Chinese Migrant Workers’ Displacement and the New Stage of Development

When a few weeks ago, fire broke out in a two-story building in Beijing, 19 people died, most of them migrant workers from the countryside (Linder 2017). Migrant workers could only afford to live in certain neighborhoods in Beijing, and now the Beijing city government used the fire as a pretext to evict migrant workers for “safety” reasons giving only a few days of notice. Never mind that the city could have taken some responsibility in improving safety precautions for the migrant worker residences. But the real objective of the city government was not to provide decent housing or safety for the millions of migrant workers in the city, but to fulfill their objective of removing “low-end” population from the city perimeter (Huang 2017).

It is the objective of the city government to limit their population to 23 million people by 2020, while it is already near 22 million at the moment. The enormous population growth in the recent past reflects the country’s trend toward urbanization, a process that is intimately linked with capitalist development. The factories and service industries are mostly concentrated in the large cities, which then also creates the purchasing power among a local middle class, which can then afford to hire cheap workers that are recruited from the countryside. Important services are in the delivery of food and other items, and staff for shops and restaurants.

It is the historic lack of regulation of migrant worker movement, which facilitated their en masse movement into the big cities and fueled its growth and development. The enormous convenience of deliveries in the cities is based on the low cost of labor: When I was in Beijing, I ordered low-cost drinking water shipments, which was handled by one man along with his wife and two children, who would sit at the motor vehicle downstairs, loading and unloading the vehicle.

In addition to the classic story of capitalist exploitation of low-cost labor, which sought to escape the poor and uneconomic circumstances in the farm at home, the Chinese local governments have maintained the hukou, the household registration system, which works like an internal passport. While any Chinese citizen is free to live anywhere they desired, their access to education, health care and social services was determined by the possession of a local hukou. Since living in the large city was preferred by most people, the city hukou became the highest coveted good, especially in the four major metropolis: Beijing, Shanghai, Guangzhou and Shenzhen. Only under exceptional circumstances are outsiders capable of acquiring a local hukou in the large city, such as with marriage to a local resident or working for the city government or an industry/ field the government regarded as high-skill/ strategic. But each of these outcomes were rather unlikely for rural migrant workers without strong social connections to people in higher classes.

The consequence of classic capitalist exploitation as well as hukou-based government/ institutional discrimination was the subsidization of the urban middle class as well as the ruling class consisting of the Communist Party cadre and the capitalist business owners via the rural migrant workers. While rapid economic development has provided many opportunities for most Chinese people (with over 700 million people lifted out of poverty since the economic opening reforms in the late 1970s), the class segmentation described above created one of the largest gaps between the rich and the poor. The Gini coefficient, an index of inequality, had increased from 0.30 to 0.55 between 1980 and 2012 (Wikipedia, “Income Inequality in China”).

In the mean time, the Beijing city government hopes to attract more high-skilled migrants, who will contribute more taxes to the treasury, but even with more high-skilled workers, there are certain low-skilled jobs that are not yet automated, and these positions still need to be filled, but regardless, the low-end population has to leave from the perspective of the government.

What happens with the migrant workers? Some of the migrant workers are forced to return to their hometown and search for employment opportunities that are a lot worse than what they find in Beijing. There is a way out for some of the migrant workers. JD.com, which is a major delivery company, had announced it would provide housing for its workers, who were affected by the demolition (Huang 2017). It is quite understandable why these service delivery companies are quite interested in helping out their workers. There is already some evidence that the evictions are exacerbating the trend toward labor shortages, which could be interpreted as a threat to the business model of these delivery companies (Yang and Liu 2017).

This raises the important question of what the next stage of Chinese development will look like given the contradiction between the government objective of limiting the population and the drain on city resources provided by endless expansion, and the capitalist objective of expanding the population to cheaply service the ever-growing consumer market and provide profitable outlets.

The Communist Party is really forced to walk a fine line between promoting their capitalist enterprises, maintaining ecological sustainability within the city and protecting what they deem the “low-end” population. But we also know that accomplishing all of these objectives becomes more and more difficult. Aside from the migrant removal, the party is becoming increasingly aggressive in cracking down on massive environmental polluters that have made breathing very difficult in most coastal cities. If China is quick and effective enough in shifting to alternative energy, then the effects on economic growth might not be noticeable, but given the complication and length of transition time, the economy will inevitably be negatively impacted. In addition, government regulators are increasingly cracking down on housing investments, a preferred tool of speculation by affluent households, thus pushing down house values and removing one area of domestic investment growth.

Another factor that will restrain the capitalists is the slow going demographic transformation via an aging population and a declining labor force. This demographic shift will lift worker wages, and might explain the recently strong wage gains of manufacturing production workers, even as nominal labor unions are found under the tight leash of the Communist Party (Friedman 2014; Estlund 2017). On a more positive note for the capitalists, rising wages will promote the growth of a middle class, which will fuel a virtuous cycle of rising consumption and rising wages.

It is to some extent the overwhelming strength of the party government, which has fueled past development and it will do so in the immediate future. But as the economic growth rate inevitably declines with every new attempt of less and less effective investment strategies- either in export, domestic investment or foreign investment- certain social and distributional struggles are bound to increase. Workers might take it upon their own hands to establish an independent union, as the state union is not perceived as giving them fair benefits. NGOs might be more inclined to point out official human rights abuses. Environmental groups might want more regulation of polluters and so forth.

The coronation of Xi Jinping for a second presidential term, which has also been accompanied by his anointment as a high leader similar to Mao Zedong, the party founder, and the lack of appointment of an obvious successor to his own rule, marks the apparent stabilization of the political regime, and reflects the international breeze of authoritarianism, which has been felt from the Philippines, Russia and the United States- of all places. Xi’s political stabilization is precisely about pre-empting potential social unrest when economic growth inevitably declines. For Xi there have been two principal challenges: (1) removing potential opponents from the ranks of CCP leadership, and (2) retaining political legitimacy in the eyes of the Chinese people.

The beginning of his rule in 2012 involved the fulfillment of these objectives via continued credit-driven infrastructure-based growth financed by the numerous shadow banks and implemented by the local governments. That strategy is now increasingly facing limits as leverage on the debt rises and make it harder to repay, thus the greater focus on foreign investments via One Belt One Road, which creates another can of worms of how to protect foreign-bound investments.

Another linchpin to Xi’s strategy of power consolidation was the corruption crackdown, targeting other high officials, most importantly the popular former mayor of Chongqing, Bo Xilai. One can naturally take Xi by his word, and claim that the corruption crackdown was genuinely about removing bad apples and restoring popular faith in the party, but if some powerful internal opponents are removed along the way, all the better.

But the anti-corruption efforts are not enough over the long term to please a restive middle class that demands other things like democratization, free speech and the protection of human and social rights, the latter of which being violated by the example of the migrant worker expulsion. Xi’s rule also meant more persecution, arrests, prohibition of public gatherings, monitoring of social media activity, social media censorship and other forms of punishment, surveillance and control. The agony to regime critics and NGOs in the form of direct punishment or self-censorship are tremendous, and contrast sharply with the largely open atmosphere in the pre-Xi era. In a recent example, a Chinese man texted to his friends a joke about an extramarital affair of a senior government official, which was tracked by the government and resulted in his arrest, interrogation and a few days of jail time (Dou 2017).

The government’s surveillance capacity has substantially increased, as Chinese people increasingly rely on data and online services to conduct much of their transactions and social interactions. In order to remain within the law, internet giants like Alibaba or Tencent have to cooperate closely with the government, which includes handing over data to the government so they can censor messages or prosecute individuals posting information they don’t like. I have seen no confirmation on this, but I would not be surprised that censorship and prosecution can increasingly be done via algorithmic tracking tools without having a human sifting through all of the billions of messages that get exchanged daily all over the country.

Jeremy Bentham had long ago described the panopticon as a prison, where prisoners think they are permanently observed such that they self-regulate their behavior to pre-empt punishment. A worse version is George Orwell’s depiction of the surveillance state in 1984, where the protagonist ultimately surrenders to the power of Big Brother: “But it was all right, everything was all right, the struggle was finished. He had won the victory over himself. He loved Big Brother.”

If the total surveillance state shall succeed, it would begin in China, where the government is already setting up a social credit system (by 2020) to allocate points to individuals based on their behavior, e.g. how filial are they in their duties to their parents? The trustworthiness index which is created is publicly visible and will determine whether you can get a mortgage, a job, education, date or take the airplane (Botsman 2017). The Chinese society is already quite used to test scores and assessments in their education system, which determines high school, college attendance and ultimately socio-economic success. But the social credit score takes it to another level, and if introduced successfully will put people on an eternal treadmill of mutual comparisons and competition (and will ironically decrease trust).

But even the most repressive regime has certain limitations, because Mencius’ principle of the Mandate of Heaven, which prioritizes on regime stability emanating from popular legitimacy, has never been deactivated, neither in China nor elsewhere. As for the migrant workers, can their forceful removal from the big cities be considered a vehicle for social change in this new phase of capitalist development?

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The National Oligarchy Prevails… For Now

Introduction

When David Koch ran on the ticket of the Libertarian Party as vice presidential candidate in the 1980 US presidential elections, he barely got 1% of the vote. Their platform was to drastically shrink the size of the state through massive reductions in social spending programs, the elimination of public education, the dismantling of environmental protection, the abolition of the IRS and the income tax, and on the side they were also quite liberal on social issues like LGBT rights or prostitution legalization (Sanders n.d.). However, it was evident that the two-party system could not so simply be undermined by the attraction of electoral votes for these libertarian principles. It simply wasn’t true that the vast majority of the American people would willingly vote for this libertarian agenda, which was about the massive transfer of wealth from the working and middle class to the rich. Instead of endlessly repeating the election bonanza, the Koch brothers turned to funding right-wing think tanks and Republican politicians (Skocpol and Hertel-Fernandez 2016). In this way, they ensured that they could expand their wealth and make it very hard for the popular masses to reclaim some of that oligarchic income via a genuinely populist electoral platform. Now, the passage of the Republican tax bill will further entrench the wealth and power of the oligarch class.

Two Party Oligarchy

In the 2016 elections, Gary Johnson had run on the libertarian ticket, and received 3% of the vote. By this point, David and his politically activist brother Charles Koch had abandoned direct electoral campaigns on their own party platform. There just wasn’t any likelihood of succeeding with the libertarian party platform. The more successful strategy of the business community has been to infiltrate the Republican Party and to some extent the Democratic Party. It was clear, however, that the mega-donors tended to side with the Republicans in more cases, because of the weird coalition of big oil, big finance, big real estate on the one hand (i.e. the oligarchs), with evangelical Christians and the white working class (i.e. the popular class) on the other. The former group would deliver the campaign cash, and the latter group would deliver the votes. The popular class does not materially benefit much from the economic policies of the Republican Party, but as part of the conservative tradition they tend not to vocally or openly resist the leadership (Frank 2007). Donald Trump seemed to upset that established order, but it turns out that he is a skilled showman, who doubles down on behalf of the oligarchs, to which he belongs. More on that later.

The Democratic Party, on the contrary, also has to contend with two major factions, which were personified by the Clinton and Sanders campaign in 2016. Hillary Clinton represented the establishment, which includes the big law firms, big tech firms, big Wall Street/ finance firms, big pharma and similar industries (some of which clearly overlap with the Republican Party as part of the donor base). Her popular base consisted of white and older voters, the latter feature of which was important for her to clinch the nomination. Among older Democratic voters, there was a strain of thinking that also tended to favor the establishment. Bernie Sanders was the only meaningful presidential candidate, who dared to run a campaign without any direct financial support from parts of the oligarchy. He ran a purely popular campaign financed by small donations and could get the entire progressive grassroots of the Democratic Party on his side (Sanders 2016). The party machine, which supported Clinton, ensured that Sanders ballots are miscounted in some states. In addition, it took time for his message to spread around the country, and there wasn’t enough for him to win the nomination.

When Clinton clashed against Trump in the general elections, there were several features that disadvantaged the Clinton campaign: (1) the Democratic Party was the incumbent ruling party and Clinton explicitly ran on continuity with the Obama administration, which some liberal voters took as justifiable betrayal to abstain from voting, which would not have happened with Sanders. (2) The mainstream media kept on receiving and airing Clinton’s email leaks, which many in the Democratic Party had traced back to Russia and Vladimir Putin, which publicly tarnished Clinton’s reputation (which is also her favored account of why she had lost the elections). (3) Clinton had been in the national spotlight for nearly 25 years. The public dislike against her and the system that she represents created so much anger that some people preferred the bully billionaire on the other side, who had promised to blow up the political system.

Trump Electoral Campaign

The Trump campaign created some electoral momentum in the states, which Clinton’s campaign had deemed “safe”, i.e. Pennsylvania, Michigan and Wisconsin. In each of these deindustrializing states, the mass mobilization of rural, working class white voters proved crucial and more than compensated for the few urban clusters (e.g. Philadelphia) that solidly vote Democratic (and were rather unenthused by the Clinton campaign). Trump’s promises included building a wall to Mexico (unrealized), tearing up the trade agreements (unrealized), and a nebulous attack against the corruption that had pervaded the oligarchic political economy of the country: “drain the swamp” (the opposite happened with the greatest swamp ever). It appears to be that the popular base bought the argument, even as the Republican donors and the establishment politicians were less than convinced that these promises made any sense, financially nor politically. Was there also the fear that draining the swamp could unravel the cozy crony capitalist arrangements they had so much gained from?

In any case, there was no chance for the Republican establishment politicians to do well with Trump making brazen promises, while the establishment had to stick with conventional promises of general tax cuts and “strengthening the private sector” (understandably not an emotional connection to generate votes). The social mobilization agenda via the evangelical voters also became a spent force, because that voter base is now much smaller than under Reagan and Bush sr. and jr (Jones 2014). Rick Santorum could Biblethump the whole day against the practically agnostic (nominally Christian) Trump, but it wasn’t resonating. In fact, evangelical voters might even be inclined to support Trump (Smith and Martinez 2016) because while he doesn’t share their religious values, he at least formed credible mass support, which might also help beleaguered evangelicals.

It is not true that racial minorities are better off than whites on average because of affirmative action or President Obama, but it is certainly true that the working class white Trump voter is hurting really badly. It is a rare feat for an industrialized country to regress on basic social indicators like the spread of the hookworm disease (McKenna 2017), opioid addiction deaths (Rudd et al. 2016) or life expectancy (Case and Deaton 2017). Blacks in America are still worse off on many social indicators and experiences than whites, e.g. the high imprisonment rate of blacks (NAACP; Pettit and Western 2004), but it is the perception and experience of deterioration among the white working class, which encourages their search for scapegoats. Trump exploited the atmosphere of anxiety by whipping up the hate among the crowds, which became evident in his campaign rallies, where he incited violence against his protesters. He hired the right-wing media strategist Steve Bannon to run his public messaging. Academics like to think that in a democracy rational people vote for candidates that promote their best interest (Meltzer and Richard 1981), but that is not true. Simply because some of us can read the New York Times hours on end and make informed political judgments does not mean that the average person will do so. Politics, at least from the perspective of the masses, is about raw emotions, and strong emotions whether it is hope, fear or anger are each strongly mobilizing forces.

Oligarchic Cabinet

To return to the donor class, it is rather strange how the candidate they did not initially support turned out to be just fine for their interests. When the Republican nomination came up, the donors finally backed Trump. The Koch brothers said they wanted to support down-ballot Republican candidates, but they were not as terrified of Trump as they would have been of Sanders. Trump made clear that he expected the full financial backing of the oligarchs now that he was the party-bearer. Upon his election, the public held its breath on Trump’s cabinet appointments, which were all either part of the oligarchic elite (oil executive Rex Tillerson became secretary of state, former Goldman Sachs banker Steven Mnuchin became secretary of treasury, heiress Betsy DeVos became secretary of education etc.), standard Republican politicians of the conservative (i.e. pro-oligarchic) variety (senator Jeff Sessions as attorney general; Congressman Mike Mulvaney as budget chairman etc.), or retired generals (chief of staff John Kelly, defense secretary Jim Mattis etc.). Only the generals did not clearly represent the oligarchic elite, though they were part of the military-industrial complex, one of the few departments that were beefed up with the Trump budget.

Pierre Bourdieu had distinguished between the nurturing left hand of the state (social security administration, education, health care, social services etc.) and the punishing right hand of the state (finance, treasury, justice, military, internal security) (in Droit and Ferenczi 1992), and it is quite evidently only the right hand that is prevailing under the Trump administration. This makes Trump one of the most regressive US presidents, thus standing in line with policies that battered the popular classes since at least Ronald Reagan.

By appointing wealthy heirs like Betsy DeVos or businesspeople like Ross Wilbur, Trump’s cabinet became by far the wealthiest cabinet in US history. This cabinet is a big change from historical precedent, where the oligarchs control politicians (mostly lawyers by training) indirectly via the financing of elections. But in the current cabinet, the middlemen have been partly displaced by the oligarchs themselves, most obvious of which is the real estate mogul Trump himself. Ironically, it is precisely Trump’s wealth, which had allowed his message of “draining the swamp” to resonate given that he genuinely could afford to not care about the views of his fellow oligarchs. But he was nothing more than a wolf in sheep’s clothing.

The problem of politics, as had been noticed by Max Weber (1994) long ago, is that even the most populist of all leaders still has to rely on an army of bureaucrats to run the country. The disruptive cultural effect of the Mongolian conquest of the Chinese empire was tempered by the Chinese literati that formed the bureaucratic class, which continued to run the empire as before at least in rural areas (in the big cities, there was a substitution for Central Asian and European officials). With the exception of Trump’s own family (his three children and son-in-law Jared Kushner), Trump does not really trust anyone else that closely, and as real estate mogul it wasn’t necessary to trust many more people, but the federal government is a giant bureaucracy which needs to be re-staffed whenever a new president enters office (Collins 2017).

Failing Trump Administration?

In very important ways, the Trump administration had appeared to be a failure: the Muslim travel ban was halted in courts, though most recently the Supreme Court has granted the ban. The coal miners, who were promised a restoration of jobs, cannot hope to return to employment when natural gas is displacing coal use. The much feared wall on the Mexican border, which “Mexico will pay for”, turns out to be rather modest in scope, and quite nonsensical given that there are not as many Mexicans coming across the border as in the past.

The biggest failure appeared to be in health care, where 3 Republican senators proved the crucial vote to sink the Obamacare repeal in the Senate. But Obamacare is not out of the woods, because the tax bill will pull the plug on the mandate and the financial penalty for not carrying health insurance, which could sky-rocket insurance premiums. Many insurance companies had already pulled out of the insurance market. The Trump administration had carried out administrative measures, which already weakened pillars of Obamacare. It, for instance, shortened the time period of the open enrollment, which is limited to a little over a month every year, which is a peculiar arrangement given that other insurance policies (life, car, home etc.) don’t have such an open enrollment window. The administration also reduced advertising expenses, such that fewer new people are reached to sign up for insurance. The essential weakness of Obamacare is that it is fragile to political attacks by an unfavorable administration, and it builds on the dysfunction of the existing health insurance system, which is largely built on administrative waste and greed. It takes enlightened leaders unencumbered by oligarchic lobbying interests to promote policies that are more durable, such as a single-payer Medicare for all system.

The repeal of the Dodd-Frank financial policy had long been announced by Trump, which he alleged to prevent job creation via the limitation on reckless bank lending procedures. While the policy remains largely intact, Republican legislators are pushing for its repeal, which could accelerate another round of speculation.

Oligarchic Regulatory Success

On another front, Trump has been a splendid success: by appointing an EPA (Environmental Protection Agency) administrator, who was the former attorney general of Oklahoma (Scott Pruitt) and has sued the EPA on behalf of oil, gas and coal companies to diminish government regulation on CO2 emissions or environmental protection measures, the fossil fuel interests have come to prevail, as environmental regulation is continuously removed, even when it comes at the price of polluted groundwater and increased sickness in the population (Worland 2017).

Organized labor, which has been on a downward trajectory since the 1950s, as deindustrialization, automation, outsourcing, the displacement of labor and pro-business government policy have combined to exert pressure on labor unions, got another shellacking by the new administration, which appointed two new members to the NLRB (National Labor Relations Board), thus tilting the balance to 3 Republicans and 2 Democrats. The business community demands a deregulation of franchisors (like McDonalds), who were previously ordered to maintain decent working conditions to the employees in the franchises, the repeal of so-called micro-unions and a slowing down of union election procedures (Wheeler 2017). In August 2016, the NLRB had given graduate students at universities the right to organize in a union, because research and teaching assistants provided necessary labor to their universities. Universities are capable of keeping a low-cost and docile workforce by maintaining the legal fiction that a stipend is not really a wage payment, and thus graduate student activity is not really work. Subsequently, some university students jumped on the bandwaggon and filed petitions for a unionization vote and certification of student labor unions, which succeeded in some cases. But the time window had been rather narrow, as the new Trump appointments to the NLRB suggest that the NLRB will be less favorable to unions, and the university administration is hoping to drag their feet to effectively prevent unionization (Flaherty 2017). The same fate might await home health aides, airport staff and other workers in the service sector that had campaigned on unionization. As the government sides with big business, oligarchic interests prevail.

Another deregulation example is the Federal Communication Commission, which is led by Ajit Pai (former legal counselor to Verizon), who wants to repeal the net neutrality rule, which has prevented Verizon and Comcast from charging higher rates or slowing speed for different users using different websites (Fung 2017). Given the quasi-monopoly power of the major internet providers, the profits will almost certainly increase while the quality of consumer services will decrease, at least for people with less resources.

Oligarchic Tax Bill

The latest sign of the success of the oligarchic agenda is the passage of two versions of the tax bill in the House and the Senate, which somewhat differ in their scope, but both have in common their intent to shift a substantial amount of economic resources from the bottom and the middle of the income distribution to the top. Reported here are some of the provisions in the Senate plan, which are slightly less regressive than the House given the much smaller positive margin of Republican votes there.

(1) The corporate tax rate will be reduced from 35 to 20%, which is permanent in the tax code, i.e. does not require re-authorization by Congress in the future. This is by itself a staggering provision and is justified by the Republican leaders as encouraging the repatriation of foreign capital, which will magically result in job growth, even as some honest corporate leaders claim that this will not really happen. It is also remarkable that the Republican Party has a zeal to reduce the nominal tax rate, when the effective corporate tax rate is rather low in international average (13%). The long-term trend has been that the US government became less and less dependent on corporate tax revenues, and here they are gifted with even more presents to hand out to top shareholders and executives. Another corporate provision is to allow a complete tax write-off for investments in buildings for the next five years.

(2) The top income tax rate will drop from 39.6% to 38.5%. The Senate plan keeps the seven current tax brackets, but shifts up the thresholds. The top tax threshold will shift from 470,000 to 1 million dollars

(3) The estate tax threshold is doubled to 11 million dollars for individuals and 22 million dollars for couples, which reduces the overall take from this revenue source, which only affects the richest people.

(4) The state and local tax deduction, which has a greater benefit to high tax states along the coasts and mostly Democratic, is completely scrapped.

(5) The personal deduction of 4,050 dollars will be scrapped and replaced by an increase in standard deduction (12,000 for individuals, 24,000 for married couples).

(6) The individual health insurance mandate will be scrapped, which will undermine a key pillar of Obamacare. (Long 2017)

The first part of the Republican agenda is to ensure that the donors get what they want. House Republican Chris Collins said that he could either vote to pass the tax bill or not bother to call his rich donors ever again (Scott 2017). This will inevitably drive up the fiscal deficit, as 1.4 trillion dollars are added to the debt in 10 years, which comes on top of the already projected debt increase without any legal change (Carney 2017). The second part of the agenda is to blame the deficit in the federal budget on Social Security, Medicare and other programs, which will then receive cuts, a point that Senator Marco Rubio admitted to (Hiltzik 2017). In a heated exchange in the senate between Bernie Sanders and Pat Toomey, the former pressed Toomey on whether he would cut the entitlement programs in the future, and Toomey gave the evasive answer that current beneficiaries would experience no cuts to their benefits, which Sanders called out on as suggesting that future recipients will experience enormous cutbacks. Toomey claimed that if the Republicans wanted to slash entitlement spending, they could have packed it in the current legislation (CHAOS- Youtube 2017). But that is disingenuous, because there is nothing that will prevent Republican politicians in the future from cutting these programs given the enlarged deficit following their tax policy.

Conclusion

The ascendancy of the Trump presidency has given the faint hope to the working class base that Trump will have the charismatic ability to shift the balance of the political forces on their behalf. The reality, however, is that his election reinforces the power and influence of the oligarchic elite, in large part because Trump himself belongs to the ruling elite. David Koch may have been a peripheral figure 37 years ago on the ticket of the Libertarian Party, but their success is best achieved behind closed doors. Domhoff (1967) maintains that within the corporate elite there is a moderate and an ultra-conservative faction with the former being okay with some Keynesian investment policies, while the latter want to massively slash taxes and otherwise reduce government spending. To the extent that the latter succeeds, there is no corresponding pressure to balance the books by immediately slashing spending, which is, in fact, increasing with regard to military expenditures, which reminds us of the functionalist Neo-Marxist account that rising state expenditures that are associated with the social costs and infrastructure requirements created by capitalism will generate a fiscal crisis of the state (O’Connor 2001[1973]).

However, the tax cut agenda for the rich will provide no temporary economic stimulation, because rising corporate profits and shareholder returns to the wealthy in the past have not contributed to a jobs boom (Lazonick 2014). A jobs boom can at best happen if the lower and the middle class receive higher incomes given their low propensity to save, which stimulates the economy. The Republicans claim that they are providing a tax cut agenda for the lower and middle classes too, though these rate cuts are sunset at 2026, and for even lower income people various cuts in tax deductibility will ultimately eat up the small gains they have made via the tax cuts.

It is hard to imagine how the political economy effects of the tax cut can drive an even more regressive agenda. The leaders of the tech and finance companies have already raked massive profits, and the Trump deregulatory agenda will pile up more short-term gains for big oil, fossil fuels and real estate developers. The ever more extreme oligarchic demands placed on the state will further sap resources that could be used to retrain the workforce or invest in their education. Structural factors like technological change and the unrestrained mobility of capital will further enhance inequality and contribute to less stable and more precarious employment relationships.

The only realistic hope for the masses is some external force that will shift the balance of power in their favor. Scheidel (2017) argues that only four interventions can realistically reduce extreme levels of inequality that have built up as a result of the path-dependence of allowing private property to accumulate: war, social revolution, state breakdown and pandemics. He does not believe that democracy can dent the level of inequality, as the rich continue to control the political institutions that make up the democracy. It will take some time before progressive counter-mobilization can oppose the normalized path toward oligarchy.

References

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The Logic of Automation

We hear with great trepidation about Frey and Osborne’s (2013) study, which claims that 47% of jobs in the United States are going to be replaced by the rise of robots. But the really interesting question is not how many jobs might be displaced by robots based on job tasks that economists themselves determine, but whether capitalists want to invest in a given robot or not. Naturally, in a market-based economy it is rather difficult to assess the precise equilibrium outcomes of rising automation, and- in the absence of good data- philosophers and futurists (Bostrom 2017; Ford 2016) are trying to prime us on a future without work, when the robots have displaced most human workers.

Some economists have now ventured to make empirical investigations into how robots will affect productivity growth (Graetz and Michaels 2015) and overall employment figures (Acemoglu and Restrepo 2017). There is no doubt that we need more of these empirical investigations.

What I will do in this post is to theoretically lay out the logic of automation, which is summarized in the following graph:

Screen Shot 2017-11-23 at 11.00.43 PM

In this model, the foundational assumption is that automation is already happening. The first effect is on the side of the employment channel, namely that it reduces the number of workers. Historically, we might argue that automation actually creates jobs, and in some modern tech sectors there is evidence of continuous automation among software engineers leading to more innovation and thus new job creation in that sector (Shestakofsky 2017). In the case of the retail sector the displacement of department store workers has thus far been offset by the growth in e-commerce, which creates jobs in warehouses and transport logistics.

But in my model, the potential growth of jobs is captured in the automation effects on the consumer channel. Lower prices of goods will increase savings of consumers, which can be channeled into increasing consumption in the same industry or in other areas of the economy. But we might also assume the opposite, namely that automation reinforces the monopoly sector’s profits (Google, Amazon and associates) and thus retains the high cost of living despite rising automation. Continued high product prices in the absence of competition implies less consumer purchasing power. Lowered consumer purchasing power also happens via the channel of displaced labor (as mentioned in the beginning), which has to compete for jobs in other areas of the labor market, which lowers the organizational clout and wage claims of workers.

The rescue for beleaguered consumer-workers happens via the consumer finance channel, as rising profits are deposited in financial institutions, who have to aggressively market those accumulated savings in the form of credit. Credit expansion in turn is made possible by lax government regulations, but it crucially buys time for the capitalists because they combine rising profits with declining wages but rising consumption. The problem with the consumer finance route is that it is inherently unstable as the lack of rising income among the masses means a high risk of default and financial crisis. Deleveraging households thus create the third way in which consumption is lowered. Lower consumption in turn predicts less profits, less investments and an economic crisis.

Automation decisions themselves are endogenous to wage trends. In the case that automation displaces workers, increases competition in the labor market, thus reduce worker bargaining power and lower wages, the pressure to automate might actually decrease, as cheaper workers compete with expensive robots. Developing countries upper middle class can still afford human butlers, which is the preserve of the upper class in the developed countries given the high cost of human labor. In the contrary case, a new consumer bonanza will allow workers to gain higher wages, which will increase the pressure to automate. This theoretical prediction has some empirical evidence as the Europeans have a higher robot penetration on average than the US, while the former also have better labor-protective legislation and higher wage costs with more generous social contributions to finance the pensions and other social welfare spending. In addition, China is the hottest market for robot imports, partly because of the manufacturing dependence of the country and partly because of the massively rising wages in the export-intensive manufacturing sectors.

Can we, thus, formulate a summarizing statement about the logic of automation? I would say, perhaps not, because the arrows are pointing to two possible outcomes: (1) a higher economic equilibrium with more productivity growth and economic growth with rising wages and more jobs, and (2) economic crisis, a depletion of middle class employment options, an entrenchment of monopoly capitalism and a further concentration of wealth in the hands of the few. For whatever reason, the more pessimistic perspective takes overhand in our contemporary experience with automation.

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Can Workers Resist Automation?

There has been a long history of workers, who have resisted the oncoming wave of automation. For supporters of capital, these workers are throwing sand into the wheels of progress, and how dare these workers speak up? They are labeled as Luddites, which are workers, who destroyed the machines that were built and replaced the workers. Luddites protested the wave of technological unemployment, which has usually not been a problem in most developed countries, because we have thus far been able to shift workers into new industries. Should we thus side with the Luddites? I argue we should not. Workers should not so much resist automation by preventing it, but resist it by demanding a fair shake from capital.

Formerly, most people were employed in the agricultural sector as farmers, but the mechanization of agricultural production increased productivity per man hour, and as the entire population could be fed with fewer people involved, displaced farmers shifted onto different sectors. Further technological advancement meant that manufacturing goods would be produced, which from the nineteenth century onward also became a major source of employment. In some countries, like Germany 20% of the workforce is still employed in manufacturing, although it used to be 40% in 1970. The overarching trend, which became clear at least since the 1950s was that mechanization increasingly claimed jobs in manufacturing as well, and since then jobs have shifted onto the service sector.

This last transformation did not happen without friction, which may be expressed in the lack of power of organized labor in the service sector. Labor unions played no role in agricultural economies (perhaps occasionally an agricultural collective or commune), but they arose from industrial struggles of the emergent working class, a dynamic that is still captured in Karl Marx Communist Manifesto (not so much in his later writings on political economy). Marx beautifully pointed out that unlike previous slave-holding or serf-based societies on dispersed soil, an economy based on workers that become physically concentrated in tight urban spaces and factories, and in which capital continuously put the squeeze on workers would generate a substantial counter-reaction of the workers in the form of agitating for labor unions and collective bargaining rights. The issue has been that service-sector workers, especially in private industry, have been more fragmented and less capable to organize and strike for better rights, though their unionization rates are now higher than in manufacturing (Schmitt 2009).

But it turns out that historically capital (and their owners) is a much more versatile object than labor. Firstly, while capital can set up shop anywhere in the world, where it finds natural resources and exploitable labor, and in the form of finance capital find borrowers, workers are usually tied to the location in which they live. Naturally, there is the option of labor migration, but even that has certain limitations as no more than 3% of the world population permanently leaves their country of origin. Language barriers, lower socio-economic status and the maintenance of personal networks (friends, family) are great barriers to movement. The threat of capital removal without implementation might already scare enough workers to prevent them from carrying out strikes, which could threaten capital. Secondly, the sustained threat to profitability by continuously rising labor costs and labor action motivates the capitalist class to make more investments in mechanization to replace sufficient labor to lower labor costs both by a reduction in new hiring and in the greater competition among laid-off workers, which holds future wage claims in check.

Therefore, only in exceptional economic time periods can workers ever hope to gain a bigger share of the pie without facing the threat of a capital strike. Notably, the government has to institutionally support organized labor in the form of Keynesian, social democratic policies, including pro-union labor laws and institutions, a growing welfare state (which socializes the cost of caring for surplus labor, old/ sick/ disabled people etc.), counter-cyclical investment policy to maintain full employment, and national policies to regulate the flow of capital and encourage domestic investment.

However, even the best social-democratic policies (think of Sweden or Denmark) are limited by the subservience of labor movements and progressive governments to the needs of capital accumulation. Insufficient capital accumulation in a Keynesian context motivates firms to hike prices on consumers. Strong labor unions in the so-called “monopoly” sectors protect their workers through high wage claims, which produced a wage-price spiral and the high inflation of the 1970s, which was not tamed until the Volcker Shock (Volcker was the US Federal Reserve chair from 1979-87) in the late-1970s (i.e. high interest rates induced a recession; a higher unemployment rate weakened the power of organized labor, thus putting a stop to inflation). In addition, the removal of pro-labor legislation and constraints on government investment policies in public works projects and the welfare state, diminished the pillars of institutional support for the working class.

This set of so-called ‘neoliberal’ policies revolves around the removal of limitations to capital mobility and capital decisionmaking by the capitalist class, and its ‘success’ gets measured in the increasing gap between the rich and the poor both with respect to income and wealth. As Karl Polanyi (1944) had pointed out, early phases of liberalism are self-undermining to the extent that workers are not perfect commodities that can easily be discarded like a cell phone. To limit the extent of commodification, workers tend to organize and erect barriers to the free decisionmaking of the capitalists. But this so-called double movement can also become undermined by innovative ways of capital to circumvent borders, i.e. via outsourcing and automation.

With the threat of mass strikes and organized labor having disappeared, workers in the developed world might have an interest to take out their sledgehammers and quickly smash the machines, because as Branko Milanovic’ (2016) “elephant” graph shows, they have been the only losers of neoliberal globalization, while the middle class in the emerging countries (chiefly China and everyone else trading heavily with the Chinese) are gaining ground, and the oligarchs all over the world are multiplying their fortunes by leaps and bounds. But in a historical analysis of the Great Depression era discourse on technological unemployment, Amy Sue Bix (2000) points out that workers have generally fought a rather defensive struggle against the collective forces of capital. The best deal that workers can get for themselves is limited to automation agreements that individual unions negotiate with their individual employer. These may be temporary worker retraining benefits, longer unemployment compensation, transfer within the firm or slower adoption of technology. In no case, however, have unions been able to halt the forces of technological displacement.

But even if we miraculously dream up a social situation where workers become strong enough to smash all the machines that exist, and thus force capital to stick it out with labor, would this halt of technological innovation be desirable? No, because under capitalism, where the means of production are privately held and those private actors seek capital accumulation, barriers to capital in the form of strong labor organization will impede capital investment, and will create new avenues by which the newly established social contract with the workers gets revoked. Even aside from the logic of capital, would we want to toil away with dull jobs that can be automated with given engineering advancements? The Luddite success would damn humanity to endless labor, which I would not enjoy even if the workers owned all of the means of production and distributed the spoils of society’s resources in an egalitarian fashion.

Another ethical problem is that the differential distribution of the spoils of globalization, where the western workers lose out and the other workers gain, make it patently unfair for western workers to determine to halt capital decisions that had lifted workers in developing countries into middle-income countries and out of poverty. On the other hand, the jubilation of the Chinese working class is tempered by the realization that upward-rising labor cost pressures induce Chinese capitalists to also contemplate outsourcing and automation. The record number of robots are ordered in China, not in the West (International Federation of Robotics 2017).

We are long overdue for another Polanyian double movement swinging back to favor the workers and the popular masses, but in a truly globalized world economy it would require that workers surrender their focus on localism and themselves embrace globalism via cross-national solidarity campaigns with workers in other countries. Progressive thinkers have long advocated for the industry-wide organization of labor unions across countries as opposed to national-level or national industrial unions. But even in a world of the internet, local network ties and affiliations by far dominate and structure our daily interactions and actions. But an international labor organization is becoming more and not less important in the context of automation and greater job anxieties.

Ironically, it may be a market mechanism which by itself could limit the scale of automation, which critics of fast automation do not tire to point out (e.g. Mishel and Shierholz 2017). Critics of automation and massive job displacement argue that if automation were a serious threat to employment it should be reflected in higher investment and productivity figures, which is not the case. Gordon (2014) goes as far as asserting that the computer is not as important as say electricity or other early forms of technological progress for productivity rises. Another way to look at it is that initially fast automation in some sectors may push people into “stagnant” productivity sectors that are not automating, and are unlikely to automate given the cheapened wages as desperate workers put up with any working conditions (Storm 2017). The rise of the so-called gig economy (Katz and Krueger 2016) which reflects the servile conditions of highly flexible labor that are mediated on internet platforms partly reflects the new labor market opportunities for desperate workers (Scholz 2016).

A useful case study is the retail industry, where department stores have on net lost 448,000 jobs from 2002 to 2016, while net gains are registered in e-commerce (178,000) and warehouses (841,000) (New York Times 2017). By raising the convenience and lowering logistics costs, Amazon has created an e-commerce bonanza for customers, which provides new opportunities to warehouse workers and transport workers via Amazon Flex. Unlike with the department store retail sector, however, the specter of automation is constantly hovering over the massive Amazon workforce, as productivity rises and optimization happen unilaterally via the introduction of warehouse and transportation robots.

Responding to the critics of automation’s impact, Brynjolfsson et al. (2017) counter that the modest productivity growth is associated with the lag effects of innovation, i.e. it takes time before robot diffusion will be reflected in the productivity statistics. Robots also affect local labor markets, because areas with more robots have fewer jobs and lower wages (Acemoglu and Restrepo 2017). However, the fact that robots are clustered in manufacturing production tells an important part of the story of deindustrialization. The robot nightmare scenario of mass unemployment only becomes realized once the high-demand service jobs are under threat (e.g. self-driving trucks and cars on the transportation industry; medical apps and robot surgeons on the medical industry; legal software on the legal industry; investment and trading algorithms in the financial industry etc.).

The outflow from the labor force has already been observed by men, whereby the labor force participation rate has been reduced by 10 percentage points to 88% over the last 60 years (Black et al. 2016). Might that be linked to the opioid addiction crisis that raised the mortality rate among working class white men (Case and Deaton 2017), or pushed them into video game addiction in their parents’ basement (Aguiar et al. 2017)?

Workers should not so much resist automation by preventing it, but resist it by demanding a fair shake from capital, which may take the form of employee stock ownership, progressive taxes with welfare redistribution or a universal basic income, which severs the link between a job and income. As giant tech companies increasingly monopolize revenues (Facebook for example having 1/7th of humanity as a customer base), new innovations are pushing workers out of secure jobs, and financial companies are pre-emptively guaranteed perpetual bailouts for risky lending policies, each of which hoarding opportunities at the top while growing the gap between the very rich and everyone else, the case for an out-of-market economic solution to unemployment and underemployment become more important than ever.

For now, the regressive political and economic agenda (i.e. Trump, Brexit, Macron) seem to prevail. Trump’s fake populism- having gained on the national sentiment against immigrants and in favor of protecting a few coal jobs by scrapping NAFTA- is revealed as fake with the imposition of trillions of dollars in tax cuts for the richest 1%, whether it is in the form of abolishing the inheritance tax or lowering the corporate tax rate (Wolf 2017). If there is anything positive that will emerge from the plutocratic agenda of the Trump administration it is that the counter-mobilization against his bigotry and elitism will provide opportunities for general upheaval.

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A Right-Wing Majority in Austria

The difference between 2000 and 2017 in Austria is that this time around right-wing populism has been normalized. Back in 2000, the second and the third largest party, OVP and FPO negotiated a coalition government, in which the third-ranked OVP was able to get the chancellory after convincing the FPO to cede the highest post. Party leader Jorg Haider subsequently retreated to his little empire in Carinthia, which he ran as the state governor. That was the beginning of the end of the Haider-FPO.

First, Carinthia became involved in the Hypo Alpe Adria scandal, the provincial bank, which had been most exposed to international speculation in real estate, which resulted in bank bailouts in 2008 and the nationalization of the bank in 2009 (re-privatization in 2015). The blame went straight to the Haider administration. Second, without Haider at the helm of the national party there no longer was a charismatic leader among the ranks of the FPO, who could agitate the masses for his party. Third, the FPO turned out to be a mere junior partner to the OVP. The one measure that they were really proud of was the stricter enforcement of immigration restriction legislation. The voters realized the fraud of the FPO government and switched their support to the OVP in 2002, which became the clear winner in the elections. Lastly, after internal quarrels, Haider had assembled his close allies to form the BZO, a new political party, which temporarily split the nationalist camp until Haider’s car crash death in 2008.

When the OVP-FPO government formed in 2000 the great dismay of the EU-leaders resulted in nominal sanctions against Austria, which were lifted a few months after the inauguration. But 17 years later there are good chances that OVP and FPO will agree on a coalition government, thus returning the FPO back to power, but this time without sanctions. The OVP had been continuously serving in government since 1986, mostly as a junior partner to the OVP, as it had been difficult to become number 1, and yet in each leading position the OVP would enter in a coalition government with the FPO. The Vranitzky doctrine according to which the SPO would not enter a coalition government with the nationalist FPO kept the options continuously open for the OVP to remain in power.

The current parliamentary elections catapulted Sebastian Kurz OVP to the first-ranked position, which had long been anticipated, essentially since he became the party chairman. The OVP had received more than 31% of the vote, and will almost certainly receive the commission to form a government. Observers will recall that the principal reason for the OVP’s electoral success lies not just in the perception of youth and renewal that Kurz represents. I think Austrian voters are cynical enough to not be fazed by it. They were instead directly responding to Kurz right-wing pandering, as he became more and more intent on problematizing the vast number of refugees as contributing to the inability to integrate them and burdening the welfare system. By using nicer words than the FPO, but responding to the same primal fears of the public, Kurz was able to draw votes to what otherwise would go to the right-wing.

But one cannot merely state that the votes come from the right, because the FPO itself gained nearly 7 points to reach 27%, historically the best result for the FPO. The FPO is clearly a winner in these parliamentary elections. In part, their better performance comes from the fact that the smaller parties are pushed to the side. The Greens catastrophically lost nearly 10 points (and might not make it to parliament), Stronach no longer runs and is thus losing 5 points, while the BZO also is virtually suspended, as it still had about 3% support in 2013. A new party with immediate gains is Peter Pilz list, which promptly gained 4%. Pilz is a former Green parliamentarian and thus has diverted some support from them. He also distinguished himself by speaking out tough on criminal refugees.

Noteworthy is also that despite the anti-immigrant and anti-refugee position, which dominates the FPO agenda, its leader Heinz-Christian Strache has toned down his rather aggressive rhetoric (in his first ever campaign as leader for the 2005 Vienna elections, he had campaigned actively against Islam), thus presenting his party as an acceptable party to plan governing coalitions. And here comes, therefore, the main reason that the OVP and FPO coalition appears most likely: both parties agree on harsh anti-refugee policies, reducing the inflow of many more migrants. Both also agree on economic and social policy, which is about tax cuts for businesses and wealthy individuals financed by drastic cuts in social spending. The latter part is not explicitly admitted on either side, and they instead dodge that bullet by demanding cuts to the “bloated administration”, i.e. the vast army of civil servants that has been going back to the days of Maria Theresia.

The alternative to social spending cuts would have been more support for the SPO, which was just about holding even at 27% of the vote, being possibly second or third-ranked (remaining letter votes still have to be counted until next week). The incumbent governing party under chancellor Christian Kern faced several difficulties. First, by being the senior governing partner since 2007, the SPO is a used up force, and the voters indicate their desire for change. Second, while Austrian workers do suffer from the consequences of neoliberalism (shorter, more unstable work contracts, more uncertain work life), the perception of urgency has shifted from economic policy to migration, which the SPO refuses to capitalize on given their voting clientele, which includes many migrants.

Third, while leader Kern appears to be technically competent, he does not have the emotional appeal that his younger opponent Kurz had. What was noteworthy in their last common TV debate was that Kern had the greater technical competence, even going so far as denouncing Kurz for being corrupt by taking campaign donations from the rich and then writing a pro-rich campaign agenda, for which Kurz had no counter-point. While the SPO had long ago proposed a political platform (“Plan A”), the OVP kept most of its plans secret until the middle of September, a month before the elections. But technical competence and debating skills are not sufficient to convince the masses, who decide the elections. Fourth, the SPO has been suffering from the Silberstein affair, a former party campaign manager, who was imprisoned for embezzlement in his home country in Israel. It then turned out that Silberstein was an expert in dirty campaigning, which the other parties then exploited to hammer the SPO on. Whether Kern was aware of Silberstein’s dealings is unclear, yet it was a clear embarrassment to his party to have to deal with Silberstein allegations, which sows doubt among voters that the SPO is a trustworthy party.

Lastly, social democracy is under attack across Europe. Some scholars think that this is because the social democrats were too successful. Their raison d’etre was the creation of the welfare state, but now that the welfare state stands, there is no reason to support social democrats and people can vote for other parties. But I would argue precisely the opposite. The failure of the social democrats comes from their lack of defense of the welfare state. It certainly becomes hard to enforce retrenchment, but given the lack of huge economic growth the main engine to finance the welfare state is in trouble. The much missed Keynesian consensus depended on a unique class compromise among capitalists and workers, who share the abundant surplus among each other.

Social democrats thus become tolerated among capitalists, and welcomed by the workers, who no longer dream of revolution (if they ever did…). But these abundant surpluses are absent in today’s world of anemic growth despite record-low rates of interest and high levels of public and private debt. A peculiar form of social democracy arose in the 1990s, as these parties resigned to the power of finance, which came to support the welfare state in return for its deregulation. There are now countless studies that show how finance reinforces inequality (Lin and Tomaskevic-Devey 2013), not good news for social democrats. Further bad news is that finance-driven economic growth is inherently unstable, which became evident with the financial crisis in 2008. Whether the finance minister was social democratic or not, there was a strange optic when the government unloads the debts of private banks and then pays for this burden via austerity measures. In that case, as social democrats side with the bankers to save the capitalist and financial system as opposed to the working class, they shall not be surprised that they get less support.

PASOK, the Greek social democrats, have virtually been wiped out and are no longer a political force there. PASOK had been the first party to manage the fallout of the Greek debt crisis and to the extent that Greece began its long trip on the knife of the EU austerity regime, voters had no reason to sustain them. Now the Greek political landscape is limited to the socialist left and the conservatives, but they agree on the austerity-cum-bailout regime, thus invalidating democracy in Greece.

There is some hope for social democratic revival in Portugal and the UK. In Portugal, the moderate Socialist Party went into a minority government under Antonio Costa, while being propped up by a left party, a communist party and the green party. Their course had been to stop new austerity, privatization, worker-right diminution measures from Brussels, though the struggle is defensive, it is an advancement to the previous administration.

In the UK, the election of Jeremy Corbyn as party leader was the game changer, as the former backbencher insisted on scrapping Tory austerity and increasing social spending. He was scoffed at by Blairite colleagues in the Labour Party, warning that Labour would never serve in government with a left-wing lunatic in charge. Except that the bungled Brexit negotiations revealed the ineptitude of the Tory government under Theresa May and voters were willing to embrace a more left-wing alternative, which destroyed the Tory majority in the last parliamentary elections over the summer. May converted a Tory majority to a minority government propped up by the Northern Irish DUP, which restricted its support for the government on some key areas like Brexit and national security but not on austerity decisions like not raising the pay for NHS workers.

Back to Austria: It is technically possible for the SPO to continue the grand coalition, but they would have to enter as junior partners. There would, however, be a lack of credibility for continuing a coalition government, which is not only discredited in the eyes of the voters, but also in the eyes of the two parties themselves. Why would they call snap elections (a year before due date) if it was not to end the grand coalition? The two parties have sufficient disagreements that such cooperation probably makes no more sense. The other option would be for the SPO to cooperate with the FPO. These are two almost equally strong parties, but the disagreements on economic, social and migration policy are bigger between these two parties than for OVP and FPO. So the latter combination is still the most likely.

The vote pattern suggests stronger right-wing forces, yet again. What is to be done about automation in the workplace? What is to be done about the precarious workforce? What is to be done about the growing wealth gap between the rich and the poor? What is to be done about multinational companies that pay less taxes than small business people? What is to be done to create a more harmonious life between indigenous and foreign-descent Austrians? These questions will not be well addressed in the immediate future, but which government has ever done so?

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Microsociology: Gaze of Female Leaders

It is well-known that women tend to be better communicators than men, that women are more interested in keeping good relationships with the people around them. One way to establish such close rapport is through the gaze with the eyes. Among small children, girls tend to look at people’s eyes much longer than boys, who tend to look down, sideways or at objects. It is only civilization, i.e. many years of life experience and feedback from society, that boys gradually begin to look people in the eyes when communicating.

But even among adults, there is a difference in the length of time that looks are sustained, as women still look at their counterparts longer than men do. This difference may be rather salient when it comes to interpreting attraction to the opposite sex. Since women tend to look at their counterpart longer than men regardless of sexual attraction, a man cannot say for sure whether a woman focusing her gaze at him has any sustained sexual interest, while men do reserve their staring gaze to the attractive women, while glancing less at sexually less attractive women.

Another potential predictor for the sustained gaze is whether one is a leader, be it in business, government or a large organization. There are evidently some uncharismatic leaders out there, but those, who are most successful exude the most charisma, and can generate positive emotional energy among the crowds (Collins 2004). There are many elements to charisma, but if we restrict ourselves to merely the gaze, I investigate the different forms of gazes performed by female leaders. It makes sense to analyze female leaders (also see Collins 2017) as they combine two attributes that should predict a more intense gaze. But the reality is that there is a variety of gazes among female leaders. (Another reason is that most leaders are male, so one could list an endless amount of examples.)

Let’s consider some examples of interviews with powerful female political leaders. The leaders are coded by low, medium and high, depending on the intensity of the gaze. A low gaze would be if the leader avoided eye contact, while a high gaze would be very rare avoidance of the gaze. The key finding is that there is a broad variation of gazes among female political leaders, which suggests that the background of the individual leaders also matters for their gaze patterns, which requires further inquiry. According to my coding scheme, there are 5 low gazes, 23 medium gazes and 11 high gazes. The list of female leaders is not exhaustive, and should encourage more future inquiry.

Margaret Thatcher (medium)

Video link

Thatcher, British prime minister (1979-90), is considered to be the Iron Lady, and, indeed, she has a firm view at the interviewer, but when she wants to collect her thoughts would look away for 1-2 seconds before re-establishing eye contact with the interviewer.

Theresa May (high)

Video link

May is a successor to Thatcher, also serving as British prime minister since the Brexit referendum in 2016. One cannot put the Iron Lady label around her. In this interview (see link above) with the BBC immediately after her massive defeat in the election polls after she had been fooled into believing that a snap election would increase her parliamentary majority, May is very teary. Her eyes are very large while speaking and she sustains the gaze much longer with her interview partner than Thatcher. The interruptions in the gaze are much shorter.

Ellen Johnson-Sirleaf (medium)

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Johnson-Sirleaf is the first female African leader, having served as Liberia’s president since 2006. Johnson-Sirleaf holds eyesight but not as long as May. Her look away would be very brief, and would be meant to not overly alienate the interviewer.

Cristina Fernandez-Kirchner (medium)

Video link

The former Argentinian president (2007-15) has a rather serious look and mostly focuses her gaze on the interviewer with occasional looks to the side or down. Another interesting movement is the head motion sideways without interrupting the gaze, which means the eyeballs move to the side.

Michelle Bachelet (medium)

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The current president of Chile (2006-10, 2014-) recurrently makes sure to maintain eye contact, though does so much less than the other aforementioned leaders. There are many interruptions to the gaze that are taken up by looks to the left and right. She chooses her words carefully and this thinking process requires her to break eye contact with the interviewer. She makes an alert impression with the raised eyebrows (similar to May) and occasional smiles, the latter of which contrasts with the serious look of Kirchner.

Dilma Rousseff (high)

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The impeached former president of Brazil is leading her crusade against her successor and the neoliberals, whom she accuses of having ousted her in a coup d’etat with the help of the Senate and the court system. Rousseff looks very serious and the big rings underneath her eyes indicate her tiredness of having to fight such political battles. But her eyesight is very firm, and never relents from the interviewer (few exceptions). It should be noted that during the Brazilian military dictatorship, Rousseff sat in prison and was brutally tortured, while Bachelet, whose father was killed by Pinochet, had escaped the country to Australia and later Germany during the early military reign in Chile.

Hillary Clinton (medium)

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The former secretary of state and presidential candidate (the closest ever to a female president in US history) also combines her gaze with raised eyebrows to leave a stronger impression on the interviewer, but similar to Bachelet is more contemplative and breaks eye contact frequently, preferably looking down and toward the side. She certainly does not bring the kind of emotional appeal of Bill Clinton.

Sheikh Hasina (medium)

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The current prime minister of Bangladesh (2009-) has a smiling face when communicating and maintains the gaze for an extended period of time, which are occasionally interrupted with sideways glances, but more often gaze interruptions come from the closing of eyes for one second, which allows her to retain a steady head while interrupting the gaze.

Indira Gandhi (medium)

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The former Indian prime minister has a somewhat downcast head and her eyes appear not fully opened. She would maintain the gaze, which would be frequently interrupted.

Aung San Suu Kyi (medium)

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The current leader of Cambodia maintains regular eye contact with raised eyebrows, but would glance downward repeatedly.

Corazon Aquino (high)

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The former president of the Philippines (1986-92) did not run for office until her husband was killed by the regime. She maintains very long eye contact and only rarely looks to the side. She retains a slight smile, which not many leaders maintain (e.g. Hasina).

Gloria Macapagal-Arroyo (high)

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The successor to Aquino, Arroyo (2001-10) has a much more serious look than her predecessor, but maintains the gaze for an extended period of time only interrupted by rare sideways glances.

Tsai Ing-Wen (medium)

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The current Taiwanese president (2016-) maintains eyesight for most of the time, but would interrupt for sideways glances. The look is rather serious.

Yingluck Shinawatra (high)

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The younger sister of ousted Thai prime minister Thaksin Shinawatra herself became ousted in another military coup. With this context, Shinawatra has a very worried look in her eyes, almost at the border of tearing up. She makes up and down motions with the head, which could be related to cultural norms. Her eyes are very firmly fixed at the interviewer with almost no interruption.

Benazir Bhutto (medium)

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The former Pakistani prime minister, who was assassinated in a car bomb is shown here in a 1995 interview. She maintains regular eye contact, which are occasionally interrupted by sideways glances.

Carrie Lam (medium)

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The chief executive of Hong Kong, Carrie Lam, generally maintains eye contact, but looks down for some amount of time. She includes a smile while she speaks, even as the interviewer goes on attack mode.

Park Geun-hye (low)

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The ousted former South Korean president Park Geun-hye is the least communicative of all female leaders, mostly looking down during the interview and glancing at the interviewer every few seconds for less than half a second each. Her hand gestures are very slow and her face is downcast serious.

Yuriko Koike (medium)

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The current mayor of Tokyo looks straight at the interviewer and makes occasional sideway glances to gather he thoughts. Her voice is rather mild.

Julia Gillard (medium)

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The former Australian prime minister maintains the gaze, and only occasionally looks down or rolls her eyes to the side. Her look is quite serious

Angela Merkel (medium)

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The long-serving German chancellor maintains eye contact throughout and glances down occasionally to collect her thoughts. Very noticeable are the creases around her mouth

Erna Solberg (high)

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The current prime minister of Norway keeps eye contact throughout and usually does not interrupt the gaze.

Dalia Grybauskaite (high)

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The Lithuanian president (2009-) has a very insistend gaze, which is only rarely interrupted.

Marie-Louise Coleiro Preca (medium)

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The Maltese president (2014-) looks mostly at the interviewer with occasional sideways glances.

Kolinda Grabar-Kitarovic (medium)

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The current president of Croatia looks mostly at the interviewer, and will make rare glances downward. While her face is mostly serious, she does resort to a smile a few minutes into the interview.

Atifete Jahjaga (low)

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The former Kosovo president (2011-6) tries to retain eye contact, but is looking down frequently for an interruption. Another way to collect her thoughts is to shut her eyes for a little longer.

Tansu Ciller (medium)

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The former Turkish prime minister (1993-6) leans forward, taking a more aggressive position, and her gaze is fixated at the interviewer, but would occasionally drift to the side, even for as long as 2-3 seconds.

Helle Thorning-Schmidt (high)

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The former Danish prime minister (2011-5) looks directly at the interviewer and makes virtually no sideways glances.

Jóhanna Sigurðardóttir (medium)

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The former Icelandic prime minister maintains the gaze, but frequently looks sideways and down as well.

Tarja Halonen (high)

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The former president of Finland (2000-12) mostly maintains the gaze with the interviewer, which would rarely be interrupted by sideway glances.

Nicola Sturgeon (high)

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The current first minister of Scotland (2014-) keeps her eyes focused at the interviewer and rarely looks sideways, which tends to happen when she gets the question, but not during the answer.

Mary Robinson (medium)

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The former Irish president (1990-7) maintains the gaze, but looks to the side for some of the time to collect her thoughts.

Yulia Tymoshenko (high)

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The former Ukrainian prime minister has sat in jail for corruption charges brought by the former president Viktor Yanukovych, who himself was ousted in the 2014 Maidan protests, after which Tymoshenko was rehabilitated in political life. Similar to the former Brazilian president, she maintains the gaze throughout the interview and takes a rather combative stance.

Hilda Heine (medium)

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The president of the Marshall Islands mostly keeps eye contact but would also glance away for some periods of time.

Helen Clark (high)

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The former prime minister of New Zealand (1999-2008) maintains the eye gaze, essentially without interruptions.

Portia Simpson Miller (medium)

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The current prime minister of Jamaica maintains some gaze, but those are frequently interrupted with sideways glances.

Golda Meir (low)

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The Israeli prime minister (1969-74) retains some eyesight with the interviewer, but prefers to look down, being very centered on formulating ideas and speaking at a slow and deliberate pace.

Megawati Sukarnoputri (low)

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The former president of Indonesia barely maintains the gaze with the interviewer. She sits sideways to the interviewer and prefers to look straight, thus avoiding direct eye contact.

Kim Campbell (medium)

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The former prime minister of Canada maintains the gaze over long stretches, which are interrupted by downward and sideways looks.

Laura Chinchilla (medium)

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The former Costa Rican president (2010-4) has a very serious look, which is fixed in the eye gaze, but is interrupted by downward glances in a very regular interval.

Beata Szydlo (low)

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The current Polish prime minister is very reluctant to retain eye contact, and prefers to look down. 1/5 of the time she returns the gaze with a generally serious look.

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The Defeat of the Governing Parties in Germany

For many months German and international media have insisted that Merkel would be the pillar of strength, which will halt the rise of right-wing populism. The narrative of the cosmopolitan elite was that Brexit, Trump and Syriza are crazy aberrations and what western democracy urgently needed was a return to normalcy, and that normalcy is Angela Merkel, the leader of Germany, the most powerful country in Europe, and therefore the right person to lead the West in openness, tolerance, cosmopolitanism, respect and human rights.

There never was any doubt that her CDU would win the election as all polls suggested she would have a wide leading margin against the social democrats, who had hoped that Martin Schulz, the former EU parliament president and not tainted by German domestic politics, would be able to challenge the chancellor. But the Schulz effect lasted for about a month and faded around April and May. The voters were not fooled as Schulz did not really promise a genuine alternative to what the SPD had previously been offering. The decisive moment of surrender in the SPD did not begin with Martin Schulz, but with Gerhard Schroder, who had campaigned on expanding the welfare state in 1998, won the elections and promptly promoted his welfare cut agenda in the form of Hartz IV and the Agenda 2010, which was rolled out immediately after his re-election in 2002. The only genuine “social democrat”, who refused to accept the right-ward drift in social policy was Oskar Lafontaine, who resigned the finance ministry in 1999 and co-founded the WASG, which later merged with the East German Die Linke to campaign for the 2005 Bundestag elections.

The discrediting of the SPD was continued in every election, in which Angela Merkel was the leader of the CDU, because the party was led by technocrats, who had no vision for a different Germany except some slight changes around the margins like the introduction of the minimum wage in the 2013 coalition negotiations. Schulz tried to give nice speeches in favor of social justice and equality, but it is noteworthy that he had not denounced the basic contours of Hartz IV, which should be kept in place, because it would not make any sense to let scroungers take advantage of the welfare state instead of working to benefit the community (needless to say, the many jobs that were added come in the part-time, low-wage sector, which require tax subsidies to allow these workers to survive).

The result is that the SPD lost more than 5 points dropping to about 20.4% in the elections. But if the social democrats can be written off, can the CDU/CSU count as winner? Yes, but only if you are concerned about relative power balances. The CDU landed on top, but has lost an astounding 8.7 points to go down to 32.8%. It might not sound surprising that governing parties tend to be punished and this has clearly happened with both the CDU and SPD, which had served in government together for the last four years. To some extent, Merkel also made a clever move to coalesce with the SPD for a second time (first time between 2005 and 2009), because the punishment for the SPD means that the CDU is cemented as the largest power, which can pick its coalition partner and remain in government.

Merkel will certainly want to form a new coalition government and has excluded the AfD, a right-wing extremist party, which contains some racists, homophobes, anti-refugee, anti-immigrant traditionalists elements. Their win is the most astounding, as Germany did not have a right-wing party in parliament since its founding, partly because of the sensitive Nazi history. The AfD was originally founded by disappointed CDU officials, who did not support Germany’s support for the Greek bailouts. It was a party led by the economist Bernd Lucke. But Lucke was ousted in 2015 by the national-conservative Frauke Petry, who exploited the incoming massive refugee wave from Syria and the Middle East to elevate her own position within the party. It was only since the refugee crisis that the AfD was taken seriously by ever more voters, many of which were upset about the unacceptably high standards of political correctness surrounding the refugee discourse. In their view, the mostly left-leaning media is sympathetic to the plight of refugees, while the AfD painted the media as “Lugenpresse”, i.e. lying press, who ignored the fear of the domestic population of the many refugees that create an ethnically diverse country, where German-blooded people can no longer feel at home.

Ironically, the economic competition argument against immigrants could not be used in the context of Germany, because under Merkel’s chancellorship the export economy and the Mittelstand continued to thrive (certainly aided by the effective control over European monetary policy, which mixes traditionally strong currency countries like Germany with weak currency countries like Spain and Greece, thus lowering the cost of German exports to say US or China), thus unemployment could be kept low. The number of employees dependent on government wage subsidies declined from 1.3 million to 1.2 million from 2013 to 2017 (DPA 2017). Instead, the AfD concentrated on the immigrant and foreigner question in the context of cultural fear and rejection of the “other”.

While elements of the AfD base and leadership might espouse conservative, homophobic, racist and anti-refugee views, one of their leading candidates, Alice Weidel, is a lesbian in a domestic partnership with an Indian descent woman and two sons with Syrian refugees as household help. It is quite astounding how Weidel can reconcile these contradictions, and one way seems to be to be silent on her homosexuality and personal life, while focusing her energy on the anti-refugee agenda. With her own household helpers she even finds the excuse that they are Christian Syrians, who are worthwhile protecting, suggesting that Muslim Syrians and other Muslims are not.

The other leading candidate is the former CDU veteran Alexander Gauland, who had made headlines by saying that he admired the footballer Jerome Boateng, a German national player with African roots, but no “real” German would want to have him as neighbor.

With the election of the right-wing nationalist AfD Germany’s post-war era has now come to an end, as it becomes a “normal” European country with its share of right-wing populists. Critics of such a harsh depiction would counter that the AfD has been excluded by the other political parties, which has gained much support from non-voters and especially former CDU voters, who had no alternative on the right-wing. But the AfD exclusion is at most temporary, because if the AfD can durably increase its vote share continuously, then sooner or later it will serve in government, which is what we might expect after the Austrian elections in October with the FPO in power.

Merkel’s other option is to form another coalition with the SPD, but Schulz declared that the SPD would definitely go into opposition, because they understand that the voters have punished them and they have to lick their wounds in opposition and hope to do better next time. The lack of a progressive political vision a la Corbyn or Sanders makes that all the harder. Merkel also refuses to speak with the Linke (9%), which probably reminds her too much of the ugly communist past, even though the Linke is the only party to be strong on the welfare state.

The FDP, which missed the 5% mark after the last election before which it was in coalition with the CDU, now makes it back to the Bundestag with about 10% support and the fourth-largest party. The FDP is a traditional coalition partner with the CDU. Their agenda is dominated by deregulation and lower taxes for businesses, which has some parallels to the CDU agenda. The FDP said that it wanted to claim the powerful finance ministry to direct economic and social policy, but the CDU will likely want to keep the post. In the last administration they held the health, justice, development, economy and foreign affairs portfolio, each of which can likely be conceded by the CDU. But they can’t form a majority government, so they would have to take the Green Party, which wants a strong environmental portfolio and might even be interested in the social affairs ministry. The so-called Jamaica coalition (black, yellow, green) would get the majority of the parliament. In this coalition, each party will likely get portfolios that are proportionate to the number of votes: 3/5 for the CDU, 1/5 FDP and 1/5 Greens.

While the representation of the Greens in power might indicate some balance to the right-wing economic policy, one should consider that the current party leadership of the Greens are so-called pragmatists, which means they don’t have a big vision and just want to serve in government. That suggests that with the exception of their environmental portfolio (lower kerosene usage in cars, climate protection, CO2 reduction), they will not push for many other policies, and this may well be a cost that the business-friendly CDU and FDP will be willing to bear to be accommodated to power.

Most importantly for Angela Merkel, the announcement of the SPD to go into opposition will cement her claim to a fourth chancellorship. If she serves the entire term, she will be able to match her political predecessor Helmut Kohl, the unity chancellor of 16 years. I doubt that Kohl would have survived this long if it wasn’t for German unity, which transformed East Germany from socialist SED to conservative CDU land. That was in the 1990s, now the picture is more heterogeneous, with the Linke and SPD also quite influential.

Some people would argue that Merkel is without alternative, but she will have to step down if not for political then for health reasons. The pundits had been speaking about the maintenance of the status quo, but I think that it is shaken by the loss of the two major parties. Next stop in Austria.

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