When the New Deal was over, capitalism remained intact.
All opposed?
The rich still controlled the nation’s wealth, as well as its laws, police, newspapers, churches, colleges. Enough help had been given to enough people to make Roosevelt a hero to millions, but the same system that had brought depression and crisis – the system of waste, of inequality, of concern for profit over human need – remained.
The last 100 years of US history appear to me to be a period of great clawing-back. The capitalists, who bitterly resented having to negotiate with workers, did everything they could to destroy unions politically and legally. Meanwhile, the rich systematically bought up the media so that they could control the narrative by owning it. Attempts at racial, sexual, and social equality have been opposed quite effectively at every turn. Capitalism wants to return the US to its “good old days” as they were just before the civil war.
I’m not saying you’re wrong here, particularly, there is a great deal of truth in what you say,
But life, 100 years ago, in 1919, was in many ways incomprehensibly worse for the poor and underprivileged in the USA. This was the age of sharecropping (“we used to own slaves, now we just rent them”) and an era in which dying of insufficient access to calories was common. By midcentury things were a lot better, but the Fontenelle Family in 1967 [1] might still find today’s world rather more congenial than theirs was.
It’s still possible to starve to death in the USA, but it requires some slightly unusual circumstances. Health care that would have seemed like magic to the Burroughs Family of 1936 [2] is now available to most, albeit far too often via the emergency room at devastating cost. Etc.
Poverty remains and inequality remain with us, gross unfairness reigns, but the life of the people at the bottom is genuinely a hell of a lot better. Are we heading in the wrong direction? Hell yeah. Capital is and has been clawing back, with great vigor. But the graph from 1919 to 2019 still has a pretty hefty upward trend, despite what looks a lot like a pretty vicious downturn currently in-progress..
[1] Gordon Parks photo essay “Harlem Family,” LIFE magazine, 1967.
[2] _Let Us Now Praise Famous Men_, Agee and Evans, 1941 (describing events from 1936), or _Cotton Tenants_, 2013.
Andrew Molitor@#1:
But life, 100 years ago, in 1919, was in many ways incomprehensibly worse for the poor and underprivileged in the USA.
True. Pre-industrial agriculture and industrial manufacturing. You farmed or you coughed your lungs out in a steel mill.I suspect Zinn would point out that any improvements in those situations was a result of the New Deal (socialism!) or unions.
The inflection point I identify as critical, in my inexpert way, is the advent of consumer debt.
Prior, Capital grudgingly hewed to Ford’s observation that you gotta pay the plebes enough to buy your shit, otherwise the economy doesn’t function and nobody gets rich(er). After, Capital was able to get people to work for $X, and charge the $Y for their own production output, and pocket the difference $(Y – X) which was consumer debt.
The total dollar amount of consumer debt outstanding, and the total dollar amount of increased wealth in the 1%, well, every time I look them up I am amazed at how close those two numbers are.
Anyways. Poverty was and remains a real thing. It is still really bad for you to be poor, you die younger, cops shoot you a lot more often, and the psychological impact of Being Poor is roughly the same as it ever was. All this despite the fact that Poor People in the USA frequently have plenty of calories, a fairly large television, and at least one terrible automobile.
The trouble is that this is a really hard position to sell to the skeptical. Taking a reasoned and scientific approach to this sort of analysis is brutal, and ineffective.
Andrew Molitor@#3:
is the advent of consumer debt.
Uncontrolled debt also had the effect of creating an infinite-sized money supply, which is also part of the problem, and sent the gold-bugs screaming and gibbering for the trees.
@ 1 Andrew Molitor
But life, 100 years ago, in 1919, was in many ways incomprehensibly worse for the poor and underprivileged in the USA.
By what standards? I do not remember hearing about fentinal overdose epidemics, tent cities of the homeless in San Francisco or Los Angles. The US does seem to have given up lynching in favour of cops shooting people in the back.
Health care that would have seemed like magic to the Burroughs Family of 1936 is now available to most, albeit far too often via the emergency room at devastating cost
True but the same health care would have seemed like magic to a Vanderbilt or Rockefeller who could buy almost anything.
And there is the matter of cost which probably applied in 1919 and 2019. Does one go to the doctor or continue to eat?
Given access to the lowest of the low working class I probably agree with you that there is some progress but how many people in the USA sleep it their cars every night? How many US citizens go bankrupt if they have a medical emergeny?
In some cases, a rising tide raises all boats but they do not raise evenly and some even sink.
@ Marcus
Pre-industrial agriculture
Hey, what’s so bad about pre-industrial agriculture? Lots of hard work in most cases but often seasonal in the Northern Hemisphere so lots of down time for crafts, repairs to equipment, social events,the odd marriage, and so on. Assuming the crops came in reasonably well and the animals did well, the farmer and family was passably to very well fed.
Note I grew up on the closest one could come to a Pre-industrial farm so I have some slight idea of what we are talking about. A pitch fork and a hay wagon is not my idea of a nice rural oil painting.
You may not have noticed but the UK basically had to drive many people off the land, usually the Commons, (Enclosures Acts, etc.,) to provide an urban proletariat. The real Tragedy of the Commons was that people who had lived on the Commons for generations were driven into the citys to cough their lungs out in a steel mill.
It did not in any way create an infinite-sized money supply, at least in the standard economic use of the term. It certainly allowed banks to expand the money supply by lending, which was different because…uh…well, actually that bit was always how it was done.
An easily expandable money supply (in the sense I think you’re using that term) is not a problem; it’s in fact a solution to a major problem: hours of labour (obviously a key component of the economy) spoil and are lost very quickly. If someone wakes up one day willing to do a day of labour, goes out looking for a job, and gets nothing because nobody has enough spare money (“real,” “fake” or otherwise, so long as it’s something that can be used to pay taxes), that’s a day of labour contribution to GDP that’s lost forever, for no good reason. With the usual knock-on effect that the labourer didn’t go out and spend his share of that money on further stuff that would have paid more labourers.
(Actually, often adding more money to the supply may not even involve an expansion in money supply, depending on the reasons for people feeling they don’t have enough extra money to spend on something they want. It could well be a compensation for money being removed from the supply by, e.g., corporate profits being reinvested by the corporation or the shareholders that received that dividend.)
While it’s certainly true that uncontrolled increase in the money supply can cause runaway inflation, this is not too hard to keep under control, and it’s also pretty clear that some reasonable amount of inflation is in general a good thing, as it keeps people investing their money rather than putting it under their mattress, reducing the risk that the mattress owners might get together and all pull it out at once, thus potentially causing some unwanted inflation.
It’s also really damn clear, from the Great Depression, the Great Recession and many, many other examples that lack of money supply causes the economy to seize up, wastes massive amounts of available (and, usually, cheap!) labour, and just hurts everyone. Almost nobody, no matter how much they saved in any form, came out anything but much worse after the Great Depression.
They were already out there anyway, since they lack the most basic understanding of what an economy is or how it works. The core of an economy and any value you can hold for later in any form is exchange of labour. Even making new gold or changing ownership of existing gold requires labour. No matter how you configure any particular store of value, if you can’t buy labour with it, it’s valueless. (There’s a reason that preppers put a lot more food and bullets than gold into their shelters; they know very well how well gold will hold its value after an apocalypse.)
jrkrideau, @ #5
Well, they didn’t have tents, but they were there… There’s a name for the particular type of shanty town that flourished all across the USA during the Great Depression: Hooverville.
From the OP:
Well, of course. Arguably, the true purpose of the New Deal was to save capitalism from the consequences of the Great Depression, and it just happened to improve people’s lives along the way.
jrkrideau #5 Quite right, it’s all relative. I am sure you could find some people who would find, say, the ability to reliably find enough calories to sustain life to be a minor gain, hardly worth mentioning. Not a *lot* of them, but sure, some.
I think we are romanticizing the past a bit. Conditions in the pre-industrial may have not been that good. Lifespans alone suggests that. There were constantly panics and periodic famines and the like. Remember also that, as one historian put, every man, woman, and child in pre-Civil War America went to bed drunk (apocryphal, but alcohol consumption was vastly higher).
I think one of the biggest problems is technology and centralization of power and control means that people have far fewer opportunities to be independently self-supporting. Especially in “advanced” countries.
jrkrideau@#5:
You may not have noticed but the UK basically had to drive many people off the land, usually the Commons, (Enclosures Acts, etc.,) to provide an urban proletariat. The real Tragedy of the Commons was that people who had lived on the Commons for generations were driven into the citys to cough their lungs out in a steel mill.
It’s basically the same process as happened in Ramp Hollow [stderr] – there was a need to push subsistence farmers into the economy and it was ruthlessly executed using all the tools available to government.
Curt Sampson@#6:
It did not in any way create an infinite-sized money supply, at least in the standard economic use of the term.
You’re right. I was thinking about it from the perspective of a gold bug. Unfortunately I’ve been bumping up against those guys lately.
Wasn’t that the first derivative financial instrument, though? I don’t fully understand how all that works but it seems like there’s a pretty serious issue with over-leveraging debt. Economics makes my head hurt.
bmiller@#9:
Remember also that, as one historian put, every man, woman, and child in pre-Civil War America went to bed drunk
My dad was part of a team of historians that did a series of books on daily life in medieval Europe. One of the sources he relied on was a particular chatelain who kept meticulous records of everything including local alcohol consumption. People were drinking several liters of beer a day, unless they could afford wine in which case they drank even more.
Towns that ran out of beer or wine suffered dysentery or cholera. The water supplies weren’t clean and making beer out of water made it “safe” (later, boiling water for tea had a similar effect on health outcomes)
Anyhow, people weren’t going around lit all the time for no reason. And, popular life probably wasn’t so great, either.
I read another analysis of drinking in the French and British military during the napoleonic wars. It does sound like people were lit all the time. I think I would appreciate a drink, too, if I were expected to serve in Nelson’s navy or face Bonaparte’s grenadiers.
Much of history makes a great deal more sense once you realise how much people were drinking – and that the people in charge were drinking even more.
I don’t think it’s “romanticising the past” to remember that it took a great deal of coercion of various forms to push people off the land and into the slum tenements of the early industrial revolution, any more than it’s romanticising the past to point out that China’s Great Leap Forward was accomplished at the cost of millions of deaths – in fact, I’d argue very strongly that it’s revisionist not to. Yes, pre-industrial agricultural lifestyles were hard and unpleasant by modern standards – but in many cases, life in the new industrial towns was even worse. A lot of people only ended up there because they’d had all other options forcibly taken away from them, and many of them did not survive the transition.
Dunc: Good points. I should not have pushed that idea so hard. Also: my other point: people have been denied independence…supports your point.
One unrelated example: While the Favelas and Pueblos Miserias of South America are terrible, they are arguably better than government-built “affordable housing” built far away from jobs and services. And they usually slowly improve over time. If the State provides basics like sanitation and water, it is arguably better than state-funded housing (which is inevitably marred by corruption and poor quality)
Some argue that the First Grand Mistake was settled agriculture. People living in hunting and gathering cultures dominated by small kinship group organization ate better and were mentally healthier than peasant farmers. Even if the former did not build massive monuments that we still admire to this day. :)
I remember when that business about the hunter-gatherer transition was going around. The story seemed to be that everyone was way healthier when they were hunting and gathering, but the life expectancy was insanely short. I never could figure out what the deal was. Were they all getting killed in predators or something? There’s probably extensive wikipedia on this by now, I guess.
Marcus @#11:
To help with the gold bugs, and probably massively increase anyone’s understanding of how a national, fiat currency economy works, I recommend Diagrams & Dollars by J.D. Alt. It will give most people a lot more than you’d expect from 40 pages and $1.50. And in particular it will help clarify that “national debt” is, despite the similarity in name, something entirely different from the kind of debt created when you or a company takes out a loan.
The key point as far as debt goes, for those who don’t want to spend a $1.50 to read the book above (or spend the time to find alternative sources explaining Modern Monetary Theory), is that issuing “national debt” is just a technique for simultaneously satisfying demand for savings within the economy and reducing the money supply: you take back money you’d previously created in exchange for a promise to re-create that money later. Note that this has some characteristics quite the opposite of private debt: it’s risk free (since it’s “paid back” by the government simply creating money as it already does when spending) and ability to borrow is limited by the amount of money previously created.
I’m can’t tell what “that” is referring to, but given the general context of the discussion, the answer would be “no, nowhere near.”
Derivatives are just contracts whose value depends on (is derived from) the value of something else, and are often used for moving risk around. It’s normal for a farmer to enter into a contract to sell his crop for a fixed price long before he harvests it (and thus the actual value of the crop is known); the farmer thus knows he’ll have enough money to plant another crop next year and the trader who took the buy side of that contract (whose value is clearly derived from the as-yet-unknown actual value of the crop) now holds the risk that the crop may fail (and receives a nice reward if it’s a bumper crop). The first recorded use of this kind of thing was by Thales, in the 6th century B.C., but I expect it goes back far further. Basically, any kind of insurance contract is a derivative financial contract, so you can see that these are kinda useful. Like any tool, these can also produce unpleasant results when abused.
Well, the first thing you need to clarify is whether you’re talking about private debt or national debt, since these are utterly different things. As I mentioned above, “national debt” isn’t any kind of debt at all but is money supply control. There’s no leveraging or anything like that in that case.
The issues with private debt come not just from “over-leveraging” and the like, but often how we treat debt in the first place. Margaret Atwood starts the first lecture of her 2008 Massey Lecture series, Payback, with an illuminating anecdote:
David Graeber, in Debt: the First 5000 Years, expands on this thought, noting that the assumption that “debts must be repaid” is both untrue in finance (much of finance is about dealing with counterparty risk) and is not an economic but a moral prescription (and a dangerous one at that). Read the first four pages to get his initial anecdote.
For some truly disgusting stories (and clear harm to society, including loss of GDP and tax revenue), you can check out how Chicago targets poor people with traffic violations to the point of driving them into bankruptcy and how a hospital relentlessly sues its own poorest employees to force them on to payment plans they can’t meet for medical services. In both cases, the victims usually end up owing several multiples of the original debt.
Curt Sampson@#18:
just a technique for simultaneously satisfying demand for savings within the economy and reducing the money supply: you take back money you’d previously created in exchange for a promise to re-create that money later
I can see I’m going to have some reading to do. Thanks for the references.
Someone on NPR’s Planet Money podcast was describing debt as an elastic money supply – when the government “collects your taxes” it actually deletes money. The money does not go somewhere and sit in some database field getting bigger – it vanishes. Then when the government pays for something it creates more money by writing a check. Or something like that. I think I got it but it made my head hurt.
I’m can’t tell what “that” is referring to, but given the general context of the discussion, the answer would be “no, nowhere near.”
I was referring to private debt. In the sense that private debts then become something that can be packaged and sold, thereby creating a secondary market for debt. I was thinking of the supposed multiples of the “real” economy that exist in the form of outstanding derivatives based on it.
As you infer, correctly, I do not understand this stuff as well as I ought to. I never got beyond small-cap business economics (which still resembles a family, in that you have income and outgo and a balance and debt)
On The Media has been doing a series on eviction, and how renters farm the poor for surcharges and late fees. It’s really upsetting. I think Reveal (was it?) had a series about payday lending and how predatory that is. I can’t remember what podcast that was – it was so upsetting I had nightmares afterward.
Andrew Molitor@#17:
I remember when that business about the hunter-gatherer transition was going around.
Whenever someone starts talking about idealized human states in the prehistoric past, I start to get a tingle from my Jean-Jacques Rousseau alarm. Rousseau had a lot of ideas that he pulled out of his ass, as enlightenment philosophers were wont to do: something about humans existing in some primal state of simplicity and honesty before the evils of civilization. (Something that appears to have never been the case)
Yup, that’s basically it. The way the system’s been set up with the Federal Reserve and all that is fairly complex for no particularly good reason, but your head might hurt less if you think about it initially as how it would work if it were all done with physical banknotes. Government prints up $80M and ships it over to Lockheed, and they get back an F-35A in return. At some point all those banknotes will come back as taxes get paid, and since they’re by now all crinkled and dog-eared, you might as well just burn them. If you need to spend $80M on another F-35A, you can just print up another $80M in fresh new clean currency. Whether you use the old cash or the new, it was out of circulation (not part of the money supply) for a while, and now it’s back in. (You could do this yourself with your own “Marcus Bucks” if you can convince people to accept them.) As the issuer it’s not really “debt” because nobody can force you to exchange those banknotes for gold or anything else.
Maybe another way to look at it is, what if the government did have a database field for “unissued currency”? If you set that to ten trillion dollars, but don’t spend it, you can reset it to twenty trillion dollars the next week, and nothing changes. The week after you can set it to five trillion and still nothing changes; the 15 trillion you just “lost” by changing that database field makes no difference to anything at all.
Once people and companies in the private sector start making and accepting IOUs between themselves, you (as a member of the private sector, now) instantly have the ability to buy and sell those IOUs, if you can find someone to be the counterparty in such a transaction. It could be that some of those flow around without ever being turned into cash: I swap something for a Lockheed IOU, you swap me something for that IOU, and then you use that IOU to buy something from Lockheed at which point the IOU vanishes. That “created” non-government-issued money as it looped around, but that’s not a “multiple” of the real economy, that is the real economy because we were all trading with each other as that IOU moved around.
The predatory lending situation is nothing to do with any of this: it’s just nasty use of power differentials to fuck over people. Basically, if you owe me a little bit of money, can’t pay it right this instant, and I have lawyers, I can hit you with late charges, sue you and charge you for the cost of suing you, and so on. Rinse and repeat and I can run your debt up as high as I like. It’s utterly despicable. And now you know why some religions prohibit charging interest.
Marcus @#20
https://www.youtube.com/watch?v=ad6V9AKt24U
You might find this lecture very interesting (it sure was interesting for me). It’s about how anthropologists and missionaries create narratives about the primitive tribes they are observing.
When it comes to the living conditions of primitive tribes, you have to take both very positive and very negative accounts and descriptions with a grain of salt. The anthropologist who reports about these people and their lifestyle has their own biases and often they are interested in portraying the primitive people in a certain way. For example, countless very negative portrayals or primitive people were created by missionaries who actually strongly disliked these people they were trying to convert to Christianity. Of course, this goes also for the opposite narratives, and also somebody who idealizes primitive lifestyles probably has some vested interests and biases that skew the narrative.
I am by no means certain it’s applicable, but the lifestyle of an apex predator might serve as a sort of extreme endpoint.
Basically, a Siberian Tiger works for something under 10 seconds per week, the rest of the time being spent (mainly) conserving energy, a little eating, a little stalking. This sounds kind of great, except that the conservation of energy Really Matters.
During the 10 seconds or less of work, the tiger’s burn rate is completely insane. In winter, a tiger can miss once, maybe twice. Two misses in a row puts the animal is a severely compromised position with, probably, insufficient calories to carry out a successful hunt. Death is a highly probably outcome at this point.
Almost any non-trivial injury also means lights out, because it compromises the animal’s ability to hunt.
When it’s working, the lifestyle is OK, but it’s crazily unstable. Almost any divergence from the optimum results in death.
Being a billionaire sounds a lot less great if is comes with a shotgun duct-taped to your neck, which is why actual billionare-ing is so much about preventing people from taping shotguns to ones neck (literal or figurative).
Interestingly, at the very very bottom of the socio-economic ladder here in the USA, almost the exact opposite obtains. The life is thoroughly miserable, but a) contains enough calories to survive and b) is almost completely stable. Every possible fuckup, disaster, and injustice has already occurred.
@#23
This is true only for somebody who is already unemployed and homeless. Besides, “stable” seems an old word when talking about people who are denied health care and thus every health complication, even a minor one, can result in a loss of whatever stability there was.
“This is true only for somebody who is already unemployed and homeless.”
Yes. Here in the USA, that is currently the “very very bottom of the socio-economic ladder” or very damned close to it.
Andrew Molitor@#23:
During the 10 seconds or less of work, the tiger’s burn rate is completely insane. In winter, a tiger can miss once, maybe twice. Two misses in a row puts the animal is a severely compromised position with, probably, insufficient calories to carry out a successful hunt. Death is a highly probably outcome at this point.
So it’s basically like being a venture capitalist.
I *wish* they’d die after a couple deals go bad. I’m pretty sure that abject failure in venture capital is what you need to go in to private equity, though?
Andrew Molitor@#27:
I’m pretty sure that abject failure in venture capital is what you need to go in to private equity, though?
They have arranged the system so that it’s all “fail up” – the worse you are the bigger your deals.
A German, a Cuban, a Silicon Valley entrepreneur, and a venture capitalist are riding along in a train.
The German extracts from their luggage a large bottle of beer, opens it, takes a single generous swallow, and throws the bottle out the window.
“Oh, in Germany, we have so much beer, it doesn’t matter.”
A few minutes later, the Cuban cuts and lights a cigar, inhales luxuriously, and throws the burning stogie out the window.
“You know, in Cuba, we have so many cigars, see?”
The entrepreneur thinks about these events for a little while, and then grabs the venture capitalist and hurls him out the window.
It’s not in any way applicable.
Well, aside from a (small) segment of the criminal world, being a billionaire comes with nothing like that.
This also is clearly wrong. Nobody sensible would call frequent states of food insecurity a “stable” life, and you typically reach that long before you even become homeless, where most people would agree “I’m not sure where I’m going to sleep tonight” is also not a “stable” life. (And, of course, as Andreas Avester points out, you still have the potential for health-related disasters causing even more misery.)
Well, Curt.
You are clearly thinking in terms of people slightly less than bottomed out. The men I hang about with have exactly no food instability, they get their food for free from a number of well defined and reliable sources (food banks and soup kitchens) and then throw away a few thousand calories of half eaten burritos and whatnot that get given to them as they panhandle.
These men, and they are very nearly all men, have exactly no instability over where they are going to sleep. It is going to be outside, either here, or there, or if it’s raining, over there. If it’s very cold they will tough it out at the shelter, which is in a fourth place..
These men also qualify for Medicaid, and get their health services at the ER, which is a surprisingly good system (for the client, it’s insanely expensive for the people paying the bills.)
It is a very simple, and profoundly unpleasant life, but it runs on remarkably reliable rails. It involves a great deal of walking. Now, I live in a place with quite good social services for the homeless, at present, but similar services and facilities have been available in a number of other places I have lived. There may be vast swathes of the USA where this sort of situation does not obtain, but there are clearly vast swathes where it *does*.
One step up from the bottom? Sure, you’re hanging by a thread, and at any moment whatsoever you could fall, dramatically crashing to the bottom, at which point you will have to work like hell, and get lucky, to scramble back up.
On he bottom and resigned to it? Almost completely stable. What makes it remarkable and noteworthy, perhaps, is that unlike in many other countries, that “stable, at the bottom” position is not “dead” (although, obviously, “dead” is a stable position here as well).
So those who are not male and childless (or don’t care about their children) or don’t live in those areas with the services you’ve described have not yet “bottomed out”?
It sounds to me more like the people you’re describing got (only relatively) lucky in terms of circumstances and location and are resting on a platform someone built for them above the bottom. (Which I’m glad to hear this platform exists, at least for some people in some places.) But I think most people would interpret “bottom” as “it can’t get worse than this for anyone in the country,” which is clearly not the case here.
Women and families make up a disproportionately small fraction of the homeless population in the USA, for reasons that I understand only partially. Yes, they bottom out less frequently than single men. If it makes you feel better, people of color, especially indigenous people, become homeless at disproportionately high rates.
You may refer to this is a platform suspended slightly above the bottom if you like, it matters not in the least. It is very very far down the socio-economic spectrum, no matter how you slice it.
I was merely making the remark that there is this curious point of remarkable stability right…. >there< without any remark express or implied about the demographics of who occupies it, its particular mechanisms or reasons for existing. It simply happens to be a thing I know about it, and I found it interesting to note.
And, yes, “bottoming out” (in almost any sense you care to intend) and “becoming homeless” are not quite the same thing. They are entangled, but not identical.
Maybe because living homeless is a much more practical and (again, only relatively) less crushing lifestyle for a single person with no responsibilities than with someone responsble for taking care of children?
Personally, I would find single homeless life to be considerably easier than to be terribly poor and have the reponsibility for taking care of one or more children as well.
Andrew Molitor: Snot punk band NoFX have a song titled “Freedom Like a Shopping Cart” that you might find…interesting.
I gotta say that the bravado is something I have not personally encountered ;) But the general thrust is, well, it’s not wrong, eh?