v6 2013 andy lamas class lecture, u of penn

7/27/2019 v6 2013 Andy Lamas Class Lecture, U of Penn

1/23

1

Russell Rockwell

Today's Economy and the Changing Relationships of the Economic and the Social

Slightly revised version of talk given at University of Pennsylvania, September 23, 2013, class

on Liberation and Ownership, taught by Andrew Lamas

Todays Economy

Monthly, the U.S. Department of Labor releases its national employment report. The most

recent report was for August, released September 6, 2013.

Unemployment rate edged down to 7.3 percent from 7.4 percent. Unemployment,however, fell for the wrong reasons, because people dropped out of the labor force and

so were no longer counted as unemployed, and not because more unemployed people

found jobs.

Lowest labor market participation since 1978 (35 years) Just since January, 2007 until July, 2013 labor market participation has fallen a full three

percentage points (from 66.5 percent to 63.5 percent)


2/23


3/23


4/23

4

Commenting on the same Saez/Piketty study, Annie Lowrie wrote in a September 10

NYT article, titled The Rich Get Richer Through the Recovery:

The economy remains depressed for most wage-earning families. With sustained,

relatively high rates of unemployment, businesses are under no pressure to raise their employees

incomes because both workers and employers know that many people without jobs would be

willing to work for less. The share of Americans working or looking for workis at its lowestin

35 years.

http://economix.blogs.nytimes.com/2013/09/10/the-rich-get-richer-through-the-

recovery/?smid=pl-share
http://www.nytimes.com/2013/09/07/business/economy/us-economy-adds-169000-jobs-as-unemployment-rate-falls.htmlhttp://www.nytimes.com/2013/09/07/business/economy/us-economy-adds-169000-jobs-as-unemployment-rate-falls.htmlhttp://www.nytimes.com/2013/09/07/business/economy/us-economy-adds-169000-jobs-as-unemployment-rate-falls.htmlhttp://economix.blogs.nytimes.com/2013/09/10/the-rich-get-richer-through-the-recovery/?smid=pl-sharehttp://economix.blogs.nytimes.com/2013/09/10/the-rich-get-richer-through-the-recovery/?smid=pl-sharehttp://economix.blogs.nytimes.com/2013/09/10/the-rich-get-richer-through-the-recovery/?smid=pl-sharehttp://economix.blogs.nytimes.com/2013/09/10/the-rich-get-richer-through-the-recovery/?smid=pl-sharehttp://www.nytimes.com/2013/09/07/business/economy/us-economy-adds-169000-jobs-as-unemployment-rate-falls.html


5/23

5

Paul Krugman, in his September 12 column, elaborated even further:

These numbers should (but probably wont) finally kill claims that rising inequality is

all about the highly educated doing better than those with less training. Only a small fraction of

college graduates make it into the charmed circle of the 1 percent. Meanwhile, many, even most,

highly educated young people are having a very rough time. They have their degrees, often

acquired at the cost of heavy debts, butmany remain unemployed or underemployed, while many

more find that they are employed in jobs that make no use of their expensive educations. The

college graduate serving lattes at Starbucks is a clich, but he reflects a very real situation.

http://www.nytimes.com/2013/09/13/opinion/krugman-rich-mans-recovery.html?smid=pl-share

And, indeed, there have been many recent studies showing the dramatic continuing

effects of the Great Recession on youth and recent college graduates.

Yet, is this all that can be said? Certainly, the economy and job opportunities are

important, as is their impact on the collective sense of social fairness and future social stability,

but society is something other than the economy.

Maybe the economy is poor, but isnt social life, despite the economy, steadily

improvingaccess to global information, the social media explosion, unprecedented

entertainment opportunities, cheaper travel, etc.? Do the apparently boundless individual

opportunities afforded by the expansion of technology to some extent balance the poor

macroeconomic picture characterized by the quantitative and qualitative downwardtrend in

employment opportunities andupwardtrends in wealth concentration?
http://www.epi.org/publication/class-of-2013-graduates-job-prospects/http://www.epi.org/publication/class-of-2013-graduates-job-prospects/http://www.epi.org/publication/class-of-2013-graduates-job-prospects/http://www.nytimes.com/2013/09/13/opinion/krugman-rich-mans-recovery.html?smid=pl-sharehttp://www.nytimes.com/2013/09/13/opinion/krugman-rich-mans-recovery.html?smid=pl-sharehttp://www.epi.org/publication/class-of-2013-graduates-job-prospects/


6/23

6

An important and probably unrecognized assumption is imbedded in that questionthat

the economic and the social, labor and society, are somehow separable in the type of society we

live inthat is, a capitalist society.

Labor: Quantity, Quality, Mediation

Lets first look at labor, and second look at the social. As we have just seen in the latest

national jobs report, in a capitalist economy labor is viewed both quantitatively and

qualitatively,numbers of jobs created (few), types of jobs created (mostly low-skill, low-

paying). But, the peculiarity of labor in a capitalist society is associated with a third dimension

never mentioned in the governments surveys or in any of the expert analyses that inevitably

follow: Labor, in the context of capitalism, is viewed in its quantitative and qualitative

characteristics, but in reality labor also functions as a social mediation. Capitalist society is

where commodity exchange is first fully developed. That is, almost everything is given a price.

Implicit in this is the objectification of ones laboror we might say transformation of labor

powerthe ability to labor into money. Objectification of labor rather than, for example,

tradition or brute force is the means by which one acquires the products of another.

Objectification of labor ultimately means the selling and buying of labor power. This indicates

that in capitalism labor has a dual or two-foldqualitya specific kindof labor produces a use

value for someone else, yet the objectification of this labor, that is, laborindependentof its

specific content, serves as the means for the acquisition of the products of others. In this dual

form, labor itselfconstitutes a social mediation in lieu ofovert social relations. Historically,

labor evolves into a new form ofsocial interdependence.


7/23

7

After this description of labor and capitalism, we can turn to society. As Moishe Postone

representing the newer generation of contemporary critical theorists who share with Marcuse and

Fromm a background in the Frankfurt School, puts it: in all social formations prior to capitalism,

as in capitalism itself, forms of social domination certainly prevail. However, in social

formations prior to capitalism, such as feudalism, overtsocial relations of domination (say lord

and serf relations) mediatedlabor, that is, conditioned the social distribution of labor and its

products. In capitalist society, while social domination stillprevails, it is not overtas in prior

social formations. Under capitalism (as I said before) labor mediates social relations. This is the

side of labor independent of its specific quality, that is, it is abstractlabor.

What is meant by mediation? (the social mediates labor or conversely labor mediates

the social)?All societies are bound together by something other than direct individual, personal

relations. Prior to capitalism, this is primarily customs, traditional ties, overt relations of power,

or even conscious decisions. The important question is: iflaborin capitalism, unique among

historical social formations, mediates social relations, that is, constitutes the mode of social

interdependence, what happens when an eversmaller proportion of the population is employed,

and to an ever greater extent, even those with jobs still do not have (or barely have) the material

means to reproduce themselves as workers? This goes to the heart of what Karl Marx identified

as the intrinsic historical contradiction of the capitalist social formation. This contradiction

suggested at one and the same time the transientnature of capitalism and, perhaps less credibly

to some, the possibility of apost-capitalist society. This post-capitalist society is described in

Marxs own terms as the dialectical transformation of the realm of necessity and the realm of

freedom, and is built on the unprecedented wealth and technological knowledge that has come

into being with capitalism. The time freed from material necessityeven if at first manifest in


8/23

8

the free time associated with mass unemployment and class oppressionin a post-capitalist

society would become the time and space for universal individual self-determination and self-

development.

Dunayevsksaya, Marcuse, and Marx on Post-Capitalist Society

A good way to begin to understand American society in this way is to listen to the

dialogues and debates between the Marxist social philosophers Dunayevskaya, Marcuse and

Fromm, which began nearly 3 generations ago, stretching from the mid-1950s to 1980an

historical period that encompassed both huge economic changes due importantly to a new stage

of automated factory and mine production, and social changes that altered the fundamental

relations between men and women, Black, Latino, and white Americans. Here we will focus on

the Dunayevskaya/Marcuse correspondence. Though it continued until 1978, most of the

exchanges took place between 1954 and 1965, years in which national debates on automation

raged and Dunayevskaya publishedMarxism and Freedom, and Marcuse publishedOne-

Dimensional Man (as well asEros and Civilization andSoviet Marxism).

Early on in her correspondence with Marcuse, in an April 3, 1955 letter, referring to

other, earlier letters she had written to a comrade, Grace Lee, in 1953, letters which included

detailed analyses of the philosopher Hegels works, such as the Science of Logic and Hegels

Introduction to his Philosophy of Mind, Dunayevskaya wrote, The twin poles to me of any

fundamental work there must have, automation at one end, and [Hegels] absolute idea or

freedom at the other end. I'm very anxious to hear your reaction to those two letters where I first

posed the question of the absolute idea in terms of a movement from practice to theory as well as

from theory to practice. (Dunayevskaya, Marcuse, Fromm Correspondence volume, p. 6-7).


9/23


10/23

10

of the laboring class under the impact of rationalization, automation and particularly, the higher

standard of living.

In fact, the social implications of automated production were among the topics in the

correspondence that provoked the most fireworks between Dunayevskaya and Marcuse.

Automation was taking hold particularly in heavy industries (Marcuse discusses Serge Mallet

and his analysis of the oil industry). Others included coal mines and automobile plants, in which

Dunayevskaya had contacts with workers involved in battles around automation and working

conditions. Automation in these industries raced ahead from the 1940s through the 1960s. In

those and the ensuing decades the service sectorexpanded and tended to absorb the labor lost to

automation in the manufacturing sector.

In his 1958 workSoviet Marxism, Marcuse wrote that the concepts of necessity and

freedomor as I previously mentioned, what Marx termed the realm of necessity and the

realm of freedomwere central for both Hegel and Marx. Prior to Marcuses Soviet Marxism

the letters on Hegel that Dunayevskaya shared with Marcuse at the beginning of their

correspondence had already taken up this very dialectic. Though not often brought up explicitly

in the correspondence, differences of interpretation of this aspect of the Hegelian Marxian

dialectic underlay much of the tension in the two writers exchanges.

Dunayevskaya and Marcuse agreed that technology and automated production were of

the utmost importance to understand both the current social conditions and the contemporary

relevance (or lack of such) of Hegels philosophy and Marxs theory for overcoming capitalism

and gaining freedom in apost-capitalist society. Marxs Grundrisse, often called the rough draft

for Marxs Capital, is where Marx explicitly discussed automated production, the free time it


11/23


12/23


13/23


14/23


15/23

15

society that defined Marxs work, and which inspired the life-long philosophical/political

commitments of Dunayevskaya, Marcuse, and Fromm:

First let me note, last December, here is how Krugman concluded his twice weeklyNew York

Times op-ed column, which clearly commands a global audience:

I think its fair to say that the shift of income from labor to capital has not yet made it into

our national discourse...[T]his is a discussion that has barely begun but its time to get started,

before the robots and the robber barons turn our society into something unrecognizable."

Krugman is referring to a potentially unprecedented crisis here. As we mentioned early in

this talk, Moishe Postone has conceived the crisis in broad historical strokes, namely, while in

pre-capitalist societies, social relations mediate labor, in capitalist society labormediates social

relations. But, where labor is increasingly automated, the currently prevailing form of social

domination erodes, and we enter unchartered territory.

Earlier in the same column, Krugman also writes:

"InRace Against the Machine, M.I.T.s Erik Brynjolfsson and Andrew McAfee

argue that similar stories are playing out in many fields, including services like translation and

legal research. Whats striking about their examples is that many of the jobs being displaced

are high-skill and high-wage; the downside of technology isnt limited to menial workers."

But to demonstrate what we're up against in the crucial battle of ideas, in sharp contrast to

Krugman on Marx's ideas, MIT economist Andrew McAfee, co-author ofRace Against the

Machine, writes:
http://www.theatlantic.com/business/archive/2011/10/why-workers-are-losing-the-war-against-machines/247278/?single_page=truehttp://www.theatlantic.com/business/archive/2011/10/why-workers-are-losing-the-war-against-machines/247278/?single_page=true


16/23

16

"I originally wanted to kick off one of the chapters inRace Against the Machinewith a

quote from Karl Marx, but my co-authorErik Brynjolfsson talked me out of it. And I'm glad he

did. Because the more I think about it, the more displeased with myself I am for suggesting it. In

fact, I'm instituting a blanket rule for myself: from now on, no more quoting Marx, or citing or

discussing his work.

I know that this sounds shortsighted or even dumb, especially now. The Great Recession

and jobless recovery have caused many to see flaws in the basic system of capitalism. Marx

helped define this system even as he ardently critiqued it. So why not re-examine his work

now

I can think of two good reasons why not. The first, and less important, is that most of his

ideas were profoundly lousy. As The Economist nicely summarized in 2002:

But the fact remains that on everything that mattered most to Marx himself, he was

wrong. The real power he claimed for his system was predictive, and his main predictions are

hopeless failures...Class war is the sine qua non of Marx. But the class war, if it ever existed, is

over. In western democracies today, who chooses who rules, and for how long? Who tells

governments how companies will be regulated? Who in the end owns the companies? Workers

for hire the proletariat. And this is because of, not despite, the things Marx most deplored:

private property, liberal political rights and the market. Where it mattered most, Marx could not

have been more wrong.

After quoting The Economist, McAffee cites his second, what he calls a
http://raceagainstthemachine.com/http://raceagainstthemachine.com/http://raceagainstthemachine.com/http://ebusiness.mit.edu/erik/http://www.economist.com/node/1489165http://www.economist.com/node/1489165http://ebusiness.mit.edu/erik/http://raceagainstthemachine.com/


17/23

17

[M]uch deeper reason for not giving Marx the courtesy of any intellectual

acknowledgmentthat his ideas and calls to action were responsible, pretty directly, for the

deaths of tens of millions of people. Does that sound like an overstatement? Here's the call to

action that closes his 1848 Manifesto of the Communist Party:

The Communists disdain to conceal their views and aims. They openly declare that

their ends can be attained only by the forcible overthrow of all existing social conditions. Let the

ruling classes tremble at a Communistic revolution.

I will leave for future discussion the seemingly hysterical thesis that Marxs humanism

inspired the deaths of millions of people.

Even as interesting and critically-minded, and thought-provoking a book as the recent

one by Silicon Valley computer engineer, Martin Ford, titled, The Lights in the Tunnel:

Automation, Accelerating Technology and the Economy of the Future, feels compelled to include

in an appendix he calls Outsmarting Marx the following disclaimer:

The central thesis of this book is that, as technology accelerates, machine automation

may ultimately penetrate the economy to the extent that wages no longer provide the bulk of

consumers with adequate discretionary income and confidence in the future. If this is not

addressed, the result will be a downward economic spiral.

It must be acknowledged that this idea is quite similar to the predictions that were made

by Karl Marx in the mid to late 1800s. Marx predicted that capitalism would suffer from a

relentless accumulation of capital, resulting in massive unemployment and wages that would be
http://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch04.htmhttp://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch04.htm


18/23

18

driven down below subsistence level. This in turn would result in diminished consumer demand,

falling profits and ultimately economic crisis or even collapse.

If the arguments in this book prove correct, then we may be in the somewhat

uncomfortable position of conceding that Marx was, at least in some ways, perceptive about the

challenges the capitalist system would eventually encounter. He advocated the abolition of

private property, a centrally planned economy, and perhaps most chillingly, the overthrow of

governments and a dictatorship of the proletariat. In the wake of the collapse of communism,

these ideas have been shown unequivocally to be non-starters. They deserve to be swept into the

dustbin of history.

The answer to the problem is clearly to adapt our system. The free market economy is

not a natural phenomenon. It is really a machine that we have built and refined over centuries: it

is an engine that is fundamentally driven by incentives. Marx wanted to take a sledge hammer to

that engine. Our job is to tune it, and even re-engineer it if necessary, so that it will continue to

power prosperity indefinitely.

Now, Marcuse argued in One Dimensional Man that even in a society in which

increasing automation was the major centrifugal force threatening social stability, as long as

the administered population had the goods delivered (employment opportunities, rising

standard of living), not many realistic prospects for social change appeared on the horizon. But

now that we have just completed the first decade in more than half a century in which

productivity has continued to soar, but income and job growth have plummeted, where to now

for theory and practice? I think the volume on Dunayevskayas correspondence with Marcuse

and Fromm is an excellent source from which to deepen the discussion.


19/23

19

Notes for further follow-up:

9/20/13 NYT:

Laura DAndrea Tyson (former chairwomen of Council of Economic Advisors in the Obama

administration, and business professor at UC, Berkeley:

According to economic logic, wage growth should reflect productivity growth. This wasthe case until the late 1970s. Since then, however, wage growthhas fallen far shortof

productivity growth, and thats true for workers regardless of education, occupation,

gender or race.

about four million workers have left the labor force, driving the labor forceparticipation rate to a historic low, at least a percentage point below its long-run

(downward) trend, according to the Council of Economic Advisers.

Jobs that are routine, that do not involve manual tasks and that do not need to be donenear the customer are being replaced by computers and automation or are being

outsourced to low-cost workers in other countries. Many of these jobs are middle-income

and middle-skill jobs.

U.S. Textile Plants Return, With Floors Largely Empty of People

BySTEPHANIE CLIFFORD

SEPTEMBER 19, 2013
http://www.whitehouse.gov/sites/default/files/docs/hope_and_dreams_-_final.pdfhttp://www.whitehouse.gov/sites/default/files/docs/hope_and_dreams_-_final.pdfhttp://www.whitehouse.gov/sites/default/files/docs/hope_and_dreams_-_final.pdfhttp://topics.nytimes.com/top/reference/timestopics/people/c/stephanie_clifford/index.htmlhttp://topics.nytimes.com/top/reference/timestopics/people/c/stephanie_clifford/index.htmlhttp://topics.nytimes.com/top/reference/timestopics/people/c/stephanie_clifford/index.htmlhttp://topics.nytimes.com/top/reference/timestopics/people/c/stephanie_clifford/index.htmlhttp://www.whitehouse.gov/sites/default/files/docs/hope_and_dreams_-_final.pdf


20/23

20

Two decades of overseas production has decimated factories in South Carolina. Between

2000 and 2011, on average, 17 manufacturers closed up shop every day across the

country It might seem surprising then to see Parkdale Mills, the countrys largest buyer

of raw cotton, reopened in 2010; yet, machines have replaced humans at almost every

point in the production process. The millproduces 2.5 million pounds of yarn a week

with about 140 workers. In 1980, that production level would have required more than

2,000 people.


21/23

21


22/23


23/23

23

v6 2013 andy lamas class lecture, u of penn

Documents