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Economy

When machines suck humanity out of the economy – Open Democracy

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Travaux par aspiration was the slogan on the lorry. Doing building work with a vacuum cleaner. The noise was colossal and the trench long as this vast machine sucked up rocks, slabs of concrete the size of a diner plate, along with all the sand and gravel under the pavement. It left a clean trench, a metre deep for some 30 metres under our kitchen window, done and dusted in the morning of the last working day in July and with only three people on site.

My first paid employment meant digging in the stone and clay of a Chiltern valley. The flints refused to give way under my pickaxe. The knack of swinging it so the point fell with the fullest force possible just where I intended, took several days of training by the lads from Connemara.

You could tell them a mile off by the cut of their hair, their tweed jackets and steady pace of bodies whose assigned function in the economy of the time was to dig into the earth, whether it was the peat of their homeland or the hoggin of the Thames Basin. Between themselves the talk was in a soft, lilting language that switched to English when instructing me in how to make, or rather craft their tea.

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This was as strong as their arms. Two half-pound packets of loose Indian from the Co-op round the corner, two pounds of sugar and a pint of milk tossed into a tin bucket of water simmering on a gas ring their ganger had brought by the bus and boat from Galway. As they dipped their cups in, I kept the bucket full with water, extra sugar, milk and tea leaves so the taste never lost its bite.

We knew each other’s names before we had lifted our first shovelful. The camaraderie and generosity to each other and to me was as warm as the language directed against their employer. Their lives, though, were hard and short, their final years solitary ones with a pint of Guinness at the bar and no pension to talk of in the pocket. Britain moved on the roads they built and lived in the homes they erected, but gave back little by way of thanks.

In 1960, on the outskirts of London, as now outside builders’ merchants in Paris, they and their kind waited and wait at the roadside for someone needing a ready hand to do a good job for as little money as the market can enforce. Travaux par aspiration is as much a threat to their restricted livelihoods as the automation of engineering factories or of bureaucratic work is to those who thought their jobs would be careers for life.[i]

Aristocratic sauternes

Where we stayed for part of this summer was a book in praise of Yquem,[ii] about the most expensive wine money can buy. Naturally, it was a song of praise to Alexandre de Lur Saluces as the vineyard in the Sauternes region of Bordeaux had been in the hands of his aristocratic family for centuries. Now, it is majority-owned by the luxury goods empire of France’s richest business figure Bernard Arnault and his LVMH, the company that clothes Brigitte Macron for free.

By a unique happenstance of the soil around the chateau and how it is drained, Yquem apparently gains its unparalleled quality because the vineyard is especially welcoming to an infection that turns the grapes into a shrivelling, fungus-ridden mass. Generations of skilled workers, mostly living in tied accommodation, made of these grapes what the author declares to be “a symbol of perfection”. We learn about what they have done, the skills they developed, the equipment they used, the price the fruit of their labours could command, even the luxurious meals that it should accompany.

The right to a name is granted to only one of them, if spiced with sexist condescension:

“Though uninhabited, the chateau is kept up and the Count often receives. The meals are usually prepared by one of the chefs of Bordeaux. For the more simple occasions, a member of the staff, a woman who knows how to roast a joint of mutton to perfection, is in the kitchen (and) it is Thérèse, one of the ‘vigneronnes du domaine’ who also cleans the house, who serves the wine, always at a perfect temperature, discreetly, with style and a calm pride.”

On page 82, two horses are pictured and named: Popaul and Pompon. The human being leading them out of their stables is left unpersonned amid this glorification of a tipple for the privileged.

In the 1990s, the work of caring for the vines still used ancient technology: perhaps it does today. Bernard Arnault, however, has plenty of experience in outsourcing, delocalising or just automating away jobs. Travaux par aspiration is the name of his game. It helps one understand why, amid all the names that never got scratched on a tombstone as capitalism and its industrial revolution moved centre stage, that of Ned Ludd, the machine breaker, is the only one we ever seem to remember.

To recall why we do, go and taste the crackling anger and sardonic irony of Lord Byron’s prose and poetry from 1812 when the then parliament voted to hang machine breakers: “Stockings fetch better prices than lives— / Gibbets on Sherwood will heighten the scenery, / Shewing how Commerce, how Liberty thrives.”

[i] You can catch up with the machines on the website of their manufacturer, the French company Rivard at https://www.rivard-international.com/en/products/aspiratrice-excavatrice/. Rivard has been part of the US Alamo Group for over a decade.

[ii] Richard Olney, Yquem, Flammarion, second edition, 1997

This piece was originally published in the September edition of Splinters.

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U.S. economic growth for last quarter revised up slightly to healthy 3.4% annual rate

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The U.S. economy grew at a solid 3.4 per cent annual pace from October through December, the government said Thursday in an upgrade from its previous estimate. The government had previously estimated that the economy expanded at a 3.2 per cent rate last quarter.

The Commerce Department’s revised measure of the nation’s gross domestic product – the total output of goods and services – confirmed that the economy decelerated from its sizzling 4.9 per cent rate of expansion in the July-September quarter.

But last quarter’s growth was still a solid performance, coming in the face of higher interest rates and powered by growing consumer spending, exports and business investment in buildings and software. It marked the sixth straight quarter in which the economy has grown at an annual rate above 2 per cent.

For all of 2023, the U.S. economy – the world’s biggest – grew 2.5 per cent, up from 1.9 per cent in 2022. In the current January-March quarter, the economy is believed to be growing at a slower but still decent 2.1 per cent annual rate, according to a forecasting model issued by the Federal Reserve Bank of Atlanta.

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Thursday’s GDP report also suggested that inflation pressures were continuing to ease. The Federal Reserve’s favoured measure of prices – called the personal consumption expenditures price index – rose at a 1.8 per cent annual rate in the fourth quarter. That was down from 2.6 per cent in the third quarter, and it was the smallest rise since 2020, when COVID-19 triggered a recession and sent prices falling.

Stripping out volatile food and energy prices, so-called core inflation amounted to 2 per cent from October through December, unchanged from the third quarter.

The economy’s resilience over the past two years has repeatedly defied predictions that the ever-higher borrowing rates the Fed engineered to fight inflation would lead to waves of layoffs and probably a recession. Beginning in March 2022, the Fed jacked up its benchmark rate 11 times, to a 23-year high, making borrowing much more expensive for businesses and households.

Yet the economy has kept growing, and employers have kept hiring – at a robust average of 251,000 added jobs a month last year and 265,000 a month from December through February.

At the same time, inflation has steadily cooled: After peaking at 9.1 per cent in June 2022, it has dropped to 3.2 per cent, though it remains above the Fed’s 2 per cent target. The combination of sturdy growth and easing inflation has raised hopes that the Fed can manage to achieve a “soft landing” by fully conquering inflation without triggering a recession.

Thursday’s report was the Commerce Department’s third and final estimate of fourth-quarter GDP growth. It will release its first estimate of January-March growth on April 25.

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Economy

Canadian economy starts the year on a rebound with 0.6 per cent growth in January – CBC.ca

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The Canadian economy grew 0.6 per cent in January, the fastest growth rate in a year, while the economy likely expanded 0.4 per cent in February, Statistics Canada said Thursday.

The rate was higher than forecasted by economists, who were expecting GDP growth of 0.4 per cent in the month. December GDP was revised to a 0.1 per cent contraction from zero growth initially reported.

January’s rise, the fastest since the 0.7 per cent growth in January 2023, was helped by a rebound in educational services as public sector strikes ended in Quebec, Statistics Canada said.

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WATCH | The Canadian economy grew more than expected in January: 

Canada’s GDP increased 0.6% in January

41 minutes ago

Duration 2:20

The Canadian economy grew 0.6 per cent in January, the fastest growth rate in a year, while the economy likely expanded 0.4 per cent in February, Statistics Canada says.

“The more surprising news today was the advance estimate for February,” which suggested that underlying momentum in the economy accelerated further that month, wrote CIBC senior economist Andrew Grantham in a note.

Thursday’s data shows the Canadian economy started 2024 on a strong note after growth stalled in the second half of last year. GDP was flat or negative on a monthly basis in four of the last six months of 2023.

More time for BoC to assess

The strong rebound could allow the Bank of Canada more time to assess whether inflation is slowing sufficiently without risking a severe downturn, though the central bank has said it does not want to stay on hold longer than needed.

Because recent inflation figures have come in below the central bank’s expectations, “it appears that much of the growth we are seeing is coming from an easing of supply constraints rather than necessarily a pick-up in underlying demand,” wrote Grantham.

“As a result, we still see scope for a gradual reduction in interest rates starting in June.”

WATCH | Bank of Canada left interest rate unchanged earlier this month: 

Bank of Canada leaves interest rate unchanged, says it’s too soon to cut

22 days ago

Duration 1:56

The Bank of Canada held its key interest rate at 5 per cent on Wednesday, with governor Tiff Macklem saying it was too soon for cuts. CBC News speaks with an economist and a couple who might be forced to sell their home if interest rates don’t come down.

The central bank has maintained its key policy rate at a 22-year high of five per cent since July, but BoC governors in March agreed that conditions for rate cuts should materialize this year if the economy evolves in line with its projections.

The bank in January forecast a growth rate of 0.5 per cent in the first quarter, and Thursday’s data keeps the economy on a path of small growth in the first three months of 2024. The BoC will release new projections along with its rate announcement on April 10.

Growth in 18 out of 20 sectors

Growth in January was broad-based, with 18 of 20 sectors increasing in the month, StatsCan said. The agency said that real estate and the rental and leasing sectors grew for the third consecutive month, as activity at the offices of real estate agents and brokers drove the gain in January.

Overall, services-producing industries grew 0.7 per cent, while the goods-producing sector expanded 0.2 per cent.

In a preliminary estimate for February, StatsCan said GDP was likely up 0.4 per cent, helped by mining, quarrying, oil and gas extraction, manufacturing and the finance and insurance industries.

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Economy

Yellen Sounds Alarm on China ‘Global Domination’ Industrial Push – Bloomberg

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US Treasury Secretary Janet Yellen slammed China’s use of subsidies to give its manufacturers in key new industries a competitive advantage, at the cost of distorting the global economy, and said she plans to press China on the issue in an upcoming visit.

“There is no country in the world that subsidizes its preferred, or priority, industries as heavily as China does,” Yellen said in an interview with MSNBC Wednesday — highlighting “massive” aid to electric-car, battery and solar producers. “China’s desire is to really have global domination of these industries.”

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