Monday, September 02, 2013

364 CEO Days

Frank Pasquale

Lynn Parramore observes that exploitative practices do little to help US productivity, or even the position of firms engaging in them:
[America's] cult of endless toil doesn’t really help the bottom line. Study after study shows that overworking reduces productivity. On the other hand, performance increases after a vacation, and workers come back with restored energy and focus. The longer the vacation, the more relaxed and energized people feel upon returning to the office. Economic crises give austerity-minded politicians excuses to talk of decreasing time off, increasing the retirement age and cutting into social insurance programs and safety nets that were supposed to allow us a fate better than working until we drop.
That doesn't seem very economically rational: why not respect Brandeis's basic insight that "I can get 12 months of work done in 11 months, but not in 12"? One clue lies in an observation from Polish economist Michal Kalecki:

Under a regime of permanent full employment, the "sack" would cease to play its role as a disciplinary measure. The social position of the boss would be undermined, and the self-assurance and class-consciousness of the working class would grow. Strikes for wage increases and improvements in conditions of work would create political tension.
Similarly, stratified opportunities for leisure are more about marking out the prerogatives of "boss" and "non-boss" classes, with ever finer degrees of particularity and rigidity. Or, to apply Corey Robin's theory: the US is "the only developed country in the world without a single legally required paid vacation day or holiday," not because this gives us economic outcomes all that better than rivals, but because absolute deference to "business demands" is part of a well-funded, pervasive ideology.

All would do better if the US made a long-term commitment to improve the state of workers at the bottom half of the economy, ranging from higher wages to better health and education benefits. Instead, trends point in the exact opposite direction:
[B]etween 2007 and 2012, wages fell for the lowest 70 percent of all wage earners, despite productivity growth of 7.7 percent. Those at the top of the income distribution have captured the gains of so-called economic recovery. In an article published in the latest Journal of Economic Perspectives, Josh Bivens and Lawrence Mishel assert persuasively that this shift reflects the successful “rent-seeking” or economic bargaining power of corporate executives and financial professionals.
We should remember that Keynes didn't recommend redistribution and stimulus to bring a radically new political order to capitalist democracies. Rather, Keynesianism is designed to rescue them from internal, self-reinforcing, and self-destructive tendencies to concentrate wealth in an ever smaller number of hands. As automatic stabilizers and basic rights to food and health care erode, the same radical alternatives that worried Keynes appear on our own horizon. A world where CEO's aspire to make 365 times their typical worker's salary, while using those gains to support politicians who eviscerate basic rights, won't be stable. Or, to be more precise, it won't be stabilized in ways consistent with basic principles of democracy and human rights.

X-Posted: Concurring Opinions.

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