Friday, December 09, 2011

It's the Technology, Stupid

Within the major movement of President Obama's speech in Kansas that's the subject of the previous post, there's a more specific one that is a lesson of the past that he is applying to "winning the future."  In a way, it is what he means by winning the future.

President Obama was in Osawatomie because it was where Teddy Roosevelt made his New Nationalism speech in 1902.  It's clear by the way that Obama has known the TR speech for a long time, as it seems a source of his own rhetoric and approach--for instance in his first famous speech, to the Democratic Convention in 2004.

 TR made the speech in response to economic and social problems he saw as a consequence of income inequality and corporate domination (huge corporations called trusts.)  But both of these were partially products of the same phenomenon--one which we share now.  And it is not in itself political.  Here is what President Obama said about what TR faced:

At the turn of the last century, when a nation of farmers was transitioning to become the world’s industrial giant, we had to decide: Would we settle for a country where most of the new railroads and factories were being controlled by a few giant monopolies that kept prices high and wages low? Would we allow our citizens and even our children to work ungodly hours in conditions that were unsafe and unsanitary? Would we restrict education to the privileged few? Because there were people who thought massive inequality and exploitation of people was just the price you pay for progress."

This transition was the result of the industrial revolution; it was in essence caused by new technologies.  Those technologies allowed corporations that controlled them, and the few who controlled the corporations, to benefit greatly, while workers did not.  The economy expanded rapidly, but since workers weren't making enough to buy enough, there were severe economic downturns, called panics (there were other causes and specific events that set them off, but this was an underlying problem.)

Though TR and others in the Progressive era began the process to institutionalize economic justice that would eventually profit the entire economy, it was only partially accomplished.  The Great War expansion and other factors created a bubble of prosperity in the 1920s, though again mostly a very small percentage--the 1%--got most of the wealth and the buying power.  By the end of the decade, the stock market crash and the Great Depression of the 1930s.

"Seen in perspective, the Depression appears to have been the last convulsion of the industrial revolution creating a hiatus before the technological revolution," writes William Manchester in his sadly neglected historical masterwork, The Glory and the Dream.  The techniques of mass production, he continues, raised efficiency by man-hour over 40%.  "This enormous output of goods clearly required a corresponding increase of consumer buying power," but that didn't happen.  Workers weren't making more money, though they were being urged to spend more.  They did, on credit.  Sound familiar?  Enter the Great Depression, caused in part by a failure to respond to an economic problem caused by new technology.

"Today, over 100 years later, our economy has gone through another transformation," President Obama said, with reference to the time of the TR speech. "Over the last few decades, huge advances in technology have allowed businesses to do more with less, and it’s made it easier for them to set up shop and hire workers anywhere they want in the world."

And that's just for starters: once again, there is a gap between technological change and the response of the economy.  Now a rational politics (not to mention a discipline of economics not controlled by ideology and corporate interests) would see how this problem has recurred, and would recognize it when it happens--even anticipate it.  And act accordingly.

President Obama has recognized it (see? He just said so) and since he took office he has advocated and engineered programs to address it, some of which he emphasizes in the rest of this speech: education, infrastructure, innovation in new technologies, particularly in the globally growing sector of green energy.  These lead to tech jobs that pay well (and with wages rising globally, America becomes more competitive.)  All of these recognize that technology now defines and largely determines the global economy.  (He didn't mention programs like health care but they also contribute in increasing buying power for people as well as for businesses, not to mention, you know, health.)

But here's something else that isn't part of this speech, or even part of the public dialogue anymore.  Because the impact of new technology--so quickly obvious in the last couple of decades--has been clearly in the cards for a half century.  It went by the name of automation for awhile, and it was a major topic for economists and sociologists in the 1960s.  (My first paper in my freshman sociology class was about a book on automation and alienation.)  The larger problems were foreseen: more production, less work.  The current situation wasn't always foreseen: employed people working a hell of a lot more, tied to their jobs around the clock by computers and cell phones, while millions of others aren't employed at all.  So these academics worried about the increased leisure time.  But they also worried about the basic problem that always occurs, that had happened in the Great Depression when many of them were in school--when technology increases production and the economy expands, but not enough people have enough money to buy what's being produced. 

They went so far to seriously consider...well, you're not going to believe me.   You might believe me if I told you there is really a Hogwarts, or that Jane Austen really was a vampire.  But you won't believe this.  But it happened, it really did.  What was seriously considered, by mainstream economists among others, was something called the Guaranteed Minimum Income.  It was clear that a high tech economy could produce such an abundance that the economy would actually work better if everyone got a minimum living, so they could buy stuff.  Businesses would profit far more than supporting the Guaranteed Income would cost them in taxes.

There were other benefits.  Poverty would essentially be abolished, if that means anything to you.  And therefore a lot of other social costs would decline--as poverty-borne disease and a lot of crime declined.  There would also be long term benefits.  Crazy geniuses wouldn't have to starve or get wage slave jobs--they could just create and innovate, and some of their art or science or whatever might benefit society. 

In any case, there was concern that at minimum there would be a gap between changes caused by new technologies and the ability of many people to deal with those changes, especially economically.  And that the economy itself would suffer, again. So something new--something to fill the gap--would be needed.  If not the Guaranteed Income, then something else.  This was foreseen in the 1950s and 1960s, and we've had half a century to figure it out.

So here we are, having not figured it out and having apparently forgotten we even knew the problem, in a situation that includes several important features of the early 1900s and the 1930s: a small number of extremely wealthy people, and a lot of people barely getting by or not getting by.  A few pigs, and a lot of suffering.  A dwindling middle class sunk further by credit (card) debt.  Growing unemployment, including people who will not be employable again, at least not with their current skills.  Technology increasing prosperity for some, but sinking many many others.

Oh, and one more factor, which the 60s economist didn't foresee.  They assumed that strong unions would protect workers incomes, and so would society.  They may have realized that capitalism has always depended on some form of slavery, but they thought that thanks to unions and the kind of progressive laws advocated by TR and instituted by FDR, the slaves of the future would all be machines.  They didn't realize they would at first be Mexicans and then Asians, and then de-unionized Americans. 

And you can tell how sophisticated our political dialogue is about these problems by listening to Mitt Gingrich and his plans to return to the child labor of the mid 19th century. Once again, the poor and the unemployed have nobody to blame but themselves, it's all their fault.  The necessary role of government in preventing economic collapses, and in responding to technological and other change, which was largely accepted 50 years ago, is now considered an alien ideology.  As President Obama said in this speech, this is partly a consequence of income inequality--the filthy rich and their institutions are dominating and corrupting the political system, and actively destroying the resources of institutions that they see as a threat.  Beyond the bumper sticker of greed, this is a source of the growing darkness.

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