March 31, 2014
A guest post from (Roughly) Daily…
As income and wealth inequality has grown in the developed world, so have the ranks of security guards—for gated communities, upscale residential buildings, corporate offices, exclusive events, and more. That trend– more inequality, more guards– seems especially apparent here in the U.S. We now employ as many private security guards as high school teachers — over one million of them, or nearly double their number in 1980. And that’s just a small fraction of what we call “guard labor.” In addition to private security guards, that includes police officers, members of the armed forces, prison and court officials, civilian employees of the military, and those producing weapons: a total of 5.2 million workers in 2011– a far larger number than we have of teachers at all levels.
Samuel Bowles, a professor at the Santa Fe Institute, and Arjun Jayadev, of the University of Massachusetts- Boston, explore these findings in their Opinionator piece “One Nation Under Guard.”
In America, growing inequality has been accompanied by a boom in gated communities and armies of doormen controlling access to upscale apartment buildings. We did not count the doormen, or those producing the gates, locks and security equipment. One could quibble about the numbers; we have elsewhere adopted a broader definition, including prisoners, work supervisors with disciplinary functions, and others.
But however one totes up guard labor in the United States, there is a lot of it, and it seems to go along with economic inequality. States with high levels of income inequality — New York and Louisiana — employ twice as many security workers (as a fraction of their labor force) as less unequal states like Idaho and New Hampshire.
When we look across advanced industrialized countries, we see the same pattern: the more inequality, the more guard labor. As the graph shows, the United States leads in both…
Bowles and Javadev conclude by quoting an august Utilitarian…
“It is lamentable to think,” wrote the philosopher John Stuart Mill, in 1848, “how a great proportion of all efforts and talents in the world are employed in merely neutralizing one another.” He went on to conclude, “It is the proper end of government to reduce this wretched waste to the smallest possible amount, by taking such measures as shall cause the energies now spent by mankind in injuring one another, or in protecting themselves from injury, to be turned to the legitimate employment of the human faculties.”
This venerable call to beat swords into plowshares resonates still in America and beyond. Addressing unjust inequality would help make this possible.
*”Who will watch the watchmen” (or literally, “who will guard the guards themselves?”) Juvenal, Satires (VI, lines 347–8)
As we shore up our defenses, we might recall that it was on this date in 1967, at the close of a show in Astoria (Finsbury Park, North London) that Jimi Hendrix first set fire to his guitar. Hendrix was treated for minor burns later that night (but apparently got the technique down quickly, as subsequent “lightings” didn’t require medical follow-up). The slightly scorched 1965 Fender Stratocaster was sold at auction in 2012 for £250,000 (about $400,00).
February 11, 2014
A guest post from (Roughly) Daily…
But to change it, you have to know what that organization is…
With this 1855 chart, Daniel McCallum, general superintendent of the New York and Erie Railroad, tried to define an organizational structure that would allow management of a business that was becoming unwieldy in its size. The document is generally recognized to be the first formal organizational chart.
Historian Caitlin Rosenthal, writing in the McKinsey Quarterly, points out that the chart was a way for McCallum to get a handle on a complex system made more confusing by the new availability of data from the use of the telegraph (invented in 1844). Information about problems down the track was important to have—it could help prevent train wrecks and further delays—but the New York and Erie’s personnel didn’t have a good sense of who was in charge of managing this data and putting it into action…
Read the whole story in the ever-illuminating Rebecca Onion’s “The First Modern Organizational Chart Is a Thing of Beauty.”
* Anthropologist Mary Douglas
As we grapple with grapple with the Great Chain of Being, we might recall that it was on this date in 1937 that General Motors formally recognized the United Auto Workers as the collective bargaining representatives of GM workers. The decision came on the heels of a 44-day sit-down strike that had begun in December, 1936, and that had idled 48,000 employees. Still (to Dr. Douglas’ point), old habits die hard: two month later GM guards assaulted and beat UAW leaders at the company’s Rouge River plant.
January 24, 2014
A guest post from (Roughly) Daily...
Over the past several years, the job market has (obviously) been pretty grim. The recession ended four and a half years ago, in June 2009. But there are still 1.3 million fewer U.S. jobs than there were in December 2007, when the recession began.
Still, when you look more closely, the picture is more nuanced. Since the recession started in December 2007:
- Health care has added 1.5 million jobs.
- Restaurants and bars have added roughly 700,000 jobs.
- The number of construction jobs has fallen by 1.6 million.
- The number of manufacturing jobs has fallen by 1.7 million.
- The number of government jobs has fallen by about 500,000.
For more on jobs lost and gained since the recession — and on average wages in different sectors — see Where The Jobs Are (And Aren’t).
Read the full story– and find a larger version of the chart– at Planet Money.
As we remind ourselves that “career” is both a noun and a verb, we might recall that it was on this date in 1981 that millions of Polish workers boycott their jobs in support of a demand by Solidarity for a 5-day work week. Formed the prior year, Solidariyy was the first non–communist party-controlled trade union in a Warsaw Pact country; by 1981, it’s membership was roughly 10 million– about one third of the total working age population of Poland. It became a broader-based anti-bureaucratic social movement as the decade progressed, surviving authoritarian attempts to quash it, and by 1989 forced negotiations with the government, resulting in semi-free elections. A Solidarity-led coalition government was formed; and in December 1990, Solidarity’s leader, Lech Wałęsa, was elected President of Poland. Solidarity remains an active labor union.
December 18, 2013
A guest post from (Roughly) Daily…
It’s all about the Benjamins… The story of the $100 bill is the story of U.S. money itself, and that story is opening a new chapter:
The hundred is the ultimate icon of American monetary strength. “It’s the closest thing to a global currency,” Chris Jones writes, “with about 60 percent of them somewhere other than here, making the Benjamin the most legal and threatened of tenders.” It’s getting a makeover…
Read a feature-by-feature rundown of the upgrade at “The New Hundy: A Study Guide.”
As we button our wallet pockets, we might recall that it was on this date in 1971 that then-President Richard Nixon declared that the official U.S. price of gold would be raised from $35 to $38 per ounce, devaluing the dollar, and effectively ending the Bretton Woods system of international financial exchange. Earlier, in August of that year, Nixon had suspended the convertibility of the dollar into gold; still, the dollar was pegged at the $35 value stipulated by Bretton Woods. In changing that value, Nixon ushered in the era of freely-floating currencies that remains to this day.
What has become known as “the Nixon shock” was a response to an overvalued dollar (a result of national debt incurred in the Vietnam War and the Great Society programs), and a subsequent move by nations (first West Germany, then Switzerland and France) to redeem their dollars for gold. U.S. gold reserves fell by half from their level a decade earlier, to $10 Billion, and the U.S. feared a “run” on that remainder. The suspension of convertibility addressed that danger, and (along with the price freeze, minimum wage guarantee, and import tariffs that accompanied it) helped both to stabilize the U.S. economy (temporarily- the period of “stagflation” was relatively soon to follow) and to bring the other developed economies to the negotiating table. The results of that parlay, The Smithsonian Agreement, raised the “value” of the gold to $38 per ounce, eliminated convertibility as feature of the international currency regime, appreciated other currencies against the dollar, and focused efforts to balance the world financial system on special drawing rights alone.
November 16, 2013
A guest post from (Roughly) Daily…
This year Sweden closed four prisons and a detention center… there simply aren’t enough prisoners to justify them. Sweden has one of the lowest incarceration rates in the world. And they seem to mean to do even better: though the crime rate is rising, the government is investing in prevention, not detention.
Conversely, the U.S. has the world’s highest incarceration rate (not counting North Korea, on which data is not available– though the Committee on Human Rights estimates that the rate is roughly equal to America’s). And though there are a few states (like Pennsylvania) in which prison populations are falling, it’s not looking to shrink overall.
Among the reasons: private prisons. Virtually nonexistent until the 1980s, private jails have spread across the nation, as for-profit corporations have built new facilities and bought older ones from cash-strapped states, operating them on contract. Lately, these companies have prevailed on their customers– the states– to agree to minimum guarantees. Some examples: Arizona has three private prison contracts requiring 100 percent occupancy; Oklahoma has three contracts at 98 percent occupancy; Louisiana and Virginia have occupancy rate minimums at 96 and 95 respectively.
As In the Public Interest (ITPI) reports
These contract clauses incentivize keeping prison beds filled, which runs counter to many states’ public policy goals of reducing the prison population and increasing efforts for inmate rehabilitation… some worried the terms would encourage criminal justice officials to seek harsher sentences to maintain the occupancy rates required by a contract…
Bed guarantee provisions are also costly for state and local governments. As examples in the report show, these clauses can force corrections departments to pay thousands, sometimes millions, for unused beds — a “low-crime tax” that penalizes taxpayers when they achieve what should be a desired goal of lower incarceration rates. The private prison industry often claims that prison privatization saves states money. Numerous studies and audits have shown these claims of cost savings to be illusory, and bed occupancy requirements are one way that private prison companies lock in inflated costs after the contract is signed…
Read ITPI’s full report (pdf), “How Lockup Quotas and ‘Low-Crime Taxes’ Guarantee Profits Guarantee Profits.”
And for a look at some approaches to improving the situation in the U.S. (spoiler alert– they don’t involve profit incentives to keep people in jail), read “Why America Has a Mass Incarceration Problem, and Why Germany and the Netherlands Don’t.”
As we rattle our chains, we might recall that it was on this date in 1916 that Margaret Sanger, fresh back from a stint in the Raymond Street jail, reopened the Brownsville Clinic in Brooklyn, NY– the first birth control clinic in the U.S. Sanger had been shut down and arrested before for obscenity (she offered a booklet called “What Every Young Woman Should Know,” explaining the female reproductive system and several contraceptive methods). This time, the police leaned on her landlord to evict her, and the clinic closed almost as soon as it reopened.
November 10, 2013
Two thousand years ago Roman senators grumbled that their women used too many Indian spices, silks and fine cottons, and that India was draining the Roman empire of bullion. Pliny the Elder called India the ‘sink of the world’s precious metal’ when he heard that a Roman ship touched an Indian port daily.
The Portuguese similarly complained in the 16th century that their hard won gold and silver from South America was being lost to India. The British Parliament echoed this refrain in the 17th century. But India kept sucking Western bullion because Western consumers hankered after Indian luxuries and Indians were not interested in Western goods. As books had to be balanced, they were balanced with bullion. Only Britain’s Industrial Revolution reversed the flow in the 19th century when Indians finally found something they wanted from the West—cheap, durable cottons from the mills of Lancashire — as handlooms worldwide gave way to machine-made cloth…
And still India absorbs about a quarter of the world’s gold. Given the one-way flow of gold over the centuries, a staggering amount has accumulated in India; the World Gold Council estimates it to be over 20,000 tons, worth $1.1 trillion– or half of India’s GDP… most of which is held, outside of the financial system, by temples and religious organizations or families (that pass the gold along to daughters as “stridhana” ["woman's wealth," which usually takes the form of gold jewelry] as inheritance at their weddings.
As Gurcharan Das (a former CEO of Procter & Gamble India) argues in The Times of India, this is both a problem and an opportunity. The most fundamental problem, obviously, is the unavailability of most of these gilded assets for productive investment. But a more timely issue is impact on India’s appetite for gold on the value of the Rupee. Though the national government has banned imports of gold, demand is so high as to have encouraged massive smuggling– India continues to be a huge global consumer of gold… which helps keep the price of gold high and the value of the Rupee low.
The opportunity is to put that gold to work…
…the process has begun. Gold loans, bonds, and deposit schemes are all steps in the right direction. In these schemes owners of gold earn interest by depositing it with banks, which in turn releases part of it in the market, thus reducing India’s demand for imported gold.
The bigger prize is to convince temples to do the right thing and deposit their vast gold stocks in banks and earn interest. Jamal Mecklai, the currency expert, had suggested earlier this year that if Tirupati temple were to deposit a third of its holdings at two per cent interest, it could earn Rs 3,000 crore a year. Tirupati did just that in May, beginning with a 2,250-kg deposit with the State Bank of India. This is a triumph! If major temples follow suit, gold will soon flood the domestic market, imports will stop, the global gold price will fall and the rupee will strengthen.
But this government is shy to go for an all out public campaign. It worries about people’s sentiments and of the opposition playing the religious card. Gold is, after all stridhana… But young Indians today are sensible and they will buy the idea that an inflation-proof gold linked certificate exchangeable for gold is the hip thing to receive at marriage rather than a bunch of clunky sets. So go for it, Reserve Bank. The road to India’s economic future may well be paved with gold.