Money in Context: Part 1

Robert Hockett – 

We’ve all heard the adage. ‘Time is money.’ The utterer usually means that time can be spent earning money, so that to ‘waste time’ is to incur a pecuniary opportunity cost. But there’s another sense in which money is time – or at any rate like time. At a remarkable juncture (Book XI) in his Confessions, Augustine notes, apropos the question ‘what is time?,’ that he seems to know the answer before posing the question, but then draws a blank check once he poses it.

Money seems to me similar here, as does number. You feel confident you know what these things are if not asked. But then if you ask, you’re not sure what an answer should look like. And so you are suddenly standing on air. ‘What is money?’ I don’t know what to say. ‘What are numbers?’ Don’t know that either.

I think that there might be a common reason for the strange mix of familiarity and befuddlement in these cases. It has to do with the fact that these phenomena are deeply embedded in practical contexts – so much so that their contexts determine them. And so when you’re posed a naïve question that appears to beckon a simple one-sentence answer indifferent to linguistic pragmatics, you’re faced with a query whose surface syntax is in order but whose underlying semantics are not.

I’d like to elaborate and explore this hypothesis here. Then in a Part 2 post I’ll ‘apply’ a few lessons I think will emerge.

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Are We Prisoners of Technological Fate?

This is the fourth post in our series discussing The Meritocracy Trap by Daniel Markovits. Click here to read all posts in the series. 

Daniel Markovits –

 The Meritocracy Trap’s account of the relationships among elite education, skill-biased technical change, and rising economic inequality is, in my mind, one of the book’s most important arguments, even as it is undoubtedly one of the least discussed. I’m therefore delighted and grateful that Gordon chose to focus his attention on these matters.

Gordon rightly emphasizes that The Meritocracy Trap combines two positions that are typically (but not by any necessary facts or logic) opposed—to embrace what Gordon calls a “materialist” theory of income inequality while rejecting what he calls a “determinist” theory of technological development. First, the book argues that, in Gordon’s words “technology has a predominant influence on social and economic structure.” Innovations have biased work in favor of a certain set of narrowly elite skills, and this bias accounts for the bulk of rising high-end economic inequality. And second, the book rejects what Gordon calls “the pervasive myth that technological change is natural, self-directing, or inevitable.” Rather, the innovations behind rising inequality are themselves produced by meritocracy, as the distribution of training influences the path of innovation and superordinate workers stimulate the demand for their own skills. This places policy that “guide[s] the course of technological change,” or as Gordon calls it, “industrial policy,” at the center of efforts to combat rising inequality.

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Are the Rich Rentiers or Superordinate Workers?

This is the third post in our series discussing The Meritocracy Trap by Daniel Markovits. Click here to read all posts in the series. 

Daniel Markovits –

I am grateful to the LPE Blog for hosting this exchange about The Meritocracy Trap. Today’s post will take up Hart’s and Steinbaum’s post and focus on facts, and tomorrow’s will turn to Gordon’s post and take up values.

Hart and Steinbaum claim that The Meritocracy Trap fails to recognize deep “differences between rich professionals and the ultra-wealthy capitalist class.” They also propose that the book exaggerates meritocratic inequality’s economic rationality, that “[i]t is not the meritocrats’ skills that bring in their high salaries.” In short, Hart and Steinbaum propose that the rich are not superordinate workers paid on account of their enormous productivity but rather are rentiers who exploit their capital to extract rents.

Hart and Steinbaum suggest that The Meritocracy Trap overemphasizes the rising labor incomes of the merely very rich and underemphasizes the exploding capital incomes of the super-rich. But in fact, although the past half-century has seen a shift of income against labor and in favor of capital, this shift is much too small to account for rising top income shares. Instead, rising economic inequality is principally caused by a shift of income within labor’s share, away from middle-class and towards superordinate workers.

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Two Timelines of Covid Crisis

Frank Pasquale – 

We often hear that the current COVID crisis came “out of the blue,” that “nobody” was expecting it.* But anyone with a decent grasp of pressing issues in public health knew the risks of pandemics. As I wrote in 2014:

[R]eduction in hospital facilities and other resources, although “efficient” in normal times, may prove disastrous if there is an epidemic. For example, one national preparedness plan for pandemic flu estimated that, in a worst-case scenario, the United States would be short over 600,000 ventilators. “To some experts, the ventilator shortage is the most glaring example of the country’s lack of readiness for a pandemic,” one journalist noted. The lack of “surge capacity” throughout the health care industry is a major infrastructural shortcoming, likely to cause tremendous, avoidable suffering if a pandemic emerges.

So how did we get here? It’s critical, in the midst of the COVID crisis, to keep two timelines of missteps and mistakes in mind. There are short-term problems that have only emerged in 2020. And there is a much longer history of disinvestment (and poor investments) in American health care. In other words: ongoing rot has exacerbated the crisis, in Sandy and Jack’s temporal framework. It is the toxic combination of these two sets of problems that has left the U.S. one of the epicenters of COVID-related morbidity and mortality.

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Slumlord Capitalism v. Global Pandemic : LPE on Covid (vol 3)

As part of our ongoing effort to bring you the best LPE work on COVID-19, today we bring you this piece from John Whitlow, followed by a roundup of LPE COVID writing published elsewhere. 

John Whitlow –

The poet Langston Hughes once wrote, “I wish the rent was heaven sent.” With a record 10 million Americans filing for unemployment benefits in the midst of the coronavirus pandemic, Hughes’ words resonate now more than ever. As we hurtle toward a public health and economic catastrophe, we must reckon with the sobering fact that our federal government is helmed by landlords, real estate developers, and financiers whose fortunes have been made – and whose worldview has been shaped – by years of predatory and extractive business practices. These practices prefigured the federal response to the pandemic and overdetermine the nature of the state-led economic rescue that is already underway.

Jared Kushner is widely regarded as the Trump administration’s behind-the-scenes point person on the coronavirus. Kushner, like Trump, inherited his family’s real estate holdings, updated the business model and expanded its geographical footprint. A New York Times expose from 2017 sheds light on the day-to-day workings of Kushner’s properties in the Baltimore area, where tenants live amidst chronically poor conditions and are subjected to a relentless pattern of petty and meritless litigation. In New York City, Kushner’s residential real estate portfolio has benefited from generous tax incentives and exploited loopholes in the state’s rent laws to remove units from regulation, in the process converting affordable apartments to luxury goods.The extraction of value that is at the core of Kushner’s business model is based on the multiplication of rents-debts and the intensification of inequalities.

The business practices of Kushner – like those of the real estate industry more broadly – are emblematic of the shifting relationship between the state and the market economy over the past four decades. Beginning in the 1970s, after years of intellectual mobilization by right-leaning economists, neoliberal policies began to take hold in the US and Western Europe. The redistributive functions of the state, established during the New Deal and expanded during the Great Society, were whittled down to a nub, resulting in a tattered safety net and exploding inequalities. At roughly the same time, capital began to move more freely across borders, and once-vibrant economic centers saw massive losses of stable, relatively high paying industrial jobs.

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Gideon and the Promise of Right to Counsel

This week, we’re sharing two discussions on John Whitlow’s recently published article reflecting on New York’s right to counsel in evictions proceedings. Our contributors share visions of right to counsel that move beyond due process rights. The contributors show that right to counsel campaigns are part of broader movements that seek to address the material deprivation underlying the need for counsel in the first place.

John Sadek and Sam Natale –

373 U.S. 335. For many public defenders, these eight characters are immediately recognizable. Better known as Gideon v. Wainwright—the famous Supreme Court case that established a constitutional right to public defenders in criminal cases. Many defenders have those same eight characters tattooed as a mark of vocation and a symbol of dedication to the work.

Gideon similarly marks the whole profession: it is our foundational myth, which is retold as follows. Clarence Gideon, facing a felony charge, asked the trial court to appoint an attorney to represent him—a request the trial court denied, stating that the court could not appoint a lawyer. After conviction and without counsel from his prison cell, Gideon handwrote and filed an appeal to the Supreme Court. Yale-educated attorney Abe Fortas then took on the case and persuaded the nine justices, who unanimously ordered a new trial for Clarence Gideon. They held that the assistance of counsel in a criminal trial is a fundamental right essential to a fair trial, a right that requires appointed counsel when a person cannot otherwise afford a lawyer.

Liberal law schools everywhere champion this story as a testament to the will and fortitude of a man who kept pushing for his rights, and a Supreme Court, that, in their wisdom, agreed and made this right the law of the land. The moral of this story is that an individual with faith in the system and a talented lawyer with the right ideas can change everything. However, this myth is missing the role of movements in establishing this right—the decades of union and anti-racist organizing that led to all but eight states adopting right to counsel far before Gideon was even decided.

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Moving Beyond Liberal Legal Rights: An Expansive Vision of Right to Counsel

This week, we’re sharing two discussions on John Whitlow’s recently published article reflecting on New York’s right to counsel in evictions proceedings. Our contributors share visions of right to counsel that move beyond due process rights. The contributors show that right to counsel campaigns are part of broader movements that seek to address the material deprivation underlying the need for counsel in the first place.

John Whitlow –

In his seminal article about the relation of Gideon to the crisis of mass incarceration, Paul Butler poses the following question: “When the problem is lack of a right, one keeps going to court until a court declares the right. When the problem is material deprivation suffered on the basis of race and class, where, exactly, does one go for the fix?” As an increasing number of cities enact the right to counsel in eviction proceedings, it is imperative that we apply Butler’s query to the deep crisis of affordable housing. To what extent does a right to counsel in this context have the capacity to move beyond the confines of individual Housing Court cases, to the structural underpinnings of gentrification and displacement? Can the right to counsel be wielded in a manner that builds the power of an emergent tenant movement that is mobilizing for redistributive policy reforms and is fighting to prioritize the use value of housing over its value as real estate? In the following paragraphs—which are a distillation of the arguments made in my recently-published article—I address these questions, pointing out how the right to counsel is being deployed expansively by tenants and organizers in New York City as part of a broad-based effort to democratize and de-commodify housing.

Within the liberal legal tradition, rights have typically operated as guarantors of formal, rather than structural, equality. That is, these formal rights by and large fail to disturb—and may even reify—the structural arrangements that underpin social inequalities and relations of domination and subordination. Because the political emancipation that theoretically flows from liberal rights regimes is located squarely within the prevailing social order, its benefits typically do not redound to those at the bottom of that order. A narrow focus on legal rights in this context tends to individualize inequality and stratification, and in the process legitimizes the status quo by failing to contend with how power is distributed in society. Wendy Brown has put this set of concerns about legal rights succinctly: “Rights in liberalism . . . tend to depoliticize the conditions they articulate.”

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Buybacks are the Symptom, Shareholder Power the Disease

Jeff Gordon –

People claim to be worried about stock buybacks. In fact, the buybacks are a stand-in for what we can all see: business in this country works for wealthy shareholders, not workers, customers, or communities.

Buybacks are in the news as policymakers contemplate a bailout of several major U.S. airlines, all of which have relatively little cash on hand to weather the current crisis. One reason the airlines have so little cash is that, as Bloomberg reports, they spent 96% of free cash flow buying back shares over the last decade. Senator Elizabeth Warren has proposed that no corporation receiving a government bailout should ever again be allowed to conduct buybacks. But the notion that, with fewer buybacks, the airlines would have saved enough to withstand a world-historic economic collapse is fanciful. To see this, we must recognize that the massive stock buybacks of the past decade are a symptom of heightened shareholder power. Efforts to limit or ban buybacks without addressing that power at its source would not lead to the higher wages, productive investments, or rainy-day savings that buyback critics hope for. Moreover, the narrow focus on buybacks distracts from the bigger opportunity presented by the crisis: to reclaim corporations for the public good.

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LPE on COVID (vol 2)

Today we’re reposting a letter from Professor Noah Zatz to his City Counsel regarding evictions during the pandemic:

Dear City Council — Thank you for all the hard work going into responding to the COVID-19 crisis locally, both by you and City staff. I hope you each are safe and secure. I wanted to write briefly about the eviction moratorium issue. Some of the specific questions raised by the moratorium are those that are central to my academic expertise in antipoverty & social insurance policy design (unlike housing in general, on which I speak merely as a well-informed resident). I hope this analysis drawing on that expertise is useful to the City. I am writing quickly, so apologies for any incompleteness or errors.

The bottom-line is this: Although it is well-intentioned and makes some sense in theory, the attempt to limit the moratorium to COVID-19-impacted individuals will likely make it almost completely useless in practice. I urge you to adopt an across-the-board eviction moratorium even if you are motivated only by ensuring protection for COVID-19-impacted households.

There are three key pieces of the restriction that work together to produce this result:

  1. a) the burden is placed on the tenant to establish the defense (“if the tenant is able to show”),
  2. b) the protection is limited to an “inability to pay rent,” and
  3. c) the protection is further limited to such an inability “due to circumstances related to the COVID-19 pandemic.”

First, remember that we are imagining someone who not only faces the restrictions, shutdowns, health, and social isolation imperatives that all of us are struggling with, but who also–by definition–is facing severe economic distress. This person now has to go to court to prove a defense, collect documentation, contact witness or sources of documentation, etc. When doing so, they cannot be working, caring for their family (kids home from school, etc.). What a nightmare.

Second, “inability to pay.” This concept is central to my decades of academic work on antipoverty policy. It is a morass, totally unsuited to first-time deployment during an emergency between litigants of unequal power. Is someone “unable to pay” if they have no present income but could exhaust retirement savings to pay one month of rent? What if they have to choose between paying rent and medical care? Food? Fixing their car? In some sense, one could say, “they have the money!” But is that what you mean? If not, what do you mean? Could anyone know in advance? How would a landlord litigate this? Is someone unable to pay if they could ask for money from someone who is not on the lease? What if they could close the gap by picking up some gigs with Task Rabbit?  Again, imagine the documentation/proof issues.

Third, “due to circumstances related to the COVID-19 pandemic.” Again, the kind of issue central to disaster relief programs, unemployment insurance, and the like. What if someone fell behind on their rent LAST month — not due to COVID-19 — but now THIS month is unable to make up the gap b/c COVID-19? Imagine all the proof and line-drawing issues with the concept of “due to.” Is every layoff in LA County Since March 1 due to COVID-19? If not, how are we to find out which ones are? Is it by industry? What if the industry is not severely affected, but the boss shut down the company voluntarily to protect the workers? If the boss’ mother got sick, and so the boss decided to shutdown? If the worker loses their job b/c they are caring for a child dismissed from school, is THAT due to COVID-19? What if it’s not their child, but their sister’s? Again, imagine the documentation/proof issues.

Note that all of these severe problems apply even if you focus narrowly just on the people intended to be protected by this moratorium. Obviously, there are also very serious broader questions about whether this is a time for ANYONE to be forced to try to fight an eviction and potentially need to find emergency housing during a crisis (especially no-fault evictions). But even if you are unmoved by those problems, in practice this moratorium is likely to fail to protect even those narrowly targeted by it. Under these circumstances, the only way to protect them is to protect everyone.

I doubt that this is the time (if ever!) when you are interested in reading an academic law review article, but in case you are interested in seeing (or verifying) my work in this area, here is the link to my essay “Poverty Unmodified: Critical Reflections on the Deserving/Undeserving Distinction”: https://www.uclalawreview.org/pdf/59-3-3.pdf.

I understand that there may have been limitations on what could be done by emergency order (though I do not know), but if a universal moratorium cannot be issued by emergency decree, I urge the Council to immediately pass a universal moratorium ordinance. Thank you again for all your efforts at an incredibly difficult time. I hope you find this analysis to be helpful to your deliberations.

Sincerely,

Noah Zatz

LPE on COVID 19

Dear Readers,

We’re living in strange times. As we try to make sense of the moment, LPE Blog wants to offer some COVID 19 coverage from our regular contributors. We’re starting today with some work that Amy Kapczynski has done with various colleagues.

To our LPE community, please send us links to your own educational and mutual aid efforts at managingeditor@lpeblog.org for these posts.

Above all, we hope you are well.

-LPE Blog

  • Five Ways public health officials should respond to coronavirus in the Philadelphia Inquirer, by Scott Burris, Amy Kapczynski, and Albert Ko.
    • Sneak peak: “Firstly, measures like contact tracing and quarantine will not work unless they are used in accordance with the law and accompanied by comprehensive social support measures and protections. Voluntary self-isolation measures are more likely to induce cooperation and protect public trust than coercive measures. If people expect hardship, they will avoid public health officials or not honestly report their contacts. Mandatory quarantine, regional lockdowns, and travel bans are difficult to implement, have large societal and economic costs, and disproportionately affect the most vulnerable. They should only be used if they are necessary, the least restrictive means needed to protect public health, justified by scientific evidence, and accompanied by strong support and legal protections.”
  • Alone Against the Virus in Boston Review, by Amy Kapczynski and Gregg Gonsalves.
    • Sneak peak: “Though we’ve had months to prepare, we have yet to reckon with the extraordinary risks that a pandemic like this poses in a country like ours. Those hardest hit will be the most vulnerable—the elderly and those with chronic diseases, particularly those in nursing homes, crowded homeless shelters, and prisons. We have no natural immunity to this new virus, and there is no vaccine. It will spread unchecked, from human to human and across our social gradients, unless we create social immunity, woven of the ways we interact and care for one another. But what kind of social immunity can we build in a body politic that has been ravaged for decades by neoliberal policies?”
  • Coronavirus and the Politics of Care here at LPE Blog, by Amy Kapczynski
  • This open letter by hundreds of public health experts on a fair and effective COVID 19 response.