Elton John: A Music Career with High Emotional Energy

Elton John has long been part of my music repertoire, and up until a few weeks ago I knew that he was no one-hit wonder, and had written a lot of very interesting songs that were nice to hear. Then I began to play the Youtube playlists of Elton John, which- for people who don’t know- is an endless playlist with a series of songs by that musician mixed with similar musicians (like Phil Collins, Cyndi Lauper, Sting and so forth). Through that tool I discovered and rediscovered many songs composed by Elton John, and so I began to put together my own Youtube playlists aggregating all my favorite singers, and with Elton John, I am currently at 43 songs, more than for any other interpreter (playlist available here). How can I be so electrified and fascinated by the songs of this one British musician? So I thought it was time to dig into some video interviews with Elton John and explore some biographical data.

My knowledge of music is so rudimentary that I cannot describe in words feelings about his music. It either makes you feel good or not and you don’t really know why. Not even John can describe his music writing process, as it is intuitive rather than logical-rational. Music is one of those things where the human language cannot really penetrate though it is real and can be perceived, which may be described as a cognitive limitation. Ludwig Wittgenstein claimed “the limits of my language mean the limits of my world”. Fortunately, I can make some sociological statements about Elton John’s success, using the framework of the sociology of emotions. In short, John gets energized in the act of writing a song, and this internal energy gets reinforced via his live concert performances in front of large audiences, who sing along with him, and inspire him in his work.

 

Sociology of Emotions

Let us first recall the key tenets in the sociology of emotions as laid out in Collins (2004): people are in social interactions and transfer emotional energy to each other based on the characteristics of the social situation and the given social and cultural capital of each individual. Picture yourself going to a party, and meet this really important big shot that everyone should pay deference to, and it turns out that he is a smooth talker, but doesn’t have much brains, but you do, so you feel dejected and want to escape the conversation. You meet the next person, initially very shy and withdrawn in body language, but you both discover that you like oldtimer cars and discuss that topic animatedly for the next two hours, which you perceive as if mere minutes went by. Sympathy for the other person is strengthened via rhythmic entrainment, which is the copying of body rhythms, tone of language and body language to create positive interactional energy. These are micro-situations, where only individuals meet each other, but in large groups so-called interaction ritual chains become possible. Picture a church congregation that is looking forward to the Sunday preachings, because the pastor is so charismatic and leave the congregants with a sense of inspiration that can reverberate outside the context, because some of the congregants share the vibe of that pastor outside the church walls, and that may attract more people to attend that church. Emotions are getting transmitted via social interaction. This is the key thesis that should be kept at the back of our minds.

 

A Biographical Sketch

Reginald Kenneth Dwight was born in north-west London in 1947 into a largely lower middle class household. He was mostly raised by his maternal grandparents in council housing, which is the British version of public housing. His father, a Royal Air Force lieutenant, was not emotionally close to John, and wanted him to pursue a conventional career as a banker. The father was often away, and when his parents were together they often quarreled with each other, thus creating John’s desire for his parents to get divorced (Interview, 1994). The conventional thinking of his father coupled with the emotional distance with John (John did not even bother to show up at his father’s funeral) created in him the desire not only to become a musician but to wear fancy clothes during his many stage performances, to be considered shrill and unconventional.

Being musically inclined, his family bought a lot of records of contemporary music, which gave him a taste for music. Being very talented on the piano, he was discovered in school and at age 11 received a scholarship at the Royal Academy for Music in London, where he spent about 5 years. While at the Royal Academy, he enjoyed playing classical music, but was not a very diligent student, and often rode around the subway rather than practice or attend class. His rare musical talent, however, allowed him to pass classes, as he could play compositions after hearing them once. John’s domestic situation improved when the father divorced his mother, and she then got married to the painter Fred Farebrother, a caring and supportive stepfather. John wrote his early songs in Farebrother’s house before he moved out.

His early musical forays began when he became a weekend pianist at a pub. He formed a band with his friends called Bluesology, and while writing songs also went on tours with them. He divided his time between running errands for a music publishing company, performing solo at a hotel bar and working with his band. John was so serious with his music that by age 17 he had dropped out of school. In 1967, John and Bernie Taupin answered the same ad for a British magazine, seeking for song composers. John admitted to Ray Williams, record company manager, that he was a good melody composer but a bad lyricist and needed help from a lyricist. Williams gave him an envelope from another person that had been rejected, Bernie Taupin. John left and took a look at Taupin’s lyrics and was enamored by it and immediately contacted Taupin (Interview, 2017; Interview, 2017).

Taupin and John became close collaborators, as Taupin wrote all the lyrics in an hour and send them to John, who would read the lyrics and produce the melody in another half hour. Some lyrics do not inspire John, and he throws it out, finding it not worthwhile to waste his time pondering over uninspiring text. While reading the lyrics, John would have an immediate feel for the mood, the speed and the tone of the song (Interview, 1999), which distinguishes musical geniuses from the average musician. Around that time Dwight also changed his name to Elton John in homage to two members of Bluesology, saxophonist Elton Dean and vocalist Lohn John Baldry. John and Taupin became staff songwriters for Dick James’ DJM Records in 1968, setting off the pattern of collaboration. Taupin writes the lyrics, and John comes up with the melody. As staff writers they primarily wrote songs for other people, but also increasingly produced their own songs. By 1970, they had put out their first album titled “Elton John”, and the second song in the album “Your Song” became the first hit single, landing number 7 in the UK charts and 8 in the US charts. However, John had almost been a failure in the UK, and it was only when his record company contacted an American record producer, Russ Regan, who really liked the song that he got his breakthrough (BBC documentary, 2010).

 

Predicting Success

The rest, as the proverb says, is history (which can be read in Wikipedia), because the first successful hit generates revenue to allow John to concentrate more on his own work composing new songs, and name recognition would grant him invitations for music concerts at popular venues, which increases his listenership further, thus generating even more revenues and social attention. The Matthew effect is clearly at work here, as initial success is converted into more success (Merton 1968). But it is not enough to have initial advantage, as that initial advantage is also tied to personal talent and knowing the right people at the right time (such as knowing the lyricist Taupin, or knowing Russ Regan, the American record producer; or being in close proximity to other great artists forming a huge network and generating more creativity, as had been the case with philosophers: Collins [1998]). John had all of these factors speaking for him.

So how come John could nourish his ability to write one great song after another? Here economic explanations are insufficient. We can’t just say that John was driven by the money, and in his labor-leisure tradeoff he placed a low value of utility on leisure, and thus favored the labor income by writing great hits and performing at live concerts. The problem with this explanation is that the homo economicus is showing up nowhere in the interviews that I have watched of John. Money cannot be the key driver for John’s internal drive to success, though he has enjoyed a great material life, owning multiple large residences and nice cars that he mostly resold because he wasn’t using them.

Fame, which is a form of social recognition, is already closer to the truth, but fame for its own sake was not what John had emphasized in the TV interviews. Rather there were three crucial factors that he emphasized in his conversations with journalists: (1) the need to be loved/ recognized for which fame was one tool to get there; (2) the love and skill of writing music and performing; and (3) the emotional energy generated from audience feedback. In short, the productive use of emotions works out very well for John, thus allowing him to coast from one great hit to another, and endure even during career stretches of less success.

 

Love and Fame

John’s need for fame and recognition really came from his need to be loved. In his interview with Barbara Walters, he described the trauma of seeing his parents get divorced. He explained how he got tremors when his father came home, as he had a tense relationship with him. “The only thing I would get excited about was playing the piano and singing. I would go out. It would be easy for me to get recognition from 20,000 people, and I loved it. Then I would come home and it was me [alone] again. And that wasn’t enough.” (Interview, 1994) Continuing the line of tense household relations and the importance of music, he states in another interview “I used to find solace in music. When my parents used to argue, I would go to my room and listen to radio Luxembourg.” (Interview, 2010)

It is not clear whether all successful people must have gone through a traumatic childhood, but in John’s case he converted his childhood trauma into productivity in the world of music. How could he know that he was being loved? Only via the constant infusion of emotional energy from the audience, and it became a potent drug. To be clear, there was a very negative phase in John’s life that a career civil servant with a predictable schedule would unlikely face. In the 1980s, John was suffering from alcohol and drug addiction, and only successfully battled it after an epiphany moment when he attended the ceremony of a gay young man, who had died from HIV/AIDS. John being a homosexual himself felt that he didn’t do enough to combat HIV, so to do something productive he had to first get his act together by becoming sober again, which succeeded about 1990 (Interview, 2008). Charlie Rose suggested in his John interview that John’s obsessive-compulsive personality can only be accommodated via music, which keeps him alive, which John agreed with (Interview, 1999).

 

Love for Writing Music

Accommodating this obsessive-compulsive personality via music is a good transition to John’s love for writing music. There are many ways to get fame and attention, but for John, a very effective method for being successful has been to simply enjoy writing good music. In his interview with Stephen Colbert, John stated, “we love what we were doing and didn’t stop for pause. We were having so much fun. When you have that adrenaline. When you have that impetus and you are successful- we were like kids in the candy store. I just loved what we were doing. That helps.” (Interview, 2017)

It is rare for a person to find a career that is completely fulfilling, and the profession of the artist, who also happens to be successful, belongs to that category. Once John was successful, he was able to devote himself completely to writing good music. Being so obsessed about the music also does not leave much time for reflection. As an artist, it is impossible to know whether that song that was just composed, will become a big hit, but one has to be relentless and not really care about temporary setbacks or disappointments. Truly successful people, like competitive swimmers, have to regard their success as mundane, focusing on their craft rather than other distractions like comparison with other successful people (Chambliss 1989). In a separate interview, John stressed the importance of coming up with new ideas and staying innovative. “I am always promoting new things. I am trying not to be an old fart.” (Interview, 2017).

John also does not get obsessed about a single song, which may excite him when it is written, but not really when he plays it for many times in front of live audiences, unless there is a lot of public enthusiasm that he can sense there. “When you first write that song and you have the birth of that song. That gives you chills. And then to be honest, when you are playing a song 1,000 times it’s hard to get chills except on certain occasions…[having] the most incredible crowd [at a recent concert]. That gave me the chills. That was the event, more than the songs.” (Interview, 1992)

 

Emotional Energy from Live Performances

That is an interesting transition to the last point. How can John know that he has been vindicated as an artist? It can’t be merely the record sales that change the value in his bank account, but the positive reactions from a large audience during a live performance. In an Australian interview, John was asked whether he would tire out performing so many concerts. “It is exhausting, but it is not exhausting playing. It is exhausting traveling.”

This suggests that playing music is part of his natural identity, and the positive audience feedback compensates for any physical exhaustion of the live performance. On the other hand, sitting at the back of the van or in an airplane traveling across different countries may not strain his voice, but the lack of audience interaction and the solitude of the travel does not lend much emotional energy. Therefore, live performances are not incidental to John’s success, but an important part of it. “The career has lasted so long because I do play live… Some nights I play and it’s horrendous. Some nights I play and it is miraculous. That’s the drug that keeps you performing, because you never know what great performance will come out of nothing. And that’s the reason you are doing it, and to get the feedback from the audience.” (Interview, 2017)

John understood the importance of live performances, claiming that it gives him the resolve and the skills to play, and stated in an interview, “Nothing is better for you than to go out and play live, even if it is to 20 people. Because it gives you resolve, it hardens you up. It makes you a better songwriter. It gives you the experience, the backbone.” (Interview, 2010) Live performances generate public approval, which in turn generates the emotional energy that he needs to continue churning out new hits.

Even though John had enjoyed the interaction with the audience, which transmitted positive energy to him, John is by no means an extroverted person, preferring to keep to himself and have his thoughts expressed in the music. It might be said that the most talented people tend to be introverts, as creativity of scientists is expressed in the lab or in front of a computer screen, or painters drawing up their still life need the alone-time with the fruits as objects. For John, his most important partner, the lyricist Bernie Taupin, was not even physically in the same room with John when writing the songs. Taupin sends the lyrics to John. John would sit in his room alone in front of his piano, read the lyrics, brood over it and hit the piano keys with the lyric for inspiration before writing down the notes (John provides some description of how he got the melody for “Tiny Dancer” in a 1971 performance).

 

Conclusion

To be sure, John’s career was not as productive from 1975 onward compared to his early years of performance (between 1970 and 1975), but he was still able to keep the flow of good songs coming. Even the brilliant scientists have their greatest work published relatively early in their career. But the fact that John kept on producing good records makes him very different from one-hit wonders, whose flame perishes soon after their commercial success. A mixture of talent, knowing the right people at the right time, early success coupled with the need for recognition, the love and skill for music and the positive emotional energy generated from audience interactions produce the music success story of Elton John. Emotions within social contexts are, therefore, an important component for achievement at the top. The benefit to Elton John fans is a long and extended track record of songs that are enlivening our daily experience.

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Hikikomori: Isolated By Choice or Force?

One interesting social phenomenon in Japan involve so-called hikikomori, which is best translated as acute social withdrawal, loners, hermits. These are young people from their teens into their 40s, mostly male, who don’t leave their bedroom, usually in their parents’ house. There are estimates of a million people in this condition. What are they doing in the comfort of their bedroom? They may be playing video games, watching TV, listening to music, reading their favorite comics or simply staring at the ceiling most of the day. For some introverted people in the West this might be a desirable way of living, but for me this would be like a boring hell over time. The ideal lifestyle is a mixture of solitude and reflection mixed with intermittent periods of social interaction. Schopenhauer had argued that the intelligent person is happy to live alone, but Aristotle was also right in pointing out that we are political and therefore social animals.

More importantly, we have to ask ourselves how it is that young Japanese men remove themselves so far from society in a way that does not happen in other similarly high industrialized countries in the West. These are the factors favoring hikikomori (acute social withdrawal, loners, hermits):

Middle class affluence and strong family values

It could be that living in a rich society among middle class people it is possible to keep children into adulthood. Not all middle class societies parents want to keep their children for such an extended period of time, but among Latino and eastern European culture I can tell anecdotally that it would be inconceivable for these middle class people to charge their children to live with them if they can afford to keep them on for longer. But staying with parents into adulthood (a phenomenon that is spreading all over the west) does not necessarily mean that one turns into a hikikomori. If I decided to stay with my parents into adulthood (not a desirable prospect), I would certainly want to spend as much time as I can outside the house.

Parental overprotectiveness

One of the reasons that Japanese children can cut themselves off from society is because their overprotective parents would not dare to interfere with the “home life” of their children. Parents certainly do notice that the children refuse to get out of their room, but the hesitancy of parents to drag out their children makes this phenomenon possible to begin with. One might counter that children will be resistant, but it is the confrontation that would have an impact on their behavior. But this factor merely explains how children can be stuck in their rooms, and not why they decide to stay in their rooms in the first place.

Deteriorating job opportunities for the youth and negative impacts on the marriage market

There is an important economic trajectory that is ongoing in the most developed capitalist countries: there no longer is rapid economic growth, which could provide the cushy, stable middle-class jobs for males. Automation and offshoring are further factors disadvantaging middle class employment in rich countries. In addition, another negative drag on the economy is the fact that the population is shrinking as women are not having enough children and the Japanese government is unwilling to sacrifice the ethnic homogeneity of the Japanese people. The lack of employment security has a negative consequence in the marriage and dating market for men all over the developed world, but has an even greater negative impact in Confucian societies like in Japan, where the inability of the male breadwinner to get stable employment discredits them in the eyes of women to provide for family life.

The lack of a female partner provides an incentive to stay in the parents’ house, while active family formation tends to result in new household formation. The lack of marriagable men, in turn, forces women to also seek for employment and greater economic independence could also reduce the pressure to get married later. (It is by no means argued that women are having a better time in the job market than men given the gender pay gap and employment discrimination against women.)

Competitive school system

Increased competitiveness in the job market with the decline of stable, middle class jobs also affects the competitive school system. In a Confucian society, parents and the society highly value their children to be as educated as is possible. As such the pressure on each child is enormous to perform well academically. Even as some education ministry officials are recognizing the importance of rest and reduce weekend schooling, parents compensate by sending their children to attend cram schools over the weekend and evenings every day. There is a lot to be criticized about an education system that overvalues rote memorization over individual creativity, but one could imagine how much worse it becomes when the number and proportion of good jobs are decreasing.

People’s internal push to get another credential increases, and as more people are getting a degree it becomes less valuable, a classic case of credential inflation (Collins 1979). But as educational expectations increase, so does the frustration of children, who cannot perform up to those high standards set by their parents. To escape the education pressure, children opt to stay at home. Given that they lack the credential to get taken at a regular job, they are forced to either work low-skilled jobs or for the more fortunate children of middle class families become devoted hikikomori.

Collectivist Culture

In a collectivist culture it is very important to fit in with the dominant cultural values of the society, including high educational performance and attaining a decent middle class job, and in the absence of such face rumor, ostracism and bullying. The extreme sense of collectivism is also remarked by Japanese-Americans or Japanese-Brazilians, who don’t really feel at home when setting foot on their ancestral homeland, because they don’t speak Japanese so well or don’t understand all the cultural mores, which makes them different in the eyes of the indigenous Japanese (Lie 2001). The high cost of collectivism is the lack of individuality, and the inevitable non-conformism leaves no other social space other than the bedroom in the parental house. In a largely individualist society within urban contexts, other people don’t really care about your individual life choices, which offers freedom to pursue one’s life choices without social exclusion, which Simmel (1903) had remarked as one of the positive elements of city life in the west.

What to Do?

Given that it is undesirable to have so many lives wasted the challenge will be to get these men out of their bedrooms. It will be an acute problem for people who have stayed at home for decades and then their parents die, in which case they will inherit the house and savings, but what happens when the savings are used up? The irony is that once the hermits become too comfortable in their nest they will have lost much of their socializing skills, and are not very receptive to outsiders coming in to tell them to get out. What almost certainly has to happen is that people have to have economic perspectives, which would allow them to participate in society. When robots take over the jobs, which is most acutely the case in Japan, it might not be feasible to think of employment opportunities, but volunteer activities funded by a universal basic income are certainly feasible. There are also psychologists, some of which were former hikikomori, who are trying to convince other hikikomori to leave their caves.

To some extent, if late-capitalism enforces such a fate of social exclusion and atomization to such a portion of society, this might bode well for our capitalist rulers, who have nothing to fear from this discarded surplus population that has no centralized organization to vent frustration against a system that so thoroughly mistreats them.

Further readings:

https://en.wikipedia.org/wiki/Hikikomori

                 Mystery Of The Missing Million

                 Hikikomori (2004) Francesco Jodice               

http://www.zeit.de/2014/24/japan-jugend-sex (German)

https://www.nippon.com/ja/column/g00455/ (Japanese)

https://ci.nii.ac.jp/naid/110001051811/ (Japanese)

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Regressive New Administration in Vienna

With the onset of the new administration in Austria, it is worthwhile to examine parts of their government agenda, some of which makes sense. The administration shows commitment to shift to alternative energy and away from fossil fuels. They want to increase the speed of approving infrastructure programs, and want to strengthen the dual-track vocational/ educational program. All of these things do make sense.

But the left-wing critique is summarized in the publication Kontrast (2017), indicating that the new government is a notable shift to the right. They have appealed to the voting masses by promising to be harsh on refugees, even as the number of refugees has substantially declined with the migrant deal with Turkey, which involved a bribe to Turkey so they don’t release any more Middle East refugees. Their major promise has been to slash the refugee payments in half, which would lower their standard of living if it does not get compensated by higher in-kind services. The logic is that the refugees shall have no better benefits than domestic nationals, which is a rather disingenuous claim, because in total nationals will always be entitled to greater benefits than foreign nationals, even if they are refugees. In addition, any refugee costs are necessary at the beginning because it takes time for the refugees to pick up the language, and the skills of refugees to become certified by local authorities such that they can find their way smoothly into the labor market. To exclude the refugees from essential benefits will complicate their integration, and could push them into criminality.

But even worse, the conservative-nationalist government is throwing sand in the eyes of the voters by pushing for a series of regressive measures, which include

  1. A reduction of the corporation tax, which will lighten the tax burden on higher earners, i.e. people, who control vast fortunes in enterprises.
  2. The hotel and tourism industry will get a tax break
  3. The expansion of the child care tax credit is only applicable for people, who pay income taxes, which is not applicable to the lowest earners (less than 11,000 euros a year).
  4. The new administration will re-introduce tuition fees of 500 euros a semester that were abolished under the SPO administration in 2008 and would only have to be paid by students, who took more than an extra year to complete their studies (e.g. if bachelor studies take 3 years, the first 4 years are free, but the fifth year and above costs 363 euros a semester). This could discourage some people from working class families to study, or force them to take part-time jobs, which they are obliged to in the current system to afford living expenses, but it will just become harder.
  5. Permission of a 12-hour work day at the plant level. Previously, employers could impose a 12-hour work day only with the approval of the trade union, which would then come with overtime pay, but if discretion is given to the employers at the plant level to impose a 12-hour work day those overtime regulations will fall by the wayside, making the workers worse off. At a time when automation and digitalization threaten jobs, it is questionable why working time shall be expanded at all. The administration claims that the 12-hour rule will only come with the consent of employees, but in a slack labor market it is not clear whether it will be all that voluntary and even if it were, it won’t be good for worker health.
  6. A current law prohibiting the arbitrary rise in rents in inner cities will be repealed. Landlords should also be able to raise their rents if they can prove an upgrading of the property, which could create an upward market pressure for rents and make cities like Vienna as expensive to live in as many other western European cities. It should be remarked that the OVP (conservatives) is serving their landlord clientele with these legislative changes.
  7. The long-term unemployment benefit (“Notstand”, best translated as emergency welfare), which can currently be drawn indefinitely after the expiry of the regular unemployment benefit (after a year), taking up 92% of the value of the unemployment benefit, will be abolished. It will be replaced by the minimum security welfare (“Mindestsicherung”), which is subject to strict asset tests. Henceforth, benefit claimants have to meet an asset test of 4,300 euros that they cannot exceed to qualify. The size of the benefit is also no longer tied to the past unemployment benefit, but to the length of time paying into the system, which might benefit older workers with longer work histories more than younger workers. The Austrian government is taking the German Hartz reforms of the early 2000s as role model, which converted long-term unemployed people into low-income workers.
  8. The previous government’s policy to create 20,000 jobs for workers 50+, who tend to fall into the category of long-term unemployed is scrapped. Employers no longer find these older workers valuable given their high wage costs. The scrapping of these public jobs for older workers is doubly cruel when combined with the scrapping of the unemployment benefit.
  9. The maximum commute time for workers will be increased to 2.5 hours a day and the requirement to claim jobs in one’s area of training will be scrapped.
  10. The number of occupations that companies can draw workers from non-EU countries will increase from 11 to 63, which will further increase labor competition in the domestic labor market. (No such laws apply to EU countries for whom there is freedom of movement.)
  11. The social security contributions are going to be reduced. The question is what will happen to social spending when this occurs. There are already indications that the welfare state will be more restricted at a time when there are many more precarious employees.

There is no doubt that the voters have involuntary voted for a more neoliberal administration.

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The Misrule of Zimbabwe with Uncertain Outcomes

With Robert Mugabe’s handover of power last month, his 37-year rule over Zimbabwe came to an end. The streets of Zimbabwe were filled by celebrations, as a much disliked and incompetent government was finally removed from power. But it would be difficult for regular Zimbabweans to rejoice given that the post-Mugabe era is still mired with uncertainty. I begin this blogpost with a biography of Mugabe, a description of political events that immediately resulted in the ouster of Mugabe, and then evaluate the economic history of Zimbabwe, which gives good clues to the general reader why he was ousted.

Robert Mugabe was born in 1924 and grew up as a son of working class parents in southern Rhodesia, which was to become Zimbabwe. His father was a carpenter and his mother was a Catholic teacher. In his early years, he was not very politically active, but because he excelled academically he gained a scholarship to study at a University in South Africa, where he became a member of the African National Congress, learning about the nascent independence movement in sub-Saharan Africa. He then lived in Northern Rhodesia, which was to become Zambia, working as a teacher, while reading Marxist and anti-colonial literature.

In 1960 he returned to Southern Rhodesia, and witnessed the arrest of National Democratic Party (pro-independence) activists, which encouraged him to join the revolutionary struggle to overthrow colonialism. The anti-colonial parties split into two after internal disputes: the ZANU (Zimbabwe African National Union), to which Mugabe belonged, and ZAPU (Zimbabwe African People’s Union). Mugabe was imprisoned for his activism in 1963 and was not released until 1975. From 1964 to 1979, the country was run as Rhodesia, which was de facto independent from British colonial rule. The prime minister was Ian Smith, a Rhodesian-born British, which was still regarded as illegitimate by the majority black population, who wanted to transfer power and influence to the black majority. More on that later.

Under greater political pressure to end white dominance, Mugabe was released from prison, and promptly joined guerrilla warfare, giving speeches and disseminating radio broadcasts. Mugabe had called for the overthrow of the white Rhodesia government, the expropriation of white-owned land and the transformation of Rhodesia into a Marxist one party state. White rule came to an end as even the white government of South Africa and the UK government had pressured the Smith administration to give up white rule. In 1979, Smith first ceded the premiership after parliamentary elections, which handed power to Abel Muzorewa, a politically moderate black bishop.

Another general election in 1980 delivered most popular votes to Mugabe’s ZANU-PF, which promptly made him prime minister in the newly founded Zimbabwe. He gradually built up his power structure and clientele such that by 1987 he was powerful enough to change the constitution to increase his power by merging the presidency with the premiership with him becoming the president. He also purged all remaining white parliamentarians, who were leading the formal opposition against his rule.

One might say that the dictatorial takeover of the first black leader in Zimbabwe and the lack of institutional constraints on Mugabe allowed his rule to last for so long and prevent his downfall. But surely no one would have cared if Mugabe was a good policymaker and decided to stay for so many years. Why would you overthrow a regime that ruled so well?

What immediately brought down Mugabe was his fateful decision to push out his vice president, Emmerson Mnangagwa, who had attempted to replace his boss as far back as 2005. What made Mnangagwa’s position so precarious was a feud with Mugabe’s wife Grace, who herself was jockeying for the top job upon her husband’s death. This feuding of wives reminds me of Jiang Qing, Mao Zedong’s scheming wife, who was aiming for political power, but was imprisoned after Mao’s death when she turned against his chosen successor Hua Guofeng.

Grace Mugabe then convinced her husband to sack Mnangagwa, who disappeared into exile in South Africa. But Mnangagwa had powerful allies in the military, chiefly Constantino Chiwenga, the chief of the Zimbabwe Defence Forces, which hated Grace Mugabe more than anyone else. The military then held Mugabe under house arrest, forcing him to resign, which Mugabe initially refused. Now the suppressed parliamentarians of his own ZANU-PF party rose up to pass a motion for impeachment, but before the vote was formally held, Mugabe tendered his resignation, which led to the installation of Mnangagwa as the new president. But Mnangagwa is also part of the ZANU-PF, and we can’t say much yet about how much he wants to change a political system that had brought much discontent to Zimbabwe.

Now to the question of what created the political discontent that led to the ouster of Mugabe as president. At the heart of it is economic mismanagement. Since the British formally colonized Rhodesia in 1890 under Cecil Rhodes (conveniently, the country was named after him), most of the valuable land was apportioned to the British and other white settlers. But while the white settlers were certainly keeping the spoils of wealth away from the black majority residents, who felt they should gain a fair share in what is after all their land, it was also the white settlers, who brought in the knowledge and cultural capital to use the land to the best advantage to produce cash crops like tobacco or sugar. Blacks were forced to live in so-called tribal areas, which happens to be the land that the white colonizers deemed unworthy for plant cultivation. The poor quality of tribal land soil and the associated overcrowding and lack of resources there forced many blacks to move to white settlements and work as their servants, reminding blacks of their inferior social status.

The political tensions resulted in strong yearnings for a black administration, because white rule will never result in a voluntary surrender of the control of the most important economic resource, i.e. land. Foreign and domestic pressure resulted in the end to white government in 1980, and Mugabe was supposed to fulfill the aspirations of the black majority for economic justice. But Mugabe was less inclined toward violence and more toward reconciliation upon becoming elected to the government. He realized that it made no sense to alienate the white landowners, as a mass exodus of whites would result in the economic destabilization of Zimbabwe.

In addition, there were external incentives for Mugabe to not expropriate white farm land, as the UK government in the Lancaster Agreement had agreed to grant full independence to Zimbabwe and help the gradual, voluntary transfer of land from whites to blacks using foreign aid and subsidies to the Zimbabwean state to ensure this transfer. But for the UK, the key was the voluntary consent, i.e. Zimbabwe could not simply expropriate white farmland.

But the exodus of whites started as far back as the early-1980s. The black population regarded the transfer process as being too slow (as white farmers were unwilling to give up their only property), and a bigger problem was the corruption that was endemic to this land transfer scheme. In other words, even if the state acquired land, it was preferably given to high-level generals, friends and family of Mugabe and other high officials.

Over the course of the 1990s, the perceived lack of progress had convinced the Mugabe administration that it became necessary to increasingly use force to transfer land to blacks, which forced whites to take up arms in their own defense and accelerated the white exodus to mostly western countries. In 1997, the new Labour government in the UK pointed to the violation of the spirit of the Lancaster House Agreement and suspended any more payments to the Zimbabwe government. Other donors in the World Bank and the IMF also reduced financial help, and all of a sudden Zimbabwe was driven to the wall.

While the economic situation was deteriorating, Mugabe still scraped together funds to engage in a war in the Congo Civil War, supporting president Kabila. When the soldiers returned as veterans their pensions contributed to another drain on the national budget. Mugabe also distracted the public from the economy by increasing attacks on the LGBT community, branding them as immoral elements to society. Despite these distractions, the constitutional referendum (another power increase for Mugabe) ended in defeat, and parliamentary elections in 2000 resulted in the loss of the two-third majority of Mugabe’s ZANU-PF.

For Mugabe, it was the straw that broke the camel’s back: instead of selectively expropriating white farmers, they now had to be systematically expropriated. From 2000 to 2013, all of the remaining white-owned farmland had been expropriated, providing over 230,000 Zimbabwean households with access to land. The mechanism through which the expropriation campaign was conducted was extreme: mostly young people were instructed to march on white-owned farmlands, initially with drums, song and dance, but then also with guns and bare hands. They drove out the white owners and their black workers, who then faced unemployment.

The expropriation campaign proved to be an economic disaster, as economic production declined substantially. The former bread basket of southern Africa turned into a malnourished country, where 45% of the population lacks sufficient food. Agricultural exports used to provide revenues, which now vanished. Western sanctions exacerbated the financial and economic situation. Life expectancy dropped and the unemployment rate hit 95%. One-fourth of the population escaped via emigration. What went wrong? Firstly, the new black landowners lacked the know-how of running these enterprises and equipment. Second, they lacked access to capital, because the banks did not consider the land as theirs, which prevented the farmers from using the land as collateral. The third problem was the already mentioned corruption. By grabbing all the land held by the whites, 4.8% of the land went to well–connected businesspeople, 3.7% to military and security service personnel and 5% to other well-connected officials of ZANU-PF (probably an underestimate).

With the economy collapsing, Zimbabwe continued to have to pay veterans pensions if it did not want to risk an uprising, so the central bank resorted to money-printing to pay the government’s bills, which resulted in hyperinflation. Soon, people had to push wheelbarrows of cash to acquire basic necessities like bread. Investments diminished to negligible amounts and household savings were essentially eliminated. In 2009, the government, now in a power-sharing agreement with opposition leader Tsvangirai, finally abandoned its currency and took on the US dollar as official currency. There was, ultimately, some economic recovery, because China became a major buyer of Zimbabwe’s goods. Zimbabwe also had their international credit lines opened when they signed away mineral rights to foreign corporations (platinum, coal, iron ore, gold. diamonds).

The temporary economic stabilization via dollarization came to an end as the 2013 elections returned the ZANU-PF with a landslide victory (with vote rigging as part of the opposition’s accusation). Mugabe promptly increased the size of his civil service and pushed for the further indigenization of the economy, by requiring non-black owned enterprises to be handed over to blacks. In 2016, resource constraints resulted in the laying off of 25,000 civil servants, and pleas to international donors like the IMF and the World Bank to re-open their credit lines. Besides bad political institutions, droughts as a result of climate change have become more severe, thus putting even more stress on a weakened agricultural system. Health indicators like life expectancy, cholera cases and HIV show signs of deterioration and the mass unemployment problem has not really been resolved.

In conclusion, Robert Mugabe’s economic policy, which is built on racial resentment, corruption and incompetence, proved to be so catastrophic that his rule was no longer tolerable, even for the ruling class itself. There was no mass uprising to remove Mugabe, with the proximate cause being the ouster of his vice president Emmerson Mnangagwa, but it is really quite astounding how he could remain in power for so long.

 

Further readings:

https://en.wikipedia.org/wiki/Robert_Mugabe

https://en.wikipedia.org/wiki/Zimbabwe

https://en.wikipedia.org/wiki/Economy_of_Zimbabwe

https://en.wikipedia.org/wiki/Economic_history_of_Zimbabwe

https://en.wikipedia.org/wiki/Land_reform_in_Zimbabwe

https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe

https://www.economist.com/blogs/economist-explains/2017/02/economist-explains-20

http://www.huffingtonpost.co.za/2017/11/21/this-is-how-mugabe-broke-zimbabwes-economy_a_23284108/

http://www.jstor.org/stable/20049887

http://www.jstor.org/stable/161691?seq=1#page_scan_tab_contents

https://www.chathamhouse.org/sites/files/chathamhouse/publications/research/2016-09-08-zimbabwe-economic-reform-re-engagement-chitiyo-vines-vandome-final.pdf

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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

Carney, Jordain. “CBO: Senate Tax Bill Increases Deficit by $1.4 Trillion.” Text. TheHill, December 2, 2017. http://thehill.com/blogs/floor-action/senate/362905-cbo-senate-tax-bill-increases-deficit-by-14-trillion.

Case, Anne, and Angus Deaton. “Mortality and morbidity in the 21st century.” Brookings Institute, 2017. https://www.brookings.edu/wp-content/uploads/2017/03/6_casedeaton.pdf

CHAOS-Youtube. Exchange between Bernie Sanders, Marco Rubio & Pat Toomey #GOPTaxPlan. Accessed December 7, 2017. https://www.youtube.com/watch?v=zhvuWGBrlSg.

Collins, Randall. “The Sociological Eye: TRUMP AND THE SOPRANOS.” The Sociological Eye (blog), December 1, 2016. http://sociological-eye.blogspot.com/2016/12/trump-and-sopranos.html.

Domhoff, G. William. “Who Rules America: The Class-Domination Theory of Power,” 1967. http://www2.ucsc.edu/whorulesamerica/power/class_domination.html.

Droit, R.P., and T. Ferenczi. “The Left Hand and the Right Hand of the State.” Variant issue 32, 1992. http://www.variant.org.uk/32texts/bourdieu32.html.

Flaherty, Colleen. “Graduate Student Union Bids at Private Institutions Have Succeeded, Flopped and Been Challenged since a Major NLRB Decision.” Inside Higher Ed, 2017. https://www.insidehighered.com/news/2017/05/04/graduate-student-union-bids-private-institutions-have-succeeded-flopped-and-been.

Frank, Thomas. What’s the Matter with Kansas?: How Conservatives Won the Heart of America. Henry Holt and Company, 2007.

Fung, Brian. “The FCC’s Net Neutrality Plan May Have Even Bigger Ramifications in Light of This Obscure Court Case.” Washington Post, December 6, 2017, sec. The Switch. https://www.washingtonpost.com/news/the-switch/wp/2017/12/06/the-fccs-net-neutrality-plan-may-have-even-bigger-ramifications-in-light-of-this-obscure-court-case/.

Hiltzik, Michael. “Sen. Rubio Tells a Secret: After Giving a Tax Cut to the Rich, GOP Will Cut Social Security and Medicare.” Los Angeles Times, November 30, 2017. http://www.latimes.com/business/hiltzik/la-fi-hiltzik-gop-social-security-20171130-story.html.

Jones, Robert P. “Southern Evangelicals: Dwindling—and Taking the GOP Edge With Them.” The Atlantic, October 17, 2014. https://www.theatlantic.com/politics/archive/2014/10/the-shriking-evangelical-voter-pool/381560/.

Lazonick, William. “Profits Without Prosperity.” Harvard Business Review, September 1, 2014. https://hbr.org/2014/09/profits-without-prosperity.

Long, Heather. “The Senate Just Passed a Massive Tax Bill. Here’s What Is in It.” Washington Post, November 30, 2017, sec. Wonkblog  Analysis    Analysis Interpretation of the news based on evidence, including data, as well as anticipating how events might unfold based on past events. https://www.washingtonpost.com/news/wonk/wp/2017/11/30/what-is-in-the-senates-massive-tax-bill-and-what-could-change/.

McKenna, Megan L., Shannon McAtee, Patricia E. Bryan, Rebecca Jeun, Tabitha Ward, Jacob Kraus, Maria E. Bottazzi, Peter J. Hotez, Catherine C. Flowers, and Rojelio Mejia. “Human Intestinal Parasite Burden and Poor Sanitation in Rural Alabama.” The American Journal of Tropical Medicine and Hygiene 97, no. 5 (November 8, 2017): 1623–28. https://doi.org/10.4269/ajtmh.17-0396.

Meltzer, Allan H., and Scott F. Richard. “A Rational Theory of the Size of Government.” Journal of Political Economy 89, no. 5 (October 1, 1981): 914–27. https://doi.org/10.1086/261013.

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O’Connor, James. The Fiscal Crisis of the State. New Brunswick, N.J: Routledge, 2001.

Pettit, Becky, and Bruce Western. “Mass Imprisonment and the Life Course: Race and Class Inequality in U.S. Incarceration.” American Sociological Review 69, no. 2 (April 1, 2004): 151–69. https://doi.org/10.1177/000312240406900201.

Rudd, Rose A. “Increases in Drug and Opioid-Involved Overdose Deaths — United States, 2010–2015.” MMWR. Morbidity and Mortality Weekly Report 65 (2016). https://doi.org/10.15585/mmwr.mm655051e1.

Sanders, Bernie. Our Revolution: A Future to Believe In. Macmillan, 2016.

———. “What Do the Koch Brothers Want?” Sen. Bernie Sanders, n.d. https://www.sanders.senate.gov/koch-brothers.

Scheidel, Walter. The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century. Princeton, New Jersey: Princeton University Press, 2017.

Scott, Dylan. “House Republican: My Donors Told Me to Pass the Tax Bill “or Don’t Ever Call Me Again”.” Vox, November 7, 2017. https://www.vox.com/policy-and-politics/2017/11/7/16618038/house-republicans-tax-bill-donors-chris-collins.

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Swanson, Ian. “Senate Confirms Second Trump Nominee to Labor Board.” Text. TheHill, September 25, 2017. http://thehill.com/regulation/administration/352345-senate-confirms-second-trump-nominee-to-labor-board.

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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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