The Coping Mechanisms of the Precariat: Prelude To The Great Resignation

This post is a continuation of my series of posts on economic precarity and the precariat.  In the last post in this series, I introduced the concept of a social nonmovement.  To quickly review, a social nonmovement is the spontaneous, unplanned emergence of a set of social practices among a large number of people, among whom these practices begin to encroach upon and ultimately disrupt an existing status quo.  The concept of the social nonmovement is introduced and explored in Asef Bayat's book Life As Politics.  What is especially relevant to the precariat is the emergence of social nonmovements among the poor and powerless in response to the pressure inflicted on these people by the rich and powerful masters of an existing status quo.  These social nonmovements encroach upon and weaken the power of the masters of the existing status quo, yet they frequently operate outside the notice of these masters even as they weaken the power of these masters.  However, sometimes a social nonmovement catches the eye of a large number of the privileged members of a society - especially when the social nonmovement appears suddenly, spreads quickly, and achieves a massive amount of disruption in a short amount of time.

Such a social nonmovement is the Great Resignation - a time in which massive numbers of people decided that their jobs were such a royal pain that they refused to take anymore, and quit.  Most scholars and journalists consider the Great Resignation to be one of the outcomes of the COVID-19 pandemic which shut down much of the American economy in 2020 due to the failure of then-President Donald Trump and his Republican Party to effectively prepare for the pandemic.  These scholars and journalists consider 2021 and 2022 to be the peak years of the Great Resignation, and some of these even say that the Great Resignation is now largely over.  However, there are minority voices such as journalists at the Harvard Business Review who say that the Great Resignation is actually a long-term trend which began at the beginning of the last decade and is still continuing.

Most people who have been alive for any length of time realize that throughout history, worker attitudes have fluctuated between job satisfaction or dissatisfaction in cycles that are reminiscent of the alternation of yin and yang in ancient Chinese philosophy.  In today's post I hypothesize that the 1960's in the United States were a time of increasing job satisfaction for an expanding number of people.  However, in making such a hypothesis, I am confronted by the difficulties which social scientists have had in defining what exactly is job satisfaction, let alone in figuring out how to measure it.  (See, for instance, "What is Job Satisfaction?", Edwin A. Locke, Organizational Behavior and Human Performance, 1969.)  Nevertheless, a 1982 report from the U.S. Bureau of Labor Statistics supports my hypothesis, noting that in 1973, 87 percent of workers were either very satisfied or moderately satisfied with their jobs.

Yet that picture has obviously changed over the years.  In 2017, an organization called the Conference Board provided a chart outlining the historical measurement of U.S. worker job satisfaction from 1987 to 2016.  According to that chart, worker satisfaction was at or below 50 percent during five of the eight years of the presidency of Republican George W. Bush.  According to the 2022 "Job Satisfaction Chartbook" from the same source, job satisfaction "is the highest it has been in a decade" at 60 percent.  Yet according to the Achievers Workforce Institute, two-thirds of employees are thinking about leaving their jobs in 2024.  This was also true in 2022, according to the Institute. This is yet more evidence that the Great Resignation is an ongoing trend.  (Maybe the people who answered the Conference Board surveys in 2022 weren't fully sharing their feelings...)

Now declining job satisfaction can be tolerated by workers for a time, yet as it intensifies, it leads to a point in which people decide that the pain of staying in an existing intolerable situation exceeds any potential suffering involved in making a change to that situation.  And workers have from time to time reacted explosively to their workplaces as illustrated by songs like "Oney" (written by Gary Chesnut and sung by Johnny Cash) and "Take This Job And..." (written by David Allan Coe and sung by Johnny Paycheck), as well as idioms such as "going postal."  (By the way, I do not condone or encourage workplace violence!)  But stories about successful quitting have been made to seem like the sort of rare events that are beyond the reach of most working stiffs.  Yet the undeniable fact is that during the last years of the last decade and the first years of this decade, a huge number of people found themselves pushed into quitting.  It is natural to ask what factors pushed so many into quitting at around the same time.

I will not definitively answer that question today.  However, I will suggest what I consider to be the likely factors.  Treat my suggestions as hypotheses, if you will.

• First, there is the erosion of the power of organized labor, an erosion which actually began with Republican President Richard Nixon's wage and price controls in the early 1970's.  This erosion kicked into high gear under the Republican presidency of Ronald Reagan and has not slowed down since.  The power of unions to protect their workers from low wages and excessive work demands was thus eroded.
• There is also the removal of the guarantee of lifetime employment for good and loyal employees of large corporations.  This was pioneered by such CEO's as Jack Welch of General Electric and was a direct contributor to the economic precarity suffered by a majority of working Americans today.
• There were the stresses imposed by globalism as wage and labor arbitrage.  This globalism was championed by right-wing, conservative executives of major corporations - the same sort of executives who are in many cases supporting the MAGA hostility to open borders championed by Donald Trump, as they see that sometimes smart people from poor countries can turn the tables on economic systems that are rigged against them.
• Consider also the removal or weakening of workplace protections against employer abuse.  Many employers (as well as business customers), thus unhindered from having to be humane toward their employees, turned some of those employees into metaphorical toilet paper, doormats, and punching bags onto whom these bosses could project their unresolved and unjustified hostility.
• Lastly (at least for today's post), there is the rise of the toxic workplace - a workplace in which bosses either perpetrate or enable bullying and mobbing behavior by popular workplace staff against those who are deemed to be scapegoats.  

Note that the last two factors are the direct result of the creation of a massive power imbalance between employers and employees over the last four decades.  The employees, reduced to a state of naked dependency on capricious bosses and a capricious labor market, were thus exposed to the prospect of either starving or having to meet unreasonable and destructive demands from these employers.  This made the management ladder a very attractive place for abusive, psychopathic, sociopathic, and otherwise personality-disordered people to take root.  Now here's an interesting perspective on the reason why leaders and managers allow abusive workplaces to continue: their continuance satisfies the ongoing psychological cravings of such managers.  A parallel to the abusive workplace is the abusive church.  As "Captain Cassidy" pointed out in a recent post on her blog Roll to Disbelieve, the whole point of creating an abusive power structure is so that the masters of such a structure (and those who are their special pets) can enjoy the psychological thrill of owning such a power structure.  And what is the best way to experience that thrill?  Why, to abuse the people at the bottom levels of such a structure, of course!  Consider Captain Cassidy's third and fourth points from the post I have cited:

• "Nothing is ever off-limits for those who hold power. More to the point, following the group’s rules is for the powerless. The powerful not only do not follow those rules, they flaunt their disobedience."

• "The powerful delight in the most potent expressions of power: forcing people to do things they don’t want to do; rubbing their own disobedience in the noses of the powerless. If power is not flexed, the powerful might as well not have it at all."

Captain Cassidy's perspective echoes what Chauncey Hare and Judith Wyatt wrote in Chapter 4 of their 1997 book Work Abuse: How To Recognize and Survive It.  But just as abusive churches (and abusive white American evangelicalism) have begun to suffer a loss of social power as their abuse has been exposed, abusive workplaces throughout the English-speaking world have begun to suffer an erosion of economic power.  Consider that workplace mistreatment cost U.S businesses between $691.7 billion and $1.7 trillion in 2021, according to a 2021 article in the Journal of Organizational Behavior.  A 2023 Forbes article puts the cost of toxic workplaces to U.S. businesses at $1.8 trillion annually.  According to a 2019 SHRM report, the cost of employee turnover in 2019 due to job dissatisfaction alone was $223 billion.  No matter what number is used, we're not talking chump change here.  What's more, toxic workplace culture has been a key characteristic of companies that either recently underwent scandals or were driven out of business, companies such as Volkswagen, Theranos (and its jailbird ex-CEO), and WeWork, to name a few.

The pinnacle of ecstasy for abusive employers seemed to come in the early months of 2020, in which powerful employers were able to bully their staff (many of whom were stuck in low-wage "service" jobs) to show up for work during the COVID-19 pandemic.  It was that pressure and the resulting threat of actual physical death which proved to be the final straw for many people who had hitherto surrendered themselves to enduring toxic workplaces.  This is also what pushed the upward trend of the Great Resignation into something of a landslide-in-reverse and which catapulted the Great Resignation into the forefront of the American public consciousness.  The next post in this series will examine the paths taken by workers from various sectors of the American economy after they quit their jobs from 2020 onward.

P.S. While I have enjoyed many of the posts on Captain Cassidy's blog Roll to Disbelieve, I can't say that I agree with everything she has written.  For instance, I am still a Christian, whereas she has deconstructed to such an extent that she has rejected Christianity altogether.  However, I can't say that I blame her as I look at the sorry legacy of white American evangelicalism and its marriage to secular earthly economic and political power.

P.P.S. I have mentioned Donald Trump a few times in today's post.  Some from the Right may assert that I should not speak critically of him since he supposedly recently survived an "assassination attempt."  And I must say that while I despise Donald Trump, I do not condone any attempt to assassinate him.  However, when I read that his injuries were not life-threatening (in fact, some reports state that he was not actually hit by a bullet at all), I have to wonder if the whole "assassination attempt" wasn't some kind of publicity stunt or false-flag operation designed to boost his media profile and polling numbers.  I don't have much sympathy...

Precarity and Artificial Intelligence: What "HAL" Might Do To "Dave's" Future

Note: the title of this post is a nod to an old, rather slow sci-fi movie with a mind-blowing ending that avoided cheesiness while actually being ahead of its time in many ways... 

This post is a continuation of my series of posts on economic precarity.  As I mentioned in my most recent post in this series, we have been exploring the impact of machine artificial intelligence (AI) on the future of  work, whether that work requires advanced education or not.  But perhaps it might be good to start with a more basic preliminary question: what might be the impact of AI on human life in general?  Of course, the answer to that question is dependent on two factors, namely, the kinds of predictions that are being made concerning the development of AI, and the likelihood of those predictions coming true.  Over the last several years, prognosticators have predicted massive disruptions to human life resulting from the massive and rapid development of AI capabilities.  The tone of these predictions has varied between the optimistic and the dystopian.  Let's limit ourselves to the optimistic for now and ask whether we would want to live in a world in which the most optimistic predictions came true.

One of the more optimistic points of view can be found in a book published in 2021 titled, AI 2041:

Ten Visions for Our Future, by Kai-Fu Lee and Chen Qiufan.  Dr. Kai-Fu Lee holds a PhD from Carnegie Mellon University and has founded or led a number of tech companies as well as doing extensive research and writing in the field of artificial intelligence.  Chen Qiufan is Chinese science fiction writer who formerly worked for tech companies Google and Baidu before launching into a full-time creative career.  AI 2041 is a multifaceted picture of Kai-Fu Lee's predictions of the evolution of AI capabilities from now to the year 2041, combined with Chen Qiufan's short stories portraying fictional settings in which each of these predictions comes true.  Among the things which Dr. Lee believes we are most likely to encounter are the following:

• The use of deep learning and big data paired with social media to guide customers of financial products into decisions and lifestyles which have the least risk of adverse outcomes and the greatest chance of net benefit as calculated by an AI objective function.  (See the story "The Golden Elephant.")
• The use of natural language processing and GPT as tools for creating customized virtual "teachers" for children.  (See the story "Twin Sparrows.")
• The use of AI tools for the rapid analysis of pathogens and the rapid development of drugs for emerging new diseases, as well as the use of automation in management of epidemics and pandemics.  (See the story "Contactless Love.")
• The displacement of skilled manual laborers by AI, and the use of AI to create virtual solutions for this displacement which return some sense of purpose to workers who have lost their jobs.  (See the story "The Job Savior.")
• The ways people cope with the likely displacements and disruptions which will be experienced by societies in which having one's basic needs met becomes decoupled from having to work to earn a living. (See the story "Dreaming of Plenitude.") 

Note that I have listed only five of the ten possible scenarios sketched by Dr. Lee.  However, these five are most relevant to the topic of today's post.  It is already becoming possible to design AI-powered virtual "life coaches" to guide people in their life decisions.  (In fact, if you really want to let your bloody smartphone tell you how to run your life, you can find apps here, here, and here for starters.)  However, when using these apps, one must remember that at their heart they are simply machines for optimizing objective functions which have been designed by humans and which have been tuned by massive amounts of human-supplied training data.  Thus these "coaches" will be only as smart (or as stupid) as the mass of humanity.  And they can be made to encode and enshrine human prejudices, an outcome which is especially likely whenever decisions involving money or social power are involved.  This is illustrated in the story "The Golden Elephant."  (For a harder-edged, more pessimistic view of this sort of AI application, please check out the short story "The Perfect Match" by Ken Liu.)

The use of AI tools in medicine for discovery of pathogen structure and rapid drug development is a fine example of the emerging use of machine implementation of multi-objective function optimization.  I truly have nothing but praise for this sort of application, as it has saved countless lives in the last half decade.  For instance, this sort of technology was instrumental in the rapid development of safe and effective COVID vaccines.  However, when we get to the use of AI to replace the kind of skilled labor that has historically depended on the development of human cognitive capabilities, I think we're headed for trouble.  Consider the case of teaching children, for instance, as exemplified by Chen Qiufan's short story "Twin Sparrows."  Teaching in modern First World societies has evolved into the delivery of a standardized curriculum by means of standardized methods to children, and the evaluation of the learning of these children by means of standardized tests.  

Now I know a little about teaching children, as I volunteered for a few years to be an after-school math coach.  And I can tell you that teaching arithmetic to one or a few children requires more than just knowing arithmetic.  It also involves emotional intelligence and the skill of careful observation as well as a certain amount of case-by-case creativity.  We must ask whether these things can be captured by an AI application that has been "optimized" to maximize learning.  How does one measure things like student engagement?  For instance, do we write some polynomial regression function in which one of the terms stands for whether the kid's pupils are dilated, another term stands for whether a kid's eyes are open and looking at the teacher or whether they're closed, another term captures whether a kid is sitting quietly or throwing a fit, etc.?  And what happens when we move beyond a standard curriculum?  How, for instance, do you make an AI "virtual" art teacher?

I won't attempt to answer these questions here, although I will mention that China has already begun to deploy AI in primary school education, as noted in the 2020 Nesta article titled, "The Future of the Classroom? China’s experience of AI in education" and the 2019 article "Artificial intelligence and education in China," which is unfortunately behind a Taylor and Francis paywall.  It will be interesting to see comprehensive, multi-year studies which document whether the use of AI in education is actually living up to its promise.  

But let's say that the deployment of AI in education really does turn out to be effective.  What happens to the human teachers in such a case?  Kai-Fu Lee says in AI 2041 that teachers will still be needed to be confronters, coaches, and comforters.  In fact, this seems to be a rather stock answer given whenever the potential massive occupational disruptions promised by the widespread deployment of AI are mentioned.  We are told that when jobs that formerly required powers of observation, quick assessment, logical reasoning, computational or motor skills, or memorization are taken over by AI, the newly-displaced workers can be retrained as "compassionate caregivers."  But it might be good to confront the fact that the widespread deployment of AI under an optimistic scenario would certainly mean the de-skilling of large numbers of people.  What possibly unforeseen effects would this de-skilling have on the displaced workers even if they were retrained as "compassionate caregivers?"

Consider, for instance, what might happen to London cab drivers if they were replaced by self-driving taxis.  To become a London taxi driver, a person must memorize a huge amount of London metro local geography, then pass a special test administered by the British government.  (From what I hear, you can't cheat on the test by using a GPS!)  All that memorization (especially visual memorization of London streets and intersections) induces strong development of key regions of the brains of aspiring London taxi drivers.  If this challenge is taken away from a London cabbie, he or she will lose that brain development.  Consider also the personnel who comprise flight crews of airliners.  Up to the 1960's, one of the positions on the flight deck of an airliner was the navigator.  But the navigator position was eliminated by autopilots.  So flight crews shrank from four to three people.  But then, further advances in automation eliminated the position of flight engineer.  So now flight crews consist of only two people.  What development was lost in the brains of the navigators when they were replaced by machines?  (What navigational feats are humans capable of when those humans are pushed to their cognitive limits?  Consider for instance how the peoples of Oceania learned to sail between their islands reliably and successfully without needing maps or a compass.)

AI has eliminated not only aircraft navigators and flight engineers, but an increasing number of other degreed professionals including medical radiologists, as well as receptionists, telephone operators, fast-food cooks, waiters, and waitresses.  AI "expert systems" are threatening the jobs of an increasing number of skilled, educated technical professionals, as noted here and here, for instance.  An increasing number of news stories are documenting the ongoing erosion of human labor markets by AI.  It must be asked what will happen to people whose jobs required the development of hard cognitive skills when those skills are replaced by AI.  Preliminary answers to that question are not encouraging.  For instance, the British Journal of Medicine published a 2018 article titled, "Intellectual engagement and cognitive ability in later life (the “use it or lose it” conjecture): longitudinal, prospective study," in which the authors concluded that lifelong intellectual engagement helps to prevent cognitive decline later in life.  There is also a 2017 article published in the Swiss Medical Weekly whose authors concluded that "low education and cognitive inactivity constitute major risk factors for dementia."  In other words, by ceding to AI the hard cognitive challenges which have traditionally been the hallmark of many kinds of paying work, we may well be at risk of turning ourselves into a society of de-skilled idiots.

Ahh, but there's more.  Let's consider the obvious fact that when AI takes over a job, one or more humans is thrown out of work.  Let's consider the response of various politicians to this fact.  For instance, let's consider the rhetoric spouted by crooks like Donald Trump and other Republican Party politicians (as well as their millions of adoring fans) in the run-up to the 2016 election.  Let's also consider the "scholarly" articles, ethnographic studies and books such as Hillbilly Elegy which sought to "explain" the Trump phenomenon.  One of the key assertions of the Trump crowd in 2016 was that the reason why the white American working class was becoming increasingly poor was the threat posed by immigrants (especially dark-skinned immigrants) taking jobs away from "real" Americans.  Thus America needed to build walls - made both of barbed wire and cement, and of policies and legislation -  in order to keep the great unwashed from stealing what "rightfully" belongs to America.  In other words, one of the biggest drivers of the growth of Trumpism was the loss of jobs and income among the white American working class.  But if concern about job losses was really so bloody important to the architects of Trumpism, why is it that they did not utter a single word in protest against the threat to jobs posed by the deployment of AI?  Why is it that NO ONE in the Rethuglican Party nowadays has anything bad (or even cautionary) to say about the use of AI by American businesses?  The silence of the Rethuglicans regarding the disruptions of AI can be explained quite simply.  AI helps business owners increase profits while reducing labor costs.  Thus AI helps the rich get richer.  Also, Trumpism is not and never was about bringing jobs back to the "working class".  It was rather always an expression of collective narcissism.  Thus all the talk about jobs, like all the rest of the rhetoric of the American Right, was and is utter crap.

To be sure, we do need to start having urgent conversations, both locally and on a wider scale, regarding the deployment of machine artificial intelligence in society.  Such conversations need to ask what AI can reasonably be expected to be able to do, as well as asking whether we really need machines to do what AI is promised to do.  If we decide that it is actually in our best interest to continue the massive development and deployment of AI, we need to figure out how to do this in such a way that we maximize the benefits of AI while minimizing our exposure to the potential downsides and negative externalities of AI.  Lastly, we need to start asking whether it might make sense to establish a basic universal income and other social structures which allow the people in our societies to develop their full human potential even in an era of the expanding use of AI.

Introducing the Main Street Alliance

I'd like to take this opportunity to introduce readers to the Main Street Alliance, an organization which seeks to foster the creation and growth of small businesses in the United States.  As I resume my series of posts on the problem of economic precarity, I will also discuss solutions.  As I mentioned in a previous post, I believe that the eradication of the monopoly power of the rich and the fostering of small business among the poor are two strategic efforts which can reduce or eliminate economic precarity in the United States.  This is what the Main Street Alliance is working to achieve.

Those who read about the activities of the Main Street Alliance will also learn about how the rich and the powerful in the United States are trying to destroy small businesses, especially those run by minorities, and how these bad actors are using Republican-appointed Federal court justices in their attacks against small business.  This should be of great concern to those of you who are small entrepreneurs.  The latest attack against small business consists of judicial challenges to the Federal tax code.  Readers of this blog can learn from the Main Street Alliance website how they can join in the fight to foster and protect small business.

The Educated Precariat: Why The Mismatch?

This post is a continuation of my series of posts on economic precarity.  As I mentioned in recent posts in this series, we have been exploring the subject of the educated precariat - that is, those people in the early 21st century who have obtained either bachelors or more advanced graduate degrees from a college or university, yet who cannot find stable work in their chosen profession.  The most recent previous post in this series discussed the university system as a machine that produces graduates for use within the larger machinery of modern late-stage capitalism, and what is happening to those graduates because of the fact that there are more graduates being produced than there are jobs into which to plug those graduates.

That previous post highlighted the fact that from at least the 1990's onward (and possibly starting from the 1970's onward), there has been a growing number of college graduates who have found themselves underemployed after graduation.  Moreover, as time has passed, the number of college graduates who have entered long-term underemployment after graduation has increased as a percentage of total college graduates.  Note that to be underemployed as a college graduate means to hold a job that does not require the knowledge, skills, and abilities that a person would acquire as part of a college education.  As a hypothetical example, think of a gas station cashier with a recent baccalaureate degree in organizational psychology.  Moreover, the sources cited in that post listed the types of college major most likely to lead to underemployment and precarious work.  From those sources it would seem that baccalaureate degrees in STEM (science, technology, engineering, and mathematics) offer the greatest likelihood of full employment and decent wages.  However, note that a 2018 Canadian study titled, "No Safe Harbour: Precarious Work and Economic Insecurity Among Skilled Professionals in Canada" cited the fact that a technical professional degree is no longer an ironclad guarantee against precarious employment.  

Why then is there such a huge mismatch between the number of people obtaining degrees and the number of available jobs which would utilize the skills implied by these degrees while paying the degree holders a decent living wage?  That is the question which today's post will try to answer.  

First, let's consider the answer offered by people like Peter Turchin, the well-fed Russian emigre to the United States whom I mentioned in another post in this series on precarity.  Turchin asserts that the supposed "excess" of college graduates, the supposed "mismatch" between the number of college graduates and the number of appropriate jobs for these graduates, is the result of an imbalance between the higher education sector and the rest of the economy.  He also asserts that the "excess" of college graduates is increasing the likelihood of instability in society caused by the radicalization of these "excess" graduates.  To put it in the language of Wikipedia, 

"Elite overproduction is a concept developed by Peter Turchin, which describes the condition of a society which is producing too many potential elite members relative to its ability to absorb them into the power structure. This, he hypothesizes, is a cause for social instability, as those left out of power feel aggrieved by their relatively low socioeconomic status." [Emphasis added.]

Note the first sentence and its mention of the capacity of a society to absorb newly educated citizens into an existing power structure.  I will return to the notion of existing power structures later in this post.  Note also that Turchin's "solution" to this problem of "overproduction" is to limit access to higher education.  This "solution" is remarkably similar to the "solution" proposed by Richard Vedder, Christopher Denhart, and Jonathan Robe in their 2013 report titled, "Why Are Recent College Graduates Underemployed? University Enrollments and Labor-Market Realities" which I cited in the previous post in this series.  To quote their report,

"The mismatch between the educational requirements for various occupations and the amount of education obtained by workers is large and growing significantly over time. The problem can be viewed two ways. In one sense, we have an “underemployment” problem; College graduates are underemployed, performing jobs which require vastly less educational tools than they possess. The flip side of that, though, is that we have an 'overinvestment' problem: We are churning out far more college graduates than required by labor-market imperatives. The supply of jobs requiring college degrees is growing more

slowly than the supply of those holding such degrees. Hence, more and more college graduates are crowding out high-school graduates in such blue-collar, low-skilled jobs as taxi driver, firefighter, and retail sales clerks..."

In evaluating whether these assertions are valid, it is helpful to consider the present-day structure of the American economy as a representative of the typical economies of the Global North.  It is also helpful to consider the background of the people who have made these assertions in order to glimpse something of their possible motives.  As I mentioned previously, Peter Turchin is an academic who is already both tenured and well-established (thus well-fed, with multiple income streams), and his assertions of the need to limit access to higher education are not likely to hurt him in any way.  As for Vedder, Denhart, and Robe, Vedder is an adjunct member of the American Enterprise Institute (AEI).  Denhart is one of Vedder's former students.  I don't know how much of Vedder's ideology was passed on to Denhart and Robe, but I do know that Vedder is a strong supporter of big business even when it pays exploitative wages to workers, as seen in his support of Wal-Mart and of the 2008 taxpayer bailout of American businesses deemed to be "too big to fail".  (Note that that 2008 taxpayer-funded bailout is one of the biggest reasons why the richest Americans are now so rich!) Moreover, the AEI itself has the policy goal of supporting big business at the expense of small businesses, going as far as advocating that the role of the American government should be to help big businesses grow bigger.  The AEI wants further to eliminate all government support for small business, especially small business incubation, as I pointed out in a previous post.

From such observations, it is possible to move to a consideration of the structural reasons for the mismatch between jobs requiring a college education and the supposed "excess" of college graduates.  I will once again state my belief that high-quality, advanced education should be made available to as many people as want it - regardless of race, creed, national origin, or economic status.  Moreover, I once again assert that education is one of the great equalizing factors in a society, as it is a key component in the struggle of historically oppressed peoples to liberate themselves from historical and ongoing oppression.  This, for instance, was the motivation for the Polish underground "flying universities" which were organized in the 1800's when Poland had been partitioned by Germany, Austria, and Russia, and these nations had forbidden Poles from having access to higher education.  This was also the motivation for the underground "freedom schools" which sprang up in the American South during the antebellum days when white Southern power made it illegal to teach Black people (my people) to read.

But education alone is rather impotent without an opportunity to use it.  And the opportunities for the use of education are constrained by the structure of the society in which that education must operate.  Too often, the structure of a society is dictated and constrained by the dominant power-holders in that society.  I will therefore suggest that the decline in opportunities for college graduates (along with everyone else) is correlated with the rise in the concentration of economic power in the hands of an ever-shrinking elite.  In fact, I will go even farther and assert that the decline in stable employment for college graduates (even those with technical professional degrees) is a direct outcome of the concentration of economic power at the top of society.

Consider the fact that as of 2015, "America's 20 wealthiest people - a group that could fit comfortably in one single Gulfstream G650 luxury jet - now own more wealth than the bottom half of the American population combined..."  These people therefore have an enormous amount of economic and political clout.  And they have used (and continue to use) that clout in order to turn the American economy into a machine whose sole function is to make them as rich as possible.  The increase in precarity, the casualization of increasing types of employment, and the increasing use of task automation and artificial intelligence are typical of the strategies which these wealthy and powerful people have deployed in order to maximize the wealth they can extract from the American economy while minimizing the amount of wealth they give to the rest of us.  The aggressive expansion of the "gig" economy is another such strategy, as is the crafting of laws and regulations (especially by Republicans) which disadvantage small businesses (and all the rest of us, especially those of us who are not of their "tribe") while giving breaks to big business.  

What would a society look like if it provided citizens with the maximum optimal education and the maximum optimal opportunity to use that education in the pursuit of meaningful work?  I'd like to suggest that first, such a society would have a mechanism in place to prevent any one person or entity from concentrating more than a very small fraction of economic output into one set of hands.  Second, I suggest that such a society would be composed largely of artisans, artists, and small businesses owners who exercised their knowledge, education, and creativity to a maximal extent.  In other words, this society would be largely composed of "yeoman entrepreneurs" similar to the "yeoman farmers" idealized by Thomas Jefferson.   Some might say that such a society would be impossible in the 21st century, but I'd like to suggest that some positive aspects of what such a society might look like can be found in the depiction of the fictional Mars City in Hao Jingfang's novel Vagabonds.  I will mention that novel again in a future post. (Note also that although there was much to like about Mars City, it was not exactly a perfect utopia - there were indeed a few flies in that ointment, so to speak.)

Lastly, I suggest that such a society would be resilient - much more so than a more stratified, unequal society would be.  This is because such a society would have a much higher degree of decentralized group intelligence than would exist in a society of stratification and inequality.  This would make the more egalitarian society much more able to respond to emergent threats and opportunities than the more stratified society.  Consider the late 19th century and early-to-middle 20th-century history of Britain as a stratified society of the Global North.  Consider how its rigid class hierarchy and caste system prevented some of its principal actors from seeing the big picture and acting appropriately in the face of challenges.  Cases in point include the failure of Robert Scott's Antarctic expedition in comparison to the successful expedition of Roald Amundsen, as well as failures in World Wars 1 and 2 that resulted from a hidebound British system of honor, privilege and caste which blindsided British leadership.  The strident attempt by the Republican Party and other right-wing elements in the United States to re-establish an American system of caste and privilege constitutes the real threat to the "existing power structures" cited by Turchin, because it is leading to the "fragilization" of these structures.

The Educated Precariat: The Modern University - Birth, Growth, Late-Stage Diseases

This post is a continuation of my series of posts on economic precarity.  As I mentioned in recent posts in this series, we have begun to delve the subject of the educated precariat - that is, those people in the early 21st century who have obtained either bachelors or more advanced graduate degrees from a college or university, yet who cannot find stable work in their chosen profession.  The most recent previous post in this series discussed the origins and evolution of formal education and of the creation of higher education systems in ancient societies.  Here we discovered that these societies left records of the creation and operation of institutions of higher education, and that these institutions served the following purposes:

• The creation of cadres of people who could either participate in politics and governance as ruling practitioners of statecraft, or as people who could serve as competent administrators/bureaucrats under these ruling elites.
• The teaching and research of basic scientific knowledge and skills in such arenas as medicine, mathematics, and astronomy.

This previous post also discussed the widespread distribution of these institutions throughout the world, in the ancient societies that existed on the African continent, in Iran, and in China, as well as the ancient Greek and Byzantine schools.  This point is important, as our present society tends to hold up Europe as the sole source and origin of lasting intellectual inquiry.  This point of view is clearly not valid if one examines the history of other societies.  (See "Ancient Centers of Higher Learning: A Bias In The Comparative History of the University?", Michael A. Peters, January 2019.  Peters also points out the existence of ancient centers of higher learning in India that existed thousands of years before any such institutions in the West.)

Nonetheless, most institutions called "universities" in the 21st century can trace their structure back to the medieval European university as it came into being from the 11th century onward.  So today's post will briefly sketch the origins and motivation for the medieval university.  We will then examine the functions of the medieval university, and how those functions evolved over time to produce the modern research university.  We will close with an examination of how the growth of certain ancillary functions within the university have distorted the mission and focus of the university system.

Origins of the Medieval University

(Sources: "State-Building and the Origin of Universities in Europe, 800-1800", Hollenbach and Pierskalla, Copenhagen Business School, Denmark, October 2022; and Wisdom's Workshop: The Rise of the Modern University, Chapter 1, James Axtell, Princeton University Press, 2016.)

The medieval university arose from the growth experienced in European societies from the eleventh century onward.  This growth included the growth of European populations (with a resulting increase in the number of new towns and cities), and a corresponding growth of trade.  This was accompanied by a growing need in the new parishes of the Roman Catholic Church for advanced training for its new priests and administrators, along with a growing need for trained secular administrators in the newly forming towns, villages, and cities.  The training and education of an administrative class had been formerly performed by monasteries, but these monasteries were unable to provide the increasingly complex and advanced training needed by secular and ecclesiastical administrators from the 12th century onward.

The Church responded to this need by establishing "cathedral schools" for advanced training of its clerics.  From these schools came academics who desired a freer rein in teaching and scholarship than the Church was willing to grant them.  One of these scholars, Peter Abelard, founded his own schools for advanced learning in the twelfth century.  In addition, some of the secular scholars that studied at cathedral schools also went on to found their own schools.  These schools eventually organized themselves into self-governing "guilds of masters and scholars", or studia generale which received and taught aspiring scholars from any locale.  In order to free themselves from the kinds of obligations and interference that both Church and secular authorities imposed on ordinary people, these guilds petitioned both the Pope and the kings of their respective nations for the granting of formal legal autonomy and freedom of operation.  Such formally sanctioned guilds thus became the first medieval universities.  Note that the Catholic Church competed with these universities sometimes by co-opting some of them into its own power structure, and sometimes by founding universities of its own.

The charters granted by either State or Church or both, combined with the organization of these universities as scholastic guilds, produced a unique internal structure and operating environment for the medieval university.  Let's examine that structure and operating environment more closely.

Functions And Structure of the Medieval University

(Sources: ""Ancient Centers of Higher Learning: A Bias In The Comparative History of the University?", Michael A. Peters, Taylor and Francis Group, January 2019; "The Medieval University", J.E. Healey, CCHA, Report, 17 (1950); Wisdom's Workshop: The Rise of the Modern University, Chapter 1, James Axtell, Princeton University Press, 2016.)

The medieval university had the following characteristics:

1. It received students from everywhere and not just its own local region.
2. It engaged in higher learning, going beyond "the Seven Liberal Arts of antiquity and the early Middle Ages" to include the re-discovered teachings and writings of Greek philosophers such as Aristotle as well as Arabic learning.
3. "A significant part of the teaching was done by Masters (teachers with a higher degree)." (Peters, cited above; Healey, cited above.)
4. It was a self-governing, autonomous institution (a corporation run like the craft guilds) with a high degree of control over its budget and expenditures, and complete academic freedom over what degrees were awarded, and to whom.  Indeed, those universities which depended entirely on student tuition had complete control over their own budgets and expenditures. (Axtell, cited above.)  This self-governance was usually exercised entirely by the university faculty, that is, the collection of masters who taught university courses.  However, sometimes, this self-governance was exercised by students, who could choose which masters to hire or fire in addition to their other administrative powers.  (See the University of Bologna, for instance.)  Note that there were no early cases of universities being run by "administrators" who were not directly involved in teaching or learning.  This point will become important later.
5. Its main function was to produce the European equivalent of mandarins and other "professionals to maintain and lead the established social order, secular as well as religious."  (Axtell, cited above.)  Research was not a major function of the medieval university, although the influence of Aristotelian thought on the university curriculum did produce a spirit of inquiry.
6. The individual universities eventually became part of a European university system in which a degree issued by any one university was recognized as valid by any other university and anyone who achieved the degree of master was to be recognized as such by any university and to be allowed to teach at any university without having to undergo further examination.

This medieval system was adequate for times in which the technologies available to European societies evolved relatively slowly.  This is also why although inquiry was encouraged through Aristotelian thinking, research was not a primary university function.  However, the strains in European society produced by the Industrial Revolution forced a reform and transformation of the university into an institution whose main mission is research.  This transformation began in Germany in the 1800's.  Let's examine this in more detail.

The Birth of the Modern Research University

(Sources: The Challenge for Research in Higher Education: Harmonizing Excellence and Utility, Alan W. Lindsay and Ruth T. Neumann, ASHE-ERIC Higher Education Reports 1988; "The Rise of Academic Laboratory Science: Chemistry and the ‘German Model’ in the Nineteenth Century", History of Universities: Volume XXXIV/1: A Global History of Research Education: Disciplines, Institutions, and Nations, 1840-1950, Chang and Rocke, Oxford University Press, July 2021.)

Although the medieval university system did not deliberately focus on research, the fact is that a large number of scholars who were products (either graduates or professors) of medieval universities went on to do the work that laid the foundation for the Industrial Revolution.  These included such figures as Isaac Newton, Leonhard Euler, and Gottfried Wilhelm Leibniz.  It can be argued that the contributions of such intellectuals were greatly amplified and expanded by the transformation of the German university system, even though the stated motivations for that transformation were not initially the pursuit of practical scientific knowledge.  According to Lindsay and Neumann (cited above), the reforms of German universities triggered in the 18th and 19th centuries were "based on an acceptance of the view that the purpose of higher education was to advance as well as to preserve and transmit knowledge."  However, another significant motivation for these reforms was the fact that Prussia had been badly humiliated by France during the wars of the early 19th century, and so the German university system was reformed in order to catch up with and pass up the French.

The main reformer was Wilhelm von Humboldt, who stated that 

"Universities should view knowledge as incomplete and so subject to discovery, although full or final knowledge could never be attained.  Further, knowledge was pure and was to

be found deep within the self. It could not be gained merely by the extensive collection of facts. Only knowledge that came from, and could be developed within, the self formed one's character; and it was character and the manner of behaving that was important for the state and for humanity, not merely knowledge and eloquence ..."

In other words, von Humboldt helped to create a system in which universities engaged in the pursuit of new knowledge simply for its own sake, and not merely for any utilitarian ends.  However, it is undeniable that this focus on research for its own sake produced great advances in German science, including chemistry, and that these advances had a number of immediate practical applications.  Those nations whose universities adopted the German model of fostering pure research also began to reap the pragmatic benefits of the discoveries which that research achieved.  This has been the basis of the astonishing technological prowess achieved by the United States in the early and middle decades of the 20th century.  However, the changes in broad American attitudes toward the public good and the maintenance of the public commons have undercut American investments in basic science from the 1970's onward.  This pressure was felt and articulated as far back as 1988, when Lindsay and Neumann wrote that

"Over the last decade, university research has gradually changed its character under the influence of cost pressures, ambivalent public attitudes, and increasingly narrow notions of "utility." The natural sciences have received higher priority, and research has been increasingly concentrated in large teams and centers. The proportion of applied research has increased and closer links with industry developed. These trends have contributed to a weakening of the teaching-research nexus. Relationships with government have been marked by increasing bureaucratization and control. The business community and the government both stress the contribution of university research to national economic and social renewal, but the pattern of postwar development in higher education has brought utility into conflict with excellence, the traditional criterion for funding research. The challenge is to incorporate utility into research policy and funding without compromising the pursuit of excellence."

In other words, American funding and administration of American universities (both public and private) has fallen victim to the same "free-market" conservative ideology that has begun to destroy many other institutions that once served the public good.  The purpose of this destruction has been to continue to concentrate the majority of our societal wealth in the hands of a few capitalist parasites at the top of our collective food chain.  Thus American universities have become cash cows which have unfortunately fallen into a lake full of piranhas.  Let's close with a picture of the feeding frenzy and how universities have tried to cope. 

The Present Day: Administrative Takeover and the University as Cash Cow

The shift in viewpoint of the American university toward a perspective of the university as a business is not entirely new.  In his 1918 book titled The Higher Learning in America: A Memorandum on the Conduct of Universities by Business Men, Thorstein Veblen wrote that American universities are 

"... corporations of learning [which] set their affairs in order after the pattern of a well-conducted business concern. In this view the university is conceived as a business house dealing in merchantable knowledge, placed under the governing hand of a captain of erudition, whose office it is to turn the means in hand to account in the largest feasible output. It is a corporation with large funds, and for men biased by their workday training in business affairs it comes as a matter of course to rate the university in terms of investment and turnover. Hence the insistence on business capacity in the executive heads of the

universities, and hence also the extensive range of businesslike duties and powers that

devolve on them."

In other words, even as far back as 1918, American universities were viewed by their administrators as businesses.  (For a look at this process in an Australian context, see "How we got here: The transformation of Australian public universities into for-profit corporations", James Guthrie and Adam Lucas, 2022.)  (BTW, lemme break one thing down for ya: when Veblen uses the term "captain of erudition," what he means is "business executive as college administrator.")

What's more, even as far back as 1918, the function of governing these universities was being moved away from faculty and students, and was being transferred to administrators who had no direct role in either teaching or learning.  Veblen was ruthless in his evaluation of these administrators: "They are needless..."  (That's "needless" as in, "useless"!)  Yet the ranks of college administrators have grown steadily over the decades, at first slowly, then meteorically during the period from the 1970's onward.  I don't have time to write the statistics here (it's late in the day - gotta clean the bathroom and kitchen, and water the vegetables!), but I will leave a list of articles that interested readers can check out themselves if they are curious.  Suffice it to say that the administrative function of modern universities has begun to displace all other functions, hogging resources like a cancerous tumor even as faculty tenure is eliminated, faculty input into university policy is marginalized, faculty pay stagnates or declines, the percentage of adjunct faculty relative to full-time faculty increases, and student tuition (along with student debt) skyrockets.  

It may well be that the growth of the administrative and non-teaching professional sector of university staff has begun to threaten the long-term economic viability of American universities, both public and private.  This would explain two phenomena which I have noticed over the last decade or so and which I identify as possible coping mechanisms: the increasing promotion of university athletic programs (particularly football) in universities which never used to care much about athletics, and the expansion of a bewildering offering of professional graduate degrees and certificates.  I suggest that these professional graduate certificates and degrees are producing a glut of mandarins of the Global North at a time in which the job market for these mandarins is becoming saturated.

What is to be done about these new mandarins and their dwindling job prospects?  One suggestion comes from Peter Turchin, a corpulent Russian academic who has proposed that elites should limit access to higher education lest their less fortunate yet educated underlings become a source of the kind of upheaval and social transformation that destroys the power of these elites.  I can't say that I agree with his moral viewpoint.  I argue that education should be made as widely available as possible precisely because of the power of educated people to transform situations of inequality dominated by entrenched elites.  But for this to occur, ordinary people must regain a sense of the purpose of education in order that they might produce and revive grassroots expressions of that purpose.  More on that in another post.

Additional Sources:

• "Globalization, Neoliberalism, and International Student Enrolments in Higher Education: Expanding Global Interconnectedness and Academic Commodification", pages 32-42
• "Degrees of Change: How New Kinds of Professional Doctorates are Changing Higher Education Institutions"
• Article by Michael Delucchi, Richard Dadzie, Eric Dean, and Xuan Pham in Review of Social Economy, June 2021 (Language warning!)
• "A Bad Bargain: Administrative Bloat and Low Faculty Pay at UDC"
• "How Much is Too Much? Controlling Administrative Costs Through Effective Oversight"
• "Report: IU Athletics generated 13th most revenue nationally in 2022"

The Educated Precariat: The Seedlings Of Early Trees

This post is a continuation of my series of posts on economic precarity.  As I mentioned in recent posts in this series, we are now starting to delve the subject of the educated precariat - that is, those people who have obtained either bachelors or more advanced graduate degrees from a college or university, yet who cannot find stable work in their chosen profession.  I suggest that the troubled lives of the educated precariat are a symptom of the troubled state of higher education generally - especially in the First World (also known as the Global North).  Two troubled groups come immediately to mind, namely, academics (college professors or salaried researchers) and college or university graduates.  We will explore the plight of new college professors and researchers later.  But suffice it to say that the guaranteed career of a tenured professor is increasingly out of reach for this group.  (See also, "Tenure Track for Professors In States Like Texas May Disappear," USA Today, 13 April 2023.)  A third group that may not know it's in trouble consists of new and continuing college and university students whose necks will one day be broken by the mousetrap of student loan debt.  A fourth group consists of the administrators and employees of the system itself.  Their trouble arises from the fact that they are running out of a key resource, namely, new students!  This is due to a number of factors, such as declining birth rates, as well as a sober realization on the part of young men and women that college education itself has begun to yield sharply diminished returns even as it has become unbearably expensive.

In considering the historical role of higher education in the development of global civilizations, it is natural to ask how things got to this state in which American higher education has begun to crumble. Where exactly did we come from that we have arrived at this destination?  To answer that question, we need to look at where we started from - in other words, it's time to look at the historical origins of education in general and of higher education in particular.

The first thing we notice is that there are records on almost every continent from almost every civilization describing the origins and evolution of formal education and of the creation of higher education systems. Ancient places of higher learning can be found in places such as these (this is a very partial list, by the way):

• Mali, African Continent (University of Timbuktu containing the Sankore Madrasah)
• Tunisia, African Continent (University of Ez-Zitouna)
• China 
• Academy of the White Deer Cavern (白鹿洞書院); 
• Songyang Academy (嵩陽書院) (This was a private rather than public institution.)
• Taixue (太學) ("National University" established by Emperor Wu)
• Greece, European Continent
• The school of Isocrates
• The school of Plato (Also known as the "Academy", which was the first historical use of this term in the West.)  (See also Higher Education In Greece, Kyriazis and Asderaki, CEPES, 2008)
• The school of Pythagoras
• The Byzantine Empire
• The Pandidakterion (known today as the University of Constantinople)

Note that although some of these institutions are called "universities," the actual entity known as the modern university did not come to being until the Middle Ages in Europe.

The entire educational process including both primary and higher education has been documented for the Greco-Roman and Chinese cases, and so it is useful to examine these cases in more detail.  First, let's consider the Greco-Roman case.  And in the case of Greece, we must consider the distinction between education in the Athenian city-state and education in Sparta.  According to Wikipedia, formal education in Athens was reserved for boys who were free-born.  The education of slaves was forbidden.  Formal education was conducted by either public schools or by private tutors.  I was not able to find out how much access to public schooling depended on family wealth, but the sources I have found do indicate that the extent of this formal education did depend on how much a family could afford to pay.  Access to higher education was strictly on the basis of a student's ability to pay, and it appears that the system of higher education was largely created and run by private individuals with sufficient means for leisure.  Thus figures such as Aristotle and Plato could be considered a kind of educational entrepreneur.  As for Sparta, while both free men and free women could participate, the purpose of Spartan education was solely to train the nation for war-fighting.

A funny thing happened to educated Athenian Greeks who had enjoyed the status of free-born intellectuals: when the Greek city-states were conquered by and absorbed into the Roman Empire, these free-born intellectuals became slaves themselves.  However, these educated slaves were able to lighten the burden of their slavery by becoming tutors and founding their own private schools (often with very slim profit margins).  This system of private education began to assume the role which Roman fathers as heads of households had traditionally held as the educators of their children.  In the Roman empire, there was no state-funded public education, either at the primary or the secondary level.  Yet those who wanted to participate in Roman politics were required to obtain a formal higher education.  This limited participation in Roman politics to the wealthy.  Also, whereas in Greece, higher education was seen as an activity of leisure which should not be tainted by any practical application (From Formal to Non-Formal: Education, Learning and Knowledge, pages 8 and 9), in the Roman empire the situation was different.  For Romans insisted that all education should have some practical purpose.  

In China, primary education began as an informal, communal process.  According to Dr. Ulrich Theobald, "The oldest word for "school" is xiang 庠, which actually means a building for livestock with two facing walls, where elderly people reared sheep, pigs or cattle and at the same time were entrusted with the duty to watch children and instruct them."  Primary education in China eventually evolved into a system of both private and public schools.  The public schools came into being during the Tang and Ming periods.  These schools, along with private primary schools and tutors, prepared students to enter the Chinese academy system, which then prepared promising students for posts in the Chinese civil service.  A couple of noteworthy facts regarding these academies is that there were times when private academies were either outlawed, disbanded, or taken over by the state as exemplified by the emperor.  Also, there were periods in which the state created or funded public academies in the academy system.  Lastly, some of the academies of the 18th and 19th centuries assumed research duties in addition to teaching.  The Taixue 太學 "National University" had already assumed a research role during the Southern Dynasties period from 420 to 589 AD.  

From the Chinese and Greco-Roman cases we can see that a key function of ancient higher education was to produce an elite class - that is, people who could either participate in politics and governance as ruling practitioners of statecraft, or as people who could serve as competent administrators/bureaucrats under these ruling elites.  Therefore the function of many ancient institutions of higher learning was not primarily research, although, as noted above, exceptions to this did exist in both ancient Greece and in China.  Stronger examples of a focus on both research and applied knowledge can be found in the Academy of Gondishapur in what is now modern Iran.  This academy was a center for the learning of medicine and science, among other subjects, and the modern hospital system owes much of its inspiration and foundational philosophy to this academy.  The Sankore Madrasah on the African continent also evolved a research function, although its main original purpose was Islamic education.  We don't have time today to explore the beginnings of the modern European university, but suffice it to say that the modern university system seems from the outset to have had the dual purposes of research and teaching.  Thus the early modern universities took over the function of producing the clerics of the Roman Catholic Church (the Western form of the mandarin administrator) in addition to producing research.

What is interesting to note is how systems of higher education fare in societies undergoing decline.  The Byzantine system of higher education is a key example.  The vicissitudes of the Byzantine empire in the 7th and 8th centuries and in the 13th century dramatically decreased the central government's ability to fund higher education and led to the privatization of higher education.  It is certain that this influenced the supply of competent practitioners of statecraft as well as competent administrators.  It is also true that declining Byzantine imperial power also produced declines in the number of jobs available to would-be mandarins who graduated from any Byzantine program of higher education.  This has significant implications for the American system of higher education, as the process of accelerating inequality continues in the United States, and as the rich parasites at the top of the food chain continue to suck nutrients from the rest of society.  More on that in another post.

Precarity, American-Style: The American Enterprise Institute and Small Businesses

This post is a continuation of my series of posts on economic precarity and the precariat.  Past posts explored the manifestation of precarity in Russia and China, two nations which returned to the capitalist fold at the end of the 20th century after abandoning free-market capitalism during the early and middle decades of the 20th century.  More recent posts have explored the spread of precarity in the United States, a nation which has been characterized from its birth by a cultural emphasis on laissez-faire, free-market capitalism and the defense of the "property rights" of those who are wealthy.  This post continues the exploration of precarity in the United States.

At the outset, I'd like to state my belief that the solution to the problem of economic precarity and rampant wealth inequality is to create a society in which the role of small businesses is central and in which private concentrations of wealth and power above a certain size are eliminated by a steeply progressive tax with no loopholes for the rich.  Such an arrangement would fulfill the ostensible goal of socialism without requiring the government to be the owner of the societal means of production.  For such an arrangement would place the means of production directly in the hands of even the poorest of people.

I can already hear the screams of rage which the emergence of such a society would produce among the leaders of the American right wing.  That's okay - sometimes people need to see their sacred cows turned into hamburger.  Yet one area in which we all seem to agree is the importance of small businesses in the American economy and the need to provide support to these businesses.  Presidents and members of Congress from both sides of the aisle have made strong and warm statements of support for small business from the days of Reagan onward.  Indeed, the Republican Party in particular has branded itself the champion of small business.  This has been part of the Republican Party's branding of itself as the party of economic growth in general and of the promotion of economic policies which guarantee prosperity for all.  (Of course, the fact that Republican policies have created many more losers than winners is blamed on the losers, but that's a story for another post.)

Can the Republican Party truthfully say that it has been and continues to be a champion of American small business?  The answer to that question can be found in the policies and activities of some of the lobbying groups and think tanks which are part of the American right wing.  Let's look at one of those groups today, namely, the American Enterprise Institute, or AEI.  According to Wikipedia, the AEI is "...  a center-right think tank based in Washington, D.C., that researches government, politics, economics, and social welfare... Founded in 1938, the organization is aligned with conservatism and neoconservatism ..."  To call them "center-right" may be quite misleading, as their membership has included several figures who are very much hard-right - figures such as Robert Bork, Newt Gingrich, John Lott, Antonin Scalia, and Dick Cheney.  In addition, the AEI is closely aligned with the Koch brothers, according to a Sourcewatch article.  Moreover, some of the recent posts and articles on the AEI website have seemed to give support to the regime of Vladimir Putin.  The AEI has become the dominant brain trust of the American right wing, "the crown jewel of the conservative policy infrastructure," according to a recent Johns Hopkins University case study.  

In 2005, the AEI published a paper titled, "Are Small Businesses the Engine of Growth?"  The abstract of that paper provides a concise summary of AEI's desired policy toward small business: 

"It is a common belief among entrepreneurs and policymakers that small businesses are

the fountainhead of job creation and the engine of economic growth. However, it has

become increasingly apparent that the conventional wisdom obscures many important

issues. It is an important consideration because many government spending programs, tax

incentives, and regulatory policies that favor the small business sector are justified by the

role of small businesses in creating jobs and is the raison d’etre of an entire government

agency: the Small Business Administration (SBA). This paper concludes that there is no

reason to base our policies on the idea that small businesses are more deserving of

government favor than big companies. And absent other inefficiencies that would hinder

small businesses performances, there is no legitimate argument for their preferential

treatment. Hence the paper suggests ending all small businesses’ subsidies." [Emphasis added.]

The paper sought to make a case for eliminating all government agencies and programs that support or incubate small businesses, both at the Federal and State levels.  It twisted a number of statistics in its attempt to make its case, attempting for instance to convince readers that the net gains in job creation  should be ignored in favor of gross job creation when analyzing the impact of small businesses during any time period of analysis.  This position, by the way, is proven false by the fact that reputable agencies such as the World Bank do count the impact of net job creation in evaluating economic performance.  For an example of the paper's mishandling of statistics, consider the part where the author tries to use gross job gains and gross job losses to "prove" that employment in the small business sector was much less stable than in large companies during the year 2000.  The author neglected to notice that during the time period in question, the net addition of jobs by small businesses was always positive, and for firms between 1 and 49 employees, exceeded 10 percent.  Lastly, I would point out the laughably false claim made by the paper that "... larger employers offer greater job security. For both new jobs and the typical existing job, job durability increases with employer size."  (That has definitely not been my experience as a working stiff and cubicle rat!  I guess the author of the paper never heard of the words "downsizing" or "redundancy"!)

The 2005 AEI paper cited above was part of a sustained effort on the part of American conservatives to make a case for eliminating all government support for small businesses.  One such example is the article, "Terminating the Small Business Administration" (2011), along with articles published from 2008 onward which suggested that government support of small businesses leads to negative economic growth.  I argue that the AEI paper, on closer examination, does not present a scientifically rigorous or accurate case.  However, it definitely does express what rich American conservatives want to do to American small businesses.  Consider the following quotes:

"... the real job growth comes not from people dreaming of being small business owners but from people committed to building big companies." [Emphasis added.]

"The paper will examine whether the pervasiveness of the belief that small businesses are the economy’s main source of job creation is warranted. Section 2 will show how this belief is the foundation for many government policies. Section 3 will expose the statistical fallacies that lead people to see job creation patterns where none exist. Besides it shouldn’t matter. Although job creation receives enormous attention in policy discussions, it is rather misplaced. The mere creation of jobs is not by itself an appropriate economic policy objective. Economic growth whether it takes the form of additional jobs or increase of productivity in existing jobs is all that matters. The paper concludes that there is no reason to base policies on the idea that small businesses are more deserving of government favor than big companies." [Emphasis added.]

In other words, the AEI has backed a policy which favors the continued growth of large companies, and the continued growth of American economic productivity even when that growth is not accompanied by the growth of jobs.  We have already seen the results of such a policy in action, namely, in the jobless "recoveries" from economic crises which occurred during the presidencies of Ronald Reagan and both Bushes.  Such "recoveries" left a lot of people out of work for a long time, while those who still had jobs were subjected to ever-increasing demands on their time from their employers in the name of increasing productivity.  To put it another way, these "jobless recoveries" resulted in ever-increasing concentrations of wealth among the richest members of society while drastically increasing economic precarity among everyone else.  It is quite telling that the AEI has pushed so hard for the elimination of all government help for small businesses even though large corporations are the biggest recipients of corporate welfare from both Federal, State and local governments.

Let us close with a couple of questions.  Does real job growth come not from people being small business owners but from people committed to building big companies?  Is it true that the only thing that matters is economic growth, regardless of whether it takes the form of additional jobs or increase in productivity in existing jobs?  I'd like to give my answer to these questions, but I don't have time today, so that will have to wait.  But as a partial answer, consider the following questions:

• How many really big companies can exist in a society whose economy is of finite size?
• Why should most people rally behind continued economic growth if the fruits of that growth are not fairly and equitably distributed?
• Who wants to volunteer to be one of the many poor, disenfranchised, and unemployed who are produced by a system in which the fruits of increased productivity are not fairly distributed?
• Who wants to volunteer to be a member of the salariat in such an economy if the only way to be a member of the salariat class is to work 80-hour weeks?

Precarity, American-Style: Causative Factors

Today's post is a continuation of my series of posts on the subject of precarity.  Today's post will be rather short, since I don't have much time.  However, when considering the state of precarity in which an increasing number of people in the United States now live, it is helpful to study the occupational and economic factors which have led to our present troubles.  As we study economic precarity in the United States, we should therefore consider the following factors:

• The decline of small businesses in the U.S.  This has been due to "the tilting of the playing field to favor massive companies over small businesses," as reported in a 2020 article by Business Insider.  (See also "Monopoly Power And The Decline of Small Business" for a 2016 snapshot of the problem.)  Note that the laws passed by the U.S. Congress and the executive orders issued under the Trump administration only made this worse.  However, the Biden administration has begun taking steps to reverse small business decline by helping small businesses compete for Federal work, as reported by the Federal News Network in a 2023 article.

• The shifting of tax burdens from the rich to the poor.  A striking case in point is the number of states (red states, particularly) whose legislatures and governors have turned them into tax havens for the rich.  (See also, "How the Ultrawealthy Devise Ways to Not Pay Their Share of Taxes," NPR, August 2022.)  Thus these states have come to resemble enclaves of dirty money that are found in the Cayman Islands.  Note that the U.S has recently surpassed the Caymans to become the "world's biggest enabler of financial secrecy" as reported by the international Consortium of Investigative Journalists in May 2022.  But these are merely one part of the overall shift of tax burdens away from the rich which began in the 1980's under Ronald Reagan.

• The use of monopoly and oligopoly power to create monopsony and oligopsony labor markets.  We all know that a monopoly is a state in which there is only one supplier of a particular good or service which is needed by many buyers.  The monopolist can therefore charge whatever price he wants, even if the price is horribly unfair.  Oligopoly is the condition in which there is more than one supplier, yet the total number of suppliers is very small.  Examples of oligopoly include Airbus and Boeing among aircraft manufacturers, or Microsoft and Brave and Alphabet (owner of Google) among Internet search providers, or CVS and Walgreens and Rite-Aid among drugstores and pharmacies.  A monopsony, by contrast, is a situation in which there is only one buyer of a good or service which is offered by many suppliers.  An example of this is a situation in which there is only one employer who can offer jobs to people in a large geographical area.  Thus the many people in this area become horribly dependent on the one large employer, and if that employer uses his power maliciously or suddenly goes out of business or decides suddenly to cut costs, many people will be devastated.  Oligopsony works the same way.  Monopsony and oligopsony are the natural outcome of monopoly and oligopoly.

• The shifting of regulatory burdens from large businesses to small businesses.  A prime example of this is the case of trying to use your own personal car to earn money by giving people rides.  Most cities and states have laws that prevent you from doing this as a private individual.  In this case, there are only two legal ways you can earn money by giving people rides: go to work for a taxi company, or become an "independent contractor" for a multibillion-dollar ride-hailing service such as Uber or Lyft.  The regulatory burden on these ride-hailing services is very small, as seen in the cases of ride-hailing drivers who are injured on the job, or passengers who are sometimes assaulted by the ride-hailing drivers.  Regulatory burdens are now crafted by state and local legislators for the purpose of expanding opportunities for big businesses by smothering small businesses who can't afford the costs of regulatory compliance.

• The innovation-depressing strategies of big businesses.  It can be argued that once a monopoly or oligopoly economy is established, the big players in such an economy will tend to fear innovation, since innovations can be disruptive and can even destroy the pre-existing monopoly or oligopoly arrangement.  Thus it is no surprise that large businesses (and wanna-be large business owners) have evolved egregious strategies to stifle any potential innovations that might threaten their interests.  One such strategy is the misuse of the "non-compete agreement."  These are agreements which employees force new hires to sign, in which the new hire typically agrees not to work for any other business or start their own business within a certain time frame and within a certain geographical area.  Certain versions of these non-compete agreements also force the employee to give up all rights to any invention or intellectual product which the employee may devise while employed by his employer and for a certain time period after the employee stops working for the employer.  (If you work for such an employer, I can understand why you would not be motivated to think very much while on the job!)  The abuse of non-compete clauses in employment contracts has moved the Biden administration to start taking steps to ban them (see this also), which should provide immediate relief from employers who want to try to turn their employees into personal property.

Future posts in this series will examine these factors in more detail, along with other factors such as the absence of single-payer health care coverage in the U.S.  But for now, consider these factors as the means by which the wealthy in this country seek to prevent the American precariat from building individual and collective self-reliance.