Inequality much worse than most think

[Woodsman]

Re: Inequality much worse than most think

I’m going to change “get” to “got”…..

“I don't understand how we ever got to a place where reasonable wages are acceptable.”

I suspect we all do on some levels, but I agree with you, it is now hard to understand at a gut level how labor got anywhere, or can get anywhere again, given the last 20 years of complacency.

Despite witnessing the assassinations of the 60’s and the climax of the civil rights movement, for those of us born in the 50’s after World War 2, it is hard to imagine the USA was in almost constant labor turmoil from 1930 onward.

The more I reread about the labor movement, the more I am astonished that it happened on familiar turf.

The 1930s: Turning Point for U.S. Labor by Sharon Smith

THE 1920s was a decade of rapid expansion for American capitalism, and ruling class confidence soared. Leading economists proclaimed that the era of booms and slumps was in the past, and the U.S. economy could look forward to "permanent prosperity." The banking magnate Melvin A. Traylor declared confidently, "We need not fear a recurrence of the conditions that will plunge the nation into the depths of the more violent financial panics such as have occurred in the past."

But they spoke too soon. Before the decade was over, the U.S. economy had plunged into the worst depression in U.S. history. The 1929 stock market crash which marked the beginning of the Great Depression ushered in a period of immiseration for virtually the entire working class. By 1932 it was estimated that 75 percent of the population was living in poverty, and fully one-third was unemployed. And in many places, Black unemployment rates were two, three, or even four times those of white workers.

But the richest people in society felt no sympathy for the starving masses. They had spent the previous decade slashing wages and breaking unions, with widespread success. By 1929, the American Federation of Labor (AFL) had lost a million members.

With the onset of depression, they banded together as a group to oppose every measure to grant government assistance to feed the hungry or help the homeless. Most employers flatly refused to bargain with any union, and used the economic crisis as an excuse to slash all wages across the board. But in so doing, they unleashed the greatest period of social upheaval that has ever taken place in the United States.

When faced with working-class opposition, the ruling class responded with violence. Police repeatedly fired upon hunger marchers in the early 1930s. In 1932, for example, the Detroit police mowed down a hunger demonstration of several thousand, using machine guns. Four demonstrators were killed and more than 60 were injured. Yet afterward a city prosecutor said, "I say I wish they’d killed a few more of those damn rioters."

In 1933, President Franklin Delano Roosevelt granted workers the right to organize into unions in Section 7(a) of the National Recovery Act, and workers rushed to join unions. But everywhere the employers put up violent resistance. In 1934, when 400,000 East Coast textile workers went on strike to win union recognition, the bosses responded with a reign of terror, provoking one of the bitterest and bloodiest strikes in U.S. labor history.

In the South, the ruling class unleashed a torrent of racism and anti-communism, while armed mobs attacked strikers. The Gastonia Daily Gazette ran "Communism in the South. Kill it!" as a front-page headline. Employers distributed anti-union leaflets that read, "Would you belong to a union which opposes White supremacy?"

In Gastonia, North Carolina, National Guardsmen joined by armed strikebreakers, were ordered to "shoot to kill" unarmed strikers:
Without warning came the first shots, followed by many others, and for a few minutes there was bedlam. Striker after striker fell to the ground, with the cries of wounded men sounding over the field and men and women running shrieking from the scene.

In Burlington, North Carolina, soldiers bayoneted five picketers in a group of 400, all of whom were wearing "peaceful picket" badges. In the North, the battle was no less violent, when National Guard troops occupied mill towns all over New England. Rhode Island’s Democratic governor declared that "there is a communist uprising and not a textile strike in Rhode Island," and called the legislature into special session to declare a state of insurrection and request federal troops.

Although the strikers fought back heroically, they lost the strike. Thousands of strikers lost their jobs; others were forced to sign pledges to leave the union.
1934: The tide begins to turn

But these early defeats were not decisive. If anything, they strengthened workers’ resolve to fight back, as the center of struggle shifted away from hunger and unemployed marches toward strikes for union recognition in industry after industry. In 1933, there were 1,695 work stoppages, twice the number of the year before, involving 1,117,000 workers, nearly four times more than the previous year. In 1934, the figures rose still higher: 1,856 strikes involving 1,470,000 workers.

And as the Depression decade continued, workers began to win their strikes. During 1934, three strikes, in San Francisco, Toledo and Minneapolis–all fought out almost simultaneously–turned the tide in favor of workers. Each strike showed in practice that with solidarity workers can win, no matter how well-armed and well-funded the bosses’ side is. Socialists played a key role in all three strikes…..

http://www.isreview.org/issues/25/The_1930s.shtml

You read my friggin' mind, T-notes. I was sitting there, typing away about strengthening laws on collective bargaining and prevailing wages like the Wagner and Davis-Bacon Acts and repealing anti-labor laws starting with the Taft–Hartley Act and other right to starve legislation and then decided against it. I didn't because I did not want to get into a pissing match so late in the evening. But I'm all rested now.

DC's approach makes sense and labor unions seem to me one sort of organization we need to grow and strengthen direct relationships. One thing that does come to mind is the vulnerability of the leadership. The "owners" of the country will attempt to co-opt, neutralize and if necessary kill anyone who rises to some effective level of prominence and leadership. And please, someone dispute this last assertion so I can show you historical examples of systematic violence employed against labor leaders; I would enjoy that exercise in teaching.

Given the reality of what faces successful leaders in labor, does anyone have such reserves of courage?

[Thailandnotes]

Re: Inequality much worse than most think

I don't understand how we ever get to a place where reasonable wages are acceptable.

I’m going to change “get” to “got”…..

“I don't understand how we ever got to a place where reasonable wages are acceptable.”

I suspect we all do on some levels, but I agree with you, it is now hard to understand at a gut level how labor got anywhere, or can get anywhere again, given the last 20 years of complacency.

Despite witnessing the assassinations of the 60’s and the climax of the civil rights movement, for those of us born in the 50’s after World War 2, it is hard to imagine the USA was in almost constant labor turmoil from 1930 onward.

The more I reread about the labor movement, the more I am astonished that it happened on familiar turf.

The 1930s: Turning Point for U.S. Labor by Sharon Smith

THE 1920s was a decade of rapid expansion for American capitalism, and ruling class confidence soared. Leading economists proclaimed that the era of booms and slumps was in the past, and the U.S. economy could look forward to "permanent prosperity." The banking magnate Melvin A. Traylor declared confidently, "We need not fear a recurrence of the conditions that will plunge the nation into the depths of the more violent financial panics such as have occurred in the past."

But they spoke too soon. Before the decade was over, the U.S. economy had plunged into the worst depression in U.S. history. The 1929 stock market crash which marked the beginning of the Great Depression ushered in a period of immiseration for virtually the entire working class. By 1932 it was estimated that 75 percent of the population was living in poverty, and fully one-third was unemployed. And in many places, Black unemployment rates were two, three, or even four times those of white workers.

But the richest people in society felt no sympathy for the starving masses. They had spent the previous decade slashing wages and breaking unions, with widespread success. By 1929, the American Federation of Labor (AFL) had lost a million members.

With the onset of depression, they banded together as a group to oppose every measure to grant government assistance to feed the hungry or help the homeless. Most employers flatly refused to bargain with any union, and used the economic crisis as an excuse to slash all wages across the board. But in so doing, they unleashed the greatest period of social upheaval that has ever taken place in the United States.

When faced with working-class opposition, the ruling class responded with violence. Police repeatedly fired upon hunger marchers in the early 1930s. In 1932, for example, the Detroit police mowed down a hunger demonstration of several thousand, using machine guns. Four demonstrators were killed and more than 60 were injured. Yet afterward a city prosecutor said, "I say I wish they’d killed a few more of those damn rioters."

In 1933, President Franklin Delano Roosevelt granted workers the right to organize into unions in Section 7(a) of the National Recovery Act, and workers rushed to join unions. But everywhere the employers put up violent resistance. In 1934, when 400,000 East Coast textile workers went on strike to win union recognition, the bosses responded with a reign of terror, provoking one of the bitterest and bloodiest strikes in U.S. labor history.

In the South, the ruling class unleashed a torrent of racism and anti-communism, while armed mobs attacked strikers. The Gastonia Daily Gazette ran "Communism in the South. Kill it!" as a front-page headline. Employers distributed anti-union leaflets that read, "Would you belong to a union which opposes White supremacy?"

In Gastonia, North Carolina, National Guardsmen joined by armed strikebreakers, were ordered to "shoot to kill" unarmed strikers:
Without warning came the first shots, followed by many others, and for a few minutes there was bedlam. Striker after striker fell to the ground, with the cries of wounded men sounding over the field and men and women running shrieking from the scene.

In Burlington, North Carolina, soldiers bayoneted five picketers in a group of 400, all of whom were wearing "peaceful picket" badges. In the North, the battle was no less violent, when National Guard troops occupied mill towns all over New England. Rhode Island’s Democratic governor declared that "there is a communist uprising and not a textile strike in Rhode Island," and called the legislature into special session to declare a state of insurrection and request federal troops.

Although the strikers fought back heroically, they lost the strike. Thousands of strikers lost their jobs; others were forced to sign pledges to leave the union.
1934: The tide begins to turn

But these early defeats were not decisive. If anything, they strengthened workers’ resolve to fight back, as the center of struggle shifted away from hunger and unemployed marches toward strikes for union recognition in industry after industry. In 1933, there were 1,695 work stoppages, twice the number of the year before, involving 1,117,000 workers, nearly four times more than the previous year. In 1934, the figures rose still higher: 1,856 strikes involving 1,470,000 workers.

And as the Depression decade continued, workers began to win their strikes. During 1934, three strikes, in San Francisco, Toledo and Minneapolis–all fought out almost simultaneously–turned the tide in favor of workers. Each strike showed in practice that with solidarity workers can win, no matter how well-armed and well-funded the bosses’ side is. Socialists played a key role in all three strikes…..

http://www.isreview.org/issues/25/The_1930s.shtml

[dcarrigg]

Re: Inequality much worse than most think

What are the first few steps? I find this idea conservative at it's core but I can't imagine this idea of labor being rewarded having any political legs in the US...none. The 'free market', get government out of my way side of the aisle will never hear of it. I don't understand how we ever get to a place where reasonable wages are acceptable. As a country we hate people who work for a living. Labor doesn't matter in the US. It just reminds us of when we were not on top. It is a thing to watch and keep in check. A thing to send to China where a 'campus' is a prison for workers. Enjoy your Nike shoes and Apple laptop. This is what we expect. Workers are less than human to most people in the US. If you reward it you encourage the idea that fairness can be expected. That won't happen here, at least not any time soon.

20 year plan. It's a US-Centric view. But as the hegemon goes, so goes the world.

Step 1: Reframe debate about property being people underlying legal issues. Larry Lessig is already working on this. Public opinion is on the right side of this, but money is not. People still care about justice. If this fails, the plan is lost. It needs to be set up and positioned to enter the public debate prominently and immediately during the next recession. Change only occurs in crisis.

Step 2: All the while work on rebuilding social capital and civil society. This is going to be a damn hard nut to crack. And the 21st century Norman Rockwell's going to paint a very different picture. But we've got to get organizations growing to strengthen direct relationships, especially across classes. It might be churches or clubs or whatever. It doesn't really matter. The point is to get people interacting with each other as equal citizens and recognizing each other as human beings with worth. This can't happen in consumer interactions, and I very much doubt it can really happen over the internet. Somehow we've got to make organizations cool again. I'm open to any suggestions here. I tend to think it best to start with youth.

Step 3: Develop alternative models to financialization with depth and clarity. Economic growth without increasing rents will require a deep retooling. But we will have to find another model anyways. The truth is that things will barrel headlong towards an ever increasing inequality and debt (the two are not unrelated) given the paralysis of Western policymakers. We will see GINI .55 by 2025 in the US. Financialization is doing the lion's share of the work towards ensuring that outcome. It does not take a sage to see that. This is part of the work being done here and in many other places. These models don't have a chance in hell of being implemented unless step 1 works. This has to wait for the second recession out (2030?) or for a national security shock spiking commodities sky high.

Step 4: Shift the risk burden back on those entities and people who can bear it best. Use no public money nor tax expenditures for increasing individual risk in the name of social insurance. Increase the public comfort and legal normalcy of allocatable, non-transferable property (property assigned to a person that can't be traded away or borrowed against). Keep high-risk, leveraged moves up in the stratosphere where they belong (and even then, limit them).

It's a long slog. It will be a fight every step of the way. And it's no quick fix. Quick fixes and get rich quick schemes need to be downplayed anyways. The next awakening must remember that greed and gambling were once considered vices, and should be thought of as such again.

But we cannot find the dignity in work before we find the dignity in each other. And we cannot find the dignity in each other so long as we spend most of our time interacting with each other as consumers and employers and service providers rather than as free and equal citizens. And even if we do find dignity in people again, it will all be for not if corporations are people, my friend.

The path's there. It's all just a matter of lots of people doing a little bit to work towards it every day for an extended period of time. The only reason why such a plan is even plausible is that most everybody today is short-term focused. Just simple, sustained daily actions towards a common end over a decade or two can shift the sands beneath the feet everyone laser focused on this week's news and this quarter's profits. And I figure thinking and moving slow is sort of built into the ethos of this place. May as well try to direct part of the process. After all, we're all in it whether we like it or not. The future comes.

[santafe2]

Re: Inequality much worse than most think

If I could sum up the goal of the model it would be to maintain a market system that rewards labor...

What are the first few steps? I find this idea conservative at it's core but I can't imagine this idea of labor being rewarded having any political legs in the US...none. The 'free market', get government out of my way side of the aisle will never hear of it. I don't understand how we ever get to a place where reasonable wages are acceptable. As a country we hate people who work for a living. Labor doesn't matter in the US. It just reminds us of when we were not on top. It is a thing to watch and keep in check. A thing to send to China where a 'campus' is a prison for workers. Enjoy your Nike shoes and Apple laptop. This is what we expect. Workers are less than human to most people in the US. If you reward it you encourage the idea that fairness can be expected. That won't happen here, at least not any time soon.

[steph_m_chick]

Re: Inequality much worse than most think

I don't think that is quite the point of view presented by the FIRE sector model implicitly. It really goes beyond the , if I may, rather worn out polemics on both the left and right. You are begging the question that government and economics can even be separated. I have wondered even how government can even provision themselves without being an agent of the economy, for if they collect too many blueberries too consistently, then houses will be purchased with 20% down in blueberries.

If I could sum up the goal of the model it would be to maintain a market system that rewards labor and industrial with purchasing power and not privilege or rent with purchasing power. The easiest way to do that is to primarily tax natural assets as the source of revenue, and to not interfere in the credit markets.

I don't think we necessarily disagree. If the Founders had separated the economy from the power of the state, we would in essence have Laissez faire Capitalism, for which neither the Right nor the Left advocate, for the obvious reason that it strips them of much of their power. My question was more to inquire if there was any other arrangement that would effectively prevent the development of the FIRE economy, or was that the fundamental flaw EJ was suggesting.

[Woodsman]

Re: Inequality much worse than most think

Also relevant to this topic - Blame Rich, Overeducated Elites as Our Society Frays

Love this photo.


Jack Whinery and family, homesteaders photographed in Pie Town, New Mexico, October 1940. Photo courtesy the Library of Congress

If we are to have a calamity as great as the American Civil War how will the FIREmen divide us this time?

[gwynedd1]

Re: Inequality much worse than most think

So the fatal flaw is the failure of the Founders to effectively separate the economy from the government? Would it be safe to say that much like the wall of separation of church and state, a wall of separation between the economy and state would have prevented the rentier class from effectively influencing politicians and vise versa (crony capitalism)?

I don't think that is quite the point of view presented by the FIRE sector model implicitly. It really goes beyond the , if I may, rather worn out polemics on both the left and right. You are begging the question that government and economics can even be separated. I have wondered even how government can even provision themselves without being an agent of the economy, for if they collect too many blueberries too consistently, then houses will be purchased with 20% down in blueberries.

If I could sum up the goal of the model it would be to maintain a market system that rewards labor and industrial with purchasing power and not privilege or rent with purchasing power. The easiest way to do that is to primarily tax natural assets as the source of revenue, and to not interfere in the credit markets.

[steph_m_chick]

Re: Inequality much worse than most think

Hopefully this is self-explanatory. It's from my next article in the section that updates the status of the FIRE Economy.

So the fatal flaw is the failure of the Founders to effectively separate the economy from the government? Would it be safe to say that much like the wall of separation of church and state, a wall of separation between the economy and state would have prevented the rentier class from effectively influencing politicians and vise versa (crony capitalism)?

[jiimbergin]

Re: Inequality much worse than most think

thanks EJ!! It is very self explanatory Too bad it ever had to happen

[EJ]

Re: Inequality much worse than most think

Can you elaborate briefly on what that flaw in design was?

Hopefully this is self-explanatory. It's from my next article in the section that updates the status of the FIRE Economy.

[wayiwalk]

Re: Inequality much worse than most think

Fascinating thread when looked at from the perspective of how hard it is to have a constructive discussion when powerful, hard felt emotions underlay the facts from each individuals' viewpoints.

It speaks volumes to me in terms of how far the pendulum needs to be pushed to right the wrongs of the FIRE economy, and how effectively left and right have been split.

[jiimbergin]

Re: Inequality much worse than most think

http://www.youtube.com/watch?v=jIfu2A0ezq0

I don't know how to post the video other than the link, but dcarrig, you must be a lot younger than me. Tennessee Ernie Ford was the one who made this song famous in 1955! It has always been one of my favorites!

[Lasher]

Re: Inequality much worse than most think

Feels a long way away from the four freedoms. First we have to make sure we know what freedoms are.

America's original sin was making people into property.

Seems to me we're way back at confusing people with property again.

First we made people into property.

Now we've made property into people.

In the universe where property is people, things operate differently.

Freedom of speech has become Citizen's United. Freedom of religion has become Hobby Lobby. Freedom from fear is criminal immunity for banks. And Freedom from want is TARP and the Discount Window.

When you confuse people with property, you confuse freedom with slavery by necessity.

Maybe it's all just a question of whether we will have another abolition movement.

This was a great post - I'd never thought of it like this before. Thanks!

[dcarrigg]

Re: Inequality much worse than most think

It has everything to do with opportunity and capital. There is a reason why the most dynamic sector of our economy is tech, because it cost pennies to start a website and college kids can do it. The problem is not everyone is an expert programmer to do it. Plus I am not the type of person to start a shame "website" or "app" idea like tumblr.

But good for them, they played the game well and convinced people that the website will make money from ads.

Everyone else is in debt just to keep up their standard of living. They don't have the opportunity/time to create the next decent or good product because they have to worry about making rent next month.

It ain't a new idea...

[gwynedd1]

Re: Inequality much worse than most think

Can you elaborate briefly on what that flaw in design was?

I believe that he has. I still recall one sentence of his. I paraphrase but it was something like "An economy too dependent on cash flows from assets".

Rather than ask further, just keep thinking about what may be inferred from this first. Then ask what is an asset under marginal theory?