The 350 pound gorilla in the capitalist living room – employment

The rise of nativism and racism in the Western world is rather obvious, now that two elections (the EU Referendum in the UK and the Presidential and Legislative branch elections in the USA) have been won by parties and forces representing regressive, nativistic thinking.
The bigger question, which many people are having trouble with, is why those forces have risen rapidly to have the impact that they have on electoral outcomes.
Inequality in societies probably plays a part. However, that is not a root cause, it is a symptom.
My view (for what it is worth) is that the underlying root cause is that, as most Western countries move to a post-industrial societal model, there simply is not enough employment to absorb all of the people who want and need paid employment. There aren’t enough jobs to go around. This problem has existed for 40+ years in many countries. Wherever you look in Europe and North America, you can see high structural levels of unemployment in many regions and countries. The causes are (1) automation of repetitive tasks, and (2) the migration of manufacturing and assembly operations to other countries with lower employment costs.
A big clue that the problem has existed for decades is that governments have been modifying the basis for counting numbers of unemployed people for decades to reduce the headline (total) number. I watched in the UK as this was done persistently by governments to keep the headline number below the politically embarrassing number of 1 million. As a result, most government official statistics on unemployment exclude long-term unemployed people who may still be looking for work, and also fail to count under-employment. So the US number of around 5% unemployment is not accurate, and has been inaccurate for decades. This tells me that this is a long-term structural issue, and that governments either do not want to address it, or do not know how to address it within the confines of current government policy and their own governing ideology.
Part of what is known as “the American Dream” is the idea that a new generation will enjoy greater prosperity than the previous generations. This manifests itself in expectations among people that they will enjoy a better standard of living than their ancestors. Until recently that was true. Now, with recessions not leading to “bounce” recoveries, and the decline of rural employment, many people in the USA have discovered that this is no longer true. Not surprisingly, they have become angry and frustrated, and they used their electoral power to send a clear and radical signal to the world, by electing a reality-show host and carnival barker to the Presidency.
One of Donald Trump’s populist promises during his campaign was that he was going to bring jobs back to the USA. He hinted that he would penalize corporations for offshoring employment, and he specifically promised to “bring back coal” to Appalachia. This was pure populist pandering in action. He was telling demoralized and desperate people what they wanted to hear.
None of Donald Trump’s expansive promises originated in any place close to current reality.
The reality is that if we want to return offshored work to the USA, we have to be prepared to pay more for just about all manufactured products in order to achieve this. The manufacturing went overseas for cost reasons. As for coal and gas, well, I wrote about that previously. The only way that the coal mines will re-open in Appalachia is via the application of huge government subsidies. Even then, the amount of employment will be limited. Automation has reduced employment demands in extractive industries dramatically. That is why the dream of re-opening timber mills in the Pacific North West is also doomed to give disappointing results. The jobs didn’t disappear because of an end to logging. They disappeared because of automation, and will not return unless automation is banned, people are subsidized to work, or a combination of both. In the meantime, unemployment in the Northern counties of California and the Southern counties of Oregon continues to be higher than the national average. Needless to say, the loss of mass employment in many Pacific Northwest counties has led to widespread discontent with central government, and pressure for secession exists, on the grounds that government from state and federal level has done nothing except make their lives worse.
The mass market political parties in the USA have no logical or coherent answer to this issue, because they are trapped in a hole of contradiction, between their public ideological position that claims that all solutions belong to the free market, and the reality that they have been subsidizing industries for decades. For example, governments already pump billions of dollars into agriculture via subsidies. State and local governments also subsidize businesses via tax abatements and other forms of tax concessions. However, political parties routinely rationalize away these contradictions.
The bottom line is that if governments want to address structural lack of employment opportunities, they have to consider one or a combination of two strategies:

1. (if you accept that people have to work) Subsidize employment
2. (a different approach) Give all people a Basic Income that will allow them to at least live above the poverty line

When a previous strategy no longer works, you need a new one, or you are condemned to slow decline. Political parties can continue to throw money at structural employment issues on an industry by industry or a regional basis, dressing it up as “relief”, “competitive investment” or any number of BS doublespeak phrases. That probably will not work in the medium term as de-industrialization and automation continue to advance. The cracks between rhetoric and reality will widen, and the contradictions will widen to the point that the political party credibility drops even lower. Or they can accept the new notion that not everybody can, must and should work.
Libertarians have been wrestling with this issue for a while, and in the Libertarian movement the concept of a Universal Basic Income (UBI) has been a topic of discussion for a long time. It is a radical and different option to address a problem that is not going away. It was tried by Canada in the 1970s, so it is not totally unproven.
The Western world is at a crossroads with respect to matching expectations to reality for its electors. If political parties continue to try and paper over the cracks, we will have more wild and wacky election results, more instability, and possible world conflict. It really is that serious.
The time for visionary ideas and solutions is now.


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