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2020 Election: Policies that Can Tackle Corporate Concentration
Host Chris Mitchell is joined by ILSR co-directors Stacy Mitchell and John Farrell as well as ILSR co-founder David Morris to discuss the 2020 election and policy platforms that focus on anti-concentration. They also touch on:
What worries me and particularly watching a campaign unfold where there’s much more focus on who’s electable instead of being on policy is that we end up with a candidate who sort of runs loosely on these ideas and issues but doesn’t actually have any plan to back it up in a real way.
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Transcript
Chris Mitchell:
Hey, Stacy. I understand that there’s an election coming up at some point, at least we’re hoping it’s going to be coming up in 2020.
Stacy Mitchell:
Well you’d have to think so because there’s certainly a lot of people out there running.
Chris Mitchell:
Well we’re getting pretty close to Memorial Day in 2019 so I guess we should talk about the election because all podcasts have to by law.
Stacy Mitchell:
Yeah, and apparently for what? The next 18 months, that’s what we’re going to do. Not on this show.
Chris Mitchell:
Right. Exactly. We’re going to talk about things that we can make a difference in rather than just endlessly speculating on things that will have no value a week after they air.
Stacy Mitchell:
Right.
Chris Mitchell:
Which is not to criticize any of the many shows that I love. Please stop talking about 2020. So Stacy Mitchell is co-director of the Institute for Local Self-Reliance. Welcome back, Stacy.
Stacy Mitchell:
Nice to be with you, Chris.
Chris Mitchell:
I’m Chris Mitchell, no relation to Stacy Mitchell. I am sitting here with two of my bosses on a television screen in front of me. John Farrell is the other one. John’s co-director here in the Minneapolis office.
John Farrell:
Hello, Chris.
Chris Mitchell:
Hey, John. John does energy. Stacy does independent business. I do broadband type stuff. We also have superstar David Morris sitting next to me here who you may all know from the founding of the Institute for Local Self-Reliance.
David Morris:
Hi, Chris.
Chris Mitchell:
We’re going to talk about some of the things we’re seeing in some of the Democratic platforms, things that we like from an Institute for Local Self-Reliance perspective. We’re going to talk about how they can help to build local power which is our mission, and I think we’re going to start with a focus on anti-concentration. Elizabeth Warren seems to be the person who has certainly talked about this the most and developed the most policy papers around it. So I’m going to now hope that Stacy can provide us with some good information because I don’t know much more than that.
Stacy Mitchell:
It’s great to kick off with that. I think so many Democrats are busy talking about who’s electable and I think that’s a fool’s errand, and it’s much more interesting and useful to actually talk about what are really substantial differences in matters of policy that have a lot of big implications down the road. So yeah. Senator Warren has been out really kind of taking the lead in terms of setting the table with a lot of far-reaching policy ideas, particularly around tackling concentrated economic power, reversing the growing monopolization of the economy.
So she’s put out at least three big pieces that I’ve caught. One is around big tech. She’s also got a big piece around agriculture and what’s happening to farmers and the whole food system. Then lastly, she has a corporate tax reform proposal that I think you could safely read as being about rolling back corporate power.
Chris Mitchell:
All right. So maybe we can have a quick discussion, a quick informal poll. Which one should we tackle first: big tech, agriculture, or one of the other issues? John and David?
John Farrell:
I am interested in big tech although I think it feels like it’s different in a way because it’s about the free flow of information and the way that people get ideas, but I’m also interested then to dive more into the way in which we see concentration affecting people’s ability to get work and make a living. I think the tech monopolies also impact that, but I think it also, as we know, has come up around issues of like, for example, election security and other really fundamental issues to the operation of a democracy.
Chris Mitchell:
Yeah, I have to say I’m curious if, David, if you have a reaction to this just before we get into the actual meat of big tech which I think may be one of the most important ones that we don’t have as much of a road map for. When I look back at Standard Oil, at AT&T, at dealing with IBM, the monopolies of the past, in some ways because we know what happened, we have a sense of a road map. Did they feel at the time like we do now in terms of just like this sense of “What do you do with this power?” It seems so overwhelming.
David Morris:
Yes, they did. There was a whole political movement around it in the late 19th century and that political movement ended up with a direct election of federal senators. It ended up with an income tax which was a progressive income tax, ended up with antitrust legislation. So absolutely people understood that this was a serious problem. One thing that is different — of course there’s many things that are different — one I think very significant thing is that the railroads or the oil companies didn’t seem to and Stacy can tell me if she disagrees with this, but they didn’t seem to over 20 and 30 years innovate a lot. I mean they were seen as having a product that was essential and they did lower prices at least to the general public, but they didn’t innovate a lot, and the telecommunications monopolies now are seen as cutting-edge innovators. So you kind of have a kind thought and then they come back at you and say “If you mess with us, you’re not going to end up with any more innovation.”
Stacy Mitchell:
What’s interesting about that is that, if you actually look at many of the innovations that have been coming out of Google, Facebook, and Amazon, the ultimate source of them is acquisitions. They have been buying up all of those companies and we’ve looked most specifically at Amazon. They’ve bought a ton of really tiny innovative tech companies in order to buy the technology and to buy the innovation, and these mergers are so small that they don’t trigger any kind of review or any review process in terms of federal approval that they need. So I think there is actually a sort of question about to what extent is this really about consolidating power and no longer about innovation and to what extent is that innovation really coming from outside these companies but they’re simply using their wealth to buy it up.
Chris Mitchell:
Stacy, that all makes sense to me and what David said totally makes sense to me. I think maybe our mission today is to get a sense of what can be done about that. So you’re the one that’s not only physically closest to Elizabeth Warren in Massachusetts, but also your work really, I think, has helped to inspire some of the people that are working with her. So what is your sense of what can be done?
Stacy Mitchell:
Well I think the policy that she’s laid out, her big tech proposal really has two main components. One is that it says if you’re a large platform over a certain size, then you’re treated as a kind of utility in the sense that you have certain obligations to the entities that are on your platform and you also can’t compete with them. So what that means is that, in the case of Amazon, you can operate this platform and have third-party sellers that are selling on that platform, but you can’t also then offer your own retail goods, your own manufactured goods on that platform. Essentially, you can do one or the other and not both. A similar kind of separation, a structural separation is called for in her plan with regard to other big tech companies like Facebook and Google.
The other component of it is that she’s calling for a rollback of recent mergers, so essentially saying that there has been this period where these companies have been allowed to, say, Facebook buy Instagram and that those acquisitions were a mistake and we actually need to reverse those. I think what’s interesting as part of this proposal and I think is a way that Elizabeth Warren stands out not only in terms of having put a lot of meat on the bones of ideas. I mean you’ve got other people running out there who are saying “Oh, yeah. Big tech is a problem or I’m concerned about concentration,” but mostly with some exceptions, they’re not going any further than that into specifics. She’s put real specifics out there.
She’s also, I think interestingly, talked a lot about the role of agencies, like federal agencies in carrying this out. So I think has a sense of the fac that the presidency is not just about proposing legislation, but there’s a lot of power within the administration and how do you use that in order to tackle the question of big tech.
Chris Mitchell:
Yeah, I’d like to actually throw that out to John and David as well because I think there is a sense that a lot of the positions we’ve seen from many of the candidates relies on Congress to be functional and perhaps even breaking up Amazon for instance or breaking up unwinding mergers or requiring Amazon and other providers of large platforms not to compete with other sellers may require acts of Congress whereas Elizabeth Warren might be the only candidate who’s actually talking about something that’s somewhat realistic in an era in which very little is likely to get through Congress in terms of actually using executive authority specifically.
John Farrell:
My only reflection on that is just that I think the functionality of Congress is simply a partisanship issue, right? So if we’re to see unified control of Congress by the Democratic Party which has been the one that’s more focused on antitrust, then I think you might see a route for a legislative progress around antitrust. Even though it’s not been totally limited to Democrats, even President Trump’s administration has noted some opposition to mergers, but I think certainly in the legislative field, it’s been Democrats so far that have really had that strong focus on antitrust. So I think that in the same way that we’re going to have a presidential election in 2020 that could be determinative here, we also are going to have Congress up for reelection and there could be some changes there that we might not be able to see now, but that if the chips fall the right way, there might be a majority in both houses of Congress to move antitrust legislation.
Stacy Mitchell:
I mean I agree that, when you look at who’s taking the lead on antitrust in Congress, you definitely see more Democrats in the mix than you do Republicans, but you do see a few. I mean there’s Josh Hawley out of Missouri who’s been leading the way on sort of calling out some of Google’s issues and talking about antitrust. Ted Cruz of all people kind of endorsed Elizabeth Warren’s tech proposals in some ways. I think you’re right. It is mostly Democrats, but I think what worries me and particularly watching a campaign unfold where there’s much more focus on who’s electable instead of being on policy is that we end up with a candidate who sort of runs loosely on these ideas and issues but doesn’t actually have any plan to back it up in a real way. It just becomes harder and harder for people to discern any difference between the parties or actually make people’s legislative and policy interests manifest in some ways, that we just sort of continue the frustration with government.
John Farrell:
It’s very much a snapshot here, but I just went to some recent polling data and looked at the five candidates who’ve most prominently been identified with either antitrust or anti-monopoly rhetoric or some policy proposals. So you have Warren at the top in terms of her high level of specificity. You’ve also seen Cory Booker, Beto O’Rourke, Amy Klobuchar, and Bernie Sanders to some degree or another saying something in the media about this being an issue. Collectively, they’re getting about 30% in the poll that I happened to look at from Quinnipiac in the last week, and Joe Biden of course is getting more than that by himself. Interestingly enough, he has a history of actually being in the wrong place on antitrust, actually moving against proposal by Senator Ted Kennedy back in the ’70s that would increase merger scrutiny.
So it is telling that this has become a big issue, that there are several candidates who are picking up that this is one, but when you contrast that with this issue of electability that a lot of people are focused on, you have the candidate that most people are thinking of when they think of the word electability squarely in opposition to good policy around mergers and concentration.
Chris Mitchell:
John, I wanted to just note that, in my world, everyone noticed that Joe Biden’s first fundraiser after coming out for president was at the top lobbyist for Comcast, David Cohen’s house. He hates being called the top lobbyist because he really tries to hide the fact that he’s a lobbyist, but that’s where Biden immediately went to raise money. So David.
David Morris:
Yes. Just a couple things. I mean one is that, in terms of Elizabeth Warren, she has the specificity as Stacy said. She also has an experience. I mean she was the prime mover to creating a federal agency, a new federal agency that took after the essential core in terms of those who were working with finance bankers, insurance, student loans and the like. It was extremely effective. So she has both that experience under belt, but also understood how it was effective. I’m sure that she would have made changes now after she’s seen it both from the inside and from the outside. So that’s extremely important especially if you don’t think that Congress is going to do anything related to this. You need to understand what the power of agencies is.
Chris Mitchell:
The part that I find fascinating about Warren is that I actually think that she communicates this better than any of the other candidates in terms of what David was just saying. She has a real practical experience. She actually knows how it works and she can describe it to people, and yet, of all the candidates, she is perceived as being very bad at communicating. So I’m trying to figure out if there’s a, if I’m just in an extreme minority in thinking she’s communicating or if we’re seeing efforts by very powerful corporate just to try to de-legitimize her, which actually seem to be where Matthew Stoller and others, they seem to think that’s what’s happening.
Stacy Mitchell:
Yeah, I think that’s right. I mean, there are a lot of people spending a lot of money because they recognize that her agenda proposes a serious threat to them and of course there’s a way in which some of those attacks on her sort of rest on misogyny, that that’s still an active current in the political dynamic. But I think we’re back to sort of the central point here is that the fact that the Democratic Party and so many rank and file Democrats are so into electability and sort of interested in the fresh face and who looks good out there, who’s trying to sort of second guess what other people are going to like. It means that a lot of people aren’t actually think about, what are the policies choices that we have? Where do we actually want to take this country because it’s not just about this election, it’s, how do you actually begin to build enough political support for long term change?
And it doesn’t seem to me that there’s as much focus on that, really, across the whole discussion about this race. I mean, Bernie Sanders is another person who’s been talking about concentration, particular in the agricultural section lately. He just gave a huge speech in Iowa all around breaking up farm monopolies and really talking about how to restore rural America and I think coming from Vermont has a very strong sense of what that means, like what’s going on with dairy farmers right now and kind of being on the losing end of things. So, there is this part of the race that is policy focused and people who are out there, I think, articulating a certain vision that was really absent for the Democratic Party for a long time and so that’s kind of good news.
But I do worry about someone like Biden who comes in and says, “Well, it’s not really about any of these things. I’m just electable and everything was fine before and Trump’s an anomaly,” and all of that and I just think that that’s just not true.
Chris Mitchell:
So, let’s do a quick roundup. Given that I think Elizabeth Warren has given substantial thought to anti-consolidating, we could spend the rest of the show and more just talking about her various policies but I’m curious, Stacy, if you could run through high points of some of the other non big tech type anti-trusts or anti-monopoly type work?
Stacy Mitchell:
Yeah, so she’s got a proposal for the farm sector where she’s talking about appointing folks to the FTC who will reverse some of the recent mergers like Bayer-Monsanto that have affected farms and rural communities negatively. She’s talking about breaking up existing concentrated monopolies in the AG sector and she’s talking about meat processors and the like. She’s also got several proposals in there that are not within kind of anti-trust space but are also using different levers to address what’s going on with power in the food system. So, one is a right to repair, which would allow farmers to repair their tractors.
Like, right now, you have to go through John Deere, it’s a whole racket and she’s also got some reforms to something called The Check off Program, which is something that a lot of growers and people who raise meat have to pay into these funds that are ostensibly for marketing but are really used by large processors for their own ends. And so, she’s calling for reform to that. So I think there again, you see some mix of anti-trust things but also kind of recognizing that there are other tools at play that can be useful. And that’s also evident in her corporate tax reform proposal and what struck me about that is kind of interesting is that she talks explicitly about part of the purpose of it is to level the playing field. So, she is pointing to data that shows that the very largest companies pay lower affective federal tax rates than small businesses do.
And a lot of it is because of loopholes. We have examples like Amazon last year earned $10 billion in profits and paid zero federal taxes. I mean, you can go out and walk down your main street and I challenge you to find a single retailer who didn’t pay something substantially higher than that. So, her tax reform proposal is kind of build around that idea of how do we have actually a level playing field?
Chris Mitchell:
Yeah and actually the right to repair, Bernie speaking out on that too very recently. So, that’s something that’s catching on.
Stacy Mitchell:
We are seeing issues of concentration show up in other candidates and a less detailed, less maybe aggressive kind of way. I mean, Amy Klobuchar, a Senator from Minnesota, who’s been on the anti-trust committee in the Senate and is very knowledgeable in this area has proposed putting some additional tightening around mergers. So, it has a little bit to policy out there. Cory Booker has also proposed a moratorium on big agriculture mergers. So, Warren isn’t the only one. It’s just that her policies go further and are more detailed and track more closely to the nature of the problem.
Chris Mitchell:
So, closing comments on anti-consolidation before, I guess there’s some other subjects in the 2020 election that may be getting people out to the polls, but I want to give John and David to weigh in on anti-monopoly type stuff before we move on to those.
David Morris:
Well, I think that the anti-monopoly is also an anti concentrated power and I think, for example, the wealth tax which Warren proposed, is something that Congress would have to do. So, one can argue that it isn’t going to get done. On the other hand, it’s a brilliant illumination of an issue in a way that people probably thought of it at all. I mean, essentially it’s a two percent annual tax on the wealth of those with over $50 million in assets and a three on those with over a billion dollars in assets and it would raise, even at the lower level, it would raise almost $3 trillion in 10 years and what could be done with that. And so, then people essentially have to respond to that. I mean, in other words, what you’re saying is you’re combating the other side’s argument that even if you took all the money away from the rich, you really wouldn’t be able to solve any of the country’s problems and you’re just being envious and jealousy.
But in fact, if you’ve dealt with wealth rather than income, that argument can be flipped.
Chris Mitchell:
I’m sensing that David may not be a supporter of the Starbucks CEO, I forget his name, the founder who labeled these ideas not even serious despite the fact that I think they polled above majority support among Republicans, to say nothing of the country as a whole. And so I think it’s worth, as you’re mentioning these issues, that its fascinating how an idea that is very well supported among the public has been written out by large segments of the elected class.
David Morris:
That’s exactly right and I think as I said in terms of history, in the late 1880s, 1890s, you had an entire party and one part of its platform, it was a very detailed platform actually, but one part of its platform was an income tax on the rich and at that point it wasn’t really to raise a lot of money because we were raising money from customs, tariffs and the like. But for moral issues, that it was something wrong about one person having more wealth than several thousand people or several million people and they got it done and we did not have it before, except for a short period of time during the Civil War. So, that was a new concept that was political movement and we got it done. Supreme Court said no, it’s unconstitutional and then we had to have a constitutional amendment.
And that was a political movement in and of itself so the idea that we don’t have a wealth tax shouldn’t stop us from thinking about, its possibilities and its potential.
John Farrell:
I just wanted to note too that there are lots of other interesting sectors in which this can apply and obviously my bias being working on energy is to see a way in which this might apply to utility monopolies but I know we want to cover a few other sectors as well but just wanted to flag that we’ve had a conversation about that issue before and I’ve written about the impact of merger and concentration in the electricity sector in particular as a point of other discussion that we’ve had on other podcasts.
David Morris:
In terms of electricity, it’s a good precedent I think for what Stacy was talking about and what Warren is talking about in terms of the platform of monopolies because what the federal government did in 1978 was essentially to allow for independent power producers and then over the next decade, decade and a half, what ended up being was a legislative movement, if you will, and a regulatory movement that essentially uncoupled the transmission, the ownership of the transmission lines of electricity, form the generation of electricity and what that then did was to open up the space for independent power producers for renewable energy and the like and the original legislation or at least that in the 1980s said that the independent power producers could not be owned by the utility companies, at least the majority owned.
So, it was what opened the door to really a technological development that today is challenging the very centralized model, as John Farell has pointed out innumerable times.
Chris Mitchell:
And I just wanted to note that I’m fortunate to be working in broad bend sector where we don’t have to worry about concentrated power of very large companies that have total control over the future of our lives. It’s really quite nice. I want to take a quick break to remind people that we’re bringing you this ad free and I’m going to encourage you to rate our show. I’m not going to go on and on about it because some of you are going to do that but some of you aren’t and maybe I’ve just guilted some of you into actually going and doing it. We’d love to get some more ratings for this content. Please let other people know about the show and support us at archive.ilsr.org/donate.
We’re going to jump right back into it and David, you had mentioned something about one of the candidates who is not getting a lot of attention that you thought was important and this is something that actually Hilary Clinton decided not to run after giving it very seriously consideration in 2016, the idea of guaranteed income and I’m curious how you can tie that into local self reliance.
David Morris:
Well, yes, I mean, the concept or the argument for universal basic income or guaranteed income has been around for a while but it’s now being implemented in a number of places as pilot projects really, although Finland did a much larger project involved in that. And essentially, the argument is that technological development is such now and I think people recognize that, that people are being replaced by either apps or robots or driverless cars or whatever it happens to be, and you have this enormous mal-concentration in wealth in part because of that and so we need to figure ways in which we can generate an income or get money to people that’s not related to their jobs.
At the same time, allowing that people will have jobs and that labor income is extremely important. So, universal basic income concept is now being adopted and it’s being adopted by a lot of different sides and it’s a complex subject, because one side essential wants to say, “Let’s take all the welfare programs, consolidate them and then give them equally to people around the country.” But the more I think, a sophisticated and well constructed argument is that much of the wealth that’s generated in a society is generated because of what the public sector has done, what government has done, et cetera. And this idea goes back to the very beginning of the United States and the Republic and to Thomas Paine and Thomas Paine wrote a book, extremely popular book called Agrarian Justice and he put forth the concept of a citizen’s dividend.
And the argument was that the value of land, the increase in the value of land, comes from two different things. One is the labor that people put into the land and that should be yours, that’s your income, that’s your genius, that’s your sweat. But the other is because of what the public sector does and at that time it was rural. So, roads for example, regulations related to delivery systems and today we’re talking about parks, we’re talking about piping systems, broad band extension. And so, the argument is then a part of that and this is what Thomas Paine said,
10% of that should actually be taken from, because that’s essentially rent and should, it’s unjust acquisition of wealth that should go to the public and then to be distributed in dividends to every man, woman, and child in the United States. And the amount of money that he was going to distribute is almost exactly the same amount of money in current dollars as the amount of money that Andrew Wang, who is a democratic presidential candidate, wants to distribute. Now there’s a problem with with Wang in that what he wants to do is raise the money from a 10% value added tax, and we can talk about a 10% sales tax at some other time, but many other people are saying what we should do is have a financial transactions tax. We should tax the increased value that comes from copyrights, from patents. That is the things that we did as a society as a whole that increased the value to an individual. A portion of that should go to the community as a whole.
Stacy Mitchell:
I have very complicated feelings about universal basic income. I like the idea of there being dividends, payments for things that are in the Commonwealth that we all contribute to and maybe should get a share of. I like the idea, also, of just getting rid of welfare programs. Of just getting rid of all the bureaucracy and the shaming and everything else that goes on in the whole welfare system by just cutting people a check and being done with it.
But I don’t believe that we’re going to have a shortage of work if we actually have the kind of economy that we should have. I think we’ve always had technological change and there have been these periods in time where technologies have come along and wiped out entire sectors. I think what is different right now is that you have a handful of companies that really have a stranglehold. Because what happened in the past is that there was a sort of flush of new innovation, new ideas that led to new industries and new kinds of jobs, and we’ve really seen a collapse in that pipeline.
And what worries me about the whole UBI discussion is it becomes sort of a way of letting, big tech in particular, but large companies kind of off the hook and not recognizing that problem. And I also think as a matter of policy, deciding that a large share of the population is essentially useless is a really … I think that’s an incredibly dysfunctional idea. And I also don’t think it’s true. I think there’s an incredible amount of work that needs to be done. I mean we had Sarita Gupta on this podcast back I think last year sometime, I can’t remember. Talking about the care economy and sort of the whole tremendous amount of need there is for people as they get older and for kids, childcare and the like, which is going unaddressed. So I think there’s a lot of work and I think the idea of saying there is no work and that people are useless is a problematic idea.
David Morris:
Well I need to, I need to step in because I didn’t say that. And I think that it’s unfortunate to sort of come back like that. Nobody is talking about the elimination of work period. And no one is talking about a universal basic income that actually would cover everything that you need. So they’re talking about it as a supplement, but it’s an extremely important supplement to your labor income. And if you look throughout history, just in terms of the amount of work, all the value generated from work, we had an agricultural sector that employed the majority of the population and now it employs, what? Five percent? If you included distribution, maybe 15%? And then we had a manufacturing sector that employed a significant part of the population. And now we have a retail sector. And yes, and a personal care sector that that is essentially the driving force for much of the economies here and in the rest of the world.
And now we can see in the retail sector and in the personal care sector, the beginning the substitution in that sector. So I do think that one can talk about the dynamics of history in a different way, but the important point is that no one that I’ve read, actually is talking about a universal basic income as your only income. But with the studies that have been done, the pilot studies that have been done in Canada and in Finland and the like, indicates that even if you get a $10,000 a year, $8,000 a year, that amount of money changes the way you work, the way you think of yourself, and the options. Not only if you happen to be very low income, but also if you happen to be above that age and income levels. And that’s what they think is mostly important on this.
Chris Mitchell:
In my reading of it, I’ve seen both sentiments. There is a sense, I think, and there’s this whole argument over dignity of work, which is something that means different things to different people, I think. It does come down to the value of someone who is working. Now, I actually think, I’d just like to go in two different directions. One, I’m going to throw to Farrell in a second here. But the other one is, is that I think there’s a real value to scaling these things up. And that’s to say that I don’t think that I would support the United States going down this path, but I love that there’s experiments with it. And as we iterate and as we go from perhaps cities to entire countries maybe moving in that direction, we’ll learn a lot. And I look forward to the next 10 years of experimentation to learn from this. But I don’t think it should be something that the US federal government is significantly doing at this point. I would support the state’s moving forward with it. Stacy’s wagging your finger at me.
Stacy Mitchell:
Well I just wanted to get-
Chris Mitchell:
The senior Mitchell has precedence.
Stacy Mitchell:
That’s right. Well, I just wanted to get back in here. I mean, I think I don’t disagree with a lot of what you said, David. And I certainly as I said when I started out, the of dividends payments and public participation in that way and the end of the welfare system and that sort of thing. But I would say that there are a lot of people in Silicon Valley and elsewhere who are talking about this notion that there is going to be no work in the future, and they are sort of sidestepping questions about what their role is and their power is in that future by saying, “Well, let’s have a universal basic income.” We’ll just sort of pay off people for the fact that there is no work to be done. And so that’s why I think actually being specific about what it is that we’re talking about is really critical and actually digging into what is the nature of this policy and what does it really mean? Because I do think those messages are out there. And there’s a path to steer through that’s more useful.
Chris Mitchell:
So as we’re wrapping up, I wanted to throw to John one last time. John, you and I actually talked a little bit about this in the morning and I thought I’d prompt you regarding this past podcast discussion that we’d had. I don’t remember if it was the one that Stacey just referenced, but where we talked about how the … we romanticize the history of the manufacturing jobs as though it was something special.
John Farrell:
Yeah, that was actually not one of the ones on the list I was thinking of, but I’m glad you brought it up. It was a fairly recent episode of Building Local Power where Stacy, who was speaking with a guest kind of about that. I believe the title was The Future of Work and it was kind of looking at the contingent labor economy. But she had this beautiful moment at the end, and I had shared a tweet, because I had just listened to the episode this week, about the way in which we romanticize the manufacturing sector as being a source of high-paying jobs and ignore the fact that that was a deliberate policy choice, thanks to union organizing. And so I think that’s a really interesting way in order to reflect on this. Stacy, I don’t know if you have something more you want to add from that conversation that you had.
Stacy Mitchell:
Yeah, that was Sarita Gupta who was the guest for that show and who made that comment. And I think right. There was nothing … Walmart jobs are just as complex as a lot of the manufacturing jobs of that era. I mean we’ve sort of internalized this idea of high skill and low skill, but I think that’s a ruse for really just overlooking what’s really going on, which is that we had policies that supported labor organizing and then we didn’t.
Chris Mitchell:
So John, I wanted to wrap up with you. Do you have any other suggestions of where people can … We got caught up in two topics that I thought we did a in a very interesting job covering in ways that we don’t see other people talking about them in this way. People who want us to go more into depth on these issues, not on the campaigns, but on some of the issues that will be discussed should let us know, [email protected], that’s our way to reach out to us, [email protected]. But John, you had some lists of some resources that you were going to recommend.
John Farrell:
Yeah, I just wanted to highlight that we, obviously, I’ve talked about concentration and a lot of different economic sectors in a lot more specificity and detail with the entire podcast episodes. Just a few that you can catch if you’re interested in this idea on work and wages. There was the podcast that we were just talking about with Sarita Gupta last summer. I don’t have the episode number unfortunately, but there was also episode 42 with Marshall Steinbaum looking at the impact of monopoly at reducing the way in which workers have … can get competition between employers and looking at this issue of how difficult it’s been during this economic recovery to see increases in wages. It’s actually been in the news again recently.
A few other episodes then addressed a concentration in the agricultural sector, which has been mentioned by a few of the candidates, including Warren. John Ikerd, episode 32, Joe Maxwell and episode 33, and then in episode 65 Leah Douglas. All three of those podcasts for Building Local Power we talk about the way in which concentration the agricultural sector is making it difficult to make a living as a family farmer.
Chris Mitchell:
And for the masterclass. Just listen to all of them again, because our wisdom is so extreme that you can only absorb all of it through repeated listenings. Stacy was distracted or else I would’ve got her with that one.
Stacy Mitchell:
You did get an eye roll.
Chris Mitchell:
Thank you, Stacy. Thank you, John. Thank you, David. It was a fun conversation.
John Farrell:
Thanks, Chris.
Stacy Mitchell:
Thanks Chris. Thanks everyone.
John Farrell:
Thank you so much for tuning in to building local power. This is John Farrell. ILSR co-director. Checkout the show page for a transcript. While here at our website, show us some love with a contribution to help cover the costs of producing this podcast. You can also help us out by rating this podcast and sharing it with your friends on iTunes or wherever you find your podcasts, or just drop us a line at [email protected]. This show is produced by Lisa Gonzalez and Hibba Meraay. Our theme music is Funk Interlude by Dysfunction Al. Please join us next time in Building Local Power.
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Host Chris Mitchell is joined by ILSR co-directors Stacy Mitchell and John Farrell as well as ILSR co-founder David Morris to discuss the 2020 election and policy platforms that focus on anti-concentration. They also touch on:
What worries me and particularly watching a campaign unfold where there’s much more focus on who’s electable instead of being on policy is that we end up with a candidate who sort of runs loosely on these ideas and issues but doesn’t actually have any plan to back it up in a real way.
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Transcript
Chris Mitchell:
Hey, Stacy. I understand that there’s an election coming up at some point, at least we’re hoping it’s going to be coming up in 2020.
Stacy Mitchell:
Well you’d have to think so because there’s certainly a lot of people out there running.
Chris Mitchell:
Well we’re getting pretty close to Memorial Day in 2019 so I guess we should talk about the election because all podcasts have to by law.
Stacy Mitchell:
Yeah, and apparently for what? The next 18 months, that’s what we’re going to do. Not on this show.
Chris Mitchell:
Right. Exactly. We’re going to talk about things that we can make a difference in rather than just endlessly speculating on things that will have no value a week after they air.
Stacy Mitchell:
Right.
Chris Mitchell:
Which is not to criticize any of the many shows that I love. Please stop talking about 2020. So Stacy Mitchell is co-director of the Institute for Local Self-Reliance. Welcome back, Stacy.
Stacy Mitchell:
Nice to be with you, Chris.
Chris Mitchell:
I’m Chris Mitchell, no relation to Stacy Mitchell. I am sitting here with two of my bosses on a television screen in front of me. John Farrell is the other one. John’s co-director here in the Minneapolis office.
John Farrell:
Hello, Chris.
Chris Mitchell:
Hey, John. John does energy. Stacy does independent business. I do broadband type stuff. We also have superstar David Morris sitting next to me here who you may all know from the founding of the Institute for Local Self-Reliance.
David Morris:
Hi, Chris.
Chris Mitchell:
We’re going to talk about some of the things we’re seeing in some of the Democratic platforms, things that we like from an Institute for Local Self-Reliance perspective. We’re going to talk about how they can help to build local power which is our mission, and I think we’re going to start with a focus on anti-concentration. Elizabeth Warren seems to be the person who has certainly talked about this the most and developed the most policy papers around it. So I’m going to now hope that Stacy can provide us with some good information because I don’t know much more than that.
Stacy Mitchell:
It’s great to kick off with that. I think so many Democrats are busy talking about who’s electable and I think that’s a fool’s errand, and it’s much more interesting and useful to actually talk about what are really substantial differences in matters of policy that have a lot of big implications down the road. So yeah. Senator Warren has been out really kind of taking the lead in terms of setting the table with a lot of far-reaching policy ideas, particularly around tackling concentrated economic power, reversing the growing monopolization of the economy.
So she’s put out at least three big pieces that I’ve caught. One is around big tech. She’s also got a big piece around agriculture and what’s happening to farmers and the whole food system. Then lastly, she has a corporate tax reform proposal that I think you could safely read as being about rolling back corporate power.
Chris Mitchell:
All right. So maybe we can have a quick discussion, a quick informal poll. Which one should we tackle first: big tech, agriculture, or one of the other issues? John and David?
John Farrell:
I am interested in big tech although I think it feels like it’s different in a way because it’s about the free flow of information and the way that people get ideas, but I’m also interested then to dive more into the way in which we see concentration affecting people’s ability to get work and make a living. I think the tech monopolies also impact that, but I think it also, as we know, has come up around issues of like, for example, election security and other really fundamental issues to the operation of a democracy.
Chris Mitchell:
Yeah, I have to say I’m curious if, David, if you have a reaction to this just before we get into the actual meat of big tech which I think may be one of the most important ones that we don’t have as much of a road map for. When I look back at Standard Oil, at AT&T, at dealing with IBM, the monopolies of the past, in some ways because we know what happened, we have a sense of a road map. Did they feel at the time like we do now in terms of just like this sense of “What do you do with this power?” It seems so overwhelming.
David Morris:
Yes, they did. There was a whole political movement around it in the late 19th century and that political movement ended up with a direct election of federal senators. It ended up with an income tax which was a progressive income tax, ended up with antitrust legislation. So absolutely people understood that this was a serious problem. One thing that is different — of course there’s many things that are different — one I think very significant thing is that the railroads or the oil companies didn’t seem to and Stacy can tell me if she disagrees with this, but they didn’t seem to over 20 and 30 years innovate a lot. I mean they were seen as having a product that was essential and they did lower prices at least to the general public, but they didn’t innovate a lot, and the telecommunications monopolies now are seen as cutting-edge innovators. So you kind of have a kind thought and then they come back at you and say “If you mess with us, you’re not going to end up with any more innovation.”
Stacy Mitchell:
What’s interesting about that is that, if you actually look at many of the innovations that have been coming out of Google, Facebook, and Amazon, the ultimate source of them is acquisitions. They have been buying up all of those companies and we’ve looked most specifically at Amazon. They’ve bought a ton of really tiny innovative tech companies in order to buy the technology and to buy the innovation, and these mergers are so small that they don’t trigger any kind of review or any review process in terms of federal approval that they need. So I think there is actually a sort of question about to what extent is this really about consolidating power and no longer about innovation and to what extent is that innovation really coming from outside these companies but they’re simply using their wealth to buy it up.
Chris Mitchell:
Stacy, that all makes sense to me and what David said totally makes sense to me. I think maybe our mission today is to get a sense of what can be done about that. So you’re the one that’s not only physically closest to Elizabeth Warren in Massachusetts, but also your work really, I think, has helped to inspire some of the people that are working with her. So what is your sense of what can be done?
Stacy Mitchell:
Well I think the policy that she’s laid out, her big tech proposal really has two main components. One is that it says if you’re a large platform over a certain size, then you’re treated as a kind of utility in the sense that you have certain obligations to the entities that are on your platform and you also can’t compete with them. So what that means is that, in the case of Amazon, you can operate this platform and have third-party sellers that are selling on that platform, but you can’t also then offer your own retail goods, your own manufactured goods on that platform. Essentially, you can do one or the other and not both. A similar kind of separation, a structural separation is called for in her plan with regard to other big tech companies like Facebook and Google.
The other component of it is that she’s calling for a rollback of recent mergers, so essentially saying that there has been this period where these companies have been allowed to, say, Facebook buy Instagram and that those acquisitions were a mistake and we actually need to reverse those. I think what’s interesting as part of this proposal and I think is a way that Elizabeth Warren stands out not only in terms of having put a lot of meat on the bones of ideas. I mean you’ve got other people running out there who are saying “Oh, yeah. Big tech is a problem or I’m concerned about concentration,” but mostly with some exceptions, they’re not going any further than that into specifics. She’s put real specifics out there.
She’s also, I think interestingly, talked a lot about the role of agencies, like federal agencies in carrying this out. So I think has a sense of the fac that the presidency is not just about proposing legislation, but there’s a lot of power within the administration and how do you use that in order to tackle the question of big tech.
Chris Mitchell:
Yeah, I’d like to actually throw that out to John and David as well because I think there is a sense that a lot of the positions we’ve seen from many of the candidates relies on Congress to be functional and perhaps even breaking up Amazon for instance or breaking up unwinding mergers or requiring Amazon and other providers of large platforms not to compete with other sellers may require acts of Congress whereas Elizabeth Warren might be the only candidate who’s actually talking about something that’s somewhat realistic in an era in which very little is likely to get through Congress in terms of actually using executive authority specifically.
John Farrell:
My only reflection on that is just that I think the functionality of Congress is simply a partisanship issue, right? So if we’re to see unified control of Congress by the Democratic Party which has been the one that’s more focused on antitrust, then I think you might see a route for a legislative progress around antitrust. Even though it’s not been totally limited to Democrats, even President Trump’s administration has noted some opposition to mergers, but I think certainly in the legislative field, it’s been Democrats so far that have really had that strong focus on antitrust. So I think that in the same way that we’re going to have a presidential election in 2020 that could be determinative here, we also are going to have Congress up for reelection and there could be some changes there that we might not be able to see now, but that if the chips fall the right way, there might be a majority in both houses of Congress to move antitrust legislation.
Stacy Mitchell:
I mean I agree that, when you look at who’s taking the lead on antitrust in Congress, you definitely see more Democrats in the mix than you do Republicans, but you do see a few. I mean there’s Josh Hawley out of Missouri who’s been leading the way on sort of calling out some of Google’s issues and talking about antitrust. Ted Cruz of all people kind of endorsed Elizabeth Warren’s tech proposals in some ways. I think you’re right. It is mostly Democrats, but I think what worries me and particularly watching a campaign unfold where there’s much more focus on who’s electable instead of being on policy is that we end up with a candidate who sort of runs loosely on these ideas and issues but doesn’t actually have any plan to back it up in a real way. It just becomes harder and harder for people to discern any difference between the parties or actually make people’s legislative and policy interests manifest in some ways, that we just sort of continue the frustration with government.
John Farrell:
It’s very much a snapshot here, but I just went to some recent polling data and looked at the five candidates who’ve most prominently been identified with either antitrust or anti-monopoly rhetoric or some policy proposals. So you have Warren at the top in terms of her high level of specificity. You’ve also seen Cory Booker, Beto O’Rourke, Amy Klobuchar, and Bernie Sanders to some degree or another saying something in the media about this being an issue. Collectively, they’re getting about 30% in the poll that I happened to look at from Quinnipiac in the last week, and Joe Biden of course is getting more than that by himself. Interestingly enough, he has a history of actually being in the wrong place on antitrust, actually moving against proposal by Senator Ted Kennedy back in the ’70s that would increase merger scrutiny.
So it is telling that this has become a big issue, that there are several candidates who are picking up that this is one, but when you contrast that with this issue of electability that a lot of people are focused on, you have the candidate that most people are thinking of when they think of the word electability squarely in opposition to good policy around mergers and concentration.
Chris Mitchell:
John, I wanted to just note that, in my world, everyone noticed that Joe Biden’s first fundraiser after coming out for president was at the top lobbyist for Comcast, David Cohen’s house. He hates being called the top lobbyist because he really tries to hide the fact that he’s a lobbyist, but that’s where Biden immediately went to raise money. So David.
David Morris:
Yes. Just a couple things. I mean one is that, in terms of Elizabeth Warren, she has the specificity as Stacy said. She also has an experience. I mean she was the prime mover to creating a federal agency, a new federal agency that took after the essential core in terms of those who were working with finance bankers, insurance, student loans and the like. It was extremely effective. So she has both that experience under belt, but also understood how it was effective. I’m sure that she would have made changes now after she’s seen it both from the inside and from the outside. So that’s extremely important especially if you don’t think that Congress is going to do anything related to this. You need to understand what the power of agencies is.
Chris Mitchell:
The part that I find fascinating about Warren is that I actually think that she communicates this better than any of the other candidates in terms of what David was just saying. She has a real practical experience. She actually knows how it works and she can describe it to people, and yet, of all the candidates, she is perceived as being very bad at communicating. So I’m trying to figure out if there’s a, if I’m just in an extreme minority in thinking she’s communicating or if we’re seeing efforts by very powerful corporate just to try to de-legitimize her, which actually seem to be where Matthew Stoller and others, they seem to think that’s what’s happening.
Stacy Mitchell:
Yeah, I think that’s right. I mean, there are a lot of people spending a lot of money because they recognize that her agenda proposes a serious threat to them and of course there’s a way in which some of those attacks on her sort of rest on misogyny, that that’s still an active current in the political dynamic. But I think we’re back to sort of the central point here is that the fact that the Democratic Party and so many rank and file Democrats are so into electability and sort of interested in the fresh face and who looks good out there, who’s trying to sort of second guess what other people are going to like. It means that a lot of people aren’t actually think about, what are the policies choices that we have? Where do we actually want to take this country because it’s not just about this election, it’s, how do you actually begin to build enough political support for long term change?
And it doesn’t seem to me that there’s as much focus on that, really, across the whole discussion about this race. I mean, Bernie Sanders is another person who’s been talking about concentration, particular in the agricultural section lately. He just gave a huge speech in Iowa all around breaking up farm monopolies and really talking about how to restore rural America and I think coming from Vermont has a very strong sense of what that means, like what’s going on with dairy farmers right now and kind of being on the losing end of things. So, there is this part of the race that is policy focused and people who are out there, I think, articulating a certain vision that was really absent for the Democratic Party for a long time and so that’s kind of good news.
But I do worry about someone like Biden who comes in and says, “Well, it’s not really about any of these things. I’m just electable and everything was fine before and Trump’s an anomaly,” and all of that and I just think that that’s just not true.
Chris Mitchell:
So, let’s do a quick roundup. Given that I think Elizabeth Warren has given substantial thought to anti-consolidating, we could spend the rest of the show and more just talking about her various policies but I’m curious, Stacy, if you could run through high points of some of the other non big tech type anti-trusts or anti-monopoly type work?
Stacy Mitchell:
Yeah, so she’s got a proposal for the farm sector where she’s talking about appointing folks to the FTC who will reverse some of the recent mergers like Bayer-Monsanto that have affected farms and rural communities negatively. She’s talking about breaking up existing concentrated monopolies in the AG sector and she’s talking about meat processors and the like. She’s also got several proposals in there that are not within kind of anti-trust space but are also using different levers to address what’s going on with power in the food system. So, one is a right to repair, which would allow farmers to repair their tractors.
Like, right now, you have to go through John Deere, it’s a whole racket and she’s also got some reforms to something called The Check off Program, which is something that a lot of growers and people who raise meat have to pay into these funds that are ostensibly for marketing but are really used by large processors for their own ends. And so, she’s calling for reform to that. So I think there again, you see some mix of anti-trust things but also kind of recognizing that there are other tools at play that can be useful. And that’s also evident in her corporate tax reform proposal and what struck me about that is kind of interesting is that she talks explicitly about part of the purpose of it is to level the playing field. So, she is pointing to data that shows that the very largest companies pay lower affective federal tax rates than small businesses do.
And a lot of it is because of loopholes. We have examples like Amazon last year earned $10 billion in profits and paid zero federal taxes. I mean, you can go out and walk down your main street and I challenge you to find a single retailer who didn’t pay something substantially higher than that. So, her tax reform proposal is kind of build around that idea of how do we have actually a level playing field?
Chris Mitchell:
Yeah and actually the right to repair, Bernie speaking out on that too very recently. So, that’s something that’s catching on.
Stacy Mitchell:
We are seeing issues of concentration show up in other candidates and a less detailed, less maybe aggressive kind of way. I mean, Amy Klobuchar, a Senator from Minnesota, who’s been on the anti-trust committee in the Senate and is very knowledgeable in this area has proposed putting some additional tightening around mergers. So, it has a little bit to policy out there. Cory Booker has also proposed a moratorium on big agriculture mergers. So, Warren isn’t the only one. It’s just that her policies go further and are more detailed and track more closely to the nature of the problem.
Chris Mitchell:
So, closing comments on anti-consolidation before, I guess there’s some other subjects in the 2020 election that may be getting people out to the polls, but I want to give John and David to weigh in on anti-monopoly type stuff before we move on to those.
David Morris:
Well, I think that the anti-monopoly is also an anti concentrated power and I think, for example, the wealth tax which Warren proposed, is something that Congress would have to do. So, one can argue that it isn’t going to get done. On the other hand, it’s a brilliant illumination of an issue in a way that people probably thought of it at all. I mean, essentially it’s a two percent annual tax on the wealth of those with over $50 million in assets and a three on those with over a billion dollars in assets and it would raise, even at the lower level, it would raise almost $3 trillion in 10 years and what could be done with that. And so, then people essentially have to respond to that. I mean, in other words, what you’re saying is you’re combating the other side’s argument that even if you took all the money away from the rich, you really wouldn’t be able to solve any of the country’s problems and you’re just being envious and jealousy.
But in fact, if you’ve dealt with wealth rather than income, that argument can be flipped.
Chris Mitchell:
I’m sensing that David may not be a supporter of the Starbucks CEO, I forget his name, the founder who labeled these ideas not even serious despite the fact that I think they polled above majority support among Republicans, to say nothing of the country as a whole. And so I think it’s worth, as you’re mentioning these issues, that its fascinating how an idea that is very well supported among the public has been written out by large segments of the elected class.
David Morris:
That’s exactly right and I think as I said in terms of history, in the late 1880s, 1890s, you had an entire party and one part of its platform, it was a very detailed platform actually, but one part of its platform was an income tax on the rich and at that point it wasn’t really to raise a lot of money because we were raising money from customs, tariffs and the like. But for moral issues, that it was something wrong about one person having more wealth than several thousand people or several million people and they got it done and we did not have it before, except for a short period of time during the Civil War. So, that was a new concept that was political movement and we got it done. Supreme Court said no, it’s unconstitutional and then we had to have a constitutional amendment.
And that was a political movement in and of itself so the idea that we don’t have a wealth tax shouldn’t stop us from thinking about, its possibilities and its potential.
John Farrell:
I just wanted to note too that there are lots of other interesting sectors in which this can apply and obviously my bias being working on energy is to see a way in which this might apply to utility monopolies but I know we want to cover a few other sectors as well but just wanted to flag that we’ve had a conversation about that issue before and I’ve written about the impact of merger and concentration in the electricity sector in particular as a point of other discussion that we’ve had on other podcasts.
David Morris:
In terms of electricity, it’s a good precedent I think for what Stacy was talking about and what Warren is talking about in terms of the platform of monopolies because what the federal government did in 1978 was essentially to allow for independent power producers and then over the next decade, decade and a half, what ended up being was a legislative movement, if you will, and a regulatory movement that essentially uncoupled the transmission, the ownership of the transmission lines of electricity, form the generation of electricity and what that then did was to open up the space for independent power producers for renewable energy and the like and the original legislation or at least that in the 1980s said that the independent power producers could not be owned by the utility companies, at least the majority owned.
So, it was what opened the door to really a technological development that today is challenging the very centralized model, as John Farell has pointed out innumerable times.
Chris Mitchell:
And I just wanted to note that I’m fortunate to be working in broad bend sector where we don’t have to worry about concentrated power of very large companies that have total control over the future of our lives. It’s really quite nice. I want to take a quick break to remind people that we’re bringing you this ad free and I’m going to encourage you to rate our show. I’m not going to go on and on about it because some of you are going to do that but some of you aren’t and maybe I’ve just guilted some of you into actually going and doing it. We’d love to get some more ratings for this content. Please let other people know about the show and support us at archive.ilsr.org/donate.
We’re going to jump right back into it and David, you had mentioned something about one of the candidates who is not getting a lot of attention that you thought was important and this is something that actually Hilary Clinton decided not to run after giving it very seriously consideration in 2016, the idea of guaranteed income and I’m curious how you can tie that into local self reliance.
David Morris:
Well, yes, I mean, the concept or the argument for universal basic income or guaranteed income has been around for a while but it’s now being implemented in a number of places as pilot projects really, although Finland did a much larger project involved in that. And essentially, the argument is that technological development is such now and I think people recognize that, that people are being replaced by either apps or robots or driverless cars or whatever it happens to be, and you have this enormous mal-concentration in wealth in part because of that and so we need to figure ways in which we can generate an income or get money to people that’s not related to their jobs.
At the same time, allowing that people will have jobs and that labor income is extremely important. So, universal basic income concept is now being adopted and it’s being adopted by a lot of different sides and it’s a complex subject, because one side essential wants to say, “Let’s take all the welfare programs, consolidate them and then give them equally to people around the country.” But the more I think, a sophisticated and well constructed argument is that much of the wealth that’s generated in a society is generated because of what the public sector has done, what government has done, et cetera. And this idea goes back to the very beginning of the United States and the Republic and to Thomas Paine and Thomas Paine wrote a book, extremely popular book called Agrarian Justice and he put forth the concept of a citizen’s dividend.
And the argument was that the value of land, the increase in the value of land, comes from two different things. One is the labor that people put into the land and that should be yours, that’s your income, that’s your genius, that’s your sweat. But the other is because of what the public sector does and at that time it was rural. So, roads for example, regulations related to delivery systems and today we’re talking about parks, we’re talking about piping systems, broad band extension. And so, the argument is then a part of that and this is what Thomas Paine said,
10% of that should actually be taken from, because that’s essentially rent and should, it’s unjust acquisition of wealth that should go to the public and then to be distributed in dividends to every man, woman, and child in the United States. And the amount of money that he was going to distribute is almost exactly the same amount of money in current dollars as the amount of money that Andrew Wang, who is a democratic presidential candidate, wants to distribute. Now there’s a problem with with Wang in that what he wants to do is raise the money from a 10% value added tax, and we can talk about a 10% sales tax at some other time, but many other people are saying what we should do is have a financial transactions tax. We should tax the increased value that comes from copyrights, from patents. That is the things that we did as a society as a whole that increased the value to an individual. A portion of that should go to the community as a whole.
Stacy Mitchell:
I have very complicated feelings about universal basic income. I like the idea of there being dividends, payments for things that are in the Commonwealth that we all contribute to and maybe should get a share of. I like the idea, also, of just getting rid of welfare programs. Of just getting rid of all the bureaucracy and the shaming and everything else that goes on in the whole welfare system by just cutting people a check and being done with it.
But I don’t believe that we’re going to have a shortage of work if we actually have the kind of economy that we should have. I think we’ve always had technological change and there have been these periods in time where technologies have come along and wiped out entire sectors. I think what is different right now is that you have a handful of companies that really have a stranglehold. Because what happened in the past is that there was a sort of flush of new innovation, new ideas that led to new industries and new kinds of jobs, and we’ve really seen a collapse in that pipeline.
And what worries me about the whole UBI discussion is it becomes sort of a way of letting, big tech in particular, but large companies kind of off the hook and not recognizing that problem. And I also think as a matter of policy, deciding that a large share of the population is essentially useless is a really … I think that’s an incredibly dysfunctional idea. And I also don’t think it’s true. I think there’s an incredible amount of work that needs to be done. I mean we had Sarita Gupta on this podcast back I think last year sometime, I can’t remember. Talking about the care economy and sort of the whole tremendous amount of need there is for people as they get older and for kids, childcare and the like, which is going unaddressed. So I think there’s a lot of work and I think the idea of saying there is no work and that people are useless is a problematic idea.
David Morris:
Well I need to, I need to step in because I didn’t say that. And I think that it’s unfortunate to sort of come back like that. Nobody is talking about the elimination of work period. And no one is talking about a universal basic income that actually would cover everything that you need. So they’re talking about it as a supplement, but it’s an extremely important supplement to your labor income. And if you look throughout history, just in terms of the amount of work, all the value generated from work, we had an agricultural sector that employed the majority of the population and now it employs, what? Five percent? If you included distribution, maybe 15%? And then we had a manufacturing sector that employed a significant part of the population. And now we have a retail sector. And yes, and a personal care sector that that is essentially the driving force for much of the economies here and in the rest of the world.
And now we can see in the retail sector and in the personal care sector, the beginning the substitution in that sector. So I do think that one can talk about the dynamics of history in a different way, but the important point is that no one that I’ve read, actually is talking about a universal basic income as your only income. But with the studies that have been done, the pilot studies that have been done in Canada and in Finland and the like, indicates that even if you get a $10,000 a year, $8,000 a year, that amount of money changes the way you work, the way you think of yourself, and the options. Not only if you happen to be very low income, but also if you happen to be above that age and income levels. And that’s what they think is mostly important on this.
Chris Mitchell:
In my reading of it, I’ve seen both sentiments. There is a sense, I think, and there’s this whole argument over dignity of work, which is something that means different things to different people, I think. It does come down to the value of someone who is working. Now, I actually think, I’d just like to go in two different directions. One, I’m going to throw to Farrell in a second here. But the other one is, is that I think there’s a real value to scaling these things up. And that’s to say that I don’t think that I would support the United States going down this path, but I love that there’s experiments with it. And as we iterate and as we go from perhaps cities to entire countries maybe moving in that direction, we’ll learn a lot. And I look forward to the next 10 years of experimentation to learn from this. But I don’t think it should be something that the US federal government is significantly doing at this point. I would support the state’s moving forward with it. Stacy’s wagging your finger at me.
Stacy Mitchell:
Well I just wanted to get-
Chris Mitchell:
The senior Mitchell has precedence.
Stacy Mitchell:
That’s right. Well, I just wanted to get back in here. I mean, I think I don’t disagree with a lot of what you said, David. And I certainly as I said when I started out, the of dividends payments and public participation in that way and the end of the welfare system and that sort of thing. But I would say that there are a lot of people in Silicon Valley and elsewhere who are talking about this notion that there is going to be no work in the future, and they are sort of sidestepping questions about what their role is and their power is in that future by saying, “Well, let’s have a universal basic income.” We’ll just sort of pay off people for the fact that there is no work to be done. And so that’s why I think actually being specific about what it is that we’re talking about is really critical and actually digging into what is the nature of this policy and what does it really mean? Because I do think those messages are out there. And there’s a path to steer through that’s more useful.
Chris Mitchell:
So as we’re wrapping up, I wanted to throw to John one last time. John, you and I actually talked a little bit about this in the morning and I thought I’d prompt you regarding this past podcast discussion that we’d had. I don’t remember if it was the one that Stacey just referenced, but where we talked about how the … we romanticize the history of the manufacturing jobs as though it was something special.
John Farrell:
Yeah, that was actually not one of the ones on the list I was thinking of, but I’m glad you brought it up. It was a fairly recent episode of Building Local Power where Stacy, who was speaking with a guest kind of about that. I believe the title was The Future of Work and it was kind of looking at the contingent labor economy. But she had this beautiful moment at the end, and I had shared a tweet, because I had just listened to the episode this week, about the way in which we romanticize the manufacturing sector as being a source of high-paying jobs and ignore the fact that that was a deliberate policy choice, thanks to union organizing. And so I think that’s a really interesting way in order to reflect on this. Stacy, I don’t know if you have something more you want to add from that conversation that you had.
Stacy Mitchell:
Yeah, that was Sarita Gupta who was the guest for that show and who made that comment. And I think right. There was nothing … Walmart jobs are just as complex as a lot of the manufacturing jobs of that era. I mean we’ve sort of internalized this idea of high skill and low skill, but I think that’s a ruse for really just overlooking what’s really going on, which is that we had policies that supported labor organizing and then we didn’t.
Chris Mitchell:
So John, I wanted to wrap up with you. Do you have any other suggestions of where people can … We got caught up in two topics that I thought we did a in a very interesting job covering in ways that we don’t see other people talking about them in this way. People who want us to go more into depth on these issues, not on the campaigns, but on some of the issues that will be discussed should let us know, [email protected], that’s our way to reach out to us, [email protected]. But John, you had some lists of some resources that you were going to recommend.
John Farrell:
Yeah, I just wanted to highlight that we, obviously, I’ve talked about concentration and a lot of different economic sectors in a lot more specificity and detail with the entire podcast episodes. Just a few that you can catch if you’re interested in this idea on work and wages. There was the podcast that we were just talking about with Sarita Gupta last summer. I don’t have the episode number unfortunately, but there was also episode 42 with Marshall Steinbaum looking at the impact of monopoly at reducing the way in which workers have … can get competition between employers and looking at this issue of how difficult it’s been during this economic recovery to see increases in wages. It’s actually been in the news again recently.
A few other episodes then addressed a concentration in the agricultural sector, which has been mentioned by a few of the candidates, including Warren. John Ikerd, episode 32, Joe Maxwell and episode 33, and then in episode 65 Leah Douglas. All three of those podcasts for Building Local Power we talk about the way in which concentration the agricultural sector is making it difficult to make a living as a family farmer.
Chris Mitchell:
And for the masterclass. Just listen to all of them again, because our wisdom is so extreme that you can only absorb all of it through repeated listenings. Stacy was distracted or else I would’ve got her with that one.
Stacy Mitchell:
You did get an eye roll.
Chris Mitchell:
Thank you, Stacy. Thank you, John. Thank you, David. It was a fun conversation.
John Farrell:
Thanks, Chris.
Stacy Mitchell:
Thanks Chris. Thanks everyone.
John Farrell:
Thank you so much for tuning in to building local power. This is John Farrell. ILSR co-director. Checkout the show page for a transcript. While here at our website, show us some love with a contribution to help cover the costs of producing this podcast. You can also help us out by rating this podcast and sharing it with your friends on iTunes or wherever you find your podcasts, or just drop us a line at [email protected]. This show is produced by Lisa Gonzalez and Hibba Meraay. Our theme music is Funk Interlude by Dysfunction Al. Please join us next time in Building Local Power.
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Audio Credit: Funk Interlude by Dysfunction_AL Ft: Fourstones – Scomber (Bonus Track). Copyright 2016 Licensed under a Creative Commons Attribution Noncommercial (3.0) license.
Photo Credit: Flickr via Penn State
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