And then there is the discussion between Brad Delong and Robert Brenner posted by Shane Taylor.
<http://yourcallradio.blogspot.com/2008/09/your-call-093008-global-capitalism-and.html>
The discussion covers the same topics, plus some good history, and provides even more socialist-democratic FDR and Depression era solutions, with DeLong on the modest side (in a kind of revisionist neoliberalism) and Brenner on the more aggressive (and socialist) side. Brenner concludes that the way out is to strenghten working class power through expansion of the welfare state, unionization, increases in the manufacturing sector. DeLong is much more vague about the way out, tending to favor some revision of the financial sector, but DeLong didn't have time left to develop his answer.
DeLong did have time to note that the shrinking manufacturing sector was more a function of increases in technology than policy or anything else, which he thought was a good thing. Of course he ignored many of the government policies he help put in place to accelerate that shrinkage, based I assume on the theory that manufacturing was no longer a solid base for an `advanced' economy.
So, I want to explain why I think DeLong was wrong. I watched the whole East Bay industrial and manufacturing system here, virtually disappear in the past forty years. Many of these industries were built up around WWII and formed part of the gigantic economic effort to support the Pacific Theater, which had its military command structure here, particularly the Navy. The whole area got a big injection of money and business during the protracted Vietnam era. What a lot of people don't know or don't remember was that the US was pumbing millions into this region to help build up both the domestic and military South Vietnamese infrastructures, and all those industrial products were produced here. For example, electric powerplants in Saigon and the Dang military complex were driven with giant diesal engines built by De Laval Turbine, in Oakland.
Many of the working class who benefitted from these developments were African Americans who came West from the 20s and 30s escaping Southern segregation and poverty. I've listened to many family stories about this migration. The consequence was that a very significant number of both white and black working class families managed to do well enough in the post-war period to buy small homes, which are still in these families. Both white flight and de-industrialization were coupled and devastated the entire area from Freemont to Richmond.
Everybody's heard that story.
What most don't realize is that working in construction, manufacturing and production, produces the foundation of a high skilled working class, and those skills are passed on the children, partly through work, partly through learning and growing up in such families and within such industrial systems. Even simple things like work discipline gets translated into school discipline, via the protestant ethic... This in turn lay the foundation for getting out of poverty and more than likely never going back. In most of the families I've visited in their homes, I usually ask about this or that picture of a grandson or daughter and what they are up to. Oh, he or she went to college and moved away. College often turned out to be on some scholarship at a small and relatively inexpensive place in the South or Midwest. When I asked about why there. The answer was often, well we have family there. I interpret that to mean two things. First, it was cheaper to live back there with family. And second, the college was likely easier and less competitive than the California state or university system here. I also suspect many small and middle sized colleges recruit in places like Oakland to keep their enrollments up.
When de-industrialization hits places like Oakland and the East Bay and stays, the whole skilled working class disappears and is replaced with a poorly educated and unskilled prolitariat, an urban mass of disaffected. Revolution is not in the cards, rather all the host of problems of urban poverty complete the ruin. The decling working class families like those noted above, start exporting their kids to the rest of the country to go find a better life elsewhere.
So then looked at another way industrial and manufacturing systems with fair wages (mostly unionized) acts as the primary anti-poverity social instrument and continues to work for the successive migrations of working class poor, no matter where they come from.
Today, obviously the new immigrants are Asians from China and Southeast Asia, and Latinos from the US, Mexico and Central America. Non-union construction has absorbed many, but certainly not all. And then too construction is highly fluid, and subject to great fluxuations. Industrial systems are much more stable.
So, the point is we need industry and manufacturing, (well and distribution systems like trucking, rail, and shipping terminals) because they perform the socio-economic functions of education and training of a skilled working class that in turn will work itself and its kids out of poverty. And unless, its been forgotten, there are a lot of people, both men and women, who like skilled labor and they prefer to do something with their hands. For example, working in commercial construction during the last year of graduate school in art taught me more about sculpture and space during the day than any graduate seminar I took at night.
And just to close, I still hope Lee and others don't support this 700 billion hand-out to Treasury because it has no intention of putting that money in low income housing, households, or re-investing in industry, manufacturing or beefed up distribution systems where it would both do a lot of working class good and shore up the economic foundations. Well, and because I think finance and credit are supposed to service economic foundations, not become the foundation. It's that reversal of economic priority that leads to all that's solid melts in air.
CG