Back in the 1980s, my father, an economist educated at American University, was fond of saying that the difference between the USSR and US is, in the former, dissenters are locked in, and in the latter, they are locked out. In the excellent HBO miniseries Chernobyl—which is set in the deep twilight of the Soviet Empire (the mid-1980s), features prominent British actors, and had its fifth and final episode on Monday, June 3—there’s not one spoken word that does not face the threat of imprisonment or disappearance.
This is how the party maintained its power. And it’s also why Chernobyl wasn’t an accident at all. Instead, it was the moment the pure fiction of a culture (Soviet culture) finally exploded in the real world. As Valery Legasov (Jared Harris), a Soviet nuclear physicist (and the star of the series), puts it: “The chain of disaster is now complete.” That chain links culture and nature. “That is how an RBMK reactor explodes, lies,” Legasov says in the last act of the series.
The insight here is deep. It’s not that lies have real consequences (that is obvious), but that culture, despite its plasticity and impressive usefulness for humans, must never be confused with nature. Though one, culture, is embedded in the other, nature, they are not the same. Recognizing this distinction, however, opens the possibility of bringing the two in closer alignment. No such possibility exists if one is confused for the other. To see culture as nature actually has the opposite effect. It delinks them. (I encourage my readers to reflect on this for a moment or two—it’s of the greatest importance.)
This is what happened during that Soviet period, and it is happening all around us in the US. One only has to read an article in USA Today titled “It’s great that you got a raise, but it just might hurt the stock market and the economy” to see that this business of confusing the culture with the real is very much alive and kicking in our times.
And people wonder why some people don’t trust the news.
— Baxter (@bdam777) June 4, 2019
How is USA Today‘s story about wages threatening to destabilize the markets and harm the economy related to the Chernobyl meltdown? For one, both are built on lies. There is no truth anywhere to be found in the assertion that wages are squeezing profits and present a great danger to the economy as a whole. But here it is in a major American newspaper. It points to one form of inflation, rising wages (which are still very low), and completely ignores others—asset values or executive pay (which exploded in 1980s). Read the whole article. You will not find one word about the other, more significant factors that are diminishing profits—the culturally defined source of economic expansion and prosperity. It is just wages.
But it does say this:
Pay increases are accelerating just as business revenue growth is slowing. As a result, they’re starting to narrow corporate profit margins, posing a threat to earnings and stocks, and to business hiring and investment plans. The trend eventually could temper economic growth, trigger layoffs and even contribute to the next recession, analysts say, depending on how sharply average wages rise… Eight percent of small businesses surveyed by the National Federation of Independent Business in April cited labor costs as their biggest problem, down just slightly from a record high 10% in February.
There are several scenes in Chernobyl that perfectly match the brazenness of the lies pushed in this passage. It happens, for example, when the head of the nuclear plant’s manager tells his underlings that what is happening—the meltdown of the reactor—is not happening, despite the data from the computer and what they have seen with their own eyes.
And what have we never seen in the entire history of capitalism? A stock market crash and depression caused by high wages. This, like a unicorn, does not exist. In fact, the historical record shows the opposite to be true: High wages stabilize the economy. The period of wage growth and robust unions in the US and Europe even has a name: the Golden Age of Capitalism—between 1947 and 1973.
Though some might say that the prosperity of this period was doomed to evanescence because post-war rebuilding could not go on forever; that sooner or later, what was broken by the war would be replaced and expansion reach a steady state of low growth. For one, the idea that slow or no growth is bad is purely cultural. There is nothing in reality (nature) that says it is bad or disastrous. And if evidence (the truth) matters, then we would certainly find that culturally determined slow growth is much more compatible with reality than unlimited and panic-paced economic acceleration (“I just can’t get enough, I just can’t get enough”).
But this period, the Golden Age of Capitalism, was defined by high tax rates on top earners and a sidelined financial sector. After the 1970s, the top tax rates plunged and finance surged. That marked the return of the boom/bust economy. None of this is controversial. It’s well documented. But it’s not in the USA Today piece. It claims wages are leading us to a recession and eventual doom. Not, mind you, an inflated stock market that demands more and more money to sustain its record-breaking levels. There was even a massive tax cut in 2017 that transferred public money to corporations on the promise that they would shower a good part of increased profits onto workers (the Tax Cuts and Jobs Act of 2017). This money is gone already? It is only 2019. Where did all of that cash go so fast? It was just good for a year or so before labor became a drag on the economy again?
To blame wages for the next downturn is pure Soviet-style lying. And it will have real consequences. In this respect, there is a close similarity between the meltdown of a stock market and the meltdown at Chernobyl. It is this: The official count of the deaths caused by radiation poisoning at Chernobyl is very low (31). We play a similar game when it comes to market crashes. We believe they kill a few to no people. In the way the Soviet government ignored the long-term effects of the disaster (a point made by the HBO miniseries), we in the US do not recognize the deep mental (and therefore biological) impact of these financial catastrophes. No one apparently died from the crash of 2008. This, of course, is a lie.
