business

49 Covid-19 has me tongue-tied. But flowers have me blossoming!

~ Roger JG Albert ~ 6 Comments
Carolyn’s dry creek bed. Tim, our son-in-law helped put this together. This greets us as we walk up the driveway towards the house. I love this scene. It always makes me smile.

Some of my artist friends have remarked that over the past month or so that they haven’t raised a brush to canvas, or engaged in any other art practice. It seems that gardening and cleaning have taken precedence over art production in the past while. For many, isolation, the cancellation of art shows, and slow sales have dampened creativity. That’s been my experience too. I’ve done a little drawing, but the bulk of my time recently has been taken up with cleaning my studio and workshop and doing maintenance projects around the property to the extent that my energy and pain levels allow. I have not written anything in quite some time. My last blog post was about our gardens here and not so much about my myeloma or Covid-19. Carolyn’s gardens have been so uplifting!

That said, Covid-19 certainly has me tongue-tied at least as far as talking about my cancer goes. The myeloma that I’m plagued with seems to have more or less evaporated, at least according to my lab results. It’s still incurable, but it’s likely that I will go into remission by the end of the summer and thankfully get a break from chemotherapy, I’m hoping for a long break. Of course, the oncologists promise nothing and I can understand that. So, it seems, myeloma is not the cause of my current health deficits, rather, the chemo drugs are largely responsible for the many side-effects that I experience every day. Old age, of course, has slowed me down. As Robert Sapolsky writes:

“we are now living well enough and long enough to slowly fall apart. The diseases that plague us now are ones of slow accumulation of damage—heart disease, cancer, cerebrovascular disorders.” (from “Why Zebras Don’t Get Ulcers: The Acclaimed Guide to Stress, Stress-Related Diseases, and Coping (Third Edition)” by Robert M. Sapolsky)

Yeah, that’s me. But, strangely enough, about a month ago I started feeling better. I suddenly got more energy. I could use my shop again and do things I have been unable to do for months. I seriously doubted that I would ever be able to handle tools again, especially chainsaws and the like, but I am. It’s wonderful! It makes life worth living again. I think my improvement is in part the fact that my body is adapting to the chemo drugs.

For some time I seriously wondered if I was not destined for a few more years of moderate to severe constant pain, low energy, dizziness, peripheral neuropathy, bowel issues, irritated eyes, headaches, and various other unpleasant bodily sensations. Death seemed preferable, frankly, although the thought of dying never did appeal to me at all. I may be able to intellectually accept the idea, but the reality of end times is another thing entirely.

Feeling better was such a relief. Then Covid-19 assaulted our lifestyles and sociality to an extreme, and we’re still trying to figure out where we go from here. Confusion reigns. What will the summer be like? Will the kids be going back to school in the Fall? Will we be able to get out canoeing at all this year? These are all open questions with no definite answers.

For a sociologist, Covid-19 and other potential future pandemics are an unintended consequence of globalization and are inherently interesting by that fact. The world has shrunk substantially over the past forty or fifty years in ways that are not readily obvious or apparent. Manufacturing businesses only incrementally moved their production operations off shore. The changes were, and still are almost imperceptible. It’s hard to pinpoint the exact time when refrigerators, car parts, computers, tools, etcetera were no longer produced in North America, even though they are still largely designed here by corporations that still control their manufacture and assembly in places like Wuhan, China sometimes in plants they own and sometimes by Chinese contractors.

This inverter tells the story of globalization. Designed in Canada by a Canadian corporation which owns the product, assembled in China but not made in China (from parts manufactured all over the place).

China has made it easy for them by establishing export-processing zones free of taxes, health and safety regulations and with low wages.

We know the container ships are out there. We know the airlines blanketed the earth with flights carrying both cargo and passengers at rapidly rising rates, and the internet has made just-in-time (Japanese-type) production possible along with the easy flow of finance capital. I can’t imagine there’s any turning back the clock on globalization, but the pandemic has exposed one very serious Achille’s heal of global corporate capitalism. When commodities and people move so easily and necessarily all over the globe in such immense volumes, it’s no big deal for viruses to hitch a ride on unknowing and unsuspecting travellers. The price of cheap commodities is exposure to viral threats that were previously contained in specific geographical areas. Smallpox was not the first pandemic but when it was introduced to North America hundreds of years ago now it killed tens of millions of indigenous people in wave after wave well into the Nineteenth Century. The Black Death in 14th Century Europe probably originated in China and arrived in Europe via new trade routes. It also killed tens of millions of people. We open up long distance trade at our peril. History has taught us that, but we haven’t learned anything from it. Seems we failed the exam.

So now what? Well, a friend (an anthropologist) and I discussed this last Monday evening and we concluded that although corporate America and Canada would love to control the process and the narrative, the more likely issue for business profits will be whether or not individuals like you and I gather up enough confidence to get out there and spend money on services and commodities. If we don’t, or are slow on the uptake thanks to successive waves of Covid-19, business will flounder and will have to rethink a globalist strategy that for decades has laid a golden egg for them. That won’t be easy for a number of reasons, one being that productive capacity has escaped national containment and it’s near impossible to produce a Ford motor car these days without assembling over four thousand parts made all over the world in factories from Mexico to China to Sri Lanka and India. It used to be that Ford produced cars in Dearborn, Michigan from scratch, bringing in all the raw materials necessary in the production of a car and making all the parts on site. Those days are long gone. Can they ever return? Maybe, but the price of vehicles and everything else is bound to rise if the nationalization of production were to be successful, possibly making most vehicles and most other commodities unaffordable to an increasingly impoverished workforce. Catch-22 is real. We’re living it right now.

Thankfully we still have our garden. Here are some pictures for you: The first three images are of the same scene taken a week to ten days apart. The greening has been very fast thanks to ideal growing conditions. The others are just a collection of pictures of flowers I chose at random. Enjoy!

Lose your job to automation: Mourn or celebrate?

~ Roger JG Albert

The three links below of several hundreds that can be found on the internet news sources these days indicate clearly the rapidly accelerating advance of automated technology moving towards the elimination of jobs.

Walmart

Australia

Japan

So far, the action seems to be very widespread but is moving especially rapidly in retail as is clear from the evidence in Australia, Japan and the US. The rationale used to justify automation by Walmart management in the US is creative and ridiculous at the same time. Nobody in management wants to say that their companies are trying to reduce or eliminate their workforces altogether. But that’s exactly what’s happening.

Karl Marx predicted this very outcome in the mid-19th Century arguing that in their efforts to control or reduce their costs of production, businesses, after overproducing in the search for profits, turn to automation to control their labour force and return to profitability. The process has been going on for a long time.

It seems perfectly reasonable for businesses to try to become more ‘efficient’ by automating jobs that are tedious and repetitive, often dangerous. For individual businesses this seems like an effective strategy to control their costs and their processes. The problem is that there is anarchy in the business world, no coordination, and competition prevents cooperation between businesses in the same field of operations. The result is that there is a reduction in the aggregate number of workers in any given area and the reality is that bots don’t buy anything. Workers are also consumers so doing away with workers is doing away with your very own customers. Nobody I know in business is worried about taking customers away from their competitors, but if Walmart eliminates much of its labour force by automation that will inevitably also reduce its customer base.

So, the question is should you mourn or celebrate the loss of your job through automation? The answer is yes and no. The actual issue is not jobs, but income. You should definitely mourn loss of income. The loss of a job not so much. Jobs, i.e, employment, are not really in sync with the human capacity to work. Humans, as Veblen is quick to point out, are programmed to work, but if they are presented with meaningless, repetitive, boring work that is really to make someone else look good or get rich, they balk. So doing away with boring, stupid, meaningless jobs is a good thing in my mind. Several countries are now toying with a guaranteed basic income. It will take some time yet for the importance of this strategy to become more widespread.

We’re at a real crossroads at the moment. With the advent of advanced robotics, automation, and especially artificial intelligence, work will be required of fewer and fewer people for shorter and shorter lengths of time. There will be, in a very short period of time, a huge surplus of people as workers and a shortage of people as consumers. The elimination of tedious labour could result in an explosion of creative energy as people are freed to think for themselves and act according to their talents and abilities. However, they will need income to be able to do that.

One thing for sure, there will have to be a greater distribution of wealth because it does no one any good to hoard cash and take money out of circulation. It sure doesn’t help corporations involved in the sale of consumer goods. From this perspective, banks and financial institutions are at loggerheads with consumer driven businesses. There will have to evolve a very different ethic, one at odds with the current capitalist Neo-liberal one that I wrote about in my last blog post.

The Space Merchants: The Prescient Misters Pohl and Kornbluth*

~ Roger JG Albert

I love strange books with compelling titles and The Space Merchants by Frederik Pohl and C.M. Kornbluth fits the bill.  This book, first published in 1952 but with the seventh and last printing taking place in 1972, was printed in the U.S.A.  It’s based sometime in the future and looking back to it’s publication in 1952 from a 2012 vantage point is a bit  strange.  Pohl and Kornbluth obviously had to design a future that was credible to a 1952 readership still infused with memories of World War II and trying to deny the existence of the Korean War.  In some ways, that’s not too difficult a task, but in other ways the challenge is daunting.  For instance, the characters in the book still use phones like in 1952, board planes on the tarmack at airports and smoke incessantly, but space travel is common.  The book is about the marketing business and how it has evolved.  Lies are common and the bigger the lie the better.  Products are not simply advertized anymore.  Marketing businesses create products to sell not based on their utility but on their salability.  (How far is THIS from our current reality?) They are trying to sell people on Venus colonization.  How can they make Venus attractive to potential colonists?  It’s virtually uninhabitable.  I leave it to you to find a copy of the book to see how the main character in the book, Mitchell Courtenay, gets along.  What I want to highlight here is a simple paragraph on page 7 of my edition of the book which reads:

“Fowler Schocken inclined his head.  ‘Thank you, Matthew,’ And he meant it.  It took him a moment before he could go on.  ‘We all know,’ he said, ‘what put us where we are.  We remember the Starrzalius Verily account, and how we put Indiastries on the map.  The first spherical trust.  Merging a whole subcontinent into a single manufacturing complex.  Schocken Associates pioneered on both of them.  Nobody can say we were floating with  the tide.  But that’s behind us.”

Indiastries [my emphasis].  ‘Now that’s prescient,’ I thought to myself.  Pohl and Kornbluth project into the future a trend that was in its infancy in 1952 with post-war globalization and geopolitics, that is, the corporate drive to find cheaper raw materials and labour wherever they might be.  Of course, that’s a movement or trend that started long before epitomized by Christopher Columbus and his P3 venture, but did it ever take off after WW II.  Now, global business corporations scour the globe like bottom feeders, looking for the cheapest raw materials and the cheapest labour.  In the case of raw materials, its a little more difficult than with labour.  Raw materials are found where they lie in the earth.  It’s possible for hard rock mining companies, oil producers and other exploiters of the earth’s ‘natural resources’ to more to parts of the earth previously unexplored to uncover precious commodities like gold.  Canadian mining corporations are all over Mexico, Central and South America mining and exploring for minerals.  That doesn’t mean Canada has no gold left in ‘them thar’ hills, but the ‘business climate’ is much better in Mexico and the near absence of environmental regulation (or their enforcement) is just fine, thank you.  And labour is cheap, cheap, cheap. For secondary or value added manufacturers and businesses operating in the service sector, the ‘Third World’ is their oyster.  They’ve managed to cut deals with impoverished governments all over the world to set up export processing zones (EPZs) which are sometimes secured compounds, sometimes entire cities or regions, where powerful global corporations can set up shop, exploit cheap labour, pay no duties, no taxes, and face no environmental or health and safety regulations.  Corporations have flocked to the EPZs.  ‘Our’ corporations are abandoning North American, Japanese, European, Australian and South Korean labour and moving production to EPZs or other facilities in the ‘Third World’ at an exponential rate.  There is no turning this around.  China and India are big players in providing cheap labour for ‘our’ corporations making it hard to pick up any ‘consumer’ product these days that’s not manufactured there.  But make no mistake about it.  Those products are not Chinese or Indian products.  They are Nike, Apple, Dell, Monsanto, Nestlé, Wal-Mart, etc., etc, products produced by cheap labour in poor countries bypassing ‘expensive’ labour ‘here.’

So, Indiastries.  Looks like it’s well on the ways to reality. India harnessed as a whole by a single manufacturing trust. With how rapidly things are changing these days, how far down the road can that be? Pohl and Kornbluth were pretty prescient guys. Only problem I find with their scenario is who’s going to buy all these wonderful products made in India and elsewhere in the ‘Third World?’  Won’t be workers here because they’re putting us out of work as fast as they can.  We’ll see how it goes.

  • This is a re-blog of a post I wrote in 2012. I think it’s quite relevant following my last post.

It’s your life, so sell it along with the rutabaga!

~ Roger JG Albert ~ 2 Comments

This is one way to think about modern capitalism. There are others.

Most of us glide through life not thinking particularly deeply, if at all, about the underlying forces controlling our lives.  In fact, we are taught all along that there are no forces that control our lives at all and that we are fully in charge of our lives whatever we make of them. That belief is actually part of the very real underlying forces I just mentioned, one that aims to line up our personal lives in such a way that we don’t question the forces that drive us to behave in certain ways and not in others.[1]

An example might help.  I’m sure you found yourself recently in a grocery store buying food for the week, or maybe just for dinner, assuming that is that you have enough money to actually shop in grocery stores and not in dumpsters, but that’s another matter I’ll deal with later.  Two aspects of this shopping scenario are of interest to me here.  First is the idea of the store itself.  How many of us actually question the very existence of the store? Not many, I’m sure.  

Stores are such a regular and ubiquitous part of life that we tend to think of them as just part of the landscape, as places to go buy things, certainly, that is if we think of them at all.   Well, a store is nothing more than a place where things are stored, awaiting distribution or for people to come along and pick them up in exchange for money. People have been storing things ever since the dawn of humankind.  

Finding secure places to store food and other goods has been a human preoccupation throughout history (and pre-history for that matter).  In a situation where food is readily available and there is no worry about spoilage because it’s consumed very soon after it’s collected, storage isn’t an issue.  This was true, for instance, of the !Kung San in Southern Africa before colonialism. It does become an issue when there is a large number of people to feed and where food can become scarce at times. Obviously, food storage is not so much an option for nomadic as opposed to settled peoples so it has been a very important pre-occupation of humankind especially for the last ten thousand years or so since the advent of large scale domestication, settlement and formal government.  Preserving food then becomes imperative and storing it securely even more so.  

So, we’ve needed to store food and other products for a long time.  Once food and other goods are in storage, they need to be made available to people for consumption.  Not just any people, of course.  In what we know of pre-history and early history, family was the most important unit of distribution.  People would pass around chunks of meat around the campfire. As we went along as a species especially in certain parts of the world we now know as the Middle East, Europe and the Far East, the units of distribution grew ever larger driven by domestication and urbanization.  Well, that was then, what about now?  

Eventually, political units tended to grow in size and motivations changed.  There was an increasing need to mobilize, equip and feed large numbers of people for various tasks like war, agriculture, large infrastructure projects like water diversions, roads, sanitation systems as well as religiously inspired projects like pyramids, cathedrals and the like. This historical development required innovations in storage management and distribution.  Centralized storage systems like granaries, warehouses and eventually freezing and cold storage facilities grew more prevalent.  But of course, human production never occurs in a vacuum.  Production, distribution and consumption, the three ‘moments’ of human production are not just economically but also politically driven for the most part and limited by the availability of raw materials, labour and technology.  In our time, and for the past three centuries, give or take a few decades, business has been increasingly dominant in all phases of human production.  Business. Yes, business. 

Business is a method, a way of organizing human activities, most predominantly economic activity.  That said, the ways and means of business have become pervasive in all types of organizations, governments and non-profit.  It’s a truism to say that businesses exist to make money. That’s not all they exist for, but if they don’t make money they don’t last long (unless they get government subsidies which they often do). And what is the interest of business in human production? Well, as I noted above, business is an organizational vehicle for the production, distribution, and often, the consumption of commodities. Note that I said business is in it for the creation of commodities not products. 

Commodities are products specifically created for the market. General Motors doesn’t make vehicles for its own use, it makes them to sell. Once a vehicle is sold it no longer holds any interest for GM. In fact, if people, car buyers, were more concerned with GM’s welfare (as GM thinks they should be) they would drive their vehicles into the first power pole they encountered upon leaving the auto dealer lot. That would mean an opportunity for GM to sell another vehicle to replace the one just smashed up against the power pole. Smashing up cars is good for business. 

Of course, the scenario I just painted is simplistic and the real situation is much more complex, but the truth is that business makes products to sell. We call those products commodities. Distribution businesses like grocery stores are also in the business of making money but their challenge is somewhat different than GM’s. Grocery businesses have conditioned us over the decades to expect a myriad of consumable commodities on their shelves. People (like you and I) get very upset when they see empty shelves or even half empty shelves in their favourite grocery store. I can hear people saying to themselves “What’s wrong? Why are the shelves getting empty? Should I stock up?” Fear and panic can set in. So, it’s better to keep the shelves topped up to avoid triggering a sense of doom and scarcity.

The reality is that grocers can never sell all the commodities that grace their shelves so masses of produce, meats, dairy products and other perishable items get tossed in the garbage every day. That is of no fundamental concern to the grocer (can you say Jimmy Pattison) as long as on average and over the long term enough commodities get sold to still make a profit. The ‘wastage’ is collateral damage. If food producers and distributors actually made food to consume rather than to sell, there would be no hungry people on the planet. But that’s not the way our world works. We allow people to starve if they have no money to bring to the market to exchange for food. It’s all about the market.

People get consumed too in the productive process. We sell our labour-power to a buyer at the best price we can get if we’re lucky and that buyer then has the ownership of our time and our capacity to work. Our time spent at work is not our time. It belongs to our employer.

However, my point is that we have to own ourselves in order to sell ourselves just like we have to own a rutabaga to sell it. That’s a basic legal foundation of capitalism. As owners of our labour-power we enter the market as free players, at least in theory. And if we are free players in the market we must also be free players in other aspects of our lives. It’s a singular philosophical expression of the reality of life in a capitalist society. More on this in another post. This one’s long enough already. 

[1]Dr. Bruce Lipton explains how we get programmed early in life to accept the reality we are presented with:  https://www.youtube.com/watch?v=7TivZYFlbX8

I’m out of control.

~ Roger JG Albert ~ 6 Comments

I’m working on a post about capitalism and democracy, a topic suggested to me by Jack Minard. It’s a great topic, but my post is growing beyond all bounds of reasonableness. I must be thinking  I’m writing a book or something. I’m up to +5000 words and I’m not done. Nowhere near done. So I’m not sure what to do now. I may just carry on with the post and finish it up as best I can. Problem is, for virtually every sentence I write, I’m left with the unsatisfying feeling that I’ve only scratched the surface of what needs to be said. So I may have to follow up this post with a number of others that deal with related issues such as nationalism (conservative and liberal versions), the ideology of internationalism, corporate supply chains and export processing zones, etc., always keeping in mind contemporary global events as they relate to the topics I just listed. 

What do you really know about corporate supply chains? Do you really believe that Canada trades with other countries? What does globalization mean to you? What do you think is the relationship between government and business? What do you think it should be? Why? 

Nestlé has 447 factories, operates in 189 countries, and employs around 339,000 people. It is one of the main shareholders of L’Oreal, the world’s largest cosmetics company. Nestlé is the largest food company in the world and is headquartered in Switzerland. Less than 5% of its labour force is in Switzerland. Is it a Swiss company? Of course it has to be headquartered somewhere, but what do you think about that? 

Oh, the questions! I have lots of them. I also have answers. Stay tuned for my epic blog post coming soon to a computer near you! 

Bank of Canada’s Poloz might be spooked by an unnatural economy: Don Pittis – Business – CBC News

~ Roger JG Albert

Many Canadians with high debt loads fear the potential impact of interest rate hikes. Given some strange factors in the economy, it’s difficult to predict when the next hike might come.

Source: Bank of Canada’s Poloz might be spooked by an unnatural economy: Don Pittis – Business – CBC News

This is a pretty bizarre story. Pettis reports that Stephen Poloz, the Bank of Canada chief, says his usual models for figuring out what’s going on in the Canadian economy aren’t doing the job anymore. The economy, he argues, is behaving strangely.

Well, I don’t think ‘the economy’ is behaving strangely at all. In fact there is no such thing as the self-contained ‘Canadian Economy’ any more that there is such a thing as exclusive Canadian weather. The problem Poloz is having is that his models have never worked and will not work in the future either. His models are based on the country, Canada, as the basic unit of analysis when in fact, global finance capital should be considered the basic unit of analysis.

Not all of them, but most countries are beholden to global finance capital. Veblen would call politicians and the likes of Stephen Poloz “Guardians of the Vested Interests”. There is very little left of national sovereignty. Harold Innis argued in the late 1940s that Canada only had sovereignty for about 6 months in 1926 when the British and American empires were almost equally influential north of the 49th parallel. Since then it’s been downhill.

More important, the shift to globally based production makes a mockery out of the notion of ‘Canadian’ manufacturing.  Corporations based in the West have transformed Chinese society (and many others in the so-called Third World)  by moving most of their productive capacity there. The Chinese have gotten jobs, certainly, but also killer pollution. We, in fact, have exported jobs and pollution. We should be proud of ourselves. Of course, it could be no other way and we, as ordinary citizens, are not to blame. It’s almost impossible to figure out what’s really going on out there but we get the odd hint now and again from the mainstream media, although they are focussed on scandal and misbehaviour like tax evasion rather than on the real story.

The course of history is pretty much fixed: globalization has been in the works for centuries and will end with the complete integration of the globe’s economic power. It’s getting to the point where national governments are becoming a major fetter to the process of the expansion of finance capital and will be soon in a position where they won’t even be able to pretend that they have any control over their own economic lives. Their currencies are objects of speculation with traders making billions guessing on which currency will go up relative to others. Their ‘trading’ relations are increasingly governed by international bodies like the World Bank, the World Trade Organization and other multinational agreements. One example of how silly the situation: when General Motors moves a  car from Brampton, Ontario to some place in Michigan, the economists call that international trade. Who’s leading who around by the nose here?

Of course Canada has stagnant wages and low inflation. There is a growing divide between labour’s productive capacity, including knowledge and training, and the needs of business and industry. Labour is not ready for the new global economy and, frankly, governments don’t give a shit because if corporations need cheap labour they know where to find it, and it won’t be in Canada. Jobs in Canada are increasingly precarious, often short term, without benefits and job security. There are a few people driving around in Mercedes’ and BMWs, but most people are sucking air driving their Toyotas they bought on credit over 7 years, and just hanging in there hoping things don’t change too radically, too quickly.

People are strung out on personal debt. Yet Poloz says the economy is doing just great. Poloz and his counterparts all over the world need new economic models, ones that are global is scope and focussed on capital accumulation and concentration if they want to understand anything about what’s going on. Statistics Canada, like all national statistical agencies, is seriously behind the times too, collecting national statistics. A long time ago Harold Innis told a gathering of his colleagues that it was about time that they (e.g., social scientists, economists, political economists, and historians as well as the statisticians at Stats Can) ceased allowing national governments to lead them around by the nose. I’m not holding my breath waiting for this to happen. There are some good international agencies collecting statistics, but unfortunately they have to rely on national agencies like Stats Canada. We need a real, global agency that can follow the bouncing buck wherever it leads.

So Poloz should go trick or treating. A big bag of Nestlé’s chocolates might tell him more about what’s going on than his outdated models of how the world works.

Of course, the situation is not as simple as I’ve laid it out here. The complexity of the global economy has got to challenge the best computer modelling software that exists.This is just a teaser. I haven’t even mentioned export processing zones. Fortunately, there are scholars out there trying to figure things out. Bill Carroll at UVic is one of them. He’s working on corporate supply chains. We need more Bill Carrolls. Enough for now.

 

Engineers thwarted by business men.

~ Roger JG Albert

I’ve been rereading Thorstein Veblen. What a character he was. He came from a family of Norwegian immigrants living in Minnesota. He refused to say when he was born but we know he died in California in 1929. He studied at various American universities including Cornell and Yale and settled first at the University of Chicago to teach economics, economic history and related fields in the late 19th century. I’m not writing a biographical note here so if you want more details on the life of this amazingly intelligent but difficult man, just google his name.

The book that secured Veblen’s public notoriety and reputation is The Theory of the Leisure Class. It’s a compendium of commentary on the mores and institutions of the United States in the late 19th and early 20th centuries. It’s available free online. Once you become familiar with his unusual use of language, he makes for a very entertaining and enlightening read. His chapters Pecuniary Emulation, Conspicuous Consumption, Conspicuous Leisure, and Dress as an Expression of the Pecuniary Culture are a classic dissection of the institutions that affect us all daily. He lays bare where our wants, needs, desires, and dreams come from. His conclusion is that they come from our ‘pecuniary’ culture. Pecuniary means relating to or consisting of money. For Veblen, our money culture and it’s predominant ruling class of ‘captains of finance’ determine how we see and act in the world. They are the preeminent institutions of our world.*

Now, and finally addressing the title of this post, Veblen was particularly interested in parsing out the various components of the economic institutions that dominate our lives. In his book The Engineers and the Price System, available as a Kindle book, he argues that business men, particularly investment bankers and financiers in general, not your run-of-the-mill corner store operator, farmer, or forestry contractor, are constantly at odds with the engineers that actually run industry. For Veblen and most economists  business and industry are two separate things. We often conflate them today. In our world business dominates industry but it doesn’t have to be that way and, of course, it wasn’t always that way. In feudal Europe, the manorial lord drove industry, not the incipient mercantile class.

Industry, for Veblen, does not mean only the factory system and machine production, it means all the physical activities in which humans engage to produce what they need and want as well as the knowledge needed to do so. He concludes that in our world business finance curtails industrial production (particularly commodity production) as a means of increasing or maintaining profit levels. This is easily observable, but it seems strange to think this is true for some people.

For Veblen, profit making often requires the curtailment of supply. Producing as much and as fast as possible, efficiently and effectively, is the aim of engineering. This imperative constantly goes against the business need to make profit where curtailment of production can ensure prices remain high. These ideas, of course, are not revolutionary, and they are behind Canada’s supply management policies regarding poultry, eggs, milk, doctors, and lawyers.

For a good example of how engineers are thwarted by financial interests, one just has to look at how urban infrastructures are built and maintained. Let’s take Courtenay for example. It’s a smallish city on the east coast of Vancouver island, typical in every way. It has the requisite shopping malls, hospital, schools, service businesses and residential neighbourhoods. Now, the municipal government is made up of elected officials, management staff and workers. The elected officials represent pecuniary interests although they claim to represent all city residents. The management staff includes civil engineers, urban planners and the like. If decisions about where to build streets, what they would look like, the materials used in their construction, etc., were left to the engineers, the city would look entirely different than it does. The monetary interests constantly impose cost restrictions on the engineers with the result that street design, urban planning and related activities, are a hodgepodge of compromise including irritating merge lanes and intersections, inadequate bridge structures and neglected maintenance that leaves many roads a hazard to drive on. However we think about it, engineers are systematically constrained by the vested interests represented by elected officials. Of course, not all elected officials see themselves as representing the vested financial interests, but if they didn’t follow the policies imposed on them by the provincial government with regard to fiscal ‘responsibility’, they would soon be removed from office. And, of course, there must be some oversight of the work of the engineers. The point Veblen makes is that the oversight is the prerogative of business interests in the name of maximizing profit, and not for creating the greatest good for the greatest number of people, in this case, the residents of Courtenay.

By the way, Veblen is off the mark when it comes to the role of engineers in a potential overthrow of the ‘kept classes’, but he wasn’t beyond speculating on the way the pecuniary culture would come to an end. I have to reread his book Imperial Germany to determine what his views are on globalization, but that’s my next Veblen read. Karl Marx was very conscious of globalization and, for him, the end of the capitalist domination of industry and production was predicated on the advanced globalization of capital accumulation. Veblen wrote extensively about Marx and admired his materialist historical method. He did have reservations about Marx’s work, but that will be for another blog post.

 

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For Veblen institution means a ‘crystallized’ habit of thought or life, crystallized meaning that they are spread throughout society so as to be essentially unquestioned by most people.

I’m disillusioned.

~ Roger JG Albert ~ 2 Comments

I spent my entire adult life studying, thinking about and teaching university courses on history, social relations and  social institutions. I researched how successive historical periods with their own set of class relations came and went. I was particularly interested in the nature of capital and how it relates to labour. I still am, I guess, but I’m not at all convinced that anyone wants to or can share in my knowledge. My scholarly trajectory has been unique. I’ve researched the ideas of a number of historians, political economists, sociologists, psychologists, semanticists, semioticians, philosophers, geologists, cultural geographers and anthropologists of the last two centuries and more. I can’t imagine that very many other people have studied the same constellation of thinkers or who have come to the same conclusions I have about history.

I’m quite active on Facebook, but I’m about to back away from any political discussion on that social medium. There is no way of developing an argument that is cohesive, well-developed and grounded in reality in a Facebook post. The trolls don’t necessarily dominate Facebook, but they often make the Facebook experience distinctly unpleasant. Even well-meaning people who don’t have the background in the social sciences that I have been privileged to acquire can make Facebook frustrating and annoying. This all may sound elitist, and there may be a touch of truth to that observation, but only to the extent that the knowledge I’ve acquired is very difficult to communicate to people who don’t share at least some of the background I have.

Take the concept of capital as an example. I’ve written about capital in the past. This blog has many posts that touch on the concept, if they’re not directly and entirely concerned with it and its relationship with other social institutions such as employment, business and the nation-state.

It’s my observation (I don’t have any scientific information to support this statement) that most people think of capital as money. It’s true that in accounting capital is considered money used to run a business. And because finance capital has become so important in the last 100 years, it’s also become synonymous with capital. Money is a social relationship but is considered a ‘thing’ in the modern mind. Capital, as I see it, and in classical economics, includes money and assets used in the production and reproduction of wealth. Marx, in Capital, distinguishes fixed from variable capital. Variable capital is the investment a capitalist makes in wage-labour. I’ve always considered capital to include labour, an idea that has gotten me in more than one heated discussion with colleagues. For me, if I hire someone to work for me, the work that that person performs is in fact an asset that contributes to my productive goals, and hence should be considered capital. If I’m a slave owner in Rome in 33 AD, my slaves must be considered my capital because they are a vehicle that allows me to accumulate more capital. In essence, for me, capital and labour are the flip sides of the same coin. Labour is always required to produce capital and capital is nothing but crystallized labour, that is, all the labour that was required to produce it. Another example going even further back in history: a bow and arrow, or spear created by a hunter must be considered capital. They embody the labour that it took to create them and they are used to create more wealth, i.e., meat for the family and community table.

Countries, businesses and individuals can have capital. In fact, it’s inconceivable that in this day and age a country or business could operate without capital. Capital assets including money, land, labour, tools (including buildings, machinery, software and that sort of thing) and knowledge, are a prerequisite of large scale industrial production.

Capital does not refer exclusively to assets in a capitalist mode of production. Capital exists whenever and wherever humans create the means to increase their stock of tools, machinery, etc., as a strategy to ensure their material survival. Capital accumulation exists wherever people can produce and stockpile more than enough assets to ensure their immediate survival.

For a number of reasons that are beyond  the scope of this short post to explore, modern capitalist production aims to replace labour as much as possible in the productive process. There is a historical dynamic to capital accumulation that leads inevitably to more and more replacement of labour by capital in the productive process. So, tools, machinery, robots, etc., (with their load of crystallized labour) are constantly in the process of replacing labour. Careful to note that I use ‘labour’ here and not ‘work.’ Work is a unit of measure of the amount of energy required to perform a given task. Labour defines how work is to be conducted. Employment, just to refine the possibilities a little, refers to a particular relationship between labour and capital in the context of a labour market,  where a person’s labour-power (their capacity to work and create wealth) is bought and sold.

Currently, global capital accumulation is the culmination of a process whereby workers are becoming less and less of a factor in production and when they remain part of the productive process are devalued to the point where they are unable to even reproduce themselves. Yes, we are not yet at a critical stage in this process, but the last 3 or 4 decades have clearly shown how corporations have moved commodity production around the planet to areas of cheap labour and lax labour and tax laws. They’ve also replaced workers ‘at home’ with mechanized systems. McDonald’s, as well as other fast food chains, is in the process of replacing front line staff with automated order taking software and hardware processes. Their initiate in this is not unusual and is in fact the goal of most corporations in all fields of production, from agriculture to mining to food and clothing production. Everybody is in on it. There are many consequences of this process and I’ll tackle those in future posts.

Suffice it to say here, that unless one has done a serious study of the dynamics of capital and labour in historical context, how can it be possible to understand one’s relationships to capital? People confuse labour with work with employment. They see these concepts as interchangeable. They’re not. Does that matter to the average person on this planet? Not at all.

Thus, appealing to a person’s rationality is useless on the grand scale of things. It’s not, however, in some immediate and personal ways. It seems the farther we get from daily life, the harder it is to understand the relationships that control us. So appeals to reason might work for some people some of the time, but people generally don’t have the knowledge and information required to apply reason to larger geopolitical events and situations. This may seem elitist, and maybe it is, but I’m not happy about it, no matter what it is. I often feel that my entire life of thought and research has been for naught because I can’t share it in any meaningful way, at least not with the social tools we have at our disposal most of the time, especially the social media.

More to come on Trump, trolls and half-truth.

 

 

 

 

 

 

 

 

Recent Developments in the Canadian Economy: Fall 2016

~ Roger JG Albert

This Economic Insights article examines the extent to which the lifetime income of children is correlated with the lifetime income of their fathers—a topic known as intergenerational income mobility. The analysis uses data from Statistics Canada’s Intergenerational Income Database, which links together children and their parents using tax files. The data provides information that permits the comparison of the income of children to those of parents at a similar stage of the lifecycle.

Source: Recent Developments in the Canadian Economy: Fall 2016

This article by staff at StatsCan looks pretty straightforward at first glance. It tells the story of the ‘Canadian economy’ for the year leading up to this fall. However, the real story lies elsewhere. As I’ve noted a hundred times, Canada doesn’t trade, ‘it’ doesn’t produce goods. it doesn’t sell goods. Those activities are carried out by business, largely in the form of large multinational corporations. That’s where you have to look if you really want to figure out what’s going on in the world of ‘economics.’ More on this soon, although a search through my archives will yield a lot of writing on this topic.

 

The power of what we think we know or: Marx was a dumbass, we know that!

~ Roger JG Albert ~ 4 Comments

The power of what we think we know or: Marx was a dumbass, we know that!

by Roger JG Albert

[I published this post in November of last year on another one of my blogs now defunct. I thought I’d publish it again, because I think it is relevant now.]

I write. I used to teach. I suppose that in some individual cases I may have even convinced a few people to change their minds about the way they perceived the world. Mostly my efforts are and were in vain.

Our dominant ideologies around possessive individualism, the nature of countries and what we value in life are so powerful as to frustrate and flummox the efforts of the most competent of teachers to get people to change their minds about anything. 

I’ve changed my mind a number of times in my life but generally in line with added knowledge gained from reading and researching writers and authors who compelled me to see beyond what I had previously accepted as true. I came to understand fairly early in my career that there is no absolute truth, only tentative truth which must be abandoned when confronted with superior ways of explaining things. 

For the first few years of my career as a sociologist I was a Marxist through and through. That early dedication to Marx’s work was soon tempered in many ways by the works of Harold Innis, Thorstein Veblen, Emile Durkheim, Sigmund Freud, Thomas Szasz, R. D. Laing, Erving Goffman, Ernest Becker, Otto Rank and many others. It’s been a ride. Although I’ve gone beyond Marx in many ways, I still often come back to one of Marx’s aphorisms about history in which he said (and I paraphrase): Human history will begin when we stop being so barbaric towards one another. 

He was an optimist who actually believed that this would come to pass with the eventual eclipse of class society, a time in which there would no longer be any reason to kill and exploit because of the rise of technology and the elimination of labour exploitation. 

 

Faced with the litany of accounts of death and destruction perpetrated by groups of people over the face of the earth going back millenia and it becomes difficult to accept Marx’s promise. I also being an optimist agree for the most part with Marx on this especially given globalization, the concentration of capital, the erosion of national sovereignty and the degradation of the natural world. These aren’t particularly uplifting processes for me, but they all point to a time in the future where capital will do itself in by increasingly attenuating the profit margin. 

Strangely, I write this knowing full well that the vast majority of people who on the off chance might read this will not have read Marx and will have no idea of what I’m writing about here. People are generally quick to dismiss ideas that don’t agree with their preconceived notions about things. That’s certainly true when it comes to Marx’s work. People can easily dismiss Marx (and most other fine writers in history) by thinking they know what Marx (and most other fine writers in history) argued and can therefore cheerfully scrub him (and the others) from their minds. Or they think of themselves as anti this or that, in Marx’s case ‘anti communist’ so that anything that Marx argued just cannot be ok. Mind shut, let no light enter. 

One of Marx’s most important ideas was that the division of society into classes would inevitably be relegated to the dustbin of history and along with it barbarism of all kinds. I like that idea, but ‘inevitably’ in this context will probably still be some time in the future. There’s plenty of time left for ignorant, highly suggestible “cheerful robots” (a term from C. Wright Mills) to commit mass murder or other kinds of atrocities in the name of eliminating the evil that they feel is blocking their prosperity or their road to heaven. 

Probably the most influential writer for me over the last 40 years of my career has been Ernest Becker.  His little book Escape From Evil published in 1975 after his untimely death in 1974 of cancer at the age of 49, has most profoundly influenced my way of thinking and seeing the world. Escape from Evil, in my mind contains all the knowledge one would ever need to explain the bloody massacre in Paris on November 13th or all the other atrocities ever committed by us towards others and vice-versa over the last 10,000 years, or for the time of recorded history, and probably even further back. It’s all there for anyone to read. But people won’t read it and even if they do, they will read it with bias or prejudice and will be able to dismiss it like they dismiss everything else that doesn’t accord with their ideology or interests. And there’s the rub.

It’s people’s interests rather than their ideas that drive their capacity to change their minds. Change the way people live and you just may change the way they think. It doesn’t work very well the other way around. 

Given Marx’s long term view on barbarism and senseless violence we cannot hope for much in the short term. We just have to wait it out. Of course our actions speak louder than our words, so within the bounds of legality, it’s not a bad idea in my mind to oppose talk that can incite some unbalanced people among us to violent action. It’s also a good idea to support peaceful solutions to conflict rather than pull out the guns at the first sign of trouble. Violence can easily invite violence in retaliation. We can resist that. It’s tough when all we want to do is smack people for being so ignorant and senselessly violent, but we can forgive rather than fight, tough as that may be. Turn the other cheek as some historical figure may have said at one point a couple of millenia ago. 

We will be severely challenged in the years to come to keep our heads as globalization increasingly devalues our labour and the concentration of wealth makes for more and more poverty. Sometime, somewhere we will have to say enough is enough and mean it in spite of the forces trying to divide us. We can regain our humanity even though it’s tattered and in shreds at the moment. It’s either that or we won’t have much of a future on this planet.