Will the pandemic cause major shakeup of capitalist economies?

[Peterkin]

I thought so at the beginning, when so many businesses had to shut down; travel and tourism all but ceased; borders were closed and people stayed at home to work, study and be entertained. And yet, when I did go out once a week to buy necessities, everything looked the same: same goods, including imported ones, on the shelves; same advertising on TV, only with extra emphasis on home delivery. 

But it seems, something has changed. "Nobody wants to work anymore."

Especially in service jobs.

But maybe not so much in offices, either.

What's going on? Why have people suddenly discovered the exploitation everybody's known about - and lampooned in movies, comedy routines and newspaper cartoons - for decades?

How will this affect capitalism as we have come to know it? 

[exchemist]

45 minutes ago, Peterkin said:

I thought so at the beginning, when so many businesses had to shut down; travel and tourism all but ceased; borders were closed and people stayed at home to work, study and be entertained. And yet, when I did go out once a week to buy necessities, everything looked the same: same goods, including imported ones, on the shelves; same advertising on TV, only with extra emphasis on home delivery. 

But it seems, something has changed. "Nobody wants to work anymore."

Especially in service jobs.

But maybe not so much in offices, either.

What's going on? Why have people suddenly discovered the exploitation everybody's known about - and lampooned in movies, comedy routines and newspaper cartoons - for decades?

How will this affect capitalism as we have come to know it? 

I'm sure there has been an effect caused by the disruption causing people to rethink their lives. Often, we need a chance to stand back for a while if we are to get a perspective on where we are going and have time to ask ourselves questions about it all. Commuters, in particular, and their employers in urban offices, have learnt what can be done via IT and may not want to resume the daily commute ever again. That will affect businesses that provide services to city workers, reduce real estate prices in city centres, and will be a boost to services provided in the places where the workers live (food shops, cafes etc). It will also affect the economics of commuter public transport. Some of these changes could well be permanent. The effect on the airline industry could be lasting, too, especially with climate change imperatives coming along next.  

Some of the wage rises in the labour market seem due to the temporary state support to people laid off during the pandemic. It's not clear to me whether these rises are permanent or will die away as the support is withdrawn. 

I don't see any of these changes as affecting the essence of capitalism per se, but they certainly will affect business. When it comes to capitalism, one thing the pandemic has taught us all is the importance of central government. The facile libertarian notion that all government is bad has been shown to be absurd. Without government support and organisation we would have had no vaccines and a lot more of us would be dead or disabled. 

  

[iNow]

2 hours ago, Peterkin said:

But it seems, something has changed. "Nobody wants to work anymore."

Especially in service jobs.

But maybe not so much in offices, either.

What's going on?

That’s a bad misreading of the evidence, IMO. The conclusion here is NOT that “nobody wants to work anymore.” The conclusion is nobody is willing to get WAY underpaid for working garbage jobs nobody else wants to do, especially after a year and a half of the entire planet referring to them as “essential workers.”

Basically, if they’re so essential, then employers need to up the wages confirming that. Getting $2 an hour and some measly tips just to survive the week and feed your kids isn’t gonna cut it anymore. Until wages go up and employers respond to these market shifts, little will change.

Folks have realized life is too short and too easily lost to continue being treated as indentured servants under horrible bosses in brutal vocations… so they’re looking for better options. People do want to work, but they also are tired of being critical to the infrastructure of society and being treated like trash. 
 

Similarly, productivity gains were mostly up in sectors where working from home was an option for the first time in the pandemic. This largely disproves the old canard that working from home leads to slacking and employees taking advantage of the system in large numbers and loss of profits, so people are rejecting employers who are needlessly trying to force employees back into the office in-person for no good reason. People are leaving those jobs and finding employers who respect their need for flexibility and family in their schedules… employers who see working from home as more than a mere perk, and acknowledge it as a requirement for many. 

1 hour ago, exchemist said:

The facile libertarian notion that all government is bad has been shown to be absurd.

I would change this only by adding the word “again.” This libertarian notion has AGAIN been shown to be absurd, but as with many ideologies to which people are emotionally married, facts don’t tend to trump passions and political preference. 

Edited July 23, 2021 by iNow

[Peterkin]

Are workers going to unite again? Class warfare has been long and fraught with trade unions playing a major role - first, in the betterment of working class conditions and then as the huge and easy target of business-friendly government.

Quote

President Reagan - Reagan Kicked off the era of union busting by successfully shutting out the air traffic controllers union in 1981. After a nationwide strike 3,000 workers were dismissed by Reagan. This was a signal to industry that union busting was o.k. It was also a signal to future presidents and politicians that taking an anti-union stance was not necessarily a political liability.

  https://www.forbes.com/sites/mikecollins/2015/03/19/the-decline-of-unions-is-a-middle-class-problem/?sh=717d2a257f2d

Or will they consider themselves each a free agent, to seek the best deal for themselves, without regard to all the other "essential" workers? 

[exchemist]

1 hour ago, Peterkin said:

Are workers going to unite again? Class warfare has been long and fraught with trade unions playing a major role - first, in the betterment of working class conditions and then as the huge and easy target of business-friendly government.

  https://www.forbes.com/sites/mikecollins/2015/03/19/the-decline-of-unions-is-a-middle-class-problem/?sh=717d2a257f2d

Or will they consider themselves each a free agent, to seek the best deal for themselves, without regard to all the other "essential" workers? 

I certainly think in the UK there may be a resurgence of union membership, due to greater bargaining power by labour. However it seems to me this is caused more by Brexit and the consequent disappearance of the EU labour pool that provided us with so many workers, from care homes, to fruit and vegetable picking, the restaurant trade and on to lorry drivers.

One has to hope that the unions will be far more modern and business-literate in their attitude than they were back in their heyday of the 1970s. Certainly, the unions representing occupations such as automotive work seem to have moved with the times. Public sector unions, not so much. There is in my view a crying need for someone to stand up for the poor sods in the "gig" economy, on zero hours and p***poor hourly rates, and people in distribution warehouses etc., like Amazon - what one might call the surveillance economy. Amazon tries hard to keep unions out but if they get in Amazon will only have itself to blame for shafting its workers. 

It is less clear to me why the pandemic should shift market forces in the direction of more power for labour, unless perhaps fear of infection drives a lot of people out of the labor market permanently. I am dubious about that.

Edited July 23, 2021 by exchemist

[John Cuthber]

17 minutes ago, exchemist said:

Public sector unions, not so much

Which?

[Peterkin]

I don't suppose the working class will return? I mean as an identity, as an economic force, as a socially recognized stratum, or as a political faction.

I remember when there was a working class - perhaps even a Working Class - that industrialists and politicians had to take seriously. I know the Reagan-Thatcher-Mulroney axis staged a major assault on the working class, was very successful with substantial help from Rupert Murdoch et al , and since then, even the the Labour and NDP parties have looked everywhere but straight in the eyes of their support base. Sometime between 1980 and 2010, everyone in the western world became "the middle class, and those working hard to join it" as Trudeau II keeps saying.

Now that they've been told and thanked and lauded for how essential they are (too essential to be allowed to strike, but not so essential as to be in the early vaccination queues) might the underpaid, disrespected workers find a collective will again?

Edited July 23, 2021 by Peterkin
the usual: mistakes

[exchemist]

2 hours ago, John Cuthber said:

Which?

Trains, and anything involving Serwotka. 

[beecee]

We have gone through epidemics before...we even had the great depression. Some businesses will go to the wall, others will flourish...some airlines will cease to exist, others will return, take up the slack, and be far better off...some countries will need to become more self sufficient with reduced imports...The most likely effect imo, is the growing distrust with China. 

In more recent times, we [the world] overcame 4 years of Trump, and in time, this pandemic and its seriousness and current impact, will also be a memory. Some things may change forever, but as in the past, we'll all make adjustments.

[Peterkin]

9 minutes ago, beecee said:

Some things may change forever, but as in the past, we'll all make adjustments.

That's exactly what interests me: what will change and how.

[TheVat]

Generally in a developed nations economy,  as lifespan increases and families get smaller (the "demographic shift" as it's called) there's a trend towards full employment (smaller percent of population is of working age) and the value of labor rises.   As labor becomes a scarcer commodity,  companies pay more for it and offer more benefits and perks to keep workers.   Of course, now we have wild cards like automation,  immigration,  and other trends that can tinker with that simplistic formula I outlined.   But I don't think any of those will prevent labor,  especially the services where we really prefer people to robots,  from rising in value.   Dropping fertility rates (thanks to both social trends and endocrine disruptors from plasticmaggedon) will see to it that we have a society top-heavy with older folks.   

[Peterkin]

Maybe so, but a couple more pandemics could balance that out.... Unless the delta and lambda variants tip it back again. 

It's those "unknown unknowns" that mess up prediction!

[iNow]

55 minutes ago, TheVat said:

Dropping fertility rates (thanks to both social trends and endocrine disruptors from plasticmaggedon) will see to it that we have a society top-heavy with older folks. 

I’m sure there’s a joke in there about fertility and being top heavy, but I’m a boob and can’t seem to nurse it out 

[studiot]

18 hours ago, Peterkin said:

How will this affect capitalism as we have come to know it? 

The French have a saying

Le plus ca change,

Le plus c'est la meme chose.

 

I remember a science fiction short story during the 1960 whose title was a good translation into English

Business as usual during alterations

[Endy0816]

Feel what we're seeing is just a major change in Market demands alongside restriction on worker migration. Another short squeeze of sorts, but on Employers this time.

Do think will eventually finish working its way through the economy.

Edited July 24, 2021 by Endy0816

[Peterkin]

And yet the Mughal empire, the Roman empire, the Mayan empire and the Soviet empire declined and fell over varying periods of time; other kinds of economy have been replaced. It's not a question of whether something will end, but when and by what means. I'm particularly interested in the intermediate steps.

[John Cuthber]

17 hours ago, exchemist said:

Trains, and anything involving Serwotka. 

Given that the trains  have not been public for about quarter of a century, I think we can largely discount your view on the matter.

[exchemist]

2 hours ago, John Cuthber said:

Given that the trains  have not been public for about quarter of a century, I think we can largely discount your view on the matter.

They are in the process of being renationalised, by this Tory government, ironically enough.

[Phi for All]

On 7/24/2021 at 11:36 AM, exchemist said:

They are in the process of being renationalised, by this Tory government, ironically enough.

That qualifies as a major capitalism shakeup, if they can pull it off. What about renationalizing water in England and Wales? I always thought roads were the most logical thing the citizens of a country could own, until I heard that y'all gave up your WATER to private interests.

[exchemist]

50 minutes ago, Phi for All said:

That qualifies as a major capitalism shakeup, if they can pull it off. What about renationalizing water in England and Wales? I always thought roads were the most logical thing the citizens of a country could own, until I heard that y'all gave up your WATER to private interests.

What has happened is the franchise system for rail blew up. Most of the companies were in financial trouble and the pandemic has holed them below the waterline, forcing the government to step in. Franchises have now been abandoned. They may stay in full public ownership, or they may try to get the private sector back in the game in a less risky way, by contracting them to provide a service defined by government and remunerated based on how many trains they run, or something. The London Overground, part of Transport for London's network, uses that model, I believe. But the risk involved in planning and recruiting demand and then investing in the assets to meet it has gone for ever, it seems.     

Water privatisation has been fairly disastrous. The companies loaded themselves up with debt, using  their assets as collateral, and paid their directors and shareholders huge dividends and bonuses while neglecting the basic service they were supposed to be providing. Almost every month now there is a new story of operational mismanagement. 

Both rail and water privatisations came at the tail end of the privatisation boom started by Thatcher and which finished under Major. While telecoms and energy seem to have worked, more or less, these two never did. Both were privatisations too far. 

 

 

Edited July 25, 2021 by exchemist

[Peterkin]

22 minutes ago, exchemist said:

What has happened is the franchise system for rail blew up. Most of the companies were in financial trouble and the pandemic has holed them below the waterline, forcing the government to step in. Franchises have now been abandoned.

Let me guess! The Tory government bails them out (adding lovely gold life-buoys for the CEO's who scuttled it)  with money collected from the people not rich enough to avoid taxation - the same people who took the hit when their national assets were sold off and they got no dividends, and who have been paying higher transportation fees ever since. Sounds vaguely familiar....

27 minutes ago, exchemist said:

Water privatisation has been fairly disastrous. The companies loaded themselves up with debt, using  their assets as collateral, and paid their directors and shareholders huge dividends and bonuses while neglecting the basic service they were supposed to be providing. Almost every month now there is a new story of operational mismanagement. 

Funny story. It had been a disaster every place it was done (committed?), and for much the same reason every privatized essential service is a disaster. By the time Thatcher's hatcheteers got 'round to it, they had examples to learn from, like Chile.  

[studiot]

On 7/23/2021 at 3:39 PM, Peterkin said:

How will this affect capitalism as we have come to know it? 

Has my answer offended you ?

[Peterkin]

1 hour ago, studiot said:

Has my answer offended you ?

Of course not! Why would it? Why would you think I was offended?

[Phi for All]

2 hours ago, exchemist said:

Water privatisation has been fairly disastrous. The companies loaded themselves up with debt, using  their assets as collateral, and paid their directors and shareholders huge dividends and bonuses while neglecting the basic service they were supposed to be providing. Almost every month now there is a new story of operational mismanagement. 

Bet you a shilling your government subsidizes the water companies in addition to what they get from consumers. Usually it's for R&D, future technologies, better methods and practices, whatever. The US often lets the private companies only do the really profitable work, and it keeps the low-profit parts publicly funded. Our private prisons don't have to house certain inmates if they prove cost-ineffective.

[exchemist]

10 hours ago, Peterkin said:

Let me guess! The Tory government bails them out (adding lovely gold life-buoys for the CEO's who scuttled it)  with money collected from the people not rich enough to avoid taxation - the same people who took the hit when their national assets were sold off and they got no dividends, and who have been paying higher transportation fees ever since. Sounds vaguely familiar....

Funny story. It had been a disaster every place it was done (committed?), and for much the same reason every privatized essential service is a disaster. By the time Thatcher's hatcheteers got 'round to it, they had examples to learn from, like Chile.  

More or less. Mind you one good effect of the privatisation of rail was that we finally got some decent investment in new rolling stock. When BR was a nationalised service the government was scared of investing properly in the trains. But we've ended up with absurdly complex fare deals and lack of integration across different providers. Trying to split the track from the trains, so that multiple companies' trains could run on the same track, never worked properly - and corners were cut on track maintenance, leading to a fatal accident due to no chain of responsibility among contractors and subcontractors. So the track part has been back in public ownership for a while. It's a dog's breakfast. 

Water seems to be a disaster due to lack of effective oversight from the regulator, on both the operations side and on not stamping on inappropriate financial engineering.

But energy and telecoms seem to be a success, so I wouldn't say privatisation has to be a catastrophe for all utlities.