Hardcore for Nerds

Good to see a critical perspective on EU economic orthodoxy, articulated within a straightforward political analysis (rather than being farmed out to  ’left’ commentators or ‘bleeding-heart liberals’ as is stereotypically more common in the Irish Times):

“Take the commission’s staff report and a passage dealing with community employment schemes. It noted that over half of the €870 million being spent on employment support schemes in 2012 was devoted to work programmes, in particular community employment.

The report acknowledged that these schemes serve a definite social purpose but continued: “[They] have, at best, an extremely weak activation and back-to-work component, and, at worst, trigger ‘subsidised employment traps’.” The report refers to a review that recommends such programmes be more geared to promoting a return to the open labour market.

The IMF report argues that such community employment schemes cost twice as much as education courses.

But there is two inherent flaws to those arguments. The first is contained elsewhere in the staff reports. The rate of unemployment has risen since 2008 to over 14 per cent and 30 per cent of those have been unemployed for over two years. Sure, there are areas where there are skills mismatches but the prospect in the short to medium term of vast numbers returning to the “open labour market” is zero. 

And the “social purpose” element of community employment schemes should not be underestimated. They are popular with political parties of all hues and brook no resistance. Besides providing employment they are seen to have a tangible, visible benefit to the parishes and neighbourhoods they serve. In a scenario where being private sector job-primed is not realistic, other factors have to be considered including the dignity of work, the sense of doing something worthwhile, having a structured week and a routine, and learning new skillsets that may or may not be useful in the workplace. Few involved in public life would even begin to identify with their portrayal as “subsidised employment traps”.

I don’t think Community Employment is a ‘solution’, and it doesn’t work as a labour activation measure (in the strict economic sense of ‘labour’) - but it does do these other things. I suppose the worst thing about it in Ireland is really how it has subsidised society, i.e. maintained activity in disadvantaged communities while other more privileged communities enjoyed the economic boom and ‘full employment’. One could be charitable and allow the neoliberals and ordoliberals and technocrats a genuine desire to change that situation, but the problem is an ideological commitment to supply-side solutions in the labour force at a time when supply far outstrips demand.

Schemes like Community Employment maintained a system that was broken, but all they’re proposing to do is fix the schemes (and thus refashion the individuals to fit the system, not the other way round). There seems to be an increasingly acute division in Irish politics between those willing to question, on a fundamental level, the approaches designed to supposedly return us to economic health, and those who accept them as representing in themselves the necessary changes we need to make to our economic system. The latter is thus essentially conservative, but it increasingly covers even on an ideological level the parties of the centre-left, such as Labour. Hence their crisis currently.

 Or also UK Labour, who have come up with welfare plans which would be pretty indistinguishable from Tory policy at any other time, dressed up in the barest of ‘progressive’ clothes:

“At the heart of Labour’s plan is the reinstatement of full employment as a government objective. Under its plans, no one would be able to remain unemployed for more than two years, reduced to a year for a young person. After that, they would be offered a real job with appropriate training funded by the taxing of bankers’ bonuses and restructuring pension tax relief for the wealthiest. If they fail to take the job they would be stripped of benefits.”

What’s really radical about it is the idea that a government will be capable of creating full employment, a “real job” for everyone, but implying that their real difficulty will be encouraging people to take them up (probably because the standard of work will be so degraded) while the fantasy part is that such a massive transformation of the economic potential of the country will be funded by “the taxing of bankers’ bonuses and restructuring pension tax relief for the wealthiest” - although probably that’s the maximum extent to which, even rhetorically, the Labour Party can go to with redistribution of wealth in 2013.

There’s something seriously wrong when the official policy responses to a massive unemployment crisis are so clearly futile - at best - or sinister - at worst. This wonderful piece by David Graeber offers a genuine conceptual alternative to employment by numbers (and his thoughts on debt, likewise, are especially pertinent to the Irish situation):

“Labor, similarly, should be renegotiated. Submitting oneself to labor discipline—supervision, control, even the self-control of the ambitious self-employed—does not make one a better person. In most really important ways, it probably makes one worse. To undergo it is a misfortune that at best is sometimes necessary. Yet it’s only when we reject the idea that such labor is virtuous in itself that we can start to ask what is virtuous about labor. To which the answer is obvious. Labor is virtuous if it helps others. A renegotiated definition of productivity should make it easier to reimagine the very nature of what work is, since, among other things, it will mean that technological development will be redirected less toward creating ever more consumer products and ever more disciplined labor, and more toward eliminating those forms of labor entirely.”

The ex-Communist writer Arthur Koestler is best known, at least as a political novelist, for Darkness at Noon – without doubt both a classic novel, and his best book - but the trilogy of which it is the central part (between The Gladiators and Arrival and Departure) is less well known and, in effect, lacks an independent study. Admittedly it is collection without any narrative connections between the books, and was only declared as a thematic trilogy by the author himself at a later date, but its theme of ends and means, whether one justifies the other in a revolutionary political context – the Stalinism of mid-20th century Russia - is clear from reading at least the first two novels, and is reflected in the third. Its evolution at the time of writing and publication illuminates, through its reception, the left-wing politics of early 1940s Britain, the general literary culture of both that country and the United States, and the significance of what was termed the European ‘novel of ideas’ in Anglophone criticism.

Powerful article by Irish left economist Michael Taft:

“US multinationals have a strong presence in Ireland – making up nearly two-thirds of all MNC turnover in Ireland. American MNCs take €240,000 in profit per employee here in Ireland; in the other EU countries, they take only €31,800. More interesting, despite the global recession, American MNCs increased their profit per employee in 2009 by over 8% in Ireland. In other EU countries, American MNCs suffered a loss of nearly 21%.”

That’s a little over $300,000 at the current exchange rate. Of course most of it comes from ‘transfer pricing’ (moving revenues between jurisdictions to find the one with the least tax) so the employees don’t receive - or create - much of it, and neither does the Irish state, due to our 12.5% tax on corporations:

“So here is a question: if all things are on the budgetary table, why is there no place for an increase in the corporate tax rate? This would not undermine pre-tax profits, and even if it were raised by a mere 2.5%, it would still be lower – much lower – than almost any other European country.

And here is another question: where in Europe, indeed the world, can MNCs make as much profit as in Ireland even if the corporate tax rate were increased?

So, why is the issue of the corporate tax rate taboo? That’s an easy question to answer: because it has been elevated to almost metaphysical status.”

A taboo that comes from the real employment the multinational companies provide, as well the total contribution to the state coffers - which more and more seems like our ‘cut’ from an international money laundering scheme. Rather than just asking for more - although we do need more employment, manufacturing is increasingly less labour-intensive, and the digital sector requires more technological and linguistic skills than are available in the population; the extra tax would certainly help with the budgetary problems, and alleviate the pressure on social spending, but the tax take as a whole needs to be put on a fairer, larger and more sustainable footing - maybe the left here should just have the cojones to say it’s wrong in the first place?

What we ought to do is consolidate the tax base across Europe and the US, so the evasive transfer pricing can’t occur, and the profits are spread evenly across the states where they are created (and then of course we have to deal with commodity pricing and the exploitation of the rest of the world). But, as long as our political institutions - in America and in Europe - serve capital ahead of social interests, that won’t happen: after all, it is basically asking to extend a giant communist super-state across the western world. And that really won’t go down well with some people.

tomewing:

This is interesting - essentially an expansion of the oft-cited “if you can’t see the product you are the product” saw as it applies to the Instagram deal.

The part I balked at was his description of colonization/expansion. “The Wild West ended up OK” - well, unless you already lived there. Even that thoughtless metaphor illuminates the argument, though.

Is there such a thing as an indigenous population of the internet, though? i.e.

“The third makes me think that the business of these virtual society companies (there are lots) is to isolate some settlement on an island, allow it to develop for a small amount of time, and then colonise it.”

Really, colonisation and settlement are the same first step (at least if there’s no-one else already living there, and thus no new political authority to impose) and annexation, like Hawaii,is the last step. So the metaphor can be saved with a few word changes.

What’s more interesting, I think, is the Marxist argument (at least via John Lanchester), familiar also from the New Inquiry’s writings on the subject, about labour value of social media use:

“Every “user” of Instagram is a worker. There are some people who produce photos — this is valuable, it means there is something for people to look it. There are some people who only produce comments or “likes,” the virtual society equivalent of apes picking lice off other apes. This is valuable, because people like recognition and are more likely to produce photos. All workers are also marketers — some highly effective and some not at all …”

and

“the word “user,” as in a user of Instagram or Facebook, is dangerous, because it hides all of this.”

I used to think, back when using the internet was a more passive experience, that the funding crisis it supposedly heralded for artists and creatives could be solved, ethically, by most of us growing up, getting jobs and having easy ways to pay reasonable amounts of money for whatever music or literature we consumed (this was an idealistic position, of course). Except advertising really took off, and interactive forms of media consumption like Tumblr which freely provide a base for ‘labour’ of a sort that somehow provides a value for the colonisers/annexationists further down the line.

There’s something about the latter situation that I feel much less comfortable with as the status quo, even if paid-for services are a challenging proposition. Much of social media’s ‘users’ are in a somewhat precarious position economically relative to having the solid ability to spend a lot of money directly on consumer goods, but lots of time and incentives to contribute virtual labour. The definition and understanding of the value of that labour is something really important to our future.