They Want It Both Ways

A common trope among the vocal rich is that handing out money to the “poor” will make them lazy. “Handing out” and “handouts” refer to welfare, food stamps, a higher minimum wage, you name it. On the flip side, they also claim that “redistributing” money from the rich to other where through higher progressive taxation will remove all of the incentive to invest and innovate.

So, at one end of the spectrum, allowing the poor to keep more of what they make or bumping their wages up to a bare subsistence level will result in them opting out of their jobs (more money = laziness) but allowing the rich to keep more of their income will encourage them to work harder, innovate more (more money = initiative).

Obviously this is merely a reflection of the class disdain the rich have for the poor. The poor are poor because of character flaws, moral weakness, lack of intelligence. The rich are rich because of their sterling character, moral strength, and brilliance. (Donald Trump … uh, is the exception that proves the rule?)

Also, is there any indication either of these “narratives” has any merit?

There is a well known phenomenon in business that as businesses grow and become larger, they tend to grow stagnant. They innovate less and their managers become more interested in milking the cow they have rather than finding new cows. In the recent tax giveaway to businesses, were the billions saved in taxes used to innovate, used to upgrade production, used to compensate workers, any of the things it was claimed it would do? Apparently, the funds were mostly used to buy back stock, which drives up the price of the stock, enriching shareholders and executives with stock options (you do get what you pay for).

Another economic “natural experiment” was the 1950’s and 1960’s economies. Marginal tax rates were sky high from the necessity to acquire funds to pursue World War 2. President Eisenhower refused to lower them, even in the peacetime following. Unions were empowered and laws were passed to provide some leveling of the playing field between labor and capital. So, were people enjoying the good times on welfare? Was there any laziness to be observed? Was innovation stifled because the rich were starved of the funds they needed to fuel the innovations? I think you know the answers to all of these (no, no, no).

So, what is with these narratives?

They aren’t new, they have been around for a century or more. They are, like religious apologies, arguments that sound reasonable but have no basis in reality. They have become memes among the rich folks, repeated often enough to be transferred from generation to generation. They are even sold to ordinary working people because they do sound reasonable and are repeated over and over. The rich are the job creators! Bah, customers create demand, demand creates jobs, and demand in our economy is mostly domestic demand which is stifled due to wage suppression activities on behalf of the rich.

The code word in use is “redistribution,” by which they mean that the rich are taxed and that money is “given” to the poor. The fact that much of the wealth the rich have accumulated is due to “redistribution” through other means is never mentioned. (Look up the history of the oil depletion allowance to see where the majority of the oil barons in this country came from.) The rich are in the business of bribing their politicians (not ours, we can’t afford them) to pass laws that benefit them. Our “representatives” do favors for the rich and nothing for the poor. For example, President Trump’s lackeys rolled back Obama-era regulations that prohibited coal companies from dumping toxic waste into the streams and rivers we draw our drinking water from, redistributing the consequences from the coal company executives to ordinary people. (1. Don’t get sick. 2. Die quickly.)

Artificial Intelligence—The Promise

I am a big fan of digital technology and someone who is hopeful of the future. It is harder and harder for me to maintain that stance, however.

Currently there seems to be a widespread debate regarding the development of Artificial Intelligence (AI). Since we know so little the positions staked out are quite broad. At one end is a new future where machines take over dangerous and boring jobs and human beings have more leisure. At the other end, autonomous drones are the first step toward Skynet (the “bad guy” in the Terminator movies) and the extermination of human beings by intelligent killing machines.

There seems also to be many opinions in between the two extremes.

Something I do know is that it will not be the machines that determine the outcome. In every case of new technology impactful enough to change the course of history, the tech has been used to coerce and oppress the labor of the masses to serve the interests of the elites.

Consider the following photograph.

This is an Amazon warehouse. Amazon is a tech company. So, how do those who work in Amazon’s warehouses fare? Amazon uses personal monitoring algorithms to make sure that its employees do not waste time taking short breaks to catch their breath or go to the bathroom. They are to stay on task as long as Amazon wants them to … or else.

Jeff Bezos, creator of Amazon, makes huge profits by paying his warehouse employees wages that are so inadequate that many of them need public assistance just to get by. Thousands of Amazon workers are forced to rely on food stamps, Medicaid, and public housing because they can’t survive on the wages they receive. Meanwhile, Jeff Bezos is now worth $158 billion, and his wealth increases by leaps and bounds. (And who pays for the public assistance subsidizing Mr. Bezos’ wealth? You and I do, of course.)

If you think back to the first powered looms to make cloth, it was the workers who had to get along with the machinery, not the other way around. Same was true with the assembly line to make automobiles, etc.

I do not argue that there were no benefits from technology that actually accrue to ordinary people. Henry Ford, no friend of workers, paid more than anyone else as a daily wage to pursue his dominance of the auto market. But that was then and now, wage suppression is the favorite tool of the captains of industry. Much of the advanced tech of today is not available to us because, well it is very simple, we cannot afford to pay for it. We don’t make enough money.

As much as people will squander $1000 on a new iPhone, the really impactful tech, such as a liver transplant, is not available to you … unless you can afford to pay for health insurance and many, many people cannot.

So, AI in and of itself will not necessary oppress ordinary people, coercing our labor for the benefit of the elites, but if rich people have any say in the future, my bet is that a sizable amount of AI will be used for just that purpose. (Jeff Bezos has already begun the application.)

Give Me the Child …

Give me the child for the first seven years and I will give you the man.
Jesuit maxim widely attributed to Ignatius Loyola;

In a blog post on the website of The Institute for New Economic Thinking (The Corporate Plan to Groom U.S. Kids for Servitude by Wiping Out Public Schools by Lynn Parramore—April 6, 2018) the author summarizes part of the opinion of Gordon Lafer, Associate Professor at the Labor Education and Research Center at the University of Oregon, thus:

“Lafer explains that in the new system, the children of the wealthy will be taught a broad, rich curriculum in small classes led by experienced teachers. The kind of thing everybody wants for kids. But the majority of America’s children will be consigned to a narrow curriculum delivered in large classes by inexperienced staff —or through digital platforms with no teachers at all.

Most kids will be trained for a life that is more circumscribed, less vibrant, and, quite literally, shorter, than what past generations have known. (Research shows that the lifespan gap between haves and have-nots is large and rapidly growing). They will be groomed for insecure service jobs that dull their minds and depress their spirits.”

She went on to say: “In the words of Noam Chomsky… ‘students will be controlled and disciplined.’ Most will go to school without developing their creativity or experiencing doing things on their own.”

While reading this I am also reading the book “Why We Do What We Do: The Dynamics of Personal Autonomy” by Edward L. Deci. I reached a point in that book in which a long standing question of mine got answered. That question is: why do kids in kindergarten and the early stages of their educations show so much curiosity when that is no longer in evidence when they get to middle school and high school?” It seemed to me that education had the effect of beating the curiosity out of kids. I wondered why. According to Deci “It is truly amazing, as pointed up by our (research) findings, that if people are ongoingly treated as if they were either passive mechanisms or barbarians needing to be controlled, they will begin to act more and more that way (p. 84).” Controlling behavior includes structuring the environment, establishing the rules, enforcing the rules, defining the rewards, etc.

When Chomsky says “students will be controlled and disciplined” he is saying “more than they are now,” the effect of which is to stifle curiosity, creativity, political will to resist the “rules,” etc.

The oligarch’s effort to dismantle public education and remake it under their “leadership” is motivated by a desire for worker drones that will shut up, do what they are told, accept whatever salary and benefits they are offered, and not make problems.

It seems that 1984 is coming, just 30 years later than predicted. And there is no Big Brother;  there are, however, quite a number very wealthy men, old white men, who are auditioning for the role.

I Don’t Get It

If you look at the updated somewhat notorious graph below, you can see that worker productivity has been detached from worker wages starting in the 1970’s. This was the result of a concerted campaign by the very wealthy to suppress wages by suppressing labor unions, getting tax code changes in their favor which transfer tax liabilities off of them and onto other Americans, even by suppressing voting.

This has created a great deal of economic distress in the bottom 90% of economic Americans and will result in a backlash. What I do not understand is the strategy. Going from astonishingly rich to fucking rich changes the lifestyles of those rich people exactly how? Is it just getting their way, at least for the while until the backlash, that makes this worth doing?

Even Henry Ford understood that if you paid better wages, you would get much of that back through one’s employees becoming one’s customers. Hell, these rich people invented the company store, where laborer’s wages got sucked back to the employer through required purchasing of the goods to survive. Those stores are no longer allowed, but Henry Ford knew that his employees, once they had the wherewithal to purchase a car, were going to buy one of his because of loyalty generated through his paying better than normal wages to his workers. (It is called gratitude.)

But, the current crop of rich bastards would rather strip away the ability to buy the goods their companies produce and, what, sell those goods overseas? When the pitchforks and torches finally end up circling their gated communities, will the plutocrats wonder why their employees aren’t more loyal to them? Are they that stupid? Do they think we do not see what they are doing?