It’s been just over a month since I started talking about how the predictions set out in 1972 by The Limits to Growth were coming true in our time. Since then the situation has become steadily worse. As I write this, rolling blackouts are leaving millions of people in China to huddle in the dark and shutting down yet another round of factories on which the West’s consumer economies depend, while China’s real estate market lurches and shudders with bond defaults. In Europe, natural gas supplies have run short, sending prices to record levels, while in Britain, the fuel they call petrol and we call gasoline is running short as well. Here in the United States, visit a store—any store, anywhere in the country—and odds are you’ll find plenty of bare shelves.
Insofar as the corporate media is discussing these shortages at all, they’re blaming it on the shutdowns last year and on a lack of truck drivers to haul goods to market. They’re not wholly mistaken. During last year’s virus panic, many firms closed their doors or laid off employees, and production of energy resources, raw materials, and finished goods fell accordingly. Now that most countries have opened up again, the energy resources, raw materials, and finished goods needed for ordinary economic life aren’t available, because the habit of just-in-time ordering that pervades the modern global economy leaves no margin for error.
The shortage of truck drivers is another product of the same set of policies. During the shutdown period, many people—truck drivers among them—got thrown out of work. Because of the same regulations that deprived them of work, they couldn’t look for other jobs, and the assistance programs meant to help people deal with the impact of the shutdowns weren’t noticeably more effective than such programs ever are. That left millions of people to find other ways of getting by, outside the official economy of employment. This, accordingly, many of them did.
I think that in retrospect, the decision to lock down entire societies to stop the coronavirus will end up in the history books as one of the most spectacular blunders ever committed by a ruling class. Partly, of course, the lockdowns didn’t work—look at graphs of case numbers over time from places that locked down vs. places that didn’t, and you’ll find that locking down societies and putting millions of people out of work didn’t do a thing to change the size and duration of the outbreak. Partly, the economic damage inflicted by the lockdowns would have taken years to heal even if the global industrial economy wasn’t already choking on excessive debt and running short of a galaxy of crucial raw materials. But there’s more to it than that.
If you want people to put up patiently with long hours of drudgery at miserably low wages, subject to wretched conditions and humiliating policies, so that their self-proclaimed betters can enjoy lifestyles they will never be able to share, it’s a really bad idea to make them stop work and give them a good long period of solitude, in which they can think about what they want out of life and how little of it they’re getting from the role you want them to play. It’s an especially bad idea to do it so that they have no way of knowing when, or if, they will ever be allowed to return to their former lives, thus forcing them to look for other options in order to stay fed, clothed, housed, and the like. (We can set aside the question of vaccine mandates for now—that’s another kettle of fish—but of course those feed into this same effect.)
So there’s a labor shortage, and it’s concentrated in exactly those jobs that are most essential to keeping the economy running. These are also the jobs most likely to have lousy pay and worse conditions. This isn’t accidental. It unfolds from one of the most pervasive and least discussed features of contemporary economic life: the metastatic growth of intermediation.
Let’s unpack that phrase a bit. The simplest of all economic exchanges takes place between two people, each of whom has something the other wants. They make an exchange, and both go off happy. If what one of the people brings to the exchange is labor, and the other person brings something the first person wants or needs in exchange for labor, we call that “employment,” and the first person is an employee and the second an employer, but it’s still a simple exchange. So long as there’s no overt or covert coercion involved on either side, it’s a fair trade.
What happens as a society becomes more complex, however, is that people insert themselves into that transaction and demand a cut. Governments—national, local, and everything in between—tax income, sales, and everything else they can think of. Banks charge interest and fees on every scrap of money that passes through their hands. Real estate owners drive up the cost of land so that they can take an ever larger share of the proceeds in rent and mortgage payments. Then you have a long line of other industries lobbying government for their share of the take.
Universities are a great example. A century and a half ago most people didn’t go to university. Doctors and lawyers entered the field by apprenticeship—you went to work for an established practitioner, learned the ropes, and passed state exams. Engineers and architects did the same thing. Schoolteachers had an even simpler route: bright kids who didn’t have other prospects got put to work teaching younger children, and as soon as they graduated from school themselves they’d find a job in a school somewhere. The system worked very well, not least because it was an effective means of social mobility: young people could enter the professions irrespective of the social class of their parents, so long as they were smart and willing to work hard.
The rise of the universities after the Second World War put an end to that system. Universities lobbied state governments to require job candidates in professional fields to have four-year degrees, so that the universities could insert themselves into the relationship between the professions and the pool of young people interested in them. You couldn’t simply find a physician, get taken on as an assistant, and proceed from their to qualify as a physician in your own right. No, you had to go to college and jump through an increasingly elaborate set of hoops in order to get to the point of passing your board exams and hanging out your shingle. If you didn’t have the money and free time to go to college, you were shut out.
It was a very effective scheme for limiting access to the professions to the children of the middle and upper middle classes, which was probably its original purpose. It was also a very effective scheme for decreasing the number of people in the professions, so they could drive up salaries to absurd levels, another likely goal. In the long run, finally, it has also turned into a very effective scheme for limiting access to the professions to conformists who never have a single original thought of their own. A century ago this wasn’t the case; physicians, for example, did their own original research and published papers in the medical journals. Now? Not so much.
Ultimately, of course, employment itself becomes a form of intermediation. By and large you aren’t hired by people who want what you produce, you’re hired by a corporation that inserts itself between you and the purchaser, takes most of the money, and gives you a pittance, while directing a big share to managerial staff. Since the corporation is also subject to intermediation, other shares go to governments, banks, and a whole ecosystem of other intermediaries who insert themselves into the same transaction. In the end, you get a small fraction of the value of your work, and that fraction has been shrinking steadily with each passing year.
There’s some history behind that. The spectacular growth of intermediation in modern times became possible for two reasons. The first was that fossil fuels made it possible for the labor of a single person to produce more wealth than ever before in human history. The second was that fossil fuels also enabled the world’s industrial nations to take over and exploit more of the planet than any previous empire in recorded history, first through conquest and colonialism, and later on through manipulative economic arrangements that left other countries notionally independent while they were being drained of wealth to support the industrial nations.
The impact of these factors on economic life is almost impossible to overstate. Before the coming of the industrial era, it took on average the productive labor of ten people to support one person in an economic role that didn’t produce necessary goods or services. This is why ancient Egyptian pharaohs and medieval kings somehow managed to get by without financial planners, administrative assistants, or personal coaches: they didn’t have the resources available to take so many people out of productive work. Exactly what the figure is nowadays is hard to work out, partly because so much glorified handwaving has been redefined as “productive work” and partly because most of the productive work that keeps modern industrial societies functioning is carried out by sweatshops and slave labor in a variety of Third World hellholes, but the sheer expansion of managerial job categories is a good sign of just how far things have changed.
The difficulty is that the torrents of cheap abundant energy that made that sort of metastatic intermediation possible depended all along on the breakneck exploitation of nonrenewable resources. Now fossil fuels are not so cheap as they once were, nor so abundant. There’s very little slack left in the fossil fuel sector—as current shortages and price spikes are making very clear—nor are renewable energy sources able to pick up the slack effectively—as current shortages and price spikes are making equally clear. For that matter, the extraction of wealth from the Third World to prop up the economies of the industrial nations is running into increasing difficulties, not least the far from minor fact that you can only pillage a nation of all its available wealth for so long before there isn’t anything left to loot.
All this imposes an existential challenge to the economy of intermediation, and to the millions upon millions of well-paid jobs that depend on intermediation. That challenge first began to bite in the 1980s, and it was met by driving the working classes into poverty and misery. It bears repeating and remembering that half a century ago in the United States, one adult with a high school education and a working class job could support a family of four in relative comfort. The changes in economic policy and corporate behavior that swept that away, replacing it with the current dismal landscape of despair and impoverishment for working people, were the steps by which the system of intermediation was preserved—for a while.
The difficulty, of course, is that you can only take that so far before it’s no longer worth anyone’s while to do those poorly paid jobs on which the whole system depends. Here in the United States, we’ve reached that point, and not just for employees. Go to any town in flyover country and walk down the streets, past the empty storefronts where businesses used to flourish. There are millions of people who would love to start their own business, but it’s a losing proposition in an economy in which governments, banks, and property owners demand so large a cut that most small startup businesses can’t break even. The same is equally true, of course, for employees, whose wages no longer even pay the basic costs of getting by in today’s America.
It’s becoming true in the field where I make my living. Writers who place their books with big corporate publishers have been watching their share of a book’s earnings shrink with every passing year due to predatory contracts. Just recently it’s come out that corporate publishers have become so rigid that a book that beats expectations won’t get reprinted—publishers will literally let it go out of print rather than cash in on the trend, because they’ve gotten locked into their own version of just-in-time ordering. As a result, more and more authors are self-publishing or turning to smaller presses not hobbled by corporate groupthink, of which there are many.
(There’s a curious astigmatism of the imagination in the essay just cited, by the way, and it’s one that I’ve seen quite often among writers. The author of the essay talks as though the only options for getting published are huge corporate publishers, on the one hand, and self-publishing on the other. Not so—there are many hundreds of small to midsized publishers, which don’t require your manuscript to go through an agent, which are open to innovative and interesting work, and which don’t have the same idiotic rigidities as the big boys. I make most of my living publishing books with them. The moral to this story is that if you ignore the conventional wisdom, you may discover that there are more options than you think.)
Thus the economy of intermediation is strangling the economic activity on which it survives. To change that would require the people whose jobs depend on intermediation to accept a drastic and permanent loss of status, influence, and wealth, and the number of them who will accept that loss willingly can doubtless be counted on the fingers of one foot. Nonetheless, they’re going to suffer that loss, some here and others there, some a little at a time and others all at once when a pink slip turns up in the inbox. If something is unsustainable, sooner or later it won’t be sustained: that’s an essential principle of economics in the real world, however busily economists try to pretend that it can’t possibly apply here and now.
The decision of millions of former working class employees to find better ways to support themselves is one of the ways that this principle is unfolding in our time. There are plenty of others—the primary force driving cancel culture in the universities, for example, is the no-holds-barred competition for an ever-shrinking pool of middle class jobs. But it’s the quiet dissolution of working class employment, the recognition by the people who keep the economy running that they have better things to do than prop up a system that treats them as disposable components, that strikes me as most important here and now.
Many of them are finding work in the underground economy. That’s a huge economic sector these days. How many people make a living doing work outside ordinary employment and getting paid “under the table,” as the phrase is, is for obvious reasons a hard question to answer, but it’s quite possibly in the tens of millions. Working in the underground economy is an effective way to get out from under the burden of intermediation, so that both parties in an economic transaction can keep most or all of the value they exchange. That’s going to become even more significant a fraction of the economy in the years ahead.
In a declining economy, one person’s productive labor can no longer support the vast teetering structure of intermediation that’s been heaped on top of it. As decline proceeds—and as we have seen, it will proceed for many years to come—so will the contraction in what each person’s labor can support. If we’re lucky, the decline will bottom out before it gets down to the medieval level—some of our scientific and technological achievements are potentially sustainable, and might keep economic life above the sheer subsistence level if they’re preserved and deployed in time—but in any possible future, the great majority of people will be producing goods and services for their own use and for that of their neighbors, rather than laboring for the benefit of the vast and unsustainable government, corporate, and institutional juggernauts of our day.
Those of my readers who are interested in making an adequate living in the future might keep this in mind. How steep the curve of decline will turn out to be in the different regions of the United States, to say nothing of overseas, is a challenging question to answer. One way or another, however, depending on regular employment in an ordinary job became a mug’s game quite some time ago and is quickly devolving further into a fool’s errand.
As this takes shape around us, I find myself thinking of John Chapman, the famous “Johnny Appleseed” of American folk legend, who was discussed in an earlier post on this blog. To support the life he wanted to lead, Chapman invented a profession all his own, providing apple seedlings to homesteaders across the Ohio River frontier region. Most of the people I know who are thriving in these times have done some (usually) less colorful equivalent, figuring out how to provide goods and services that people want and need directly to those who want or need them, without bothering with the clanking, dilapidated machinery of employment. For many people today, that’s territory as untraversed as the wilderness through which Johnny Appleseed roamed, but at this point that’s the direction in which the future can be found.
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