Why people go hungry in America, but still, meh – Part 2

If we produce enough food to feed everyone in the US, even after our waste, why do we have such an issue with food insecurity? Why are the Republicans looking at cutting welfare programs that keep people fed, cuts that will likely harm the most vulnerable of our society (the elderly and children)? Is it because their [Republicans] mothers didn’t love them as kids? Did their fathers abuse them? Do they just hate poor people and view them as less human? The answer to all of those question is “probably,” but it ignores the core of the problem.

The problem is capitalism. I know, shocking. Capitalism is the boogeyman that comes to devour children late at night, is the cause of all the world’s problems, and without it we’d all be living better lives and on the verge of perfection. Of course, that’s not anywhere close to the case as Capitalism is merely a transitional economic method from feudalism (or types of feudalism) to industrialization. It is not, or at least it should not, be used as a permanent economic model. Why? Well, because it’s gotten us into this shit.

Everyone thinks capitalism is nothing more than an exchange of goods for a price that creates a profit for the person selling. While that is a part of capitalism, to reduce capitalism to such a simplistic definition is just idiotic. Under that definition, literally every system of economics out there has been capitalist, including the Soviet Union where vendors could still sell good for a profit.

A better understanding of capitalism is that it’ll have a few characteristics to it, such as the privatization of labor’s profits, ownership of capital producing private property, the dissuading of collective or family ownership (e.g. it’s more efficient for the capitalist to own one mega-farm than to buy from thousands of family farms; and the capital is privatized, not shared among the workers), maximizing profit in all situations, an increase of wage employment (rather than individual ownership), and having a certain segment of the population existing as spare labor.

While we could nuance the shit out of the above, those are some very broad characteristics of the various capitalist systems in existence. As it is, capitalism isn’t inherently bad or wrong. If you apply the above to a nation transitioning from an oppressive economic system that just doesn’t function, then the nation is going to be better off. All the memes and statistics showing that capitalism has helped decrease poverty around the world are mostly true; anyone with a proper understanding of Marx’s critique of capitalism would have no problem agreeing to these facts. That doesn’t mean, however, that capitalism is preferable for advanced economies, or even good for advanced economies. A kid who is child training might go from diapers to pull ups (kind of underwear, kind of diapers), but they don’t remain in them forever because they have to transition on to something better, otherwise they’re an adult who still from time to time shits their pants. In this scenario, capitalism is the adult that shits its pants from time to time.

Of all the characteristics I listed, all of them in some way contribute to the issue of food insecurity in the US, however the last one – having a certain segment of the population existing as spare labor – is without a doubt the leading cause of food insecurity. In the 1950s and 60s, the theory of having a surplus labor pool was great (if you were white…we won’t go down that path for now). Part of the reason the US did so well economically is that they produced things, and because Europe had been basically destroyed by WWII. But even prior to WWII, the US had the capacity and was outpacing Europe in terms of production.

What helped the US so much is we had a surplus labor force, a group of workers who were either unemployed or underemployed, so the moment a job or better job presented itself they could leap at it. This prevents labor shortages, which can lead to inflated wages, which can lead to overpriced goods, which can lower demand and, ironically enough, lead to layoffs. So from the 1940s all the way to the 1970s, the US had this small segment of people – typically under the age of 25 – who were underemployed or unemployed who could be called up the moment someone retired or there was a demand for more labor. The wages for the new jobs had to be higher than minimum wage and the benefits had to be better in order to entice people to take those new jobs.

It’s why we see many “progressive” economists focusing so much attention on the minimum wage. The theory is that if the minimum wage is increased for the “reserve labor force,” the wage for those working in “real jobs” will also increase so as to entice those minimum wage workers to jump on board if there’s ever a labor shortage. And in a society that produces things, this theory actually does work.

However, our economy has transitioned from the era of producing things, but our economic theories are still running off early 20th century thinking. The problem is the above theory doesn’t work in today’s economy for a few reasons:

1)      Most of our growing economy isn’t based on production in the traditional sense, but instead is based on financing (moving money around).

2)      Due to automation and an increase of efficiency, we don’t need as many workers as we did before, so our reserve labor force typically represents almost half the labor force.

This is why so many economists are baffled that even though unemployment is down, wages haven’t gone up. Typically, the more people you have employed, the more competitive it becomes for wages. In today’s economy that’s not the case because the people employed don’t really need to be employed. Why else would half the nation be classified as low income? If production is at an all-time high and corporate profits are at an all-time high, why aren’t people getting raises? The answer is because there’s so much of a surplus of unemployed/underemployed labor, there’s no need to raise wages. If 50% of your workforce would jump at even a $1 per hour raise, those currently in those positions simply won’t quit because “they’re grateful to have a job.” They’re less likely to push for a higher wage when there are 10 people in that reserve labor pool who would happily take the job for fewer dollars. And so because there’s so much reserve labor, there’s no need to increase wages; but corporate profits keep increasing.

It’s why tax cuts for businesses, while not necessarily bad, won’t find their way to employee’s pockets without regulation. Most corporations don’t need to reinvest money for production or labor; rather they reinvest in their own stock or some other company’s stock. That money goes into the market and the excesses remain in the market. The majority isn’t turned into tangible goods. In a perfect world, businesses would reinvest in their labor force to make them more productive, to motivate them, and to attract employees from other companies; in our world because wages are so low (lowest per capita since before the Great Depression) there’s simply no need to increase salaries because, honestly, where else are the workers going to go?

Thus, it’s a bit hypocritical for these major corporations to hold food drives for those in need when they’re the single biggest cause for food drives. Wages should be high enough and government protections should be in place so that there’s no need to worry about where your next meal will come from. No, not everyone should have that new TV or new computer. Not everyone needs a Mercedes. And not everyone needs a rack of lamb with Russian caviar (gross). But shouldn’t everyone in the wealthiest nation the world has ever known at least have a meal?

I’d argue that yes, yes they should. People shouldn’t have to worry about where their next meal is coming from. Part of this is we have to rethink how the economy works. Right now, wages are based on two things: the value the person brings and the market price of the labor. The market price for a welder might only be $20 an hour, but on certain projects his value could cause that price to go up. This is why individual contractors often charge different clients different rates, because the value they bring to that individual client might be more or less than the value to another client.  Under wage theory, the value is an estimate while the market value of the labor is almost constant. A lawyer who helps low-income residents in the city and a lawyer who helps the corporations fuck over the low-income residents of the city will work about the same hours. So the labor is equal. The value, however (and the ability to pay for that value), is drastically different. The lawyer helping average people generates no value for the company and therefore they won’t get paid. The lawyer helping the company, however, generates value and is therefore paid for his value.

This is why we have the divide between skilled and unskilled labor. A person cleaning a department store might work 10 hours a day on her feet whereas an executive manager at an investment firm will work the same amount of hours. However, the value each brings is different. The janitor has a job that (in theory) almost anyone coulddo (but won’t always do), whereas the executive manager has a job that (in theory) few could do. A specialized skill always brings more value and therefore always pays more.

In today’s economy, however, this model is broken because it’s undermining our economy. At the end of the day if an economic model brings your society closer to an economic collapse, then you should probably change that model. Both the value theory of labor and having a reserve labor force in a modernized, semi-automated economy works to crash the economy. If the majority of people lose the ability to purchase things, then capital ceases being put into the economy and eventually the economy comes to a halt.

We’re at the beginning stages, I’d argue, of a long term or even permanent stagnation. That we have food drives around Christmas to help almost 1 out of 5 citizens is nuts. We’re starting to witness the collapse of our economy to a point where it can’t be recovered without some tears and agony, or guillotines.

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Will things ever get better? A very quick note on optimism

I pretty much have a negative outlook on life, but that’s because when your best friends in college were all books written by dudes who had pretty negative outlooks on life, you kind of adopt their style. I should also add Nietzsche was my favorite philosopher, not because I agreed with him, but because he was so absurdly absurd. So there’s that. I think this negative point of view stems from philosophy requiring you to be cynical of all claims until you can really think over what’s being claimed. In terms of looking at economics and society in general, this means I’m naturally cynical of any claims of optimism.

Sadly, however, the numbers back up my cynicism. How desperately I wish I were just Eeyore, being negative for the sake of being negative. But all statistics, all analysis shows that at the very least, life in the US is regressing. Things are getting worse. Our foreign influence is waning, the middle class is more endangered than the polar bear, and thus far we haven’t seen any major legislative moves to try and prevent these things from happening; if anything, all legislation up to this point has merely maintained the status quo or made it worse.

That being said…

The majority of people under the age of 30 (about 55%) have a mostly favorable view of socialism, whereas about 57% of the same group holds a similar view of capitalism. It doesn’t take a genius to figure out why people under the age of 30 (really under the age of 40) hold a favorable view of socialism; it’s because pure capitalism hasn’t worked. It’s failed and continues to fail. This is an age demographic that grew up watching their parents struggle through the 2008 collapse, or for those who are in their 30s they graduated college only to find no job prospects. So those of us under the age of 40 face no healthcare, have no hope of social security when we reach retirement, have jobs that pay us below what we’re worth, and face a lower standard of living (comparatively speaking) than our parents did. So yeah, we’re a bit miffed.

But that also means that over the next 10-15 years, people my age and younger are going to become the majority voters. Statistics are showing that people in their 30s aren’t becoming more moderate, but rather are staying on the progressive side of economics. As we become the majority, politicians are going to have to adapt a populist economic message, but one that actually works. It’s very likely that in the next 10-15 years, the US will see steps made toward universal healthcare, better worker protections, and tax-payer backed public education. And while the younger generation is no where near perfect on race relations, we do tend to be ever-so-slightly better than previous generations, so we could potentially see an increase in cultural tolerance. But that one is always hard to predict. While that’s not immediate and the lack of immediacy is disheartening, and while no one can predict the future, the fact that people under the age of 40 are remaining consistent in their wants and desires from politicians is good.

So there is hope that things in the US will eventually get better. While I do believe we’re still watching the collapse of our republic, I think that if done correctly we could witness a political and economic revival in the US in the next 10-15 years. I’m not sure that’s the likeliest of outcomes as there are many other factors that could take us off that course, but one can hope, right?