Should economic growth be policymakers’ top priority? In The Once and Future Worker, published earlier this month, I argue no. Growth is important, to be sure, and rising material living standards depend on it. But I propose what I call the
Working Hypothesis: that a labor market in which
workers can support strong families and
communities is the central determinant of long-
term prosperity, and should be the central focus of
public policy. “While growth is necessary to a
prosperous society,” I write, “it is not sufficient.
Not all growth is equally beneficial, and the
policy choices that yield the most immediate
short-term growth don’t necessarily prepare the
ground for sustained economic and social
progress.”
Michael Strain and Jim Pethokoukis of the American Enterprise Institute have taken offense to this suggestion, and have launched a series of heated rebuttals in defense of the honor of economic growth. “The only thing [the book] really demonstrates is that it’s devilishly difficult to make sense out of nonsense,”
writes Pethokoukis. “And trying to do so forces one to embrace the absurd.” They accuse the book of being “
anti-globalization,” though the first sentence of its chapter on globalization observes that “practical objections to ‘globalization’ tend to be quite narrow.” The book, again, purportedly “
downplay[s] growth,” though its discussion of how best to understand prosperity emphasizes that “this isn’t to say that economic growth isn’t important; of course it is.”
These critics are fighting the last war, without showing a clear sense of where the current dispute lies. Both men insist repeatedly that growth leads to rising material living standards, especially when paired with rising redistribution, a point no one is questioning here. This is the classic idea of the “economic pie,” which policymakers seek to expand so that everyone can have a bigger slice. The Once and Future Worker’s core argument is that while this view—which I call Economic Piety—is self-evidently correct on its own terms, it is incorrect in the unstated assumption that present consumer welfare is the correct measure of prosperity.
Rather, I contend, work matters. People’s well-being is more closely tied to their productive capacity, and their commensurate ability to support their families and contribute to their communities, than it is to their level of consumption. Further, growth is itself an emergent property of a healthy society; insofar as the goal is to maximize long-term growth, all segments of society must remain engaged in a broad-based economy. We should not simply adopt the policies that appear most growth-friendly at a given moment in time, because ensuring wide participation in economic productivity is foundational to a healthy society, not a nice-to-have byproduct.
So when Strain and Pethokoukis affirm their correctness from within their own consumption-maximizing perspective, they miss the point. They repeatedly attribute positions to the book that it does not take, avoid quoting from it, criticize none of its actual policy proposals, and fail even to acknowledge the existence of the question whether Economic Piety or the Working Hypothesis offers a better way to understand prosperity. Compare Pethokoukis’s claim that I argue “globalization has brought only stagnant living standards” for the non-“elite” with the book’s text: “we got exactly what we thought we wanted: strong overall economic growth and a large GDP, rising material living standards…” But as the book’s next sentence notes, “we gave up something we took for granted: a labor market in which the nation’s diverse array of families and communities could support themselves.”
Focusing on concrete points of disagreement might help us avoid talking past each other. How, for example, should we understand the present condition of the American working class—roughly, those who have not earned a college degree? If our standard is material consumption, they have never been better off: virtually all of them have microwave ovens, mobile phones, and other consumer products. If our standard is supporting their families and communities through productive work, however, the past decade has been the worst of the post-war era. So, is the working class thriving or not? I think the evidence points clearly toward a crisis. The working class is beset by withdrawal from the labor force, family collapse, rising dependence on government programs, skyrocketing substance abuse and suicide rates, and declining life expectancy. On what basis should we say things are going well?
Second, is all growth of equal value? An aggregate measure of GDP or productivity obscures the question of who is producing or becoming more productive. If the least productive 20 percent of a nation’s workers drop out of the labor force entirely, but the most productive 20 percent double their productivity, GDP will be higher. Is the nation better off? I would say no. Do my critics disagree?
Regarding globalization, Strain and Pethokoukis take particular issue with my suggestion that trade and immigration may not be always beneficial. My view is that they can be beneficial, but balance matters. An international market in which America imports $50 billion of cars from Japan and sends back $50 billion of airplanes is healthy. But if we send back $50 billion of IOUs (i.e., Treasury bonds) instead, American workers lose and the American economy suffers. Do my critics see these transactions as comparable, and voice no preference between them? Likewise, immigrants bring many positive assets to America, but adding unskilled workers to a labor market struggling to accommodate those already here is a mistake. Do Strain and Pethokoukis believe high levels of unskilled immigration have been and will continue to be superior to a skills-based system, either for American workers, or our long-run economic growth?
Obviously, there is much to discuss. I hope Strain and Pethokoukis will answer these questions and perhaps pose some of their own, but that in doing so they will take the time to understand what The Once and Future Worker actually says, and how it differs from their own views.
Oren Cass is a senior fellow at the Manhattan Institute and the author of the new book,
The Once and Future Worker (November 2018).
One million dead from suicide, drug overdoses since 2007
Casualties of the social counterrevolution in America
1 December 2018
This year’s report on mortality rates released Thursday by the Centers for Disease Control (CDC) reveal that the American working class is confronting an unprecedented social, economic, health and psychological crisis.
The CDC’s findings show a staggering increase in the indices of social misery in just one year, from 2016 to 2017.
- Life expectancy dropped from 78.7 to 78.6 years, the third consecutive year-by-year decline.
- The age-adjusted death rate increased 0.4 percent, from 728.8 deaths per 100,000 people to 731.9 per 100,000 (including a 2.9 percent increase among young people aged 25-34).
- Drug overdose deaths increased 9.6 percent (including a 45 percent increase in deaths from fentanyl). Drug overdose is the leading cause of death for those under 55.
- Suicide rates increased in 2017 by 3.7 percent, from 13.5 per 100,000 to 14.0 per 100,000.
The report’s historical figures quantify the devastating impact on the working class of the financial crash of 2007-2008 and its aftermath.
- From 2007 to 2017, suicide deaths rose from 34,598 to 47,173, a 36.3 percent increase.
- Drug overdose deaths nearly doubled, rising 95.0 percent, from 36,010 in 2007 to 70,237 in 2017.
- The total dead from suicide and drug overdose since 2007 alone is 954,365 people—equivalent to the population of America’s 10th largest city. This is more than the total number of US soldiers killed in all of America’s wars, excluding the Civil War. With 2018 nearly complete, the total dead has now likely crossed one million people.
The response of the political establishment to the report is entirely predictable: an article or two in the major newspapers, a quick segment on the evening news, and maybe a tweet from a handful of politicians.
But everyone knows that nothing will be done. The stock prices of the corporations peddling pills to disabled veterans and injured workers will continue to rise. By tomorrow, the CDC reports will be long forgotten, buried beneath the ruling class’s anti-Russia and anti-China campaigns, #MeToo hysteria, and demands for internet censorship.
The cause of the deaths of 100,000 people per year from social misery is not a great mystery. It is the product of the capitalist system and the intended result of policies of deindustrialization and social counterrevolution carried out for more than four decades by both the Democrats and Republicans, in collaboration with the trade unions.
This is a widely recognized fact among medical professionals. A 2018 study published by the American Journal of Public Health titled “Opioid Crisis: No Easy Fix to its Social and Economic Determinants” blames “a multi-decade rise in income inequality and economic shocks stemming from deindustrialization and social safety net cuts” for growing differences in life expectancy between the rich and the poor.
In particular, the study notes the devastating impact of the massive wealth transfer carried out by the Obama administration after the 2008 financial crash. “The 2008 financial crisis along with austerity measures and other neo-liberal policies have further eroded physical and mental well-being,” the report states.
While the banks and corporations received trillions in bailouts, millions of workers lost their homes, their jobs and their sense of dignity and purpose.
Last Monday, when General Motors announced that it was closing five auto plants and laying off 15,000 workers in the US and Canada, its stock soared nearly 7 percent. For the company’s affluent shareholders—including the bureaucracy of the United Auto Workers union (UAW)—this news means longer and more exclusive vacations, new and more expensive cars and homes, and plenty of jewelry and champagne for the holidays.
But for autoworkers, their families and the millions of residents of the impacted areas, it means desperation, drug addiction and death.
Those cities impacted by the GM plant closures—including Detroit and its Warren, Michigan suburb, White Marsh, Maryland and Lordstown, Ohio—are already among the most horribly affected by the opioid crisis after decades of cuts to jobs, wages and social services. The difference in life expectancy between the richest and poorest 25 percent is already 6.7 years in Youngstown, Ohio, near Lordstown. In metro Detroit the difference is 8.2 years.
GM’s move was hailed by the corporate press. The Wall Street Journal and Washington Post (owned respectively by the multibillionaires Rupert Murdoch and Amazon CEO Jeff Bezos) praised the decision as a stroke of genius. Automotive News named company CEO Mary Barra “Industry Leader of the Year.”
The duplicitous and staged anger among a relative handful of Democrats, Republicans and UAW officials to GM’s move is totally fraudulent. All those politicians and union bureaucrats who are pounding the podium with one hand are accepting company payoffs with the other.
GM gave billionaire CEO Donald Trump $25,000 for his 2016 presidential run and he reciprocated with massive tax cuts for corporations and the rich. That same year, GM gave more money to Bernie Sanders ($33,000) than to any other senator. In 2018, GM contributed to the campaigns of a majority of those elected to the House and Senate, in equal parts Democratic and Republican.
As for the UAW, this organization of bribe-takers and company agents is responsible for decades of concessions, which have transformed auto towns like Dayton, Toledo and Kokomo from relatively comfortable communities to epicenters of the opioid crisis. In return, the union bosses have been well compensated. A growing list of current and former UAW officials is under federal investigation for accepting bribes from GM, Fiat-Chrysler and Ford in exchange for helping the companies increase exploitation and cut labor costs.
Under capitalism, the working class is entirely excluded from the decision-making process. The political establishment makes nothing available to help the victims of factory closures and deindustrialization, leaving them to die.
Instead of meeting the needs of the working class, the ruling class pockets the wealth created by workers and allocates trillions of dollars to the military and intelligence agencies so that they can implement through military force the demands of the banks and corporations.
The Trump administration cut more than $200 million from health programs to help pay the cost of locking up 14,000 working-class children from Central America, whose only “crime” was to flee their impoverished homelands in search of a better life.
In September, the Department of Health and Human Services announced that it was transferring $16.7 million from the CDC, $9.8 million from Medicare and Medicaid, $87.3 million from the National Institute of Health and $80 million from refugee care to establish internment camps for immigrant children. And Trump wants workers to believe that immigrants—and not the government and corporations—are to blame for plant shutdowns and cuts to wages and social programs!
The CDC reports provide a quantitative expression of the immense social anger and desperation that have built up in the working class, for which there has been no progressive outlet. The decades-long suppression of the class struggle imposed by the trade unions has forced workers to channel their anger inward, and in their isolation, many are taking self-destructive measures.
But this long period of one-sided class war is coming to a close. This year, which has seen a major increase in strike activity, is only the beginning of a new period that will be marked by increasingly powerful strikes and protests in the US and internationally.
Workers must build their own organizations—rank-and-file committees—to unite and coordinate their struggles across industries and national boundaries. In this way, workers can harness their collective social dissatisfaction and channel it in a political direction in the struggle against capitalism and for socialism. By unleashing their immense social power, workers will storm the commanding heights of the capitalist system and free up trillions of dollars to meet the urgent needs of the human race.