The Disrupted is a thought provoking film now being streamed
at The Siskel Film Center (siskelfilmcenter.org). The film follows three individuals – a Kansas
farmer, a 3M factory worker (and former felon) and an Uber driver (formerly in
the mortgage industry) whose lives have been thrown into disarray because of
the vicissitudes of our economy. The
film is engaging because all three are sympathetic individuals that have been
derailed and put under severe stress through no fault of their own. All three are trying very hard. The fifth generation farmer is being crushed
by commodity prices and debt. The Uber
driver was tossed aside during the mortgage crisis. And perhaps the most sympathetic is the 3M
worker that suffered through a plant closing after putting his life back
together following a prison record—doing all the things you would want him to
do—work, stay married, and raise a child.
Each of them is earnestly toiling away at earning a living but has been
rolled over by market forces.
The film illustrates a number of r imbalances in the U.S.
capitalist system that have caused me to revisit some of the conventional
wisdom that has been purveyed by economics departments. My free trade/free market orientation was
influenced by The University of Chicago and Milton Friedman, George Stigler and
the like. While I still have a strong free market inclinations,
I question whether some adjustments are necessary and appropriate. I believe that much of the social discord and
turmoil we are now feeling result from unresolved issues that resulted in the
’08 crash and ensuing Great Recession.
These issues were glossed over
and are now coming back with a vengeance.
Today, I am just going to spin out some of these issues, and in the
coming months, I will be having discussions with knowledgeable individuals, and
some economists when I can to discuss these issues in some detail.
-The worker. While a
certain amount of churn is necessary, expected and even desired in a free
market economy, a great swath of the middle class has been pancaked by the
modern economy, and many don’t really recover beyond a mere subsistence
level. The hollowing out of the middle
class has been copiously written about.
But it really gained speed during the ’08 crisis when home equity was
wiped out at the same time much of Wall Street was protected by the Fed. With technology accelerating worker churn and
displacement, is revisiting worker protections, guaranteed income and
protections for health care warranted?
-Big Tech and Trust Busting.
The conventional position is that market will solve it. Google, Twitter and Facebook now occupy such
dominant positions and have no real competitors. The social media giants are actively engaged
in censorship and manipulation. Twitter
recently froze out Richard Grenell and suppressed certain viewpoints on
COVID19. Just as I write this, Facebook
and Twitter have frozen accounts that are posting the New York Post story
concerning Hunter Biden’s emails that implicate Joe Biden. The laissez-fare
position would say that the market will eventually sort it out. But in the meantime, Big Tech is doing things
government cannot and it calls into question whether Big Tech should be regulated more heavily and/or broken up.
-Risk/Reward. Steve
Kaplan, professor at The Booth School at The University of Chicago continuously
justifies the mega salaries for public company CEO’s. And he is correct in some respects. They are like free agent baseball stars.
There is a limited supply of people capable of running large corporations. But the ratio of CEO pay to average worker
pay is at an all time high. And when CEO’s run things into the ground and
still get humongous severance packages, it raises eyebrows. After the crashes of the 737 Max, Boeing’s
Dennis Mullenberg walked away with a $60 million package even though 346 of his
customers didn’t walk away from crashes.
WeWork’s Adam Neumann received a massive buyout (since reneged upon)
while the company was laying off thousands when the company’s IPO
sputtered. Kaplan has a point but the
unseemly pay packages…especially when a company fails deserve discussion. They give ammunition to the burgeoning
socialist movement.
-Purpose of the firm/Virtue signaling The Milton Friedman
view of the primary purpose of a corporation is to increase profits for its
shareholders is being re-examined. I
won’t go into much detail here, but there have been some lively discussion and
panels on that topic, and as to whether the corporation owes duties to a wider
constituency—workers, suppliers, society as a whole.
-Trade. Most of us
grew up on the notion that free trade enriched us all and was an unalloyed
good. We celebrated the signing of
NAFTA. World trade increased
dramatically. And free traders pointed
to the reduction of worldwide abject poverty from 43% in the 1990s to around
10% today. But China has triggered a
second look at free trade. Does free
trade with a global adversary make sense, especially one that steals your intellectual
property, manipulates its currency, shows contempt and disregard for behavioral
norms, and shows no inhibitions about inflicting harm on you.
-Immigration. As with
trade, liberal immigration (or lax enforcement) was seen as an unalloyed
good. But if immigrants are unskilled, illiterate,
unemployable, they either end up in the social welfare system or the criminal
justice system. Furthermore, unlike
immigrants of a couple of generations ago, the children of immigrants today are
thrown into a public education system which (1) the taxpayer must pay for, and
(2) now teaches them that the United States is an evil, colonial power. With the demand for unskilled labor expected
to decrease in the future, how much immigration do we really need?
This is meant to be an exhaustive list, but rather are some
of the areas that warrant some discussion.
With capitalism under attack like never before, it is important, I
think, that we open some of these issues up for discussion.
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