Saturday, July 8, 2017

Bigness

The recent-ish news that Amazon is acquiring Whole Foods seems as good a prompt as any for us to pose over again the old, old question -- the same one that Pippin asked on the battlements of the citadel, with face innocently upturned: "Is there any hope, Gandalf?" That is, is there any chance that the little Shires of the world will survive the onslaught of the great Molochs and Mordors of the retail conglomerates? To which the latter replied -- unhelpful as always -- "there never was much hope." We may be able to do little better. None of which is to shed too many tears over the lost innocence of Whole Foods, by the way, which is hardly Bag End, but one is certainly justified in worrying that if even they are being bought out by Amazon, what hope can there be left for Mom and Pop?

Of course, the techno-optimists and their bumptious breed of professional opiners will tell us that they know better (those "great interpreter[s]/Of the American mediocre mind," to borrow a phrase from Claude McKay, writing of a now long-since forgotten op-ed scribbler, Westbrook Pegler). They will say, "Why, your doom-telling is just the same thing people said back when Amazon first launched, or back when it gobbled up several brick-and-mortar competitors. It's what they said about Wal-Mart. Indeed, it's what people said about the very first department stores!" To which we have a ready enough response: "Yes, that's true, and all those people were right! In case you haven't noticed, things have been getting a lot worse for a lot of people!"

Nor will the antitrust legislation on the books be enough to save us. These laws can do a great deal to ensure that prices are kept low on the consumer end. They can even ensure that some industries are kept in the hands of several massive conglomerates, rather than just one. What they really are not equipped to do, however, is to protect small businesses, family-owned stores, local producers, etc. from being driven out of business.

All of which is, as Richard Hofstadter noted in his classic essay "What Happened to the Antitrust Movement?" rather at odds with the conception of antitrust still purveyed in the school history textbooks -- a story that Hofstadter dubs "the old romance." According to this version of events, the antitrust movement was fought to take down the great business Goliaths in the interests of the Davids. It was an episode of dragon-slaying.

Hofstadter contrasts this rather chivalric notion of "trust busting" that he had inherited from prior liberal historians (and which was still being passed down in my schoolbooks, as late as the 1990s, even though I was growing up in the very heart of Big Box store country) with the industrial world as it had actually developed around him, in the aftermath of the Progressive era legislation and the New Deal. Writing in the mid-60s, he observed that antitrust was basically useful for regulating and balancing relations between multiple behemoths in a given industry, but really was not about sheltering the village economy or the American small town from remote market forces.

All of which, let it be noted, Hofstadter regarded as more or less a good thing, and an improvement over the faintly anti-modern cast of the old style of liberal criticism of "Bigness" in and of itself (a term he picked up, it would seem, from Justice Brandeis). I guess Hofstadter was in a mood that day to confirm some of the worst of what the New Left and the Old Right have been saying abut Cold War-era liberals from the start -- they they were really a species of managerial technocrat in democracy's clothing.

I'm still of a mind, pace Hofstadter, that the world he describes of regulated "Bigness" -- with very little room left over for "smallness"-- was not a good thing, but the truth of his observation about what antitrust law can and can't achieve has remained unchanged in the years since. If anything, he's more right now than ever. It is widely agreed that Amazon, Wal-Mart, and similar megacorporations are broadly untouchable by the antitrust laws, since they can hardly be accused of conspiring to drive up prices on the demand side of the equation. As an essay by Steve Coll a few years back in the New York Review of Books put it, "as in so many other fields of economic policy, antitrust law has been reshaped in recent decades by the spread of free-market fundamentalism. Judges and legislators have reinterpreted antitrust law to emphasize above all the promotion of low prices for consumers, which Amazon delivers, rather than the interests of producers—whether these are authors, book publishers, or mom-and-pop grocery stores—that are threatened by giants."

There is something beyond the mere general toothlessness of antitrust law, however, that drives our sense of despair in the face of these massive social changes -- something else that makes people either try to hail the ascent of the retail übermenschen as inevitable "creative destruction" (à la, "I for one welcome our new insect overlords") or else bemoan it as destruction plain and simple, but which never leads anyone to propose a plan as to how we might actually do things differently. It is something that touches much more closely the human heart -- namely, the awareness that we are ourselves in part to blame for all this. Here is another reason why our comparison to Sauron at the beginning of this post is so apt. Like the Ring, none of us can truly resist it.

The root of our fall before the forces of "Bigness" will vary in each case. Some of us may be bewitched by the promise of low prices. I recall one summer when I was interning for a labor rights organization, and we were tasked with dropping in at local Wal-Marts and making a list of the suppliers they seemed to have in stock. I recruited a fellow left-leaning friend to keep me company on the project, and we had only made it a few minutes into our grand muck-raking exposé before she said -- holding a package of mushrooms or some such and eying it with wonderment -- "But it's so cheap!" She ended up doing her grocery shopping there, on top of the great task of unmasking that was the reason we came.

Others, meanwhile, may find it impossible to turn down the undeniable improvement in sheer speed one gains from purchasing through the big online sellers, and will find it difficult to live any other way once they have come to depend on it. I recall one recent pilgrimage to a local bookstore specializing in poetry, undertaken because I had seen from their website that they carried Ezra Pound's off-beat critical opus, the ABC of Reading. They had sold out of the book by the time I got there, and I recall being brightly told, after I had filled out a yellowed form to place it on order, that a copy was sure to arrive "within a couple weeks." My heart sank to the floor and out one pants leg. Didn't they realize that by then, whatever strange and incomprehensible fancy had convinced me that I really needed to read Pound's ABC of Reading, of all things, and to read it now, would have evaporated -- possibly never to return?

In brief, even those of us who consider ourselves enemies of the giants -- if not quite giant-killers -- will often be found to be paying midnight visits to their caves in secret. I have certainly linked to Amazon more than a few times on this blog, as a quick and easy way to direct readers toward a book I happen to be mentioning (I'll probably even do it again, before the end of this post), and here I am using the same blog to wag my finger at the online seller.

Along these same lines, there is an amusing and prescient little scene in Harold Frederic's oddball 1896 satirical novel The Damnation of Theron Ware that speaks to this familiar and daily dalliance with hypocrisy in which so many of us have participated. Incensed by the arrival in town of a modern department store called Thurston's, which is driving the local sellers out of business, the local Methodist minister and eponymous main character, Theron Ware, decides to write a scathing denunciation of the injustices committed by the large stores against the small. Then, a line-break later: "On this bright and cheerful Tuesday morning he walked with a blithe step unhesitatingly down the main street to 'Thurston’s,' and entered without any show of repugnance the door next to the window[....] His original intention had been to bestow this patronage upon the old bookseller, but these suavely smart people in 'Thurston’s' had had the effect of putting him on his honor when they asked, 'Would there be anything else?' and he had followed them unresistingly."

--

Less funny than all this is to consider the cumulative impact that these countless small instances of moral backsliding on all our parts have on our larger society. The low prices that my friend encountered at Wal-Mart, the two-day delivery speed that I have come to rely on in matters of online purchasing with almost the intensity of a spiritual yen -- both are made possible by some pretty egregious injustices in the supply chain, which I will discuss here.

This point will not be immediately obvious or well-known to many readers. Most of the controversy surrounding Wal-Mart has tended to center on the low wages it doles out to its own store employees, the impact of the arrival of one of its stores on local sellers, its notorious anti-union stance, and accusations of gender discrimination in hiring -- all of which are important, but all of which can likewise be at least partially countered and diminished by citing a parade of statements from Wal-Mart store employees -- mostly women -- explaining how satisfied they are with their jobs, how much better the Wal-Mart opportunity is than whatever existed in their towns beforehand, how much creativity and individuality the company enables them to express, etc. Quote enough of these, and suddenly the anti-Wal-Mart critique starts to sound like just another instance of privileged and out-of-touch liberal carping. "Why cahhn't they just work at Bloomingdales?"

Curiously enough, this is the cumulative effect of a very strange book about Wal-Mart that we read in Divinity School -- Bethany Moreton's To Serve God and Wal-Mart: The Making of Christian Free Enterprise. By virtue of its title and its appearance on a syllabus at the graduate institution I attended, this is the sort of book that everyone assumes to be a left-wing condemnation of Wal-Mart, without having actually read it. And indeed, the author does score a few good points off the founding Waltons along her way--pointing out, for instance, the role that a massive infusion of federal dollars played in turning the Ozarks into a beautiful resort area in the first place, thereby rendering it a suitable location to serve as the fertile crescent for this particular mega-corporation, which would itself go on to become such an emblem of American "free enterprise." Showing the way in which the loudest denouncers of "government spending" are more than happy to benefit from mega-spending on their own behalf is of course always good fun. (My favorite discovery along these lines recently concerns one Ross Perot. I learned the other day -- maybe everyone else already knew this -- that he made his fortune in computing through servicing the federal government for the massive data-processing needs generated by the introduction of Medicare. This was the man who would go on to use this same fortune to self-finance his quixotic run for office, all on the pledge that he would balance the budget and slash the debt -- by, among other things of course -- lowering entitlement spending. C'est la vie!)

But the trouble is that Moreton -- apart from this amusing but hardly decisive ad hominem about the role of federal spending -- doesn't choose to cite any evidence that might satisfy our expectation (and -- apparently -- her own) that this book is really going to cast Wal-Mart in a negative light. Instead, the book is full of glowing statements from Wal-Mart employees about how fantastic life is on the shop floor. These are all lifted, by the way, from no more "objective" source than the company's own internal newsletter!

Moreton writes with a species of contempt about these women, ultimately seeming to view them as a kind of labor aristocracy, adept at funneling resources toward themselves and doing little for others. "The Wal-Mart Moms offer another perspective, one that links them directly to America's original Populists," she writes. "Like the rural insurgents of the old People's Party, they expect government to help citizens like themselves -- white, hardworking, Christian family members. In the twentieth century, their home communities in the South and West flourished through deliberate federal redistribution of resources out of the Northern Rust Belt into the Sun Belt." (pp. 3-4).

This is sort of a left-wing critique of Wal-Mart, I guess -- though not a very appealing or generous-hearted one. But another way of phrasing Moreton's conclusion would be to say that Wal-Mart is actually doing quite well by its own employees -- including the many women in rural communities to whom it has provided a new opportunity. Which is, of course, exactly what the company itself would like us to believe, and exactly the narrative it wishes to tell to journalists and academics in order to counter the idea that it pays too little, that it is a remorseless foe of collective bargaining, that it discriminates against women, and so on and so on.

We can get around all this silliness about the relative advantages of Wal-Mart's employees by recognizing that, one way or the other, Wal-Mart's effects on the economy go far beyond the welfare of or lack thereof of the people on its payroll. As one of the largest single purchasers of goods in the world, it is in a position to exert an enormous downward pressure on wages across every global industry that supplies products for its shelves (and that is no small number of industries, you may have noticed!). Thus, it can lower wages for everyone else's workers, even if wages for its own are not always as lousy as they could be. How? By forcing suppliers to outbid each other with low prices to secure Wal-Mart contracts, which may make up a vast percentage of their revenue for the year, Wal-Mart ensures that suppliers in turn have to relentlessly drive down their own production and distribution costs, which invariably at some point will come out of their worker's paychecks, and/or lead to lower health, safety, or environmental standards. (This point should be sufficiently notorious by now hardly to need citation, but see for instance a 2012 Food and Water Watch report that came to this conclusion.)

My Dad-- one of whose careers was in the corporate world -- has described Wal-Mart supplier meetings to me that had something of the air of an Evangelical Revival. A supplier who had just found religion, that is to say, would be seen standing in front of the room, sweating profusely, and saying things like "Alright, we're gonna do it, we're gonna lower prices, I don't know how we're gonna do it yet, but by God, we will!" All to thunderous applause. And just like at any Revival, the man then had to return home and face the difficulty of actually living up to his newfound resolutions. How were prices to be slashed yet again? What manufacturing could they move, and to where? Whose wage could they lower, and by how much?

Simply keeping prices up and losing the Wal-Mart contract to someone else is not an option for a small supplier, since that contract may well make up the majority of their business. They are in something of the position of M. Denuelin, the small mine owner in Zola's Germinal, who is ultimately as much at the mercy of the larger mining concerns as are his unfortunate workers. "'You want five centimes," he tells his miners who are threatening to strike, "and I agree that the work is worth it. Only I can't give it. If I gave it I should simply be done for. You must understand that I have to live first in order for you to live, and I've got to the end, the least rise in net prices will upset me.' [...] Then Deneulin, persisting, explained his struggle with Montsou, always on the watch and ready to devour him if, some day, he had the stupidity to come to grief." (Ellis trans.)

This is why monopolistic practices are supposedly outlawed in this country. This is why we don't want only a single mega-corporation to set the terms of every deal. Without meaningful competition from other retailers that could challenge Wal-Mart for these contracts, suppliers have no choice but to pass the misery on to their employees. There is no incentive for Wal-Mart to sweeten the deal for its suppliers by purchasing at a higher cost, because there is nowhere else those suppliers might turn. But since this is all in the service of, and does in fact result in, lower prices for the "consumer," the injustice of the arrangement is little noticed, at least not by federal prosecutors.

The low price on the consumer end, of course, is more than just the bone that contents the antitrust watchdogs in the Justice Department -- it is also what enables Wal-Mart's executives to sleep easily at night and to do their work with minimal disturbance of conscience. It is all, ironically, a kind of populist crusade, we are constantly being told. That's what the whole company is about. Wal-Mart is bringing consumer goods to the people at a price they can afford.

The irony, of course, is that people would not need such low prices in the first place if Wal-Mart were not, through its purchasing decisions, putting downward pressure on wages across the entire economy. If there were any real strength on the demand side of our economy, we wouldn't need to be so worried about affordability on the supply side. As Joyce Appleby succinctly makes the point in her (otherwise largely pro-capitalist) Relentless Revolution -- which we also read for that Div School class mentioned above -- “Had wages not been driven down in recent decades, low prices would not figure so prominently in people’s calculation of their interest.” (pp. 359-360). Wal-Mart is trapping rural America into only being able to afford goods as its own basement-level prices. This is a "generous" arrangement in the same way that it was "generous" of companies in the era of The Jungle to pay employees in a coupon for the company store rather than in cash wages.

As for those Amazon speed deliveries I am so fond of, they too are purchased on the back of labor. The growing consumer expectation that delivery orders will be processed and shipped for very low costs in only a handful of days has turned the warehousing industry into one of the most Dickensian in the United States. Chicago's Warehouse Workers for Justice describe on their website a working environment where the most extreme forms of labor exploitation are routine -- especially wage theft. A Vice News report on the "Perma-temp" work phenomenon shows one way in which this happens -- their journalists accompany a largely undocumented workforce as they are swept into white vans in the early morning hours and taken to a warehouse, only to have the costs of transportation deducted from their pay at the end of the day. There is never a formal labor contract, the employer is generally sub-contracted by several stages of removal from the original company, and there are few avenues for redress for labor violations-- especially now that we are in Trump's America -- since most of the workers do not have papers and will not be willing (for good reason) to contact the authorities.

That's how those Amazon books are getting to me. Someone is being docked a hard hour's work from their pay, so that I can have my ABC of Reading by Monday, instead of in three weeks.

--

This is why the despair begins to weigh on one. One is confronted with the fact of one's own complicity, but also with the self-knowledge that one probably isn't going to change one's consumer behavior, since the problems are so abstract and the people it primarily concerns so far away. Moreover, one is aware that even if one did change one's own purchasing decisions, that would hardly make a dent in the larger economic forces at work. And who, anyway, is enough to blame that one can justify directing one's money elsewhere? We've already seen how the smaller companies that constitute links in the supply chain, as much as they may be brutally extorting surplus value from their own workforce, often do so out of necessity. In many cases too, again as we just saw, the king is unaware of what his evil councilors are up to. A supplier driving down production costs may have sub-contracted out to some labor recruiting outfit, whose scandalous and even illegal practices in pursuit of those low costs may never come to the former's attention (not that he makes much of an effort to look into them, mind.)

And besides, are not even the biggest companies themselves the victims of market forces? Don't they have to play this wicked game as well in order not to succumb to some even more rascally upstart? And would it do any good to see Amazon or Wal-Mart go under? Does their staff not also have mortgages and families to take care of? Here's where we really start to sink with cynicism and resignation before the Hobbesian spectacle of it all. As one of the characters in Hamlin Garland's sentimental story collection of the Populist era, Main-Travelled Roads, observes: "The hawk eats the partridge, the partridge eats the flies and bugs [...] So in the world of business, the life of one man seemed [...] to be drawn from the life of another man, each success to spring from other failures."

--

Or, before we all bow our heads to the ax, we could do the next most obvious thing, which is to enact some public policies that might lead us toward an alternative future, and create a less dystopian society. Fancy that! This is precisely why we seek for political solutions to problems. It enables us to accomplish things collectively that would be too hard for us to do on our own, as individual agents. It creates a set of ground rules that can be applied fairly, rather than singling out any particular economic actor as the "problem" and punishing them, which is always hard to do in a system like ours that is so driven, from top to bottom, by the profit motive. Moreover, what these policy solutions might be is not actually that hard to dream up -- they just happen to be marginally different from anything that seems to be routinely proposed on the conventional Left and Right.

But let's start with a quick course on what will not work. Stronger antitrust laws are probably a non-starter, and wouldn't do much good anyway. At most, under any legal standard of maintaining competition and combatting monopoly, these laws -- even if they were considerably fortified -- could only lead to fairer play between a handful of mega-competitors, as Hofstadter describes, rather than to any significant protection of small businesses. Unless, that is, those laws are to become so stringent that they impose fines or criminal liabilities on any corporation that allows itself to become large or to produce commodities cheaply, which is not likely to have much appeal to any part of the voting public, especially not in this country.

The Left is putting a great deal of its energy -- to the extent it is doing anything at all on this set of issues -- into minimum wage battles, and while these are significant and necessary, they do have a potential downside if pursued in isolation. In the absence of any other affirmative support for small businesses, that is to say, the burden of paying for higher wages is likely to be far harder for small employers to meet, and could if anything hasten their fall into the maw of the massive conglomerates (which will be able to accommodate the higher payroll expense more easily), à la the fate of M. Deneulin above.

Otherwise, if the Left addresses that vague creature of the media "middle America" or "rural America" at all, it is simply to promise that they won't cut entitlements and will increase spending on safety net programs. Then they act as if this should be more than sufficient attention, and are astonished that everyone does not appear fully satisfied with this proposal. Many a young Sanders supporter, say, is perpetually baffled by the fact that the possibility of a guaranteed minimum income or larger transfer payments doesn't immediately seem to send the unemployed rural American  flocking to the progressive banner.

The reason, of course, should be obvious. The labor movement especially has no excuse for not perceiving it. Just like the Lawrence mill worker, people in rural communities want bread and roses. They don't just want a cash dole that could be plucked back out of their hands again the next time a reactionary administration comes to power. They want public policies that further their need for autonomy, dignity, and a self-directed life, not just food in the belly. An old-fashioned vulgar materialism of the Left portrays the laid off worker in the same light as Heine's proletarian "Wander-Rat"-- a creature who understands only "soup-logic and dumpling-reason." It should be small wonder -- especially in a country like ours where actually very few people stand in immediate peril of starving, and where, as Richard Wright once put it, "no man could escape [...] the spirit of the Protestant ethic which one suckled, figuratively, with one's mother's milk, that self-generating energy that made a man feel, whether he realized it or not, that he had to work and redeem himself through his own acts"  -- that people chafe at this reductive and dismissive analysis of their needs and capabilities.

--

My Dad was complaining about all of this the other day, after reading my previous post about Hamilton, etc. He was of a mind that Tocqueville had gotten it partially right, in his warning that American society -- and particularly the Left -- was in danger of tending toward a dependence on the state to solve all social problems. Tocqueville's reasoning was that, as the equality of all progresses, the weakness of each person relative to her neighbors is increased as well. When there are no secondary sources of power in society, and everyone is helpless relative to everyone else, there is no one to appeal to for protection apart from the state itself.

Now, this may seem like an odd concern to express -- it always does to me when I hear it from conservatives -- in a society like ours that has such a woefully puny and inadequate welfare state, such a frayed and minimal safety net that is hardly capable of breaking anyone's fall. Where, exactly, in this present picture of American life, is the tendency toward the "Servile State" that we are supposed to be worrying about? How can we be experiencing too much equality in a society that is among the most profoundly unequal in the developed world?

As for Tocqueville himself, while our modern-day conservatives and libertarians will certainly resonate with the concerns expressed in the previous paragraph, he made a few other tentative predictions that will undoubtedly sit less well with their preconceptions, and that seem to do a better job of describing the society we presently inhabit, with its vast chasms separating rich and poor:
"As the conditions of men constituting the nation become more and more equal, the demand for manufactured commodities becomes more general and more extensive; and the cheapness which places these objects within the reach of slender fortunes becomes a great element of success. Hence there are every day more men of great opulence and education who devote their wealth and knowledge to manufactures; and who seek, by opening large establishments, and by a strict division of labor, to meet the fresh demands which are made on all sides. Thus, in proportion as the mass of the nation turns to democracy, that particular class which is engaged in manufactures becomes more aristocratic. Men grow more alike in the one — more different in the other; and inequality increases in the less numerous class in the same ratio in which it decreases in the community. Hence it would appear, on searching to the bottom, that aristocracy should naturally spring out of the bosom of democracy.
[...] I am of opinion, upon the whole, that the manufacturing aristocracy which is growing up under our eyes is one of the harshest which ever existed in the world; but at the same time it is one of the most confined and least dangerous. Nevertheless the friends of democracy should keep their eyes anxiously fixed in this direction; for if ever a permanent inequality of conditions and aristocracy again penetrate into the world, it may be predicted that this is the channel by which they will enter." (Reeve trans.)
Tell me truly if you do not perceive, in Tocqueville's prediction, something of the America of warehouses and Wal-Marts I have described in this post. He has even spotted the correlation between the need for cheap commodities, itself justified on spuriously "populist" grounds, with an actual increase in inequality. Hardly a place suffering from an excess of equality and of government support for the needy!

Talking to my Dad a bit further, however -- who is these days very much a liberal himself -- I began to see his point. He was not trying to say that the Left shouldn't be talking about entitlements and transfer payments at all, simply that these are insufficient on their own to meet people's deepest needs. He was concerned that the contemporary American Left -- at least not the Democratic Party -- doesn't talk to people as if it is able and willing to provide them with a sense of autonomy and self-direction in their lives. It doesn't offer, as the word's of Gandhi's great Talisman put it, "to restore them to a control over their own life and destiny." Instead, my Dad said, it offers "a helping hand when you really need it." Which is fine enough, as one plank of an agenda. But hardly an inspiring vision of the world as it ought to be.

Meanwhile, we seem to hear an even more disturbing manifestation of the tendency Tocqueville was warning against -- the one toward universal weakness and an all-powerful state -- in those creepy future projections that come from the self-declared neo-liberals and their ilk. The ones in which we will all -- or nearly all -- soon be driven out of work by super-sentient machines, but this will be okay,  because we'll all supposedly have a universal guaranteed income by that point to live on.

The question of what incentive our new machine overlords and their technocratic handlers will have to keep the rest of us alive indefinitely with transfer payments, and what's to stop them from one day simply pulling the plug and letting us starve, seems never to trouble the purity of this crystalline analysis. One begins to think that perhaps the "neo-liberals" might not mind if they did so-- and this, coupled with those eery utterances one would sometimes hear from one's fellow liberals after the election, about how "the demographics are on our side -- all those angry old white men will eventually die off," reinforce the eugenic flavor of the whole discourse. It ought to give gooseflesh to anyone who has half a heart or brain.

But no matter. The point here is simply that, even if the machines and Peter Thiel do see fit to graciously keep us on the dole until the end of time, people do not particularly want to live like that. It should surprise neither us nor the neo-liberals that people hear this proposed vision of the future as an expression of contempt for themselves and the contributions they make to our society. You cannot concoct a scheme for the planned obsolescence of 95% of your fellow citizens and expect them to go along quietly with it.

But what then, again, is to be done? We can't outlaw technology! We can't get rid of the machines and the computers! We can't abolish large corporations! We are at the mercy of market forces that were somehow human-made, but that have grown entirely beyond human control! "Things are in the saddle/And ride mankind," said Emerson. And what is worse is that -- the truth is that in his era as in ours -- they ride some of us harder than others. Some of us feel the spurs and the whip more keenly. What ever on Earth is to be done?

--

Well, we could simply do what every modern society, including our own, does when it decides that a particular industry, community, or way of life is worth protecting. In short, we could subsidize it. This term, of course, has some well-deserved negative connotations, as we mostly associate it with the massive subsidies that the farming industry receives from the U.S. government each year, and that have wreaked so much devastation in Third World economies whenever they have been forced to compete in unfair trade agreements with U.S. food commodities (in which they are often forced to reduce or eliminate tariffs, while the U.S. keeps its subsidies). But there is no good reason why those same subsidies couldn't be directed away from massive agribusiness concerns and toward family farms and small rural businesses instead, which wouldn't pose the same risk to other societies.

The obvious solution to Wal-Mart's ability to overwhelm all smaller competition, meanwhile, is not some punitive approach directed against the conglomerate, but simply to offer subsidies to local businesses, family-owned stores and restaurants, and small employers to enable them to sell their goods at competitive prices.

This is, of course, a solution in which the government plays a significant role. But it is also one that would build people's power at the local level. It would create nodes of influence in each town that would be far removed from the central government, thereby working to mitigate Tocqueville's concern about universal weakness and an all-powerful state. There is something pleasingly Chestertonian about the possibility -- and we wouldn't need to carry along all the downsides of Chesterton with it either.

We will be told, of course, by the neo-liberals and the libertarians and the movement conservatives and the rest, that this whole proposal is doomed to fail. That it would be subsidizing inefficiency and waste. But again, year after year, our government has seen fit to subsidize an industry that it wishes to render more competitive than it would "naturally" be -- if it were wholly at the mercy of the market -- namely, agribusiness. The result so far has been the catastrophic desolation of the rice industry in Haiti and traditional agricultural communities in Mexico, etc., along with a few extra dollars in the hands of Clinton's former constituents in Arkansas.  Our government has apparently decided that all that was worth doing, that was a goal in which it was willing to invest public resources. Why not turn that same investment instead toward industries that would employ more Americans, in more neglected rural communities, and that aren't of a size to overwhelm the impoverished workers and peasants of the rest of the globe?

Government supports are effective. They do in fact keep key industries alive and thriving, whenever a society decides that that industry and the way of life of the people engaged in it are worth preserving. That is why so many elected governments offer these supports, when they have the power to do so. No country that took literally the prescriptions of the Washington Consensus would have joined the developed world in the first place -- Japan certainly didn't ascribe to its tenets, which is a large part of why its tech industry performed so well compared to ours in the 1980s and '90s. The United States certainly didn't either-- its rules about subsidies and protectionist tariffs were always applied to other people -- generally, to people who, because of crippling prior debts to First World powers or U.S.-abetted coups, had little say in the matter. Haiti's rice industry was actually protected for decades by high tariffs. The country was actually producing its own food. That industry collapsed because the tariffs were removed, and even the promised sweatshops have not materialized to replace it.

So if all of these things work, why hasn't the U.S. tried it on some of its desolated rural communities? On struggling family farms and "small businesses" -- the latter of which are at least rhetorically a focus for both major parties? Why has it tried it instead -- with much success, at least for the direct beneficiaries, if not for the rest of humanity -- on big agribusiness?

People in rural America can be excused for suspecting that the real reason may be because the powerful and influential sectors of our society have decided that they are not worth preserving, that their ways of life are less important.

Among the people who cares least about their continued existence, one can safely say, is the current occupant of the White House and his brood of creeps. But the Left to date has given little indication that it cares a great deal more. Talk from presidential candidates about "job training" for unemployed coal miners has got to be one of the most laughably hollow promises ever pitched on the campaign trail. Job training for what? people rightly wonder. Which is the industry that isn't currently being gobbled up by this same maw of automation and digitization, and which will continue to be unless we see fit to protect some of those industries through affirmative supports? Computers themselves are constantly being computerized.

But this job-training nonsense is, of course, not the only proposal the Left could be placing on the table. The Left could offer to help people preserve the lives they have made, in the industries they know. It wouldn't be a hard sell, and combined with the Left's other commitments (and not replacing them, as some of our tiresome critics of so-called "identity politics" seem to be proposing) it could yield a very strong electoral coalition.

To get to that point, however, the Left will have to show that it sees and values the humanity of people living in rural communities. In an academic Left where one hears contemptuous references to "Wal-Mart Moms" as supposed parasites on the federal largesse (one is immediately reminded of the no less contemptuous -- and perfectly parallel -- narrative on the Right about "Welfare Moms"), we seem to have a long way still to go. We have to somehow get it through our heads that the worst loss suffered by unemployed communities is not the loss of the paycheck, but the sense of powerlessness, the feeling of having a world that once operated on cognizable proportions suddenly being overturned by malevolent outside actors.

There is an extraordinary piece of longform journalism I once stumbled across on this theme, through some implausible channel (actually, I remember -- it was Donna Kossy's website about "Kooks"). A.C. Koch's "The Muckracker," is the author and title. It is about a gifted small town newspaper writer (Marquart) who one day became convinced -- and quite suddenly-- that this home burg was being invaded by a network of giant transportation tubes that were mysteriously sucking people up into the atmosphere, or otherwise disappearing them. In Koch's skilled and empathic hands, this oddball news item about a tragic case of schizophrenic delusion becomes a meditation on the social changes that really are causing the disappearance of people, industries, stores, and whole ways of life from small town America. It is a useful mental picture for the world wrought by Wal-Mart, which appears several places in the essay. The piece is well worth reading in full, but I will leave you with just the closing lines:
 "What nobody around here got was that Marquart was doing it for them. He was speaking for the community, standing up to Wal-Mart and fastfood and all that corporate power that's sucking the life out of the little towns like Marthasville and New Haven and Washington. I don't know if he truly believed in that tube thing or not — maybe he was just trying to get noticed — but I do think he believed that this town was being bled dry, and he was determined to do something about it." Roth wound up and tossed a phantom pitch at home plate then turned and peered into the emtpy bleachers with a grin on his face. "Because those tubes, if they do exist, are not there to help us."



4 comments:

  1. You may be surprised to hear that I'm actually pretty sympathetic to this proposal and general line of policy thinking (I'm moving in an increasingly anti-capitalist policy direction, for reasons I imagine we'll discuss more at some point). However, I have some concerns about it (and this sort of thinking in general) that I'm curious to get your thoughts on:

    (1) One group of beneficiaries of Walmart capitalism who you don't discuss are low-wage workers in the developing world who are able to get jobs because their limited bargaining power enables suppliers to satisfy Walmart's demands for lower prices. Sweatshop labor is of course horrifying and degrading in a whole host of ways, but it does seem to be a real step up from the abject rural poverty that's still widespread in India and China (though less so now). Helping higher-wage suppliers in the developed world to compete would presumably make sweatshops less economically viable and so (absent other policy changes) consign more people in poor countries to even greater misery. "Absent other policy changes" is of course a huge caveat, but I'm enough of a Hayekian, and a student of the history of development policy, to be skeptical that centrally planned development schemes could compensate for market-generated employment growth in developing countries, and I do think we need to compensate for the reduction in poor-country growth that will come from proposals like yours for them to be morally defensible.

    (2) A standard socialist critique of social democracy (see e.g. https://jacobinmag.com/2012/12/the-red-and-the-black) is that it isn't sustainable because as long as the resources ultimately come from capital, it can eventually force governments to change policy. It seems to me that your proposal suffers from this problem (e.g. behemoth firms, which would still exist, could announce plans to withdraw from America en masse). I feel like proposals like this are ultimately workable only as part of a transition to a fundamentally non-capitalist social order, which is discomfiting since revolutions are (a) really difficult and (b) tend to have high body counts, but is still true. (I don't think your subsidy examples disprove this, since they either involve subsidizing whole industries [like farming] or were implemented as part of an industrialization process [as in the Asian tigers] and thus there were no or small established industries that had reason to resist.)

    (3) Is it too late? I don't know the data, but my intuitive sense from looking around the rural area where I went to high school and am currently staying (and generally living in this country) is that the economic system you rightly attack has already so devastated small- and medium-sized businesses that there may not be enough to reconstitute our economy around.

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    1. Thanks as always for reading and for the insightful comments! I'm not sure I have a good response to all these points -- they definitely remain open questions for me, and I share your concerns. Here are a couple ideas that come to mind though:

      (1) I'm skeptical that these low-wage industries are really to anyone's benefit, and my very limited experience interacting with people in Latin American civil society tends to suggest that people are not clamoring for more low wage factories, they are mostly trying to protect local industries from being displaced by large-scale development projects, the arrival of subsidized U.S. commodities, etc. To over-simplify an obviously much more complicated issue -- would you agree that it seems that a large part of the reason why sweatshop labor is "better than the alternative" for many individuals in the developing world is that neoliberal policies have themselves rendered those alternatives unviable? I'm less able to speak to the details of this in India and China, but in Central America at least we can see how CAFTA is working both sides of this lever at once: gradually phasing out tariffs and subsidies that protected traditional industries, subsistence agriculture, etc., while encouraging foreign direct investment, which generally means more maquiladoras. The goal is pretty clear -- render the traditional sector untenable and replace it with sweatshops. The same or worse certainly happened in Haiti, except the sweatshops didn't even end up materializing, for the most part.
      This doesn't mean that people want to stay in subsistence agriculture forever, but there have to be development strategies that incorporate more democratic decision-making on the part of the people most directly impacted and that focus on improving existing industries, rather than driving people off their lands and into urban slums. The U.S. could use its foreign aid dollars, for instance, to buy food aid from local suppliers in the places it is aiding, thereby stimulating their economies as well as providing emergency nutrition support. I have to believe that there are possibilities for development beyond a 19th century model of pauperizing rural communities and sending people to "dark Satanic mills" -- which is never a model that any democratic society imposes on its own people, since the traumas of dislocation are so high. Finally, my sense again from very limited exposure to Latin American civil society is that there is a lot of room for international solidarity work with the U.S. labor movement around shared advocacy goals to end or renegotiate existing trade deals along more progressive lines.


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    2. (2) This is definitely a valid concern. Thanks for sharing the Jacobin article as well, which was really interesting. I guess my response would be that a subsidy-based approach would at least be less likely than some of the alternatives to lead to Wal-Mart or other multinationals pulling out of the U.S. -- certainly it would be less likely to lead to this than a punitive regulatory model that operates through fines, etc. It would also be a harder case for Wal-Mart to win in the realm of public opinion, since few would be persuaded that they face a real existential threat from having a few more local businesses and family farms be able to compete with their prices (though perhaps Fox News would just need to get a hold of some privileged yuppie organic goat cheese farmers who were receiving the new family farm subsidies and the furor would begin).
      As for the Jacobin writer's proposal, I'm not sure I understand it fully, but you would probably agree it seems to suffer from the Tocquevillian concern about the lack of any secondary powers in society outside the state. I take it he's not just proposing to nationalize the finance industry, but ultimately all other enterprises would be “socialized” as well, once they were above a certain size. It seems to me that no matter how democratic the first few elections were in a system with such a massive state, they would inevitably empower some single party that was able to command a majority and which would then be able to use the massive state apparatus to ensure its own continuity in power, etc. The writer assures us that all of the socialized firms will be “autonomous,” but I’m not sure what this means in this context, and how that will be guaranteed, apart from simply asserting that’s how it will be.
      I think my last point of difference w/ the Jacobin writer is that I don’t think I accept the analysis (curiously shared across Marxist and Neoclassical schools) that social democratic regulations will lead to a reduction in the profit rate over the long term. A given regulation does provide a check on an individual firm’s profit-oriented decision, but by ensuring high wages and collective bargaining rights, these policies also establish a strong base on the demand side of the economy. Workers will be able to buy a wider variety of goods and at higher prices, which will create new sources of revenue for businesses, etc. By contrast, it seems to me that the Wal-Mart approach is the one that threatens to saw off the branch that capitalism is sitting on, by eventually driving prices so low, and in turn driving wages so low, that no one is able to afford anything, so prices need to be reduced yet again, and profits eventually fall to zero.

      (3) This definitely seems like a real, if disturbing, possibility. My hunch would be that the extent to which this is true varies across the country, and that some states have done a better job already of pursuing policies that affirmatively protect small businesses and allow people to keep family farms, but I haven’t really looked into it. More research definitely required.

      Much to discuss!

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    3. Thanks for the helpful response (and for your post which is thought-provoking as always)! We should probably discuss these issues at greater length at some point, but here are a few quick thoughts:

      (1) These are good points, and I broadly agree that "it seems that a large part of the reason why sweatshop labor is 'better than the alternative' for many individuals in the developing world is that neoliberal policies have themselves rendered those alternatives unviable", although I would put more of the blame on imperialist-era exploitation (at least in India which is the country I'm most familiar with). However, I have some of the same concerns about making this the basis for policy as I did for the United States in my original point (3); village industry, etc., mostly has been destroyed/rendered unviable and it may be too late to resurrect it now. I also still worry from a Hayekian perspective about how state-led a development venture like this might have to be, although I would need to look at the details much more carefully to know for sure whether this is a valid concern.

      (2) To clarify, I shared the Jacobin article only to make the point about the long-term unsustainability of social democracy; I share your concerns about the author's specific proposal and don't support the nationalization of finance. With respect to your point about social democracy not reducing profits in the long-term, I think that the total flow of profit is probably greater under social democracy (due to fewer recessions) but most individual capitalists have to suffer financial losses relative to what they as individuals could be earning at a given moment, and people are bad at long-term thinking. And I haven't thought through the mechanics of how Walmart, et al would oppose your proposal, so you may be right, but I would just note in general that economic power has been used to crush very popular reform schemes (see e.g. the fate of Syriza in Greece).

      (3) You make a good point about state-by-state variation, and I haven't studied this enough to have more to say. Would be interested to hear about the results of any research you do.

      P.S. I also wanted to single out for praise your discussion of the political implausibility and (as lawyers say) "dignitary harms" of UBI socialism. I've found this frustrating ever since we talked about it in college but don't think I've seen anyone raise the "what if the multimillionaire fully-automated-factory owners decide they don't want to subsidize everyone else anymore" problem before, so thank you.

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