"In a time of universal deceit telling the truth is a revolutionary act." -George Orwell

Posts Tagged ‘Wage Stagnation’

Why The Cult Of Hard Work Is Counter-Productive: Loafing Around Can Be An Act Of Dissent Against The Ceaseless Demands Of Capitalism

In Uncategorized on December 20, 2013 at 7:57 pm

Oldspeak: “There is no kind of idleness, by which we are so easily seduced, as that which dignifies itself by the appearance of business and by making the loiterer imagine that he has something to do which must not be neglected, keeps him in perpetual agitation and hurries him rapidly from place to place . . . To do nothing every man is ashamed and to do much almost every man is unwilling or afraid. Innumerable expedients have therefore been invented to produce motion without labour, and employment without solicitude Some are always in a state of preparation, occupied in previous measures, forming plans, accumulating materials and providing for the main affair. These are certainly under the secret power of idleness. Nothing is to be expected from the workman whose tools are for ever to be sought. ” -Samuel Johnson

“The crisis of complexity we’ve constructed is destroying life on earth. How different would the world be if the social agreement that is capitalism was no longer subscribed to by those currently being ruthlessly and ceaselessly dominated by it? if we refused to be driven mad by senseless and soulless busy work and wage slavery. Refused to accept the illusion that we need money to be happy and live richly. Rejected the propaganda of infinite growth, endless consumption, violence, domination, exclusion, competition, greed, cruelty and inhumanity of go go go go that are necessary for the agreement to be maintained? Gave our life energy to things that could benefit others and by extension ourselves… Gave the majority of our life energy to inner work and cultivating our higher selves? if we all agreed to give our life energy to good mindful work and not mindless unneccesary work. i imagine it would be a lot more pleasant for everyone than it is now. More meaningful. Fulfilling. Lovelit.” -OSJ

By Stephen Poole @ The New Statesman:

Recently, I saw a man on the Tube wearing a Nike T-shirt with a slogan that read, in its entirety, “I’m doing work”. The idea that playing sport or doing exercise needs to be justified by calling it a species of work illustrates the colonisation of everyday life by the devotion to toil: an ideology that argues cunningly in favour of itself in the phrase “work ethic”.

We are everywhere enjoined to work harder, faster and for longer – not only in our jobs but also in our leisure time. The rationale for this frantic grind is one of the great unquestioned virtues of our age: “productivity”. The cult of productivity seems all-pervasive. Football coaches and commentators praise a player’s “work rate”, which is thought to compensate for a lack of skill. Geeks try to streamline their lives in and out of the office to get more done. People boast of being busy and exhausted and eagerly consume advice from the business-entertainment complex on how to “de-fry your burnt brain”, or engineer a more productive day by assenting to the horror of breakfast meetings.

A corporate guru will even teach you how to become a “master of extreme productivity”. (In these extreme times, extremity is always good; unless, perhaps, you are an extremist.) No one boasts of being unproductive, still less counterproductive. Into the iron gate of modernity have been wrought the words: “Productivity will set you free.”

Strategies to enhance the “productivity” of workers have been formalised since at least Frederick Winslow Taylor’s early-20th-century dream of “scientific management” through methods such as “time studies”. The latest wheeze is the Big Data field of “workforce science”, in which everything – patterns of emails, the length of telephone calls – may be measured and consigned to a comparative database to create a perfect management panopticon. It is tempting to suspect that the ambition thus to increase “worker productivity” is aimed at getting more work out of each employee for the same (or less) money.

To the long-evolving demands of productivity at work we must now add the burden of productivity everywhere else. As the Nike T-shirt’s slogan implies, even when we’re not at work, we must be doing work. There is certainly a great deal of Taylorised labour available on the internet: “sharing”, “liking” and updating profiles constitutes click-farm piecework for which we eagerly volunteer, to the profit of the large “social” media corporations.

Even for those who are not constantly bombarded with work demands outside the office, the ubiquity of information processing presents a temptation to be on call at all times. Our world has become an ambient factory from which there is no visible exit and there exists an industry of self-help technologies devoted to teaching us how to be happy workers. “Is information overload killing your productivity?” asks a representative business story. The answer is to adopt yet more productivity strategies. The labour of work is thus extended to encompass the labour of learning how to keep up with your work (specialised techniques, such as “Inbox Zero”, to manage the email tsunami) as well as the labour of recovering from your work in approved ways.

“Exercise,” advises one business magazine feature. “It makes you more productive.” In a perfect world, you would be getting exercise while you work – standing desks and even treadmill desks are sold as magical productivity enhancers. In the future, we’ll enjoy the happy possibility of carrying on with our work while out running, thanks to “wearable computing” devices such as Google Glass, which has the potential to become the corporate equivalent of the electronic tags that record the movements of criminals.

In the vanguard of “productivity” literature and apps was David Allen’s “Getting Things Done” (GTD) system, according to which you can become “a wizard of productivity” by organising your life into folders and to-do lists. The GTD movement quickly spread outside the confines of formal work and became a way to navigate the whole of existence: hence the popularity of websites such as Lifehacker that offer nerdy tips on rendering the messy business of everyday life more amenable to algorithmic improvement. If you can discover how best to organise the cables of your electronic equipment or “clean stubborn stains off your hands with shaving cream”, that, too, adds to your “productivity” – assuming that you will spend the time that is notionally saved on a sanctioned “task”, rather than flopping down exhausted on the sofa and waking groggily seven hours later from what you were sternly advised should have been a power nap of exactly 20 minutes. If you need such “downtime”, it must be rigorously scheduled.

The paradox of the autodidactic productivity industry of GTD, Lifehacker and the endless reviews of obscure mind-mapping or task-management apps is that it is all too easy to spend one’s time researching how to acquire the perfect set of productivity tools and strategies without ever actually settling down to do something. In this way, the obsessive dream of productivity becomes a perfectly effective defence against its own realisation.

As Samuel Johnson once wrote: “Some are always in a state of preparation, occupied in previous measures, forming plans, accumulating materials and providing for the main affair. These are certainly under the secret power of idleness. Nothing is to be expected from the workman whose tools are for ever to be sought.”

Nor is there any downward cut-off point for “our current obsession with busyness”, as one researcher, Andrew Smart, describes it in his intriguing book Autopilot: the Art and Science of Doing Nothing. Smart observes, appalled, a genre of literary aids for inculcating the discipline of “time management” in children. (Time is not amenable to management: it just keeps passing, whatever you do.) Not allowing children to zone out and do nothing, Smart argues, is probably harming their development. But buckling children into the straitjacket of time management from an early age might seem a sensible way to ensure an agreeably docile new generation of workers.

If so, the idea has history. In 1770, an anonymous essay on trade and commerce was published in London. (It is now usually attributed to a “J Cunningham”.) In it, the author proposes that orphans, “bastards and other accidental poor children” ought to be made to labour in workhouses for 12 hours a day from the age of four. (He allows that two of these hours might be devoted to learning to read.) This will have the happy effect, the author argues, of creating a new generation “trained up to constant labour” and thus increasing the general industry of the population, so that future labourers will be happy to earn in six days a week what they currently make in four or five.

Cunningham’s proposed workhouses are also conceived to house (or, rather, imprison) adult vagrants and other so-far-incorrigible poor people. Existing workhouses are too luxurious, he complains: “Such house must be made an house of terror”. Only terror will make the inmates properly productive; the solution is “the placing of the poor in such a situation that loss of liberty, hunger, thirst . . . should be the immediate consequences of idleness and debauchery”.

Fear has not ceased to be a useful spur to productivity. A recent article in the London newspaper Metro reported that research had shown that “dedicated Britons” were “less likely to pull a sickie” than workers in Germany and France. The researcher claimed: “Strong employment protection and generous sick pay was empirically found to contribute to increased staff sickness in Germany and France.” It could indeed be that Europeans are slackers and Brits are peculiarly “dedicated”. Or it could be that Britain’s more “flexible” labour market terrifies citizens into struggling into work even when they are ill.

The reason sickness is undesirable is not that it causes distress or discomfort but that it results in what is often called “lost productivity”. This is a sinister and absurd notion, predicated on the greedy fallacy of counting chickens before they have hatched. “Workplace absence through sickness was reported to cost British business £32bn a year,” the researcher claimed in Metro: a normal way of phrasing things today, but one with curious implications. The idea seems to be that business already has that money even though it hasn’t earned it yet and employees who fail to maintain “productivity” as a result of sickness or other reasons are, in effect, stealing this as yet entirely notional sum from their employers.

It took a long time before the adjective “productive” – which once simply meant “generative”, as applied to land or ideas – acquired its specific economic sense, in the late 18th century, of relating to the production of goods or commodities. (The noun form is first recorded by the Oxford English Dictionary in an essay by Samuel Taylor Coleridge, in which he writes of the “produc­tivity” of a growing plant.) To call a person “productive” only in relation to a measured quantity of physical outputs is another way that business rhetoric has long sought to dehumanise workers.

One way to counter this has been to attempt to recuperate the supposed vice of idleness – to hymn napping, daydreaming and sheer zoning out. Samuel Johnson is sometimes counted among the champions of faffing, perhaps simply because of the name of his essay series The Idler. Yet he looked sternly on occupying oneself with “trifles”, as he describes his dilettante friend Sober doing in one of those columns. The guiding principle of The Idler, as Johnson described it in the farewell essay, was to encourage readers “to view every incident with seriousness, and improve it by meditation”. So meditating seriously is not idleness.

On the other hand, Johnson noted sagely in an earlier entry, one can be idle while appearing anything but: “There is no kind of idleness, by which we are so easily seduced, as that which dignifies itself by the appearance of business and by making the loiterer imagine that he has something to do which must not be neglected, keeps him in perpetual agitation and hurries him rapidly from place to place . . . To do nothing every man is ashamed and to do much almost every man is unwilling or afraid. Innumerable expedients have therefore been invented to produce motion without labour, and employment without solicitude.” Does this not perfectly describe our modern saturation in fatuous busywork?

David Graeber, the anthropologist and author of Debt: the First 5,000 Years, would also probably approve of it as a characterisation of what he calls “bullshit jobs”. In a recent essay for Strike! magazine, Graeber remarks on “the creation of whole new industries like financial services or telemarketing, or the unprecedented expansion of sectors like corporate law, academic and health administration, human resources, and public relations”, all of which he describes as “bullshit” and “pointless”. Their activity is to be contrasted with that of what Graeber calls “real, productive workers”.

It is telling that even in such a bracingly critical analysis, the signal virtue of “productivity” is left standing, though it is not completely clear what it means for the people in the “real” jobs that Graeber admires. It is true that service industries are not “productive” in the sense that their labour results in no great amount of physical objects, but then what exactly is it for the “Tube workers” Graeber rightly defends to be “productive”, unless that is shorthand for saying, weirdly, that they “produce” physical displacements of people? And to use “productive” as a positive epithet for another class of workers he admires, teachers, risks acquiescing rhetorically in the commercialisation of learning. Teaching as production is, etymologically and otherwise, the opposite of teaching as education.

Idleness in the sense of just not working at all, rather than working at a bullshit activity, was championed by the dissident Marxist Paul Lafargue, writer of the 1883 manifesto The Right to Be Lazy. This amusing denunciation of what Lafargue calls “the furious passion for work” in capitalist civilisation, which is “the cause of all intellectual degeneracy”, rages against its own era of “overproduction” and consequent recurring “industrial crises”. The proletariat, Lafargue cries, “must proclaim the Rights of Laziness, a thousand times more noble and more sacred than the anaemic Rights of Man concocted by the metaphysical lawyers of the bourgeois revolution. It must accustom itself to working but three hours a day, reserving the rest of the day and night for leisure and feasting.”

That sounds nice but why exactly should we do it? It is because: “To force the capitalists to improve their machines of wood and iron, it is necessary to raise wages and diminish the working hours of the machines of flesh and blood.” Workers should refuse to work so that new gadgets get invented that will do the work for them. Similarly, Bert­rand Russell, in his 1932 essay “In Praise of Idleness”, argued that technology should make existing work patterns redundant: “Modern methods of production have given us the possibility of ease and security for all,” he wrote. Somewhere, he is still waiting for that possibility to be realised.

One modern anti-work crusader who cleanly abandons any notion of productivity is Federico Campagna, whose recent book The Last Night is an exercise in poetic dissidence. In seeking their existential justification in work, Campagna writes, “Humans elected their very submission to the throne as their new God.” Those who resist the siren promises of labour are therefore the true “radical atheists” and should be glad also to call themselves “squanderers”, “egoists”, “disrespectful opportunists”, “parasites” and most of all “adventurers”. Campagna explains: “Adventurers, like all humans, live within a dream, in which they try to be the lucid dreamers.” Something like dreaming or idling, it turns out, is also now sanctioned by another arena whose popular rhetoric often lays claim to a kind of religious authority: that of neuroscience.

According to Andrew Smart’s book Autopilot, recent (but still controversial) brain research recommends that we stare vacantly into space more often. “Neuroscientific evidence argues that your brain needs to rest, right now,” Smart declares on the first page. (It took me a long time to finish the book, because I kept putting it down to have a break.)

Smart’s evidence suggests the existence of a “default network”, in which the brain gets busy talking to itself in the absence of an external task to focus on. To allow this “default network” to do its thing by regularly loafing around rather than switching focus all day between futile bits of work, Smart argues, is essential for the brain’s health. “For certain things the brain likes to do (for example, coming up with creative ‘outside of the box’ solutions),” he writes, “you may need to be doing very little.”

The poet Rainer Maria Rilke, Smart observes, was not very “productive” in terms of the quantity of poems he produced in an average year. However, while pootling away his time, he occasionally experienced a torrent of inspiration and what he did produce were works of greatness.

This reminds us that it is not necessary to abandon the notion of “productivity” altogether. We all like to feel that we have done something useful, interesting or fun with our day, even (or especially) if it has not been part of our official work, and we might harmlessly express such satisfaction by saying that our day has been productive.

This ordinary usage encodes an ordinary wisdom: that mere quantity of activity – as implied by the get-more-done mania of the productivity cult – has nothing to do with its value. Economics does not know how to value Rainer Maria Rilke over a prolific poetaster in receipt of an official laureateship. (One can be confident that, while mooching around European castles and writing nothing for years on end, Rilke would never have worn a T-shirt that announced: “I’m doing work”.) And his life sounds like more fun than one recent Lifehacker article, which eagerly explained how to organise your baseball cap collection by hanging the headwear on shower-curtain hooks arrayed along a rail.

Perhaps I shouldn’t mock. All that time saved every morning by knowing the exact location of the baseball cap you want to wear will surely add up, earning you hours more freedom to hunt and hoard ever more productivity tips, until you are a purely theoretical master at doing nothing of value in the most efficient way imaginable.

Steven Poole’s “Who Touched Base in My Thought Shower? A Treasury of Unbearable Office Jargon” is published by Sceptre (£9.99)

The Universal Pre-K Diversion: Why Isn’t Closing 129 Chicago Public Schools National News?

In Uncategorized on March 2, 2013 at 7:36 pm

Oldspeak:“President Obama waxed poetic at his state of the union speech; tours the country crowing about providing universal pre-k education and increasing access to college education, and receives thunderous applause. One has to wonder why then, he has been silent about the decimation of public school systems nationwide? Even though most of the school closings and privatizations are occurring in socioeconomically disadvantaged minority-majority communities where he presumably did his much ballyhooed community organizing. Why no discussion of the increasing corporatization and militarization of public schools that has no measurable benefits for students?  Probably because he appointed as his education secretary Arne Duncan, a non-educator & former CEO of Chicago Public Schools who was instrumental in implementing the CPS’s “Renaisance 2010” school privatization scheme. Yes, Mr. Duncan oversaw the conversion of  over 100 public schools to charter schools during his tenure in Chicago. What about others in the political class, red and blue? Why the silence on this? Bruce A. Dixon has an interesting take.

Related Stories:

Educators Push Back Against Obama’s “Business Model” for School Reforms

“Who’s Killing Philly Public Schools?”: Daniel Denvir on Plan for School Closings, Privatization

A Look at Arne Duncan’s VIP List of Requests at Chicago Schools and the Effects of his Expansion of Charter Schools in Chicago

Zombie Politics, Democracy, And The Threat of Authoritarianism

By Bruce A. Dixon @ Black Agenda Report:

It’s an obvious question, with an easy answer. Our nation’s bipartisan political elite have decided to privatize public education. They know the only way they can execute this deeply unpopular policy is to do it on the down-low, with a minimum of coverage, and no mention of the p-word, especially of growing civic resistance to it.

If you don’t live in Chicago you might not know that the CEO and the dozens of other six figure a year mayoral cronies who run the Chicago Public Schools want to close 129 public schools this year, more than a third of the city’s total. It’s not national news for the same reason that closing 40 public schools in Philadelphia last year wasn’t national news, and massive school closings in the poorer neighborhoods of cities across the country is not news either.

It’s not news because school closings and school privatization, the end game of the bipartisan policies the Obama administration, Wall Street, the US Chamber of Commerce, a host of right wing foundations and deep pockets and hordes of politicians in both parties from the president down are pushing down the throats of communities across the country, are deeply unpopular. The American people, and especially the parents, teachers, grandparents, and other residents of poorer neighborhoods where closings and privatization are happening emphatically don’t want these things.

Even the word describing their policy, “privatization” is so vastly unpopular that they’ve taken it out of circulation altogether. The best way, our leaders imagine, to contain and curtail resistance to their deeply unpopular policies is to avoid naming them for what they are, to keep them on the down low, to not report on their implementation, and certainly to not cover any civic resistance to them.

Local elites in each city and school district concoct real or imaginary “crises” to which the solution is always firing more experienced teachers, hiring more temps in their place, instituting more high-stakes testing, closing more public schools and substituting more unaccountable (and often profitable) charter schools, frequently in the same buildings that once housed public schools. In Chicago the “crisis” is precipitated every year when the CPS (that’s Chicago Public Schools – Chicago’s never had an elected school board, they’re all mayoral appointees) honchos announce the schools are in a billion dollar hole. The Chicago Teachers Union of course, took a look over the same books and revealed that despite the host of top $100,000 a year officials whose jobs never seem to be cut, the system was nine figures in the black, not ten in the red. Naturally, local and national media didn’t report that either.

Chicago’s teachers have done what those in New York, Houston, Dallas, L.A. and others have not, and spent their union dues funding outreach and collaboration with parents across the city, so neighborhood hearings on the school closings are packed to overflowing with outraged parents, indignant local business people, angry teachers and concerned students. If CNN, MSNBC, or Fox News gave the school closings and privatization story a fraction of the coverage they gave deceptive and dishonest pro-privatization movies like Waiting For Superman and Won’t Back Down, the outrage against the move to privatize education would be unstoppable. The most coverage the wave of school closings have received lately was a misleading segment on Melissa Harris-Perry’s weekly TV show on whether school closings were “racist” or not, with no examination of the how or why they happen or the growing resistance to them.

Oceans of ink and hot air have been expended claiming that “social media” would somehow take up the slack created by the disappearance of local news gathering organizations, and how these things can somehow fuel and sustain a wave of public outrage that can topple unjust authority and make the will of the people felt. But when it comes to the war of our elite waged to privatize public education, we haven’t seen it yet.

For Black Agenda Radio, I’m Bruce Dixon. Find us on the web at www.blackagendareport.com.

Bruce A. Dixon is managing editor at Black Agenda Report. A longtime Chicagoan, he now lives in exile near Marietta GA, where he is a state committee member of the Georgia Green party and a partner in a tech firm. Contact him via this site’s contact page, or at bruce.dixon(at)blackagendareport.com.

Labor Day & The Election Of 2012: It’s The Inequality, Stupid.

In Uncategorized on September 3, 2012 at 6:53 pm

https://i0.wp.com/truth-out.org/images/090312in_.jpgOldspeak:” Seems pretty self-explanatory: “As wealth and income rise to the top, moreover, so does political power. The rich are able to entrench themselves by lowering their taxes, gaining special tax breaks (such as the “carried interest” loophole allowing private equity and hedge fund managers to treat their incomes as capital gains), and ensuring a steady flow of corporate welfare to their businesses (special breaks for oil and gas, big agriculture, big insurance, Big Pharma, and, of course, Wall Street). All of this squeezes public budgets, corrupts government, and undermines our democracy. The issue isn’t the size of our government; it’s who our government is for. It has become less responsive to the needs of most citizens and more to the demands of a comparative few.“-Robert Reich

By Robert Reich @ Robert Reichs Blog:

The most troubling economic trend facing America this Labor Day weekend is the increasing concentration of income, wealth, and political power at the very top – among a handful of extraordinarily wealthy people – and the steady decline of the great American middle class.

Inequality in America is at record levels. The 400 richest Americans now have more wealth than the bottom 150 million of us put together.

Republicans claim the rich are job creators. Nothing could be further from the truth. In order to create jobs, businesses need customers. But the rich spend only a small fraction of what they earn. They park most of it wherever around the world they can get the highest return.

The real job creators are the vast middle class, whose spending drives the economy and creates jobs.

But as the middle class’s share of total income continues to drop, it cannot spend as much as before. Nor can most Americans borrow as they did before the crash of 2008 — borrowing that temporarily masked their declining purchasing power.

As a result, businesses are reluctant to hire. This is the main reason why the recovery has been so anemic.

As wealth and income rise to the top, moreover, so does political power. The rich are able to entrench themselves by lowering their taxes, gaining special tax breaks (such as the “carried interest” loophole allowing private equity and hedge fund managers to treat their incomes as capital gains), and ensuring a steady flow of corporate welfare to their businesses (special breaks for oil and gas, big agriculture, big insurance, Big Pharma, and, of course, Wall Street).

All of this squeezes public budgets, corrupts government, and undermines our democracy. The issue isn’t the size of our government; it’s who our government is for. It has become less responsive to the needs of most citizens and more to the demands of a comparative few.

The Republican response – as we saw dramatically articulated this past week in Tampa – is to further reduce taxes on the rich, defund programs for the poor, fight unions, allow the median wage to continue to fall, and oppose any limits on campaign contributions or spending.

It does not take a great deal of brainpower to understand this strategy will lead to an even more lopsided economy, more entrenched wealth, and more corrupt democracy.

The question of the moment is whether next week President Obama will make a bold and powerful rejoinder. If he and the Democratic Party stand for anything, it must be to reverse this disastrous trend.

Top Economists Agree: The U.S. Is In A Depression

In Uncategorized on May 8, 2012 at 2:07 pm

Oldspeak:”You know it’s grim when the prevailing debate among economists and historians is whether the world economy faces the “Great” depression of the 1930s or the “Long” depression of the 1870s.” I like to call it a “Stealth Great Depression” The bread lines have been replaced with EBT cards, and the banks are too bigger to fail, but many of the other conditions that existed in the 1930’s and 1870’s exist today. Tent cities, high unemployment, high poverty, high homelessness, wage stagnation, high debt, mass bankruptcy etc, etc, etc… A profound difference between today’s depression and those of the past is the propaganda. It’s so exquisitely and insidiously crafted that people actually believe it over what it happening all around them in the real world. Meanwhile “Institutions (banks) that know how and why to prevent things from falling apart and which nonetheless sit back and do nothing. A global collapse is being engineered. We need a radically new way forward to avert catastrophe but all we’re being offered by our political classes is tried and false ways of the past that are clearly leading to catastrophe. A ‘sustainable future’ is being monetized. More and more people awakening to the reality that those old ways are no longer acceptable. Our civilization needs a new operating system. Or a crash is not a matter of if, but when. Greed will be our downfall.

By Washington’s Blog:

Paul Krugman released a new book yesterday called “End This Depression Now“. In the introduction, Krugman writes:

The best way to think about this continued slump, I’d argue, is to accept that we’re in a depression …. It’s nonetheless essentially the same kind of situation that John Maynard Keynes described in the 1930s: “a chronic condition of subnormal activity for a considerable period without any marked tendency either towards recovery or towards complete collapse.”

Robert Shiller said yesterday that the world is in a state of “late Great Depression”.

Many other top economists also say that were in a Depression.

We are stuck in a depression because the government has done all of the wrong things, and has failed to address the core problems.

For example:

  • The government is doing everything else wrong. See this and this

This isn’t an issue of left versus right … it’s corruption and bad policies which help the top .1% but are causing a depression for the vast majority of the American people.

Oligarchy In The U.S.A.- How The Wealth Defense Industry Protects The Ultra-Rich: The .0001%

In Uncategorized on March 2, 2012 at 5:51 pm

Oldspeak:A small fraction of wealthy Americans constitute a powerful donor class that provides the vast majority of candidates’ funds. Long before ordinary citizens get to vote, they say, their choices are reduced to politicians deemed acceptable by the richest Americans via a “wealth primary,” in which candidates straying from a narrow economic agenda are shut out of campaign funding.“For all their influence at the polls, guys like Joe the Plumber aren’t typically campaign contributors,” explains Sheila Krumholz, executive director of the Center for Responsive Politics. “You’re more likely to see John the Bond Trader bankrolling these campaigns.” And she’s right: Of the roughly 1.4 million individual contributions of $200 or more during the 2008 elections, three-fourths of the money came from a mere one-fifth of the donors, who in turn comprised one-tenth of 1 percent of American adults.”-Jeffery A. Winters Today in America, being ‘merely-rich’ is not enough to live ‘comfortably’ and be represented by government. Apparently living comfortably involves avoiding taxation by paying untold sums and devoting whole industries of lawyers, accountants, and wealth management agents to defrauding the government. A government by virtue of their extreme wealth and inherent political power resources, 400 men run. Democracy’s gone, Oligarchical Capitalism reigns.

By Jeffery A. Winters @ In These Times:

In 2005, Citigroup offered its high net-worth clients in the United States a concise statement of the threats they and their money faced.

The report told them they were the leaders of a “plutonomy,” an economy driven by the spending of its ultra-rich citizens. “At the heart of plutonomy is income inequality,” which is made possible by “capitalist-friendly governments and tax regimes.”

The danger, according to Citigroup’s analysts, is that “personal taxation rates could rise – dividends, capital gains, and inheritance taxes would hurt the plutonomy.”

But the ultra-rich already knew that. In fact, even as America’s income distribution has skewed to favor the upper classes, the very richest have successfully managed to reduce their overall tax burden. Look no further than Republican presidential contender Mitt Romney, who in 2010 paid 13.9 percent of his $21.6 million income in taxes that year, the same tax rate as an individual who earned a mere $8,500 to $34,500.

How is that possible? How can a country make so much progress toward equality on other fronts – race, gender, sexual orientation and disability – but run the opposite way in its policy on taxing the rich?

In 2004, the American Political Science Association (APSA) tried to answer that very question. The explanation they came up with viewed the problem as a classic case of democratic participation: While the poor have overwhelming numbers, the wealthy have higher rates of political participation, more advanced skills and greater access to resources and information. In short, APSA said, the wealthy use their social capital to offset their minority status at the ballot box.

But this explanation has one major flaw. Regardless of the Occupy movement’s rhetoric, most of the growth in the wealth gap has actually gone to a tiny sliver of the 1% – one-tenth of it, or even one-one-hundredth.

Even more shockingly, that 1 percent of the 1% has shifted its tax burden not to the middle class or poor, but to rich households in the 85th to 99th percentile range. In 2007, the effective income tax rate for the richest 400 Americans was below 17 percent, while the “mass affluent” 1% paid nearly 24 percent. Disparities in Social Security taxes were even greater, with the merely rich paying 12.4 percent of their income, while the super-rich paid only one-one-thousandth of a percent.

It’s one thing for the poor to lose the democratic participation game, but APSA has no explanation for why the majority of the upper class – which has no shortage of government-influencing social capital – should fall so far behind the very top earners. (Of course, relative to middle- and lower-class earners, they’ve done just fine.)

For a better explanation, we need to look more closely at the relationship between wealth and political power. I propose an updated theory of “oligarchy,” the same lens developed by Plato and Aristotle when they studied the same problem in their own times.

Who are the oligarchs?

How much wealth does it take to make someone an oligarch in the United States?

Not just any rich person is an oligarch. Oligarchs are those rich enough to buy the professional firepower of the WDI to defend their wealth. Pulitzer Prize-winning economics reporter David Cay Johnston says that “this can sometimes be an outlay of $10 million to avoid $30 million in taxes, and other times spending only $1 million to save the same amount.”

For some perspective, look at the income chart above, which breaks down the extent of material inequality in the United States. Pay special attention to the last column, the Material Power Index (MPI), which defines each income level as a multiple of the average income among the bottom 90 percent of American taxpayers.

Even at more than 30 times the average income of the bottom 90 percent of Americans, an average annual income of $1 million for those in the top one-half of one percent is still too modest to make them oligarchs. These citizens are certainly rich. But they don’t have enough material power to hire anything beyond the cheapest foot soldiers of the WDI.

Starting with the next threshold, however — the top one-tenth of 1 percent of incomes — the MPI suddenly quadruples from 32 to 124, and then leaps another six-fold to 819 for those with incomes in the top one-one-hundredth of one percent. In 2007, about 150,000 Americans had average annual incomes of $4 million and above. This is the threshold at which oligarchs begin to dominate the landscape.

A quick review

First, let’s review what we think we know about power in America.

We begin with a theory of “democratic pluralism,” which posits that democracy is basically a tug-of-war with different interest groups trying to pull government policy toward an outcome. In this framework, the rich are just one group among many competing “special interests.”

Of course, it’s hard not to notice that some groups can tug better than others. So in the 1950s, social scientists, like C. Wright Mills, author of The Power Elite, developed another theory of “elites” – those who wield more pull thanks to factors like education, social networks and ethnicity. In this view, wealth is just one of many factors that might help someone become the leader of a major business or gain a government position, thereby joining the elite.

But neither theory explains how the super-rich are turning public policy to their benefit even at the expense of the moderately rich. The mass affluent vastly outnumber the super-rich, and the super-rich aren’t necessarily better-educated, more skilled or more able to participate in politics; nor do the super-rich dominate the top posts of American government – our representatives tend to be among the slightly lower rungs of the upper class who are losing the tax battle.

Also, neither theory takes into account the unique power that comes with enormous wealth – the kind found in that one-tenth of the 1%. Whether or not the super-rich hold any official position in business or government, they remain powerful.

Only when we separate wealth from all other kinds of power can we begin to understand why our tax system looks the way it does – and, by extension, how the top one-tenth of 1% of the income distribution has distorted American democracy.

Enormous wealth is the heart of oligarchy.

So what’s an oligarchy?

Across all political spectrums, oligarchs are people (never corporations or other organizations) who command massive concentrations of material resources (that is, wealth) that can be deployed to defend or enhance their own property and interests, even if they don’t own those resources personally. Without this massive concentration of wealth, there are no oligarchs.

In any society, of course, an extremely unequal wealth distribution provokes conflict. Oligarchy is the politics of the defense of this wealth, propagated by the richest members of society.

Wealth defense can take many forms. In ancient Greece and Rome, the wealthiest citizens cooperated to run institutionalized states that defended their property rights. In Suharto’s Indonesia, a single oligarch led a despotic regime that mostly used state power to support other oligarchs. In medieval Europe, the rich built castles and raised private armies to defend themselves against each other and deter peasants tempted by their masters’ vaults. In all of these cases oligarchs are directly engaged in rule. They literally embody the law and play an active role in coercion as part of their wealth defense strategy.

Contemporary America (along with other capitalist states) instead houses a kind of “civil oligarchy.” The big difference is that property rights are now guaranteed by the impersonal laws of an armed state. Even oligarchs, who can be disarmed for the first time in history and no longer need to rule directly, must submit to the rule of law for this modern “civil” arrangement to work. When oligarchs do enter government, it is more for vanity than to rule as or for oligarchs. Good examples are New York City Mayor Michael Bloomberg, former presidential candidate Ross Perot and former Massachusetts Governor Mitt Romney.

Another feature of American oligarchy is that it allows oligarchs to hire skilled professionals, middle- and upper-class worker bees, to labor year-round as salaried, full-time political advocates and defenders of the oligarchy. Unlike those backing ordinary politicians, the oligarchs’ professional forces require no ideological invigoration to keep going. In other words, they function as a very well-paid mercenary army.

Whatever views and interests may divide the very rich, they are united in being materially focused and materially empowered. The social and political tensions associated with extreme wealth bond oligarchs together even if they never meet, and sets in motion the complex dynamics of wealth defense. Oligarchs do overlap with each other in certain social circles that theorists of the elite worked hard to map. But such networks are not vital to their power and effectiveness. Oligarchic theory requires no conspiracies or backroom deals. It is the minions oligarchs hire who provide structure and continuity to America’s civil oligarchy.

The U.S. Wealth Defense Industry

The threats to wealth that oligarchs face, and want to overcome, create the enormous profit-making opportunities that motivate the wealth defense industry, or WDI. In American oligarchy, it consists of two components.

The first is the mercenary army of professionals – lawyers, accountants, wealth management agencies – who use highly specialized knowledge to navigate 72,000 pages of tax code and generate a range of tax “products” and advice, enabling oligarchs to collectively save scores of billions of dollars, every year, that would otherwise have to be surrendered to the state. While most of us are what I call “TurboTaxpayers,” buying cheap tax software to navigate our returns and make routine deductions, oligarchs purchase complex “tax opinion letters” from professional firms. These letters are drafted to justify enormous nonpayments of taxes if the IRS ever questions how certain transactions produce losses, or how other accounting gymnastics make it appear that no gains or compensation occurred. The letters can cost up to $3 million each, but can save an oligarch tens or hundreds of millions of dollars in a given year.

Written by some of the most high-powered attorneys and firms in the industry, tax letters serve to intimidate the legal department of the IRS even before a prosecution is contemplated.

The Senate is aware of these letters – noting in a 2003 report on the “tax shelter industry” that “respected professional firms are spending substantial resources … to design, market, and implement hundreds of complex tax shelters, some of which are illegal and improperly deny the U.S. Treasury of billions of dollars in tax revenues” – but getting specific information about them is extremely difficult, since the IRS rarely prosecutes oligarchs. When it does, most cases are sealed, and oligarchs who work with tax attorneys can invoke attorney-client privilege. But in 2003, there was a breach of this fortress of secrecy when the Senate published detailed reports about illegal tax shelters created by the accounting firm KPMG.

According to the Senate, the KPMG tax shelters created “phony paper losses for taxpayers, using a series of complex, orchestrated transactions involving shell corporations, structured finance, purported multi-million dollar loans, and deliberately obscure investments” for 350 clients between 1997 and 2001. The fake losses totaled about $8.4 billion, or $24 million per client; applied against their incomes, these losses reduced the taxes of each oligarch by an average of $8.3 million, or $2.9 billion for the group.

One of the reasons this case was exposed is that it was all rather down-market, using cheap cookie-cutter tax opinion letters priced at a mere $350,000 each.

Not only did all the firms and banks conspiring on behalf of these 350 oligarchs – and the oligarchs themselves – know that the investments “had no reasonable potential for profit,” but KPMG calculated that even if it was fined for failing to disclose the shelters, it would still earn far more in fees than it would pay in fines. The firm was fined $456 million. Even more incredibly, more than a dozen KPMG clients sued the firm for the taxes and penalties incurred after being discovered – the suits claim that KPMG bungled its job of creating shelters for tax evasion with zero legal risks for oligarchs. It’s tantamount to suing your hit man for a sloppy murder.

The second component of the WDI is the nitty-gritty legwork that keeps the tax system sufficiently porous, complex and uncertain enough to be manipulated. Some oligarchs do this work themselves, speed dialing public officials to directly complain about laws and regulations, but most do not. Instead, WDI professionals, motivated to earn a share of annual oligarchic gains, constitute a highly coherent and aggressive network for political pressure. These lobbyists fight to insert favorable material into the tax code, cut sections that cause problems, and block threats on the horizon.

Apologists for havens

Discussions about money in politics often begin with campaign finance reform. Advocates argue that a small fraction of wealthy Americans constitute a powerful donor class that provides the vast majority of candidates’ funds. Long before ordinary citizens get to vote, they say, their choices are reduced to politicians deemed acceptable by the richest Americans via a “wealth primary,” in which candidates straying from a narrow economic agenda are shut out of campaign funding.

“For all their influence at the polls, guys like Joe the Plumber aren’t typically campaign contributors,” explains Sheila Krumholz, executive director of the Center for Responsive Politics. “You’re more likely to see John the Bond Trader bankrolling these campaigns.” And she’s right: Of the roughly 1.4 million individual contributions of $200 or more during the 2008 elections, three-fourths of the money came from a mere one-fifth of the donors, who in turn comprised one-tenth of 1 percent of American adults.

But while this fraction does coincide with our approximation of the size of the American oligarchy, campaign donations are not oligarchs’ primary or even most effective strategy for political influence. Academics Michael Graetz and Ian Shapiro explain this in their 2005 book, Death by a Thousand Cuts: The Fight over Taxing Inherited Wealth.

“Campaign contributions, soft money, spending limits for political candidates and the like have become controversial issues,” they admit, “but they mattered little in the estate tax fight.” The battle was between smaller oligarchs and the biggest players at the top. Believing it unlikely that the elimination of the estate tax could be extended indefinitely, a significant number of wealthy Americans with a net worth between $5 and $15 million wanted the threshold moved up to exempt their estate tax. In exchange, they supported a higher estate tax rate on everyone above the threshold. Big oligarchs took the opposite position. They wanted no estate tax at all. But if Congress was going to bring it back, the ultra-rich supported a lower exemption in exchange for a lower overall rate.

The big oligarchs won again – but not because of campaign finance. “Money mattered more fundamentally in shifting the tectonic plates underlying American tax debates,” Graetz and Shapiro suggest. And this is precisely where oligarchs deploy their resources in the WDI.

Oligarchs’ “three decades of investments in activist, conservative think tanks” has blazed an ideological path that drones in the WDI follow. Activists at institutions like the Heritage Foundation supply “ideological ammunition to the lobbyists and interest groups … who work relentlessly … to keep up the tax-cutting pressure on the Hill.”

This pressure was hard at work in President Obama’s feeble attempt to curtail offshore tax havens in 2009. In the middle of massive public bailouts to the financial system and large bonuses on Wall Street, the president proposed stronger measures to fight against who he called “tax cheats,” the individuals using offshore tax havens to deny the government nearly $70 billion a year – a level equal to about seven cents on every dollar of taxes paid honestly.

But Obama’s proposals were less aggressive than his rhetoric. The president urged Congress to support efforts to sanction nations that maintained secrecy on bank accounts and corporate entities, and sought to hire 800 additional IRS agents “to detect and pursue American tax evaders abroad”; these measures were projected to save a mere $8.7 billion over 10 years – about one percent of the losses from offshore accounts. Despite the timidity, the proposals received only a lukewarm response from Democrats and outright hostility from Republicans, who argued that they would cripple American corporations’ ability to compete globally.

Dan Mitchell, a senior fellow (i.e. mercenary) at the Cato Institute (a think tank financed by American oligarchs), defended tax havens as “outposts of freedom.” If Americans are concerned that “individuals are moving their money to countries with better tax law, that should be a lesson to us that we should fix our tax law.”

In other words: Let’s decrease taxes on the super-rich.

The WDI, arising naturally from the opportunities and risks created by enormous wealth, has spawned its own pile of these opinion-makers, free to spread their ideas through a compliant corporate media while oligarchs themselves are free to look on.

Oligarchy, or Democracy?

To argue that the United States is a thriving oligarchy does not imply that our democracy is a sham: There are many policies about which oligarchs have no shared interests. Their influence in these areas is either small or mutually canceling.

Though it may strike at the heart of elitism, greater democratic participation is not an antidote to oligarchic power. It is merely a potential threat. Only when participation challenges material inequality – when extreme wealth is redistributed – do oligarchy and democracy finally clash.

The answer to the question of inequality, then, is troubling. Wars and revolutions have destroyed oligarchies by forcibly dispersing their wealth, but a democracy never has.

Democracy and the rule of law can, however, tame oligarchs.

A campaign to tame oligarchs is a struggle unlikely to fire the spirits of those outraged by the profound injustices between rich and poor. However, to those enduring the economic and political burdens of living among wild oligarchs, it is an achievement that can improve the absolute welfare of average citizens, even if the relative gap between them and oligarchs widens rather than narrows.

A graduate student in one of my seminars – resisting my terminology – once declared that the “U.S. has rich people, not oligarchs.” More than anything else, that statement claims that somehow American democracy has managed to do something no other political system in history ever has: strip the holders of extreme wealth of their inherent power resources and the political interests linked to protecting those fortunes.

Of course, this hasn’t happened.

But it is endlessly fascinating that we’re now in a moment when Americans are once again asking fundamental questions about how the oligarchic power of wealth distorts and outflanks the democratic power of participation.

Jeffrey A. Winters is an associate professor of political science at Northwestern University. For a more extensive explanation of his theory of oligarchy, read Oligarchy (Cambridge University Press, 2011).

 

As The Plutonomy Powers Ahead, The Realonomy Remains In Recession

In Uncategorized on February 3, 2012 at 4:55 pm

Oldspeak:‘In a Plutonomy “the rich absorb a disproportionate chunk of the economy and have a massive impact on reported aggregate numbers.” In other words, official economic statistics no longer represent the experience of the economy as a whole. More and more, they represent only the experiences of the very rich...the Realonomy has been in recession since 1999. Even at the very top of the Realonomy, people have experienced flat or declining incomes over the past 12 years…The Realonomy won’t start growing again until America addresses its runaway inequality. We need fairer taxes, higher minimum wages, and more – not less – government spending…That may all sound counterintuitive in a recession, but that’s only because we’ve gotten so used to the politics of Plutonomy. Growth isn’t enough.’ –Salvatore Babones. Not only is Growth not enough, it’s unsustainable. Infinite growth in simply IMPOSSIBLE on a planet with finite resources. The current empire in decline, the U.S. of A. one of the biggest debtor nations on the planet has not come to terms with the fact that it is indeed an empire in decline, and is generating more debt than wealth, while drawing down assets faster than they can replenish them, thus accelerating the rate of decline. “The ‘culture of debt’ has become a global issue, and it is not just financial, but defines how every society and economy now interacts with respect to their fundamental economic, human and natural assets.” –Edward B. Barbier We can’t continue down this unsustainable path indefinitely. The music will stop and the party will end. Then what? That’s what we need to be asking ourselves. Then what?

By Salvatore Babones @ Truthout:

America’s longest recession since World War II officially ended in June 2009. Since then, the economy has expanded by almost 6 percent (adjusted for inflation). All of the losses of 2007-2009 have been erased.

American economic output is now at an all-time high. So why doesn’t it feel that way?

Back in October 2005, three Citigroup stock analysts heralded the arrival of a new kind of economic system in the United States. They called it the “Plutonomy,” the economy of the rich.

They explained that in a Plutonomy “the rich absorb a disproportionate chunk of the economy and have a massive impact on reported aggregate numbers.” In other words, official economic statistics no longer represent the experience of the economy as a whole. More and more, they represent only the experiences of the very rich.

Official economic statistics show that US national income per capita grew a cumulative 10 percent between 1999 and 2011 (adjusted for inflation). In aggregate, we generate 10 percent more per person than we did 12 years ago. Where did that 10 percent growth go?

Up in the stratosphere of the American Plutonomy, the IRS reports that incomes among the top 400 American taxpayers increased 107 percent between 1999 and 2007 (adjusted for inflation). Top 400 incomes declined in 2008, but by most accounts they have now bounced back to pre-recession levels.

For people who just make it into the top 1 percent, the gains have been much more modest. Their real incomes have risen about 12 percent since 1999, depending how you count. By some estimates, the increase has been closer to 6 percent. In other words, people at the 99th percentile of the US income distribution – people making upwards of $360,000 per year – have just about kept pace with economic growth in the economy as a whole.

Since 1999, no group below the top 1 percent has even kept pace. They are the “other 99 percent.” They live in the “Realonomy.”

In the Realonomy, people make most of their money from wages, not investments. In the Realonomy, people have to worry about retirement planning and health insurance. In the Realonomy, people can’t afford to lose their jobs.

While the Plutonomy continues to grow by leaps and bounds, the Realonomy has been in recession since 1999. Even at the very top of the Realonomy, people have experienced flat or declining incomes over the past 12 years. For example, families at the 95th percentile of America’s income distribution have experienced, on average, a 1.2 percent decline in real income (income adjusted for inflation) since 1999.

Further down the ladder, the situation gets worse and worse. For families at the 80th percentile, incomes are down 1.3 percent; at the 60th percentile, down 4.4 percent; at the 40th percentile, down 7.1 percent; at the 20th percentile, down 10.5 percent.

Nor does education provide an insurance policy. Among college graduates with full-time, year-round jobs, real incomes are down 3.6 percent over the past 12 years.

On the other hand, those without college degrees or full-time jobs have fared even worse.

The simple fact is that the Realonomy has been stagnant or in recession since 1999. The Realonomy hit bottom in 2009-2010, but it still hasn’t bounced back. Only the Plutonomy is growing, not the Realonomy.

The Realonomy won’t start growing again until America addresses its runaway inequality. We need fairer taxes, higher minimum wages, and more – not less – government spending.

That may all sound counterintuitive in a recession, but that’s only because we’ve gotten so used to the politics of Plutonomy. Growth isn’t enough.

We have growth. The top of the top 1 percent is growing like crazy. It’s government’s job to redirect some of that growth to the other 99 percent.

 

Why Major Newspapers & Corporations Run Fake Job Ads To Avoid Hiring American Workers

In Uncategorized on February 3, 2012 at 2:36 pm

Oldspeak: Behold! The fruits of globalization! “Instead of being about talent, H-1B visa is about importing cheap labor. There’s an insidious way that the high-tech industry denies jobs to US citizens. It’s called the H-1B visa, which allows America’s technological firms – and other specialized employers – to bring in foreign employees, frequently at a lower wage package than might be paid to an individual with the same qualifications who is an American citizen. There are many arguments against the program, primarily the allegation that there is generally no actual shortage of US citizens with high-tech skills for the work done by H-1B visa holders. After the H-1B workers are sent back to their native nations, there are reports that they are rehired by US companies abroad to start offshore high-tech offices that move more US jobs overseas. In short, the H-1B visa could be seen as an outsourcing training program at the expense of highly skilled US professionals.” I wonder if Obama’s “Jobs Czar” GM CEO Jeffery Immelt is aware of this stealth job outsourcing sector of the economy. As CEO of a an American multinational corporation that employs 82% of its workforce outside the U.S., I would surmise, probably so. “Ignorance is Strength” “Profit Is Paramount”

Related Video

Immigration Attorneys Teach Corporations How To  Avoid Hiring Qualified Americans.

By Smoke & Mirrors:

Every Sunday, major newspapers, websites and corporations run fake job ads. Why? The goal is to prove that no qualified Americans are available, so that green cards can be secured for H1B workers (“highly-skilled” foreign workers from “high tech” to architects to nurses and Kindergarten teachers).

The claim is H-1B is a remedy for “labor shortages” and as a means of hiring “the best and the brightest” from around the world. The reality is it’s all about cheap labor.

The fundamental reason for the H1B Visa program, created in 1990, is to substitute cheap, imported, supposedly “skilled” (equivalent to American high school degree)  labor for more expensive American labor. The employer, who reaps a ton of tax advantages, doesn’t have to pay medical benefits, overtime, social security, etc., can also force the departing US worker to train their foreign replacement.  The problem is not lack of enforcement or fraud. Instead, the problem is gaping loopholes in the law.

Congress has allowed the expansion of importation under all VISA programs. 125,000 work authorized visas per month. This includes green cards, L-1, H1-b, H2-b etc  and the state hands out about 320K J-1 student work visas yearly.

Body Shops:

According to Civil Defense Attorney James Otto, who poses the question: “Whether the U.S. should allow the replacement of U.S. workers with foreigners imported under the several visa programs and should Government hire foreigners in stead of U.S workers?”, there are eight main body shops which bring in foreign workers to take American jobs. One body shop, Infosys, faces a lawsuit by former employee Jack Palmer over charges that it abused US visa programs. Per the Economic Times of India “The Infosys charges illustrate the growing conflict between the desires of multinational corporations to source cheaply (even if “cheap” has been mismeasured by not not being adjusted for risk) and what actions need to take place at a country level to make sure these very same multinationals have decent market for their goods.”

On December 7, 2011, Secretary of State Hillary Clinton, through the U.S. Embassy in India, announced that the State Department has authorized the U.S embassy to allow the admission of a limitless number of foreign workers into the U.S. to take jobs that millions of unemployed Americans could and would do.

The practical implications of the State Department’s conduct is that every U.S employer can now hire as many foreign workers as they desire to replace all American workers.

So even jobs that require face to face work are not safe from “outsourcing” because of “importing”.

Of course, this is no more the fault of the imported foreign nationals than it is the fault of the workers employed in sweatshops overseas.  The corporations treat them horrendously.  While displacing American workers, the goal is to reduce the salary level to a point where they can get qualified professional American workers at the same cheap price. Just one more government policy that result in We the People suffering in order that corporate profits soar.

Hi-Tech US Corporations Deny Skilled American Workers Jobs Through Abuse of Visa Loophole

By Mark Karlin @ BuzzFlash:

A short time ago, BuzzFlash at Truthout ran a commentary on how US global corporations don’t give a hoot about increasing jobs in America.

In it, we included a section about how Silicon Valley high-tech companies, particularly Apple, use overseas contractors to manufacture their latest technological consumer products. It has been documented that some of these contractors create such harsh conditions and pay such low wages that workers have been driven to suicide, as The New York Times and other publications have detailed.

 

In a two-part Times expose, an Apple executive claimed: “We [Apple] don’t have an obligation to solve America’s problems.” That was in response to Apple shipping so many potential US jobs overseas to these slave-wage sweatshops; e.g., “90 percent of the parts of an iPhone are made outside the U.S.”

But there’s another insidious way that the high-tech industry denies jobs to US citizens. It’s called the H-1B visa, which allows America’s technological firms – and other specialized employers – to bring in foreign employees, frequently at a lower wage package than might be paid to an individual with the same qualifications who is an American citizen. There are many arguments against the program, primarily the allegation that there is generally no actual shortage of US citizens with high-tech skills for the work done by H-1B visa holders.

President Obama appeared blindsided by a question on a Google Plus interactive town hall the other day from a woman whose husband had been laid off by Texas Instruments:

Jennifer Wedel was the second to question Obama, and the four-minute exchange was among the most memorable of the 50-minute online event.

“My question to you is to why does the government continue to issue and extend H-1B visas when there are tons of Americans just like my husband with no job?” she asked.

Obama offered that industry leaders have told him that there aren’t enough of certain kinds of high-tech engineers in America to meet their needs. Jennifer Wedel interrupted him to explain that that answer didn’t match what her husband is seeing out in the real world.

“Jennifer, can I ask what kind of engineer your husband is?”

“He’s a semiconductor engineer,” she told the president, who seemed genuinely surprised.

“If you send me your husband’s resume, I’d be interested in finding out exactly what’s happening right there,” he told her. “The word we’re getting is somebody in that high-tech field, that kind of engineer, should be able to find something right away. And the H-1B should be reserved only for those companies who say they cannot find somebody in that particular field.”

Of course, the high-tech companies are telling the White House and Congress that they can’t find US citizens for the H-1B jobs, but many critics argue that many high-tech companies hire H-1B workers without even offering the positions to Americans. On top of that, after the H-1B workers are sent back to their native nations, there are reports that they are rehired by US companies abroad to start offshore high-tech offices that move more US jobs overseas. In short, the H-1B visa could be seen as an outsourcing training program at the expense of highly skilled US professionals.

It was nice of the president of the United States to offer his personal job placement services to Jennifer Wedel’s husband, but it’s a bit disturbing that the White House appears to have fallen for the Silicon Valley canard.

When it comes to the H-1B visa, it’s the same old story: follow the profits.

A Failed Social Model: Providing Basic Goods Via Crushing Consumer Debt

In Uncategorized on November 22, 2011 at 4:15 pm

Oldspeak:” Something to think about days before the annual hedonistic consumption orgy that is “Black Friday” when crushing consumer debt will likely increase. “We have been living in a society where debts, rather than rights, have been the major means for accessing basic social goods like housing, education, and health care. That social model was built around the assumption that while real incomes stagnated and the state did not directly provide many basic goods through universal entitlements, cheap credit would do the trick instead. High finance was inextricably intertwined with the privileges of citizenship.” –Alex Gourevitch When High finance is linked to a system, you can pretty much guarantee it will be accompanied by exploitation, corruption, fraud, greed and disenfranchisement. We are beginning to see the devastating effects of attaching debt commitments to basic needs combined with decades long wage stagnation for most workers and concentration of wealth among owners. A collapsed housing market and unprecedented rates of foreclosure. 1 in 5 Americans on food stamps. 1 in 3 children living in poverty. Widespread medical bankruptcies and less and less access to preventative health care.  Exploding student loan debt and creation of artificially constricted choice of profession and shortages of manpower in vital and low-paid ‘public interest’ jobs. All while the banksters have grown richer and more brazen in their casino capitalistic practices. Providing basic social goods for all has very few negative consequences. However it doesn’t adhere to basic corporcratic ethos “Internalize profits, externalize costs”, thus universal rights and freedoms will continue to be at worst denied, and at best a monetarily  based privilege. “Profit Is Paramount”

By Alex Gourevitch @ New Deal 2.0:

Some things — education, health, housing — should be rights, not financed through taking on more and more debt.

Occupiers have joined anti-foreclosure advocates to occupy home auctions and abandoned buildings and block foreclosures. A few state attorneys general have begun resisting the Obama administration’s awful mortgage fraud settlement and started investigating banks and servicers. Even shareholders are in revolt, filing class action suits against their companies. By one measure, student loans are one of the biggest concerns amongst supporters of Occupy Wall Street. There is now an OccupyStudentDebt. A petition to forgive student loans has gathered 300,000 signatures and was included as part of a general debt forgiveness bill on the floor of the House of Representatives. Congress has even begun to touch on medical debt issues.

Taken together, we can say that these and other actions are the sign of growing resistance to key aspects of the social model of the past 30 to 40 years. We have been living in a society where debts, rather than rights, have been the major means for accessing basic social goods like housing, education, and health care. That social model was built around the assumption that while real incomes stagnated and the state did not directly provide many basic goods through universal entitlements, cheap credit would do the trick instead. High finance was inextricably intertwined with the privileges of citizenship. This was not a very good social model. With any luck, and a serious amount of political action, current resistance could lead to alternative ways of thinking about how we make these goods available to all.

After all, while the previous decade has been represented as a debt-financed spending binge when consumers lived well beyond their means, it turns a complex story into a morality play. A major part of the credit ‘binge’ was about necessities, not luxuries. Sub-prime mortgages (especially with the decline of affordable housing) were the only way for many to become homeowners. Similarly, student loans were the only way for many to gain access to higher education and thus participate as equals in the radically unequal distribution of opportunity in the United States. The total value of student loans has surpassed total credit card debt, and is projected to top $1 trillion later this year. Mike Konczal posted the following graph at Rortybomb showing the dramatic rise of student debt. In a decade, student loans have gone from a third of consumer loans to far more than half.

alex1

We find a similar story in health care. Two major national studies of medical indebtedness by a group of scholars, including Elizabeth Warren, have shown that illness and medical costs are a major cause of household bankruptcy. They noted that by 2001 “illness or medical bills contributed to about half of bankruptcies.” Notably, in their 2001 study, they found that 75.7 percent of medical debtorshad insurance at the onset of illness. Underinsurance, as much as lack of insurance, was a major financial burden. So too was loss of income due to illness (by their estimate, income loss is 40 percent of medical-related indebtedness). Worse yet, their follow up 2007 study of medical indebtedness notes that the “number of un- and underinsured Americans has grown; health costs have increased; and Congress tightened the bankruptcy laws.” That has led to a 50 percent increase in the proportion of bankruptcies attributable to medical problems. These bankruptcies, moreover, occurred in families only marginally worse than the median income and occupational class of American citizens. Once again, indebtedness is the product of the 99% trying to meet the costs of a basic good — health care.

If there is a reasonable expectation that debtors can meet their interest payments then in theory debt is not a particularly bad way to finance access to certain goods. It is on the individual borrower to make a judgment about what constitutes a reasonable debt burden.

There are, however, two problems with this theoretical view. First, there might be very good social reasons to not want to yoke access to certain social goods to debt. Education is a prime example. Taking on debt means accepting a kind of discipline. One must make all future calculations about, say, educational and career choices with the need to meet future interest payments in mind. In conscious and unconscious ways this narrows horizons and produces a more instrumental relationship to education. In college I saw concerns about debt shape decisions about which classes to take and what to major in. I also saw many of my college classmates make more conservative professional choices (corporate law, consulting, finance, medical specialist) than they might otherwise have made (public service, teaching, science, public interest law) in order to ensure their ability to pay back loans. This appears to have been a pattern. A study of educational and career choices in the early 2000s by Princeton economists has found that “debt causes graduates to choose substantially higher-salary jobs and reduces the probability that students choose low-paid ‘public interest’ jobs.”

It is frequently observed that the growth of finance sucked up the math and physics geniuses, who might have contributed something lasting to society, into hedge funds and investment banks to ruinous effect. But the alteration of professional choices is much wider than that. The number crunchers at the top were, one suspects, lured away by lucrative pay. The much more widespread, and difficult to measure, shift in career choices due to the discipline of debt burdens is probably the more important, and still ongoing, consequence of high student loans.

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If access to higher education were on the order of something like a right — a publicly financed good, provided at little or no cost, to ensure real equality of opportunity — then one can imagine a much different set of results. While conservatives like to talk about ‘freedom,’ this is a place where the left ought to have the upper hand in connecting economic practices to real freedoms. Providing necessary social goods, especially education, as a right rather than through debt not only reduces the disciplining effects of the latter. It also is a way of publicly recognizing and democratically defending the real freedoms of all citizens.

To be clear, this is not a moralistic criticism of debt as evil or irresponsible. But there are very good reasons why society would not want to impose certain kinds of discipline on (most of) its citizens. Firstly, from a social point of view, people’s talents might be much more productively used in some other area than those that promise the most immediate monetary returns. There is no shortage of aspiring bankers and traders, but there is a primary care doctor shortage. Primary care doctors can graduate medical school with as much as $200,000 in debt.

A second reason is that practice does not resemble theory. Again, the theory is that so long as each individual makes a reasonable calculation about his or her ability to meet debt payments, there is nothing wrong with financing access to basic social goods through credit. Putting systematic fraud aside (but remembering it is unlikely that credit can sink that far into housing and educational markets without it), there is a deep historical reason for thinking that practice was the opposite of theory. The rise of debt-financed household consumption generally was the product of stagnating wages. Consider, for instance, this research by the Federal Reserve Bank of San Francisco comparing the growth of debt, wealth, and income:

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Or compare the above growth of household debt with the stagnation of wages and benefits during that same period (from State of Working America):

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Debt-financed consumption was, in other words, a response to the declining ability of most households to afford existing rates of consumption, not an increasing ability or trust in future ability to pay back that debt.

The entire social model, then, was built on a lie. The separation of consumption (financed by future promises to pay) from production (based on limiting present ability to earn) was a mirage. The problem has been that the underlying right to maintain a certain standard of living, or even to access to certain basic social goods like housing, health, and education, was just that: implicit. Every so often, of course, it was made somewhat public — for instance when Clinton or Bush would say something about providing housing to the poor and minorities who could not otherwise afford it (mainly by changing market incentives and promoting sub-prime borrowing, as it turned out). But this promise was always implicit and had to stay that way because it was mediated through the credit system. Access to these basic social goods was never a fully publicclaim each individual had against society. Instead, access to these social goods was a matter of a complex series of private, individualized claims against other private institutions like banks and employers, with the public role submerged in the form of altered market incentives. That is the difference between debt and right, and it is clear that the debt-based social model has failed.

There are certainly some situations where debt-financed consumption is a perfectly good option. For instance, the current call for more fiscal austerity at the federal level is ideological claptrap. Moreover, any economy always has to take a bet on the future if it is going to innovate, especially since innovation always comes with the risk of failure. But there are certain kinds of basic goods that are better provided as a matter of universal right, both for the sake of the freedom of the persons who need those goods and as a matter of economic efficiency and productivity. We can have risk-averse graduates and a chronically ill workforce chained to underwater mortgages, or we can have healthy, well-educated citizens with enough security, and thus freedom, to take real risks in their lives.

Alex Gourevitch a Post-Doctoral Research Associate at the Political Theory Project at Brown University. He also runs a blog calledThe Current Moment.

This Labor Day We Need Protest Marches Rather Than Parades

In Uncategorized on September 5, 2011 at 1:09 pm

Oldspeak:”Like many other American holidays, Labor Day has been commercialized and divorced from its original ideals, morphing into a spectacle of consumption the oligarchs are proud of. It’s been the worst decade for American workers in a century. That hardly calls for a celebration. ‘Labor Day, the first Monday in September, is a creation of the labor movement and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.’ ‘It’s been the worst decade for American workers in a century… American workers should march in protest. They’re getting the worst deal they’ve had since before Labor Day was invented – and the economy is suffering as a result.”-Robert Reich

By Robert Reich @ The Christian Science Monitor

Labor Day is traditionally a time for picnics and parades. But this year is no picnic for American workers, and a protest march would be more appropriate than a parade.

Not only are 25 million unemployed or underemployed, but American companies continue to cut wages and benefits. The median wage is still dropping, adjusted for inflation. High unemployment has given employers extra bargaining leverage to wring out wage concessions.

All told, it’s been the worst decade for American workers in a century. According to Commerce Department data, private-sector wage gains over the last decade have even lagged behind wage gains during the decade of the Great Depression (4 percent over the last ten years, adjusted for inflation, versus 5 percent from 1929 to 1939).

Big American corporations are making more money, and creating more jobs, outside the United States than in it. If corporations are people, as the Supreme Court’s twisted logic now insists, most of the big ones headquartered here are rapidly losing their American identity.

CEO pay, meanwhile, has soared. The median value of salaries, bonuses and long-term incentive awards for CEOs at 350 big American companies surged 11 percent last year to $9.3 million (according to a study of proxy statements conducted for The Wall Street Journal by the management consultancy Hay Group.). Bonuses have surged 19.7 percent.

This doesn’t even include all those stock options rewarded to CEOs at rock-bottom prices in 2008 and 2009. Stock prices have ballooned since then, the current downdraft notwithstanding. In March, 2009, for example, Ford CEO Alan Mulallyreceived a grant of options and restricted shares worth an estimated $16 million at the time. But Ford is now showing large profits – in part because the UAW agreed to allow Ford to give its new hires roughly half the wages of older Ford workers – and its share prices have responded. Mulally’s 2009 grant is now worth over $200 million.

The ratio of corporate profits to wages is now higher than at any time since just before the Great Depression.

Meanwhile, the American economy has all but stopped growing – in large part because consumers (whose spending is 70 percent of GDP) are also workers whose jobs and wages are under assault.

Perhaps there would still be something to celebrate on Labor Day if government was coming to the rescue. But Washington is paralyzed, the President seems unwilling or unable to take on labor-bashing Republicans, and several Republican governors are mounting direct assaults on organized labor (see IndianaOhio,Maine, and Wisconsin, for example).

So let’s bag the picnics and parades this Labor Day. American workers should march in protest. They’re getting the worst deal they’ve had since before Labor Day was invented – and the economy is suffering as a result.

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers’ own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. This post originally ran on www.robertreich.org.

Chomsky: Public Education Under Massive Corporate Assault — What’s Next?

In Uncategorized on August 8, 2011 at 1:06 pm

Oldspeak: “Converting schools and universities into facilities that produce commodities for the job market, privatizing them, slashing their budgets — do we really want this future? People who are in a debt trap have very few options. That is true of social control generally. In a corporate-run culture, the traditional ideal of free and independent thought may be given lip service, but other values tend to rank higher. Defending authentic (academic) institutional freedom is no small task. However, it is not hopeless by any means.” –Noam Chomsky Unfortunately  “The era of affordable four-year public universities heavily subsidized by the state may be over.” When access to free, high quality, education is eliminated and is replaced with pay for the privilege corporate controlled education democracy dies. “Ignorance is Strength”

By Noam Chomsky @ Alter Net:

The following is a partial transcript of a recent speech delivered by Noam Chomsky at the University of Toronto at Scarborough on the rapid privatization process of public higher education in the United States.

A couple of months ago, I went to Mexico to give talks at the National University in Mexico, UNAM. It’s quite an impressive university — hundreds of thousands of students, high-quality and engaged students, excellent faculty. It’s free. And the city — Mexico City — actually, the government ten years ago did try to add a little tuition, but there was a national student strike, and the government backed off. And, in fact, there’s still an administrative building on campus that is still occupied by students and used as a center for activism throughout the city. There’s also, in the city itself, another university, which is not only free but has open admissions. It has compensatory options for those who need them. I was there, too; it’s also quite an impressive level, students, faculty, and so on. That’s Mexico, a poor country.

Right after that I happened to go to California, maybe the richest place in the world. I was giving talks at the universities there. In California, the main universities — Berkeley and UCLA — they’re essentially Ivy League private universities — colossal tuition, tens of thousands of dollars, huge endowment. General assumption is they are pretty soon going to be privatized, and the rest of the system will be, which was a very good system — best public system in the world — that’s probably going to be reduced to technical training or something like that. The privatization, of course, means privatization for the rich [and a] lower level of mostly technical training for the rest. And that is happening across the country. Next year, for the first time ever, the California system, which was a really great system, best anywhere, is getting more funding from tuition than from the state of California. And that is happening across the country. In most states, tuition covers more than half of the college budget. It’s also most of the public research universities. Pretty soon only the community colleges — you know, the lowest level of the system — will be state-financed in any serious sense. And even they’re under attack. And analysts generally agree, I’m quoting, “The era of affordable four-year public universities heavily subsidized by the state may be over.”

Now that’s one important way to implement the policy of indoctrination of the young. People who are in a debt trap have very few options. Now that is true of social control generally; that is also a regular feature of international policy — those of you who study the IMF and the World Bank and others are well aware. As the Mexico-California example illustrates, the reasons for conscious destruction of the greatest public education system in the world are not economic. Economist Doug Henwood points out that it would be quite easy to make higher education completely free. In the U.S., it accounts for less than 2 percent of gross domestic product. The personal share of about 1 percent of gross domestic product is a third of the income of the richest 10,000 households. That’s the same as three months of Pentagon spending. It’s less than four months of wasted administrative costs of the privatized healthcare system, which is an international scandal.

It’s about twice the per capita cost of comparable countries, has some of the worst outcomes, and in fact it’s the basis for the famous deficit. If the U.S. had the same kind of healthcare system as other industrial countries, not only would there be no deficit, but there would be a surplus. However, to introduce these facts into an electoral campaign would be suicidally insane, Henwood points out. Now he’s correct. In a democracy where elections are essentially bought by concentrations of private capital, it doesn’t matter what the public wants. The public has actually been in favor of that for a long of time, but they are irrelevant in a properly run democracy.

We should recall that the great growth period in the economy — the U.S. economy — was in the several decades after WWII, commonly called the “Golden Age” by economists. It was substantially fueled by affordable public education and by university research. Affordable public education includes the GI Bill, which provided free education for veterans — and remember, that was a much poorer country than today. Extremely low tuition was found even at private colleges. Actually, I went to an Ivy League college, and it cost $100 a year; that’s more now, but it’s not that high, it’s not 30 or 40,000, you know?

What about university-based research? Well, as I mentioned, that is the core of the modern high-tech economy. That includes computers, the Internet — in fact, the whole IT revolution — and a whole lot more. The dismantling of this system since the 1970s is among the many moves toward a very sharply two-tiered society, a very narrow concentration of wealth and stagnation for most everyone else. It also has direct economic consequences. Take, say, California. What they are doing to the public education system is going to undermine the economy that relies on a skilled work force and creative innovation, Silicon Valley and so on. Well, apart from the enormous human cost of depriving most people of decent educational opportunities, these policies undermine the U.S. competitive capacity. That’s very harmful to the mass of the population, but it doesn’t matter to the tiny percent of concentrated wealth and power. In fact, in the years since the Pell Memorandum, we’ve entered into a new stage in state capitalism in which the future just doesn’t amount to much. Profit comes increasingly from financial manipulations. The corporate policies are geared toward the short-term profit, and that reduces the concern for loyalty to a firm over a longer stretch. We’ll talk about this more tomorrow, but right now let me talk about the consequences for education, which are quite significant.

Suppose, as is increasingly happening not only in the United States, incidentally, that universities are not funded by the state, meaning the general community. So how are the universities going to survive? Universities are parasitic institutions; they don’t produce commodities for profit, thankfully. They may one of these days. The funding issue raises many troubling questions, which would not arise if fostering independent thought and inquiry were regarded as a public good, having intrinsic value. That’s the traditional ideal of the universities, although there are major efforts to change that. Take Britain. According to the British press, the Arts and Humanities Research Council was just ordered to spend a significant amount of funding on the prime minister’s vision for the country. His so-called “Big Society,” which means big corporate profits, and the rest look out for themselves. The government produced what they call a clarification of the famous Haldane Principle. That’s the century-old principle that barred such government intrusion into academic research. If this stands, which I think is kind of hard to believe, but if it stands, the hand of Big Brother will rest quite heavily on inquiry and innovation in the arts and humanities as the masters of mankind follow the advice of the Pell Memorandum. Of course, defending academic freedom in ways that would receive nods of approval from Those-Who-Must-Not-Be-Named, borrowing my grandchildren’s rhetoric. Cameron’s Britain is seeking to take the lead on the assault on public education. The rest of the Western world is not very far behind. In some ways the U.S. is ahead.

More generally, in a corporate-run culture, the traditional ideal of free and independent thought may be given lip service, but other values tend to rank higher. Defending authentic institutional freedom is no small task. However, it is not hopeless by any means. I’ll talk about the case I know best, at my own university. It is a very striking case, because of the nature of its funding. Technically, it’s a private university, but it has vast state funding, overwhelming, particularly since the Second World War. When I adjoined the faculty over 55 years ago, there were military labs. Since then, they’ve been technically severed. The academic programs, too, at that time, the 1950s, were almost entirely funded by the Pentagon. Under student pressure in the time of troubles, the 1960s, there were protests about this and calls for investigation. A faculty-student commission was formed in 1969 to investigate the matter. I was a member, thanks to student pressure. The commission was interesting. It found that despite the funding source, the Pentagon, almost the entire academic program, there was no military-related work on campus, except in the sense that virtually anything can have some military application. Actually, there was an exception to this, the political science department, [which] was deeply engaged in the Vietnam War under the guise of peace research. Since that time, Pentagon funding has been declining, and funding from health-related state institutions — National Institute of Health and so on — that’s been increasing. There’s a reason for that. It’s reflecting changes in the economy.

In the 1950s and 1960s the cutting edge of the economy was electronics-based. The Pentagon was a natural way to steal money from the taxpayers, making them think they’re being protected from the Russians or somebody, and to direct it to eventual corporate profits. That was done very effectively. It includes computers, the Internet, the IT revolution. In fact most of the modern economy comes from that. In more recent years, the economy is becoming more biology based. Therefore state funding is shifting. Fifty years ago, if you looked around MIT, you found small electronics startups from the faculty. They were drawing on Pentagon funding for research, and if they were successful, they were bought up by major corporations. Those of you who know something about the high-tech economy will know that that’s the famous Route 128. That was 50 years ago. Now, if you go around the campus, the startups are biology based, and the same process continues. The genetic engineering, biotechnology, pharmaceuticals and the big buildings going up are Novartis and so on. That’s the way the so-called free enterprise economy works. There’s also been a shift to more short-term applied work. The Pentagon and the National Institutes of Health are concerned with the long-term future of the advanced economy. In contrast to a business firm, it typically wants something that it can use — it can use and not its competitors, and tomorrow. I don’t actually know of a careful study, but it seems pretty clear that the shift toward corporate funding is leading towards more short-term applied research and less exploration of what might turn out to be interesting and important down the road.

Another consequence of corporate funding is more secrecy. This surprises a lot of people, but during the period of Pentagon funding, there was no secrecy. There was also no security on campus. You may remember this. You walk into the Pentagon-funded labs 24 hours a day, and no cards to stick into things and so on. No secrecy; it was all entirely open. There is secrecy today. A corporation can’t compel secrecy, but they can make it very clear that you’re not going to get your contract renewed if your work leaks to others. That has happened. In fact, it’s lead to some scandals, some big enough to appear on the front page of the Wall Street Journal.

Outside funding has other effects on the university, unless it’s free and unconstrained, observing the Haldane Principle. Indeed, it has been true to a significant degree by funding from the Pentagon and the other national institutions. However, any kind of outside funding [has effects], even keeping to the Haldane Principle, supposing it establishes a teaching or research facility. That kind of automatically shifts the balance of academic activity, and that can threaten the independence and integrity of the institution. And in the case of corporate funding, quite severely.

Corporatization can have considerable influence in other ways. Corporate managers have a duty. They have to focus on profit making and seeking to convert as much of life as possible into commodities. It’s not because they’re bad people; it’s their task. Under Anglo-American law, it’s their legal obligation as well. There’s a lot to say about this topic, but one element of it concerns the universities and much else. One particular consequence is the focus on what’s called efficiency. It’s an interesting concept. It’s not strictly an economic concept. It has crucial ideological dimensions. If a business reduces personnel, it might become more efficient by standard measures with lower costs. Typically, that shifts the burden to the public, a very familiar phenomenon we see all the time. Costs to the public are not counted, and they’re colossal. That’s a choice that’s not based on economic theory. That’s based on an ideological decision, which applies directly to the “business models,” as they’re called, of the universities. Increasing class-size or employing cheap temporary labor, say graduate students instead of full-time faculty, may look good on a university budget, but there are significant costs. They’re transferred and not measured. They’re transferred to students and to the society generally as the quality of education, the quality of instruction is lowered.

There’s, furthermore, no way to measure the human and social costs of converting schools and universities into facilities that produce commodities for the job market, abandoning the traditional ideal of the universities. Creating creative and independent thought and inquiry, challenging perceived beliefs, exploring new horizons and forgetting external constraints. That’s an ideal that’s no doubt been flawed in practice, but to the extent that it’s realized is a good measure of the level of civilization achieved.

That idea is being challenged very openly by Adam Smith’s Principal Architects of Policy in the State Corporate Complex, the direct attack on the Haldane Principle in Britain. That’s an extreme case; in fact so extreme I assume it may be beaten back. There are less blatant examples. Many of them are just inherent in the reliance on outside funding, state or private. These are two sources that are not easy to distinguish given the control of the state by private interest. So what’s the right reaction to outside funding that threatens the ideal of a free university? Well one choice is just to reject it in principle, in which case the university would go down the tubes. It’s a parasitic institution. Another choice is just to recognize it as a fact of life that when I’m at work, I have to walk past the Lockheed Martin Lecture Hall, and I have to look out my office window at the Koch building, which is named after the multibillionaires who are the major funders of the Tea Party and a leading force in ongoing campaigns to wipe out the remnants of the labor movement and to institute a kind-of corporate tyranny.

Now, if that outside funding seeks to [influence] teaching, research and other activities, then there’s a strong argument that it should simply be resisted or rejected outright no matter what the costs. Such influences are not inevitable, and that’s worth bearing in mind.