Why is Washington so implacably hostile to a reduction of hours of work as the solution to unemployment? And, why has it abandoned the 99ers to their fate?
The answer to these questions is simple: Washington depends on the unpaid hours of labor wrung from the working population as much as capital itself. Washington is not a neutral party when it comes to hours of labor; it is, without exception, the largest single consumer of surplus labor time in society. The entirety of its revenues amount to the unpaid labor of society either directly, in the form of taxes, or indirectly, in the resources it controls through debt or money printing.
This fact is never admitted by progressives, nor even by vulgar proponents of Marx’s theory. The argument made by the Marxists against the current State amounts not to a recognition that the machinery of state shares with capital the total pot of surplus labor time, and, as a result, must be interested in the longest possible duration of unpaid labor, but only that this machinery is under the control of capital and should instead be controlled by the working class. The progressive critique of the State amounts to a demand that this unpaid labor time be devoted to the “improvement of society”; the typical vulgar proponent of Marx differs from this only in that he proposes this be under the direction of a working class party. Neither raises the demand for the abolition of all unnecessary labor, and with it, the state in its entirety.
When the Great Depression erupted Washington suddenly had access to billions of hours of unpaid social labor which it, along with the other great powers, immediately set about throwing into preparation for World War II. Government, already the largest single consumer of unpaid labor time in society, expanded monstrously – consuming perhaps as much as 40 percent of national output. But, in the aftermath of that horrible conflict, we really see its voracious hunger, and insatiable lust for surplus as the Truman administration conceived of and implemented a policy of a permanent war footing: The Cold War.
In his annual message to the Congress, delivered January 12, 1951, Truman opened with these words announcing the birth of the national security state:
We face enormously greater economic problems, as I transmit this fifth annual Economic Report, than at any time since the end of World War II. Although our economic strength is now greater than ever before, very large new burdens of long duration are now being imposed upon it.
The United States is pledged and determined, along with other free peoples, to cheek [sic] aggression and to advance freedom. Arrayed against the free world are large and menacing forces. The great manpower under the control of Soviet communism is being driven with fanatic zeal to build up military and industrial strength. We invite disaster if we underestimate the forces working against us.
The economic strength of the free peoples of the world is, however, superior to that of their enemies. If the free nations mobilize and direct their strength properly, they can support whatever military effort may be necessary to avert a general war or to win such a war if it comes. The resources are on our side. The only question is whether they will be used with speed and determination. The answer will depend upon unity of purpose and of action–unity among the free nations, unity here in the United States.
Unity is imperative on the economic front. On this front, under the American system, everybody is involved–every businessman, worker and farmer; every banker and scientist and housewife; every man and woman. We can win our way through to ultimate triumph if we all pull together. Decisive action, essential to our safety, should not be halted by controversy now.
Truman, in his report, explains the implications of a conflict with the Soviet Union of a very long duration:
These manpower needs will call both for increasing our labor force by reducing unemployment and drawing in women and older workers, and for lengthening hours of work in essential industries. These manpower requirements can be met. There will be manpower shortages, but they can be solved.
For those readers whose critical facilities have been dulled by countless hours of exposure to American Idol, what we have here are the words of a craven hustler — a two-bit con artist trying to sell you something you don’t need. Washington is in the business of selling security and its sales methodology is the practice of sowing fear of chaos, terror, and the unspeakable strange unknown. This sales strategy required the creation of an adversary to the “American system”, as well as its domestic avatar buried deep within the populace, to create a pervasive sense of vulnerability and distress among the population. It doesn’t matter that this adversary is Soviet communism or “Islamofascism”, nor that its domestic avatar appear in the form of a devout Muslim citizen or communist trade union activist; what matters is that the threat be, at the same time, pervasive and discrete, universal and particular, potentially life-threatening and merely strange.
This impeccably crafted direct appeal to the collective lizard brain of society, which paralyzes critical thought as our painfully slow brain tries to calculate the odds that the Sikh gentleman sitting in front of us on the bus might be strapped with explosives — renders critical thinking useless, and, therefore, a mere impediment to the apprehension of our empirical circumstances, reduces each of us to a suggestible sheeple, and set us up for acquiescence to the burden of providing Washington with ever greater hours of unpaid labor.
On the one hand, this “service” provided by Washington is very profitable to capital in its own right, since it requires enormous amounts of otherwise unprofitable output in the form of every imaginable thing from paperclips to the most advanced spy satellites, and launchers to put them in orbit. On the other hand, the demand for these products are the very kinds of superfluous expenditures that become increasingly necessary for the continuation of this social form of production.
Once the identity of interest between capital and the State in the longest possible extension of hours of labor is established, it is possible to understand not only Washington’s hostility to work time reduction as the means to end unemployment, but also its imposition of the regime of global competition on the American economy, its facilitation of companies moving industrial facilities and service jobs off-shore, and its hypocritical promotion of amnesty for undocumented immigrants: the capitalist state is a state that must operate according the laws of capital because it is founded entirely on the consumption of the surplus labor created by capital.
It also helps us explain the abandonment of the 99ers to their fate, the impending evisceration of the social safety net and the brutality of the austerity regime now being prepared by Washington. Far from merely falling under the control of Wall Street, Washington itself wants and needs this brutal assault on the living standards of Americans because all other methods of increasing the extraction of surplus value have failed.
In my rant yesterday, What help for the 99ers?, I made an argument why folks who support the 99ers should nevertheless oppose extension of unemployment compensation beyond 99 weeks. That argument made what might be considered an obscure connection between the unemployed and the large body of “public servants” who compose the state machinery of repression, totalitarian control and imperial expansion.
Let me add a few remarks to clarify how I see this connection.
To do this, we have to look at Karl Marx — not the infamous icon of Marxism, but the real guy, the writer and, to some extent, anthropologist of capitalist society — Often the two get conflated, so that, for instance, the utterances of any knucklehead running around with a copy of the Communist Manifesto sometimes is mistaken for the actual words written down on paper by the original person.
In Marx’s model of capitalist society, the unemployed worker is not an accidental occurrence and should not be treated apart from the labor force itself. The unemployed worker is a reserve force available to capital for those periods where new profitable opportunities or requirements for additional labor suddenly open up. The idled worker makes it possible for these new areas to be exploited by providing the additional labor capacity necessary to take advantage of them. This reserve also serves a function of depressing wages during times of depressions, when capital rationalizes its operation to resume profitable expansion by pressing wages below their cyclical average.
Thus, unlike economists, who treat unemployment as an aberration, a defect, or failure of the market, Marx believed a relative surplus population of workers was essential to the functioning of the capitalist system of production itself. The constant expansion and contraction of the labor reserve is consistent with his comprehensive model of capital in which, for example, the price of a good had to fluctuate according to the laws of supply and demand, and only reflected the value of the good through the moving average of these fluctuations. Capitalism is a social system of production carried on by millions of individuals acting privately — unless the system itself had flexibility to adjust to billions of differing and even contradictory decisions each day it would soon break apart.
In times of unusually vigorous expansion, and even for war, the great mass of this population of unemployed would be “called up” (both metaphorically and actually in the case of the military draft) to fill needed positions in industry or on the battlefield. Thus, the “liquidity” of the reserve source of labor power is not simply a matter of business concern, but also a matter of state. So, for example, it is not a surprise to see a statement by White House in the debate over the DREAM Act explaining why the act would be useful for its ongoing military operations:
Secretary of Defense Gates has written to DREAM Act sponsors citing the rich precedent of non-citizens serving in the U.S. military and stating that “the DREAM Act represents an opportunity to expand [the recruiting] pool, to the advantage of military recruiting and readiness.
The size of the reserve labor force is not determined by the means available to expand the scale of productive activity, but to expand activity that creates profit and for purposes of State. But, this purely cyclical movement in unemployment is not of the least concern to us, because it merely masks a longer term trend identified by Marx: the conversion of this reserve labor force from a relative oversupply of labor into an absolute oversupply of labor.
Over time the improvement in the productive capacity of labor — by augmentation with new types of machinery, new methods of organizing work, application of new scientific knowledge, and technology — is increased to such an extent that the relative proportion of workers who can be employed productively shrinks and a permanently unemployable reserve of labor emerges. (Today, this unemployable reserve consists not only of the 99ers, but also a massive hidden population of young people who have never entered the labor force and who, in addition, compose the largest part of the swollen prison population.) This permanently unemployable reserve — a growing stratum of the labor force rendered entirely superfluous by the advance of industry — loses its opportunity to engage in productive labor and is reduced to serving only as a market for the output of the productively employed labor force.
Along with the emergence of a permanently displaced population of workers we find the emergence of the fascist state — a peculiar type of state organism combining both a permanent war footing with an extensive social safety network of state provided services. Although this state is typically identified with German Nazism and Italian Fascism it is not limited to them, but emerges in all the industrialized nations during the Great Depression, and is the essential feature of Franklin Roosevelt’s New Deal. The social basis of these fascistic entities is the general clamor among all classes in capitalist society for state action to preserve the conditions of existence of the society; namely, the purchase and sale of labor power. It is for this reason the fascist state appears on the scene as the embodiment of the national interest and asserts the populist idea of a national rebirth through a pan-class coalition.
The charge of this state, as imposed by general social demand on it, is to employ the unemployable, and hence, to provide the demand for the output of industry. From this point, political-economy becomes concerned with the problem of consumption of the massive and ever growing output of industry. The fact that the emergence of an absolute oversupply of labor implies the possibility of a drastic reduction in hours of labor for all in society, and, therefore, the awareness of the possibility that society might be entirely freed from labor and the system of domination inherent in the division of labor is, from this point, not only ignored, but actively suppressed. Thus, we see, from the end of World War II, that discussion of the idea improving productivity would lead to the abolition of labor disappears from economic textbooks — to be replaced by the phrase, “the lump of labor fallacy”.
The erasure from economic textbooks of the idea that a reduction and ultimate abolition of labor was the probable outcome of improving productivity foreshadowed last night’s news that the House of Representatives had abandoned the 99ers to their fate. As we showed in the case of the Obama administration, Washington is not merely unaware that unemployment can be wiped out by drastically reducing hours of work, it is hostile to the idea.
Why is Washington ignoring the 99ers, and why is it hostile to the great question of work time reduction? We will answer this in the next post.
I am having a “marxist moment” today. The Obama tax deal, in addition to its other flaws, has completely excluded mention of those who first lost their jobs in 2008 and early 2009, when the worst of the layoffs hit the economy. Millions have already exhausted their benefits, and perhaps 4 million more will join them in the next few months.
So what is to be done for them?
Think about a situation where an unemployment check is fifty, seventy or even ninety percent of the income in your household. And, now, that income is approaching imminent termination. You have probably run through your savings, stopped paying credit card debt and the mortgage; you may even be parking the car away from home to avoid repossession. The crisis was not your fault. You never made sub-prime loans, nor was your own home purchase financed by the deliberate fraud of a liar’s loan. You weren’t the one who bundled those loans and sold them to Iceland and pension funds. You probably never missed a payment on your mortgage, auto or credit card loans until that day the company announced it was shutting down your entire division and began handing out severance checks.
At the risk of personalizing this discussion, I know people like this — one is a neighbor, another is a friend and former co-worker at a debt mill run by a large financial company. The debt manufacturer has a seat on the Federal Reserve Bank, and when its debt creating operation ran into the difficulty, it ran to Uncle Sam to bail it out — just another welfare queen in an Armani suit.
I DVR’d the CEO of Motorola talking on PBS Newshour yesterday, because I couldn’t believe what I had heard — I had to record it, so I could look at it today and confirm that, yes, he is that much a self-absorbed bastard. The CEO had just exited a gathering with President Obama of corporate bosses discussing what it would take for the nation’s largest companies to start hiring again. He opined that the administration was moving in the right direction and that President Obama had made a good deal with the Republicans in congress for across the board extension of President Bush’s 2001 tax cuts, which are heavily weighted toward the income of the top one percent of the population. The CEO praised the agreement for its effect in ending much of the uncertainty surrounding the administration’s tax policy.
Now, he said, we had to get serious about the deficit and deal with entitlements.
This morning I am trying really hard to avoid playing the class war card. Playing the class war card in these circumstances doesn’t require any creativity or thoughtful response. It is the political equivalent of yanking back your hand from a hot stove. Yes, corporate CEOs are ruthless narcissistic bastards, who have stripped the nation of its productive assets, moved them offshore, and left us with a hollowed out economy devoted to imperial adventures. And, the situation of the 99ers is pitiable. In conversation with my friend and with my neighbor, I have survivor’s guilt — and this, when I just might be the next dead hostage.
Yes, President Obama is a shameless whore who sold out his sacred pact with his supporters at the first opportunity!
Yes, the 99ers are at the point of extreme financial duress and tilting dangerously on the edge of physical existence!
Yes, our corporate masters are little more than Caligula’s court!
Yet, for all of this the move by the Congressional Black Caucus to introduce an amendment to President Obama’s and the GOP’s tax cut deal by extending unemployment benefits beyond 99 weeks must be opposed. That, this deal is an ugly filthy thing from the progressive perspective is obvious. But, no amount of sweetner will make horse urine taste like champagne. No more than will allowing gays to serve openly change the fact that they are now allowed to be openly gay while carrying out the military policy of an empire.
But, my opposition goes beyond simply “rejecting the good for the perfect” — a child-like refusal to accept compromise: The CBC’s proposal is itself to be condemned because it extends the dependence of the 99ers on state handouts and does not call on both those who are working and those who are unemployed to put an end to this dependence, and the larger dependence on selling themselves into slavery to survive. I think we should be sickened by the recent AFL-CIO internet commercial which portrays the 99ers as helpless, vulnerable victims of economic forces over which they have no control. A depression is not a natural disaster; we are not helpless victims of some financial force of nature beyond our control.
It is a matter of demonstrable fact that the Obama administration knows that all it takes to eliminate unemployment in this society forever is a large reduction in hours of work. His former economic adviser, Larry Summers, former president of Harvard University, and former Treasury Secretary in the Clinton administration, stated this directly:
“I think we got the Recovery Act right,” Larry Summers, the president’s chief economic adviser, said in an interview. “The primary objective of our policy is having more work done, more product produced and more people earning more income. It may be desirable to have a given amount of work shared among more people. But that’s not as desirable as expanding the total amount of work.”
Preferable for whom? For the state, of course, which now has ample excess resources it can put to work expanding the empire. Resources that, having no possible productive employment opportunity, can be employed for whatever unproductive purpose Washington demands. Beyond simply holding down the wages of those who work, the unemployed are the cannon fodder of empire, the TSA gropers, the bureaucrats ceaselessly promulgating new directives that other bureaucrats enforce. They are the drug enforcement agents, the cultivators of every new would-be “muslim terrorist”, the operators of a vast systematic destruction of young minds in the guise of public education. They are the operator of the largest prison population on the planet — a filthy, vile, unspeakable chamber of horrors that excels only in spreading disease and moral breakdown.
The CBC’s proposal not only does not address these concerns, it reinforces them and promises only to extend them indefinitely. A consistent anti-statist position has to call for the end of all unemployment compensation and its replacement by a large reduction in hours of labor.
There is an ongoing argument between the Left and the Right which can be summed up thus:
Tax Cuts Do Not Work
and, its opposite:
Tax Increases Do Not Work
Tony Wikrent makes a powerful argument for the Left in his post, The Obama tax deal with Republicans is insane:
The central premise of U.S. economic policy since the election of Ronald Reagan in 1980 has been that the people in the private sector who know how to invest – the rich – do a much better job allocating society’s financial resources than the federal government. In fact, Reagan told us in his first inaugural address, “government is the problem.”
In order to get as much of society’s financial resources into the hands of the rich – the people in the private sector who supposedly would do a better job investing it – Reagan, the Republican Party, and American conservatives in general developed a simple-minded faith in tax cuts, especially in reducing taxes on the highest incomes.
What are the results of this thirty year experiment low taxes? The Reagan / Republican / conservative theory DOES NOT WORK. For the first time in American history, we now have a generation that has less education and worse economic prospects than their parents did thirty years ago.
In all the hub-bub and brou-hah-hah of the tax debate the past few days, weeks, and months, hardly anyone has put forward the clear and unambiguous information that
The definition of “work” is, of course, subtly redefined by each side in the debate, as would be expected, since the object of the debate is to obscure rather than enlighten. By the same token, measurement of “work” requires some consistent standard, but this is an ideological debate, not a scientific one, so each side also has its own set of measures by which it judges “work”.
However, both sides agree that they are talking about The Economy, which is to say, both sides are talking about capital – a distinct set of social and material relations among the members of society that are established between these members through their activity. So, in some sense, by “work” we can deduce each side is asking the question:
“Which policy makes capital work better as capital: tax cuts or tax increases?”
As with any argument of this sort, the answer is undefined. Under certain circumstances, tax cuts will make capital work better as capital. And, there are certain circumstances where tax cuts will make capital work less well as capital. There are also circumstances where tax increases will make capital work better as capital, as well as the reverse.
Finally, there is a circumstance where neither cuts nor increases will have an effect on capital. We are in that circumstance now.
Since capital is a very complex social organism with its own historical trajectory there is no hard and fast rule on what will be most conducive to its operation at any given time. It is not possible, for instance, to draw any hard or fast rule about the usefulness of tax cuts for the very wealthy by examining the economic policy of the Reagan or Clinton Presidencies. The Reagan Presidency began just as the nation was emerging from the severe depression of the 1970s, while the Clinton Presidency covered the peak period of that same expansion.
The Bush II Presidency began just as the peak expansion came to an end, resulting in a depression that, so far, has lasted from 2001 to the present. By the time Barack Obama took office, not only was the world market firmly gripped by this depression, but the very mechanisms of economic management — fiscal and monetary policy — had broken down in the ruin of the Great Financial Crisis.
The GFC is a rather unprecedented set of circumstances precisely because the entire structure of modern society now rests on the capacity of the State to counter the capitalist breakdown by managing the continuous expansion of superfluous labor. This superfluous labor is most familiar and obvious to us when it takes the form of Minsky’s Ponzi debt growth, but that is only its monetary expression.
Suppose, we zeroed out taxes for the entire top five percent of society, federal, state, and local (we might argue, as the Right do, that they already perform an incalculable service to society by employing the bottom 95 percent), would this make capital work better as capital? I would argue, “No.” Capital would continue to operate pretty much as it does. Likewise, were we to zero out the taxes of the bottom 95 percent (we might argue, as the Left do, that those who make more should pay more), and levy taxes solely against the top five percent, capital working as capital would be unchanged.
The reason for my conclusion is that capital working as capital is no more than a tiny slice of the wealth in society — it is only that portion that is actually put into circulation as self-expanding value — that is, productively employed labor. The reason why government economic policy became so important to the economy was not to increase the productive employment of labor, but to manage and grow the massive expenditure of superfluous, or unproductive labor.
The severe damage to government management of the economy using fiscal tools like tax cuts or increases, which was caused by the Great Financial Crisis, has hurt the productive employment of labor (capital) only because the constant expansion of unproductive employment of labor is the fundamental condition for capital’s operation.
To put this another way: it take so little productive employment to produce everything we need, that only by employing the vast majority of people unproductively can they acquire the wages to buy it.
And tax policy won’t fix this.
So, this is the takeaway from the Messiah’s tax deal with the Party of Wall Street: there wasn’t any tax deal. The agreement between the Messiah and the Party of Wall Street is an admission that the economy is officially brain dead and on complete life support. There is no recovery, there is only the false appearance of recovery produce by the expansion of federal debt.
Unemployment shows no signs of improving, job creation is negligible, the bankster mafia cartel’s quantitative easing money printing scheme has already failed and will fail again to generate inflation in the world market.
Of course, there was no recovery during the period 2003 to 2007, when the economy appeared to expand because of the increasing debt slavery of working families. The collapse of your income put an end to that Ponzi scheme, and the only thing keeping the entire global economic system from imploding is the judicious application of Washington debt manufactures to sustain the illusion of economic growth.
As the O’stimulus version 1.0 petered out, so did the recovery. And, it will likely be the same for version 2.0.
While the Party of Washington mobilized its useful idiots among the progressives to engage in a blatant class war against “the rich”, and as the Party of Wall Street deployed fear of US bankruptcy to drive its base to meet them, the Washington-Wall Street Axis negotiated a separate peace: to continue propping up an essentially brain dead economy with a feeding tube of unlimited public debt.
Progressives should have been warned in advanced: the Party of Washington does not engage in the language of class warfare unless they are trying to cover up their shameless and blatant treason against working families. The more insidious the betrayal, the louder the call to arms against the “rich”. “billionaires”, and “wealthy fat-cats”. Each new enslavement of the working stiff to Wall Street is always accompanied by a party announcement of a new era of freedom from bondage.
As for the Party of Wall Street: who are we kidding here? Look at the history of American public debt. The continuous stream of steady debt service oozing from the orifices of every government body — local, state and federal — is the mother’s milk of Ponzi economics. Public revenue and the power of money creation converted into an endless stream of safe Wall Street “investments” is the entire foundation of the fictitious economic activity and the ever lengthening social work week.
Once again, you have been played. But, you will never learn, will you? Even now you are angry at some imagined betrayal by the Party of Wall Street, or the Party of Washington — depending entirely on your personal ideological delusion.
Unfortunately, the joke is on you — you’re a pawn and the chessmasters move you where they see fit because you have not acquired the capacity to decide where your interest lie, and, hence, what must be your next move.
Today, Europe is deciding their next move: a bank run. Will they be any more successful than you. Perhaps not, but at least they are trying.
You can’t be in the game until you realize there is one.
The exact opposite of a smart idea to prevent economic collapse: Print money to pay the Wall Street terrorists
Steve Randy Waldman thinks Washington should give you cash. Not just you, of course, he would also give it to your neighbor, your cousin Stella, and Paris Hilton (Lord knows she needs the money). Everyone would get some cash. It would be deposited in their bank accounts, or otherwise handed over in order to address the absence of demand that is now wreaking havoc on the economy.