Archive for the ‘Society’ Category

“The pitchforks are coming … for us plutocrats”

June 27, 2014

[Video added 6/28/14.  The TED organization refused to distribute this TED talk because it was "too controversial" ]

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Nick Hanauer, a billionaire who lives in Seattle, said he got rich mainly by foreseeing 30 years ago how important the Internet was going to become.  What does he foresee now?  Pitchforks—that is, revolution against people in his income class unless income and wealth are more widely distributed.   He wrote in the current issue of Politico:

The fundamental law of capitalism must be: If workers have more money, businesses have more customers.

Which makes middle-class consumers, not rich businesspeople like us, the true job creators. Which means a thriving middle class is the source of American prosperity, not a consequence of it. The middle class creates us rich people, not the other way around.  … …

During the past three decades, compensation for CEOs grew 127 times faster than it did for workers. Since 1950, the CEO-to-worker pay ratio has increased 1,000 percent, and that is not a typo.  CEOs used to earn 30 times the median wage; now they rake in 500 times.

Yet no company I know of has eliminated its senior managers, or outsourced them to China or automated their jobs. Instead, we now have more CEOs and senior executives than ever before.  So, too, for financial services workers and technology workers.  These folks earn multiples of the median wage, yet we somehow have more and more of them.

The thing about us businesspeople is that we love our customers rich and our employees poor. … …

The most insidious thing about trickle-down economics isn’t believing that if the rich get richer, it’s good for the economy.  It’s believing that if the poor get richer, it’s bad for the economy. … …

Hanauer believes that Seattle’s new $15 an hour minimum wage will be good for the local economy.

Capitalism, when well managed, is the greatest social technology ever invented to create prosperity in human societies.  But capitalism left unchecked tends toward concentration and collapse. 

It can be managed either to benefit the few in the near term or the many in the long term.  The work of democracies is to bend it to the latter.

That is why investments in the middle class work.   And tax breaks for rich people like us don’t.  

Balancing the power of workers and billionaires by raising the minimum wage isn’t bad for capitalism.  It’s an indispensable tool.

via Nick Hanauer – POLITICO Magazine.

I thank my friend David Damico for the link.

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Dmitry Orlov on communities that abide

June 23, 2014

I recently read Communities that Abide, a quirky little book whose editor and lead author, Dimtry Orlov, seeks lessons for human survival in the study of small, resilient communities such as the Roma (gypsies), the Amish and the Hutterites.

Orlov thinks such lessons are needed because industrial civilization is in danger of collapse.  He writes weekly on his blog about this subject.  He sees the key to survival not in stockpiling guns, ammunition, gold coins and canned food, but in human solidarity and mastery of survival skills.

He admires the anarchist thinker, Prince Peter Kropotkin, and says the three communities follow the anarchist principle of mutual aid.  Community work is not based on payment of wages.  Distribution of goods within the community is not based on ownership of property.  Community rules are not enforced by means of violence.   That’s anarchism in a nutshell.

CommunitiesThatAbide_CoverLack of a formal governmental structure does not, however, mean a high degree of individual freedom.  Norms of behavior within the community, which are largely unwritten, are enforced my means of gossip, ridicule, peer pressure and, in extreme cases, shunning and expulsion from the group.   Such means are much more controlling than a system of formal rewards and punishments, because there is nothing tangible to rebel against.

Orlov said the experience shows that the maximum size of an effective community is about 150 people.   Any group larger than that starts to develop a bureaucracy, he wrote.  The three groups he described are all networks of communities small enough that members can decide things in public meetings where everybody gets a chance to speak.

This fits his own experience working with high-tech start-ups in the Boston area.   Every time a new company got to be larger than 150 employees, he wrote, it ceased to be a team and become a hierarchy.

My own experience is the same.  I belong to a church whose congregation never seems to grow beyond 150 members.  Our denominational leaders and ministers have told us we are wrong in being content not to grow.  But Orlov’s book indicates that maybe growth is better achieved by spinning off new groups.

Solidarity within Roma, Amish and Hutterites is maintained through customs, some of them hidden from the outside public, that separate them from the public.   Orlov said all communities that endure have a story of their founding, which they continually affirm through stories, ceremonies and historical re-enactments.   Jacob Hutter led his community for only three years in the early 1500s before he was martyred for his beliefs, yet so strong was his vision and his commitment that, 500 years later, there are people called Hutterites.

The key activity of these communities, aside from providing members with food, clothing and shelter, is the rearing and home schooling of children.  The greatest threat to group identity is public education, because it teaches the values of the modern world.  That is not to say they all refuse to send their children to school, but they have their own schooling to teach their own values.

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Piketty’s inequality argument in six charts

June 14, 2014

Thomas Piketty’s book, Capital in the Twenty-First Century, has stirred up a lot of controversy.  As well it should.  If he is right, there is nothing to stop a tiny elite from growing richer and richer at the expense of the rest of us.

The important thing to remember of Piketty’s argument is that it is not based on economic theory.   It is based on years of research on sources of wealth and income through history in different countries.   And, as quantitative information, it lends itself to charts.

I think Piketty’s research is important to understand for the future of our country and the world.   I’m reproducing six charts based on Piketty’s data from an article by John Cassidy in The New Yorker, which sum up Piketty’s findings well.

The first chart shows the share of American income taken by the best-paid 10 percent.

chart-01The chart shows that half of the income earned by all Americans went to the top 10 percent just prior to the stock market crash of 1929, that their income share fell to between 30 and 35 percent between 1945 and 1975 and now it is going back up again to 1920s levels.

Piketty explained this with his equation, r > g.   When the rate of return on investment is a higher percentage than the rate of economic growth, the holders of capital will get an ever-increasing share of income.   For the purposes of his book, Piketty has a special definition of capital, which is different from economists’ standard definition.  He defines capital as anything you can own that will give you an income, including agricultural land, government bonds, houses (which you can rent), common stocks or anything else.   In the Old South, prior to the Civil War, slaves were a form of capital.

Income distribution in the 20th century USA became more equal for a time partly because the Great Depression destroyed the value of so many financial assets, but mostly because of the high rate of economic growth following the Second World War.

Of late the pay of financiers and corporate executives has gone up much faster than the pay of middle-class and poor people, but, as the following chart shows, inequality in ownership of financial assets is a bigger factor in the income share of the top 1 percent than inequality in wages and salaries.

top1%sharechart-02

The next chart shows that same trend exists among the top 1 percent in all the major English-speaking countries.

chart-03

The next Cassidy chart shows the income shares of the top 1 percent in some of the developing countries.

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How political correctness shields oligarchy

May 21, 2014

 The survivalist blogger Dmitry Orlov thinks debating “political correctness” is a way to prevent discussion of real issues of American politics.

Discussions of social policy, especially with regard to such things as the rights of women and sexual and racial minorities, play a very special role in American politics.  … It has recently been shown that the US is not a democracy, in which public policy is influenced by public opinion, but an oligarchy, where public policy is driven by the wishes of moneyed interests.

Dmitry Orlov

Dmitry Orlov

On major issues, such as whether to provide public health care or whether to go to war, public opinion matters not a whit.  But it is vitally important to maintain the appearance of a vibrant democracy, and here social policy provides a good opportunity for encouraging social divisions: split the country up into red states and blue states, and keep them in balance by carefully measured infusions of money into politics, so as to maintain the illusion of electoral choice.

Throw a bit of money at a religious fundamentalist candidate, and plenty of feminists, gays and lesbians will vote for the opposing kleptocrat who will, once elected, help Wall Street confiscate the rest of their retirement savings, in return for a seat on the board; throw another bit of money at a rainbow-colored lesbian, and plenty of bible-thumping traditionalists will vote for the opposing kleptocrat who, once elected, will funnel tax money to his pet defense contractor in return for some juicy kickbacks.  This part of the American political system works extremely well.

On the other hand, if some matter comes before the politicians that requires helping the people rather than helping themselves and their wealthy masters, the result is a solid wall of partisan deadlock.  This part works very well too—for the politicians, and for the moneybags who prop them up, but not for the people.

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Gadgets getting cheaper, necessities more costly

May 5, 2014

essentialsvstoys

I’m old enough to remember when a personal computer or even a television set were so expensive than an average person couldn’t afford it.  But nowadays second-hand television sets and electronic gadgets are so cheap that hardly anybody does without them.

The things that are increasingly out of reach are child care, health care and education — the things you need to rise in the world.   The things that are affordable are the games, toys and entertainment that distract you from your condition and reconcile you to the limited life that you have.

Click on  Why America’s Essentials Are Getting More Expensive While Its Toys Are Getting Cheaper for more by Derek Thompson for The Atlantic.

Click on How the Middle Class Lifestyle Become Unaffordable for thoughts of Charles Hugh Smith.  One factor I failed to note in my original post is Baumol’s Disease, which is that as technology makes manufactured goods cheaper, the costs of human services become relatively more expensive.  [Added 5/7/14]

Pournelle’s Iron Law of Bureaucracy

April 22, 2014

Pournelle’s Iron Law of Bureaucracy states that in any bureaucratic organization there will be two kinds of people”:

Jerry Pournelle

Jerry Pournelle

  • First, there will be those who are devoted to the goals of the organization. Examples are dedicated classroom teachers in an educational bureaucracy, many of the engineers and launch technicians and scientists at NASA, even some agricultural scientists and advisers in the former Soviet Union collective farming administration.
  • Secondly, there will be those dedicated to the organization itself.  Examples are many of the administrators in the education system, many professors of education, many teachers union officials, much of the NASA headquarters staff, etc.

The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization .

via Report Template.

This rule of thumb applies equally to government bureaucracies, corporations and other private organizations.  I saw a good example of this during the 24 years I worked as a reporter for the Democrat and Chronicle in Rochester, N.Y.   Many of us reporters were (or thought we were) dedicated to the profession of journalism, and to the professional goals of good writing, accurate reporting and fearless investigation of wrongdoing.  Many people in the business departments of the newspaper resented our indifference to the goals of increasing the newspaper’s circulation and advertising revenue.

This is not a case that we in the newspaper department were righteous and the people in the circulation and advertising departments were not.   If people didn’t buy the newspaper, and businesses didn’t advertise in it, we reporters and editors would not have had a means to do our work.  You need a balance between both — those devoted to professional excellence and those devoted to making the organization flourish.

Click on Saving Labor From Itself for another example.

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Jerry Pournelle is, among other things, a best-selling science-fiction writer.

Click on Chaos Manor for his home page and web log.

Why people accept the things they do

April 9, 2014

post2experiment

I don’t know when, where or if this experiment was actually carried out, but it is a good parable of why bad customs persist.

Hat tip to Carol Avedon (who is listed on my Blogs I Like page).

http://avedoncarol.blogspot.com/

http://avedoncarol.blogspot.com/2014/04/clip-joint.html

Which nation’s people are the most satisfied?

February 26, 2014
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Las year researchers from Pew Research Center once again asked a sampling of people from different countries, “Overall, are you satisfied or dissatisfied with the way things are going in our country?”

The map and chart indicate the percentage who answered, “Satisfied.”

The peoples who reported the most satisfaction were the Chinese (85%) and Malaysians (82%) and those who reported the least satisfaction were the Spanish (5%), Italians (3%) and Greeks. (2%).  We Americans were in the middle (31%).

What these surveys measure is not which countries are flourishing the best, but whether life in those countries measures up to expectations, which is different.

Hat tip to Business Insider and Marginal Revolution.

A good question

February 26, 2014

hattip.corrente

Hat tip to Corrente.

http://crooksandliars.com/diane-sweet/35-million-homeless-and-185-million-va

http://www.theguardian.com/society/2014/feb/23/europe-11m-empty-properties-enough-house-homeless-continent-twice

James Scott and the Art of Not Being Governed

February 25, 2014

Some time ago I read and admired James C. Scott’s Two Cheers for Anarchism, in which he pointed out how nowadays most Europeans and Americans are overly ready to obey authority.

I also read Scott’s Seeing Like a State, which is about how the modern world has been shaped by the desire of rulers to make their subjects legible, so that they can be more easily taxed, conscripted and controlled, and the disasters that have followed from rulers’ illusion that information is the same as understanding.

I haven’t yet got around to reading his other great book, The Art of Not Being Governed, which is about 100 million people in the uplands of southeast Asia who have successfully escaped the control of governments in the region.  This video is a good preview.

As Scott pointed out, the ungoverned people he studied were not primitives who had failed to catch up with civilization.  Rather they were the descendents of people who centuries before had escaped the control of governments of China, Vietnam, Thailand and other countries.

He noted that only during the last few centuries has it been possible to even argue that there is a  net benefit to being under the jurisdiction of a government.  Prior to that you were better off being a free hunter-gatherer.  All government did was tax you, conscript you, enslave you and possibly provide some protection for other governments.


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