Archive for April, 2014

New trade pact would lock in privatization

April 30, 2014

TISA Trade in Services Agreement globalization free trade

The proposed new 50-nation Trade in Services Agreement now being negotiated is the latest in a series of proposals in create international structures to lock in corporate agendas and neutralize government regulation.   It would, among other things, prevent municipal governments that privatized public services from taking them back if privatization didn’t work out.

I learned about TISA through a report published by two Canadian academics, Scott Sinclair of the Canadian Centre for Policy Alternatives, and Hadrian Mertini-Kirkward of the Institute for Political Economy of Carleton University, and commissioned by Public Services International, an international federation of public sector trade unions.  What follows is based on their report.

Formal TISA negotiations began early in 2013, and negotiators hope they can finish up by the end of 2014.   There’s a round of negotiations now going on in Geneva.   The Chinese government reportedly wants to join, but the U.S. representatives aren’t sure the Chinese are committed to the goal of the agreement.

The basic idea of TISA is that foreign companies should be able to compete to provide services on the same basis as domestic companies.  Hence there “standstill” and “rachet” clauses to make current and future privatizations of public services a one-way street, so that foreign companies don’t lose their right to bid on them.

There are provisions for governments to carve out exceptions in the agreement, but if there is something they fail to think of, they are out of luck.  Even if you think privatization is a good idea in general, you might admit that municipal governments should have the power to make decisions based on individual circumstances.

The agreement would forbid governments to restrict movement of corporate employees, such as construction workers or nurses.  Corporations would be allowed to bring in their own workers, without having to check on whether local workers were available to do the work.

However, there is no provision to give these employees resident or immigrant status.  When and if they lose their jobs, they’d be kicked out of the country immediately, so that they would not be in a position to complain or join unions.

Another provision would restrict governments’ authority to set rules for licensing clinics and medical laboratories, water and sewerage plants, power plants, for broadcast licenses and for accreditation of schools and universities.

There seems to be no end to these agreements.  First there was NAFTA, the North American Free Trade Agreement, which I was foolish enough to support, but which never delivered on its promises.

Then came the proposed Trans Pacific Partnership Agreement, which in the name of international trade would restrict governments from regulating corporations, and create an unelected tribunal to which corporations could appeal decisions that unfairly deprive them of “expected profits.”

I’d written and published a good many posts about the TPP when I learned there was another international agreement in the works that was just as bad, the Trans-Atlantic Trade and Investment Partnership.

Now this.  I wonder what else is being cooked up that we the people don’t know about.

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Click on Secret trade negotiations undermine public services: study for the press release by the Canadian Centre for Policy Alternatives.

Click on The Trade in Services Agreement and the corporate agenda for the complete report.

Protecting wealth vs. promoting growth

April 30, 2014

piketty,mattbors5_n

There’s no single principle that explains everything, but there is great explanatory power inn the French economist Thomas Piketty’s idea that inequality always increases whenever the rate of return on investment exceeds the rate of growth of the economy, that is, when r > g.

piketty-saez-top10aThis is not something that results from impersonal economic forces.  During the past 30 years, the policy of the U.S. government, and of governments that follow the U.S. lead, has been to prioritize return on investment over economic growth.

The U.S. Congress and many state governments are in the process of cutting back scientific research, education, maintenance of public works and other things that are needed for our nation’s economic future, in order to keep tax rates low for corporations and upper bracket taxpayers.

These are the same “austerity” policies being enforced by the World Trade Organization, International Monetary Fund and European Central Government on vulnerable governments, which are forced to sacrifice the well-being of their citizens in order to satisfy powerful financial institutions.   In both cases, there is a tradeoff to sacrifice economic growth in order to maintain returns on investment.

top1%sharechart-02One part of austerity is to sell off government property at bargain rates and delegate public services to corporations.  Most of the time this amounts to a transfer of wealth from taxpayers to well-connected business owners, who have no financial incentive to maximize service.

Some other ways that government policy fosters investor income at the expense of economic growth are (1) bailing out banks that have failed due to reckless financial speculation, (2) refusal to prosecute financial fraud by the “too big to fail” banks or claw back profits due to fraud, (3) expansion of patent and copyright monopolies, (4) failure to regulate cable and telecommunications laws, (5) failure to enforce antitrust laws, (6) the ban on student loan refinancing or bankruptcy …. The list goes on.

Increasingly corporate management seeks profit not by increasing the size of the economic pie, but by giving investors and executives a larger part of the pie — through financial manipulation and excess fees in the case of banks, through driving down wages and increasing executive compensation in the case of corporations in general.  I don’t say all corporate managers behave in this way.  I say that this has become common and acceptable.

the-top-01-of-americans-get-a-near-record-amount-of-income-at-around-10The result has been a concentration of wealth and income in a tiny minority of the population, and economic stagnation for everybody else.   So the first step in reducing inequality is to stop promoting it.

Piketty’s preferred solution to undue concentration of wealth is a progressive tax on capital, sufficient to prevent the wealth of the economic elite from expanding at a faster rate than the economy as a whole, along with progressive taxes on income and inheritance.  I don’t object to any of these, but higher taxes on the rich do not, in and of themselves, benefit the middle class, wage-earners or the poor.   I think it is more important to  strengthen labor unions, raise the minimum wage, maintain essential public services and invest in the future.

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Defenders of wealth push back against Piketty

April 29, 2014
piketty12growthrate

Source: Thomas Piketty, Capital in the 21st Century

If things go on as they are now, there’s nothing to prevent wealth from becoming more and more concentrated and economic inequality returning to the levels of England and France 200 years ago, according to French economist Thomas Piketty in his new book, Capital in the Twenty-First Century.

But many economists say this is not a problem.  They say concentration of wealth is a good thing, not a bad thing, and benefits us all in the long run, not just a tiny elite.   In this post, I will consider this argument, and state it as fairly as I can, then explain what I think the argument leaves out.

Concentrations of wealth are necessary to a capitalist free-enterprise economy.  They provide the means to invest in machinery, technology, education and the other things that increase society’s total wealth.   Capitalism has generated more economic growth than any alternative system and, without capital, there is no capitalism.

The chart above is illlustrates Piketty’s conclusion, based on his research,  that, most of the time, r > g – that is, the rate of return on investment exceeds the rate of growth of the economy, which, as a matter of logic, means that the income of investors grows faster than the income of wage-earners.

Now the chart should be read with discretion.  The parts prior to 1820 are no more than an educated guess; the parts from 1820 to the present are blends of different national economies; the future projection is possibility, not a prediction.  That’s no criticism of Piketty.  He did the best he could with the data available, and what he shows is reasonable.

According to the chart, r > g by a great deal on average prior to 1913.   Nevertheless there was an increasing rate of economic growth.  Inequality was just as extreme in 1913 in France and Britain and more extreme in the USA compared to 1820 or 1700, but that doesn’t mean the average person got no benefit from that growth.  It just meant there was just as much of a gap between rich people and the rest of us.

Not all rich people did things that promote economic growth, but the famous economist Friedrich Hayek argued that an idle rich class is of benefit to society.  They are pioneers in consumption, he said.   Once automobiles were a luxury for the upper class, for example, but now almost every family in North America owns one.  If rich people hadn’t provided an initial market, automobiles would never have developed.   Medical treatments which once were affordable only to rich people are now available to the general public.

Rich philanthropists finance good works, including, as economist Tyler Cowen pointed out, Belknap Press of Harvard University, publisher of the English translation of Piketty’s book.

A final argument is that the problem of excessive returns on capital is self-correcting.  When you have too much capital, the rate of return on capital falls.  If too many houses are built, rent falls.  If capitalists invest too much in building railroads or making personal computers, railroad tickets or computers become a glut on the market, and profits fall.  The economist Joseph Schumpeter called this “creative destruction,” and he said this is how the capitalist system renews itself.

I don’t think these arguments are completely wrong, but they leave a lot out.   Let me explain.

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Piketty’s Capital21: why is inequality rising?

April 28, 2014

Thomas Piketty’s Capital in the Twenty-First Century is a great book.  It consists of the working out of the implications of a simple principle, namely, that if the return on investment is a higher percentage rate than economic growth, wealth and income will become more and more concentrated in the hands of a tiny minority.

He said there is nothing to prevent wealth from becoming as concentrated in the hands of a tiny elite as it was in France and England in the 18th and 19th centuries — which is not the same thing as saying this is certain to occur.   I’m now re-reading Piketty’s book, from which I’m learning a lot, but l think it is important to be clear on what he’s saying and not saying,

He says that historically return on investment has exceeded the rate of economic growth, or, as he puts it, r > g,ut, like most economists, he writes of this as if it were the impersonal workings of the economy.  He lumps all income-producing forms of property together, which is legitimate for his purposes, but I make a distinction between (1) innovators who create value, (2) inheritors and passive investors and (3) usurers and manipulators.  The first deserve rich rewards, the second deserve average rewards, the third deserve to be unemployed or maybe in prison.   I think the rise of people in the third category is a big reason for the upward distribution of income in the USA.

Extreme inequality of income is a bad thing because it gives a small group of people too much power over the rest of us.  But curbing the excessive power of the top 0.1 percent or top 0.01 percent of income earners will not, in and of itself, create economic growth or end poverty.   These are not Piketty’s topics.

His preferred solution to excessive concentration of wealth is a progressive tax on capital along with progressive taxes on incomes and inheritances.  I’m not opposed to this, but I think there are other, better ways to change the r > g equation.  Promoting economic growth is one way.  Empowering wage-earners, such as by stronger labor unions or higher minimum wage laws, is another.

Below are links for those who want to know more, but don’t have time to read the 585 pages of his book and 78 pages of end notes.

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John Cage’s 10 rules for students and teachers

April 27, 2014

RULE ONE: Find a place you trust, and then try trusting it for a while.

RULE TWO: General duties of a student: Pull everything out of your teacher; pull everything out of your fellow students.

John Cage

John Cage

RULE THREE: General duties of a teacher: Pull everything out of your students.

RULE FOUR: Consider everything an experiment.

RULE FIVE: Be self-disciplined: this means finding someone wise or smart and choosing to follow them.  To be disciplined is to follow in a good way.  To be self-disciplined is to follow in a better way.

RULE SIX: Nothing is a mistake. There’s no win and no fail, there’s only make.

RULE SEVEN: The only rule is work.  If you work it will lead to something.  It’s the people who do all of the work all of the time who eventually catch on to things.

RULE EIGHT: Don’t try to create and analyze at the same time.  They’re different processes.

RULE NINE: Be happy whenever you can manage it.  Enjoy yourself.  It’s lighter than you think.

RULE TEN: We’re breaking all the rules.  Even our own rules.  And how do we do that?  By leaving plenty of room for X quantities.

HINTS: Always be around.  Come or go to everything.  Always go to classes.  Read anything you can get your hands on.  Look at movies carefully, often.  Save everything.  It might come in handy later.

via 10 Rules for Students and Teachers Popularized by John Cage – Open Culture.

http://marginalrevolution.com/marginalrevolution/2014/04/john-cages-rules-for-students-and-teachers.html

http://en.wikipedia.org/wiki/John_Cage

The Nazis were good for business (until the end)

April 25, 2014

Nazi is an abbreviation for “National Socialist” which is a short form of “National Socialist German Workers Party,” but they were not, in fact, a left-wing or socialist party under any reasonable definition.

The Nazis were opponents of free enterprise.  They did not believe in the unregulated free market.  But they were not opponents of capitalism.   The capitalists did very well under the Nazi regime.

Source: The Wages of Destruction, by Adam Tooz.  Click to enlarge

Source: The Wages of Destruction, by Adam Tooze.   Click to enlarge

I have read The Wages of Destruction, and it refutes the notion that Hitler was a madman — evil, yes, but not without reasons for what he did.  Hitler’s idea was that Germany could be a great nation only if it had access to resources equal to the great continental nations, the United States and Soviet Russia, or the great overseas empires, Britain and France.

To accomplish this, after coming to power in 1933, he planned to conquer and depopulate Poland, Belarus, Ukraine and Russia in order to create “living space” for the Germans.  Ukrainians and Poles were starved so that the German population could be fed.  Even Hitler’s anti-Semitism, even though it didn’t have an economic motive, served an economic purpose.  Confiscation of Jewish property helped to finance the Nazi regime.

Click to enlarge,

Source: Thomas Piketty, Capital in the 21st Century.   Click to enlarge,

This chart shows that, in Germany under Hitler, holders of financial assets received about a third of the national income, while in the United States under the New Deal, they received less than one-fourth.   Piketty’s statistics only go through 1938, but the German capitalists did very well in the early days of the war, when they were able to buy up property and companies in conquered countries at bargain rates.

Of course in the end the Hitler regime ended disastrously for everybody, including the Nazis themselves.   Germany later achieved prosperity and a dominant position in Europe in the way it always could have done — but developing its industry and its human resources.

The Hitler and Stalin regimes were both one-party dictatorships exercising absolute power, and both were among history’s greatest mass killers.  But instead of being regarded as two examples of the same thing, they have been regarded as opposite extremes, both in their time and the present.

The explanation is in the charts.   Under Lenin and Stalin, capitalist wealth was confiscated.  Under Mussolini and Hitler, the capitalists lost their power, but continued to enjoy their incomes and affluent ways of life.  That is the difference.

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I took the charts from this post and this post on Corey Robin’s web log.

A device that converts plastic back into oil

April 25, 2014

This video has been making the rounds for four years or more, but I just learned about it when my friend Bill Elwell called it to my attention.  It seemed to me to be too good to be true, but evidently the plastic-to-oil converter, made by the Blest Co. in Japan, is for real.

Here are some links to articles giving details.

Man Invents Machine to Convert Waste Plastic Into Oil and Fuel on hoaxorfact.com

Plastic to Oil $$ by Alternatives Journal, “Canada’s environmental voice”

Plastic to Oil Fantastic on Our World.

Converting plastic back into oil by Snopes.com

 

The twilight of net neutrality?

April 24, 2014

Tom Toles Net Neutrality

The Internet was created by research paid for by American taxpayers, and, since it was first opened up to the public, it has operated under the principle of Net Neutrality — the principle that it is equally open to all, regardless of their views, social status or ability to pay.

Now Tom Wheeler, a former telecommunication lobbyist appointed by President Obama to head the Federal Communications Commission, has proposed a change in policy — to allow some companies to pay extra to get better access.

Just two months ago the White House itself gave a good explanation of why that is a bad idea.

Rights of free speech, and the free flow of information, are central to our society and economy — and the principle of net neutrality gives every American an equal and meaningful opportunity to participate in both. Indeed, an open Internet is an engine for freedom around the world.

12217_large_neutral-bitsPreserving an open Internet is vital not to just to the free flow of information, but also to promoting innovation and economic productivity.  Because of its openness, the Internet has allowed entrepreneurs — with just a small amount of seed money or a modest grant — to take their innovative ideas from the garage or the dorm room to every corner of the Earth, building companies, creating jobs, improving vital services, and fostering even more innovation along the way.

Absent net neutrality, the Internet could turn into a high-priced private toll road that would be inaccessible to the next generation of visionaries. The resulting decline in the development of advanced online apps and services would dampen demand for broadband and ultimately discourage investment in broadband infrastructure. An open Internet removes barriers to investment worldwide

This is from The White House Blog: Reaffirming the White House’s Commitment to Net Neutrality (Feb. 18, 2014).   Evidently the FCC didn’t get the word, or maybe it was the White House spokespeople who didn’t get the word.

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The giant vampire squid becomes gay-friendly

April 24, 2014

The Mafia, as has been said, is not an equal opportunity employer. But even if it was an equal opportunity employer, it would still be a criminal organization.

Likewise, while Goldman Sachs is cultivating a reputation for being gay-friendly, it is still the same financial predator that is always was, still what Matt Taibbi called the “giant vampire squid,” inserting its tentacles into every crevice of the American economy and sucking out the blood.

giant_squidHuman Rights Campaign, the gay rights organization, honored Goldman Sachs at its annual dinner last year, and named Lloyd Blankfein, its CEO, as its national corporate spokesman for gay marriage.   It’s nice that a few gay people will get a shot at high-paying jobs at Goldman, but that doesn’t entitle the firm to a plenary indulgence, or get-out-of-jail-free card, or whatever you want to call it from the harm it has done to ordinary Americans, including gay people, through its financial manipulations.

As Matt Taibbi has documented, former and future Goldman officials in government successfully lobbied for repeal of the regulations that held banks back from reckless speculation with their depositors’ money.    They then pursued a policy of pump and dump, bidding up the price of investments, such as subprime mortgages, that they knew were worthless, then bailing out at the key moment and leaving the suckers holding the bag.

Goldman and similar Wall Street manipulators did more harm than to just bankrupt a few unwise investors.  Their financial manipulations brought about the Wall Street crash of 2008 and the wave of layoffs and mortgage foreclosures that followed.  Gay people suffered as much as their straight neighbors.   As Kathleen Geier pointed out, gay people as a group as not especially affluent — contrary to the way they’re typically depicted on TV.

Some of us liberals like to point out how conservatives can be suckered into voting against their economic self-interest by cynical appeals to feelings about social and cultural issues[1].   However this may be, they aren’t the only ones.

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John Pennington: My Great Wisdom at 75

April 23, 2014
  1. 1e5bc8e4c9ccccf537ae057d22e53c67I learned at age eleven, at the sunburned end of the first day the public pool was open, that pale skin is not superior.
  2. Real food has one ingredient.
  3. Never buy food from someone who gets an annual bonus.
  4. There is nothing corporations won’t do for profit. Take toothpaste. What used to be one or two kinds per manufacturer now takes up ten feet of shelf space because they now make the same stuff in twelve different flavors.
  5. The US is a great place, a huge country with astonishing and beautiful things to experience.
  6. The US is a lousy place where only money matters, plagued by too many people who view themselves as chosen because they have a lot of it.
  7. The US has been a bully from Day One. Every two years on average we invade a small country in order to seize its riches, destroy its government, and impoverish its people.
  8. By 20 I was sure I was a mature adult. It turned out that wasn’t exactly true.
  9. Hatred is an equal opportunity religion. Every religion has followers who somehow miss the central message about love, tolerance, and compassion, and spend their time murdering people they don’t know.
  10. Revenge is equally stupid, with the same result.
  11. Politicians should be amateurs who go home when their sentence is up.
  12. Corporations, like religions, should be prohibited in politics entirely.
  13. Money isn’t speech. Speech is speech. Corporations aren’t people. People are people.
  14. Fundamentalist Christians are trying to impose their version of Sharia on us.
  15. Gay is not a “lifestyle”. Your kids can’t be “recruited”, either.
  16. You’re not going to look great when you get old. Don’t worry about it.
  17. The older you get, the more weird things grow on your body.
  18. Every abortion marks a failure. Regardless, anti-abortionists should get the hell out of your womb.
  19. I’ll worry about abortion when all of the 13,000 daily unnecessary deaths of living, breathing children cease to happen because anti-abortionists did something about it.
  20. People who are a lot smarter than you are not necessarily right, and the world is full of rich fools.
  21. You can be happy at any age. Unfortunately, you can also be unhappy at any age, but happy is better so let yourself be happy if you can.
  22. Spanish is not a foreign language. The US is not America. Puerto Ricans are not immigrants.
  23. Immigrants should learn the prevailing language of their new country. In much of the US that language is Spanish, and the immigrants are Anglos.
  24. There is no official language in the US. If there were to be, perhaps it should be Navajo.
  25. Being dead is no big deal, and worrying about it is a waste of time. Now, dying is another matter. If you want to worry, worry about dying. But that won’t change anything either, so why bother.
  26. The older you get, the more time you have.
  27. Everything changes. Everything.
  28. All of humanity is of no consequence. Neither is the Earth, or even our solar system. In fact, our Milky Way Galaxy, where the closest of uncountable stars is much too far for humans to reach in a single lifetime, is only one of billions. This shouldn’t make us feel insignificant. We should feel amazed at being part of this astonishing universe.

Source: My Great Wisdom At 75 from Class War in America.

NSA: a bureaucracy in search of a function

April 22, 2014

Edward Luttwak, a historian and long-time consultant to the Pentagon on military strategy, wrote an article in the Times Literacy Supplement of London recently arguing that the National Security Agency’s all-encompassing surveillance is simply the result of a bureaucracy looking for a way to justify its existence.

Compared to the days of the Cold War, he wrote, there is little scope for the NSA is trying to keep track of scattered Islamic militants who don’t even use phones for communication.  The NSA’s response was, in its own way, a stroke of genius.  Don’t just track people who are threats to the United States.  Track everybody who is a potential threat, which means tracking everybody.

Luttwak’s article is behind a pay wall, but Peter J. Leithart wrote a good summary in First Things magazine.

In a TLS review of Luke Harding’s The Snowden Files, Edward Luttwak traces things back to dynamics within the post-9/11 intelligence bureaucracy. In Luttwak’s telling, it’s a case study of bureaucratic expansion.

He argues that “Only a few hundred were really justified of the many thousands employed to service collection antennae on land, at sea and in the air operated by the signals’ branches of the Army, Navy, Marine Corps and Air Force, and of the many thousands of translators, cryptologists, decoders, super-computer operators, and analysts of all sorts as well as more thousands of managers. As the Cold War receded, there was an increasing danger that the fiscally prudent on Capitol Hill might uncover the situation, and demand mass firings.”

Edward Luttwak

Edward Luttwak

After all, “the sum total of emitters in Afghanistan was tiny, while communications identified as suspect worldwide were scarcely more numerous. . . . things looked up for the signals intelligence business with the 2003 Iraq war, but again the volume of business was not substantial, compared to the huge size of the installed capacity – so long, that is, as it was suspects that were to be intercepted.

If there wasn’t enough work, the solution was not to cut personnel, but to make more work: “the answer to the problem of the shortage of suspects was simply to intercept ‘possible’ suspects as well.”

On the other hand, he charges, the CIA doesn’t do what is necessary actually to have a major impact on terrorism – they aren’t engaged in operations: “terrorist groups simply cannot be defeated without action on the ground, to infiltrate them with volunteers, to detect them in the dodgy places where they can still emerge, to lure them into false-flag traps, and such like – all the activities that the CIA performs splendidly in films, but which in real life interfere with intra-office, other-office, interagency and intra-embassy meetings, so that in reality they are not performed at all. . . . Operators are outnumbered even by fairly senior managers, they are outnumbered by the lawyers in the General Counsel’s office, they are outnumbered by the human relations and affirmative action.”

When Congress increased the CIA budget, little went to improving operations: “The CIA knew exactly what to do with the money: it promptly added new layers of management on top of the old ones, just in time for the arrival of a whole new intelligence Directorate for all intelligence organizations placed over it, increasing the administrator/operator ratio to levels scarcely credible.”

The intrusions that Snowden revealed arose, Luttwak claims, in a context of incompetence and cowardice: “the mass intercept of everyone’s telecommunications became just another way of evading the penetration and disruption tasks that need to be done – the tasks that the CIA will not do because of sundry inconveniences and possible dangers.”

via Snowden and Bureaucracy | Peter J. Leithart | First Things.

In  Luttwak’s opinion, Edward Snowden is a true patriot for revealing the extent of the NSA’s improper opinions.  He said Snowden should be invited to return to the United States and granted amnesty for his lawbreaking.   He said the National Security Agency and Central Intelligence Agency should be scaled back to what is needed to collect information, and a new agency, separate from the CIA, should be created to conduct operations against terrorists as Israel’s Shin Bet does.  The new agency should consist of people who speak foreign languages, understand foreign cultures and are willing to get out of the office and take risks.   This all sounds reasonable to me.

Click on The interception scandal for something else by Luttwak on Edward Snowden’s disclosures about NSA surveillance.  He thinks the disclosures will result in a drastic change in U.S. policy.  I’d like to think he’s right.

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.

Did China bungle its age of discovery?

April 21, 2014

Voyages_of_Zheng_He_1405-33

More than 50 years before Columbus, the great Chinese admiral Zheng He (aks Cheng Ho) voyaged throughout the Indian Ocean, and down the coast of east Africa.  Some historians think he may have reached the Cape of Good Hope.  But he had no successors.   His voyages were merely a stunt, for the sake of prestige, like the U.S. moon landings.

Some historians have speculated that if the rulers of the Ming dynasty had followed up, there might have been a Chinese age of exploration and discovery, to rival the great European explorers.  Zheng He’s fleet was larger, both in numbers and in the size of the individual ships, than anything the European explorers sent out.

I’m not so sure.  As James C. Scott wrote in The Art of Not Being Governed, Chinese rulers historically have sought to control large numbers of people, not large areas of territory.  I have read a smattering of Chinese philosophy in translation, and it is all about a ruler who is wise and just can increase his wealth and power by encouraging people to migrate to his realm.

In the light of history, this might not have been a bad choice..   The English, French, Spanish and Portuguese spread all over the world, and they have millions of descendents in North and South America and other parts of the world, but this no longer adds to the power of the English, French, Spanish and Portuguese nations.

Today China, which did not seek to rule an overseas empire, is much more powerful than any of these countries.  That is not to deny that China is an empire.  Just ask the Uighurs (in what used to be called Chinese Turkestan) or the Tibetans.   It is that China is a more unified and enduring empire.

China never needed a merchant fleet or overseas outposts to participate in the world economy.   Since the days of the Roman Empire, merchants traveled the Silk Road across central Asia to buy Chinese silk, porcelains and other manufactured products.

Spain and Portugal sent out explorers to find routes to China and India so that their merchants could bypass the Muslim countries in between.   The Spanish conquistadors were greedy for gold and silver because it was scarce.  China and India had favorable balances of trade for centuries and a large fraction of the world’s precious metals ended up in those countries.   The Spanish regularly sent out treasure galleons from Mexico to the Philippines to trade with China.

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Most people live in or near India and China

April 21, 2014

These maps illustrate an important fact that I find hard to get my mind around – the immensity of the populations of China and India.   They aren’t just individual countries in the way the USA, the UK and Russia are countries.    They equal or exceed the populations of individual non-Asian countries.   There are provinces of China and India that are more populous than important European countries

Half the World

Double click to enlarge.

The top map shows that the combined populations of China, India, Japan and a couple of neighboring countries exceed the populations of the whole rest of the world.

The bottom map shows the world divided into equal segments of 1.2 billion persons each.  They show that the populations of (1) part of China plus Japan and (2) part of India plus Bangladesh and Burma are equal to the populations of  (3) all of North and South America plus Australia and New Zealand, (4) all of Europe plus western Asia, (5) all of Africa and (6) the rest of Asia.

worldpopulationbillions

Double click to enlarge.

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Seek less to be understood, as to understand

April 20, 2014

StFrancisPrayer

The case against government and civilization

April 19, 2014

Montani Semper Liberi: Mountaineers Always Free

==State Motto of West Virginia

James C. Scott, a political scientist and anthropologist, in his book, THE ART OF NOT BEING GOVERNED: An Anarchist History of Upland Southeast Asia, (2009) calls into question accepted ideas about government versus anarchy, civilization versus barbarism and the nature of progress. It is an account of a mountain region including parts of Burma, Thailand, Vietnam, Cambodia, Laos, plus northeast India and four provinces of southern China, which is home 100 million people.

Scott’s argument is that the tribal people of this region, which he calls Zomia, are not backward and not at an earlier stage of human development.  Rather they have made a rational choice not to be subject to government and to be free of despotism, serfdom, taxation, military conscription and slavery, which is what civilization has meant to most people for most of history.

scott.notgoverned.coverHe tied it in with a larger framework which is not the familiar story of the rise and spread of civilization, but an unfamiliar story of evasion and  escape from the spread of civilization.

The invention of agriculture made civilization possible.  It created a food surplus large enough to allow people to be employed full-time as overseers, priests and soldiers.  This was beneficial to rulers, but not necessarily to their subjects.  I recall reading that ancient remains of hunter-gatherers show them to have been bigger and healthier than those who worked the land.   The lives of laborers who built the Pyramids were more nasty, poor, brutish and short than the free nomads in the deserts beyond.

There always were people who fled to inaccessible mountains, forests (like Robin Hood), jungles, marshes and the open sea to be free of control — the Berbers in North Africa, the runaway Russian serfs who formed the Cossack nation, the runaway slaves who joined with natives to form the “maroon” communities of North and South America, even those white American pioneers like Daniel Boone who preferred life beyond the frontier of settlement.   But their story has been neglected, Scott wrote, because they left few artifacts and virtually no written records.   Upland southeast Asia is part of that story.

Civilization in China, as elsewhere, originated in fertile river valleys where there was enough of an agricultural surplus to support a government and an army, which gave rulers the means to bring more people under their control.  Scott said that the rulers of China, and their imitators in the small kingdoms to the southeast, were less interested in increasing the territory under their rule than in increasing the number of people under their rule.  Conquering generals were expected to bring back captives to increase the subject population.   The Great Wall of China and the Chinese border troops were more to keep their subjects in than to keep invaders out, according to Scott.

Southeast Asia was largely populated by people whose ancestors were pushed out of what’s now southern China by the expanding Han Chinese.   Some organized governments on Chinese and Indian models, based on royal courts and hierarchies of rank.   These centered in rice-growing areas.  The advantage, from the standpoint of governments, is that rice and other grain crops are easy to identify, hard to relocate and easy to confiscate.   Rulers wanted their subjects, in Scott’s phrase, to be “legible”.

The hill people of southeast Asia didn’t want to live like this.  They chose to live in mountain regions that were hard to get to.  Ethnic groups, according to Scott, were differentiated not so much by location on the map as by altitude.   They defined themselves by how much hardship they were willing to endure to make themselves inaccessible, versus how much they wanted to trade with or raid the more settled people below..

Zomians mainly engaged on foraging, or in slash-and-burn agriculture (swiddening), which involves cutting down the trees, burning the underbrush, planting a crop for one growing season and moving on.   They planted root crops, which were hard to spot and hard to seize.  New World crops such as the sweet potato quickly found their way to Zomia.   (The Irish took to the potato for the same reason.  Potatoes were hard for English landlords and tax-collectors to seize, and the potato mounds tripped up the Irish horsemen.)

The hill peoples had flexible and changeable social structures, much to the frustration of the valley kingdoms whose rulers never were completely sure who or what they were dealing with.   They often were multi-lingual  and multi-cultural, adopting different customs depending on whom they dealing with.   When invaders came, they tended to scatter and fade away, breaking up into smaller units.

Southeast Asia kingdoms had established religions, usually based on Theravada or Mahayana Buddhism.   The upland peoples followed individual shamans with fluid doctrines and, in times of crisis, often followed charismatic prophets who appeared seemingly from nowhere, but often were defectors from the civilized communities.

In his most debatable chapter, Scott argued that there was an advantage to being an oral culture rather than an illiterate culture, and that rejection of literacy may have been a choice rather than a pre-existing condition.

Written laws and histories are a means to give kingdoms a fixed identity and hold them together.   An oral tradition is easier to adapt and change.   This, of course, is contrary to the idea that people who lack a recorded history live in a culture that is timeless and unchanging.  I think of the Comanche Indians, who wandered the Great Plains on foot for centuries, but as soon as they encountered stray horses left by the Spanish conquistadors, transformed themselves into some of the fiercest and most effective mounted warriors the world has ever seen.

These are all generalities, but, as Scott noted, every upland culture was different.  Each had its own mix and match of traits from different cultures.   He made had a lot of specific things to say about the Hmong, the Karen and other peoples, most of which didn’t register on me.  I’m more interested in the overall picture.

The inhabitants of Zomia were not angels and their societies did not represent an anarchist idea of utopia.  Some had a trading relationship with neighboring civilized communities.  None of them were barbarian invaders like the Vikings, Mongols or Huns, but  some were thieves and bandits, and some have been slave traders.   The region includes the Golden Triangle, a central of the world opium trade.

However, the main objection to the upland peoples by the Chinese, by the southeast Asian kings, by the British and French colonial rulers and by the modern governments is the same — that they are hard to pin down and command.   The possibility of evading control of government becomes less every year, barring some civilization-destroying catastrophe, which Scott does not consider.

The main thoughts I took away from this book were:

1.  The desire for freedom – that is, the desire to live one’s life without taking orders from overseers – is not limited to American or European culture.  It is found in many different cultures, probably all or almost all of them.

2.  As the world’s cultures go, we Americans are not, as a whole, especially freedom-loving.  As somebody pointed out, we think of ourselves as heirs of Athenian democracy, but the way the USA is organized is more like the Persian Empire.   We accept much more supervision in our daily lives than not only our ancestors, but than much of world’s peoples through history.

3.  As an offset, we have the possibility, which has only emerged since the American and French revolutions, of creating governments that serve the welfare of their subjects, and are accountable to their subjects.   This is a new experiment in human history, not certain to succeed, but worth trying to make succeed.

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Hope, change and Hillary Clinton

April 18, 2014

are.we.ready?John Atkinson writes as follows in Common Dreams.

Remember “hope and change?” At the time, few thought to ask what exactly we were hoping for and what exactly we were changing to.

And of course, what we got was a great slogan, better speeches, very little change and even less hope.

Here’s what Obama promised:

Shutting down Gitmo;

Ending warrantless wiretapping;

Ending foreign wars;

An end to trickle down economics;

Greater regulation of Wall Street and the financial sector;

A public option for health care;

Protecting social security, Medicaid and Medicare;

Serious action on climate change;

Greater equality in opportunity and more broadly shared prosperity …

Here’s what we got: An administration that set up Goldman Sachs south in the Treasury, doubled down on domestic spying; expanded a drone policy that creates between 40 to 60 new terrorists for every one it kills; health care reform that is better than the status quo, but which rewards corporate insurers as much or more than it does citizens; international trade agreements that favor corporate interests, while eviscerating domestic wages, scuttling environmental performance, and crippling US industrial infrastructure. It’s so bad, they’re trying to negotiate it in secret … … …

So now enter Hillary Clinton and the deluded Democrats who hopd for her Presidency.  Maybe it’s time to ask what, specifically, we will get; what we can hope for, and whether it will usher in changes Americans overwhelmingly want … …. .

And here’s the answer – If we nominate Hillary Clinton we will get another DLC Democrat who mouths progressive values during the campaign, then shifts to the right when (and if) elected. In short, citizens get no real choice. … …  …

The fact is, the people’s interests aren’t being represented in Washington and they won’t be if Hillary Clinton is elected. Her record is clear. She’s an ardent proponent of trade agreements; she’s consistently supported the interests of Wall Street over Main Street; she’s been hawkish on foreign policy; weak on civil protections; hawkish on the deficit (until very recently) and mum on many other issues that demand a progressive advocate.

Click on Hillary Clinton and the Future Failure of Progressive Hope and Change for Atkinson’s whole article.

Hat tip to Mike Connelly for the link.

Maidan snipers: Ukraine’s Gulf of Tonkin?

April 18, 2014

The crisis in Ukraine was set off on Feb. 20 by snipers killing peaceful anti-government demonstrators in Kiev’s Maidan Square on Feb. 20.   Angry mobs surrounded the Ukrainian Parliament and forced President Yanukovych to flee the country, and he was replaced by an unelected provisional government.

Now an investigation by a German TV station, ARM Monitor, which was broadcast last week, indicates the sniper was working for the extreme Ukrainian nationalist Svoboda Party, which was part of the opposition and is now part of the new government.   Police as well as protestors were killed, and the bullets came from the same guns.   The snipers were operating from the roof of the Hotel Ukrayina, which was the headquarters of the protestors.

Now a member of the Svoboda Party is in charge of the investigation.   Families of dead protestors are unable to get autopsy reporters or other vital information.

Michael Hudson, a distinguished professor of research economics at the University of Missouri at Kansas City, was interviewed about this on the relatively obscure Real News Network  (which is listed on my Resources page).   The ARM Monitor investigation is headline news in Germany and (naturally) in Russia, he noted; why is it ignored in the United States?

http://www.nakedcapitalism.com/2014/04/ukraine-obama-channeling-cheney.html

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=11730

I’m not saying that President Yanukovych or President Vladimir Putin necessarily have good intentions, or that the Russian secret services are not capable of false flag operations of their own, or that Russian-speaking Ukrainians necessarily want to be part of Russia.   I recognize that there are armed minorities in both east and west Ukraine who don’t necessarily speak for the people they claim to represent.   I do not claim to understand the intricacies of Ukrainian politics.

All I’m saying is that the Ukrainian people, and the American people, are being pushed toward war over something that didn’t happen the way we were told it did.

Who goes to jail? America’s injustice gap

April 17, 2014

In an interview with Democracy Now, Matt Taibbi talked about the contrast between the refusal of the federal government to investigate and prosecute corporate crime with the increasingly arbitrary and brutal treatment of ordinary citizens by police and prosecutors.   This is the topic of his new book, The Divide.

How can it be, he asked, that somebody can go to prison for having half a marijuana cigarette in his pocket, yet no executive of HSBC has been indicted for laundering billions of dollars for the Mexican and Colombian drug cartels?

Or that a black man can be charged with obstructing pedestrian traffic, just for standing in front of his home at 1 a.m. when nobody is on the street, yet the federal government lets Wall Street bankers off the hook for the financial fraud that led to the 2008 market crash?

Good questions, and I think we all know the answers.

For a transcript of the interview, click on the following link.

http://www.democracynow.org/2014/4/15/who_goes_to_jail_matt_taibbi

For more about Taibbi’s book, click on the following links:

http://www.democracynow.org/blog/2014/4/14/read_matt_taibbi_on_the_divide?

http://www.truthdig.com/arts_culture/item/the_divide_20140418  [added 4/19/14]

http://www.nytimes.com/2014/04/13/books/review/the-divide-by-matt-taibbi.html?_r=0

http://www.washingtonpost.com/opinions/the-divide-american-injustice-in-the-age-of-the-wealth-gap-by-matt-taibbi/2014/04/11/66a1e7c8-b291-11e3-8cb6-284052554d74_story.html

[Added 8/28/14]

Here are some of my later posts of Matt Taibbi’s The Divide

Above the law and below it in the USA

Matt Taibbi on impunity for rich criminals

The incentives to ignore due process of law

A predatory business model based on lawbreaking

Is your state’s highest-paid employee a coach?

April 16, 2014

Source:

ku-bigpic.highpaidpublicemployee

Click to enlarge.

Source:

http://deadspin.com/infographic-is-your-states-highest-paid-employee-a-co-489635228

 

How traditional Africans treat clinical depression

April 15, 2014

The writer Andrew Solomon used to suffer from depression.  A friend of his who lived in Senegal said the people there had a traditional cure for depression.   In the spirit of being willing to try anything once, he traveled to Senegal and had the chance to get a Senegalese village therapy session.

It consisted of stripping to a loincloth, being rubbed with millet, listening to a tape of Chariots of Fire, holding shamanistic objects and dropping them, listening to villagers drumming, getting in bed with a ram, being covered in blankets and sheets by dancing villagers, stripping naked, being drenched with the blood of the ram and two roosters, drinking a Coke, being wrapped in the intestines of the ram, burying little bits of the ram, receiving the millet wrapped in paper with orders to give it to a beggar the next day,  saying goodbye to the spirits that infested his body, and then being cleansed of blood by village women spitting water on him.

And you know what?

Although he had no belief whatever in exorcisms or spirits, the experience left him feeling great.

Some years later he went to Rwanda, which is on the other side of Africa.  A Rwandan acquaintance told him that while Rwandan customs were different, the Senegalese ceremony made sense to him.   Then, according to Solomon, the Rwandan said something interesting:

You know, we had a lot of trouble with Western mental health workers who came here immediately after the genocide, and we had to ask some of them to leave.”

I said, “What was the problem?”

And he said, “Their practice did not involve being outside in the sun, like you’re describing, which is, after all, where you begin to feel better. There was no music or drumming to get your blood flowing again when you’re depressed, and you’re low, and you need to have your blood flowing. There was no sense that everyone had taken the day off so that the entire community could come together to try to lift you up and bring you back to joy. There was no acknowledgment that the depression is something invasive and external that could actually be cast out of you again.

“Instead, they would take people one at a time into these dingy little rooms and have them sit around for an hour or so and talk about bad things that had happened to them. We had to get them to leave the country.”

Click on http://www.esquire.com/blogs/news/notes-on-an-exorcism to read Solomon’s whole article.

Social Security backs down on debt collection

April 15, 2014

The U.S. Social Security Administration, criticized for seizing tax refund checks without notice based on debts of the taxpayers’ deceased parents, said it will stop trying to collect debts more than 10 years old.

That’s good first step. How about promising to use due process of law before trying to collect any debts? And how about observing the legal principle that children are not responsible for the debts of their parents?

http://www.washingtonpost.com/politics/social-security-stops-trying-to-collect-on-old-taxpayer-debts/2014/04/14/9355c58e-c40f-11e3-bcec-b71ee10e9bc3_story.html

History’s death tolls: a comparison chart

April 15, 2014

Here’s an interesting set of charts from the Wait But Why blog giving the sizes of the death tolls in history’s greatest massacres and from other causes of untimely death.  As W. Edwards Deming once said, no number is meaningful unless there is another number to compare it with.

Death Final1a
As somebody else once said, one of the hardest things for human beings to grasp is differences in orders of magnitude (units vs. thousands vs millions).
DEATH2
Notice the enormous range of estimates in the larger figures. It seems as if the greater the death toll, the harder it is to determine just how great it was. But we shouldn’t fall into the trap of thinking that massacres that are lesser in numbers are not really atrocities.

DEATH3

http://waitbutwhy.com/2013/08/the-death-toll-comparison-breakdown.html

http://waitbutwhy.com/

Hat tip to Yves Smith (whose naked capitalism web log is listed on my Blogs I Like page)

“This is a republic, not a democracy”

April 14, 2014

If you don’t believe the United States is, or should be, a democracy, just who is it that you want to rule over you?

Overall, CEOs don’t earn their big paychecks

April 14, 2014

o-CEO-PAY-570

The following is by Mark Symonds for Forbes

It isn’t every day that academic research comes along to tell you something you really wanted to hear and that you suspected was the truth all along.  In this case it’s about the long running debate around top executive pay.

A recent paper by J. Scott Armstrong of the Wharton School and Philippe Jacquart of France’s EMLYON, seem to have finally established that paying top dollar simply doesn’t get a better job done.  And, in fact, it might actually get a worse one done.

According to Armstrong and Jacquard, while there is plenty of evidence that financial incentives can be effective in motivating people to do mundane and boring tasks, individuals do the more interesting and challenging stuff…well, because it’s interesting and challenging.

Perversely, they say, very large financial incentives may actually hinder top performance. The paper argues there is strong evidence that individuals can become fixated on incentives and either become limited in their thinking, unable to digest and adopt new ideas or alternately become convinced that they will achieve the goal automatically so do not need to try as hard as they might otherwise.  Whatever the outcome, every other stakeholder from the more modestly earning employee to the corporate stockholder loses out.

And finally the research also suggests that we might not really be getting the brightest and best talent at the top because the tools and processes used to identify candidates are either limited or downright faulty

There is simply too much emphasis on past performance, personal recommendation, unstructured interviewing, an unwillingness to ask really difficult and searching questions and that more dangerous selection criterion of all – gut instinct. Worryingly, it seems that the headhunters and in-house recruiters charged with hiring occupants of the corner office may be relying too much on perception and too little on good, hard facts.

The paper points out that CEOs who win prestigious industry awards constantly out-earn those that don’t.  Yet the stocks of the companies the award winners head up consistently under-perform in comparison to those of their less publicity hungry peers.  Perhaps because the latter spend their time running their businesses well instead.  [snip]

Unlike many academics, who might shy away from coming up with a solution, EM Lyon’s Jacquart is one willing to give the obvious if uncomfortable answer – namely that current incentive models need to be abandoned and overall executive pay should be reduced.

And he’s also ready with a counter to those who will doubtless argue that this will make it impossible to recruit the right people and bring major banks and corporations crashing to the ground.

“Yes, of course this may make it more difficult to recruit very senior individuals from outside an organization, at least in the short term. However it would force businesses to focus more on the development of the talent it already has, the talent that is more likely to be more loyal to and understanding of its aims, goals and methodologies.”
[snip]

via Big Company CEOs Just Aren’t Worth What We Pay Them.

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