The slow revolt of Western electorates

[karaddin]

Well one field which has historically enjoyed good levels of remuneration is going to have the workload drop off a cliff in the near future - lawyers.  It's an extremely expensive degree in terms of money and time, and while I don't see any robot or software replacing court room lawyers in the near future, clerical stuff is likely to be almost entirely taken over by software.

[Ormond]

I think this article from "The Economist" is very relevant to this issue. 

http://www.economist.com/news/leaders/21702750-farewell-left-versus-right-contest-matters-now-open-against-closed-new

I do think that the main problem with arguing for "openness" comes in this part of the article:

 It is to devise bold policies that preserve the benefits of openness while alleviating its side-effects. Let goods and investment flow freely, but strengthen the social safety-net to offer support and new opportunities for those whose jobs are destroyed. 

I am afraid that "offering support and new opportunities to those whose jobs are destroyed" is way easier said that done. Even if one provides a "safety net" that gives displaced workers the same income they had before, those "new opportunities" are going to be hard to give to a lot of workers, especially older ones. I don't think it's any accident that there was a huge age difference in Britain's Brexit vote, or that older White blue-collar or lower level white-collar men are the biggest supporters of Trump in the USA. It's one thing to convince a 30 year old that he or she will be given "new opportunities" and that with education and retraining they will be successful in a globalized economy. But how does one realistically promise that to someone who is 50? It is a tall order to eliminate the old job of a worker that age and NOT have them see that as a major insult to their own self-worth. I think the implied message to those whose jobs are being eliminated by globalization and technology that they are not useful to society any more causes a lot of the anger seen in the electorate, perhaps even more than any loss of income.

[Altherion]

2 hours ago, Ormond said:

I think this article from "The Economist" is very relevant to this issue. 

http://www.economist.com/news/leaders/21702750-farewell-left-versus-right-contest-matters-now-open-against-closed-new

I mostly agree with your view of the main problem, but I would put it more strongly: the article is laughable neoliberal propaganda. I have two points to add to what you said.

First, as somebody (I think a comedian) pointed out several years ago, a safety net is something to catch a person when they fall. It is not something where one would live long-term. To make the safety net good enough to replace a median income would require a dramatic redistribution of wealth.

Second (and this is where my view of the article as laughable comes from), who exactly is going to pay for the "new opportunities"? It's clear that whoever wrote the article has not applied for a job recently. I've gone through the process in one of the few fields where, for the moment at least, employment is growing and the pay is reasonably good and I can tell you that everybody explicitly asks for multiple years of experience in the field. I don't blame them for doing this: the competition for these jobs is fierce so if they have their pick between multiple people with 5+ years of experience, why wouldn't they require it? If you don't have any experience in the field, you're competing with recent college graduates and, in some fields, with workers imported from third world countries ("openness"!). For reasons which I hope are obvious, either of these is significantly preferable over an older American worker with no experience in the field.

Of course, this is not to say that it is impossible to completely switch fields -- many people do it including the brilliant, the well-connected, the lucky and the determined. However, it doesn't scale: if an industry loses 70% of its jobs, it's very unlikely that even half of the workers will find positions that are as good as their old ones.

EDIT: Reading through the comments, I found one (presumably by a European) who edited the cover image to illustrate another issue with openness. I thought it was pretty well done.

[Ormond]

15 minutes ago, Altherion said:

I mostly agree with your view of the main problem, but I would put it more strongly: the article is laughable neoliberal propaganda. I have two points to add to what you said.

First, as somebody (I think a comedian) pointed out several years ago, a safety net is something to catch a person when they fall. It is not something where one would live long-term. To make the safety net good enough to replace a median income would require a dramatic redistribution of wealth.

Second (and this is where my view of the article as laughable comes from), who exactly is going to pay for the "new opportunities"? It's clear that whoever wrote the article has not applied for a job recently. I've gone through the process in one of the few fields where, for the moment at least, employment is growing and the pay is reasonably good and I can tell you that everybody explicitly asks for multiple years of experience in the field. I don't blame them for doing this: the competition for these jobs is fierce so if they have their pick between multiple people with 5+ years of experience, why wouldn't they require it? If you don't have any experience in the field, you're competing with recent college graduates and, in some fields, with workers imported from third world countries ("openness"!). For reasons which I hope are obvious, either of these is significantly preferable over an older American worker with no experience in the field.

Of course, this is not to say that it is impossible to completely switch fields -- many people do it including the brilliant, the well-connected, the lucky and the determined. However, it doesn't scale: if an industry loses 70% of its jobs, it's very unlikely that even half of the workers will find positions that are as good as their old ones.

EDIT: Reading through the comments, I found one (presumably by a European) who edited the cover image to illustrate another issue with openness. I thought it was pretty well done.

Sorry, I don't think that was "well done" at all, because I think terrorists are about the last group that would be effectively prevented from entering another country by the sort of restrictions the "closed" politicians propose. Such restrictions are actually likely to increase terrorism, in my opinion, by radicalizing more young people. 

[Altherion]

17 minutes ago, Ormond said:

Sorry, I don't think that was "well done" at all, because I think terrorists are about the last group that would be effectively prevented from entering another country by the sort of restrictions the "closed" politicians propose. Such restrictions are actually likely to increase terrorism, in my opinion, by radicalizing more young people. 

I'm not sure whether this thread is the place to get into this, but we now have experimental evidence that this is simply not true. Take a look at the distribution of terrorist attacks in "open" European countries and compare it to the "closed" ones.

[Iskaral Pust]

I agree that the ideal policy solution is a Pollyannish retraining of displaced workers that is unlikely to happen.  That retraining was promised after NAFTA and will be promised again but older and low skilled workers are the least likely to seek training or be successful at it or to represent a good investment for training. 

I think that fundamentally our world has been growing in complexity at an increasing pace since the Industrial Revolution.  No prior period in history has seen so much change in the fundamental aspects of life, except for agrarian/hunter-gatherer peoples newly colonized or conquered by industrialized nations -- and look how those fared.  Some people, notably the young and the cognitively advanced & flexible, will adapt well to this accelerating change.  But many individual people and broader social systems -- religions, cultures, etc -- are not well suited.  If Conservative parties are typically comprised of people who cognitively and emotionally favor tradition & stability over change, then they will become the home of the displaced and resentful, while Liberal parties become Progressive parties in a literal sense -- people who embrace and participate in change, plus those who benefit from change (e.g. African Americans as a group suffer a lot from the loss of manufacturing jobs but they support the Progressive agenda because it supports their emergence from an underclass status legally and culturally, and raises social welfare benefits that they now require). 

Obviously as a beneficiary of the rate of change, I personally don't support Luddite policies, nor do I think they can survive social competition -- our species was probably happiest as hunter gatherers with low population density, but agrarian culture supplanted it despite more effort, shorter life expectancy, ceding power to chiefs/petty kings and professional soldiers to extract tribute/taxes.  But we need a clearer view of how to accommodate those left behind by our new economic system. 

[White Walker Texas Ranger]

4 hours ago, Altherion said:

I mostly agree with your view of the main problem, but I would put it more strongly: the article is laughable neoliberal propaganda. I have two points to add to what you said.

First, as somebody (I think a comedian) pointed out several years ago, a safety net is something to catch a person when they fall. It is not something where one would live long-term. To make the safety net good enough to replace a median income would require a dramatic redistribution of wealth.

Second (and this is where my view of the article as laughable comes from), who exactly is going to pay for the "new opportunities"? It's clear that whoever wrote the article has not applied for a job recently. I've gone through the process in one of the few fields where, for the moment at least, employment is growing and the pay is reasonably good and I can tell you that everybody explicitly asks for multiple years of experience in the field. I don't blame them for doing this: the competition for these jobs is fierce so if they have their pick between multiple people with 5+ years of experience, why wouldn't they require it? If you don't have any experience in the field, you're competing with recent college graduates and, in some fields, with workers imported from third world countries ("openness"!). For reasons which I hope are obvious, either of these is significantly preferable over an older American worker with no experience in the field.

Of course, this is not to say that it is impossible to completely switch fields -- many people do it including the brilliant, the well-connected, the lucky and the determined. However, it doesn't scale: if an industry loses 70% of its jobs, it's very unlikely that even half of the workers will find positions that are as good as their old ones.

EDIT: Reading through the comments, I found one (presumably by a European) who edited the cover image to illustrate another issue with openness. I thought it was pretty well done.

How do you define "neoliberalism" and what actual alternatives do you propose? Or are you just one of those people who likes throwing around bombs and hoping everything somehow gets better?

[Altherion]

22 minutes ago, White Walker Texas Ranger said:

How do you define "neoliberalism" and what actual alternatives do you propose? Or are you just one of those people who likes throwing around bombs and hoping everything somehow gets better?

I wrote down what I mean by neoliberalism in the first post of this thread (you can also look at Wikipedia). If I or anyone else had an alternative that was reasonably sure to be better, it would already be out there and there would be politicians arguing for it. Nobody is throwing anything around -- I'm merely stating the problem, the consequences and why the solutions proposed so far are inadequate.

[White Walker Texas Ranger]

16 minutes ago, Altherion said:

I wrote down what I mean by neoliberalism in the first post of this thread (you can also look at Wikipedia). If I or anyone else had an alternative that was reasonably sure to be better, it would already be out there and there would be politicians arguing for it. Nobody is throwing anything around -- I'm merely stating the problem, the consequences and why the solutions proposed so far are inadequate.

Neoliberalism as a whole is just a buzzword for what people dislike about capitalism. It's still important to know what it means to you in particular. In your case,anti-neo-liberalism to be mixed in with some nativism and anti-immigrant/anti-muslim sentiment which isn't the case when a lot of more left-leaning people talk about it (not including Jeremy Corbyn, obviously)

As it stands, to paraphrase Churchill, Capitalism is the worst economic system, with the exception of all the others.

[Jo498]

Someone like Solo could probably name alternatives by the dozen (anarcho-syndikalism and what have you). A viable alternative is what was basically practiced between 1950 and 1990: Some protectionism and restrictions to free trade, fairly high taxes for the top 10% as well as corporations, far stricter rules for banking, brokering etc., quasi-gold-standard (Bretton-Woods-System) and a few more things. Of course there are real pressures that led to the changes of the last 30 years.

But it was no force of nature, those rules were deliberately changed and by now it is fairly clear that 2/3 or more of the populace of most Western countries are doing considerably worse (not always mainly in reduced incomes but in loss of any job security), especially the bottom third or so. While a few at the top have been hitting jackpot frequently and when they messed up they got bailed out by the government (that before was supposed to be shrunk that it could be drowned in a bathtub, but suddely very welcome with helping failing banks out).

[Iskaral Pust]

1950-99 owes it's economic success to massive fiscal stimulus (post-WW2 reconstruction and the heyday of Keynesian fiscal policy), govt protectionism that proved inevitably unsustainable, a huge demographic tailwind from the baby boom and women entering the workforce, a huge expansion in total debt, massive productivity growth, and economic isolation from the third world.  That cannot be repeated.  We certainly could do some infrastructure expansion but the expansion multiplier available is quite low.  Everyone, the left and the right, likes to point to this singular era as evidence that their pet policy was a success, but it was mainly a fortunate confluence of unsustainable tailwinds.  

[White Walker Texas Ranger]

2 hours ago, Jo498 said:

Someone like Solo could probably name alternatives by the dozen (anarcho-syndikalism and what have you). A viable alternative is what was basically practiced between 1950 and 1990: Some protectionism and restrictions to free trade, fairly high taxes for the top 10% as well as corporations, far stricter rules for banking, brokering etc., quasi-gold-standard (Bretton-Woods-System) and a few more things. Of course there are real pressures that led to the changes of the last 30 years.

But it was no force of nature, those rules were deliberately changed and by now it is fairly clear that 2/3 or more of the populace of most Western countries are doing considerably worse (not always mainly in reduced incomes but in loss of any job security), especially the bottom third or so. While a few at the top have been hitting jackpot frequently and when they messed up they got bailed out by the government (that before was supposed to be shrunk that it could be drowned in a bathtub, but suddely very welcome with helping failing banks out).

And none of them would work.

The 1950s had the benefit of the post WWII baby boom, the massive industrial stimulus during the war, and the fact all of the US's rivals had their industry bombed into dust. The post WWII boomed petered out on its own.

[Altherion]

1 hour ago, Iskaral Pust said:

1950-99 owes it's economic success to massive fiscal stimulus (post-WW2 reconstruction and the heyday of Keynesian fiscal policy), govt protectionism that proved inevitably unsustainable, a huge demographic tailwind from the baby boom and women entering the workforce, a huge expansion in total debt, massive productivity growth, and economic isolation from the third world.  That cannot be repeated.  We certainly could do some infrastructure expansion but the expansion multiplier available is quite low.  Everyone, the left and the right, likes to point to this singular era as evidence that their pet policy was a success, but it was mainly a fortunate confluence of unsustainable tailwinds.  

But is this not, ipso facto, a problem with the system as a whole? From the point of view of physical availability of resources, the fact that we no longer need to rebuild due to a war and the infrastructure that we do still need to build does not require as much labor as it used to for its creation are good things. In fact, much of technological progress has consisted of reducing the amount of human labor necessary to perform a certain task and it shows no sign of stopping. The situation that this progress naturally leads to is one where production is mainly done by machines with only a few human beings (or maybe none at all) necessary for setting goals and performing maintenance. This is the stuff science fiction utopias are made of, but in our current system, it would be an unmitigated disaster.

[snake]

I've been reading some essays on Project Syndicate and it would appear that some are finally starting notice the growing discontent throughout the world.

Stephen Roach. The Globalization Discontent

 

Yanis Varoufakis  Building a Progressive International.

 

J. Bradford DeLong  A Brief History of (In)Equality

[Iskaral Pust]

1 hour ago, Altherion said:

But is this not, ipso facto, a problem with the system as a whole? From the point of view of physical availability of resources, the fact that we no longer need to rebuild due to a war and the infrastructure that we do still need to build does not require as much labor as it used to for its creation are good things. In fact, much of technological progress has consisted of reducing the amount of human labor necessary to perform a certain task and it shows no sign of stopping. The situation that this progress naturally leads to is one where production is mainly done by machines with only a few human beings (or maybe none at all) necessary for setting goals and performing maintenance. This is the stuff science fiction utopias are made of, but in our current system, it would be an unmitigated disaster.

I agree with that.  We are a wealthy society with enormous material resource and comfort.  What we don't have is as much potential for further growth from this point.  Much of the current economic complaint in the world is about the absence of growth: the US middle class has stagnated (not declined, only stagnated) in real terms even as US minorities, the third world and the global 1% have grown -- and only the growth for the 1% is a bad thing from a distant, objective POV, and even then it is somewhat necessary to have incentivized the incredible growth that lifted all of us to these levels of material resource and comfort.  

The "new normal", liquidity trap, zero bound, deflationary spiral, etc are all symptoms of a low growth world.  Austerity politics reappeared because we will no longer outgrow our debt.  Mature companies overpay for acquisitions in an attempt to find some new source of growth (and prolong the career and prestige of the CEO) rather than just stick to what they are good at, generate profits for the shareholders and accept the inevitable wind-down.

We are economically and emotionally struggling to accept a low growth world.  In the absence of growth, we fight more over relative share of the pie, even though most of the angriest people already have substantial material resource and comfort. Our population is aging and hitting a plateau, and many new technologies deliver intangible benefits and/or cost reduction -- so we need to learn how to be satisfied in a world of low growth and/or global equalization.  

Most SF Utopias have switched to some sort of collectivism where everyone has anything they want.  But realistically we are not yet at a point where we can disincentivize labor.  And none of the SF Utopias were clear on what would happen to the lowest skilled and least contributing members of a society with unlimited resources and capabilities.  At some point, power, prestige and influence will be concentrated in the hands of those who lead the actual economic and resource engine, and the rest will be an irrelevant underclass.  Isn't that what Trump supporters are already protesting?  The problem isn't how to provide materially for those left behind -- we already do that -- it's how to not leave them behind at all. 

[Clueless Northman]

1950-1980 massive growth looks good in hindisght, but it was also necessary due to the population growth caused by the baby boom. With basically zero demographic growth in European societies, such a huge growth that can't be easily replicated or justified by a massive post-war rebuilding program isn't necessary. The whole thing could work on with a far less impressive growth, as long as population growth is actually null.

Of course, a healthy dose of protectionsim and higher regulation levels should also be brought back on a global scale.

Now, notice how the EU leadership acts in direct opposition to these goals - when they're actually the less bad options for Europe, and when the current aims and actions of said EU leadership is and has been for 2 decades directly harmful towards their population.

[Altherion]

3 hours ago, Iskaral Pust said:

We are economically and emotionally struggling to accept a low growth world.  In the absence of growth, we fight more over relative share of the pie, even though most of the angriest people already have substantial material resource and comfort. Our population is aging and hitting a plateau, and many new technologies deliver intangible benefits and/or cost reduction -- so we need to learn how to be satisfied in a world of low growth and/or global equalization.  

Most SF Utopias have switched to some sort of collectivism where everyone has anything they want.  But realistically we are not yet at a point where we can disincentivize labor.  And none of the SF Utopias were clear on what would happen to the lowest skilled and least contributing members of a society with unlimited resources and capabilities.  At some point, power, prestige and influence will be concentrated in the hands of those who lead the actual economic and resource engine, and the rest will be an irrelevant underclass.  Isn't that what Trump supporters are already protesting?  The problem isn't how to provide materially for those left behind -- we already do that -- it's how to not leave them behind at all.

I think there's a pretty good chance that the point where we can disincetivize labor is beyond the point where all of the people angry at the system destroy it in one way or another. As to not leaving people behind, there are several ways -- but all of them would require the elites to share the wealth.

For example, we could reduce the number of hours worked by everyone without affecting the net pay (i.e. salaried workers keep their existing salary, hourly workers get a proportional increase) and hire more workers to compensate. This would benefit both the people being left behind (who can now be useful) and those who currently have jobs (who now work less for the same pay). Of course, the elites would never agree to anything of the sort unless they were seriously frightened as it not only costs more, but introduces inefficiencies.

[karaddin]

6 hours ago, Iskaral Pust said:

The "new normal", liquidity trap, zero bound, deflationary spiral, etc are all symptoms of a low growth world.  Austerity politics reappeared because we will no longer outgrow our debt.  Mature companies overpay for acquisitions in an attempt to find some new source of growth (and prolong the career and prestige of the CEO) rather than just stick to what they are good at, generate profits for the shareholders and accept the inevitable wind-down.

The stock market has just become utterly broken at this point, with so many of the biggest companies structured around quarterly reporting to boost stock prices and very little consideration given for the long term of the company. Why on earth should a CEO care what happens in 20 years time, their bonus depends on 2 months away and they will be 10-15 years gone (if not more) by that point. There is no incentive for them to care. Its also coincided with the complete erosion of executive responsibility. The entire justification for their obscene wages is a) the value they supposedly add and b.) the weight of the massive responsibility they are taking on...but executives almost never actually take responsibility. And when they do, it involves a huge golden parachute and they'll be straight into another cushy job elsewhere as the whole thing is a rotating door of mates helping each other out.

I have no idea what the solution to these combined problems are, and I'm not sure the stock market can even be redeemed as a model at this point with the transition to software driven hyper speed trading.

2 hours ago, Altherion said:

For example, we could reduce the number of hours worked by everyone without affecting the net pay (i.e. salaried workers keep their existing salary, hourly workers get a proportional increase) and hire more workers to compensate. This would benefit both the people being left behind (who can now be useful) and those who currently have jobs (who now work less for the same pay). Of course, the elites would never agree to anything of the sort unless they were seriously frightened as it not only costs more, but introduces inefficiencies.

This really really needs to happen.  I'm not surprised it hasn't, due to the reasons you've listed, but I am surprised that there aren't a whole lot more people clamouring for it.  Instead we still have employers that push for the exact opposite, trying to underemploy and drag more hours out of their staff - and many of them get angry at the temerity of being asked to pay the staff for those hours (and that's in places where they have to, in plenty of others they simply demand it for nothing).

[Jo498]

The example of the 1950s-1980s is (at least) twofold. Of course there were several conditions that made growth easy. But the point is not simply that there was easy growth but that easy growth (growing cake) led to a fairer distribution of the cake (or at worst more crumbs for the worst off).

So some of the hard questions ((re-)distribution) did not have to be asked. In a low-growth world we are back to the hard questions but most of us are afraid to ask them. In any case, quite a few of the stabilizing factors in place in the (roughly) second half of the 20th century were dismantled for reasons that are only vaguely connected with slowing growth (more with growing greed but some "elites" and the necessity to keep up some apparent growth, i.e. blowing up the financial and related sectors out of any proportion).

I think that the rise of somewhat extremist and/or ressentiment parties or political figures should be at least an important wake-up call to show us that we cannot keep up the facade of harmony and we cannot keep everyone down with trash TV and Pokemon Go forever. That we are back to hard questions and tough struggles about real politico-economical issues. (Although at least in the West it is still fairly mild compared to e.g the 1920s.)

[White Walker Texas Ranger]

3 hours ago, Jo498 said:

The example of the 1950s-1980s is (at least) twofold. Of course there were several conditions that made growth easy. But the point is not simply that there was easy growth but that easy growth (growing cake) led to a fairer distribution of the cake (or at worst more crumbs for the worst off).

So some of the hard questions ((re-)distribution) did not have to be asked. In a low-growth world we are back to the hard questions but most of us are afraid to ask them. In any case, quite a few of the stabilizing factors in place in the (roughly) second half of the 20th century were dismantled for reasons that are only vaguely connected with slowing growth (more with growing greed but some "elites" and the necessity to keep up some apparent growth, i.e. blowing up the financial and related sectors out of any proportion).

I think that the rise of somewhat extremist and/or ressentiment parties or political figures should be at least an important wake-up call to show us that we cannot keep up the facade of harmony and we cannot keep everyone down with trash TV and Pokemon Go forever. That we are back to hard questions and tough struggles about real politico-economical issues. (Although at least in the West it is still fairly mild compared to e.g the 1920s.)

While taxes in the US were higher, that doesn't necessarily mean that distribution was much more equitable. Johnson's Great Society was enacted in the mid-60s. And economic growth started slowing down in the 70s. Not saying there's necessarily a connection, just that high economic growth of post WWII era wasnt always characterized but strong redistributive policies.