All economic theories are statements about what sort of people we are, or rather, what sort of people we should be. Economics has homo economicus, economic man, the rational utility maximizer who always acts in his or her own interest. We know that humans aren’t rational and we know that we don’t always do what is best for us, or even know what it is, but economics stands, nonetheless.
Economic man is prescriptive: it is about how we believe we should act. In ordinary terms a rational utility maximizer is a greedy, selfish bastard: a functional sociopath. They are concerned with other people’s well-being precisely and only to the extent that that affects their own. That we strive to realize this philosophy in our society is obvious from a perfunctory look at how we run our primary economic institutions: corporations. Our society insists and has put into law that corporations be concerned only with profit and nothing else(x). Our culture celebrates greed, we declare that “greed is good”. We believe that if everyone acts selfishly, for themselves, in freely agreed upon contracts, no matter how unequal the power of the people entering into them “freely”, that maximum well-being will result.
It took a great deal of intellectual labor to make being a greedy selfish bastard intellectually respectable:
To a survival machine, another survival machine (which is not its own child or another close relative) is part of its environment, like a rock or a river or a lump of food. It is something that gets in the way, or something that can be exploited. It differs from a rock or a river in one important respect: it is inclined to hit back. — Richard Dawkins, “The Selfish Gene”, pg 66 (30th ann. edition)
If any civilization is to survive, it is the morality of altruism that men have to reject.
– Ayn Rand(x)
Well first of all, tell me: Is there some society you know that doesn’t run on greed? You think Russia doesn’t run on greed? You think China doesn’t run on greed? What is greed? Of course, none of us are greedy, it’s only the other fellow who’s greedy. The world runs on individuals pursuing their separate interests. — Milton Friedman
And the theory has been put to the test. In Russia after the collapse of the Soviet Union western economists and development experts instituted it as shock therapy and the Russian population collapsed, the life span of Russians dropped, and happiness cratered for over a decade.(x) One of the harshest totalitarian states in history, and people were happier in it than what our free market apostles wrought.
Since the 70s or 80s, in most developed countries we we have been slashing taxes, cutting social benefits, and extolling the benefits of free markets, by which we mean not free markets, but markets which the government does not work to keep either free or fair. The results are in: wages have stagnated, the rich have become the richest rich in world history, exceeding even those of the Gilded Age, and the developed world is in semi-permanent crisis, with Europe a shambles and America unable to produce good jobs and running record deficits. Food prices are soaring, energy prices are through the roof and the Middle East is in flames.
By their fruits you shall judge them and the idea that greedy people operating completely selfishly will lead to everyone being better off has produced its bitter harvest. This is not the first time it has done so. The famous economist of the Great Depression, John Maynard Keynes acidly quipped that “Capitalism is the extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of all. “*
The idea is absurd, and it has proved so in practice. The market, even the free market, properly understood, is powerful and prosperity requires it. But allowing unalloyed greed to be the principle that rules us, by which we run our societies, has proved disastrous, not just to our prosperity but to our liberty and to our democracy.
If we want more prosperous societies, which is to say, societies where affluence is widespread, we need to align our private morals and our public ethics. We cannot expect to exalt selfishness and greed and to always put ourselves and the few people we love first, second and last, and expect that miraculously, our worst of motives will lead to the best of results for people we don’t care about. We cannot put functional sociopaths in charge of our economic and political organizations and expect them to produce results which are good for anybody but themselves and the few people they need to keep happy in order to make themselves richer. We can’t expect widespread affluence when we tell ourselves that people are bastards who do, and should, look out only for themselves.
A society which creates widespread affluence must be based on four principles, and must elevate and honor people who embody those four principles.
Fairness. Everyone must be treated equally within the requirements of their needs. This does not mean being treated the same, a child with learning disabilities should not be treated the same as one who is gifted, but both should go to the same school system, and be treated no differently regardless of who their parents are or how much money they have. The wealthy and powerful must use the same institutions as the middle class and the poor for no system will work if it is not in the interests of the rich, powerful and influential that it does so.
Kindness. Instead of asking “What’s in it for me?”, we must ask that oldest of moral questions: “How would I want to be treated if I were them?” Kindness is not weakness, it is a refusal to allow yourself to become an evil person in response to evil. Finland, which treats its prisoners with kindness that astounds Americans, has ex-convicts who re-offend at half the rate of American prisoners(x). As justice must always be tempered with mercy, and mercy always tempered with justice, so kindness must be tempered with fairness. Being kind does not mean being a mark, it means giving people a chance, and treating them first with compassion.
Generosity. Greatness is not measured by what you have taken, by what you have hoarded, or by who dies with the most. It is measured by who has given the most and by who has made the most peoples lives better. The resources we have created are meant to be used; the more we share them, the more we make others lives better and the more they, in turn, can make our lives better. Happier, healthier, more affluent people are better for the economy and more fun besides. Economic cripples, unable to participate fully in society are in no one’s interest. Generosity, combined with the compassion which asks “what do they need?” helps everyone.
Future Oriented. The past gave birth to the present, which midwifes the future. The winners of the past, those who built the past, have their rewards in their time, but cannot be allowed to postpone the future till they can control it. Every society changes, or it dies. Every economic model must be modified in time. The old cannot insist that the world they grew up in is the world their grown children will live in.
These four principles can be embodied both by individuals and societies They are the characteristics of a generous dynamic society, in which everyone contributes, everyone cares and is cared for and everyone works to build the future. And they are not schizophrenic attributes: people can act this way in their individual lives. It is not required that people be kind and loving and generous to their family and friends, but ruthless and greedy in their business or political life.
We’ve given greed and selfishness a fair shot. More than a fair shot. More than a fair shot. We’ve destroyed uncounted lives and driven our own economies to the brink of disaster and then beyond. It is time to stop expecting that acting horribly will lead to good. It hasn’t worked and it won’t work. Instead it is time to try acting generously, kindly, and fairly. It is time for make sure that everyone shares in the wealth our societies are capable of creating. We should do this not just because the vast majority of us will do better, but because it is the right thing to do. It would be one thing if being bastards really did lead to the greater good and was a regrettable evil, but it isn’t. So, having exhausted every other option, perhaps it is time to, with a weary sigh, return to being good, to do unto our neighbors as they would have us do unto them.
It is time to be better people and to reap the rewards of doing so. It is time to correct those who prefer to be greedy, selfish bastards. It is time to return to affluence for all, rather than riches for a few. And it is time to end the rein of the greedy, selfish bastards.
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The simplest economic principle is this: people do more of what they’re rewarded for. Right now, I can no longer justify writing at this frequency and level for free.
I need to determine how much actual demand there is for these articles, and how much time I should spend writing them, so I’m asking you to donate if you find them valuable (and you can afford to; please never donate if you’re having trouble paying for food, housing or healthcare).
I’ll fundraise for two weeks at least. At the end, I’ll add up the subscriptions, divide the one-time donations by three, and use the amount to determine how much I write for the next three months, or more, if we do very well.
$0-$999 —I’ll write when the whim strikes. In the past that has meant that sometimes weeks have gone by between articles, and months between significant pieces.
$1000-$1999 I’ll average two significant pieces a week for three months: articles on important issues like how we came to this, how the world actually works, and how we can change the world for the better.
$2000-$2999 There will be something new to read every weekday for three months, barring unforseen circumstances like illness, accident, or unplanned travel.
$3000+ On average there’ll be more than one new post every weekday for three months, and often new posts on the weekend.
$More If we do very well, I’ll extend the $3,000 level for more months.
I’ve maintained these paces for years in the past, at BOPnews, The Agonist, and Firedoglake, while also being managing editor of the second two, so barring serious illness, there’s little risk I can’t deliver.
For individuals, I’ll mention two other donation levels. If you subscribe, when your monthly donations reach this level, they’ll apply:
$100 – Give me the ok, and I’ll dedicate an article to you, or to your designee, within reason (aka. no, no matter how much you give, I’m not dedicating an article to neo-Nazis or Goldman Sachs).
$500 – Email me and I’ll write an article on a subject we determine. I won’t write on anything, I have to have something useful to say, and you don’t get to determine what I write about a subject, but I’ll work with you. (This isn’t the same as commissioning a piece, if you want to do that, email me).
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I’ve been meaning to write about the fact that people don’t understand the lessons of Iraq, Afghanistan and Mexico for some time.
In simple terms: the US military, the most expensive, most powerful military in the world, lost in Iraq (they had to pay bribes to leave). They are losing in Afghanistan. In Mexico the state has been unable to control drug gangs. In Lebanon, the IDF, the most powerful military in the Middle East, was defeated by Hezbollah. Hezbollah also won the e-lint war against the IDF.
(Kicking this to the top again, I want more people to see it. – Ian)
Technology is not necessarily on the side of the great powers, of the big armies. IEDs are cheap, any halfway competent mechanic can make them with materials that are readily available even in Afghanistan. Weapons are widely available everywhere, and soon it will be trivial to 3D print most of them. Drones, which people are so scared of (with reason) are essentially remote controlled airplanes, they are not hard to make, and they will spread to guerillas, resistance movements, terrorists and so on.
These are, yes, terror weapons, as the US, in its use of bombing and drones, well understands. They are also area denial weapons, weapons that prey on the psyche of the opposition, leaving them no peace and quiet.
They are weapons whose widespread use can and will destroy nations by destroying the peace and stability required for prosperity and normal life.
But they are very, very effective. They will work in virtually any nation if a large enough portion of the population wants them to work.
Do not think that the more intelligent members of current elites don’t know this. They understand what many on the left don’t: that first world militaries can be defeated, have been defeated, and that it can happen in their own countries.
And I suspect they are very very scared. The surveillance state, routine assassinations by the executive, the loss of habeas corpus, and so on, are their response. Total surveillance, and the ability to take people out anywhere, any time, is their answer, which is why I keep saying that I will know people are serious about revolution when they take out surveillance systems as a matter of routine, when surveillance becomes ethically anathema.
Be scared, not because those on the left who insist that modern militaries are unbeatable and all anyone can do is supplicate the powerful are right, but because militaries are very fightable, but such fights leave countries in ruins. If the elites continue on their current course, in many first world countries, Iraq and Afghanistan and Mexico are the future. People with no future will fight, and too many people now know how this form of war works.
This is the future of war. If elites continue on their path of unaccountability, their insistence on destroying the future, and their crushing of prosperity, this is what will happen.
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Just another quick note: Bitcoins keep track of every single transaction. That information is filed into the bitcoin itself.
Do not think that this is anonymous money, it is anything but. You’re still best off using cash for anonymous transactions or buying one use cards, etc… for online anonymous transactions.
China got bitcoin right. It is a virtual good. You could just as easily use any other virtual good to transfer money out of a country, so long as there is a liquid market you trust.
I want to highlight two items relating to surveillance of people who dare resist the status quo. First, your cell phone:
The New York Timesreports that the Ukrainian government is using advanced surveillance technology to track protesters in the streets.
The Ukrainian government used telephone technology to pinpoint the locations of cellphones in use near clashes between riot police officers and protesters early on Tuesday, illustrating that techniques that can be used to target commercial information can serve law enforcement as well.
People near the fighting between riot police and protesters received a text message shortly after midnight saying “Dear subscriber, you are registered as a participant in a mass disturbance.”
The phrasing echoed language in a new law making participation in a protest deemed violent a crime punishable by imprisonment. The law took effect on Tuesday.
The device used in Kiev is most likely what’s known as an ‘IMSI catcher‘, which tricks cell phones into thinking it is a cell phone tower. Any phone within a certain distance of the device will therefore send identifying information to it, allowing the operator to automatically compile a list of every person nearby with a cell phone. The systems can also capture web, phone, and text content from mobile devices, as well as automatically serve content like text messages to every phone within range. For that reason, advertisers and corporations increasingly use them to target people with location-specific pitches for products and services.
Back in 2012, a security researcher in the United Statestold an audience of hackers in New York that the NYPD routinely used IMSI catchers at the Occupy Wall Street protests, enabling the intelligence division to keep nearly perfect records of every person in attendance.
Another estimateof the prevalence of corporate espionage–but perhaps a self-serving one–comes from Russell Corn, managing director of Diligence, a corporate intelligence agency. Corn says that “private spies make up 25 per cent of every activist camp. ‘If you stuck an intercept up near one of those camps, you wouldn’t believe the amount of outgoing callsafter every meeting saying, ‘Tomorrow we’re going to cut the fence’,’ he smiles. ‘Easily onein four of the people there are taking the corporate shilling.’”
I doubt it’s one in 4, but I bet it’s high.
Here is the bloody rule: if you are involved in these activities you either don’t take a cell phone, or you put it in a Faraday bag (I have just learned, joy, that taking the batteries out might not be enough, as there is a backup battery you don’t control, meant to avoid loss during battery changes and so on). In addition to being a tracking device you take with you, it is also possible to use your phone as a bug, to listen in remotely. Laptops are also problematic if they have a camera, can connect to the internet, or have microphone. At the least, keep them powered off.
The technological revolution did not happen unless you want everyone to know your business. There are times when you do, but if you don’t, turn this stuff off.
Next: infiltration. Assume that your movement is infiltrated. Figure out how to identify the moles. When you do, if you’re serious, you need to figure out a way to punish them so that whoever sent them won’t, or can’t, send more. I leave how to do that to the reader to figure out.
Next, forget democratic decision making when it comes to specific tactical decisions. One person should know what you’re going to do, and he or she should not tell ANYONE until just before it is to be done, and hopefully too late for effective counter-action.
Finally: assume surveillance. Learn how to obscure your identity, and learn where the blind spots of the system are. A lot of countries are making wearing masks during demonstrations illegal, but there are other ways. Again, I leave how to do this an exercise to the reader, but bear in mind, it doesn’t take much to screw up facial recognition, and gloves are still your friend, and not illegal.
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Modern economies are often measured in terms of Gross Domestic Product (GDP). Look up the definition of GDP and you’ll come up with something like this: a country’s GDP is the total value of all finished goods and services in a country in a year plus exports, minus imports.
Consider this, if a parent takes care of their children, is that included in GDP?
No, it isn’t.
What if the children are taken care of by a nanny or day care worker?
Then yes, it is part of GDP.
Either way the work gets done, the children are taken care of. But if they are looked after by someone who is paid for it, it’s considered economic activity and if not done for money, it isn’t considered economic activity. Studies show, and our own common sense tells us, that as a rule, children cared for by their own parents, especially when young, turn out better: healthier, less likely to commit crime later on, brighter, and so on. So, increasing GDP by paying to have children cared for reduces well being while increasing the size of the economy.
More money being spent, and more GDP, is not always good. Another commonly used example is that if a hurricane devastates a city, the rebuilding will increase economic activity, and GDP. This doesn’t mean we want hurricanes to wipe out cities. Keeping someone in prison costs more than sending them to university, that doesn’t, or at least shouldn’t, mean we prefer locking young men up to sending them to prison.
In the developing world GDP is often increased by moving from subsistence farming, which is to say, people growing their own food, to cash crop farming. Moving to cash crops, for various reasons, tends to push people off the land. They no longer grow their own food and now have to buy it. GDP increases because cash crops are sold for money, mostly to foreigners, and sometimes because a whole bunch of people now have to buy their food rather than growing most of it.
The theory behind this is that with the foreign currency earned by selling cash crops, the country can modernize, the displaced subsistence farmers will find jobs, and buy food. In practice, in many countries, the farmers have wound up in vast urban slums without jobs, food has to be imported from overseas, and what the UN euphemistically calls “food insecurity” spreads. There is a larger economy as measured by GDP, but more people are hungry, more people can’t support themselves, and malnutrition stunts the intelligence and growth of the generations to come.
Ironically, because there are only so many cash crops, and western “development experts” spent decades telling multiple countries to grow the same few crops, the price of the the crops often crashed. The end result of that was that countries wound up with trade deficits, and had trouble affording imported foods. (The IMF will then tell the government to stop subsidizing food. The result is predictable.) So you have the spectacle of Egypt, for millenia the breadbasket of the world, needing to import food, nor is it the only country which went from feeding itself to having to buy food. (check timing on this)
GDP is up, measurable economic activity is up, but much of the population is worse off, though certainly some people get rich.
Another way GDP and the money economy increased is through privatization. Imagine a road is sold to a private company. The people, in the form of the government, get a one time infusion of cash. The company receives an asset – the road, whose value comes from the ability to charge people to drive on it.
This increases the money economy in three ways:
- An asset can be borrowed against. The value of assets in the economy has just increased, and new capital can be raised by the owners of the road to do whatever they want with. This could be productive, investing in their business, or it could be used to pay the executives more money, or it could be used to buy back shares in an already existing company, raising share prices and increasing executive bonuses based on share price.
- If not already a public company, the company can sell itself either to other private investors, or by issuing shares to the public. If they raise more money doing that than they spent buying the road, then they have a surplus which they can use to pay themselves or invest in some fashion. They could buy another company, invest in the business itself, branch out (perhaps putting up stores on the road), and so on. Once those shares are issued, people who own them have an asset, and they too can borrow against that asset, often for many times what the shares are worth.
- The fees used to drive on the road. The road is an end product, this is GDP. The economy has increased in size.
All of this may sound good, but the price is obvious: people have to pay to drive on the road. While it’s strictly true that the public road was paid for, through taxes, that’s very different from having to pay a private company to drive a road. Because it is no longer free in daily practice, the road will be used less. Drivers will have to decide if the cost of driving on this particular road is worth it.
This will reduce economic activity. Say you were thinking of going out to eat. The cost is no longer gas+meal cost, it is now gas+meal cost+toll or perhaps the cost of taking roads which go to the same place, but less quickly. For some people, the cost will now be higher than the benefit. The restaurant loses a sale. So do other businesses.
By selling the road we have pumped up the economy in the short term, and created more assets which can be borrowed against (which is good if the money is used productively, but not if it isn’t) and we have given some specific people a way to make a profit in the future. But we have also reduced the benefits of the road for everyone else.
There are other types of privatization. Perhaps the government directly provides garbage pickup, using its own employees. Perhaps road repair, or police, or cooking food for troops, or car insurance, or the railways, or airports, or power generation, or clean safe water, or sewage removal and treatment, or parks.
Privatization can be good, there are services and goods which are better produced by markets, but widespread privatization is often a way of artificially pumping the private asset base of the economy. It looks good, it produces increased GDP and GDP per capita, but it often actually reduces welfare.
Privatization, then, often produces money and the chimera of economic growth, but not the happiness, sense of purpose and access to healthy levels of necessities which are supposed to be the purpose of growth and money.
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Exactly 98.1% of Egyptians said yes to the new constitution in this week’s referendum. The outlawed Muslim brotherhood says it does not recognize the vote, which saw some 20 million, or over 38% of registered voters, participate.
Outlaw the most popular political party, get less than 40% turnout (and who knows if it was even that), and declare yourself winners? And have the Western press echo your propaganda?
98.1%? Could they at least try to pretend the vote was representative? This is USSR style “democracy”.
There is no question, in the developed world in general, that men are better off than women; that whites are better off than people with melanin; and that straights are better off than non straights. (Let alone the transgenders.) To give just one example, a black person will receive half the requests for interviews that a white person will with the exact same resume; and a white convict is more likely to be hired than a black non-convict.
I am unclear on how to deal with this type of discrimination at the current time. What I see is that we are rats, deliberately starved and set against each other. The plight of the female, non-CIS, non-white, non-standard-sexuality rats is worse (on average): but, we’re rats, and we have masters, and they have taken all the gains in productivity for 40 years now–and we’re fighting for scraps, because goddamn it we need them.
The reality for working class white males is that while their lives are better than females/ethnics/etc… things have been getting worse for them since 1968 – 45 years now. That’s when their wages peaked. They are bitter and angry. Sure, things are worse for other people, but their pain is real, and being told that they are to blame does not fly with them, and it never, ever, will. You can scream till your faces are blue at them, and they will not believe they are to blame. (In the same way that most boomers will never admit they have any blame for how the US has turned out.)
If we have a tide that is raising all boats, these problems are easier to fix: the white CIS straight males get less of the increases; the more discriminated people get more of the increases; but everyone’s life is getting better. When it’s not a zero some game, when it’s a positive sum game, this problem becomes so much easier to fix.
When the rich are taking all of the winnings of the economy, and then some: we tear at each other like starved rats.
Agree that everyone will win (except the rich, who will lose); and that those who need more; who have suffered more, will get more.
Then turn our ire to the people who have taken everything they can.
Are you most productive doing what you love, or doing something you are indifferent to or hate? If you could try your hand at doing anything, would you be doing what you’re doing? Are you on track to eventually spend your life in the work of your dreams, or is it clear that will likely never happen?
There will always be lousy but necessary jobs that few people want to do. The garbage must be picked up, the toilets must be cleaned and the bed pans must be emptied. But a society is a better society when more people are doing what they love, or at least working for themselves, out from under close supervision. Almost no one likes being micromanaged, and normal jobs are called wage slavery for a reason.
We want people to stretch themselves, we want them to reach for their dreams, we want them to get up each morning looking forward to the day’s work. We want that for the cold hard calculated reason that such people are more productive, and we want it for the warm soft calculated reason that we’d rather live in a society with as many such people as possible because they’re a lot more enjoyable to spend time around than people who hate their jobs.
It’s not hard to create a society which makes it more likely that people can do what they want. It’s not hard to create an economy which encourages people to start new businesses or to launch new careers. But such a society cannot exist if we prefer to be mean, if we want to punish people for failure. It cannot exist if we see someone else’s success as our failure or if we allow envy to infect our public policy.
People fail to pursue their dreams because they fear failure or because the opportunities aren’t available. Fear of failure is rational: pour everything into a new business which fails, and many businesses fail, and you can be left with no money, no source of income, and lose everything. In a country without universal health care, you could even lose your life if you lose your insurance and become ill or have an accident.
So the first thing a society needs to do is have in place a basic social net: a basic income below which people cannot drop, so they will not become homeless if they fail. Universal health care so they can pursue their dreams without being chained to a health insurance premium. Bankruptcy laws which allow most debts to be wiped away in the event of failure, not just so that people don’t lose everything, but so they can try again. Many entrepreneurs fail more than once before they create a business which works, and we want that, we want bankruptcy. We also want bankruptcy because it is important that lenders do their due diligence and accept the real risk of lending, rather than insisting that the government act as their bill collector. It is not in the government’s interest for people to become impoverished, as impoverished people cannot contribute to society nearly as well.
Credit and calculable law are needed for entrepreneurship. People must be secure in the title to their property so they can borrow against it. They must know that contracts are generally upheld and that basic physical safety is taken care of. Taxation must be calculable, though it doesn’t have to be low. Eras with top marginal income tax rates in from 80% to over 90% have had far more growth than our own low tax periods, and much higher corporate tax rates do not correlate with low economic growth either. After all, first you have to make a profit, or make so much money you’re in the top bracket. As the saying runs, it’s a good problem to have.
Credit in in the modern era is ultimately a product of government. Banks create money when they lend, they do not lend money they have on deposit, though the amount of money they can lend may be some multiple of what they have on deposit. Since the ability to create money is a government grant, and since a government grant is a grant from the people of a nation, the government has the right to influence or even set interest rates. This ability is already used, with central banks setting overnight rates, treasuries influencing bond rates at different durations, and so on. Mortgages in many countries will simply not be issued if they do not meet requirements set down by governments, and so on.
If we want people to do things, we have to make sure the money is available for them to do it. This can mean credit, or it can simply mean the government paying for or subsidizing what is needed. In many countries health care is provided out of taxes. At one time, post-secondary education was virtually free for those who qualified, because governments understood that educated people make more money, create more jobs and contribute more in general. With progressive taxation a government can easily provide free or very cheap education knowing that it will take a portion of every extra dollar earned as a result of that education. Rationing education is short-sighted and foolish, even on a pure cold-cash calculation.
A basic income is another thing governments do and can offer. In the modern day this is generally done through a complicated hodge-podge of systems, from welfare to unemployment insurance to student loans and tax breaks. This is vastly inefficient, and should be simplified. If we aren’t willing to let anyone go without basic lodging and food we should simply guarantee the necessary level of income to anyone over the age of 18 or whatever age children usually leave home. It is simple enough to do it in a way so that everyone is still better off working, it is vastly cheaper than paying an army of social workers to determine who is worthy, and it assumes the most basic tenet of liberty: that adults have the ability to know what they want to do. Nothing is more counter-productive than policies which, say, restrict welfare recipients from going to university, so they can’t improve themselves and have a better chance to contribute to society.
Knowing that they will always have enough to keep a roof over their head and food in their belly people are far more likely to pursue their dreams, to do the work they really want to and to start new businesses. It is true that some people will take advantage of such a system, it is also true that such a system will have much lower administrative costs than current systems. And since the basic income will not be a great income, but only basic, it will not be attractive to many.
It will also put pressure on businesses to treat their employees better. If a business cannot make a job more attractive than living at barely above subsistence then perhaps that job shouldn’t exist. Do all the fast food jobs really make our societies richer? If a job really needs to be done, like janitorial work or garbage collection or cleaning the bums of our parents and grandparents, then does it not deserve to be compensated well? If your CEO doesn’t show up for work, or if the janitor who cleans the toilets doesn’t show up, who do you miss most? And do you really want the person looking after your parents in an old-folks home or hospital to hate their job?
Most money from a basic income, assuming high progressive rates on the rich and the same corporate tax rates as were the norm in the 50s and 60s, will wind up back in the government coffers in any case, after it goes through multiple hands and supports many jobs.
These are the first two thing required to increase the number of people who do work they want to do, or at least don’t hate—freedom from fear of devastating loss and the availability of opportunities to gain the necessary skills, education and credit.
The third thing is to reform laws so people can do what they love.
Consider Silicon Valley in California, one of the greatest entrepreneurial hotspots in the world. New tech business after new tech business has been started there, from Hewlett Packard to Apple. Millions of jobs have spun out from Silicon Valley to the rest of the world. What made Silicon Valley possible? Well the first thing is government money, both to buy products like early computers and to support Stanford University, which histories of the Valley put at the heart of its culture. But another reason Silicon Valley happened in California and not in Massachussets, say, around MIT (though there is a tech corridor around MIT) is this: California law makes non-compete agreements illegal.
A non-compete agreement is a legal contract which states that someone can’t work in a business which competes with their current employer, generally for a few years. So if you have a great idea for a new product in the same line of business you can’t quit and go set up a new company.
Silicon Valley’s history is of startup after startup directly competing with the company the founders left. There would be no Silicon Valley as we know it if California allowed non-competes.
This is a general principle. If law does not allow people to do what they want, well then, they can’t do it. Barriers to entry, barriers to the creation of new businesses are too much to deal with in this article, but just note that what is good for a specific business is rarely good for business as a whole. If I own a business I don’t want my employees to leave and compete against me. That’s bad for me. But it’s good for whatever business I’m in for their to be more competitors and new products and it’s good for society as well.
Likewise laws on protected works and intellectual monopolies in terms of copyrights and patent law can stifle the creation of new businesses. If a person or company is forbidden from creating a product or must pay overly high licensing fees, the business will not happen. There is a balance here, some protection for actual inventors and creators is needed, but in our current society we are very far from the correct balance, and much law that seems to protect creators in fact only creates intellectual rents, stifles the economy and inhibits competition. To cover intellectual properties properly would take another huge article, so I won’t go into it futther here. The basic principle is simple: if it’s illegal to start a business or engage in a career, or it costs too much to be worth it, people won’t. Every time we pass a law which protects incumbents from competition or which protects the work of the past, we ossify our economy and make it harder for people to do the work they want to do, sticking more and more of them in jobs they hate.
The more people who are both free and able to work in jobs they enjoy; who are able to start new businesses; who are able to pursue professions they prefer, the better off everyone will be. This is true both in pure economic terms and in softer terms: happy people are healthier and they are far more fun to be around than unhappy people.
In economies which are running cold, people turn mean. Seeing scarcity all around, they feel that they are in competition for scarce good jobs, scarce good education and scarce happiness. They start blocking other people and insisting that everyone pay upfront intead of behind. Bosses, knowing that there aren’t enough jobs, become mean as well, treating employees badly, knowing they have nowhere to go and confident that if they lose one, or a hundred, or a thousand employees to mistreatment, more will be ready to work, impelled by fear of hunger and poverty.
We can’t all be rich, but we can all be prosperous, and we become prosperous as a group, as a society, not blocking each other, but by opening up opportunity for all, treating everyone as adults, and understanding that other people’s success is our success in the broadest sense. It is certainly true that in a competitive market environment there will be losers and if your closest competitors win, you can lose as a result, but for everyone else in society, the success is beneficial so long as those who succeed to not shut the avenues to success behind them. And if failure does not mean disaster, if there are second and third and fourth acts in life and those who try are allowed to try again, then the fear that both stops people from trying and makes those who are successful try and stop those behind them is greatly reduced.
Societies are prosperous together. Individuals are rich separately. Let us remember this, and remember that fundamental economic success for societies requires generosity and kindness, not parsimony and cruelty.
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is how to hurt their interests at an acceptable cost to those doing the harm.
The traditional answer to this was solidarity and martyrdom. It is impossible to overstate how dangerous being a union activist right up to the middle of the 20th century was. You had to accept that you would be beaten, jailed and possibly killed. Violent confrontations with police and private cops were routine. Outright battles were not unknown, as when miners squared off against the military in a multi-day battle with over ten thousand casualties.
Nor did the early unions wring their hands about violence, even “criminal” violence. Clarence Darrow was a union lawyer for years. One of his most prominent cases was defending union members who set off explosives in a newspaper office, killing people in that office. The unions did not abandon those workers, who had clearly committed what we would call terrorism: they hired a star lawyer, one of the best in the country, to defend them.
The general strike, even more than the strike, was another answer: just shut the entire economy down. It was used because it inflicted real costs on employers: they still needed some workers. But a strike requires social solidarity: bringing in scabs must be socially unacceptable, either due to mores or because the scabs know they’ll have their kneecaps broken. A general strike requires enough workers to be willing to do it to shut down an entire city, region, or country.
The Gandhian resistance method is very similar to general strikes: it requires hundreds of thousands to millions of people to be willing to shut down the economy and dare the police or army to kill or imprison them all. When you have only a few hundred or thousand people, the police can deal with that easily enough: worst case they call in the national guard. Hundreds of thousands: not so much.
What all of these actions had in common is that they genuinely hurt the interests of the rich where it mattered, in the pocketbook.
You can also get change through making the lives of the rich unpleasant, or making them fear for their very lives. Social peace has often been bought by treating ordinary people better, when the rich genuinely feared the army and police couldn’t protect them.
But if the elites think that their security forces can protect them, and especially if they live in a bubble where they never have to face people whose lives they have made miserable, as is the case for most of our rich, who fly by private jet, travel about the city in helicopters or chauffered limos and live in gated enclaves; and if you can’t cost them any real money, why should they let you have any of the surplus of society beyond the bare minimum you need to remain useful to them? (Not to survive: as the cutting of food stamps in the US indicates, that’s not a priority for the oligarchy.)
Be clear that distribution of goods and money in an economy is almost entirely unrelated to any ethical idea of merit or deservedness. The bankers, amongst the best paid people in the world economy, destroyed far more money than they earned in the 00s, and yet are still paid billions of dollars in bonuses every year. They receive the money they do because they had the power to make the government make them whole after they lost everything, then the power to make the government make them even richer than before. They control a bundle of valuable rights from the state: the right to borrow at prime, the right to value assets to model (fantasy); the right to huge leverage; and the right lend, which is how money is actually created in our economy (aka. they can print money.)
This is why they’re rich: not because they produce net value: they destroy value; but because they have the power to make the government do what they want it to do and to make it not prosecute them when they break the laws, and even to change the laws so they can take even more money.
Distribution in an economy is based, virtually entirely, on power. A group receives goods and money because it can force others to give it to them. The libertarian fantasy of free markets and free choice is exactly that. They don’t exist today, they have rarely existed in the past, and to the extent they have existed they owe their existence entirely to government making sure they exist. As soon as any group gains enough power to take over government, they do, and free markets cease to exist because they make the government give them special rights,whether those are rights to print money, borrow low and lend high, or so-called intellectual property rights that let them continue to profit from ideas created 80 years ago.
Power, power is all that matters. Even distribution, or something close to it, happens only when there is relatively equality between groups in society or there is an existential threat to society which requires the willing participation of all parts of society.
If you ever want to see raises for ordinary people again, you must figure out how they will become powerful: and power means “what can they do to hurt people who cross them, hurt them really, really badly.”
Peace is the result of everyone knowing and believing in their hearts that if they break the conditions of the peace, others will react with overwhelming force. When it becomes clear that there is no cost for taking more of the pie, people will do so, and yes, did do so.
So: how do we punish the rich for what they have done? How do we force them (not convince, force) to give up more of the surplus crated by society?
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