Sunday, June 25, 2017

"If There Is Any Such Thing": Why read Hoxie on theory?

Unionists are not theorists; unionism is an eminently practical thing. -- Robert F. Hoxie 
Theory and trade unionism are almost contradictory terms. -- Edward M. Arnos  
In accordance with this theory it is held that there is a certain fixed amount of work to be done... David F. Schloss
Paul Samuelson once wrote that it takes a theory to kill a theory. He didn't say it had to be a better theory. What would it take to kill a theory that never was?

The Sandwichman's summer project has been to consolidate my research and blog posts on the lump of labor from the last ten years into something like -- and yet unlike -- "the archaic stillness of the book." Sometimes, when cross checking old sources, new sources spring up out of the archives and one of the most astonishing was Robert Hoxie's commentary on what he called "fixed group demand theory."

The term appears elsewhere only in a few sources: a dictionary entry on the lump-of-labor theory in What's What in the Labor Movement: A Dictionary of Labor Affairs and Labor Terminology (1921) by Waldo Ralph Browne, in The Settlement of Wage Disputes (1921) by Herbert Feis, whose discussion mainly centered on Hoxie's analysis, and Warren Gartman made a brief, parenthetical reference to the theory in a 1950 report on Longshore Labor Relations on the Pacific Coast, 1934-50. By  far the most substantive treatment of fixed group demand theory was in Edward M. Arnos's 1915 article, "An Interpretation of the Working Rules of the Carpenters' Unions of Chicago." Arnos was a doctoral student at the University of Chicago at the time when Hoxie was conducting his research on organized labor's views on the Taylor method ("scientific management") and Hoxie engaged his students in the research project. Hoxie also wrote on the concept of fixed group demand previously without using the terminology. I reproduce both Arnos's and Hoxie's discussion below.

Hoxie's novel method was to ask people why they did something. Appendix II of his Trade Unionism in the United States contains an 18 page outline and summary of  the "students' report on trade union program." Appendix VIII of Hoxie's Scientific Management and Labor presents over 100 pages of questions used by Hoxie in that study. In the latter study, Hoxie prepared preliminary statements based on extensive reviews of the literature, summarizing the labor claims made by scientific management and the objections to scientific management by unions. He then circulated the summaries to proponents of scientific management and labor leaders, respectively, for their revision and approval. By his own account, Arnos's investigation followed similarly thorough methods.

The point of such rigorous investigation was not to vindicate or invalidate the theories in question but to examine their claims in the light of experience. The outcome was not a triumph for one theory and a defeat for another -- a sorting into economic laws and economic fallacies -- but an assessment of the extent to which each of the competing theories had merit and their respective limitations. Hoxie operated in the spirit of ethical debate as latter proposed by Anatol Rapoport.

There are two aspects of Hoxie's discussion of fixed group demand theory I would like to emphasize. The first is his explanation of unions' restrictive rules as pragmatic, opportunistic measures adopted locally and retained through trial and error rather than in accordance with some overarching "theory" of how the economy works.

The second is a subtle but devastating critique of the pretension of economic theory to apply simultaneously to both the universal long run and to local immediacy. In Trade Unionism in the United States, Hoxie rhetorically affirmed the validity of the classical economic analysis "when applied to society as a whole, if there is any such thing, and in the long run" while objecting that for workers, "there is no society as a whole, and no long run, but immediate need and rival social groups." A few years later, Maynard Keynes echoed the assessment that "this long run is a misleading guide to current affairs."

In a brief essay on "The Theory of Unionism: Principles of Uniformity," Hoxie thinly muzzled a searing critique of economic orthodoxy by presenting it as the employer's naïve conclusion: 
Apparently it rarely occurs to the employer that this analysis is not complete. Having assumed that definite laws determine the manner in which income is shared among the productive factors, he apparently concludes, somewhat naively, that just as the laborers in society will in the aggregate profit by increase in the social income, so also will the laborers in any individual establishment profit by increase in its income.
Hoxie's "employer" is simply parroting the old "Say's Law" truism that, as Alfred Marshall put it, "the demand for work comes from the National Dividend; that is, it comes from work: the less work there is of one kind, the less demand there is for work of other kinds; and if labour were scarce, fewer enterprises would be undertaken." Marshall's "national dividend" was an updated and sanitized label for what a decade earlier in The Economics of Industry, he still referred to as the "wages-and-profits fund," which was too close to the discredited wages-fund to escape scrutiny. The bottom line, though, remained that "there is no such thing as general overproduction." There is only ever "commercial disorganization; and that the remedy for it is a revival of confidence."
The chief cause of the evil is a want of confidence. The greater part of it could be removed almost in an instant if confidence could return, touch all industries with her magic wand, and make them continue their production and their demand for the wares of others. If all trades which make goods for direct consumption agreed to work on and to buy each other's goods as in ordinary times, they would supply one another with the means of earning a moderate rate of profits and of wages. 
Although Marshall didn't mention this, it follows from his analysis of the impossibility of overproduction that in a crisis entrepreneurs commit the lump of confidence fallacy (or the fallacy of the fixed Confidence-fund). If only they understood how the "magic wand" of confidence works. Nor did Marshall happen to mention that the employers' stock remedies for hard times of cutting wages and/or laying off workers simply reflects their obliviousness to the fact that "there is no such thing as general overproduction."

Why worry about what Alfred Marshall wrote or didn't write 136 years ago? Because it is the dogma echoed down through the ages, such as in this 1986 gem by Richard Layard, How to Beat Unemployment:
The one fatal heresy in economic analysis is to take output as given. That is the 'lump of output' fallacy. You must always have a theory of how output is determined and you must never say, 'Higher output per worker reduces employment, because it reduces the employment needed to produce a given output'. Likewise you must never say 'More people cause unemployment', unless you can explain why output will not grow.
Along with Richard Jackman, Layard recycled the archaic and bogus analysis the next year in a pamphlet, "Innovative Supply-Side Policies to Reduce Unemployment" and yet again in 1991, adding Stephen Nickell to the team in Unemployment: Macroeconomic Performance and the Labour Market. This "analysis" became the basis of Tony Blair's and Gerhard Schroeder's miserable "New Supply-Side Agenda for the Left." Jonathan Portes's proudest accomplishment was explaining the lump-of-labour fallacy to successive cabinet ministers. And so the magic wand of confidence waves on...

But enough about the magic confidence wand (if there is any such thing). Below is some true grit from Hoxie and Arnos.

Robert F. Hoxie "The Theory of Unionism: Principles of Uniformity," in Readings in Current Economic Problems, 1915
The third charge against the unionist which we have undertaken to examine states that while he is struggling for increase of wages he is at the same time attempting to reduce the efficiency of labor and the amount of the output. In other words, while he is calling upon the employer for more of the means of life he is doing much to block the efforts of the employer to increase those means. 
There is no doubt that this charge is to a great extent true. In reasoning upon this matter the employer, viewing competitive society as a whole, assumes that actual or prospective increase in the goods' output means the bidding-up of wages by employers anxious to invest profitably increasing social income. It follows that in competitive society laborers as a whole stand to gain with improvements in industrial effort and process. In the case of the individual competitive establishment it is clear that the maximum income is ordinarily to be sought in the highest possible efficiency, resulting in increased industrial output. At least this is true where there are numerous establishments of fairly equal capacity producing competitively from the same market. Under such circumstances the increased output of any one establishment due to "speeding up" will ordinarily have but a slight, if any, appreciable effect on price. Each individual entrepreneur, therefore, is justified in assuming a fixed price for his product and in reckoning on increase of income from increase of efficiency and industrial product. Apparently it rarely occurs to the employer that this analysis is not complete. Having assumed that definite laws determine the manner in which income is shared among the productive factors, he apparently concludes, somewhat naively, that just as the laborers in society will in the aggregate profit by increase in the social income, so also will the laborers in any individual establishment profit by increase in its income.  
To this mode of reasoning, and to the conclusions reached through it, the unionist takes very decided exceptions. To the statement that labor as a whole stands to gain through any increase in the social dividend he returns the obvious answer that   labor as a whole is a mere academic conception; that labor as a whole may gain while the individual laborer starves. His concern is with his own wage-rate and that of his immediate fellow-workers. He has learned the lesson of co-operation within his trade, but he is not yet class-conscious. In answer to the argument based on the individual competitive establishment he asserts that the conditions which determine the income of the establishment are not the same as those which govern the wage-rate. Consequently, increase in the income of the establishment is no guarantee of increase of the wage-rate of the worker in it. Conversely, increase in the wage rate may occur without increase in the income of the establishment. Indeed, in consequence of this non-identity of the conditions governing establishment income and wage-rate, increase in the gross income of the establishment is often accompanied by decrease in the wage-rate, and the wage-rate is often increased by means which positively decrease the gross income of the establishment.  
The laborer's statements in this instance are without doubt well founded. The clue to the whole situation is, of course, found in the fact that the wage-rate of any class of laborers is not determined by the conditions which exist in the particular establishment in which they work, but by the conditions which prevail in their trade or "non-competing group." With this commonplace economic argument in mind, the reasonableness of the unionist's opposition to speeding up, and of his persistent efforts to hamper production, at once appears.
"An Interpretation of the Working Rules of the Carpenters' Unions of Chicago," Edward M. Arnos, 17th Report of the Michigan Academy of Science, 1916
Theory and trade unionism are almost contradictory terms. The trial and error method of testing rules, the ever changing conditions of the trade, the large number of men concerned in the agreement, the different nationalities represented in the union personnel, and the triennial agreements have left the carpenters' rules marked as if they are in a process. The constant changes in the agreements evince the carpenters' struggle to get control of the trade, first by one method or rule and then by another. This trial and error method has removed at least the trace of theory as a controlling force in the construction of the joint agreement. Journeymen are seldom conscious of any underlying theory of the rules in explaining their demands, methods, policies, and aims. Although the development of the rules has been free from the control of theorists, development has been in harmony with certain theories of business and human relationship. The theory of standardization, the theory of undercutting, the fixed group demand or lump labor theory, and the standard of living theory, are vital to the carpenters' rules. Journeymen may not realize the presence of any theories, nevertheless the officers interpret the rules in the light of these theories. To illustrate, one business agent said the rule prohibiting journeymen from taking their tools on the job before they were employed was to prevent men from gathering around the places of employment prepared to work, because the employers used their presence to intimidate the journeymen on the job; i. e., according to his theory of life, men who were out of employment would place themselves where they could underbid their fellows who were employed. To illustrate the underlying force of their fixed group demand theory, one of the officials said that they were in favor of a raise of wages to 70 cents per hour because there was a certain amount of work to be done and the carpenters could get 70 cents per hour as well as 65 cents. Thus consciously or unconsciously, the carpenters supported all of their rules by some of their theories of life. Let us consider these theories and their significance after careful analysis. 
The presence of an unemployed group and their theory of undercutting necessitates standards and uniform units of measurement. Thus the first of the hypothetical theories is accounted for. This assumption of the constant over-supply of labor also presupposes that there is a fixed group demand for labor, thus their theory of a fixed group demand or "lump of labor" theory. The third theory to be considered is that of the fixed group demand. This fixed group demand is usually approached through the desire to share work among their members, which they accomplish by limiting the supply of labor. Their rules on apprenticeship so limit the number of apprentices that it is said that only the sons of the most prominent journeymen are indentured. The number of apprentices range from one to two per cent of the number of journeymen. Rushing and excessive work have the same effect upon the supply of labor, through the limitation of the amount of work to be done in a certain time. The eight hour day and holidays limit the number of working hours and thus limit the labor supply. The fixed group demand theory is supported by their experience of unemployment. The leaders contend that the unemployed are as numerous under low wages as they are under high wages. The hypothesis is that there is a certain amount of carpentering to be done in Chicago. This is fixed by the number of persons who live there. To quote an official, "a man wouldn't live in a tent if wages were high nor in two houses if they were low." Of course this opinion would not bear strict interpretation nor do they claim that for it. The constant increase in the scale of wages and the accompanying decrease in unemployment in the trade are often cited as proof of their hypothesis. Their wage slogans, "high wages breed high wages," "no wage reductions," "cheap wages make cheap men," and "get more now," have their origin in this group of facts. 
Their fixed group demand theory explains the union's defense for limiting the output. The public press has frequently denounced trade unions for limiting the output. Employers have made most bitter attacks upon the union for those rules and practices which result in limiting the output. The opponents of trade unions on this point usually argue that prices to the consumer are thus raised, and charge the union with a breach of good faith with society. The business man, the entrepreneur, and the classical economist would usually undertake to solve the problem of unemployment by reducing wages with the hope that the demand for labor would be increased by reason of the decrease in wages. Not so with the trade unionist. He has a different theory of business. The former groups think that prices and demand vary inversely, the latter group thinks that "there is a certain amount of work to be done and a certain number of men to do it. Each should be given a chance to do some of it." In a few words, their theory is that there is a fixed demand for commodities regardless of price, within a reasonable limit. According to this latter theory, a man does not buy a straw hat because it is cheap, but because it is the custom of certain classes to wear a certain kind of hat on certain occasions. The increase in wages for the makers of high hats would probably not decrease the demand for that particular kind of hat. On the other hand the author of the foregoing reasoning admitted that he would buy an automobile if the price dropped to one hundred dollars and unwillingly admitted that his demand in the automobile market would increase the demand for mechanics. Neither of the above theories are valid if applied to the extreme, and are contradictory when so applied. The carpenters observe from experience that a change in wages is not followed by a corresponding change in demand for labor. They try to take advantage of this slowness of "demanders" to adjust themselves to a changed condition of supply. The union theory operates in these cases where the demand for an article does not fall when the price is raised, or in technical language, Where the demand is inelastic, and the opponents' theory operates in those cases Where the demand for an article falls off rapidly as the price is increased, or in technical language, where the demand is elastic. The demand for salt and carpenter work is almost fixed or "inelastic," and the demand for automobiles is quite elastic. Therefore the carpenters' and the employers' theories are both valid as you limit their applications and neither theory has universal applications.

Saturday, June 24, 2017

California’s Battle for Single Payer

On June 1, the California Senate passed a health care bill that has folks hopeful:
A proposal to adopt a single-payer healthcare system for California took an initial step forward Thursday when the state Senate approved a bare-bones bill that lacks a method for paying the $400-billion cost of the plan. The proposal was made by legislators led by Sen. Ricardo Lara (D-Bell Gardens) at the same time President Trump and Republican members of Congress are working to repeal and replace the federal Affordable Care Act…The bill, which now goes to the state Assembly for consideration, will have to be further developed, Lara conceded, adding he hopes to reach a consensus on a way to pay for it. Republican senators opposed the bill as a threat to the state’s finances.
Per usual, the Republicans are claiming private insurance is better and one cannot raise taxes to pay for this. While there has been a lot of Democratic support, some Democrats have suggested this proposal needs to be more fully developed. Robert Pollin suggests it is all doable with certain “cost savings” and tax increases. He co-authored Economic Analysis of the Healthy California Single-Payer Health Care Proposal (SB-562). I’ll admit I have not read this analysis but at least we have a start here. Alas the bill is being shelved in the House:
A high-profile effort to establish a single-payer healthcare system in California sputtered on Friday when Assembly Speaker Anthony Rendon (D-Paramount) decided to shelve the proposal. Rendon announced late Friday afternoon that the bill, SB 562 by state Sens. Ricardo Lara (D-Bell Gardens) and Toni Atkins (D-San Diego), would not advance to a policy hearing in his house, dampening the measure’s prospect for swift passage this year. “SB 562 was sent to the Assembly woefully incomplete,” Rendon said in a statement. “Even senators who voted for SB 562 noted there are potentially fatal flaws in the bill, including the fact it does not address many serious issues, such as financing, delivery of care, cost controls, or the realities of needed action by the Trump Administration and voters to make SB 562 a genuine piece of legislation.” Rendon took pains to note that his action does not kill the bill entirely — because it is the first year of a two-year session, it could be revived next year. But the move is nonetheless a major setback for legislation that has electrified the Democratic party’s progressive flank.
It is good that this proposal is not dead and maybe much more work needs to be done. But California needs to lead the nation and Lord knows Washington D.C. is AWOL.

Thursday, June 22, 2017

Hoxie on "Fixed Group Demand Theory" (the "lump of labor")

From Robert F. Hoxie, Trade Unionism in the United States, 1917:
There is much scorn of unionists by economists and employers because of this lump of labor theory with its corollaries. This scorn is based on the classical supply and demand theory and its variants. Supply is demand. Increased efficiency in production means an increase of social dividend and increased shares, which in turn increase production and saving. Therefore, the workers cut off their own noses when they limit output or limit numbers. The classical position is undoubtedly valid when applied to society as a whole, if there is any such thing, and in the long run. But the trouble is that, so far as the workers are concerned, there is no society as a whole, and no long run, but immediate need and rival social groups. 
The fixed group demand theory is as follows: The demand for the labor of the group is determined by the demand for the commodity output of the group. The community—wealth and distribution remaining the same—has a fairly fixed money demand for the commodities of a group. It will devote about a given proportion of its purchasing power to these commodities, that is, if the prices of the group commodity are higher, it will buy less units and vice versa, but expend about the same purchasing power. Therefore, the demand for the labor of the group, profits remaining the same, is practically fixed, and increasing the group commodity output means simply conferring a benefit on the members of other groups as consumers without gain to the group itself. Therefore, to increase the efficiency and the output of the group will not increase the group labor demand and group wages. Decreasing the efficiency and output of the group will not decrease the group labor demand and the group wage. 
Increasing the number of workers tends to decrease their bargaining strength relatively and to lower the total wage and the wage rate. Increasing the efficiency and the output of the workers is equivalent to increasing the group labor supply, and so tends to lower the group wage and the wage rate. Decreasing the number of workers tends to increase their bargaining strength relatively and so to increase the group wage and the wage rate. Decreasing the efficiency and output of the workers tends to increase their bargaining strength relatively and so to increase the group wage and the wage rate. The introduction of labor saving devices is equivalent to increasing the labor supply and so lowering the wage rate. Limitation of output through shorter hours, etc., i.e., decreasing the supply of labor, increases bargaining strength and tends to increase the wage. Strikes and trade union insurance funds are means of temporarily withdrawing labor supply and so of increasing bargaining strength and increasing wages. In practice the group demand theory is simply the application by the unions of the principle of monopoly, admittedly valid. But this theory only in part explains union efforts to limit both individual and group efficiency and output and to limit numbers. These policies in part rest on other theories and considerations. 
Robert F. Hoxie committed suicide on June 22, 1916. For an overview of his important but neglected contribution to economic thought see Charles R. McCann Jr. and Vibha Kapuria-Foreman, "Robert Franklin Hoxie: The Contributions of a Neglected Chicago EconomistResearch in the History of Economic Thought and Methodology, Volume 34B, 2016.

Wednesday, June 21, 2017

Saudi Succession Shuffle

A not unexpected event has just been announced: 31-year old Prince Muhammed bin Salman bin Abdulaziz al-Sa'ud has been elevated from Deputy Crown Prince of Saudi Arabia by his father, 81-year old King Salman bin Abdulaziz bin Abdul-Rahman al-Sa'ud, to replace his 57-year old cousin, Prince Muhammed bin Nayef bin Abdulaziz al-Sa'ud.  The former Crown Prince is Minister of the Interior, a position he inherited from his father, the late Prince Nayef, who was Crown Prince prior to current King Salman, but died before the most recent king, Abdullah bin Abdulaziz bin Abdul-Rahman al-Sa'ud died at age 90 in 2015, so Salman got to be king and now has moved his younger son up ahead of his somewhat older nephew.  Muhammed bin Salman (MbS) is also Defense Minister, the position his father had taken in 2011 on the death of Prince Sultan, who was then also Crown Prince, with Salman prior to that serving as Governor of Riyadh province for 40 years.  MbS has by all accounts been running things in Saudi Arabia recently, being behind the aggressive war in Yemen that has gone badly and also probably the main orchestrator of both Donald Trump's visit to Saudi Arabia and the move to diplomatically and economically isolate Qatar.  Juan Cole describes MbS as being "sloppy" and "unwise," but he may be in position now to rule Saudi Arabia for a long time to come if this appointment is not reversed somehow by other members of the Saudi royal family.

It is possible that the trigger for this elevation has been reports in the last few days of the US Secretary of State, Rex Tillerson, and Secretary of Defense,  Mad Dog Mattis, turning increasingly against the campaign against Qatar pushed by MbS, despite Donald Trump's repeated support for it via Twitter.  Not only did Tillerson sell Qatar a bunch of F-15s a few days ago, but yesterday Tillerson demanded that the Saudis and Emiratis (from UAE) present their specific demands of the Qatar regime.  It has been two weeks since they initiated this campaign against Qatar, with the clear support of Trump, but indeed they have neither issued specific demands that by satisfying them Qatar could bring about an end to this diplomatic and economic embargo, nor have they presented a shred of evidence of the Qataris financing terror groups, the supposed justification for all this, although pretty much everybody knows that it is a more general annoyance by the Saudis with their not just going along with whatever the Saudis want as well as in particular the Qataris being too friendly with Iran, although even the anti-Iran Tillerson and Mattis realize that the US is allied de facto on the ground in the war against ISIS, which the Saudis have done near zero to support, not to mention Qatar hosting the US major air base that is being used in the campaign against ISIS/Daesh.

Regarding the tangled relationships in the Saudi royal family, all these current players are descendants of the founder of modern Saudi Arabia, Abdulaziz, who died in 1953 after uniting Saudi Arabia and having 43 sons and over 100 wives, although never more than 4 at a time.  Certain wives were more important than others and produced more important sons, with basically only three in play here regarding possible future succession to the Saudi throne.  Currently in charge and looking to cement their hold are the 7 sons of Abdulaziz's favorite wife, his cousin, Hassa bint Ahmed al-Sudairi, the so-called Sudairi Seven, of whom only two remain alive, Abdul-Rahman who was once Deputy Minister of Defense but was removed from that position and the succession by arguing with other members of the family, and the current king, Salman.  Of the others, the most important was Fahd who was king for over 20 years prior to Abdullah, dying in 2005, Sultan who long served as Defense Minister, and Nayef, father of the just deposed Muhammed from being Crown Prince.  This current shuffle amounted to an intra-Sudairi Seven switch, with the Sudairis appearing to nail down a strictly hereditary line that is theirs.

The main potential rivals would be the sons of late King Abdullah, the most important of whom, Mulab, succeeded his father as Commander of the tribally based Saudi Arabian National Guard (SANG). He might have the potential for pulling off a military coup, although the official military under the control of the new Crown Prince is probably more powerful, if push were to come to shove.  However, it seems that he does not have all that much support from other top Saudi royals.

More competent would be one of the sons of the late King Faisal, viewed without question as being the most competent and revered of the 43 sons of Abudlaziz, whose mother came from the al-Sheikh family, descendants of Muhammed bin Abdel-Wahhab, the founder of the Wahhabi doctrine that the
Saudi royal family has followed since 1755. At age 16 in 1919, Faisal represented his father at the Versailles conference.  He would later serve him as Foreign Minister and continued to do so even as king until his assassination in 1975 at the hands of a nephew.  The most competent of the second generation was his son, Sa'ud, educated at Harvard, who served as Foreign Minister from 1975 until just before his death in 2015, then the longest serving foreign minister in the world, but he is not available being dead.  Another candidate might be his 72 year old brother, Princeton-educated Turki, who ran Saudi intelligence from 1977 to 2001, when he stepped down 9 days before 9/11, with it being convenient that he had been the one who selected Osama bin Laden to go to Pakistan and fight the Soviets in 1979.  Turki has since served as ambassador to both the US and UK and is now Chairman of the King Faisal Foundation, a very powerful body, but he has reportedly angered family members by being too vocal in criticizing certain policies publicly.  More serious and reportedly a candidate for the succession when Abdullah died in 2015, is another Faisal son, Khalid, now Governor of Mecca, also educated in Princeton.  He is widely respected, but at 77, well, the Faisals are just too old, and quite a lot of commentary about the new appointment of MbS is that he is a millennial, and this is the moment of the millennials taking charge there, even if it is a "sloppy" and "unwise" and highly aggressive one that is doing so.

Frankly, this does not look good.  Having a hot head running Saudi Arabia rather than a cool son of the late King Faisal could end up leading to a lot more bad things in an already much troubled Middle East.

Barkley Rosser

Addendum: One should be wary about Wikipedia information regarding members of the Saudi royal family. Some of it is inaccurate.  Thus Wikipedia claims that Hass bint  Ahmed al-Sudairi died in 1969, but she was not only still  alive more  than a decade later, but was for all practical  purposes running the kingdom from a hospital bed through her powerful sons.

Addendum, 6/22:  Apparently Muhammed bin Nayef has made a recorded TV statement supporting his replacement as Crown Prince by Muhammed bin Salman. He has also been deposed as Minister of the Interior, no word on what else he might be doing, although no reports of jail or exile.  Presumably they will treat him semi-decently if he continues to play along.  Also, MbS is being portrayed as a sort of authentic "real Saudi," whom youthful Saudis really like, and who has this dynamic vision of the future (women will get more jobs, even if they still do not work with men).  He was educated inside Saudi Arabia and apparently does not speak English very well, unlike all those snobby Faisals with their Harvard and Princeton educations.  Also, he wears sandals, presumably the distinctively Saudi kind, rather than loafers. So, a real man of the people, even if hi is a sloppy hothead.

Monday, June 19, 2017

Should Cultural Appropriation By Elvis Be Condemned?

Probably I should not post something like this on Juneteenth, but I have become increasingly frustrated by what seems to me a very misguided discourse on cultural appropriation.  While I think that there are cases that deserve condemnation, a great deal of what is being denounced I think should not be denounced.  Indeed, without cultural appropriation I contend that we would have little culture of any sort worthwhile at all.  Most culture is the result of cultural borrowings and fusions, not all of them well understood, at least some amount of cultural appropriation, if you will.  Most of the time such cultural appropriation should be praised, not condemned  (and movements on campuses to restrict such supposed appropriations and efforts to fire anybody associated with them should be condemned).

So besides a lot of really stupid stuff on campuses about this, what has me moved to post this is the case of Elvis Presley, with posts recently floating around the internet and Facebook denouncing the late rock and roll singer for his reported cultural appropriation of supposedly authentically African-American rhythm and blues in his songs that helped create what is now known as rock and roll.  I think he should be praised for what he did, which arguably was cultural appropriation, but there are a lot of other aspects of  this case that I have  seen few comment on. So, I am going to point them out here.

The first is that if only those with ancestry from a group can use what are the cultural artifacts of that group, well, guess what, Elvis Presley almost certainly had African ancestry, even if as the son of a culturally white family born in the heart of the racist Deep South in Tupelo, Mississippi, he never made any mention of this likely fact overtly to my knowledge.  It is not even clear that he used this term, but it is pretty much accepted that he had Melungeon ancestry through his mother, and he did apparently claim to have Sephardic Jewish as well as Cherokee Indian ancestry through her.  While it is unlikely that there is much Sephardic Jewish input to the racial and ethnic mix that goes into the Melungeon population, and a long list of possible groups have been claimed including Portuguese and Turkish, there is no doubt that this group is a tri-racial group, with the largest components being various sorts of  Europeans with African, and less Native American, but some.

The origin of the group would seem to be intermarriages between indentured whites and blacks in Virginia in the mid-1600s, with these people moving into the mountains of Virginia while intermarrying with other groups, including at least some Native American Indians, with the current epicenter of this population being in Lee County in southwestern Virginia and neighboring Hawkins County, Tennessee.  This group suffered substantial discrimination due to its mixed race background throughout the 19th century and well into the 20th century.  In parts of southwest Virginia, regular white children would be threatened by their parents that if they did not behave, "the Melungeons will get you!" The first recorded use of the term dates to 1813 in a Baptist church document in Lee County, in which a woman is denounced for supposedly protecting a "Milungin" woman, which this woman heatedly denies, it obviously being something she did not want to be accused of.  The unremittingly negative use of this term dated even until after Elvis died in 1977, with the first change coming with a country song in 1979 that presented Melungeons as semi-heroic figures and there now being a movement to praise them.  Among those besides Elvis being possibly of Melungeon ancestry are Abraham Lincoln, Ava Gardner, Tom Hanks, Francis Gary Powers, and Bill Monroe of bluegrass fame.  In any case, Elvis very much fits the stereotype of these supposed "straight-haired mulattoes," with his straight black hair and swarthy skin color.

So, quite aside from the fact that Elvis might well legitimately be able to appropriate culturally African-American culture due to his almost certain African ancestry, there is another deeper matter.  What he appropriated was already a cultural fusion of European and African, and what he added to that to help create rock and roll, a supposedly white country-folk input, was also a European-African fusion. So what he did  was put one European-African fusion together with another European-African fusion to create a fusion of these two fusions, American rock and roll.  Who can denounce that?

On R&B, well, the rhythms are arguably African and much of the blues elements in melodic and tonal structures as well.  However, the instruments and the underlying tonal forms are European.  One runs into a similar pattern with jazz, although there is no question especially in the case of jazz that it was African-Americans who created it, as is the case of the blues part of R&B.  However,  one finds blues elements as well in country-folk music, the supposedly white music.  While the largest input into the country-folk tradition comes from the British Isles, there are other African elements, not just the blues part,but also certain instruments, most notably the banjo, which is an instrument that came almost straight and unchanged from Africa.  Given this latter fact it is a bit odd that it is an instrument now essentially never played by any African-Americans.  It is as authentically African as you can get.

So there it is.  Rock and roll is a fusion of two fusions.  We should thank the late mixed race Elvis Presley for his role in bringing about this fusion of fusions to create the most authentically American music of them all.

And a happy Juneteenth to one and all.

Barkley Rosser

Saturday, June 17, 2017

Is Trump's Apprenticeship Program Like His Infrastructure Program?

It looks like it might be in a crucial way.  Both involve lots of rhetoric about expanding programs that many support, apprenticeships and infrastructure.  However, on looking at them closer to the extent we can see anything specific aside from the rhetoric, it looks like they involve actual cuts in funding support for existing programs related to both apprenticeships (and more broadly worker training and retraining) as well as for in-process infrastructure projects such as those funded by CIG, in favor of vague plans for  some sort of private support for these programs, apprenticeships or infrastructure.

As it is, it looks like the rhetoric and privatization proposals for apprenticeships are much vaguer than those for infrastructure.  For the latter we have had the specific proposal to privatize air traffic control, a proposal that has previously gone before Congress only to draw opposition from GOP senators, not all of those  yet on board, along with supposed tax breaks for privatizing other parts of the infrastructure. 

What is supposed to constitute the support for the private replacement for  the currently publicly supported apprenticeship programs is much less clear, although one suspects that it will be the usual GOP panacea, some tax breaks.  I  suspect that we shall have to wait and see, which is ironic given that supposedly Trump was pushing this recently at least partly to distract us all from his self-incrminating tweets, but those tweets have so distracted his own administration that they seem increasingly unable to formulate any sort of detailed or  concrete plan for any real policies, if they ever were able to do so.  And this latest rhetoric on apprenticeships is just another embarrassing example of this floundering incompetence.

Barkley Rosser

Thursday, June 15, 2017

When Somebody Called "Mad Dog" Is The Only Adult In The Room

In the last few days it has come to pass that twice US Secretary of Defense, James "Mad Dog" Mattis has shown himself to be the only adult in the room in the Trump administration.  His first such exhibition of adulthood came during the bizarre spectacle of Trump's first full televised cabinet meeting.  Trump openly demanded verbal obeisance from those assembled, promptly delivered by all but one in the room, with some of them embarrassingly effusive, such as Reince Priebus declaring it to be a "blessing" to serve Trump.  Ugh.  Even SecState Tillerson chimed in with a relatively perfunctory bit of praise for Trump.  Only Mad Dog Mattis refused to go along, making a statement praising US military personnel around the world without a single word about Trump.

And then we have the underreported event yesterday that I saw on Juan Cole's blog that Mattis signed a $12 billion dollar deal for F-15s with Qatar.  Now I am not in general a big fan of  these Middle East arms deals with anybody, but in this case this blatantly goes against Trump's absolutely stupid and probably corrupt (Saudis paid $270,000 in hotel bills at Trump's hotel in Washington since Trump took office) support for the Saudi move to blockade Qatar and pressure it into  going along with Saudi aggression in Yemen and more generally against Iran.  Both Tillerson and Mattis made verbal statements last week arguing for a more balanced approach there, only to have Trump double down on supporting this very stupid policy.  Tillerson is  not able to cut deals independently supporting Qatar, but Mad Dog Mattis has just done so.

Maybe Trump will fire him, but I kind of think that maybe even he is  not quite that stupid in the current circumstances.  So there we have it, having to thank somebody nicknamed "Mad Dog" twice in a few  days for being the much=needed adult in the room.

Barkley Rosser

Wednesday, June 14, 2017

Technically Social Services, Toll Roads, and Adam Smith

Nina Shapiro presents a must read entitled the “Hidden Cost of Privatization”. I will not even attempt to do its excellent discussion beyond noting some conservatives what to pretend that the only public good is national security but she makes the case that roads are also a public good. Guess who also made that case?
as Adam Smith emphasized in The Wealth of Nations, roads and other transport facilities should be undertaken by governments not to increase the revenues of the “sovereign,” or “defray” the expenses, but to “facilitate the commerce of the nation.”

Monday, June 12, 2017

Sean Spicer v. Tim Worstall on India’s Growth Rate

I just listened to some babbling by press secretary Sean Spicer which sent me trying to check the facts on India’s growth since 2000. More on that later but let me share with you a related rant from Tim Worstall:
India has reported GDP growth of 7% for the December quarter. That's just not a number I believe I'm afraid, not when we try to consider the effects of demonetisation.
Read this rest of this at your own peril. To be honest, I got a little bored with it all. Spicer just now said India has enjoyed 7% growth but then he claimed that India’s GDP now is 6 times what it was 16 years ago. But that would require a 12% growth rate as a 7% growth rate would have only tripled real GDP over this period, which is approximately what has happened. Of course India’s nominal GDP may be 6 times what it was since the beginning of the century given that its inflation rate has averaged near 5%. Look – I doubt Spicer gets any of this. It is more likely someone else in the White House gave him these misleading talking points. Why? I have no idea. But I was amazed that not one of the reporters picked up on this absurd spin. Yes – we need smarter reporters.

Sunday, June 11, 2017

Dani Rodrik on German Trade Surpluses and US Trade Deficits

John Judis interviews the very insightful Dani Rodrik:
So in the case of Germany, I do think Germany is the world’s greatest mercantilist power right now. It used to be China. China’s surplus has gone down in recent years, but Germany’s trade surplus is almost 9 percent of GDP. And they are essentially exporting deflation and unemployment to the rest of the world. I think the damage, though, is done to the rest of Europe and not the United States. In addition, it is not a trade problem. It is a macro-economic problem. The solution is to get German consumers to spend more and save less and the German state to spend more and to increase German wages. It is not the trade policies of the US or any other country that is going to be able to address this issue. It is similar to the way Trump has picked up grievances about how trade agreements have operated in the United States. These agreements have created loses, and grievances that have not been addressed, and I think there is a lot of truth to those kind of things, but I don’t think he has any realistic way of dealing with those things.
This was after Dani noted Trump’s complaints with respect to Germany’s trade surplus were “bonkers”. Now I wish I had said that. Dani next turns to the U.S. trade deficit in response to a question whether it is a problem:
Yes, but I don’t put it on the top of our concerns. There have been times when it is a bigger issue. The U.S. could use more aggregate demand and one of the places it could come from is smaller trade deficit. But you could get the same result more effectively through a more aggressive fiscal stance on the part of the federal government and the states, particularly through expenditure on infrastructure. I do think the low labor force participation is something we should try to bump up and I think there is a place for increasing demand. A lower trade deficit might contribute a little bit to raising it, but I don’t think it’s where the major action is.
I’m all for more infrastructure investment – in fact, a lot more. Of course there are couple of qualifiers here. One – if you got a lot more, we probably need to raise taxes to offset any excessive fiscal stimulus. But secondly – it seems this agenda has been put on hold unfortunately. But Dani generally is right – we need a bit more aggregate demand. Rather than use trade protection which will likely strengthen the U.S. dollar with the usual result that net export demand on net will not change, let’s try something novel. I’m talking about lowering U.S. interest rates. Yes – I know the Federal Reserve seems hell bent on doing the opposite but that is a mistake. The ECB has been pursuing an aggressively easy monetary policy which has devalued the Euro with respect to the dollar, which of course raises German net exports and lowers our net exports. If the Federal Reserve reverses course and lowers interest rates, we could get a much needed devaluation of the dollar.

Saturday, June 10, 2017

Econospeak In The Top 100 Economics Blogs

So, Prateet Agarwal of The Intelligent Economist has issued his list of the top 100 economics blogs for 2017. Econospeak is on the list, which does not rank them but rather puts them into different categories, with us being in the financial economics category, for better or worse.  There are some oddities in our description, including the erroneous claim that Max Sawicky is at the Economic Policy Institute, which he once was quite some time ago.  It is also claimed that one needs "a strong economics background" to read Econospeak, which I think is a bit overdone.  Lots of other blogs are described as being well written and easy to  read, but, well, I haven't seen us bogging things down with lots of equations and theorems too much.  I think Agarwal must have showed up when Egmont was plying us with his axioms, :-). Anyway, we are there, for better or worse.

Oh, I note that Angry Bear is on the list also, categorized as a General Economics blog.  There is a lot of overlap between us and them, with Dan Crawford frequently reposting stuff we put up onto their blog.

Barkley Rosser

Friday, June 9, 2017

"One Hundred Percent" Fake News

No, uh-uh, false, wrong.
Trump: I'm '100 percent' willing to testify under oath -- The Hill-2 hours ago
Trump: I'm willing to testify under oath about Comey claims -- CNN-3 hours ago
Trump willing to testify to counter Comey under oath -- Talk Media News-35 minutes ago
Trump Says He'd Testify Under Oath About Comey -- Featured-The Atlantic-2 hours ago
Donald Trump did not say he was one hundred percent willing to testify under oath. He replied to a question about testifying with a word salad of obfuscation that contained the phrases "one hundred percent" and "under oath" but did not connect the two in any coherent way. Read the eff'in' transcript:
Trump's "one-hundred percent" is free floating. His two uses of the phrase "under oath" indicate that a misinterpretation or pretended misinterpretation of the question as being whether he asked Comey to pledge his loyalty under oath. So his "one hundred percent" is simply a one hundred percent denial that he demanded that Comey pledge allegiance to him under oath. There is no commitment in the exchange to testify under oath.

Of course, even if Trump had committed one hundred percent to testifying under oath, there would be no way to compel him to honor his commitment and he almost certainly would not do so.

Trump will not testify under oath and he will not release his tax returns.

A Personal Observation On Trump's "Infrastructure Week"

Yes, folks, you may have already forgotten it, but this has officially been Trump's "Infrastructure Week," highlighted by his proposal to privatize air traffic control in the US, and his trip to Cincinnati where he in general terms talked about the supposed virtues of privatizing highways, bridges, and airports, While he claims he wants to provide up to $200 billion in federal funding to draw forth a supposed $800 billion in private funding, the last time I checked his proposed budget supposedly cuts infrastructure funding.  So much for that big infrastructure boost!

As it is I want to comment on the proposal to privatize highways.  I shall briefly note that privatizing air traffic control might not be a bad thing, assuming that it is done properly.  Canada did so some years ago, and most reports have it that this has worked out pretty well.  Maybe it would in the US as well, although my confidence in Trump not to mess it up is pretty low.

Anyway, back to highways.  There has been some effort to do this in some states recently, with decidedly mixed results. But my observation is that over the longer haul it seems that outside of gated communities or private property, this does not work very well.  The historical record in the US is that if one goes back a few centuries, one finds many roads that were originally built and run by private companies.  Nearly all of these eventually reverted to some sort of government control at one level or another.  In particular in Virginia where I live, there were quite a few build in the 1700s, but during the 1800s they pretty much all reverted to some sort of government control. The private sector just did not do all that good of a job running them.

So, where is the personal angle in this?  Last weekend I learned that the street behind my house here in Harrisonburg, VA, Bruce Street, a minor street that is one way and in my block only has houses backing up to it, was once one of these privately owned highways that was later taken over by the city.  I learned this while visiting with my daughter Sasha the oldest building in Harrisonburg, the Thomas Harrison House, which was originally the private residence built probably in 1770 of the person for whom the city is named.  It is a small limestone structure that has not been previously opened to the public like this, but the city has taken ownership of it from the Methodist Church across the street that had owned it for a long time (it had been used as a law office most recently).  The city is planning on turning it into a museum, and they have had archaeologists from James Madison University excavating its basement, which was used as a kitchen during the days the structure was a house (up until the 1840s).  Anyway, they decided to open the basement up for the public to see as well as the many objects they have found there, including lots of animal bones.  So, visiting daughter and I made the visit to check it out.  The main archaeologist, Carole Nash, is a good friend and gave a most informative talk.

And that is where I learned about the history of Bruce Street, which is now only about 7 blocks long, cut off at one end by an elementary school and at the other by a public park.  Anyway, the Thomas Harrrison House is located just off the intersection of Bruce Street and Main Street, which also happens to be US 11, a highway that runs from Montreal to New Orleans, the old overland route of the French empire in North America (it is not called "US 11" on the other side of the Canadian border).  Now it happens to be the case that old timers here in the Shenandoah Valley call US 11, the "Valley Pike," short for turnpike. And indeed it was one of those highways that was originally built by a private company that collected tolls on it, until it was taken over by the federal government in the 1800s.  The word "turnpike" comes from the barrier at the toll booths back in those horse and buggy days.  A stick would would be stuck in the ground that could be turned and it would have another stick that would cross the road blocking it.  When people paid their toll, the toll keeper would turn the turnpike allowing them to proceed further.  Indeed, at least in Virginia one finds streets and roads that are actually called "turnpikes," and nearly all of them have this history of being once privately owned and run, but since taken over by some level of government, with Little River Turnpike in Northern Virginia being one such (I think in its case it is owned by the Commonwealth of Virginia, but not sure).

But I had never heard anybody talk about the not very long or impressive Bruce Street as being a "Pike."  But in fact as Carole informed us, in 1770, ten years prior to Harrisonburg being officially founded as Rocktown, that intersection was the main one in the area, the intersection of two major highways in the Valley, the Valley Pike, now US 11, running from southwest to northeast (or vice versa, if you prefer) and the road that was then called the Warm Springs Turnpike, indeed another privately owned and run highway, later taken over by the city and turned into the minor Bruce Street perpendicular to the now Main Street.   Carole indeed confirmed that this was its history, and it was clear that Mr. Harrison very consciously located his house near this intersection, where it also happens to sit on top of a spring, which we saw in the basement, houses back then usually being built that way so that they could withstand a siege by Native Americans (this was only a few years after the French and Indian War, the last battles of which took place in the Shenandoah Valley in 1764, the year after the war supposedly ended).

So, both the Valley Pike and the Warm Springs Turnpike in Harrisonburg are examples of highways once built and run privately, but since taken over by government.  The long term record is not all that favorable for privately owned highways that go any distance.

Barkley Rosser

Addendum on June 13:  I have done some further digging on the details of the history here, and some of the above is not quite accurate, although the general story of privately built roads in Virginia getting turned over to various units of government holds, indeed is pretty darned impressive.

So, there were no organized systems of road provision or maintenance in 1770 in the Shenandoah Valley when it appears the Thomas Harrison House was built. Nevertheless it was at the intersection of the two main trails that were being used at that time.  The establishment of private companies to build "plank roads" (out of wood) on these trails would occur in the 1830s, 1830 for the Warm Valley Turnpike Company, and in 1836 for the Valley Turnpike Company.  I do not have the date of the ending of the latter (although I can find it out), but the Warm Springs Turnpike Company ceased to exist in 1901, after which that road became owned by different levels of government for different parts of the turnpike.

As it was, the part of Bruce Street that goes behind my house one and a half blocks east of the intersection in question was never part of the turnpike. It turns out that the intersection was its northern most endpoint.  It headed west along Bruce Street but then turned southwest to follow what is now Virginia 42 for awhile and then other roads to finally end up in, big surprise, Warm Springs VA in Bath County, which is a site of bath houses, although Hot Springs a bit south of it is more famous as the site of the Homestead Resort, visited famously by Thomas Jefferson.

My source for all this is a Wikipedia entry on "Turnpikes in Virginia and West Virginia" that shows that during the 1800s there were well over 100 of these private companies formed to build or run turnpikes.  For the majority of them, there is no information on what they did or when they were founded or what happened to them, but for many there is considerable information on when and how and what current roads are what the built or run. The bottom line holds.  All of those many roads are now in the public sector, so the bottom line conclusion still holds, despite my having certain historical details a bit off.

Another Addendum, 6/15:  This is strictly amusingly personal, but yesterday there was a bear "lumbering" or "traipsing" or just plain "ambling" one block over from Bruce Street on Newman where Carole Nash lives, until animal  control  officers got it under control.  Big joke is that some people on FB claimed that maybe it was actually Carole's large and very furry brown Tibetan mastiff, Artemis, but Carole assured people that Artemis was inside at the time.  And anyway, the bear was black, not brown, :-).

Yet More, 6/17: I saw the arehaeologist, Carole Nash, this morning at our farmers' market, and she assured me that the bear was for real, apparently a young male, and that it ran up their street.  Apparently after it went into the historic Woodbine Cemetary, it crossed US 33 (aka Market Street) heading north. It was finally apprehended and stunned on Wolfe Street to be taken out of town somewhere.  And that I  think will be the final word on that, :-).

Trump Right For Once In A Tweet

Yes, I think so.  It was his tweet on Monday when he took credit for the move by Saudi Arabia and some other Arab nations to cut diplomatic relations with Qatar.  He claimed that it was his visit to Riyadh, his strong support for going after Iran, and supposedly his demand that these nations stop financing terrorists.  I think he is right.  I do not think these nations would have made this move without this strong support from Trump, who supported the move in his tweet as well, although we cannot be sure about this.  But Qatar had not done anything recently to newly aggravate the Saudis and others.  Indeed, most reports have that it provides no state support for terrorists and has made some moves to crack down on private citizens doing so, although perhaps not as much as some other Gulf states, but more so than Kuwait, which has not had its diplomatic relations cut.  And while the Saudis have claimed that Qatar is too friendly with Iran, in fact the Qataris have 1000 troops in Yemen helping the Saudis fight the Houthis, who are supposedly supported by Iran.

Of course more recently Trump has been offering to have this dispute settled or negotiated by one or another of his top national security officials, most of whom were in Australia when he made his tweet.  If they had had advance warning of his tweet, they might have pointed out to him that Qatar hosts the main US air base and CENTCOM in the Gulf, from which US planes combatting ISIS take off.  Probably they did get around to pointing this out, which may be why he is now offering to help negotiate a solution.  But I suspect that the Qataris are not too keen on using his good services for this.

I also think that his visit and statements triggered the killing of protesters in Bahrain right after the visit and also the arrest of several thousand people in Egypt. Both of these nations are among those joining Saudi Arabia in cutting diplomatic relations with Qatar.  What I am not sure of is whether his visit had any connection with the ISIS attack on Tehran, probably not, but who knows?  Of course his statement of "sympathy" to Iran has been outrageous and received as such by the Iranians.  And while Trump and the Saudis and the Israelis claim that Iran is the leading state sponsor of terrorism in the world, the most recent estimate has about 94% of terror attacks being carried out by Sunni Muslims, not Shia ones such as the majority of the population of Iran is. And, indeed, this ISIS attack on Tehran has been reportedly carried out by Iranian Sunnis.

Oh, another place where Trump may have had some influence is on the outcome of the British election.  He is very unpopular there, and while maybe the Tories would have lost anyway, May's strong identification with Trump certainly did not help her, especially with him also making an outrageous and inaccurate tweet attacking London Mayor Khan, and then doubling down on it.  It is not out of the question that this last shenanigan may have been the straw that broke the back of the failed Tory effort to retain their majority in Parliament.

Thursday, June 8, 2017

Class Resentment and the Center-Left, or the Politics of "We Are the 80%"

I’ve just read the suitably downbeat piece by Thomas Edsall about the travails of the Democratic Party in today’s New York Times.  Edsall, citing a recent symposium of political strategists in The American Prospect and a report by Priorities USA, a DP polling outfit, describes the widespread abandonment of both the center and the left by a wide swath of the American working class.  As he says, it’s not just that working class (non-college) Trump voters have opted for “populism”; their political disposition radically excludes activist government programs, multiculturalism, and other principles that no one on the left could reasonably run against.

Evidence from public opinion polls depends on the questions pollsters take to the people.  Questions are framed in particular ways to test the suppositions in the pollsters’ minds, which means it’s difficult to find evidence for suppositions they aren’t considering.  That in turn means that those of us with different hypotheses can only speculate, at least until the stories we tell get enough traction that pollsters and focus group organizers decide to test them out.

A further caveat is that the population is extraordinarily diverse, and almost any hypothesis is going to be true for someone.  The question is not who is “right”, but how influential particular political trends are among various portions of the electorate, in combination with other trends.

So here is one approach, based on a quote Edsall culled from Nick Gourevitch, a contractor for Priorities USA:
So it may be that within economically distressed communities, the individuals who found Trump appealing (or who left Obama for Trump) were the ones where the cultural and racial piece was a strong part of the reason why they went in that direction. So I guess my take is that it’s probably not economics alone that did it. Nor is it racism/cultural alienation alone that did it. It’s probably that mixture.
How to think about this interaction?

When the left thinks about inequality and the legitimate grievances of the working class, its target is generally “Wall Street” or the “billionaire class”.  The pitchforks should be waved at the one percent of the one percent, the tycoons who wield inordinate influence over government and get policies that enhance their wealth and power at the expense of the rest of us.  But the “populist” vote in 2016 went for a billionaire (or someone who claims to be while hiding his tax records).  What gives?

I suspect most people upset with inequality tend to blame the class directly above them, the one they interact with most.  If so, consider a rough four-class model of the US.  On the bottom are the poor and the precariate, desperate to make ends meet month to month or even day to day.  Relatively few of them vote, and when they do they tend to go for Democrats because they know how much they depend on social programs.  They are driven less by ideological fervor than flat out necessity.  Above them is the main portion of the working class.  They are vulnerable to shocks like severe accidents or illnesses or regional economic downturns, but for the most part they don’t feel they have to vote for reasons of personal protection or benefit; they have the luxury of ideological voting.  They’ve gotten shafted for generations.  Going up the ladder, the next group we find is the upper-middle class, roughly the upper 20%.  They’ve had some periodic stress, but overall they’ve made out rather well.  Nearly all the economic growth we’ve experienced in this century has gone to them.  They tend to have economic views in line with their station and otherwise adopt a relatively cosmopolitan perspective, itself a reflection of their roles in the “new economy”.  And at the top is the capitalist class, those who own or control the bulk of society’s wealth.  While no cutoff is perfect in identifying them, they represent approximate the upper .01% of the income distribution.  They play the largest role in funding and positioning the two major political parties.

Now here’s the thing: what happens if classes blame the one above?  If you’re in the upper-middle class and you’re angry about how unequal this society has become, your target is the ultra-rich.  There’s no one else to blame unless you want to denounce yourself and your friends.  Hence “we are the 99%”.  But if you’re in the main portion of the working class, and you feel the country has become fundamentally unfair, you’re likely to take it out on the upper-middles.  These are your direct bosses, people in government offices that give you a hard time, teachers who send notes home with your kids, and media people who tell you how backward and misguided you are.  Those are the “liberals”, the ones who think more education and a cushier job gives them the right to ignore you.  Whenever the problems of lousy jobs or no jobs comes up, their one solution is to tell you to go back to school, get better grades this time, and be like them.  Resentment is not hard to come by.

My experience in the classroom is that few students from working class backgrounds even know there is a capitalist class or that it has influence.  They see the country being run by folks like me, and politics comes down to whether you think that’s good or bad.

So what about racism and nativism?  The dynamics are complicated, but I suspect an aggravating factor, and one that brings economics and bigotry together, is that the push for multiculturalism and cosmopolitanism is seen as coming from the upper middle class.  From a purely logical or empirical point of view, there’s not much basis for the notion that working class hardship is the result of affirmative action, immigration or even specific trade deals (with the possible exception of the accession of China to the WTO).  Most of it is about the evolution of capitalism, which has resulted from a range of political decisions and non-decisions under the guiding influence of the capitalists themselves.  But if economic protest takes the form of resenting the class one rung above, the fact that the upper middle class is strongly identified with liberal values and programs is how economics and culture come together for a large number of workers.*

Incidentally, the campaign of Hilary Clinton was disastrous from this perspective precisely because it combined an aggressive advocacy of cultural liberalism with an economic outlook oblivious to the problems faced by the majority of the population.  It was practically an advertisement for right wing populism.

Again, all of this is speculative.  I have no evidence to back up any of this, other than personal observation, and that may be wrong too—I might be misinterpreting what I hear.  But it would be interesting to do some opinion research to find out if there’s an element of truth.

*Note that I use the term “working class” and not “white working class”.  The Democrats have suffered an erosion of support across the working class, and it would be a mistake to assume that workers of color automatically favor government programs to aid people of color worse of than them or more liberal immigration policies—or at least that their advocacy is strong enough to convince them to cast a vote.