Peter Frase

I went into excruciating detail about manufacturing output statistics in my last post, mainly so that I could post some more analysis using various international sources. One question that often comes up about American manufacturing, after all, is whether our pattern of deindustrialization is unusual compared to other countries. To get some idea, we can use the statistics on employment and output compiled by the OECD. These numbers are, as best I can tell, roughly comparable to the Federal Reserve "output" numbers I used in my initial post on U.S. manufacturing.

For most countries, the OECD data only goes back a few years. So for some of the most interesting cases--namely, recently industrializing poor countries--we don't have good historical data. However, we can at least compare the U.S. to other rich countries. Here's manufacturing employment and output for the U.S., Sweden, and Japan, going back to 1970:

Here, we see that "deindustrialization" in the sense of declining manufacturing employment is not just a U.S. phenomenon. Likewise, manufacturing output has grown dramatically in all three countries. Indeed, output growth has been faster in the U.S.

This is particularly amusing with respect to Japan. Back in the 1980's, of course, Japan played the role of bête noir in American popular discourse that China plays today: the scary Asian menace that was going to out-compete the U.S. economy and ensure our economic doom. And indeed, output and employment in manufacturing both grew faster in Japan than in the U.S. in the 1980's. But since then, Japan has followed the same pattern of employment decline as the United States, while its output has remained stagnant. This is worth keeping in mind when considering the likely future of manufacturing in today's low-wage countries.

But what if we expand our view to include some more recently industrialized countries? Given the available data, we are unfortunately limited to just the most recent business cycle. Still, there are some interesting patterns:

Now some different patterns emerge. The U.S., Germany and especially Korea show the pattern of divergence between employment and output. In South Africa and Turkey, on the other hand, the two are more closely linked. Turkey, in fact, shows an actual increase in the number of manufacturing employees, unlike any of these other countries. This is likely due to a combination of low Turkish wages and proximity to EU markets--along with the anticipation of possible future Turkish membership in the EU. There are those who would like to "bring back" manufacturing jobs from offshore locations like Turkey. But it's not clear how many jobs this would actually create--Turkish manufacturing is a big employer precisely because it isn't all that productive. Protectionist policies--or increases in wages in the low-wage producers--would probably create some jobs in the rich countries, but they would also probably lead to increased use of labor-saving technology.

Of course, we still haven't dealt with the panda bear in the middle of the room: China. But I'm going to wait and put that one in its own post.

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.

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")

Compare and contrast:

"Work is where they find their real fulfilment--running an investment bank , designing an airport, bringing on stream a new family of antibiotics. If their work is satisfying people don't need leisure in the old-fashioned sense. No one ever asks what Newton or Darwin did to relax, or how Bach spent his weekends. At Eden-Olympia work is the ultimate play, and play the ultimate work."  --J.G. Ballard, Super-Cannes

"Old premise: work sucks, and after decades of toil, one has “earned the right” to get paid to do nothing. New premise: work is self-defined, self-led and empowering. Small-scale and global-reach entrepreneurship is a reality and this will make work a joy rather than a painful necessity." -Pascal-Emmanuel Gobry, The American Scene

The libertarian right assures us that the preceding is a description of utopia.

This message intellectually sponsored by the Work Less Party.

We live at a time when advances in technology make possible an easing of the burden of work by a reduction in working hours, and a tremendous expansion of human freedom. A moribund capitalism prevents us from realizing this potential, by turning productivity into profit instead of free time, and by trapping the creative potential of human knowledge in the form of private monopolies enforced by the state. Two pieces of data illustrate this point.

The first is this graph, which comes from a report of the President's Council of Economic Advisors (PDF):

Forget what you heard about outsourcing. The manufacturing sector in the U.S. produces eleven times as much as it did in the 1940's, but employs a far lower percentage of the population than it once did. All that increased productivity could be turned into reduced hours for all; instead it is turned into profits for a few, unemployment and uncertainty for many.

The second datum comes from a remarkable study that was reported today. An analyst at a private firm looked at American companies in order to determine where their value came from:

Cardoza said his research showed that tangible assets, like plants, equipment and inventory, represented four-fifths of the market value of U.S. companies 30 years ago. The other fifth came from intangible assets like brand name, reputation and other factors. Now, he said, the ratio has flipped, and intangibles, which he valued by subtracting tangible assets from a company's total market value, make up four-fifths of the pie, with the largest slice made up of patents, copyrighted material and other forms of intellectual property.

In other words, state-granted monopolies over knowledge, rather than the production of commodities, are now the basis of American capitalism. The money that accrues to the holders of these monopolies is what, in the economic tradition, is known as a rent. Unproductive extraction of rent was something that was associated with the landowning nobility during the transition to capitalism, and bourgeois thinkers raged against it. Now the capitalist class is the unproductive, rentier class. But who will overthrow them?

To get a sense of the case against patent and copyright law--from both a left and right perspective--see this fascinating blog, where I first spotted the link to this article.

Critics of neoliberalism, from right and left, have often remarked on the nonsensical quality of Gross Domestic Product as a measure of societal wealth. Since GDP measures everything which is paid for on the market, it cannot distinguish between positive and negative forms of economic activity. A cure for cancer becomes equivalent to cleaning up an oil spill, so long as both cost money. On the other hand, helping your neighbor carry her groceries up the stairs has no economic value, while the production of cigarettes and the treatment of lung cancer become major sources of "wealth".

This critique is really two critiques, however, one of which has some radical implications. Merely pointing out that GDP valorizes things like environmental destruction and weaponry as forms of wealth leads to a tame (if salutary) reformism: such "public bads" should be taken off the books, or counted negatively against those good things which are produced for sale in the market. All this amounts only to a better accounting method, a better way of showing how much, and how efficiently, is being produced by the capitalist economy.

But the critique of GDP points to a deeper question: why should things be produced for money at all, regardless of whether they are good or bad? That is, do we really gain as a society when things which could be performed voluntarily and for free become paid jobs?

The standard response to this question is that, while it would certainly be nice if all production could be undertaken voluntarily rather than under the discipline of wage labor, such an anarchist utopia is totally impractical. And for many goods, this is a real and difficult problem. The same things that make production efficient--the division of labor, repetitive and tedious jobs--are the same things that make people not want to do them unless they get paid. To address this problem, we need some way of negotiating the trade-off between having more things and having more (and higher quality) free time. Of course, under the present fetishization of constant economic growth, it is impossible even to articulate such a trade-off, except in the language of consumer or worker "choice".

But let us set this set of problems aside for a moment. The tension described above is true primarily for physical goods, things like cars and shoes. But what is distinctive about the capitalism that has developed over the past few decades is the increasing preponderance, in the money economy, of commodities that are not physical objects, but intellectual property of one kind or another. Let us take a single example, from the computer software industry.

Microsoft is preparing to release the new version of Microsoft Windows, called "Vista". In the run-up to launch, the company is making every effort to persuade customers of the value of this new product. One of the most important targets of persuasian has been the European Union, which has been increasingly unhappy with Microsoft's monopoly business practices. To the end of persuading the EU to welcome Vista with open arms, Microsoft recently released this white paper. Its purpose is to outline the positive economic benefits which Microsoft Vista will supposedly bring to Europe. These, are, according to Microsoft:

• Within its first year of shipment, IDC expects Windows Vista to be installed onmmore than 100 million computers worldwide. More than 30 million computers inmthe region studied are expected to be running Windows Vista.
• In the six countries studied, Windows Vista-related employment will reach moremthan 20% of IT employment2 in its first year of shipment.
• While much of this employment will shift from Windows XP-related employment,mover 50% of the growth in IT employment will be driven by Windows Vista.
• For every euro of Microsoft revenue from Windows Vista in 2007 in the sixcountries studied, the ecosystem beyond Microsoft will reap almost 14 euro in revenues. In 2007 this ecosystem should sell over ?32 billion ($40 billion) in products and services revolving around Windows Vista.
• Within the six-country region, in 2007 over 150,000 IT companies that produce, sell, or distribute products or services running on Windows Vista will employ over 400,000 people; another 650,000 will be employed at IT using firms.

Billions of dollars in economic growth due to Vista! What wonderful news! But wait--what does this mean? One critic quickly saw through the gambit on offer:

The white paper may predict sales by the "Microsoft ecosystem" of over $40 billion in six of Europe's biggest economies, but what this figure hides is the fact that income for Microsoft and its chums is a cost for the rest of Europe. In other words, IDC's white paper is effectively touting an expense of over $40 billion as a reason why the European Commission should welcome Vista with open arms.As the paper itself mentions, half of this cost is down to the hardware. Some of these purchases would have taken place anyway; the rest represent upgrades from older hardware that cannot meet Vista's requirements. But if Vista did not exist (or, for example, if the European Commission were to block its sale for whatever reason), the old systems would not suddenly stop working: they would tick along for a few more years, gradually being replaced. The only justification for this hefty expenditure is to be able to run Vista: no Vista, no need to rustle up many extra billions on hardware upgrades outside the usual replacement cycles.

It's the same on the software side. The case for Vista itself is hardly strong. As the product's ship date has slipped, so more of its new features have been ripped out. Now it is not entirely clear what the benefit of upgrading is (apart from the evergreen "better security", of course). And without the need for hardware and software upgrades, the associated consultancy and service costs disappear too: most of Vista's $40 billion "benefit" is not only a cost, but an unnecessary one at that.

A product which imposes heavy costs on users, including accelerated hardware obsolesence, without clear benefits? Who would want such a thing? The economic growth being cited by Microsoft is evidently the kind of phony "wealth creation" cited by critics of GDP in the first sense mentioned above. But we can also ask the second question. Suppose that Vista did have discernible benefits. Certainly operating systems, generally, are useful things, and have to be upgraded sometimes. Even if Vista was a better piece of software, we might still ask: why should such a thing be made by a private company and sold for a profit? Why couldn't people just make it for free in their spare time, and then give it away?

To which Microsoft might respond: without the possibility of profit, there would be no incentive to innovate, and hence no-one would write operating systems. As against the cases of shoes and cars, however, a clear counterexample exists that vitiates this argument. The existence of free and open-source software is an excellent example of a post-capitalist form of production, in which social wealth is produced outside the system of economic (monetary) value.

The fact that the things like software can
be produced for free in the "social economy" does not mean that everything can be produced this way, as some of the more exuberant proponents of the "immaterial labor" thesis would have you believe. Yet by criticizing the facile equivalency between economic activity and wealth, we can begin to move toward a real critique of capitalism. This critique, if it is to reinvigorate socialism as an idea, has to take as its starting point this observation of Marx's, from volume 3 of Capital, one of the few places where he prefigures the communist future:

The actual wealth of society, and the possibility of constantly expanding its reproduction process, therefore, do not depend upon the duration of surplus-labour, but upon its productivity and the more or less copious conditions of production under which it is performed. In fact, the realm of freedom actually begins only where labour which is determined by necessity and mundane considerations ceases; thus in the very nature of things it lies beyond the sphere of actual material production. Just as the savage must wrestle with Nature to satisfy his wants, to maintain and reproduce life, so must civilised man, and he must do so in all social formations and under all possible modes of production. With his development this realm of physical necessity expands as a result of his wants; but, at the same time, the forces of production which satisfy these wants also increase. Freedom in this field can only consist in socialised man, the associated producers, rationally regulating their interchange with Nature, bringing it under their common control, instead of being ruled by it as by the blind forces of Nature; and achieving this with the least expenditure of energy and under conditions most favourable to, and worthy of, their human nature. But it nonetheless still remains a realm of necessity. Beyond it begins that development of human energy which is an end in itself, the true realm of freedom, which, however, can blossom forth only with this realm of necessity as its basis. The shortening of the working-day is its basic prerequisite.

Now the distinction between "freedom" and "necessity" is not as clear-cut as Marx seems to imply here, and it is not coextensive with "immaterial" and "material" goods. Fine wines and Sony Playstations are material goods, but are they necessary ones? This is, ultimately, a political question, but it is not one that can be resolved in capitalism. Defining the boundary between the realm of necessity and the realm of freedom is, I would argue, the specific content of socialism as a form of society and a political process (rather than a telos, a utopia, or an end of all politics). Framing things this way explodes the false opposition between state planning and market anarchy. The aim of socialism is not to pull all economic activity under the control of the state. Rather, it is to push out as much as possible from commodity production in the market to socialized labor in the "free" sector.* Conversely, only where necessary, that is, where other ways of organizing production are not feasible, would production be pulled in to collective control by the state, workers collectives, or some other communal form.

This formulation opens a new horizon of possibility for the socialist project, a new vision of what society could be like. It also clearly rules out certain longtime "left" preoccupations as being basically anti-socialist. The Keynesian idea that we need more jobs and higher wages for everyone comes to seem dilatory, in this view: what we need instead are shorter hours and a lower cost of living. As a corollary, we need things like socialized health care and child care, which reduce individual dependence on wage-labor. Neither of these are anti-capitalist programs in themselves; yet they point away from capitalism rather, as with Keynesianism, toward an intensification of its logic.

Left untheorized, here, is imperialism, or more generally, uneven development (and by implication, racism). If too much wage-labor is the constitutive problem of European and North American societies, this cannot be said of much of the rest of the world--or even of the pockets of deprivation within the rich societies. Thus, the socialist project must entail a massive, internationalist, redistributive project along with the anti-capitalist project delineated here, if it is not to degenerate into the construction of elite islands of privilege in a global sea of misery. (In this, Hardt and Negri are right: a guaranteed income and global citizenship are the sine qua non of the left project today. Unfortunately, their naive postmodernism and reflexive anti-statism made them unable to connect this realization with a coherent political strategy.) Likewise, ecology and the reality of physical limits on human societies demand serious attention, if we are to give real content to Marx's comment about "the associated producers, rationally regulating their interchange with Nature". And last but not least, what is described here is intrinsically also a feminist project: without a critique of unpaid women's labor, reduction of paid labor just reduces itself to a patriarchal ideology of the "family wage". But consideration of these dilemmas will have to wait for another time.

[* The free sector, or the realm of freedom, would be free in a double sense: its products would be available to everyone for free, like open source software; at the same time, the laborers themselves would be "free" in the sense that they work according to their own schedules and according to their own desires, rather than at the direction of a boss. The realm of freedom is thus, pace Stallman, free as in free spech, and free as in free beer.]