04/10/2013 § 3 Comments
Most site hits here are not from the US. As an ex-pat, I feel a duty to explain the current ‘shutdown’ of the US government to my guests.
‘What in the world is going on?!’ I hear you cry. ‘We thought only Italy did this sort of thing.’
There are two explanations you need. The first is procedural, the second is political.
The procedural explanation is actually straightforward. The whole thing is legal, in keeping with the Constitution. The US is not a parliamentary system, so the President can be from a different party than the one that controls the Congress. In addition, the Congress is bicameral (two ‘rooms’ or houses: ‘bi-’ + ‘camera’). The House of Representatives is larger and has two-year terms. It is considered the most responsive to popular sentiment — lots of members (smaller constituencies) and shorter terms. The Senate is smaller, and Senators have six-year terms. It is thought to be more august and deliberative (paralleling the UK House of Lords). Different parties can control the two houses. Currently, the Republicans control the House and the Democrats control the Senate (and have the Presidency).
Under the Constitution, spending bills must start in the House. The idea is that, since it is the people’s money, the people’s representatives should have first say. After that (very long story short), bills have to be approved by the Senate and the President. They will have their own ideas about what the spending bill should say. The Senate can work in committee with the House to create a compromise version. The President essentially can only vote up or down on whatever bill he receives.
The current shutdown, procedurally, is simply that the Republican House is proposing a spending bill that neither the Democratic Senate nor Democratic President will approve. Because they cannot agree, no funding has been approved for this fiscal year (starting 1 October). No money, no government.
That explanation, though, is entirely unsatisfactory, because it doesn’t have the frisson of politics. That’s where the action is. It helps to understand a few things:
- Both parties are fractured. Both parties have different groups representing different interests, often at odds with each other.
- Both parties primarily represent business interests. They represent different business groups, who have different agendas. Because only the two main parties have any real power, all the other interests are somehow incorporated into them: labour, Green, libertarian, etc.
- Democrats tend more toward labour and environmental interests. Under the New Democrats (Clinton(s) and Obama), these interests must be placated enough to keep them from getting in the way of business. For examples, see Obama’s throwing of Elizabeth Warren under a bus, and the Clinton/Obama healthcare reforms that maintain industry structure and profit while still leaving millions uninsured.
- Republicans tend more toward laissez-faire economics and social conservatism. Since Reagan, the strategy has been to fire up a base of social conservatives (the Christian right), then do as little as possible to keep them placated while advancing an agenda of big business power. This strategy has involved ‘wedge’ issues (that is, being divisive), including God, gays, guns and abortion. Republicans also controlled the last redrawing of Congressional districts, and they resorted to the time-honored tradition of gerrymandering. Although they are the minority party, they have leveraged their smaller vote count into a powerful position.
The current stalemate is the result of two forces. First, the Democrats have moved more and more towards supporting business interests. Obama represents the policies of Republicans of 20 years ago. The Affordable Care Act (‘Obamacare’) is basically the same as a proposal by the conservative Heritage Foundation and the Massachusetts plan instituted by Romney before he was the Republican candidate for President. The more the Democrats move in that direction (‘triangulate’ in Clinton terms), the more Republicans need to move even further in conservative and/or libertarian directions. The political centre moves with them.
The second, related force is the split in the Republican party. It used to be that the Christian conservatives and small-government advocates were ‘useful idiots’. They helped get Republicans elected but didn’t drive policy. Reagan and Bush I raised taxes. Reagan, Bush I and Bush II all presided over expansions of government power and spending. They didn’t adhere to the principles they espoused.
But they have been doing this schtick for over 30 years. A whole generation of voters has been raised on the rhetoric and didn’t know it was a con. Add to them the social conservatives who want to keep privilege for themselves (‘Segregation forever!’). Then add in a few more low-information types (‘Keep government out of Medicare!’). In the last couple of elections, these voters have been successful at sending just enough contrarians and culture warriors to the House to create a voting block big enough to say ‘No!’ That is splitting the Republicans between the True Believers and those in the business of business, and the TBs currently have the upper hand.
The rhetoric also contributes to a view amongst some of these voters that the current government is illegitimate: it doesn’t represent the ‘real’ America and must be opposed.
Keep in mind, though, that even the TBs in the House don’t believe what they say they believe. This is obvious as the shutdown takes effect. For example, these same people who won’t fund the government went down to the WWII memorial in a public park to make a PR stunt of helping a group of veterans get in. They are also more than happy to have the Capitol police on duty — unpaid! – today. They have kept on the flight controllers and the border guards. They don’t want a government shutdown. They just want to dictate which parts of government operate and which ones don’t.
This point circles back to the trouble with Democrats. They keep letting Republicans off the hook for their rhetoric and never call them to account. The Democrats do this because fundamentally they want something similar: smaller government via smaller social programmes.
And that’s really why we have the shutdown. The Democrats want something and can’t quite admit it, and the Republicans don’t really want what they say they want. So they’ve bumbled into a barfight, circling each other in displays of aggression and keeping the rest of us from just enjoying a night at the pub.
16/09/2013 § 2 Comments
The proposed changes to the Resource Management Act have the potential to increase the use of cost-benefit analysis in RMA applications and decisions. New Zealand uses the RMA to find a balance between economic claims on resources and other claims, especially environmental and social.
The results are controversial. One area of controversy is the extent to which CBA should inform decision. How important is it? Can we trust it?
My colleagues at NZIER wrote a discussion paper earlier this year on these issues. They suggested that we need better information to support more consistent decisions. They pointed out that methods do exist for understanding the value that people place on the environment. We need to apply them, however, and that takes money.
Parenthetically, I’ll note that this should be better funded by the public good science funds. Major decisions keep being made without good data, because it is never cost-effective to collect the data in any single case. It is a collective action problem, which is why we have a government.
Two lawyers, Christensen and Baker-Galloway, have written in Resources Management Journal an article that reviews the decisions and the legal reasoning behind them. The article mainly puts some legal context around the economists’ contention that we could and should do more with non-market valuation.
One message that comes through in the cases reviewed is that judges are reserving the prerogative to judge. The talk of ‘flexible’ and ‘holistic’ decisions is in part cover for judicial discretion. This isn’t necessarily wrong on the surface. The issue is that we do have ways to include better information. If that narrows the field of discretion, so be it — it would be a net gain for society.
Specifically, Christensen and Baker-Galloway discuss the High Court decision in Meridian Energy Ltd v Central Otago District Council, in which the High Court overturned the Environmental Court decision. The article quotes the decision:
Parliament has not mandated that the decisions of consent authorities should be “objectified” by some kind of quantification process. Nor does it disparage, as a lesser means of decision-making, the need for duly authorised decision-makers to reach decisions which are ultimately an evaluation of the merits of the proposal against relevant provisions of policy statements and plans and the criteria arrayed in Part 2. That process cannot be criticised as “subjective”.
The point of having decision-makers is to make decisions. If you take away the discretion, what are they going to do?
In a 1998 article by David Pearce, an expert in CBA, I found the following:
…perhaps a cynical interpretation, CBA tends to present results in a reasonably cut and dried manner, subject to the uncertainty of the estimates. Benefits exceed or do not exceed costs. But decision-makers may place as much importance on flexibility of decision. A CBA that, in effect, removes that flexibility will not be welcome.
New Zealand case law seems to support that view.
10/09/2013 § Leave a Comment
Now that I have your attention — it may be that we aren’t paying enough for parking in Wellington. This is NOT the message of the downtown retailers, of course, and the Dominion Post doesn’t explain the issues, but let’s run through the economics.
Say you are the mayor of Harbourside City. Your city has 1000 parking spaces available. The downtown workers, public and private, want to drive to work and park all day without breaking the bank. The downtown retailers want parking for shoppers from the suburbs, and figure that cheap parking with some turnover would be good. Downtown residents want to park whenever, wherever, for as long as they want. What are you going to do?
These 1000 parking spaces represented a limited supply. You have to figure out how to allocate the limited supply amongst the competing users. You could start by divvying them up — maybe 200 for cars with resident stickers, 400 short-term spaces for shoppers, 400 all-day spaces for workers. Then you have to allocate within each group — which workers? which shoppers? You’ll also have to deal with people gaming the system: a worker who buys a parking sticker from a carless resident, shoppers who parking in the all-day parking so they have enough time for browsing and lunch, etc.
So…you put a price on the parking spaces. That helps ration the limited supply. Workers and shoppers start taking the bus, residents decide not to bother with cars, etc. You have to be careful, though, with the relative prices. If daily parking gets really expensive but resident stickers are free, enterprising people will figure out how to arbitrage the difference.
Now that you have a price on the limited supply, what happens? Well, you might just collect $25 million in parking fees and fines.
That could raise a few eyebrows. It might look like the City is gouging residents because it controls the parking. How would you know?
Remember, first, that people have options. Shoppers can go to the malls in the suburbs. Office workers can take the bus or work from home. Residents can factor the cost of parking into what they are willing to pay for rent.
The question becomes, how full are the car parks? If they are always running at 95% to 100% occupancy, then the price isn’t limiting people’s use of parking. Shoppers are still shopping downtown, etc.
The Dominion Post, in repeating the complaints of the retailers, doesn’t actually tell us how full the carparks are, so it is impossible to know whether to be outraged at the $25 million or not. My few data points tell me that parking is tight. Last week, I was a bit late getting into work. At 9.20 am, the three parking buildings I tried were all full. I ended up working from home that day. It didn’t help that at least two buildings are closed because of the earthquakes and lots of buses were off the road because of maintenance issues.
The problem isn’t the $25 million. The problem is the limited supply of parking. If we aren’t going to build more, then we have to ration what we have.
09/09/2013 § 3 Comments
In the recent book Inequality: A New Zealand Crisis, Jonathan Boston has a really useful chapter. It probably should have started the book as a way of laying some intellectual groundwork, instead of being Chapter 5. It raises the same point as Matt Nolan does at TVHE, quoting Amartya Sen, but with more detail. Here’s Boston:
As highlighted in this chapter, there is almost universal acceptance that equality matters. Yet there is no consensus on what kind of equality should be championed.
And here’s Nolan:
Everyone, especially those who are more extreme in any given “political dimension” cares about equality of something – and the underlying reason why there are trade-offs stems from (as Sen discusses in the book) the heterogeneity of individuals!
Boston tries to cope with the different equality targets in two ways. First, he says that some equalities are more important than others, arguing that there is an inequality of equalities. With this, I believe he steps right back from his initial understanding — that reasonable people may reasonably disagree. Secondly, he suggests a certain pragmatism, or specific egalitarianism. While this seems attractive, it papers over the real conflict amongst theories of egalitarianisms with a poorly defined set of concrete goals.
In doing this, Boston shows how hard it really is to have evidence-based policies. When it comes time to make a decision, we have to take values and preferences into account. A particular set of evidence can be made to suit a range of policies, once you introduce different values. I’ve not read Peter Gluckman’s new report on evidence-based policies (pdf), but the reporting I’ve seen suggests that it is insufficiently attuned to this problem.
There is a second problem less well understood. When we make judgements about inequality, we are using mental models of social systems to create counterfactuals. For example, if one says, ‘they wouldn’t be poor if they weren’t lazy’, there is a mental model of society that underpins the judgement. That model has a weighting on ‘effort’, as well as weightings on other things like ‘education’, ‘social network’, ‘ethnicity’, ‘gender’, and more. The ‘effort’ weighting is sufficiently large to counteract any negatives from the other factors. We could, through interviews and surveys, estimate the parameters that people apply to those factors.
We all have these models. They are all wrong. I say that with conviction because ‘all models are wrong.’ They are always partial — they have missing variables — and the parameters are estimated from a sample of observations rather than the population. So, in my interpretation of my experience, it may be that ‘effort’ is sufficient to make a person not-poor. That doesn’t make it so, either for my experience (which suffers from observer error) or for the wider world.
In economic analysis, counterfactuals are hard to construct. You have to decide which factors are important and how important and over what time. If I’m being cynical, I might say that the counterfactual is the most important part of any cost-benefit analysis, and it is literally something we just make up. With data and evidence, mind you. But we make it up just the same.
How much harder is it, then, to understand the counterfactuals that people create from poorly-specified mental models of complex social systems?
More evidence would help, so it’s good to see Gluckman encouraging the government to find and use more. The findings will rarely be conclusive, however, as evidenced by Boston’s discussion of equality.
05/09/2013 § Leave a Comment
Lazy and uninspired on a Thursday, so I’ll point you to Pattrick Smellie. He reminds us that extractive industries are productive industries.
These statistics tell a simple story: jobs in the mining, oil and gas sector are vastly more rewarding to New Zealand on a per job basis than jobs in the highest-value parts of the manufacturing sector.
This can be expressed even more starkly. The average petroleum or mining sector worker earns an average annual salary of $105,645 a year, more than twice the $50,262 national average salary for all industries.
I was looking at similar figures last week, because we were doing some CGE modelling of mining. I spend about half my time dealing with agricultural economics, so the mining statistics were eye-opening.
In the modern world, in today’s economy, with today’s demands and preferences, mining pays. That’s not to say it always will, and we should definitely keep in mind the trade-offs involved. But the discussion needs to be informed by economic reality, and Smellie has reminded us of that.
04/09/2013 § 1 Comment
Wellington is proud of its green space. From its early days, the wise and good of the city planned a Town Belt to provide healthy outdoor space for the citizens. Oh, and if Wikipedia is to be believed:
the New Zealand Company did not just have public health in mind. The Company wanted to keep land prices high in the areas known in the plan as “town acres”, thus ensuring more favourable returns for its investors (the owners of the “town acres”).
The green belt continues in this function today — limiting space for housing, limiting options for building roads to more housing, generally constraining supply in the face of increasing demand. We know what that does.
Which is why the political hoardings made me laugh this morning. It’s election time, and the candidates’ signs have gone up. Three of the four signs I could see at the stoplight leaving Karori had candidates’ headshots superimposed over panoramic pictures of … downtown. Buildings! Glass! Waterfront! Even the Green candidate used the harbour view, although it did have the Oriental Bay fountain.
What are they selling? A vibrant city economy. Jobs and businesses.
And not a native bird or bush among them.
28/08/2013 § Leave a Comment
A friend pointed me via social media to a column/post on The Leveraged Buyout of America:
As Representative Grayson and co-signers observed in their letter to Chairman Bernanke, the banking system is now dominated by “global merchants that seek to extract rent from any commercial or financial business activity within their reach.” They represent a return to a feudal landlord economy of unearned profits from rent-seeking. We need a banking system that focuses not on casino profiteering or feudal rent-seeking but on promoting economic and social well-being; and that is the mandate of the public banking sector globally.
The core argument is that banking should be an auxiliary activity in service of the commercial sector. The current set-up (in both senses of the term) promotes (a) risk-taking and (b) rent-seeking in ways that harm the economy. Responsible public banking should be promoted as an alternative, to achieve better well-being.
The column packs a lot of ideas into a small space, so it might help to tease them out a bit.
Rent-seeking: This is jargon for economists but isn’t being used exactly that way in the column. Economic ‘rent-seeking’ is trying to fix the rules of the game to get an unfair advantage. ‘Rent’ is super-normal profits for not doing anything useful. So, for example, getting the government to change copyright laws to protect a monopoly over a certain cartoon character — that’s rent-seeking.
The letter the author cites focuses on:
businesses [in] such fields as electric power production, oil refining and distribution, owning and operating of public assets such as ports and airports, and even uranium mining.
We’re talking capital-intensive infrastructure businesses, some of them with local monopolies. These sorts of businesses can have a standard return on investment, including a payment for the land they use (‘rent’ in the everyday sense). In addition, they can use their market power to extract economic rents or excess payments. It’s a classic problem with infrastructure — they tend to be ‘natural monopolies’.
What’s not clear is what ‘rent-seeking’ is alleged. The purchases could be innocuous: just people with lots of money buying things that cost lots of money and generate a consistent return over many years, sort of like buying bonds. On the other hand, they could be nefarious: sharp suits buying local monopolies with a plan to extract super-normal profits. But that has to happen over time — it isn’t the buying that’s the problem, it’s what they do with the assets once they own them.
Risk-taking: The deals described are risky, in the sense that they are done with borrowed money and expose banks to Minsky’s debt ratchet (pdf). It isn’t the underlying assets that create the risk, or the fact that someone new has bought them. It could be an insurance company, a pension fund, a sovereign investor or a consortium of private investors who buy the asset hoping to make a profit. The fact that it happens to be financial holding companies linked to banks isn’t all that important. It’s the structure of the finance that creates the risk.
But the deals create a problem I find more interesting: a privately planned economy. Think about it. These finance companies are trying to manage a whole bunch of assets and make as much money as they can — they are trying to manage small economies. This was Schumpeter’s and Galbraith’s insight about modern industrial economies. Especially as they start to manage the supply side through infrastructure investments and the demand side through credit card policies, they are now faced with trying to be Soviet planners. Do they relax credit conditions for their customers to goose spending on their airports and ports, or would they be better off charging monopoly prices for port access but thereby reducing demand and credit card earnings?
Here’s my prediction: they will fail. The problem, though, is that they are going to take down an even bigger portion of the economy than last time. That’s the ‘macro’ or ‘systemic’ risk that is now being created.
Cash is king: In a financial crisis, when a Ponzi bubble bursts (see the above Minsky paper), cash is king. People are trying to reduce debt as quickly as possible, so they sell assets at whatever price they can get. The people with the cash have the power. In this case, the banks have the ‘cash’ — safe, liquid assets. Highly indebted people with large, illiquid assets are looking for buyers. It’s not really a surprise that mines, airports, ports and other big expensive items are being converted into cash. Heck, New Zealand is following the same strategy. There’s not a lot you can do about it once you’ve got a Ponzi situation — it’s a natural consequence of the debt cycle.
But let’s ask ourselves, why are the finance companies cashed up? Well, that’s where any reasonable justification falls over. The same swaggering sultans spending large to buy all these assets crashed the world economy a few years back. They were bailed out by public money. It is like they went to a casino, bet large and lost, and then the house gave them the money back and let them try again.
The real problem isn’t so much what they are doing with the money they have. It’s the fact that they still have any money in the first place.
26/08/2013 § 2 Comments
The title of the post was going to be ‘Beer taxes cause child abuse’, but that over-states the case (and is inflammatory). Instead, let me just refer you to a paper I stumbled across and make a gentler point: taxes don’t mechanically change behaviour. They don’t pull a lever over here and have exactly the effect you think they will over there. Life is messy, people are complicated, and prices are just another variable.
The paper is here (pdf). The authors look at the impact of beer taxes on child abuse. The dependent variable is the probability of severe violence against children, and the main independent variable is the state tax on beer in the United States. Several other variables, including other alcohol policies, were included. The key results are in Table 1.
They find that the tax on beer significantly and sizeably reduces the probability of abuse by women. For men, on the other hand, the parameter is nearly zero for 1976 data (in the full model) and is positive and large in 1985. That is, higher beer taxes lead to child abuse.
Yes, this is just one paper. Yes, the results are ambiguous when you take into account gender and years and model specification.
But, it serves as a warning. I can take these results and tell a plausible story. Some father just wants to go home and have a few beers and get a nice buzz on. The price has gone up, so he has to ration his beers a bit more. He can’t afford that fourth or fifth or sixth one, the one that gives him the click*. Or, when he does, he doesn’t want that now-expensive buzz ruined by some snotty, whining kid. A few beers at home has turned into worrying about money, and he takes it out on the children.
Sin taxes aren’t mechanical. Raising prices does reduce consumption (of alcohol or cigarettes or fat or sugar or whatever). But what drives the social interest in personal behaviour is the harm caused, not the consumption itself. The link between prices and harm is not as clear-cut, not as mechanical. In fact, as this article suggests, it may sometimes be the opposite of our expectations.
Brick: It’s like a switch, clickin’ off in my head. Turns the hot light off and the cool one on, and all of a sudden there’s peace.
21/08/2013 § 3 Comments
There is a fascinating little side discussion going on in the econoblogosphere. John Quiggin, who was a keynote speaker at the recent 2013 New Zealand Association of Economists conference, brought some recent blog-strands together to support a provocative statement:
Paul Krugman’s recent columns, responding in various ways to JM Keynes, Michal Kalecki and Mike Konczal have made interesting reading, signalling a marked shift to the left both on economic theory and on issues of political economy.
Quiggin picked up on some ideas that Krugman was bouncing around, and suggested that together they represent a challenge to current economic policy. The two (of three) that got me thinking were:
- the loss of the neoclassical synthesis, which asserts essentially that getting macro conditions right gives free rein to laissez-faire micro policies, and
- recognition that people — motivated, opinionated, blinkered people — do science in general and economics specifically, so that any statements of fact and truth must be viewed as partial.
Taking the last one first: well, duh. Oh, sorry, that’s not very intellectual of me. Let’s try this: modernism focused on universal statements, while post-modernism called into question the universality of modernism. Modernism made bold sweeping statements about how society should be organised; post-modernism suggested that it depended on your perspective. Po-mo suggested that perspective was bound up in power and privilege, so the bold-sweeping-statements were re-statements of power. And furthermore, as deconstructionism demonstrated, the bold narratives contained seeds of dissent, gaps or kernels (depending on your metaphor) that revealed how much the modernist perspective was imposed. So, recognising that the people doing economics are always speaking from a situated perspective, well, that puts economics about where the rest of the social sciences were in the late 1960s.
On a related note, Noah Smith’s description of ‘derp’ is absolutely brilliant. He uses Bayesian updating to explain political discussion. People who don’t change their minds in the face of contradictory evidence aren’t irrational, they just have really strong priors. Some of what passes for political and economic analysis is just restatements of priors, which are themselves reaffirmations of power relationships.
The loss of the neoclassical synthesis is a bit different. My history of economic thought is shaky, but here’s my take. There has been discussion for years about the microfoundations of macroeconomics. Somewhere, Krugman explained that micro and macro have different bases. Micro is about how people behave, so it’s the psychology and sociology of commerce. Macro is about statistical relationships in aggregates. We can estimate the statistical relationships without needing a behavioural explanation of why they hold.
The recent Krugman blog post that Quiggin picks up goes further than saying that these are two different areas of research. The neoclassical synthesis intentionally separated them, ring-fenced the micro from the macro. In a totally economist move, the neoclassical synthesis said, ‘assume the correct macro conditions’ when thinking about micro. The GFC and follow-on show the assumption is unwarranted. We won’t get the macro conditions right, and that will have micro ramifications.
This is also, in a sense, old news. When I finished my Bachelor’s, we were in a recession and jobs were hard to find. When my brother finished his degree, we were in a boom and employers were paying hiring bonuses. He stepped right into a job and never looked back; I took a while to get going. I have sympathy for the 20-somethings of today — their futures are significantly damaged by stuff that was going on when they were teenagers or younger. Of course the macro affects the micro. It’s just not as personal when you’re a tenured academic producing economic theory.
What Quiggin and Krugman and others are saying is that economics needs to account for the lived experience of people in ways that it has been reluctant to do over the last few decades. Well, they have my support.
12/08/2013 § 5 Comments
Over the weekend, I ended up at a review of The Invention of Capitalism. The book’s author is Michael Perelmen, an economist in California who has stirred up controversy over the years. Apparently, he doesn’t disappoint in this book.
Disclaimer: I have no idea whether Perelmen is right in his history, or should I say ‘right’, as history is a matter of interpretation (written by the winners and all that). Having said that, I had two reactions:
1) Aren’t we still living with the attitudes described?
This quote from a pamphlet of the day caught my attention:
The possession of a cow or two, with a hog, and a few geese, naturally exalts the peasant. . . . In sauntering after his cattle, he acquires a habit of indolence. Quarter, half, and occasionally whole days, are imperceptibly lost. Day labour becomes disgusting; the aversion increases by indulgence. And at length the sale of a half-fed calf, or hog, furnishes the means of adding intemperance to idleness.
Here we have a peasant making a decision about work and leisure. He has a few animals and the wherewithal to maintain them, and that suffices. ‘Day labour becomes disgusting’ — well, or not worthwhile. Not worth the effort. And what does our peasant do to while away the time not spent working? He drinks! He is intemperant! Oh my stars and garters!
What is the problem with this? Well, he isn’t working. He isn’t being industrious. He isn’t being productive.
The review (and thus the book) suggests that the problem to the thinkers of the time was that these were potential labourers who could produce profits for the rich. They needed to be forced out of their traditional lifestyles, and hunger was the weapon.
What I noticed, though, was the command to be productive. It wasn’t up to the individual to make such decisions. They were clearly wrong. And alcohol was clearly part of the problem.
It is the same today. When the ‘social costs of alcohol’ are computed, lost productivity and lost worklife are often included. These are largely private costs, locally affecting the drinker and perhaps a few people around the drinker who are able to make local decisions about the problem (and thus force the drinker to internalise the externalities). Nevertheless, there is horror that these people aren’t working to their full potential. So, as much as this is a history book, that same command to work and produce is still apparent today.
2) What does the forced labour of those people mean for today?
We (the industrialised West) are rich. Fabulously wealthy by historical standards. Yes, there is poverty and want, but most people have enough. We have more food than we can eat. Most individuals have their own bed (or share by choice). Our farm animals don’t live in our houses in the winter. We have one room for sleeping, one for eating, one for sitting, etc.
We rarely convert this personal wealth into anything productive. It goes on consumer goods, so many that they don’t fit in our houses and we pay people to store them for us. My daughter was marvelling this weekend at the size of the Wellington Storage King.
Many of us could take all this wealth and buy back the lifestyle of the peasant or the ‘native Highlanders’ of Scotland. And yet we don’t.
So, even though as a matter of historical record the shift to factory work may have been achieved through a deliberate campaign of dispossession, and even though this is an excellent demonstration that property rights are socially constructed and enforced by rough men standing ready to do violence, how does that help us make sense of the consumer economy? Is it about understanding that we have options — that we choose to live like this? Is it about understanding the violence inherent in the system (Help! I’m being repressed!)? Or, is it nostalgia for a simulacrum?