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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.

Down with (‘Occupy’) Materialism, Up with Diversity and Holism


Despite the rhetoric of ideologues like Slavoj Žižek, an approach that looks beyond capitalism as the root of all evil will be key to the success of Occupy. Economics is my specialty, but even I recognize it’s not the whole game.

Liberating Possibilities

occupy atlanta assembly

After articulating the relevance of longstanding economic and political crises to Americans’ everyday lives, the Occupy Wall Street movement must now make itself relevant to those same lives. Will the next phase be a dual-power movement?

Small is Beautiful… Can Big Be, Too?


An emerging backlash against the portrayal of small businesses as the backbone of economic stability and job growth has a point, but it fails to recognize the big vs. small conflict as exposing a critical contradiction of capitalism.

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?


Hierarchy on the Defensive

Mug reads: Boss, You're Fired

You might expect capitalism-centric media would react negatively to the recent buzz around Valve Software‘s innovative non-hierarchical structure. I was actually a little surprised about how un-reactionary the broad response was. The problem for industry media is, it’s really hard to defend hierarchy with actual research. Most behavioral economics research has uncovered big holes in the conventional workplace structure, which is of course maintained in order to foster and perpetuate class divisions, keeping a tiny owner class, a minority coordinator class, and the largest possible share remaining as fundamentally disempowered, disenfranchised worker bees.

I was actually wondering where the reaction to Valve’s novelty revelation of its innovative structure and policies was hiding. So much industry reportage had just treated it as a lark to note and move past. (Probably the wiser strategy.)

Then I saw Inc. magazine’s apologetics piece purportedly defending the virtues of hierarchy. I couldn’t wait to see what kind of contortions would be needed to try to undermine what is becoming more and more obvious: that workers thrive under conditions of empowerment, and that class divisions and disparities of wealth and income are causes of anxiety and dissatisfaction.

But I thought the establishment press would be able to come up with something a little better than this, at least.

Titled “Your employees like hierarchy (no, really)”, the short Inc. piece squirms for a minute then ends up praising Valve. The title addresses you as if the author knows who the fuck you and your employees are. It assumes they’re just like the subjects of a laughably conducted study that proves conclusively that people prefer the way a hierarchy looks on paper. Of course, the study purports to show that people appreciate being in a pecking order. But in fact, it does nothing of the sort.

Let’s not pick on the poor journalism in the Inc. article. The study’s own press release is shoddy enough.

The researchers apparently did not actually test whether their subects would like to work in a hierarchy. Not only did the study fail to examine actual workplaces of various structures and compare them, it didn’t even put the subjects in the hypothetical perspective of employees.

(c) 2006, Carol Simpson

In one of the five experiments used in the study, researchers had subjects react to pairs of photographs of people’s faces that had been independently analyzed for dominant vs. submissive features.

The results indicated that subjects consistently responded more quickly to the pair of photos consisting of a “dominant” face and a “submissive” face — what they termed the “hierarchy condition” — than to any other pair. They concluded that because people process pictures of hierarchies faster than pictures of equalities, hierarchies are easier for people to perceive.

Taking the results at face value (pun intended), what’s the point? I honestly don’t know. Ease of perception is supposed to correlate to preference, let alone actual validation? Nice try.

What’s next?

The second experiment sought to prove that people have an easier time remembering hierarchical relationships than equal ones, and therefore like them better.

To be fair, judging from the abstract, the researchers apparently surveyed the participants on their preference; they didn’t just infer it from ease of memorability of a seating chart (sometimes PR teams get a little carried away in relaying findings). But still, who cares if it takes someone slightly longer to learn the structure of a hierarchy vs. a collective? Has ease of memorability been independently correlated long term appreciation? Is it even conceivable that you would list “how long it takes to learn the workplace structure” among your top 100 factors in choosing an employer, given you’ll likely spend years there after the few days or maybe weeks it takes to figure out who’s who?

The third experiment involved testing whether subjects more quickly memorized relationships of power hierarchy (boss/worker) over differentials in friendliness. Again, how could we possibly extrapolate a livelihood preference from such an exercise?

“The symmetric-orders condition, where people could give orders to the same people who gave them orders, was extremely hard for people to learn,” the study concluded. “This is interesting because sometimes organizations try to create equality by producing more symmetry; that is, by empowering people to give orders to one another and to take orders from one another. Yet, this kind of structure was confusing to our participants, and some even complained that these relationships did not make sense.”

They weren’t dealing with real people! Not even real fellow subjects, just fictitious people on paper. Of course it would be confusing. This experiment is not in the slightest way an analysis of how people behave in the real world, with real human beings.

I work every day in two flat workplaces. In both cases, team members regularly assign each other tasks. We use a project management system that’s configured to give everyone the power to do so. Sometimes we reassign tasks or even assign them back to the person that gave them to us, indicating we don’t have the capacity or we’re not the best specialist to do it. It’s not confusing. It’s empowering!

The fourth experiment was much more interesting and conceivably relevant.

Using their home computers, subjects were asked to read materials and provide recommendations for a fictitious company, whose goals included “downsize by 10 percent,” “phase out the Atlanta office,” and “increase the number of women in senior positions.” The materials contained spreadsheets of employees’ names, genders, ages, and performance ratings, as well as organizational charts showing their locations and positions.

That’s where the researchers manipulated the variable: some of the charts demonstrated little or no hierarchy, with a maximum of three levels per department, while others revealed a much more stratified structure, with highly differentiated job titles.

Next step: the participant got to do some firing! But all this experiment examined (by its own admission), is how outsiders would handle the challenge. And from what I’m able to see (I don’t have the actual model), it’s not clear that there was any attempt to actually familiarize the subjects with the way the organization worked. That said, the experiment does demonstrate the obvious: that someone from outside an organization will have a harder time analyzing a collective than a traditional hierarchy. So don’t bring in an outside firm to downsize your egalitarian workplace.

It’s also worth noting that in Experiment 4, the participants “expressed a much more positive view of the [hierarchical] firm and its employees”. This could have bearing on all sorts of matters, including prospective customer/client or partner or investor relationships for a company that eschews old-fashioned organizing in favor of a progress-aware approach.

Furthermore, it’s interesting that the charts used in Experiment 4 varied in two ways: stratification and job titles. There’s nothing about less-hierarchical workplaces that would suggest job titles can’t be significantly varied. It’s just bad methodology to change two variables when testing for one factor.

In the end, to a progressively minded person, these findings simply suggest there needs to be a shift in social attitudes towards organizations, away from judging how they’re structured, toward judging how and if they work. Indeed, if the study didn’t include outcome differentials, it’s that much more worthless. I suspect that testing four objects instead of two would have had revealing results. That is:

  • a successful collective
  • a successful hierarchy
  • a failed collective
  • a failed hierarchy

Who thinks success would not have five or more times the influence of the structure variable?

The fifth and final experiment is the real zinger. I find it frankly jaw-dropping that it is treated as anything but an impeachment of the first four experiments. Long story short, participants had an easier time recognizing — and indicated a preference for — hierarchies that were headed by a male as opposed to a female, all else being equal. That’s not very shocking, if you live on planet Earth, where sexism pervades.

What is disturbing is that the researchers don’t reject the first four subject preference equals objective superiority conclusions based on the findings in the fifth experiment. All they’re showing — at most — is that people raised in a messed-up society show messed-up, even self-defeating preferences. No duh.

The researchers were at best gleaning whether people objectively — that is, from the outside — preferred the look of a hierarchy vs. a flat structure. They found out how people who are also generally sexist (like most of us — male, female, trans, whatever) perceive hierarchy. The subjects received no orientation, no special training, not even an explanation, as you would find in any halfway decent workplace, collective or otherwise. The study is a joke, and anyone using it to defend hierarchy looks very desperate.

All that being the case, I think it’s pretty obvious that not everyone would prefer a nonhierarchical workplace. Most people, understandably, are wary of change and newness. I’d love to see a survey of contrasting samples: those who work in collectives vs. those who work in hierarchies. Or, maybe tell us if participants who preferred male-dominated hierarchies are the same subjects that found hierarchy more comfortable in general. Then we’d know if people we should admire — those who did not show a recognition preference for male bosses — favor other forms of equality, too, at least from the outside.

(c) Carol Simpson

What’s funniest of all is that half the Inc. article is taken up introducing the reader to Valve Software’s alternative, horizontal structure, and is not particularly critical in its assessment. For more about Valve’s awesome bossless approach, check out this analysis and this narrative.


End-of-the-world Profiteering

the end of the world offers profit opportunities

the end of the world offers profit opportunities

This reminds me of a couple of posts from last year, particularly my reviews of “doom-and-gloom” financiers Jeremy Grantham and Nouriel Roubini.


Capitalism Makes Us Sick


I often enjoy reading Harvard economist Kenneth Rogoff’s commentaries. He strikes me as someone who kind of “gets it” about capitalism but who is unable, for whatever reason, to draw the logical conclusions. The final paragraphs of his column entries that point to some serious flaw in capitalist economic arrangements are almost always anticlimactic disappointments.

His latest piece, a brief exposé of how capitalist forces contribute to bad diets and poor health titled “Coronary Capitalism”, serves as a great example of his unsatisfying lessons. The piece starts off digging into an important economic matter. After noting that decreased life expectancy is bad for economic growth, he explains that making people fat and sick is probably a net boon to the economy, all aspects considered. Here’s the nut:

Highly processed corn-based food products, with lots of chemical additives, are well known to be a major driver of weight gain, but, from a conventional growth-accounting perspective, they are great stuff. Big agriculture gets paid for growing the corn (often subsidized by the government), and the food processors get paid for adding tons of chemicals to create a habit-forming – and thus irresistible – product. Along the way, scientists get paid for finding just the right mix of salt, sugar, and chemicals to make the latest instant food maximally addictive; advertisers get paid for peddling it; and, in the end, the health-care industry makes a fortune treating the disease that inevitably results.

Coronary capitalism is fantastic for the stock market, which includes companies in all of these industries. Highly processed food is also good for jobs, including high-end employment in research, advertising, and health care.

So, who could complain? Certainly not politicians, who get re-elected when jobs are plentiful and stock prices are up – and get donations from all of the industries that participate in the production of processed food. Indeed, in the US, politicians who dared to talk about the health, environmental, or sustainability implications of processed food would in many cases find themselves starved of campaign funds.

Okay, all of this rings true. But doesn’t it sound like the problem is pretty deep? Doesn’t the problem even seem inherent to capitalism?

Not for an economist steeped in the religion of markets — “free” or otherwise. For these cats, the market — regulated or not — has to form the basis of any solution to an economic problem… even when the market causes the problem in the first place. Rogoff is so conventional in his mindset, he seems to think market forces are actually an excuse for problems, rather than ever being able to draw the conclusion that markets are the problem. Look at the way he almost gives food pricing a pass:

True, market forces have spurred innovation, which has continually driven down the price of processed food, even as the price of plain old fruits and vegetables has gone up. That is a fair point, but it overlooks the huge market failure here.

[emphasis added]

Let’s explore the first sentence, which is so strangely structured as to imply that lowering food prices through subsidies, monocropping, and over-processing is a positive in any way — like, cheap food = good, so it counts for something. But let’s give Rogoff the benefit of the doubt. I think it’s fair to define “innovation” as developments that make something more economically efficient or profitable but not necessarily “better”. Still, I’d bet most people think of innovation as inherently “good”. It would make sense to take pause here and consider that in capitalism, innovation is something that helps capitalists. It may incidentally help workers, but usually it does not. And it doesn’t necessarily help consumers at all; it might even harm them. So finding cheaper ways to get junk food out to people is an innovation — one that is killing us.

But Rogoff acknowledges the “market failure” — so why am I picking on him for allegedly not recognizing that markets are the failure? Am I just nit-picking? Rogoff goes on:

… [P]roducers have few incentives to internalize the costs of the environmental damage that they cause. Likewise, consumers have little incentive to internalize the health-care costs of their food choices.

As far as I can discern, producers have no incentives to internalize the costs of environmental damage of their economic activity. I would love to see Rogoff’s list of the few incentives he thinks they do have. But where is this division coming from, concerning who has what incentives to internalize “externality” costs? This divide between producer and consumer is very real in our society, but how unimaginitive does an economist have to be — or how logically manipulative — to divvy up who bears what costs of bad economic behavior? Rogoff seems to be suggesting, by implication, that producers should have to internalize environmental costs and consumers should have to internalize health care costs of bad agricultural, food-processing, and dietary practices. Consumers somehow aren’t responsible for the production of their food, and producers aren’t responsible for the consumption of their goods (even though previously he notes that advertising is a significant force in the equation). This is the best analysis a conventionally “progressive” orientation on economics produces: bizarre, irrational surface conclusions drawn about a system that is fundamentally flawed at its core.

So what are Rogoff’s disappointing, vague, intangible suggestions for addressing the latest problem he has rightfully (if not rightly) exposed? Well, you can bet he will suggest reforming the “pathological regulatory-political-economic dynamic that characterizes” the food industry, for starters. It isn’t the market, you see; it’s our failure to regulate that pesky rascal. Indeed, Rogoff insists,

We need to develop new and much better institutions to protect society’s long-run interests.

That’s the only sentence we get on the matter, so we’re left to presume he’s talking about regulating bodies of some sort, to rein in the market, or manipulate it so that it works the way centuries-old magic-imbued dogmas suggest it should… you know, intervene to make markets do what they’re supposed to do precisely as long as we don’t intervene.

But even this cop-out directive comes with a familiar warning.

Of course, the balance between consumer sovereignty and paternalism is always delicate. But we could certainly begin to strike a healthier balance than the one we have by giving the public far better information across a range of platforms, so that people could begin to make more informed consumption choices and political decisions.

And that’s it. It’s all he offers. I don’t know Rogoff so I won’t presume to know what goes on in his mind, but it wouldn’t surprise me if the constraints of a neoclassical economics education, a current gig at Harvard, and a couple of stints at the IMF, have limited Rogoff’s imagination so that he can’t fathom there might be another way to manage production, consumption, and allocation in a modern society. Standard forms of centrally planning are too “paternal” to consider; I’d agree with that. And I’d even suggest that having a thoroughly undemocratic government like the United States republic intervene to coerce policy in a major sector of the economy would be rashly paternalistic, with mixed and confusing impact.

So what does that leave us with? Oh, if only there was a way to plan production, consumption, and allocation in a democratic manner, averting the paternalism problem altogether. Information for consumers is indeed a good start. But short of people actually organizing in their dual capacities as consumers and producers, let’s not pretend we can change much just by making smarter purchases. The idea of using the blunt instrument that is “voting with our dollars” to affect the agricultural and manufacturing policies of the handful of conglomerates that dominate our food supply is just plain ridiculous. Change will require collective action to tear down existing institutions and replace them with a foundation of alternatives.


Billionaires Smell Like Fear


Bloomberg News, often the mouthpiece of the elite, is revealing the soreness of .01% at the nascent excoriation movement dishonoring their special place in society as “job creators”. How dare we not be grateful for their large(ne)ss?

Read this. It’s stunning how bizarrely out of touch these folks are even when making deliberate statements to the press.

One example:

[John] Paulson, the New York hedge-fund manager who became a billionaire by betting against the U.S. housing market, has also said the rich benefit society.

This is actually pretty good reporting, but not as explicit as it should be. Paulson made money off of mass suffering and loss. It’s not a judgment, it’s a statement of fact.

Then there’s this:

Attacking the banking system is a mistake because it contributes to “a healthier economy,” [Blackstone Group CEO Stephen Schwarzman] said in the interview.

I honestly don’t know if these guys believe this stuff. A banking system could contribute toward a healthier economy, but the banking system we have? Not so much.

“If I hear a politician use the term ‘paying your fair share’ one more time, I’m going to vomit,” said billionaire founder of Paychex, Tom Golisano.

Fairness makes them sick.

Then a thinly veiled threat:

“It’s simply a fact that pretty much all the private- sector jobs in America are created by the decisions of ‘the 1 percent’ to hire and invest,” [Delphi Financial Group founder Robert] Rosenkranz, 69, said in an e-mail. “Since their confidence in the future more than any other factor will drive those decisions, it makes little sense to undermine their confidence by vilifying them.”

Read: “If you attack us, you’ll get hurt worst and first.” You seriously couldn’t make this stuff up if you were making comic-book villains out of these elitists.

Really, the whole article is chock-full of this stuff. I’m not even picking favorites here.

Okay, just one more:

[Home Depot co-founder Bernard Marcus, who also co-founded the 1 Percenter public relations group Job Creators Alliance] said he isn’t worried that speaking out might make him a target of protesters. “Who gives a crap about some imbecile?” Marcus said. “Are you kidding me?”

Right. He doesn’t give a crap; he just started a PR firm to respond to it. Other than that one move, he shows no sign of being bothered by the nationwide protests.


Down with (‘Occupy’) Materialism, Up with Diversity and Holism


It’s barely secret that numerous local Occupy groups have encountered allegations of internal racism and sexism. When people who are marginalized or sidelined in the outside world feel that happening inside movement groups, they tend to get upset. I don’t really have trouble seeing why that makes sense, but a lot of people do, so I’d like to explain as briefly as possible one main reason for it.

Activists hopefully understand that racism, sexism/heterosexism, and ageism in movement circles are rooted in their institutionalized counterparts in the rest of society. But what keeps them from effectively preventing or even addressing these problems’ reemergence in and between activist groups? I believe the problem is that many leftist intellectuals insist oppressions such as sexism and racism are secondary to classism: the exploitation, alienation, and subjugation of labor. The Occupy movement is fertile ground for this ignorance, and I’m glad that it’s being challenged in many quarters.

Slavoj Žižek’s recent column really brought this home for me. In his commentary, pop-left darling Žižek falsely identifies the Occupy phenomenon as a monist movement about economics alone. But he’s not that far off, actually; he may be more right than wrong.

Žižek is positively giddy that, in his perception, the Left seems to be abandoning its attachment to struggles against racism and sexism, finally getting back to the real work of fighting capitalism.

In a kind of Hegelian triad*, the western left has come full circle: after abandoning the so-called “class struggle essentialism” for the plurality of anti-racist, feminist, and other struggles, capitalism is now clearly re-emerging as the name of the problem.

Yes, the was italicized in the original. I think he really believes all other problems are not just subordinate to and exacerbated by exploitative economic relations, but that “racism, sexism, and other struggles” are strictly rooted in capitalism.

He’s not alone. Many hardcore Marxists, and even reformed Marxists as most style themselves these days, have long lamented the Left’s foray into “identity politics”, that murky expanse in which the “special interests” of people of color, women, queers, and sometimes even young folks are taken into account, or even raised to the same level of concern as workers’ grievances against capital. Those who believe economics is the central (or only) battlefield of struggle usually admit some or all of these groups are oppressed, but they add caveats. They say (1) people of color, women, queers, etc. are primarily oppressed as workers; and (2) capitalism is the root cause of all oppression, so surmounting it will naturally lead to universal liberation.

What’s really going on here? How is it that someone with a supposedly sophisticated mind like Žižek’s can believe that capitalism is really the only problem (“the problem”)?

Here’s the deal: capitalism is “reemerging as the name of the problem” because the OWS phenomenon started with a massive influx of people who are new to radicalism and radical ideas. These folks first came together mainly around economic concerns, i.e., Wall Street vs Main Street, 1% vs. 99%, etc. Then shifty Marxian ideologues swooped in to coopt Occupy Wall Street, along with its various manifestations and energy. The truth is, they did a pretty poor job of this, I gather largely because OWS and its offshoots were steadfastly anti-authoritarian. Still, as a social phenomenon that lacks the sophistication developed through generations of struggle and learned analysis, Occupy is highly susceptible to oversimplified ideologies and sectarianism. Craven Marxist hacks apparently cannot help but try to take advantage of this, even through the pages of mainstream newspapers.

Make no mistake: materialist fixation (also known as “economism” or “class struggle reductionism”, as Žižek noted) in North American movements means in practice writing off or at least subordinating major concerns of pretty much everyone outside the white, male so-called “middle class” (not to mention groups like young people, among whom consciousness raising of oppression is barely active). This doesn’t seem to matter to folks like Žižek, because they can draw the privileged into their camp with promises that the resulting vanguard will take care of women and people of color (who are technically welcome, after all) “after the revolution” (guided by the remaining white men who stay in board).

There’s nothing like an immature movement to make people with immature analysis feel righteous. And there’s nothing like a lack of real organizing experience to let someone believe exclusive ideologies won’t have exclusive effects on participation. At last, there’s nothing like being a straight white male to enable one to decide that racism and sexism are secondary to classism.

Even if you buy into a theory that poses a primacy of economics over cultural, interpersonal, and other social dynamics, consider the implications of organizing around class issues to the general exclusion of anti-racism, anti-sexism, anti-ageism, and so forth. This is what some incarnations of the Occupy phenomenon have tended toward; women and people of color (too many links to list) especially are taking notice. And they’re not just charging that the Wall Street-oriented focus doesn’t include their particular interests; they’re noting that traditional race, sex, and age-based hierarchies are appearing within Occupy groups.

To truly transform society, a social movement will need to be radical (seek out and strike at the roots of problems), and its approach to the array of oppressions will need to be holistic. To attract the kind of diverse participation that makes a movement worth really standing behind, it will need to be at least pluralistic in this crucial regard. Sidelining or subordinating the major, legitimate concerns of people from marginalized communities and identities all but guarantees a movement dominated by people with backgrounds and privileges in tune with the top 20% that really owns and runs society, if not the 1%. And even though Occupy might be under the impression that the 99% are one big happy monolith, reality begs to differ. Failing to acknowledge this reality is essentially terminal for any radical social movement in the US, Canada, or Western Europe.

The good news is, there are elements inside most Occupy manifestations that I’ve heard of — including straight white males — who are willing to challenge failures of inclusiveness. There are folks effectively making the case for holistic or at least pluralistic approaches. Occupy may well be headed in the right direction, not least because its failure to empower an official leadership has not allowed the narrowly, materially focused among them to heed typical calls of “let’s just move on” from matters of race, gender, and so forth. That said, the failure to have accountable leadership has enabled unofficial hierarchies to develop, and this militates in the wrong direction, almost no matter their character.

If you’re participating in an Occupy general assembly or working group and feel like calls for inclusiveness and diverse objectives are bogging down the process, I urge you to rethink. There is power in movement and organizational diversity, and there is something to the idea that addressing oppressions other than hierarchy and classism is critical to the endeavor of radical social transformation.

* (I wouldn’t worry too much if the meaning of “Hegelian triad” doesn’t jump out at you; it’s pretty clear with references of this nature that you aren’t Žižek’s intended audience. There’s no use for that phrase except as a wink to those steeped in the teachings of the pre-Marxian philosopher Hegel. He’s just talking to the academics and bookworms; he doesn’t mind if the rest miss his message. If you haven’t read Hegel, maybe you don’t really matter to Žižek.)

Photo credit: Will Stevens/AP


A Brief Animated History of the Near Economic Future


This video from the Post-Carbon Institute is pretty cool. I hope it goes viral and jars some folks out of complacency.





Are We Really All One Big Equally Unhappy 99%?


Radical economist Michael Albert has made a tremendous contribution to the so-called occupy movement by injecting nuanced class analysis. The 99% slogan has caught on, and it’s easy to understand why. But it’s not a good idea to accept the notion that everyone who isn’t super rich is in one unified camp, even setting ideology aside. The 99% can’t form an egalitarian society or anything close to it until we address internal structural matters… such as that pesky third class aside from workers and capitalists. I believe it’s downright dangerous, and that maybe my friend Mike understates the problem, if anything.

We Are The 99% – But Are We?