Monday, 25 July 2016

Towards global Marxism?

At the weekend I shared sparkling wine (English, as it happened) with some Marxists. OK, so I did not go drinking specifically with Marxists, they happened to be at the flat-warming I went to. But they are Marxists, and unashamedly so. Their basic premise is that a lot of people have had their living standards hollowed out by globalisation. Another guest - from more of a right-wing perspective - seemed to agree that while trade and migration within the EU and NAFTA had generated wealth overall it had produced some pretty worrying side-effects.

My main contention was that in the long term, say the next fifty to a hundred years, these imbalances will become less marked as developing countries catch up on living standards and so will be less able to undercut rich-world workers. Trade restrictions cannot be tough enough to undermine the cost advantages that China, India et al. have at the moment, and it would be thoroughly immoral (not to mention self-defeating) to try to stop poor countries from getting rich by selling us stuff. While the Marxists may pine for an era of an enthusiastic proletariat (yes, someone actually used the word) working in Utopian steel factories, we cannot turn back the clock even if we wanted to. 

So, can the people and governments of the world do anything to mitigate the most negative effects of rapid globalisation, whether they are exploitation of workers in poor countries or the undermining of traditional working class industries and skills in the rich world? Should we try to? Or should we try to get through this stage of the world's economic development as quickly as possible, by streamlining the whole process, with the hope that in a few decades' time many many more people can expect a comfortable living whichever part of the globe they are born in?

54 comments:

Sackerson said...

Jam in fifty years' time is far worse even than jam tomorrow. We have to be able to offer something better to more, sooner.

Steven_L said...

And it's definitely 'globalisation' and not 'robots' that are 'hollowing out people's living standards'?

If you shun fashion and the latest gadgets (and admittedly I do not) 'stuff' has never been cheaper compared to UK wages has it?

Except for fags, good scotch and housing, but of those only the price of Macallan has anything to do with 'globalisation'. And it's not robots smoking all the fags or bidding the price of housing either.

Nick Drew said...

As I have said before, I view capitalism as a gigantic arbitrage-facilitator. Anything practicable (& civilian) you want to do, capitalism will enable you to do it more easily than any other system

If you want to do whatever you are already doing more cheaply (and everyone does), capitalism will help

the only way to stop a manifestation of this dynamic is to make it illegal, either de jure or haram (- & even then ...)

Suff said...

Im certainly no protectionist. As Maggie once said "you can't buck the market" but I believe a true FREE capitalist environment is only a reflection of its big brother Evolution (and it's only our arrogance and ignorance that make us believe we are above that) Something grows bigger and stronger but slower to react and is replaced by more nimble things more adapt to changes in the environment. The main driver for globalization is not the cost of wages but the legislation and taxes placed on our industries, put in place to PROTECT the corperations and political establishments. The corperations love legislation as it stops SMEs entering the market and protects their cash cows. The politicians need their pound, kilo, stone, 100 weight from an ever decreasing tax base.
Should we complain about the poorer countries getting rich selling us stuff? Hell no but let's have s level playing field. Give our own SMEs a chance. Mechanization and computers outgun salaries every time. Where's all the free time I was promised at school, spent on pointless sh1te.
Should we streamline globalization. Hell no. The problem is there are too many people in the world. Should we improve the living standards to try and reduce child mortality in poorer countries with high birth rates? Would a pride of lions say "the pride next door have been over copulating and have exhausted their food supply. Lionel be a good chap and take over this zebra"

Elby the Beserk said...

I hoped you pointed out that globalisation, whatever its evils, has halved global poverty in just 20 years? And that it wasn't Socialism or any of its endless variations that did this?

Roger said...

The thesis of the last para is that global capitalism will make everybody happy and fill all bellys, unlikely I reckon.

A few humans + many machines could produce much more than one human's need for goods or services. The surplus humans can be left for governments to support as minimally as they dare.

But we will not be left with no human economy, rather as a parasite does not kill the host so global capitalism and governments will probably form a symbiosis. But where is/are the stable point(s) in that symbiosis.

A limited number of humans? A global makework of local government meetings? Global literary study groups and poetry festivals? Separate the have-a great-deals, the have-somes and the have-nots, biologically if need be?

Not everybody will be happy.

Electro-Kevin said...

We should be reducing our population - not increasing it.

roym said...

'We should be reducing our population - not increasing it.'

This should start to happen once developing economies have caught up no?

after seeing the viciousness spewed out on social media these past few months, glad to see you could have such a discussion in such genial fashion!

Antisthenes said...

It can be argued that globalisation is giving some a shitty deal in comparison to others in more developed countries but then without it they would be getting no deal. They would still be piss poor subsistence farmers or refuge scavengers. As you say by having a deal shitty or not eventually they will catch up.

ivan said...

It all boils down to cheap reliable power, the main things here are cheap and reliable.

The developed nations have let the eco-green lobby dictate that power will be expensive and unreliable forcing industry to reduce costs, usually by laying off the expensive workforce, and people into poverty to pay for it.

Developing countries are being held back by the eco-green lobby and NGOs because they are against giving the people cheap reliable power and leaving the people with no alternative but to have large families to just scratch out a living.

The industrial revolution brought the UK out of poverty and gave people a better future. Now the Marxists, greens and eco-loons are trying, and succeeding, to take the country back to some pre-industrial la, la land state with high infant mortality and grinding poverty for most people while they enjoy the 'high life'.

The conditions we are seeing today will remain, and get worse if the eco-greens have their way, until electricity is actually 'too cheap to meter' and available to all. Unfortunately there are far too many loons with vested interests to allow that to happen.

Gordon the Fence Post Tortoise said...

"Utopian steel factories"?

in say ... the communist paradise of PRC perchance?

Doctrinaire Marxists are little different to Jehovah's Witnesses - but demand to be taken more seriously and to tell us all how to live ...

Not a single one of them employed outside the public sector I'd wager....

hovis said...

Nice to see Panglossianism alive and well at C@W.

More nuanced thoughts when have time later.

Laban Tall said...

@Roym - "This should start to happen once developing economies have caught up no?"

The population of Africa doubles about every 50 years. Good luck with that.

In 1950, Europeans (even after WW2 slaughter) were 22% of world population, Africans 9%. Now Europeans are 11%, Africans 15%. By 2100 the UN estimates Europeans will be 6% of world population, Africans 39%.


https://pbs.twimg.com/media/CoRGVAmVUAAiO5i.jpg:large

Tim Worstall said...

"whether they are exploitation of workers in poor countries or the undermining of traditional working class industries and skills in the rich world?"

Why would we want to stop doing these things? They're exactly what is making everyone richer.

Anonymous said...

British working people aren't included in Tim's 'everyone' who's getting richer, that's the trouble.

dearieme said...

My most revealing discussion with a Marxist: he had in earlier conversations been gung-ho about blast furnaces being built in Brazil. But this time he was downcast: "You know what the bloody Brazilians do with all the steel?" "What?" "Make bloody cars and refrigerators".

There's no answer to that. It's like discussing something with a member of a fundamentalist religion, quite pointless.

Blue Eyes said...

@ Tim, the issue is that people do not believe it. If everyone was feeling pretty good about how things were going, then we would probably not have Brexit/Trump/Sanders/Le Pen/and so on.

Hovis, either you did not read the post or do not know what "Panglossian" means.

andrew said...

Generally speaking, just about everyone is better off than they were 15 years ago.

If you are Chinese, dramatically so
If you are in the bottom 10% of the english income distribution, a bit so

The trouble is that in the UK the other 90% are a lot better off relatively speaking.

The other trouble is that yes, you may be 'better off' in that you have a mobile phone and a big telly and primark clothes and all the things nice middle class people patronise lower income people with,
but if you are working and you have to go to a food bank or get income support it will not feel like you are better off.

At least, it wouldn't to me.

It should be clear that market mechanisms are failing and transfer payments are not really solving the problem.

This is a tricky one, but this is why we have a govt.



Blue Eyes said...

Great comments on here. Not sure I agree that cutting the population down would achieve anything, though. What is it supposed to achieve? We have plenty of space left on the planet, we are getting better at producing stuff with fewer resources, etc..

Blue Eyes said...

Andrew that is right but what do you want the government to do? Or do you expect it just to crack on without your input?!

Anonymous said...

If globalisation ever got to a point where cheap labour didn't exist, as the cost of producing a widget became the same in every country, what happens then to the economies that currently benefit from cheap labour?

If something costs £5 to produce in UK but only 30p in China, what happens when we have to pay £5 as that's the only cost for the item no matter where it's produced, but this is true for every item that's affordable because of cheap labour?

Is the only hope that automation keeps up to hopefully offset this?

Blue Eyes said...

Anon, presumably global growth would slow to the rate limited by productivity improvements and innovations.

Electro-Kevin said...

ROYM said *** 'We should be reducing our population - not increasing it.'

This should start to happen once developing economies have caught up no? ***

Or dragged us down (which is why we are seeing a lurch to the right across western politics.)

As the West automates and outsources it embarks on the mass importation of poverty, which is unfortunate.

Japan has the right idea. Ignore the demographic shortfall. The march of the robots is coming and will take up a lot of the slack with the ageing population.

The EU's solution ?

Import millions of uneducated and pushy young men who have (so they tell us) abandoned their own women, children and elderly to Daesh - those good boys 'l look after us and pay our pensions when we're old.

Electro-Kevin said...

What causes Marxism is when you have lots of inequality and poor people. And that's exactly what we're creating in the West through mass immigration. We were on the verge of killing this silly notion off for good in the late '80s/ early '90s (and that's where I'd like to go back to - not the '50s that so many accuse me of.)

Blairism: Croney Capitalism meets Socialist Activism

After the success of Thatcherism the Labour movement gets is raison d'etre back (poverty and inequality) while capitalism gets a cheap and willing workforce.

Except that workforce is not so cheap - because it is propped up with welfare.

Sorry to reprise my old arguments but I happen to think that they still hold true.

Laban Tall said...

Andrew - were working people worse off 15 years ago? I don't think so, and they were probably better off 30 years ago. We do have more cheap shiny gadgets though - all of them made overseas (yes, I know about ARM - what's their cut of the average phone sale price?).

I don't think the ONS keep track of male wages before 1997, but I'd be surprised if the figures weren't similar to the US. Back in the day a male on average earnings could buy a property AND support a stay at home spouse - something that's now the prerogative of either the well off or the very poor (or some 'cultural groups' who are prepared to take the financial hit).

http://www.brookings.edu/research/opinions/2015/09/17-male-us-worker-earned-less-in-2014-than-in-1973-wessel

"The typical man with a full-time job–the one at the statistical middle of the middle–earned $50,383 last year, the Census Bureau reported this week. The typical man with a full-time job in 1973 earned $53,294, measured in 2014 dollars to adjust for inflation. You read that right: The median male worker who was employed year-round and full time earned less in 2014 than a similarly situated worker earned four decades ago. And those are the ones who had jobs."

Laban Tall said...

Andrew - just took a look at the UK figures since 1997.

http://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/datasets/ashe1997to2015selectedestimates (Table 1)

Median male weekly earnings £343.70, to match that today taking RPI into account you'd need £564.25

http://www.bankofengland.co.uk/education/Pages/resources/inflationtools/calculator/flash/default.aspx

But median male earnings 2015 are £517.50 i.e. 8.3% less in real terms than they were 18 years before - and that's with interest rates nailed to the floor, and an RPI index that underestimates housing costs.

Demetrius said...

Marxists, how quaint, were any Chamberlainites there debating three acres and a cow with them?

Blue Eyes said...

Demetrius, I also thought it quaint. Of course, just because he was wrong at the time and still wrong now, doesn't mean he won't be right at some point....

Blue Eyes said...

So EK just to confirm, if the population was rising thanks to educated white people, you would have no problem?

andrew said...


L

I know the cash value of earnings has not changed much but the whole picture is v. complicated - Tax levels have changed etc, RPI depend on who you are (smokers...) and where you live , some things are much cheaper (cars), some more expensive (housing in the south east)

I would add that things like the internet that were the province of universities in the 90s (and v.v. expensive) are now close to being in the same class as water/ electricity acc to the govt.

BE

I dont know what the right answer is. One (maybe the only) good thing about JC is that he does seem to recognise there is a question to be answered here.
I dont like his answer (redistribution)
I dont like the cons answer before May (do nothing)

Laban Tall said...

Andrew, it's not that complicated. The stats are in front of you - cash value of male earnings is down over the last 18 years in the UK, and is at 1973(!!) levels in the US. And the internet, wonderful though it be, is a particularly useful and informational shiny toy (and who makes the routers, the laser LEDs, the optical fibre, the high-purity silicon?) which has enabled all the other shiny toys (there were libraries once, before the 90s - though I first got online in 1992/3, and it wasn't that expensive - though it was all "usenet" discussion boards, no web as such - that was only after Netscape appeared in 94. The Web was in full swing by 95, it's just that only techies played with it).

One other thought - about half of all young people entering the job market for the last 20 years already have a debt millstone round their neck - a millstone which is now up to 20K a year, to be repaid at 3% plus RPI, and the interest clock starts ticking in Freshers Week.




Roger said...

I voted Remain not because the EU is so great but because our Parliament is just too stupid to manage any sort of sane alternative.

To consider Globalisation though. Old style manufacture allowed government to spend little on a minimal education, but modern manufacture and a move to services required a big boost - that did not happen. The boost never happened because to boost services also requires a boost to social education - better culture, better attitudes, better housing and that would raise expectations of jobs - jobs that would themselves have required change. Change to planning policy with concomitant upset in the leafy shires.

The opportunity was missed and has now gone. Parliament was too self interested and too stupid to see the consequences. Now running around like headless chicken. Never mind, Foxy will come home with all those juicy contracts - not.

L fairfax said...

Housing of course has got expensive partly (entirely )because of Government policies.
If the Government takes away money from people who work and gives it to those who don't so they can have nicer housing then there will be a problem.
They should say no one can get housing benefit in the South East unless they are work 35 hours per week.

Electro-Kevin said...
This comment has been removed by the author.
Electro-Kevin said...

"So EK just to confirm, if the population was rising thanks to educated white people, you would have no problem?"

We chose not to increase our white population - and as we had fewer children we saw our wealth and comfort increase whilst our national consumption was going down. The population increase (and resulting decrease in standard of living) was forced upon us against our desires.

As I've said before - automation will take up some of the demographic slack. Train drivers will be freed from their labours to become carers - or robots may even be programmed to wipe bottoms (so long as they are made with rubber fingers and not metal ones.)

But as we are having a population increase I'd prefer it to be by educated people whatever their colour on a selective basis. As it is our population is being increased in large part by backward tribesmen who will cost a lot more than they contribute.

(The insinuation that we're racist is tiresome.)


Electro-Kevin said...

Why is increasing consumption and population pressure considered to be an advancement ? How do we reconcile it with carbon reduction and the exhaustion of limited natural resources ?

Wildgoose said...

I agree E-K, Blue Eye's constant insinuation that anybody who disagrees with him is either racist, stupid, or both - is extremely tiresome.

Blue Eyes is obviously intelligent and can frame a good case for his point of view.

However he then constantly spoils this by refusing to engage with commenters and instead preferring lazy insults.

In this respect he's like a "Schoolboy Capitalist" instead of a "Schoolboy Marxist", but with the same "holier than thou" propensity to resort to insults the moments somebody doesn't agree with him 100%.

P.S.
I am glad to see Laban Tall writing again, even as a commenter rather than a blogger.

Blue Eyes said...

Wildgoose I am sure that EK appreciates your taking offence on his behalf. One way of responding to your rather inane comment (what IS a schoolboy capitalist, by the way?) may be to point out that there are plenty of other internet sites available if you don't like reading things I have written.

EK your point is interesting about the rich world having reduced childbirth rates. It is true. But we also (still) have a welfare state which will go bust if entitlements keep ahead of the ability of the working population to pay those entitlements.

Nobody in Japan is voting for lower pensions...

I may do a post on this topic as it generates so much interest on here.

andrew said...

L T

"it's not that complicated."
... beg to disagree

Looking at whether you are paid more or less in gross terms taking account of RPI over a long time period is one thing and not that complicated and you may be correct.

Looking at what you can actually buy with the post tax income - money in your pocket is another - and I maintain - not simple and depends on personal preference and circumstance.

e.g.
if you own the same house for 10 years, your housing costs have dropped
if you rent the same house for 10 years, your pips may well be squeaking
if you rented on housing benefits for 10 years, you may not have noticed any change

(Not saying this is good or right)





Blue Eyes said...

Andrew you make a very good point. If you bought a home when interest rates were 5-6% - quite recently, and have taken advantage of lower rates then even a stagnant salary goes much further. My mortgage interest is basically the same as my commuting cost at the moment. Down by about half against ten years ago.

Someone renting a similar home would find that the rent has probably doubled over the same period.

Also inflartion and GDP figures measure quality and invisible stuff very badly indeed. Ie modern technology. We can scoff about how many iPhones that geriatric blog commenters really need, but the effect is significant.

Electro-Kevin said...

Blue - I'm all for a bit of tough love on the welfare state too. But to be fair we have to reduce people competing for jobs. Limitless immigration of unskilled is not the answer.

Yes. I enjoyed Wildgoose's support but disagreed on the schoolboy bit. You're a worthy member of the CU team and enhance the blog greatly. A very good appointment in my view.

Laban Tall said...

Of course, Andrew, someone who's paid off the mortgage on a large house that he paid a relative pittance for 20 years ago has very low housing costs.

But the key point is - what's the outlook for a 30-year old on median wages who wants to buy a house and raise a family? I'd suggest it's the worst since WW2. And that 30 year old will have to work til 67, and he's very unlikely to have a final salary pension. The state pension won't even pay the rent on a 3 bed semi, let alone provide for food, unless you're in the Valleys or Burnley.

We are returning to the days of our great-grandparents - low wages, rent all your life, retire a few years before death on a lousy pension.

Blue Eyes said...

So Laban, perhaps that means that the post-war era was an aberration? A debt-fuelled, unsustainable period?

L fairfax said...

@Blue Eyes said...
"
So Laban, perhaps that means that the post-war era was an aberration? A debt-fuelled, unsustainable period? "
I don't think so we could have cheap housing again, we could either let companies/people build more homes, change the benefit system, convert empty shops to home or better still all of the above.

andrew said...

L T

Again, complicated.
What was the life of someone aged 30 on median wages in 1950 like?

I will go for Vv different.

To claim better is a stretch.

andrew said...

There was not much in the way of planning permission needed in the 50s
We could go back to that as long as we all we able to bear the price

Laban Tall said...

BE - the post-war UK was not at all debt-fuelled. It was only in the Thatcher era that private borrowing became at all significant. 1n 1979 there were no mass-market credit cards, and to get a mortgage, you had to show a track record of saving with the institution, usually for at least 2 years. Then you'd get 3.5 times a single salary.

In fact the Thatcher era was also the start of the rise in house prices and the slowdown in male wages - probably not a coincidence. The 'Thatcher miracle' was dependent on debt and women's employment to boost "household income". Blair in the end was just Continuity Thatcher.

As for individuals, so for the country. In 1970 it was seriously argued that one reason for Wilson's GE defeat was an order for Boeing airliners which resulted in an £8m balance of payments deficit for the month prior to the election. Now the deficit is tens of billions per month and no one seems to care.

https://www.theguardian.com/business/2015/apr/09/uk-trade-deficits-used-to-matter-at-election-time-not-any-more

Sackerson said...

@Laban: there was a sharp increase in the money supply in the early 70s also, even before OPEC raised their price.

Blue Eyes said...

Laban, the UK was living on borrowed time with outdated industries, was rife with state planning and inefficiency. Overall, the 60s through to the 80s were crap times indeed for the UK economy. No wonder housing was cheap.

There is a huge amount of wishful hindsighting going on here.

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