Ian Welsh

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

Week-end Wrap – Political Economy – June 21, 2020

by Tony Wikrent

Countering the surveillance state

IF YOU’RE TAKING to the streets to demand justice for the victims of police brutality and homicide, you may want to leave your phone at home. No matter how peaceful your behavior, you are at risk of getting arrested or assaulted by police. Cops might confiscate your phone and search it regardless of whether or not they’re legally allowed to, or they might try to break it, especially if it contains photos or video of their violent or illegal actions.\

At the same time, it’s a good idea to bring a phone to a protest so you can record what’s happening and get the message out on social media. Filming police is completely legal and within your rights, and it’s one of the few tools citizens have against police brutality. It’s also important to be able to communicate with others in real time or to find your friends in case you get separated….

If this is too expensive for you, you may have other options: If you have an old phone collecting dust in a drawer, as long as it still works and the battery still holds a charge, you can use this as your burner phone rather than buying a new one. You just need a new SIM card, like one that comes with prepaid cell service. Make sure to factory reset the phone before getting ready to protest….

The Markup published some good steps to take before bringing your primary phone into a protest, and the Electronic Frontier Foundation has a good guide as well.

How Police Infiltrate, Create Violence and Target Journalists

Lee Camp [via Naked Capitalism 6-20-20]

Where most of the world’s people live…

After Violent Clash, China Claims Sovereignty Over Galwan Valley for First Time in Decades

[The Diplomat, via Naked Capitalism 6-17-20]The writer of the New York Times article on this clash (which I do not link to) made no attempt to explain why this remote area with hardly any inhabitants would be disputed by the India and China. First, the glaciers of the Tibetan Plateau are the source of Asia’s major rivers: Indus and Satluj of Indus river water system, Arun, Ghaghra and Gandak of Ganges river water system, Manas and Brahmaputra of Brahmaputra river water system, Yellow River, Yangtze, Mekong and Salween rivers.

China suspends debt repayment for 77 developing nations, regions
[DefendDemocracy.Press 6-20-20]

China has announced the suspension of debt repayment for 77 developing countries and regions as the nation is working with other G20 members to carry out the G20 debt relief initiative for low-income countries, Chinese officials said at a press briefing at the State Council Information Office on Sunday…. China announced in May that it would provide $2 billion over two years to help other countries respond to the impact of the coronavirus pandemic…..

China has made multilateral donations to the World Health Organization (WHO) of $50 million, and has provided assistance to global organizations including the Global Alliance for Vaccines and Immunization. China also actively assisted in the fundraising event organized by the Solidarity Response Fund of the WHO in China.

Zero Hedge — Beijing Sounds Alarm About Dollar’s Reserve Status
[via Mike Norman Economics 6-19-20]

Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, delivered a strong warning on the U.S. currency this week. He made four points in a speech at the Lujiazhui Forum in Shanghai:

  • A. The Fed is the de facto central bank of the world. When its policy targets its own economy without considering the spillover effect, the Fed is “very likely to overdraft the credit of the dollar and the U.S.”
  • B. The pandemic may persist for a long period of time, and countries keep throwing money at the problem with a diminished impact. “It is recommended that you think twice and reserve some policy space for the future.”
  • C. There is no free lunch. Watch out for inflation.
  • D. Financial markets are disconnected from the real economy, and such distortions are “unprecedented.” It’s going to be “really painful,” when the policy withdrawal starts….

The Epidemic

Open Thread

Use the comments to discuss topics unrelated to recent posts.

Is Cruelty Required?

Is it possible to have a society without cruelty?

That’s really the fundamental political question. (Economics, as you know, is a subset of politics, not different from it. So it’s also the fundamental economic question.)

It’s fair to say that there has never been a major society without cruelty baked into it, at least not since the rise of agricultural kingdoms about three thousand years after the invention of agriculture. Previous societies often had a lot of violence, but it’s not clear they all did, and some hunter gatherer band level societies seem to have had little cruelty.

But every major agricultural civilization has been cruel, and so has every major industrial society, though some are less cruel than others (insert reference to Scandinavia). Even those, however, are enmeshed in a system of industrial production that is, at best, exploitative, as in the case of conflict minerals, low paid workers, killed union organizers, and so on. Because it is not possible to run a decent society in the modern work in autarchy, even relatively kind societies are enmeshed in economic arrangements that cause great suffering hundreds to thousands of miles from them.

Cruelty is endemic even in good societies in the sense that our fundamental economic relationships are based on coercion; if you don’t work for someone else, probably doing something you wouldn’t do without the whip of poverty at your heels, and under supervision, well, you will have a bad life. School is based on coercion; do what you’re told when you’re told, or else, and so is work for most people.

That’s just the way our societies work, and while details vary, it’s more or less how they’ve worked since agriculture. Oh, the peasant may not have had close supervision, but they gave up their crops, labor, and lives under threat of violence, and they knew it well.

Even positive incentives are coercive. Get good grades and you’ll get a good job, etc… Please the mast… er, I mean, boss, yes, boss, and you may get a raise.

But a great deal of real cruelty lies behind the positive coercion in our major societies. American jails are startlingly cruel, filled with violence, rape, and fear. Chinese prisons aren’t so nice either. Police exist to throw you out of your house if you fail to pay the rent, which some double digit percentage of Americans are about to experience, because their society has mishandled an epidemic.

Sell cigarettes without the sanction of the state and your last words may be, “I can’t breathe.”

Our societies are based on positive and negative incentives. The amount of each varies with time and place. Finland right now has a lot more positive, and a lot less negative and a lot less consequences for disobeying. 50 years ago, the US put a lot less people in jail and gave those it allowed good jobs (white males) much better, nicer lives.

But there’s still always that threat in the background. And it’s always based on cruelty: “Bad things will happen to you, either actively or passively if you don’t go along.”

Now there are things we need to get done, collectively, in society. Build and maintain housing, grow and distribute food, keep the internet running (these days), but how much cruelty and coercion is required to do those necessary things? How much do you have to threaten people to get them to do those things? How cruel do you have to be to them if they don’t do them?

But another problem is that most of the coercion and cruelty in our societies has nothing to do with creating necessities like food and shelter and medicine and internet.

It has to do with making sure that some people have far more than they need, and others have far less. That some people have good lives with little coercion, while others live in constant fear. One problem with the boss, you lose your job, and you wind up homeless or in prison, and then even more terrible things happen.

Terrible things that are meant to happen, of course. We could lock up a lot fewer people and treat those few far better. We have more empty homes than homeless people and throw out at least a third of our food. No one need go hungry or homeless, and as for the internet, well, ISPs make close to 100 percent profit, so yeah, I’m pretty sure there’s no reason anyone should go without basic internet access.

So the cruelty in our societies is a choice. We can feed and house everyone, give everyone health care and have plenty left over, but we want billionaires and huge militaries or something, so we’re cruel. We’re cruel in the small details of everyday life (those maste…, er bosses) and we’re cruel in how we structure life, and it’s all a choice we’ve made.

Is it necessary? Must we be cruel? If we must be cruel, how cruel? What cruelty is actually needed, how much is just a preference or only required because we want very unequal societies?

Are we cruel of necessity?

Or desire?


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A Small Insight About Power, Markets, and Post-capitalism

Last week I wrote a brief post about the process of having insights: How we don’t control what insights we get, or when–we can only do the preparatory work, and then sit back and wait.

The insight I was writing about was really “Oh, this isn’t up to me, it happens when it happens,” but there was also an insight related to markets, capitalism, and really, post-capitalism.

A lot of what I’ve spent the last 30 years thinking about could be considered to be collective action problems–who, as societies, we let make decisions about what we’ll do. Feudalism did that one way, capitalism does it another; there have been other systems, and even within capitalism there are sub-ideologies: neoliberalism is very different from New Deal capitalism with its emphasis on increasing wages, decreasing inequality, and keeping prices up.

But the real issue is about power. Money is a type of power, it gives whoever controls it (not has it, but controls it), the ability to tell other people what to do. When you buy something or hire someone, that’s power.

There are so many issues with using markets to determine who gets power that you could write multiple books about them, but let’s review the positive argument for markets.

If someone pays you for something, they want it or need it. It has utility to someone.

The more people pay you, therefore, the more utility you are providing. Coincidentally, the more they give you, the more utility you can provide, as more money gives you more power to control people and resources. It’s a nice, positive feedback loop.

But one simple problem with it is that money can be used for things other than what people paid you for. Say you’re Bill Gates and you masterminded an operating system and productivity suite people use. (You did this using ethically suspect tactics, but let’s assume you still did more good than harm.)

Now you have a ton of money, and you use it to change how the US organizes education.

That’s what Bill Gates did.

Then it turned out, and Gates himself admits it, that his plan didn’t make things better. Arguably, it made things worse.

So the simple insight was only this: Money is too general a power. We want people who do something good to be able to do more of it, but to assume that, because they did one thing that other people want, means they are qualified to decide how people do other things is unwarranted.

We wouldn’t take the best teacher in the world and say, “Okay, Thelma, now you design the next universal operating system!” We wouldn’t ask the best surgeon in the world to design environmental policy.

We generalize the ability to make money doing one thing to assume it means you’re good at doing everything.

Maybe money shouldn’t be the sole metric we use to decide who will lead. Maybe Gates shouldn’t have been making education policy. Maybe the Koch brothers shouldn’t have decided what half the Republican party policy program should be.

Not a very startling insight, I’m afraid.

But I’m less interested in fixing capitalism than I am in thinking about post-capitalism. So what’s interesting about this isn’t the insight that this is one of the many ways capitalism fails, which I already knew, BUT that a feature of post capitalism needs to be avoiding power creep; just because someone is good at one thing doesn’t mean you hand him control of unrelated things. At most, you then put the best surgeon on the world on a committee to improve surgery, then maybe they start influencing hospital management, then maybe drugs, etc., etc.

A small movement to a related sector, without great power, but with influence, makes sense. Handing them huge power is stupid. A successful businessman isn’t necessarily good at anything but the specific business they were in, and generally isn’t good at economic policy beyond saying what’s good for him, or maybe, what’s good for their industry if what’s good for the industry isn’t also bad for them. (What was good for computers and software in the 90s was not, in my opinion, what was good for Bill Gates, and he wasn’t trying to make the best industry, but the richest Microsoft and Bill Gates.

Communism, with its central planners, had this same problem. Central planners didn’t know much about almost any of the industries they were planning.

Which leads us to a final note: I’m tired of people acting as if communism, social democracy (socialism in modern discourse), and capitalism are the entire acceptable spectrum.

Capitalists want this to be the conversation because they can say, “Hahaha, the USSR failed and Stalin was evil so you have to stick with us, there is no other alternative.

But all three systems have failed, because all three failed to handle climate change. They knew about a catastrophe for over 40 years and did nothing. That’s failure.

So the question isn’t, “Where on the communism to capitalism spectrum should we land?” The question is: “How do we create a third pole? Something new and better which avoids the known problems of previous systems?

And, along with, “It’ll come when it comes, and I’m not in direct control,” is the bigger insight I had while shopping for trout.

Something different, truly different, is needed.

Or we’re all cooked.


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Does Generational Character Exist?

The answer is yes, unless you believe that the experiences people have don’t shape them.

At a given time and place, we experience similar things. In the US of the 30s, we experience poverty, desperation, and the hope of FDR. In the 50s, we have prosperity, but also stifling expectations of behaviour and a closing of possibilities for women. In the 60s, we experience the flowering of youth culture, traumatic assassinations, and civil rights victories. In the 70s, we grow up during inflation, terrorism, and the end of “the good times.” In the 90s, we grow up in helicopter households under stifling levels of supervision unknown to previous generations.

Character is formed by genetics and environment in concert. A generation which has one set of experiences is different from a generation which has another set of experiences. The average Boomer personality is different from the GI Generation, the Silents, Xers or the Lost Generation. They grew up in affluence, expected smooth sailing, grew up in a world which worked and in which their youthful experience was a bend toward justice. This is very different than the Xer or Millennial experience of growing up in an economy which was growing worse than that in which their parents had lived, and of the Millennial experience of a world where civil liberties beyond identity rights were actually constricting as they grew up.

To argue that generational differences don’t exist is to argue that nurture doesn’t matter, or to argue that there are no significant differences in the experiences of different generations in the 20th and 21st centuries. I will be frank: Anyone who believes either of those things is wrong.

Likewise, generations make different decisions at different points in their life cycles. The choice the GIs, Silents, and Boomers made in 1980 to abandon the  Democratic Party, either because they were racist southerners responding to the southern strategy (and yes, that was a racist strategy, and the people who created it have said so), or whether they voted for Reagan in  northern suburbs because they wanted those suburbs to stay white, and fuck the black people, made choices. White flight was a very real phenomenon; it is what those Boomers, GIs, and Silents did.

This does not mean all Boomers/Silents/GI Generation types made those choices, but enough did to  make the Reagan revolution possible. Being racist or keeping their suburban housing prices up was more important to them than anything else, and they voted those values. They voted repeatedly for tax cuts–again and again. You could not run except on tax cuts and expect to win. That was what they wanted, that was what they voted for, that was their character.

The massive deregulation of securites which took off in the 80s could not have happened while the Lost Generation were still the majority of decision makers and one of the largest voting blocks. They would not have allowed it, and in the early 70s when an attempt was made to get rid of the uptick rule (that you can only short sell on an uptick of a stock) was quickly abandoned because they came out ferociously against it.

Certainly they had their flaws. But that generation, having lived as adults not just through the Depression, but through the Roaring Twenties, understood that you don’t allow securities markets to get out of control.

There is far too much special pleading today, mostly from Boomers, that America just went to hell when they were the largest voting bloc and later, had the majority of politicians, “because of a few bad people.”

No, that doesn’t happen. They were complicit, they chose to vote racism and fear, they chose to vote, again and again, for tax cuts which hurt the weakest amongst us. They backed three strikes laws, they ate up Reagan’s bullshit about Welfare Queens. If they lost control of their political parties (a questionable claim in 1980), well that too was a choice: a choice not to participate actively in internal party politics.

Generations have character, tendencies in common, and they make decisions based on priorities shaped by their characters and tendencies. That some of them disagree with their peers does not change this, any more than the fact that many people in Democratic elections vote for the losing parties. A decision was still made and that decision reflects their collective values.

This does not mean there are not other causal factors: the failure of liberalism, the oil shocks, the strategies of the rich to fund an ideological apparatus outside the universities, the concentration of capital, the idiotic war in Vietnam, and so on. There are always plenty of factors, but generational character, and generational choice played a part, and until the Boomers have shuffled off the stage, and the Millennials move to the fore, our problems stand no real chance of being fixed.  (I leave GenX out, because while, on the balance, our generational character is abysmal, and our most prominent politicians are people like Rand Paul, we are too few in number to really matter: The Millennials will take over from the Boomers, in the same way that the poor Silents were essentially skipped over in favor of the Boomers.)

Character is destiny, for nations, individuals and generations. And character is formed by the experiences we have.

Originally published Jan 7, 2014.


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Week-end Wrap – Political Economy – June 14, 2020

by Tony Wikrent

Strategic Political Economy

“Where justice is denied, where poverty is enforced, where ignorance prevails, and where any one class is made to feel that society is an organized conspiracy to oppress, rob and degrade them, neither persons nor property will be safe.” — Frederick Douglass
[via WallStreetonParade, June 1, 2020]“America’s Moment of Reckoning”: Cornel West Says Nationwide Uprising Is Sign of “Empire Imploding”
[DemocracyNow, June 1, 2020]

The catalyst was certainly Brother George Floyd’s public lynching, but the failures of the predatory capitalist economy to provide the satisfaction of the basic needs of food and healthcare and quality education, jobs with a decent wage, at the same time the collapse of your political class, the collapse of your professional class. Their legitimacy has been radically called into question, and that’s multiracial. It’s the neofascist dimension in Trump. It’s the neoliberal dimension in Biden and Obama and the Clintons and so forth. And it includes much of the media. It includes many of the professors in universities. The young people are saying, “You all have been hypocritical. You haven’t been concerned about our suffering, our misery. And we no longer believe in your legitimacy.” And it spills over into violent explosion.

And it’s here. I won’t go on, but, I mean, it’s here, where I think Ella Baker and Fannie Lou Hamer and Rabbi Heschel and Edward Said, and especially Brother Martin and Malcolm, their legacies, I think, become more central, because they provide the kind of truth telling. They provide the connection between justice and compassion in their example, in their organizing. And that’s what is needed right now. Rebellion is not the same thing in any way as revolution. And what we need is a nonviolent revolutionary project of full-scale democratic sharing — power, wealth, resources, respect, organizing — and a fundamental transformation of this American Empire

“A Left Critique of the Current Protests” 

[Benjamin Studebaker, via Naked Capitalism Water Cooler 6-9-20]

 “As long as we have millions of alienated, armed Americans, the police will never be abolished. Calls for their abolishment will instead result in privatisation. The Democratic mayors who run our cities want to avoid responsibility for the killings that are the result of decades of their own negligent policy. Privatising the police divests them of culpability. Privatised police will be even less accountable than publicly run departments. They’ll probably kill even more people. But when it happens, the cities can blame it on the contractors. They can simply fire one outfit and hire another. The anarcho-capitalists have wanted this for ages. They are chomping at the bit to use these protests to make it happen… Sadly, our organizations are inferior to the organizations of the anarchists and the woke neoliberals, and for this reason they will continue to hasten the victory of the right nationalists, much to our chagrin.”

An excerpt of an excerpt form Thomas Frank’s new book on elites’ opposition to populism
“The Pessimistic Style in American Politics”

Thomas Frank [Harpers, via Naked Capitalism Water Cooler 6-11-20]

Open Thread

Please use the comments to discuss topics unrelated to recent posts.

Your Responsibility for Insight, Understanding, and Creative Work

Regular readers will know I’ve written about the logic of markets and capitalism many times. It’s one of my ongoing interests: How they work, what they do well, and where they fail.

And why.

Yesterday, at the supermarket buying a rainbow trout fillet, a thought popped up about one of the ways in which markets fail, giving people power outside their area of expertise; past where they can do good and turn to evil. It was a simple insight, though at the end of a chain of logic.

I was both very pleased and chagrined, it seemed to me that after spending 30 years on this subject I ought to have had this insight already, but I was happy it had shown up.

And then I thought something else, which was “It’s not my responsibility anyway, I get the insights I get when I get them.”

This is one of the fundamental truths of all non-mechanical creative and intellectual inquiry: You do the work, but you don’t control when you reap the results, or even what they will be.

You do the reading, you practice (I’ve written all those “logic of capitalism articles” in part as practice), you contemplate what you know, running through the links. You ask questions (and even the questions are more given than something you control) and the results are out of your hands beyond that.

You control the preparatory work. Reading, thought, conversation; you don’t control the crop.

This is even more true of creative work: You could study the great masters of painting, learn how to do all the brush strokes, spend endless hours contemplating how light, perspective, and symbolism work, but you can’t guarantee what work will come from it.

This is the great curse of such endeavors: You can put in all the work and not get a great deal as a result. The less mechanical the discipline, the less determined the results are.

But it is also a blessing: Your job is just to show up and do the work. Because you can’t control what happens after that, or what your body, heart, and spirit are doing with the material, there is no point in worrying about it; no point in self-blame. What shows up after you’ve mixed in the materials is not your responsibility.

You can relax and enjoy the process, the pleasure of ideas or aesthetics, the joy of a great idea or inspiration popping up.

Indeed, relaxation is necessary. You select a seed, plant it in the right soil, water it, ensure it gets enough sunshine, and weed it. Then, you leave it alone. The breaks, the times you don’t think about your art or area of inquiry are just as necessary as anything else. (In fact I recommend any creative workers or thinkers also be nappers.)

Generally, the more relaxed you are, the more you trust the process, the better the results.

This doesn’t mean you don’t turn your critical intellect or aesthetic sense on whatever pops into your mind. Not all ideas or inspirations are great or even good. But if you self-flagellate, you make the process slower, the results weaker. Treat every sprouted idea and impulse with joy, and you’ll get more of them, even if not all of them are as pretty or useful as you hoped.

That moment when inspiration strikes, those ah-hah moments, are one of life’s great joys. Treat them as such, nourish them, and understand you have no direct control, and you’ll have more of them.

They come when they come, their frequency and quality is not up to you–but nurturing them, evaluating them, and loving them is. They are all your children, all loved, but not all equal.


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