Archive for September, 2014

Can workers own the means of production?

September 30, 2014

income distribution

The Marxist economist Richard D. Wolff thinks that a new form of economic organization, the worker self-directed enterprise, can gradually replace the for-profit corporation.

Richard D. Wolff

Richard D. Wolff

I hope he is right because the world needs something better than predatory corporations or oppressive government bureaucracies, which are the main choices on offer now.

But successful worker-owned enterprises have been around for a long time, and yet have never reached the critical mass that would enable them to become an important part of the economy.

Advocates of worker-owned businesses cite the example of the Mondragon Corporation, which originated in the Basque country in Spain in 1956 with a half dozen people and now is a federation of 257 businesses and co-ops employing 76,000 people in 31 countries.  But why is there only one Mondragon Corporation?  Why hasn’t it become a template for other successful efforts?

One of the things that limit worker-owned businesses, as I see it, is precisely this lack of critical mass.  There is a societal infrastructure of business schools, business services and business finance to serve the new for-profit business.  Worker-owners would have to learn as they go.  This takes a level of commitment of which many people aren’t capable, unless they are in dire straits.

One of Wolff’s ideas is to provide seed money for WSDEs by giving the unemployed their compensation in a lump sum rather than weekly checks.  This shows how he underestimates the difficulty of implementing his program.

To begin with, starting a successful small business is not something everybody can do, although many people think they can.  If you wanted a pool of people with the ability to succeed in business, you probably wouldn’t choose them from among the unemployed.  You’d be more likely to find them among people who have good jobs and money in the bank.

Then again, the American Dream is to own your own business.  Generally speaking, it is not to be part of a community of comrades who share and share alike.   We Americans think of ourselves as individualists, no matter how subservient to authority we may be in practice, and we only abandon the dream of self-sufficiency for compelling reasons.

Farmers’ marketing co-ops came into existence because farmers thought they were being cheated by middle-men.  Electric power co-ops came into existence because the investor-owned utilities weren’t interested in serving them.  Savings and loan associations, and later credit unions, were formed because people were dissatisfied with banks.

Workers have been known to take over factories from bankrupt employers and restart the businesses.  Some co-ops are formed around political and social movements, such as selling organic food.  But worker-owned and cooperative businesses are not the norm.  There has to be a compelling reason to commit to starting one.

The commitment tends to fade when the compelling reason fades.  Even the successful cooperatives tend to wither away, or be bought out, or to incorporate.  Even the successful utopian communities, the Oneida community in New York state and the Amana community in Iowa, wound up as corporations.

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Is economic democracy possible?

September 30, 2014

feed-with-gdp

Richard D. Wolff, a Marxist economist, wrote in his recent books that capitalism has failed, and that it is necessary to replace for-profit corporations as we know them with what he calls worker self-directed enterprises.

Democracy at WorkBut for-profit corporations aren’t going to go away, even if—which remains to be seen—worker-owned enterprises offer a better alternative.

If economic democracy is the only means by which workers can keep the value of what they produce, then it is going to be necessary to reform existing corporate structures.

The USA needs legislation to curb abuses in corporate management, such as leverage buyouts, in which slick financial operators can gain control of a company with borrowed money and then milk it for their own benefit, regardless of its impact on the company.  We need enforcement of anti-trust laws and prosecution of corporate and financial fraud.

Beyond that, the USA needs to build up labor unions as a countervailing power.  Congress should enact the Employee Free Choice Act, aka Card Check, in which employees get the right to bargain collectively when a majority sign up to join a union.  It should repeal or reform the Taft-Hartley Act and Landrum Griffin Act.

But all of this falls short of true economic democracy.  True economic democracy would mean something like Germany’s co-determination system, in which employees of firms are represented on the board of directors.  I think this should be required of all companies whose stock is publicly traded.  If an entrepreneur doesn’t want to share control of a company,  then don’t sell its shares on the open market.

Economic democracy also would mean letting workers share in day-to-day management of the company, along the lines suggested by W. Edwards Deming.  Knowledge in any institution is widely distributed.  No small group has a monopoly on useful information.  I think a company will be better managed when workers and managers have the same information available.

Banking and finance are a separate issue.  There can be no economic democracy when financiers have a veto over democratic decisions.  Banks should be regulated utilities.  Bankers should be servants of the people, not masters of the universe.

When and if these things can be achieved, there will be a favorable environment for Wolff’s worker-self-directed enterprises.  The government would give them the same kind of support across the board that rural electric co-ops got in the 1930s and 1940s.  Otherwise, probably not.

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Is there a better way than capitalism?

September 30, 2014

20120314-graph-the-1-percents-jobless-recovery-01Marxists say that the trouble with the capitalist economy is that workers don’t get the full value of what they produce.  Whether or not that’s true as a general principle, it is a good description of the current direction of the U.S. economy.

capitalismhitsthefan_The Marxist solution is that the workers themselves should own the means of production.  A Marxist economist, Richard D. Wolff, said that where socialists and Communists have gone wrong is in promoting government ownership rather than worker ownership.

I recently read Wolff’s three latest books.  His view of the current economic crisis is the same as mine.   In the 1970s, overall American wages stopped growing.  Working people tried to maintain their material standard of living by putting in longer hours and having more family members in the work force.   When that reached a limit, they kept up their spending levels by borrowing.

Now the spending power of ordinary Americans has reached a limit.  Most Americans are either broke, nearby broke or paying down their debts.  That’s why the government has failed to stimulate the economy through spending or lower interest rates.

occupytheeconomy0The solution, according to Wolff, is the creation of WSDEs – worker self-directed enterprises – in which the workers themselves are the ultimate deciders of what is done with the profits (in Marxist lingo, the “surplus”).

A WSDE would be more than worker participation in management, where corporate ownership remains the same.  And it would be more than a worker-owned business, where board of directors and the rest of the corporate management structure remains in place.   And it would be more than just a co-operative, which can be organized to serve the interests of any group, not just employees.

This would not necessarily solve all problems, Wolff wrote, but it would make other problems easier to solve.  A WSDE wouldn’t lay off workers or reduce wages merely to increase the income of managers and stockholders.  Employees wouldn’t feel alienated from their work.  A worker-owned business would be less likely to be willing to pollute the community in which they live than would a board of directors responsible to stockholders who live far away.

Democracy at WorkI am in favor of more worker-owned businesses, but I think Wolff greatly underestimates the opposition to his proposed program.   Does he think the interests that engineered the sale of the Postal Service’s assets to private businesses (such as Nancy Pelosi’s husband) or advocate replacing public schools with for-profit businesses (aka charters)—does he think these interests are going to sit still and allow Wolff’s WSDEs to push them aside?

Back in the New Deal era, the federal government fostered electric power co-operatives, which provided electricity at lower rates than the for-profit corporations.  But they did not displace the for-profit corporations, nor become a model for how to operate electric utilities.

Instead the electric power industry successfully pushed for deregulation of the industry, in which competition between electric power providers was supposed to keep rates low.  Deregulation also abolished a requirement that an electric utility have enough reserve generating capacity to prevent future blackouts and brownouts.  Nobody is responsible for keeping the lights on now.

 The fact that something is economically feasible and socially desirable does not mean that it will be politically successful.   There is no substitute for political power.

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The passing scene: Links & comments 9/30/14

September 30, 2014

Bernie Sanders: Longterm Democratic strategy is “pathetic”, an interview by Thomas Frank for Salon.

Senator Bernie Sanders, an independent from Vermont, said the Democratic Party is too beholden to big-money donors to do anything meaningful for working people.  Instead Democrats pin their hopes on social issues, demographic changes and fear of Republican extremism.

Sanders told Thomas Frank that nothing is going to change until there is a political awakening in this country as to the power of big money and the need to overthrow it.

Obama’s Long Battle to Cut Social Security Benefits by Eric Zuesse for Washington’s Blog.

President Obama throughout his term of office has tirelessly campaigned for a budget-balancing bargain in which Social Security and Medicare would be cut.  This is not something Republicans have forced upon him.  It goes well beyond anything they have asked for.

None of this is a secret.  It is all on the public record.  Yet few of Obama’s supporters seem to notice.

Did Indiana Autoworkers Strike a Blow Against Two-Tier Contracts? by David Moberg for In These Times (via Bill Harvey)

Two-tier union contracts, in which newly-hired workers start at a lower pay rate than the incumbents, demonstrate the weakness and lack of solidarity of labor unions and their pessimism about the future.

The United Auto Workers signed a contract with a Lear Corp. auto parts plant in Hammond, Indiana, that supposedly restores the principle of equal pay for equal work.  But the price of the contract is wage reductions for sub-assembly workers.  So did the workers gain or lose?

My e-mail pen pal Bill Harvey, who sent me the link, pointed out that the two-tier benefits structure remains in place.

After Surgery, $117,000 Medical Bill from Doctor He Didn’t Know by Elisabeth Rosenthal for the New York Times.

Hospitals and physicians jack up medical bills by bringing in “out of network” consultants without asking the patient’s permission.  Not every ethical!

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David Malone, a British blogger who posts as Golem XIV, has written a new installment in his series about the strategy of the global over-class.   Here are links to the complete series so far.

The Next Crisis – Part One

The Next Crisis – Part Two – A manifesto for the supremacy of the 1%

The Next Crisis – Part Three – The World Turned Upside Down

These articles a bit long to read on a screen, but they contain good information and insight.

Who’s running this country anyhow?

September 29, 2014

Carmen Segarra, a bank examiner assigned by the Federal Reserve System to Goldman Sachs, was fired after refusing to withdraw a report criticizing Goldman.

Theodore RooseveltShe made tape recordings showing how subservient the other Fed examiners were to a company they were supposed to regulate.

The country is being run by the kind of people that Theodore Roosevelt called “the malefactors of great wealth” and “the criminal rich class.”  The fact that certain people are rich does not, in and of itself, entitle them to respect or deference, let alone immunity from laws and regulations that other people have to obey.

LINKS

The Secret Goldman Sachs Tapes by Michael Lewis for Bloomberg View.

Inside the New York Fed: Secret Recordings and a Culture Clash by Jake Bernstein for ProPublica.

NY Fed Fired Examiner Who Took On Goldman by Jack Bernstein for ProPublica (2013).  This has more details on the problems with Goldman Sachs than just what was on the recordings.  [added later]

Fed Whistleblower Carmen Segarra, Edward Snowden and the Closing of the Journalistic Mind by Yves Smith for naked capitalism.  [added later]

The Secret Recordings of Carmen Segarra, an interview by Ira Glass for This American Life.

Fed official says low unemployment is dangerous

September 29, 2014

Richard Fisher, president of the Federal Reserve Bank of Dallas, said it may be necessary to raise interest rates if the unemployment rate falls below 6.1 percent because low unemployment could lead to higher wages.

Crowded Michigan Unemployment OfficeFisher pointed out that in Texas, wages are rising faster than the rate of inflation.

To me, that is a good thing, not a bad thing.  Why interfere with the law of supply and demand?  The only reason that I can think of is that it might decrease the market value of financial assets.

I am reminded of Karl Marx’s claim that “a reserve army of the unemployed” is necessary to the functioning of capitalism.

I believe in the value of self-discipline, education and the willingness to work.  But anybody who preaches these values ought to be able to show that there is a payoff, and that the payoff is available to everyone, not just the exceptionally talented and the exceptionally lucky.

If the economic system is set up so that at least 6.1 percent of the work force is unemployed at all times, then there is no way to rise out of that 6.1 percent without knocking somebody else down into it.

LINKS

Fed’s Fisher: wages rise when joblessness falls below 6.1 percent by Reuters (via Tom the Dancing Bug).

‘Poor people don’t plan long term.  We’ll just get our hearts broken’ by Linda Tirado for The Guardian.  Somewhat long, but well worth reading.

Obama’s Long Battle to Cut Social Security Benefits by Eric Zuesse for Washington’s Blog (via Mike the Mad Biologist).  The President’s goals are not what his supporters think they are.

The legacy of Eric Holder

September 29, 2014

The Real News Network interviewed Bill Black, an expert on white-collar crime and a former financial regulator, on the legacy of Attorney General Eric Holder.  Here is part of what he said:

Eric Holder has surprised me.  I always predicted that he would at least find one token case to prosecute some bank senior executive for crimes that led to the creation of the financial crisis and the global Great Recession. … …

Well, he’s actually going to leave without even a token conviction, or even a token effort at convicting

So, in baseball terms, he struck out every time, batting 0.000, but he actually never took a swing.  So he was called out on strikes looking, as we would say in baseball.

Too-big-to-jailAnd I couldn’t believe that he would leave without at least having one attempted prosecution against these folks.

So he hasn’t done the most–he never did the most elementary things required to succeed. He never reestablished the criminal referral process, which is from the banking regulatory agencies, who are the only ones who are going to do widescale criminal referrals against bank CEOs, because, of course, banks won’t make criminal referrals against their own CEOs.

Holder could have reestablished that criminal referral process in a single email on the first day in office to his counterparts in the banking regulatory agencies, and he’s going to leave never having attempted to do so.

On top of that, if you’re not going to have criminal referrals from the agencies, the only other conceivable way that you’re going to learn about elite criminal misconduct of this kind is through whistle-blowers.  And as you mentioned, this administration, and Eric Holder in particular, are known for the viciousness of their war against whistle-blowers.

What the public doesn’t know—and it doesn’t know because of Eric Holder—is that in the three biggest cases involving banks–again, none of them, not a single prosecution of the elite bankers that drove this crisis—all three of those cases, against Citicorp, against JPMorgan, and against Bank of America, were made possible by whistle-blowers.

via After Eric Holder Resigns, A Look at His Record on Bank Prosecutions.

Instead of prosecutions, Holder negotiated settlements in which the big banks agreed to pay big fines.  That would have shifted the penalty from the actual wrongdoers to the stockholders.  Black pointed out that the stockholders didn’t suffer, either, because when the settlements were announced, the stock prices of the banks rose by more than the amount of the settlements.

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The passing scene: Links & comments 9/28/14

September 28, 2014

Emotion Is Not the Enemy of Reason by Virginia Hughes for National Geographic.

All normal human beings are both rational beings and emotional beings.  Someone who claims to be rational and above emotion is simply being dishonest, either with themselves or others, about their feelings.  Someone who claims to be intuitive and above reason is being dishonest, either with themselves or others, about their thought processes.

Rational people direct their feelings toward appropriate objects.  They fear that which is truly dangerous, admire that which is worthy of respect and yearn for that which will make them happy.

This is your brain on narcissism: The truth about a disorder that nobody understands by Sarah Gray for Salon.

Someone who suffers from narcissistic personality disorder has, on the one hand, an enormous sense of self-importance and entitlement and, on the other hand, an ego too fragile to accept criticism or recognize unwelcome facts.

Nations as well as individuals can be narcissistic.  Patriots are willing to defend their native lands.  Narcissistic patriots insist that their native lands are the greatest countries that ever were and any criticism or doubt is by definition disloyal.

Simplifiers and Optimizers by Scott Adams for boingboing.

Do you try to do things the best way, and never get done?  Or do you do things the easy way, and never get an excellent result.  Scott Adams, creator of the Dilbert comic strip, advises striving for excellence on the few things that are important to you, and looking for the simplest way to get through everything else.

 

Kurt Vonnegut Jr. on taking a moment

September 28, 2014

2012-03-21-KURT-VONNEGUTSource: Zen Pencils

Could rats succeed as hedge fund traders?

September 27, 2014

An intriguing book has turned up: Art and Economy, the first volume of a catalogue of projects on the global economy supported by the Landia Foundation and Universität der Künste Berlin.

rattraderOne project is Michael Marcovici’s Rat Trader.  The book describes the training of laboratory rats to trade in foreign exchange and commodity futures markets.  Marcovici says the rats “outperformed some of the world’s leading human fund managers.”

The rats were trained to press a red or green button to give buy or sell signals, after listening to ticker tape movements represented as sounds.  If they called the market right they were fed, if they called it wrong they got a small electric shock.  Male and female rats performed equally well.

The second generation of rat-traders, cross-bred from the best performers in the first generation, appeared to have even better performance, although this is a preliminary result, according to the text.

Marcovici’s plan, he writes, is to breed enough of them to set up a hedge fund.

via Investment rats | The Enlightened Economist.

Clikc on Business Insider for more details.

Click on rattraders for Marcovici’s web site.

This is, of course, a joke, not to be taken seriously.

But, in the spirit of the joke, let me say that the advantage of rat traders is that if they failed to perform, they wouldn’t ask for a government bailout.   And there’s something to be said for traders who take bonuses in the form of cheese.

And it would be interesting to see if the rats outperform the computer algorithm that a venture capital firm supposedly appointed to its board of directors.

The war for living space

September 27, 2014

Tom the Dancing BugSource: Tom the Dancing Bug Blog.

I don’t think the discomfort of airline flight discomforts me as much as it does most people.

The night before I go on an airplane trip, I stay up as late as I can so that I doze all through my airplane flight.

I have the ability to lose myself in reading and always take an engrossing pocket-size book with me on a flight.

LINK

To recline your seat or not?  Stop arguing.  Capitalism has already won this stupid war by Oliver Burkeman for The Guardian.

The aurora borealis in real time

September 27, 2014

This is not time lapse photography. This is as it happened in real time.

Hat tip to kottke.org

The powerful and precarious rise of China

September 26, 2014

The rise of China is one of the most important historical events, maybe the most important, of our time.

Jonathan Fenby, an experienced reporter and former editor of the South China Morning Post, gave a good account of China’s rise in his 2012 book, TIGER HEAD, SNAKE TAILS: China Today, How It Got There and Where It is Heading.

I finished reading Fenby’s book a week or so ago.  It reminded me of histories of the United States in the late 19th century, the era of the so-called robber barons.

Like the USA then, China has sweatshops, child labor, pollution, slums, suppression of minorities and rampant bribery and corruption.  But also like the USA then, China is full of energy and optimism, growing in wealth and power, and a land of opportunity for its entrepreneurs.

fenby.tiger.headWhen I was a boy, most Americans thought China was eternally doomed to upheavals, poverty and famine.

From the Opium Wars to the death of Mao Zedong, that was China’s fate.  But during the past 40 years, the Chinese leaders have made their country one of the world’s great economic powers, brought population growth under control and provided a basic subsistence to all and prosperity to many.

From 1978 to 2012, China’s economy grew 17-fold.  China’s economy is the second-largest in the world, although still far smaller than the United States.  It has a positive balance of trade.   It is the largest trading partner of Australia, the largest trading partner of Africa and a growing presence in Latin America.

Chinese companies compete and expand worldwide, while China’s own territory attracts industry from the USA, Europe and Japan.

The Chinese challenge, however, is much different from the Japanese challenge of the 1980s.  The Japanese challenge was that Japanese companies made products of a higher quality than U.S.-based companies.  This resulted in a competition for quality that was good for both the United States and Japan.

This is a different from the Chinese challenge of making products more cheaply than U.S.-based companies.  This results in a race to the bottom which is bad for most countries.

While many Chinese companies make world-class products, others cut corners.  Chinese companies are noted for cheap imitations of foreign brand name products.  Violation of copyright and theft of patents are common.  Fenby reported that 80 percent of counterfeit goods seized in the USA and Europe originate in China.

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The government needs better repo men

September 26, 2014

aed61e987

The U.S. government imposes huge fines against financial criminals, but rarely collects the full amount.

Notice the chart on the right, which is in fractions of a percentage point.  That’s right.  The Commodity Futures Trading Commission has never collected as much as 1 percent of the finds it has imposed in any year.

Big money is easy to hide and hard to collect.  So why not prosecute and see if financial crooks can be sent to jail?

Source: Financial Criminals Have Been Fined Billions, But They Rarely Pay by Joe Pinsker for The Atlantic

Eric Holder stepping down as attorney general

September 25, 2014

Attorney General Eric Holder plans to step down as soon as a successor is confirmed.  I think the following is a just summary of his legacy.

Holder’s tenure as Attorney General has been a tragic one. Not only has he been engulfed in partisan scandals over an incompetent gun running sting known as “Fast and Furious,” he has been under fire for attacking the First Amendment rights of the media and is widely seen as having given his friends and former clients on Wall Street a complete pass on the criminal conduct that led to the 2008 financial crisis.

Holder’s involvement with the war on whistle-blowers, tracking and intimidating reporters, killing Americans without judicial review, and the abysmal failure to enforce the law against criminals in the financial services industry has left America a more divided and unjust society.

Not a particularly good legacy to leave behind.

America not only saw a white collar crime wave go unpunished, but saw Holder himself announce a doctrine that has been called Too Big To Jail.  

Holder claimed in congressional testimony that some Wall Street banks could not be prosecuted because of their size, saying “If you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.”

Holder made no corresponding effort to break up the banks so they could become the appropriate size for him to feel comfortable prosecuting them when they broke the law. 

Instead, the comment signaled to everyone that if you were big and powerful enough the Holder Justice Department was not coming after you in criminal court – which still holds true as there has not been any major prosecutions against the banks or bankers.

As Eric Holder exits the stage America remains worse off from his having been in office.

via FDL News Desk.

Bill O’Reilly wants anti-terror mercenary army

September 25, 2014

oreilly-mercenaries

The above is from Bill O’Reilly’s Monday evening appearance on Fox News. Source: Media Matters.

CBS_This_Morning_-Oreilly

The above is from O’Reilly’s Tuesday morning appearance on CBS News.  Source: Daily Kos.

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For what it’s worth, the United States government already has an elite force for fighting terrorists.  It is called the Joint Special Operations Command.  Whatever can be accomplished through valor, training and military professionalism, they can do.

The problem is that if the U.S. government does not have a clear purpose in waging war, American troops can not accomplish that vague purpose, no matter how dedicated they are nor how skilled in use of deadly force.

The “global war on terror” does not have a clear purpose.  The U.S. government fights against certain terrorists under certain circumstances in the interest of advancing U.S. geopolitical power, while supporting other terrorists (and sometimes the same terrorists) when this fits the U.S. purpose.

Outsourcing U.S. military operations to mercenaries—and the dictionary definition of “mercenary” is “serving merely for pay or sordid advantage”—is intended to solve a political and Constitutional problem, not a military problem.

The political problem is that we the American people are not interested in fighting wars of geopolitical advantage.  We are only willing to fight when we think our own country is threatened.

Terrorism is not such a threat.  We Americans (and the world) are more in danger from the Ebola virus than we are from the Islamic States and its predecessors.  That is why our government has had to lie and exaggerate our perils in order to talk us into war.  Each time, the lies and exaggerations become less believable.

With a mercenary army, the political problem goes away.  Mercenaries would fight whomever they are paid to fight, no questions asked.  The drawback is that they wouldn’t necessarily be American citizens or have any loyalty to the United States.

We would face the historical problem of countries that depend on mercenary fighters, which is how to prevent mercenaries from turning against their employers when that is the more profitable option.

LINK [added later]

10 Frightening Facts About Private Military Companies by Pauli Poisuo for ListVerse.   Hat tip to djgarcia94.

Why we fight

September 25, 2014

ByX_Ou3IYAADiaHAbove is a letter to the editor to The Daily Mail in London concerning what military intervention in the Middle East is all about.  Actually it’s a bit out of date.  The Saudi Arabian government doesn’t officially support the Islamic State militants any more, which doesn’t necessarily mean that they don’t get any support from individual Saudi Arabs.

Another interesting question is where Israel stands in all this.  The Islamic State (ISIS) and the other Sunni Muslim militias fighting in Iraq and Syria are enemies of Israel’s Shiite Muslim enemies, especially Hezbollah, the Shiite Muslim militia and political party in Lebanon, and Hezbollah’s backer, Iran.

I am always in doubt at moments such as this as to whether the President (whoever he is at the time) lacks a clear purpose, or whether he has a purpose that is not revealed.

LINKS

War Without End: The U.S. may still be fighting in Syria in 2024, 2034, 2044 by Jack Shafer for Bloomberg News (via Naked Capitalism).

The War Nerd: Bombs away in the Middle East!  But why is Israel so quiet? by Gary Brechter for Pando Daily.

Prosperity for whom?

September 25, 2014

income distribution

This chart shows that during the Obama administration, the United States has had an economic expansion in which the vast majority of the population lost income.   This is the first time this has happened in more than 50 years.

There were sharp drops in average income growth during the Reagan (1982-1990) and Bush (2001-2007) years, but this is worse.

An economic expansion is a period of continuous growth in gross domestic product for at least two fiscal quarters in a row.  Americans are producing more.  But most aren’t getting the benefit of it.

I don’t think this is so much because of anything specific that the President and Congress have done as what they have not done.

I think the economic system is now structured to redistribute income upward unless something changes, and most of the present political establishment, both Democrat and Republican, is unwilling to change.

income-growth

It is true that the top income earners lose a greater fraction of their incomes in recessions that the majority do.  But taking the ups and downs together, the economic elite are taking an ever-larger share.

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Source: “The Most Remarkable Chart I’ve Seen in Some Time”: The Rich Gain More Ground in Every U.S. Expansion by Yves Smith for Naked Capitalism.

If you’re trying to reconcile the two charts, keep in mind that the top chart distinguishes between 10 and 90 percent of the population, and the bottom chart distinguishes between 1 and 99 percent of the population

David Graeber on corporatization

September 25, 2014

The increasing interpenetration of government, university and private firms has led everyone to adopt the language, sensibilities, and organizational forms that originated in the corporate world.

Although this might have helped in creating marketable products, since that is what corporate bureaucracies are designed to do, in terms of fostering original research, the results have been catastrophic.

My own knowledge comes from universities, both in the United States and Britain.  In both countries, the last thirty years have seen a veritable explosion of the proportion of working hours spent on administrative tasks at the expense of pretty much everything else.

In my own university, for instance, we have more administrators than faculty members, and the faculty members, too, are expected to spend at least as much time on administration as on teaching and research combined.  The same is true, more or less, at universities worldwide.

The growth of administrative work has directly resulted from introducing corporate management techniques.  Invariably, these are justified as ways of increasing efficiency and introducing competition at every level.

What they end up meaning in practice is that everyone winds up spending most of their time trying to sell things: grant proposals; book proposals; assessments of students’ jobs and grant applications; assessments of our colleagues; prospectuses for new interdisciplinary majors; institutes; conference workshops; universities themselves which have now become brands to be marketed to prospective students or contributors; and so on.

As marketing overwhelms university life, it generates documents about fostering imagination and creativity that might just as well have been designed to strangle imagination and creativity in the cradle.

via Of Flying Cars and the Declining Rate of Profit – The Baffler.

The Hank Funnies, Episodes 6 to 9

September 24, 2014

These central character in these cartoons, drawn by a local Rochester, NY, artist named George Dardess, is my peace advocate friend, Hank Stone.

Hank-6.1-787x1024

The Hank Funnies, Episode #6

Hank-7.1-1024x765

The Hank Funnies, Episode #7

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The 1% prepare for the next financial crash

September 24, 2014

The past 30 years have seen a series of financial crises, each worse than the previous one, followed by a government bailout.  David Malone, a documentary filmmaker turned financial journalist, said the world’s financial elite see another crisis coming, which will be the worst of all.

Rather than try to prevent the next crisis, he wrote, the financial elite are preparing to secure themselves from harm.  This means neutering the ability of national governments to regulate banking or restructure debt.   This includes international trade sgreements that would make freedom from regulation a binding obligation under international law.

With government rendered powerless, international bankers and financiers, as their creditors, would have the power to dictate.

There’s more.  Read his two articles to get the full story.  This is speculation based on circumstantial evidence, but it seems plausible to me.

LINKS

The Next Crisis – Part one by David Malone as Golem XIV (via Naked Capitalism)

The Next Crisis – Part two – a manifesto for the supremacy of the 1 percent by David Malone as Golem XIV (via Naked Capitalism)

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David Graeber on postmodernism

September 24, 2014

Might the cultural sensibility that came to be referred to as postmodernism best be seen as a prolonged meditation on all the technological changes that never happened?

The question struck me as I watched one of the recent Star Wars movies.  The movie was terrible, but I couldn’t help but feel impressed by the quality of the special effects.

Recalling the clumsy special effects typical of fifties sci-fi films, I kept thinking how impressed a fifties audience would have been if they’d known what we could do by now—only to realize, “Actually, no. They wouldn’t be impressed at all, would they? They thought we’d be doing this kind of thing by now. Not just figuring out more sophisticated ways to simulate it.”

That last word—simulate—is key. The technologies that have advanced since the seventies are mainly either medical technologies or information technologies—largely, technologies of simulation.  [snip]

The postmodern sensibility, the feeling that we had somehow broken into an unprecedented new historical period in which we understood that there is nothing new; that grand historical narratives of progress and liberation were meaningless; that everything now was simulation, ironic repetition, fragmentation, and pastiche—all this makes sense in a technological environment in which the only breakthroughs were those that made it easier to create, transfer, and rearrange virtual projections of things that either already existed, or, we came to realize, never would.

Surely, if we were vacationing in geodesic domes on Mars or toting about pocket-size nuclear fusion plants or telekinetic mind-reading devices, no one would ever have been talking like this.

The postmodern moment was a desperate way to take what could otherwise only be felt as a bitter disappointment and to dress it up as something epochal, exciting, and new.

via Of Flying Cars and the Declining Rate of Profit – The Baffler.

Black and white ways of child-rearing

September 23, 2014

Brittney Cooper, who is black, wrote for Salon about why black parents are often so authoritarian and white parents are often so permissive.

In college, I once found myself on the D.C. metro with one of my favorite professors.  As we were riding, a young white child began to climb on the seats and hang from the bars of the train.  His mother never moved to restrain him.  But I began to see the very familiar, strained looks of disdain and dismay on the countenances of the mostly black passengers.

They exchanged eye contact with one another, dispositions tight with annoyance at the audacity of this white child, but mostly at the refusal of his mother to act as a disciplinarian.  I, too, was appalled.  I thought, if that were my child, I would snatch him down and tell him to sit his little behind in a seat immediately.

My professor took the opportunity to teach: “Do you see how this child feels the prerogative to roam freely in this train, unhindered by rules or regulations or propriety?”

“Yes,” I nodded.

“What kinds of messages do you think are being communicated to him right now about how he should move through the world?”

And I began to understand, quite starkly, in that moment, the freedom that white children have to see the world as a place that they can explore, a place in which they can sit, or stand, or climb at will. The world, they are learning, is theirs for the taking.

Then I thought about what it means to parent a black child, any black child, in similar circumstances. I think of the swiftness with which a black mother would have ushered her child into a seat, with firm looks and not a little a scolding, the implied if unspoken threat of either a grounding or a whupping, if her request were not immediately met with compliance.

So much is wrapped up in that moment: a desire to demonstrate that one’s black child is well-behaved, non-threatening, well-trained.   Disciplined

I think of the centuries of imminent fear that have shaped and contoured African-American working-class cultures of discipline, the sternness of our mothers’ and grandmothers’ looks, the firmness of the belts and switches applied to our hind parts, the rhythmic, loving, painful scoldings accompanying spankings as if the messages could be imprinted on our bodies with a sure and swift and repetitive show of force.

I think with fond memories of the big tree that grew in my grandmother’s yard, with branches that were the perfect size for switches.  I hear her booming and shrill voice now, commanding, “Go and pick a switch.”   I laugh when I remember that she cut that tree down once we were all past the age of switches.

via The racial parenting divide – Salon.com.

I think there is a lot of truth in this.  How parents bring up children depends partly upon whether they see the world as a harsh and dangerous place, or whether they see the world as a place of opportunities to be explored.  (I’m writing now about normal families, and not about messed-up families without any real parenting).

The differences are not just between black and white families.  Blue-collar families, of whatever race, tend to more strict than upper-crust families.  Contrary to the stereotype that some black people have, not all of us whites are affluent, college-educated professionals.

I think there also is a generational divide.   Looking at the generations in my own family, my grandparents were much tougher disciplinarians than anybody would be today.   That was because of the customs of the times.  Nobody then would have thought that slapping or spanking a child was a form of abuse.  But those customs were a product of a much more demanding and unforgiving world than the one I grew up in.

One of the problems of the children of the Baby Boomers was that so many of them were raised to live in a kinder, gentler world than the one they find themselves in.

I think it’s tough to be a parent.   I don’t know how you strike the right balance.

David Graeber on the space race

September 23, 2014

It’s often said the Apollo moon landing was the greatest historical achievement of Soviet communism.  Surely, the United States would never have contemplated such a feat had it not been for the cosmic ambitions of the Soviet Politburo.  [snip]

The American victory in the space race meant that, after 1968, U.S. planners no longer took the competition seriously.  As a result, the mythology of the final frontier was maintained, even as the direction of research and development shifted away from anything that might lead to the creation of Mars bases and robot factories.

The standard line is that all this was a result of the triumph of the market.  The Apollo program was a Big Government project, Soviet-inspired in the sense that it required a national effort coordinated by government bureaucracies. 

As soon as the Soviet threat drew safely out of the picture, though, capitalism [supposedly] was free to revert to lines of technological development more in accord with its normal, decentralized, free-market imperatives—such as privately funded research into marketable products like personal computers.  [snip]

In fact, the United States never did abandon gigantic, government-controlled schemes of technological development.  Mainly, they just shifted to military research—and not just to Soviet-scale schemes like Star Wars, but to weapons projects, research in communications and surveillance technologies, and similar security-related concerns.

To some degree this had always been true: the billions poured into missile research had always dwarfed the sums allocated to the space program.  Yet by the seventies, even basic research came to be conducted following military priorities.

One reason we don’t have robot factories is because roughly 95 percent of robotics research funding has been channeled through the Pentagon, which is more interested in developing unmanned drones than in automating paper mills.

via Of Flying Cars and the Declining Rate of Profit – The Baffler.

The decline of ‘stop and frisk’ in NYC

September 23, 2014

Capture

I’ve written posts about the injustice (and also the uselessness) of singling out young black men for police harassment, often leading to arrests for trivial or arbitrary reasons.   So I’m pleased to read a report in the New York Times, illustrated by many fine graphics such as the one above, that this practice is on the decline.

Of course there can be reasonable grounds why a police officer might regard someone as a suspicious character.  But those grounds should consist of more than being young, black and scruffy-looking.

The decline in stop-and-frisk has NOT resulted in a rise in crime.   Violent crime continues to decline in New York City, as it does almost everywhere else in the United States.   The chart below is based on national figures.

Capture2

LINKS

‘Stop-and-Frisk’ Is All But Gone From New York by Mike Bostock and Ford Fessenden for the New York Times.

Crime isn’t up by Peter Moskos for Cop in the Hood.  (And a hat tip to Moskos for the New York Times link)

[Added 10/2/14]  Mayor Bill de Blasio campaigned on a promise to end stop-and-frisk in New York City.  He deserves credit for a promise kept.