Common concerns

Comparative analysis can help solve our local economic problems

By Liat Spiro

I glanced at the procession of tents scrawled with messages decrying the struggles of the middle class, and I thought of home. Then I thought of my time studying abroad in China. Educated and employed but unable to purchase housing, thousands of protesting Israeli youths expressed frustrations that would likely resonate with their peers in Beijing or Shanghai. A type of public land ownership that mixes red-tape bureaucracy, pro-industrial park zoning, and corruption has slowed the construction of affordable housing in areas surrounding both Israeli and Chinese cities. Meanwhile, Israeli medical students and young doctors decry the lack of public funding for healthcare, the desperate shortage of hospital beds and, concomitantly, the dwindling supply of doctors. In some respects, the state looms too large; in others, its role has become insufficient.

Israel was a socialist country that, like many around the world, embarked on a road to market liberalization in the late 1970s and is now confronting the ornery problem of income polarization.

This brings me to a largely unmet challenge in academia: It has become popular to investigate big problems where the causes and culprits are obviously mobile and clearly varied—and rightly so. Climate change, viral epidemics, controversies of migration and assimilation, and international terrorism surely deserve the attention they get.

But what about shared problems of political economy?  The main question really is: What institutional arrangements should underpin widespread socioeconomic mobility and dignified creative labor? So far, no one nation has meaningfully solved this quandary. The United States punted on it and actively spread its semi-effective punting method to its allies in the wake of WWII.

To sustain growth and prevent disasters, we pursued Keynesian policies and instituted national financial regulations and international systems (Bretton-Woods, the International Monetary Fund (IMF), hegemony, etc.). In the new consensus of behemoths and aggregation—mass production, mass consumption, mass unions, massive corporations—the older concerns about Free Labor were forgotten. If concentrated labor and capital could hammer out negotiations, if injections of public funds could stimulate the economy, if everyone could expect a middle-class lifestyle, who needed local institutions to encourage socioeconomic mobility, creative dignified labor for the majority, or entrepreneurship and small business? Why envision types of mechanization to offer workers new tools rather than degradation or replacement?

Lured by Ford’s sweet formulation—that paying workers who feared both physical exertion and mental activity a decent wage to do the narrowest of tasks would initiate a salutary consumption cycle—we punted by momentarily securing a nice lifestyle, rather than a skilled one.

This punting has ultimately endangered the middle and working classes in many places. This summer, we witnessed violent looting in the London suburbs. Feeling the first tremors of sustained economic polarization and well aware of their potential consequences, Israel broke out in peaceful but enduring protests over the rising cost of living and the disproportionate influence wielded by the elite ‘tycoons.’ And now there’s Occupy Wall Street, spreading to cities across the U.S.

This brings us to the deeper question: What institutions—public, civil society, and private—would encourage Free Labor for the twenty-first century?

For me, answering this question means investigating the Progressive Era fight for Free Labor that, not coincidentally, occurred within the context of the First Globalization. Although Fordism, in retrospect, may seem the unavoidable result of a race toward efficiency, labor politics proved quite contentious in late nineteenth- and early twentieth-century America. In Europe, the dynamics of institutional change were likely even more complicated, with a variety of social compacts, from the old guild system to the new forms of municipal socialism and Mittelstand paternalism, iteratively re-negotiated on local, provincial, and national levels, with conservative leaders cultivating interesting coalitions to stem the tide of socialism.

Out of the tumultuous reformulations of economic community and dignified work, and with the institutional cross-pollination resulting from progressive reformers, local social welfare groups took shape. In public schooling, settlement houses, universities, and commercial clubs, a wide variety of interest groups advocated vocational education that would develop the individual’s head and hands through activities such as architectural and engineering drafting and design. The administration of such skill-learning regimens varied widely by country, providing good terrain for comparative research in economic history, as well as potential sources of inspiration for today. Could computer programming today be analogous to what drafting was then? If so, what academic governing structures could ensure that students gain the skills to succeed in existing industries while still offering enough outlets for independent thought and creativity?

The establishment of simultaneously mental and manual education systems, dense networking between for-profit and non-profit organizations, and accessible research centers for projects no one individual enterprise could afford could spawn myriad applications of new technologies. We see some of these processes in those current islands of hope: Silicon Valley and downtown Boston. Looking backward and outside our borders reveals other frameworks, perhaps more suitable to other regions of the U.S.

These transnational, shared histories and the resulting family of variations offer a wonderful palette for comparative research in political economy that moves beyond mere factor endowments to include social institutions and practices—how people conceive of work and entrepreneurship and accomplish risky, financially burdensome, or technologically complicated tasks.

With the state, with their heads and hands, and with each other.

Liat Spiro is a fourth-year in the College majoring in history.