Raise the Hammer
A response to the argument that the best way to help the poor is to stop helping them.
By Ben Bull
Published November 04, 2008
I completely agree that globalization is a horrible idea.
And so began another acrimonious give and take on RTH's commentary roll. The rebuke was posted last Friday by regular RTH commentator 'A Smith'. It was in response to my blog about globalization and its discontents.
I thought about responding to it directly, but decided I had a lot more to say.
The context of Mr. Smith's remark, and the commentary that preceded it, was that low skilled workers should pay their way. "Average income Canadians could begin shouldering a higher percentage of the tax burden," suggested Smith, adding, "the universe rewards people who give to others."
This is a bit harsh, I thought to myself when I read it. It doesn't seem right at all.
So I re-read my blog. The post was a cobbled together commentary about how low-skilled jobs are going abroad. "In a global economy where the rich are getting richer, the poor poorer, and nobody in the 'civilized world' seems to make anything anymore," I wrote. "You have to wonder where all this is heading."
A Smith was obviously not impressed.
"Since the universe rewards people who give to others," he countered, "I believe the loss of good paying jobs for average Canadians can be tied directly to the decrease in their contributions to the government coffers.
"If anyone doesn't believe in the power of giving to others, I ask them to try it out. I bet as soon as you do, you will recognize that the universe always rewards good works and generosity."
I don't like ideologies. My reaction is to coil away whenever I sense them coming - they're like a bad smell. I used to be an ideologist. When I was younger, living in the UK, I was all about Margaret Thatcher and her right-wing policies. I used to think that her free-market mantra was the solution to all of England's ills.
Let the market run its course, I thought, and everything will fall into place. But, as we've seen over the years, it didn't, and it hasn't, and today we are facing the consequences of a free market gone mad.
I'm not averse to simple logic like Smith's. I am always looking for the easy answer, but the truth is - there very rarely is one. And having principles is all well and good, but you have to be able to see beyond your own sphere of influence, to look at the problem through other people's eyes.
I didn't feel that A Smith was doing that.
So I reflected a little, on his ideas. His stated principle of pulling back and allowing people to help themselves is one I've adhered to myself, and written about, too, but in this instance it just didn't seem right. And so I crafted my response.
A Smith, you seem to be ideologically attached to the notion that less is more. That by holding back our helping hand for folks who are struggling to get ahead, we will somehow enable them to reach higher and succeed. After some reflection I've come to the conclusion that this is simplistic and naïve - It won't work.
While your notion is reasonable in principle - it is only by giving of ourselves that we obtain rewards, and all that - it is far too general when it comes to shaping our economy.
Why do I say this? Well, let's look first at the engine of our economy - the work force.
I believe there are two types of people in the workforce: Shirkers and Workers.
Shirkers can be rich or poor, as can Workers. Shirkers feel that the world owes them a living. They have either inherited a sense of entitlement from their parents or their environment, or a sense of hopelessness instead. They have no motivation to do any real work and they look for short-cuts and handouts wherever they can. We all know a Shirker or two.
Poor Shirkers subsist on government handouts and generous relatives. They do everything they can to avoid paying anything back. Rich Shirkers laze around at work and complain when they get fired. The only reason they work at all is because they have to, to pay the bills, or because they fear the stigma of being unemployed.
Rich Shirkers are able to work because their parents forced them to get an education and a skill and so they could find work. Rich Shirkers are never really 'rich' at all, as they never have the motivation to achieve anything. They simply get by.
Workers make up the rest of us. We are rich or poor, sometimes resourceful, and generally able to find a way to make a living, even if it's not what we really want to do.
Getting Shirkers to contribute to society - pay taxes, provide a meaningful contribution at work - is a tricky task. I've worked with a lot of them and managed one or two, and I know - these are hard people to motivate. I agree with you that, to some extent, the only help that Shirkers need is to help themselves.
But enabling Workers is a harder task. There are all kinds of Workers. Some are highly resourceful and blessed with infinite energy and optimism. But many are more easily discouraged. Looking for work, retraining, grinding it out in the wrong job can be a hard slog (I've been there many times). Many of the programs offered by the government today simply keep hard working people in a holding pattern - enabling them to get part-time, low paying jobs and penalizing them whenever they try to work their way up.
Your notion that the government should do less for people like this is not going to help them because, like I say, many of them are already worn down. By abandoning these folks we risk leaving them on the scrap heap for a long time. And that's a waste - a costly one. Because Workers are what keeps our economy humming and these people need to be encouraged to get back into the right job as soon as possible.
You also seem to subscribe to the logic that workers should be paid according to their skill set. Nobody's arguing with that. But you go further, saying that, if all the menial jobs are going oversees because of our open markets then, so be it, let the folks at home retrain, get some more skills and do some more interesting work.
But it's not that simple. Firstly, many societies - ours included - have a subset of workers who are unskilled for a reason. Perhaps they skipped school, or just landed from some foreign country with few recognized qualifications. Perhaps they are in between jobs or working their way through school towards a better job.
Perhaps they have skills, maybe even a degree, but there's just no demand for their services right now. Whatever the reasons the fact is we need low skilled jobs as part of our economy. Low skilled jobs are necessary, and low skilled workers will always be there.
How many people do you know whose parents worked in the local factory all their lives and watched their kids go off to school to get better jobs and make better lives for themselves and their families? This is not a temporary phenomenon. It's a cycle, and the cycle goes on. If we take away these 'good' low skilled jobs then we are relegating these hard working folks to a lifetime of driving taxis and working in Wal-Mart. Crappy, low paying, no-benefit jobs.
So, instead of growing up with a moderate income, benefits, and the feeling of security, the children of these workers are faced with a serious set of challenges. The sort of challenges that come with a low income status like this: never seeing Mum or Dad because they're always at work, witnessing the effects of stress on their parents, watching their parents break up, eating poorly, moving house all the time to keep on top of the bills.
Your logic of abandoning low paid, hard working people so they can 'pull themselves up' is naïve, simplistic and heartless. Principles like this are not a solution; they're an excuse for you to feel better about doing nothing, for offering no concrete suggestions of your own.
I might apply these principles to Shirkers, sure - if it were at all possible to identify them - but I believe that most folks are Workers at heart and should be given the opportunity to work their way into a better standard of living. But the fact is it's hard to do that when you're working at Wal-Mart, and it's even harder when the government is slapping you in the face.
What globalization has done, and is doing, is shipping all these 'good' jobs abroad.
On the subject of outsourcing, you contend that poor people in other countries should be allowed to take on our menial jobs, "Imagine, allowing people in poor countries the opportunity to be lifted out of poverty by giving them a job" you suggest, again sarcastically, "How dare they want to share in our prosperity"
Well of course, they dare. Many of them have no choice. But the problem is that other countries don't play by the same rules. Many of these countries treat their workers like crap, paying them poor salaries for ridiculous hours. Some of these countries employ kids to take on our unwanted jobs. Some countries have virtually no regard for the environment of the local community, polluting the local water supply and putting workers' health at risk. Some countries utilize protectionist measures such as export subsidies, and import tariffs. What is the benefit of this? I wonder. To them, to us, to the planet?
The general principle suggested by one of the Star letter writers I referenced in my blog, is that we should try to retain more of our manufacturing jobs here at home. Sure the goods may be a little pricier, but if we work towards creating more of these 'good' types of jobs, then people will be better able to exercise their discretionary spending, better able to afford the cost of locally produced, and ethically produced, goods and better able to support themselves and their families.
Makes sense to me.
On top of that I believe we need to start looking at ways of improving the conditions for our other low skilled sectors, such as retail, warehousing and the like. If we want our low skilled workers to contribute to our tax coffers as you propose, we need to ensure that all of our low skilled jobs pay well. You can't get something out of nothing. When your whole income cycle revolves around not eating, short term loans at high rates of interest, and working triple shifts - making life harder is not the solution.
You state, in your response, that, 'Perhaps we should take it (the argument) a step further and all go back to producing everything for ourselves. We could all become our own doctor, farmer, plumber, electrician, cook...' In a sense that's exactly what I am saying. I am asking, 'what is the cost of our current globalized outsource everything approach?' Is it possible for us to do more for ourselves?'
In the bare bones version of capitalism we came from, countries amassed their wealth by leveraging their unique resources. Brazil shipped bananas, India made tea, but we seem to have drifted away from that. These days we import apples from China and sell them our telecommunications consulting services. We buy cars from Japan and send teams of auditors to scrutinize their banks.
For sure we still sell oil, lumber and other resources, and our intellectual capital is as much an 'asset' as anything else, but it seems to me that we have to start evaluating the cost of letting go these once prized portions of our home grown economy, or else face the consequences.
Another question we need to ask is - are we really helping these outsourcer suppliers? Is Indonesia any better off for making our shirts? Mexico for making our cars? China for making our loot bags? How many decades of worker and environmental exploitation will it take for these countries to start doing things right? And how much will cost us all, before they do?
I appreciate your comments, and all the comments we receive at RTH, because it forces me to think things through. This discussion has helped me divorce myself further from my Thatcherite ideologies and realize that globalization should not be seen as something that has to evolve, on its own, with minimal governmental intervention.
The rules around global trade do not create some kind of magical self-correcting organism that makes everything better, for everyone, eventually. Global trade should be better now. There is no moral, environmental or long-term economic excuse for pursuing the same outsourced economic model we are pursuing today. After all, we can all see the effects, and they aren't good.
No, instead we should be looking to keep more of what we own, make more for ourselves and insist that our trading partners play by a new set of rules. If we take a look at where our globalized economy has brought us today: rising unemployment, the loss of high paying jobs, the planet dying, third world countries fighting and starving, the rich getting richer, more of us getting poorer...we have to wonder: if we do nothing to change it, how much worse it is going to get?
By Koivu (anonymous) | Posted November 04, 2008 at 15:00:01
Isn't the belief that there are only two types of people, Shirkers and Workers, an ideology (that is, a set of beliefs that structures worldview)?
A-ha! So I'm a hypocrite...?! (you wouldn't be the first person to suggest that :) )
Defintion of ideology (dictionary.com): "the body of doctrine, myth, belief, etc., that guides an individual, social movement, institution, class, or large group. "
I don't think my Shirkers and Workers idea is an ideology. The Shirkers and Workers stuff is a theory in my view, one that I would happily modify if alternate evidence came along. I'm not married to it. I simply used it to try to explain that it takes different methods to motivate different types of people. Nothing is simple. When I mention ideologies I'm thinking of hard coded doctrines that people use to frame their view of the world and refuse to question. A Smith is doing that quite clearly, harking back to his belief that you only get out what you put in and applying it to all the wrong places.
By geoff's two cents (anonymous) | Posted November 05, 2008 at 02:40:36
Ben Bull, thanks for taking the time to craft this response to A. Smith. Although I rarely agree with his positions, I find that discussion of the issues he raises helps to clarify my own positions. In particular, I've found that he's quite good at suggesting/asserting things that seem downright abominable, but are surprisingly difficult to counter with logical argument.
I'm no free-market fundamentalist, but I would suggest that out-and-out protectionism is risky - and potentially nasty - business as well. For one, if people in these countries actually want their jobs, it seems a little condescending for us to assume that we know what is better for them, doesn't it?
Lots to comment on here, of course. Owing to time constraints, I'll do a lot more reading than blogging on this issue. Looking forward to the responses.
By Grassroots are the way forward (registered) | Posted November 06, 2008 at 09:29:11
A Smith has no empathy, he views in the world, in his own expectations, which is not realistic. It should not be free trade but fair trade.
To be honest a plan is already set in motion and well for the most part, the average person no matter where they are on this global, is going to be struggling more.
The best the people can do, is at a local level, buy locally, get all involved in the local community, have open discussion with business, workers and average people to identify problems from all sides and to hopefully come up with reasonable solutions.
I went to a social justice forum and one of the topics was a Canadian company which has moved jobs from Canada to another country. I find it very distrubing that with this move, those workers in the other country work in deplorable conditions, and it is our own fellow "rich" citizens, the owners, seem to have no conscience about this. Is it not reasonable as Canadians to lay pressure on this company and others that do the same thing? Are we not all global citizens? How can those at the top demand the best of things in their pursuit to earning a living, yet deny others the basics of human and employment rights? I would also say that those, high up in government levels, turn a blind eye as well, when one looks at things in a perspective, of who is getting protection, those the capitalists with never ending resources vs the most marginalized workers around the globe.
The powers to be want things at a global level, yet seem to have a problem with International Labour Standards. We are seeing, here in our own country, many that are affect by the downgrade of employment standards for those who the most marginalized. One only has to look at the policies of Workfare and Elect to Work.
By A Smith (anonymous) | Posted November 07, 2008 at 14:52:06
Ben, I understand my ideas seem pretty crazy, but here me out.
When the government taxes its citizens, it can either give that money back in useful goods and services, pay down debt/build a surplus, or waste some of it on things that don't directly help the people.
Obviously, wasting it on things that don't help the people is the last thing we want our government to do, or is it?
In the fifties, sixties and seventies, governments in North America (my numbers are from the US Bureau of Economic Analysis) funneled more of our money into the military then they do presently.
In comparison to today, the difference between tax receipts and useful government spending (infrastructure, health, education) was over 10% of GDP.
Curiously enough, as government wasted people's tax dollars on weapon systems, the economy spit out great paying jobs like no one's business.
Moreover, when this figure accelerated, thus indicating a widening between what government received in taxes and what it gave back in useful goods and services, the economy took off. When the number shrank, so did the economy.
How do we explain this? If government wastes precious tax dollars on building missiles, tanks, and ships how does that help the economy? I chalk it up to balance.
Everything in life is balanced by its opposite, so when government tries to be responsible with our tax dollars, it actually causes the opposite reaction to take place. That is the situation we are in today.
This notion, which is understandably illogical by normal standards of thinking, is borne out by the numbers.
If you want more proof, I will email you an excel file that shows a great correlation between government wastefulness and great economic growth for the average person.
By Doing it wrong (anonymous) | Posted November 08, 2008 at 01:17:45
Correlation ≠ causality.
By A Smith (anonymous) | Posted November 08, 2008 at 19:47:22
Let's take a look at the years 1993 to 2000...Non military spending as % of the US economy, followed by % GDP growth.
1993 28.98 2.67
1994 28.38 4.02
1995 28.61 2.50
1996 28.34 3.70
1997 27.64 4.50
1998 27.13 4.18
1999 26.89 4.45
2000 26.81 3.66
Now let's look at the years 2001 to 2008 (first 2 quarters annualized)
2001 27.60 0.75
2002 28.19 1.60
2003 28.25 2.51
2004 27.75 3.64
2005 27.97 3.07
2006 27.95 2.87
2007 28.70 2.19
2008 29.25 1.84
As you can see from the first set of numbers, when government stops helping the people, the economy takes off.
Contrast that to the Bush years, where government has tried to help the people (new drug entitlement programs, stimulus package) and all that produces is economic pain.
This same effect can be seen anytime government tries spending money to help the citizens.
It all comes down to balance. When government tries to create a better life for the people, the universe balances those efforts out with economic pain.
When government stops helping the people as much, the universe steps in and gives the people a fast growing economy.
Therefore, the next time you here about government cutbacks, don't be surprised when you here that the economy has done surprisingly good in the months following those cutbacks. All you have to remember is that good leads to bad and bad leads to good.
By geoff's two cents (anonymous) | Posted November 09, 2008 at 04:57:13
A. Smith, I understand your point. . . to an extent anyways. On a very basic level, it's like raising a child - You spoil him/her, and he/she won't learn how to take care of themselves.
After "Doing it Wrong" 's comment, I'm sure you're perfectly aware that you are demonstrating a correlation, and not necessarily a cause.
More Importantly, this correlation can be read another way. What about the possibility that the decline in government spending is actually immediately preceded by an economic turnaround (or, equally, that government officials predicate their spending cuts on a positive economic forecast), thus making a decline in spending politically feasible? This, at any rate, seems to be an equally logical interpretation of the numbers you bring to the table.
I'm sure you will also admit that economies prosper and decline according to criteria other than government spending.
I don't have the numbers at hand, but I'm sure that Burmese government spending increased markedly in the aftermath of the tsunami. However, it would truly be a leap of faith to assume that the correlation of increased government spending and near economic collapse indicates the adverse effect of the former on the latter. In this particular case, an increase in government spending is symptomatic of economic hardship, not the cause.
Finally, where you and I might perhaps diverge is that I do not recognize economic productivity as 'the' supreme good (I say 'perhaps' because I do not know your position on this for certain - It's a semi-informed guess). There are contingencies that call for government spending, the success or failure of which is not necessarily measured in dollars or finite quantities.
By A Smith (anonymous) | Posted November 09, 2008 at 18:40:56
Geoff, you make an excellent point.
What came first, the booming economy, which increased the role of the private sector or shrinking government, which does the same thing.
However, what you can do, is look at the nominal change from one period to another.
From 1993 until 1999, non military spending went up 34.8%. In contrast, from 2000 to 2007, non military spending went up 50.9 %.
Nevertheless, I agree with you that there are many other factors that affect economic progress.
My point is that we tend to create positive scenarios from seemingly negative actions and vice versa.
Look at the price of oil and gas. When the stimulus checks went out to the people, oil and gas spiked, thus countering most of the effects of the government "help". Now that the government has shifted its help to the corporations, the price that consumers pay for basic staples has fell dramatically.
Isn't it interesting to see the correlation between government help for the people and oil increases, in contrast to corporate help and oil price declines.
What the government giveth to the people, the universe taketh away and vice versa.
I can't prove this theory of balance, but try taking a fair look at it.
If it is correct, it means that the universe is always judging your actions with complete fairness and will prosper you in proportion to how much you help others.
By Undustrial (registered) - website | Posted November 11, 2008 at 17:27:42
"In the bare bones version of capitalism we came from, countries amassed their wealth by leveraging their unique resources. Brazil shipped bananas, India made tea, but we seem to have drifted away from that."
Absolutely untrue.
First off, Brazil was into sugar, not bananas.
Secondly, neither of those nations got very rich at the dawn of capitalism, though the nations who conquered them - Britian and Portugal - did. Britain made a heap of cash off its colonial posessions, it's manufacturing base grew by leaps and bounds by producing the war machine needed to maintain it and the trade goods needed to maintain its commercial aspects (ie: guns, booze and cloth to trade for slaves). The growth of capitalism absolutely cannot be seen without that context. Living in one of those colonial possessions, one which still exists in large part for its raw material exports (timber, fish, oil etc).
Globalization is not simply an evolution of trade and markets, it is a set of policies consciously put forth by government and corporate elites, much like the imperial Europe - a process which, by the way, was also portrayed as a universally beneficial evolution of natural institutions. This is exactly the same kind of historic/economic determinism that Marxism was based on.
Ideologies are like religions - at most, one can be right.
By geoff's two cents (anonymous) | Posted November 11, 2008 at 20:35:35
The "dawn of capitalism"? When was that? There were markets, empires and trade in Asia, the Middle East and Latin America long before the Europeans came around with their own military and ideological empire-building machines.
The jury is also still out as to whether or not it was Britain's empire that enabled it to build such a formidable industrial powerhouse. Scholars are now pointing in equal measure to an "industrious revolution" over the course of the 18th and 19th centuries - the evolution of home-grown cultures and institutions conducive to large-scale capital investment such as we have today (institutions of risk-management, for example). There is also a lot of debate over what effect the empire actually had on this process. Your own take on this stems heavily from the version popularized by Immanuel Wallerstein in the 1970s. There is near unanimity in the historical community to the effect that the empire was actually a drain on British resources, not a net contributor.
Nor am I entirely comfortable with what appears in your comments, Undustrial, as well as the article above, to be an idea of globalization as a unidirectional, teleological process. With, perhaps, the exception of the internet, almost any measure of globalization versus locally based production, consumption and identity-formation, points to the nearly synonymous and countervailing (and perhaps dialectic) impact of globalizing and localizing "forces" (for lack of a better word). In the eighteenth century, there was Indian indentured labor displacing indigenous laborer in the British Caribbean. Between two "world wars", the 1930s saw the enormous, nearly worldwide popularity of various locally-based, xenophobic "nationalisms." For a more locally-relevant example, consciousness of a particular "Canadian" identity has progressed almost lock-in-step with Canadian consumption of American material and cultural productions.
I don't necessarily disagree with the tenor of much of what appears above (including the article itself). I'm just nit-picking (and not - God forbid - trolling). It just so happens I have academia on my mind, and a tad too much time on my hands, so bear with me!
While I don't think our concerns our necessarily misplaced, however, I sometimes think that too much is made of the tragic "way things are now" without placing present-day conditions in historical context. The movement of large labor forces across the globe has taken place at least since at least the 18th century. Labor has been conscripted, indentured or simply underpaid for millenia. In my opinion, the fact that the people working these jobs (in Thailand, Indonesia, or whatever) are at least, by and large, choosing to work these jobs represents a marked improvement over the past.
At the same time, Ted, I'm no believer in the magic and mysticism of the financial market's ability to determine universal happiness or providence, and I agree on the need to interrogate existing power structures and modes of managing wealth if they lead to such a wide income disparity.
A. Smith's ideas make more sense to me if I broaden my notion of the "market" or "economy" to include, for example, economies of highly subjective personal value at the highest level of abstraction. While I question the universal applicability of this model to real-life decisions of civic and global finance, I certainly don't think they're worthless for this purpose, and I think that they possess more value on a different level.
By Undustrtial (anonymous) | Posted November 19, 2008 at 11:32:26
The rise of capitalism as a dominant economic system is only 2, at most 3 hundred years old. Before that markets existed, but were constrained by state regulations, guilds, feudal, imperial or communal land ownership etc. Markets and trade do not necessarily equal capitalism - capitalism is markets and trade in the context of the private ownership (and market trade) of capital.
And in no sense am I saying that globalization does not have counterveiling tendencies (though it's pretty obvious that they're usually simply ideological and have been losing the battle pretty seriously for millenia), just that what we know as "globalization", rather than simply a current of global integration, is a more specific pattern of institutions (WTO, IMF, UN etc), policies (NAFTA, etc) and resulting cultural and economic homogenization.
And as for whether imperialism was a net cost or a net drain on the Brits...that depends which Brits. The merchant class - those who became the capitalists, certainly got *very* rich off it. Other classes...maybe not so much so.
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