South Korea: Managing Growth by Increasing the Minimum Wage

A significant number of economists have begun to realize that the US economy has been experiencing a state of stagnation in which not enough demand has existed in order to induce corporations to invest their earnings in new production.  Usually this situation is addressed by the federal government providing a fiscal stimulus by funding investments in projects that will provide more economic activity via the purchase of goods and services.  The stimulus to the economy then comes from the increased sales some companies will see and the extra wages that will be paid in providing those services.  The economy as a whole will benefit to the degree that the effects of additional production and increased wages are widely distributed.  There is no guarantee that increased production will generate spin-off production directly, but it is certain that a large fraction of any increase in wages will be spent and contribute to general economic activity.

Given the above reasoning, it would seem most efficient to directly increase wages if one wishes to stimulate the economy.  One can try to accomplish this effect by tax cuts, but those tend to go preferentially to the highest tax payers who are the least likely to spend any largess in stimulating the general economy.  One could conjure up a tax cut that would deliver money directly into the hands of lower income people, or one could declare a tax holiday that would benefit some sector of the population preferentially.  In this case, consumers who are also debtors will tend to use much of the extra income to help pay off bills, particularly if the increase in income is viewed as temporary.

It would seem that the most efficient way to inject money directly into the economy is to increase the wages of people who have no choice but to spend the money.  Fortunately (or not) the US has a large number of workers living at or near the poverty line who are in great need of the means for increased consumption.  An efficient way to boost the economy, and by so doing provide income to those most in need, would be to increase the minimum wage.  Presumably, the greater the increase, the greater will be the stimulus.

Such a move is said to produce severe economic consequences.  Businesses will be affected with higher wages costing some to raise prices, some to eliminate workers, and some to close up shop.  However, the increase in wages will show up as increased activity which will have a counterbalancing effect.  Will such a move improve the economy and the life of its workers, or will it diminish both?  No one really knows.  Small changes in minimum wage or large changes that were only applied locally have led to arguable results.  What one needs to understand the dynamics is for a large increase in minimum wage to be applied throughout the entire economy and to observe the long-term results.  Fortunately, South Korea seems poised to perform that experiment for us.

An article in The Economist titled Promising the Moon in the paper edition (a play on the name of the new President of South Korea) became the more relevant South Korea tries to boost the economy by hiking the minimum wage online.  South Korea might seem an unlikely nation to pursue such a policy.  The country has long been blessed with high growth rates that reflected its ability to produce high-value goods that sold well throughout the world.  But all growth brings with it problems.  One is the inequality that inevitably comes with capitalism.  The dependency on export-driven growth can also leave a nation too vulnerable to the whims of international markets.  The goal of the new President, Moon Jae-in, is to address both issues by increasing the minimum wage by about 55% by 2020.

“On the face of things, the South Korean economy is doing well. Growth has averaged 3% annually over the past six years, a decent outcome for a period when global trade was sluggish. Income per person is about two-thirds of America’s, up from a third 25 years ago. The unemployment rate is just 3.6%. South Korea spends more as a share of GDP on research and development than almost any other country.”

“Nonetheless, poorer Koreans resent rising inequality….A study by the International Monetary Fund last year found that the top 10% of South Koreans receive 45% of total income—a greater concentration than in other big economies in Asia. The proportion has risen sharply over the past two decades as the wages of the rich have grown faster than those of the poor….Adjusted for inflation, household incomes fell last year, something that in recent decades had happened only in the wake of financial crises.”

“The bet is that the jump in wages will feed through to stronger consumption, particularly as low-earners tend to spend more of their pay than the rich do. In addition to propping up growth, stronger consumption would make South Korea less reliant on exports and so less beholden to the whims of China and America, Mr Moon predicts. It should also help reduce inequality.”

The article provides this chart to help place what South Korea intends to do in comparison with policies in other countries.

Since The Economist is quite conservative in its economic principles, it suggests that disaster might be the outcome.  Let us hope not.  History tells us that a required minimum wage provides a very stable floor to wages.  The only way to improve the wages of the lowest-paid workers is to raise that minimum.

The interested reader might find the following articles informative:

Inequality and Slow Growth: Secular Stagnation

The Minimum Wage, Employment, and Social Choices

Why You Don’t Want to Raise the Retirement Age for Social Security

Every year or so a new proposal comes out to address Social Security funding issues by raising the eligibility age for the program to acknowledge the increases in life expectancy that have occurred since the program was initiated.  One of the more recent came from James M. Stone in his book Five Easy Theses.  He provided this comment on the subject.

“….a more complete repair is available if Congress would add to the enabling legislation a provision that it might have included from the start if the rapid increases in life expectancy had been foreseen.  It is hard to believe that an ever-lengthening period of benefit collection was either desired or expected by Social Security’s drafters, and it is harder still to justify that feature now.  Scientists tell me that we should see life expectancy continue to rise over time, then eventually flatten out as expected life spans approach one hundred.”

This is the conventional wisdom with regard to longevity.  Although there are some who think that life may one day be extended indefinitely, little is said about the possibility that life expectancy could peak and then turn downward.  Nevertheless, some evidence is accumulating that seems to indicate that something like that might be beginning to happen.  In addition, it is dangerous for people to perform analyses on diverse populations using average numbers.  Longevity turns out to depend on a number of factors such as wealth, culture (lifestyle), gender, and geography.

This source provides the following longevity data for the US population.

The first thing to realize is that the biggest leverage on average numbers arises from the mortality rates of children.  Much of the dramatic rise in longevity over past decades came from advances that lowered child mortality rather than advances that allowed adults to live longer.  What is of interest for programs such as Social Security is the longevity of people when they reach age 65.  This longevity is usually expressed as a life expectancy number rather than as years left to live.  Given that preamble, average life expectancy at birth for the US population increased by 10.3 years between 1950 and 2009.  However, the number was only 5.3 years for those aged 65. 

One might still consider 5.3 years a large increase that must be dealt with.  Now consider life expectancy as a function of income.  Katelin P. Isaacs and Sharmila Choudhury have produced The Growing Gap in Life Expectancy by Income: Recent Evidence and Implications for the Social Security Retirement Age which included the following chart. 

This looks at two populations, one born in 1920 and the other in 1940.  They would respectively be aged 97 and 77 today.  Data are presented for both males and females.  The fact that there is a life expectancy variation based on income is obvious.  This has been known for some time, but what might be less obvious is that the difference between the wealthy and the poor is increasing dramatically over time.  For the 1920 cohort the difference between the lowest and highest incomes was 5.0 years.  For the 1960 cohort, after a mere 20 years, the difference has increased to 12.0 years.  The comparable numbers for females are 3.7 years and 10.1 years.  Something rather significant has occurred to produce those results in a 20-year time period.

Also consider that the Social Security program was designed to be most protective of the lower income people.  They receive more in retirement income than deserved on a purely actuarial basis while the higher income people receive less.  Consequently, the lowest income people are the most affected by any attempt to increase the retirement age.  In fact the longevity of the poorest people has hardly changed at all over that 20 year period.  For lowest income males the increase was a mere 1.7 years, and for females there was no increase at all. 

Can one still justify the claim that increasing average life expectancies are driving a need to increase the retirement eligibility age?  And if your conclusion is yes, what value would you use.  Remember that you are still using averages by income, what about variations by region?  Yes there is a huge variation in longevity depending on the location within the US.  This source provides longevity, in terms of years to death, by county at age 50 for both men and women.

Note that longevity can vary by as much as 10 years depending on where one lives.  There are locations where the life expectancy at birth is barely equal to the current Social Security retirement age.  Is it fair to those citizens to increase that age?

There are perhaps more troubling developments that must also be considered.  Can we really expect the population to continue to have increasing longevity?  Data are beginning to accumulate that cast doubt on that cherished expectation.  In 2012, Sabrina Tavernise published a New York Times article titled Life Spans Shrink for Least-Educated Whites in the U.S.  By “least educated” was meant those without a high school diploma.  This decrease in longevity only occurred in whites.  It was absent for Hispanics and blacks.  Therein resides a clue.

In 2015, Anne Case and Angus Deaton produced Rising morbidity and mortality in midlife among white non-Hispanic Americans in the 21st century.  They demonstrate that the  mortality rate has been rising for non-Hispanic whites in the US, an effect that is not seen for Hispanics.  Nor is such an effect seen in any of the other advanced countries.  The authors also conclude that education is a critical factor in the level of mortality.  All the rise in mortality comes from the cohort with a high school degree or less.  Those with some college education but no degree have slightly decreased mortality.  For those with a college degree or post-graduate education the mortality rate has continued to drop.  Note that the data presented by Tavernise was based on those without a high school diploma, a much smaller group.

Much of the increase in mortality comes from bad lifestyle choices.  Increases in drug use (poisoning) and alcohol abuse are indicated as major contributors, along with a greater number of suicides.

There is clearly something terrible occurring in some classes of our society that is unique to our nation.  It would behoove us to figure out what it is and fix it.

There is yet another aspect of aging to consider in addressing the appropriate retirement age.  The fact that we are, on average, living longer is usually associated with the assumption that we are living longer because we are healthier.  That is not necessarily true.  Consider the results obtained by Eileen M. Crimmins and Hiram Beltran-Sanchez: Mortality and Morbidity Trends: Is There Compression of Morbidity?  They are asking whether or not people are living longer in a healthy condition. Their paper appeared in 2011.  Two of the tables summarizing their data are reproduced below.  There is much of interest here.

                          

This chart looks at various measures of functional mobility at all ages from surveys taken in 1998 and 2006.  In all age groups the 2006 cohort reports decreased mobility relative to the earlier group.  It seems we are becoming feeble at an earlier age.

                     

This chart tallies the outcomes expected given the health status reported by the 1998 and the 2006 groups.  Included for consideration are the functional mobility findings and the occurrence of cardiovascular disease, cancer, or diabetes as a life threatening factor.  The general conclusion is that by 2006 the number of years one could expect to live without one of those diseases was declining, and the number of years one could expect to live with a major disease was increasing.

Another way of expressing these results is that as we approach retirement age we are more likely to be feeble and unhealthy than were the people in the same situation eight years earlier.  In what universe does that suggest we should by increasing the retirement age?

Our society seems to have some serious problems.  Perhaps it is time to start worrying about them.  Things are getting worse not better.  We need to ask why.  

At least a few people are beginning to take notice.  A few days ago an article appeared on the Bloomberg website: Americans Are Retiring Later, Dying Sooner, and Sicker In-Between.  This was motivated by a slight tick upward in the overall mortality rate.

The interested reader might find the following articles to be of informative:

Life Expectancies and Social Security and Medicare Eligibilities

Are We Living Longer, or Just Dying More Slowly?

Education, Income,and increased Mortality in Poorly Educated Whites in the US

Facebook: Will It Die a Natural Death or Should We Kill It?

Facebook, the social media giant, has received a lot of bad press recently, mostly focused on how it may or may not have affected the results of the last presidential election.  This spotlight has pushed into the background other concerns about it that are occasionally raised: its size and extent give it monopoly power in selling its users to advertisers; it is the most extensive surveillance organization the world has ever known (except perhaps Google/Alphabet); it is likely that Facebook uses its knowledge of its users for beneficial as well as malignant purposes; most importantly, is it beneficial to society or not?

John Lanchester wrote an essay addressing issues like these for the London Review of Books:   You Are the Product.  The title comes from the notion that if someone provides you with something for free, then you can be assured that the product being sold is you.  Lanchester begins by describing the size and scope of Facebook. 

“In the far distant days of October 2012, when Facebook hit one billion users, 55 per cent of them were using it every day. At two billion, 66 per cent are. Its user base is growing at 18 per cent a year – which you’d have thought impossible for a business already so enormous. Facebook’s biggest rival for logged-in users is YouTube, owned by its deadly rival Alphabet (the company formerly known as Google), in second place with 1.5 billion monthly users. Three of the next four biggest apps, or services, or whatever one wants to call them, are WhatsApp, Messenger and Instagram, with 1.2 billion, 1.2 billion, and 700 million users respectively (the Chinese app WeChat is the other one, with 889 million). Those three entities have something in common: they are all owned by Facebook. No wonder the company is the fifth most valuable in the world, with a market capitalisation of $445 billion.”

What makes Facebook and other social media platforms so popular?  Lanchester suggests that humans have an innate wish to know what others are doing so that they may copy them (mimetic desire).  This notion is attributed to René Girard, a French philosopher.

“Girard’s big idea was something he called ‘mimetic desire’. Human beings are born with a need for food and shelter. Once these fundamental necessities of life have been acquired, we look around us at what other people are doing, and wanting, and we copy them.”

Such a notion would certainly explain Facebook’s popularity.  However, Lanchester also points out that numerous studies have concluded that use of Facebook tends to generate unhappiness and depression.  

“To sum up: there is a lot of research showing that Facebook makes people feel like shit. So maybe, one day, people will stop using it.”

If Facebook is satisfying some fundamental need, why would it be making people unhappy?  It could be because Girard misinterpreted human nature.  Keith Payne, a psychology professor at the University of North Carolina provides another interpretation of human nature that suggests an explanation for why using Facebook can lead to distress.  His perspective is provided in his book The Broken Ladder: How Inequality Affects the Way We Think, Live, and Die.

According to Payne, we are interested in other people not because we want to copy them, but because we are concerned about our status and are continually checking to see how we compare.  Copying may occur but it will be driven by a quest for status.

We evolved off of the chimpanzee line, a species that forms rigid hierarchical structures to insure that the best specimens, both male and female, have optimal prospects for mating and feeding.  For chimpanzees, status was a critical aspect of life.  While humans have evolved their own unique properties over time, the tendency for human groups to form a hierarchy is still present.  All human assemblies tend to arrive at a leader or a leadership group and a bunch of followers.  While precise hierarchical levels tend to exist mainly in military organizations, all members of the assembly will be conscious of their status and concerned that they are treated properly given their status.  Psychological studies tell us that this status checking is innate and often takes place subconsciously.

According to Payne, obvious factors such as attained wealth and academic achievement are not reliable markers for high status.  What is most important is how we assess our ranking among those who we recognize as peers.  If a person feels diminished in status relative to peers this sense of inequality generates physical and mental stress and produces the same unhealthy responses as produced by living in a state of material poverty.

“….inequality is not the same thing as poverty, although it can feel an awful lot like it….Inequality makes people feel poor and act poor, even when they’re not.

Payne compares levels of status to rungs on a ladder

“We have to take subjective perceptions of status seriously, because they reveal so much about people’s fates.  If you place yourself on a lower rung, then you are more likely in the coming years to suffer from depression, anxiety, and chronic pain.  The lower the rung you select, the more probable it is that you will make bad decisions and underperform at work.  The lower the rung you select, the more likely you are to believe in the supernatural and in conspiracy theories.  The lower the rung you select, the more prone you are to weight issues, diabetes, and heart problems.  The lower the rung you select, the fewer years you have left to live.”

“Let me be clear that I am not simply asserting that, if you are poor, then all of these things are more likely to happen to you.  I am stating, rather, that these things are more likely to happen to you if you feel poor, regardless of your actual income.”

This rather startling conclusion provides a convincing reason why social media platforms like Facebook are so compelling and also why they also leave us feeling depressed.  A Facebook page is a stage on which a person can present themselves in the best possible light and perhaps engage in a bit of embellishment.  An observer will be constantly comparing his/her unembellished life with that of friends as presented on the screen.  Feelings of inequality seem inevitable.

Jean M. Twenge has examined the trends observed in adolescents as they spend large amounts of time on social media and reports her findings in an article in The Atlantic: Have Smartphones Destroyed a Generation?  She is most concerned about the effects generated because interpersonal interactions via social media have become a substitute for face-to-face interactions. 

“Social-networking sites like Facebook promise to connect us to friends. But the portrait of iGen teens emerging from the data is one of a lonely, dislocated generation. Teens who visit social-networking sites every day but see their friends in person less frequently are the most likely to agree with the statements ‘A lot of times I feel lonely,’ ‘I often feel left out of things,’ and ‘I often wish I had more good friends.’ Teens’ feelings of loneliness spiked in 2013 and have remained high since.”

Social media boasts of connecting people, but it is also a mechanism for demonstrating a person’s isolation from peers.

“For all their power to link kids day and night, social media also exacerbate the age-old teen concern about being left out. Today’s teens may go to fewer parties and spend less time together in person, but when they do congregate, they document their hangouts relentlessly—on Snapchat, Instagram, Facebook. Those not invited to come along are keenly aware of it. Accordingly, the number of teens who feel left out has reached all-time highs across age groups. Like the increase in loneliness, the upswing in feeling left out has been swift and significant.”

“This trend has been especially steep among girls. Forty-eight percent more girls said they often felt left out in 2015 than in 2010, compared with 27 percent more boys. Girls use social media more often, giving them additional opportunities to feel excluded and lonely when they see their friends or classmates getting together without them. Social media levy a psychic tax on the teen doing the posting as well, as she anxiously awaits the affirmation of comments and likes.”

One of social media’s most significant contributions to society is to increase the suicide rate.

“Girls have also borne the brunt of the rise in depressive symptoms among today’s teens. Boys’ depressive symptoms increased by 21 percent from 2012 to 2015, while girls’ increased by 50 percent—more than twice as much. The rise in suicide, too, is more pronounced among girls. Although the rate increased for both sexes, three times as many 12-to-14-year-old girls killed themselves in 2015 as in 2007, compared with twice as many boys. The suicide rate is still higher for boys, in part because they use more-lethal methods, but girls are beginning to close the gap.”

“These more dire consequences for teenage girls could also be rooted in the fact that they’re more likely to experience cyberbullying. Boys tend to bully one another physically, while girls are more likely to do so by undermining a victim’s social status or relationships. Social media give middle- and high-school girls a platform on which to carry out the style of aggression they favor, ostracizing and excluding other girls around the clock.”

Twenge then illustrates the extent to which social media provides those owning the platform with personal information that they can use to increase their profits.

“A recently leaked Facebook document indicated that the company had been touting to advertisers its ability to determine teens’ emotional state based on their on-site behavior, and even to pinpoint ‘moments when young people need a confidence boost.’ Facebook acknowledged that the document was real, but denied that it offers ‘tools to target people based on their emotional state’.”

Lanchester believes the surveillance aspect of Facebook’s business model is poorly understood and could become a problem for the platform if more users appreciated what was actually being done to them.

“The one time Facebook did poll its users about the surveillance model was in 2011, when it proposed a change to its terms and conditions – the change that underpins the current template for its use of data. The result of the poll was clear: 90 per cent of the vote was against the changes. Facebook went ahead and made them anyway, on the grounds that so few people had voted. No surprise there, neither in the users’ distaste for surveillance nor in the company’s indifference to that distaste.”

Sue Halpern obtained access to some of the information Facebook had gathered about her and provides some interesting insight into how it works in a New York Review of Books article: They Have, Right Now, Another You. 

Halpern tells us that Facebook accumulates 98 data points that it uses to characterize an individual.  These factors are intended to help advertisers decide whether or not it is worth putting an ad in front of this person.   Some of these are self reported by the individual of interest, while most are extracted via other means.  For example, if you provide Facebook with a photo of yourself, its facial recognition software is good enough to pick you out of other peoples’ photographs.  It can clearly mine information from posts by you and those who it associates with you, but since they wish to make money by selling you to vendors, they need to learn more than you are likely to be willing to share.

“Facebook also follows users across the Internet, disregarding their ‘do not track’ settings as it stalks them. It knows every time a user visits a website that has a Facebook ‘like’ button, for example, which most websites do.”

“The company also buys personal information from some of the five thousand data brokers worldwide, who collect information from store loyalty cards, warranties, pharmacy records, pay stubs, and some of the ten million public data sets available for harvest. Municipalities also sell data—voter registrations and motor vehicle information, for example, and death notices, foreclosure declarations, and business registrations, to name a few. In theory, all these data points are being collected by Facebook in order to tailor ads to sell us stuff we want, but in fact they are being sold by Facebook to advertisers for the simple reason that the company can make a lot of money doing so.”

What Halpern learned about Facebook’s characterization was that it was often misleading and in some cases incorrect.  Some of the mistakes were so outrageous that Halpern began to wonder if Facebook has purposely created a more marketable persona for her in order to attract higher priced ads to the pages at which she would be looking.  This makes one wonder just how far Facebook would go in order to make more money.

Many of us think that a social media company that collects data on us in order sell ads presenting us with something we might be interested in buying is a harmless nuisance.  However, there is a dark side to this practice.  Cathy O’Neil provides a number of examples in her book Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy.

O’Neil tells us we should be concerned because big data, such as that accumulated by Facebook, can be used to pinpoint vulnerable people and take advantage of their vulnerability.

It has been demonstrated that degrees from for-profit colleges are of little value to students.  They are much more expensive than equivalent education from a community college and less highly valued by employers—in fact, little better than a high school education.  These schools make nearly all their money from government-guaranteed loans.  Whether students succeed or fail has little to do with their business plan.  Platforms like Facebook have all the information required to provide vulnerable targets for these outfits.

“Vatterott College, a career-training institute, is a particularly nasty example.  A 2012 Senate committee report on for-profit colleges described Vatterott’s recruiting manual, which sounds diabolical.  It directs recruiters to target ‘Welfare Mom w/Kids.  Pregnant Ladies.  Recent Divorce.  Low Self-Esteem. Low Income Jobs.  Experienced a Recent Death.  Physically/Mentally Abused.  Recent Incarceration.  Drug Rehabilitation.  Dead-End Jobs—No Future.’”

 

What might you think of a social media company that would assist an organization in inducing people like these to take out large school loans with little or no prospect of ever being able to repay them? 

Lanchester has clear feelings about Facebook.

“I am scared of Facebook. The company’s ambition, its ruthlessness, and its lack of a moral compass scare me.”

In fact he was moved to consider how Facebook might stumble and fall. 

The first possibility is that its growth is likely to slow dramatically.  There are only so many eligible people in the world.  The next billion users will be difficult to find.  This will keep it generating large profits but its stock price will likely fall.

Other eventualities could force Facebook to change its business model.  Lanchester wonders if people will begin to reject the platform once they fully realize the extent of Facebook’s surveillance activities.  Users might also just grow tired of an activity that makes large numbers of people depressed and unhappy.  The government might also step in by recognizing that Facebook’s size and influence has made them too big to exist in its current form. 

Perhaps the most likely occurrence is that the business of selling places for ads on web pages may dry up.  The model is burdened by rampant fraud.  It is easy to create a webpage, place ads on it, and then schedule a bot on another platform to come and click on those ads as often as one wishes.

“The industry publication Ad Week estimates the annual cost of click fraud at $7 billion, about a sixth of the entire market. One single fraud site, Methbot, whose existence was exposed at the end of last year, uses a network of hacked computers to generate between three and five million dollars’ worth of fraudulent clicks every day. Estimates of fraudulent traffic’s market share are variable, with some guesses coming in at around 50 per cent; some website owners say their own data indicates a fraudulent-click rate of 90 per cent.”

Facebook is not responsible for that fraud, but it has been caught using dubious methods in presenting its value to advertisers.

“….many of Facebook’s metrics are tilted to catch the light at the angle which makes them look shiniest. A video is counted as ‘viewed’ on Facebook if it runs for three seconds, even if the user is scrolling past it in her news feed and even if the sound is off. Many Facebook videos with hundreds of thousands of ‘views’, if counted by the techniques that are used to count television audiences, would have no viewers at all.”

The best eventuality for society and Facebook users would be for this ad-driven model to fail and disappear.  That presumably would force Facebook to adopt a fee-for-service model to acquire its income.  Surveillance would no longer be necessary and users’ selected preferences would control how the platform interacts with them.

If something like what is suggested above does not occur, we face an unknown future that is greatly feared by Lanchester.

“Automation and artificial intelligence are going to have a big impact in all kinds of worlds. These technologies are new and real and they are coming soon. Facebook is deeply interested in these trends. We don’t know where this is going, we don’t know what the social costs and consequences will be, we don’t know what will be the next area of life to be hollowed out, the next business model to be destroyed, the next company to go the way of Polaroid or the next business to go the way of journalism or the next set of tools and techniques to become available to the people who used Facebook to manipulate the elections of 2016. We just don’t know what’s next, but we know it’s likely to be consequential, and that a big part will be played by the world’s biggest social network. On the evidence of Facebook’s actions so far, it’s impossible to face this prospect without unease.”

The interested reader might find the following articles informative:

Big Data: How It Threatens Democracy

Big Data: Its Role in Increasing Inequality

Inequality, Poverty, and Social Dysfunction

The Southern Diaspora and the Southernization of America

The Republican Party has long been associated with fiscal conservatism.  It still is—or at least it was until Trump arrived.  But it was also generally liberal on social issues with its moral core derived from traditional New England Protestantism.  At some point the Party became associated with a particularly radical social conservatism as its center of gravity moved to the states of the South that promoted the values of Evangelical Christianity.  Donald Trump surprised everyone by gaining the Republican nomination for president, and startled everyone by actually winning the election.  Commentators were so busy drawing comparisons with the rise of Adolph Hitler that they forgot to notice that the politician Trump most resembled was the southern segregationist governor, George Wallace, who ran for president in 1964 and 1972 as a Democrat and in 1968 representing the American Independent Party.  Trump did not run as a segregationist, but he gave a wink and a nod to every racist he encountered.  Wikipedia provides these comments on Wallace’s 1968 campaign.

“Wallace ran a campaign supporting law and order and states' rights on racial segregation. This strongly appealed to rural white Southerners and blue-collar union workers in the North. Wallace was leading the three-way race in the Old Confederacy with 45% of the vote in mid-September. Wallace's appeal to blue-collar workers and union members (who usually voted Democratic) hurt Hubert Humphrey in Northern states like Ohio, Illinois, New Jersey, Michigan, and Wisconsin. A mid-September AFL-CIO internal poll showed that one in three union members supported Wallace, and a Chicago Sun-Times poll showed that Wallace had a plurality of 44% of white steelworkers in Chicago.”

“Wallace's foreign policy positions set him apart from the other candidates in the field. If the Vietnam War was not winnable within 90 days of his taking office, Wallace pledged an immediate withdrawal of U.S. troops. . . . Wallace also called foreign-aid money 'poured down a rat hole' and demanded that European and Asian allies pay more for their defense.”

Wallace appealed to the racial and economic fears of the white working class.  The surprising strength of his campaign should have told us that Trump would also be stronger than expected outside of the South.

Historians, social scientists, and political analysts have often been moved to use a phrase similar to the “southernization of America” to describe the process by which the Republican Party was reconfigured to take its current form and the white working class switched from seeking the economic benefits promised by Democrats to pursuing the cultural values promoted by Republicans.  Could it be that southern values propagated out of the South with the huge migrations of southerners that dispersed throughout the rest of the nation during most of the twentieth century?  James N. Gregory is a history professor at the University of Washington who believes that to be the case.  He presents his data and conclusions in The Southern Diaspora: How the Great Migrations of Black and White Southerners Transformed America (2005).

The migration of Blacks from the South to the cities of the North and West has been referred to as “The Great Migration.”  The migration of whites from the South over the same period was much larger, but much less studied.  Gregory provides this summary of what his investigations demonstrated.

“This book is about what may be the most momentous internal population movement of the twentieth century, the relocation of black and white Americans from the farms and towns of the South to the cities and suburbs of the North and West.  In the decades before the South became the Sun Belt, 20 million southerners left the region.  In doing so, they changed America.  They transformed American religion, spreading Baptist and Pentecostal churches and reinvigorating evangelical Protestantism, both black and white versions.  They transformed American popular culture, especially music.  The development of blues, jazz, gospel, R&B, and hillbilly and country music all depended on the southern migrants.  The Southern Diaspora transformed American racial hierarchies, as black migrants in the great cities of the North and West developed institutions and political practices that enabled the modern civil rights movement.  The Southern Diaspora also helped reshape American conservatism, contributing to new forms of white working-class and suburban politics.  Indeed, most of the great political realignments of the second half of the twentieth century had something to do with the population movements out of the South.”

Given the interest in Donald Trump and the Republican voters, the focus here will be on the effects of the southern white migrants.

Discussing internal migrations and the effects they might have becomes complicated because people will leave one location in search of a better life but a significant number will return eventually, sometimes within months, sometimes only decades later.  Data exist providing numbers of southerners who migrated out over some time period, and data exist indicating where those migrants settled over that period.  However the data needs interpretation from other sources in order to determine what effect they might have had on any society in which they embedded themselves.  Economic and social circumstances would also play a role in where people settled.  Blacks were restricted in where they could go and headed for the black enclaves in the big northern and western cities.  Whites could go anywhere other whites lived, but were not equally welcome in all places.  As a result, whites would also tend to concentrate in areas where jobs were available and any cultural peculiarities they might have brought with them were tolerated. 

The migration flow breaks down into two periods.  The first begins at the start of the twentieth century, grows through the war years and diminishes during the Great Depression of the 1930s.  The second and largest migration period was driven by World War II and the postwar boom years.  The out migration of blacks would peak in the 1970s and fall considerably as the century came to an end.  For whites, the peak would come in the 1950s and stay relatively high from then on.

“In the Great Migration era of the early twentieth century, when African Americans moved north for the first time in large numbers and established much-noticed communities in the major cities, less-noticed white southerners actually outnumbered them roughly two to one.  The margins became larger after 1950 and still larger as the century drew to a close.  Over the course of the twentieth century, more than 28 million southerners left their home region—28 percent were African Americans, 68 percent were non-Hispanic whites, and 4 percent southern-born Latinos, Tejanos mostly, who had been joining the flow north and west since World War II.”

Gregory provides a breakdown of where former southerners lived in 1970 by region.  By far, the most densely settled regions are what he refers to as the Pacific (California, Oregon and Washington) and the East North Central (Wisconsin, Michigan, Illinois, Indiana, and Ohio).

“In 1970, 12 percent of California residents were southern born.  This was proportionally similar to Ohio, where 1.4 million southerners of both races lived, and to Indiana, which was home to 617,000.  In Illinois, where former southerners numbered close to a million, and Michigan, where there were more than 800,000, they constitutes 9 percent of the population….Unfortunately, we have no way of counting the children and grandchildren born in these states.  They would certainly at least double the demographic impact.”

 One must remember that statewide numbers can be misleading because conditions encouraged concentration of migrants.  Consider California as an example.  It saw a huge influx of migrants from Oklahoma, Arkansas, and Texas during the depression years.  Many of them settled in the Central Valley where agricultural jobs were available and became a significant fraction of the population.  California is today, politically, two states: the coast and the inland region.  It is perhaps the most liberal state in the union because most of the voters live on the coast where the original settlers had mostly non-southern origins.  The inland parts of the state are highly conservative, differing little today in political views from those now found in Oklahoma, Arkansas, and Texas.

Gregory was quoted as writing that the migrant southerners “helped reshape American conservatism, contributing to new forms of white working-class and suburban politics.”  How does he justify that claim?

One of the southern contributions to political discourse was to make racism and racial violence more politically correct.  Racism already existed outside the South, but it was generally illegal and violence was not condoned.  The southerners brought the attitude that racism was legal and violence against blacks was condoned.  This message was one of encouragement of others to behave as whites did in the south.  Although the southerners were not numerous enough to be major participants in racial incidents, they could be the tinder that lights the flame.  Gregory provides this example.

“Southern whites played a real part in the hate strikes and white-against-black housing riots that occurred in northern and western cities in the 1940s and 1950s.  Sociologist Katherine Archibald worked in a shipyard in Oakland, California, during World War II.  She witnessed neither riots nor major violent clashes, but in her book Wartime Shipyard,  she explored the tense racial dynamics of the yard, where about 20 percent of the workers were African Americans from the western South and another 20 percent were whites from the same region….Okies often took the lead in whites-only conversations about the ‘Negro problem.’  Vicious, uncompromising racism, she pointed out, was widespread, virtually universal among whites of all backgrounds in the shipyard, but the southerners spoke loudly about their hatreds and theories, drawing a sense of authority from their supposed special knowledge about how to handle black people.  Talk of lynching was an Okie contribution to the racist discourse: ‘What you need round here.’ one former southerner counseled, ‘is a good old fashioned lynching.  Back in my home state we string a nigger up or shoot him down, every now and then, and that way we keep the rest of them quiet and respectful’.”

Why is the encouragement of racism of significance in the history of American conservatism?  Because every Republican president from Nixon to Trump has sent the message that racists are welcome in the Republican Party, the conservative party.  This embrace of racism led southern Democrats to turn into southern Republicans and helped working and middle class whites outside the South decide to vote the same way, although there would be more than racism involved.  Under Trump, the Republican Party is best described as a white nationalist party.

Gregory provides several examples where the migrant southerners did more than just talk.  The resurgence of the Ku Klux Klan in the 1920s was driven mostly by southern activism.  The participants were majority non-southerners, but southerners led the way.

“Estimates of the numbers who joined [the Klan]….range well above 2 million, with two-thirds of the membership outside the South.  Huge Klan organizations were built in Indiana, Ohio, Pennsylvania, Illinois and Michigan.  The West also responded to the Invisible Empire.  Oregon elected a Klansman governor in 1922, as did Colorado in 1924, and there were pockets of Klan strength in California and Washington.”

A Texas native, D.C. Stephenson was perhaps the most politically successful of the Klansmen.

“….Indiana alone counted 300,000 Klansmen….the 1924 election season witnessed Stephenson’s greatest triumph: first a Klan takeover of the Republican Party, then of the Indiana statehouse.  Until he was brought down by a 1925 rape and suicide scandal, Stephenson was the most visible and probably the most powerful Klansman in the country.”

A similar dynamic occurred when George Wallace brought his campaign to the North in the 1960s.  He received considerable support from southern migrants, but probably more importantly, their support provided the cover for others who might have hesitated to vote for such a controversial and unlikely figure.  By the time Wallace arrived on the national scene a number of other developments had occurred. The civil rights movement and subsequent legislation had further aroused racial issues.  School desegregation would be a long and nasty process—unpopular in both the North and South.  The war in Vietnam would grow to monstrous proportions, dividing the nation as to how to define patriotism.  The cultural upheavals of the 1960s had offended the traditionally minded and prompted religious groups to become more politically active.

Wallace brought more to the table than just racism.  Like Trump he appeared to be the answer to a number of the concerns of the white lower and middle classes.

“His promises crossed the boundaries conventional in northern politics.  He sounded like a Republican on welfare, race, and taxes, a Democrat on social security and union rights, and a southerner on the centrality of God-fearing religion.”

Much of the cultural division that emerged during the 1960s was driven by southern music.  Traditional southern music formed the basis for both an industry of folk music and one of country music.  The two would take opposite sides on virtually all issues.

The South also spawned liberals who would take their music north and create an industry that would side with liberals on issues related to race and unionization, and promote anti-war stances during the 1960s.  Woody Guthrie was born in Oklahoma and gained notoriety in California.  He would be the prototype.  The traditional southern melodies would be used to create protest songs that were used as a resource in the labor and civil rights movements, and ultimately in the antiwar movement.

Country music took a different path.  It had been increasing in popularity outside the South for some time, acquiring a country-western flavor when cowboy themes were added.  However, the arrival of rock and roll music in the 1950s produced an existential crisis.  To continue to grow, country had to redefine itself.  It had to shed the hillbilly and cowboy imagery and find an audience on which to focus.  If the youth wanted rock and roll and exciting experimentation, country would go for an older audience and emphasize traditional values.

“The racial markings remained very apparent as Nashville positioned itself against the racially integrated imagery and personnel of rock and roll and as George Wallace and other segregationist politicians claimed country music for the backlash cause.”

Country music also positioned itself as the “working man’s” music.  The songs were often about humble people working dangerous jobs, while suffering broken romances with unfaithful women, and the disdain of the elites.  This approach was broadly popular across different regions and the various ethnicities.  It had found a definite demographic niche.

“Listener surveys revealed that country music appealed largely to whites in middle-age range, twenty-five to forty-nine, with few younger listeners.  And the audience was largely blue-collar families—especially the skilled and semi-skilled sectors—with mid-range incomes and modest educations.  In the North, former southerners accounted for a vigorous portion of this market, thus approximating the start-up role they played in the Wallace crusades.  But the product had spread far beyond that base.  Country music had also become popular in ethnic neighborhoods, showing up in all sorts of blue-collar taverns….”

With the coming of the Vietnam War and the associated controversies, country music put itself firmly on the side of the war and the soldiers who had to fight it—a strategy that would again be popular with its audience.  It would represent patriotism and traditionalism.  Would this be enough to help determine the course of working class conservatism?  Gregory provides this comment.

“These are songs some critics will say, and who knows what they meant to audiences?  But they were not just songs.  Country music of this era was surrounded by political commentary.  DJs, artists, journalists, and music-buying publics recognized that music was a prime battleground for the epic conflicts of the Vietnam era.  Politicians did as well.  Many of the medium’s biggest stars signed up to help Wallace in 1968, performing with the governor as he crisscrossed the country.  Nashville’s ‘Music Row was practically a battlefield command post for George Wallace,’ observed journalist Paul Hemphill, who found also a few Nixon supporters but nary a star who publicly supported Hubert Humphrey.”

“In the years that followed, Republicans moved to take over that command post.  Repeatedly (and awkwardly) declaring his fondness for country music, President Nixon courted musicians and Nashville executives, knowing that these entertainers would help secure the new voting blocs that the Republicans counted on, working-class whites in the South and working-class whites outside the south.”

Southern whites would provide yet another factor that would drive working-class and middle-class whites in a more conservative direction: the rise of religious political activism.  The religion exported to the North and West was of a very traditional Bible-driven form.  It was tolerant of racism, but intolerant when it came to Catholics, Communists, homosexuals, and feminists.  It did not become aggressively political until the Roe v. Wade decision in 1973.  On the issue of abortion, the southern churches and Catholicism finally found common ground.

“Fear of Catholics had been part of what had last driven evangelicals into the political arena in the 1920s, when their voices and votes had aided the causes of prohibition, anti-immigration, and the Ku Klux Klan.”

“With the reawakening of politicized Christian conservatism, Republicans grafted moral traditionalism onto the patriotic and racial traditionalism that had been helping them win elections.  Opposition to feminism, gay rights, sex education in the schools, and especially abortion offered a new way to appeal to blue-collar and lower-middle-class whites who not long before had been consistent Democrats.”

The politicization of Christian traditionalists provided the Republicans with another opportunity to gain votes among the white working and middle classes by promising to discriminate against and restrict the civil rights of an expanded list of people.  The party once known for fiscal responsibility and civil liberties had now formed a covenant with these white voters that allowed blacks, Hispanics, immigrants of all kinds, homosexuals, and women to be considered as less than full citizens of the United States. 

Such an approach to politics would inevitably lead to someone like Donald Trump.

And that is how we arrived at where we are today.

The interested reader might find the following articles informative:

American Nations: How Puritans Turned the Left Coast Blue

Election 2012: The Assembly of the Dixie-Led Red State Bloc

The American Nation of Greater Appalachia: A Persistent Culture

Red vs. Blue: Private Protestants vs. Public Protestants

Capitalism Ends with an Overdose of Itself

What we now call economics was once referred to as political economy.  This latter term recognized the fact that the activities we associate with economics today should be considered

in the context of the overall performance of society.  It was assumed that healthy economies, in terms of production and trade, should be coupled with cultural, legal, and national constraints to produce a healthy society.  Political economy then becomes a domain consisting of social scientists as well as those devoted to studying the flow of money and product.  Over time, the discipline of economics has grown apart from this coupling with sociology.  In fact, the neoliberal uprising in the latter half of the twentieth century has resulted in the near elimination of social issues except to the extent that they support neoliberal capitalistic models.

Wolfgang Streeck seems a throwback to an earlier time in that his primary background is in sociology, and he views economic antics in the context of their interaction with society in general.  This perspective produces a rather jaundiced view of the path down which neoliberal capitalism is taking us.  His views are summarized in a collection of essays in his book How Will Capitalism End?: Essays on a Failing System. 

Streeck is the director of the Max Planck Institute for Social Research in Cologne and Professor of Sociology at the University of Cologne.  He is an Honorary Fellow of the Society for the Advancement of Socio-Economics and a member of the Berlin Brandenburg Academy of Sciences as well as the Academia Europaea.  Although Europe is his home base, his view is relevant to all.  His reference to capitalism as a failing system refers to all advanced Western economies.  The United States, as the biggest and most powerful economy, is also the baddest of the bad actors.

Streeck sees capitalism as a highly unstable construct that is incapable of self-regulation and must be continually forced to remodel itself as society and stakeholders, such as its needed workers, constrain its behaviors.

“Capitalism has always been an improbable social formation, full of conflicts and contradictions, therefore permanently unstable and in flux, and highly conditional on historically contingent and precarious supportive as well as constraining events and institutions.”

“In fact, the history of modern capitalism can be written as a succession of crises that capitalism survived only at the price of deep transformations of its economic and social institutions, saving it from bankruptcy in unforeseeable and unintended ways.”

Early capitalism savaged itself and society with wild periods of boom and bust as it was unable to live with unmanaged competition.  It moved on to forming monopolies to control competitors and stabilize (maximize) profits.  Society had to move in and apply constraints.  It struggled for decades with labor movements which eventually forced it to change its mode of operation and cede more of its autonomy to social forces.  In the early twentieth century it was essentially ruled by government decree as it was used to support two world wars.  In the period between the wars, capitalism failed to lead to stable societies in many countries and succumbed to either fascism or communism.  After the second war capitalism had generally been left in a highly-controlled mode by governments following Keynesian economic principles.

“Out of this grew the democratic welfare-state capitalism of the three post-war decades, with hindsight the only period in which economic growth and social and political stability, achieved through democracy, coexisted under capitalism, at least in the OECD world where capitalism came to be awarded the epithet, ‘advanced’.”

From about 1970 on, this equilibrium would dissipate under a surge in neoliberal thinking and the combined effects of a series of economic and social crises.  Streeck highlights three economic crises that followed this transition point.

“To be precise, three crises followed one another: the global inflation of the 1970s, the explosion of public debt in the 1980s, and rapidly rising private indebtedness in the subsequent decade, resulting in the collapse of financial markets in 2008….This sequence was by and large the same for all major capitalist countries, whose economies have never been in equilibrium since the end of post-war growth at the end of the 1960s.”

During this post-war period the acceptance of neoliberal principles produced profound changes in capitalist societies.

“While in the 1970s governments still had a choice, within limits, between inflation and public debt to bridge the gap between the combined distributional claims of capital and labour and what was available for distribution, at the end of inflation at the beginning of the 1980s the ‘tax state’ of modern capitalism began to change into a ‘debt state.’  In this it was helped by the growth of a dynamic, increasingly global financial industry headquartered in the rapidly de-industrializing hegemonic country of global capitalism, the United States.”

The financial burden of debt would cause yet another transition to what Streeck refers to as the “consolidation state.”  If the level of debt was deemed to be insupportable, then the only way to keep indebtedness in check was to scale back government expenditures.  This trend was encouraged by the neoliberal crowd who believed that a strong market economy and a strong society were one and the same.  However, by diminishing the capabilities of government and virtually eliminating any possibility of collective action on the part of wage earners, capitalism weakened the sources of power that had kept it from running off the rails in earlier times.

“The advance of neoliberalism coincided with steadily declining electoral turnout in all countries, short-lived exceptions notwithstanding.  The shrinking of the electorate was, moreover, highly asymmetrical: those that dropped out of electoral politics came overwhelmingly from the lower end of the income scale—ironically where the need for egalitarian democracy is greatest.  Party membership declined as well, in some countries dramatically; party systems fragmented; and voting became volatile and often erratic….Also declining is trade-union membership—a trend reflected in an almost complete disappearance of strikes, which like elections have long served as a recognized channel of democratic participation.”

In addition, the continued accumulation of wealth in the hands of a very few that is an intrinsic property of market capitalism has supported a herd of oligarchs who use their money to influence political policies, and they use their philanthropy to recast society in a form with which they are more comfortable.  Streeck quotes a conclusion reached by Jeffrey Winters in Oligarchy and Democracy.  Winters constructed a Material Power Index to assess the degree of influence which the very wealthy possessed in comparison to the bottom 90% of the population. Winters produced an interesting comparison.  If one takes the wealth provided power of the top 100 households and compares that to that of the bottom 90% (excluding home equity) the ratio is 108,765 to 1. 

“….this corresponds roughly to the difference in material power between a senator and a slave at the height of the Roman Empire.”

Is capitalism really heading toward some ultimate crisis that will finally break its hold on society, or are we just moving towards another transition point?  Streeck points out three trends that have been running in concert over several decades that suggest the problems with capitalism are long term and intrinsic.  He focuses on lower growth, increasing inequality, and ever larger levels of both public and private debt.  These are long-term global trends.  The three feed off each other.  For example, low growth justifies wage stagnation, but wage stagnation and the inability to accommodate more debt limit aggregate demand, leading to continuing low growth.

“….low growth contributes to inequality by intensifying distributional conflict; inequality dampens growth by restricting effective demand; high levels of existing debt clog credit markets and raise the prospect of financial crises; an overgrown financial sector both results from and adds to economic inequality etc., etc.  Already the last growth cycle before 2008 was more imagined than real, and post-2008 recovery remains anaemic at best, also because Keynesian stimulus, monetary or fiscal, fails to work in the face of unprecedented amounts of accumulated debt.”

Extreme inequality and low demand, which seem to be coupled, leads the wealthy to seek essentially nonproductive ways to increase their wealth.  This is likely a source of the extreme risk taking that has permeated financial markets.  Wealth, with nowhere productive to go, bids up asset prices and leads to bubbles and crashes.

There is certainly danger in the power of oligarchs to influence society and government policy, but Streeck points out an additional aspect of extreme inequality: the tendency of the very wealthy to view themselves as above or at least separate from society.  In fact, a new term has been conjured up to describe such a situation: plutonomy.  We have this definition from Wikipedia.

“Plutonomy is a term that Citigroup analysts have used for economies ‘where economic growth is powered by and largely consumed by the wealthy few’.”

A society in which a few extremely wealthy people continue to make money while everyone else treads water and watches cannot go on forever.

Capitalism has also created problems for itself by moving market solutions into areas that should, and ultimately, must be controlled by society.  Following Karl Polanyi, Streeck mentions the three “fictitious commodities” of “labour, land (or nature) and money.”

“A fictitious commodity is defined as a resource to which the laws of supply and demand apply only partially and awkwardly, if at all; it can therefore only be treated as a commodity in a carefully circumscribed, regulated way, since complete commodification will destroy it or make it unuseable….Unless held back by constraining institutions, market expansion is thus at permanent risk of undermining itself, and with it the viability of the capitalist economic and social system.”

Advanced nations are all struggling to deal with capitalism’s commodification in these areas as they increasingly impinge on and alter the nature and stability of societies.  As low growth persists in the economies, ever more complex and risky methods of gaining profits are being pursued.

“….we may note that it was an excessive commodification of money that brought down the global economy in 2008: the transformation of a limitless supply of cheap credit into ever more sophisticated financial ‘products’ gave rise to a real-estate bubble of a size unimaginable at the time.  As of the 1980s, deregulation of U.S. financial markets had abolished the restrictions on the private production and marketization of money devised after the Great Depression.  ‘Financialization,’ as the process came to be known, seemed the last remaining way to restore growth and profitability to the economy of the overextended hegemon of global capitalism.”

  

Streeck lists a number of predictions on how capitalism might ultimately fail and require a reimagining of how societies must work in the future.  The two most compelling thoughts involve inevitable crises involving land (nature) and labor.  In the former case, global warming has the potential to impose catastrophic changes on climate and the environments in which nations must exist.  This will require advanced planning and resource allocation on a broad scale.  Will states weakened by generations of neoliberal market-driven propaganda have the strength to counter the profit-driven oligarchs and their legions of lobbyists?  Can profit-driven capitalists be expected to come to their own rescue? 

The world must also deal with an ever increasing population with ever increasing demands on the earth’s resources.  As more nations increase in wealth and demand the right to have a lifestyle similar to that in the advanced countries, the impact on resources will worsen.  Again, will profit-driven capitalists contribute to wise discourse on allocation of critical resources, or will they counter any attempt to limit their profits?

The excessive commodification of labor may force society to rise up and demand a new societal approach before climate change becomes critical.  Capitalism has brought increased wealth to nations, but its decision to not share that wealth has led not to increased prosperity and improved lives for the majority, but rather the opposite.

“Deregulation of labour markets under international competition has undone whatever prospects there might once have been for a general limitation of working hours.  It has also made unemployment more precarious for a growing share of the population.  With the rising labour-market participation of women, due in part to the disappearance of the ‘family wage,’ hours per month sold by families to employers have increased while wages have lagged behind productivity, most dramatically in the capitalist heartland, the U.S.  At the same time, deregulation and the destruction of trade unions notwithstanding, labour markets typically fail to clear, and residual unemployment on the order of 7 to 8 percent has become the new normal, even in a country like Sweden.”

The combined impact of automation and artificial intelligence has yet to be fully felt.  There will be very few jobs for which human interaction is absolutely required.  It is the duty of a market-driven capitalist to replace all humans with more reliable and cheaper options whenever possible.  Some sort of intervention in the system will be required by society through its agent, the government.  Will profit-driven capitalists be willing to address the problem by limiting their freedom of operation or by limiting their profits?  Or will they fight against any such resolution?  Who will win the day?

Streeck believes capitalism as we know it must eventually disappear, but he does not profess to know exactly how or when it will happen.  And he does not expect the transition to a new economic model to be quick or easy.  Part of the problem will arise because there has been, up to this point, no serious and credible proposal for how to replace our current form of capitalism.

“Not just capital and its running dogs, but also their various oppositions lack a capacity to act collectively.  Just as capitalism’s movers and shakers do not know how to protect their society from decay, and in any case would lack the means to do so, their enemies, when it comes to the crunch, have to admit that they have no idea of how to replace neoliberal capitalism with something else….”

“Before capitalism will go to hell, then, it will for the foreseeable future hang in limbo, dead or about to die from an overdose of itself but still very much around, as nobody will have the power to move its decaying body out of the way.”

Interested readers might find the following articles informative:

The New Road to Serfdom

Learning to Live With Stagnation

Our Economic Future and What We Should Be Teaching Our Children to Prepare Them for It

Capitalism vs. The Good Life: The Faustian Bargain