US Constitution by KJD
It’s sometimes unclear to me whether the US has been more of a good thing than a bad thing, but Happy Independence Day. Remember to thank the French–there’s a fairly strong case that without them, the US would have lost the War of Independence.
But every powerful nation has committed their share of atrocities, so, well, so be it.
Enjoy the day.
A small break from more serious posts. I’m the sorta guy who takes a book almost everywhere. When I was younger I’d grab a paperback and read it while walking wherever I was going. I certainly never get on a bus, train, or plane without a book, and often multiple books.
And as for classes at school and university, well most of them are about an 80 percent waste time to anyone who’s done the reading so I usually bring a book as well. (To this day, I still loathe people who don’t do the reading, so that the professor thinks they should recapitulate it and wastes everyone else’s time. Also, profs: Don’t do that!)
So, anyway, yes, normal books are nicer than e-books, and most e-book formats which handle footnotes or text boxes or images badly (well, all formats, but maybe I’ve missed something), so if it’s a book where those matter, a print version is important.
(I am fundraising to determine how much I’ll write this year. If you value my writing and want more of it, please consider donating.)
All that said, buying a good e-book reader, ummmm, changed my life? I hate using that phrase about a consumer purchase, but the fact is that the books are cheaper and I can buy them so much more easily that it’s vastly increased how many books I read.
I got out of the habit of reading tons of books with the rise of the internet. The problem with that is that while the internet is nice in many ways as long as you don’t become addicted to social media, reading online articles is not the same as reading books. It cannot substitute in terms of actual learning or enjoyment.
I had already started a move back to books before I bought an e-reader, but the ease of it ramped it to the point where, today, I’m back to teen rates of reading at least a book a day, and often two or three. (Four or five happen occasionally.)
Cheaper, more convenient, and the e-reader is small enough that I can stick it in a large pocket. And when I finish one book, there’s always another.
Anyway, e-readers: One of the few things I really like about the late telecom revolution. (As much as I love the internet and have made much of my living on it for two decades now, I’m not sold that it’s overall a good thing and I don’t like smartphones much at all, even though I have one.)
(Oh yeah. E-readers have been used to hurt the publishing industry. Absolutely. But that’s a policy matter and could be fixed with policy.
What pieces of tech have actually made your life better?
by Tony Wikrent
[Valdai Discussion Club, via Naked Capitalism 5-26-19]
When analyzing the place that Russia and China occupy in each other’s bilateral trade, there is an imbalance arising from the difference in the size of the two economies. But it is hard to think of a way China could use it to blackmail or pressure Russia. Fuel and energy resources dominate Russia’s exports to China as well as Russian exports in general – fossil fuels accounted for 73 percent of its 2018 supplies. Russia is one of the main suppliers of oil to China, competing for first place with Saudi Arabia.
This does not speak well of the structure of the modern Russian economy. But, from a political standpoint, all prior experience tells us that trade in energy products creates a strong interdependence between supplier and buyer. Unlike other types of goods, any pressure on energy exporters is always associated with immediate and significant losses for the importing country, so it is only used as a last resort in rare cases.
The Electric Vehicle Revolution Will Come from China — not the US
by Lambert Strether [Naked Capitalism 5-26-19]
(I am fundraising to determine how much I’ll write this year. If you value my writing and want more of it, please consider donating.)
This post is by TONY WIKRENT
China’s population could peak in 2023, here’s why that matters
China’s population is likely to peak in 2023, according to a study by online database company Global Demographics and analytics firm Complete Intelligence. The Chinese government had previously estimated that the country would hit its maximum population size in 2029…. The decline in births is driven by a “maternity cliff,” according to the report. The number of women of childbearing age in China — defined as aged 15 to 49 by the publishers — is set to fall from 346 million in 2018 to 318 million in 2023.
With fewer women of childbearing age and fewer births per 1,000 women, the total number of newborns will drop as well. The study predicts that 13.3 million babies will be born in 2023, down from 15.2 million last year.
The New Silk Roads reach the next level
Asia Times, via Naked Capitalism 4-30-19]
….the West, as usual, ignored what was the absolutely key takeaway of the BRI forum: the deepening, on all fronts, of the Russia-China strategic partnership. It’s all here, in President Putin’s speech.
Putin emphasized “harmonious and sustainable economic development and economic growth throughout the Eurasian space.” He noted how BRI “rhymes with Russia’s idea to establish a Greater Eurasian Partnership, a project designed to ‘integrate integration frameworks’, and therefore to promote a closer alignment of various bilateral and multilateral integration processes that are currently underway in Eurasia.”
Putin could not have been more specific. “The Eurasian Union…has already signed a free-trade agreement with Vietnam and a provisional agreement with Iran, paving the way to the creation of a free-trade area. The preparation of similar instruments with Singapore and Serbia is nearing completion, and talks are underway with Israel, Egypt and India. We cooperate actively with the Shanghai Cooperation Organization and the Association of Southeast Asian Nations.”
Addressing the forum, Putin added another enticing dimension, with the China-driven Maritime Silk Road possibly joining the Russia-driven Northern Sea Route, “a global and competitive route connecting northeastern, eastern and southeastern Asia with Europe” will emerge.
Economists Are Learning to Love the Minimum Wage
[City Lab, via The Big Picture 4-29-19]
….two new papers provide powerful evidence that higher minimum wages in fact boost the conditions of workers—especially the least skilled and lowest paid among them—without doing broad economic harm.
The first paper is forthcoming in the prestigious Quarterly Journal of Economics and is currently available as a NBER working paper. (There is also a shorter, more reader-friendly research brief available.) It tracks the economic effects of more than 100 minimum-wage hikes across the country between 1979 and 2016.
Want to decrease suicide? Raise the minimum wage, researchers suggest
I was recently interviewed by Collin Morris for his Zion 2.0 podcast.
Not all of this will be of interest to all my readers. The first part is about how non-capitalist forms can compete with corporations and inside capitalism and survive (or rather, it’s me spelling out the problem rather than the solution). The second part is about emotional performance in an age of social media, how damaging it is, and what we can do to stop it from hurting our physical and mental health.
After that, the podcast is about spirituality and meditation and those of you who aren’t interested in those topics may want to quit before that.
You can find the interview here.
The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.
Share of Wealth Held by the Bottom 90 Percent by Country
[Real World Economics Review Blog, via Mike Norman Economics 4-24-19]
The Great Deformation: Why Income Inequality Has Become Intractable
Yves Smith, April 23, 2019 [Naked Capitalism]
Taylor’s talk last week focused on the drivers of the rise in inequality, which came about via a rise in profit share of GDP, something we first noted in 2005 in a Conference Board Review article. That has enabled the top one percent to pull away from everyone else. Investment as a proportion of GDP has also dropped while consumption has increased. The paper has more detail, but Taylor estimates it would take 40 years to reduce inequality to 1980 levels. He also warns that wealth concentration could increase from 40 percent held by the top one percent to 60 percent….
…advocates of workers have failed to take up the task of determining what a reasonable level of profit is. We’ve mentioned before that in the early 2000s, Warren Buffett deemed a profit share of six percent to be unsustainably high. Yet for the past three years, the profit share has been nearly twice this high.
Oddly, the left and labor supporters have not engaged with the question of what a fair profit might be. Modern cultures have deeply internalized the idea that the result of market forces is somehow virtuous, when markets sit both in a legal system and in a set of societal norms that play a large role in what supply and demand looks like.
[Below via, via Naked Capitalism 4-23-19]
“Pete Buttigieg Trivializes the Impact of Trade on US Job Losses”
This post is by Tony Wikrent
I have been looking at the work of Cornell University law professor Robert Hockett, who is serving as an economics adviser to Representative Alexandria Occasio-Cortez. I have been delighted to find that Hockett has been working the same angle I have: applying the classical republicanism that informed the creation of USA, to today’s issues of political economy. Hockett’s contribution is the development of the concept of what he calls “the producers’ republic“:
….the United States actually has a distinguished tradition of what I am calling “productive republican” finance. It is a tradition pursuant to which productive assets were deliberately spread broadly among diligent citizens ready to better the lives of themselves, their families, and ultimately their communities through thoughtful, hard work.
Historically, the tradition is rooted in two complementary sources: first, an implicitly opportunity-egalitarian, “productive yeoman” colonial culture and subsequent national self-image, stemming in large measure from the Civic Republican and Classical Liberal ideological origins of the American republic; and second, an attendant suspicion of large aggregations of financial capital, stemming ultimately not only from the inconsistency of such aggregations with equal opportunity and productive yeomanry themselves, but also from many of the Founders’ and their forebears’ personal experiences, as agronomists, with exploitative absentee London banking concerns across the
Atlantic.
This past January, Hockett was a participant in a small conference Money as a Democratic Medium, sponsored by Harvard University’s Program on the Study of Capitalism, Institute for Global Law and Policy:
Money, governance, and public welfare are intimately connected in the modern world. More particularly, the way political communities make money and allocate credit is an essential element of governance. It critically shapes economic processes – channeling liquidity, fueling productivity, and influencing distribution. At the same time, those decisions about money and credit define key political structures, locating in particular hands the authority to mobilize resources, determining access to funds, and delegating power and privileges to private actors and organizations.
Recognizing money and credit as public projects exposes issues of democratic purpose and possibility. In a novel focus, this conference makes those issues central. Scholars, policy makers, and students have often assumed that money and credit emerge from private exchange and entrepreneurial activity. Recent work, by contrast, emphasizes that modern currencies depend on collective orchestration. That approach resets the frame.
One of the participants was Jeffrey Sklansky, professor of history at the University of Illinois at Chicago and author of Sovereign of the Market: The Money Question in Early America (University of Chicago Press, 2017). Sklansky gave a brief but excellent overview of the career of Charles Macune, the head of the Southern Farmers’ Alliance from 1886 to December 1889 and editor of its periodical, the National Economist, until 1892. Macune developed the Sub-Treasury idea to break the stranglehold the big banks and grain trading firms had on finance and credit for agriculture. There is precious little information available on Macune, and Sklansky has earned my deep respect for what he is doing.
Hockett’s presentation is also in this video, as is that of Joseph R. Blasi of the Rutgers School of Management and Labor Relations, “The Citizen’s Share: Reducing Inequality in the 21st Century”
This is only one of about a dozen YouTube videos of the Money as a Democratic Medium conference.
In Having a Stake: Evidence and Implications for Broad-based Employee Stock Ownership and Profit Sharing, Blasi writes about the federally mandated profit sharing the administration of George Washington imposed on the cod fishery to rebuild it, after the British had nearly destroyed it because it trained so many of the officers and sailors in the American navy.
….Jefferson, Washington, and the Congress chose to help the industry get back on its feet by what was essentially a tax cut (in lieu of tariffs paid for supplies coming from outside the U.S.) to the owners and workers of the cod fishery on the condition that the ship owners share the tax credits with all the workers…. they rejected outright subsidies to the wealthy owners who controlled the boats and warehouses on the basis that any government tax credits had to include workers. The law was explicit in its sharing criterion: owners had to share five-eighths of the credit with the crew, and additionally have a signed agreement with the captain and crew for broad-based profit sharing on the entire catch throughout the voyage. The tax credits were administered by the Treasury Department headed by Alexander Hamilton through the port Customs’ Houses. The arrangement helped rejuvenate the industry. Congress continued it for many decades. See The Citizen’s Share: Reducing Inequality in the 21st Century, Joseph R. Blasi, Richard B. Freeman, and Douglas L. Kruse. (New Haven: Yale University Press, 2013), 1-8. See also the Report on the American Fisheries by Secretary of State Jefferson.
Thomas Marois, Senior Lecturer in Development Studies at the University of London and recent guest on It’s Our Money with Ellen Brown, argues that until people regain control of money and credit, we will not be able to stop economic and ecological crises.
“There’s really no option. We can’t simply relegate the question of money and finance and credit … We can’t do anything until we have control of money. And to leave that to the private sector is a strategic mistake because then they control that agenda. They control credit. They control access to credit.”
“Research is vital to the moral integrity of social movements”
Rev. Dr. William J. Barber II [Economic Policy Institute, via Naked Capitalism 4-8-19]
A must-read.
One of the quickest ways for a movement to lose its integrity is to be loud and wrong. We’ve seen too many movements that have bumper sticker sayings but no stats and no depth. Researchers help to protect the moral integrity of a movement by providing sound analysis of the facts and issues at hand. Armed with this information, we’re able to pull back the cover and force society to see the hurt and the harm of the decisions that people are making….
…the prophet Isaiah said to those who were rich, powerful and presumed themselves to be morally superior. “Woe unto those who legislate evil and rob the poor of their rights and make women and children their prey.” Isaiah even went as far as saying that religious activity—worship and prayer—was not a cover for their failure to “loose the band of wickedness.” Wickedness in that text is specific to the issue of not paying people what they deserve and trying to cover it over with a lot of religiosity. He goes on to say that the nation will never be able to repair itself until it ends the wickedness of not paying people what they deserve. Because society’s policies had actually insulated destruction, injustice and inequality could never be resolved without a change of policy.
These statements reflect more than just a difference of opinion concerning the legislation. Rather, such bold and specific statements suggest an analysis of the society which concluded that the legislation was evil in that it was robbing those who were most vulnerable. In other words, Isaiah’s moral authority to criticize policy could be confirmed and validated by research….
The 13 former Confederate states, which only have about 36 percent of this country’s population, decide 178 electoral votes, 26 United States Senate seats and 35 percent of the seats in the United States House of Representatives. That means all it takes to win control of both houses of Congress is 25 Senate seats and 16 percent of U.S. House of Representatives seats available from the other 37 states.
100 million is the number of people that didn’t vote in the 2016 election. 40 million is the number of poor and low-wealth people in this country. The majority of them are in the South and are the key to the transformation of our politics.
All of the close elections we witnessed in the 2018 midterms are a sign that we are right at the tipping point. If there’s ever been a time that we ought to go south and shift the political calculus in this nation for the next 20 to 40 years and beyond, it is in fact right now.
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