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Month: May 2016

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(How) Does Capitalism Incentivize? Part I

This post originally appeared June 9, 2015.

In my youth my parents would defend capitalism by saying that it incentivized work in contrast to communism. If you thought you could get paid the same amount whether you worked hard or not, you would see no reason to work hard or better. It isn’t just my parents. A recent This American Life podcast, “Same Bed, Different Dreams (transcript),” includes a recording smuggled out of North Korea in the early 1980s of Kim Jong-Il saying that North Korean filmmakers have no incentive to make creative and interesting work because of communism. How did everyone from one of the last communist dictators to my parents come to believe that capitalism incentivizes hard work, creative and inventive work, while communism does not?

It turns out that the men who defend and articulate the systems under dispute here–Adam Smith and Karl Marx–agree on quite a bit when it comes to what incentivizes workers. Workers work in order to eat. Smith and Marx agree that capitalists try to pay workers as close to whatever it costs to reproduce labor: “A man must always live by his work, and his wages must at least be sufficient to maintain him” (Smith, The Wealth of Nations, 61). To reproduce labor can be understood in two ways: to get it to come back again the next day or to add more labor to the force. In the first sense, to reproduce labor is to renew the body of the worker for more work. In the second sense, to reproduce labor is to produce more bodies of workers through biological reproduction. Both senses are biological reproduction, one is the furthering of energy in the same body and the other is procreative.

Smith explains the reproduction of labor in connection to the law of wages:

If this demand [for labor] is continually increasing, the reward of labour must necessarily encourage in such a manner the marriage and multiplication of labourers, as may enable them to supply that continually increasing demand by a continually increasing population. If the reward should at any time be less than what was requisite for this purpose, the deficiency of hands would soon raise it; and if it should at any time be more, their excessive multiplication would soon lower it to this necessary rate. The market would be so much understocked with labour in the one case, and so much overstocked in the other, as would soon force back its price to that proper rate which the circumstances of the society required. It is in this manner that the demand for men, like that for any other commodity, necessarily regulates the production of men, quickens it when it goes on too slowly, and stops it when it advances too fast (71).

You need workers, so you have to attract them through wages. You pay them. They produce. You pay them. But this doesn’t seem to produce wealth. To produce wealth you do two things: you invest your capital into machines and you divide the tasks of labor. So then you need more workers. You produce more. The more you divide labor, the less your workers needs skills, so the less you need to pay them. But demand cannot keep up with this cycle. Demand levels off and now you don’t need those workers. What happened while you were needing more workers is that the workers were responding to the labor market demand for more workers by having more workers, ie. children. Now they have more workers to satisfy the market, but the market is glutted. Demand levels off. You can pay your workers a whole lot less because you don’t need to pay as much to reproduce the worker because if that worker can’t sustain herself to come back the next day, someone else who wasn’t working can step in to fill that worker’s place.

In a capitalist society, the incentive to work is to live. The capitalist has an interest in keeping the worker as close to the edge of living so that she will work for a lower wage. Even Smith warns against this outcome of his own system when he says that “Where wages are high, accordingly, we shall always find the workmen more active, diligent, and expeditious, than where they are low” (72).

The capitalist’s incentive is productivity and the capitalist might realize that she can pay workers more and find more productivity. But she can also realize that she can pay them less than they are worth (less than the value they produce by adding labor to the raw materials on which they work), and still recoup a profit. The reason the capitalist can pay the worker less than she is worth is that she must work in order to eat. There is very little bargaining when one would have to walk away to protest and to walk away is to die. Part of the problem with supposing that capitalism incentivizes workers to work harder is that it assumes that workers recoup the benefits of their increased productivity. But if you work a wage job in capitalism, you actually find yourself in a more precarious situation and get paid a smaller percentage of the value that you produce the more productive you are. The capitalist pays you an hourly wage. Say you work eight hours and are paid ten dollars an hour for 80 bucks a day. If you make a widget that will be sold for $12 and it costs the capitalist $2 in materials, you add $10 in value for the widget.  Let’s say you produce 8 in a day. Then the capitalist is paying you for as much as you have produced. You are paid as much as the value you produce. The capitalist examines this situation and wonders whether you can live on less in order to reduce the wage and make more profit or she can find ways to make you more productive by dividing labor or giving you some tools. So the next day you make 16 in a day. You are really productive. But you went from getting 100% of the value you added to 50% of the value you added. Now really, what’s your incentive to work harder? The harder you work now, the more it costs to reproduce your labor, but you aren’t producing more for yourself but for the owner. Perhaps you think this makes you more indispensable so you are more secure in your work? But no, as the labor is divided in smaller parts to make workers more productive and tools are added to make you more productive as well, the easier it is to replace you and so the more willing you are to work for less.

So when people say that capitalism provides an incentive where communism does not, they are saying that capitalism does a better job of keeping people in the precarious position where they must work for whatever little they can get in order to live. The harder workers work the less of their own value they recoup. So what does capitalism incentivize? The problem with saying it incentivizes people to work harder and be more creative is that it assumes that everyone has the same incentives in capitalism–the owners and the workers. But this is not the case. Smith argues that everyone pursues her self-interest in capitalism, but the interest of the capitalist is to be more creative about how to make more money by creative uses of machinery and labor, reading the market well, and paying labor less while the interest of the worker is to be paid more so that she can stop worrying about the day-to-day concern for living. The better the capitalist organizes work, the more she recoups. The harder the worker works, the less she recoups.

Dan Horn, columnist at the The Cincinnati Enquirer interviewed a middle-class citizen, Donna Palmatary, about the lifestyle and income of the middle class for a USA Today article on the 2015 Pew Charitable Trust Study on the shrinking middle class, who aptly distinguishes the middle class from both owners and workers when she says, “You have to work for what you have.” Owners don’t work for what they have, and the workers don’t have what they work for.

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When Is It Rational to Trust a Stranger?

This post originally appeared October 13, 2015.

A father hands over the keys to his house to a stranger, his children fast asleep upstairs. Two grandparents share their living room with a traveling salesman in town for the week. A young woman falls asleep in the guest room of a man she has never met before that night. While such scenarios may sound like the beginning of a horror film, it is now a fact that millions of individuals in over one-hundred-and-ninety countries rely on online services to rent lodgings, most often in private homes. The broader sharing economy encompasses, among other things, the sharing of workspace, the sharing of automobiles, and even the sharing of home-cooked meals. In some cases what is shared is publicly owned, such as in most bicycle sharing schemes. But typically one party owns what is shared in an exchange between strangers.

All this cooperative activity between strangers is taking place in an age when parents feel the need to install “nanny-cams” in their children’s rooms, companies monitor their employee’s web surfing, and a proliferation of online services allow anyone to order a background check on anyone else. Do these apparently divergent cultural trends point to a more fundamental polarization of values? Or do they simply represent differential responses to varying social circumstances?

To the skeptic, the trustful enthusiasm of the sharing economy is a symptom of naïveté. The only cure is a painful experience with cynical breach of faith. Recent cases like the alleged sexual assault of an airbnb guest are the canaries in the coalmine. To the optimist, these sensational cases are remarkable precisely because of their paucity. What the amazingly rapid growth of the sharing economy teaches us is that human beings, in aggregate, are much more trustworthy than previously imagined.

I think that both the skeptic and the optimist have got it wrong. On the one hand, it’s silly to think that involvement in the sharing economy confers upon its participants the esteemed moral character trait of trustworthiness. On the other hand, the trusting attitudes manifested in many corners of the sharing economy are both rational and prudent, under the right conditions.

Borrowing a term from Princeton philosopher Philip Pettit, I will refer to these as the conditions for trust-responsiveness. In a paper delightfully entitled “The Cunning of Trust”, Pettit makes the case that you can have reason to trust others even if you have no antecedent knowledge about their reliability. This is because you can make them responsive to your trust simply by communicating that you trust them. This might seem like pulling a rabbit out of hat. But on reflection, the dynamic is not unfamiliar.

Pettit’s analysis rests on a relatively uncontroversial psychological claim: human beings care very much about their standing in the eyes of others, and are often moved by love of regard. In his Theory of Moral Sentiments, Adam Smith, the father of modern economics and a keen psychologist, went so far as to say that Nature has endowed Man “with an original desire to please, and an original aversion to offend his brethren. She taught him to feel pleasure in their favorable, and pain in their unfavorable regard. She rendered their approbation most flattering and most agreeable to him for its own sake; and their disapprobation most mortifying and offensive.”

What other people think of us matters to us a great deal. In particular, a reputation for trustworthiness has both intrinsic and instrumental value. Pettit notices that when people decide to rely on us, they signal to others that they regard us as trustworthy. We are motivated to be responsive to their trust because we want that signal to be broadcast. As Pettit puts it, “The act of trust will communicate in the most credible currency available to human beings – in the gold currency of action, not the paper money of words – that the trustor believes the trustee to be truly trustworthy, or is prepared to act on the presumption that he is.”

When a person is widely perceived to be trusted, he or she gains a highly valuable status. When we manifest trusting reliance, we give the person we rely on an incentive to do the very thing we rely on them to do, because they want to cultivate and maintain that status. This is why the trust of strangers can be a rational gamble. It is never a sure bet, but it is a good bet more often than one might imagine. And this is why the skeptic is wrong. The dramatic growth of the sharing economy is predicated on fundamental facts about of human psychology.

But the optimist gets something wrong as well. There is no necessary connection between ubiquitous sharing and the dawn of a new age of trustworthiness. Trust-responsiveness and trustworthiness are altogether different animals. A trustworthy person will do what he or she is trusted to do regardless of whether anyone else is watching. This is why we hold trustworthy people in esteem and think that trustworthiness is a morally desirable trait of character. In contrast, trust-responsiveness is predicated on a desire for good opinion and is therefore, at best, morally neutral. Moreover, trust-responsiveness will only survive under certain institutional conditions.

It’s worth noting that these conditions exist par excellence in many corners of the sharing economy. The oxygen in which this economy exists is the collection and dissemination of reviews. On airbnb, for example, hosts who meet certain criteria of responsiveness, commitment, and five-star reviews are granted the coveted status of “superhost” which is signified by a red and yellow badge of approval on their profile. This status may increase demand for booking, thereby providing a financial incentive to hosts looking to juice their profits. It also works because it flatters people who self-identify as open, warm, and hospitable.

But we shouldn’t be too cynical about all this. Aristotle noticed that moral virtue could be acquired by cultivating good habits. It may be that exercise of the dispositions of trust-responsiveness can help cultivate the morally desirable trait of genuine trustworthiness. Maybe. I think the jury is still out on that one.

Our judgments about whether to expose ourselves to the hazard of trust are influenced both by our beliefs as by arational factors. Sometimes we just have a bad feeling about someone – we don’t like the cut of their jib. These kinds of knee-jerk responses can be wiser than our reflective selves, which are prone to rationalization. But just as often our “intuitive” judgements reflect unexamined biases. A 2014 Harvard Business School study found that “non-black hosts are able to charge approximately 12% more than black hosts, holding location, rental characteristics, and quality constant. Moreover, black hosts receive a larger price penalty for having a poor location score relative to non-black hosts.” Clearly we have a long way to go in learning how to trust well and without prejudice.

My own family rents out a garden-level apartment in our house on airbnb. We’ve met many interesting people, including one guest who eventually became a co-author of mine. And the money we earn helps to pay a hefty daycare bill. When we tell our friends and family that we have lent our keys to scores of people, they sometimes respond with horror and disbelief. And to be honest, in some frames of mind, we feel pretty nervous ourselves. But overall I think we are making a rational bet, and not one that presupposes a Pollyannaish faith in humanity. Of course, a truly malicious person can always rack up sterling reviews with the express purpose of lowering his victim’s defenses. But this kind of evil, like moral virtue, is rare.

My other work on trust and promises can be here.

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Vote On Principle*

Donald Trump. Not a day goes by when I don’t hear that name. It is constantly on the news and it is what everybody is talking about. So much so, it is almost inescapable. This man has killed it. Since the start of his campaign he has managed to grasp the attention of the media, the nation and the world by saying whatever he wants, especially if it causes controversy. This tactic—whether purposeful or a mere reflection of his values and beliefs—has worked: Donald Trump is essentially the de facto Republican nominee. So hats off to you Mr. Trump, you have shown us how anger (against “Washington” politicians) and fear (of economic instability, foreigners, etc.) can be preyed on to mobilize a campaign to win. In the meantime, the Republican Party is struggling and making a concentrated effort to unite the party behind their champion. This might prove to be a challenge because Trump has essentially vilified everyone: not only his former opponents running for the Republican nomination (and in one case their wife) but entire nationalities, ethnicities and religions.

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Uninformed Public is Danger to Democracy

The economy continues to struggle, the educational system underperforms and tensions exist at just about every point on the international landscape. And there is a national presidential selection process underway. It seems, in such an environment, that citizens would feel compelled to get themselves fully up to date on news that matters. It also would stand to reason that the nation’s news media would feel an obligation to focus on news of substance.

Instead, too many citizens are woefully uninformed of the day’s significant events. A pandering media, primarily television, is content to post a lowest-common-denominator news agenda, featuring Beyoncé’s “Lemonade” release and extensive tributes to Prince.

Constitutional framer James Madison once famously wrote, “Knowledge will forever govern ignorance. And a people who mean to be their own governors must arm themselves with the power which knowledge gives.” Citizens who are unable or unwilling to arm themselves with civic knowledge diminish the nation’s ability to self-govern.

Technological advances have made it easier than ever for citizens to stay informed. The days of waiting for the evening television news to come on or the newspaper to get tossed on your doorstep are long gone. News is available constantly and from multiple sources.

A growing number of citizens, particularly millennials, now rely on social media for “news.” While that might seem like a convenient and timely way to stay informed, those people aren’t necessarily aware of anything more than what their friends had for lunch. Data from the Pew Research Center indicates that about two-thirds of Twitter and Facebook users say they get news from those social media sites. The two “news” categories of most interest among social media consumers, however, are sports and entertainment updates.

Sadly, only about a third of social media users follow an actual news organization or recognized journalist. Thus, the information these people get is likely to be only what friends have posted. Pew further reports that during this election season, only 18 percent of social media users have posted election information on a site. So, less than a fifth of the social media population is helping to determine the political agenda for the other 80 percent.

The lack of news literacy is consistent with an overall lack of civic literacy in our culture. A Newseum Institute survey last year found that a third of Americans failed to name a single right guaranteed in the First Amendment. Forty-three percent could not name freedom of speech as one of those rights.

A study released earlier this year by the American Council of Trustees and Alumni had more frightening results. In a national survey of college graduates, with a multiple-choice format, just 28 percent of respondents could name James Madison as father of the Constitution. That’s barely better than random chance out of four choices on the survey. Almost half didn’t know the term lengths for U.S. senators and representatives. And almost 10 percent identified Judith Sheindlin (Judge Judy) as being on the Supreme Court.

The blame for an under-informed citizenry can be shared widely. The curriculum creep into trendy subjects has infected too many high schools and colleges, diminishing the study of public affairs, civics, history and news literacy.

The television news industry has softened its news agenda to the point where serious news consumers find little substance. Television’s coverage of this presidential election cycle could prompt even the most determined news hounds to tune out. The Media Research Center tracked how the big three broadcast networks covered the Trump campaign in the early evening newscasts of March. The coverage overwhelmingly focused on protests at Trump campaign events, assault charges against a Trump campaign staffer and Trump’s attacks on Heidi Cruz. Missing from the coverage were Trump’s economic plans, national security vision or anything else with a policy dimension.

When the Constitutional Convention wrapped up in 1787, Benjamin Franklin emerged from the closed-door proceedings and was asked what kind of government had been formed. He replied, “A republic, if you can keep it.” Those citizens who, for whatever reasons, are determined to remain uninformed, make it harder to keep that republic intact. Our nation, suffering now from political confusion and ugly protests, sorely needs a renewed commitment to civic knowledge.

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The Dangers of Partition as Peace

The glass façade of Kosovo’s parliament building is no stranger to the impact of rocks. A tall wedge of grey and blue, the building stands in the center of downtown Prishtina, Kosovo’s largest city and capital. The square it inhabits is usually a peaceful space, filled with strolling couples, street musicians and men selling neon plastic pinwheels to passersby.  Yet, in recent months, clashes between protesters and riot police have also gripped the downtown, once again pulling the country into the international spotlight.

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Should Felons Be Able to Vote?

Many Indiana residents went to the polls on Tuesday to exercise a key privilege and responsibility granted to those fortunate enough to live in a democracy: the right to vote. However, not everyone was able to go make their voices heard. Up until April 20th, there were four states where anyone convicted of a felony was permanently disenfranchised from voting, and six where some or most convicts are banned. However, the number of states with automatic bans has now dropped to three. Terry McAuliffe, Governor of Virginia, recently signed an order that restored voting rights to 200,000 ex-cons – not in time for Virginia’s primary, but for the general election in November.

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Freedom of Association and Right-to-Work Laws

This post originally appeared on October 20, 2015.

In March 2015, Wisconsin became the 25th state to adopt “right-to-work” laws. Kentucky, Illinois, Missouri, New Mexico, Montana, and West Virginia are all considering such laws. Right-to-work laws do not prohibit unions. They prohibit agreements between unions and employers that require workers to be members of unions or to pay agency fees for the benefits they receive from union representation.

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Why I’m Voting for Hillary

I’m voting for Hillary Clinton. As a young, liberal, white male, that may come as a surprise. Bernie Sanders has captured the heart and soul of my generation through a combination of emphasis on environmental protection, social justice, and student debt. His campaign has churned out t-shirts bearing his face among the cast of Seinfeld and depicting, in bold black and white, his arrest as a student demonstrator during the civil rights movement.   He has successfully portrayed himself, despite being a 74-year-old white male and career politician, as an outsider on a crusade to reform government and return the reins of power to the people, rather than big-moneyed interests and corrupt politicians.

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Outdoor Exercise Versus Air Pollution

A recent study by the University of Cambridge reported that the benefits of walking and cycling outside outweigh the risks associated with current air pollution levels in the UK . Approximately 40,000 deaths in the UK per year are attributed to exposure to outdoor air pollution, and outdoor exercise contributes to that exposure. However, according to the University of Cambridge researchers, the health benefits of exercise, namely lowering the risk of diabetes, heart disease, and several cancers, outweighs the harmful effects of air pollution to one’s body.

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Negotiating with Terrorists in Colombia

The thought of allowing a terrorist group who has committed human rights violations such as the murder, kidnappings and displacement of thousands to create their own political party, let alone be integrated into society, is terrifying. Immediately you get a bad taste in your mouth. But if it means ending a 50-year-old conflict, is it worth the risk?  After several failed negotiations throughout the years, the Colombian government is closer than ever to ending its ongoing civil conflict with its two top guerrilla organizations, the Revolutionary Armed Forces of Colombia (FARC) and the National Liberation Army (ELN).  The negotiations include land reform, the elimination of the drug trade, amnesty for combatants, and political participation through new political parties.

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FBI and Its Hacking Power

On Thursday, April 28, 2016, the Supreme Court heard a proposal to amend Rule 41 of the Federal Criminal Procedure, which details the circumstances under which a warrant may be issued for search and seizure. The proposal asks to extend the parameters of search warrants to include “access to computer located in any jurisdiction,” according to a Huffington Post article written Thursday.

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Women’s Resilience and Post-Feminist Sexism

This post originally appeared November 10, 2015.

In 1977, punk pioneer Poly Styrene used loud, screamed, overdriven vocals to revolt against the stereotype that “little girls should be seen and not heard.” In the 1990s, the riot grrrl bands she inspired used similar strategies to shout “revolution girl style now!” In 2014, Rebecca Solnit, who coined the term “mansplaining,” argued that year was “a year of mounting refusal to be silent…a loud, discordant, and maybe transformative” time because the “strong individual voices and the great collective roar of social media” meant that “women are coming out of a silence that lasted so long no one can name a beginning for it.” Women, in other words, could most certainly be heard, and people were finally paying attention to those screams.

Is society’s ability to hear and celebrate women’s noisy feminist voices really evidence of progress, as Solnit claims? Or is loud, noisy “feminist” voice just a different type of oppressive stereotype we expect women to embody?

The short answer is: no to the first question, and yes to the second. The longer answer is that society’s investment in the concept and practice of resilience has some very specific implications for women. Last month I wrote about resilience discourse in general, and argued that it reproduces the relations of domination and inequality that it claims to solve. Here, I want to focus on how individual women’s resilience contributes to institutionalized sexism and racism. We expect women to perform a specific kind of resilience: they must loudly and spectacularly demonstrate that they have overcome patriarchal oppression. Noisy feminism is both a new gender norm for women to embody and a tool white supremacy uses to scapegoat non-white men for lingering sexism.

Traditionally, (white) women were supposed to be passive, silent, and fragile–princesses to be rescued, damsels in distress. Resilience has replaced these older stereotypes; as photographer Kate Parker puts it, “strong is the new pretty.” We now expect individual women to overcome the damage wrought by traditional femininity (negative body image, objectification, sexual assault and/or domestic violence, silencing, etc.): they need to “lean in” and be tough, be “all about that bass,” and so on. Resilience still requires women to be hurt by the same old sexism while also creating a new kind of sexism on top of it. This new sexism has a few interwoven layers: (1) it makes women responsible for fixing sexism, thus maintaining the gendered division of labor that has women cleaning up after everyone else’s mess; (2) treating the negative effects of sexism as individual women’s failure, not society’s failure, it hides the fact of ongoing social injustice behind the veneer of feminist victory; (3) it replaces what gender studies scholars call the virgin/whore dichotomy with the opposition between resilience and lazy backwardsness so that women who don’t appear to be resilient are seen as both abnormally gendered and sexually deviant; (4) it instrumentalizes women, using them as tools to cut the post-racial color line and hide white supremacy behind the veneer of racial diversity.

Though the music videos for both Rihanna’s “Bitch Better Have My Money” (BBHMM) and Beyonce (feat. Lady Gaga)’s “Video Phone” tell stories about women conquering male dominance, the differences between the videos and reactions to them clarify how (3) and especially (4) work. In each video, the main woman character(s) executes a man that has harmed her. Beyonce and Gaga shoot arrows into camera-headed men, who symbolize the male gaze that objectifies women and reduces them just to their bodies. Rihanna butchers her accountant who embezzled from her, continuing a long line of what Doreen St. Felix identifies as gendered “Love & Theft” from black women musicians. The plot is effectively the same, except for one major difference: in “Video Phone,” Beyonce kills a black man; in BBHMM, Rihanna kills a white one. Beyonce’s performance appears resiliently feminist: she overcomes the male gaze that would otherwise objectify her. Rihanna’s performance, however, was widely critiqued as un-feminist. Though most critics said BBHMM was misogynist because Rihanna’s character kidnapped the accountant’s woman partner, that’s not why it felt un-feminist. Her performance felt un-feminist because it wasn’t properly resilient. Women’s resilience is supposed to point the finger at men of color, especially black men, as exceptionally backwards, misogynist, and incapable of evolving with the times. For example, as NPR reported, the Hollaback! Project’s 2014 video “10 Hours of Walking In NYC As A Woman” edited out all the white men so that black and Latino men appear solely responsible for street harassment. Similarly, non-Western men of color are often portrayed as backwards, regressive remnants of the misogynist attitudes and behaviors that Americans have evolved beyond. BBHMM doesn’t do this: it points the finger squarely at an extremely wealthy white man and blames him for still practicing the old-school (and racist) sexism that he and society are supposed to have overcome. Women’s resilience is supposed to show that some group of non-white men is incapable of overcoming old-school misogyny, and are thus unfit for inclusion in our post-feminist, post-racial, multicultural society–this is how resilience discourse instrumentalizes women in the name of white supremacy. And women who deal with sexism in ways that doesn’t cut a line between regressive non-white men and progressive, diverse society–they’re not resilient. Because resilience is the definitive feature of contemporary femininity, non-resilient women appear deficiently feminine, like they’re not “really” women.

Resilience, as I argued in my last post, isn’t just coping: it’s a way of reproducing hegemonic social institutions. Women’s resilience reproduces sexism and racism in the particular forms that work best with 21st century technologies, international and domestic politics, and media. And that’s why it’s something we expect women to practice. Women have to be resilient, because their resilience is key to the kinds of sexism and racism that hide behind the appearance of post-feminist, post-race multiculturalism. Resilient women aren’t liberated from narrow stereotypes; resilience is just a new stereotype they’re expected to fit.

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Removing Slavery from Textbooks

Earlier this academic year, Roni Dean-Burren, a Houston mother, posted on Facebook in response to a passage in her ninth-grade son’s history book, which referred to slaves—not as slaves—but as “workers” and “immigrants.” The post went viral, influencing the publisher “to apologize, correct the caption and offer — free of charge — either stickers to cover it up or corrected copies of the book to schools that want to replace their old ones.” They did not issue a recall of the misleading, erroneous books.

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