“Recession” is an Orwellian term
The European Union’s statistical agency reported yesterday that the eurozone continues in “recession” for the sixth consecutive quarter and it’s top news throughout the mainstream and business press. That so many on the continent live increasingly insecure lives and that the officially measured unemployment rate has reached a stratospheric 12.1% is, of course, horrible news. But what importance should the average person place on the fact of “recession”? I think absolutely none, for the word has become an Orwellian term that serves to shift our focus away from reality and toward “solutions” that are in fact the problem. War is Peace, Freedom is Slavery, Ignorance is Strength, and now, Growth is Austerity and Competition.
“Recession”, in official use, means that the total monetary value of goods and services sold in a period has declined. It tells us nothing about what types of goods and services these may have been or what group or class may have suffered as a result. But this is critical information we need to know in order to judge the significance of “recession”. What’s important to the vast majority is the widespread availability of such critical goods and services as housing, healthcare, quality food, decent clothes, leisure time for friends and family, clean environment, security, retirement, and so on. The only important meaning of “recession”, one would think, would be a decline in the availability of these truly important things. And it’s perfectly reasonable to think that, with our amazing level of productive capacity, we should have long ago conquered “recessions” so defined.
The sad and incredible fact of the matter, though, is that we have lived in a recession of the important kind for quite some time. Real wages have been down throughout Europe and the “developed” world for decades now, as has been the various collective benefits of education, retirement, health care, income security, and so on. We find everywhere that worker shares of what’s produced are at record lows.
The full power of the orthodox meaning of “recession” is exposed when we hear the orthodox solutions. The straightforward honest solution would logically be to simply devote more resources and technology toward the things we want. But not so in our Orwellian universe – we find in fact the exact opposite! The solution to the problem of reduced living standards is to reduce them even more! The solution to recession is recession.
The story that’s told in support of this fantastical idea is necessarily nonsensical for the goal is the maintenance of power, not the improvement of general living standards. The central character in the tale is “competition”, an interesting fiction given our world of oligopoly. Competition doesn’t apply to oligopolistic firms though; it applies solely to workers and nations and requires of them an unending downward spiral in wages and collective welfare. It’s the very nature of the capitalist system and, as European Commission head Barroso told French President Hollande yesterday, “To be against globalization is like spitting in the wind”. Now spitting in the wind is never a very wise idea, but isn’t it an incredible feature of our world that the wind always seems to blow towards the general population? And that supposedly democratically elected leaders are so ready, willing, and able to spit on them?
So the downward spiral of true recession continues with no end in sight. Hollande, not one to spit in the wind, continues on the recessionary path with no helpful ideas in sight, proposing just today to increase the retirement age. “People live longer, they should work longer”, he says. While this may on its surface seem reasonable, it neglects our vast growth in productivity and technology, the reality of huge numbers of unemployed people both in France and globally that could be brought online, and the huge misallocation of resources towards purposes having no bearing on general well being. We see this very well reflected in OECD statistics. While life expectancy in France has risen 6.2% since 1990, labor productivity has climbed 35.9%, offset by a 10.2% decline in average hours worked. These improvements in overall productive output, though, aren’t being shared as median household income growth has been just 52.9% of per capita GDP growth during this period. To even suggest that living standards should decline in the face of these facts is truly outrageous.
The world’s population has been in a real recession for decades and the mainstream economists and politicians tell us the answer to recession is nothing but more recession. The real solution, however, is quite straightforward; we simply need to assure that sufficient resources for the quality things we want are always employed. A recession in luxury yachts, mansions, or military spending is fully acceptable, even desirable. But a recession in general prosperity is not. By getting specific about the meaning of recession, we can more easily differentiate between real and phony solutions and begin to see the gaping chasm that exists between capitalism and true prosperity.