Who’ll Stop the Rana?
You’d think that our recent bruising encounters with the devastating fallout from the deregulators’ handiwork in the housing market of the early aughts should, by rights, render Friedman’s complaints about the public sector’s assaults on market virtue the deadest of dead letters. But, if anything, the ritual defense of the market’s sovereign prerogative has dug in that much more intractably as its basic coordinates have been discredited. As critics such as Dean Baker routinely point out, the stalled recovery out of the Great Recession is almost exclusively a function of the failure of our neoliberal economic establishment to speak honestly about a collapsed housing bubble that created a yawning shortfall in demand—a shortfall that, amid the paralysis of credit markets in the same recession, could be jumpstarted only by government stimulus.
All sorts of absurdities have flowed from this magisterial breakdown in comprehension. Since the neoliberal catechism holds that stimulative government spending can never be justified in the long run, much of our debate over the recovery’s prospective course has been given over to speculative nonsense. Chief among these talismanic invocations of free-market faith is the great question of how to placate the jittery job creators. At virtually every turn in the course of debate over how steeply to cut government spending in this recession, our sachems of neoliberal orthodoxy have insisted that any revenue-enhancing move the government so much as contemplated would spook business leaders into mothballing plans to expand operations and add jobs. It became the all-purpose worst-case scenario of first resort. If health care reform passed, if federal deficits expanded, or if marginal tax rates were permitted to rise for the vapors-prone investor class, why, then the whole prospect of a broad-based economic recovery was as good as shot.[*]
And since neoliberalism is most notably a global—or properly speaking, the globalizing—ideology, such pat distortions of economic reality are no longer confined to the Anglo-American political economy. Nor are they confined to strictly cognitive errors in policymaking. The collapse of the Rana Plaza garment factory in Bangladesh has yielded commentary from neoliberals that might well merit entry into the psychiatric profession’s DSM-5 as textbook illustrations of moral aphasia. Here, after all, was a tragedy that would appall even the darkest Victorian imaginings of a Charles Dickens or a Karl Marx: factory workers earning a monthly wage of $38 crowded into a structurally unsound multistory facility built on a foundation of sand above a drained pond. Three stories of the factory had been hastily erected on top of an already unsound existing structure just to house the fresh battalions of underpaid workers demanded by bottom-feeding international textile contractors.
Government inspectors repeatedly demanded that the facility be shuttered on safety grounds, but the plant’s proprietors ignored their citations, reckoning that the short-term gains of maintaining peak production outweighed the negligible threat of a fine or safety citation. Nor was there likely to be any pressure from Western bastions of enlightenment and human rights. The ceremonial stream of Astroturf labor-and-safety-inspecting delegations from Western nations made zero note of the cracked and teetering foundations of the Rana Plaza structure. Lorenz Berzau, the managing director of one such industry consortium (the Business Social Compliance Initiative), primly told the Wall Street Journal that the group isn’t an engineering concern—and what’s more, “it’s very important not to expect too much from the social audit” that his group and other Western overseers conduct on production facilities. And, as Dave Jamieson and Emran Hossain reported in the Huffington Post, labor organizers have long since learned that the auditing groups serve largely as pro forma conduits of impression management for consumer markets in the West. The auditing of manufacturing facilities in the developing world “ends up catering more to the brands involved than the workers toiling on the line,” Jamieson and Hossain write.
Yes, factory owners and managers well understand the permissible bounds of discourse in such Potemkin-style inquiries—and instruct their workforce accordingly. “What to say to the auditors always comes from the owners,” a Bangladeshi line worker named Suruj Miah told the two reporters. “The owners in most cases would warn workers not to say negative things about the factories. Workers are left without a choice.” Sumi Abedin, one of the survivors of an earlier disaster—a factory fire in the nearby Tazreen plant that claimed the lives of 112 workers in November 2012—told the Huffington Post that on the day of an international audit team’s visit, management compelled workers to wear T-shirts designating them as members of a nonexistent fire safety committee, and had them brandishing prop fire-extinguishing equipment that plant managers had procured only for the duration of the audit.
What this disaster ought to have driven through the neoliberal consensus’s collective solar plexus is something close to the polar opposite of its cherished, evidence-proof theory of the captive regulator: a largely cosmetic global watchdog effort funded overwhelmingly by private-sector concerns, far from delivering oversight and accountability, has incentivized fraud and negligence. And conveniently enough, it’s the race-to-the-bottom competitive forces unleashed by the global workplace that ritually sanctify all of this routine dishonesty. In their malignant neglect of worker safety measures, local factory managers are able to cite the same market pressures to maximize production and profit that have prevented the ornamental Western groups conducting audits of workplace safety practices from releasing their findings to the workers at risk of being killed by the neoliberal regime of global manufacturing.
Still, the dogmas of neoliberal market prerogative are far sturdier than a collapsing factory or a raging fire on the production line. If the dogmatists have thrown overboard Hayek-era intellectual values like experimentation and skepticism, at least they can stave off their inevitable extinction by shoring up Friedman-era platitudes and, from the mantles of the nation’s most prestigious universities and op-ed shops, try to pass them off as the nation’s highest common sense. So former University of Chicago law professor Richard Epstein, who helped found the influential law and economics movement that essentially transposed the shibboleths of public choice theory into legal doctrine, has patiently explained that the just and measured response to the collapse of Rana Plaza is to seek enforcement of preexisting building codes across the Bangladeshi private sector. Writing on the heels of the disaster, in the Hoover Institution’s web journal, Defining Ideas, Epstein takes pains to rule out the passage of any “new laws” to improve worker-safety standards or international monitoring efforts.
But lest even this minimal recourse to regulation sound like too heady a plunge into statist remedies, Professor Epstein also cautions that the aggrieved and grieving workers in the Bangladeshi garment trade must not veer recklessly into unionism or other non-market-approved modes of worker self-determination. After all, he reasons, “in order to stave a shutdown off by improving factory safety, the savvy firm will have to raise its asking price from foreign purchasers . . . and may have to lower wages to remain competitive.” (This is another classic myth of the neoliberal faith—the rational “trade-off” between personal safety and wages that the independent broker makes when he or she contracts with an employer to freely exchange time and skills for wages. Only, of course, the notion of such rational choice has been reduced to a bitter farce in workplaces such as Rana Plaza, where the basic human rights of workers are only acknowledged theatrically, for the purposes of Potemkin auditing tours.) A more activist approach to the crisis in global worker safety would create intolerable distress to Epstein’s utopian vision of the carefully calibrated relations of global market production. Sure, the EU might ban exports of clothes bearing the taint of labor exploitation—but such a measure would just perversely create “undeserved economic protection” for EU economies that are net clothing exporters (and by implication, would deprive consumers of the sacred right to the cheapest possible attire that bullied and undercompensated labor can provide).
And do not get Epstein started on the mischief wrought by unions, which are all but certain to multiply calamities like the Rana Plaza disaster:
It is not as though the only thing that a union does once it gains its dominant position is to advocate for the safety of its workers, even if that item is at the top of its agenda. Unions also bargain over wages, work rules, seniority, pensions, benefits, and other conditions of employment. In dealing with these issues, they exert a monopoly clout that can easily raise wages and reduce productivity. In a market with many firms, they can exert that force only if they are prepared to take retaliatory action against the firms that refuse to bow to their conditions. And they can only do so if they induce the government to take measures to restrict the entry of non-union firms that could underbid them.
In other words: Bangladeshi workers can either be more safe or starve more rapidly. But according to Epstein, they assuredly aren’t entitled to earn a living wage without the threat of being crushed or burned to death at any given moment. The pertinent market trade-offs simply won’t permit it. Indeed, if you want to know the truth, Epstein claims, “labor agitation was . . . one of the contributing causes to the collapse at Rana Plaza.” Even the threat of union-related disruptions to established work discipline can be Kryptonite to the beleaguered clothes barons of Bangladesh. We find ourselves confronted yet again by the torments of the heroic job creator. Prospective labor agitation, Epstein contends, “places enormous strains on the firms that have to deliver goods to foreign purchasers in order to remain in business. The threat of a repeat protest has led many firm bosses to step up the pace of work in the factories, which in turn means longer shifts, more workers, more extensive use of heavy equipment in order to make up for lost production, and stockpiling goods. That maneuver turned into a fatal insurance policy against future labor disruptions.”
You see? One minute you’re protesting for a wage increase or a work regime less likely to injure you, and before you know it, you’ve frightened your employer into stockpiling inventory at such a frenetic pace that he kills you. Could the tonic discipline of market preferences really be any clearer? One can only hope that future no-goodnik labor agitators will heed this tragic lesson and recognize “foreign purchasers” as the remote, punitive, and awesome deities that the market meant them to be.
Trapped in the Moneybox
It is not all that surprising, in light of the trajectory of neoliberal ascendancy, to see rigidly orthodox market apologists like Professor Epstein driven to such extremities to tease out a neoliberal moral from the bloody, smoldering squalor of the Rana Plaza disaster. But the neoliberal consensus has long since transcended conventional divisions of party and ideology; the axiomatic assertion of market dominance is a conditioned reflex among nearly all established pundits.
In a now-infamous April 24 write-up of the Bangladeshi catastrophe, Slate’s Moneybox columnist Matt Yglesias—an eager Democratic partisan brandishing pious Washington credentials from The American Prospect and the Center for American Progress—tried his own hand at an Epstein-style vindication of the market’s undeviating wisdom. In a post bearing the reassuring free-to-be-you-and-me headline “Different Places Have Different Safety Rules and That’s OK,” Yglesias framed his defense of the status quo regime of erratic standards for worker safety in the hoary rhetoric of the public choice “trade-off.” “While having a safe job is good,” Yglesias chirped, “money is also good.”
OK, then! But note again the pinched moral universe in which employees are permitted only to have a safe job or a (barely) sustenance income, and never both at the same time. It seems a modest social goal to demand that the exchange of labor value for a paycheck in non-mortal conditions be accepted as an incontrovertible human right. If a rapidly globalizing market order is unable to secure that baseline personal and financial security, its support for wildly varying models of job safety should be regarded precisely as the problem—and not as the taken-for-granted standard for phony assertions about what individual workers (let alone “the Bangladeshis,” tout court) are purported to be choosing.
But Matt Yglesias, like many of Washington’s market-besotted, faux-contrarian pundits on the notional left side of the partisan aisle, will not be rushed into stating the morally obvious. Yes, he concedes, there could well be an abstract case here for collective action aimed at upgrading the safety conditions of Bangladeshi workplaces—but like Epstein, he frets that the collective-action models of richer, Western workplaces create prohibitive costs of doing business and therefore may not fall within the ambit of choices that workers in Bangladesh should reasonably be permitted to make. “Bangladesh is a lot poorer than the United States, and there are very good reasons for Bangladeshi people to make different choices in this regard than Americans,” Yglesias writes. “Safety rules that are appropriate for the United States would be unnecessarily immiserating in much poorer Bangladesh.”
So, not to worry, Mr. Moneybox confidently asserts. The trade-offs have yielded optimal gains in each diverse market setting, in this, the best of all possible neoliberal worlds: “American jobs have gotten much safer over the past 20 years, and Bangladesh has gotten a lot richer.” As an authority for this sweeping claim—which, by the way, is untrue in what Yglesias sees as the argument-clinching “safer” U.S. end of the spectrum; Bureau of Labor Statistics data on workplace fatalities show steady increases over the past five years, with right-to-work states such as Texas leading the grisly toll—Yglesias cites the work of Robert Frank, a public-choice enthusiast who, in his recent book The Darwin Economy, seeks to lay the groundwork for a terrifying entity he calls the “libertarian welfare state.”
Social media scourges wasted little time in calling out Yglesias’s smug, fatuous, and opportunistic effort to advertise his market contrarianism on the ruins of the Rana Plaza collapse. Eventually the scribe was hounded into publishing a passive-aggressive follow-up post averring that he’d been misread and unfairly castigated by his critics. The stalwart wonk remained unbowed, however; Yglesias wrote that he still “absolutely” stood by the conclusion that, in matters of workplace safety, it’s “appropriate for rich countries to have more stringent standards than poor ones.”
Now, Matt Yglesias is not a doctrinaire neoliberal thinker—certainly not in the sense that a disciplined propagandist like Milton Friedman was (even though he longs, absurdly, for a revival of “Friedman-style pragmatism” to bring the economic right to its senses).[**] But that’s precisely the point. Neoliberal orthodoxy has leached so deeply into the intellectual groundwater of the nation’s political class that it’s no longer a meaningful descriptor of ideological difference. That’s why Yglesias’s erstwhile American Prospect colleague Ezra Klein, over at his prestigious post atop the Washington Post’s economic blog shop, can marvel at the tough-minded budget “seriousness” of serial Randian liar Paul Ryan—or why the Obama White House can confidently slot offshore billionaire Penny Pritzker as its second-term commerce secretary while it continues to mouth empty platitudes about saving the nation’s middle class.
All Friedmans Now
It was Milton Friedman himself who famously announced, during his tour as an informal adviser to Richard Nixon, that “we’re all Keynesians now”—but that oft-quoted maxim has been badly truncated from its full context. What Friedman actually said, in a 1968 interview with Time magazine, was “in one sense, we are all Keynesians now; in another, no one is a Keynesian any longer.” He went on to spell out the paradox more fully: “We all use the Keynesian language and apparatus; none of us any longer accepts the initial Keynesian conclusions.”
Now, more than four decades on, Friedman’s savvy rhetorical dodge is the watchword of all mainstream macroeconomic thought. Even putative liberals who pay lip service to the efficacy of government intervention dig in behind their own pet postulates about the market’s transcendent wisdom and beneficence—about the need to temper the alleged excesses of the social-democratic usages of social wealth with sterner, more austere pieties about the real-world trade-offs mandated by the lords of neoliberal market liberation.
It is an undeniable species of gibberish, one that would have likely appalled even as firm a market stoic as Hayek, who, whatever his other intellectual handicaps, well understood the mischief wrought by a glib and self-seeking centrism. During the Mont Pelerin group’s tenth anniversary gathering in 1957, Hayek delivered a controversial speech called “Why I Am Not a Conservative.” It was designed, among other things, to distance the group from the steady accretion of self-insulated and untested right-wing bromides that would later be the hallmark of Friedman’s successor reign. Today, however, Hayek’s oration sounds a much more sobering note of prophecy for our political culture at large. “Advocates of the Middle Way with no goal of their own, conservatives have been guided by the belief that the truth must lie somewhere between the extremes—with the result that they have shifted position every time a more extreme movement appeared on either wing,” Hayek announced.
The one true road to intellectual serfdom, in other words, was the one that Hayek correctly saw lurking within the heart of the neoliberal revolution.
Source: The Baffler.