Skip to content

Book Review: Zero To One by Peter Thiel

2016 October 22
Peter Thiel, Berlin, 2014

Peter Thiel, Berlin, 2014

A few weeks ago, for work related reasons, I had to bone up on Venture Capital. One of the books I read was Thiel’s “Zero to One.”

Thiel has become even more famous recently for bankrolling the lawsuit that put Gawker out of business and for his support of Trump.  He’s a libertarian gay man.

Before this Thiel was most famous for being one of the founders of Paypal, of Palantir (the “information” company), and for being one of the early investors in Facebook, which made him about a billion dollars.

He’s also a very smart man, and his book, which is about startups, is worth reading, even if I don’t agree with all of his politics or ideas.

Zero to one is based on the idea that there is doing more of the same: normal business, and there is creating something new.  When you create a new way of doing things, that’s going from zero to one. Doing more of the same is additive, new stuff is what really grows the economy.

(This is, interestingly, exactly the same beat that Jane Jacobs tackled in “The Economy of Cities”, which I’ll be reviewing soon. Her answer was more fundamental than Thiel’s, and more important, but Thiel says things worth reading.)

Thiel thinks the key to creating something new is knowing something is true that most people think is not true.

Having a secret.  You can use that secret, whether it is a scientific fact or a social one, to do something other people aren’t doing.  Elon Musk’s secret at Tesla was to start with luxury cars, and use the demand of wealthy people to drive down market.

But Thiel’s big secret is one that is known to a lot of successful business people, but denied piously by most.

If you want to get stinking rich; if you want to create an important company, it helps to be a monopolist (or oligopolist.) In a lot of markets, there’s one or a few big winners, and they take all the money.  Google in search (and thus online ads); Microsoft in OS’s back in the 90s.  Paypal in sending money online.  Steam in online distribution of games.

Opolies (a new word I just made up) make money hand over fist.

Thiel goes on a bit of a run here, trying to justify monopolies and oligopolies as good for society, noting that only rich companies can treat their employees and customers well, everyone else cuts wages and costs into the ground.

According to Thiel opolies  are good if they can be superseded and if they exist because their product is genuinely better.

He then uses the example of Microsoft, which undermines his entire argument.  Microsoft’s first operating system that really did well, MS Dos, was not better than other operating systems at the time.  It rode to success of the back of a previous monopoly, that of IBM.  There used to be a saying in the IT business “no matter how big and standardized a computer market is, IBM can change it.”

IBM could certainly have written an OS as good and almost certainly better than MS Dos, when they did a little later on it was better.  But they were under a lot of consent orders due to anti-trust laws, so they bought the right to use MS-Dos (which Gates bought from someone else.)

Big mistake.  Gates outplayed IBM.  But MS-Dos didn’t win because it was better, and Windows and Windows 95 were inferior to Apple OS’s at the time as well.

Gates won because he understood positive externalities and did everything he could to get the OS on as many systems as possible and reaped the positive externalities of doing so (and because of Microsoft Office, another discussion.)

Monopolists and oligopolists, in fact, treat suppliers and customers and employees no better than they feel they must. Amazon is a notably nasty place to work. Silicon Valley colluded for years to not compete for engineers on pay, and so on.  Monopolies and oligopolies look good when you have a regulatory environment where everyone is allowed to treat workers and customers terrible (aka. neo-liberalism) and some of them can look good in comparison to the blood washing the Agean Stables outside.

But enough of sweeping the bad side of monopolies under the rug.  Thiel is right: if you want to get filthy rich, you want to create a company which seizes a huge chunk of a market, and you don’t want to compete on commodities.  This has been known for a long time, it is the ugly step-child of market theory.  Fair and competitive markets drive profits into the ground; companies that want to be profitable, especially for long, need an unfair competitive advantage.

This leads to another of Thiel’s secrets. The power law: a very few companies make almost all of the actual profits.  A venture capitalist makes money not because of how most of his investments do, but because a few do very well.  So, Y-Combinator, which helps startups and takes a small share, has made almost all of its money off two out of hundreds: Dropbox and AirBnB.  Everything else, in terms of returns, is a wash, even if it made ten times returns.

Startups are lottery tickets to investors.  Most of them won’t pay back enough to matter, a few will and it is almost impossible to tell which ones in advance (if you think it’s easy, get moving, and when you make your first billion, I expect you to give me nothing.)

Still, Thiel thinks they have the best chance when they are based on some principles:

  • a strong view of the future
  • A small group of founders (no more than 3) who really get along
  • an understanding that you are aiming to be an oligopoly or monopoly and plan to get one
  • knowledge of something (a secret) that most other people don’t have
  • a knowledge of how you’re going to distribute and sell (basic, but his advice is sound)

Thiel is especially strong on having a plan; a view.  He divides world-views into 4 types. Definite and indefinite optimists and definite and indefinite pessimists.

Definite means “having strong views of the future and a plan.”  Thiel puts China into definite pessimists: they have a plan, they’re working on it, and they expect the future to suck.

Why? Because they are copying the West, mostly, and they know that every Chinese can’t live the American dream: there aren’t enough resources in the world, or enough sink for greenhouse gasses.  But they aren’t sitting around, they’re doing what they can.

Americans in the post-war liberal period were definite optimists. The future was going to be great, and they had a plan to build it!

Modern Americans Thiel puts into indefinite optimists (I think Millenials aren’t, however.) They think the future will be swell, and have no idea how to get there.  (The results are that are mostly bad, in Thiel’s view. I agree.)

And the Europeans are indefinite pessimists. The best is behind, their plan is kinda suck, and they expect the future to be worse. I’m not sure I agree, Eurocrats have a pretty definite plan, but it may well be true of Europeans more generally, and the business community in particular.

Thiel is strong in encouraging people to have a plan, to not treat themselves as lottery tickets, even if that’s how VC’s view founders.  Know what you’re doing and why.

Thiel ends with a macro look at the future. The ancients saw the world as up and down. Civilization rises and falls.  We tend to look at the future and see a plateau.  He thinks these two are now unlikely, that we’re either going to get to real sustained exponential growth (the abundance society), breaking the bonds of limited resources thru technology, or we’re going to pretty much wipe ourselves out.

I can recommend Thiel’s book. It’s pretty good on startups and venture capital, his philosophy is basic but generally not stupid, and it’s an easy read.  Perhaps more importantly, Thiel’s thinking appears to be pretty widespread in Silicon Valley and amongst tech elites in general.  That doesn’t mean they all agree with the politics which have recently bought him infamy on the left, but that his general philosophy resonates with them, and how he does business makes sense to them.

Given that these people do drive some of the most important parts of the world economy, understanding how they think is important.

If you enjoyed this article, and want me to write more, please DONATE or SUBSCRIBE.


Because You All Come Here For My Taste In Music (Part 2)

2016 October 19
by Ian Welsh

Ah, the 80s.

(Part 1: Fiddle Music!)

Russia Is Preparing For War

2016 October 18
by Ian Welsh

I don’t think there’s much question about it. Even if they think it’s unlikely, Russia thinks war is possible enough that steps are required.

Citing routine drills, Russia has even moved missiles within striking range of NATO targets, into the Kaliningrad enclave bordering Poland and Lithuania.


Meanwhile, CNN informs us that:

“Moscow abruptly left a nuclear security pact, citing U.S. aggression, and moved nuclear-capable Iskandar missiles to the edge of NATO territory in Europe. Its officials have openly raised the possible use of nuclear weapons.”


This tension is spilling out into territory beyond the U.S. as well, as reports show the  European Union is less likely to ease sanctions on Moscow over Ukraine, now that Russia has intensified air strikes on E.U. and U.S.-friendly rebels in Syria. They are even considering more punitive steps.

…Press Secretary Josh Earnest said this week the U.S. was considering a “range” of “proportional” responses to alleged Russian hacking of U.S. political groups like the DNC. The accusation from Washington, CNN reports, came after the Syrian ceasefire talks broke down when U.S. officials suggested Russia should be investigated for war crimes.


This is all profoundly stupid and unnecessary.  Crimea and the Ukraine are not worth a war with Russia over (especially Crimea, which was part of Russia for centuries, and whose population, as best I can tell, genuinely did want to join Russia.)

Unlike everyone else in Syria, Russia was invited by the recognized Syrian government.  And no Western nation should have much of an interest in destabilizing Syria. There are reasons for the Gulf Arabs, Saudi Arabia, Israel and Turkey to want to, but not for the West. Furthermore, to note the blitheringly obvious, there are NO “moderate” rebels of any significance in Syria. If Assad, nasty as he is, loses, an awful Islamic state will be set up in Syria.

The evidence of Russian interference in the US election is circumstantial at best, and even if they have given Wikileaks some documents, so the fuck what?  All the documents released by Wikileaks are real documents, the information they reveal is what matters.  The US has interfered far more in a long list of other countries elections, including in Russia’s.

Let us remember, Russia still has enough nuclear weapons to destroy civilization multiple times.  So does the US.  The Russians have been quite explicit that if they start losing a conventional war, they WILL use tac nukes, and it is a short step up from there to strategic nukes.

Over Syria?  Over the Ukraine and Crimea, which were part of Russia for centuries and are clearly in their sphere of influence?

Clinton is an uber-hawk.  Hillary has said that Putin is echoing Hitler in the 30s. She also called for a no-fly zone in Syria, after Russia was there.

Apropos of “rhetoric”, if you sincerely say someone is Hitler in the 30s, gobbling up territory, you are saying “only force can stop him.”

This is deranged. This is insane.  This is potentially genocidally insane.

I hope that Clinton and other Western leaders are just spewing rhetoric, but I also know that that rhetoric is leading to real, concrete actions, like moving weapons and men to the borders of NATO; real sanctions which are doing real harm, and so on.

Contrary to what many seem to think, you can back yourself into a war (see World War I). We can’t afford to back into a war with Russia.

(Update: the “return of officials story” is wrong and I have removed it.)

If you enjoyed this article, and want me to write more, please DONATE or SUBSCRIBE.

You Can’t Scream Holocaust or Fascist Without Consequences

2016 October 17
by Ian Welsh

For decades now, the anti-abortion right has had an argument.

Every abortion is a murder.

Because there are so many abortions, there are so many murders, which means America and the world is in the middle of an unacknowledged Holocaust.

Abortion doctors are mass-murderers.  They kill, and kill, and kill again.

Rhetoric has consequences. If you believe that there is an ongoing campaign of mass murder against, one notes, people who cannot protect themselves, your duty to stop it is clear, and it is not clear that duty stops short of violence.

Indeed there has been violence around abortion clinics, up to, an including murder, and not of fetuses.

Left-wingers, as a group, accept the argument that this rhetoric has led to the anti-abortion violence.

Donald Trump is a Fascist.  This has been proclaimed repeatedly.

To most Americans fascist = holocaust, Hitler and World War II. To be a fascist is to be the worst thing possible.

Popular culture is full of references of going back and killing Hitler before he became powerful.  We bewail that no one did anything.  We blame Neville Chamberlain for responding to Hitler’s provocations by making concessions.

To try and make peace with a fascist, it is generally accepted, is foolishness.

Donald Trump is a fascist, so are many of his followers, and those who follow him but who aren’t fascists are still working to try and get a fascist into power. They must be stopped, and our culture believes violence is justified in stopping fascists.

That is the logic of the rhetoric.

So, yesterday we had someone bomb a GOP field office.  A swastika was painted, along with the message “Nazi Republicans leave town or else.”

No one was killed. This time.

Meanwhile we have the constant, frankly deranged, insistence that Russia is behind Trump, escalating in many cases to calling him one of Putin’s agents.  Claims are constantly made that Wikileaks is Russian cat’s paw, on quite weak evidence.  The leaks themselves are all legitimate, despite what many have claimed, but they have largely been neutralized by anti-Russian rhetoric.

The government has announced that it will “cyber attack” Russia in retaliation.

Next to a Nazi, what is the worst thing in the world to most Americans, especially old ones?  Bla… uh, I mean, Russians. Commies (yes, they aren’t any more but people still think of Russia as the big bad.)

Trump has stoked xenophobia throughout the election—Mexicans and Muslims and so on.  But those who support Clinton have massively demonized Trump’s supporters as Nazi third columnists supported by big bad Russia.

This has consequences. It is especially insane with respect to Russia, which still has enough nuclear weapons to destroy the world, multiple times and which feels very threatened by the US and NATO, with rather good reason.  Russian elites really do think Clinton wants war with them.

Rhetoric has consequences.  Americans have been whipped, by both sides, into hatred of their fellow citizens, with Democratic supporters as guilty as Republican ones. All this fascist rhetoric is not harmless and that its targets are white and therefore it is not “racist” rhetoric does not make it less dangerous.  And whipping up hatred and fear of Russia is playing with something so dangerous it could lead to nuclear war.

Rhetoric does have consequences.  We all understand that Trump’s rhetoric is dangerous, but those on the left seem to not understand just how much damage the left has done by reaching for the fascist and Russia rhetoric to demonize Trump and his supporters is.

If you’re going to say people are trying to install a fascist, you’d both better be right, and ready for the logical consequences. You cannot scream “fascist” and also say “but  hey, it’s not worth fighting to stop.”  Does not compute in a society in which fascist=Holocaust.

Rhetoric has consequences. For abortion as holocaust. For racism. For fascism. For demonizing a nation with nukes.

Play with fire and be burned.

If you enjoyed this article, and want me to write more, please DONATE or SUBSCRIBE.

The Republican Party Is Not “Broken”

2016 October 15
by Ian Welsh

There are a great number of stories about how Trump is “destroying” the Republican party.


That Trump is most likely to lose the Presidency badly does not make the Republican party broken.  There is some down-ballot effect, but:

  • Republicans will certainly hold the House;
  • Republicans will still control majority of State Governorships; and,
  • They might lose the Senate but if they do it will be barely.

Does that sound like a broken party?  No, it sounds like a largely ordinary election result: in fact, in 2008, the Republicans did far worse.

There will be blow-on effects from the Trump candidacy, but they will no more “destroy” the Republican Party than the Tea Party did.

If you enjoyed this article, and want me to write more, please DONATE or SUBSCRIBE.

Some Comments on the US Elections and that Which Is and Isn’t Said

2016 October 12
by Ian Welsh

Donald TrumpSo, Trump said some very nasty things about women, which were caught on tape and released to the public.

There’s no question that Trump is a vile misogynist, and he has multiple outstanding sexual assault allegations against him.

It is also true, as Trump says, that Bill Clinton is a piece of work when it comes to women (no, spare me) and that Hillary has attacked those who accused him.

But what is more interesting to me is that a norm has been violated. Male politicians regularly molest women.

Please, don’t act surprised, everyone in the business knows this and so does anyyone outside it who wants to know. (Younger men get molested a lot too, the position of “page” is a dangerous job.)

But, as Marcy Wheeler has pointed out, this doesn’t usually get brought up. In the ’90s, Clinton got hit with it, and then it was mostly swept under the rug.

Now, someone has opened it up again.

This is what Trump has been, in his blustering way, warning about: Those who attack him on this issue will be attacked in turn. Especially Republicans, as he and his team view them as traitors–always worse than the “officially” avowed enemy.

Usually I despise having a “conversation,” but this is a conversation I welcome. Let’s get into it. Let’s talk about all those who are groping, molesting, assaulting, and out-and-out raping.

I do think it is worth pointing out that the Iraq war caused more rapes and assaults than anything Trump has ever done. Libya too. Oh, and “super-predator” legislation increasing the prison population would have caused a lot of rapes also.

It is worth looking at what people actually do. When someone is potentially in a position of power, it’s worth it to ask how many people they have, through their actions, hurt. This is a rounding error predicting the harm they might do. I know this is an intensely alienated way for most people to think, but being unable to think in those terms causes great suffering.

That said, one can certainly make the argument that Trump will be a worse President than Clinton (on some scale of awfulness). Remember, it isn’t necessary to pretend that Hillary is a good person for whom to vote, with the worst enemy being Iran, and the first priority being to overthrow Assad. One needs only to say either she’s the lesser evil or that fuck it, they’re both bad, and you’ll be voting in your own interest.

Finally, I note that, contrary to what you may have read, the Wikileaks releases from the DNC and Podesta are entirely accurate. In a normal election, they would be dominating the news-cycle. Clinton is a corporate shill and a warmonger who has caused immense suffering in her life.

These are not good people. Do not identify with either, nor with their courtiers. Those close to them have sold their souls for power, or its illusion. You would be selling something precious and receiving nothing close to that in return.

If you enjoyed this article, and want me to write more, please DONATE or SUBSCRIBE.

On Brexit: Britain Can’t and Shouldn’t Have It Both Ways

2016 October 10
tags: ,
by Mandos

…The chances are we’ve gone too far,
You took my time and you took my money,
Now I fear you’ve left me standing,
In a world that’s so demanding…

— New Order, “True Faith”

In this post, I discuss the options for the UK in its relationship to the EU after the Brexit vote, particularly in light of the fact that Theresa May’s government has decided that freedom of labour movement is to be sacrificed on the altar of the hostility towards immigration–which is held to have driven much of the support for Leave. It is also increasingly clear that the EU will take a harsh view of British attempts to separate trade access to the EU from the access of EU citizens to British work opportunities. I argue that, overall, this position is justified and mostly reflects an EU leadership representing the interests of their citizens in the face of a United Kingdom that, for whatever reason, believes that it can take what it believes to be the beneficial parts of its relationship with continential Europe and leave behind what it mostly (and wrongly) considers to be the costly parts. I make this argument despite a dislike of and disagreement with some of the governing attitudes in continental Europe: The historic demands of conservative, Eurosceptic UK politicians would have exacerbated what is bad about the EU and attenuated what is good about it.

The Taxonomy of Brexits

In practice, the European Union is actually a constellation (or maybe nebula) of treaty-defined entities. An EU member is a country that participates in a certain subset of them, but not necessarily all of them (there is of course a more formal definition, but I am talking about the institutional mechanics)–the UK is one of the exemplars of this choice. Conversely, there are countries that participate in some of the EU institutions, but are not members–the best exemplar of this is Norway, which participates in the single market, the unified visa area under Schengen, in the scientific bodies, and pays a significant charge in lieu of membership dues.

We are now months after the Brexit referendum returned a clear Leave result (52-48 is not a small margin, and immediate do-overs after buyer’s remorse is a democratically terrible idea), and the United Kingdom faces a choice in how to implement the referendum. The taxonomy of choices resolves to two major taxa of future possibilities: “hard” or “soft” Brexit. Under a “hard” Brexit, the UK effectively reverts unilaterally to a mostly exterior relationship with the countries of the European Union without (much) special status or access to EU-related institutions. The UK becomes like a nearby Canada, in other words. There’s no question that the border will remain open for Brits to visit the EU, but they will likely do so under the same visa waiver terms under which Canadians and Australians live, which generally excludes labour competition with EU citizens and permanent residents, outside of designated priority professions. Goods and services will have to be negotiated by treaty separately, but they will have to be agreed-upon by the entire EU, meaning that everything, absolutely everything, would be on the table, and more favorable terms than the current access to the single market would not be on offer.

Under “soft” Brexit, the UK becomes, in practice, mostly like Norway. That is, it would retain access to the single market, have to pay dues, and remain a participant in many of the institutions–but will emerge from the direct, if often only superficial, supervision of the European Commission. Much less, in terms of the UK’s real capabilities, would change, but some aspects of internal policy and regulation become officially independent of EU authority, and much influence in EU institutions would, of course, be lost.

The division between these two types of Brexits turns out to revolve around one issue: The separability of the Four Freedoms of the European Single Market. These are: freedom of movement of (1) goods; (2) labour; (3) capital, and; (4) services. These freedoms, presently well-entrenched in the EU treaty framework, are supposed to guide convergence towards a fully-implemented, single market (meaning: It’s not fully implemented). If, as a Leave supporter, your problem with the EU lies elsewhere, for instance, in its economic regulatory framework, then you would still be willing to accept the Four Freedoms, and soft Brexit is an option that other EU partners would accept in overall good faith, especially since the departure of Britain from the rest of the EU’s convergence framework would enable other agenda items, that the UK has deliberately hindered, to go forward with minimal overall disruption.

Economic Freedom as Compromise

If, however, your problem with the EU is with the implementation of the Four Freedoms, then, Houston, you have a real problem as a Brexiteer. Because every country in the EU has some significant sectors vulnerable or sensitive to one or more of the Four Freedoms. The Four Freedoms establishes a relatively simple guiding framework for compromise among these issues. I hope that it is not too difficult to see that allowing countries to withdraw in spirit and practice from one or more of these freedoms, while retaining full privileges on the rest, is a recipe for disaster for the entire Single Market project, because some countries would become “free riders” to the detriment of the other countries, which would in turn cause the disadvantaged countries to withdraw from other freedoms, in a downward spiral that would dismantle European economic unity.

The Four Freedoms and the regulatory framework that accompanies them makes the Single Market a far superior trading arrangement to treaties like NAFTA, and, yes, TTIP. The common regulatory framework, needless to say, impedes (however, does not prevent) the degree of race-to-the-bottom behaviour that you see in NAFTA-like deals, by creating a regulatory and arbitration system that is, yes, considerably more accountable to the public than the infamous investor-state dispute settlement (ISDS) that is a common practice in bilateral treaties. European, particularly British critics, decry the European Commission and its institutions as being very distant from popular sovereignty, and the criticism is true, to some extent; but that the road to accountability is long does not mean that there is no road at all, in contrast to international arbitration tribunals, which are sensitive to very little.

But more importantly, the free movement of labour is essential if you decide you want to have free trade at all. It is increasingly clear that trade deals like NAFTA, alleged to lift poor countries out of poverty by exporting low-skilled economic activity to these countries, actually have deleterious effects on developing countries. Mexico has experienced a great labour dislocation from exposure to competition from sectors that were domestically important but more productive and heavily subsidized in the US. Free movement of labour at least slightly ameliorates this by permitting workers in sectors negatively affected by this dislocation to find work in countries that directly benefited from it (overall). Because NAFTA does not lift border controls on the free movement of labour, Mexican workers who go where the work has gone (to the US) cannot send back remittances that reflect the higher US value of their labour, because they live under a wage-suppressive environment of immigration control. Needless to say, US workers do not benefit from the immigration controls as much as they are told.

What UK Eurosceptics are demanding, when they demand immigration controls for EU labour while retaining access to freedom of goods, capital, and services, is that UK business be able to profit from access to new markets in Bulgaria and Romania, countries that cannot yet compete in productivity with the UK, and yet fail to offer Bulgarian and Romanian workers the ability to improve their lot and their skills in higher-wage, higher-productivity environments with UK domestic labour protection, such as exist. It should not be hard to see why this is toxic.

European Unity and Freedom of Movement

The choice that Theresa May seems to be making is for a hard Brexit, particularly as signaled by some public pronouncements suggesting that existing EU-citizen workers in the UK would not be fully protected and grandfathered into the post-Brexit arrangement–that is, they are being designated as bargaining chips. The only condition under which it makes sense to use their status as a bargaining chip is to make an attempt for the UK to have privileged access to the EU without accepting any reciprocal obligations. (Whether it is actually possible to use them as bargaining chips this way is another matter.)

For the choice to be something in the middle between a hard and a soft Brexit, the EU would have to allow cherry-picking among the four freedoms, and therefore its own demise as a political project. I have described some of the reasons for this above. The EU is not going to passively accept its own demise at the hands of right-wing British Eurosceptics, some of whom have made no secret of their desire not only for Britain to leave the EU, but for the EU project itself to fail.

The mistake of British Eurosceptics, at least those who care about maintaining a privileged economic relationship with the European Union, is to fail to understand many continental politicians and bureaucrats, and significant portions of the continental public really “mean it” when it comes to European convergence. While the spectre of WW2 hangs in the air, somewhat faded due to the inevitable passing of those who survived it, continental Europe has still had regular reminders that it, the originator of colonialism, is in the modern world now itself susceptible to divide-and-conquer politics steered by greater, exterior powers. Critics of the EU say that the democratic legitimacy of its institutions is undermined by the non-existence of a European “demos,” but policy-makers are well aware of that. That is the whole point of the convergence process. The EU, in fact, has programmes to encourage social relationships between citizens of member states, precisely out of a desire to ensure that a European demos emerges in a future generation, and, yes, the United States of Europe can thereby be finally constructed.

Freedom of labour movement is a element of the unification of peoples explicitly envisaged by the construction of the European Union. In addition to its role in helping the Single Market to be mutually beneficial, the workplace is a key element of social integration and the building of trust between peoples at an individual level. Among younger British people, the policy has already shown signs of working–one of the complaints of younger Brits about Brexit is precisely that they were the generation that had both the most developed European identity and the highest intention of taking advantage of freedom of labour movement, of educational movement, and other related European freedoms.

National and Personal Factors

I would be remiss if I stayed only at the “high” institutional levels when discussing the dilemma into which the EU must now force the UK. There is certainly a personal dimension that cannot be ignored. British Eurosceptic politicians and media, both UKIP and Tory, have attacked what most continental Europhiles, both official and otherwise, see as the emotional core of the EU project, and did so consistently and constantly, so much so that EU immigration is seen as a prime driver of the Leave vote. Indeed, so much so that Theresa May feels compelled to choose it over Single Market access. Anyone who believes that such a consistent attack on a core belief and life work of many European politicians and bureaucrats would have no effect on how the negotiation proceeds is fooling themselves. Greece’s and Syriza’s offense during the 2015 negotiations was to attempt to step off script and make it politically impossible for German politicians to sell the band-aid to their own public; this is nowhere near as offensive as a direct political attack on free labour movement. If the UK gets off this with less visible damage than Greece, it is only because the UK is, for various reasons, economically much stronger than Greece–and not a member of the Eurozone.

Furthermore, it evidently became a bad habit in UK politics to blame domestic policy failures on the EU. The UK was never a member of the Eurozone, and there is nothing about the EU that prevents the UK from running a more social-democratic economy than it has. It was always within the power of the UK to handle its own housing crisis, its economic inequality issues, its infrastructure issues, and so on. What flaws the EU has (and it definitely has flaws!) cannot be blamed for very many of the problems now viewed as causing the political alienation that has led to the Brexit vote. Now, yes, it is a common sport across the EU for national politicians to blame Brussels officials for preventing them from doing things, and this is often true: The Commission has known democratic legitimacy issues, even if it is better legitimized than ISDS arbitration tribunals. Eurocrats are used to serving as the “distant scapegoat” function. The problem is that UK politicians did not, apparently, know when to pull back, or they knew it and chose to go over the cliff anyway, because an internal Tory party battle was more important than keeping the European project together. EU negotiators are human; they are not going to simply accept that they were the cruel masters from whom the British people needed freeing.

Therein lies a major, unavoidable issue. There are parties, particularly in countries like France and the Netherlands, that would likewise wish to scapegoat Brussels for whatever goes wrong and sell an EU breakup as a panacea. Former (?) colonialist countries like France have populations that share the imperial nostalgia issues that right-wing British Eurosceptics do. It would be actually irresponsible if EU negotiators simply attempted to go for the narrow-sense, economically most mutually beneficial deal with the UK possible. It must be seen that the EU was not the author of British woes, but at worst neutral. This is quite a different situation from Greece and the Eurozone, where, in material terms, the structure of the Eurozone acted as a real straitjacket on Greek well-being and Greek fiscal democracy.

Brexit, Boiled Hard

If there’s anything underhanded about the EU position on these matters, the blame goes principally to the people who set up the EU treaties well before this point. The article 50 exit procedure is deliberately designed to disadvantage the exiter by turning the tables: Exit is turned into exclusion, and exclusion happens automatically after the (too-short) deadline. No negotiation is possible until the country in question puts on the article 50 dunce cap and sits in the corner of shame. The architects of European convergence have always been especially careful to ensure that convergence is a one-way procedure wherein departure is so costly as to be better to be avoided at all. This was done, to put it in Ianwelshian terms, because they thought it was the right thing. Otherwise, European convergence would not be externally credible, and its lack of external credibility would be a further invitation for foreign powers to play wedge games.

One may argue that a hard Brexit also damages Europe as it disrupts the flows that currently exist, and this is always costly. European leaders have made it crystal clear that the project is more important to them than the short-term cash flows. Just as the British say that they can find substitute buyers and sellers, so can the rest-of-EU–with, in some ways, greater efficiency, because manufacturing still significantly exists on the continent. And everyone, even German industry, knows that the destabilization caused by separation of the four freedoms of the Single Market would, in the medium term, be more costly than putting up tariffs against the UK, to be negotiated down in a later and less UK-favorable process than full UK membership.

In this instance, I do explicitly take a strongly EU-sympathetic position on this. The aftermath of the Leave campaign has shown that anti-immigrant hysteria, nationalist nativism, and colonial/imperial nostalgia had a major impact on the shape of this, not a major desire for either libertarian economics or left-wing fiscal expansion. These are real dangers and ought not to be rewarded by political victories. Even under a hard Brexit, it still remains fully within the power of UK politicians to ensure that ordinary people are at least exposed to only minimal immediate suffering, and if they are not willing to use their means to protect their people, we know, once-and-for-all, that the woes and alienation of the people of the UK were never because of Europe.

Obama’s Department of Justice’s Prime Job Is to Immunize Rich Wrongdoers

2016 October 8
tags: ,
by Ian Welsh

Nobody went to jail over the financial crisis. Instead, their companies paid fines. Those fines were usually less than the company made in the crisis, and they did not include repayment of salary and bonuses, so the executives always won.

Now, the DOJ has immunized Mylan over their EpiPen price gouging:

maker of anti-allergy device EpiPen said its subsidiary Mylan Inc. has agreed to a $465 million settlement with the Justice Department and other government agencies stemming from the classification of EpiPen for Medicaid rebates. The terms of the settlement “do not provide for any finding of wrongdoing” by Mylan.

This is deliberate government policy and, yes, it comes from the top, from Obama. Obama and his DOJ engage in what should be considered routine criminal behavior, as far as I’m concerned: Helping criminals get away with their actions is itself criminal and that’s even before we talk about his actions in Libya, and so on.

Scum. Absolute scum. People die when lifesaving drugs are raised to high prices. This is is immunizing negligent homicide.

I want to be real clear, corporate criminals generally do more actual harm than the worst serial killer.

Meanwhile, “liberals” act like Obama’s the greatest president ever, even though he left the US economy far worse for most Americans, was a warmonger, and engaged in the largest immunization of corporate crime in at least 90 years.

He talks pretty but the man is scum. Scum to the bone. He took Bush’s America and regularized most of it and made some parts worse: kicking out more Hispanics, being far worse on whistleblowers, continuing to sign continuations of the AUMF and so on.

That Obama is scum does not mean, for the less bright, or more partisan, that he is not better than certain alternatives. Beelzebub being the lesser evil to Satan doesn’t mean you want to sup with him.


If you enjoyed this article, and want me to write more, please DONATE or SUBSCRIBE.

How US Presidential Politics Guarantees Inevitable Decline

2016 October 3
The Course of Empire by Thomas Cole

The Course of Empire by Thomas Cole

It is a cliche, but true, that American elections, especially Presidential elections, are lesser-evil contests.

Both candidates are bad. Both candidates will reign over continued decline. Both candidates will kill a lot of people whose deaths will not make America or the world safer or more prosperous.

Every US Presidential election of my life, with the possible exception of 1968 and 1972, when I was four years old, has been between two candidates who, objectively, could be expected to do things which would cause American decline. (And in both 1968 and 1972, the bad candidate won.)

Somewhat coincidentally, 1968 is the earliest year from which you can date American decline; 1968 is when white working class wages peak. It’s not until 1980 that one can say, “Ok, America has chosen decline,” however, because how to fix the problems of the late 60s and the 70s is the question of that time.

Since 1972, every election has been between people who would have been (or will be) bad Presidents. Every single one.

You cannot be led by bad leaders for 44 years and expect anything but bad results.

Various attempts have been made to end the “nothing but bad candidates problem.” All of them have failed.

Each failure is another rail pounded into the railway to Hell America is building.

You must fix this problem, of nothing but bad leaders, or you can go nowhere good. And even if you elect the “lesser evil,” you are just going to Hell a little slower.

Fix your politics, or wind up in Hell.

It is that simple, and I am not saying “Hell” idly.

(The saddest thing is that as flawed as he was, I’d take Nixon in a heartbeat over any President from Reagan on. Yes, including Clinton and Obama. It isn’t even close.)

If you enjoyed this article, and want me to write more, please DONATE or SUBSCRIBE.

Trump/Clinton Debate Open Thread

2016 September 26
by Ian Welsh

I used to get paid to watch these things. I don’t any more. So…I’m going to go read a nice novel in a coffee shop. Please feel free to talk about the debate in comments. I will, actually, be curious to hear what people have to say, just not willing to sit through so much sewage to get my own “take.”