Polanyi's labor market blastocyst

Over at the Boston Review, Michael Piore and Andrew Schrank’s recent article (“Trading Up: An embryonic model for easing the human costs of free markets”) on labor in Latin America offers a spot of good news. They’ve been studying labor inspections throughout the region, from the Dominican Republic to Mexico to Brazil and Chile, and say they’ve found “an emergent model for reconciling market and social forces.”

Some background—and it’s the background they offer that got me interested in their article in the first place. Piore and Schrank are looking at Latin America through the lens of early-mid 20th century economist Karl Polanyi ideas expressed in his classic book The Great Transformation. I’ve been a fan of that book for years and recommend it highly. And while Polanyi still has decent name recognition among economists, there aren’t that many who rely on his ideas to guide their work. As P & S sum The Great Transformation up,

Polanyi described the economic policies of industrial society as the product of a “double movement.” The first movement is toward a free market, particularly in labor and land, and also in international trade. But free markets generate enormous pressures for the continual redeployment of resources, especially human resources. So Polanyi’s second movement is a response, an attempt to protect society from these pressures. While the movement toward the market is guided and directed by a coherent theory and the ideology of political and economic liberalism (the Washington Consensus is but its most recent expression), the second movement is visceral, an instinctive effort to rescue society from the ravages of unfettered economic competition and the constant redeployment of resources that destroys the context in which people understand themselves and create meaning and purpose in their lives.

P & S say that in today’s world, there’s no coherent ideology that promises to reconcile the two forces driving, on the one hand towards unfettered markets and on the other hand back towards the social meaning and cohesion that people rely on. Marxism, fascism, even Keynesianism have all been largely discredited throughout much of the world, and so can’t do the trick.

Now I’d like to throw in religious movements here as a possible candidate for playing the role of a Polanyi-esque ideology. In the U.S. in the last half-century or so, it seems that fundamentalist Christianity has served, for a significant fraction of the population, to help people accept the social disruptions that come with a market economy (particularly the markets for human labor, for jobs). While their economic fortunes have waned, the turn to a strong religion has helped them preserve a connection to the past (real or imagined) and to a community of peers. Similar arguments have been made for the rise of fundamentalism in the Muslim world as well.

Anyhow, P & S suggest that if there’s no ideology from above, as it were, for dislocated social movements to gravitate towards, maybe we can learn a new ideology from the actions of the social movements themselves.

In this unprecedented intellectual vacuum, one way to begin creating a coherent alternative would be to try to construct such a vision inductively, working from the changes that are actually happening on the ground. In studying what people are already doing locally in response to the conflict between market and social forces and identifying the particular institutions that are emerging in that process, we might find a way of working those institutions into the broader structure of the economy, using them as the starting point for an alternative model of social and economic organization.

And that’s what they report finding in Latin America, following Polanyi’s lead, in the realm of labor law and enforcement. There has been a strong increase in labor law enforcement in Latin America, they say, and the Latin American model of labor law enforcement (which, of course is not identical or consistently maintained throughout the entire region, but which shares some broad commonalities) is serving as a piece of the social struggle to protect people from being nothing more than wage slaves.

Furthermore,

the Latin approach to labor-market regulation is not only distinct from the prevailing U.S. approach but is also better able to reconcile the need for regulation with the exigencies of economic efficiency. Indeed, it offers the possibility for a country to shift from a strategy of competing in world markets through cost-cutting and labor exploitation to a strategy of upgrading business practices to raise productivity, reduce inventory levels, and improve quality.

Ironically, while they see advantages to the Latin American model, one of the positive features they profile has been funded by the U.S. Department of Labor—the Regional Center for Occupational Safety and Health (Centro Regional de Seguridad y Salud Occupacional, or CERSSO), which is active in eight Central American and Caribbean countries (but not the U.S.).

A recent study of garment factories in El Salvador, Guatemala, and Nicaragua, for example, found that returns on safety and health investments engendered by the program [CERSSO] ranged from four to eight times the costs of the initial interventions.

Well, there’s no need for me to summarize their entire article, but I will leave off with another tidbit of theirs on just why this kind of intervention is necessary.

Price signals alone will not lead employers to protect their workers. Nor will altruism. In the absence of meaningful government intervention, ignorance, self-interest, and short-term thinking will rule the day. And professional labor inspectors are therefore needed not only to block the low road but to pave the high road as well.

Ah, the beauty of a win-win situation. Okay, so Latin American garment factories are still a long shot from being rose gardens, so all this rose-colored glasses stuff has got to be taken with a grain of salt. But still, if there is some progress being made it’s worth acknowledging and understanding. And if the progress is uselessly incremental, we ought to try to know that as well. Anyway, do read on; after all, I haven’t touched on how P & S see that

This last step crosses the threshold from a conception of labor inspection narrowly focused upon work standards to a notion of labor inspection as a much broader approach to social and economic policy. The agency then becomes a bridge between economic and social forces, at least one piece of an alternative to the Washington Consensus, or rather to the vacuum in which the reaction to the Washington Consensus is emerging....

Annals of unexpected consequences: gay escort to halt global warming?

For all that social sciences are able to figure out patterns of behavior, there's one thing that guarantees a continuing need for old fashioned history analysis: the existence of totally unpredictable twists and turns in culture and politics.

Now I can't say with any confidence that the recent fall from grace of Rev. Ted Haggard, until this past Thursday the president of the huge and hugely influential National Association of Evangelicals and leader of a megachurch in Colorado Springs, will be one of those surprisingly pivotal events. But there's a distinct possibility that his outing as a repeat customer of male prostitution could lead to major changes in US policy and cultural attention towards global warming.

Here's the historical review of the situation that I'm imagining might be done twenty years from now.

1) Haggard has been president of the NAE.
2) Recently, the NAE has been having internal debates over what the official evangelical response should be to evidence of global warming.
3) Many evangelical leaders, like the Rev. Richard Cizik (vice president for governmental affairs of the NAE), have realized that global warming is for real and that they should get off the sidelines (or the status quo defense) and on the side of "creation care." (Cizik is profiled in the recently released movie The Great Warming.)
4) But these "green" evangelicals couldn't persuade the overall NAE leadership to endorse their petition calling for strong action to halt global warming.
5) With Haggard now resigned because he was hot to trot, the possibility exists that someone like Cizik might end up as the new NAE president; and if that happens, then some of the evangelical energy currently expended on sexual politics hot-air might be shifted to a higher calling--in lay minister Matthew Sleeth's words, serving God through saving the planet.

At this point there's no way to know if this is how our near future will play out, but my fingers are crossed, so to speak.

[Conflict-of-interest alert: I mentioned Matthew Sleeth and link to his book's website. I work at the publishing company that put out the hardcover edition of his book. The plain fact is that without my having worked with him and his book, I wouldn't have been as aware of the NAE and Cizik's role in the greening of Christianity.]

Econ-Atrocity: Will it matter if the Democrats win?

Will it matter if the Democrats win?
By Gerald Friedman, CPE Staff Economist

As I write this, it appears likely that after 12 years in the wilderness, the Democrats will capture a majority in the House of Representatives and will make substantial gains in the Senate. (My favorite objective source, http://www.electoral-vote.com/, gives the Democrats a 225-208 lead in the House and a gain of 4 Senate seats to move to 49-51 in the upper body.) After 6 years of almost uninterrupted one-party rule, and the worst government this country has endured since the 1850s, we can only rejoice at Democratic gains as, if nothing else, a sign of a return to sanity after the trauma of September 11, 2001. But, beyond this, what can we expect from the Democrats? Can we anticipate a reversal of Bushism, and a renewed push for social progress?

Alas, the short answer is ‘no’. That said, we should all hope for a Democratic win. A Democratic victory would bring welcome changes in Congress. A Democratic majority would install John Conyers of Michigan as chair of the House Judiciary Committee. Sponsor of a Bush impeachment resolution, a dedicated opponent of the use of torture, and a defender of civil rights and civil liberties, Conyers would replace the reprehensible F. James Sensenbrenner. Charles Rangel of New York, a liberal with a nearly perfect labor voting record, would become chair of the House Committee on Ways and Means, replacing William (Cal) Thomas, a dedicated opponent of social security and progressive income taxation whose lifetime AFL-CIO voting record is 12% right, 88% wrong. Holocaust-survivor and Iraq-war critic Tom Lantos would replace right-wing ideologue Henry Hyde at International Relations. Without exception, a Democratic majority would install committee chairs preferable to the Republicans’; and we can confidently anticipate that with the new committee structure, the new Democratic majority would not endorse torture, repeal Habeas Corpus, tie a minimum-wage increase to repeal of the Estate Tax, or privatize social security. And there may even be more to gain from a Democratic victory. After six years of virtual free ride, the Bush-Cheney Administration will finally be subject to meaningful oversight. And Bush’s reign of error provides abundant opportunities for serious investigation!

Still, even if the Democrats capture control of the Senate as well as the House, we should not expect that the new Democratic majority will be able to do much more than to limit the damage that Bush-Cheney can do. The structures of government power will still largely be in Republican hands. First, the Republicans will retain the White House, of course, with all of its newly accrued power, control of the Federal bureaucracy, the right to interpret and reinterpret legislation, and the power to veto congressional legislation. Republican minorities in Congress will fight the Democrats at every turn. And, outside of Congress, the Republicans retain the infrastructure of the Conservative Revolution, including an arsenal of right-wing think tanks, media outlets, and corporate funding. Nor have the Democrats prepared the ground to reverse Bush-Cheney. Instead of campaigning to win a mandate for economic renewal and a reborn democracy, they have fought to attract moderate and conservative voters by emphasizing the Administration’s failures of execution, such as its mismanagement of the Iraq war and the Federal deficit. To show their moderation, Democrats have emphasized their military links, the large number of Iraq-war veterans they have nominated. As a result, any Democratic majority will be installed by the election of relatively conservative Democrats from districts with a history of supporting Bush and other Republicans. As if to seal the deal with conservatives and to slam the door on significant social reform, the Democrats have nominated for the Virginia Senate seat a life-long Republican, Jim Webb, Naval Academy graduate, Marine Corps veteran of the Vietnam War, and Assistant Secretary of Defense under Ronald Reagan. Corporations have understood the message the Democrats have been sending; the New York Times reports (October 28, 2006) that rather than donating more to the Republicans to try to stop a Democratic victory they have been shifting their campaign contributions dramatically towards the Democrats to ensure continued access to congressional leadership.

Without a mandate for single-payer health insurance, for renewed regulation, for new environmental initiatives, or even for a withdrawal from Iraq, it is hard to see how a new Democratic Congressional majority will be able to do much more than to slow the bleeding. This is a worthwhile goal. More, it is just about all that we could ever expect from political action by itself. Every major legislative reform - from slave emancipation in the 1860s through the anti-trust activity of the Progressive Era, the New Deal’s Social Security Act, and the Civil Rights legislation of the 1960s - was the result of popular pressure from below. In each case, politicians voted social reforms to catch up with popular pressure and to appease militants. Congress did not create the Civil Rights movement by passing the Civil Rights Acts of 1964 and 1965; instead, those acts ratified and institutionalized the gains made by the popular movements of the 1950s and 1960s.

Whatever happens on November 7, our task is clear: to build a popular democratic movement that will not only slow Bush-Cheney but will reverse their works and rollback the neoliberal program of the 1980s and 1990s. Our model should be successful movements like the New Deal, the Civil Rights campaign, and the Conservatives of the 1970s and 1980s: each built from the ground up, beginning with an ideological campaign both to critique the prevailing wisdom and to support a new vision. Each of these campaigns was helped by friendly politicians; but they learned that the best way to make political friends is to build people power. We should remember that as we head to the polls to vote Democratic November 7.

Sources:

• Irving Bernstein, Turbulent Years: A History of the American Worker, 1933-1941. Boston, Houghton Mifflin, 1970.
• Frances Fox Piven and Richard Cloward, Poor People’s Movements: Why they Succeed, how they Fail. New York, Vintage, 1979.

© 2006 Center for Popular Economics

Econ-Atrocities are a periodic publication of the Center for Popular Economics. They are the work of their authors and reflect their author's opinions and analyses. CPE does not necessarily endorse any particular idea expressed in these articles.