Thursday, June 30, 2011

Old Tom, the Sandwich-board Man

From "Blood on the Tracks: Sensation Drama, the Railway, and the Dark Face of Modernity," Nicholas Daly, Victorian Studies, 1998:
The preoccupation in the contemporary accounts with the instantaneous nature of the crash points to a popular perception of something qualitatively different in all industrial-technology accidents: they occur in "machine time," not human time. Human agency cannot usually move rapidly enough to intervene, and there are few rescues. In fact, such incidents are often too quick for the eye, and perception takes place after the event: if you see it, you are still alive.

We can understand the appeal of Boucicault's After Dark and the other "railway rescue" plays in this light. They envision scenarios in which a human agent can beat a mechanical agent, in which, for a moment, the human comes to enter and master the temporal world of the machine. The third act of After Dark contains Boucicault's ultimate version of this contest between man and machine. It begins with the villains throwing the hero, the sandwich-board man Old Tom, into a wine vault beneath a gambling den. This vault is adjacent to the underground railway tunnel and a narrow opening connects the two. Old Tom's former comrade, Captain Gordon Chumley, has crossed the villains and they have left him unconscious on the railway line to meet his death. In the first scene of Act 3, Old Tom is working to enlarge the opening between the vault and the tunnel when he sees his old friend on the rails:
Old Tom: About 4 courses of bricks will leave one room to pass. What is that on the line? There is something, surely, there. [A distant telegraph alarm rings. The semaphore levers play, and the lamps revolve.] Great Heaven! 'tis Gordon. I'm here. He does not answer me. [A whistle is heard, and distant train passes.] Ah! murderers. I see their plan. They have dragged his insensible body to that place, and left him there to be killed by a passing train. Demons! Wretches! [He works madly at the orifice. The bricks fall under his blows. The orifice increases. He tries to struggle through it.] Not yet. [The alarm rings again. The levers in the front play. The red light burns, and a white light is turned to L.H. tunnel. The wheels of an approaching train are heard.] Oh, heaven! give me strength-down-down. One moment! [A large piece of wall falls in, and Old Tom comes with it.] See, it comes, the monster comes. [A loud rumbling and crashing sound is heard. He tries to move Gordon, but seeing the locomotive close on him, he flings himself on the body, and, clasping it in his arms, rolls over with it forward. A locomotive followed by a train of carriages, rushes over the place, and, as it disappears, Old Tom frees himself from Chumley, and gazes after the train.]
See also American Law Review.

Saturday, June 25, 2011

from The Right to be Lazy by Paul Lafargue

Instead of taking advantage of periods of crisis, for a general distribution of their products and a universal holiday, the laborers, perishing with hunger, go and beat their heads against the doors of the workshops. With pale faces, emaciated bodies, pitiful speeches they assail the manufacturers: "Good M. Chagot, sweet M. Schneider, give us work, it is not hunger, but the passion for work which torments us". And these wretches, who have scarcely the strength to stand upright, sell twelve and fourteen hours of work twice as cheap as when they had bread on the table. And the philanthropists of industry profit by their lockouts to manufacture at lower cost.

If industrial crises follow periods of overwork as inevitably as night follows day, bringing after them lockouts and poverty without end, they also lead to inevitable bankruptcy. So long as the manufacturer has credit he gives free rein to the rage for work. He borrows, and borrows again, to furnish raw material to his laborers, and goes on producing without considering that the market is becoming satiated and that if his goods don't happen to be sold, his notes will still come due. At his wits' end, he implores the banker; he throws himself at his feet, offering his blood, his honor. "A little gold will do my business better", answers the Rothschild. "You have 20,000 pairs of hose in your warehouse; they are worth 20c. I will take them at 4c." The banker gets possession of the goods and sells them at 6c or 8c, and pockets certain frisky dollars which owe nothing to anybody: but the manufacturer has stepped back for a better leap. At last the crash comes and the warehouses disgorge. Then so much merchandise is thrown out of the window that you cannot imagine how it came in by the door. Hundreds of millions are required to figure the value of the goods that are destroyed. In the last century they were burned or thrown into the water.

But before reaching this decision, the manufacturers travel the world over in search of markets for the goods which are heaping up. They force their government to annex Congo, to seize on Tonquin, to batter down the Chinese Wall with cannon shots to make an outlet for their cotton goods. In previous centuries it was a duel to the death between France and England as to which should have the exclusive privilege of selling to America and the Indies. Thousands of young and vigorous men reddened the seas with their blood during the colonial wars of the sixteenth, seventeenth and eighteenth centuries.

There is a surplus of capital as well as of goods. The financiers no longer know where to place it. Then they go among the happy nations who are leafing in the sun smoking cigarettes and they lay down railroads, erect factories and import the curse of work. And this exportation of French capital ends one fine morning in diplomatic complications. In Egypt, for example, France, England and Germany were on the point of hair-pulling to decide which usurers shall be paid first. Or it ends with wars like that in Mexico where French soldiers are sent to play the part of constables to collect bad debts.

These individual and social miseries, however great and innumerable they may be, however eternal they appear, will vanish like hyenas and jackals at the approach of the lion, when the proletariat shall say "I will". But to arrive at the realization of its strength the proletariat must trample under foot the prejudices of Christian ethics, economic ethics and free-thought ethics. It must return to its natural instincts, it must proclaim the Rights of Laziness, a thousand times more noble and more sacred than the anaemic Rights of Man concocted by the metaphysical lawyers of the bourgeois revolution. It must accustom itself to working but three hours a day, reserving the rest of the day and night for leisure and feasting.

Thursday, June 23, 2011

CEPR: New Report Suggests Work Sharing as Best Means of Preventing Layoffs and Lowering the Unemployment Rate

For Immediate Release: June 23, 2011

Contact: Alan Barber, (202) 293-5380 x115

Washington D.C. - With the unemployment rate at a painfully high 9.1 percent, the majority of Americans list jobs as their number one economic concern. A new report from the Center from Economic and Policy Research (CEPR) suggests that in the current economic climate work sharing may be the most effective way to avoid many layoffs and quickly return the economy to full employment with little additional spending.

“The labor market in the United States is still suffering the effects of the last recession,” said Dean Baker, co-director of CEPR and author of the report. “With the economy operating well below its full capacity, work sharing could be a significant factor in preventing layoffs and lowering the unemployment rate.”

The report, “Work Sharing: the Quick Route Back to Full Employment,” describes a system of work sharing that would give employers an incentive to keep workers on their payrolls with shorter hours as an alternative to laying them off. This would be attached to the current unemployment insurance system with short-time compensation as an alternative to unemployment compensation.

“We have already seen that work sharing works in the example of Germany,” Baker continued. “While most countries saw their unemployment levels spike during the recession, Germany, which already had a work-sharing system in place, saw its unemployment rate fall 0.4 percentage points below the rate at the start of the downturn.”

Work sharing is a practical, but underutilized, policy option here in the United States. Senator Jack Reed (D-RI) plans to soon reintroduce legislation along these lines to incentivize work sharing domestically.

In addition to most nations in the Organization for Economic Cooperation and Development (OECD) having some experience with work sharing, 21 states in the United States already have work sharing programs in place. While recognizing some implementation issues could be addressed to make it more attractive, the report presents hypothetical take-up rates and the likely impact of work sharing on productivity in the United States.

Perhaps due to a misplaced focus on deficits rather than jobs, the U.S. economy remains weak and growth is tepid at best. With threats of a possible double-dip recession and more rounds of layoffs looming, work sharing may very well be the most economically and politically viable means of lowering the unemployment rate.

It's an Idea Economists View with Contempt...

...whenever the economy is sluggish.



See also "An Open Letter to Paul Krugman."

Sunday, June 19, 2011

What a Fucking Maroon

It’s Still the Economy, Stupid

Fourteen million Americans remain out of work, a waste of our greatest resource. The 42nd president has more than a dozen ideas on how to attack the jobs crisis.

Not even close. No cigar.

Saturday, June 18, 2011

Coals to Newcastle

Here are the notes for my presentation today (June 16, 11:00 am) to the Pacific Northwest Labour History Association conference.

PNWLHA

Sunday, June 12, 2011

Bad grammar is bad politics

GENEVA (ILO News) – The prolonged jobs crisis, despite some promising signs of growth, continues to defy global efforts by governments and businesses to generate employment and end the growing hardships people are suffering in their search for work.
The "job crisis" is not an agent. The agents in this case are the governments and businesses who are NOT making global efforts to generate employment. What is the ILO trying to say? That businesses are trying to hire people but they just can't find any? What passive-aggressive bullshit.

Lump of Larry

Thus Spake Professor Summers:

A sick economy constrained by demand works very differently from a normal one. Measures that usually promote growth and job creation can have little effect, or backfire. When demand is constraining an economy, there is little to be gained from increasing potential supply. In a recession, if more people seek to borrow less or save more there is reduced demand, hence fewer jobs. Training programmes or measures to increase work incentives for those with high and low incomes may affect who gets the jobs, but in a demand-constrained economy will not affect the total number of jobs. Measures that increase productivity and efficiency, if they do not also translate into increased demand, may actually reduce the number of people working as the level of total output remains demand-constrained.

A sincere welcome to the real world, Dr. Summers! In other words, abstract doctrine is bunk when conditions on the ground are not ideal. Meanwhile, back at the White House, President Pivot and his CEO choir is puffing... training?

Juliet Schor: "why recent bad economic news means it’s time for working less"

Juliet Schor wrote on her Plenitude blog.

So what’s the alternative to slashing government programs, budget cutting, and more concentrated wealth at the top? The centerpiece of a new approach is to re-structure the labor market by reducing hours of work. That may seem counter-intuitive in a period when the mainstream message is that we are poorer than ever and have to work harder. But the historical record suggests it’s a smart move that will create what economists call a triple dividend: three positive outcomes from one policy innovation.

The first benefit of hours reductions is a significant reduction in unemployment... We need shorter hours because it is unrealistic to count on growth in GDP to absorb all this current and future “surplus” labor. Rich countries just never grow that rapidly. So the austerity economics that says work longer and retire later has it exactly wrong.

But even if GDP growth could solve the unemployment problem, it shouldn’t, because the cost in GHG emissions is prohibitive. North America and Europe have already blown their carbon budgets and until we re-structure energy systems, growth isn’t reconcilable with responsible emissions levels. Here too shorter hours of work provide a dividend. They are associated with lower ecological and carbon footprints. Countries that work more pollute more.

The third benefit of shorter hours is the time itself...

Saturday, June 11, 2011

Urbane Dictionary

pi'vot: 1. n. short shaft upon which something spins or vacillates; 2. v.t. spin as on a pivot (sit on it and pivot.) [F. of uncert. orig.]
Suppose you were a policy maker who wanted to pivot away from emphasizing the need to reduce the budget deficit and towards the need to reduce the jobs deficit.

You’d get out there on TV and... [complete the sentence in comments]

Friday, June 10, 2011

Deadpan

Satire strikes out.

Dear Tom Walker:

Thank you for participating in the 2011 Hamilton Project Policy Innovation Prize competition. We were delighted by the broad interest in our competition and the wealth of ideas that it produced.

We have read your submission, "Thinking along the Right Lines": Creating Jobs through Longer Workweeks and Later Retirement, and commend you on your work. Unfortunately, following a rigorous review process, your proposal has not been selected as one of the finalists.

Thank you again for your interest in The Hamilton Project. We wish you the best of luck in your future endeavors.

Sincerely,
Michael Greenstone
Director
The Hamilton Project
1775 Massachusetts Avenue, NW
Washington, DC, 20036
202.797.6059
UPDATE: Six minutes after I posted the above, Dani Rodrik posted the following, A rejection letter I would like to receive from a journal one day to his blog:
This is one that Charles Babbage received in 1821 from The Edinburgh Journal of Science
"It is with no inconsiderable degree of reluctance that I decline the offer of any Paper from you. I think, however, you will upon reconsideration of the subject be of opinion that I have no other alternative. The subjects you propose for a series of Mathematical and Metaphysical Essays are so very profound, that there is perhaps not a single subscriber to our Journal who could follow them."
From Gleick, James (2011). The Information: A History, a Theory, a Flood (p. 99). Pantheon. Kindle Edition.

Thursday, June 9, 2011

Commons Beyond Growth

The following report is so well argued that I am compelled to re-post the entire thing rather than merely link to it or comment on it.

The "Pivot" That Dares Not Speak Its Name

“The current concerns about the state of the planet require something of a paradigm shift for economics. If we don’t make serious changes soon, probably in the next 10 or 15 years, we may find that it’s too late.”

Those words by a 2008 candidate for President were spoken to and reported by David Leonhardt in the New York Times. That candidate referred Leonhardt to a famous 1968 speech by Bobby Kennedy:
“…that gross national product counts air pollution, and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for people who break them. It counts the destruction of the redwoods and the loss of our natural wonder in chaotic squall. It counts Napalm, and it counts nuclear warheads, and armored cars for the police to fight the riots in our city. It counts Whitman’s rifles and Speck’s Knifes and the television programs which glorify violence in order to sell toys to our children. Yet, the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play; it does not include the beauty of our poetry of the strength of our marriages, the intelligence of our public debate for the integrity of our public officials….”
Can the Commons Bring Us Beyond Growth?” makes the following point:
The capitalist market economy has achieved some things but failed in important respects…
1. It cannot succeed in satisfying the basic material needs of many people, nor can it meet the immaterial needs of all people.
2. It is inefficient and ineffective in preserving natural resources.
3. It systematically destroys jobs.
The last point is crucial. Destroying jobs is an essential feature of capitalism, not an anomaly. The way that we compensate for that job destruction is through perpetual growth to create more jobs to replace the ones that have been destroyed and accommodate population increase. More growth means more total consumption of natural resources, including energy, even when the relative consumption per dollar of growth shrinks.

Bobby Kennedy, the 1968 candidate for the Democratic nomination for President was assassinated. His critique of GNP became part of his legacy — an epitaph. Barack Obama, the 2008 candidate was elected. His words about “something of a paradigm shift” are a dead letter.

Tuesday, June 7, 2011

"Framing" vs. Real Narrative Policy Analysis

It's nice to see narrative policy analysis getting some airplay at Jared Bernstein's blog but will it get any traction? Levison seems to assume that the Democratic narrative he cites is right or at least is the best of the only two narratives in the game, the Democratic and the Republican.

Actually, you can take just about any two dominant narratives and draw out of them a couple of more neglected or repressed narratives. Emery Roe shows how to do this in his 1994 book, Narrative Policy Analysis. But I will give an example that should be more readily accessible. It is the analytical matrix at the core of Elinor Ostrom's 2009 Nobel Prize lecture, "Beyond Markets and States: Polycentric Governance of Complex Economic Systems."


Ostrom looks at two variable characteristics of goods, their "subtractability of use" and their "difficulty of excluding potential beneficiaries." Goods can be rated on either of these characteristics on a continuum from low to high. The analytical matrix generates four "ideal types" of goods only two of which, public goods and private goods figure in the standard Democratic and Republican narratives cited by Levison.

What I would suggest is that instead of trying to devise a strategy for promoting the traditional Democratic narrative, some serious thought needs to be given as to whether either of the two extant narratives are at all pertinent to the unique conditions we face today.

I'm afraid that one common mistake is made by both sides. That is to assume that if the other guy's argument is obviously wrong, that makes your argument right. Not so. It is possible for both arguments to be utterly wrong.

Monday, June 6, 2011

If Wage Controls Worked...

There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don't know we don't know.

Donald Rumsfeld, chariman of President
Nixon's Cost of Living Council


Slavoj Žižek added the category of unknown knowns to Rumsfeld's taxonomy. Things we know but don't know that we know. For example, we know that on August 15, 1971, President Nixon announced his "New Economic Policy," which include wage and price controls, a 10% surcharge on imports and the closing of the official gold window. This was the final nail in the coffin of the Bretton Woods agreement.

We also know that a number of significant statistical trends take shape shortly after that event, two of which were a growing gap between real hourly compensation and productivity and a steady increase in labor force participation.

BLS: "The compensation-productivity gap: a visual essay"




If wage controls worked, it should not be surprising to see a growing gap between productivity and compensation. And if wages stagnated, it should not be surprising to see growing labor force participation as households attempted to compensate for stagnant wages by supply more hours to the workforce. Running faster to stay in place.

Thursday, June 2, 2011

Energy Intensity of Employment and the Passive-Aggressive Balance of Payments Strategy

REVISED AND CORRECTED

The chart below shows something you should worry about more than the upcoming BLS employment situation report on Friday. The blue line shows the declining energy intensity of real GDP in the U.S. It's the "underappreciated positive trend" in energy efficiency that Jared Bernstein highlighted in his Odds and Ends a couple of days ago. Jared remarked that it takes half as much energy per dollar of GDP as it did in the 1960s. Actually, it takes about half as much energy as it did in 1977.

But there is a dark cloud surrounded by that slender silver lining. The red line shows the energy intensity of employment since 1973. [My original chart was "upside down" and erroneously showed the energy intensity actually increasing]. It takes about 30% MORE energy to employ each person in the civilian labor force than it did in 1973. And the trend continues upward. The revised chart shows that since 1975, and particularly since 1986, the energy intensity of employment has decreased at a slower rate than that of GDP. There's nothing good about that news unless it is the analytical hint contained in the chart about where the root of the problem lies.

Sources: U.S. Energy Information Agency, Table 1.5 Energy Consumption, Expenditures, and Emissions Indicators, 1949-2009 and BLS Labor Force Statistics from the Current Population Survey, 1949-2009.

I've indexed both series so that 100 = the average intensities for 1970 to 1973. This highlights that both trends entered a transition during that period. The energy intensity of GDP began a steeper decline after 1970 while the energy intensity of employment reversed its trend after 1973 from increasing to decreasing energy intensity. However, that decreasing trend slowed considerably after 1986. Second, the two trends run in tandem during the 1970 to 1973 index period. This feature is accentuated by using an average from that period as the index, but it is, nevertheless, a striking coincidence.

So what happened from 1970 to 1973? The period is bracketed by the demise of Bretton Woods, symbolized (although not initiated) by the August 15 1971 Nixon "New Economic Policy" and the Arab oil embargo announced in October 1973. In 1970, the Brookings Institution published a paper by Lawrence Krause, titled "A Passive Balance of Payments Strategy for the United States." In The Origins of International Economic Disorder, Fred Block credited Krause's article as the "highest expression" of a view that had been emerging since the late 1960s regarding how to manage the U.S. balance of payments deficit. The Nixon administration pursued a strategy roughly along the lines of the Krause strategy culminating in the August, 1971 "New Economic Policy" that closed the official gold window, established a 10 percent import surcharge and imposed a system of domestic wage and price controls. In October 1973, the Organization of Arab Petroleum Exporting Countries imposed an oil embargo "in response to the U.S. decision to re-supply the Israeli military during the Yom Kippur War."

Far be it from me to try to tease out all the implications of my little energy intensity chart. Let's say it's a piece of empirical evidence that challenges John Quiggin's and Brad DeLong's confidence that, as Brad put it, "it all depends on the facts, and the jury is in" or in John's words,"Most economists would regard it (Jevons Paradox versus the fallacy of the lump of labor), on the basis of the empirical evidence, as being generally true for employment and generally false for energy." While energy consumption per dollar of GDP in 2009 was less than half what it was in 1973, consumption per employed person less than 25%, almost all of which was in the period from 1973 to 1986. What do most economists have to say about the stagnating energy intensity of employment (call in "ENINEM" for short)?