Economics + Squid Game in Real Life + the challenges of progressive governance
+ New jobs and great events
In this issue
We feature several pieces we like on the theme of economics — including critiques of what you might call “Squid Game economics”:
Felicia Wong breaks down how “zombie neoliberalism” is shambling back into the negotiations over the Build Back Better legislation, a bill now afflicted with failed ideas like work requirements, means testing, individualist solutions, and increasing reliance on markets instead of government to achieve public goals.
Annie Lowrey’s piece “The Time Tax” in The Atlantic shows the costs, both to beneficiaries and society, of imposing means testing and other bureaucratic requirements in public programs.
An important piece by C.P. Chandrasekhar and Jayati Ghosh, “Is public investment holding up capitalism’s dynamism?” shows that public investment, not private sector dynamism, has been the key to economic performance in both China and the United States in recent decades.
In Labor Notes, Minsun Ji has a brilliant piece, “The Real-Life Auto Strike Behind the Runaway Netflix Hit Squid Game,” making sense of the record-breaking series in the context of the actual struggles and repression of South Korean workers.
An important new paper, “Immigration and public finances in OECD countries” by Hippolyte d’Albis, Ekrame Boubtane, Dramane Coulibaly demonstrate the positive impact of increased immigration on per capita growth and fiscal health.
In an older but still worth-reading piece from The Guardian, David Edgerton explains that “Brexit is a necessary crisis — it reveals Britain’s true place in the world.”
The Forge features a roundtable conversation with Kevin Simowitz, Connie Razza, Jamila Michener, and Deepak, who explore “policy feedback loops” as a key, underused strategy to bridge between the world as it is and the world as it should be — and assess how well the Biden Presidency and progressives have made use of these tools.
ICYMI
On Tuesday, October 19th, McNally Jackson Books’ Seaport store in New York City hosted a fantastic discussion for the release of the paperback version of Immigration Matters. Cristina Jimenez, Daniel Altschuler, Ruth Milkman, Penny Lewis, and Deepak discussed their chapters and the project overall followed by a Q&A with the audience, which was full of immigration battle veterans. You can watch it here.
People’s Action had a great zoom event, “All in to Win: Act for Immigrant Justice,” which highlighted the importance of deep canvassing and brought together leaders in the movement: Rep. Pramila Jayapal, Lorella Praeli of Community Change, César Torres of LUCHA, and Deepak. The talk focused on how to take action to ensure the inclusion of a path to citizenship in the bill pending in Congress.
The Leadership Center for Democracy and Social Justice launched this weekend with the first cohort of 26 brilliant folks, mostly women, people of color, and people from low-income and working-class backgrounds seeking or entering social justice and labor careers. We’re thrilled to support them! The Center is looking to hire an Executive Assistant.
Social and Economic Justice Leaders Action Fund is hiring a Director of Election Integrity and a Director of Learning Communities.
CUNY’s School of Labor and Urban Studies (SLU) has a great new position open: Associate Director for Internships and Experiential Learning.
Economics Articles We Liked & The Role of Policy Feedback Loops in Progressive Governance
From Felicia Wong’s superb piece “Build Back Better Meets the Spooky Season: Zombie Neoliberalism Creeps into the Negotiations”:
After decades of neoliberalism as the dominant political and ideological order, we are at the precipice of a badly needed paradigm shift. We can see bold ideas for changing the structure of our economy and democracy contemplated in the Build Back Better Act, which is built on the foundation of an ascendant worldview that refigures the relationship between the government and markets, in service of a high-care, low-carbon economy.
Yet, as the negotiating process marches on, the legislation is being pushed further and further away from this new framework. “Zombie neoliberalism” is creeping into the debate as policymakers revert back to policies shaped by the decades-old economic consensus that prioritizes freedom from government “interference” over public investment for the common good. This reversion to failed policies is reflexive and will continue to be a danger until public provisioning becomes the norm in our politics and policymaking. Reverting to neoliberal policies risks squandering the best chance we have had in decades to transform our economy and democracy for future generations.
First, we can see it in the return to means-testing. Negotiators have considered income-based eligibility requirements and work requirements for the child tax credit, as well as means-testing for child care subsidies and for Medicare dental and vision benefits. Imposing restrictions on eligibility both makes it more difficult to deliver widespread services because of the administrative burden and abandons our pursuit of a shared common good.
Zombie neoliberalism can also be seen in an increasing reliance on markets, rather than the government, to solve key problems. From clean energy and electric vehicle tax credits to a private insurance model for paid leave, the emerging deal turns to opaque and unaccountable private subsidies as a substitute for direct, public intervention. But, as my colleagues Rhiana Gunn-Wright and Kristina Karlsson write, it is the federal government, not the private sector, that “has the coffers, credit, and power to spend at the scale we need and to push unwilling corporate actors to move in the right direction.”
On the revenue side, zombie neoliberalism is leading policymakers to look at taxation merely as a “pay-for” to finance government investments. In doing so, policymakers are shortchanging taxation’s ability to reduce inequality and curb extractive corporate power. Thinking about taxation solely as a revenue source means ceding a range of policy tools to address some of our thorniest societal challenges.
The Atlantic’s Annie Lowrey takes on the bureaucracy of our public systems which impose complex requirements (like work requirements and means-testing) that beneficiaries must navigate. In “The Time Tax,” she writes:
. . . at some point, I started thinking about these kinds of administrative burdens as the “time tax”—a levy of paperwork, aggravation, and mental effort imposed on citizens in exchange for benefits that putatively exist to help them. This time tax is a public-policy cancer, mediating every American’s relationship with the government and wasting countless precious hours of people’s time.
The issue is not that modern life comes with paperwork hassles. The issue is that American benefit programs are, as a whole, difficult and sometimes impossible for everyday citizens to use. Our public policy is crafted from red tape, entangling millions of people who are struggling to find a job, failing to feed their kids, sliding into poverty, or managing a disabling health condition.
Our culture’s prevalent mythology portrays the private sector as a dynamic engine of growth always burdened by a sclerotic public sector. In their MRonline piece “Is public investment holding up capitalism’s dynamism?” C.P. Chandrasekhar and Jayati Ghosh show that public investment, not private sector dynamism, has been the key to economic performance in both China and the United States in recent decades.
. . . throughout this entire period, private capital provided only the smaller part of gross fixed capital formation in these two economies. Surprisingly, the share of the private sector investment in total fixed capital investment was even smaller in the US, at less than one-fifth, compared to China at just under 30 per cent. In other words, most of the fixed investment so crucial for capitalist accumulation and economic growth was undertaken by the public sector in these two most significant economies.
This is really quite an extraordinary pattern, which completely confounds the general perception of private accumulation being the driving force of economic expansion during the phase of globalisation. At least in the two largest economies in the world, it was actually public investment that was far more weighty and substantial in fixed capital formation, accounting for more than four-fifths of total fixed capital formation in the U.S. and more than two-thirds in China.
This underlines the fact that global capitalism is on life support provided by governments. Not only is central bank intervention through massive creation of liquidity now essential even to maintain economic functioning in the advanced economies, but even the investment that does occur is mainly because of public sector activity, with private investment playing at best a supporting role. Purely on its own terms, global capitalism is failing.
Squid Game has become the most-watched debut series in Netflix history, with 111 million households having seen at least some of it and 87 million making it through all nine episodes. That’s why we hope millions fans out there will read Minsun Ji’s brilliant piece “The Real-Life Auto Strike Behind the Runaway Netflix Hit Squid Game.”
The series portrays a violent survival game in which desperate and impoverished competitors compete to the death to win a huge glass pig filled with 46.5 billion won (nearly $40 million). Though even casual viewers can quickly grasp the show’s concern over inequality between the rich and the poor, much of its worldwide audience may miss the way that Squid Game comments on Korea’s union history and the role of worker solidarity in sustaining the humanity of the oppressed. . . .
One of the subtler nods to Korea’s labor movement comes in episode 5 (“A Fair World”), in a cryptic scene where the lead protagonist witnesses his fellow competitors turning on each other in a violent free-for-all. This traumatic event drives him into a trance as he remembers similar scenes of deadly violence from his life as an auto worker.
The casual viewer is likely unaware that these trance visions portray a real-life event in Korean history—the 2009 SsangYong Motors strike. That struggle ended in violent defeat when hundreds of rampaging police charged into the factory and brutally beat down the striking workers. . . .
The real-life 77-day SsangYong strike resulted when the company unexpectedly laid off 43 percent of its entire workforce (2,646 workers) to facilitate a profit-driven transfer of its assets to global investors . . . After the strike was violently suppressed, the strikers were blackballed from employment with other large Korean companies. In addition, SsangYong and local police used civil courts to sue them for damaging the company. Union members were ordered to pay hefty “economic damage” fines of about $9 million—a sum that these workers did not have and would never see in their lives. What’s more, the deferred interest on these fines was to increase by 620,000 won per day, soon exceeding 1.5 times the principal owed.
The Journal of Economic Dynamics features an important new paper by Hippolyte d’Albis, Ekrame Boubtane, Dramane Coulibaly, “Immigration and public finances in OECD countries.” The language is dry, but the punchline is dramatic: Immigration has a positive economic effect on countries with aging populations and large public sectors.
This paper shows that the macroeconomic and fiscal consequences of international migration are positive for OECD countries, and suggests that international migration produces a demographic dividend by increasing the share of the workforce within the population. The estimation of a structural vector autoregressive model on a panel of 19 OECD countries over the period 1980–2015 reveals that a migration shock increases GDP per capita through a positive effect on both the ratio of working-age to total population and the employment rate. International migration also improves the fiscal balance by reducing the per capita transfers paid by the government and per capita old-age public spending. To rationalize these findings, an original theoretical framework is developed. This framework highlights the roles of both the demographic structure and intergenerational public transfers and shows that migration is beneficial to host economies characterized by aging populations and large public sectors.
Returning to our recent theme of what the ruling class is thinking, we liked this older piece in The Guardian by David Edgerton, who seeks to explain how Brexit passed despite opposition from much of the business class: “Brexit is a necessary crisis — it reveals Britain’s true place in the world.”
Who backs Brexit? Agriculture is against it; industry is against it; services are against it. None of them, needless to say, support a no-deal Brexit. Yet the Conservative party, which favoured European union for economic reasons over many decades, has become not only Eurosceptic – it is set on a course regarded by every reputable capitalist state and the great majority of capitalist enterprises as deeply foolish.
If any prime minister in the past had shown such a determined ignorance of the dynamics of global capitalism, the massed ranks of British capital would have stepped in to force a change of direction. Yet today, while the CBI and the Financial Times call for the softest possible Brexit, the Tory party is no longer listening. . .
The fact is that the capitalists who do support Brexit tend to be very loosely tied to the British economy. This is true of hedge funds, of course – but also true for manufacturers such as Sir James Dyson, who no longer produces in the UK. The owners of several Brexiter newspapers are foreign, or tax resident abroad – as is the pro-Brexit billionaire Sir James Ratcliffe of Ineos.
But the real story is something much bigger. What is interesting is not so much the connections between capital and the Tory party but their increasing disconnection. Today much of the capital in Britain is not British and not linked to the Conservative party – where for most of the 20th century things looked very different. . .
Brexit is the political project of the hard right within the Conservative party, and not its capitalist backers. In fact, these forces were able to take over the party in part because it was no longer stabilised by a powerful organic connection to capital, either nationally or locally. . . .
Brexit is a necessary crisis, and has provided a long overdue audit of British realities. It exposes the nature of the economy, the new relations of capitalism to politics and the weakness of the state. It brings to light, in stunning clarity, Brexiters’ deluded political understanding of the UK’s place in the world. From a new understanding, a new politics of national improvement might come; without it we will remain stuck in the delusional, revivalist politics of a banana monarchy.
Progressive governance is hard, but a timely and important new special issue of The Forge, entitled “Governing Together,” explores how inside and outside players have navigated the tensions – sometimes with success, often meeting with disappointment. The issue features a roundtable conversation with Kevin Simowitz, Connie Razza, Jamila Michener, and Deepak, who explore “policy feedback loops” as a key, underused strategy to bridge between the world as it is and the world as it should be. They also assess how well the Biden Presidency and progressives have made use of these tools.
Kevin Simowitz: Let’s talk about how policy feedback loops factor into campaigns. What do we mean when we say policy feedback loops?
Jamila Michener: Think about the ingredients, like if we are baking a cake. You need the design of a policy, you need the key actors who are involved in making the policy, you have the way the policy is implemented and evaluated — all of those different pieces of the policy puzzle. Then you add the key ingredient, which is time. As time goes by, those ingredients create unfolding conditions. That might mean that in the next round of policymaking, it's easier to achieve your goals or that it's harder to achieve your goals. The policy feedback ingredient that is key here is time: how what we do now shapes the political circumstances that we're going to have to deal with going forward.
KS: Why are policy feedback loops a useful tool?
Connie Razza: Either way, the feedback loop is going to be there. If we don't attend to it, we can't make sure that it's in the service of people in our communities. Others will be attending to making sure that they're in the service of the powerful, the wealthy. We can actually be getting those immediate needs met and be, at the same time, undercutting ourselves for the long haul. Attention is needed to not just deliver in the immediate term but really lay the foundation for power in the future. It’s important to have the patience to be able to do the thing that's going to take a little while, it's going to get a ton of blowback in the moment, but it's actually going to set the conditions for the next big thing.
KS: How do you think the Biden administration is doing in regards to policy feedback loops? Do you feel like we've learned the lessons from the Obama administration?
Deepak Bhargava: I think it's definitely an improvement, but there's some major flaws. They clearly understand that the benefits have to be visible to the people who get them. The child tax credit is a good example of this. Some of the measures around trying to make sure that there are incentives to favor labor in infrastructure projects are very positive. The intent around institutionalizing racial equity across different agencies in government is very positive.
I think the big critique is they don't have a plan to save our democracy. It is under the biggest threat in recent memory, and it's really not a core priority.They assume that if you do good on the delivery of economic benefits, that will translate into lasting electoral majorities. However, if the rules are extremely rigged, as they are now, it may not.
KS: Any last remarks?
DB: Maybe just one thing. One of the greatest values of policy feedback loops is as a bridge between the world as it is and the world as it should be. Our movements get so polarized between folks who are very oriented to radical transformation and folks who are focused on the here and now. Policy feedback loops are crucial as a bridge for people who are committed to a radical transformative vision of society to say, how are we going to do our short-term battles in a way that alters power relationships, that moves us in that direction? The road to big social change is paved with policy feedback loop after policy feedback loop after policy feedback loop. So I think we need to build that bridge. I think it's a crucial missing element for us to get to the kind of transformation we really need.