The horizon is not so far as we can see, but as far as we can imagine

Month: September 2021 Page 1 of 3

What App Stores Have Cost All Of US

There’s a very old Canadian joke. A farmer is angry at the weather, so he raises his fist to the sky, and yells, “Goddamn you, CP Rail!”

Back in the age of rail if you were a farmer the only way to get your product to market unless you lived very close to a city, was by rail. There were few railroad companies, probably only one near you, and whatever they charged, you had to pay.

Rail company freight prices were based on maximizing profit for them, and that price drove a lot of farmers out of businesses, and left many others working for poverty wages.

App stores are, effectively, the only way many software developers can get their products to market. Most of them charge 30%.

A lot of consumers think this doesn’t matter, “who cares how they split the price?”

But that 30% is a cost, a high cost, for a service which costs companies like Apple and Steam almost nothing. (Apple also insists on a cut of all in-App purchases.)

Thirty percent is actually about a 42% price increase (30/70). It is HUGE. It is absolutely a cost; apps are not viable at all price points: you can’t just charge whatever, because most of them aren’t “must haves.” Running app stores costs almost nothing compared to the profits (not for the monopoly or near-monopoly providers, like Google, Apple and Steam).

Anyone who is the least familiar with business knows that increasing your production costs so much absolutely means that many products will never see the light of  day; they aren’t profitable. Entire companies will not come into existence because when the initial costing is done, the 30% makes their offerings unprofitable. Other companies will go out of business because their product(s) don’t make a profit or enough of a profit with that 30% in place, where they would at 15% or 10% or 5%.

Even businesses which do exist, and prosper, would prosper more if the charge was less, AND Apple and Steam and Google would all still be fine, and able to provide just as good services. (All these businesses are infamous for their profits, and their app stores are nearly pure profit.)

So what app stores at 30% has cost us is a lot of businesses: many which never existed and we can’t miss, others that went out of business. Thirty-percent app stores have also cost existing businesses a lot of profits they could have reinvested in new employees, or given to shareholders (or, admittedly, wasted on their executives.) They have also cost us a lot of apps, both from companies that never existed and from existing companies, because the 30% made them unprofitable right at conception.

App store fees are taxes; all major app stores that I can think of off-hand are near monopolies or part of oligopolies. We don’t know what Apple’s profits from the app store are, but one expert guessed around 80% (Apple said “no” but never gave the necessary data to refute.)

No one makes that sort of profit except in brief periods or when they have a huge, and unfair, market advantage. There is no way in any reasonable market theory to justify such profits over a period of more than a couple years. These are pure market position/monopoly/oligopoly profits.

So, yes, my friends, unless you are attached to the spigot (not necessarily the App spigot, but the general oligopoly spigot), the App store has cost you something: a world with a lot more jobs, companies and apps. You don’t even know what you lost, because what App store companies have done is mostly akin to strangling newborns: you never got to see what they killed, just by existing and taking extortionate profits.

(My writing helps pay my rent and buys me food. So please consider subscribing or donating if you like my writing.)

The Advantage of Permission & The Fall Of Oligarchies

One of the main advantages of capitalism is “permission.” It gives more people permission to do things than oligarchical or state capitalism. This was, actually, a lot of what Adam Smith was complaining about in “The Wealth of Nations”: that state monopolies and controls were limiting who could effectively participate in the economy: you might have a great idea, but you couldn’t do anything with it.

Capitalism, as a Western system, also has other features, of course, including wide-scale theft of capital from the majority of the population, of which the enclosure of the commons was one part (the commons were property rights). Society becomes divided into those who have capital, and those who don’t, who are compelled by Marx’s “whip of hunger” to work for wages. (Thus wage-slavery, a term coined in the 19th century when this process was happening in America.)

Still, the explosion of businesses of all sizes is much of what drove the success of capitalism: the ability to DO things, and not be stuck in old forms.

This is also at the heart of much of the success of China. What Westerners don’t realize is that, despite all the cries of totalitarianism, the Chinese government is one of the most decentralized in the world: over 70% of spending decisions are made below the national level: this makes it the most decentralized national government in the developed world.

China’s central leaders make decisions and laws, to be sure, but much of how that is implemented in any locale is up to the local party, and definitely not micro-managed.

If China had tried to micro-manage everything, they would never have succeeded in becoming the World’s largest economy, or lifted so many people out of poverty. Instead they would have succumbed to the same diseases that did in the USSR. (Which had its own successes, but stalled out for a variety of reasons.)

Some years ago, in an old book I can’t find, I read an introduction where the author, who had lived thru WWII, noted that the idea that fascism was the superior form of government had been proved to be absolute nonsense: when the Allies turned their economy around and pointed it at war production and mobilization it produced miracles precisely because decision making wasn’t bottle-necked at the top. A dictator and his few trusted cronies can be decisive, but their unwillingness to extend trust down the chain cripples them.

This requires social consensus and trust, however. America and Britain and Canada and Australia had to be behind the war at a population level: but they were, and while guidance was needed and often correction, it is precisely that many people could make decisions which made the war effort possible and helped crush the Nazis.

The problem we have now in the West is dual-barreled; we both have improper direction from the top and bottlenecking. New enterprises can start, and do, but if they are successful they can’t run: they are bought up or sold out. This is a result of the structure of financing these days: founders generally don’t control the majority of their company’s voting stock, and are forced to sell or go public by investors (most often, sell.)

Money itself is bottle-necked: there’s tons of it pooling at the top, but there are radically fewer banks than ever before, and access to money has to go thru the already rich. The old middle and even upper (not rich, but upper classes) are relatively poorer: the famous “check from Dad” investment is available to fewer and fewer.

Regulatory hurdles are massive. Everyone knows, for example, how to make insulin, and you’d think someone would get into the business and undercut producers. Insulin costs about $4 to make, and sells for over $300. In economics this looks like the sort of situation that would automatically lead to competition.

It doesn’t. For one, getting permission to produce is hard and expensive. For the second, if you did manage to, it would be costly to setup the initial factory and supply chain, and that means the current producers would simply step in and undercut the new entrant till they went out of business (people would buy the cheapest), then push prices back up once they had driven the challenger out of business.

The second bit is also a regulatory issue. A properly functioning government wouldn’t allow undercutting: but then a properly functioning government would not allow the sort of predatory pricing and abuse of oligopoly power.

There are only three insulin producers in the US: they are obviously in collusion (which older anti-trust law would have said is clear given how their prices are all so high and uniform, and thus it did not require proof of meetings and so on to set prices.)

And this is the next problem: if there were a hundred pharma producers in the US, one of them would break ranks. But when there are so few, they don’t: collusion is easy. You don’t even have to get together,  you just have to follow the price increases and be willing to commit mass murder. Since it is a requirement of membership in modern capitalist elites in the West to be so-willing, of course no one in charge of Pharma in the US isn’t willing to mass murder to get richer, as Covid has also proved.

This inability to really do new things or even old things (insulin ain’t new) unless they benefit and are controlled by incumbents is rife throughout Western societies: it is by design. Even international trade law is designed to ensure this: tariffs and subsidies are how companies that don’t already lead an industry used to develop, but we’ve made that basically illegal, leaving only “pay your workers dirt cheap wages and we’ll let you in, if you cut us in on those delicious exploitation profits.”

This is what China did, at first: they cut Western and American elites in on the profits. But they also were very aggressive about obtaining the manufacturing knowledge (called “intellectual property” in the West”) for themselves. The price of the profits was that you had to give up your secrets. This was the deal, I was told this decades ago by people familiar with business in China and offshoring, but there’s a lot of pretense now that Western elites didn’t know it. They sold their countries good manufacturing jobs and middle classes down the river for Chinese gold.

I don’t blame the Chinese for this: I’d have done the same in their shoes, because industrializing by the “rules” hasn’t ever worked unless one was willing to be subordinate (Japan, Korea, Taiwan, etc…)

The Chinese sized up Western, and especially American weaknesses shrewdly and took advantage of them. American elites did get most of the profits they had been promised, they just didn’t get to own the Chinese economy, which is what they really wanted.

China is, thus, the great exception: the one who made it out. Almost everywhere else, however, what has happened is that a few companies in each industry have come to predominate. Their production facilities are scattered, but at the same time bottlenecked, with parts production in various locations final assembly in others, so that if any part of the chain is taken out the entire chain can experience shortages.

They are protected by vast “barriers to entry”. They can undercut at will, and regulators won’t stop them. The structure of starting new businesses means upstarts have to sell out, and often to their competitors, as one can see by watching internet giants gobbling up strong competitors like YouTube, Instagram, WhatsApp and so on. Law is against them, up to and including international law.

And so a few companies, controlled by a very small elite compared to the population, control most of the developed world economy. Where there might have been dozens or hundreds of viable large firms, now most sectors are controlled by a few conglomerates. These conglomerates then own national politicians, and those politicians write the laws to suit them. (A perusal of major extension of copyright law in the USA, with the original expiration dates on copyright on Mickey Mouse will be educational.)

Oligarchy is always stupid and unproductive. The great oligarchs are made out to be heroes, but almost all of them exist by making more activities impossible than they make possible: they do their best to allow nothing to succeed unless they will profit from it, as app stores, with their 30% rates, show at the most retail level.

All things human end. All oligarchical ages end, just as do all democratic ages, aristocratic ages and so on. The question is when and how? The ideal is to use what remains of the machines of effective democracy and government to end this oligarchical age. China has recently cracked down on billionaires and tech exploitation of workers (for example, they made abuse of app delivery workers illegal). They did so because the CCP understands its interests: it doesn’t want opposing power centers, and because the CCP wants the Chinese economy to work for everyone because they don’t want serious dissent.

The need for survival concentrates the CCP’s minds. Whatever one thinks of them, they can, as Matt Stoller points out, still govern.

Our elites, on the other hand, are pigs at the trough. There is nothing they will not do to become richer, and they have no eye for the longer run, only for power and money and now.

This has worked well for them for so long they do not believe it will ever end.

It will. It will either end because the populace ends it (led by a chunk of fallen elite or elite who decides to betray the other elites) or because the necessary conditions for its success crumble. This can be an end to geopolitical supremacy (which Western elites are scared of, which is why the onrushing Cold War with China) or collapse of the environmental conditions and resources necessary to continue this mode of production, which is something our elites are not scared of (no, they aren’t scared of climate change.)

Unfortunately, at this time, it seems most likely that this configuration will end because of environmental and societal collapse.

(My writing helps pay my rent and buys me food. So please consider subscribing or donating if you like my writing.)

Week-end Wrap – Political Economy – September 26, 2021

by Tony Wikrent

Strategic Political Economy

“Rich People Are Leading the Anti-Vaccine Movement — and Experts Have a Theory Why”

[Money, via Naked Capitalism Water Cooler 9-20-21]

From 2019, still germane: “Disease experts say the parents least likely to vaccinate their kids live in some of the most affluent neighborhoods in the country. They’re well-educated, and have exceptional access to healthcare. And while some pockets of low-income communities of color are ‘under vaccinated’ for religious or financial reasons, studies published in places like the American Journal of Public Health show that the parents opting out for ‘philosophical reasons’ are mostly white and mostly wealthy…. Parents who opt out of vaccines tend to “believe, simply, that they can make the scientific determinations about the efficacy and dangers of vaccines for themselves,” she says. They have more free time on their hands than lower income parents — time that can be spent poring over anti-vaccine forums and websites, and applying for state-specific exemptions required to bypass school immunization laws…. When an outbreak does happen, rich families aren’t the only ones affected, of course. Usually, they aren’t even the hardest hit. This underscores a more sinister theory about why rich Americans are opting out of vaccines. A string of research referenced in the Washington Post last year suggests that wealthy people simply have less empathy than everybody else. They’re more likely to cheat on their taxes, and their spouses. And they give lower proportions of their income to charity. ‘Wealth is basically a mechanism for power, and power has a freeing effect on people,’ the social psychologist Adam Galinsky told the Post.’“It takes away the constraints of society and frees people to act according to their dominant desires.’ If you’re rich, the consequences of ‘opting out’ aren’t particularly dire. After all, it’s easier to rationalize the risks of bypassing immunization if you can afford a lengthy hospital stay, or to pull your kid out of daycare if her classmate gets sick. And while the U.S. has a long history of stigmatizing poor parents—’free range parenting,’ versus neglect, ‘welfare moms‘ versus stay at home mothers—if you’re a wealthy anti-vaxxer, you probably won’t face any social ramifications either.”


‘I need help’: Michigan county health director pleads for help after almost being run off the road

Aysha Qamar, September 21, 2021 [DailyKos]

As people resort to violence across the country, health officials are pleading for help. In one horrific incident, a Michigan County health director pleaded with county commissioners for help after almost being run off the road following the issuance of a mask mandate for preschool through sixth-grade school buildings, Michigan Advance reported.

“I need help. My team and I are broken. I’m about done. I’ve done my job to the best of my ability. I’ve given just about everything to Kent County, and now I’ve given some more of my safety,”  Kent County Health Department director Dr. Adam London said in a letter to county commissioners. The letter outlined his reasons for issuing the public health mandate requiring students to wear masks this fall….

“There is nothing to be gained by entertaining such people with dialog. In many cases, these are the same people who dismiss the plot against the governor as ‘just guys joking around’ and the January 6th insurrection as a peaceful patriotic protest. I think it is a grave mistake to unnecessarily give them targets and platforms. There is a sickness in America far more insidious than COVID. You are more empowered to fight this disease than I am.”

London told commissioners he would not “needlessly expose” himself to “the brute mob hatred” from a “vocal and energized minority.” In his letter, he noted that people called him terms like “child-abusing monster” and even threatened him with abusive language directed at his children.

“I will not participate in witch trials in which the science I’ve presented, and the opinions of legitimate experts is reduced to the same stage as people living in echo chambers of junk science, salespeople, and YouTube videos. For the leaders of these misinformation campaigns, it’s never really been about our data, it’s been about their dogma,” London said.


Likely Assassination of UN Chief by US, British and South African Intelligence Happened 60 Years Ago Today

[Consortium News, via Naked Capitalism 9-19-2021]


Number of Environmental Advocates Killed in 2020 Hits New Record

[Undark, via Naked Capitalism 9-23-21]

Open Thread

Use the comments to discuss topics unrelated to recent posts.

The Wages Of Embarassing Elites Are Death

Everyone remember the Panama papers? A leak of bank records showing that the ultra-rich are hiding massive wealth, tax-free and often breaking the law to do so?

A rather weak set of laws designed to allow tax avoidance by rich people, at that.

Found out the other day that the reporter who broke the Panama Papers story was killed by a car bomb.

Coincidence, no doubt.

You may recall the Ferguson protests, started after another black man was killed by a cop. They were a big deal.

Since then six of the Ferguson protest leaders have died: two inside burnt cars, three by suicide, one an overdose.

Coincidence, no doubt.

Then there was a high ranked pimp, who flew important men like Bill Clinton and Bill Gates and Prince Andrew in his private jet and provided under-age women for sex. The first time he was indicted he was let off because the prosecutor was told to back off, as he belonged to intelligence. The second time, influence not having worked, he “committed suicide” in prison.

I used to work in life insurance. There’s an adage, backed up by lots of studies, that people who are worth more dead than alive tend to die a lot more than the actuarial tables would suggest for someone of their age and health.

Coincidence, no doubt.

The simplest fact of modern life is elites kill and impoverish other people in order to make money and secure their power. You are seeing it in the pandemic, where Billionaire wealth has spiked 60% and vaccine companies refuse to share their “intellectual property” while planning to sell Covid booster shots in perpetuity. Actually wiping out Covid would close pharma money, but if it stays around, it’s golden.

Meanwhile, all the small and medium businesses closing has lead to a vast buying opportunity for those with lots of money, and private equity is moving big into buying up distressed homes.

It’s just business, baby. Your death, or homelessness, well, it’s someone else’s profit opportunity.

We have the richest wealthy the world has ever seen; even more than the gilded Age. Richer than kings and emperors. They are rich exactly because they hold political power: in the period from 32 to the 70s they lost relative wealth and income, because that’s what government policy was set up to to do.

So they bought up intellectuals like Milton Friedman and politicians like Reagan, Thatcher, Blair, Clinton and Obama, along with tens of thousands of lesser lights. They changed how government was run. It lowered taxes massively, sold off its crown jewels, and got rid of regulations meant to keep wages up while education and housing were cheap.

It’s not that long ago. I remember the last parts of the post-war era, and many people still living remember the 50s and 60s, even as adults.

But that world is long, long dead, and we live in a new one. One where it doesn’t matter if climate change or a pandemic will killing millions or billions. One where lower wages are good, and the Federal Reserve intervenes constantly to lower them, while always making sure the rich never lose everything in a financial collapse.

And in this world, the rich kill and impoverish you for money. Usually they do it in ways they can pretend aren’t about them: policy changes, or increases to insulin prices, but if you really get on their nerves or might even be a real threat, as with our pedophile pimp (and almost certain blackmailer) Jeffrey Epstein, well, people who are worth more dead than alive, they tend to get dead.

Are you worth more dead than alive to some rich person, or some politician in the pay of said rich people?

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Ricardo’s Caveat



In 1817, David Ricardo formalized the Law of Comparative Advantage. Since then, it has stood the test of time as one of the very few laws that an economist can point to and say: “This is indisputably true.” It’s because of this law that you only rarely find an economist who doesn’t believe in unrestricted free trade. But Ricardo added an important caveat when he discussed free trade and comparative advantage, and it’s one that most modern economists seem to have forgotten…

Let’s quote straight from Ricardo:

In one and the same country, profits are, generally speaking, always on the same level; or differ only as the employment of capital may be more or less secure and agreeable. It is not so between different countries. If the profits of capital employed in Yorkshire, should exceed those of capital employed in London, capital would speedily move from London to Yorkshire, and an equality of profits would be effected; but if in consequence of the diminished rate of production in the lands of England, from the increase of capital and population, wages should rise, and profits fall, it would not follow that capital and population would necessarily move from England to Holland, or Spain, or Russia, where profits might be higher.

This is the Achilles heal of comparative advantage — the flaw in the foundation of free trade that causes outsourcing woes. Those who say that the law of comparative advantage proves that free trade is good are absolutely right, but they’ve forgotten his caveat.

Because, in Ricardo’s world, it was true that capital was not particularly mobile. It is not true in our world, and it wasn’t true in the Victorian world.

In a world in which I can move my capital freely between locales, in which I can also move my profits freely, and in which I don’t have to live where my capital is working, there is no reason to invest in any productive activity in my home country if I can make more money elsewhere.

The higher surplus locale is going to get as much free capital as it can soak up and as is available. The logic behind this is simple: Let’s say I have one million dollars to invest, and I can invest it in two different locales. In one place, I’ll get five percent return, in another a ten percent return. In both locales, I can take my profit and do what I want with it. I can live in either locale and, in both places, my money is secure from being seized by the government or destroyed by violence. Obviously, I’m going to put my money into the place with the higher returns.

When I get those profits, I’m going to sink any reinvestment into the place with the higher returns again. It’s a virtuous circle — if you’re the place with the higher returns, and it ends when returns even out or there is no more excess capacity.

If the higher-return country runs out of investment opportunities that pay higher than the low-return country, it makes no sense to invest in it. What matters here is the marginal rate of return — that is, the return on the next dollar of my investment. In principle, there ought to be diminishing returns; people snap up the good opportunities and, over time, the opportunities get worse and worse until returns equalize (this happens faster when currency values are decided independent of government intervention, but it doesn’t always happen — even in the long term, when we’re all dead).

Profit is just how much surplus you’re receiving. Let’s say my workers are capable of producing $5 of goods for every hour they work and my costs are $3/hour for everything (property, taxes, capital costs, and wages). I’m making $2 an hour for every worker I have working for me.

That’s Country A. In Country B, the average worker produces $10 an hour, but my costs are $9, so my surplus is $1. This is half the profit of Country A, even though my workers are more productive.

That’s why US workers are more productive and people are shipping jobs to China and India. Costs in the US are higher for property, wages, and taxation.

To stop capital (and jobs) moving from Country B to Country A, you have to increase surplus. There are two ways to do that: You can reduce costs (most easily by cutting taxes or wages), or you can increase productivity. If the average worker produces one more dollar of goods while costs stays the same, and Country A’s worker’s productivity doesn’t increase, then you’re even.

Or Country A could increase wages, taxation, or property costs and become less competitive.

In a world without mass capital flows, there was another way. You could have lower capital costs. But having the Fed set lower capital costs than another country means little — borrow in the US, invest it where the ROI is higher.

More than that, money you can’t use is, well, useless. Let’s say you’re investing in a factory in China, but you want to live in Europe or the US — and Europe and the US won’t let you use the money you have in China in their countries (or will only let a fraction back in). In this scenario, you’re not likely to invest in China, are you? In addition, money that can’t move is captive to political unrest and other such events, which gives mature, stable countries a big leg up. If moving money is hard or slow, then you’d better be sure that where you have it is stable because if something goes wrong, you can kiss it goodbye.

A key problem right now is demand. Capital flows to low-production-cost/high-surplus domiciles. But there’s only so much demand for goods and only a limited amount of growth in demand for goods. So you’ve got your profits, and you have to figure out what to do with them. You can’t plow all of it back into productive investment, because you’d wind up with more productive capacity than there is ability to buy the goods. As a result, the excess money has to go into nonproductive uses.

The money that does go into productive uses will go to the domiciles that produce the greatest surplus (profit). Many people have pointed out that the US hasn’t lost jobs to outsourcing, that’s only true in a technical sense. What has happened is that the new jobs have been mostly created overseas (in cases where they can be done overseas). Old jobs haven’t been moved (mostly) because of sunk capital costs. Once you’ve paid ten million dollars to create a factory, spending another ten million dollars to relocate the factory usually doesn’t make sense. But if you have to build a new factory anyway (either because you need more capacity or because the old factory would have to be replaced for some reason), then it makes sense to build it in the domicile with the higher surplus production. That’s exactly what we’ve seen over the last few years: China and India getting the new jobs in non-protected sectors. It’s not rocket science, it’s just ROI (Return On Investment).

Because you can’t put all the money back into production, you’ve got to stick some of the money elsewhere. And what we have going is a nice, reinforcing trend. Oldman has called it strip mining the US economy. The money is used to buy your customers’ assets or lent to your customers. In exchange, they put up as collateral either the full faith of their government (we’ll see how good that is in a few years) or their assets, which in the current case means mortgage-backed securities, bonds, and common shares in companies (which represent ownership of assets). They then use that money to buy your goods, and the cycle continues.

This vicious cycle (or virtuous if you’re the one getting rich, and you get out in time) results in excess productive capacity, a slow decline in employment in the low-surplus domicile, and an increase in debt in the low-surplus domicile. It also pushes costs in the low-surplus domicile lower (meaning wages and taxation, primarily).

In the meantime, if the developed world (and specifically the US) were to stop borrowing to buy, the entire engine would collapse. This is not a sustainable development; if the US were to buy only what it could afford, based on its own exports, there would be an economic shockwave — not just in the US, but in China, India, and other high-surplus/low-cost domiciles. And right now, the dynamic is being funded by taking money out of the US and other high-cost domiciles, which must ultimately end in a reduction of demand. If the low-cost domiciles, which have been getting the capital investment, are not capable of soaking up the excess capacity when the US’s consumption comes in line with what the US can afford, then you will have a worldwide recession at the least — and likely a depression.

Economics views systems as moving towards equilibrium. But it’s more useful to view systems as subject to multiple different tendencies. At any given time, different tendencies may be stronger than others. What should be happening is that US costs should drop and developing country costs should rise. It is happening, but it’s not happening very fast. Where these costs meet is going to be somewhere a lot south of the current US standard of living. In the meantime, the dynamic has the US shipping its capital and its growth in productive capacity to lower-cost/higher-surplus domiciles. This will continue until the conditions enabling it end and not before. The conditions which can end it are increased shipping costs (favouring more localized production), the evening out of surplus production, a political decision to discourage either trade or capital flows, or an unwillingness or inability of either the US to borrow or its creditors to lend (the end of the housing bubble strikes directly at this). Until then, capital will go to the higher returns, and since the highest returns on production are mostly not in the US, capital that creates production jobs will flow disproportionately away from the US while asset bubbles form in the United States in order to pay for imports. (And the assets they have bought, or allowed the US to borrow against, are likely to crash in the final days of this system. A suckers’ game all around, but the only thing worse than playing is trying to stop playing.)

(Originally published years ago at BOP news, I put it back up here because this is what is at the heart of problems with globalization and why comparative advantage no longer works. April 25, 2015 — and back to the top again, in honor of the Trans-Pacific Partnership Trade Agreement. Sept 2021, and again, twice a decade seems appropriate.)

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The Age Of Assassination

It’s forgotten now, but the invention of effective pistols created a period with a lot more assassinations.  Effective portable bombs made assassins even more effective. Archduke Franz Ferdinand, whose assassination started World War I, is the most famous victim, but hardly the only one.

We’re in the start of a golden Age of assassination. It has gone largely unremarked because the victims have been nobodies, and mostly in the developing nations like Iraq, Afghanistan, Pakistan, Libya, Syria and so on, though hardly limited to those war zones.

A large group of assassins have been drones (special forces hit squads are the other group.) Drones are not, as I have noted before, a technology of the rich and strong: a good mechanic can make a drone easily enough in their garage. Hezbollah has its own fleet of drones. Iran has invested in them. Turkey, while certainly a powerful nation is not a technological leader overall, but has become a leader in drones and especially autonomous drones.

Drones will get smaller, more deadly and harder to stop. More and more will become autonomous, so that they can’t be jammed.

Meanwhile, the NYTimes has a story about how Israel assassinated Iran’s top nuclear scientist:

Israel’s Mossad used an AI assisted 1 ton machine gun robot. Its parts were detached, smuggled into Iran and assembled inside Iran. The robot used facial recognition to recognize the target.

All of this tech is going to come back to bite our elites in the ass. As Dan points out, there’s no reason these types of technologies can’t be used to kill Western elites, and they will be. The reaction to then try and then clamp down on the technology will do huge harm to tech development, because the items needed to create a drone or stationary robot are simple, not complicated, and will become simpler and less complicated over time.

Ages of assassination aren’t pretty, and they increase political instability substantially. That isn’t always a bad thing, it depends if what’s on offer is better that the status quo, but it’s always a mess.

Technologies are never neutral and that is nowhere more true than technologies of violence. Firearms put a decisive end to the age of the knight, and allowed for the creation of mass democracy. Knights, when they became predominant did the opposite: they entrenched an age of aristocracy, because Knights were expensive as hell, and training to be a knight almost had to start in childhood.

How a technology starts is also not necessarily how it winds up being used predominantly. Consider the machine gun. For the first decades of its existence the machine gun was an offensive weapon: it was used by the Brits and then other colonial militaries to absolutely butcher native forces that dared to oppose them. It helped expand the British Empire and other colonial regimes.

Then came World War I, and it turned out that machine guns were actually a weapon of defense when both sides had them.

Drones have started as weapon by which elites terrorize the weak, and autonomous robots, especially, seem like a dream come true for the powerful. The great problem of power is always the Praetorian one: you need enforcers, and the more you insist on being far richer and out of touch with the commons, the more you need them, but the less you can trust them: whatever the pretense, they become mercenaries, and people who fight for money or for the right to loot and hurt people are never reliable.

Robots seem like the perfect solution, allowing elites to have a much smaller enforcement class; just the people who create and repair them. The real dream is that eventually loyal AIs will design and repair themselves, and non-elite humans will be completely unneeded. The elites will rule alone, with loyal robotic servants and no Praetorian problem or fears that in a revolution, the troops won’t shoot.

But an age of drone and autonomous robots, some of them as small as insects, but still deadly and operating in swarms, is not an age that seems likely to actually favor elites as much as they think, because, as noted earlier, it isn’t actually a hard tech: it’s hard to pioneer, yes, just as were early gunpowder weapons (which were used by Kings to destroy the power of the feudal nobility, since only they could afford enough cannon, and cannon trumped Medieval castles) but once it is pioneered, it will spread and it will be used against elites.

The only way to avoid that is to crack down, hard, on all the precursors, but since the precursors are so simple and basic to a technological society, doing so will make you backwards, and as with Japan completely controlling firearms, this only works if everyone does it everywhere in the world, otherwise one day the “White Ships” show up and you realize you’re helpless before them.

Simple, cheap, effective autonomous or semi-autonomous killing machines are an epochal military technology which is going to change everything if we can maintain societies capable of fielding them. Even in a semi-collapse, we may be able to do so, because they are, actually, simple.

The results are in the air, to be sure. No one in 1500, even, could predict all the results of firearms and the printing press.

But elite who think this will all to their way may find out, as they bleed out their last, just how wrong they were.

(My writing helps pay my rent and buys me food. So please consider subscribing or donating if you like my writing.)

Week-end Wrap – Political Economy – September 19, 2021

In memorium, Ronald Anthony Wikrent

August 8, 1963 – September 16, 2021

Please excuse me for putting this at the top, but I want to remember my “little” brother, Ronald Anthony Wikrent, who finally succumbed after a two year battle with a frighteningly aggressive cancer. He was seven years younger than me, and supported me throughout my life, both materially and spiritually. A few years after I graduated university, Ronnie agreed that he would stay home in Chicago, and support and look after ma, freeing me up to pursue my passion of “trying to save the world.” He built up and ran his own frozen food distribution business, and there were many times when I could have (and perhaps should have) joined him. I certainly would be facing a much more comfortable “retirement” right now, but Ronnie always made sure I was never in real material need of anything. He was constantly thinking of new ways to do business, for me to be financially secure, or to attack political problems. He literally helped feed millions of people in the Chicago area. He delighted in discussing politics and economics with me, and I spent many days each summer staying at his house while in between the special events at which I peddled books on agricultural, industrial and transportation history.

Ronnie, thank you for your love and support over the years. You were the best brother there could be, and I will miss you terribly. 


Strategic Political Economy

Understanding Is Good.

[Reminiscence of the Future, September 14, 2021, via Mike Norman Economics]

Like General John Hyten understands. Especially when talking to such a “think-buggy” as Brookings, known to be a nest of exceptionalist and neocon ideas….Actually, give it up for Hyten–he talks totally common sense things and, what is really important, and I know it for sure, neither Russia nor China want the war with the United States. In fact, his conclusion on modernization of Russia’s nuclear arsenal is spot on–Russia was worried about the US. Russia still worries about the US, this time because of a major clusterfuck the country has become and Russians are keenly aware that bat shit crazy element in US decision-making circuit is still present and one cannot completely exclude a possibility of those people pushing the United States to the brink of unleashing a war of desperation. Good that Hyten speaks to one such institution where neocon ideas are popular due to military ignorance of people exercising those and the words of General Hyten can only be commended. But as I am on record non-stop, the remaining expertise about the outside world rests today primarily, not exclusively, with some segments in the US military, who, by the virtue of their profession, have understanding of a horrendous price if the United States decides to unleash a suicidal war.


Republicans seethe with violence and lies. Texas is part of a bigger war they’re waging.

[The Guardian, via The Big Picture 9-12-2021]

This extremist vigilante abortion law is of a piece with everything else Republicans are doing: overturning democracy itself

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