← Pitchfork Economics with Nick Hanauer
Pitchfork Economics with Nick Hanauer
The Worker Power Missing From the Abundance Debate (with Kate Andrias and Alexander Hertel-Fernandez)
00:34:26
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A
The rising inequality and growing political instability
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that we see today are the direct
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A
result of decades of bad economic theory.
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The last five decades of trickle down economics haven't worked. But what's the alternative? Middle out economics is the answer because the middle class is the source of growth, not its consequence. That's right.
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This is Pitchfork Economics with Nick Hanauer,
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a podcast about how to build the
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economy from the middle out. Welcome to the show.
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B
It's Paul again.
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A
Yes, it is. Here I am.
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B
Man, we've been getting an abundance of Paul on these podcasts recently.
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A
Waka waka. I know. I'm bringing down the median salary of our podcast team here.
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B
Yeah, well, that's not hard. Every time Nick is not on the show, it's a very different class feel, I guess. But speaking of an abundance of Paul, we're talking about abundance again.
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A
It's been over a year. We've had an abundance of conversations about it, and the abundance conversations will continue until morale improves. You know, I've been thinking a lot about abundance. Right. Obviously I read the book last year. We had some listeners who were upset that we mentioned it in our year end book roundup. Although I still stand by the fact that it was an important conversation.
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B
Look. Yeah, look. You look on my bookshelf, you'll see the Communist Manifesto, Das Kapital, Mein Kampf. You know, Mein Kampf is a terrible book. It's, you know, important part of history. I didn't read the whole thing, but, you know, reading bits of it. I'm not equating abundance with Mein Kampf.
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A
Let's, let's get out on the record.
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B
It's another one of those books that I hate read, you know? Sure, you. I had to read it.
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A
Well, and I've been thinking about it a lot lately because even, you know, locally in Seattle, we've had three or four ongoing conversations that sort of apply to abundance in, in different ways. Right. Like there's a conversation about one of Seattle's wealthiest communities happens to be right next to the region's biggest children's hospital. And it turned out that, that the wealthy homeowners made it so that helicopter trips from, you know, Idaho and, and Montana and other regions of the Northwest, if they were not enough of an emergency, that the children would land in the helicopter a mile away from the hospital and be ambul the rest of the way so as not to interrupt the sleep of the poor, wealthy homeowners.
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B
Right.
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A
So that's, that's one thing. That's a nimbyism debate.
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B
Yeah. And just to put that in perspective, the only pediatric trauma center in Washington, Idaho, Montana, Alaska, this is the only place to take them. But if it's the wrong time of day, kids will have to wait.
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A
They need their beauty sleep. And then there's a debate about, an ongoing debate that I think a lot of parts of the country are having about banning the, the construction of data centers until, you know, the AI conversation is, is. Is still going hot and people don't want to have something that might, you know, drive up energy costs and suck the groundwater out for everybody. And, yeah, so that's an ongoing debate. And we're also having an issue with transit. Our transit construction so far has been incredibly popular. Our light rail line keeps overperforming all of the estimates for, for how many people will be taking it once it's. But we're running into some budget shortfalls. And now there's some austerity talk, and there's a big conversation about which communities get rail first and which ones have to wait until 2050 to see their light rail line. So these are, these are all different facets of what seems like the abundance conversation.
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B
It's interesting because let's be clear. We're talking about abundance and you are focusing on all of the obstacles to abundance. Right. And that really is what the book is about, in a sense, is that there are these things, these obstacles, these legal, regulatory, social obstacles to building the things we want. And they argue for eliminating a lot of that. And one of the things which is often brought up, which is what we're talking about predominantly today, is the role that labor plays in allegedly making it more difficult to build and more difficult to build affordably. And to have that conversation, we're going to talk to a couple of experts on the subject. Kate Andreas is a professor of law at Columbia Law School, where she focuses on labor law, constitutional law, democracy, and political economy. And Alexander Hertel Fernandez is a professor of government in the School of International and Public affairs at Columbia University. His work focuses on American political economy, labor, public policy, and democracy.
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A
That's right. And together they are the authors of a new report from the Roosevelt Institute titled Democratic An Abundance that Works for Workers.
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D
I'm Kate Andreas. I'm a professor of law at Columbia University, where I teach labor law and constitutional law.
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B
Oh, we still have a constitution. I wasn't sure.
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D
It's hanging in there by a thread.
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C
I'm Alex Hurdle Fernandez and I'm Kate's colleague at Columbia. I teach at the School of International and Public affairs with A focus on political economy, workers and labor power as well. And we're both excited to be talking about our report, Democratic Abundance and Abundance that Works for Workers, which is hot off the press with the Roosevelt Institute.
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B
I guess we should start off. There's been a lot of talk about abundance. We've talked about it on the pod. We've talked about it off the pod with some maybe not as polite language. Why don't you define for us first what abundance is when people are talking about abundance now and what you mean by democratic abundance.
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D
So abundance means, or what its proponents say it means, is that government should be organized in order to produce more of what people need. It should produce more housing, transit, clean energy, infrastructure, and we should be able to do that at scale. Abundance argues in large part that the problem, the reason we're not doing that is because of excessive procedure, delay and veto points, which are largely driven in abundance as used by overregulation and various litigation challenges. Our point is not to reject abundance, but to argue that it has to be done in a way that's democratic and pro worker if it's going to survive and if it's going to help society.
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C
Yeah, I guess what I would say is that we agree on the goal, but I think we would disagree with many of proponents of abundance's diagnosis and solutions for how to get that goal of better infrastructure, better housing, more goods and services that everyday people need.
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A
So I guess first let's start sort of counterintuitively and maybe you could share what you think that the original abundance argument gets right. Like were there things that resonated with you as you started building your report?
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C
Yeah, I'm happy to start and say, you know, I think there's something really helpful about what abundance the book laid out, which is this vision of a society that has more of the everyday things that Americans need, whether it's affordable energy, housing, care, infrastructure. These are all really worthy goals. I think abundance is also helpful in reminding us that at one point we did do a lot of this and we did more of it at scale, thinking especially for instance about the New Deal period and period immediately following World War II. And abundance also helpfully points out that there have been an erosion in our ability to do more of this at scale. And I think as we mentioned, where we depart from the diagnosis that abundance offers is in unions, workers and many regulations as being. Being the key obstacle to all of that. I'm curious what you think, Kate.
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D
Yep, I think that's right. I mean, abundance focuses on process as being the problem and participation as being the problem. One of the arguments that a number of abundance proponents make is that too much involvement by unions and by labor slows things down and drives up cost. And they have similar complaints about participation by other people in our society. And we think that's focusing on the wrong culprits. That in fact the big problem that abundance is leaving out is distribution of power. That what really matters is who's dominating current policy debates and the production of goods. And that unless we shift that, we're not going to see different outcomes in terms of both the amount that's produced and who it's benefiting.
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B
You know, that's one of my big complaints is they do ignore. They don't actually even. They don't ignore distribution. They shove it aside. They basically say they make the political argument that Democrats have been focusing on distribution for too long and not on abundance. Personally, I'm not pro scarcity, which I think is the opposite of abundance. So they really set themselves up with a wonderful. That's a great word. It's a wonderful argument.
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A
I know that some abundance advocates argue that unions are part of the problem, raise costs, slow projects down, make it harder to build an argument that labor has had to fight for pretty much my entire life. And I was wondering if you could talk about what the evidence actually shows in regard to that and what you think about that argument.
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B
Sure.
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C
Happy to start here. And I think you're right that this is not a new critique of the labor movement, that unions raise costs and make it harder to do things. But we also, despite the fact that it's a long standing critique, we just don't think it's right. And I think when I look to abundance and the discourse around it, I often find that a lot of the proponents of this view fixate on individual cases where it seems to be the case that it was unions responsible for making it harder to build things. But as academic researchers, we know we can't just focus on individual cases. We have to look at what the evidence says more generally. And when we do that, as we do in our Roosevelt Institute report, we just don't find compelling evidence that unions are the main reason or even a primary reason why we can't build things in the United States. And let me give you two examples of the kind of evidence that we've looked at. One is cross nationally. We know that countries that have much stronger labor movements than the United States, in Western Europe, especially in northern Europe, they're able to build things much more effectively. And at scale than we are in the United States. So it can't just be the case that it's the strength of the labor movement. And even within the United States, it's just not the case that labor costs are driving high infrastructure costs or erecting barriers to housing, especially residential housing. There's some really compelling work, including by some abundance proponents, showing that the strength of labor just does not relate to, for instance, how much it costs to build a mile of highway. And so in our view, the evidence is just not there that unions are the primary obstacle to building things.
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B
Let's talk a little bit about the role that unions play in enabling abundance, how they can play a role in building things. Making it easier.
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D
Yeah. Our report traces several ways in which they play an important role in helping build. One is that they play a critical role in training and supplying the skilled workers that are needed to build infrastructure. There are a lot of problems with shortages of labor. And there's a lot of evidence showing that union apprenticeship programs and union training programs help increase the pipeline and provide the labor pool that's needed to do massive building. A second way that they can help and that they have helped is by building political coalitions for public investment. So labor support for public investment and for new infrastructure can be instrumental in getting it passed. And third, we show that unions also help build legitimacy and effectiveness into public infrastructure programs in the sense that when you have buy in from workers in the community, the programs are more likely to be supported, and they're also likely to benefit from the expertise of the workers who are going to be both helping build the infrastructure but also benefiting from it at the end.
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B
But there are things that labor can do different to enable this.
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C
That's right. And we look at the labor movement not monolithically, and we see some unions that are much more proactive in thinking about how they can be part of abundant solutions. And we note that that's not every union. And we tie that back to the structure of labor law in the United States. And this is an area where Tate's done a lot of research showing that the structure of labor law in the United States that puts organizing and barg bargaining at a very micro level. Unions have to go store by store, factory by factory, generally work site by work site, to organize and bargain with employers. That that means unions often bring a narrower set of preferences to the bargaining table than they might in a context where unions are bargaining and negotiating with employers and government over entire regions or industries. What's known among labor scholars as sectoral bargaining. And so we think that a way to bring even more of labor to the table support these kinds of abundance reforms is to think about labor law reforms like sectoral bargaining that would help push unions to think about a broader constituency when they're bargaining with employers, and also bringing government to the table in negotiating with workers as well.
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D
We also show that even within the existing legal regime, there are ways that some unions have been more creative about compromising on abundance programs or on infrastructure programs. So, for example, we point to the role that the carpenters played in the reforms in California, where they wanted to see more growth and more building, but wanted to make sure it didn't happen at very low wage standards that would exploit workers. And so they were willing to engage in a compromise that would enable them to organize more residential housing workers into the union and also enable more growth of housing construction, even if that meant some changes to the kinds of agreements they would normally expect.
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B
And what type of compromises did they agree to?
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C
So the general principle is that instead of getting the highest wage that they were accustomed to, maybe accepting a lower starting wage that would apply to new residential projects with the aim of ensuring more production that in turn could generate more potential new members. So really thinking about a shift from delivering immediate gains on wages to existing members to thinking about the opportunity to build their membership by ensuring more production. Another way I often think about this is getting unions to think outside of the mindset of just focused on one project at a time to thinking about how they can ensure production or construction on a stream of projects over time that could build their membership.
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D
One other thing that's important to note about the California compromise is the compromises that were made were for workers who were almost entirely non union. So it wasn't about lowering standards of existing members or existing workers, but about raising standards in an industry that had long been very low wage and non union.
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B
Did this require any legislative changes as well? Because I know in Seattle and King county, government funded projects are required to pay prevailing wage and are required to hire unionized contractors.
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C
Yes. So the California compromise was part of a string of legislative agreements that were hashed out between lawmakers and the building trades, and particularly the carpenters, as well as proponents of more residential construction. And I think it's a nice example to return to. One of the ways that Kate mentioned. Unions can be part of the abundance coalition of unions showing up and saying, we're interested in building more, but we want to make sure that we raise the floor, particularly for the most vulnerable workers.
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A
One of the things I noticed when I was reading Abundance is that a lot of it is directed to the CEO level, right? Like the deregulation and all that. And then there's a lot that's devoted to the consumer level, you know, like what it would be like to live in a place where medication was cheaper and so on and so forth. But there is very little directed to the worker level, which is a pretty important exclusion. And I was wondering if you could talk about what you think that worker abundance world might look like.
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D
Yeah, I mean, I think for one thing to note is that workers do occasionally get mentioned in abundance. And there are certainly some people within the kind of broader abundance umbrella umbrella that are, that are willing to say, yes, workers are important as well. But as you say, they pass over that really quickly and workers don't really play a central role in what the vision of an abundant society would look like. And we think it's important for labor abundance, for abundance that works for workers to come with good jobs, more jobs, jobs that are good quality, but also a system where workers have a voice at the outset in helping define what the priorities are, what it is that we're going to build. Because workers are both workers who help produce goods and they are also the consumers of whatever gets built in the end.
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B
I hate to move away from labor, but just briefly, when we talk about democratic abundance and we talk about how important power this is, a lot of the arguments in the Abundance book was about environmental regulations and how they are used and the courts are used to block projects. What does democratic abundance look like in that context where clearly there's a trade off in terms of the power of communities to say what they want built within them?
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C
Yeah, I think it's such an important question and it gets to the question of trade offs. What is it that communities value? And we think that communities should have a seat at the table when these trade offs are being discussed. Do you want what configuration basically of good jobs, of environmental protection, of new production? And that's an important role that we think a democratic abundance vision can offer to people is the chance for communities to have a say in making these kinds of decisions. There's been some interesting new work looking at community benefit agreements, for instance, as a vehicle for communities to be able to have this kind of voice when there is new construction that's happening in particular regions, making sure that community members have a seat at the table with government, with developers, to be able to think through what are these trade offs that we want and where do we put the most value. For instance, do we want to generate jobs? Do we want to protect particular areas of the environment? And do we want to ensure that there is equitable gains from whatever the new construction is? And so we view those mechanisms as being a key part of the way that democratic abundance could work in practice, Creating mechanisms for communities to be able to sit down and think about the kind of policy and deal that they would want ultimately struck.
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D
The only point I would add to that is we're really urging that communities be brought in in the front end. So if environmental concerns and labor concerns are brought in at the front end and projects move ahead quickly, but with good jobs and minimal harm to the environment built into the project, then that makes the need for constant litigation at the back end less. One of the things that the abundance proponents really complain about is endless litigation. Nobody's for that. That's a bad thing, right? It takes up a lot of resources and it del. But if you can incorporate the concerns that communities have about environmental degradation and the need for good jobs in the projects before they get off the ground and bring people to the table through tripartite arrangements, then you can minimize the need for that litigation at the back end.
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B
Are there procedural changes on the legal end? Obviously, the intent of these environmental review laws when they were created, was not to create an opportunity for opponents of projects to just endlessly block them until they no longer pencil out financially. Are there ways to reform the laws, such as to still preserve that original intent, yet remove the ability of opponents to just abuse the legal system towards their own end?
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D
Yeah, we think that there are at least two really important mechanisms. One is by creating tripartite negotiation at the front end. So if you bring in groups that are concerned about the environment and labor groups to the table at the front end and come up with a community benefits agreement or framework for the project that satisfies those needs, then a reasonable trade off is to reduce litigation challenges at the back end. So tripartite administrative arrangements sometimes is what these get referred to as. Another framework is community benefits agreements. But it's the same idea, right? It's increasing front end input and in exchange for that, decreasing the ability to litigate at the back end.
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A
This. This might be a curveball, and it's fine if you don't have an answer in the news right now. There is an ongoing debate about construction that seems like it might have some lessons for abundance. And I'm not entirely sure about this, but the construction of data centers, which seems very unpopular with everyone, but that A lot of politicians seem sort of dead set on, on progressing right. Even against the will of the people. And at Maine, which is where I'm from, so I pay attention to it where they passed a data center ban that the Governor Mills overruled, vetoed, and that was, you know, generally thought to be the sort of the killing blow to her senatorial campaign. Is there anything that you're watching from this? Are there any takeaways from this? Is there anything that you are especially interested in as the. The data center debate goes on?
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C
Yeah, I mean, I think the first thing to say is the public backlash against data center construction, I think, shows the risk of building, enacting a bold new agenda without actually consulting the public. I think one of the reasons why there's so much opposition to the construction of data centers is that people view it as one of the few ways that they can have some degree of agency over the course of AI development in the United States. We aren't having a national discussion about the role that citizens or workers should play in the development and deployment of AI. And so this is one of the only mechanisms through which people can sort of put up their hand and say, I don't feel good about this. I want this to slow down. I want to have some sort of say in the process. With that said, I think there are some interesting models that we could evaluate that are happening at the local level. Again, to return to the example of community benefit agreements, where communities and workers are thinking about the kind of deals that they would want to strike with data center developers and the firms that are building it, to be able to have a say in the kind of jobs that they create, the kind of environmental standards that they would need to meet, and the kind of benefits that they would return to their local communities. But to return to where I started, the big lesson I take away is if you try and build a lot of things without consulting people, they're going to understandably get frustrated and mad and seek to slow down the process as a whole.
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A
We used to call it the benevolent dictator question, and now we call it the magic wand question due to current events. If you could redesign the abundance agenda with zero constraints, what would you build into it from the start? Start?
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D
We would build worker power in from the start. Strong labor standards, union apprenticeship, pipelines, project labor agreements, community benefit agreements, tripartite. So having workers have a seat at the table from the beginning and guaranteeing that whatever gets built gets built in ways that are good for workers that don't, that aren't premised on exploited labor, unsafe working conditions. We would also build in mechanisms for other community members to have a say in what happens. So we're all about abundance, right? We need to build the things that our society needs. We need to produce more of what we all need. We just need to do it in a way that benefits working people, that benefits community members, and that doesn't just benefit concentrated economic interests that already are dominating the policy process.
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C
Maybe the other thing I would just add is, Paul, you joked a little about how you had to rename the benevolent dictator segment, because we are living through a moment of genuine democratic backsliding with every day seeing a new form of authoritarian overreach and violation of our basic democratic norms and institutions. I just think now is not the time to be thinking about either trying to bypass or weaken one of the most important pillars of our civil society that we know from both our past and from other countries will be so essential to the fight for democracy here in the United States. And so it's not just important for its own terms that we support a democratic abundance with workers. It's also important for our democracy as a whole to make sure that these institutions that channel the voices of so many Americans into the economy and into politics can be strengthened and can really have a role to play in how these decisions are decided.
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B
Right. So we don't want a dictator to be able to say absolutely no to wind power. Can't have that wind farm. But yes, you have to have that AI data center. I guess our final question. Why do you do this work? We'll start with Kate.
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D
I have been doing this work for so long. I started as a union organizer. From the very beginning, I've wanted to have all of us have a greater say in what our society looks like. And I think that by building collective organizations and participating in our democracy, we can have the kind of abundance we all deserve. Point number one. Point number two. Doing the kind of careful research, empirical studies, and actually looking at what works and what doesn't helps us all make better decisions about what direction to go
- [26:59]
C
in the future on my part. Part of my family is from Chile and South America that saw a brutal dictatorship come to power, in part because there were fundamental imbalances of economic and political power with a lot of inequality. And that country has really struggled ever since with a return to fully inclusive, responsive democracy. And I grew up hearing about the importance of labor in that story, both in pushing for a return to democracy and in fighting for a more equal economy that could support a better Better functioning democracy. As I thought about the work that I do, for me, workers and democracy are just so intimately connected that you can't have a well functioning democracy without a vibrant and healthy and strong labor movement. And so that's what motivates a lot of the work I do trying to understand how we can achieve that vision of a better functioning economy and democracy that puts workers at the center.
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A
So Goldie, I think we have an abundance of takeaways from that conversation.
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B
Well, you know me, Paul, I always have an abundance of opinions. I think, well, there's several things that bothered me about the abundance take from Ezra and company. And part of it is, as I mentioned, the way they ignore distribution as being part of the problem that we actually live in a society, in a world, an economy full of abundance, we have, have an abundance of resources, more than enough to clothe, house, educate, feed everybody beyond their basic needs. And the fact that we don't do this is a political choice, not an economic choice. And the reason why we make that political choice and the reason why that political choice ends up having the unequal effects it does is because we don't have an equal distribution of power. This is one of those things that is missing from mainstream economics. They ignore power, that markets always even things out in the end because of that magical invisible hand. And of course the reason why we have organized labor in the first place is to try to balance that power between capital and labor labor. So that built in power advantage that employers have, that you can go all the way back to Adam Smith and the wealth of nations and see even him acknowledging it, that's always been there. Without organized labor, workers do not have power. And the interesting thing about labor power, especially when it comes to big construction projects like you had mentioned mentioned at the top, Seattle's light rail or one of the things that I spend a lot of time thinking about what people call social housing, what I like to call a public option, this idea that government can play a very big role in building affordable housing, not subsidized housing, affordable housing that the market cannot do, is that when you have labor on your side, on the same side as the builders, as the developers, when they are part of the conversation and they are at the table and they are working with you to get these things done, you now have the power of organized labor on your side. And that creates a bipartisan effort to do big things. Because certainly locally in Washington state and in Seattle, where labor, labor does have a lot of power, it has a lot of power with the Democratic Party. And it is the Democratic Party that is essentially running the show here. And labor plays a big role in that. So if you have labor, the power of organized labor as diminished as it is compared to where it was 75 years ago, it's much easier to get big things done.
- [31:03]
A
And I think it's also important because the labor is more likely to actually live in the community that they are building things in as opposed to some of the these, you know, CEOs who want to swoop in and build say a data center or something like that. So in a lot of ways, labor can be sort of a proxy for, for the community voice that has been missing from, from some of these conversations.
- [31:28]
B
Right. Because it turns out the people that are in labor are workers and workers are live in the community. They're also consumers. It's weird how it's the people, the majority of people actually are the workers, not the investors. So you, you know, you might want to take their opinions into account. But also, and I think this is important because I've looked at it from the housing side, there are things about our agreements with labor and the way the laws are written and that make it more expensive for government to build, that increases the labor costs and the idea that we can bring labor to the table to compromise in an effort. And this is really important, I think it's something that Kate pointed out is that rather than focusing on maximizing, simply on maximizing the wages for your existing members, if you are looking at growing your membership, you're not just growing your membership as a labor union, as a trade union, you are growing your power because the more members you have, the more powerful you are. And that benefits all your members in the future as opposed to just looking at the present on one individual project.
- [32:52]
A
These are the kinds of things that happen when you reinsert power into economic conversations where it's been stripped out over the course of 50 years or so.
- [33:01]
B
Personally, I, I know about 30% of the country disagrees with me on this. I think democracy is a good thing thing and we should be expanding it rather than diminishing it. And it's an interesting take and I think an important report for people to read because it does provide this counter to the straight up abundance argument that if we just get all those regulations and unions out of the way, we can finally have build good things again.
- [33:33]
A
And of course, as always, you can find a link to that report in the show notes. It's absolutely free to read.
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B
It's democratic abundance and abundance that works for workers.
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E
Pitchfork Economics is produced by Civic Ventures. If you like the show, make sure to follow, rate and review us wherever you get your podcasts. Find us on other platforms like Twitter, Facebook, Instagram and Threads. Itchforceconomics Nick's on Twitter and Facebook as well. Ickhanhauer for more content from us, you can subscribe to our weekly newsletter, the Pitch over on Substack, and for links to everything we just mentioned, plus transcripts and more, visit our website, Pitchfork economics.com as always from our team at Civic Ventures, thanks for listening. See you next week.