Peter Frase

The other day I got involved in an exchange with some political comrades about the state of manufacturing in the United States. We were discussing this Wall Street Journal editorial, which laments that "more Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined". Leaving aside the typical right-wing denigration of government work, what should we think about the declining share of of Americans working in industries that "make things"?

I've written about this before. But I'm revisiting the argument in order to post an updated graph and also to present an alternative way of visualizing the data.

Every time I hear a leftist or a liberal declare that we need to create manufacturing jobs or start "making things" again in America, I want to take them by the collar and yell at them. Although there is a widespread belief that most American manufacturing has been off-shored to China and other low-wage producers, this is simply not the case. As I noted in my earlier post, we still make lots of things in this country--more than ever, in fact. We just do it with fewer people. The problem we have is not that we don't employ enough people in manufacturing. The problem is that the immense productivity gains in manufacturing haven't accrued to ordinary people--whose wages have stagnated--but have instead gone to the elite in the form of inflated profits and stock values.

Anyway, I'm revisiting this because I think everyone on the left needs to get the facts about manufacturing employment and output burned into their memory. The numbers on employment in manufacturing are available from the St. Louis Federal Reserve, and the data on output is available from the national Federal Reserve site. Here's an updated version of a graph I've previously posted:

I like this graph a lot, but today I had another idea for how to visualize these two series. Over at Andrew Gelman's blog, co-blogger Phil posted an interesting graph of bicycing distance and fatalities. That gave me the idea of using the same format for the manufacturing data:

This graph is interesting because it seems to show three pretty different eras in manufacturing. From the 1940's until around 1970, there was a growth in both employment and output. This, of course, corresponds to the "golden age" of post-war Keynesianism, where the labor movement submitted to capitalist work discipline in return for receiving a share of productivity gains in the form of higher wages. From 1970 until around 2000, output continues to rise rapidly, but employment stays basically the same. Then in the last ten years, employment falls dramatically while output remains about the same.

This big take-home point from all this is that manufacturing is not "in decline", at least in terms of output. Going back to an economy with tons of manufacturing jobs doesn't make any more sense than going back to an economy dominated by agricultural labor--due to increasing productivity, we simply don't need that many jobs in these sectors. Which means that if we are going to somehow find jobs for 20 million unemployed and underemployed Americans, we're not going to do it by building up the manufacturing sector.

One thing that has long bothered me about many socialist and Marxist critiques of capitalism is that they presume that a system based on the accumulation of *capital* presupposes the existence of *capitalists*--that is, a specific group of people who earn their income from investment, rather than by working for wages. It is totally possible to imagine a system in which profit-making private enterprise still exists, the economy is based on profit-seeking and constant growth, and in which the entire population works as wage-laborers for most of their lives. I always figured the most likely candidate for such an arrangement was some kind of [pension fund socialism](http://www.leftbusinessobserver.com/NSPensions.html). But today, Matt Yglesias gives [another similar path](http://yglesias.thinkprogress.org/2011/03/obtaining-the-returns-to-capital/). He's discussing something from Felix Salmon about how the rich increasingly have access to lots of investment opportunities that are closed off to ordinary investors, and he says:

> [T]he right thing to do is to just directly think about the issue of how best to ensure that everyone obtains the financial benefits of equity investments. And the answer, I think, is sovereign wealth funds. That’s how they do it in Singapore and conceptually it’s the right way to do it. An American version of Singapore’s Central Provident Fund would be much too large for any market to absorb, but the US share of world GDP should shrink over time and it’s conceivable that there would be some way to work this out on the state level to create smaller units. A fund like that would render the public listing issue irrelevant, since it would clearly have the scale to get in on the private equity game. This would, needless to say, entail injecting a hefty element of socialism into American public policy but I’m always hearing from smart conservatives how much they admire Singapore.

This points in the direction of an ideal type of society in which all businesses are owned by sovereign wealth funds of this type, which are used to pay for public services. So everyone works at a job for a wage or salary, and contributes some of their paycheck to one of these funds, just as they now contribute to pension funds. The returns from the funds are then used to pay for things like retirement, health care, education, and so on. Yglesias jokingly refers to this as "socialism". And by certain classic definitions, it is: the capitalist class has been abolished, and the workers now own the means of production (through their sovereign wealth funds).

But in many other ways, of course, this is not how socialism was traditionally conceived. In particular, you would still have profit-seeking companies competing with each other, and they would still be subject to the same kind of discipline they are now--the shareholders, which is to say the sovereign wealth funds, would demand the highest possible return on their investment. So at best, this is a kind of [market socialism](http://books.google.com/books?id=KWy9JbWvjywC). But while there are people who take on the task of the capitalist--the employees of the sovereign wealth funds--they don't make up a *capitalist class*, because they aren't investing for their own personal profit. Indeed, we've already moved a long way in this direction, which is why Peter Drucker was [talking about pension fund socialism](http://tpmcafe.talkingpointsmemo.com/2010/07/23/socialism--american_style/) in 1972.

Of course, we do still have actual capitalists, and getting rid of them would be a long and difficult process. But the important point about capitalism without capitalists is that in many ways it isn't any better than capitalism *with* capitalists. You still have to sell your labor power and submit to a boss in order to survive, so alienation persists. Since firms are still competing to deliver the highest returns to their shareholders, there will still be pressure to exploit employees more intensely and to prevent them from organizing for their rights. Exploitation goes on as before, and it will be all the more robust insofar as it is now a kind of collective self-exploitation. And on top of all of this, the system will still be prone to the booms and busts and problems of overaccumulation that occur in today's capitalism. It was, after all, public and union pension funds that [bought many of the toxic mortgage-backed securities](http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aW5vEJn3LpVw) during the housing bubble.

All of this is why it is analytically important to separate the conceptual framework of *capital and wage labor* from the concept of *capitalists and workers*. In the system I've just described, capital and wage labor still exist, and still define how the economy works. But now each person is simultaneously a capitalist and a worker, in some degree or for some part of their life. Thinking through the inadequacy of such an arrangement is, for me, a more accessible way of thinking through the arguments of people like [André Gorz](http://books.google.com/books?id=7wxpl7sYYCYC) and [Moishe Postone](http://books.google.com/books?id=GwDxsHOxd84C). They argued that the point isn't to get rid of the capitalist class and have the workers take over: the point is to get rid of capital and wage labor.

Mike Judge's [*Idiocracy*](http://www.imdb.com/title/tt0387808/) is a pretty smart and funny movie, which touches on some themes I've recently [written about](http://www.peterfrase.com/2010/12/anti-star-trek-a-theory-of-posterity/). But it's also a widely underappreciated and misunderstood film. Perhaps that's because one of the people who seems to misunderstand it the most is its own writer and director, Mike Judge.

The basic premise of the film, as per IMDB:

> Private Joe Bauers, the definition of "average American", is selected by the Pentagon to be the guinea pig for a top-secret hibernation program. Forgotten, he awakes 500 years in the future. He discovers a society so incredibly dumbed-down that he's easily the most intelligent person alive.

The rest of the film is an extended satirical riff on this idiotic future society. Its residents are both unbelievably crude and endlessly capable of falling for consumerist marketing bullshit. With regard to the former: Starbucks now offers hand jobs, everyone regards reading and thinking as activities for "fags", and one of the film's set pieces involves a #1 hit film called "Ass", consisting of nothing but the image described in the title. In a climactic scene Joe Bauers (played by Luke Wilson) addresses Congress, wistfully declaring that:

> there was a time in this country, a long time ago, when reading wasn't just for fags and neither was writing. People wrote books and movies, movies that had stories so you cared whose ass it was and why it was farting, and I believe that time can come again!

Meanwhile, everyone in the future mindlessly repeats advertising slogans as though they were a scientific consensus. The threat of famine looms because everyone insists on watering crops with a noxious energy drink called Brawndo, while insisting that "it's got electrolytes . . . they're what plants crave!" It's left to Joe Bauers to convince his moronic fellow humans of the virtues of old fashioned water.

This sounds like the sort of thing your average anti-corporate liberal might enjoy, although I'd note that liberal yuppies are [hardly](http://www.youtube.com/watch?v=7L2fsubA2-c) [immune](http://www.youtube.com/watch?v=FL7yD-0pqZg) to this sort of irrational marketing hype. But the movie made a lot of people uncomfortable, and it has been mostly forgotten since its 2006 release. In part, that's because of the generally elitist "most people are idiots" vibe that Judge evokes. But more specifically, I think it's because of the film's overtly misanthropic, eugenics-minded opening:

This [reaction from Manohla Dargis](http://movies.nytimes.com/2009/09/04/movies/04extract.html) is typical:

> "Idiocracy" expresses the kind of fear lampooned, consciously or not, in the old joke about revolting masses. (Messenger: "The masses are revolting!" King: "You’re telling me!") It opens with a comparison between trailer-trash types, with low I.Q.’s, who freely propagate, and smarty-pants types who fret about conceiving, using every excuse to find the perfect time to have children. In the end the low I.Q.-ers overrun the intelligent, who die off, which is funny if you think that only certain kinds of people should reproduce. An equal-opportunity offender, Mr. Judge can wield satire like a sledgehammer, so it’s no surprise that he doesn’t bother with the complexities of class and representation in a bit about the dire consequences of a birth dearth.

This bit of the movie is every bit as offensive and reactionary as Dargis suggests at is, and its stupidity is pretty much summed up in this [xkcd cartoon](http://xkcd.com/603/). But the tragedy of the whole movie is that *this premise is totally unnecessary*. It's completely possible to explain the emergence of the *Idiocracy* future based on sociological and political-economic themes that have nothing to do with genetic determinism, while leaving the rest of the movie mostly unchanged.

To me, one of the most interesting and suggestive bits of the movie is the following exchange toward the end of [the story](http://www.pages.drexel.edu/~ina22/splaylib/Screenplay-Idiocracy.htm):

Joe and the Cabinet Members are gathered around a VIDEO PHONE
talking to the CEO OF RAUNCBO, who's in his office, panicking.
We hear people rioting outside his building and occasionally
bottles and debris hit his window.

RAUNCHO CEO
What happened?!

JOE
Ah... Well, we switched the crops to
water.

RAUNCHO CEO
I'm not talking about that.
(points to a computer
screen, freaked out)
Our sales are all like, down. Way
down! The stock went to zero and the
computer did auto-layoff on
everybody!

ATTORNEY GENERAL
Shit! Almost everyone in the country
works for Rauncho!

RAUNCHO CEO
Not anymore! And the computer said
everyone owes Rauncho money!
Everyone's bank account is zero now!

What does this exchange tell us about the film's implicit [theory of posterity](http://www.peterfrase.com/2010/12/social-science-fiction/)?

1. The future economy is highly automated, to the point that even the management of companies is done automatically by a computer.
2. People nonetheless need money to pay for things, which they get by working for Brawndo (which is called "Rauncho" in this earlier version of the screenplay). It's not clear what they do for their money, but it can't be very important in light of their obvious stupidity and the above-noted automation.
3. The continued stability of this society is therefore dependent on the existence of a business which does not actually improve anyone's material standard of living--indeed, it is *decreasing* it by killing all the crops.

The theory of posterity the grounds *Idiocracy*, it seems to me, is a close cousin of [Anti-Star Trek](http://www.peterfrase.com/2010/12/anti-star-trek-a-theory-of-posterity/): an economy that needs humans as consumers, but makes them mostly superfluous as producers.

So how does this explain the fact that everyone is such a moron? Well, consider what would happen to education in a society like this. If the productive economy is all run by computers, then there's no need to teach people how to make things, or how anything actually works. On the contrary, it would be economically beneficial to encourage delusions about the magical properties of consumer products, the better to ensure that people will continue to drink Brawndo rather than water. In other words, there is no economic incentive to produce intelligence. We can imagine that at some point in the past, legitimate institutions of higher education were dismantled (perhaps by the people Diane Ravitch discusses [here](http://www.slate.com/blogs/blogs/thewrongstuff/archive/2010/05/17/diane-ravitch-on-being-wrong.aspx)), and replaced by things like [Costco Law School](http://www.imdb.com/title/tt0387808/quotes?qt0427921).

I really wish someone would make a movie that's as funny as *Idiocracy* without falling back on such lazy right-wing premises. On the other hand, it's intriguing that Judge could end up making a film that mostly functions as a radical critique even though it's based on a reactionary assumption. *Idiocracy* does illuminate a dangerous trend in contemporary capitalism--one that has nothing to do with the wrong people having babies, and everything to do with a system that increasingly reproduces itself by producing stupidity in the population. The movie's only mistake is to think that our genes can save us from stupidity, when it seems far more defensible to say that "intelligence" is some combination of socially nurtured ability and [statistical myth](http://cscs.umich.edu/~crshalizi/weblog/523.html).

In the process of trying to pull together some thoughts on intellectual property, zero marginal-cost goods, immaterial labor, and the incipient transition to a rentier form of capitalism, I've been working out a thought experiment: a possible future society I call *anti-Star Trek*. Consider this a stab at a [theory of posterity](http://www.peterfrase.com/2010/12/social-science-fiction/).

One of the intriguing things about the world of Star Trek, as Gene Roddenberry presented it in *The Next Generation* and subsequent series, is that it appears to be, in essence, a communist society. There is no money, everyone has access to whatever resources they need, and no-one is required to work. Liberated from the need to engage in wage labor for survival, people are free to get in spaceships and go flying around the galaxy for edification and adventure. Aliens who still believe in hoarding money and material acquisitions, like the Ferengi, are viewed as barbaric anachronisms.

The technical condition of possibility for this society is comprised of of two basic components. The first is the replicator, a technology that can [make instant copies of any object with no input of human labor](http://radar.oreilly.com/2010/12/diy-fabrication-hits-a-new-pri.html). The second is an apparently unlimited supply of free energy, due to anti-matter reactions or dilithium crystals or whatever. It is, in sum, a society that has overcome scarcity.

Anti-Star Trek takes these same technological premises: replicators, free energy, and a post-scarcity economy. But it casts them in a different set of social relations. Anti-Star Trek is an attempt to answer the following question:

* Given the material abundance made possible by the replicator, how would it be possible to maintain a system based on money, profit, and class power?

Economists [like to say](http://delong.typepad.com/sdj/2010/12/what-do-econ-1-students-need-to-remember-most-from-the-course.html) that capitalist market economies work optimally when they are used to allocate scarce goods. So how to maintain capitalism in a world where scarcity can be largely overcome? What follows is some steps toward an answer to this question.

Like industrial capitalism, the economy of anti-Star Trek rests on a specific state-enforced regime of property relations. However, the kind of property that is central to anti-Star Trek is not physical but *intellectual* property, as codified legally in the patent and copyright system. While contemporary defenders of intellectual property like to speak of it as though it is broadly analogous to other kinds of property, it is actually based on a quite different principle. As the (libertarian) economists Michele Boldrin and David K. Levine [point out](http://levine.sscnet.ucla.edu/general/intellectual/coffee.htm):

> Intellectual property law is not about your right to control your copy of your idea - this is a right that . . . does not need a great deal of protection. What intellectual property law is really about is about your right to control my copy of your idea. This is not a right ordinarily or automatically granted to the owners of other types of property. If I produce a cup of coffee, I have the right to choose whether or not to sell it to you or drink it myself. But my property right is not an automatic right both to sell you the cup of coffee and to tell you how to drink it.

This is the quality of intellectual property law that provides an economic foundation for anti-Star Trek: the ability to tell others how to use copies of an idea that you "own". In order to get access to a replicator, you have to buy one from a company that licenses you the right to use a replicator. (Someone can't give you a replicator or make one with their replicator, because that would violate their license). What's more, every time you make something with the replicator, you also need to pay a licensing fee to whoever owns the rights to that particular thing. So if the Captain Jean-Luc Picard of anti-Star Trek wanted ["tea, Earl Grey, hot"](http://www.youtube.com/watch?v=R2IJdfxWtPM), he would have to pay the company that has copyrighted the replicator pattern for hot Earl Grey tea. (Presumably some other company owns the rights to cold tea.)

This solves the problem of how to maintain for-profit capitalist enterprise, at least on the surface. Anyone who tries to supply their needs from their replicator without paying the copyright cartels would become an outlaw, like today's online file-sharers. But if everyone is constantly being forced to pay out money in licensing fees, then they need some way of *earning* money, and this brings up a new problem. With replicators around, there's no need for human labor in any kind of physical production. So what kind of jobs would exist in this economy? Here are a few possibilities.

1. *The creative class*. There will be a need for people to come up with new things to replicate, or new variations on old things, which can then be copyrighted and used as the basis for future licensing revenue. But this is never going to be a very large source of jobs, because the labor required to create a pattern that can be infinitely replicated is orders of magnitude less than the labor required in a physical production process in which the same object is made over and over again. What's more, we can see in today's world that lots of people [will create and innovate on their own](http://cyber.law.harvard.edu/wealth_of_networks/Main_Page), without being paid for it. The capitalists of anti-Star Trek would probably find it more economical to simply pick through the ranks of unpaid creators, find new ideas that seem promising, and then buy out the creators and turn the idea into the firm's intellectual property.

2. *Lawyers*. In a world where the economy is based on intellectual property, companies will constantly be [suing each other](http://yro.slashdot.org/story/10/12/10/154202/Worlds-Largest-Patent-Troll-Fires-First-Salvo) for alleged infringements of each others' copyrights and patents. This will provide employment for some significant fraction of the population, but again it's hard to see this being enough to sustain an entire economy. Particularly because of a theme that will arise again in the next couple of points: just about anything can, in principle, be automated. It's easy to imagine big intellectual property firms coming up with procedures for mass-filing lawsuits that rely on fewer and fewer human lawyers. On the other hand, perhaps an equilibrium will arise where every individual needs to keep a lawyer on retainer, because they can't afford the cost of auto-lawyer software but they must still fight off lawsuits from firms attempting to [win big damages for alleged infringment](http://news.cnet.com/8301-1023_3-20021735-93.html).

3. *Marketers*. As time goes on, the list of possible things you can replicate will only continue to grow, but people's money to buy licenses--and their time to enjoy the things they replicate--will not grow fast enough to keep up. The biggest threat to any given company's profits will not be the cost of labor or raw materials--since they don't need much or any of those--but rather the prospect that the licenses they own will lose out in popularity to those of competitors. So there will be an unending and cut-throat competition to market one company's intellectual properties as superior to the competition's: Coke over Pepsi, Ford over Toyota, and so on. This should keep a small army employed in advertizing and marketing. But once again, beware the spectre of automation: advances in data mining, machine learning and artificial intelligence may lessen the amount of human labor required even in these fields.

4. *Guard labor*. The term "Guard Labor" is [used by the economists Bowles and Jayadev](http://ideas.repec.org/p/ums/papers/2004-15.html) to refer to:

> The efforts of the monitors, guards, and military personnel . . . directed not toward production, but toward the enforcement of claims arising from exchanges and the pursuit or prevention of unilateral transfers of property ownership.

In other words, guard labor is the labor required in any society with great inequalities of wealth and power, in order to keep the poor and powerless from taking a share back from the rich and powerful. Since the whole point of *anti-Star Trek* is to maintain such inequalities even when they appear economically superfluous, there will obviously still be a great need for guard labor. And the additional burden of enforcing intellectual property restrictions will increase demand for such labor, since it requires careful monitoring of what was once considered private behavior. Once again, however, automation looms: robot police, anyone?

These, it seems to me, would be the main source of employment in the world of anti-Star Trek. It seems implausible, however, that this would be sufficient--the society would probably be subject to a persistent trend toward under-employment. This is particularly true given that all the sectors except (arguably) the first would be subject to pressures toward labor-saving technological innovation. What's more, there is also another way for private companies to avoid employing workers for some of these tasks: turn them into activities that people will find pleasurable, and will thus do for free on their own time. Firms like Google are already experimenting with such strategies. The computer scientist Luis von Ahn has specialized in developing ["games with a purpose"](www.cs.cmu.edu/~biglou/ieee-gwap.pdf): applications that present themselves to end users as enjoyable diversions, but which also perform a useful computational task. One of von Ahn's games asked users to identify objects in photos, and the data was then fed back into a database that was used for searching images. It doesn't take much imagination to see how this line of research could lead toward the world of Orson Scott Card's novel [*Ender's Game*](http://en.wikipedia.org/wiki/Ender's_Game), in which children remotely fight an interstellar war through what they think are video games.

Thus it seems that the main problem confronting the society of anti-Star Trek is the problem of effective demand: that is, how to ensure that people are able to earn enough money to be able to pay the licensing fees on which private profit depends. Of course, this isn't so different from the problem that confronted industrial capitalism, but it becomes more severe as human labor is increasingly squeezed out of the system, and human beings become superfluous as elements of *production*, even as they remain necessary as *consumers*.

Ultimately, even capitalist self-interest will require some redistribution of wealth downward in order to support demand. Society reaches a state in which, as the late André Gorz [put it](http://books.google.com/books?id=xRQOcJWXRwEC&pg=PA90&lpg=PA90&dq=gorz+%22means+of+payment%22&source=bl&ots=RjZtvZ7QxG&sig=eWqhIlEDIfuXfcIaAFkh5EHtiAw&hl=en&ei=fJYHTeHIOIK88gb_3v2hBw&sa=X&oi=book_result&ct=result&resnum=1&ved=0CBMQ6AEwAA#v=onepage&q&f=false), "the distribution of means of payment must correspond to the volume of wealth socially produced and not to the volume of work performed". This is particularly true--indeed, it is *necessarily* true--of a world based on intellectual property *rents* rather than on value based on labor-time.

But here the class of rentier-capitalists will confront a collective action problem. In principle, it would be possible to sustain the system by taxing the profits of profitable firms and redistributing the money back to consumers--possibly as [a no-strings attached guaranteed income](http://www.aei.org/book/846), and possibly in return for performing some kind of [meaningless](http://www.bbc.co.uk/news/uk-politics-11728546) [make-work](http://movieclips.com/4aBM-office-space-movie-did-you-get-the-memo/). But even if redistribution is desirable from the standpoint of the class as a whole, any individual company or rich person will be tempted to free-ride on the payments of others, and will therefore resist efforts to impose a redistributive tax. Of course, the government could also simply print money to give to the working class, but the resulting inflation would just be an indirect form of redistribution and would also be resisted. Finally, there is the option of funding consumption through consumer indebtedness--but this merely delays the demand crisis rather than resolving it, as residents of the present know all too well.

This all sets the stage for ongoing stagnation and crisis in the world of anti-Star Trek. And then, of course, there are the masses. Would the power of ideology be strong enough to induce people to accept the state of affairs I've described? Or would people start to ask why the wealth of knowledge and culture was being enclosed within restrictive laws, when "another world is possible" beyond the regime of artificial scarcity?

Recently The Atlantic published a piece about how "a generation of file-sharers is ruining the future of entertainment". The piece is pretty silly, since it conflates "the future of entertainment" with "the profitability of the major entertainment corporations", and in particular the record industry. Marc Weidenbaum has a nice explanation of how absurd that is. But even if you believe that the profitability of these companies is somehow necessary for us to have culture, the concern for their health seems to me wildly disingenuous and misplaced. Their troubles are not a function of "freeloaders" or the evils of the Internet. They are a result of greed and an unwillingness to part with an obsolete business model--an unwillingness that has been encouraged and abetted by the state and its approach to intellectual property law.

Here's my solution for the record companies. All they need to do is offer a service that provides:

• Unlimited downloads of a huge selection of music from both recent years and past decades...
• In a high-quality format...
• With absolutely no copy protection or other Digital Rights Management...
• For no more than $5 per month.

Why do I think this might be a success? Because it already exists. The SoulSeek network is a file-sharing service that contains a huge selection--at least for the kinds of music I tend to like. And though it's free to use, for a $5 donation you get a month of "privileges", which essentially put you at the front of the line when downloading from other users, which makes the whole experience much faster.

I've given a lot of money to SoulSeek over the past couple of years--nearly $5 a month, as it turns out. And I would have happily given that money to a similar service that gave full legal access to copyrighted downloads, and passed some of that money on to the artists. But it doesn't exist, because the record companies still believe they can force us to pay for $12 CDs and $1 iTunes song downloads. They don't cling to that model because it's the only one possible, but because they're too greedy and short-sighted to try anything else.

Of course, the record companies and their apologists would immediately claim that the model I've described isn't economically viable, and they could never make enough money from it to do all the good work they supposedly do to find and develop young artists. But even at $5 a month, there's a lot of money to be made here. If unlimited downloads at a monthly rate caught on, it could come to be something like cable TV that a large percentage of households pay for as a matter of routine. I don't think this is all that implausible: people like music almost as much as they like TV, and what I'm proposing would be an order of magnitude cheaper than cable.

According to the cable providers' trade assocation, there are 62.1 million basic cable subscriptions in the United States. This number of online music subscriptions, at $5 per month, would bring in around $3.7 billion of revenue. In 2005, total revenue from the sale of recorded music in the U.S. was about $4.8 billion. When you consider how much cheaper digital distribution is than manufacturing and shipping physical media, the unlimited-downloads model looks pretty competitive with traditional sales.

Now, maybe this model wouldn't catch on in the way I've suggested. But if people continue to prefer buying their music a la carte, there's no reason a subscription-based service couldn't coexist with iTunes style pay-per-download. Unfortunately, there's not a whole lot of incentive for the big copyright cartels to move toward the system I've sketched out here, because the Obama administration seems intent on using the repressive power of the state to force people into consuming media in the way the media conglomerates would prefer. Atrocities like the ACTA treaty are moving us toward a world of pervasive surveillance in which our cultural wealth is kept under lock and key for the benefit of a few wealthy copyright-holders.

In light of all this, the correct response to anyone who decries the moral perfidy of file-sharers is derisive laughter. The media companies have chosen to transition into a form of rentier capitalism that requires them to wage war on their own consumers. In that environment, it can hardly be surprising that the consumers fight back.

As a teenager in Minnesota, I attended my first Democratic Party caucus, where we sat in a church basement while a prospective candidate for office appealed for our support. At one point, a member of the audience asked the candidate for his position on the means-testing of public programs. When the candidate responded by asking which programs, in particular, ought to be means-tested, the questioner replied "any that conceivably could be means-tested".

At the time I didn't yet understand what "means testing" meant, but I still found this response a bit peculiar. It suggested that "means testing" was some kind of general point of principle rather than some technical point about implementing specific programs, which is what it sounded like.

I later found out that means testing refers to the practice of making public benefits conditional on one's demonstrated need for them, and on one's financial means of obtaining equivalent services in the private market. Policies that are specifically targeted at the poor, such as food stamps and Medicaid in the United States, are therefore means-tested programs. People like the man at the caucus meeting are in favor of extending this structure to programs which are not currently means-tested, like Social Security. They argue that cash support for the aged should be provided only to those who do not have sufficient income to get along without it.

This position has a superficial plausibility that makes it attractive not only to conservatives, but even to people on the left who are concerned about equality and social justice. It seems unnecessary, even unjust, to provide public benefits to those who are already affluent, particularly when doing so uses up finite public funds that could otherwise be redirected to those more deserving. However, I have come around to the position that means-testing of public benefits is something that the left should essentially never support.

The first justification for this position is entirely political in nature. In short, I do not believe it is possible to sustain the public consensus necessary to defend a generous welfare state regime, if the benefits of that regime are perceived as being directed to a privileged subset of the population. Setting up benefits in this way inevitably breeds resentment among those segments of the working class who pay taxes and do not receive substantial benefits, who then become open to the argument that the poor are parasitic on their hard work. This tendency is accentuated by the fact that the beneficiaries of means-tested programs will tend to be people who are already subject to social stigma and bigotry, such as women and members of racial minorities. The paradigmatic example of this in the United States is the dismantling of "welfare as we know it" in the 1990's. In that struggle, the barely-coded racist imagery of "welfare queens" highlighted a perception that the recipients of welfare were undeserving and opportunistic Others rather than people who could have, with a bit of bad luck, been any of us.

Not all elements of the welfare state suffer the same fate as welfare, however, not even in the United States. Consider, for example, the resilience of Social Security and Medicare in the face of decades of persistent conservative and neo-liberal attacks, culminating most recently in George W. Bush's abortive attempt to privatize Social Security. Those programs remain extremely popular with a broad cross-section of the public, to the point that Republicans will demagogue against Democratic health care proposals by posing as defenders of Medicare.

The difference between Medicare and Welfare, of course, is that Medicare is for everybody. You receive it when you turn 65, with no ifs, ands or buts. It therefore has the character of a social right, an entitlement of citizenship, rather than a special benefit or privilege. If a means test were to be imposed, however, it would convert Medicare into a program like Welfare--or indeed, a program like Medicaid, which, though ostensibly available nationwide, tends to be provided in a quite paltry form in poorer and more conservative states.

I therefore conclude that means testing of public benefits is little more than a trap set for progressives by those whose ultimate goal is the total destruction of these programs. Universal social rights are politically defensible, while particularist benefits are not. This lesson is, I think, supported by the work of Political Scientist Paul Pierson; as Joshua Tucker explains at the Monkey Cage, Pierson "explained how difficult it would be for governments to consolidate or retrench existing social policy programs, because these policies (pensions being the best example) create their own support coalition that reaches far beyond the left-wing electorate."

There is, however, an additional reason to support universalistic rather than targeted public programs, and this is a matter of principle rather than politics. The problem with means-tested benefits is not only that they are politically untenable, but that they inevitably put the state in the business of judging the worth and deservingness of applicants--and thus, by extension, judging the way in which they lead their lives. If, for example, welfare benefits are made contingent on performing work of some kind, then the state must decide what counts as a legitimate form of work. Does, for example, a mother's time spent raising a child count? Does getting a college education count? If it does, are all majors equally acceptable?

The fact that the state must adjudicate these issues--and must do so continually over time, since a person's status is constantly subject to change--means that benefit recipients are constantly subject to arbitrary bureaucratic domination. Universal benefits, on the other hand, require relatively little meddling in people's lives: in a country with universal health care, the only consideration for the state is whether or not you are a citizen. One should not, of course, understate the extremely fraught and contentious politics of citizenship itself, which may turn out to be the Achilles' heel of social democracy in the 21st century. Nevertheless, I regard it as a major step forward if we are arguing over who has the rights of citizenship rather than attempting to judge what makes a person deserving of some particular benefit.  I think that ultimately, means tested benefits tend to make the poor less free and less autonomous than the affluent. This is precisely the opposite of the goal we should be aiming at in thinking about the welfare state, which should be about enhancing human freedom and facilitating human flourishing.

This line of argument is, in a certain sense, in sympathy with critiques of the welfare state that have been offered from libertarian, anarchist, and Foucauldian perspectives. Unfortunately, discussion of these arguments tends to become bogged down in a narrow debate over whether one is "for" or "against" the welfare state. By now, however, we should all understand that there is not one welfare state but many, and that different institutional configurations can have very different implications for people's lives. Thus my goal as a writer and researcher is to promote a vision of the welfare state that enables individual autonomy and freedom by guaranteeing a basic standard of living as a human right, while simutaneously critiquing the idea that public benefits are special supports provided only to the deserving poor, and only in those instances where the private capitalist marketplace has "failed".

[Cross-posted from The Activist]

Serious debate about our visions for the future is always welcome, so it's nice to see Jason Schulman and David Schweickart debating "market socialism" and related things on this site. I don't have a lot more to add about formal models of the socialist economy, because frankly I'm not all that interested in them. Schemes for socialist economies--whether market or planned or whatever--tend to come off as a a bit of an exercise in what Marx derisively referred to as  "writing recipes for the kitchens of the future". Trying to predict exactly what socialism will look like is foolhardy--and moreover anti-democratic, since it pre-empts the actions and decisions of the actual masses who will have to make a post-capitalist world happen. So while these thought experiments about alternative economic models can be useful in clarifying our principles, I don't think we need to take the details all that seriously.

Rather than trying to draw up a detailed blueprint of a socialist economy, I prefer to think in terms of what Andre Gorz called "non-reformist reforms": changes to the system that can be implemented under capitalism, but which set the stage for further radical transformations. And I want to highlight one particular such reform that's associated with Gorz, and which commenter R. Burke brings up in the comments of Jason's recent post: the guaranteed minimum income, or "Universal Basic Income" as it's sometimes called.

This is just what it sounds like, an income that every citizen would be entitled to, independent of work. And I find it compelling because it directly addresses one of the most fundamental objectionable things about capitalism, namely the fact that it makes almost everyone dependent on performing wage labor in order to survive. This is despite the fact that we live in a society that is more physically productive than any other that has ever existed. Eighty years ago, John Maynard Keynes was predicting that the greatest problem his grandchildren would face was what to do with their abundant leisure time.  Instead, we are all working more than ever.

A guaranteed income could begin to reverse this state of affairs by giving people the option of opting out of the labor market, which today is only possible for a wealthy few. It would therefore address a goal that Pat Devine mentions in a passage Jason quoted: reducing the amount of unpleasant labor that people are forced to perform. As I already noted, I think this goal is of such paramount importance that I'm baffled by any theory of a socialist economy that doesn't make it absolutely central.

Which brings me to one thing I found quite unappealing about the vision David Schweickart presents. His description of economic life seems to assume that the ideal way to live is to have some job that you go off to for 40 hours a week for the rest of your life. If labor is unpleasant, the solution is to give workers more control, rather than giving them the option of opting out of work--"voice" rather than "exit", to use Albert Hirschman's lovely phrase. Now maybe this makes sense to people who grew up in the mid-20th century, when the labor market was less volatile and careers were more stable. But it doesn't make any sense to me. Even if full employment is possible, why would it be desirable? If there's not enough work to go around, why would you go and create more? And maybe it's true that if we make the workplace democratic, then work will be fulfilling and people won't mind it. But in that case, why force them?

It's at this point that you're supposed to start talking about "material incentives", to take Schweickart's choice of jargon. It usually starts with some troll objecting that socialism is impossible because nobody will do any work without the fear of starvation. The socialist then comes back with some argument about how socialism is going to motivate everyone to go out there and work hard. For Schweickart's system, the answer is that "one’s income is directly tied to the success of one’s firm", and so you work hard for the material reward. Jason doesn't explicitly address this issue, but I'm sure he could come up with a response.

But approaching the problem this way gets the whole issue backwards, by proposing solutions before we have understood what the actual problem is.  If you just talk in general terms about giving people "incentives to work", you're neglecting the reality that while some work would have to get done in any kind of desirable society, other kinds of work should actually be dis-incentivized. Broadly, I'd say that paid work in capitalism falls into at least the following categories:

1. Things that people want done, but which nobody particularly wants to do.
2. Things that people would do voluntarily provided they have enough time, even if they weren't paid.
3. Things that are useless or destructive, and happen only because they facilitate capital accumulation and people need jobs.
4. Things that people may want done and/or may want to do, but which have destructive effects on other people or the environment.

The discussions about material incentives are relevant to things in category 1. But much of the labor in modern capitalist societies falls into the other categories--more of it than we think, I suspect. I'd argue that a lot of artistic and knowledge work falls into category 2. So does child care, although just who does it voluntarily is another matter, which is why feminism is a core part of socialist analysis. Financial engineering, telemarketing, and basically anything that happens at a private health insurance company fall into category 3. So does much of the estimated 25% of U.S. employment that's taken up by what economists Sam Bowles and Arjun Jayadev call "guard labor": supervising workers, running the prison-industrial complex, providing private security, and other stuff that is mostly about preserving current power relations and maintaining inequality, rather than making anything useful. Driving a car or burning coal for electricity may fall into category 4.

Even though I can sketch out examples like this, in general it's pretty hard to differentiate these different kinds of labor in capitalism. That's because capitalism creates a situation where all work is "good" because it provides jobs, which people need in order to survive. However, these different kinds of labor wouldn't get differentiated in Schweickart's version of market socialism either, since he still assumes that everyone is forced to work--moreover, the idea of government as "employer of last resort" implies that we'd be actively creating useless category 3 work for people.  Devine's alternative, meanwhile, would attempt to use a convoluted planning process to differentiate between desirable and undesirable uses of labor. That may be necessary in some cases, but I don't think it should be our first solution--attempting to comprehensively micromanage every aspect of production strikes me as undesirably bureaucratic.

More importantly, I don't think it's necessary to go down this road at all. Rather than starting with these complicated issues of economic planning, we should start with the thing that's actually most desirable: making people less dependent on wage labor. Social Democracy has already gone part of the way in this direction, by removing things like health care and education from the market. But to really attack wage labor at its root, you need something like the guaranteed minimum income--perhaps in combination with reductions in the length of the work-week. 

At this point we get back to the incentives business again, with the critics screaming "but nobody would do any work!" At one level, I think this is just silly. For one thing, at least in the short run, most people would want to make more than the guaranteed minimum, and so would continue to work. For another thing, it's clear that people do various jobs for lots of different reasons that don't have to do with money, and some kinds of work would get more popular if people didn't have to worry about having the money to meet their basic needs. Some jobs really are enjoyable, in other words, and people would do them for free if they could. Other kinds of work give their returns by conferring status--for example, for all but the most famous artists, making art is more about gaining recognition than making money.  One appealing aspect of a basic income is that it would start to sort out the distinctions between the different kinds of labor outlined above. If some jobs start being things people do as hobbies, then great! If some jobs disappear, and we don't miss them, then great! If you have to pay people more to make them take crappy jobs, great!

Which isn't to say that basic income is a one-shot magic solution to all the problems of capitalism (although for the argument that it could be, check out a weird and provocative article called "The Capitalist Road to Communism"). Indeed, he best thing about a guaranteed income is that it stands a pretty good chance of provoking major economic disruption and social crisis--that's what makes it a "non-reformist reform."  In a world with a guaranteed income, it could very well turn out that there are some things that just aren't getting done. It's not clear that you'd be able to find enough people to clean office bathrooms or work the night shift at 7-11 if they had access to a basic income, no matter what you paid them.

Some people invoke the above scenario as an argument against the basic income, but let me emphasize that this is a problem I would love to have. Once it becomes clear what kind of work is both desired and undersupplied, we can have a political struggle about how that work will get done. By offering special rewards (i.e. "material incentives")? By creating some kind of national service requirement in exchange for the basic income (you have to go clean toilets or work the night shift once a month, say)? By finding clever new ways to automate these jobs? Or by deciding we can really do without some things we thought we "needed"?

I can't predict in advance what the solution would be. And I don't have to. That's really the most important point I want to make here.  I think the lesson of history is that momentous social change never happens because someone came up with a detailed plan for the future, won people over to it, and then implemented it. The chaos of real people making their own history always overwhelms such neat plans.

And I want to suggest that socialists, armed with an analysis of capitalism and a set of basic principles for the future, shouldn't be afraid of a politics that aims to provoke a crisis without knowing exactly where it will lead. The idea of a basic income that breaks our dependence on wage labor is a proposal for pushing toward that productive crisis, and for that reason I find it far more compelling than all the sterile blueprints for economic democracies and democratic plans and Parecons and what have you.

Leaving aside the economics, is a guaranteed income politically feasible? It's certainly a long shot--but then, so is any kind of radical economic change. It at least has the virtue of being straightforward and easy to explain. As I noted above, in some ways it's really just a an extension and completion of the historical project of Social Democracy: conferring a "social right" to the necessities of life and reducing the dependence of individuals on the labor market. And oddly enough, some on the right--like Milton Friedman and  the notorious Charles Murray--have endorsed versions of guaranteed income (although with some important differences from the leftist variants). Moreover, if it could be won it would be very difficult for the capitalist class to undo, because truly universal social programs are generally quite popular and nearly impossible to roll back.

Regardless, I think it's something worth talking about and agitating for. And who knows--if the current predictions of a long, high-unemployment "recovery" are borne out, perhaps people will begin to look more favorably on the idea of separating income from employment.

Today Matt Yglesias revisits a favorite topic of mine, the distinction between U.S. manufacturing employment and manufacturing production. It has become increasingly common to hear liberals complain about the "decline" in American manufacturing, and lament that America doesn't "make things" anymore:

Harold Meyerson had a typical riff on this recently:

Reviving American manufacturing may be an economic and strategic necessity, without which our trade deficit will continue to climb, our credit-based economy will produce and consume even more debt, and our already-rickety ladders of economic mobility, up which generations of immigrants have climbed, may splinter altogether.

. . .

The epochal shift that's overtaken the American economy over the past 30 years  . . .  finance, which has compelled manufacturers to move offshore in search of higher profit margins . . .  retailers, who have compelled manufacturers to move offshore in search of lower prices for consumers and higher profits for themselves

. . .

Creating the better paid, less debt-ridden work force that would emerge from a shift to an economy with more manufacturing and a higher rate of unionization would reduce the huge revenue streams flowing to the Bentonvilles (Wal-Mart's home town) and the banks . . . . The campaign contributions from the financial sector to Democrats and Republicans alike now dwarf those from manufacturing -- a major reason why our government's adherence to free-trade orthodoxy in what is otherwise a mercantilist world is likely to persist.

. . .

[Sen. Sherrod] Brown . . . acknowledges that as manufacturing employs a steadily smaller share of the American work force, "younger people probably don't think about it as much" as their elders . . . . Politically, American manufacturing is in a race against time: As manufacturing becomes more alien to a growing number of Americans, its support may dwindle, even as the social, economic, and strategic need to bolster it becomes more acute. That makes push for a national industrial policy -- to become again a nation that makes things instead of debt, to build again our house upon a rock -- even more urgent.

I don't dispute that manufacturing has become "more alien" to the bulk of American working people. But I question Meyerson's explanation for why this has happened, and I wonder whether we should really be so horrified by it. The evidence suggests that the decline in manufacturing employment in this country has been driven not primarily by offshoring (as Meyerson would have it), but by a dramatic increase in productivity. Yglesias provides one graphical illustration of this; here is my home-brewed alternative, going back to World War II:

This picture leaves some unanswered questions, to be sure. First, one would want to know what kind of manufacturing has grown in the U.S., for one thing; however, my cursory examination of the data suggests that U.S. output is still more heavily oriented toward consumer goods over defense and aerospace production, despite what one might think. Second, it's possible that the globally integrated system of production is "hiding" labor in other parts of the supply chain, in China and other countries with low labor costs.

But I don't think the general story of rapidly increasing productivity can be easily ignored. To really reverse the decline in manufacturing employment, we would need to have something like a ban on labor-saving technologies, in order to return the U.S. economy to the low-productivity equilibrium of forty or fifty years ago. Of course, that would also require either reducing American wages to Chinese levels or imposing a level of autarchy in trade policy beyond what any left-protectionist advocates.

Needless to say, I think this modest proposal is totally undesirable, and I raise it only to suggest the folly of "rebuilding manufacturing" as a slogan for the left. As Yglesias observes in the linked post, manufacturing now seems to be going through a transition like the one that agriculture experienced in the last century: farming went from being the major activity of most people to being a niche of the economy that employs very few people. Yet of course food hasn't ceased to be one of the fundamental necessities of human life, and we produce more of it than ever.

And yet I understand the real problem that motivates the pro-manufacturing instinct among liberals. The decline in manufacturing has coincided with a massive increase in income inequality and a decline in the prospects for low-skill workers. Moreover, the decline of manufacturing has coincided with the decline of organized labor, and it is unclear whether traditional workplace-based labor union organizing can ever really succeed in a post-industrial economy.  But the nostalgia for a manufacturing-centered economy is an attempt to universalize a very specific period in the history of capitalism, one which is unlikely to recur.

The obsession with manufacturing jobs is, I think, a symptom of a larger weakness of liberal thought: the preoccupation with a certain kind of full-employment Keynesianism, predicated on the assumption that a good society is one in which everyone is engaged in full-time waged employment. But this sells short the real potential of higher productivity: less work for all. As Keynes himself observed:

For the moment the very rapidity of these changes is hurting us and bringing difficult problems to solve. Those countries are suffering relatively which are not in the vanguard of progress. We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come-‑namely, technological unemployment. This means unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.

But this is only a temporary phase of maladjustment. All this means in the long run that mankind is solving its economic problem. I would predict that the standard of life in progressive countries one hundred years hence will be between four and eight times as high as it is to‑day. There would be nothing surprising in this even in the light of our present knowledge. It would not be foolish to contemplate the possibility of afar greater progress still.

. . .

Thus for the first time since his creation man will be faced with his real, his permanent prob­lem‑how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.

Productivity has continued to increase, just as Keynes predicted. Yet the long weekend of permanent leisure never arrives. This--and not deindustrialization--is the cruel joke played on working class. The answer is not to force people into deadening make-work jobs, but rather to acknowledge our tremendous social wealth and ensure that those who do not have access to paid work still have access to at least the basic necessities of life--through something like a guaranteed minimum income.

Geeky addendum: I thought the plot I made for this post was kind of nice and it took some figuring out to make it, so below is the R code required to reproduce it. It queries the data sources (A couple of Federal Reserve sites) directly, so no saving of files is required, and it should automatically use the most recent available data.

manemp <- read.table("http://research.stlouisfed.org/fred2/data/MANEMP.txt",
   skip=19,header=TRUE)
names(manemp) <- tolower(names(manemp))
manemp$date <- as.Date(manemp$date, format="%Y-%m-%d")
 
curdate <- format(as.Date(substr(as.character(Sys.time()),1,10)),"%m/%d/%Y")
 
outputurl <- url(paste(
   'http://www.federalreserve.gov/datadownload/Output.aspx?rel=G17&amp;series=063c8e96205b9dd107f74061a32d9dd9&amp;lastObs=&amp;from=01/01/1939&amp;to=',
   curdate,
   '&amp;filetype=csv&amp;label=omit&amp;layout=seriescolumn',sep=''))
 
manout <- read.csv(outputurl,
   as.is=TRUE,skip=1,col.names=c("date","value"))
manout$date <- as.Date(paste(manout$date,"01",sep="-"), format="%Y-%m-%d") par(mar=c(2,2,2,2)) plot(manemp$date[manemp$date&gt;="1939-01-01"],
   manemp$value[manemp$date&gt;="1939-01-01"],
type="l", col="blue", lwd=2,
xlab="",ylab="",axes=FALSE, xaxs="i")
axis(side=1,
   at=as.Date(paste(seq(1940,2015,10),"01","01",sep="-")),
   labels=seq(1940,2015,10))
text(as.Date("1955-01-01"),17500,
   "Manufacturing employment (millions)",col="blue")
axis(side=2,col="blue")
 
par(new=TRUE)
plot(manout$date,manout$value,
   type="l", col="red",axes=FALSE,xlab="",ylab="",lwd=2,xaxs="i")
text(as.Date("1975-01-01"),20,
   "Manfacturing output (% of output in 2002)", col="red")
axis(side=4,col="red")

Lots of interesting stuff in the most recent New Left Review. Last night I went through Gopal Balakrishnan's latest, in which he argues that the capitalist world system is not in for a return to rapid growth any time soon, but is instead headed toward the stagnant "stationary state" that characterized pre-industrial civilizations:

Note that this is subtly different from the "catastrophist" predictions which leftists have historically made, and which have a terrible track record. Balakrishnan is not arguing that capitalism is on the verge of collapsing and giving way to something else, because there is no oppositional movement powerful enough to bring about this outcome. He opens his essay with a quote from Gramsci, speaking about the potential for a "crisis that lasts many decades"; the passage evokes a more famous remark Gramsci's that "the old is dying, and the new cannot yet be born".

Balakrishnan gives four reasons for his prognosis: "demographic disproportion, ecological deterioration, politico-ideological de-legitimation and geo-political maladaptation". These refer to:

• The aging of Western societies, leading to a situation in which there are fewer productive workers supporting the retirement benefits of a growing elderly population. The growing cost of health care and the weak prospects for productivity growth in the service sector will lead to serious fiscal pressure on the state.
• The effects of climate change and other man-made disasters. While a transition to a "green capitalism" may theoretically be possible, at present it seems as though neither the bourgeoisie nor the political elite have the will to see this through.
• Neoliberalism has been discredited by the crisis, but the Keynesianism of the postwar era seems equally incapable of restoring growth, and instead can only prop the system up with a series of desperate bailouts and fiscal stimulus measures. Meanwhile, there remains no credible ideological challenge from the left. The consequence is escalating depoliticization and cynicism across the world polity.
• Finally, no clear successor to the American hegemon presents itself: China's economy is still too weak to shoulder the burden, Europe lacks the unified state capacity to do it, and no ad-hoc alliance of world powers seems capable of truly restructuring the system and moving it to a new stage.

The piece is speculative, without much in the way of empirical evidence, but it's nonetheless useful. As to these four explanations, some strike me as more plausible than others.

The ageing of Western societies is a real phenomenon, of course, but I am skeptical that it will have quite the impact that Balakrishnan suggests. For one thing, there is no reason to suppose that the current retirement age will remain fixed--indeed, we have already seen some efforts to push it up. Since fewer jobs today require intensive manual labor, it is feasible for people to remain at work longer. Of course, increasing the retirement age would be a reversal of one of the great gains made by the working class in the twentieth century, and it would have highly inequitable consequences for those who do still work in manual occupations. But we are speaking here only of possible resolutions of the crisis, not desirable ones.

Balakrishnan is also too quick to accept at face value the argument that health expenditures will continue to accelerate rapidly while the service sector will experience no productivity gains, based on what appears to be a variant of Baumol's cost disease theory.  The argument about health care betrays some ignorance about health care economics. Much of the cost of care in the United States is driven by the perverse structure of the market for health services, and the comparison of modern welfare states shows that the state is quite capable of restraining cost growth. As for the rest of the service sector, the issue of slow productivity growth is a real one, but I would not discount the possibility of realizing substantial efficiency gains. Think of the growth in self-checkout machines at grocery stores, which could do to grocery employment what ATM's did for bank tellers. Or, even more dramatic, consider the innovations in online education which could completely upend the existing system of higher learning. I suspect, in fact, that increased productivity in services has been held back by the appallingly low wages at the bottom of the American labor market, which have disincentivized employers from economizing on labor.

As for ecology, I am unfortunately afraid that Balakrishnan is right. The way the climate change debate has unfolded in the United States and elsewhere certainly suggests that the capitalist class is incapable of putting their long-term interests ahead of short-term profits and ideological antipathy to state solutions such as carbon taxes or even cap-and-trade. (Although the recent defections from the chamber of commerce are perhaps hopeful signs.) At the same time, it's still difficult to imagine that China will really consent to restrain their emissions in a way that the earlier industrializers never had to, all in order to ameliorate a problem that they themselves did not create.

While the consequences of climate change for humanity will be terrible, however, I do wonder whether they will really be as bad as all that for capital accumulation. On the one hand, ecological chaos would lead to a widespread destruction and devaluation of capital, allowing a new round of accumulation to proceed. On the other hand, there' s no reason in principle that adapting to and cleaning up after climate change-induced mayhem can't be highly profitable, even if its human consequences are terrible. The relevant maxim here, it seems to me, is that the reason capitalism never collapses is that there always turns out to be a way of resolving the crisis at the expense of the working class.

The issue of ideological drift and delegitimization of political institutions is, to me, the strongest of the arguments Balakrishnan musters--though oddly, it is the one he gives in the least detail. The bankruptcy of neoliberalism and the insufficiency of mainstream Keynesian solutions are plain enough.  As is the depoliticization and demobilization of the demos, the supposed mass base of bourgeois democracy. But what is even more ominous is the way in which bourgeois political institutions seem increasingly incapable of competently managing capitalism, even from a narrowly capitalist standpoint. Years of tax revolts and racist pandering from the right have lead to a situation in which it is always possible to appropriate new funds for new programs (at least if they take the form of giveaways to business or the rich), but never possible to raise the tax revenue to pay for them.  The end state of this trajectory is California, where Proposition 13, a 2/3 majority requirement for legislative tax increases, and a fanatical Republican minority have rendered the state an ungovernable wreck.

This situation appears intolerable, yet there remains no ideology on the horizon that seems capable of challenging it--certainly not Barack Obama's technocratic center-rightism, which appears to be interested only in the restoration of postmodern finance capitalism's status quo. And as Fredric Jameson points out, “the mass of people . . . do not themselves have to believe in any hegemonic ideology of the system, but only to be convinced of its permanence”.

The final of the four arguments, about geo-politics, is the most difficult to assess. As to the present moment, it certainly seems correct. American power is already over-extended, and the fiscal dilemmas outlined above may, eventually and hopefully, actually make cuts in defense spending thinkable in this country. I'm less pessimistic than Balakrishnan about the future of a united Europe, but it certainly doesn't seem like any rapid further consolidation is likely in the near term. As for China, it may yet rise to take its place in a Sinocentric world system, as Giovanni Arrighi and other World Systems theorists predicted long ago. But in the meantime, it does seem as though we are in for a period of uncertainty and chaos.

It is never wise to discount capitalism's ability to reinvent itself. We may yet see the launch of a new regime of accumulation in the coming years. Or, we may see another speculative bubble, putting off the crisis for another decade before culminating in an even worse crash. But if Balakrishnan is right, and we're in for a slow, grinding stagnation, then the political order of the day will be the Gramscian "war of position", as the left struggles to reorganize itself and raise the banners of "a better world in birth".

But what is that world, and what will be inscribed on our banners? That is, what are the principles that would underpin an alternative to capitalism today? That, alas, is a topic for another day.

A persistent debate in Marxist circles revolves around the concept of the "mode of production". Marx's own work, of course, was given over to discovering and theorizing the capitalist mode of production: a form of society in which the selling of wage labor and the accumulation of capital are the central organizing principles. But Marx's writing sometimes suggests that one can develop an entire theory of history around the notion that the countours of a society--its ideas, its institutions, its politics, and so on--can be derived from an understanding of that society's particular mode of production:

This conception of history depends on our ability to expound the real process of production, starting out from the material production of life itself, and to comprehend the form of intercourse connected with this and created by this mode of production (i.e. civil society in its various stages), as the basis of all history. (The German Ideology)

This is sometimes referred to as the model in which an economic "base" determines the cultural "superstructure". Thus there can be not only a capitalist mode of production, but others--primitive communist, feudal, socialist, and perhaps, one day, communist modes of production. This in turn leads to the "stagist" conception of history, in which one mode of production necessarily follows another, in a teleological progression from primitive tribalism to communism.

But even if you don't accept stagism, the very notion of noncapitalist modes of production brings with it a number of difficulties. When you start to look at the diversity of noncapitalist societies, it becomes less and less evident that a particular way of organizing production predicts a particular way of organizing social life. A great diversity of forms seems possible. What's more, the very idea of separating the economy from the cultural superstructure is analytically difficult when you're not considering capitalism, the one type of society which is premised on making that very separation: people in a hunter-gatherer society don't necessarily conceive of a separate entity called "the economy"; production is just a part of life in general, regulated by cultural codes and rules.

All of this quickly becomes apparent when one consults the record of Marxist attempts to understand noncapitalist societies. Marx's own speculations along these lines haven't held up all that well. Engels' work on primitive societies was later refuted by anthropologists. Karl Wittfogel's notorious conception of an "Asiatic Mode of Production" would have to be mentioned here, of course. Anthropologists like Maurice Godelier and Eric Wolf came to grief over the matter of mode of production, and when some in the Althusserian tradition tried their hand, they fared no better. In the extreme case of Barry Hindess and Paul Hirst, the manifest shortcomings of a theory of history based on the mode of production led to the repudiation of Marxism, and to the production of one of the most reviled and ridiculed [PDF] books of the whole 1970s period of left theorizing.

What to do, then? It seems to me that the correct solution to this problem is the one proposed by the anthropologist Talal Asad, in a review of a book by the aforementioned Eric Wolf. The review rehearses a familiar Marxist distinction between different ways of extracting a surplus from a dominated population: through force (as is the case in feudalism, for example) or through voluntary exchange (as is characteristic of capitalism). After discussing some of the limitations of this view, and of Wolf's project in general, Asad says the following:

This, I suggest, expresses very well where the trouble lies. We can surely accept that noncapitalist social relations in production, as in other areas of life, are more personal, and that reciprocal obligations across wide bodies and networks of kin are more common, than they are in capitalist societies. But there is no key to the secret of noncapitalist societies. It is only when we assume that such societies are determined by some single principle, or integrated into a determinate totality, that we look for the key that will explain them. But there is no good reason to assume that such is the case, and indeed the thrust of Wolf's entire narrative throws doubt on that assumption. Only in capitalist societies, based as they are on production for profit, on the drive for unceasing growth, on the penetration of money-values into various spheres of life, and on the continuous transformation of productive forces, is there something approaching 'a key' to its understanding. This is not to say that capitalist societies are integrated totalities, autonomous and homogeneous, without contradictions and without heterogeneous cultural spaces, because that they clearly are not. It is merely to argue that, if the concept of mode of production has any explanatory use, it is in relation to capitalism, and not in relation to 'kin-ordered' societies.

"There is no key to the secret of noncapitalist societies." This is a deep point, because it implies that the whole project of generalizing Marxist concepts to noncapitalist situations is misbegotten. Asad's argument amounts, in fact, to what I would consider the key procedure which Marxism uses to assimilate non-Marxist arguments: the historical circumscription of categories. In the same way that Marx argues that, say, "value" is a category specific to the capitalist economy, Asad argues that "mode of production" is meaningful only in relation to capitalist societies. If we carry his argument just a bit further, we can turn it into a historical contextualization of Marxism itself, which is now taken to be a theory of capitalism rather than of history tout court. It follows that the passing of capitalism would make Marxism obsolete: the residents of a communist future would have no more need for Marxism than we have for medieval scholastic philosophy.

The question of thought's historical grounding also relates back to a philosophical debate about Marx's relationship to Hegel, and in particular to Hegel's concept of "totality". On this latter point, the best treatment is given by Moishe Postone, who performs the historical circumscription gambit on Hegel, showing that the totality can only be the capitalist one (and that communism therefore is not a totality), and that Hegel's Geist is in fact capital itself. Though he does not stage the critique in these terms, it seems that Asad holds, as does Postone, that the category of totality must itself be historicized, so that we come to see it as something specific to capitalism. Thus are all the attempts at a "Marxist" theory of noncapitalist societies swept away--Asiatic mode of production, Hindess and Hirst, Gibson-Graham, and all the rest. They are mis-specified, irrelevant, "not even wrong" as Wolfgang Pauli once cruelly dismissed the work of a yo
ung physicist.

This line of argument has, perhaps, a somewhat tendentious claim on the handle "Marxism". It certainly entails rejecting, e.g., the Marx of The German Ideology whom I quoted above. One can call it whatever one likes, of course, but I would still defend the term "Marxism" on the grounds that one can distill a consistent and powerful theoretical system from Marx's thought without relying on a general "theory of history" based on modes of production.

All of this comes down to an extended riff on a maxim of Fredric Jameson: "always historicize!" One might object that this slogan is, itself, a transhistorical generalization--that the imperative cannot be applied to itself. I suppose that the historicizing imperative itself could be regarded as the one and only transhistorical postulate of Marxism. More paradoxically, however, I might suggest that "always historicize" is itself historically contingent, and that it may well be valid for people in noncapitalist societies to think in terms of transhistorical categories.

In any event, I do believe that contra, say, G.A. Cohen, we can rid ourselves once and for all of the conception of Marx's "theory of history". This conclusion is, to my mind, profoundly liberating, and not merely because it frees us from a long series of insular debates and intractable false problems. Limiting the historical reach of the mode of production's totalizing and determing force means, above all, that we can accept Marx's thought without acquiescing to any kind of economic determinism. This allows us once again to envision the post-capitalist future as a realm of freedom, and not just another iron cage.

And we now have the definitive riposte to all those post-modernists who would damn Marxism for its sins of essentialism, determinism, and teleology, and who would counsel us to abandon our master narratives and transcendental signifieds. To this we can now respond that what they perceive as an error in thought is in fact the defect of that reality which must be overturned; it is not a philosophical, but a political question, in other words. To put it another way: the demand to give up master narratives is the demand to give up a condition which imposes a master narrative.