The Gig Economy is What Yesterday’s Socialists Said They Wanted; Why do Today’s Socialists Hate it?

A February Harris poll finds that 49.6% of Millennial and Generation Z Americans would “prefer living in a socialist country.”

US Senator Bernie Sanders (I-VT) and US Representative Alexandria Ocasio-Cortez (D-NY), among other politicians, proclaim a message of “democratic socialism,” evoking an ideology last ascendant in the early 1900s when Eugene Debs and Norman Thomas moved the needle in US elections.

But the devil is, as always, in the details. The goals of today’s American “democratic socialism,” as laid out in Ocasio-Cortez’s Green New Deal resolution, in Sanders’s “Stop BEZOS Act,” etc. look a lot more like Franklin Delano Roosevelt’s effort to “save capitalism” through welfare statism than like the proposals of socialism’s last rise to prominence.

The essence of socialism as laid out by Proudhon and Marx and promoted by the International Workers of the World, et al., came down to destroying the wage system and building a classless society based on worker ownership of the means of production.

Those earlier socialists would almost certainly have lauded gig economy workers as examples of what socialism sought. Today’s socialists disdain them.

Consider gig economy drivers, once just called “gypsy cabbies.” In recent years many of them have chosen to affiliate with services like Uber and Lyft to get easier connections to people seeking rides.

Gig economy drivers own the means of production (their cars).

Gig economy drivers set their own hours and choose their own workplaces instead of slaving away on  someone else’s terms.

Gig economy drivers can use customer discovery services like Uber/Lyft, or they can go their own ways (many Uber drivers give me their cards, telling me to call them directly next time and cut out the capitalist middleman).

But today’s “democratic socialists” fought tooth and nail to preserve the capitalist “medallion cab” monopoly, and having lost that fight they’ve re-oriented their struggle toward roping the drivers, and the companies they choose to work with, into the old-style capitalist “wage employee” system.

Even the most virulent revolutionary Marxism posited that the state would wither away as workers seized the means of production, got rid of the bosses, and started working for themselves. That didn’t work out — the socialist parties ended up substituting themselves for the old ruling class, operating in the name of, but not as true proxies for, “the workers” — but that was the goal.

In the US, the same kind of substitutism came about “democratically” and incrementally as “progressives” co-opted pieces of socialist-sounding reforms. But just like the Marxist-Leninist parties in the old Soviet orbit, today’s “democratic socialists” are … well, conservative.

They don’t want the wage system to go away. They just want to run it.

They don’t want the workers to own the means of production. They just want to tax and regulate it.

They don’t want a classless society. They just want to be the new ruling class.

US president Donald Trump is already touting the 2020 presidential election as a referendum on “socialism.” Are any real socialists going to show up for that fight?

Open This Content

Why I’m an Economic Optimist but Happiness Pessimist

Seven years ago, my mentor Tyler Cowen did an interview with The Atlantic entitled, “Why I’m a Happiness Optimist but Economic Pessimist.”  His point: Though GDP growth has been disappointing low for decades, the internet does give us tons of free, fun stuff.  The more I reflect on the Paasche price index, though, the more I’m convinced that Tyler’s picture is exactly upside-down.  At least in the First World, the sensible position is economic optimism combined with happiness pessimism.

How so?  To repeat, we shouldn’t take the ultra-optimistic Paasche calculations of GDP at face value, but neither should we dismiss them.  The judicious position is that U.S. growth has been excellent, though not astronomical.  Even so, we’re way richer than we were in 1990. Yet sadly, Americans’ measured happiness has barely changed.  We have abundance, but not bliss.

What’s going on?  Well, we already knew that income has a very modest effect on happiness.  But when you upwardly revise your estimate of prosperity, you automatically downwardly revise your estimate of the effect of prosperity on happiness.  Such is life.

When I insist that standard measures sharply underestimate economic growth, it’s easy to accuse me of motivated reasoning.  Before you make this accusation, however, consider the whole picture.  What possible agenda could I advance by simultaneously claiming that GDP has greatly increased, but brought us little joy?

So what’s the real story?  Simple: I look at the world and see great economic growth.  I take a second look at the world and see that money doesn’t buy happiness.  Then I report my observations.  This picture isn’t ideologically convenient for me.  But when I put ideology aside and stare at the world, this picture is what I see.

Open This Content

I Win My European Unemployment Bet

In 2009, the U.S. unemployment rate exceeded Europe’s for the first time in decades.  Apologists for European labor market regulation rejoiced, so I publicly bet that European unemployment would exceed U.S. unemployment over the next decade.  The original authors I targeted turned me down, even after I offered a 1 percentage-point spread.  But noted economist John Quiggin took the bait.  Our final terms:

The stake is $US100 and the agreed criterion is that, for Bryan to win, the average Eurostat harmonised unemployment rate for the EU-15 over the period 2009-18 inclusive should exceed that for the US by at least 1.5 percentage points.

Ten years later, the bet’s results are now in.  The average U.S. unemployment rate during this decade was 6.8%.  The EU-19 (the original EU-15 plus the Baltics and Slovakia) was 10.3%.  Since the EU-15 is no longer widely available, Quiggin would have been within his rights to hold out for slightly adjusted numbers, but via email he has nobly decided to concede.   Since the Baltics and Slovakia have low populations, they couldn’t sway the final figure much – and in any case, unemployment rates for the Baltics and Slovakia aren’t major outliers.  The upshot is that I won the European unemployment bet by an enormous margin of 2 full percentage-points (on top of the original 1.5 percentage-point edge).

What does this all mean?  To me, this bet is just a small extra piece of evidence in favor of the orthodox and blindingly obvious theory that Europe has higher unemployment than the U.S. because it has stricter labor market regulation.  Flexible labor markets respond more sharply to shocks, but yield lower unemployment rates overall.  As I originally explained:

During the dot-com bust, U.S. unemployment remained below Europe’s, but it clearly rose faster.  Isn’t this further evidence that the mainstream case against European labor market regulation is overstated?

On the contrary, this is precisely what the mainstream case predicts!  Europe makes it harder to get rid of workers, so it’s only natural that when a big shock hits, U.S. unemployment rises more.  However, precisely because it is easier for American wages to adjust and American employers to change their minds, our labor market is also relatively quick to recover.

Disclosure: From the outset, Quiggin argued that the U.S. unemployment rates were artificially suppressed by high incarceration.  This has always seemed crazy to me, as I explained back in the day:

From a labor market perspective, though, Quiggin’s incarceration adjustment would only make sense if you thought that most or all of the people in jail would be unemployed if they were released.  That doesn’t make sense to me – while the people currently in American prisons might not be model workers, most of them could easily be gainfully employed on the outside.

Notice: Even if you think that the people in jail have no desire to work, you’d expect this to show up in labor force participation, not unemployment.  After all, to keep counting as unemployed, you have to keep trying – and failing – to find a job.

That said, I heartily commend Quiggin for actually making our bet.  He towers above all of the apologists for European labor market regulation who refuse to put their money where their mouths are.

Stepping back: Isn’t it possible that European-style labor regulation still helps workers, because the extra wages outweigh the lost hours of employment?  To be fair, this optimistic story is consistent with standard estimates of labor demand elasticity.  However, the optimistic story overlooks a pessimistic truth: Most of the harm of unemployment is psychological, not material.  Holding income constant, the employed are much happier than the unemployed.  Hence, no sensible person would want to see U.S. workers’ wages rise by 10% if the unemployment rate rose 3.5% as a result.  And psychology aside, remember that the welfare state forces active workers to support the idle.  So when regulation forces wages up, even the lucky workers who keep their jobs ultimately forfeit much of what they gain.

What did I learn from this bet?  Back in 2009, I was unaware that Germany had seriously liberalized its labor markets a few years earlier.  Since then, German unemployment has fallen from a peak of over 11% in 2005 to 3.3%.  The Great Recession barely happened in Germany; unemployment inched up from 7.1% in late 2008 to 7.9% in mid-2009, then continued its free fall.  There’s no reason all of the other high-unemployment countries in Europe can’t swallow their pride and follow Germany’s path to progress.  Well, unless “We’re too busy debating populism versus socialism” counts as a reason.

By my count, this betting victory brings my record to 19 wins, 0 losses.  Yes, perhaps I’ll see my first defeat later this month.  But even if I do, I’m not afraid to repeat that I have publicly demonstrated that my judgment is good.  And in my demonstrably good judgment, radical deregulation of Europe’s labor markets is long overdue.  I’m happy to make the Quiggin bet all over again with anyone who’s interested, but what’s the point?  My homeschooled sons understood all of this when they were 12.  Forget ideology.  Let’s all join hands, admit that labor market regulation is a scourge, and tear down these paper walls.

Open This Content

Liberty is Not An “Ideology”

I saw a headline recently, which read in part, “Ideologies clash…”

It turns out one side simply wants to exercise liberty (open a brewery), while the opponents want to violate the first side’s liberty for “reasons”. The reasons include religion, fear of negative consequences of letting people control their own lives, and prohibitionism.

One side is an ideology, the other isn’t.

Liberty isn’t an ideology. It is the acceptance of the reality of self-ownership. From this acceptance flows certain principles. It doesn’t matter to the existence of liberty whether people accept it or not– it just is, to be respected or violated.

Yes, there will be consequences for exercising liberty. Everything has consequences. But slavery’s consequences are worse than liberty’s. And you’re the bad guy when you choose slavery over liberty, no matter what “reasons” you come up with.

This is why governing others is never a valid form of interpersonal interaction. It allows people to violate the liberty of others too easily, and without the risk which should come along with such anti-social behavior.

Open This Content

Why I’m Optimistic About Venezuela

If there were mass protests against the government of Saudi Arabia, and the U.S. decided to recognize the opposition as the legitimate government of Saudi, I would expect disaster.  Why?  Because…

1. Supporters of the Saudi monarchy remain powerful and confident enough to aggressively fight back, plunging the country into hellish civil war.

2. If the monarchy loses, it’s most likely replacement will be a revolutionary Islamist dictatorship.

3. Even if the new Saudi government sticks to democracy, the median Saudi voter probably favors even worse policies than the Saudi monarchy now imposes.  In particular, government enforcement of Islamic fundamentalism would tighten, and economic policies would move even further toward socialism and populism.

And now you know why I am optimistic about the constitutional crisis in Venezuela.

1. Supporters of Maduro are too weak and demoralized to aggressively fight back, so I put the risk of hellish civil war below 10%.  (Indeed, since there’s a high base rate for civil wars in situations this dire, it’s quite possible that the risk of civil war has actually fallen due to the crisis).

2. If the Maduro regime loses, its most likely replacement will be a moderate pro-Western democracy.

3. If the new Venezuelan government sticks to democracy, the median Venezuelan almost certainly favors better policies than Maduro now imposes.  In particular, government enforcement of socialist ideology will crumble, and economic policies will move sharply away from socialism and populism.

If you’re too young to remember the collapse of Communism, this is a tiny taste of the sweetness of 1988-1991.  When’s the last time you had reasonable hope of dramatic peaceful pro-freedom change in the world?

Open This Content

Dear Women: You ARE Your Body, And That Isn’t A Bad Thing; It’s Your Power

The mind/body duality is as fundamental to universal nature as masculine/feminine duality. If you don’t believe in masculine/feminine energy polarities or that there are “masculine” traits and characteristics as well as “feminine” ones, then maybe just stop reading because this article probably isn’t for you. If you do have a deep or even general understanding of this, then continue on…

When it comes to qualities and strengths of the mind and body, it seems fair enough to conclude that the mind is used for more masculine energies (reason, logic, intellect, etc) and the body holds more feminine energy (intuition, flow, sensing, where emotions are stored and felt).

In my opinion, one simple way to break down and describe what so many people call “the patriarchy” is to say it’s a society that fundamentally operates in a way that values the mind (intellect/doing) over the body (intuition/feeling). 

We see this played out everywhere, one of the most obvious and pervasive is the ideology of science and the use of charts, graphs, and measurements to “prove” if something is true or untrue. Science is typically seen as “fixed” and “settled.” There is no room for personal accounts, stories, things that are felt but not seen, etc.

This isn’t to say science is wrong or bad at all. I am simply suggesting that it might not be the ONLY means to discovery. Our dismissal of things like magic, energetics, intuition, and all things meta is a sign of masculine dominance, as these things were quite common and well understood in past times. Some radical feminists point out that the process and politics of modern science is a projection and influence of the western man’s values. Here is an excerpt I like from an article by Dr. Kelly Brogan:

Ever heard the phrase, “…the science is settled?” If so, it didn’t come from the mouth of a true scientist. Scientific dogmas create taboos – things you’re not allowed to ask about or talk about, let alone study and research. But science is not a destination…it is a process of discovery. Moreover, it is a means of studying and honoring the wonder around us and within us. When science is bound and arrested by dogmatic beliefs, it becomes an eviscerated religion that can be co-opted for political gain and control.

Rupert Sheldrake is a brilliant renegade scientist and theorist with this to say on the matter:

“We are, many of us, waking up from a several century long slumber induced by Scientism – the dogmatic belief in the dominant narrative of science as religion. As we wake up to nuance, to new science that defies the old, and to a complexity that often leads us to an awareness of all that we don’t know, those Scientism believers will become more and more uncomfortable. These people may be your family, your doctors, or even your formerly trusted media reporters. They may foam at the mouth and threaten violence at the suggestion that Scientism’s sacred cows (pharmaceuticals, bioengineered foods, industrial chemicals) are not what we have been lead to believe. Stay strong and reconnect to the elegance of a world of natural design, harmony, and regeneration.”

Another way we witness the unconscious cultural belief of mind > body is through this idea that women’s bodies are  “objects” and we should stop appreciating and wanting their beautiful, sexy bodies and instead pursue them for their mind/intellect/creativity. Again, not that the latter qualities are not important, but why isn’t the body seen as equally significant, desirable and powerful?

Ironically, it’s typically other women who I see most demanding to be noticed and recognized for the qualities they possess in their mind, while mocking and ridiculing anything body-centric, essential to female biology (which is a damn powerhouse), is focused on appreciating the female form, or uses intuition as a compass for living.

One might call this the real “internalized misogyny.” The deeply unchecked belief that the mind is more valuable than the body.

In a world where we are so divorced from our bodies and mostly live in the mind, the mind is seen as superior, and all of our ideas and advocating for reform are still rooted in these masculine values of systems, intellect, tests, logic, data, etc…

To me, the new feminism would be a return to embodiment. Yet, as it stands today, it seems we still generally believe the mind is the more sophisticated and trusted between the two, while we depreciate the body as the weaker one. Something susceptible that is to be feared and not trusted. Just a powerless “object” that acts as a distraction to men, couldn’t possibly know when and how to give birth, and offers no healing in and of itself.

I believe if women owned the power of their body, heart, and sex, and made embodiment their practice, that is to say, focused on radically changing “in here” rather than trying to change how everyone responded to us “out there,” then we would see shifts in our world beyond what we could ever imagine.

Open This Content