Peter Frase

I've argued on various occasions that in the quest for full employment, we ought to be [less obsessed with maximizing job creation](http://www.peterfrase.com/2011/07/against-jobs-for-full-employment/) and more concerned with [making it easier and better to not be employed](http://www.peterfrase.com/2011/08/on-the-productivity-of-unemployment/).

The most persuasive argument against this view is that unemployment is really bad for people, and they don't like it, and therefore it's very important to minimize its incidence. [This analysis](http://www.voxeu.org/index.php?q=node/7943) at VoxEU by three European economists initially seems like it's going to validate that perspective. They write that while "people adapt surprisingly well to changes in their lives", the unhappiness produced by unemployment is an exception: "the life satisfaction of the unemployed does not restore itself even after having been unemployed for a long time."

However, the authors go on to ask *why* the unemployed are so persistently unhappy, and in doing so they clarify an ambiguity that always arises when the effects of unemployment are discussed. Is unemployment bad for people because the experience of working is good for them, or because unemployment carries a powerful social stigma? (Leaving aside, of course, the most obvious reason for the unpleasantness of being jobless---being broke.)

The answer to this question has important political implications. If work is inherently life-improving, then job-creation schemes---even of the useless [hole-digging](http://www.peterfrase.com/2011/07/stop-digging-the-case-against-jobs/) variety---are more desirable than simply handing money to the unemployed, which would risk leaving people isolated, dissolute, and cut off from meaningful activity. If, however, the negative impacts of unemployment are primarily due to social stigma, then it would be more helpful to combat the ideology that equates working for wages with contributing to society.

The VoxEU column attempts to pry apart these two views about work using survey data from the German Socio-Economic Panel. The clever approach is to look at the change in self-reported life satisfaction among people who move from being unemployed to being retired. The authors observe that "[e]ntering retirement brings about a change in the social category, but does not change anything else in the lives of the long-term unemployed." Yet they find that the shift from being unemployed to being retired brings about immediate and dramatic increases in happiness, even when controlling for other factors:

> The average life satisfaction of a long-term unemployed male living in a partnership and with average personal characteristics (e.g. state of health and income) rises by approximately 0.3 points on a life satisfaction scale from 0 to 10. If he was actively looking for a job before retiring, his average life satisfaction even rises by nearly 0.7 points, and even more so if he experienced several unemployment spells in the past. Women who became unemployed for the first time shortly before retiring hardly benefit at all from retiring. However, if they had been unemployed several times during their life, their life satisfaction also rises considerably when they retire, by as far as 0.9 points if they were actively looking for work prior to retiring.

> A comparison may help appreciate this observed rise in life satisfaction. The experience of a marriage causes a mere 0.2 point increase in average life satisfaction (see Lucas et al 2003). This comparison shows __how strongly long-term unemployed people benefit from the change of their social category while retiring and the associated relief from not having to meet the social norm of being employed anymore.__ This underlines the importance of identity for individual wellbeing.

The unemployed become happier, it turns out, as soon as they stop thinking of themselves as workers. This result suggests that the harm caused by unemployment has a lot to do with the way we, as a society, regard the unemployed. We treat paying work as a sure mark of a person's worth, even though this conviction has [no coherent rationale](http://jacobinmag.com/winter-2011/hipsters-food-stamps-and-the-politics-of-resentment/).

An immediate political application of this finding is as a rebuke to those who like to call for raising the retirement age for Social Security in the United States. With unemployment still high, and older workers in particular [struggling to find jobs](http://www.epi.org/blog/pew-long-term-unemployed/), the easiest way to immediately raise the well-being of Americans would be to *lower* the retirement age.

For those of us who write about politics and the economy, there is a bigger lesson. Liberals and even leftists constantly repeat the mantra that unemployment is bad for people, and therefore job creation is an urgent necessity. I've done it myself at times. But in glibly repeating this formula, we unwittingly help to reinforce the stigma of unemployment. My anti-work themed writings, like my recent *Jacobin* essay on [the politics of getting a life](http://jacobinmag.com/spring-2012/the-politics-of-getting-a-life/), are my tiny attempt to contest this picture of the world.

I got a touching email from a reader the other day, thanking me for that essay, and for reinforcing his conviction that the rejection of work is more than just childish or lazy. But, he said, his one attempt to share the article with a normally open minded friend resulted in scorn and dismissal, leaving him "afraid to broach the subject with anyone else".

The stigmatization of the unemployed feeds that fear, and the fear reinforces the stigma. In the short term, job creation may be a necessary response to our immediate crisis. But the longer term project is to disconnect waged work from its associations with material well-being *and* with social prestige. With respect to the material side, I'll just keep quoting André Gorz: "the distribution of means of payment must correspond to the volume of wealth socially produced and not to the volume of work performed." But studying the unhappiness of the unemployed demonstrates that it's not only the means of payment that need to be redistributed, but the sources of social esteem as well. This is why post-work politics is simultaneously a demand for policies like the [Basic Income](http://www.usbig.net/index.php) and an ideological campaign against the hegemony of the work ethic.

It's far to soon to say what the elections in France and Greece mean for the future of austerity in Europe. François Hollande may turn out to be a meek Sarkozy-lite---or he may be pushed in that direction by the German government, the bond markets, and the European Central Bank. Greece, meanwhile, is still in a state of flux, although the rise of the radical-left Syriza is [encouraging](http://www.leninology.com/2012/05/syriza.html) (even as the sectarianism of the Greek Communist Party is dispiriting.) Greece may be looking at another round of elections, and the rise in support for the fascist Golden Dawn party suggests that things could get dangerous if the left isn't able to come together in coalition. In any case, I'm certainly not the one to make expert pronouncements on all this, and I'd direct you instead to my *Jacobin* comrade [Seth Ackerman](http://inthesetimes.com/uprising/entry/13165/europe_in_revolt_an_interview_with_seth_ackerman/).

I hope Hollande is right, and "austerity can no longer be the only option". Whatever else it ultimately achieves, the resurgence of the European electoral Left has provoked a defensive response from the propagandists of the austerity faction, who have raced to denounce the foolish notion that our problems can be solved in any way other than by sadistically punishing ordinary people while further enriching the financial elite. The dumbed-down mass market version of this comes, naturally, from [David Brooks](http://www.nytimes.com/2012/05/08/opinion/brooks-the-structural-revolution.html):

> The recession grew out of and exposed long-term flaws in the economy. Fixing these structural problems should be the order of the day, not papering over them with more debt.

> There are several overlapping structural problems. First, there are those surrounding globalization and technological change. Hyperefficient globalized companies need fewer workers. As a result, unemployment rises, superstar salaries surge while lower-skilled wages stagnate, the middle gets hollowed out and inequality grows.

> Then there are the structural issues surrounding the decline in human capital. The United States, once the world's educational leader, is falling back in the pack. Unemployment is high, but companies still have trouble finding skilled workers.

Singing from the same hymnal, but for the [highbrow crowd](http://marginalrevolution.com/marginalrevolution/2012/05/raghu-rajan-polarizes-with-his-essay.html), we have [Raghuram Rajan](http://faculty.chicagobooth.edu/raghuram.rajan/research/papers/FA%20May%202012.pdf):

> With the aid of technology and capital, one skilled worker can displace many unskilled workers. . . .

> Not all low-skilled jobs have disappeared. Nonroutine, low-paying service jobs that are hard to automate or outsource, such as taxi driving, hairdressing, or gardening, remain plentiful. So the U.S. work force has bifurcated into low-paying professions that require few skills and high-paying ones that call for creativity and credentials. Comfortable, routine jobs that require moderate skills and offer good benefits have disappeared, and the laid-off workers have had to either upgrade their skills or take lower-paying service jobs.

> Unfortunately, for various reasons---inadequate early schooling, dysfunctional families and communities, the high cost of university education---far too many Americans have not gotten the education or skills they need. Others have spent too much time in shrinking industries, such as auto manufacturing, instead of acquiring skills in growing sectors, such as medical technology.

There is an odd dissonance in these accounts, however, one that's more obvious in Rajan's version than in Brooks'. First, we are told that the stagnation of wages and the disappearance of jobs is an unchangeable structural fact: globalization and technology dictate that the demand for labor will be split between a handful of high-skill, "superstar" jobs and a mass of menial, poverty-wage service work. Yet we are also told that we face a deficit of "human capital", implying that adequate education is all that anyone needs to escape the trap of unemployment or low wages.

There is an odd sort of [Lake Wobegonism](http://en.wikipedia.org/wiki/Lake_Wobegon) in this prescription, in which everyone gets to be above average in the labor market. This is, perhaps, a style of argument well-suited to appeal to Americans, who [believe they can all become millionaires](http://blogs.wsj.com/wealth/2011/09/19/what-are-your-chances-of-becoming-a-millionaire/) and [never get sick](http://andrewgelman.com/2012/04/clueless-americans-think-theyll-never-get-sick/). But we are given no reason to suppose that an investment in education will change the sort of labor demanded by capitalist enterprises. Just because everyone is qualified for high-skill "superstar" positions doesn't mean that we can all inhabit those positions; someone still has to fill all those "low-paying service jobs that are hard to automate or outsource". *Ceteris paribus*, more education is just a recipe for more [PhDs on food stamps](http://www.huffingtonpost.com/2012/05/07/food-stamps-phd-recipients-2007-2010_n_1495353.html). It's also the setup for another round of zero-sum, beggar-thy-neighbor neoliberalism, in which countries, localities and social groups fight to take the good jobs for themselves while foisting the bad jobs off on somebody else.

A simple solution to this problem, of course, would be to compensate those forced into the bad jobs by transferring lots of money from the "superstars" to the low-waged. But I suspect that suggestion would provoke Brooks or Rajan to go all [Edward Conard](http://prospect.org/article/endless-arrogance-wall-street) on us.

Philosophically, the Brooks and Rajan essays are interesting for the way they awkwardly combine an old-fashioned style of conservatism (the poor will always be with us, accept your lot) with a more modern form of inclusive neoliberalism (accept deregulation, and you too can be rich!) By itself, the first style of argument is simply intolerable to modern sensibilities, but the crisis has rendered the second increasingly implausible. Together, however, the two arguments add up to nonsense.

The simplest response is that self-styled critics of "structural" economic problems are not [being structural *enough*](http://www.cepr.net/index.php/blogs/beat-the-press/david-brooks-parallel-universe). The existence of a hyper-polarized wage structure is not a fact of nature but is itself a structural problem, and one that has been facilitated by specific policy choices. What we need is not "human capital" but a shift away from [protecting rentiers](http://jacobinmag.com/winter-2012/four-futures/) and toward [strengthening the bargaining position of labor](http://www.peterfrase.com/2012/02/the-dialectic-of-technology/).

I don't usually write about education. I don't have any special expertise or knowledge about it, and anyway, fellow *Jacobin* writers [Andrew Hartman](http://jacobinmag.com/winter-2012/teach-for-america/) and [Megan Erickson](http://jacobinmag.com/uncategorized/a-nation-of-little-lebowski-urban-achievers/) are on the case. But [this story](http://thehappyscientist.com/blog/problems-floridas-science-fcat-test) (via [Slashdot](http://science.slashdot.org/story/12/04/16/2119219/florida-thinks-their-students-are-too-stupid-to-know-the-right-answers?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Slashdot%2Fslashdot+%28Slashdot%29)) touches on some of my more typical themes.

The linked post is written by Rob Krampf, a science educator in Florida who found some serious problems when he was trying to develop practice materials for fifth grade students preparing for the state's mandatory science test, the FCAT. This is one of those so-called "high stakes tests" which are the idol of the education reform movement and the bane of left-wing education critics, because they are used to dole out financial incentives or penalties to schools. But the trouble with these tests goes beyond the standard criticism of testing-focused education. In the test questions Krampf received from the state, many of the "wrong" answers turned out to be just as correct as the supposedly "right" ones. This led to an exchange with state authorities that should be read in its entirety, for the dark comedy if nothing else. Here, however, is a representative sample from the FCAT:

> This sample question offers the following observations, and asks which is scientifically testable.

> 1. The petals of red roses are softer than the petals of yellow roses.
> 2. The song of a mockingbird is prettier than the song of a cardinal.
> 3. Orange blossoms give off a sweeter smell than gardenia flowers.
> 4. Sunflowers with larger petals attract more bees than sunflowers with smaller petals.

> The document indicates that 4 is the correct answer, but answers 1 and 3 are also scientifically testable.

> For answer 1, the Sunshine State Standards list texture as a scientifically testable property in the third grade (SC.3.P.8.3), fourth grade (SC.4.P.8.1), and fifth grade (SC.5.P.8.1), so even the State Standards say it is a scientifically correct answer.

> For answer 3, smell is a matter of chemistry. Give a decent chemist the chemical makeup of the scent of two different flowers, and she will be able to tell you which smells sweeter without ever smelling them.

> While this question has three correct answers, any student that answered 1 or 3 would be graded as getting the question wrong. Why use scientifically correct "wrong" answers instead of using responses that were actually incorrect? Surely someone on the Content Advisory Committee knew enough science to spot this problem.

I'd just add that you could probably find scientists who'd call 2 a right answer as well (survey a random sample of listeners about the prettiness of birdsongs, and voila...) This would be embarrassing enough if it were merely a sloppy oversight. But when he asked for an explanation of this bad question, Krampf received the following justification:

> Christopher Harvey, the Mathematics and Science Coordinator at the Test Development Center told me:

> "we need to keep in mind what level of understanding 5th graders are expected to know according to the benchmarks. We cannot assume they would receive instruction beyond what the benchmark states. Regarding #1 - While I don't disagree with your science, the benchmarks do not address the hardness or softness of rose petals. We cannot assume that a student who receives instruction on hardness of minerals would make the connection to other materials. The Content Advisory committee felt that students would know what flowers were and would view this statement as subjective. Similarly with option 3, students are not going to know what a gas chromatograph is or how it works. How a gas chromatograph works is far beyond a 5th grade understanding and is not covered by the benchmarks. As you stated most Science Supervisors felt that student would not know this property was scientifically testable. The Content Advisory Committee also felt that 5th graders would view this statement as subjective. We cannot assume that student saw a TV show or read an article."

Here we have the ideology of testing reduced to its fatuous essence. The ritual memorization and regurgitation of a decreed list of "facts" is the paramount value, superseding all other goals of education. We simply "cannot assume" that a student might "receive instruction beyond what the benchmark states", that they could "make the connection to other materials", or that they "saw a TV show or read an article." Not only does the FCAT not assume these things, it actively penalizes them. The test is not merely indifferent but actually hostile to any understanding or learning that happens outside the parameters of the testing regime.

Krampf's commenters continue to pile on; a reading teacher reports tests full of "bad grammar, incorrect spellings, and questions that simply made no sense". You might ask what sort of system could produce the kind of pathological rationalization for these errors that I quoted above. Another commenter refers to "a culture of bureaucratic ass-coverage", which lends credence to David Graeber's claim, [which I discussed the other day](http://www.peterfrase.com/2012/04/capitalism-against-capitalists/), that much of the apparatus of late capitalism has degenerated into a sclerotic order dominated by "political, administrative, and marketing imperatives".

A slightly different question, though, is *what sort of society can tolerate this kind of dysfunctional education system?* I'm not a rigorous [structural functionalist](http://uregina.ca/~gingrich/n2f99.htm)---that is, I don't think every social phenomenon can be explained in terms of the role it plays in optimally reproducing the social order. But I'm enough of one to think that as a rule, the behaviors that are encouraged by a society are those that are useful to it, or at least not actively hostile to it. Capitalism is unusually hospitable to [sociopathy](http://thenewinquiry.com/features/why-we-love-sociopaths/), for example, because the sociopath approaches the ideal-typical personification of capital itself. Conversely, capitalism is an unfriendly place for those of us who tend to prefer [time over money](http://www.peterfrase.com/2012/03/the-scourge-of-overemployment/), because this is in tension with capital's need for ceaseless expansion.

One might think that capitalism requires workers who know how to do and make things, and that therefore our elites would not complacently accept the emergence of Florida's regime of enforced stupidity through testing. There is a narrative of cultural decline to this effect, still available in both liberal and conservative packaging. According to this lament, America neglects the proper education of its populace at its peril, as we allow ourselves to be eclipsed and out-competed by better-educated, more ambitious hordes from abroad. This is a reassuring argument, in a way, because it presumes broad agreement about the purpose of education: to produce a society full of practically skilled workers, capable of at least enough critical thought to do their jobs.

Critique from the left tends to spend its time condemning models of education that are narrowly focused on the instrumental task of creating a new generation of obedient and productive workers. Megan Erickson's [essay](http://jacobinmag.com/winter-2012/a-nation-of-little-lebowski-urban-achievers/), for instance, worries that under the influence of self-styled reformers, "social studies and music classes are commonly replaced by . . . glorified vocational training". But a farce like the Florida science exams fails even at this narrow task. A population raised to take the FCAT will be ill-prepared to be either engaged citizens *or* productive workers. Can the ruling class really be so inept, so incapable of producing the proletariat it requires?

An alternative explanation is the one I've explored in my writings on the disappearance of human labor from production---most notably, in ["Four Futures"](http://jacobinmag.com/winter-2012/four-futures/). My analysis of the political economy (recently summarized and seconded by [Matt Yglesias](http://www.slate.com/blogs/moneybox/2012/04/05/slouching_toward_utopia.html)) is that we are experiencing a slow transition from a capitalist order in which accumulation is based on the exploitation of labor, into a ["rentist" order based on rents](http://www.peterfrase.com/2011/07/slouching-towards-rentier-capitalism/) accruing to land or intellectual property. Such a society is not, in my view, functionally compatible with the ideals of broadly-distributed critical thinking or practical work skills.

In a rentist order, an increasing percentage of the population becomes superfluous *as labor*---but they are still necessary as consumers. For reasons of ideological legitimacy and political control, the fiction that everyone must "work" is maintained, but work itself must increasingly be pointless make-work. What kind of populace is suited to this habit of passive consumption and workday drudgery? One that accepts nonsensical and arbitrary rules---whether they are the rules of endless work or endless consumption. Students who learn to answer the questions the testing bureaucracy wants answered, irrespective of their relationship to scientific knowledge or logic, will be well trained to live in this world.

Krampf's description of the Florida science testing dystopia is a grim vindication of something I wrote in [an old post](http://www.peterfrase.com/2011/01/idiocracys-theory-of-the-future/) about the Mike Judge movie *Idiocracy*. I think of that post as kind of a lost chapter in my "rentism" series---I wrote it just after ["Anti-Star Trek"](http://www.peterfrase.com/2010/12/anti-star-trek-a-theory-of-posterity/) and intended it as a follow-up, but it's been read by orders of magnitude fewer people. I hope you'll go read that post, but my general critique was that Judge portrayed stupidity as being inherent and genetic, even though the logic of his own movie suggested that stupidity is socially produced.

And mindless, bureaucratized testing is exactly the sort of system fit to produce the citizens of our future idiocracy. The mentality required to correctly answer the questions on the FCAT is a mentality suited to a world of pervasive marketing and advertising, in which reality is reduced to a postmodern nominalism of disconnected slogans. The students who unthinkingly repeat the assertion that smell and texture are not scientifically testable will grow up to confidently inform you that they water their crops with Brawndo---it's got electrolytes, after all, they're [what plants crave!](http://www.youtube.com/watch?v=e1fKzw05Q5A&noredirect=1)

The *New York Times* brings us once again to Foxconn and China's manufacturing industry, in [a story](http://www.nytimes.com/2012/03/31/business/global/labor-shortage-complicates-changes-in-chinas-factories.html) reporting that "there is a growing shortage of blue-collar workers willing to work in China's factories". This, we are told, is "a big factor in the long shifts and workweeks manufacturers have used to meet production quotas."

The implied model of the labor market here is a strange one indeed. If an important input to production---in this case, workers---is scarce, economic theory suggests that its price will be bid upward. That would mean some combination of higher wages, shorter hours, and better working conditions. Instead, we are supposed to find it logical that a shortage of workers causes bosses to work their employees *harder*.

In what seems to be something of a pattern in NYT labor reporting, the giveaway line is saved for the last paragraph. "It's hard to find a good job," says a young Chinese worker. "It's easy to find just any job." The entire story is now revealed to be a slightly more orientalist version of a U.S. media standby, in which capitalists whine about being forced to offer competitive wages and working conditions. Dean Baker never tires of [lampooning](http://www.cepr.net/index.php/blogs/beat-the-press/the-problem-of-structrual-unemployment-really-incompetent-managers) these [stories](http://www.cepr.net/index.php/blogs/beat-the-press/washington-post-reports-on-incompetent-managers-in-manufacturing-industry), which credulous reporters continually trot out as an explanation for high unemployment.

My favorite recent example of this phenomenon was the flurry of coverage surrounding Alabama's anti-immigrant laws, which had the effect of driving many undocumented workers out of the state. This produced, among other things, a long magazine article about ["Why Americans Won't Do Dirty Jobs"](http://www.businessweek.com/magazine/why-americans-wont-do-dirty-jobs-11092011.html). What we actually learn from the article, however, is why American citizens won't put up with the kind of working conditions that immigrants without legal protection have no choice but to accept.* And once again, the real story is saved for the final paragraph. There, we meet Michael Maldonado, a young immigrant who has remained in Alabama and gets up at 4:30 to work at a fish processor. "With the business in desperate need of every available hand, it's not a bad time to test just how much the bosses value his labor", the article observes. Maldonado himself is well aware of his increased leverage. "If you pay me a little more---just a little more---I will
stay working here,” is how he puts it. "Otherwise, I will leave. I will go to work in another state."

(\* *Lest I be misconstrued: this does not mean that I think the Alabama law was a good idea. All this story shows is that driving away immigrants can, in fact, create a situation of labor scarcity. Unlike [Walter Benn Michaels](http://jacobinmag.com/blog/2011/08/tea-party-patriots-against-neoliberalism/), I don't think that's enough to recommend an anti-immigrant politics. I still think the policy is immoral and inconsistent with a principle of internationalism, because its effects on the labor market come at the expense of Latin American workers who are generally even poorer than their American counterparts.*)

All of this is amusing, but it also raises a dilemma for those of us who would like to use labor scarcity as a cudgel to drive high wages and labor-saving innovation, and thereby [harness the drive for relative surplus value](http://www.peterfrase.com/2012/02/a-victory-at-foxconn/) in the service of increasing productivity and decreasing the burden of work. In order for the increased bargaining power of labor to have its desired effects, capitalists must actually behave the way their economic ideology claims they should---that is, they must respond to incentives, rather than whining about having to pay their workers and demanding that the state guarantee their cheap labor supply.

But it turns out that nobody hates a free market more than the capitalist class. It was Adam Smith who [observed that](http://geolib.com/smith.adam/won1-10.html) "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." The unwillingness of really existing capitalism to face market competition goes beyond a complacent assumption of the right to cheap labor. It's at the foundation of Ashwin Parameswaran's [far-reaching account](http://www.macroresilience.com/2011/12/07/the-great-recession-business-investment-and-crony-capitalism/) of our current troubles, which he traces to a "system where incumbent corporates do not face competitive pressure to engage in risky exploratory investment."

This then leads to the troubling (for a radical) notion that the operation of capitalism is too important to be left to the capitalists, and so the workers' movement must do some of their work for them. This is one of the intriguing ideas that runs through the Italian "workerist" Marxist tradition, and it's something that always bemused me. For all that *operaismo* and its descendants have become a hip, ultra-left alternative to staid traditional Marxism in certain circles, one of the tradition's core claims is that the workers' movement is historically tasked with *rationalizing capitalism*, helping Capital to achieve its own destiny. Mario Tronti, in [*Workers and Capital*](http://www.reocities.com/cordobakaf/tronti_workers_capital.html), puts it like this:

> After a partial defeat even following a simple contractual battle, __capital is violently pushed to having to come to terms with itself__, i.e., to reconsider precisely the quality of its development, to repropose the problem of the relation with the class adversary not in a direct form, but mediated by a type of general initiative which involves __the reorganization of the productive process, the restructuring of the market, rationalization at the factory, and the planning of society.__

On this reading, a big part of the historical mission of the Left was to make capitalism as revolutionary in reality as it was in its own ideological self-conception. Marx wrote admiringly of the [revolutionary élan](http://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch01.htm#007) of the bourgeoisie, which "cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society." But according to Tronti, the capitalist must be dragged kicking and screaming into this revolutionary fervor. Just as Corey Robin argues that right wing political theory [borrows from its revolutionary antagonists in its defense of hierarchy](http://coreyrobin.com/new-book/), capitalist production adopts radical measures to defend the prerogatives of accumulation, but only in response to working class challenges. Creative destruction is only ignited by the sparks thrown off from class struggle.

The idea that dynamism and innovation must be forced on capitalism from the outside recurs in a different way in David Graeber's essay for the [re-launched *Baffler*](http://thebaffler.com/) (not online, but the whole issue is worth buying). In a move reminiscent of both Parameswaran and [Tyler Cowen](http://www.amazon.com/The-Great-Stagnation-Low-Hanging-ebook/dp/B004H0M8QS), Graeber laments that we are living in an age of technological stagnation, in which "the projected explosion of technological growth everyone was expecting---the moon bases, the robot factories---fail[ed] to happen". The explanation he proposes is that the wellsprings of invention and creativity have been corporatized and bureaucratized, administered in a away that favors caution over breakthroughs. "[E]ven basic research", he argues, "now seems to be driven by political, administrative, and marketing imperatives that make it unlikely anything revolutionary will happen." Academia, meanwhile, has been transformed from "society's refuge
for the eccentric, brilliant, and impractical" into "the domain of professional self-marketers." Looking back at a bygone age of rapid progress, Graeber---like Tronti---sees a system that had to be forced into innovating by a hostile antagonist; in his account, however, it is the Soviet Union rather than the domestic labor movement that plays the starring role.

Graeber concludes by insisting that capitalism is neither "identical with the market" nor "inimical to bureaucracy". He implies that capitalism today finds itself where its Soviet twin was a few decades ago---a stagnant, bureaucratized order, incapable of reinvention or reform. He is ultimately a technological optimist---he is careful to distance himself from anti-industrial strains of anarchism---but he insists a break with capitalism must precede a return to technological dynamism:

> To of begin setting up domes on Mars, let alone to develop the means to figure out if there are alien civilizations to contact, we're going to have to figure out a different economic system. Must the new system take the form of some massive new bureaucracy? Why do we assume it must? Only by breaking up existing bureaucratic structures can we begin. And if we're going to invent robots that will do our laundry and tidy up the kitchen, then we're going to have to make sure that whatever replaces capitalism is based on a far more egalitarian distribution of wealth and power---one that no longer contains either the super-rich or the desperately poor willing to do their housework. Only then will technology begin to be marshaled toward human needs.

As a long-term vision, I agree with Graeber on this. The question is whether all of these issues can be left for after the revolution, or if there is a more reformist project we can engage with in the meantime. What does it mean if Graeber is right that capitalism tends toward bureaucratic inertia, and Parameswaran is right that our economy is held back by incumbents barring the way to creative destruction, and Tronti is right that it's the workers who ultimately force innovation on Capital? Maybe it means that until we can get rid of the capitalist class, we have to force them to bend to the forces of the market, rather than cling to their [patent monopolies](http://www.cepr.net/index.php/blogs/beat-the-press/patents-are-not-free-trade-24567) and their God-given right to cheap labor.

Dean Baker argues, in [*The End of Loser Liberalism*](http://www.cepr.net/index.php/publications/books/the-end-of-loser-liberalism), that progressives should reject the notion that they are in favor of regulation while the right is in favor of free markets. He insists that, understood correctly, everything from the defense of Medicare and Social Security to the [critique of "free" trade agreements](http://www.cepr.net/index.php/blogs/beat-the-press/manufacturing-jobs-still-matter-as-does-the-dollar) can be understood as part of the project of ensuring that "the logic of the market leads to progressive outcomes". It's easy to see this as a kind of rhetorical trick, but maybe it's just that capitalists can never be trusted to properly run a capitalist society. The great irony of Tronti's reading of capitalist development is that it's us anti-capitalist rebels who end up animating the logic of Capital in spite of ourselves---at least until we manage to break that logic altogether.

This perspective also casts the figure of [the left neoliberal](http://www.peterfrase.com/2012/03/the-rent-is-too-damn-high/) in a different light. The arguments I've described as left-neoliberal rely on certain free market tropes: competition, deregulation, efficiency. But taking such tropes seriously is perhaps more subversive than it appears, since actually existing neoliberal capitalism is not consistently based on any of these principles. It is instead, [as David Harvey has said](http://mrzine.monthlyreview.org/2006/lilley190606.html), a project of class power. In another of his essays, ["Against Kamikaze Capitalism"](http://shiftmag.co.uk/?p=389), Graeber contends that "Whenever there is a choice between the political goal of undercutting social movements---especially, by convincing everyone there is no viable alternative to the capitalist order---and actually running a viable capitalist order, neoliberalism means always choosing the first." So perhaps it's not so surprising to see University of Chicago finance professors attempting to [save capitalism from the capitalists](http://www.amazon.com/Saving-Capitalism-Capitalists-Unleashing-Opportunity/dp/0609610708), while two other mainstream economists express their hope that it will be Occupy
Wall Street that ultimately helps [save capitalism from itself](http://www.huffingtonpost.com/daron-acemoglu/us-inequality_b_1338118.html).

As I said in an earlier post, my essay in the forthcoming *Jacobin* is structured around a review of political theorist Kathi Weeks' new book [*The Problem With Work*](http://www.dukeupress.edu/Catalog/ViewProduct.php?productid=48492&viewby=title). It's a timely and interesting book that effectively ties together a number of my preoccupations: the critique of wage labor, the deconstruction of the work ethic, the demand for shorter hours, universal basic income, the politics of the non-reformist reform. More than most other writers on these topics, however, Weeks connects all of these issues to feminism.

One of the benefits of making this link, which I wasn't able to cover in my essay, is that it gives you the analytical tools to understand sex work correctly. I'm continually enervated and depressed by the way Leftists will unthinkingly throw around [stuff like this](http://www.facebook.com/photo.php?fbid=378436448851269&set=a.200655096629406.57916.196601040368145&type=3&theater):

Or, to take another example, there was the incident where some right-wing nut called Elizabeth Warren a ["socialist whore"](http://gawker.com/5856124/crazy-heckler-calls-elizabeth-warren-socialist-whore) a few months ago. People whose politics I respect mostly treated that phrase as a bit of laughable word salad. But I've actually known a few socialist whores in my life, and they're good comrades! And as I [noted recently](http://www.peterfrase.com/2012/03/in-defense-of-the-tramps/), the right-wing connection between the threat of socialism and the threat of loose sexual morality is not an arbitrary one.

I was talking recently to an old friend and former editor at the late, lamented [$pread Magazine](http://www.spreadmagazine.org/), and she noted that many sex worker rights activists have little experience even interacting with the traditional Left, so reluctant are most leftists to come anywhere near their issues. She also lamented the unfortunate state of the debate over sex work, which tends to be reduced to two equally inadequate positions: a patriarchal moralizing that treats sex work as a uniquely awful form of exploitation in which women can only ever be regarded as victims, and a panglossian libertarianism that revels in sex work as a source of independence and self-expression while glossing over its less glamorous aspects.

The first perspective produces legislative atrocities like the proposed [New York City bill](http://blog.audaciaray.com/post/14224060152/this-morning-i-testified-at-a-new-york-city) that would have penalized taxi drivers for transporting prostitutes. The
second perspective can neglect the coercive and violent parts of the sex industry, which are real even if they tend to be misrepresented as the entirety of sex work. But the real problem with a lot of the more exuberant pro-sex work arguments and their anti-sex work counterparts is a bit more subtle: the issue with sex work is not the sex, it's the *work*. As Canadian writer and sex worker Sarah M. puts it in an article [at the rabble.ca website](http://rabble.ca/news/2012/02/would-be-sex-work-abolitionist-or-aint-i-woman):

> [T]o call sex work degrading, as if that's news, is to deny that all jobs are degrading . . . Conversely, that these jobs are degrading doesn't automatically make sex work empowering. It just makes it unexceptional. "Jobs" are degrading because capitalism is degrading, because waged work is degrading. . . . Sex workers don't want to make prostitution "a job like any other." It's already our job. As long as welfare and minimum wage work, which are neither consistent nor sustainable, are the only other options, we will continue to do sex work -- legally or illegally, in the open or hidden, safely or in dangerous places, depending on the other factors that determine how we do our work. Because work is about money.

The basic problem that afflicts many pro- and anti-sex work arguments is that they take for granted the desirability and legitimacy of *wage labor in general*. They are caught up in an ideology that says that work is supposed to be a source of meaning and dignity in life. They are therefore committed to either stigmatizing sex work as an illegitimate and particularly dehumanizing kind of work (if they oppose it) or endorsing it as being just as dignified and fulfilling as any other job (if they support it). Weeks sums this up perfectly in this passage from *The Problem With Work*:

> Feminist analyses of sex work offer an illustrative example of the limitations of certain efforts to claim the title of work when that also involves making use of the legitimacy conferred by its dominant ethic. Introduced originally as a way to intervene in the feminist sex wars, the label "sex work" sought to alter the terms of feminist debate about sexual labor (Leigh 1997). For example, as a replacement for the label "prostitution," the category helps to shift the terms of discussion from the dilemmas posed by a social problem to questions of economic practice; __rather than a character flaw that produces a moral crisis, sex work is reconceived as an employment option that can generate income and provide opportunity.__ Within the terms of the feminist debate about prostitution, for example, the vocabulary has been particularly __important as a way to counter the aggressive sexual moralizing of some in the prohibitionist camp, as well as their disavowal of sex workers' agency and insistent reliance on
the language and logics of victimization.__ The other side, however, has produced some comparably problematic representations of work as a site of voluntary choice and of the employment contract as a model of equitable exchange and individual agency. More relevant to our topic here, __it is important to recognize how much of the rhetorical utility of the label "sex work" stems from its association with conventional work values.__ For those involved in sex worker advocacy, __the term can serve not only as a way to foreground the economic dimensions of such labor practices, but as a way to insist on their essential worth, dignity, and legitimacy__, as---in the formulation of one advocacy group---"service work that should be respected and protected" (quoted in Jenness 1993, 67). I do not mean to deny the vital importance of these efforts, only to point out that they often tend to echo uncritically the traditional work-ethic discourse. Thus the prostitutes' rights group COYOTE ("Call Off Your Old Tired Ethics")
may succeed in calling off one of our old tired ethics, but in the process of doing so, taps into and reproduces another. __The approach usefully demoralizes the debates about the nature, value, and legitimacy of sex for wages in one way, but it often does so by problematically remoralizing it in another; it shifts the discussion from one moral terrain to another, from that of a suspect sexual practice to that of a respectable employment relation.__

I'm in favor of legalizing all forms of sex work for adults---not because I think it's necessarily such great work, but because I think being a legal worker is better than being an illegal worker. The sex work "abolitionist" position makes about as much sense to me as reacting to Foxconn by calling on China to ban factory work. But perhaps it's the troublesome "remoralizing" of work that Weeks identifies which is at the root of the uneasiness that pro-sex worker positions provoke in some Leftists. A lot of left-wing critiques of sex work, particularly in private conversations, strike me as the bad conscience of reflexively upholding the work ethic, rather than a coherent account of sex work in particular.

Not only does sex work destabilize the work ideology, it also conflicts with a bourgeois ideal of private, monogamous sexuality that also remains widespread on the left. If you want to oppose sex work without opposing work in general, you're forced to fall back on some normative claim about what counts as normal, natural sexual relationships. This is closely related to the tendency to fall back on a naturalized conception of "the family" as the subject of society and politics, as in one of my least favorite names for a progressive political party ever, the ["Working Families Party"](http://www.workingfamiliesparty.org/).

Laura Agustin has an interesting discussion of the status of sex work in an essay for [The Commoner](http://www.commoner.org.uk/). She notes that much discussion of contemporary sex work assumes that the most natural form of sexual relation is one that is mediated only by love or passion rather than by money or any other form of instrumentality. She then observes that no sexual relationship is ever so simple, and that the imbrication of sex with money and exchange has a long history. This is hardly foreign to American culture, as anyone who's familiar with ["The Millionaire Matchmaker"](http://www.bravotv.com/the-millionaire-matchmaker) is aware. But Agustin observes that "[i]n societies where matchmaking and different sorts of arranged marriages and dowries are conventional, the link between payment and sex has been overt and normalised, while campaigners against both sex tourism and foreign-bride agencies are offended precisely because they see a money-exchange entering into what they believe should be '
pure' relationships." Against those who would lament the corruption of such "pure relationships", she says that:

> I see no postmodern crisis here. Some believe that the developed West was moving in a good direction after the Second World War, towards happier families and juster societies, and that neoliberalism is destroying that. But historical research shows that before the bourgeoisie’s advancement to the centre of European societies, with the concomitant focus on nuclear families and a particular version of moral respectability, loose, flexible arrangements vis-à-vis sex, family and sexuality were common in both upper and working-class cultures (Agustín 2004). In the long run it may turn out that 200 years of bourgeois 'family values' were a blip on the screen in human history.

She goes on to say:

> For some critics, the possession of money by clients gives them absolute power over workers and therefore means that equality is impossible. This attitude toward money is odd, given that we live in times when it is acceptable to pay for child and elderly care, for rape, alcohol and suicide counselling and for many other forms of consolation and caring. Those services are considered compatible with money but when it is exchanged for sex money is treated as a totally negative, contaminating force---this commodification uniquely terrible. Money is a fetish here despite the obvious fact that no body part is actually sold off in the commercial sex exchange.

While I agree that no good can come of treating the commodification of sex as though it's qualitatively different from the commodification of other aspects of human relations, I can't be quite so sanguine on the implications of commodification in general. I am, after all, on record expressing my doubts about the indefinite expansion of both [wage labor]() and [commodification](). However, the problem I would identify does not have to do with the exchange of money itself, but with the power relations within which it is embedded. I'm inclined to return once again to Erik Olin Wright's concept of "capitalism between consenting adults", which he [invokes as part of his case for a Universal Basic Income](http://www.ssc.wisc.edu/~wright/Inc-equal.pdf):

> When Marx analyzed the process of “proletarianization of labor” he emphasized the “double separation” of “free wage labor”: workers were separated from the means of production, and by virtue of this were separated from the means of subsistence. The conjoining of these two separations is what forced workers to sell their labor power on a labor market in order to obtain subsistence. In this sense, proletarianized labor is fundamentally unfree. __Unconditional, universal basic income breaks this identity of separations: workers remain separated from the means of production (these are still owned by capitalists), but they are no longer separated from the means of subsistence (this is provided through the redistributive basic income grant). The decision to work for a wage, therefore, becomes much more voluntary. Capitalism between consenting adults is much less objectionable than capitalism between employers and workers with little choice but to work for wages.__ By increasing the capacity of workers to refuse
employment, basic income generates a much more egalitarian distribution of real freedom than ordinary capitalism.

It's undeniably true that many sex workers, if they had access to another source of income, would either leave the sex industry or demand better conditions for themselves. But the same could be said of [supermarket checkers](http://www.peterfrase.com/2011/09/conservative-leftists-and-radical-dockworkers/) or [factory workers](http://www.peterfrase.com/2012/02/a-victory-at-foxconn/). And that, ultimately, is the only argument against sex work that I think holds up: it's work, and work is [often terrible](http://motherjones.com/kevin-drum/2012/03/breaking-news-lots-people-really-dont-their-jobs-much).

Matt Yglesias has [responded to me](http://www.slate.com/blogs/moneybox/2012/03/12/equality_requires_abundance.html), although in a way that sort of misses the point I was trying to make.

Part of his post is given over to reiterating the position that increasing the amount of housing stock in desirable cities would be a correct and egalitarian thing to do, even if it inconveniences some of the incumbent owners and residents. Let me emphasize that I *agree* with this. But he goes on to speculate that I hedged my position because it "makes [me] feel icky to embrace deregulation", as though my critique were a symptom of an affective disorder.

That really isn't the point. I'm actually quite a bit farther toward the left-neoliberal "deregulate and redistribute" end of things than many of my comrades on the Left. My argument---which was meant as a self-critique of my own tendencies as much as Yglesias'---is that we need to be attentive to the people's legitimate objections to rapid change, which complicate any project that wants to substantially rearrange the existing order.

Yglesias doesn't really respond to my argument that his overall deregulatory project tends to make life more volatile, when stability is itself a value to a lot of people. What he does say, in response to my comment that "there’s no a priori reason to say that the desire to have a stable, predictable life or job or neighborhood is less valid than the desire to maximize economic growth", is that:

> The question is not whether some fixed pool of people should give up stability in exchange for more money. The question is whether the incumbents should be asked to give up some stability for the sake of other people who are currently excluded from the opportunities the incumbents enjoy. My answer is that yes they should. That we should work toward plentiful housing not merely for its own sake, but precisely for the sake of equality.

The language of "incumbents" and "insiders" plays a central role in the neoliberal critique of regulation, whether in land use or in the labor market. And it's an argument I have some sympathy for. One of the things that most irks me about progressive nostalgia for the post-New Deal golden age is the way it elides the exclusions---of non-whites, of women, of non-union members---that made up the other side of stable high wage employment for the white male breadwinner.

But if an analyst portrays the issue merely in terms of a few insiders and an excluded mass, then he sets himself too easy a task. It's not just rich owners of San Francisco real estate who benefit from some kind of "insider" status. Many of us are insiders, whether due to rent regulations or union membership or occupational licensing. In any particular case, it's easy to set this up as a matter of egalitarianism and access. But generalized across the entire economy, what this amounts to is *everyone* (or most people) losing stability to
some degree, in return for everyone having more freedom and access. There can be a tradeoff between equality and stability, and my point was simply that it *is* a tradeoff. And it's the unwillingness to jump into the whirlwind of market relations that I think drives some of the revulsion at Yglesias' political project from certain quarters.

People want, and have always wanted, institutions that protect them from the pressures of the market. Even if one would *like* people to act as perfect left-neoliberal subjects---obeying the dictates of the profit motive by day, enjoying their generous transfer payments by night---the historical evidence is that people rarely behave that way. This argument is basically drawn from [Polanyi](http://en.wikipedia.org/wiki/Karl_Polanyi); here is how the deregulators of an earlier age are criticized in [*The Great Transformation*](http://economistsview.typepad.com/economistsview/2008/06/polanyis-the-gr.html):

> Nowhere has liberal philosophy failed so conspicuously as in its understanding of the problem of change. Fired by an emotional faith in spontaneity, the common-sense attitude toward change was dis­carded in favor of a mystical readiness to accept the social conse­quences of economic improvement, whatever they might be. The ele­mentary truths of political science and statecraft were first discredited then forgotten. It should need no elaboration that a process of undi­rected change, the pace of which is deemed too fast, should be slowed down, if possible, so as to safeguard the welfare of the community. Such household truths of traditional statesmanship, often merely re­-teachings of a social philosophy inherited from the an­cients, were in the nineteenth century erased from the thoughts of the educated by the corrosive of a crude utilitarianism combined with an uncritical reliance on the alleged self-healing virtues of unconscious growth.

Polanyi's argument wasn't merely a normative one, but an analysis of history. He argued that industrial society was characterized by a "double movement", in which efforts to subordinate society to the self-regulating market were met with the "self-protection of society". This entailed efforts to impose limits on the market's control over the "fictitious commodities": labor, money, and, yes, *land*. It should be noted that Polanyi believed that the cataclysmic changes wrought by capitalism---the enclosures, the industrial revolution---were on balance *good things for humanity*. But he believed that someone needed to stand athwart history yelling "slow down!":

> A belief in spontaneous progress must make us blind to the role of government in economic life. This role consists often in altering the rate of change, speeding it up or slowing it down as the case may be; if we believe that rate to be unalterable---or even worse, if we deem it a sacrilege to interfere with it---then, of course, no room is left for intervention.

When it comes to the abundance-stability tradeoff, Yglesias and I are more on the same side than not---I'm ready to move in the direction of abundance, relative to the status quo. But we still have to take into account the disruptive impact of removing someone's "insider" protection---whether it's a restrictive zoning ordinance or an occupational licensing scheme. The insiders have be either persuaded, bribed, or coerced into giving up their privileges. And since a large proportion of Americans are "insiders" in one or another part of the economy, figuring out how to strike this balance has major implications for the democratic legitimacy, achievability, and feasibility of the project Yglesias is advocating. Which is why I spend so much time talking about ways to counteract the volatility of life in contemporary capitalism---like, for instance, [the basic income](http://bloggingheads.tv/videos/9185?in=58:05&out=61:18)---without reproducing insider-outside dynamics.

My Twitter feed is alive with the sound of indignation about an ad agency at South by Southwest that is [using the homeless as human 4G wireless hotspots](http://www.readwriteweb.com/archives/sxsw_in_a_nutshell_homeless_people_as_hotspots.php). The idea is that you see a homeless person with a t-shirt reading "I am a 4G hotspot", and then you pay them a small fee to get online. There is definitely something unsettling about this, but there is also something a bit off about a lot of the reactions I've been seeing to it. I'll get back to that in a bit, after a detour through a familiar theme.

The [blog post](http://bbh-labs.com/homeless-hotspots-a-charitable-experiment-at-sxswi) announcing the initiative is full of gobbledygook about "charitable innovation", and it's very unclear about whether this project is supposed to be a profit-making business venture, a charity project, or some utopian neoliberal combination of both. Whatever it is, there's something undeniably creepy about it, in the way it [turns people into infrastructure](http://nytsxsw.tumblr.com/post/19145988299/getting-a-decent-data-connection-at-sxsw-can-be-a)---e.g. "I am a hotspot" rather than "I'm running a hotspot".

It's also, naturally, an opportunity for people to [project their anxieties](https://twitter.com/#!/michelledean/status/179056846961786882) about the desirability of capitalist "innovation". But the homeless-as-hotspots plan highlights a point I've been trying to make about technology. Technical change comes in two forms, one that is designed to more intensely exploit labor, and one that is designed to replace labor. Which one will dominate depends, in large part, on the condition of labor itself.

In a [recent post](http://www.peterfrase.com/2012/02/the-dialectic-of-technology/), I framed this in largely Marxist terms. But I want to return, for a third time, to the mainstream economics version of the same argument, which I still think hasn't gotten enough attention. The work I draw on is a paper by Daron Acemoglu, "When Does Labor Scarcity Encourage Innovation?". It was [published in the *Journal of Political Economy*](http://www.jstor.org/stable/10.1086/658160), and an ungated version is [here](http://econ-www.mit.edu/files/6179). It includes lots of mathematical formalisms, which I'll admit I only barely followed; my years of taking calculus are well in the rear-view mirror. But the core of the argument is easily understandable.

Acemoglu is attempting to reconcile two different stories about the interaction between labor supply and technological change. Standard economic growth models posit that when labor is scarce and wages are high, adoption of new technology will be discouraged and growth will slow. But there are a variety of arguments to the contrary. Robert Allen [has argued](http://www.econ.yale.edu/seminars/Kuznets/allen-101007.pdf) that the industrial revolution took off in 18th century Britain because of the high price of labor there relative to other parts of Europe, which encouraged the invention and use of technologies that substituted machinery and energy for labor. The "Habakkuk Hypothesis", meanwhile, claims that the U.S. grew faster than Britain in the 19th Century because labor was scarce (and therefore more expensive) in the U.S., which in turn encouraged mechanization and other labor-saving technology.

The contribution of Acemoglu's paper is to contextualize these arguments in a general framework in which there are two kinds of technology: labor saving and labor complementary. In economic jargon, a labor saving technology *decreases* the marginal product of labor, while a labor complementary technology *increases* it. This means that with labor saving tech, businesses need to use less workers, while with labor complementary tech, they need *more* workers. This then leads to Acemoglu's conclusion about the reverse causal process: what is the effect of labor scarcity (and high wages) on the adoption of technology? From the paper:

> The main result of the paper shows that labor scarcity induces technological advances if technology is strongly labor saving, meaning that technological advances reduce the marginal product of labor. In contrast, labor scarcity discourages technological advances if technology is strongly labor complementary, meaning that technological advances increase the marginal product of labor. I also show that, under some further conditions, an increase in wage levels above the competitive equilibrium has effects similar to labor scarcity.

So here's a riddle: which form of technology should we prefer, labor saving or labor complementary? Labor saving technology is consistent with high wages and tight labor markets. But it also, of course, leads to less jobs overall in the sectors where it is deployed. Which brings us back to the homeless people with hotspots. Let's imagine, for the sake of argument, that this is a legitimately profit-making business venture rather than a weird kind of charity. (And note that even as charity, the project depends on its consumers viewing it as a kind of legitimate business, a way for the homeless to engage in "productive" labor.) Putting hotspots on homeless people has to count as a labor complementary technology. From the standpoint of the wireless company, the marginal product of a homeless person's labor is much higher (i.e., it's non-zero) once you've figured out that you can attach hotspots to them. So if you think that it's bad when machines replace human labor (which is [not what I think](http://www.peterfrase.com/2011/09/conservative-leftists-and-radical-dockworkers/)), then this is just the kind of technical change you should prefer.

But labor complementary technology doesn't necessarily look so great once you're face-to-face with the kind of labor it complements. In this case, it relies upon the existence of a cheap and exploitable labor force---something that's obvious when you're looking at a homeless person in a creepy t-shirt, less so when you order from an [online retailer](http://motherjones.com/politics/2012/02/mac-mcclelland-free-online-shipping-warehouses-labor). And here's where I think a lot of the outrage over homeless-people-as-infrastructure goes wrong.

I don't recall seeing a lot of complaints about the problem of [homelessness in Austin](http://www.austinecho.org/) prior to this story. Which I don't mean as some kind of "gotcha"---the world is full of horrible things, and it's neither possible nor particularly helpful to try to talk about all of them all of the time. But to get up in arms about an ad agency exploiting the homeless as wifi routers strikes me as a peculiarly half-assed form of outrage. If they weren't walking around as billboards for wireless service, Austin's homeless and poor would still be homeless and perhaps a bit more poor. The fundamental problem here is not exploitation, but the condition of possibility for that exploitation, which is the fact that there are so many poor and homeless Americans in the first place.

"The misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all", goes the old adage from [Joan Robinson](http://books.google.com/books?id=-8m7B0OLXg4C&pg=PA45&lpg=PA45&dq=joan+robinson+%22misery+of+being+exploited%22&source=bl&ots=gLKrk0cCVp&sig=ypYrnHkscraD1nxenDFqFYKGLow&hl=en&sa=X&ei=lA5eT-HNOMOcgwe6woCiCw&ved=0CCgQ6AEwAQ#v=onepage&q&f=false). Then again, says Marx, ["to be a productive laborer is not a piece of luck, but a misfortune](http://www.marxists.org/archive/marx/works/1867-c1/ch16.htm). In the short run, labor complementary technology may employ more people, which is better than them not being exploited at all. But in the long run, the jobs thus created [tend to be terrible](http://motherjones.com/kevin-drum/2012/03/breaking-news-lots-people-really-dont-their-jobs-much), and our real goal ought to be to channel technical change toward labor saving innovation.

This leaves us with the question of what the homeless of Austin can demand, if not the right to be walking 4G hotspots. Fortunately there is a simple solution to that. There's nothing (economically) stopping us from just [giving people cash](http://rortybomb.wordpress.com/2011/12/22/why-not-just-give-poor-people-cash-preliminary/); and as the housing activist [Max Rameau](http://en.wikipedia.org/wiki/Take_Back_the_Land) likes to say, the cause of homelessness is that people don't have homes, and we have [plenty of those](http://blog.amnestyusa.org/us/housing-its-a-wonderful-right/). So imagine what would happen if this pool of cheap, easily exploitable labor wasn't available. A company that wanted to sell 4G wireless services might have to invest in more transmitters to fulfill demand. Or perhaps they would deploy robots to roll around the streets selling wireless access! This would not employ as many people, since it's more a labor saving than a labor complementary technology. But it also wouldn't create the grotesque spectacle of fellow human beings serving as pieces of infrastructure.

I'm quite upset that Matt Yglesias came out with [an ebook called *The Rent Is Too Damn High*](http://www.amazon.com/Rent-Too-Damn-High-ebook/dp/B0078XGJXO) before I had a chance to use that title for one of the iterations of my [rentier-capitalism arguments](http://www.peterfrase.com/category/anti-star-trek/). That aside, the book condenses a number of themes that will be familiar to regular readers of Yglesias' blog---in particular, his advocacy of the virtues of urban density, and his condemnation of the thicket of local regulations that bias the United States away from dense development. Mike Konczal has [a bunch of interesting things to say about it](http://rortybomb.wordpress.com/2012/03/07/some-critical-thoughts-on-the-rent-is-too-damn-high/), which I'll try not to repeat. (Though on his last point, regarding the state's role in gentrification, I'd add that [Neil Smith's work](http://books.google.com/books?id=IpxT3CDOapsC) is worth a look.) In lieu of a full review, here are two things that struck me as I read the book.

####All that is solid melts into air

Mike criticizes the limitations of Yglesias's analysis of rent control, and points us to JW Mason's [great post](http://slackwire.blogspot.com/2012/02/economicsts-actively-evil-neoliberal.html) on the subject. The basic point is that rent control isn't just about prices, it's just as much about stabilizing neighborhoods and reducing turnover. But it doesn't surprise me that Yglesias misses this, because the omission is symptomatic of a larger weakness in his style of analysis.

Toward the end of the book, after recounting the virtues of allowing new, high-density development, Yglesias remarks that:

> In the real world, of course, people tend to resist change and want to use whatever levers are at their disposal to resist it, oftentimes disregarding the greater costs to society at large. Fortunately, state and federal officials have tools at their disposal to counteract this tendency.

The problem, here as elsewhere, is that in the tradeoff between social stability and aggregate material prosperity, Yglesias appears to assign stability a value of zero. If people "tend to resist change", then this is simply an obstacle to be overcome by "state and federal officials". The ideal type of society that's evoked here is a perfectly frictionless world of market transactions, one that fully realizes Marx's comment that under capitalism, "all that is solid melts into air".

This is the utopia I find to be implicit in Yglesias's writing in general---not just on urban development, but also on unions, or on occupational licensing, for example. It's the basis for a particular version of left-neoliberalism, in which a perfectly efficient and deregulated market exists alongside a very redistributive social democratic state, but a state which only moves money around *ex post* rather than penetrating into the concrete workings of either production or exchange.

That vision assumes that it's desirable to subject all of life to the whims of the market, in return for a higher standard of living. But whether or not such a tradeoff is politically or economically feasible, there's no *a priori* reason to say that the desire to have a stable, predictable life or job or neighborhood is less valid than the desire to maximize economic growth. It's not that Yglesias's line of critique is totally wrong---I agree that NIMBYism and fear of change is often an impediment to desirable policies, and I agree that people with generally Left politics often betray a confusion about these issues. But while it's not desirable to just freeze our current cities and neighborhoods as they are, it's unreasonable to simply dismiss the desire for stability out of hand. To take this to its *reductio ad absurdam*, I don't think most people---or probably even Matt Yglesias---would want to live in a world where we all had to change jobs and move to new apartments every few weeks, even if such an arrangement would make us materially richer.

####Mutations of the property form

The other thing that caught my eye was a brief remark Yglesias makes about our evolving understanding of property rights. I've written on this topic repeatedly in the context of intellectual property law, noting how the concept of property that forms the basis for IP is very different from the one that applies to physical property. Following the economists [Michele Boldrin and David K. Levine](http://www.dklevine.com/general/intellectual/coffee.htm), I emphasize the way that physical property rights are supposed to be about what you can do with property in your physical possession, while intellectual property rights entail the ability to tell *other* people what they can or can't do with their copy of some general pattern or idea that you own the rights to. But as Yglesias notes, the politics of urban development suggest a related evolution in or attitude to property rights in real estate:

> . . . over the past several decades, there's been a revolution in our understanding of what property rights entail. We've switched from a system in which owning a piece of real estate means you're entitled to do what you want with it, to one in which owning a piece of real estate means you get wide-ranging powers to veto activities on your neighbors' land.

There's evidently a formal resemblance here, but I'm not yet sure whether it reflects some deeper connection. The parallel is suggestive, however, since it was the classical economists' treatment of property in land that gave rise to the theory of rent, which would later be [applied to intellectual property](http://p2pfoundation.net/Intellectual_Property_as_Artificial_Property_Rent). This relates to something else Mike Konczal brought up, harking back to [his](http://rortybomb.wordpress.com/2011/07/07/rents-versus-profits-in-the-financial-reform-battle-and-post-industrial-economy/) and [my](http://www.peterfrase.com/2011/07/slouching-towards-rentier-capitalism/) earlier speculations about the increasing importance of rentiers in a post-industrial economy.

I don't have anything very thought out to say about this yet, but it's interesting that both in both its landed and immaterial guises, the rentier form of property seems to give rise to this post-individualist conception of property rights. The connection, perhaps, could come from the notion of [oligarchical wealth defense](http://rortybomb.wordpress.com/2011/07/15/a-response-to-corey-robin-on-the-political-idea-of-monetary-policy/). Both land use regulations and intellectual property protections tend toward conserving not just one's ability to use a plot of land or a piece of information, but to maintain its economic *value*.

Today is [International Women's Day](http://en.wikipedia.org/wiki/International_Women's_Day)---an event that was [inaugurated by socialists](http://www.marxists.org/archive/kollonta/1920/womens-day.htm), even if actual socialist men [aren't always so good](http://www.meredithtax.org/taxonomyblog/announcing-first-annual-victor-berger-award-socialist-sexism) about embracing its spirit.

My IWD resolution is to work on infusing *Jacobin* with more feminism and more women writers---our score on the second count unfortunately ranks with some of the worse offenders on [this list](http://www.vidaweb.org/the-2011-count). As to the first, here's something from Kathi Weeks' [*The Problem With Work: Feminism, Marxism, Antiwork Politics, and Postwork Imaginaries*](http://www.dukeupress.edu/Catalog/ViewProduct.php?productid=48492&viewby=title). The entire book is excellent, and I'll be writing more about it in a future issue of *Jacobin*. In this passage, Weeks cleverly uses the figure of the "tramp" to connect the linked oppressive disciplinary functions of the work ethic and the family ethic.

> The partnership between the work ethic and the family ethic is sustained in and through a variety of cultural forms. One can see this interconnection operating behind the interesting coincidence of labels marking the male and female version of the tramp. __The figure of the male tramp, seen as a threat to social order and values, figured prominently in public discourse from the late nineteenth century until the early twentieth century, when the word also came to designate a negative moral judgment on modes of female sexuality__ (Rodgers 1978, 226-27; J. Mills 1989, 239). What interests me here is how the tramp functions as a disavowed figure in both work and family discourse, how a similar controlling image marks in comparable terms the boundary between the normative and the abject.6 __Contrary to the central tenets of both the work ethic and the family ethic, the tramp is in each usage a figure of indulgence and indiscipline.__ Both male and female tramps are wanderers who refuse to be securely housed within and contained by the dominant institutional sites of work and family (see Broder 2002). Both are promiscuous in their unwillingness to commit to a stable patriarch, as shown in their lack of loyalty to an employer or to an actual or potential husband. __The tramp is thus situated against legible models of both productive masculinity and reproductive femininity.__ Given that the accumulation of property was supposed to be one of the central benefits of a disciplined life of wage labor, and respect for property a cornerstone of the sanctity of marriage, both male and female tramps violate yet another set of fundamental social values. __Each is a potentially dangerous figure that could, unless successfully othered, call into question the supposedly indisputable benefits of work or family__ and challenge the assumed naturalness of their appeal (see Higbie 1997, 572, 562). __Just as male tramps, these "villains on a stage of toilers and savers' threatened to inspire otherwise compliant workers by their "shameless rebellion against all work," the figure of the female tramp threatened the ideals of sexual propriety and women's roles at the heart of the bourgeois family model__ (Rodgers 1978, 227). Though the language of the tramp may have fallen out of use, the basic offenses that the label identified continue to be registered under and regulated by means of more contemporary controlling images. The racialized figure of the welfare queen, in which the supposed violations of both work ethic and normative family form are distilled, is one of its most injurious reiterations.7

Something to think about as we endure this endless and infuriating ["sluts on birth control"](http://annfriedman.com/blog/slutty-women-gifable-0) debate.

Rick Perlstein's recent *Rolling Stone* [column](http://www.rollingstone.com/politics/blogs/national-affairs/why-obama-needs-to-change-to-win-20120222) performs what is now a routine left-liberal critique of Obama: by failing to articulate an ideology and differentiate himself from Republicans, the President has allowed Republicans to redefine mainstream political debate ever farther to the right. This argument has certain charms, but I couldn't help but notice the way Perlstein himself inadvertently enacts the same error he ascribes to Obama, and "ratifies his opponent's reality, by folding it into his original negotiating position." In the course of refuting various Reagan-era calumnies against Jimmy Carter, Perlstein informs us that:

> What's more, to arrest the economy's slide, Jimmy Carter did something rather heroic and self-sacrificing, well summarized [here](http://www.huppi.com/kangaroo/L-carterreagan.htm): He appointed Paul Volcker as Federal Reserve chairman with a mandate to squeeze the money supply, which induced the recession that helped defeat Carter – as Carter knew it might – but which also slayed the inflation dragon and, by 1983-84, long after Carter had lost to Reagan, saved the economy.

This has settled in as the preferred narrative of the "Volcker shock" across the mainstream political spectrum, with Carter and Volcker as the self-sacrificing heroes who forced unpleasant but life-saving medicine down the throat of an unruly nation. We are to imagine them wistfully reading Brecht's ["To Posterity"](http://www.poemhunter.com/poem/to-posterity/) as they sacrifice their political reputations on the altar of contractionary monetary policy; do not judge them too harshly.

Not to worry, for judgment has been remarkably generous, even among liberals. It falls to radical malcontents like [Doug Henwood](http://lbo-news.com/2011/12/13/the-fed-and-the-class-struggle/) and David Harvey to tell a different story. If the heroic mythology of Volcker's recession is reminiscent of the self-congratulatory rhetoric of the contemporary pro-austerity faction, this is no coincidence. In the radical account, the Volcker shock is the beginning of the long era of [opportunistic disinflation](http://thinkprogress.org/yglesias/2010/07/22/197970/opportunistic-disinflation/), in which wage and employment gains may never be tolerated if they come at the expense of a little inflation. Here is how Harvey describes the opening salvo:

> In October 1979 Paul Volcker, chairman of the US Federal Reserve Bank under President Carter, engineered a draconian shift in US monetary policy.¹⁸ The long-standing commitment in the US liberal democratic state to the principles of the New Deal, which meant broadly Keynesian fiscal and monetary policies with full employment as the key objective, was abandoned in favour of a policy designed to quell inflation no matter what the consequences might be for employment. The real rate of interest, which had often been negative during the double-digit inflationary surge of the 1970s, was rendered positive by fiat of the Federal Reserve (Figure 1.5). The nominal rate of interest was raised overnight and, after a few ups and downs, by July 1981 stood close to 20 per cent. Thus began ‘a long deep recession that would empty factories and break unions in the US and drive debtor countries to the brink of insolvency, beginning the long era of structural adjustment’.¹⁹ This, Volcker argued, was the only way out of the grumbling crisis of stagflation that had characterized the US and much of the global economy throughout the 1970s.

This was all understood at the time. Here is the *New York Times* on December 31, 1981:

> The outlook for inflation, said Richard G. Lipsey, of Queens University in Ontario, "turns on the determination of wage increases," not supply-side tax cuts or quick changes in inflationary expectations. For Mr. Lipsey, this means that the fight against inflation requires accepting the pain of high unemployment and a sluggish economy.

> Mr. Volcker said he was optimistic. "The picture looks a little better to me," he said this week after leading a panel discussion at the social science convention. But, he added with his usual caution, "the evidence is not clear yet."

> "The problem," Mr. Volcker said, "is not only making gains at a high cost during a recession, but also keeping them when the recovery begins."

> "I'm agnostic," said Charles L. Schultze, chairman of the Council of Economic Advisers in the Carter Administration. "I don't know. We will get the special ones, like autos, but I don't know the extent to which they will slop over into the rest of the economy."

Volcker was trying to accomplish the same thing that Ronald Reagan was trying to do when he smashed the air traffic controllers' union: weaken labor. [Here](http://books.google.com/books?id=c7b-lYM_-TcC&lpg=PA82&ots=N-wyRBuypt&dq=feldstein%20american%20economic%20policy%20in%20the%201980s&pg=PA162#v=onepage&q&f=false), Volcker offers that:

> the single most important action of the [Reagan] administration in helping the anti-inflation fight was defeating the air traffic controllers' strike. He thought that this action had had a rather profound, and, from his standpoint, constructive effect on the climate of labor-management relations, even though it had not been a wage issue at the time.

And yet it's hard to imagine a writer like Rick Perlstein calling Reagan's attack on PATCO "courageous".

But perhaps the neglect of the Volcker regime's class nature reflects a deeper shortcoming in liberal politics. The stagflation that Carter faced was a more intractable problem than the demand shortfall that confronts the American economy today, and it was far less susceptible to the traditional Keynesian remedies. When capital refuses to invest, and labor refuses to take no for an answer, then something has to give. The alternative to neoliberalism's assault on the working class was not simply a continuation of the Fordist golden age, but a more radical attack on the capitalist mode of production. Reflecting on the stagflation era in 1988, the socialist economist Diane Elson [remarks](http://newleftreview.org/?view=424):

> Conventional Keynesian fiscal and monetary remedies are unable to deal with a situation in which prices and wages are rising while output and employment are falling. This has opened the way for ‘monetarist’ policies to confront the problem by a combination of deflation and attempts to make markets more ‘competitive’, in the sense of more like the markets of Walrasian and Austrian theory, with prices falling as demand falls. Such policies impose enormous costs in terms of unemployment and wasted resources, and are ultimately self-defeating. Most markets fail to behave like those in Walrasian and Austrian theory not for lack of competition, but precisely because of the existence of competition. An accessible exposition of this point is provided by Okun, who concludes: ‘ . . . the appropriate functioning of customer markets and career labour markets requires a marked departure from the price flexibility of the competitive model. Customers and suppliers, employees and firms develop methods of reducing price variation that help to perpetuate relations and minimize transaction costs over the long run.’ [39] At the micro-level, there are good reasons for firms to raise wages and pass on increased costs in price increases while reducing output and employment. By doing so, they may be better able to maintain the co-operation and loyalty of their customers and workforce than by cutting wages and prices.

> The policy conclusion commonly drawn from this type of reasoning is the need for Keynesian monetary and fiscal policy to be supplemented by some kind of incomes policy which will restrain firms from raising wages, and thus make it possible for conventional Keynesian policies to maintain a higher level of demand without running into the problem of inflation. However, this penalizes households in relation to enterprises if there is no complementary mechanism restraining prices. Recognizing this, some advocates of incomes policies also advocate price controls. But if the process of setting prices is left in the hands of enterprises, there still remains a fundamental imbalance: households cannot monitor price formation in a way that enables them to enforce restraint on enterprises in the same way that enterprises can monitor wage formation and enforce a wage restraint programme upon workers. [40] Moreover, the vital knowledge of unit costs and profit margins remains in the hands of enterprises, and without this Price Commissions have no teeth, and the implementation of price guidelines cannot be effectively monitored. This imbalance could only be removed by socializing the price formation process, making it transparent to households by making information on unit costs and profit margins public. Capitalist enterprises will always resist this, because secrecy gives them a competitive advantage and private ownership implies the right to withhold information. State-owned enterprises will also resist such disclosure if they are enjoined to focus their efforts on maximizing their own surpluses, and to relate to other enterprises, and to households, primarily through the market. It is not surprising that price formation is such an explosive issue in the marketization of socialism.

Elson goes on to detail her radical solution, which includes free public services, an unconditional basic income, worker-managed public enterprises, and public accounting of prices and wages. Around the same time, others were experimenting with less ambitious---yet still extremely radical---solutions such as the [Rehn-Meidner plan](http://findarticles.com/p/articles/mi_m1093/is_n1_v41/ai_20485334/). Such far-reaching proposals may perhaps seem quaint now, and this kind of grand theorizing may indeed be ill-suited to the present moment. But that only underscores the difference between the crisis we face today and the one the capitalism faced around the 1970's. Today's crisis stems, ultimately, from labor's weakness, and its historically low share in total output; this is a problem that the ruling class could in principle solve, even if they choose not do so (whether for political reasons or merely out of ineptitude). The previous crisis was something else, the consequence of labor's *strength* and of capital's increasing inability to contain it.

Such crises represent social democracy's revolutionary limit, and hence conventional reformist liberalism has no good answers to them. At best, it finds itself in the position of William Greider, [mounting a defense of inflation](http://www.thefreelibrary.com/Secrets+of+the+Temple.-a06306539http://www.thefreelibrary.com/Secrets+of+the+Temple.-a06306539) as the friend of the debtor---a reasonable claim at moderate inflation rates, but more tenuous for the situation of the early '80s. Today, liberals and socialists can find themselves aligned in calling for aggressive fiscal policy to restore effective demand. But if they don't grapple with the historic impasse that the stagflation era represented, then liberals may well find themselves in the uncomfortable position of endorsing the Volcker shocks of the future.