Don’t miss Dylan Matthews’ piece on Modern Monetary Theory, which argues that deficit spending is essential to economic growth. Here’s the crux of the philosophy:

This claim, that money is a “creature of the state,” is central to the theory. In a “fiat money” system like the one in place in the United States, all money is ultimately created by the government, which prints it and puts it into circulation. Consequently, the thinking goes, the government can never run out of money. It can always make more.

This doesn’t mean that taxes are unnecessary. Taxes, in fact, are key to making the whole system work. The need to pay taxes compels people to use the currency printed by the government. Taxes are also sometimes necessary to prevent the economy from overheating. If consumer demand outpaces the supply of available goods, prices will jump, resulting in inflation (where prices rise even as buying power falls). In this case, taxes can tamp down spending and keep prices low.

But if the theory is correct, there is no reason the amount of money the government takes in needs to match up with the amount it spends. Indeed, its followers call for massive tax cuts and deficit spending during recessions.

Fighting our recession with austerity measures is failing horribly and yet favoring austerity is widely perceived as the serious-minded approach to our current economic woes. Modern Monetary Theory provides a framework for thinking about fiscal policy in a different way and shifts the Overton window away from austerity.

Matthew Yglesias on how societies stock up for the future:

A lot of the stuff we make has a pretty short shelf-life. Computer software gets obsolete super fast. Clothing wears out. Food spoils (even Twinkies). Durable goods like cars last longer. Airplanes last even longer. But the real durability is in structures. Houses, office buildings, bridges, tunnels, factories, train tracks. As a society, we save for the future by channeling resources—steel, elecricity, human labor power—into the production of things that last a long time rather than things that are more perishable.

This is a point the federal government does not seem to really understand.

I would take issue with his point about software, though. Yes, most software does not last very long, but as we build software, we also build a corpus of knowledge about how to build software more efficiently, and to create more powerful computers to run that software. I would argue that the software industry has created massive social value over the course of its existence.

Lately, working conditions in Chinese factories that produce consumer electronics that we all use and love have gotten a lot of press. Mike Daisey has been touring and presenting a one man show, The Agony and Ecstasy of Steve Jobs, on this subject. Portions of it were recently aired on This American Life. Perhaps not coincidentally, the New York TImes published an exposé on Foxconn last month that looked into the poor pay, unlawfully long hours, and dangerous work conditions at the company’s factories.

I’ve been following the subsequent debate. Tech pundit and Apple fan David Pogue responds with what is largely a straw-man filled argument about the price of electronics doubling and the fact that all companies use these factories, not just Apple. Mike Daisey responds ably.

I want to talk about two aspects of it, though. One is the scope of the problem, and the other is the fairness of singling Apple out. As the article points out, Apple is not the only electronics company that manufactures its products in China. Almost everyone does. And of course, we’re only talking about electronics manufacturers. What are working conditions like at Chinese tire factories? Or toy factories? Or the factories where they make buttons for shirts? The story is the same across industry in China, if not worse.

Everybody is in some ways a beneficiary of the low prices that come with China’s low wages and poor working conditions — there’s no room for sanctimony.

On the other hand, I think it’s fair and useful to single out Apple, for several reasons. The first is that it’s easier to rally action against a single company than it is against every company that imports goods from China, or even everyone in the electronics industry. Apple happens to be the highest profile target available right now, for all of the same reasons that the iPhone and iPad are so popular.

The pressure is working. Apple CEO Tim Cook sent an internal email about working conditions to Apple employees the day after the New York Times article talking about steps the company was taking to make things better. It has worked int he past as well. A few years ago, Greenpeace succeeded in getting Apple to improve its environmental practices by singling the company out as well.

Secondly, Apple just reported the best quarter in the history of the technology industry. If any company has the breathing room to spend money to bring all of the links in its supply chain into compliance with the relevant labor law without raising its prices at all. As has been pointed out, the factories that manufacture Apple products manufacture products for other companies as well. If they are required to improve their practices for Apple, then they will most likely have to improve them across the board. So targeting the biggest fish makes sense from that perspective as well.

Is it fair to target Apple alone? If Apple is benefitting in terms of cost through the illegal practices of its suppliers (as Mike Daisey points out, the suppliers are not even complying with Chinese labor laws), then it is perfectly fair to call them out for it, regardless of what every other company is doing. Beyond that, it’s a question of strategy. Would it be fair to boycott Apple and encourage people to buy Samsung phones instead? No, nor would it be sensible. But it makes sense to target your activism where it will have the most impact.

Ultimately, as explained in the National Geographic article I linked to above, labor conditions in China are the result of systemic problems that we cannot address directly. China has a surplus of labor, a weak regulatory regime, and a highly corruptible government system in charge of maintaining that regime. China also lacks the institutions that could counterbalance the conditions that work against laborers. Workers are unable to organize and negotiate with their employers, and are unable to change the state of things via the ballot box.

The reason I keep returning to this subject is that it pricks my conscience. Disentangling oneself from abusive labor practices in China is impossible, but I do think it is the responsibility of consumers to be informed about the origin of the products that we consume. I wasn’t going to post this article because that sounded like such a weak prescription, but it turns out that it’s working. Apple is changing its behavior, and I’m sure that other companies will follow suit. “Pay more attention” doesn’t sound like much, but it has the potential to be quite effective.

Update: This post about McDonalds requiring pork suppliers to stop using gestation crates illustrates why it makes sense for consumer activists to focus on big game. An earlier policy change by McDonalds changed practices across the entire poultry industry.