Unions are the natural foil to large corporations. I’m thinking that for any corporation with more than 100 employees, a union should be mandatory.
Corporations cannot be trusted, for the most part, to properly care for their employees; look at how many don’t offer living wages, PTO, health insurance, educational benefits, etc. And look at the states that don’t require proper care of employees; state legislatures have been bought off by the very business leaders who are the most egregious “bad employers” and who wield the real power in this country.
I like unions as long as corruption is kept out. I was a member of a Teamsters local in Pittsburgh PA in the early 70s. It was controlled by the local mob. Complain about working conditions or how the local was run would get you beaten up or worst. Favoritism in choice working assignments to those who were one of the "boys". And much more "anti-worker" things. A terrible experience that soured me on unions for a long time!
I was married to an FBI agent that worked on Mafia cases, the Teamsters case, and the Hoffa disappearance. Those were terrible times for many workers. I am sorry you had to endure that. I was a nurse for 41/years and belonged to the Illinois Nursing Assoc, a union at UIHealth. It was a great union and for years protected us and patients. Just before the pandemic administrators brought in a new DON with her crew to try and bust up the union. When covid started, we did not have adequate PPE, staffing, or protections for patients, As a nurse, I never expected to go on strike, but we did and we were able to win proper staffing, safety, and protections for employees and patients. Any organization can be corrupted. I don’t think any of us expected the corruption of the Supreme Court that we have seen, Every organization or court needs rules, policies and laws to protect it from corruption, but unions are one of the few ways employees have a voice and has the power to put checks on employers who see their only goal as making money. I agree with Janet. for any company over 100, it should be mandatory to have a union with required standardized rules.
Money corrupts! dah. If leadership is not held accountable corruption is guaranteed. Regular leadership elections are the potential cure for leaders who are in power too long. Because power corrupts. Power = money = power. They often are one of the same.
When "mobsters" are the ones who own the workplaces, the unions have to adapt. USA is not a normal country, it is an oligarchy, it has more in common with Russia or China regarding democracy and freedom. I think that you deserve better, but maybe "Stokholm syndrome" is an actual thing.
My locals--both Teamsters--had less of the Mob feel, but all the reactionary conservatism. The bottlers' local enjoyed a 1-year takeover by the workers before the screws were turned. Oh, God bless the memory of Ron Carey ..
I'm probably one of the few people in the world that has been both a member of the AFL-CIO (Musicians Union) and a senior executive in a Fortune 100 corporation, the 2nd largest computer company at the time. It was a corporation that never unionized because the company was ethical and did the right thing by its employees and customers. The reason was the CEO and founder was a highly ethical person and made "Do the right thing" and "Value differences" as mottos we lived by. So, while I support unions I also know that both unions and corporations need to be ethical and not just about money for all of us to have well-being. Here's a short video on the Legacy of Ken Olsen, CEO of Digital Equipment Corporations .
The problem with unions is that they negotiate a flat wage for every member. But shouldn't more talented, efficient, or dedicated employees be rewarded for their talents, efficiency, and dedication? How can this be done within the union system?
"The problem with unions is that they negotiate a flat wage for every member". Newport News Shipbuilding welders are represented by the Steelworkers union. A regular ship welder can train to become a specialized nuclear pipe welder at a much higher wage. The union contract has wage scales for all the shipbuilding professions that reward workers for their talents and effort to improve their skillset.
Good to know. Thank you. I've never been in a union but I have heard the stories where a carpenter wanting to chalk a line had to wait for a union laborer to come and sweep the area in front of him.
In the non-union workplace, deciding who are the "more talented, efficient, or dedicated employees" is at the whim of the manager/management. I've seen many workers who fit into the above categories overlooked or fired by management that rewards and hires friends and relatives. Neither system is perfect, however a properly run union that is free from corruption gives the worker more protection from these sorts of abuses.
I am not against unions. The key, as you say, is "a properly run union that is free from corruption." Power almost always seems to come with a temptation to abuse it.
I was a shop steward. I was asked to sit in on a hearing between an employer and his supervisor. I sided with the supervisor. the employee was a grade insulting, he was an asshole, later confirmed by co workers. to his supervisor even in front of me.
Kudos! This is how union representation should work. When I was shop steward as an IBEW worker I never had to sit in on a hearing. But I did have to hold a supervisor's feet to the fire when he balked at providing necessary safety equipment. If it were a non-union shop I wouldn't have been able to get the correct equipment.
Martin, this is why unions need some standardized rules and it’s members need to vote on how the union will operate, I was in a union that negotiated different wages depending on the job the RN was doing, seniority, overtime, vacation pay, and shift differential. They were also great at protecting us.
I agree that unions can be a great thing as Americans exercise their Right of Free Association which derives from the First Amendment Rights to Free Speech and the Right of Assembly.
The negotated wage is the minimum that the employer, in my case the signatory electrical contractor must pay. The employer can always pay more for someone whose work they appreciate and that they really want to keep in a competitive job market. Sometimes this translated into a per diem paid on top of the wage, for being on the job.
Great to have your artwork back, Professor, because it always connects the dots with a thicker twine!
When I went to Cal in the ‘70s, I considered the major “Political Economy of Industrial Societies.” So I’ve been wise to the GOP lie of the lack of interdependence in these three dynamics for almost 50 years. What gets me is how that illusion of separation has been justified for things like the “trickle-down” theory where drips go to the middle class while buckets are offered in tax cuts and deregulation for CEOs and billionaires - those destined to be GOP donors to create the feedback look of #RepubloFascism.
Huge tax cuts for the rich with the assumption that they will “create jobs” that a few Americans can benefit from. But you already knew that.
What percentage went to expansion rather than the buyback of existing stock to drive the price up? Perhaps the yacht making industry saw the greatest gains in the short term…
It's called supply-side economics. Supply-side economics is a macroeconomic theory postulating that economic growth can be most effectively fostered by lowering taxes, decreasing regulation, and allowing free trade.
When the supply of goods is increased, prices go down.
That's not the definition for supply-side that I was taught. What we were told was that the idea behind supply-side is that the solution to a slow Economy is to INCREASE production because the more you produce, the more there will be for consumers to buy, yielding greater profits for producers, allowing them to hire more workers to produce even more. That extra money in workers' pockets would theoretically increase product Demand.
Just like trickle-down Economics, supply-side was a monumental flop, leading to bloated Inventories, which in turn led to layoffs. The follow-up theory argued for Just In Time Inventories -- lean Inventories that don't get replenished until the Demand manifests _first_. (And is entirely dependent on efficient Transportation systems.) The follow-up there resulted in numerous stockouts and shortages, seriously disrupting many production lines.
Captain, I believe the idea that economics is a science separate from morality began with a distortion of Darwin's theory of natural selection. "Organisms best suited to their environments are most likely to survive" became "survival of the fittest." By leaving the environment part out, the wealthy were able to convince many that their wealth and power was justified because, they must be the fittest. They are the fittest in the environment they created for themselves, politically whereas Darwin meant the natural enviroment the living thing is in. Of course that distortion of Darwin's scientific theory also agreed with Calvinism's Protestiant doctrine of predestination, that those who succeed economically are favored and chosen by God and that nothing a person does changes their fate. So the mix of religion and science also fit nicely with the "mudsill theory" that Thom Hartmann introduced us to earlier this week. The mudsill theory is there must be a class on the bottom that must stay in their place in society to support the social classes above them. The GOP theory isn't called that anymore but is continues to guide their political philosophy. Thank you Robert Reich and Thom Hartmann for furthering my understanding of the world.
Gloria, doesn't it amaze you how many "theories" of economics are political, but have no moral or ethical component whatsoever. Trump, considered by many as a "good businessman" believes he can do whatever he wants because he is rich and is the "fittest" and no one has the right to challenge him. I suspect his "press conference" is going to be a collection of old tried and true whines that he did nothing wrong, everyone is out to get him, and they are the fascists (or whatever term he chooses from his collection). I have not noticed the business world stepping up to say that cooking books to advance an election is a crime. I won't hold my breath on that one.
Gloria my friend. Economics is a pseudo science. It is also my undergraduate major. Because they use mathematics to provide stats and stuff like Economic Order Quantity, it poses as a science.
As regards morality, morality is subjective. What is moral to a Trump humper is immoral to a liberal. There were (are?) cultures that practice cannabilism, and consider that moral,
What you consider moral is a reflection of your personal culture, not the culture of a Donald J Trump., an Elon Musk, a Jeff Bezo's,
I meant Calvinism's predetermination. The back and forth proving I am me makes it difficult to comment. Anybody else have to verify on their phones and emails over and again?
Yes, we are seeing the outcome of Just in Time stock. An example: pharmacies. My insurance won’t let me order a refill more than 3-7 days before I am completely out. Yet the medication is always “out-of-stock” and can take two weeks or more to come in. It’s absurd.
And, Karl, it's BS! No corporation is going to use windfall gains of any kind to help anyone but themselves, and if they did, they wouldn't stay in business long with everyone else helping themselves to the wealth. The whole premise is a lie that a lot of people believed or claimed to.
No the prices don't go down when supply increases. If it did we would have cheaper gas, and people wouldn't be paying more for food. Suppliers use crisis that produce shortages to raise prices and then maintain those prices when the shortage passes.
There is actually more oil than we can use. When I was 21 gas was $2.9 a gallon, tax included., it took a big jump with the Arab oil embargo, and after the embargo it came down from but never to the original level.
As regards lowering taxes, you mean income taxes, taxes never come down, but successive Congresses and Executives have lowered taxes, but mainly on the millionaires and billionaires, besides reducing, drastically, the top bracket from 91% to 37, Congress has created loopholes, devices, credits that only the really rich can take advantage of.
The middle class, like myself, has seen the tax brackets rise, while the upper class have reduced their tax burden.
That is the lie that underlies supply side economics.
I actually did read ALL of Wealth of Nations as my pre-Scotland trip homework and was astonished at how far from Smith our understanding of capitalism has progressed! And recently reading about Mexican cartels and the power they wield caused me to wonder how their " money justifies everything" rationale may have its origins in current US economic theory. Certainly those " banana republics" became banana republics because profit was the driving motive of those US based food chains. Greed is NOT good. Greed is the original sin! We must return to seeing economics as a moral understanding of how best to structure a fair state. We all do better WHEN we ALL do better!
I have a Minor in Economics. (It was originally supposed to be a Major, but when all those graphs started to look like square plates of multi-colored spaghetti I figured I'd be better off majoring in something else.) One of my Econ professors was fond of bellowing, "Economics is NOT a Science! It's next to impossible to apply the Scientific Method to economic matters. (You can try, but don't hold your breath.) If you put three Economists in a room and tell them to develop a Unified Theory of Economics, what they will most likely come back with is FIVE unprovable theories." [It was also next to impossible to nap in his class. Even in the back row of the lecture hall.]
You've pithily demythologized conservative (primarily republican but some democrats, too) canards about socioeconomics and American society (or any society and its well-being).
Since Reagan, neoliberalism has so distorted our nation's sense of decency and fairness that it has produced what you presciently warned of decades ago: an angry, divided country and dangerous demagoguery.
I hope a time will come when our country eventually finds a better path forward and heals from our current havoc.
I like the fact that economics, politics and moral philosophy go hand in hand so to speak. This is going to be an interesting series. I couldn't help but think that by separating those three, it has caused damage to the American Experiment. I don't believe a lot of people are looking at economics objectively right now because it seems they are putting their own spin on things and interpreting it so that it ties in with their agenda. Thanks, Professor Reich, this promises to be an informative and educational series! I appreciate you!
Peggy, yes, folks are putting their spin on things. We have a Fed Chair who seems to be more interested in promoting a recession than looking at the moral implications of interest rates so high that vulnerable Americans are hurt, even financially crippled. I have friends in that situation and it is simply wrong so greedy corporations can price-gouge while all kinds of other entities are blamed for the slightly higher interest rates than the made-up 2% that Powell wants. Where is the moral compass in his life. If he has one, it certainly isn't set toward fairness for all Americans, just the rich white ones. Unfortunately, Republican moral compasses when they exist at all are set there too.
I'll ask the question again. Should the purpose of government be to support, protect, and improve the lot of its citizens or is it to manage the herd on behalf of the already wealthy?
I’m researching the origins of the corporation which are much more complex than might first appear. Interestingly Adam Smith took a dim view of the company. His view was coloured by the East India Company which by any measure was an abomination. Even more interesting perhaps is that Edmund Burke, the political economist who is patron saint to conservatives, had a very similar view. That they could feel a sense of outrage is telling and supportive of the proposed thesis.
I found it on Jstor but I can only read it online. There are various chapters of a book separately presented. The book is The Corporation that Changed the World: How the EIC Shaped the Modern Multinational 2012 pp122-144. Jstor has a good search function. You can read 100 articles on line per month without charge. EB was the prime mover behind an impeachment of an EIC official named Hastings.
Thanks for the referemce. btw, The TV series Taboo, if you haven't seen it, was dark, grimy and true to history in depicting the EIC. Also had some top UK/Irish actors.... Although it made me want to take a shower after watching every episode.
I’m not sure I want to watch it! I’m British by descent, well mostly. There is little point in being ashamed of one’s cultural past. But what the EIC did to India is a disgrace of unparalleled proportions. When the EIC first began its depredations India had 27% of world GDP. When the British left it was 4%. As Westerners we need to be way less arrogant about of role in history.
The East India Company was a monopoly, and it no longer exists. The modern limited liability corporation is a monster, not unlike a giant caterpillar. Its head constantly searches for food to feed its multiple, insatiable parts--and its own powerful self. When there are multiple similar entities the whole ecosystem can collapse.
It wasn’t really a monopoly in the first few decades of its existence. It was formed to compete with the Dutch equivalent. At first it operated like a professional association. It had the problem of interlopers which it could do little about until it became a strange hybrid of public and private. But I agree the modern corporate is parasitic. The problem is limited liability. Get rid of it and change will happen.
Thank you for the clarification. Originally, limited liability charters and other privileges were granted to corporation engaging in very risky ventures to encourage investment. A modern example would be one of Elon Musk's ventures (minus X/twitter). Most modern corporations operate in fairly safe environments. A business owned by real life persons is likely to behave responsibly.
I know more about Britain than the US but LL in Britain was introduced to protect the interests of the wealthy. They were concerned that small investors would leave them with a disproportionate share of any failure. My objection lies latent in your narrative. The risk exists. It means that if those with the power to influence management limit their responsibility pass their risk to those without influence, particularly tort creditors. Risk is constant. LL only determines how it is allocated if and when it comes to fruition.
Thank you for this. That some claim economics to be a science reveals their ignorance as to what science is. First, economics is not falsifiable, being instead like religion: based on belief. Second, most economic theories diverge from physical reality by postulating that growth can go on forever, and that resources are unlimited. Then there is the assumption of rationality, scientifically disproven by the experiments of Tversky and Kahneman though still largely ignored by many.
I don't think you understand the concept of falsifiability. If economics were falsifiable, it would be possible to reject all invalid economic theories. Here is a link to Popper's paper: https://staff.washington.edu/lynnhank/Popper-1.pdf
One of the greatest problems we continue to deal with today is the view by Milton Friedman and the rest of the crew at the University of Chicago that the only objective for corporations was to maximize profits for their shareholders. They contend that the corporation has no obligation to the rest of its stakeholders including employees(not offering living wages), customers(selling products like cigarettes and soft drinks), the general public(industries that pollute and destroy biodiversity) and the global community(exploiting the developing world for low cost manufacturing and raw materials).
The biggest success of conservative politicians was selling us on the idea that certain things (like economics) are unpolitical as is being not interested in politics.
What is frightening in recent TV and internet information is the number of billionaires who will still vote to have Trump as president. Why? Because he told them he would lower their taxes even more if they donated a certain amount of money. When is enough enough for these greedy people? They are totally willing to sacrifice law, justice, fairness and our democracy for their venality. Terri Quint
In Western neoliberal doctrine, the market has become the only meaningful guideline for what society needs to gauge itself. Cut out all the middlemen. Keep it simple stupid.
When social science is dumbed down to an absurdity like what passes for economics in our country then the public is captured in a self serving elite fraud. It's why economic philosophy and history isn't taught in our academic institutions. Marx and Engels are a forbidden heresy. And the doctrine is considered a finished theory. There is no alternative as Margaret Thatcher proclaimed.
Compare that to the organic nature of Socialism with Chinese characteristics that is perpetually testing and refining their economic doctrine and the realization of how they've achieved such success with their system to the erosion of ours is quite evident. They encourage the social sciences that include all the humanistic disciplines. Ethics, philosophy, psychology, sociology and the sciences to augment their perspective towards serving public service.
Our democracy has become infected with the age old wealth virus. And our economics has been tailored in its behalf. And BOTH of our political parties adhere to it.
Who says it is? If you go by western media that says China's economy is going to collapse anytime soon then you're reading propaganda. China was hit like our economy by the Covid pandemic. But its in far better shape than ours. If Taiwan is on par with China, good for them. They have industrial capacity that we gave up on years ago. But China's economy dwarfs Taiwan's.
Unions are the natural foil to large corporations. I’m thinking that for any corporation with more than 100 employees, a union should be mandatory.
Corporations cannot be trusted, for the most part, to properly care for their employees; look at how many don’t offer living wages, PTO, health insurance, educational benefits, etc. And look at the states that don’t require proper care of employees; state legislatures have been bought off by the very business leaders who are the most egregious “bad employers” and who wield the real power in this country.
I like unions as long as corruption is kept out. I was a member of a Teamsters local in Pittsburgh PA in the early 70s. It was controlled by the local mob. Complain about working conditions or how the local was run would get you beaten up or worst. Favoritism in choice working assignments to those who were one of the "boys". And much more "anti-worker" things. A terrible experience that soured me on unions for a long time!
I was married to an FBI agent that worked on Mafia cases, the Teamsters case, and the Hoffa disappearance. Those were terrible times for many workers. I am sorry you had to endure that. I was a nurse for 41/years and belonged to the Illinois Nursing Assoc, a union at UIHealth. It was a great union and for years protected us and patients. Just before the pandemic administrators brought in a new DON with her crew to try and bust up the union. When covid started, we did not have adequate PPE, staffing, or protections for patients, As a nurse, I never expected to go on strike, but we did and we were able to win proper staffing, safety, and protections for employees and patients. Any organization can be corrupted. I don’t think any of us expected the corruption of the Supreme Court that we have seen, Every organization or court needs rules, policies and laws to protect it from corruption, but unions are one of the few ways employees have a voice and has the power to put checks on employers who see their only goal as making money. I agree with Janet. for any company over 100, it should be mandatory to have a union with required standardized rules.
Yes! Kudos, Linda!
Money corrupts! dah. If leadership is not held accountable corruption is guaranteed. Regular leadership elections are the potential cure for leaders who are in power too long. Because power corrupts. Power = money = power. They often are one of the same.
Corruption is the Best American and Israeli Exports !
Term limits!
Valuable observation, Tim. Like corporations, unions can be morally deficient.
When "mobsters" are the ones who own the workplaces, the unions have to adapt. USA is not a normal country, it is an oligarchy, it has more in common with Russia or China regarding democracy and freedom. I think that you deserve better, but maybe "Stokholm syndrome" is an actual thing.
My locals--both Teamsters--had less of the Mob feel, but all the reactionary conservatism. The bottlers' local enjoyed a 1-year takeover by the workers before the screws were turned. Oh, God bless the memory of Ron Carey ..
I'm probably one of the few people in the world that has been both a member of the AFL-CIO (Musicians Union) and a senior executive in a Fortune 100 corporation, the 2nd largest computer company at the time. It was a corporation that never unionized because the company was ethical and did the right thing by its employees and customers. The reason was the CEO and founder was a highly ethical person and made "Do the right thing" and "Value differences" as mottos we lived by. So, while I support unions I also know that both unions and corporations need to be ethical and not just about money for all of us to have well-being. Here's a short video on the Legacy of Ken Olsen, CEO of Digital Equipment Corporations .
https://www.youtube.com/watch?v=-6We6VDtyHY At Digital we knew we were changing the world for the better and we did.
Thank you for this thoughtful, highly relevant comment.
The problem with unions is that they negotiate a flat wage for every member. But shouldn't more talented, efficient, or dedicated employees be rewarded for their talents, efficiency, and dedication? How can this be done within the union system?
"The problem with unions is that they negotiate a flat wage for every member". Newport News Shipbuilding welders are represented by the Steelworkers union. A regular ship welder can train to become a specialized nuclear pipe welder at a much higher wage. The union contract has wage scales for all the shipbuilding professions that reward workers for their talents and effort to improve their skillset.
Good to know. Thank you. I've never been in a union but I have heard the stories where a carpenter wanting to chalk a line had to wait for a union laborer to come and sweep the area in front of him.
In the non-union workplace, deciding who are the "more talented, efficient, or dedicated employees" is at the whim of the manager/management. I've seen many workers who fit into the above categories overlooked or fired by management that rewards and hires friends and relatives. Neither system is perfect, however a properly run union that is free from corruption gives the worker more protection from these sorts of abuses.
I am not against unions. The key, as you say, is "a properly run union that is free from corruption." Power almost always seems to come with a temptation to abuse it.
I was a shop steward. I was asked to sit in on a hearing between an employer and his supervisor. I sided with the supervisor. the employee was a grade insulting, he was an asshole, later confirmed by co workers. to his supervisor even in front of me.
Kudos! This is how union representation should work. When I was shop steward as an IBEW worker I never had to sit in on a hearing. But I did have to hold a supervisor's feet to the fire when he balked at providing necessary safety equipment. If it were a non-union shop I wouldn't have been able to get the correct equipment.
Martin, this is why unions need some standardized rules and it’s members need to vote on how the union will operate, I was in a union that negotiated different wages depending on the job the RN was doing, seniority, overtime, vacation pay, and shift differential. They were also great at protecting us.
I agree that unions can be a great thing as Americans exercise their Right of Free Association which derives from the First Amendment Rights to Free Speech and the Right of Assembly.
Everything in a union contract is negotiable, including using merit as the keystone rather than just seniority.
We call that promotions having little or nothing to do with unions and everything to do with management.
The negotated wage is the minimum that the employer, in my case the signatory electrical contractor must pay. The employer can always pay more for someone whose work they appreciate and that they really want to keep in a competitive job market. Sometimes this translated into a per diem paid on top of the wage, for being on the job.
Great to have your artwork back, Professor, because it always connects the dots with a thicker twine!
When I went to Cal in the ‘70s, I considered the major “Political Economy of Industrial Societies.” So I’ve been wise to the GOP lie of the lack of interdependence in these three dynamics for almost 50 years. What gets me is how that illusion of separation has been justified for things like the “trickle-down” theory where drips go to the middle class while buckets are offered in tax cuts and deregulation for CEOs and billionaires - those destined to be GOP donors to create the feedback look of #RepubloFascism.
My ol' pappy used to say" Social science is to science as masturbation is to fornication."
If our voters new more social science they might not be swayed by fornicator Trump.
Both culminate in an orgasm.
What is "trickle-down" theory? Define it.
Huge tax cuts for the rich with the assumption that they will “create jobs” that a few Americans can benefit from. But you already knew that.
What percentage went to expansion rather than the buyback of existing stock to drive the price up? Perhaps the yacht making industry saw the greatest gains in the short term…
It's called supply-side economics. Supply-side economics is a macroeconomic theory postulating that economic growth can be most effectively fostered by lowering taxes, decreasing regulation, and allowing free trade.
When the supply of goods is increased, prices go down.
That's not the definition for supply-side that I was taught. What we were told was that the idea behind supply-side is that the solution to a slow Economy is to INCREASE production because the more you produce, the more there will be for consumers to buy, yielding greater profits for producers, allowing them to hire more workers to produce even more. That extra money in workers' pockets would theoretically increase product Demand.
Just like trickle-down Economics, supply-side was a monumental flop, leading to bloated Inventories, which in turn led to layoffs. The follow-up theory argued for Just In Time Inventories -- lean Inventories that don't get replenished until the Demand manifests _first_. (And is entirely dependent on efficient Transportation systems.) The follow-up there resulted in numerous stockouts and shortages, seriously disrupting many production lines.
Captain, I believe the idea that economics is a science separate from morality began with a distortion of Darwin's theory of natural selection. "Organisms best suited to their environments are most likely to survive" became "survival of the fittest." By leaving the environment part out, the wealthy were able to convince many that their wealth and power was justified because, they must be the fittest. They are the fittest in the environment they created for themselves, politically whereas Darwin meant the natural enviroment the living thing is in. Of course that distortion of Darwin's scientific theory also agreed with Calvinism's Protestiant doctrine of predestination, that those who succeed economically are favored and chosen by God and that nothing a person does changes their fate. So the mix of religion and science also fit nicely with the "mudsill theory" that Thom Hartmann introduced us to earlier this week. The mudsill theory is there must be a class on the bottom that must stay in their place in society to support the social classes above them. The GOP theory isn't called that anymore but is continues to guide their political philosophy. Thank you Robert Reich and Thom Hartmann for furthering my understanding of the world.
Gloria, doesn't it amaze you how many "theories" of economics are political, but have no moral or ethical component whatsoever. Trump, considered by many as a "good businessman" believes he can do whatever he wants because he is rich and is the "fittest" and no one has the right to challenge him. I suspect his "press conference" is going to be a collection of old tried and true whines that he did nothing wrong, everyone is out to get him, and they are the fascists (or whatever term he chooses from his collection). I have not noticed the business world stepping up to say that cooking books to advance an election is a crime. I won't hold my breath on that one.
Gloria my friend. Economics is a pseudo science. It is also my undergraduate major. Because they use mathematics to provide stats and stuff like Economic Order Quantity, it poses as a science.
As regards morality, morality is subjective. What is moral to a Trump humper is immoral to a liberal. There were (are?) cultures that practice cannabilism, and consider that moral,
What you consider moral is a reflection of your personal culture, not the culture of a Donald J Trump., an Elon Musk, a Jeff Bezo's,
I meant Calvinism's predetermination. The back and forth proving I am me makes it difficult to comment. Anybody else have to verify on their phones and emails over and again?
Thanks for your clear summary.
JIT is much more dependent on unbroken supply chains as we saw with the advent of Covid and will see again the next time we run into a pandemic.
Just like trickle-down Economics, supply-side was a monumental flop, leading to bloated Inventories, which in turn led to layoffs.
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Do you have any real data to back this up?
Do you hae any data to back up your assertions? Karl.
https://www.thebalancemoney.com/supply-side-economics-does-it-work-3305786
I agree with your assertion.
Yes, we are seeing the outcome of Just in Time stock. An example: pharmacies. My insurance won’t let me order a refill more than 3-7 days before I am completely out. Yet the medication is always “out-of-stock” and can take two weeks or more to come in. It’s absurd.
I posted the correct definition of supply-side economics.
which one? Source please.....
And, Karl, it's BS! No corporation is going to use windfall gains of any kind to help anyone but themselves, and if they did, they wouldn't stay in business long with everyone else helping themselves to the wealth. The whole premise is a lie that a lot of people believed or claimed to.
https://en.wikipedia.org/wiki/Trickle-down_economics
'Supply side economics' disproportionately benefits the wealthy and exacerbates income inequality.
Prices also go down when there is no demand.
Prices also go down when supply exceeds demand.
No the prices don't go down when supply increases. If it did we would have cheaper gas, and people wouldn't be paying more for food. Suppliers use crisis that produce shortages to raise prices and then maintain those prices when the shortage passes.
There is actually more oil than we can use. When I was 21 gas was $2.9 a gallon, tax included., it took a big jump with the Arab oil embargo, and after the embargo it came down from but never to the original level.
As regards lowering taxes, you mean income taxes, taxes never come down, but successive Congresses and Executives have lowered taxes, but mainly on the millionaires and billionaires, besides reducing, drastically, the top bracket from 91% to 37, Congress has created loopholes, devices, credits that only the really rich can take advantage of.
The middle class, like myself, has seen the tax brackets rise, while the upper class have reduced their tax burden.
That is the lie that underlies supply side economics.
No the prices don't go down when supply increases.
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yes they do.
Yes, when suppliers and middlemen gouge the consumer. You are correct then.
https://en.wikipedia.org/wiki/Supply-side_economics
You’re absolutely spot on! Also don’t forget we lost our right to a free education so the rich could get their tax cuts, courtesy of Ronald Reagan.
All the luxury industries are booming, and yet many of the wealthy are unhappy with Biden.
Start with this if you're trying to be helpful
https://en.wikipedia.org/wiki/Trickle-down_economics https://en.wikipedia.org/wiki/Supply-side_economics
He's not.
Says one of the useless posters on this site.
You mean the Trump Humper under the pseudonymn of Karl Marx.
In all of your posts you have contributed absolutely nothing. Absolutely nothing and that is the definition of useless.
I only agree with him when he's right.
Lol.
I actually did read ALL of Wealth of Nations as my pre-Scotland trip homework and was astonished at how far from Smith our understanding of capitalism has progressed! And recently reading about Mexican cartels and the power they wield caused me to wonder how their " money justifies everything" rationale may have its origins in current US economic theory. Certainly those " banana republics" became banana republics because profit was the driving motive of those US based food chains. Greed is NOT good. Greed is the original sin! We must return to seeing economics as a moral understanding of how best to structure a fair state. We all do better WHEN we ALL do better!
excellent, excellent!
I have a Minor in Economics. (It was originally supposed to be a Major, but when all those graphs started to look like square plates of multi-colored spaghetti I figured I'd be better off majoring in something else.) One of my Econ professors was fond of bellowing, "Economics is NOT a Science! It's next to impossible to apply the Scientific Method to economic matters. (You can try, but don't hold your breath.) If you put three Economists in a room and tell them to develop a Unified Theory of Economics, what they will most likely come back with is FIVE unprovable theories." [It was also next to impossible to nap in his class. Even in the back row of the lecture hall.]
Excellent post, Dr. Reich.
You've pithily demythologized conservative (primarily republican but some democrats, too) canards about socioeconomics and American society (or any society and its well-being).
Since Reagan, neoliberalism has so distorted our nation's sense of decency and fairness that it has produced what you presciently warned of decades ago: an angry, divided country and dangerous demagoguery.
I hope a time will come when our country eventually finds a better path forward and heals from our current havoc.
I like the fact that economics, politics and moral philosophy go hand in hand so to speak. This is going to be an interesting series. I couldn't help but think that by separating those three, it has caused damage to the American Experiment. I don't believe a lot of people are looking at economics objectively right now because it seems they are putting their own spin on things and interpreting it so that it ties in with their agenda. Thanks, Professor Reich, this promises to be an informative and educational series! I appreciate you!
Peggy, yes, folks are putting their spin on things. We have a Fed Chair who seems to be more interested in promoting a recession than looking at the moral implications of interest rates so high that vulnerable Americans are hurt, even financially crippled. I have friends in that situation and it is simply wrong so greedy corporations can price-gouge while all kinds of other entities are blamed for the slightly higher interest rates than the made-up 2% that Powell wants. Where is the moral compass in his life. If he has one, it certainly isn't set toward fairness for all Americans, just the rich white ones. Unfortunately, Republican moral compasses when they exist at all are set there too.
So true, Ruth!
I'll ask the question again. Should the purpose of government be to support, protect, and improve the lot of its citizens or is it to manage the herd on behalf of the already wealthy?
I am looking forward to this series on economics.
I’m researching the origins of the corporation which are much more complex than might first appear. Interestingly Adam Smith took a dim view of the company. His view was coloured by the East India Company which by any measure was an abomination. Even more interesting perhaps is that Edmund Burke, the political economist who is patron saint to conservatives, had a very similar view. That they could feel a sense of outrage is telling and supportive of the proposed thesis.
I had heard about this dim view taken by AS but not by EB. Any quick source at hand that might elaborate?
I found it on Jstor but I can only read it online. There are various chapters of a book separately presented. The book is The Corporation that Changed the World: How the EIC Shaped the Modern Multinational 2012 pp122-144. Jstor has a good search function. You can read 100 articles on line per month without charge. EB was the prime mover behind an impeachment of an EIC official named Hastings.
Thanks for the referemce. btw, The TV series Taboo, if you haven't seen it, was dark, grimy and true to history in depicting the EIC. Also had some top UK/Irish actors.... Although it made me want to take a shower after watching every episode.
https://en.wikipedia.org/wiki/Taboo_(2017_TV_series)#:~:text=Taboo%20explores%20the%20dark%20side,in%20wealth%20of%20the%20rich.
I’m not sure I want to watch it! I’m British by descent, well mostly. There is little point in being ashamed of one’s cultural past. But what the EIC did to India is a disgrace of unparalleled proportions. When the EIC first began its depredations India had 27% of world GDP. When the British left it was 4%. As Westerners we need to be way less arrogant about of role in history.
The East India Company was a monopoly, and it no longer exists. The modern limited liability corporation is a monster, not unlike a giant caterpillar. Its head constantly searches for food to feed its multiple, insatiable parts--and its own powerful self. When there are multiple similar entities the whole ecosystem can collapse.
It wasn’t really a monopoly in the first few decades of its existence. It was formed to compete with the Dutch equivalent. At first it operated like a professional association. It had the problem of interlopers which it could do little about until it became a strange hybrid of public and private. But I agree the modern corporate is parasitic. The problem is limited liability. Get rid of it and change will happen.
Thank you for the clarification. Originally, limited liability charters and other privileges were granted to corporation engaging in very risky ventures to encourage investment. A modern example would be one of Elon Musk's ventures (minus X/twitter). Most modern corporations operate in fairly safe environments. A business owned by real life persons is likely to behave responsibly.
I know more about Britain than the US but LL in Britain was introduced to protect the interests of the wealthy. They were concerned that small investors would leave them with a disproportionate share of any failure. My objection lies latent in your narrative. The risk exists. It means that if those with the power to influence management limit their responsibility pass their risk to those without influence, particularly tort creditors. Risk is constant. LL only determines how it is allocated if and when it comes to fruition.
Thank you for this. That some claim economics to be a science reveals their ignorance as to what science is. First, economics is not falsifiable, being instead like religion: based on belief. Second, most economic theories diverge from physical reality by postulating that growth can go on forever, and that resources are unlimited. Then there is the assumption of rationality, scientifically disproven by the experiments of Tversky and Kahneman though still largely ignored by many.
Economics not falsifiable? Every Marxist economy failed, because it is deficient.
I don't think you understand the concept of falsifiability. If economics were falsifiable, it would be possible to reject all invalid economic theories. Here is a link to Popper's paper: https://staff.washington.edu/lynnhank/Popper-1.pdf
Thank you for the reference.
One of the greatest problems we continue to deal with today is the view by Milton Friedman and the rest of the crew at the University of Chicago that the only objective for corporations was to maximize profits for their shareholders. They contend that the corporation has no obligation to the rest of its stakeholders including employees(not offering living wages), customers(selling products like cigarettes and soft drinks), the general public(industries that pollute and destroy biodiversity) and the global community(exploiting the developing world for low cost manufacturing and raw materials).
great opening...keep em coming
The biggest success of conservative politicians was selling us on the idea that certain things (like economics) are unpolitical as is being not interested in politics.
What is frightening in recent TV and internet information is the number of billionaires who will still vote to have Trump as president. Why? Because he told them he would lower their taxes even more if they donated a certain amount of money. When is enough enough for these greedy people? They are totally willing to sacrifice law, justice, fairness and our democracy for their venality. Terri Quint
Perhaps they are afraid of Trump.
there is no "enough"for an addict
and the more you have the higher up you are in the social hierarchy we have created.
In Western neoliberal doctrine, the market has become the only meaningful guideline for what society needs to gauge itself. Cut out all the middlemen. Keep it simple stupid.
When social science is dumbed down to an absurdity like what passes for economics in our country then the public is captured in a self serving elite fraud. It's why economic philosophy and history isn't taught in our academic institutions. Marx and Engels are a forbidden heresy. And the doctrine is considered a finished theory. There is no alternative as Margaret Thatcher proclaimed.
Compare that to the organic nature of Socialism with Chinese characteristics that is perpetually testing and refining their economic doctrine and the realization of how they've achieved such success with their system to the erosion of ours is quite evident. They encourage the social sciences that include all the humanistic disciplines. Ethics, philosophy, psychology, sociology and the sciences to augment their perspective towards serving public service.
Our democracy has become infected with the age old wealth virus. And our economics has been tailored in its behalf. And BOTH of our political parties adhere to it.
So why is it that Taiwan is doing much better than mainland China?
Who says it is? If you go by western media that says China's economy is going to collapse anytime soon then you're reading propaganda. China was hit like our economy by the Covid pandemic. But its in far better shape than ours. If Taiwan is on par with China, good for them. They have industrial capacity that we gave up on years ago. But China's economy dwarfs Taiwan's.
"Economics" is the alchemic "science" of reading Unicorn entrails in a cave lit by a fire made of Truffala trees.
Thank you for this. I earned a degree in Business Economics back in the 70's. Without a doubt, economics, politics and power are joined at the hip.