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About the Socialist Bugaboo

 

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First, let me say that “socialist” is mainly a label - a derogatory one at that. It’s the next thing to being called a “communist”. I do not criticize Bernie Sanders for declaring himself a socialist. In fact, he is to be applauded for his courage. I’m waiting for Joe the Plumber to come up to Sanders and accuse him of being a socialist. That would make for a good comedy routine.

The theory of socialism is that the government takes over businesses, often without compensation to the previous owners. Historically, however, we must distinguish between the various types. Obviously, Bernie Sanders is not a Lenin or Stalin who would kill the Czar’s family on their way to seizing power. He is not a National Socialist like Hitler. The word Democratic Socialist has a much less menacing connotation. It’s the social system they have in the Scandinavian countries and other parts of Europe. It means that government runs the health-care system, allows longer vacations, encourages more equal incomes, and things like that. The Dalai Lama recently said he was a Marxist socialist. Now, if only Pope Francis did the same, we could put this label to rest.

The worst thing about old-style socialism is that it brings totalitarian government. Government power and business power are fused in a single structure under government control. But how about government and business power being fused in a structure under business control? Wouldn’t that also be totalitarian? Isn’t that close to what we have today in the United States? Totalitarianism breeds corruption according Lord Acton’s formula that power corrupts and absolute power corrupts absolutely. I don’t want this. Government should be under the people’s control.

I do not consider myself a socialist - after all, I'm a landlord who has spent years fighting city government - but I have friends who are. One of my friends is Brian P. Moore, who was the presidential candidate of the Socialist Party U.S.A. in 2008. He said he’d make me housing secretary if he was elected. I (unsuccessfully) helped him canvas for signatures to get on the ballot in Minnesota and also handled some of the paperwork for the other canvassers. As a Congressional candidate with Minnesota’s Independence Party, I got more votes than Moore did that year. But due to the socialist label, Brian Moore was asked to appear on Comedy Central.

But enough of labels. There is a useful discussion to be had about socialism if it means saying which functions government should handle and which functions should go to business. Where I differ with Sanders - and with most conventional Democrats for that matter - is in regards to jobs. Does government or business have the main responsibility for furnishing jobs? I say: business. He and many other Democrat say: government.

What is Sanders’ jobs policy? Go to his campaign web site. Under the category of “creating decent paying jobs”, his “key actions” include:

“Introduced legislation which would invest $1 trillion over 5 years to modernize our country’s physical infrastructure, creating and maintaining at least 13 million good-paying jobs while making our country more productive, efficient and safe.

Opposed NAFTA, CAFTA, permanent normal trade relations (PNTR) with China, the TPP, and other free-trade agreements. These deals kill American jobs by shifting work overseas to nations which fail to provide worker protections and pay extremely low wages.

Introduced the Employ Young Americans Now Act with Rep. John Conyers. It would provide $5.5 billion in immediate funding to employ one million young Americans between the ages of 16 and 24, and would provide job training to hundreds of thousands of others.”

I do not necessarily disagree with these prescriptions. If we need to fix our crumbling infrastructure - as we do - then by all means do it. Government needs to take the lead in repairing highways, bridges, sewer pipes, and other public infrastructure. It needs money for such projects. An important byproduct would be that many well-paying jobs would be created. On the other hand, I do not conceptually favor work for the sake of providing jobs. Make-work projects are not the answer. There is only so far you can go with that approach.

With respect to the trade agreement, I back Sanders’ position completely. I was a co-founder of the Minnesota Fair Trade Coalition. In 1992, I wrote and published the first anti-NAFTA book on the market (A U.S.-Mexico-Canada Free-Trade Agreement: Do we just say no?) and personally handed a copy of this book to presidential candidate Bill Clinton. But the result was disappointing.

With respect to $5.5 billion to fund young people’s jobs, I would not oppose this even as a make-work program because the need is so great. But $5.5 billion is a drop in the bucket. This proposal, too, falls far short of what is needed. The country is hurting.

It’s interesting that Bernie Sanders is working with Congressman John Conyers on the jobs program for young people. I, too, worked with Conyers on his shorter-workweek bills in the late 1970s and early 1980s. I wrote articles published in the Congressional Record and helped his staff draft legislation. But the powers that be frowned upon this approach. Conyers, a practical politician, moved on to other things. I remained on ideological hold.

But this is, in fact, where, as a presidential candidate, I differ from Bernie Sanders. We need to cut working hours to offset labor displacement from technology. The mechanization of production has previously reduced agricultural labor from 70 percent of the work force in 1830 to less than 2 percent today. It has reduced employment in manufacturing from 27 percent of the work force in 1920 to around 10 percent today. With advancing technology, employment in the productive sectors of the economy is shrinking. Even “brain power” jobs are shrinking; robots can handle this work just fine. No, we cannot educate our way to full employment. We can only recognize that full productive employment will not be possible at the present level of hours.

I know that shorter workweeks have a bad rap. They mean tough times when hours and incomes are cut. But I am not talking about changes taking place during recessions. Shorter hours are needed not to counteract dips in the business cycle but the long-term, year-to-year displacement of labor as so-called “labor-saving” technologies steadily advance.

We are only fooling ourselves to think that new industries will come along to absorb the people discharged from traditional industries. What are those new industries? How about corrections? How about military service to fight future wars? How about high-priced education or medicine? How about employment in the casinos? How about lawsuits to the max and high legal fees? (Read about some of my experiences.) Is this really what you think is a better future?

Yes, my proposal for a four-day, thirty-two hour workweek is a tough sell. But if Bernie Sanders can sell socialism, I can try to sell this. My proposal requires government action. It requires amending the Fair Labor Standards Act in several ways. But it does not require that government become employer of the last resort and, in time, have this type of employment expanded until government becomes the main employer. It does not require that people be paid without working.

No, just cut hours. Give working people part of their lives back. More free time means increased freedom in general. “Live free or die!” Isn’t this what people in New Hampshire and elsewhere want?

You are in a position to help make this happen when you cast your ballot for me in the 2016 Democratic primary. If my program is adopted, I promise to free those millions of people presently enslaved to long hours of work. You can call me "Abe".

My specific proposal is too long and complicated to be presented here. I have published more than fifty papers on this subject on a web site, shorterworkweek.com. Read the last article, “The New Overtime Income Threshold Could be Only the Beginning”, written in response to something the Obama administration did last May. It adjusted the income threshold for overtime pay up to $970 an hour. This was one of President Obama’s better moves. But now we need to follow it up with a full-scale, permanent reduction in working hours, starting with a 4-day, 32-hour workweek. This should have been done years ago. Incomes need not suffer.

Being a supporter of the free-enterprise system, I believe in the power of markets governed by the law of supply and demand. This law also applies to labor. If labor is in short supply, wages rise. If there is too much labor in relation to demand for service, wages are depressed. The latter situation characterizes the U.S. economy today. There are too many job seekers relative tothe need for their laboring service.

What leftists fail to realize or acknowledge is that the business community or interest groups favorable to its position have rigged the labor market to their advantage by systematically creating an oversupply of labor. How so? First, they have pushed for free-trade agreements that add millions of workers in foreign countries to the labor supply while consumption of the goods produced by these workers is confined to the United States. That puts labor in oversupply so that wages go down. Related to this, the government has issued visas to foreigners with special skills allowing them to work in the United States, again increasing labor supply. In both cases, the federal government has put its thumb on the scales of the labor market tilting the balance in favor of business and against labor. It has caused labor to be in oversupply.

The bigger threat, however, comes from the displacement of labor through technology. Robots and other machines aiding production allow more to be produced with a given amount of human labor. In effect, the supply of labor is being increased. How do we offset this? We reduce the hours of work. The supply of labor is defined in terms of worker-hours. It is employment times the average hours of work. If we reduce average working hours through federal legislation, labor supply is also reduced unless employment rises by an even greater amount, which is highly unlikely. My proposal for a shorter workweek would therefore put government's thumb on the scale to tip the balance of supply and demand in favor of the worker - for the first time since the Fair Labor Standards Act was passed in 1938. But business would also benefit from having a more robust and stable consumer market. It is only the self-rewarding CEOs and professional investors, who benefit from short-term gains in profits, who stand to lose if this change were put into effect.

To end this discussion of socialism, let me suggest that instead of attaching labels we try to decide which functions government or business can handle best. If we want creativity in delivering the product, then give the function to business. But if we want methodical, “stick-to-the-book” performance of a function, it belongs to government. In some cases, government and business can both deliver the same service - the U.S. Postal Service and Fed-Ex, for instance - each taking a niche.

By this criterion, I would not want government manufacturing new consumer appliances or taking over the entertainment function because the private sector’s creative drive adds value. On the other hand, I would question the value of creative accounting or creative lawyering because we want such services to be delivered in an even and impartial way. We want competent bureaucrats doing this work. In particular, I am in favor of socialized law because I have seen how bad the present system of dishonest judges and greedy attorneys can be. (See legal challenges.)

With respect to health care, I favor a national health service run by the government because doctors are supposed to be competent technicians of medical treatment. My own grandfather, Samuel McGaughey, was a government doctor. He examined the doughboys going off to World War I and later worked at a public hospital in Indianapolis. But, at the same time, there is a role for creative medicine to treat unusual ailments. So a dual health-care industry, with government handling people’s basic medical needs and private providers handling the more exotic or expensive stuff, would probably be best.

Higher education is another area that needs both private and public institutions. Here the principal need is to reduce unnecessary services to hold down costs. There is an upward creep in credentials required for many jobs. Higher education is becoming way too expensive. We are not treating our young people that well. In that respect, I am fortunate to have been born in the 1940s.

P.S. The U.S. Senate did actually pass Senator Hugo Black's bill for a 30-hour workweek in 1933 but the incoming Roosevelt administration did not support it. Yes, Vice President Richard Nixon made a public statement during the 1956 presidential campaign welcoming a four-day week which he thought might come in the near future. And, yes, Senator Eugene McCarthy, best known for his strong showing in the 1968 New Hampshire Democratic presidential primary which prompted a sitting president to leave office, was also chair of the 1959 Senate Special Committee on Unemployment which set the agenda for labor legislation in the 1960s. I was privileged to meet Sernator McCarthy years later and, due to our mutual interest in reducing work time, co-author a book with him titled Nonfinancial Economics: The Case for Shorter Hours of Work (Praeger, 1989).

 

Further readings:

economic effects of shortening work time

how shorter working hours and international trade are related

why Christians should support Shorter Workweek legislation

Samuel Gompers own account of the fight for the eight-hour day

 

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