The Discontents of Human Existence

Happiness is apparently not a natural human category (Euba 2019). In other words, we can’t experience happiness for long and it is fragile and fleeting. The reason is that if we were too happy, it would lower our guard and threaten our survival. To understand this intuition it is important to go back to our ancestral origins, the hunters and gatherers in their tribes. Even killing an animal and cooking it on open fire creates only a temporary burst of happiness, which climaxes when it enters the body through eating. But then the day is over and the next day, the food may already be digested. You are hungry again, and you and your tribal members are contemplating the next source of proteins.

Another one of our natural activities is sexual intercourse, which evolution made pleasurable on purpose to ensure that we reproduce. If it were painful, then we would likely not even exist beyond one generation. Sexual activity is of limited duration and ends in the climax or orgasm after 5 to 7 minutes of thrusting on average. By stopping temporarily or slowing down body movements, the length of time until orgasm can be prolonged. Generally female orgasms take longer to build up, which makes sense, because it is the male orgasm that is the basis of reproduction, although pregnancy is favored if the woman orgasms as well. But even the intense physical moment of happiness is circumscribed to a short duration, because if it were an hourlong extended and complicated ceremony it would similarly reduce chances for producing offspring. If we go back to the hunter-gathering world, where there were no comfortable private apartments and no strong protections against wild bears or other animals, it also made sense to shorten the mating phase.

Dopamine, endorphin and oxytocin are our happiness hormones, but despite greater material riches we do not have higher hormone levels and are no happier than our more primitive ancestors, as Yuval Noah Harari (2014, ch.19) pointed out. We could even argue that people in modernity are less happy because greater wealth has produced more independence and individualism, even as much of human history was lived in tribes with community, spirituality and solidarity (where suicide was rare as Emile Durkheim noted). In my own family, I am always astounded how tightly-knit the network feels like when my parents meet an Indian-Chinese and they reminisce about the past. There used to be over 50,000 Chinese in Calcutta, and being such a visible minority fostered enormous community bonds that are lost among those who migrated on to western countries, where corporate jobs, long work hours and living in suburban houses physically separate and individualize people.

The consumer capitalist economy is further promoting the latest consumptive crave that will supposedly bring happiness to our shores when it really creates only more distraction. For Rutger Bregman, consumerism is about buying things we don’t need to impress people we don’t like. If we look at basic indicators of social progress, there is no doubt that today is the best time to be around. Medicine continues to make progress; life expectancy is increasing (at least for people who are not down and out like in the American countryside); the length of education increases; permanent internet connectivity means we have full access to the world’s knowledge at our fingertips. Surely there are downsides to the present. Climate change is starting to bite just about now, but for those not living on exposed Pacific islands or flooded coastal regions, life is still okay- for now.

In the long term, climate change is making life unsustainable, and Greta Thunberg’s Friday for Future campaign, where students are taking off their Fridays from school work to demonstrate for action on climate change, is the least that we need to create the awareness and galvanization for social action. The only generation that can enjoy great material comfort in a still habitable planet are perhaps the generations that are currently alive and not yet destroyed by climate change.

But even in a society of technical abundance, there is much that is going wrong as people on the left like Bernie Sanders or Andrew Yang point out. There is a lot of economic injustice, because in the world of automation and monopoly capitalism there are many people who don’t benefit from the bounties of modernity. Millions of Central Americans are stranded on their way to the US, the so-called promised land, even as the US cruelly shuts its borders. The same thing is occurring among Middle Easterners and Africans eager to escape to Europe. A few people own as much wealth as half of humanity. It is this social struggle for what one might call social justice, socialism and egalitarianism that gives some of us the purpose to wake up in the morning. If we fixed slavery, we have to fix race discrimination. Then we have to fix sex discrimination. Then we have to fix capitalism. And once that is fixed, believe me, we’ll find something new to agitate for or against.

But for the purposes of this post, let us set aside for a moment these real distributional struggles at the root of contemporary capitalism and let us imagine the Star Trek future in the present. In the Star Trek world, all material struggles are solved. No one needs to work, because the robots and machines do all of the valuable tasks, and humanity gets to have a permanent early retirement. We can endlessly go to the holodeck, a device where we can enter into a virtual reality world of boundless adventures and experiences like going skiing, fishing, surfing, boxing or any activity the mind is craving for.

Assuming a Star Trek world, would humanity be at peace? If we accept Harari’s line the answer is most likely not. It has to do with how the human mind works, which is captured in the negativity bias and the Hedonic treadmill. In the negativity bias, we are more shocked about material or social losses than we are happy about a gain. So the loss of a job, house or stock value will be very traumatizing and motivate us to prevent such a failure or mistake again, but gaining a new job, winning the lottery or eating good food quickly normalizes and does not contain a long-term boost in our mental well-being.

In the Hedonic treadmill this normalization causes us to want and desire more things. So in effect, capitalism is about exploiting our permanent insecurity and discontent with the status quo. This is certainly the basis for social progress. Just to take a trivial example, Steven Pruitt is a civil servant for the government, but in his off-time he edits tons of Wikipedia articles, making him one of the most influential people on the internet (albeit in the background). The journalist that interviewed Pruitt asked him how he celebrates his accomplishment. “Write another article. Edit another article.” (See Youtube). There is no end to it. As long as he is alive, he will edit Wikipedia articles, and be our secret unsung hero for making knowledge available so widely. Clearly, not all aspects of the Hedonic treadmill lead to more progress, because the pursuit of financial profit and the correspondingly high opportunity cost of leisure (and associated benefits like spending quality time with friends and family, art, music, sports, literature etc.) impoverishes us spiritually and emotionally even as we can afford more and more gadgets and vacations.

In the world of Star Trek, pure enjoyment would have been a poor guide for viewer entertainment. Trashy TV shows like The Real Housewives, where unemployed women who have married rich men play out their intrigues and ostentatiously display their leisure, certainly fill the screens nowadays, but I would consider that to be more of a fringe genre enjoyed by a small number of people. Star Trek, in contrast, has a broader base of followers, because the plot is more imaginative and the main characters are still striving for something. In a world where food and water or even health can be received with a simple voice command, it is not food, water or health that is the objective of the TV series (for the dog-eat-dog genre Hunger Games is a better bet), but the adventures and conquests of the crew, which involves conflicts with the Borg, Q, the Ferengi, Romulans, Klingons, Cardassians. Here we are in the world of material abundance where humans could just take it easy, but no, the excitement of life comes from the struggle, the war, the conflict, the intrigue, the backstabbing, the insinuation, the conquest, the victory followed by new conquests.

The ancient human struggle was related to survival and that consists primarily of acquiring or growing food and fighting wars with neighboring tribes and later states. Capitalism created material abundance and discouraged wars among the big and powerful states, because merchants and industrial capitalists need peace to grow their industries. (Financiers like the Rothschild’s, however, seem to thrive more during wars, although they do quite well in any period, wherever they can sell their loans.) For Albert Hirschman (1977), capitalism neutered human passions for war and destruction and channeled it into production and acquisition of material goods, which is a “harmless” one-dimensional passion. We might quibble about the “harmless” adjective given the environmental unsustainability of capitalism, but he has a valid point about pacifying society from tribal warfare. This could be reversed with the resurgence of nationalism, which suggests that capitalism tempers the human warrior spirit but does not kill it (and as in the Second World War might profit from wars).

It is the permanent discontent that is part of human existence which forms a powerful counter-argument against the fully automated luxury communism depicted in Star Trek, and not material-technical barriers that neoliberals try to convince us of (they would argue that we have substantial labor shortages in the present economy and that an elimination of profit and a social well-being oriented economic system would result in a breakdown of the economy). So if we are bound to be unhappy, is it better that most of us shall remain slaves, i.e. wage slaves or capitalist slaves (because even the capitalists are trapped in the game of having to produce profits or they forfeit their position as capitalist and are replaced by other capitalists)? Because at least slaves are too bogged down in the struggle for survival, beating out competitors for contracts or jobs or good housing for good schools for one’s kids, that they have no time to contemplate even greater or newer forms of discontent.

Jean-Jacques Rousseau was a cogent opponent of civil society, which is the foundation of private property and the starting point for the commodification of more aspects of life and inequality in society. For him, the savages were indeed noble. But I would argue that the genie of modernity is out of the bottle. Perhaps Albert Einstein’s horror vision of a massive nuclear world war or crop- and civilization-destroying climate change will some day hurl us back to a more “innocent” Rousseauian world. But if we resist this pessimistic vision, we truly have to question whether it makes sense to become self-sufficient farmers or hunters again. We may still have the bodies of hunters given the inherent unhappiness and alienation of modern office workers (I am one of them!) no matter how comfortable the air conditioning feels. I still prefer the alienation of modern city life in exchange for the comforts of civilization. I argue what needs to be done is not a scaling back of civilizational and technological advances, but a more realistic readjustment of human priorities. In other words, let’s create a Star Trek world and then deal with meaning and contentment at the back end.

The quest for meaning and satisfaction has never been easy, but that is what religion and philosophy is all about, which is basically about the ideas that make life interesting and meaningful. In Harari’s (2011: 437) words, “A meaningful life can be extremely satisfying even in the midst of hardship, whereas a meaningless life is a terrible ordeal no matter how comfortable it is.” In Christianity (and to some extent in Judaism and Islam), the goal is to trust in a god, and even more importantly do that in a context of a coherent community with common rituals like prayers and religious service.

While community is important not all people have such an easy time believing in the religious myth, so another approach is formulated by Buddhists, who argue that human unhappiness comes from the pursuit of temporary states of excitement, which returns us to the Hedonic treadmill and consumerism. For Buddhists, the solution is the renunciation of this desire for temporary excitement. By purging increased material or spiritual demands, one is less likely to feel discontent. If you are not looking for anything you won’t miss anything. Despite renting only a tiny, unclean yet highly affordable room, I am grateful every day to return to this abode compared to the hundreds of thousands of homeless people who sleep out on the streets. If I had the desire to live in a cleaner or bigger space, I would feel restless and discontent rather than enjoy the blessings of the present moment.

The ancient Greeks essentially formulated the same idea. Aristotle prized the attainment of eudaimonia, which is often translated as happiness, although human flourishing is probably a less misleading translation, because we associate the short-term excitement and emotional arousal as being happy. Who has eudaimonia? The person, who knows what virtue is and can live by it. Virtue is about the practical judgment of doing what is right. Most people in Western civilization raised in the notion of original sin will believe that most people start off as evil (similar to Xunzi and the Legalists in China), but it is also true that most people have some sense of morality, and have to think long and hard before they do something immoral like killing or hurting others. The Stoics also believe in virtue, and insist that we must be indifferent to pain and sorrow, arguing that the human condition consists of pain and sorrow. The Epicureans argued that the goal in life must be the pursuit of pleasure and the avoidance of pain, although they are not concerned about extreme pleasures but in moderation, knowing that extended periods of happiness is not a humanly attainable category. The Epicureans insist on not fearing death or gods.

It is true that long-term happiness is not a humanly possible thing. Any material and emotional bumps (like a pay raise or the start of a romantic relationship) flatten out pretty quickly, while devastating shocks (like disease, death in the family, loss of job etc.) are always lurking in the corner. For any social planners seeking to maximize the “pursuit of happiness” (as stated in the US declaration of independence), there is no feasible technocratic fix that is materialist. Once we have reached a world with a universal basic income and greater economic security, we will either have to strive for new endeavors like Star Trek space exploration, attempting to shatter new heights in our pursuit of Hedonic pleasure and accomplishment (the preferred route of politically conservative people), and/or we have to radically change our values and become committed quasi-Buddhists/ quasi-Epicureans/ quasi-Stoics, in which we renounce extreme pleasures and endure the vicissitudes of life (preferred by more utopian/ idealist individuals).

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The Hong Kong Impasse

Podcast available here

Why have the Hong Kong people been protesting continuously on the streets, challenging the local government and recently even stormed the parliament building? The HK government had tabled a bill, which would permit extradition into other jurisdictions. The people feared that it was designed to silence human rights activists and independent civil society activists in Hong Kong, because they could now be extradited to the Mainland, which does not care for civil liberties at all. The HK government did not use this justification for the passage of the bill. They cited a recent case of a HK couple that lived in Taiwan, where the husband had killed the wife in Taiwan, then returned to HK and there was no formal extradition treaty with Taiwan. The Taiwanese authorities do not even demand that this HK man should be extradited, not because they do not want to punish him, but because Taiwan does not want HK to pass that law, because it is aimed at pleasing the Mainland, which does not want any restrictions on whom they want to silence in HK. Taiwan supports the pro-democracy movement in HK, knowing that their defeat could imperil Taiwan in Beijing’s quest for reunification.

Presently, HK people are not even safe from extradition to the Mainland, although it happens with clandestine means. A few years ago, a book salesman, who sold Beiijing-critical political gossip, was abducted and transferred to the Mainland where he faced a show trial and had to admit to wrongdoing in front of the camera. Upon release, he returned to HK and denied anything he said in the forced confession.

The HK protests have a precedent with the 2014 umbrella movement, which occurred after rule changes in the appointment of the HK executive (or prime minister/ mayor). The Election Committee (where one-quarter of the electors are in the pro-democracy camp and the remainder in the pro-Beijing or big business camp) should vote for two or three candidates that are voted on by the people, and Beijing then approves or disapproves that candidate. The current HK executive Cary Lam has been in office since 2017, and has been the hand-picked pro-Beijing leader. Ironically, the current crop of HK protesters demand that Cary Lam steps down, even though they were successful in pressuring her to shelve the extradition bill, although it has not been completely withdrawn. The protests had begun in March 31 and increased in intensity, reaching 550,000 participants by July 1. There were violent clashes between the police and the protesters. By June 15, Lam capitulated and shelved the bill. On July 9, she declared the bill “dead”. Lam’s concession did not really please the crowd, because she only shelved the bill without withdrawing it, which creates the justifiable fear that the bill will return once the protests disperse. Second, the protesters are licking blood, and they now demanded Lam’s removal from office.

Beijing is keen to avoid a leadership change, fearing the headache of fresh protests. The CCP is a central party organization. Given that there is no democracy on the Mainland (with the exception of some local elections), the CCP controls the appointment of provincial and regional governors. It does not have to deal with term limits, and governors are only removed when they do things wrong from the perspective of the party or when they are promoted or pushed into retirement. Challenging Lam is a direct challenge to the CCP. The CCP was okay with Lam’s concessionary strategy on the bill, but they do not want to see more concessions including her resignation. In the struggle between the HK people and the HK government, it is not the application of violence which decides the outcome. The HK police has been quite brutal, yet the protesters are still on the street. Some protesters have stormed and vandalized the parliament building, yet the HK government and institutions still stand. The outcome is decided by collective psychology. What is the prevalent emotion that defines the situation?

The collective sentiment is currently favoring the protesters because the HK government withdrew the bill, which is different from the 2014 protests when the authoritarian reforms succeeded and the umbrella movement had to disband. Even the handful of Beijing-critical MPs that were elected in the following parliamentary elections were barred from taking their seats, because the authorities alleged that they “did not properly take the oath of office”. For Beijing, the 2014 protest was still problematic, because it created a collective consciousness that is posing a direct challenge to the communist regime. The 2019 HK protesters have drawn from some of these collective mental resources built up five years ago.

Before speculating on where the current protests are headed it might be useful to understand HK’s history, which diverged from the Mainland for about 150 years. HK was a sleepy fishertown. The Qing emperors banned maritime trade and resettled the coastal people inland, which was lifted by the Kangxi Emperor in 1684. In the eighteenth century, China increasingly traded with the West, selling them tea, silk and porcelain, but China was not interested in anything but silver from the West. That was infuriating to the West, especially the British that had a lack of silver supplies. To balance trade flows, the British exported opium to China, making many Chinese drug addicts. The Qing emperor finally prohibited the import of opium, which resulted in the First Opium War, and the Chinese military was hopelessly inferior to the British. The British took Hong Kong Island as colony in the Convention of Chuenpi and the 1842 Treaty of Nanjing. In the Second Opium War, China also ceded Kowloon Peninsula and Stonecutters Island to the UK. In 1898 they took a 99-year lease of the New Territories, which expired in 1997. In 1984, the UK and China agreed that HK will be returned to China in 1997.

The British thought that HK was a useful and important colony which gave them an important foothold in Asia. They built an airport, a university and various infrastructure. A subway and public houses were built in the post-1945 period. HK has been poor, but benefited from merchant immigrants that came after the Taiping rebellion, during and after the Chinese Civil War. The Shanghai bankers moved to HK in the 1930s and 1940s, which transformed the city into an important financial hub. Skilled migration from the Mainland was the basis for rapid economic development and made HK a member of the Four Asian Tigers, including South Korea, Taiwan and Singapore.

The transfer of sovereignty to the People’s Republic of China was an important historical change. Firstly, many HK people either fearful or resentful of the CCP applied for foreign visas, seeking to escape the claws of CCP rule. Half a million HK people left the city from 1987 to 1996. Secondly, the waning British rulers, who maintained an authoritarian regime throughout their rule, brought forward democratic reforms in the 1990s. In part, HK was responding to the democratization movements in South Korea and Taiwan, which HK leaders sought to emulate. Furthermore, the 1989 Tiananmen crackdown created strong public demands for democratic elections, which promptly occurred in 1991. In 1992, the new and last governor Chris Patten unilaterally democratized HK by allowing half of the legislative seats to be assigned by democratic elections, which angered Beijing. The Patten administration also legislated labor rights and collective bargaining, which was previously unacceptable. The British clearly played a political game. Now that they could no longer rule, the British insisted on democracy, creating a big headache for the authoritarian rulers in Beijing.

After the transfer of sovereignty the first post-unification legislative elections reserved only 20 out of 60 seats to democratic elections. The pro-democracy party received two-thirds of the votes and one-third of the seats, while for the pro-Beijing camp the proportions were reversed. Beijing clearly had no interest in full democratization, even though they initially accepted the proposal to fully democratize HK by 2012. Their actions spoke a different language. A proposed 2003 HK law prohibited “treasonous, secessionist, subversive” activities against the central government, which sparked a large protest and prevented its passage. Parliamentary deliberation on a referendum on full democratization, i.e. free legislative elections, were scuppered by the pro-Beijing parliamentary majority. Despite major protests in 2014, the 2016 appointment of Carrie Lam as chief executive and the exclusion of MP candidates, who were too critical of Beijing, revealed the sham of the democratic process in HK.

Given HK’s peculiar history, where the British did not bother with relenting to democratic reforms until the early-1990s, it is unlikely that HK has a chance of democratizing. Another problem for HK is that since the early-1990s, its economic growth has been less than in the much poorer People’s Republic. The rising fortune of the Mainland means that the Mainland cared less and less about pleasing the views of the HK people. HK certainly matters as a financial hub, as foreign capital is primarily funneled to the Mainland via HK. But at this point, HK is just one of the economically prosperous areas of the Mainland.

Furthermore, while the relatively weak predecessors Jiang Zemin and Hu Jintao could tolerate and manage the pro-democracy movement in HK, there were no such pretensions by the all-powerful Xi Jinping. Xi’s ascendancy to power meant that China had to take on the mantle of an aspiring superpower challenging the hegemony of the US. This means a more assertive foreign and economic policy centered on controlling islands, the creation of multilateral organizations headed by China, and the investment strategy titled Belt and Road initiative. With regard to domestic policy, it meant that any internal dissent needs to be crushed, which one can see with the imprisonment and brainwashing of hundreds of thousands of Uyghur Muslims, the crackdown and imprisonment of human rights activists and civil society organizers, and, of course, the quashing of the pro-democracy movement in HK.

But the latter is also the most complicated part for Beijing to handle at the moment. If the HK protesters refuse to disperse, it could affect domestic tranquility on the Mainland despite the heavy internet and news censorship there. Mainlanders do not generally know much or care much about the HK protests, and if they hear about it from the official media it tends to be quite negative on the protesters, e.g. that they are thugs funded and supported by foreign forces. On the other hand, if the protests persist, then some Mainlanders may question their own leadership. The sentiment of the Mainland is uncertain, not only because of the censorship but also because the government-controlled media attack the protesters. The British flag that was planted inside the parliamentary chamber when some protesters broke in could be used to condemn the protesters for being unpatriotic, which can galvanize the Mainlanders against the HK protesters.

The central government can clearly not afford for the HK residents to continue protesting as economic growth is declining inside the Mainland, precipitating more social discontent. The central government had entered a Faustian bargain with its people, promising economic prosperity in exchange for popular acceptance of authoritarian rule. Modernization scholars who think that capitalism will result in a strong middle class and demands for democracy has so far been proven mistaken in the context of China, which never had democracy, but had continuous central administration for thousands of years. It is not surprising that the Chinese government is now singing the virtue of Confucianism, because of the eminently conservative and anti-democratic assumptions embedded in it. The bargain could weaken if economic growth is declining, which it must. The Chinese government addressed the global recession of 2008 with very aggressive stimulus, creating new infrastructure like high-speed rail. There also is evidence for a rebalancing of the economy in favor of domestic consumption, but it could be insufficient given the decline of economic growth. Furthermore, industrial automation is beginning to reduce jobs, and Chinese industrial workers are disproportionately affected given that the industrial workforce is quite substantial. Unemployment can be kept low by shifting these industrial workers into the service sector, but the same logic of low wages and insecure contracts due to weak bargaining power could result in more inequality and thus more potential for social discontent.

Economic plight is quite substantial among the ordinary residents of HK as well, because the political economy tends to favor the financiers and real estate bosses, who control the political process. The pain among the population is felt by stagnant wages and high inequality. The bottom decile earns 0.7% of the wages while the top decile earned 41% (Census and Statistics Department 2016: 86). The median wage is HK$14,800 a month. Restaurant workers earn HK$10,500 and retail workers HK$11,500 a month. The lowest paid are the domestic workers, who earn HK$4,110. Median wages for workers with a tertiary education is substantially higher, which is HK$23,500 a month (SCMP 2015). The biggest headache is the lack of affordable housing, which is exacerbated by the incoming Mainland population, mostly upper middle class and rich people, who can afford a second home or rental properties in HK. There is a daily cap of 150 on HK residency permits given to Mainlanders, but that still creates housing pressure. A lot of HK land is underdeveloped and could be converted into residential space, but the real estate tycoons have no interest in developing too much land, because housing scarcity drives up property values and, therefore, the rents. Student-led pro-democracy mobilization does not only come from their pro-democratic education and dislike of Beijing’s heavy-handed authoritarian rule, but also because the unsustainable cost of housing locks them out of a middle class lifestyle. Perhaps by receiving more political autonomy or even independence, Mainland immigration can be curbed and political power can be wrested from real estate tycoons. Or that might be the hope of the pro-democracy faction.

So what tools does Beijing have to disperse the crowds? It could implement a Tiananmen-style crackdown. The military is already stationed in HK and could be called out of the barracks. In fact, the People’s Liberation Army has taken up increasingly more space to do naval exercises out of Victoria Harbor, perhaps to intimidate the HK protesters. But HK is not Beijing or any other Mainland city for that matter. An important pillar of state legitimacy is that authority does not use excessive force and that is especially true for HK, which still holds onto the Sino-British agreement to preserve one country-two systems until 2047. The best bet for Beijing is to let the HK authorities and police handle the protests, but if the PLA steps in it could immediately undermine Beijing’s legitimacy and bring even more protesters on the street. Any military victory produced by a gruesome bloodbath will be a Pyrrhic victory. Thus, the second approach is to take a wait-and-see approach. If the HK government withdraws the extradition bill and makes no further legal changes to the status quo, the protesters will tire out and disperse on their own. That will be the most pragmatic route to take. The HK government is hoping that the wait-and-see approach will work too. There is no choice. Cary Lam noted her frustration that she could not negotiate with any of the HK protesters because there is no central leadership. You can negotiate with individual leaders, but not with a mass of people. But that makes sense in an authoritarian context, where the rulers will imprison any charismatic leader. Decentralized organization (primarily via text messages and social media chat groups) is a necessity for the protesters to survive and prevent targeted imprisonment, although it will make it unclear what these protesters stand for and when their demands are met.

From the perspective of the HK protesters, while the public sentiment favors their stance, it is difficult to maintain momentum over long periods of time. The public while generally sympathetic to the protesters become weary of protests. The protesters themselves want to go home and rest. The HK protesters are waging a defensive battle, where Beijing can bide its time while further eroding any remnants of political or civic liberties. On the other hand, any thoughts about dispersing and pacifying the HK people for good also need to be discarded. As such global observers will continue to hear about unrest in HK.

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Three-and-a-half Job Dystopias and No-Job Utopia

Podcast available here

The goal of the future is full unemployment, so we can play. That’s why we have to destroy the present politico-economic system.Arthur C. Clarke

As I see it, there are three and a half forms of job dystopias that exist and continue to make lives miserable for most people in contemporary capitalist society. (1) No job dystopia. (2) Low wage/ poor working conditions/ precarious job dystopia. (3) Bullshit job dystopia and (3.5) full employment dystopia. The last point might sound like it is good and, indeed, it would be a Pareto improvement to the status quo (i.e. better than status quo), but it would not be the best and most ideal solution given the capacity of current technological progress. I regard the latter as a half-dystopia. I argue that the goal in society must be to realize a full unemployment/ no-job utopia.

No Job Dystopia

The first scenario is most clearly enunciated by people like Frey and Osborne in their study proclaiming that 47% of jobs could be automated. Arntz and co-authors think that much fewer jobs are endangered, i.e. in the 10% range. Andrew Yang’s presidential campaign is about the universal basic income, the freedom dividend, based on what he sees as the impending doom of mass unemployment because of self-driving trucks, delivery drones, automated call centers, automated food preparation and service, automated accounting, legal work, medical diagnostics and on and on throughout the economy. So far the robots have not taken most jobs, and we have created many more especially in the caring parts of the service economy. Home health aides, teaching aides, social workers, nurses, security guards as well as the big category of administrative/ managerial services are picking up the slack. I have more to say on the latter category a little later. No social scientist or market analyst can genuinely predict whether “this time is different”, i.e. the mass displacement of jobs is imminent and we won’t have enough work for people to do. But if that time comes we have to think really hard about how to provision people with the income they need to survive. The fact that this is not already happening is reflected in the increased suicide and depression in the countryside, when the manufacturing jobs left and new jobs of similar quality were no longer available. The automation wave has been real, and there are many losers.

Low-wage/precarious job dystopia

The second scenario partly accounts for the not yet fully devastating mass unemployment, which is about what David Weil called the “fissuring of the workplace”, i.e. the increased reliance on contractors and subcontractors to do tasks, which were once considered core business operation. The fissuring results in low wages, poor working conditions and create temporary, precarious jobs without tenure or security. Any McDonalds worker is aware that even though they work for a franchise, the specific rules about what and how to sell burgers is determined by corporate headquarters. The onset of algorithmic platforms like Uber, Upwork or Mechanical Turk have opened up an online marketplace, where independent contractors do work, often for minimal levels of compensation and no job security. If things go wrong, like the car breaks down or internet does not work temporarily the loss of income and reputation is exclusively for the contractors, i.e. providers of the service, not for the rich and powerful platforms. Loss of reputation could bar the contractor from the platform and exclude them from any potential revenue from that platform. The risk to the platform is minimal, because there is usually only one or two platforms for a service (the others get bought up by a Silicon Valley behemoth), and there are millions of contractors competing for contracts. Given that automation in other parts of the economy is continuing apace, there seems to be no labor shortage ahead.

Furthermore, companies seem to be engaged in what Janet Vertesi considers “pre-automation”, or outsourcing tasks while training algorithms and machines to automate the task at a later stage. The fact that automation turns out to be a moving target is the entire business model of the Amazon empire. Starting out in 1994 as a “basement bookstore” online, Jeff Bezos gradually built a giant business empire, recognizing that Americans would become more and more willing to prefer the convenience and low prices of online retail to the traditional brick-and-mortar retail. The Amazon workforce has been substantially growing as online retail has increased, but their hiring policy is not compensating for the hemmorhaging of jobs in the retail sector that began to be felt around 2017. Furthermore, ever since the acquisition of the Kiva robots in 2012 to move shelves in warehouses, it is pretty clear that Amazon cares about automating its logistics chain. The next step is to hire assistants, who use a joystick in front of a computer screen to train the algorithm robot arms how to pick up and package items, one of the remaining tasks in the warehouse. Amazon is also aggressively attempting to cut costs in the delivery business.

Upset about the rising cost of delivery with the postal service (and UPS and FedEx), who- God forbid- have a union, a stable employment contract and health and pension benefits, Amazon is moving the delivery business in-house. The bulk of in-house delivery drivers are private individuals on Amazon Flex, which is like the Uber for packages. Flex drivers wait for an order to open up, and then bid for a delivery contract by thumbing their smartphone screens wildly. When their contract is accepted, they drive to the warehouse, where they queue up with other contractors. They collect the dozens of parcels along a delivery route and drive to the neighborhood, constantly getting in and out of the car, go to the trunk, flick through the many packages, find it, scan it, deliver the package and onward to the next package. All of the risks are loaded on the drivers, who are compensated a piece rate, which means that a car breakdown in the middle of the delivery can result in a negative rating and loss of potential income.

My bet is that Bezos is already anticipating the discontent of delivery drivers, who might get the idea to use apps and online forums to vent their grievances and potentially sign union cards. To pre-empt any such collective organization (which in the standard Marxian framework should naturally follow from extremely exploitative work conditions), Amazon is aggressively testing drone and self-driving vehicle deliveries, producing impressive videos for investors and technology nerds to show that this is well underway. Whether pre-automation becomes full automation is again an empirical question, but the threat clearly exists in a way that had not been considered possible even a few years ago.

Bullshit job dystopia

The third dystopia is about the proliferation of bullshit jobs, which David Graeber defines as jobs where employees do not think that it provides any material or spiritual value to society. The emotional scar on rather well-paid employees is that it is depressing to not do meaningful work. The paycheck and the good lifestyle seem to be the only thing that keep out utter madness. Graeber targets corporate middle management, advertisers, marketers, corporate lawyers, consultants, bankers, higher education and medical administrators and some other occupations. Administrative work is one of the reliably expanding occupations and have halted the slide into a no-job dystopia. Automation is real, when referring to production workers like agriculture, manufacturing and selected services like retail (as with the Amazon example above), but when it comes to “managing” other people there seems to be no natural limit, which Adam Goldstein showed empirically. We don’t have a 15 hour workweek because the technology is underdeveloped but because we keep on inventing bullshit work to do.

For Max Weber the increasing bureaucratization of life (shuffling paper to meet some arbitrary managerial targets) is part of the increasing “rationalization” of life. But Weber also noted that most of the bureaucratic outgrowth would be among communist states, where a powerful state doles out jobs to keep people busy rather than increase economic output or when increasing the output having low quality. Capitalist societies are supposed to operate according to rational principles of “eliminating waste”. However, there is a difference between the perfectly competitive environment of mainstream economic models and the Adam Smith era and the monopoly capitalist environment described by neo-Marxists like Paul Baran and Paul Sweezy. Once corporations become large enough, there is no reason that they have to retain the competitive spirit of efficiency. William Whyte’s organization man of the 1950s emerged out of the big corporate bureaucracies that consolidated over the course of the early twentieth century.

The stable corporate hierarchy has been destabilized with the hiring of temp workers as shown by Louis Hyman. Many big corporations, who are using communication and information technology to better track rank-and-file workers- a traditional task taken on by corporate middle management, are downsizing, citing a greater focus on “core operations”, “cutting the fat” and elevating “shareholder value”. What is remarkable is that whenever these corporations announce triple- or quadruple-digit layoffs of their white collar workforce, it usually is not associated with declining output or declining quality output. The BLS data does not seem to suggest that professional and business occupations are declining, so perhaps all we are seeing is an employment shift within that sector, and, thus, an upholding of the bullshit job dystopia rather than a no-job dystopia. Although the well-paid bullshit jobs can be converted into low-paid bullshit jobs, thus doubling up on the low-wage and bullshit job dystopia.

These three job dystopias work like maneuvering between Scylla and Charybdis, the ancient Greek Homeric story, where Odysseus’ ship had to move between two hard rocks with scary monsters along a narrow river passage, but moving away from one monster would drive him closer to another monster. Would we rather have no jobs and a lack of income, or offer our labor cheaply as independent contractors, or do meaningless, soul-crushing jobs?

Full-Employment Dystopia

To fight these three dystopias progressive activists have rallied around a job guarantee, which, however, risks creating a full employment dystopia. To call full employment a dystopia is quite challenging to mainstream political sensibilities and requires careful elucidation.

Firstly, we should recall Michal Kalecki’s argument that full employment is not so much an economically undesirable equilibrium (because it would add to aggregate demand and long-term profits/ capital accumulation), but politically undesirable from the standpoint of capitalists, who fear that they lose the power of the sack, which would lose its disciplining function under a full employment guarantee by the state. Wages could be bid up, which the capitalist claims will raise prices, but in a somewhat competitive market structure is more likely to lower profits and shareholder value (and very likely only temporarily, because of the output-increasing effect of more aggregate demand). But, again, for Kalecki it’s not about the money, but the power. How dare the workers not fear the sack? And would these workers at some point not realize that they don’t need their bosses to run the business? Could they become disobedient and restart the 1968 sentiment, when full employment and rising wages meant vigorous labor protests along with student and environmental protests? Who knows, but the capitalist is surely unwilling to dare to find out. So there might be a socially moral case for full employment (higher wages, more worker bargaining power, less inequality), but in a private-ownership based economy, where governments depend on the consent of capitalists, there is no practical case for it.

Historically, there have been limited periods under capitalism where we had full employment. And even within that definition it still meant that 2 or 3% of the people are unemployed, because of friction in the labor market, e.g. not all laid off people are willing to move to sectors or regions where jobs are more plentiful. The social democratic period in the immediate post-war era delivered secure full employment to the masses, but as we now know it was the exceptional period in history, where capitalists surrendered some investor returns to share their wealth with broader society to suppress fascism and communism. As soon as the memories of the war receded and communism failed, we have apparently reached Fukuyama’s end of history, where liberal democracy and market capitalism prevail throughout the world. In reality, disembedded liberalization has created a substantial rise in inequality and the attendant political discontent with globalization, which returns the spirits of fascism and right-wing populism. One can imagine a restoration of full employment, which many economists think has occurred recently 10 years after the 2008 financial crisis, but it comes at the cost of the low-wage/precarious job dystopia.

But is the moral case for full employment water-tight? I think not. The problem is the practical administration of a full employment program, which requires a larger government bureaucracy to find tasks to do for people. With the exception of caring work and refurbishing the national infrastructure (especially public roads, railroads and the energy grid), there are not many obvious areas that the government can consider investing in. What will happen sooner or later is that government administrators become the bullshit taskmasters, who tell half the people to empty the trash can and the other half to pick it up and then switch roles the next day. If that sounds absurd, a more realistic scenario is that you have five door greeters in every government office or you see construction zones everywhere, filling asphalt on roads without potholes. (I know the latter has been happening in Japan which has been stuck in low-growth deflation since the 1990s.) The obsession with jobs traps humans in a permanent state of bullshit jobs, i.e. the third job dystopia. As automation is advancing the administrators have to become increasingly creative with job creation and that sounds to me like an indefinite increase in bullshit work. The only aspect that is redemptive to full employment is that it would deliver more pro-popular social outcomes, which is a Pareto improvement to the status quo.

The case for full unemployment/ no job utopia

If my argument is that we must avoid a full employment dystopia does it mean that I advocate for a no-job scenario? Yes, guilty as charged. The first objection will be that I had described the no-job scenario as a dystopia at the beginning, so how can I argue that no-jobs can be utopia? It turns out that state social policy entirely determines whether we have a no-job dystopia or no-job utopia. If we divorce income from work, then we can imagine that not having a job will no longer be a big deal, similar to art collectors, who are the heirs and heiresses of rich, powerful families.

We need a universal basic income (UBI) and/ or universal basic services (UBS) to get there. In the UBI model, people are paid a certain amount of money, which will help circulate funds in the local economies, which might create jobs in more rural areas that are underserved and where talent is leaving. A UBI does not require much intervention with ownership rights and market mechanisms of distribution, and is therefore welcomed by Silicon Valley titans who are at the forefront of automating jobs. UBS is a more state-centric strategy and requires the government to invest in public services, especially agriculture, public housing, public health care, public transportation, public utilities and public education to offer these services free at the point of service. It is more targeted than UBI in alleviating poverty, which sacrifices poverty-targeting for universality. In UBI, people would have more disposable income to consume goods in the marketplace, while in the UBS people would require less disposable income to consume goods. The state can use both strategies, but tradeoff a higher basic income for fewer public services with a lower basic income with more public services. There has to be public deliberation over what direction is preferred by citizens.

UBI and UBS will defeat the three evils of no-job, low-wage/ precarity and bullshit jobs without falling into the trap of what Baudelaire described as “productivism” (or pretended productivism as in the proliferation of bullshit jobs).

UBI and UBS does not come without critics, though I don’t think that the often-cited argument of high cost/ unaffordability is valid given that we already established that very rich societies have a standard of living that is so high that there should be no economic shortages for any human being. UBI is opposed by some left-wingers for neglecting social class struggles over the ownership of the means of production in the workplace/ preserving consumerist capitalism, while right-wingers argue that it creates dependency on the welfare state. UBS is opposed by libertarian left-wingers for empowering the state rather than local communities, while right-wingers will again cite the dependency on the state.

Regarding dependency on the state, this argument is a veiled way of complaining that capitalists will lose their reliable, desperate and anxious workforce, which is not necessarily a socially bad outcome. There is a valid practical objection similar to the full employment program that without capitalist consent such redistributive policies cannot be implemented, but that raises the question about whether capitalism is the best system to have. (And I still favor UBI and UBS in a non-capitalist economy over full employment, assuming that robots can deliver us what Aaron Bastani called “fully automated luxury communism”.) And taking the claim at face value one needs to compare the “dependency on the state” not with some abstract ideal of the valiant Robinson Crusoe on an empty island, hunting his own fish and building his own cabin, but with the status quo of welfare dependency built into the current system, where increased labor income will result in an even greater loss in welfare benefits. Only in America can low-income workers be harmed by a 15 dollar minimum wage as they lose more money from food stamps after losing eligibility than a gain in their paycheck. Furthermore, opponents of state dependency often neglect the even worse form of dependency, namely on an employer, who can be abusive and/or low-paying. To the same extent that trust fund kids get to be free to pursue their own passions and interests by being “dependent” on their family fortune, poor people must similarly be free to pursue their passions by being “dependent” on the state.

The more serious criticism comes from the left that insists on empowering local communities and the working class directly. On the first claim, while I have sympathies for local socialism I think that vast economic disparities on a national and international level and my desire to have the highest standard of living possible for all means that some wealth sharing at the central level must happen. Local socialism is certainly preferred over the status quo, but not for redressing substantial imbalances between various jurisdictions. Regarding the empowerment of the working class which a UBI would supposedly thwart it is not clearly whether that will happen. Trade unions hate UBI because they fear that their organization will no longer be needed if workers can strike out on their own. This is an empirical question and one might find that on the contrary, a UBI creates a strike fund more powerful than any trade union can provide. Workers with a UBI can still communicate with each other and coordinate strike action or more radically use legal means to wrest ownership rights over the firm. But even if trade unions were to decline as workers fragment and individualize, this is not really a problem if all we care about is social well-being and not sustaining trade union membership fees.

Could a UBI make the society more materialist? It could, indeed, be the case that all that UBI is doing is giving more leases of life to the capitalist economy as people use the extra cash to buy more goods, then run low on savings and then return to work to earn enough money to spend in the next cycle. I think this is another empirical question, because one could argue that low income people who have more money to spend will want to do so in the beginning until they realize that money does not make them happy, and then they will return to more modest levels of spending. On the other hand, to permanently raise consumption levels (slightly) of the poor due to UBI might not be a morally bad thing to do given their previous economic deprivation and all the mental and physical stress that poverty creates, as seen in Kathryn Edin’s and Luke Shaefer’s research.

There is another moral case for full employment that needs to be addressed. These people are against a no-job utopia by insisting that no-job always means dystopia, whether it means automation without social insurance or UBI/UBS. Period. Their argument is that humans always want to be needed by others, and that historically it has never been any other way. The hunters killed and cooked up animals so they and their tribe (including the old, the children and the sick, who can’t hunt) could eat. The peasants worked the fields and grew crops so that their families and the landlord they worked under could be fed. The manufacturing workers worked on the assembly line, so that consumers could buy and drive cars, or other commodities like washing machines, microwaves or dishwashers. The bartenders and servers work in restaurants so that people could eat. The barbers provide haircuts for people and on and on through the economy. In this account a job is more than just the paycheck but a signifier for human dignity. If we take the job out, we take out the dignity in people’s lives. If that account is true, then even creating bullshit jobs for them is desirable, because even as robots do the productive work we humans can at least be busy and by implication sane, while the slothful indolent are supposedly insane.

My objection is that a society without jobs is not a society without work. Jobs can disappear, but work will always exist. But that is only socially sustainable if we separate work and income. A job is a formal employment contract where an employee promises an employer the delivery and/or production of a service or product in exchange for a specified payment. Work is any activity requiring physical or mental exertion for the benefit of someone. So if I purchase my own groceries and cook for myself in the house, then I don’t have a job but I have done work, because I got fed. If a mother or father switches the diapers of their infant, then they have done work, although it is not a job. The social obsession with jobs means that these proponents also favor eternal wage slavery and an eternal dependency relationship between an employer and an employee, even though as time goes on robots can be our slaves for almost any job, while we turn to more interesting work. The goal is not to get rid of self-directed work, but of coercive work organized and controlled by other people. In practice, we can’t eliminate all jobs, because there are some necessary jobs, and I think that the market incentive system is still needed to fill these jobs, but with technology this should become easier to do as time progresses.

There is a broader argument about the undesirability of certain kinds of work. The ancient Greeks had argued that a slave cannot be free, because the free man pursues wisdom and philosophy and that requires leisure, which is the root word for school (which comes from ‘schole’). But men of leisure need to be fed, so they had slaves (and women) to do the necessary work. Can we not imagine a world, where we do more self-chosen work and, God forbid, play, as Johan Huizinga thinks we do? Targeting full unemployment is certainly unprecedented in human history, although some individuals like monks, priests, scholars and artists have long been able to pursue a life of leisure. For conservatives, this unprecedented nature makes them really uncomfortable and they would rather retain the safety of wage slavery than the insecurity of individual freedom. But are these conservatives more concerned about the sanity and well-being of the masses or a fear that liberation from material struggles could galvanize the masses to overthrow the people at the top of society?

Job-first proponents might cite the rising suicides, alcohol and opioid addiction in the American countryside as evidence that adding leisure to the masses can be socially disorienting. But it is not merely the lack of jobs that have created a mental health crisis, but the lack of welfare services and the loss of social status. Regarding welfare, we do not see reversals in life expectancy in most European countries even as they experience the same trend toward deindustrialization and loss of manufacturing employment due to automation and outsourcing. Regarding social status, the trauma is not just the lack of jobs, but that the new jobs are paying a lot less than in manufacturing. If an assembly-line worker becomes a janitor in a retail store at 1/3 the hourly pay that is a substantial loss of status. If welfare and status is what we are concerned about, then increasing welfare spending, including UBI and UBS is what we want to do. The social status question is resolved by divorcing income from work so that the men can identify with things other than their paid work, and find new meaning in life rather than regard themselves as failure, even though it was the system that had failed them.

It is not unthinkable that a progressive coalition will rally around a full employment agenda. There might even be ways to make it socially palatable and minimally bureaucratic by the government and employers agreeing to continuously reduce the standard full-time work week with sufficient wages and benefits and a limit of greed at the top. However, I think we have to consider seriously what society’s goal should be, which I argue is to realize Arthur C. Clarke’s dream of full unemployment.

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The Declining Fortune of Social Democracy

Podcast available here

In the European elections, the Social Democrats had lost 38 seats. The Conservatives had lost 39 seats. The main winners of the elections were the liberals that gained 41 seats (21 of which comes from Macron’s La Republique En Marche), the Greens that gained 25 seats (12 of which in Germany) and a new right-wing faction Identity and Democracy (which includes Austrian FPO, Belgian VB, German AfD and French RN), which gained 73 seats. The centrist parties, who have been ruling the continent for many decades in the postwar era, are now clearly losing out to alternative political forces that include the economic liberals (for those wishing continued globalization and reward for the wealthy), the Greens (for those wishing a left-wing ecological transformation) and the right-wing populists (for those wishing a return to national boundaries, anti-immigrant positions, xenophobia).

In any narrative of the collapse of the political center, the relatively bigger losers are the Social Democrats on the center-left. The only light points for Social Democrats all across Europe are found in Spain, Portugal, Malta, Denmark and the UK. In this post, I analyze the political situation in these countries and find that Social Democratic parties are waging a largely defensive battle, and only a new anti-capitalist vision can revive their electoral fortune.

Malta has a stable two party system with the Labour Party holding an edge with 37 of the 67 seats in the last parliamentary elections. They have been ruling since 2013, but the conservative Nationalist Party has also held power in turns. Joseph Muscat, who had become Labour Party leader in 2008, won the parliamentary election decisively in 2013, inheriting rising budget deficits, a slowing economy and a near-bankrupt national utilities provider. Upon taking office, Muscat pushed for stronger civil liberties, better access to medicine, free child care centers, more financial/ social benefits for families and a youth employment guarantee. Poverty was reduced and pensions increased.

Muscat almost stumbled on the revelations of the Panama Papers, where he and some collaborators apparently held two companies in that jurisdiction. The journalist Daphne Caruana Galizia uncovered this connection and died in a car bomb attack. A legal inquiry did not produce any evidence for direct links between Muscat and the Panama companies.

For his reelection campaign Muscat promised a more equal wealth distribution, the re-introduction of public holidays, the refurbishing of roads and a tax bonus for low and middle income workers. He was handily re-elected also on the basis of an improving economy (upward of 4% growth) and public finances (surplus since 2016). Given that the GDP per capita is still 5,000 euros below EU average there is still room to grow. The unemployment rate that was more than 6% before 2013 halved to 3.7% in 2019.

In Spain, austerity policies since the great economic crash in 2008 had brought a conservative government to power in 2011. Even though PP leader Mariano Rajoy promised tax cuts for small businesses, a protection of health care and education from austerity cuts, the PP was even more insistent than the Socialists (PSOE) in austerity policies and was ultimately toppled with a vote of no confidence in 2018. The 2016 election had produced an electoral stalemate with the Conservative PP forming a minority cabinet backed by Ciudadanos (C), a smaller centrist political party, and receiving the abstention of the PSOE. PSOE had a leadership crisis after the loss of seats in 2016, which forced out Pedro Sanchez, who did not want to back a PP-C government. However, the other PSOE politicians did not want another general election fearing even more losses, so they begrudgingly endorsed the Rajoy government. Unfortunately for the PP, the economy was not improving, the austerity pain dictated by Europe continued to bite and the corruption scandals their leaders were part of made them very unpopular. Sanchez seized the moment, returned as party chair in May 2017 (also likely for lack of viable alternatives) and launched a vote of no confidence against the Rajoy government. Sanchez was appointed prime minister of a minority government, but his PSOE had even fewer seats than the PP.

In February 2019, Sanchez budget resolution failed lacking sufficient support from the opposition parties and he had to call snap elections for April. The PSOE gained 38 seats (reaching 123) and became the biggest political party albeit still short of a majority, while the PP lost a whopping 69 seats coming down to 66. The bribery, money laundering and tax evasion ring (Gurtel case) surrounding the PP had ultimately destroyed its electoral fortunes. The 2019 election also featured a new right-wing party, Vox under Santiago Abascal. Sanchez PSOE could also steal votes from the left-wing Podemos (-29 seats), which became famous for attacking the centrist parties for their austerity policies.

Sanchez portrays himself as more progressive than his predecessor. He appointed 11 women into his cabinet of 18 ministers. He wants to expand unemployment compensation, strengthen relations with the EU, endorse a refugee resettlement program, where Spain accepts some of the refugees that are in Germany. Sanchez opposes Catalan separatism. After indicating dialogue with the Catalans, stiff independence referendum demands by the Catalans made Sanchez respond with the threat of police force and crackdown from Madrid.

Sanchez is in the midst of forming a new government cabinet. I doubt that Sanchez popularity comes from his progressive ideas (which are rather scarce and limited), but rather the complete mismanagement and corruption of the PP opened up the political vacuum for the PSOE. They have a few years to prove themselves in power. If they oblige to the EU austerity guidelines, more votes can be lost to left-wing Podemos. If they are too open on immigration, the right-wing Vox can steal supporters. And once the Spanish voters begin to forget the PP’s corruption scandal, they will be back in power in 5-10 years.

In any case, PSOE’s position is still quite fragile, holding only a little more than one-third of the seats in parliament. In the talks he is holding with the opposition parties, he is hoping to get either support from Podemos, Ciudadanos or PP, but he seems to be coy on whether to form a coalition government. In the Madrid regional elections held on May 26, the PP lost 18 seats, allowing PSOE to become the first party by holding their 37 seats from the previous election. A PSOE-led Madrid government is not guaranteed as the leaders of PP, Vox and Ciudadanos are negotiating for a three-way right-wing coalition agreement.

What is the situation in Portugal? Since democratization with the Carnation Revolution in 1974, there have been two major political parties dominating the Portuguese political system, including the center-right Social Democratic Party (what a misnomer!, PSD), which combines Christian Democracy with economic liberalism. The other major party is the center-left Socialist Party (PS). PSD and PS have switched up political control over the decades. The heated period came around 2010, when the EU essentially forced a nearly bankrupt Portugal to accept austerity policies to comply with the conditions of debt repayment.

In 2011, the opposition parties voted down the austerity budget bill proposed by the minority PS government led by Jose Socrates, which triggered snap elections that same year. The Socrates government also requested a EU bailout facing an unaffordable surcharge on the government bond after investors began to sell Portuguese debt en masse. In the elections, the PS promptly lost 23 seats and the PSD gained 27 seats. The PSD under Pedro Passos Coelho negotiated a coalition government with the smaller Christian-conservative CDS-PP. The conservative coalition government imposed even more brutal austerity policies, slashing civil servant salaries and curtailing their hiring, increase the health care tax and fees, increase the VAT, an end to the Lisbon-Madrid high-speed rail construction, the privatization of media, utility, banking, the airline, telecom, insurance and hospitals, and cuts to the unemployment benefit size and duration (30 to 18 months).

Coelho’s policies were quite unpopular, and even their junior coalition partner threatened to blow up the coalition by withdrawing from government in 2013, but Coelho convinced the CDS-PP to stay on. The unpopularity of the austerity policies convinced party leaders of the governing coalition to form an electoral alliance, which was called Portugal Ahead. It became the largest parliamentary faction, but lost a combined 22 seats and thus the absolute majority in parliament. Coelho was appointed prime minister again, but failing a no confidence vote was replaced by the Socialist Antonio Costa, who could convince the left-wing Left Bloc (BE) and Communist-Greens (CDU) to back his minority government. BE and CDU agreed to prop up Costa’s PS because he promised to roll back many austerity measures, while also promising the EU to reduce the budget deficit.  Costa backed an increase in the minimum wage, an increase of vacation days, tax credits for SMEs, higher public-sector salaries, and a halt to privatization. At the same time, Portugal is expected to generate a budget surplus next year.

How is that possible? For one, Costa’s government made cuts in infrastructure spending, which could impact future growth. The ECB bond-buying program has calmed the nerves of investors. A modest economic recovery in the EU helped Portuguese exports, and higher prices in Greece and Italy lure more tourists to cheaper Portugal. 250,000 Portuguese had left their country with the onset of the crisis, which relieves the unemployment rolls. Finally, by reversing painful austerity measures, the business community restored their confidence and began to invest in economic expansion, which is crucial to generate a virtuous economic cycle of rising economic activity and tax revenues. The economic growth rate accelerated to 3% in 2017, and is still 1.7% projected for this year.

In election polls for the general election in the fall, PS holds a comfortable relative majority of 37%, way ahead of the PSD’s 26%. The left-wing majority with BE and CDU will likely hold as well. The Portuguese voters are likely to reward the turn away from austerity. But there are signs of strain in the left-coalition. The teachers unions have made demands to collect back pay for the frozen salaries between 2005-07 and 2011-17. The finance minister projects the additional cost to be between $600 and $800 million, which might not be a lot when the government at all levels spends $100 billion, but Costa thinks that the government has to be committed to a zero deficit target and that any concessions made to teachers will result in political demands by other civil servants, thus ballooning the fiscal deficit. Catarina Martins, BE party chair, backs the teachers’ demands and claims that Costa is playing political theater for denying the teachers their back pay. Costa threatens his resignation if the BE and CDU vote for the back pay bill.

In Denmark, things are looking positive for the Danish Social Democrats under Mette Frederiksen, which held its vote share in the 2019 elections and picked up one seat to become the biggest party with a quarter of the seats. The Social Democrats had been ejected from government in 2015, when Lars Lokke Rasmussen’s Venstre (conservative) coalesced with the Liberal Alliance, the Conservative People’s Party and was propped up by the right-wing Danish People’s Party (DPP) that campaigned on welfare chauvinism and an anti-Muslim agenda. Now the left-wing alliance, which includes the Social Liberals, Socialist People’s Party, Red-Green Alliance and the Faroese Social Democratic Party have 93 of the 179 seats, thus scoring a majority, although Frederiksen has to negotiate the details of the coalition agreement. The big losers of the 2019 election have been the right-wing DPP losing 21 of their 37 seats. Venstre gained 9 and the Conservatives gained 6 seats.

What happened to the DPP? The first problem seems to be that by propping up Rasmussen’s coalition government, the DPP became associated with the political establishment, and right-wing parties tend to lose out when they get to government and start disappointing the public. Second, the SD under Frederiksen claimed that the loss of social democratic legitimacy comes from the neoliberal policies which involve cuts to social services and elevated levels of immigration, which hurts the working class electorate. Frederiksen argued that in order to return to power, the Social Democrats had to be pro welfare state and anti-immigration. Frederiksen endorsed the burqa ban and the deportation of unwanted non-EU migrants, primarily those from African countries. These unwanted migrants needed to be resettled to North Africa, which resulted in her being accused of being xenophobic. The SD could not steal many votes from DPP, but they surely made it less appealing for existing SD voters to switch to DPP. The Danish Social Democrats are not very inventive or visionary. Rather they are waging a defensive struggle against the right-wing.

The UK political system has been dominated by Brexit and that actually is a major threat to a potential Labour Party victory. But let us analyze it slowly. The big story is that the Labour Party had returned to power in 1997 with the promise of the Third Way, which is the adoption of neoliberalism with a friendly face under Tony Blair. Blair deregulated the financial sector, allowed for a further hollowing out of British manufacturing, the foundation of private-public partnerships for funding infrastructure, the costly war in Iraq and a boost in health care and education spending. The finance-first strategy was quite risky as the economic crisis of 2008 hit Britain especially hard. A Conservative administration under David Cameron took over in 2010 blaming the escalating debt on Labour mismanagement (which was really about handling the cost of the financial crash and bailouts of banks), and promising harsh austerity cuts. Despite austerity, it was remarkable that Cameron won reelection in 2015 and could end the coalition government with the Liberal Democrats based on his promise to hold an EU referendum, hoping to appease the Tory skeptics and UKIP, which threatened conservative MPs. It was a political gamble Cameron lost. The 2015 election vote was not a vote for austerity.

In the mean time, Ed Miliband stepped down as Labour leader. Changes in Labour Party rules (giving Labour Party grassroots supporters who paid a 3 pound membership fee the right to vote for the leader) made it possible for the hard-left backbencher Jeremy Corbyn to become leader of the Labour Party, pledging to reverse not only the Tory austerity cuts but also to throw Blair’s Third Way into the garbage can. Corbyn is a 1970s leftie, and hopes to restore public ownership in industries and higher investments into the welfare state. This came to the dismay of the Blairites of the Labour Party, who were plotting their political assassination of their unloved leader. This leadership bid carried out in 2016 under the charge of Owen Smith failed spectacularly by confirming Corbyn as Labour leader. Smith copied some of Corbyn’s rhetoric but assured businesspeople and middle class voters that he would not appear as radical as Corbyn. Who would vote for a fake copy?

In the following general election post-Brexit called by the uncharismatic and uninspiring Theresa May hoping to get a bigger Tory majority and reduce her reliance on hard Brexit Tory backbenchers during the crucial Brexit negotiations with the EU, Corbyn’s Labour Party won a whopping 30 seats, while the Tories lost 13 seats and their absolute majority. May had miscalculated, and was forced to go into a confidence and supply deal with Arlene Foster’s DUP to prop up her minority government. The hard Brexit backbenchers led by Jacob Rees-Mogg and the European Research Group were more powerful than ever, voting down all three attempts of May to get her Brexit deal approved by parliament. With Labour’s electoral gains, the Blairite assassins had been thoroughly defeated, and no one as of yet has dared to overthrow Corbyn again.

But the Labour Party is not guaranteed a victory largely because of Brexit. The opinion polls show that the remainer Liberal Democrats and the Brexit Party under Nigel Farage are gaining in the polls. The March 2019 deadline for Brexit had been breached because parliament refused to accept either a no-deal or May’s deal. May then requested from the EU an extension to the deadline, which has been pushed to October 31. This should give parliament more time to deliberate. May announced her decision to step down hoping to break the deadlock, although a Tory leadership contest will mean more months of uncertainty. Both the Labour and the Tory Party have been losing half their voters they had in 2017, because neither of these parties has a true solution. If Jeremy Hunt wins the Tory leadership contest, he might re-introduce May’s deal. If Boris Johnson wins it, there could be a hard Brexit, which most politicians and British people do not want (although under this scenario the Labour Party could profit the most).

As for Labour, Corbyn had campaigned for remain but in a lackluster way, because he thinks that the EU is a neoliberal project that undermines working class interests. Furthermore, the trade union leaders are Brexiters themselves and are pressuring Corbyn to not relent on Brexit. Although two-thirds of Labour constituents support remain and a second referendum, Corbyn does not like the idea and insists on a general election and a soft Brexit, which he hopes to negotiate as incoming prime minister. The optics is really bad, because Corbyn’s strength is on domestic and social policy legislation, not Brexit. If a new general election happens before a decision on Brexit is reached, then it is by no means guaranteed that the Labour Party will win it or gain a plurality of seats. With an indecisive Labour Party the entire Corbyn agenda could be stopped in its tracks.

What can be said about social democracy in these countries? In Malta, the economic management of the Labour Party has been much better than for the National Party, which gives the Labour Party the political legitimacy to govern. The only thing that can stop their rise is if a corruption scandal engulfs the government or an economic downturn occurs. The relatively lower standard of living in Malta suggests that there is some more space for growth (upward of 4% rather than 2%). In Spain, the relative weakness of the PSOE and the lack of reliable coalition partners means that the Sanchez government could not make an important impact in policy and he has only been in power for almost a year, mainly because the incompetent and highly corrupt PP had destroyed its own public image.

Only in Portugal does one have the impression that social democracy has made a powerful comeback. But the major reason is that rather than the PS propping up a conservative minority government (and thus implicitly endorsing the EU austerity mandate), it formed a minority government itself with the support of the left-wing BE and CDU, who demand a reversal to austerity cuts. The Portuguese political system has a left-wing bias, chiefly because immigration, the preserve of the right-wing, is not really an issue in Portugal. The largest immigrant groups are from Angola, Brazil, France, Mozambique and Cape Verde, but they are about 5% of the population. Given the low fertility rate and poverty-related emigration, the Portuguese population is actually shrinking. The mobilizing topic are bread and butter lack of jobs and reductions in social services, which tends to stimulate left-wing voting. Costa can then present himself as a guarantor of social services, while also signaling budget responsibility to the EU. This happens in a favorable period of the economic cycle. When that period comes to an end, the socialist hold on power is threatened.

For Denmark, the SD is waging a defensive battle against the right-wing DPP, which suggests that aside from a splintered left there is a substantial anti-immigrant sentiment and a desire to maintain the welfare state for ethnic Danes. The UK Labour Party is in the process of throwing off Blairite Third Way ideology, but is currently in political opposition and is obliterated in the polls by Corbyn’s unsustainable position on Brexit. These successful cases of social democracy reveal the defensive struggle of social democracy.

Aside from those cases, the Swedish and Finnish Social Democrats lead government coalitions, but they have only about a fifth of parliamentary support and need many coalition partners to stay in power. The overall trend for these parties is one of gradual decline. The Finnish party system has long been splintered, as it competes with two other big parties, the agrarian Centrists and the conservative National Coalition. Sweden- similar to Austria- has been a Social Democratic dominated country, where SD could get at least 40% of voter support, but that hegemony has been declining the past 20 years. The 2018 elections pushed the SD down to 28.3%, which is the lowest value since 1908.

In Eastern Europe, Social Democrats in Poland are not doing so well because they are connected with Communists. The right-wing conservative Law and Justice Party of Jaroslaw Kaczynski has dominated Polish politics at least for a decade. In Hungary, the Social Democrats held power during various periods until 2010, when the election of the right-wing conservative Viktor Orban devolved the country into a quasi-dictatorship with a deteriorating civil society, unfree media and pliant judges. The Czech Social Democrats are somewhat better off, although they are squeezed by the centrist populist businessman Andrej Babis, who is now experiencing mass protests against his corrupt rule. The Social Democrats support Babis in a coalition cabinet. In Slovakia, a charismatic politician Robert Fico, who founded the Social Democratic SMER as a successor to the post-communist Party of the Democratic Left in 1999, led his party to a string of electoral successes and the largest political force in the country. The continued success of SMER is in doubt. In 2018, Fico resigned after the death of the journalist Jan Kuciak, who had investigated tax fraud and corruption among SMER government officials.

Romania has been a Social Democratic dominated country since the second legislative elections in 1992. It also emerged as a successor to the National Salvation Front under Ion Illiescu. Unfortunately for Romania, many of Illiescu’s successors were quite corrupt. Adrian Nastase (prime minister from 2000-4), Victor Ponta (2012-5), and party chair Liviu Dragnea (2015-9) have either been sentenced to prison or have faced fines for corruption charges. While the Romanian SD is affiliated with the European Social Democrats, the Western European party colleagues have advocated for severing the ties with their Romanian colleagues given the attempted court packing, undermining of rule of law and severe corruption among the Romanian SD, which is still in the ruling government. The European PES is hesitant to exclude the Romanian SD because it would weaken the parliamentary group. Among the Baltic states only Latvia has a relatively influential Social Democratic Party, which is translated as Harmony, taking up about one-fifth of the seats, but since its founding in 2010 it has been stuck in opposition.

Elsewhere, the situation is quite dire for Social Democrats. In France and Italy, they have disappeared as a political force. In France, the liberal Macron is fighting it out with Le Pen’s National Front. In Italy, the north supports the nationalist Northern League and the south supports the centrist-populist Five Star Movement. Both parties are in a coalition government. In the Netherlands, the previously ruling PvdA lost three quarters of their seats and became an insignificant political force in 2017. In Austria, the long-dominant SPO has been pushed to second place with the takeover of the young, charismatic Sebastian Kurz in the conservative OVP, who made his name by taking on the right-wing anti-immigrant themes of the FPO and thus pretending that he is not part of the establishment (even though he has been in government since 2011, and his party since 1986). The nationalist FPO is facing a leadership crisis with their leader Heinz-Christian Strache resigning from government after being caught in a videotape desiring a Russian oligarch to take over a newspaper and influence the elections. Yet, the SPO cannot take advantage of the situation because leader Pamela Rendi-Wagner lacks the charismatic appeal and a strong vision.

In Germany, the SPD is obliterated in the polls. It got 20% in 2017, but now polls at 12% being trapped in an unwanted grand coalition government and without a real positive vision for the country. Party leader and parliamentary group chair Andrea Nahles promptly resigned her post after the Bremen council elections and the EU elections went badly for the SPD. The Green Party with their focus on climate change, and shutting down nuclear and coal plants, are soaking up the political vacuum, even overtaking the conservative CDU. The only hope for the SPD is the chair of the youth wing, Kevin Kuhnert, who demanded the re-nationalization of companies and investments in the welfare state. In Greece, the severe financial crisis with attendant austerity has wiped out PASOK with the political vacuum taken up by left-wing Syriza, right-wing Golden Dawn and the conservative New Democracy.

The declining electoral fortune of Social Democrats could be interpreted in different ways. One thesis is that after many years of building up the welfare state, we no longer need Social Democrats, and people start being interested in environmentalism or national security issues. Another thesis is that the Social Democrats are needed more than ever, but they have not properly responded to the challenges of globalization and technological change, which undermined the working class, the voting base of social democracy. As such radical left forces like in Greece or right-wing forces as in most other European countries become the party to vote for. A third related thesis is that Social Democrats becoming so weak have to coalesce with conservative and centrist parties, who veto pro-welfare legislation referencing the inability to create more debt. The EU legislates a debt brake via the Maastricht criteria and does not allow for much fiscal space for social investment programs, thus undermining any potential for social democratic policymaking.

Presently, social democratic ideas are saved in some corners but not by traditional party apparatchiks. Antonio Costa reverses austerity policies on the backs of an improving economy, and two left-wing parties applying pressure from the left. Jeremy Corbyn has a genuine vision, but it is going back to a supposedly more celebrated era of the past. Yanis Varoufakis, chairman of Diem25, has been running a failed EU campaign to push for more public investments in Europe. Die Linke party leader in Saarland, Germany and former SPD chairman, Oskar Lafontaine, advocates a merger between SPD and Linke to strengthen the left-wing of the political spectrum. Bernie Sanders in the US is trying to introduce a European-style welfare state.

These are a few light points, although they are unlikely to restore the social basis for voting social democratic. Traditional working class identities are challenged by automation and ever more insecure employment contracts. Legislating more employment security is at most a temporary stopgap measure before the robot assault prevails. A return to the Keynesian era of economic growth- the pillar of social democratic policymaking- is no longer sustainable with impending scarcity of natural resources and climate change. Corporate supply chains are very globalized, and the all-powerful technology companies are built on the network effect. The implication is that returning to a national social community of the postwar era- another premise of social democracy- is unrealistic. The only way for social democracy to survive is to overthrow the neoliberal and work-centric mantra by advocating for a shortening work week, a radical shift toward renewable energy, the strengthening of social services, a universal basic income and a renunciation of the economic growth model. It will probably take some time before this message can sink in, but given their existential crisis the comrades ears are hopefully going to open up.

If social democrats pursue an anti-capitalist agenda, and we are able to introduce what Aaron Bastani called a “fully automated luxury communism” would that not make social democracy irrelevant? One should recall that the birth of social democracy was the industrial revolution and the insufficient social protection of the emerging working class. The institutionalized and mediated class conflict between labor and management froze into place a political structure where social democrats are represented in the ranks of government. They were not solving a social crisis but ameliorating and managing it, and thus kept themselves politically relevant. A true communism would obviate the need for social democracy. Is that not a pity for social democracy? In that case, my reply is that my goal has never been to save social democracy for its own sake, which would be an understandable motivation for party apparatchiks eager to keep their jobs and membership contributions. My goal is human liberation, and only time will tell whether the route of liberation requires social democracy as an instrument or not.

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Why Freeloading is No Problem

There is a great concern about freeloading in society. But I really see no problem in it, and the ratio of productive workers to everyone else gets smaller and smaller. Only 47% of Americans are in the labor force and if you count out the unemployed it is only 44% [the math is computed from; if you want to recalculate use this formula for the 44% figure: (128,572+27,189-3,814-1,553-5,052-1,262)/327200; the 47% figure does not have the three subtractions]. Of the 56% not-working, we have children, seniors, the unemployed, the housewives, the prisoners, disabled etc. Among the 44% with jobs, 40% think they are doing bullshit jobs [at least in a UK survey, though I suspect US figures are similar], i.e. only activities to keep them working like filling out paperwork that no one checks. That reduces the productive workers to 26%, but let us assume that some of these self-described bullshit workers are being too modest with themselves and are doing productive jobs, and we are still at 30% of the population that are productive workers, i.e. the teachers, nurses, doctors, engineers, programmers, firefighters, police officers, janitors, bartenders, bus drivers, trash collectors, construction workers, farmers, manufacturing assembly line workers etc. If automation continues, I expect the productive workforce/ population to continue to diminish.

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Notes on Czech Politics

Podcast available here:

One generalization about Eastern European politics is that these countries are at the forefront of nationalist movements, anti-EU political rhetoric, anti-migrant politics. In Poland and Hungary, one finds the strongest right-wing populist forces, as they dominate the government there. In the Czech Republic, the trend is somewhat less extreme. Czechia is among the wealthier members of the eastern European states, but their political trend shows that Czech politics is also moving toward a peculiar form of populism.

The strongest party is the centrist-populist ANO, which is led by businessman Andrej Babis, who has been prime minister since the 2017 parliamentary elections. Babis is the second richest man in Czechia, having spent many years in exile in Morocco until he returned after the installment of democracy in the early-1990s. Babis took advantage of social connections in the Communist Party to gain ownership over Agrofert, a subsidiary of Petrimex, a state-run foreign trading company for agrochemicals. Agrofert later became a giant conglomerate. The conglomerate holds businesses in agriculture, food, chemical, construction, logistics, forestry, energy and mass media in China and in many European countries. In less than 20 years, Babis built up a massive fortune, but was no longer content merely running businesses. In 2011, he joined politics by founding his political party, vowing to fight corruption and the ills of the Czech political system. In 2013, ANO contested the first elections and promptly received 47 of the 200 parliamentary seats. Babis promptly entered the coalition government, receiving the finance minister and deputy prime minister post. That came as a shock to the two major parties, the social democratic CSSD and the conservative ODS, that dominated politics the more than 20 years since the introduction of democracy in 1990.

The 2013 election also brought Tomio Okamura’s Dawn, which became the Movement of Freedom and Direct Democracy (SPD) in 2015, into parliament. SPD was a Euroskpetic, anti-immigrant and pro-direct democracy party. The number of seats increased from 14 to 22. Okamura is campaigning against taking up any refugees and for a referendum to exit the EU. Okamura receives the endorsement of the influential Marine LePen, the leader of the National Front, the leading right-wing populist party in France. Okamura is quite a strange proponent of Czech nationalism given that his father is Japanese. Okamura grew up in both Japan and Czechia before settling in Czechia as adult. He operates a tourist business, luring Japanese tourists to visit Czechia. Ironically, he represents globalization and ethnic diversity, yet his political project points toward nationalism and ethnic purity. What somewhat helps his cause is that there are only a handful of Japanese people in Czechia, while much of the anti-foreign resentment is focused on the Roma people and Middle Eastern refugees. He also defends himself against any racist allegations that his mother is full-blooded Czech. His right-wing voters do not seem to care anyway, and the greater public support in part comes from his extensive social media presence, which is focused on sharing viral anti-migrant stories.

Exiting the EU would be fatal for Czechia. The former president Vaclav Klaus (2003-2013) had advocated for the accession to the EU, which occurred in 2004 along with the other Visegrad states. Klaus is no longer as optimistic about the benefits of EU membership, but warns against exiting the EU, which would create even more complications than for the much more powerful British. Macro-level data such as unemployment rate (1.9%), GDP growth (4.3% in 2017) and life expectancy (peaked at 78.82 in 2014, but declined to 78.33 in 2016) seem to suggest that the Czech people don’t have much to complain about. But the success of unconventional political parties, including the Pirate party which became the third largest force in 2017, suggests that many Czechs are fearing that they don’t benefit from economic development.

Putting a billionaire like Babis in charge is strongly reminiscent to Silvio Berlusconi and Donald Trump. They are very wealthy people, who claim that their wealth insulates them from corruption, and that they are the only people who could clean the political system. They promise to run the government like a business and create tons of jobs. They promise halting the hordes of refugees (that never entered Czechia in substantial numbers). While their statement of the symptom is correct, they are misguided with their solutions. Babis, for instance, is primarily concerned about attaining power, and using the levers of government to benefit his own business. After serving for four years as finance minister, he was forced to surrender ownership control over his business given conflict of interest, though the instituted trusts are still in his name. Babis obtained 2 million euros in EU subsidies that went to his farm. The Czech police requested the suspension of Babis parliamentary immunity so he can be prosecuted. He is accused of fraud and criminal conspiracy. The European Anti-Fraud Office (OLAF) also took on investigations and delivered a report to the Czech authorities in December 2017.

By this time, Babis had become the clear winner of the parliamentary elections. The CSSD lost 35 of its 50 seats. The communists also lost many seats (-18), but Babis ANO became the big winner, receiving 78 of the 200 seats. Babis also had a powerful ally in president Milos Zeman, who himself had won re-election in 2018, campaigning on pro-Russian, Euroskeptic and anti-migrant statements. After the election, Zeman promptly appointed Babis as prime minister. Because most parties refused to cooperate with Babis, he decided to form a minority government, which promptly was voted down in a no confidence vote. Instead of calling for new snap elections, Babis negotiated a coalition government with the CSSD and got a confidence and supply agreement with the Communists, both the big losers of the prior election. The CSSD had entered a coalition with ANO and the Christian Democrats, the KDU-CSL between 2014 and 2017 under CSSD leader Bohuslav Sobotka. Sobotka had quit the government coalition in 2017 after the Babis corruption allegations were aired, but president Zeman had convinced Sobotka to stay. Sobotka stayed on as prime minister but sacked the finance minister Babis. But politicians apparently have a short memory, and in any case, the election defeat ended Sobotka’s political career, while Babis party became the biggest in the country. The Czechs voted for Babis in droves hoping to overcome corruption, but he is at the epicenter of corruption in Czech politics.

In April 2019, the Czech police recommended the indictment of Babis on the fraud charge. Babis promptly replaced the Minister of Justice with an ally, Marie Benesoava, which led to countrywide protests. Babis publicly denies any wrongdoing, citing a witch-hunt against him to interfere with his political promise to ruffle feathers with the establishment. The process is reminiscent of the US, where the Trump-appointed attorney general, William Barr, is directly responsible for handling the Muller report, which investigated the ties between Trump and the Russians interfering in US elections. The fox should guard the henhouse. Why should a loyalist remain true to the rule of law? The EU recently released a report stating that prime minister Babis has a conflict of interest, because his business empire is placed in a trust fund, which garners EU and national contracts, i.e. fraud. The European Commission may decide to cut EU funding (Japan Times 2019). Last month tens of thousands of protesters rallied in Prague to demand the ouster of prime minister Babis (Janicek 2019). Babis is facing criminal charges, but over the short term remains intent on retaining power. Similar to Vladimir Putin in Russia, he seems to be unwilling to surrender power, because that could mean the loss of political immunity, a fall from grace and potentially even jail time. Amid all this, ANO still received the most votes in the EU parliament elections, gaining 21% or 6 seats. In another strange twist of events, his son Andrej Babis Jr. claims to have been abducted in Crimea to stop him from testifying in Czechia on his father’s business dealings.

The inability of Czech politics to settle down reflects the instability of a young democracy, which is already weakened by the takeover of a billionaire president, who promises a clean-up of corruption but really personifies corruption and makes the situation even more explosive so that the true right-wingers take over. While Okamura wants to undermine further EU integration, Babis is more cautious about calls to withdraw from the EU. Unlike Orban and Kaczynski, Babis steers a more moderate course with fewer direct lines of conflict with the EU (Tait 2019), though this might change if the EU gets serious in denying the Czechs EU funds. Between a xenophobic nationalist and an opportunist billionaire open to xenophobia, centrist democratic governance is unlikely to prevail, so we better continue watching the trends in Czechia.

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Right-Wing Incompetence in Austria

Podcast available here:

The Austrian political system has been under turmoil ever since a scandalous video was published by two German newspapers (Spiegel and Suddeutsche Zeitung), which shows former vice chancellor, Heinz-Christian Strache from the nationalist Freedom Party (FPO), promising a supposed Russian oligarch niece state contracts for infrastructure projects in exchange for purchasing the Kronenzeitung, the largest tabloid newspaper in Austria with over 2 million readers. With Strache’s resignation, the coalition government fell apart and the country is facing snap elections in the fall.

Strache wanted the oligarch to use the tabloid to promote the FPO in the elections. According to the video, Strache suggested if she did that “we will get 34% and not 27%” of the vote. The oligarch pose was a scam, and apparently she was commissioned by a lawyer, who disliked Strache, to lure him into a mansion in Ibiza, a Spanish island, and then videotape him confessing his true intentions. Strache is known for his dislike for critical media, having attacked Armin Wolf, a journalist at the public broadcaster known for asking very tough questions to politicians, desiring an obedient media like in Hungary for Viktor Orban.

Strache claims that he was drunk and that the person that surveilled him ought to be prosecuted. But the video shows that Strache was not very drunk and could still articulate his thoughts clearly. Furthermore, in his conversation he was articulating his true thoughts, which is to gain maximum political power by manipulating the public via the media. The irony comes from Strache’s public speeches, where he has condemned the governing grand coalition for being corrupt and dividing the country among themselves as a fiefdom. But once Strache and the FPO gets in charge, they do the same political appointments and they are even more corrupt than their much-maligned predecessors.

The FPO has a long history of corruption and mismanagement, and it happened with the first charismatic leader, Jorg Haider. Haider made himself famous by condemning the power cartel of socialists and conservatives, which gave him a continuous string of electoral successes. By 2000, he reached the zenith by negotiating a coalition government with the third-ranked OVP under Wolfgang Schussel. European pressure and sanctions against the Austrian government prevented Haider from becoming chancellor. Instead, he retreated to his Carinthian province home, where he served different periods of governorship. Despite Haider’s criticism of the corrupt regime, he took millions of dollars of “gifts” from the former Libyan dictator Muammar Gaddafi, who was also his best friend. A bigger problem was with the Carinthian state bank Hypo Alpe Adria, which aggressively lent money to eastern European countries without these debtors being viable with regard to repayment.  Hypo also funded a grandiose soccer stadium and a luxury hotel, even though these projects don’t bring in much revenue. A state bank can’t do much lending unless the state government underwrites these loans, which is what governor Haider provided.

When internal party disputes made Haider quit the Freedom Party and found a new political party (that quickly went to a demise after his death in a car crash in 2008), Strache became Haider’s successor and promised to be cleaner and less corrupt than Haider was. With the support of his campaign strategist and speechwriter, Herbert Kickl, Strache led mayoral campaigns in Vienna, challenging the ruling Social Democrats with anti-Muslim and anti-migrant sentiment. Strache could deliver charismatic speeches that generated electoral gains to the Freedom Party. When the FPO got so big in 2017 as they had in 1999, the big parties could no longer ignore the FPO, and the OVP under Sebastian Kurz, who quit the previous coalition with the SPO, called for snap elections and promptly negotiated a coalition agreement with Strache’s FPO.

Unlike the public disagreements that prevailed in the grand coalition, the OVP-FPO coalition proved quite stable for the year and a half that it was in office, and there rarely was disagreement in public among the coalition partners, even though there were more reasons for discord than under the grand coalition between OVP and SPO. FPO general secretary and party strategist Herbert Kickl became minister of the interior, being in charge of refugee policy, and the police/ security apparatus. Kickl promptly caused controversy by advocating for “concentrating refugees”, which is an allusion to a Nazi concentration camp. Even if the intent was not as malign as many in the media and the political establishment believe, the idea is horrendous in its own term, because precluding refugees from mainstream society will cause the crime and social disorder the FPO is supposedly campaigning so hard against. Kickl, the security freak, also promoted the militarization of the police, providing them with military-style assault rifles and increasing police hiring. Kickl has a very loose understanding of the rule of law, ordering police investigators to raid intelligence services, presumably to find dirt on political opponents of the FPO.

Kickl’s unreliability was also the proximate cause for the collapse of the coalition government. When the Ibiza video became public and Strache announced his resignation, chancellor Sebastian Kurz demanded a full investigation of the Ibiza video, so he recommended to president Van der Bellen the dismissal of interior minister Kickl, who would presumably lead an investigation against his former boss, and would block any such investigation. Van der Bellen was the chairman of the left-leaning Green party, and complied gladly with his request. One should note how Van der Bellen only narrowly won the presidential elections three years ago against the FPO’s Norbert Hofer, the current party chairman after Strache’s resignation. If Hofer were president now, Kurz would have a hard time changing the government ministers.

In protest, all the FPO ministers resigned from the government and joined the SPO vote of no confidence motion against the OVP government. Kurz tried to salvage his office by delaying the parliamentary assembly by about a week after the EU elections which delivered a seat gain of 2 for the OVP, while the SPO stagnated and the FPO lost one seat, and appointing independent experts and civil servants close to the opposition SPO to fill the ministerial vacancies. The SPO under Rendi-Wagner had none of it, judging correctly that supporting a temporary Kurz administration until the snap elections would bolster Kurz’ popularity among voters, and pushed for the vote of no confidence. After the no confidence vote, Kurz called up president Van der Bellen, telling him that he would resign his office immediately and transfer the chancellory to his finance minister and deputy Hartwig Loger. Van der Bellen promptly dismissed the government cabinet and appointed them interim ministers, vowing to appoint a new cabinet shortly. The temporary chancellor is Brigitte Bierlein, chair of the constitutional court.

Upon resignation, Kurz immediately gave a speech in an OVP camp, promising to focus full-time on campaigning for the September elections as lead candidate for his party. He did not even bother to become an MP and chair of the parliamentary group. The OVP is likely going to win the elections with upwards of 40% of the vote. When the Ibiza video came out and Kurz called snap elections, I immediately recognized that the FPO voters are likely going to stay home, and some will vote for Kurz OVP. The Greens might return to parliament, which comes at the expense of Peter Pilz Jetzt party, which was founded by the former Green Party member Pilz after he was ranked lower in the party list for the last elections. The only possible challenger is Rendi-Wagner’s SPO, but the trained doctor, who became a politician only a little over 2 years ago (having been a doctor and high-level civil servant in the health ministry before), does not have the charisma or the vision to challenge Kurz.

With the right candidate, taking on Sebastian Kurz is not that difficult. The only thing that speaks for him is his youth and vitality. He does not have much political substance or a fixed political vision, but he has a Machiavellian killer instinct which matters to survive and advance in a leadership position. He realized that with an ideology of compromise one cannot win elections, but he needs agitation against unwanted foreigners and minorities. He was instrumental as foreign minister of the old government under the SPO chancellor Christian Kern of ending the grand coalition, sensing the possibility for a power grab in snap elections in 2017. Around that time, the voters had the Middle East refugee wave of late 2015 fresh in their minds. The FPO led a reliable anti-refugee campaign, which got mixed up with general xenophobia and Islamophobia that they had campaigned on in the past. What was new was that the conservative Kurz rode on the same anti-refugee policy without sounding explicitly racist. He did that by avoiding explicit culture clash statements, but still dog-whistling to get the right-wing voters to support him. He campaigned on closing the Balkan route as foreign minister, which was about convincing these Balkan states to shut their borders and not let the refugees travel on to Austria. He also campaigned on mandatory German courses for refugees and condemning presumed radical Islamists, who need to be deported.

The voters caught on the message, and Kurz OVP gained a few percentage points to overtake the Social Democrats, who ran a traditional pro-welfare agenda, arguing that the refugee topic distracted from the real concerns and needs of the voters. It is not surprising that Kurz and Strache saw eye to eye on cutting cash benefits for refugees, banning the burqa in public settings, increasing surveillance on Islamist preachers and coming up with new points of political agitation every few weeks.

Kurz also argued that the size of the state must shrink. Welfare services must be more restricted, the government’s tax take needs to decline and all of a sudden Austria becomes a more competitive country. This position would be hard to force on the SPO, which still has many trade unionists in their rank. It should also be noted that even within his own party about one third of the political positions are reserved for the OAAB, the civil servant and employee wing of the OVP. Within a grand coalition government, an unrestricted neoliberal agenda was hard to implement. It is also hard to win elections with neoliberal policies (except for the investors and businesspeople, who already have a neoliberal mindset), but voter support would still come with the focus on refugee policies and continuous agitation.

Kurz also neutralized any party opponents within the OVP by demanding the party’s full loyalty and discretion to act and appoint ministers. Kurz had the advantage that there were no crazily power-hungry opponents within the party. His immediate predecessor, Reinhold Mitterlehner, was a bureaucrat and party apparatchik, and in his autobiography you will find that Mitterlehner actually offered Kurz the OVP leadership position for the next elections, which reveals Mitterlehner’s lack of pure power instinct.

The last Machiavellian politician with an instinct for power within the OVP was Wolfgang Schussel, who blew up the coalition government in 1995 and negotiated a coalition with the FPO in 2000. Kurz integrated colleagues from the youth wing of the party (Gernot Blumel, Elisabeth Kostinger) as well as independent experts and businesspeople (Hartwig Loger, Margarete Schrambock, Heinz Fassmann, Juliane Bogner-Strauss) into his cabinet, thus bypassing the needs and interests of the three big party wings (employees, business, agriculture) and the provincial chiefs/ governors.

The major opponent to Kurz’ rule was the SPO, which went to opposition after the 2017 elections. The FPO, however, was quite open to neoliberal positions. Strache generally subscribed to the business freedom rhetoric, even though most FPO votes come from working class voters, who jump on the FPO bandwaggon because of the anti-immigrant rhetoric. The coalition agreement involved a debt brake (prohibiting new public debt), a greater reward for entrepreneurs, a cut in corporate taxes and restructuring of the welfare state. The latter point involved the abolition of the long-term unemployment insurance which allowed people to draw on public benefits beyond the 1 year unemployment period without means-testing. Now, the long-term unemployed would have to spend down their assets before being eligible for basic welfare. This measure will presumably increase work discipline.

Furthermore, the coalition government imposed a 60-hour work week/ 12 hour workday, which goes beyond the 10 hour maximum under the previous system. In rare cases, employers could previously impose a 12 hour shift if it was negotiated with the union. Under the new rule, unions do not have to be consulted if bosses ask of their workers to add hours. The only respite for workers is that they can reject overtime without stating a reason (although in a competitive labor market that could risk their job), and in a 17 week period the average workweek must not exceed 48 hours, so workers should technically be able to get 4 day work weeks or shorter work weeks to make up for the overtime in other weeks. There are probably more liberalization moves that the coalition intended to implement if the Ibiza videos had not come out. The great fear is that the recipe “anti-welfare policy coupled with anti-refugee sentiment” will work again in this election, especially if Kurz receives the biggest boost in electoral support. The Kurz-Strache coalition has meant a deterioration in labor standards in what had still been a quite corporatist industrial regime (i.e. where trade unions and company leaders co-determine wages and working conditions). As of now, things are not as explosive as in France, where the gilet jaunes protests have shown the limits to Macron’s neoliberal agenda.

The establishment media is hammering Kurz for going into a coalition with the FPO in the first place, because the right-wing populists- what a surprise- are charlatans and unreliable coalition partners. But within the logic of democracy, copying their playbook and coopting them in coalition governments is likely the only way out of the establishment impasse. Plato does not regard democracy as the most ideal form of government, believing that the mob cannot rule intelligently and they need to be led by a powerful, benevolent monarch. Aristotle was much more friendly to the prospect of democracy, but it has to be combined with the best elements of aristocratic rule. Really existing democracies that don’t respond to popular interest (as in the neoliberal regime) result in the rise of demagogues, who attack the corruption of the present political establishment and demonize outsiders and foreigners to get to power. Once they are in power, they become the establishment themselves and to prevent opposition, they want to shut down all democratic institutions like an independent judiciary and a free press. Democracy then devolves into a tyranny, and the tyrant himself needs to be overthrown if his rule becomes intolerable, but it is questionable whether the future leader is better for the people.

Austria is still somewhat far removed from a collapse of democracy compared to their eastern European neighbors that have joined the democratic club only the last 30 years. Strache’s resignation has been prompt and the political institutions and rule of law have been preserved. But how long will that continue? Strache despite being the last-ranked in the EU election list got enough priority votes to become eligible for an MP position in the European parliament. If he takes it, he can go to Brussels and lick his wounds. He might, in fact, return to Austrian politics once the voters have forgotten the Ibiza scandal, and I suspect many will. Within the FPO there are no genuine charismatic politicians. The new party chair Norbert Hofer sells himself as a friendly face of the xenophobic party, and with the presidential campaign three years ago he has name recognition, but he lacks the charisma and aggression of Strache. His new deputy is Herbert Kickl, a brilliant campaign strategist, but a horrible rhetorician. That plays into the hand of Kurz, who can expect a landslide in the fall elections.


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