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Musings Report 2022-15 4-9-22 The Perfection of Self-Exploitation: Hyper-Globalization / Financialization
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The Perfection of Self-Exploitation: Hyper-Globalization / Financialization
Few have fully comprehended the complex transition of our economy from stability and security to instability and insecurity. This has many sources. (I’ll cover two below: hyper-globalization and hyper-financialization.) The net result is that we’re all on our own, and so we have to devote ourselves to work to achieve some security.
Korean-German philosopher Byung-Chul Han calls this the achievement society. Nobody needs to command us to achieve more, we are our own slave-driving boss.
In his 2010 book The Burnout Society, Han says overachievement and overcommunication lead to exhaustion, fatigue and suffocation. He writes, “The achievement society is the society of self-exploitation.” In other words, we willingly exploit ourselves, constantly seeking to produce more as the price of getting ahead.
In Han’s view, we think we’re free because we’re not beholden to an outside authority: nobody is telling us we have to pursue this career. But this freedom of choice is illusory, as we’re imprisoned by our need to achieve, whatever the price. We end up working harder than if work were compulsory. Han writes, “This is what makes self-exploitation so efficient.” The achiever is both “perpetrator and victim.”
In other words, this isn’t just healthy ambition to achieve: it’s hyper-achievement. When hyper-achievement becomes our principal goal, we fall into hyper-self-exploitation which becomes destructive: we sacrifice everything to achievement. Burnout is our involuntary withdrawal from self-exploitation.
No wonder we’ve come to depend on our work to make us feel good about ourselves—work is now so all-consuming there isn’t much time or energy left for anything else.
Why does this all-consuming work life leave us so prone to burnout?
In Han’s analysis, our economic system is not concerned about a good life. Its focus is “more capital (income, wealth) produces more life.” The more money you make and own, the more expansive your life. But is this life of ever-expanding production and achievement a good life? It is certainly profitable for those reaping the gains of the self-exploiting workers, but is it a good life for the self-exploited?
What is a good life? A good life is a life of self-generated security and well-being, a balanced life with many sources of fulfillment that aren’t dependent on wealth or the approval of others. A good life is a life in which we have enough, and we control the sources of our income, security and self-worth.
The illusions that more achievement and money will lead to a good life collapse in burnout. We can no longer exploit ourselves once we burn out.
We accept the notion that more money, status and achievement will deliver the good life, but this dependence on superficial appearances does not create a good life.
Focusing on externalities—our status, what we own, what exotic locale we can brag that we visited—is an exercise in emptiness because none of these generate true security.
In exploiting ourselves for the appearance of success, we get the opposite of what we expected: instead of security and happiness, we get a crisis of belief and meaning. We realize these superficialities are fragile and dependent on forces beyond our control: we might lose our job or find our wealth diminished when speculative bubbles pop.
If we’ve bet our lives on things that are beyond our control, this insecurity is the opposite of the good life: instead of feeling secure, we’re anxious about losing things that depend entirely on others.
We burn ourselves out trying to nail down more wealth, thinking that this would make us happy, and then we discover our dependence on work has hollowed us out.
Once money and status are all that we’re measuring, it’s never enough. If our goal was to be worth $1 million, when we reach that goal, we worry that we might need $2 million. Our goal moves up to $2 million.
We’re not striving for a good life; we’re striving for more of what fuels our insecurity and burnout.
Hyper-Globalization
Another reason we drive ourselves so relentlessly is we are expendable: somebody else can do our job.
Hyper-globalization forced workers in developed countries to compete with a billion poor people in developing nations who had new opportunities for paid work. Since these workers were willing to work for a fraction of the wages paid to developed-nation workers, wages fell around the world when measured by how many work-hours it takes to pay for housing, healthcare, etc.
Economist Michael Spence explained the difference between tradable work and untradable work. Tradable work can be done anywhere by any group of workers.
This interchangeability of parts, software, workers and work is called commodification: when something is commodified, it becomes interchangeable with products and services from all over the world. It doesn’t matter where the computer chip was fabricated or the bushel of wheat was grown, each chip and bushel serve the same function in the global economy.
Work has also been commodified. It doesn’t matter where tech support is located or where software is coded, it’s interchangeable with software coded elsewhere. Manufacturing and service industries have been offshored, i.e., transferred to countries with lower costs of production due to low wages, low environmental standards and low-value currencies.
In summary: hyper-globalization / financialization = hyper changes in work.
Hyper-Financialization
Untradable work cannot be offshored. Examples include haircuts, repairing front porches, childcare and generating electricity for our homes. None of these tasks can be performed overseas.
But even untradable work has become insecure due to the other major change in our economy, hyper-financialization. Financialization is a complex dynamic, but it basically means two things: 1) financial instruments such as stocks, options, bonds, loans and derivatives have been commodified and globalized, and 2) borrowing huge sums of money to leverage these instruments makes far more money than producing goods and services, the traditional source of wealth.
In a globalized economy, nobody becomes rich by building a new steel mill in the U.S. They get rich building a steel plant in a low-wage nation and closing the steel mill in the U.S.
In a financialized economy, nobody becomes a billionaire moving the steel mill to a developing nation. They become billionaires by borrowing and leveraging money to make enormous financial plays that have nothing to do with creating products or jobs. They are purely speculative finance.
The more that the financier can borrow, the bigger the gains. The more money the financier can leverage, the more spectacular the gains.
The key to making money with borrowed money (i.e., financialization) is to 1) leverage $1 billion into a $10 billion bet and 2) reduce risk via financial magic: hedging futures, selling complex derivatives, etc.
Hyper-financialization is when this system of debt and financial magic dominates the real-world economy of producing goods and services. Those who can tap into this system no longer make millions, they make billions. The wealth of the top few is no longer measured in billions, it’s measured in trillions of dollars. This is not just wealth, it is hyper-wealth, a world in which $100 million yachts, estates, paintings and private jets are now unremarkable.
The statistics are startling. The top three billionaires in the U.S. own more financial wealth than the bottom half of American households (165 million people in 62 million households). The total wealth of the 614 U.S. billionaires grew from $240 billion in 1990 (adjusted for inflation) to $4.18 trillion in March 2021—a 17-fold increase, while the median wealth of American families barely budged, moving from around $80,000 in 1990 to about $110,000—a trivial gain compared to the enormous gains of the super-wealthy.
In a hyper-financialized economy, those who can borrow and leverage the most make the most money. Since all this wealth is generated by assets such as real estate, stocks, bonds, etc., those who bought these assets before they were hyper-financialized have become wealthy by virtue of buying early.
Since the bottom 99.5% can’t borrow and leverage millions into billions, there’s no way we can get hyper-wealthy. Those relative few who bought assets decades ago are now wealthy because the house they bought for $100,000 is now worth $1 million, not because it’s ten times bigger or better but because our economy has been hyper-financialized.
This is why the top 10% of American households own 90% of the nation’s financial wealth and over 70% of all wealth.
The bottom 50% own a meager 2% of all wealth, which includes vehicles, household items, family homes, etc.
In other words, hyper-globalization and hyper-financialization generate hyper-inequality. These forces have changed our economy into a winner take most rat-race: a relative few get spectacular paychecks and a few speculators win big in the casino of trading stocks, But the vast majority of workers don’t earn enough to bridge the wealth gap.
The gap between those who bought homes, stocks and bonds decades ago and those trying to buy these assets now is unbridgeable except for those who inherit money or the few speculators who strike it rich and don’t lose it all when the speculative bubbles that enriched them pop.
A relative few do well in small business, but the financial pressures on small business have increased. It’s hard to make a middle-class income after paying all the expenses, fees and taxes, and most proprietors and free-lancers work more hours than employees. The net income earned by proprietors and free-lancers is also winner take most, as the majority of small business income goes to the few at the top.
Faced with this uphill battle to earn enough to buy a house, many people give up on the conventional job market. They work in the informal (cash) economy or in the gig economy, perhaps relying on government subsidies for low-income workers for some expenses. A relative few do well but financial insecurity is never far from the door of most gig workers.
The pressures to exploit oneself are intense in a winner take most, highly unequal economy. No wonder work absorbs so much of our time and energy, and why we come to rely on it so much for our self-worth.
Highlights of the Blog
Video:
The Dam Has Cracked (37 minutes, with Gordon Long)
Posts:
For Freak's Sake, People, Even the Crash Test Dummies Are Nervous 4/6/22
The Global Order Has Cracked 4/3/22
Best Thing That Happened To Me This Week
After receiving letters from the IRS in January 2022 and March 2022 stating they hadn't received my 2020 tax return, even though they deposited the check attached to the return on March 31, 2021, I thought to log into my IRS account and download a transcript of my records. This confirmed that they'd received my 2020 tax return in late March, 2021 but hadn't processed my return until February 21, 2022.
So almost a year after receiving my return they processed it, and a month after they finally processed it they still sent me a letter professing no knowledge of my 2020 return.
So the good news here--heh--is the IRS claims to have paid me interest on the estimated taxes I paid in 2020. I have yet to see the payment but I hold out hope that it won't take the IRS 11 months to process my interest payment.
Is this comedy or tragedy or both? It's certainly no way to run a critically important agency.
From Left Field
NOTE TO NEW READERS: This list is not comprised of articles I agree with or that I judge to be correct or of the highest quality. It is representative of the content I find interesting as reflections of the current zeitgeist. The list is intended to be perused with an open, critical, occasionally amused mind.
A decade-long look at how Big Insurance profiteers American taxpayers and the sick. (via LaserLefty)
More Wealth For The Wealthy, Paid For By Crushing Inflation For The Rest...
Is this Shanghai’s COVID-19 Tipping Point?
How the ‘Uber Economy’ Is Killing Innovation, Prosperity, and Entrepreneurship: We need to shift our focus from disrupting markets to creating them
The Ingenious Ship That Will Revolutionise The World--click-bait headline... would need 1,000 of them to make an impact...
The Dunedin study at 50: landmark experiment tracked 1,000 people from birth
Galaxy Brain: How the impeccably credentialed, improbably charming economic historian Adam Tooze supplanted the dirtbag left. (via Maoxian)
How the West Got Russia’s Military So, So Wrong
From demand stimulus to demand destruction
Seen On Twitter: Today, I offered a contract drilling hand $424,000 for a 6 month job, and he turned it down. The oilfield is officially back. This is not a joke.
The photographer with 60,000 undeveloped images of rock history ‘waiting to come back to life'
Experience the Night Watch (Rembrandt painting)
"Getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again. It freed me to enter one of the most creative periods of my life." Steve Jobs
Thanks for reading--
charles |
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