I had been advised not to write a post about President-elect Donald Trump. As in the Russia of his good friend Vladimir Putin, it is possible that under a Trump regime critics may simply spookily disappear, evanesce away. Hopefully my family's concerns are unfounded. It is always possible that black-suited CIA operatives may knock on my apartment's door to spirit me off to some antipodean Guantanamo bay in the middle of the night but I think this unlikely. And anyway, I don't intend to talk directly about Trump in today's post. Instead I want to talk about the system of capitalism more generally. I want to show that it is in the process of gradually devouring itself and what we, as global citizens, need to do to prevent this happening.
Capitalism itself is implicated in Trump's triumph. Trump's success depended on his appeal to uneducated working-class white males. The men who voted for Trump are part of the first generation since the Great Depression whose living standards and economic prospects are worse than their fathers. Unemployment, underemployment, declining real wages and job insecurity are rife among this demographic. These men, feeling emasculated, clinging to their guns and their religion (as Obama once accidentally and ill-advisedly said to Letterman in 2008), blame their problems on immigration and an 'out-of-touch' Washington elite. The vote for Trump was a big Screw You to the establishment. But these men are making a major error by blaming Democrats for their plight. They are directing their anger in the wrong direction. The cause of these men's declining living standards is not left-leaning politicians. It is Capitalism itself.
To explain what I mean I need to say a little about capitalism so please bear with me for a moment. The aim of businesses in a capitalist society is to generate as much profit as possible, to return to owners, share-holders and upper management as much money as can be reasonably generated. The aim is to sell as much of the product as possible while incurring the least possible cost – and one of the greatest costs most businesses bear is the cost of labour. Consequently businesses, when wanting to be as efficient, as streamlined, as possible, seek to do so by reducing labour costs as much as they can. In other words, companies seek to reduce the number of people they employ to the fewest they need to make and sell their goods, and pay their employees as little as they possible.
There are many ways a business can reduce the cost of labour but the two I'll single out are outsourcing and technological advancement. Outsourcing occurs when corporations relocate factories and other ground-level manufacturing jobs from countries like the US to low-wage economies such as China and India. This is one simple way to reduce labour costs. Technological advancement also reduces costs because machines obviously don't need to be paid an hourly wage like real people and so there is an advantage in replacing people with machines. In a recent article, the journalist Gwynne Dyer, who has also obviously thought seriously about this issue, has pointed out how the advent of driverless cars may soon put hundreds of thousands of lorry and taxi drivers around the world out of work. This is good for the capitalists who own these businesses but bad for those who work for them. It could happen within a decade – yet few had the imagination to anticipate it ten years ago (although Kim Stanley Robinson was one who did in fact predict the advent of driverless cars, in his 1987 Sci-Fi novel The Gold Coast). It is almost impossible to know in advance how innovation will affect economies. All we know is that it inevitably does. Technological innovation should be an unequivocally good thing but, under capitalism, its most immediate effect is simply to cause apparently secure jobs to evaporate.
I have personal experience of this. From 2005 until 2013 I worked part-time for the TAB, the principal semi-governmentally-owned organization through which New Zealanders (and foreigners) could gamble on horse races and other sports events. I worked in a call centre; punters would call us in order to have a flutter on the horses or the rugby without needing to leave home. When I first started working there in 2005 the call centre had over a hundred and fifty operators but, over the years, the number of operators was gradually whittled away to less than fifty. The TAB management was quite candid that paying us operators was the major cost they bore and were jut as candid in letting us know that they were actively seeking to encourage patrons to switch to touch-tone or internet betting, neither of which required a human interface. This policy despite the fact that the TAB was enjoying record profits. At last, in 2013, having successfully diverted almost all transactions into touch-tone or internet betting, the TAB closed the call center I worked in completely and put all those who were left out of work. I'm sure some of my readers may have similar stories.
Technological innovation does not just increase unemployment. The law of supply and demand applies as much to labour as to other commodities and, if supply outstrips demand, if more and more people are competing for fewer and fewer jobs, it pushes wages down. Paradoxically, because there is less work to go around, labour itself decreases in value. Unions lose their teeth and workers lose their bargaining power. Ever increasing efficiency shifts wealth and power gradually and irreversibly from workers to those who own the businesses or are in a position of choosing their own income - upper management. Thus capitalism, combined with technology-enabled improvements in efficiency, naturally leads to an ever widening gap between the rich and poor, between those who own the capital and those who actually carry out the work.
The role of government should be to counterbalance the tendency of capitalism to concentrate wealth and power in the hands of a minority, its proclivity to increase inequality, to favor the few over the many. In the mid-twentieth century it was believed that technological advancement would lead to an 'age of leisure' for everyone in which no-one would need to work (think The Jetsons). But those who naively imagined this future failed to put two and two together, that capitalism itself precludes a true age of leisure for everyone. Even supposing that technological innovation leads to cheaper commodities (rather than putting more money in the pockets of share-holders), a person still needs money to buy these goods and some kind of reasonably paying job to provide him or her with that wherewithal to do that. To consume goods and services a person needs cash and he or she can only have cash if he or she has a job.Yet technological innovation destroys jobs. I am not arguing that technological innovation is bad in itself (I am not a Luddite) but, under capitalism, the downside of technological innovation sometimes seems to outweigh the benefits. There are a few things governments can do. The bare requisite governments around the world need to provide is a minimum wage that at least keeps pace with inflation and an unemployment benefit on which people can survive without indignity - not only is this the most humane policy but it reduces competition for work so diminishing downward pressure on wages and, ideally, at least a little compensating for capitalism's natural propensity to make the poor poorer and the rich richer.
I would go further. I think nations around the world should establish a Universal Basic Income. I think every citizen of a country should receive a weekly or fortnightly payment from the government, an income on which they can survive, regardless of whether they are working or not. We need this because full employment will never occur again. If we gave everyone a Universal Living Allowance, we could get rid of the minimum wage – anything a person earned would be on top of what the State already gives them. This would greatly diminish the cost associated with current systems and the bloated bureaucracy associated with them. How would we pay for such a radical scheme? First, simply by closing loopholes that allow wealthy individuals and companies to avoid paying tax. Second, by increasing tax on the most affluent individuals and companies. The only way to save capitalism is to temper it with socialism.
The alternative to such a solution, if we blindly ignore the tendency of capitalism to shift wealth from the many to the few, is self-destruction. Those who supported Trump have failed to recognize the true reason for their discontent, capitalism itself. It feels like we are living in the 'thirties just prior to the Second World War. This last American election is a sign of the End Times: if things continue this way it will only end in civil war, possibly world war. This mis-recognition, this failure to recognize the true villain, is not just an American problem, it is global, as shown by Brexit and by the rise of the Far Right in European countries. But a turn to the Far Right is not the solution, it could only make things worse. The answer to the problems facing the world is not nationalism, not xenophobia and prejudice, not fascism. The answer is Socialism.
No comments:
Post a Comment