Economy

Why The World Of Work Has Changed Forever

A professor at the London School of Economics argues that the free market and everything we thought we knew about economics are now irrelevant.

Hopeless
Hopeless
Mickey Peled

TEL AVIV — Professor Amos Witztum examined, checked, cross-checked and analysed his data, then made a clear-cut conclusion: the gods of economics are dead. The naive belief around which humanity has collectively organized life — the free market, the education system and even the core principles of social justice, just turned out to be false.

“We’ve been taught that if we study hard and work hard, everything will be all right,” says Witztum, an economist of the London School of Economics. “But this assertion has long been irrelevant.”

Maybe it has always been, says the professor who predicts the end of a world based on standard and continuous work allowing people to make a decent living.

“We are in a market where most people would get reduced access to products through work — be it because there would be no work, or because salaries would be low,” he says.

In November 2013, even the Organization for Economic Cooperation and Development (OECD) acknowledged that there was a problem. The organization, which traditionally works to promote a free market, observed two concurrent trends in each of its member countries.

On one hand, it saw a rise in per capita GDP, in part because of productivity increases. On the other, the organization spotted a persistent stagnation in real wages. At best, increased wages have been high enough to keep pace with inflation, but they surely haven’t been consistent with the rising productivity per capita.

In other words, we’ve lost for good the correlation between contribution and compensation — between employee output and the salary they receive, Witztum says. The excess money hasn’t disappeared, but it now goes to capitalists through dividends to shareholders, for example.

Furthermore, even when people do find jobs, they often don’t match their abilities, the professor says. Witztum mentions studies showing that the percentage of overqualified employees is growing. In the UK, for instance, the number has jumped from 21% in 1992 to 33% in 2006.

Fear is everywhere

This reality is already a daily concern for many employees who fear losing their jobs to a younger, quicker and cheaper workforce — or even to computer software. Eighty percent of the decrease in employee income is explained by technology, which allows greater output and reduced pay to workers, an OECD study found.

Occupy Wall Street protests in October 2011 — Photo: David Shankbone

But we should think of this reality as an opportunity rather than taking to the streets, Witztum believes. “We live in a world where technology enables the production of an increasing share of things we need,” he says. “It would be wiser to embrace the value of technology, rather than pushing people to come up with more ways to get a salary. There is hopelessness in the need for people to invent new ways to make a living.”

Witztum believes this is linked to the kind of education we receive. Yet an alternative is possible. “Today, higher education teaches students how to be competitive in the job market, giving them specific skills,” he says. “Yet schools don’t need to train students to become screws in the economic system. They rather need to put an emphasis on endowing their cultural capital through science and spirit. Such capital would allow them to deal with a reality where salaries don’t grow, where income from capital is limited, and when working hours decrease as fewer hands are needed to produce something.”

It doesn’t take an economist to feel the employment scarcity. In recent years, an unprecedented wave of protests have erupted in developed countries because of the gap between the haves and the have nots. Witztum, however, doesn’t pin his hopes on Occupy Wall Street and its sister movements.

“The protests were a complete shame,” he sayss. “In the end, what did they say? ‘We’re not against the system, but capitalists shouldn’t exaggerate with what they take. Bonuses should be smaller.’ This is nonsense. The problem is not that people act in an extreme way, but the fact that there is a system allowing it. It only shows how strong the perception that if you work hard enough, everything will be alright is.”

Witztum doesn’t believe that social democratic ideas are the answer to capitalism, simply because they are based on market principles that are “inherently unsocial,” he says. But he is also reluctant to think that growing frustration with the existing system will automatically lead to a breakdown. “To me, people’s fatigue with their work and life is already so deep that I’m not even sure who would protest,” the professor says.

A brave new world

Witztum admits that he can only outline in broad terms this “new world” that will replace the current system. Yet he is confident that once we understand the fact that a free market cannot save decreasing work resources, new solutions will appear.

“I’m not calling for a centralized governance,” he stresses. “But there is a significant difference between the dominant perception today — which idealizes the market — and the understanding that the market is a necessary evil. A change in perception will also change policy. For instance, governments would no longer focus on supporting a competitive business environment, but realize their responsibility to citizens. They would revisit private property rights and the redistribution of wealth. They would be able to do so by increasing taxation or by changing the definition of corporate from one that’s only caring for its stockholders, to one that cares for its stakeholders.”

Could guaranteed basic income be a solution? — Photo: Russel Higgs

It’s been a while since the challenges of ending the work era has been on the minds of economists and social studies researchers. One of the most popular solutions for life in a work-free world — or at least in a world where work is not mandatory — is called “guaranteed basic income.” As strange as it may sound, the idea is that every citizen would receive a specific amount of money that is high enough for them to make a minimal living, independent of other incomes they might have.

The proposed arrangement has been endorsed by some renowned economists. Witztum himself believes this idea might hold some potential for solutions. The different supporters of this concept stress several reasons for its logic, but most of them agree on the need to tap existing technological resources to ensure a minimal living standard, and reduce dependency on work.

The main question, of course, is what the cost would be for the national output, and hence the ability to provide this basic income. If people don’t have to work at all, or work much less, tax revenue might also decrease. One way to settle this is by establishing a ratio for changes in that basic income that is consistent with changes in the national product.

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Green

Ecological Angst In India, A Mining Dumpsite As Neighbor

Local villagers in western India have been forced to live with a mining waste site on the edge of town. What happens when you wake up one day and the giant mound of industrial waste has imploded?

The mining dumpsite is situated just outside of the Badi village in the coastal state of Gujarat

Sukanya Shantha

BADI — Last week, when the men and women from the Bharwad community in this small village in western India stepped out for their daily work to herd livestock, they were greeted with a strange sight.

The 20-meter-high small hill that had formed at the open-cast mining dumpsite had suddenly sunk. Unsure of the reason behind the sudden caving-in, they immediately informed other villagers. In no time, word had traveled far, even drawing the attention of environment specialists and activists from outside town.

This mining dumpsite situated less than 500 meters outside of the Badi village in the coastal state of Gujarat has been a matter of serious concern ever since the Gujarat Power Corporation Limited began lignite mining work here in early 2017. The power plant is run by the Power Gujarat State Electricity Corporation Limited, which was previously known as the Bhavnagar Energy Company Ltd.

Vasudev Gohil, a 43-year-old resident of Badi village says that though the dumping site is technically situated outside the village, locals must pass the area on a daily basis.


"We are constantly on tenterhooks and looking for danger signs," he says. Indeed, their state of alert is how the sudden change in the shape of the dumpsite was noticed in the first place.

Can you trust environmental officials?

For someone visiting the place for the first time, the changes may not stand out. "But we have lived all our lives here, we know every little detail of this village. And when a 150-meter-long stretch cave-in by over 25-30 feet, the change can't be overlooked," Gohil adds.

This is not the first time that the dumpsite has worried local residents. Last November, a large part of the flattened part of the dumpsite had developed deep cracks and several flat areas had suddenly got elevated. While the officials had attributed this significant elevation to the high pressure of water in the upper strata of soil in the region, environment experts had pointed to seismic activities. The change is evident even today, nearly a year since it happened.

It could have sunk because of the rain.

After the recent incident, when the villagers raised an alarm and sent a written complaint to the regional Gujarat Pollution Control Board, an official visit to the site was arranged, along with the district administration and the mining department.

The regional pollution board officer Bhavnagar, A.G. Oza, insists the changes "aren't worrisome" and attributes it to the weather.

"The area received heavy rain this time. It is possible that the soil could have sunk in because of the rain," he tells The Wire. The Board, he says, along with the mining department, is now trying to assess if the caving-in had any impact on the ground surface.

"We visited the site as soon as a complaint was made. Samples have already been sent to the laboratory and we will have a clear idea only once the reports are made available," Oza adds.

Women from the Surkha village have to travel several kilometers to find potable water

Sukanya Shantha/The Wire

A questionable claim

That the dumpsite had sunk in was noticeable for at least three days between October 1 and 3, but Rohit Prajapati of an environmental watchdog group Paryavaran Suraksha Samiti, noted that it was not the first time.

"This is the third time in four years that something so strange is happening. It is a disaster in the making and the authorities ought to examine the root cause of the problem," Prajapati says, adding that the department has repeatedly failed to properly address the issue.

He also contests the GPCB's claim that excess rain could lead to something so drastic. "Then why was similar impact not seen on other dumping sites in the region? One cannot arrive at conclusions for geological changes without a deeper study of them," he says. "It can have deadly implications."

Living in pollution

The villagers have also accused the GPCB of overlooking their complaint of water pollution which has rendered a large part of the land, most importantly, the gauchar or grazing land, useless.

"In the absence of a wall or a barrier, the pollutant has freely mixed with the water bodies here and has slowly started polluting both our soil and water," complains 23- year-old Nikul Kantharia.

He says ever since the mining project took off in the region, he, like most other villagers has been forced to take his livestock farther away to graze. "Nothing grows on the grazing land anymore and the grass closer to the dumpsite makes our cattle ill," Kantharia claims.

The mining work should have been stopped long ago

Prajapati and Bharat Jambucha, a well-known environmental activist and proponent of organic farming from the region, both point to blatant violations of environmental laws in the execution of mining work, with at least 12 violations cited by local officials. "But nothing happened after that. Mining work has continued without any hassles," Jambucha says. Among some glaring violations include the absence of a boundary wall around the dumping site and proper disposal of mining effluents.

The mining work has also continued without a most basic requirement – effluent treatment plant and sewage treatment plant at the mining site, Prajapati points out. "The mining work should have been stopped long ago. And the company should have been levied a heavy fine. But no such thing happened," he adds.

In some villages, the groundwater level has depleted over the past few years and villagers attribute it to the mining project. Women from Surkha village travel several kilometers outside for potable water. "This is new. Until five years ago, we had some water in the village and did not have to lug water every day," says Shilaben Kantharia.

The mine has affected the landscape around the villages

Sukanya Shantha/The Wire

Resisting lignite mining

The lignite mining project has a long history of resistance. Agricultural land, along with grazing land were acquired from the cluster of 12 adjoining villages in the coastal Ghogha taluka between 1994 and 1997. The locals estimate that villagers here lost anything between 40-100% of their land to the project. "We were paid a standard Rs 40,000 per bigha," Narendra, a local photographer, says.

The money, Narendra says, felt decent in 1994 but for those who had been dependent on this land, the years to come proved very challenging. "Several villagers have now taken a small patch of land in the neighboring villages on lease and are cultivating cotton and groundnut there," Narendra says.

They were dependent on others' land for work.

Bharat Jambucha says things get further complicated for the communities which were historically landless. "Most families belonging to the Dalit or other marginalized populations in the region never owned any land. They were dependent on others' land for work. Once villagers lost their land to the project, the landless were pushed out of the village," he adds. His organization, Prakrutik Kheti Juth, has been at the forefront, fighting for the rights of the villages affected in the lignite mining project.

In 2017, when the mining project finally took off, villagers from across 12 villages protested. The demonstration was disrupted after police used force and beat many protesters. More than 350 of them were booked for rioting.

The villagers, however, did not give up. Protests and hunger strikes have continued from time to time. A few villagers even sent a letter to the President of India threatening that they would commit suicide if the government did not return their land.

"We let them have our land for over 20 years," says Gohil.

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