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Capitalism, Government, and Religion

Last Thursday the Public Religion Research Institute, in cooperation with the the Governance Studies Program at the Brookings Institution, published a report titled Do Americans Believe Capitalism & Government Are Working?  Religious Left, Religious Right & the Future of the Economic Debate.  

The survey on which the report was based, a very professionally designed phone poll conducted last month, has already been discussed below in a July 18 post by Paul Moses.  Having been invited to be part of a panel at  the Washington event introducing the report, I worked my way through it in considerable detail and am adding my own observations.

Here are some of the basic findings about the economy, inequality, capitalism, and government aid and competence:  

Whether one looks at Americans by ethnicity or race, by educational level, by party affiliation, or by generation, there is unusual agreement that the lack of jobs is the nation's number one economic problem.  There is also a general pessimism about the economic future.  Almost two-thirds of the population believe that the government should be doing more to decrease the gap between rich and the poor, and should provide a safety net to take care of people who can't care for themselves.   Less than 6 of 10 Americans think capitalsim is working well while more than 4 in 10 think that it isn't.  More than half think that unequal chances in life is a big problem.     

But more than two thirds also say that the federal government is "broken," either partially (40%) or "completely" (26%).

There's a lot more about personal responsibility, greed, the importance of family stability, the minimum wage (73% favor increasing it to $10 per hour), and health care.  It's all analyzed by age group, party loyalty (Democrat, Republican, Independent), ethnicity and race, gender, income, and religion (white evangelical Christians, mainline Christians, Black Protestants, white Catholics, Hispanic Catholics, other Catholics, other Christians, non-Christians, and the nonreligious or religiously unaffiliated.

A lot of the more detailed results are not surprising.  White evangelicals and Republicans and more affluent people are less apt to see economic problems or favor government remedies.  Blacks, Hispanics, nonChristians, and the nonreligious are more apt to.  White Catholics and mainline Christians fall in between.  

But some findings are quite unexpected.  When asked which came nearest to their own views, 44% of Americans said that capitalism and the free market system were "at odds with Christian values" compared to 41% who said that capitalism and the free market system were "consistent" with Christian values.  I was doubly surprised that only 39% of white evangelicals chose "consistent" as nearest their views and 50% chose "at odds."  It was also interesting that Hispanic Catholics were more likely than white Catholics to say "consistent" (49% to 45%) and less likely to say "at odds" (39% to 43%), although I'm not quite sure of the statistical significance.  

One observation about all this that I made at Brookings was that a lot of these findings are two-edged.  (E.J. Dionne and William Galston also made the point.)  Thus large percentages of Americans see economic problems and favor government action to remedy them.  But an equally large percentage doubts the competence of the federal government. Also more Americans saw the growth of the government as stemming from unjustifiable rather than justifiable reasons.  Here's another example:  Well over a majority of Americans (56%) thought that the government should guarantee health insurance for everyone "even if it means raising taxes,"  Yet the population is evenly split between those for and those against repealing Obamacare (42% in each camp).  

To me this pointed to the importance of the way issues are posed and explained to the public. "It is clearly the case that different ways of framing economic and social justice questions provide each side with opportunities to move opinion," Dionne and Galston stated. 

Besides the findings on the economy, government, and values, the report also offered an analysis of "religious progressives."  Several years ago, the Public Religion Research Institute did a study for Brookings on the Tea Party movement and the religious right.  This examination of the religious left was a kind of bookend.  In Washington I had a lot say about this part of the report, and I'll post on it separately.   

  

 

About the Author

Peter Steinfels, co-founder of the Fordham Center on Religion and Culture and a former editor of Commonweal, is the author of A People Adrift: The Crisis of the Roman Catholic Church in America.

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The "lack of jobs" that so many think is the nation's No. 1 problem needs to be broken down more than it ever is. So many analyses, even by smart people, implicitly assume that the old normal will return when the automakers and steel companies start hiring again. That is not going to happen.

The jobs in the Obama "recovery" seem to be of two types: 1) Jobs that sort of look to be full time because you have to be available 40 hours (or more) a week. But the holders of those jobs will never get more than 30 hours of work, so they will never have benefits, and they won't get the 30 very often because managers will play it safe to keep them below 30 hours. Those are not good jobs, even with food stamps, which the House would like to kill or cut. And 2) jobs that paid $22-$25 an hour in the upper Midwest before they went overseas and now are coming back to southern states, where they pay $14 or $15.

If that is the new normal, the old days cannot come back. My impression -- buttressed by parts of this new survey -- is that a heck of a lot of the Americans saying lack of jobs is the problem know the facts, at least generally. But the anchors, editors and mooseheads would generally flunk a test in modern American labor economics. Since the communicator-in-chief left office in 2001, we have had two administrations that are absolutely incoherent on what's bugging the economy. Until they get someone who can talk turkey to them, Americans are going to seem confused when you ask them what should be done -- as when they look for help from a government they know is incompetent.

That goes to the problem of how the issues are "framed," but the frames aren't likely to improve until the framers live on the McDonalds-Visa budget for awhile. But one of our leading newspapers has put its imprimatur on the theory that the budget is "realistic," so it may be a long wait for coherence.

 

 

To me this pointed to the importance of the way issues are posed and explained to the public. "It is clearly the case that different ways of framing economic and social justice questions provide each side with opportunities to move opinion," - 

This has always been the point and why it does not remain the focus is the problem. Walmart which is threatening to close six stores in NY as its way of objecting to the minimum wage is one example. That same Walmart will support Limbaugh and Hannity because they phrase the question  like Walmart and Co. wants it. Goldman Sachs is making 5 billion a year controlling aluminum, at enormous cost to the consumer, is overlooked while those seeking universal health care are "creeping socialists." The facts are now showing how Obamacare is economically a big hit. Yet the question wil be phrased that we need to get government off our backs. But who else will police the greedy, when shareholders become more important than human rights? It is the same in the church when the excesses of the liturgy were exaggerated while the enormous benefits of the Npvus Ordo were miniimized as the reason for lack of priests. Phrasing the question, honestly and in a way that helps the downtrodden is a responsibility we all have and fail miserably at. Can we change course? Otherwise the downtrodden will remain  footnotes on Diocesan websites while they are completely ignored. 

"Jobs that sort of look to be full time because you have to be available 40 hours (or more) a week. But the holders of those jobs will never get more than 30 hours of work, so they will never have benefits, and they won't get the 30 very often because managers will play it safe to keep them below 30 hours."

Tom B. ==

If the usual work-week were 30-35 hours there would be enough work for everyone.  Further, 1) if there was universal health care, and 2) if profits were used to pay the workers a fair wage, and 3) if we improved the quality of products so things don't have to be replaced as quickly as they do now, we wouldn't need boom times.   

It's not federal government problems as much as local municipalities which are in very deep trouble.  Detroit, anyone?

Close to my home there is this:  http://blog.sfgate.com/matierandross/2013/07/21/oakland-gets-labor-peace-but-at-what-cost/

This little town, surrounded by Oakland, but a bastion of upper middle class income, property and rectitude, is also facing looming problems:  http://www.piedmontcivic.org/2012/07/24/piedmont-pensions-44-percent-and-rising/

It seems to make no difference the demographics; past sins cannot be corrected by future changes.

The joke around here is when one sees one of those $500,000+ luxury RVs with the $50,000 SUV in tow go by, is this:  there goes a retired fire fighter or police officer.

 

 Less than 6 of 10 Americans think capitalsim is working well while more than 4 in 10 think that it isn't. 

I just want to call out that this is exceedingly worrisome, because all the alternatives we've been able to think of to capitalism are really, really bad - much worse than capitalism.  This may be the greatest failure of the GOP in the 2012 election: the party's failure to surface a candidate who could speak persuasively about the importance of a free market economy.  

 

 

 

Jim and Jim, Right after the beginning, public servants had jobs that provided more security than jobs in the private sector, but at lower pay. Until the latest depression, that remained pretty much true of the public sector. Those RVs and SUVs are the fruits of that. The next generation of police officers and firefighters won't have them. And the folks in the private sector stopped being able to look forward to them in the 1980s. Once upon a time, retired steelworkers and autoworkers had the equivalent SUVs.

And so, Jim Pauwels, the Republicans couldn't surface a candidate who could preach on the virtues of the free market economy because the folks in the private sector already knew they were screwed. So instead Republicans tried to mislead the screwed folks in the private sector by telling them it was the veteran folks in the public sector who were screwing them. The voters saw through that smokescreen, and so you have the second term of the unprepared Democrat.

The market doesn't have to work the way it currently is working in this country. But it will continue to work the way it is as long as it remains a wholly owned subsidiary of people with the power and money to make it work for their exclusive benefit.

I don't think it is necessarily  inconsistent to look to an incompetant government to address problems.

For example, I think it is very important we help meet basic needs of poor Americans.  I would agree with people who think hat government does a lousy job of addressing those needs. But I don't believe that voluntary charity is going to address the problem, so it is important enough to me that I would rather  see government do an inefficeint job at this, than not have it done at all.

I also believe government should provide health care for all, but to the extent I understand it, I also think Obamacare is a lousy program.  Here, too, I  think it's better than nothing and more than we've seen from anyone else.

I think most of us know what we've got with our govermenet, we're maybe just not seeing better alternatives.

Jim P,

I think that the criticism of capitalism reflects dissatisfaction with the current version of capitalism in the US rather than a readiness to discard capitalism entirely.  One can imagine--or simply remember if old enough--a capitalist US that promoted a partnership among managment/owners, workers, and government, rather than the level of corporate greed and power hunger that exists now.  I'm thinking of a system in which the wealth created by capitalism is more fairly shared out.  Sure the entrepreneurs and managers will make more than the rank and file, but we could have an economy more like the immediate post WWII economy, wehre the rich were not as excessively rich as some today, the middle class was more stable and secure, and many working class folks had more realistic aspirations of making it to the middle class.  Smart--and self-interested--capitalists should be thinking of how to modify the current model so that it addresses the needs and interests of all Americans, and gives them a reason to want to preserve it. 

Kevin - yes, that's very sensible.   I would just add that it is not just capitalists  (the financial and director class) that need to think this through; all Americans do.  This is what worries me.  But maybe I should be less glass-half-empty and see it as an opportunity.

(You're not the Kevin Mulcahy who was a classmate of mine by any chance?  Boylan Central Catholic, Class of '79.)

 

One can imagine--or simply remember if old enough--a capitalist US that promoted a partnership among managment/owners, workers, and government, rather than the level of corporate greed and power hunger that exists now. 

 

This is, I think, the vision of Catholic social teaching.  But for liberal Catholics, it's very difficult to break out of the habit of taking an adversarial stance toward management/owners.

 

I think most of us know what we've got with our govermenet, we're maybe just not seeing better alternatives.

Irene - I agree.

 

Jim,

No not your classmate (St. Jospeh's Regional in Montvale, NJ class of 1969).  I agree that everyone should be involved in the rethinking/revisioning, but right now the power mostly resides with the managers/owners of very large businesses (certainly not small businesses and workers) and with certain facets of the government.  The greater level of power and influence probably carries a greater level of responsibility of course, but perhaps the responsiblity of the workers and small business is to seek peaceful and positive change, and to promote the ideal of partnership.  I share Lennon's (john that is) attitude towards revolution, not Lenin's.

Walmart which is threatening to close six stores in NY as its way of objecting to the minimum wage is one example. 

But can't this be viewed as a bit of a mixed curse?  If Walmart won't pay a just wage - then good riddance, right?  Their place in the BY market will be taken by someone else, or a whole bunch of someone else's, who will be required to pay the minimum wage.

 

Our society's "safety net" is clearly insuficient and there seems to be no significant political will to improve it to the point that massive numbers of people, including children, don't have enough to eat or adequate access to medical care.

Looking at the way our federal government is now failing to address in any serious way the massive national problems we have, my fear is that the very structures of congress, the federal courts, and the executive branch are simply outmoded but remain entrenched. The flow of money and lobbying certainly contributes to this governmental paralysis, but so does the resurgence of raw individualism.

Where are the institutions that can dontribute to a rejuvenation of our system? Institutions of higher education don't seem to be prreparing citizens to think in terms of the common good. The Catholic hierarchy in the U. S. seem to be stuck in "self-referentiality." Corporate leadership, as William Pfaff recently pointed out, has retreated from civic responsibility. The press is too fragmented and also, largely "selfpreferential."

Not a pretty picture! And yet we are duty bound to hope, th insist that there are no undeserving poor, that the earth is not ours to exploit however we choose, and that peace is not mere absence of wars, but rather is a condition that we vulnerable human beings need if we are to flourish.

Capitalism is not some stable thing. It is an approach to policy formation, distribution of resources, etc. Whoever thinks that it has eternal truths to proclaim is muddleheaded, to say the least. No economic system can be the unqualifiedly "est." Every suchsystem, even more that the Church is in perpetual need of reformation.

I agree that everyone should be involved in the rethinking/revisioning, but right now the power mostly resides with the managers/owners of very large businesses (certainly not small businesses and workers) and with certain facets of the government.

I am not sure to what extent this holds true.  The results of the 2012 election may be viewed as a repudiation of the monolithic power of big business.  I agree that wealthy entities (both individuals and other types of entities such as corporations and PACs) wield an influence that is disproportionate to their numbers, but the currency of politics is votes, and the Obama coalition of voters - regardless of how the Obama campaign was funded - responded to a populist, arguably anti-capitalist campaign to re-elect the President.

 

 

"... we could have an economy more like the immediate post WWII economy, wehre the rich were not as excessively rich as some today, the middle class was more stable and secure, and many working class folks had more realistic aspirations of making it to the middle class."

Kevin M. --

A new and apparently very important study is out today about the cities where the poor have the best chance of becoming middle class.  Some surprising findings, e.g., urban sprawl makes it difficult to impossible for the very poor to get to the places in their cities where the jobs are.  Paul Krugman is all excited about it -- it confirms his thinking, of course :-)  See the ATL. v. Bos thread.

http://krugman.blogs.nytimes.com/

 

 "my fear is that the very structures of congress, the federal courts, and the executive branch are simply outmoded but remain entrenched. my fear is that the very structures of congress, the federal courts, and the executive branch are simply outmoded but remain entrenched."

Bernard  --

Indeed.  There is one structural problem with the Congress, specifically the Senate, which has allowed the Congressional gridlock of become in effect permanent -- the new fillibuster rule that allows a Senator who is not even on the Senate floor to CALL IN his/her objections to a bill and stymie debate.  

The classic Jimmie Stewart good-guy movie "Mr. Smith Goes to Washington" had that wonderful scene in which Mr. Smith after fillibustering in the old sense of the word (speaking without stopping on the Senate floor for hours) finally collapses in sheer exhaustion.  But that's not the way fillibusters work anymore, and I suspect that most Americans don't realize that the rule has changed drastically.  These days it doesn't take anything in the way of principle to "fillibuster".  All it takes is a phone to call in and take command of the debate.  And the press has not made it the issue it should be:-(  It's an outlandish and outrageous rule.

I think that the criticism of capitalism reflects dissatisfaction with the current version of capitalism in the US rather than a readiness to discard capitalism entirely. 

I hope that is true.  On the other hand, I read this passage from an article to which Margaret links in her thread on Detroit.  This is Juan Cole:

It seems to me that we need to abandon capitalism as production becomes detached from human labor. I think all robot labor should be nationalized and put in the public sector, and all citizens should receive a basic stipend from it. Then, if robots make an automobile, the profits will not go solely to a corporation that owns the robots, but rather to all the citizens. It wouldn’t be practical anyway for the robots to be making things for unemployed, penniless humans. Perhaps we need a 21st century version of ‘from all according to their abilities, to all according to their needs.’

Communally-owned mechanized/ computerized forms of production would also help resolve the problem of increasing income inequality in the United States. The top 1% is now taking home 20% of the national income each month, up from 10% a few decades ago. The 1% did a special number on southeast Michigan with its derivatives and unregulated mortgage markets; the 2008 crash hit the region hard, and it had already been being hit hard. The Detroit area is a prime example of the blight that comes from having extreme wealth (Bloomfield Hills, Grosse Pointe) and extreme poverty (most of Detroit) co-existing in an urban metropolitan area. It doesn’t work. The wealthy have no city to play in, and the city does not have the ability to tax or benefit from the local wealthy in the suburbs. These problems are exacerbated by de facto racial segregation, such that African-Americans are many times more likely to be unemployed than are whites, and to live in urban blight rather than in nice suburbs. 

http://www.juancole.com/2013/07/bankruptcy-americas-globalization.html

It sounds loony to me.  But I assume he wrote this while perfectly sober.

 

 

 

Tom B:  "public servants had jobs that provided more security than jobs in the private sector, but at lower pay"

What was the private sector competing market for police officers and fire fighters with the demands of those jobs in the public sectors?  I doubt that those muni employees were underpaid compared to anyone in private industry.

Walmart which is threatening to close six stores in NY as its way of objecting to the minimum wage is one example.

 

Please dont denegrate NY.  Its that bastion of civic rectitude and prosperity, Washington DC, which is attempting to set Walmat's wages.  

Jim McC, the cops and fire fighters could have made more money, in those days, by joining the UAW or UMW or other unions whose members made and mined things. The police and fire fighters were smart enough to form their own unions when everyone else's union was being busted in the name of free markets, efficiency and productivity. Their unions are so strong that not even Scott Walker wants to take them on. The UAW and WMW used to be that strong, too, before they were outsourced and negotiated into their current conditions.

But you know all that.

Jim Pauwels,

A world of mechanized production with little need for human labor is coming. Its leading edge is already here and already causing serious disruption. What Juan Cole suggests may be loony, but then what is the solution? Growing inequality that leaves the great majority of the earth's people penniless and dependent on begrudged handouts from the haves will probaby lead to bloody revolution, as it has in the past. In that case, capitalism is likely to be swept away along with millions of the dead.

We have some time remaining in which we might put to good use that universally praised and rarely exercised human ability, foresight. We have dealt with great change in the past and found workable solutions. The trouble is that we don't usually begin until the crisis is upon us. Witness, for example, our so far lackadaisical response to the abundant and growing evidence of climate change caused or worsened by us. Left to themselves, these two problems converging on us in the near future will create conditions that will make us positively grateful to be mortal.

So I will not question the sanity or sobriety of anyone who is suggesting alternatives, even unwelcome ones. I wonder instead about the rest of us. If we are truly made in the image and likeness of God, this would be a good time to show it. But if I had to bet on the outcome, I'd be tempted to go with le déluge.

What Juan Cole suggests may be loony, but then what is the solution?

The things that come to mind would include bringing about stronger economic growth, improving education and strengthening families.  I don't claim to be very imaginative - I'd never have thought of Juan Cole's idea.

 

Tom B:  cops and fire-fighters didn't have to unionize.  They were ... and are ... part of a very large muni employee voting bloc that can and will unseat any mayor or city council member who dares to vote against giving them pretty much anything that they want.  As I pointed out above, Oakland, CA, is about to suffer the economic consequences of their intransigence. 

So is San Francisco: 

"San Francisco’s combined plans would fall from 88% funded to 69% funded, SBS says. The municipality says it has $17.1 billion in combined assets for all its plans, and that it owes $19.5 billion in benefits for its government workers. But under the new methodology, the city would owe about $5.3 billion more to retirees not backed by assets, SBS analysis shows."

Read more: http://www.foxbusiness.com/government/2013/06/11/california-on-brink-pension-crisis/#ixzz2ZodLYKx4

And we also have the Bay Area Rapid Transit upcoming strike to deal with and their demands:  http://www.mercurynews.com/opinion/ci_23577926/mercury-news-editorial

Public employees continue to shoot themselves in both feet with their demands in times of private employee employment difficulties, including the loss,curtailment or diminution of pensions (if anyone actually still gets them!) and other health and welfare benefits.  The people who are paying the bills would LOVE to have what the public employees are demanding, usually at no or minimal costs to themselves.

I do not have sympathy for employees who are rapidly becoming the top earners when it comes to pay increase, benefits increases and pension enhancements.

Sorry.

 

 

Jim,

What's so loony about Juan Cole's speculation? We have a consumer economy (what we lefties call "late capitalism"). For most people, consumption requires a regular income, and income usually requires a job. But there are fewer and fewer jobs that only people can do—or, to put it another way, you can do more and more without people. As this trend continues, businesses will run up against a contradiction. Survival will require efficiency, which means employeeing as few people as possible. But with businesses employeeing fewer people—and paying many of the people they do employ less—there will be less consumption, and businesses need that too. You can try to deal with this problem by encouraging consumers to take on debt, but, as we've seen, that can't last forever. Or you can deal with the problem by providing consumers with an income whether or not there's any demand for their labor. There are other possiblities, of course, but most of them are even "loonier"—that is, more radical. If you think Cole's crazy, you may find this unintelligible, but let me recommend it anyway.

Well, Jim, I am sorry you can't work up some sympathy for the declining number of working Americans who are still treated like human beings in their jobs. I may be a bit biased because the local sheriffs deputies cauight the perps burglarizing my house while they were still in the driveway, something the whole Walton family is a) incapable of doing and b) unlikely even to try to do. And I may be a bit unimpressed with the promisers of Jim Pauwel's economic growth someday, somehow, because I know that while we are waiting, they -- for instance -- corporately jet off to their skyboxes for the big sports events true fans can't afford, and when they do, they are met by trafficked women from all over the world imported at great expense to meet their needs. We know it, but we don't talk about it. We talk instead about "economic impact" when taxes go to expand our venues.

And complain about people in the same boat we're in. I am not surprised you can find stories describing apparent overreach by public employees because we talk about that. It's the things we don't talk about, as I said earlier, that are killing us.

Those underfunded pensions- were the local governements investing in them in the fat years, or did they stop making contributions the years the stock market was booming?.  That what the bosses did to the transit workers in NYC; when the funds were flush, they stopped contributing.   Not really fair to then blame the workers in the lean years.  

Jim P.,

Stronger economic growth, improving education and strengthening families are excellent things in themsleves. But I think they are at least as much consequences as they are generators of full employment and equitable income distribution. I don't see how growth, education, and families can thrive when most people are destitute. 

Capitalism is not an end in itself, but a tool to create better economic conditions for people. And it has indeed generated greater wealth and prosperity, however unevenly distributed, than other systems. But if it stops working for large numbers of people, they will look for an alternative.

 the Republicans couldn't surface a candidate who could preach on the virtues of the free market economy because the folks in the private sector already knew they were screwed. So instead Republicans tried to mislead the screwed folks in the private sector by telling them it was the veteran folks in the public sector who were screwing them. The voters saw through that smokescreen, and so you have the second term of the unprepared Democrat. "  Perhaps the greatest calamity that occurred is that   IBM did not produce windows. So a great company which was a model or productivity and treatment of people lost out to founders of companies becoming billionaires and keeping the profits rather than spreading the wealth around to build a sounder economy and society. The public knows they do not have friends in corporate American now and will continue to retaliate until everybody wakes up.

Jim M -

Having served in the military, earned a doctorate and worked in both private and public sector jobs I believe I have some useful experience to share on the topic of public vs private sector employees.  Best I can tell self-centeredness and self-righteousness are not consistently associated with a particular job sector.  As for income the President of the United States would have to be in office for 20 years to receive the salary Jamie Dimon receives in a single year.  Our public sector employees gain wealth soley by their connection to the private sector not based on their salaries.

As for pensions, perhaps you recall the truly other worldly corruption in the private sector that led to the near complete destruction of a significant number of investment options the private sector so graciously suggested public sector investment funds join. 

If a police officer or fire fighter or public nurse was able to dance around the unforgiveable theft of their pensions by the private sector and end their careers with a well stocked SUV, I say good for them and thanks for the service.  As for Jamie Dimon or any other mere mortal, perhaps you can tell me what they actually provide that earns them the level of income they themselves so clearly believe they deserve.  Single handedly provide a cure for cancer perhaps?

After spending 8 years in the Air Force I spent the next 33 years in private industry.  I was NEVER in a job in which I was even potentially covered by a pension.  401(k) was the flavor of the month and it has turned out to be, at best, a crap shoot for more people.  Even having worked during the "good years" (1970 - early 1990s) when earnings on these vehicles were good, it all tanked in the late 1990s/early 2000s.  What may have been a rather delightful retirement income has turned out to be adequate but not supportive of the SUV lifestyle.  And I am not supporting a wife and family.

My employment choices were mine and I've learned to live with them.  I just do not feel good about having to fund greed and entitlement with my taxes when my static retirement earnings are slowly but surely being eroded by taxes and inflation.  No inflation indexing for me (except for social security, of course, but that goes to pay for the increase in Medicare premiums.)

"Greed and entitlement"?

My own husband's  union pension is quite generous, and could definitely  support the purchase of an SUV.  (We do drive a Subaru Forester ). And, we have what would today be considered very good health benefits, thanks again to my husband's union.   That pension by the way, was funded not just by the employer but also by my husband's own contribution each paycheck, week after week, year after year. 

I have nothing but sympathy for those retired workers who do not have  the pension of the retired union members, this recession has devastated our working class.  But  the last thing we should do is looking with envy on the union workers who weathered it, or blame them for our country's problems. I think we should instead strive to give all working people that same comfortable retirement in their old age. 

Proud to be a union family.

My pension situation is close to Irene's. And I do have sympathy for Jim McCrea's plight. But I think there's a bigger point on which all Christians ought to agree. That point is: Every human being, whatever his or herintellectual abilities, industriousness, age, health condition, is morally entitled to basic food, clothing, shelter, and medical care. No ifs or buts about it. There are no undeserving poor, however badly they act. Note that our own society legally requires that even the most hardened criminal be provided with these rudimentary resources.

I grant that we apparently don't know how to arrange our society's economic activity to insure that everyone have these basic resources. This ignorance relieves us of moral culpability for the plight of the impoverished IF AND ONLY IF we are ready to take any reasonable opportunity to improve their condition. This means no rationalizations like, the "law of supply and demand," the need to reward talent or effort, or any other putative acceptance that someone is really not entitled to these necessities.

Even if we Christians were to insist that there are no "unworthies," we may very well not know how to put this conviction into action. But it would ensure that we wouldn't start taking gthe needy as just a part of the natural order instead of as the victims they assuredly are..

But  the last thing we should do is looking with envy on the union workers who weathered it, or blame them for our country's problems. "                      Talk about pharsing the questions. "The way issues are posed....The public got misled in condemning unions when the greedy guys should have been banned.

What's so loony about Juan Cole's speculation?

Where to begin?  How about here: if government takes ownership of the means of production, how are the people's interests ensured?  Will there be a disinterested, wise and  benevolent dictator - a Juan Cole, so to speak - to ensure that to each is given what she needs?  

Here's just one more thought experiment: suppose the City of Detroit assumes - somehow - ownership of the manufacturing capacity of Ford and GM.  Now, suppose people decide they don't want to buy those cars anymore.  Now what?

 

 

My own husband's  union pension is quite generous, and could definitely  support the purchase of an SUV. 

Irene - I am very glad to hear this.  My in-laws, one a Chicago Public School teacher, the other a lifelong Teamster, also had very generous retirement benefits, and enjoyed a very nice, secure retirement while their health was good.  (Both have now gone to heaven.)

Am I right in recalling that your husband is a public-sector worker?  If so - I just want to call out that what is happening in Detroit could happen in a number of other cities - and states (cf Illinois).  I believe I have heard that one serious proposal for Detroit's public retirees is that their pensions be paid at 20 cents on the dollar.  I find this wildly unfair, and who knows how it will all pan out, but it points out that the notion that the public sector is a comparatively risk-free sector for employment and retirement benefits, can no longer be taken as gospel truth.

My own very amateur prediction in these government broke-and-bankrupt scenarios is that there will be winners and losers, and the process for determining who wins and who loses will be remarkably ugly, and there is no guarantee that the outcome will be fair, except insofar as brutal political combat and lawsuits determine fair outcomes.  Friends of mine from my college days who work as civilians for the US military are currently being furloughed one day per week because of sequestration - a de facto pay cut of 20%.  They have children in college and children who are young. Whether federal government retirement benefits have been affected by the sequester cuts, I don't know, but it's not immediately clear to me that retirees should escape the pain while working parents and children don't.  

 

 For most people, consumption requires a regular income, and income usually requires a job. But there are fewer and fewer jobs that only people can do—or, to put it another way, you can do more and more without people. As this trend continues, businesses will run up against a contradiction. Survival will require efficiency, which means employeeing as few people as possible. But with businesses employeeing fewer people—and paying many of the people they do employ less—there will be less consumption, and businesses need that too. You can try to deal with this problem by encouraging consumers to take on debt, but, as we've seen, that can't last forever. Or you can deal with the problem by providing consumers with an income whether or not there's any demand for their labor.

Businesses producing and selling more with the same or even fewer people is called producitivity growth.  Overall, it's a good thing, as it is a key to those businesses growing and expanding, which in turn generates ... more jobs.  

One way of thinking about it is that, throughout the 50s, 60s, 70s, 80s and 90s, when Americans overall were doing relatively well, the poverty in much of the world was mind-blowing.  Now, some large pockets of historical poverty - the Indian subcontinent, China, Brazil, Eastern Europe - are becoming more prosperous.  They are doing so at the expense of American semi-skilled and unskilled labor, which is bad for us, but it is a very good thing for them.   It's not clear to me that this is an unjust outcome.   This is, in fact, a variation on the grand liberal program of redistribution: the rich (American workers) accepting a bit less, so that the poor (Indian and Chinese and Brazilian workers) can have a good deal more.  I am half-serious in asking: why don't more liberals in the US cheer this development?

 

 

Instead of SUV, I really meant to talk about the $500k+ RVs that tow the SUVs.

Jim, you gotta be kidding. Sure we cheer that other people got better. But the greed of the US 1 percent drove it . Not for the poor's benefit. But for theirs. The Middle Class here did not have to suffer. Save me from your sophistry!!!

Jim,

It seems to me you've resolved the contradiction I described by ignoring one side of it. Those businesses that grow and expand by becoming more efficient ("selling more with same or even fewer people") need someone to sell their products to. As it becomes possible to replace more and more kinds of human labor with automation, there will be (a) huge gains in "productivity growth" but also (b) a lower demand for labor. More people will be unemployed or underemployed. Without some kind of wealth redistribution, fewer people will be able to afford the consumer products these growing companies need to sell.

You acknowledge that the economy has undergone a radical transformation since the 50s. You seem unwilling to consider that it may undergo other radical transformations in the future. Right now, we're at the stage in economic globalization in which it's still cheaper to pay people in the developing word to do what robots can already do, or will able to do soon. If those countries continue to develop and technology continues to advance, that will change. (One might claim, however implausibly, that there will always be countries whose people are so poor that they will be willing to do what a robot can do for less than it costs the robot to do it, but then the preservation of capitalism depends on some pockets of poverty not becoming too much more prosperous. And why should anyone cheer that?)

So what's the plan here? Are all the people who don't own the means of production going to work in what remains of the service sector (remember: many of those jobs can be automated too)? You seem to want to argue that greater efficiency will always lead to greater growth, because it always has. But an economy can't grow without consumer demand and consumers need money to spend. How will they get it? You can't just assume there will always be new and better jobs to replace the old ones that are being lost. You need some kind of story, however provisional, about what those new jobs will be and some reason to think there will be enough of them. Otherwise, the general dynamic I've just described seems to spell the end of capitalism as we know it, though the end may be a while in coming.

HI Jim P.  yes, My husband is a retired NYC transit worker; he worked for a division called "MABSTOA"; the surface transit arm, where he fixed the buses that drove in Manhattan & the Bronx.  If we can believe the City Comptrolle, the NYC pensions are doing just great, with a  12.3% return for the fiscal year that ended last month and an annualized return of 7.5%over the past 10 years, 9.5%over the past 30.

Hopefully, NYC doesn't go bankrupt anytime soon  and go after our pensions.

And I agree with what Bernard said.  The problems of Detroit should be a problem we all share, I think.  Rather than forcing the people of Detroit to cut pensions and sell off their Art Museum, the rest of us should be figuring out a way to help Detroit and share the burden. I don't know how we do that, though.  

 

 

If retirement benefits, which are really just deferred wages, can be withheld on a claim that the employer is in dire financial straits, what prevents employers, aided by courts, from seizing bank accounts, cars, homes, or any assets the employees has paid for with wages? Or if someone has worked a full week and expects to be paid on Friday, can an employer say, "Well, I can pay the full amount for Monday and Tuesday, but I'm afraid you will have to be content with sixty cents on the dollar for the rest of the week"? And does it work the other way? Can the employee say, "I know we contracted for a forty-hour week, but I find I haven't the stamina to work more than thirty-five. I still expect to be paid for forty, of course"?

Financial Capitalism is not working. The big banks continue the practices that led to the collapse of 2008.

Monetary stimulus (QE any number) does not work except to inflate the value of assets such as stocks.

Fiscal stimulus, as used by the US in the past, works: collecting a lot of taxes and dispersing them to increase local employment and income. Social Security, food stamps, grants for education, grants for transportation and infrastructure all incrrease local income and spending and therefore hiring.

We need an economy that helps local businesses to survive and hire. An economy where a substantial portion of business ownership is in teh form of worker-woned coops would stabilize local economies, prederrve jobs, enable the worker-owners to adapt to market conditions and compete with and sometime cooperate with global coorporations. Cooperationing might take the form of worker-owned local franchises, or worker-owned contract manufacturing.

It was priest inspirred by Catholic Social teaching who started the large, succesful coops in Spain. These coops are now making profits even in the severe Spanish recession.

Take a look at the web site of the US Federation of Worker Owned Coopeartives.

As it becomes possible to replace more and more kinds of human labor with automation, there will be (a) huge gains in "productivity growth" but also (b) a lower demand for labor. More people will be unemployed or underemployed. Without some kind of wealth redistribution, fewer people will be able to afford the consumer products these growing companies need to sell.

As it becomes possible to replace more and more kinds of human labor with automation, there will be (a) huge gains in "productivity growth" but also (b) a lower demand for labor. More people will be unemployed or underemployed - See more at: http://www.commonwealmagazine.org/blog/capitalism-government-and-religio...

As it becomes possible to replace more and more kinds of human labor with automation, there will be (a) huge gains in "productivity growth" but also (b) a lower demand for labor. More people will be unemployed or underemployed. Without some kind of wealth redistribution, fewer people will be able to afford the consumer products these growing companies need to sell.

It's surprising one still hears arguments like this in a post-feudal world, but there are none so blind as those who would refuse to see.   (And the scare quotes around productivity growth are sublime)

A simple count-factual that all can comprehend:

Let's take an extreme example and imagine that automation increases productivity such that every employer could halve the number of hours his employees worked and still prodcue the same quality and quantity of product.   What would happen to prices?    They would halve, since the cost of raw materials would halve.  So, everyone gets to buy the same amount of goods they buy now, and work only half as many hours.    So, is Matthew against the 2.5 day workweek?

Capitalism rocks!

 

Mark Proska, Productivity really took off in the late 1970s -- at the same time real wages stopped growing. So all of the income gains from productivity since the mid-'70s went to ther owners of the means of production, not their leaner and meaner workforce that provicded the productivity gains.

When you say "capitalism rocks," I presume you mean the rocks trickle down onto the heads of the workers who make the capitalists richer.

 

 

 

 

Mark --

This time I agree with you.  We don't need to redistribute wealth so much as we need to redistribute the number of hours each person is expected to work.  The robots, in other words, will have solved the problem of leisure for the working classes. 

But the capitalists have got to summon up their nerve to rist investing  their money on new companies for the growing number of new workers.    The capitalists are taking an unfair amount of profits and not even doing what capitalists are supposed to do -- invest.  They're sitting on trillions and have been doing so since '08 because they fear to lose their ill-gotten gains.  There's plenty enough cash in their accounts to kick=start the economy. 

On second thought, lowering the work-week to 35 hours would probably not be enough for much leisure.  But it would be a start. Middle-class Americans have enough money, and many still have a lot of it, but they are time-poor, especially the middle-class working mothers.  

Hi Mark

Let's take an extreme example and imagine that automation increases productivity such that every employer could halve the number of hours his employees worked and still prodcue the same quality and quantity of product.   What would happen to prices?    They would halve, since the cost of raw materials would halve.  So, everyone gets to buy the same amount of goods they buy now, and work only half as many hours.

Why would one assume that employers would retain the same amount of employees and simply trim the hours in this scenario? Wouldn't it be more reasonable to assume that an employer would cut the number of employees and keep those employees hours the same? That is what usually happens during layoffs, and layoffs are usually caused by the scenario you envision. The only time I ever hear of employers trimming hours, or hiring more part-time workers, is to reduce the number of employees who qualify for health benefits, which is another conversation. Even if employers did choose to keep the same number of employees with reduced hours, how would the loss in hourly pay affect workers? Some mechanically produced items might be cheaper, but what about non-mechanically produced goods? What about housing and healthcare? What if prices in all goods and services dropped? Would that be desirable? There are only two times in US history since 1900 in which we have seen deflation: the Great Deoression and the crash of 2008. Neither one of those instances served society or workers well.

Hi Ann

We don't need to redistribute wealth so much as we need to redistribute the number of hours each person is expected to work. 

If you mean that workers should be able to afford a decent standard of living on less hours of work, (ie. one minimum wage job instead of two), then I would agree.

Sorry guys. I need to indent my quotations.

Jeff --

Yes, that's what I mean.  How could the system transition to that state of affairs?  I suppose it could be done by law.  Didn't the government make it the law that 40 hours would be standard and beyong that the worker would get overtime?  If the work-week were reduced say 8 hours for everyone, then it would be more expensive to pay overtime than to hire some more 32 hr per wk workers at the regular wage, and the empoyers would hire more.

This assumes, as I suggested in another post, that there be universall health care.  If there weren't, and if the employer had to pay for more workers, then the new system would indeed be a drag on his/her business.

Ah. You are trying to reduce unemployment by reducing the the number of hours before employers must pay overtime. Interesting. I really don't know, but if it were to happen, I would agree that universal health care and higher hourly wages would be a necessity.

Why would higher hourly wages need to be higher?  (I'm assuming that the economy is othrwise in good shape.)

All y'all, Let's go back to Mark's original hypothetical. Working 2.5 days a week at $12 an hour yields $240 before taxes. So, $400 for rent, which is reasonable for my area, and $100 for food for a family of three -- which I am told is possible if you go heavy on pasta and eschew fresh fruits and vegetables and all deserts and snacke (as good serfs would do) -- how much is left over for clothing, transportation, insurance, utilities and co-pays at the doctors'?

Ah, you say, but Mark assumes all prices are cut in half. Rent? How is that affected by productivity? Actually, when rents start coming down, they stop building rental properties, as good capitalists would.  And can farmers double the number of kernels on an ear of corn? Like most economics hypotheticals, this one stops making sense at the classroom door.

I am assuming most workers will take an 8 hour pay cut. I suppose higher paid workers can handle it, but lower paid workers can't.

And I agree with what Bernard said.  The problems of Detroit should be a problem we all share, I think.  Rather than forcing the people of Detroit to cut pensions and sell off their Art Museum, the rest of us should be figuring out a way to help Detroit and share the burden. I don't know how we do that, though.  

We do it in the US through politics and bankruptcy courts.  A bankruptcy court will provide relief to the City by not requiring it to fulfill all of its debt obligations - essentially, the court will force the City's creditors (of whom its municipal retirees are one class, but by no means the only class) to share in the pain.  Politically, the City of Detroit, Wayne County, the State of Michigan and the United States are the political entities that would be stakeholders in Detroit's success, and those entities will pursue whatever remedies are politically feasible.  The risk in all this is that, in the last few decades at least, democratic political entities in the US have lacked the courage and foresight to impose burdens on voters.  I expect that the capacity for sympathy for Detroit's woes among relatively wealthy Detroit suburbanites has a limit, and that limit will be reached in pretty short order.  

(In the late '60's and early '70's, as a child, I lived for a few years in the suburbs of Detroit.  Almost all of my neighbors at that time were white former Detroit residents who had fled the city in the wake of race riots and block-busting.  The children I played with, and their children, are now living in Detroit's suburbs.  Those family memories and histories of Detroit, I'd think, are somewhat mixed and complex.  Here is Ron Fournier on this history.)

FWIW, my view is that selling the assets of the art museum would be quite foolish.  It's pretty clear that, to fulfill its pension obligations, Detroit needs to somehow transform itself into a viable city - an attractive place for tax-paying, employed people to live.  The art museum strikes me as the kind of thing that Detroit should keep around if it wants people to think of it as a good place to live.

It seems to me you've resolved the contradiction I described by ignoring one side of it. Those businesses that grow and expand by becoming more efficient ("selling more with same or even fewer people") need someone to sell their products to. As it becomes possible to replace more and more kinds of human labor with automation, there will be (a) huge gains in "productivity growth" but also (b) a lower demand for labor. More people will be unemployed or underemployed. Without some kind of wealth redistribution, fewer people will be able to afford the consumer products these growing companies need to sell.

I didn't ignore the seeming contradiction, I addressed it: businesses that experience better productivity are the ones who expand production, which is precisely how new jobs get created.

Here is the thing: we know that workers get laid off because of automation, as well as for a whole bunch of other reasons.  This is not a new thing.  Cycles of layoffs have followed economic cycles my entire life, and were happening long before I was born.  Yet somehow, employment recovers.  Employment was so high in the late 1990s that the unemployment rate fell below the line that, when I was in college, was conventionally thought to represent a full-employment rate.  Unemployement is even dropping, anemically, now.  

How can this be?  Despite automated production and increasing productivity, how is it that laid off workers manage to become employed again?  Well, from the worker's point of view, it happens with some pain and suffering.  A worker who, for many years, thought of himself as "Detroit automobile assembly worker" needs to re-imagine himself as something else: as "Marysville automobile assembly worker", or "Detroit truck driver" (perhaps delivering Marysville-assembled autos to Detroit-area showrooms), or "North Dakota petroleum fracker" (producing the raw material that becomes affordable gasoline for Marysville-assembled autos), or "Long Beach dockworker" (unloading auto parts manufactured overseas for final assembly in Marysville), or something else.  It can be disruptive and painful.  As a society, we've developed some ways to ameliorate the pain and disruption: unemployment insurance, jobs training programs, and so on.  Eventually, most people who are laid off find another job.  And that's because a free market economy generates jobs for people.

 

Something a little savage about characterizing pensioners as creditors and then paying them 20 cents on the dollar. Again, I think. maybe all of us should share the pain of those pensioners and assure they have a decent standard of living in their later years. 

Something a little savage about characterizing pensioners as creditors and then paying them 20 cents on the dollar. 

 

Right.  The bankruptcy laws provide an order of precedence to determine which of the many claimants on the bankrupt entities' insufficient assets get first dibs, second dibs, and on through the line.  Where pensioners fall in that order of claimants, I am not certain, but they may not be first.

Also, there is this to consider: those pensioners - unionized city workers, now retired - presumably used every political and legal tool at their disposal, over many years, to extract the promise of retirement income that, in retrospect, was unaffordable.  If the bankruptcy courts don't step in to impose some order, the retirement income might be preserved at the expense of other classes of claimants who believe they also are morally entitled to be paid what they are owed.  It is the court's job to assess these competing claims and come up with a fair distribution.  For example: we've all heard that the average response time by Detroit's police to a 911 call is 58 minutes.  Clearly, Detroit's police department is underfunded, in part because of pension obligations (as well as all the other financial obligations that drain away money that could go into hiring more cops on the street).  Is the claim by pensioners superior to the claim by citizens (most of whom are poor) to police protection?  I think it would take some thought to sort all this out.

 

Jim P.,re your Whigish reading of our society's way of dealing with unemployment, etc.

Today's NY Times has a report about the GOP's economic agenda for the remainder of Pres. Obama's term. It is one that aims to cut back on the social safety net that you refer to as the way our society ameliorates the pain and disruption of unemployment. Have you noticed what the North Carolina legislature has done to the safety net? Unless a steady stream of reports about the direction the GOP wants to take the country are mistaken, the needy will receive less help from the government. In this case the "government is US." Listen to the arguments about immigration, about food stamps, about investing in education or infrastructure. 

Frankly, I have no reason to be confident that good jobs for more people is the goal of American corporations. What they seem to be doing is resorting to temporary contractors who will have no jub security, no company-provided health benefits, no say in working conditions. Anecdotal evidence shows this to be the case in the jobs in fracking and in the practices of companies like AT&T.

I can't deny that I lack expertise in many of these matters. But, as a citizen who attempts to pay attention, I see no good reason to buy into your rosy view of the wonders of the business practices that are presently in place here. As a Christian, I believe I have a duty to do whatever I can to strengthen the safety net, even if it requires some "economic inefficiencies" to do so.

The Democratic party, both nationally and locally, is by no means the party of and for the needy. But so faar as I can see, the GOP is actively out to make the lot of the needy even worse than it presently is.

Bernard - I don't really disagree with anything in your comment.  The GOP won't start showing a preferential option for the poor in its policies unless and until it's politically punished.  I'm not particularly trying to advance GOP policies in the comments on this thread.  (FWIW, I'm not a Republican.)  I'm just making the point that a free market economy is the least bad option we know of, and I'm concerned about collective amnesia regarding the alternatives, as illustrated by the survey under consideration here.

Jeff,

I really haven't thought the whole thing through, and I'm not competent to do so in the first place.  It's all too complex for non-economist dummies like me.  But I am willing to listen to new ideas.

It seems to me that history has shown that capitalism, like government, has evolved, and the current world-wide recession has proven that in its present form it is incapable of performing well -- there simply aren't enough jobs to maintain a healthy economy.  

We need the courage to face the fact that the system must be revised drastically, taking into account the criticisms of the system from both sides including 1) the complaint of the liberals that the very rich are the new robber barons who now own the national legislature, an 2) the complaint of the conservatives that an economy with massive numbers of people continuously on welfare is incapable of working long-term.

Something has to give, and I'm hopeful that an change in the work-week hours could make  afundamental change for the good.  No, it wouldn't solve all the problems, but I suspect that it is a part of an ideal economy.

What I'd like to know is why economists no longer seem to think in terms of ideal economies.  Basic intellectual scafolding has long proven useful in the real world -- just look at the practical benefits from the physicists searching for simpler and simpler models.

(FLASH:  Baby Cambridge is going to be named George Alexander Louis.  Louis????  Louis????  What are they doing?  Trying to make up with the French after all these centuries?  How the world can surprise us.  And a good thing that :-) 

Thanks, Jim P. Sorry that I misread you.

I hope that some updated version of the European Social Democratic  or non-Marxist Socialist economic model might prevail. But I have to admit that the prospects for such an approach are dim at best.

Bernard, no worries.  And while I don't know exactly what "Whigish" means, I know Abraham Lincoln was a Whig at one time, so I hope it is an honorable state of life :-)

As to comments that unionized city workers "extracted" promises of funded retirment, this is too favorable an impression of the power of unions.  I've been involved, to an admittedly limited extent, in union negotiations.  If the market is as efficient and powerful as many like to think it is, municipalities and corporations have had many an occassion to call unions' bluffs.  The fact of the matter is the responsible government entities (city councils, state boards, what have you) have in the past seen wage gains and funded retirement plans as simply a decent thing to do for the people who perform the work we need done.  Recent demonization (read; Scott Walker here in Wisconsin) has created a false dialogue akin to comments above, that we "can't afford it".  Yet we can afford government giveaways to already wealthy corporations under the guise of "job creation". 

Well, many a public pension fund has been well funded, and well managed.  But, governors and legislatures in lean times see that pot of money sitting there, waiting to be paid to retirees, as a patch for holes in budgets, with a promise to "pay it back".  Thankfully Wisconsin's supreme court has had the foresight to tell former governor T Thompson and current gov Walker "leave it alone."  If a pension fund is unfunded, I'd blame those responsible for managing it, not those who work a life expecting to be paid what they were promised. 

Jeff --

It seems to me that any recasting of the fundamentals, if it is to be understood by voters like me, must be in simple enought terms and the expression of the basic elements and forces in an economic model.  Sort of a theory of the ideal village.  (Yes, yes, complications arise when village become large, but the underlying forces will remain the same.)  

So how about your thinking up a nice model of the ideal economic village -- sort of like what Adam Smith tried to do.  (It would be much to complex for me.)  What would tne necessary elements be?  What would its goals be? What would the necessary and simplest laws be?  What "laws" would the *nature of the system itself * impose? (E.g., how free would the competition be?)  

 

 If a pension fund is unfunded, I'd blame those responsible for managing it, not those who work a life expecting to be paid what they were promised. 

Shayne LaBudda -  I agree with you that elected officials have failed in their responsibility to public worker pension funding.  But the public sector union leadership surely has been politically complicit (and also has failed in their responsibility to their members), as it actively supported, over many years, the political success of those failed leaders.

It is very difficult to blame an individual worker for the failings of her union.  I agree that many individual unionized retirees are victims.   But inasmuch as the union movement is about collective action, there has to be some responsibility that flows to the union members who elected those leaders. 

Please note: this is not an argument that "Detroit public workers are getting what they deserve."  But I don't think it's accurate to position public sector workers as completely innocent bystanders, either.  The public sector workers had a hand, an important hand, in bringing about the confluence of circumstances that has landed Detroit where it is now.  If union retirees have to take a haircut, as they probably will, as a result of the failure of the City of Detroit, it will become a question of how much of a clip job is fair.

Public sector unions, among the other things they are, are political special interest groups.  Such groups are subject to the risks of politics.  Politicians filleth the trough, and politicians emptieth it.  That is the nature of politics.

 

Too late have workers heeded old Omar's words, as rendered into English by Fitzgerald:

Ah, take the cash and let the credit go,...

Rent? How is that affected by productivity?

Tom--

In my example, productivity doubles everywhere, so prices halve.   The landlord now needs only half the rent he did before to still purchase the same goods.   If he doesn't halve the rent he charges, tenants will go elsewhere, because in a free market, other landlords will.

One might claim, however implausibly, that there will always be countries whose people are so poor that they will be willing to do what a robot can do for less than it costs the robot to do it, but then the preservation of capitalism depends on some pockets of poverty not becoming too much more prosperous. And why should anyone cheer that?

Matthew - I just want to call your attention to this article, which touches on this dynamic in the context of economic ills besetting China.  My view is that cheap and reliable labor will always attract capital, and so long as a supply of such cheap labor exists, capital will try to figure out a way to leverage it.  Unfortunately, there are still a staggering amount of extremely poor people in the world, so this dynamic isn't likely to end anytime soon.  

Even if we succeed in lifting all the poor in the world to a level such that their basic needs are met, there will still be labor price arbitrage opportunities that capital will try to leverage.

 

Mark, you can't have been following the real estate market for rentals, both housing and office, in the past 20-30 years. It is one of the few "free" markets in our late capitalism that actually is affected by supply and demand. If the price of everything else in the world goes up or down by 50 percent, the price of rentals will still be affected by supply and demand. And the way to keep profits up is to keep the supply a little behind the price of demand (something the landlords can't always do, which is why the market is still free). Even when your Prius costs half as much, the rent for your office is going to depened mostly on who else wants it.

 

What  I'm wondering most about is how one could use the results of this survey to accomplish something good.  How can we build ecumenical movements with people of different faiths and different politics? An in our more narrow universe of American Catholicism, how can we bring togther Catholics whosee priority might be the return of the Latin Mass with Catholics who think their parish should join an Alinsky-style coalition?

Irene, Odd you should mention Saul Alinsky, who has been dead for 41 years. I thought his memory was being kept alive by the Foxheads who think he was a co-conspirator with Premier Josef Stalin rather than Cardinal Albert Meyer. But our parish is afffiliated with a community organization in the Alinsky line although a quieter, gentler version. Our organization got its initial funding from the Moscow-influenced socialists of the U.S. Conference of Catholic Bishops and still gets money from their diabolical Catholic  Campaign for Human Development.

So I probably hear a few more social justice homilies than most Catholics, but when we get one, the preacher is told by many people that he is wrong. One of our parochial vicars was co-president of our community organization while he was here, and he was regularly told he was wrong. The flock isn't notably traditionalist. I can count maybe five or six who would drive more than six blocks to get to a Latin Mass, and we have 3,000 at the Sunday Masses during the season. About 300 of them will show up when our organization has an action. But most of our people never heard of Rerum Novarum or Populorum Progressio and don't believe it if you tell them what  they said. They say they never heard such a thing in Catholic schools.

Hey Tom- we have a number of Catholic parishes in the Bronx that are affiliated with Alinsky and Alinsky-lite coalitions.  I guess I'm trying to think through why things need to be either/or. Last Easter, I went to the Pax Christi Way of the Cross, more recently I've been going to a novena to St Anthony (some of the other people there seem to be part of something called the Pious League of St Anthony.)  These are two very different types of devotions, but each very cool in its own way.  I think if we coud be more embracing of relious diversity among Catholics, it might be good for us.  

3,000 is fabulous mass attendance and 300 at an action ain't too shabby either.

Irene and all, just want to call attention to this Time Magazine article on how Stockton, CA's bankruptcy may provide clues as to how Detroit's will pan out.

 

No need to be modest Ann. I've seen many of your posts and know that you are very intelligent. I didn't say that I necessarily disagreed with you. I am not an economist either; I am merely trying to understand the state of affairs. I tend to see both unemployment and the vast rise in equality as the two major problems we currently face. I have no economic model, but I think an increase in the minimum wage is by far one of the best things that can happen right now. As contributor Matthew Boudway mentioned, there is far too much wealth concentrated at the top. And, as you mentioned earlier, they aren't spending it. A shift in income from the top to bottom could increase demand because people at the bottom will definitely spend their money. My thoughts have been that an increase in the minimum wage could help shift some income to the bottom, increase demand, and decrease inequality. The increase in demand could boost the economy in other sectors.

Thinking up a nice economic model of a village? I may have to do that! As I said, I am no economist. Most of my background was in philosophy and history, and I am currently enrolled in the MA program in Global Development and Social Justice at St. John's University, New York. It is an interdisciplinary program, and I will have to take some economics. My Economics of Development course begins this fall. I doubt we will have to create our own village models, but who knows. Lol.

Dr. Charles Clark teaches the economics portion of the GDSJ program. He has written a few articles for Commonweal in the past, but it's been more than a few months since his last. US Catholic just recently interviewed him and published a few artcles from the interview. Maybe you'd enjoy some of them.

http://www.uscatholic.org/blog/201306/catholic-case-raising-minimum-wage...

http://www.uscatholic.org/articles/201306/catholic-economics-101-charles...

http://www.uscatholic.org/articles/201306/economics-inequality-why-wealt...

Interesting how this new "reply" feature doesn't really reply. It just posts a new comment. That comment doesn't appear directly under the comment you are replying to.

Thinking up a nice economic model..... was directed at Ann Olivier

Mark Proska

productivity doubles everywhere, so prices halve.

Tom Blackburn is right. In your argument for mechanized production, you only decrease costs associated with the production of mechanically produced goods. In doing so, you can also increase the supply of those goods. You couldn't possibly believe that it will affect the supply or demand in the real estate market. As a matter of fact, the world is already experiencing the rise of the conditions of which you speak. It is why so many ridicule the American poor. They have cell phones, flat screen TV's, they have microwaves, etc. Truly poor people wouldn't have these things, correct? The cell phone could have been free with a low cost contract, or free as a used donation. The TV is the most expensive item on the list, but a 32" TV (new or used)doesn't even cost half the price of a month's rent, or a month's payment of decent health insurance in some areas. That is because real estate and health care are hardly affected by the rise of mechanized production.

Can anybody recommend for me a nice simple little book about what money is and how it works in a capitalist economy?  I mean about banking and the finantial markers, the influence of government taxing and spending, and whatever else is basic? One without a lot of numbers and formulas. There are dozens of Dummies books about econ, but none specifically about money.

Sorry Ann. I could really benefit from something like that myself.

Ann—

Among other things, the concept of money is premised upon faith, trust, risk and dependence.   Just further proof that the free market is from God.

Mark --

I'd say that money is actually *constituted* by the trust we put in those bits of paper or data in databases or whatever.  Our agreement to be part of a monetary system (unless the money has intrinsic value as does gold, etc.) is itself something like a contract, and as such it is a *spiritual* reality.  

But doesn't that pose some theological problems?  Jesus told us to beware of possessing a lot of money.  Hmm.  We can hardly possess too much Bach (his music is mainly a spiritual reality) or make too many  good choices (more spirit), but we can have too much money.  Spirit as dangerous .  .  .  Just as too much power over others is dangerous .  .  .  And, as has often been noted, money is a kind of power.

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