone. With such a demonstrably slim difference between fascism and capitalism, it’s not clear why the Avlons and the Kristoffs spend so much of their time focused on the shortcomings of the Chinas and the Russias instead of analyzing the corporatist structure of the US political economy.


*There are two main determinants of the broad character of an economy. These are (1) ownership of the means of production and (2) form of coordination. To keep it simple, the ownership options are basically: collective (state or public ownership) or private (individual or shareholder ownership). On the matter of how much of what goods and services are produced and consumed by whom, the options are basically planning (command) or markets (supply/demand). The dominant options tend to determine the form of economy: market capitalist, planned socialism, market socialism, or planned capitalism (fascism).

Chinese propaganda poster from chineseposters.net.

Robots Will Waste You

robot advisor

I couldn’t really run a blog called Future Economy if I didn’t love talking about robots. Well, over the last several days, my RSS feed was like Shark Week for radical econ geeks.

Humans as Wasted Capital

First up, Frances Coppola with an interesting commentary on “The Wastefulness of Automation”. If it’s just dawning on you that the perpetual automation game is rigged against working people, you can go through some of the phases of grief with Coppola (though, to her credit, I think she doesn’t make it past “bargaining” here).

It starts out on an odd note for someone as highly schooled in economics as Coppola:

But what if capitalists DON’T want a large labour supply? What if automation means that what capitalists really want is a very small, highly skilled workforce to control the robots that do all the work? What if paying people enough to live on simply is not cost-effective compared to the running costs of robots?

First thing’s first. A large labor supply means lots of people willing and able to work. The more of them available, the cheaper they’ll sell their hours. Of course capitalists want a large labor supply — they get to pick and choose from that supply which ones can come off the 95% unemployment list.

But Coppola struck on the core conundrum — the contradiction hopefully keeping the worst-conceivable future off the table. Do capitalists want a large, active workforce?

If only a small number of people can afford to buy the products produced by all these robots, then unless there is a vibrant export market for those products – which requires the majority of people in other countries to be doing rather better than merely surviving on a basic subsistence income – producers have a real problem.

Okay, well, phew — capitalists will always need us workers. Problem averted, right?

Coppola notes the current trend of automation happening in middle-skilled office jobs, where labor is costly enough that automation is most attractive, while automating the lowest-skilled jobs is of lesser priority to the cost-cutting capitalist happy to pay slave wages for picking and skinning, maybe even lifting and sorting.

But we can’t lose sight of the reason “white collar” jobs pay more; it is because the people in the market for those jobs have comparative bargaining power. It is not because the jobs themselves are more valuable, or have a marginal advantage to the purchase of labor, compared to lower-paying jobs. They’re just more costly due to irrational market forces.

Therefore, such jobs are worth spending more to eliminate.

If the future is that the majority of people will do unskilled, insecure jobs for very low wages, then this amounts to a shocking waste of human capital. And if the more distant future is that even these jobs will eventually be automated, and working for a living will become the privilege of a few, then it is an even bigger waste.

Well, no. Under capitalism, human resources are only “wasted” if they could otherwise be put to better use. There has to be an opportunity cost to their disuse. In the dread scenario Coppola lays out, it’s not clear all this excess potential could do anything the capitalists would value. And since capitalists in the scenario have nearly all the demand power (not just an insanely disproportionate share, as now), who else would capitalism dictate has the prerogative to be valued? Who would a skilled worker be to argue that her talents and passion are being “wasted”?

In these conditions, a “waste of human capital” would be someone who could outwork a robot for wages amounting to less than the cost of the droid’s inputs but who, by some accident, doesn’t get put on the assembly line working shoulder-to-shoulder with X9-5R112. What a shame, the capitalist would think if he ever learned of the case. But someone who can make great art or engineer a way to feed the poor is of no value in this scenario if they can’t do it in a way that makes money for capitalists.

That skilled worker withering away in a tomato patch is only a “problem” if you’re unfortunate enough to possess morals that suggest human suffering is somehow wrong, per se. It is demonstrably not something markets can be bothered by.

Crucially, this isn’t some “Egads! There’s a flaw!” aberration of capitalism. This is one of the market’s more elegant features, if you set aside the hardship blah blah blah. It’s what you get when you put your faith in a system that values people precisely for their ability to (1) invest capital, (2) consume products, or (3) produce valuable goods and services at market rate. What else would you expect?

If you have no money and can’t compete with robots, according to capitalism you’re not a “waste of human capital”; you’re a waste of carbon and water. Coppola can’t seem to get over this shocking notion that capitalism has this built-in anti-sanity attribute:

A labour market that is skewed towards unskilled jobs when the workforce is more highly skilled and educated is malfunctioning. People who are in the wrong jobs are less productive than they should be: therefore, when most of the workforce is in the wrong job, we inevitably have an economy that is less productive than it should be.

No. What you’re actually seeing is that markets don’t care about your skills. And they’re not supposed to. That’s not their job! You either outwork a robot while matching its obedience and loyalty, all while asking for less… or you can go rot in a gutter. At best, you can go do something that’s not yet cost-effective to automate. Oh, and don’t forget, the capitalist gets to keep the robot’s wages; you’ll probably get all selfish and only give your wages back to him in exchange for some kind of commodity or service.

Now, the quote above about the labor market “malfunctioning” if it is “skewed towards unskilled jobs when the workforce is more highly skilled and educated” is true about an economy if and only if you believe an economy’s mandate is to take care of human needs. But it is not true of a market, which has the mandate of moving products to sources of demand. You ask for an invisible hand, you don’t get to whine or call it a “malfunction” when it predictably turns into a fist and squashes you and everyone you love the way it’s been abusing so many for so long.

Robots don’t eliminate jobs; markets do.

Cartoon by Carol Simpson - Robots gather for employee empowerment seminar

Coppola’s revelations continue:

Looking ahead, the only way in which such extensive outright subsidy of wages can be sustained in the longer term is through heavy taxation of profits and wealth – which rather undermines the purpose of forcing down labour costs, from capitalists’ point of view.

Exactly. The capitalists’ only choice would be to pay people just to buy stuff. As neat as that might be for a dystopian novel setting, there’s a flaw in the concept: it would be way more sensible for them to pay robots to buy stuff. Why bother with consumer markets when you can program demand? (Everywhere you look, those damn robots…)

Anyway, we know this isn’t a practical scenario. So Coppola tries to bring us back to reality:

It seems to me that providing people with a reasonable income while they find or create for themselves the right job (not just any job), or to enable them to do creative and/or socially useful things that are currently unpaid, or to study and develop new skills, might be a good investment for the future, improving the productivity of human capital which over the longer term benefits the economy.

This is certainly the right general attitude to have about the future. But then you have to stop using the term “human capital”. As long as humans are capital, their “productivity” will be measured by the value of their output in the market. Only sounds about two-thirds insane… until you remember: robots. And then continuing to advocate markets sounds three-thirds insane.

You also have to rethink what it means to serve an economy. If the mandate of the economy is to produce goods and services for anything with demand power, there’s no way that “benefiting the economy” means “benefiting society”.

How They’ll Do it to Us

Martin Ford of EconoFuture blog is on a similar tip, but he’s been thinking hard about this issue for a very long time, and is probably the leading harbinger of the very real possibility that hyper-automation will create structural unemployment, with predictable shock waves throughout economies. Ford’s latest contribution is a primer on just how contemporary automation may encroach more permanently on the workforce.

Of course, people have cried wolf about technological developments throughout the modern era, yet from prior periods of egg-cracking disruption, omelets have usually emerged. So what’s different now?

Well, what if innovations started targeting more and more costly lines of work, as Ms. Coppola noted above? What if they started doing creative work? What if they start innovating, even upgrading themselves? Would that be fundamentally different from the steam engine? (Yes. Yes it would.)

Ford notes that the trend of automation is to replace routine functions carried out by workers. We see this everywhere. Workers welcome it when it means making their job a little easier — sometimes to their own peril down the line. Now innovators are seeking to automate more complex forms of routines.

Our definition of what constitutes a “routine” job is by no means static. At one time, the jobs at risk from automation were largely confined to the assembly line. … Machine learning … is in essence a way to use statistical analysis of historical data to transform seemingly non-routine tasks into routine operations that can be computerized. As progress continues, it seems certain that more and more jobs and tasks will move from the “non-routine” column to the “routine” column, and as a result, an ever-increasing share of work will become susceptible to automation.

So what are the implications for you and me?

Rather than simply acquiring new skills and moving to another routine job, workers will have to instead migrate to an occupation that is genuinely non-routine and therefore protected from automation—and they may have to do this rapidly and repeatedly in order to remain ahead of the advancing frontier.

Okay, but my job can’t be automated, you say… Well,

Lawyers and paralegals have been displaced by e-discovery software that can rapidly determine which electronic documents are relevant to court cases. More routine forms of journalism—such as basic sports and business writing—have been successfully automated.

If you’re starting to wonder if anybody is safe from the rise of the robots…

Not Brain Surgery, Right?

I imagine if I were a brain surgeon, I’d have trouble believing I could be replaced by a machine, even as I bragged about the jaw-dropping technological innovations being made in my field.

So I’m going to excuse the limits of Dr. Garnette Sutherland’s inability to see the writing on the wall as he regales us with stories of new and near-future technologies that are revolutionizing neurosurgery.

My favorite line is this:

What robots lack is the human brain’s executive capacity. Given that comprehending – and reacting appropriately to – the immense number of variables that can arise during surgery would require enormous computing power, surgical robots aim to integrate human experience and decision-making ability with mechanized accuracy.

Yeah, good luck with that, Doc. Neurosurgery will be a prime target for automation. Of course computers have an executive capacity; try playing one in Backgammon, Chess, or Texas Hold’em. If in the middle of a surgery, a not-yet-programmed decision needs to get made, the on-call surgeon will be able to cover several robot surgeries at once. Maybe several hundred. From across the Internet.

And talk about high-cost routines! Before the good doctor knows it, robots will be explaining how the human brain utterly lacks the capacity to aggregate the compound experiences of multiple units (in real time, no less!), and how its error rate is N times that of robots, and how it can only perform one surgery at a time, and how it needs to sleep and play golf, and go to conferences, and… you get the point.

A Millennial Strikes Back

Matt Bors infographic-style comic about demonization and scapegoating of Millennials

This is an amazing infographic-style cartoon from Matt Bors, a cartoonist who used to contribute regularly to my old project The NewStandard. I found it on CNN.com, where I also read that Matt was nominated for a Pulitzer in 2012. You can follow him on Twitter.

Matt Bors infographic-style comic about demonization and scapegoating of Millennials

Left Catastrophism and Its Detractors

The Coming Economic Collapse That Never Was

The perfect subject for my return to this blog has presented itself in the form of an interview with Sasha Lilley, following up on the 2012 book Catastrophism: The Apocalyptic Politics of Collapse and Rebirth, which Lilley contributed to.

It has been a long time since I’ve nodded my head throughout an article while fundamentally disagreeing with a key part of its basic thesis. But that was my response to “Hoping for the Worst“, an interview with Lilley by Samuel Grove about just why so many people who want to make a better world seem to yearn for economic catastrophe and collapse, as if it will necessarily hasten the change they seek. With wisdom and clarity, Lilley thrashes what is indeed a commonplace view, which she calls Left catastrophism, used by many progressives and radicals as an excuse to wait for change to arrive, rather than making it themselves.

I found myself agreeing strongly with Lilley while also, uncomfortably, recognizing some of my own beliefs among those she is roundly criticizing. But Lilley’s representation of the archetypal collapse-anticipating radical doesn’t fit me or many others I know. I absolutely, unequivocally do not hope that global catastrophe arrives in order to usher in a new post-capitalist era.

In the first place, like Lilley, I don’t think such a meta-crisis would necessarily yield an egalitarian future. In fact, we suspect quite the opposite would emerge. In times of crisis, Lilley notes, humans do tend to turn toward regressive rather than progressive solutions:

Fear … tends to tilt right, not left. When people are fearful, they’re more likely to accept authoritarian solutions and the scapegoating of immigrants and others.

Ever skeptical of utopic pretenses, I simply do not believe that from the chaos of mass social upheaval will naturally emerge a peaceful, orderly anarchy. Such a thing must be strategized and painstakingly organized through struggle, and then failed at many times before success is at hand.

Even short of reactionary responses to crises, great upheavals are more likely to necessitate centrally coordinated solutions. In the wake of a real collapse scenario — the likes of which pretty much nobody involved in this debate can remotely fathom — the more reasonable among lifelong anarchists may just earnestly support authoritarian solutions. You might think you’ll simply twinkle and consense your way to socialism if the government and its systems suddenly vanished, but I wouldn’t bet on it.

Lilley describes the probable result of “disaster fatigue” and the patronizing nature of the notion that more bad outcomes from capitalism will raise consciousness. She notes:

[People] don’t need convincing that something is wrong, or that the system we live under doesn’t work for them.

Unfortunately, Lilley seems to hold out hope in the potential for revolutionary change without war or any other calamity, if only for the sake of having hope. She is cynical about cynicism:

Political despair and a crisis of organization lend themselves to the hope that an external jolt will replace the arduous work of reaching out to and organizing others. … Catastrophism is, amongst other things, about shortcuts and the messy business of fighting and losing sometimes and winning others can be shunted to the side.

Lilley even sympathizes with some catastrophists — those who are desperate for a better world but fear that jolt will be required:

Add to this the very real urgency that many people feel about the need to stop the ravages of capitalism—global warming being the most obvious—and catastrophism is eminently understandable.

I think perhaps this is what discerns a reasonable belief that socioeconomic collapse is highly probable, from catastrophism – the hope that it will happen soon, ushering an era of great positive changes.

Lilley seems to hold as near certainty that capitalism will adapt to oncoming crises, rather than undo itself through internal contradictions or ever allow itself to be undone by outside forces such as climate change or resource depletion.

Denial is the first stage of... No it isn't!

But I see a bit of paradox in Lilley’s assertions:

  1. Capital will not permit itself to wither or collapse from external causes…
  2. …yet, workers could organize to defeat capital…
  3. …and if capitalism were to crumble due to outside factors, the same workers (who are powerful enough to overthrow it now) would then be unable to establish a superior alternative order.

I’m definitely convinced of Point 3, excepting the parenthetical flourish added to emphasize the contradiction, but the other two are not so obvious to me.

This is subjective stuff, to be sure, but my twenty years of closely observing the US Left in action have left me with essentially no confidence that it can or will evolve into a force that could organize a revolution against capitalism.

While I’m perhaps less impressed by the Left and its potential, I also see more weaknesses in late capitalism than Lilley seems to discern. I’m surrounded by optimists who believe capitalism will innovate its way out of climate change and find ways around the very real matter of finite resources. I am far less convinced that the End Game is not close at hand.

Despite my skepticism, pessimism, and cynicism, I believe in working toward practical solutions. I advocate dual power strategy — radical organizing that also happens to be relatively collapse-resistant. It’s an actual plan for dealing with economic catastrophe or smaller-scale chronic crises without necessitating, investing in, or hoping for such events.

I also agree with Lilley that there will be no radical social change without struggle. Collapse, catastrophe, or blue skies, any transformation will be made by people, through organization.

But I find hope for hope’s sake overrated. I spent years mimicking Noam Chomsky’s adaptation Pascal’s Wager: we don’t know we can bring about real, lasting social change, but we know if we do not try, we are certain to fail.

Okay, well, what does the evidence suggest? After years of believing — insisting even — that a pro-active revolution leading to a dramatically altered world was possible and attainable, I have reached the sad realization that the people of this current world are not going to make that happen, possible or not. Despite my intense desire to conclude otherwise, I see no real evidence that authentic revolution is in the cards.

Lilley’s final statement in the interview is, to me, most revealing of the weakness of all sides of this argument, including my own:

Not surprisingly, catastrophism tends to stress our collective weakness, rather than our collective power.  And that I think is to be avoided, no matter how grim things sometimes appear, because it’s actually inaccurate.

Note the last clause, tagged on to convey truism, but to me it highlights an inadequacy. Don’t stress our collective weakness … because it’s inaccurate; we’re not weak. I rather think the only reason for radicals not to stress the demonstrably profound weakness of the presently mobilized populace is to pretend it is not in fact weak, perhaps fooling people into believing they can accomplish more. Hell, I wouldn’t scorn a rallying strategy that involved a “little white lie”, provided it actually worked.

Current Left strategies (and maybe the whole concept of a “Left”) are failing miserably, while capitalism is very likely entering a new phase of vulnerabilities and limitations.

I don’t think Lilley is suggesting we double down on the status quo Left approaches to change. And that’s good. But continuing to build on strategies that do not include contingencies for collapse is as ill-advised as living without health insurance or not backing up your computer files. (Collapse is not as certain as climate change, so I won’t compare ignoring it to purchasing beach front property.)

But I’m afraid collapse is far more likely than an authentic social revolution emerging while capitalism is, as Emperor Palpatine described his second Death Star, “quite operational”. Since capitalism doesn’t have an exhaust vent leading to a critical vulnerability we can torpedo, we may have to resort to sabotaging its defenses, building strong alternatives, and vigilantly preparing for better opportunities. Besides, the sweetest irony of all would be if, in the end, zombie capitalism lost out not to a lofty idea, but to a superior, competing system already in practice. (No, I’m not actually arguing that irony is a justification for delay. Sheesh!)

I think Sasha Lilley and I broadly agree on so much here, differing mainly in our hopes that the Left can pull off a revolution. We probably also both believe she’s a better writer than I am, so I urge you to read her previous short treatment on this subject, “Apocalypse Now?