For What it's Worth: Thoughts on "Brexit"

I lived in Bologna, Italy for almost three years, from 2003 to 2006. 

It was a time of enormous promise and energy for this region of Italy--the part of the country that academics often call the "third" Italy; those prosperous, economically dynamic and egalitarian central-northern regions -- anchored by "Red" Bologna -- whose thousands of micro- and small-firms, and mid- to large-sized cooperatives, competed globally in the manufacture of high-end goods, from Ducati motorcycles, to bio-medical devices, supported by progressive social and economic development policies, undergirded by a dynamic of deep citizen participation in economic decision making and democratic life.

For a region like this, the introduction of the Euro, free movement of people and capital throughout the EU and the release of millions of dollars of "structural funds" (large grants to support economic integration through the development of the EU's poorer regions) represented enormous opportunity to further position itself in the global economy, and support balanced social and economic growth. 

But even then, the EU always seemed to me like two trains on a collision course. One of those trains -- the EU's highest ideals of democracy, growth and justice -- was rooted in the continent's enlightenment tradition. The other train was fiscal austerity, which was baked into the EU's DNA just as much as it's enlightenment values, and enforced by the less democratic institutions of the Council of Ministers and the European Central Bank. 

While the economies of the EU were rapidly growing, it was easy to overlook the specter of austerity -- the straight-jacket of deficit and debt limits placed on member countries as a condition for participation in the Euro. But these limits, set by the Maastricht treaty, acted like a noose around the euro-zone's economies once the Great Recession hit. Rather than pump new money into the economy to kick-start the Eurozone, the EU required that national governments further tighten their belts, only exacerbating the effects of the global recession. 

While the United States was quickly pumping money into the economy to prop up banks, bailout the auto industry and enact a major stimulus, EU governments made significant cuts at times of negative growth rates and staggering unemployment. 

Add to this mix the worst refugee and migrant crisis since World War Two, and the result is what we see: a system completely unable to produce balanced, equitable growth to support enlightenment ideals in the 21st century, unable to respond to the refugee and migrant crisis in a way consistent with the EU's higher ideals, and unable to act as a meaningful pole in a multi-polar world. 

The only credible (though not legitimate) challenge seems to be coming from the right, with no left formation capable of capturing the consensus and imagination of the majority to point a way forward.

The centrist leadership keeps re-hashing Clinton/Blair third way policies in the hopes that something sticks, without addressing what is at the core of peoples' legitimate anxieties, which are more and more expressed as anti-immigrant, anti-Muslim.

Finally, from my perspective, the Brits were never all-in, nor were they particularly good EU partners.

I don't see how this project can move forward without a progressive challenge to austerity, rather than austerity wrapped in leftish language from the mouths of people who used to call themselves communists and socialists.

In the absence of this alternative from the left, the only parties that will have any legitimacy in the eyes of frustrated, unemployed, suffering Europeans, who see their job prospects diminished and their welfare system puled out from under them, will be the hard right parties, who will continue to distract by directing peoples' anger at immigrants and refugees.

RE: “Why I Was Wrong About Welfare Reform,” June 18, 2016

To the Editor:

Reading Mr. Kristof’s latest op-ed, I found myself disappointed and frustrated. As a 17 year-old high

school student I opposed the Personal Responsibility and Work Opportunity Act (PRWORA or “welfare reform”) when it was debated in Congress, and was sickened when President Clinton declared “ending welfare as we know it.” How, then, could someone as smart and compassionate as Mr. Kristof have supported this law?

Mr. Kristof provides the answer: without a requirement to work, the poor would simply take advantage of the free check. To make his point he quotes Stephanie Johnson, a 35-year-old woman, “raising four children through odd jobs,” who says: “If it was readily available, I’d abuse it; I’d say they’re giving me free money.”

Mr. Kristof’s cruel rhetoric betrays a perverse logic: the victims of poverty and oppression are to blame for their condition: “If only they would pull up their pants…” “If only they had a ‘middle-class’ work ethic…” “If only she hadn’t worn that skirt…”

This faulty logic is refuted by basic arithmetic. Employers in the US simply do not provide enough good-paying jobs for every able-bodied adult. While economists call our current 4.9% unemployment rate “full employment,” that too is a lie, for it has only been achieved with the lowest labor force participation rate since 1977 and the highest incarceration rates in the world. (The jailed to not count as unemployed.) 

And of the jobs created since the Great Recession, according to the National Employment LawProject, 44% pay between $9.38 and $13.33 an hour: jobs that typically come with no benefits, little stability or inherent meaning, nor a connection to a career path that might lead to meaningful employment. Only 30% of the jobs created since the end of the recession can be considered “higher wage.”

The truth is, if more of the poor and the discouraged started to look for jobs, unemployment would rise and wages would fall. 

Rather than focus on the poor, policymakers should set their sights on employers. The goal should not be to incentivize working, but to incentivize the creation of more high-paying, meaningful work.

Something like a universal, guaranteed minimum income would do the trick. Provide each adult in the United States (rich or poor) with a level of income sufficient to meet their basic needs, and no one would be coerced into accepting low-wage, demeaning and dead-end work. Instead, employers would be forced to compete for peoples’ labor by paying high wages, creating better career-paths and making work more intrinsically motivating.

In the meantime, people like Stephanie Johnson should not feel ashamed. Given the choice between struggling to get by on odd jobs or free money, I would take the free money.

Sincerely,

Matt Hancock

Princeton, NJ

Tackling inequality: new solutions to persistent problems

I was reading Adam Davidson’s “On Money” column in the New York Times
Magazine this morning. While the article offers a fascinating peek into the seemingly contradictory world of the Army’s War College, as a solution for what ails the middle class the article falls short.

"The period of increasing inequality in the United States (1973-present) has now eclipsed the post-war boom that we had come to think of as “normal.”"

While the disappearance of the middle manager is no doubt a part of the story, the bigger news is the effect of the concentration of capital ownership and technology on inequality and employment. Thomas Piketty and others have meticulously documented the natural tendency of returns to capital to exceed income growth, as well as the increasing concentration of capital ownership of the past few decades. And academics like Andrew McAfee and Erik Brynjolfsson have uncovered evidence that technology is now simultaneously increasing productivity, while lowering overall employment.

These trends should force us to call into question two long-held notions: first that there should be a rigid distinction between owners and workers, and second that the 40 hour workweek is akin to a law of nature.

What if equity were more broadly shared with employees so more of us could share in the benefits — and responsibilities — of ownership? And what if we used future productivity gains, not just to pay more, but to give people more free time: for example by providing more vacation time, paid leave or even working less hours overall?

Answers to these questions may be more obvious than we think.

In the United States we have a robust experience with “employee-ownership:” forms of broad-based equity sharing in firms. Today, nearly 13 million workers own equity in their companies through Employee Stock Ownership Plans.Research shows that these firms are not only more successful, but they also hire more, pay better, tend to layoff workers less and provide stronger retirement benefits. 

"There is an urgent need for new thinking: thinking outside of the 40-hour-workweek box, and beyond the outdated paradigm of “owners” versus “workers.”"

What about working less? In 1890 the average worker in manufacturing worked 100 hours a week. It wasn’t until 1940 that 40 hours became standard. And while Americans worked less, their real wages went up. For much of the twentieth century productivity gains supported both increased wages and more free time — and lower unemployment for a growing population.

The period of increasing inequality in the United States (1973-present) has now eclipsed the post-war boom that we had come to think of as “normal.” And the story of inequality isn’t just a story of wages or wealth, but also of stressed out and overworked middle- and professional-class families. Too often we’re asked to choose between career and family, economic security and personal fulfillment. There is an urgent need for new thinking: thinking outside of the 40-hour-workweek box, and beyond the outdated paradigm of “owners” versus “workers.”

May the Best Days Always be Ahead

This is the welcome address I delivered at Chicago Tech Academy's second commencement, on June

21st 2014.

One of your schoolmates asked me, earlier this year, if I had ever dreamed that we would havecreated a school that would have inspired so many students to become passionate about technology.

I told her that I could never have imagined a school like this. When we started ChiTech, we thought of education as something that us adults did to you kids. What can we teach you? What opportunities can we provide for you?

What you’ve taught us is that education is a partnership. ChiTech is the school that we are building together. I could never have imagined a school like this, because I never could have imagined students as talented, smart and driven as you.

A Quiet Revolution in Public Schools

We know what drives sustained, high performance in the private sector, especially in knowledge enterprises. Author Daniel Pink sums it up pretty succinctly: autonomy, mastery and purpose.

It's curious, then, why such little attention has been directed toward applying what we know works to the ultimate purpose-driven, knowledge enterprise: the public school.

While many reformers still ask, "how do we better hold teachers and schools accountable for their performance?" very few ask the one question that really matters: "how do we make our school, or school district, a great place for great teachers to work, collaborate and grow? How do we create an organization-wide culture that will drive sustained, long-term performance by tapping into the skills, knowledge and passions of its people?"

Leadership and the Virtues of Print

For as long as I can remember, the New York Times has been a part of my life.

Even when our family's subscription may have lapsed, few days went by during my childhood when my father didn't have a copy within arms' reach. My parents, now divorced, still receive the New York Times, in print, delivered to their doorsteps.

"When I advocate that young people should be less connected than they are now... I'm... told that would mean putting them at a disadvantage... I don't buy it."

Women in Technology Panel

It was an honor to share the stage with Howard Tullman, Roger Liew and Bob Miano at ARA's "Women in Technology Panel."

You can see a video re-cap of the event online.

More to come I'm sure!