Archive for the 'Economics' Category

TechnoFeudalism Killed Capitalism

Thursday, May 16th, 2024

Techno Feudalism; What Killed Capitalism, Yanis Varoufakis, 2023


Self proclaimed libertarian Marxist.

The Rise of Big Finance and Big Business

To produce the rivers of credit necessary to fund the Edisons, the Westinghouses, and the Fords of early twentieth-century capitalism, small banks merged to form large ones and lent either to the industrialists directly or to speculators eager to buy shares in the new corporations…And it led to emergence of Big Finance, which grew up alongside Big Business in order to lend it monies borrowed effectively from the future: from profits not yet realized but which Business promised to delivery.

The Creation of the American technostructure in WWII (Eisenhower’s military industrial complex)

(after Pearl Harbor brought the US Into WWII) the US government began to emulate…the Soviet one.


Galbraith at work in 1940
It told factory owners how much to produce and to what specifications, from aircraft carriers to processed food. It even employed a price czar – the economist John Kenneth Galbraith – whose job, literally, was to decide the price of everything, to fend off inflation, and to ensure a smooth economic transition from wartime to peacetime is no exaggeration to say that American capitalism was run according to Soviet planning principles, with the exception that the networked factories remained under private ownership of Big Business.

Under President Roosevelt, the US government’s deal with Big Business was simple: they would produce what was necessary to win the war and, in exchange, the state would reward them with four incredible gifts. First, state guaranteed sales translated into state guaranteed profits. Second, freedom from competition, since prices were fixed by government. Third, huge government funded scientific research (e.g. the Manhattan Project, jet propulsion) that provide Big Business with wonderful new innovations and a pool of highly skilled scientific personnel to recruit from during and after the war. And forth, a patriotic aura to help rinse off the stench of corporate greed that clung to them after the crash of 1929 and make them over as heroic enterprises that helped America win the war.

Galbraith called this nexus (at the end of the war) the technostructure.

With the war behind them, one thing kept the good folks of the technostructure up at night: if the government would no longer guarantee sales and prices, where would they find the customers ready and willing to pay for all the chocolate bars, cars, and washing machines that they were planning to manufacture…(hence the rise of Madison Avenue and consumer behavior modification)

In the 1960s, a decade marked by an ideological and nuclear clash between America and the Soviet Union that almost blew up the world, Soviet planning principle were implemented with remarkable success in …the United States. Irony has seldom taken a more effective revenge over earnest ideology.

The American Golden Age of Bretton Woods 1944-1971

This dazzling design, America’s Global Plan to remake Europe and Japan in the image of its technostructure, led to capitalism’s Golden Age. From the wars end until 1971, America, Europe and Japan enjoyed low unemployment, low inflation, high growth and massively diminished inequality.

As long as America was the major surplus nation, Bretton Woods was safe as houses. And that’s why, by the late 1960s, the Bretton Woods system was dead in the water. The reasons? Three developments which caused America to lose its surplus and become a chronically deficit economy. The first was the escalating Vietnam War which forced the US government to spend billions in South East Asia on supplies and services for its military. The second was President Lyndon Johnson’s attempt to make amends for the ill effects of conscription on working-class America, its black communities in particular. His valiant but expensive Great Society program substantially reduced poverty but, at once, sucked lots of imported goods from Japan and Europe into the United States. Lastly, Japan’s and Germany’s factories surpassed America’s in terms of quality and efficiency, partly due to the support successive US governments had extended to Japan’s and Germany’s manufacturing sectors – the car industry being an obvious example.

Nixon Shock the death of Bretton Woods 1971

..on 15 August 1971 President Nixon announced the eviction of Europe and Japan from the dollar zone. Bretton Woods was dead. The door had been opened on a new and truly dismal phase in capitalism’s evolution.

Fed Dismal Chairmen Volcker, Greenspan, Bernanke

In 2002, thirty years after the Nixon Shock, humanity’s total income approximated $50 trillion. In the same year, financiers around the world had wagered $70 trillion on a variety of bets…. By 2007 humanity’s total income had risen from $50 to $75 trillion – a decent 33 percent increase over five years. But the sum of bets in the global money market had gone up from $70 to $750 trillion – a rise in excess of 1000 percent…Bretton Woods was designed to prevent such greed-fueled recklessness from bringing humanity to the brink of another Great Depression, indeed another world war, ever again.

Once they lost their fixed exchange with the dollar, the dollar value of European and Japanese money began fluctuating wildly…The dollar became the only safe harbor, courtesy of its exorbitant privilege, namely, that if any French, Japanese, or Indonesian company, indeed anyone wanted to import oil, copper, steel, or even just space on a freight ship, they had to pay in dollars…The Nixon Shock produced a magic trick for the ages; the country going deeper and deeper into the red was the country whose currency was becoming more and more hegemonic…But there was another reason why the dollar’s hegemony grew: the intentional impoverishment of America’s working class.,,It is also no coincidence that union busting became a thing in the 1970s.

Crash of 2008

With investment first knocked out by the crash of 2008 and finished off soon after by austerity, throwing new money at the financiers was never going to resurrect it. Put yourself in the position of a capitalist at a time when austerity is eliminating your customer’s income. Suppose I give you a billion dollars to play with for free, i.e. at a zero interest rate. Naturally you will take the free billion but as we’ve established you would be mad to invest it in new production lines. So what are you going to do with the free cash? You could buy real estate or art or better still, shares in your own company. That way, the shares in your company appreciate in value, and if you are the CEO running it, your stature and share-linked bonuses rise too. No new investment, in other words, but a lot more power in the hands of the powerful.

For while the American deficit returned with a vengeance a year after the crash of 2008 and the subsequent bankers bailouts, it never restored the beast’s capacity to recycle the world’s profits. True, the rest of the world continued to send most of its profits to Wall Street. But the recycling mechanism was broken: only a small fraction of the monies rushing to Wall Street returned in the form of tangible investments in factories, technologies, agriculture. Most of the world’s money rushed to Wall Street to stay in Wall Street. There, it sloshed around doing nothing useful. As it piled up, it bid up share prices, thus giving the Jills and the Jacks of of finance yet another opportunity to do stupid things at a mammoth scale.

When an activist states makes fabulously wealthier, the same banks whose quasi-criminal activities brought misery to the majority, while they are punished with self-defeating austerity, two new calamities beckon: poisoned politics and permanent stagnation. The poisoned politics we need not elaborate on – from Greece’s neo-Nazis to America’s Donald Trump we have all lived through the nightmare. But permanent stagnation? Why would more wealth for the ultra-rich stagnate capitalism? And how did it lead to the funding of cloud capital?

Cloud proles and cloud serfs

…capital has hitherto been reproduced within some labor market – within the factory, the office, the warehouse. Aided by machines, it was waged workers who produced the stuff that was sold to generate profits, which in turn financed their wages and the production of more machines– that’s how capital accumulated and reproduced. Cloud capital, in contrast, can reproduce itself in ways that involve no waged labor. How? By commanding almost the whole of humanity to chip in to its reproduction – for free…By doing so, we shall see that while workers have become ‘cloud proles’ we all have become ‘cloud serfs’…Cloud proles – my term for waged workers driven to their physical limits by cloud based algorithms—suffer at work in ways that would be instantly recognized by whole generations of earlier proletarians. (As in Chaplin’s 1936 movie Modern Times)
Workers employed by General Electric, Exxon-Mobil, General Motors or any other major conglomerate pay in salaries and wages approximately 80 percent of the company’s income. This proportion grows larger in smaller firms. Big Tech’s workers, in contrast, collect less than 1 percent of their firm’s revenues. The reason is that paid labor performs only a fraction of the work that Big Tech relies on. Most of the work is performed by billions of people for free…The fact that we do so voluntarily, happily even, does not detract from the fact that we are unpaid manufacturers – cloud serfs whose daily self-directed toil enriches a tiny band of multibillionaires residing mostly in California and Shanghai.

Amazon and Jeff Bezos the end of capitalism

Enter Amazon.com and you have exited capitalism. Despite all the buying and selling that goes on there, you have entered a realm which can’t be thought of as a market, not even a digital one…Even the ugliest of markets are meeting places where people can interact and exchange information reasonably freely. In fact, it’s even worse than a totally monopolized market – there at least, the buyer can talk to each other, form associations, perhaps organize a consumer boycott to force the monopolist to reduce a price or to improve a quality. Not so in Jeff’s realm, where everything and everyone is intermediated not by the disinterested invisible hand of the market but by an algorithm that works for Jeff’s bottom line and dances exclusively to his tune.
(Amazon is) a type of digital fief…A post-capitalist one, whose historical roots remain in feudal Europe but whose integrity is maintained today by a futuristic, dystopian type of cloud-based capital.

Tesla and Elon Musk Amazon copycat


Copycat ecommerce platforms, offering variations on the Amazon theme, are springing up everywhere, in the Global South as well as the Global North. More significantly,other industrial sectors are turning into cloud fiefs too. Take for example Tesla,,, Elon Musk’s successful electric car company. One reason financiers value it so much higher then Ford or Toyota is that its cars’ every circuit is wired into cloud capital. Besides giving Tesla the power to switch off its cars remotely, if not, for instance, the driver fails to service it as the company wishes, merely driving around Tesla owners are uploading in real time information (including what music they are listening to!) that enriches the company’s cloud capital.

A.I. Algorithms produce Cloud Proles and Cloud Serfs

It took mind-bending scientific breakthroughs, fantastical sounding neural networks and imagination-defying A.I. Programs to accomplish what? To turn workers tolling in warehouses, driving cabs and delivering food into cloud proles. To create a world where markets are increasingly replaced by cloud fiefs. To force businesses into the role of vassals. And to turn all of us into cloud serfs, blued to our smartphones and tablets, eagerly producing the cloud capital that keeps our new overlords on cloud nine.

Privatization of the Internet Commons

Capitalism surfaced when owners of capital goods (steam engines, machine tools, spinning jennies, telegraph poles, etc.) acquired the power to command people and nations– powers that far exceeded, for the first time, those of landowners. It was a Great Transformation made possible by the prior privatization of common lands. Same with cloud capital. To acquire its eve greater powers to command, it too required the prior privatization of another crucial commons: Internet One.
Previously, to exercise capital’s power to command and make other humans work faster and consume more, capitalists required two types of professionals; managers and marketeers. Especially under the auspices of the post-war technostructure, these two service professions achieved greater prominence even than bankers and insurance brokers…Then cloud capital arrived. At one fell swoop it automated both roles. The exercise of capital’s power to command workers and consumers alike was handed over to the algorithms. This was a far more revolutionary step than replacing autoworkers with industrial robots. After all, industrial robots simply do what automation has been doing since before the Luddites: making proletarians redundant, or more miserable or both. No, the truly historic disruption was to automate capital’s power to command people outside the factory, the shop or office – to turn all of us, cloud proles (blue collar working-class) and everyone else, into cloud serfs in the direct (unrenumerated) service of cloud capital, unmediated by any market.
Meanwhile, conventional capitalist manufacturers increasingly have no option but to sell their goods at the discretion of the cloudalists, paying them a fee for the privilege, developing a relationship with them no different to that of vassals vis-a-vis their feudal overlords.

The Apple iPhone and the Apple Store


The stroke of genius that unlocked cloud rent for Steve Jobs was his radical idea to invite ‘third party developers’ to use free Apple software with which to produce applications for sale via the Apple Store. In one fell swoop Apple had created an array of unwaged laborers and vassal capitalists whose hard work yielded a host of capabilities available exclusively of iPhone owners in forms of thousands of desirable apps that Apple engineers could never have produce themselves in such variety or volume.

Google’s Android Operating System and Google Play


Only one other conglomerate managed to persuade a significant proportion of those developers to create apps for its own store: Google. Long before the iPhone arrived, Google’s search engine had become the centerpiece of a cloud empire which included Gmail and YouTube, and which would later include Google Drive, Google Maps and a host of other online services…Google followed a different strategy to Apple’s. Instead of manufacturing a handset in competition with the iPhone, it developed Android, an operating system that could be installed for free on the smartphones of any manufacturer, including Sony, Blackberry and Nokia, who chose to use it. The idea was that if enough of Apple’s competitors installed it (Android) on their phones, the pool of smartphones operating on the Android software would be large enough to lure third-party developers to produce apps not only only for the Apple Store but for a new store running on Android software. That’s how Google created Google Play, the only serious alternative to the Apple Store.

Creation of Vassal Capitalists and the Precariat

But large or small, powerful or otherwise, all vassal capitalists are by definition dependent to a greater or lesser extent on selling their wares via an ecommerce site, whether Amazon or Ebay or Alibaba, with a sizable portion of their net earnings being skimmed off by the cloudalists they depend on.
Meanwhile, as Amazon was snaring makers of physical products within its cloud fief, other cloudalists were focusing their attention on the precariat (people whose employment and income are insecure). Companies like Uber, Lyft, Grubhub, DoorDash and Instacart in the Global North, along with their imitators in Asia and Africa, wired into their cloud fiefs a vast array if drivers, delivery people, cleaners, restauraneurs – even dog walkers – collecting from these unwaged, piece-rate workers a fixed cut of their earnings too. A cloud rent.
The Great Transformation from feudalism to capitalism, was predicated on the usurpation of rent by profits as the driving force of our socio-economic system. That was why the word capitalism proved so much more useful and insightful than a term like market feudalism. It is this fundamental fact – that we have entered a socio-economic system powered not by profit but by rent – that demands we use a new term to describe it. To think of it as hyper capitalism or rentier capitalism would be to miss this essential defining principle. And to reflect the return of rent to its central role, I can think of no better name than technofeudalism.

Technofeudalism Underlies the Great Inflation

…the Great Inflation and cost-of-living crisis that have followed the recent pandemic cannot be properly understood outside the context of Technofeudalism…I recounted how for twelve long years after the crash of 2008, central banks printed trillions to replace the bankers’ losses. We saw how socialism for bankers and austerity for the rest of us dampened investment, blunted Western capitalism’s dynamic and pushed it into a state of gilded stagnation. The only serious investment of the central banks’ poisoned money during this time went into the accumulation of cloud capital. By 2020, cloud rents accruing to cloud capital accounted for much of the developed world’s aggregate new income.
…rents stunning comeback could only mean deeper and more toxic stagnation. Wages get spent by the many struggling to make ends meet. Profits get invested in capital goods to maintain the capitalists’ capacity to profit. But rent is stashed away in property (mansions, yachts, art, cryptocurrencies, etc.) and stubbornly refuses to enter circulation, stimulate investment into useful things, and revive flaccid capitalist societies. And so the vicious cycle begins: deeper stagnation.
The pandemic (2020) exacerbated the same trend. The only significant difference from the pre-pandemic period was that, this time, and for the first time since 2008, some of the fresh trillions printed by the central banks were spent by governments on the population, to keep their citizens alive while locked down. Nevertheless, most of the new monies ended up bolstering the share price of Big Tech corporations. This explains the report of the Swiss Bank UBS, published in October 2020, which found that billionaires had increased their wealth by more than a quarter (27.5 per cent) between April and July of that year, just as millions of people around the world lost their jobs or were struggling to get by on government schemes. What happens when supply suddenly dies? Especially during times when the locked-down masses get some income support from the central banks’ money tree. The price of groceries, exercise bikes, bread makers, natural gas, petrol, housing and host other goods goes through the roof and, following a dozen years of subdued prices, a Great Inflation sets in.
When, for whatever reason, prices surge across the board, a social power game is afoot in which everyone attempts to suss out their bargaining power. Business managers try to work out how far they can raise prices – if not to profit then, at least, to recoup their own rising costs. Rentiers, both traditional and cloudalists, test the water with rent hikes. Workers assess the extent to which they can push for a pay rise – at least to compensate for the higher bills they must meet. Governments play the game too: do they intervene by using the greater income and VAT tax receipts flowing from the rising prices to assist weaker citizens being crushed by inflation? Or do they subsidize Big Business as it is squeezed by high energy prices? Or do they do nothing much? Until these questions get answered inflation continues to roll.

Delayed Green Energy Adoption

The need to switch from fossil fuels to green energy could not be more urgent. The rise in energy costs that is an integral part of the Great Inflation would seem to have taken us away from that goal, offering a windfall to the fossil fuel industry. But this will not last long. Advances in green energy are pushing down fast the costs of green electricity generation. Even though the life cycle of fossil fuels has been extended, ruinously for the planet, cloud based green energy is growing – and, with it, so is the relative power of cloudalists.

China’s Dark Deal Post 1971 Global Capitalism

From the 1970s onward, global capitalism was founded on this fascinating recycling of, mainly, Asian manufacturing profits into American rents, which in turn sustained the American imports that provided Asian factories with sufficient demand.
Why call it a Dark Deal? Because in the small print of this pact between America’s and East Asia’s ruling classes was written misery for workers on both sides of the Pacific. American workers faced the exploitation and immiseration that resulted from under investment and its industrial heartland being hollowed out by manufacturing in Asia and the underdeveloped Global South. Meanwhile, in China’s fast-industrializing coastal cities, workers suffered the frenzied exploitation associated with over investment…
The came the crash of 2008. This had two main effects that, together, underpin today’s New Cold War: it strengthened China’s position in the global recycling mechanism, ant it turbocharged the build-up of cloud capital both in the United States and China.
…when the bottom fell out of Wall Street, China stabilized global capitalism by cranking up domestic investment to more than half of China’s national income. It worked in that Chinese investment took up much of the global slack caused by Western commitment to austerity. China’s international stature rose, and its accumulating dollar surpluses allowed Beijing, in addition to feeding Wall Street, to become a major investor in Africa, Asia, even in Europe through its famed Belt and Road Initiative.

Chinese cloudalist agglomeration

…to grasp the enormity and nature of China’s big five cloudalist conglomerates – Alibaba, Tencent, Baidu, Ping An and JD.com – consider the following thought experiment. Imagine if, in the West, we were to roll into one Google, Facebook, Twitter, Instagram and the version of Chinese owned Tik Tok still available to American users. Then include the applications that play the role that telephone companies used to: Skype, WhatsApp, Viber, Snapchat. Add to the mix ecommerce cloudalists like Amazon, Spotify, Netflix, Disney Plus, Airbnd, Uber and Orbitz. Lastly, throw in PalPal, Charles Schwab and every other Wall Street bank’s own app.
Unlike Silicon Valley’s Big Tech, China’s is directly bound into government agencies that make all-pervading use of this cloudalist agglomeration: to regulate urban life, to promote financial services to unbanked citizens, to link its people with state health care facilities, to conduct surveillance of them using facial recognition, to guide autonomous vehicles through the streets – and, outside its borders, to connect Africans and Asians participating in China’s Belt and Road Initiative to its super cloud fief.
With this great leap into financial services, China’s cloudalists acquire a 360-degree view of their users’ social and financial life. If cloud capital is a produced means of behavior modification, Chinese cloudalists have accumulated cloud capital beyond the wildest dreams of their Silicon Valley competitors, who, by comparison, enjoy far less power per capita to accumulate cloud rent.

American Dollar Reign

It (dollar’s reign) has allowed countries with large trade surpluses, like China and Germany, to convert their excess production – their net exports – into property and rents in the United States: real estate, US government bonds, and any companies that Washington allowed them to own. Without the dollar’s global role, Chinese, Japanese, Korean, or German capitalists would never have been able to extract such colossal surplus value from their workers and then stash it away somewhere safe. Michael Pettis: “While the US dollar may create an exorbitant privilege for certain American constituencies, this status creates an exorbitant burden for US the economy overall, especially for the vast majority of Americans who must pay for the corresponding trade deficits either with higher unemployment, more household debt, or greater fiscal deficits.”

Cloud Capital Affect on the Liberal Individual

It (cloud capital) has produced individuals who are not so much possessive as possessed, or rather persons incapable of being self-possessed. It has diminished our capacity to focus by co-opting our attention. We have not become weak-willed. No, our focus has been stolen. And because technofeudalism’s algorithms are known to reinforce patriarchy, stereotypes and pre-existing oppressions, those that are most vulnerable – girls, the mentally ill, the marginalized and yes, the poor – suffer the outcomes most…Bigotry is technofeudalism’s emotional compensation for the frustrations and anxieties we experience in relation to identity and focus…it is intrinsic to cloud capital, whose algorithms optimize for cloud rents, which flow more copiously from hatred and discontent.
And therein lies the greatest contradiction: to rescue that foundational liberal idea – the liberty of self-ownership—will therefore require a comprehensive reconfiguration of property rights, over the increasingly cloud-based instruments of production, distribution, collaboration, and communication. To resuscitate the liberal individual, we need to do something that liberals detest: plan a new revolution.
To stand a chance of overthrowing technofeudalism and putting the demos back into democracy, we need to gather together not just the traditional proletariat and the cloud proles but also the cloud serfs and, indeed, at least some of the vassal capitalists. Nothing less than such a grand coalition that includes them all can undermine technofeudalism sufficiently.

Cloud mobilization

The beauty of cloud mobilization is that it stands on its head the conventional calculus of collective action. Instead of maximal personal sacrifice for minimal collective gain, we now have the opposite: minimal personal sacrifice delivering large collective and personal gains. This reversal has the potential to pave the way toward a coalition of cloud serfs and cloud proles that is large enough to disrupt cloudalists control over billions of people.
Under technofeudalism, we no longer own our minds. Every proletarian is turning into a cloud prole during working hours and into a cloud serf the rest of the time. Every self employed striver mutates into a cloud vassal, while every self employed struggler becomes a cloud serf. While privatization and private equity asset-strip all physical wealth around us, cloud capital goes about the business of asset stripping our brains. To own our minds individually, we must own cloud capital collectively. It’s the only way we can turn our cloud-based artifacts from a produced means of behavior modification to a produced means of human collaboration and emancipation.
For a more thorough discussion of the required mobilization see Yanis Varoufakis’novel, Another Now, 2021.

Elite Capture and Value Capture

Wednesday, August 30th, 2023

Elite Capture: How the Powerful Took Over Identity Politics (And Everything Else), Olufemi O Taiwo, 2022

In democracies, ostensibly, the elites (policymakers) are put in office by the non-elites (citizens), who can remove and replace them if they fail to defend public interests. Much like the mythical market, mythical liberal democracy is supposed to be self-correcting and self-justifying by definition. This way of casting the conversation about power and governance has been integral to the framing that links “freedom” and “capitalism” in the ideals and practices of liberal democracy: a country’s freedom need only be found at its ballot boxes rather than in, say its workplaces. Thus, if one believes in liberal democracy, they may believe that imbalances of power everywhere could be fixed by instituting arrangements like the “rules-based international order,”democratic elections,” and “formal political representation.” In a nutshell, if the right ideals are embodied in the right formal systems, then the outcomes of those systems are justified.

Ronald Reagan’s 1986 Anti-Drug Abuse Act, which helped supercharge mass incarceration by establishing mandatory minimum sentencing guidelines and adding $1.7 billion toward the drug war, while welfare programs were cut…The consequences led Democratic senator Daniel Patrick Moyniham to make a striking appraisal: “If we blame crime on crack, our politicians are off the hook. Forgotten are failed schools, the malign welfare programs, the desolate neighborhoods, the wasted years. Only crack is to blame. One is tempted to think that if crack did not exist, someone, somewhere would have received a federal grant to develop it.”

And then there’s capital. The 1950’s and 60’s saw important innovations in corporate management (particularly in the United States, which stood comfortably atop the post-World War II global economy):leveraged buyouts, divestitures, mergers, major sell-offs of “non-core businesses,” and other forms of reorganization of business by profit-hungry shareholders. These trends intensified in the 1980’s, producing what researchers called the “shareholder revolution”: a proliferation of management techniques that put previously complacent industry managers under strict discipline of activist shareholders. This second phase of shareholder revolution coincided with and helped produce a larger “global business revolution,” a “fast-developing process of concentration at a global level in numerous industries supplying goods and services,” to “system integrators”–the few large firms who can reorganize global production around their “core” business models and assets.

These institutions emerged as the world order was being reconstructed in the waning years of Second World War, with the United States newly emergent as a global hegemon. The architects met in Bretton Woods, New Hampshire, where they set up the International Monetary Fund (IMF) and what later became the World Bank. Whatever the “narrow” technical pretensions of their mandates, these organizations in fact have immense governing powers. They offer aid packages that are conditional on certain governance decisions by the receiving country – decisions that help determine the availability of jobs, public services, and the price of food. These basic features of non-elite life are thus placed in the hands of foreign bureaucrats over whom the country’s population have no means of democratic control, nor even the pretense of any sort of democratic relationship.

Rather than a cataclysmic putsch or violent event, for (Wolfgang) Streek, the end of democracy simply is the gradual capture of the political by the elites. “[A]s one crisis followed the next, and the fiscal crisis of the state unfolded alongside them, the arena of distributional conflict shifted, moving upward and away from the world of collective action of citizens toward ever more remote decision sites where interests appear as ‘problems’ in the abstract jargon of technocratic specialists.

Value capture is a process by which we start with rich and subtle values, encounter simplified versions of them the social wild, and revise our values in the direction of simplicity—thus rendering them inadequate…Capitalism is itself such a system: it rewards the relentless and single-minded pursuit of profit and growth—extremely narrow value systems that exclude much of what makes life worth living. But societies organized around fundamentalisms (whether religious or secular) and war have resulted in similarly warped value systems long before capitalism arrived on the scene.

Trauma, Illness & Healing in a Toxic Culture

Tuesday, December 6th, 2022

The Myth of Nornal; Trauma, Illness & Healing in a Toxic Culture, Gabor Mate with Daniel Mate, 2022

If we begin to see such illness itself not as a cruel twist of fate or some nefarious mystery but rather as an expected and therefore normal consequence of abnormal, unnatural circumstances, it would have revolutionary implications for how we approach everything health related.
The current medical paradigm, owing to an ostensibly scientific bent that in some ways bears more resemblance to an ideology than to empirical knowledge, commits a double fault. It reduces complex events to their biology, and it separates mind from body, concerning itself almost exclusively with one or the other without appreciating their essential unity.

My own observations of self and others have led me to endorse fully what a review of the stress literature concluded, namely that “psychological factors such as uncertainty, conflict, lack of control, and lack of information are considered to most stressful stimuli and strongly activate the HPA axis.” A society that breeds these conditions, as capitalism inevitably does, is a super powered generator of stressors that tax human health.

Capitalism is “far more than just an economic doctrine,” Yoval Noah Harari observes in his influential bestseller Sapiens. “It now encompasses an ethic — a set of teachings about how people should behave, educate their children, and even think. Its principal tenet is that economic growth is the supreme good, because justice, freedom, and even happiness all depend on economic growth.” Capitalism’s influence today runs so deep and wide that its values, assumptions, and expectations potently infuse not only culture, politics, and law but also such subsystems as academia, education, science, news, sports, medicine, child-rearing, and popular entertainment. The hegemony of materialist culture is now total, its discontents universal.

“The political system seems to be failing as much as the economic system,” (Joseph) Stiglitz writes in his 2012 book, The Price of Inequality. In the eyes of many, he continues, “capitalism is failing to produce what was promised — inequality, pollution, unemployment, and most important of all, the degradation of values to the point where everything is acceptable and no one is accountable.”

The Swiss bank UBS reported in October 2020 that during the COVID-19 induced market turmoil the international billionaire stratum had grown their fortunes to over ten trillion dollars between April and July of that year. The worlds than richest individual Jeff Bezos had increased his wealth by over $74 billion Tesla owner Elon Musk by up to $103 billion. …the Toronto Star reported. “That’s in the midst of an economic crisis that has left millions of Canadians unemployed or working reduce hours and struggling with bills and our governments are borrowing to fund emergency financial aid for individuals and businesses to stave off even greater hardship.
In the realm of political decision making, a widely circulated U.S. study showed that the views of ordinary people make no difference to public policy: a lack of control on a mass scale. “When a majority of citizens disagree with economic elites or with organized interests, they generally lose.” “Even when fairly large majorities favor policy change, they generally do not get it.”

Scottish labor leader Jimmy Reid:

“Alienation is the precise and correctly applied word for describing the major social problem in Britain today. People feel alienated by society…Let me right at the outset define what I mean by alienation. It is the cry of men who feel themselves the victims of blind economic forces beyond their control. It’s the frustration of ordinary people excluded from the processes of decision-making. The feeling of despair and hopelessness that pervades people who feel with justification that they have no real say in shaping or determining their own destinies.”

Not only does our individual and societal sanity depend on connection so does our physical health. Because we are biopsychosocial creatures, the rising loneliness epidemic in Western culture is much more than just an psychological phenomenon it is a public health crisis.


psychoanalyst Steven Reisner:

“Narcissism and sociopathy describes corporate America. But it’s flat-out wrong to think in twenty-first century America that narcissism and sociopathy are illnesses. In today’s America, narcissism and sociopathy are strategies. And they’re very successful strategies, especially in business and politics and entertainment.”

in what the Wall Street Journal called “an unprecedented plea” editors of two hundred health journals internationally, including the Lancet, the British Medical Journal, and the New England Journal of Medicine, called the failure of political leaders to confront the climate crisis “the greatest threat to global public health.” The harms of climate change include acute and chronic physical illness such as cardiovascular disease and susceptibility to infections, along with mental health challenges. Especially at risk are people with heart or kidney conditions, diabetes, and respiratory ailments. I need hardly mention food and water insecurity, major stressors already affecting millions.

Underlying the active and callous disregard of our Earth’s health is the sociopathology of the most powerful entities, whose planetary poison-pushing removes any hint of metaphor thus this book’s subtitle phrase “toxic culture.” The oil companies pumped billions of dollars into thwarting government action. They funded think tanks and paid retired scientists and fake grassroots organizations to pour doubt and scorn on climate science. They sponsored politicians, particularly in the U.S. Congress, to block international attempts to curtail greenhouse gas emissions. They invested heavily in greenwashing their public image…in 2020 the top hundred or more American corporations channeled their political donations largely to lawmakers with a record of stalling climate legislation…Compared with financial gain the climate is, well, small change.

Historically the idea of race arose from the impulse of European capitalism to enrich itself by subjecting, enslaving, and if necessary, destroying Indigenous people on other continents, from Africa to Australia to North America. Indeed, the word “race” did not exist in any meaningful way until it was created in the late eighteenth century. Psychologically, on the individual level, the “othering” of racism entails an antidote to self-doubt: if I don’t feel good about myself, at least I can feel superior to somebody and gain a sense of power and status by claiming privilege over them.

The brilliant writer James Baldwin once said, “What white people have to do is try and find out in their own hearts why it was necessay to have a n_____ in the first place. If you, the white people, invented him, then you’ve got to find out why.”

For another take on the current worldwide health crisis see Deep Medicine

Why China Will Not Rule the World

Saturday, November 5th, 2022

The China Boom; Why China Will Not Rule the World, Ho-fung Hung 2016

The China Boom <><> <> <> <> Ho-fung Hung

Hong Kong born Hung is a sociologist who has studied capitalism and Chinese history extensively. This book sites the many studies and research about the rise of modern China, its politics, economics, its capitalist development, and its place in the global world order. Here is a short summary of his conclusions.

Amid the late twentieth-century rise of global neoliberalism, under which the United States and Europe shifted to financial expansion, debt-driven consumption, and reliance on imported manufactured goods from low-wage countries, China eschewed central economic planning and absorbed substantial foreign-capital accumulated during the industrial takeoff of its Asian neighbors, particularly those of Chinese diasporic origins, turning itself into a dynamic center of export-driven capitalism…It is apparent that China has no intention of or capacity for transforming the global neoliberal order because the China boom has been relying heavily on transnational free trade and investment flow. China also makes significant contribution to the perpetuation of U.S. global dominance through its addiction to U.S. public debt.


Mao and Deng

..SOEs (State Owned Enterprises) and state control of the marketing of agricultural products as a means to speed up rural surplus extraction and industrial capital accumulation began in certain KMT (Kuomintang) controlled areas before 1949. What the CCP (Chinese Communist Party) did after 1949 was to expand this state-owned sector to the whole economy and to collectivize agriculture, turning the state into the sole agent of capital accumulation. As a consequence, China managed to build an extensive network of heavy industries and infrastructure despite its international isolation in 1949-1979. It also successfully defended its sovereignty and geopolitical security vis-a-vis both the United States and the Soviet Union. The Mao period in China represented the culmination of a century of the state elite’s quest for state-led industrialization…the expansion of KMT-controlled state enterprises, the successful land reform, and the rise of state-directed rural cooperatives that facilitated agriculture-to-industry surplus transfers in Taiwan can be seen as a mild variation of SOEs and the People’s Commune in Mao China. This continuity attests to Immanuel Wallerstein’s provocative formulation that “actually existing socialist countries” emerging in mid-twentieth century were always part of the capitalist world system and that their socialist system has been little more than a strategy of rapid capital accumulation and industrial catch up under the strong hands of mercantilist states.

In retrospect, many Deng and post-Deng reform measures would not have been that successful had it not been for the legacies of the Mao era. The SOEs and infrastructure constructed in Mao times, though moribund and unprofitable at the advent of reform, were important foundations for the capitalist takeoff during the reform period. For example, many foreign companies investing in China did not start from scratch but began as joint ventures with preexisting SOEs. At the same time, many SOEs developed into sizeable transnational capitalist corporations with financial and policy support from the state, though ownership changed from the state by itself to other combinations — for example public listing but with the government owning a majority share. Most of China’s biggest corporations today originated in the Mao era or were built on state assets developed in that era…It is not surprising that many other former socialist countries in Russia and Eastern Europe have also witnessed a similar predominance of state corporations.

Other Mao-era legacies include the restriction of rural-urban migration by means of the household registration system and public investment in rural education and rural health care in the People;s Communes. These policies created a generation of literate and healthy rural laborers available in great numbers for private, export-oriented enterprises as well as TVEs (Township and Village Enterprises) from the 1980s on. The self reliance policy in the Mao period prevented the large-scale external borrowing in the 1970s that many other developing or socialist countries indulged in, thus sparing China from the international debt crisis in the 1980s that brought large setbacks to the developing world and the Soviet bloc.

China has not challenged U.S. global dominance despite its leader’s postures and its nationalist press’s rhetoric. On the contrary, it has been a key force in helping perpetuate U.S. global dominance. China’s SOEs have been transformed into U.S. style capitalist corporations, many of them with the aid of Wall Street financial firms, and floated in overseas stock markets such a Hong Kong and New York. China’s export-oriented growth relies on the United States and Europe, the two biggest markets for its manufactured goods, and China’s exports to both places have been paid for mostly in U.S. dollars. The massive flow of U.S. dollars into China in the form of trade surplus impels China to invest addictively in U.S. Treasury bonds as the most liquid and largest US dollar-denominated store of value.Since 2008, China has replaced Japan as the biggest foreign creditor to the United States, and such financing enables the United States to continue living and fighting beyond its means. This investment in U.S. Treasury bonds in turn facilitates the perpetuation of the global dollar standard, which has been the single most important foundation of U.S. global power. The foreign exchanges brought in by China’s export sector have been the foundation of the state banks’ profligate creation of liquidity that fuels fixed-asset investment. In short, the China boom relies on the global free market instituted and warranted by the United States. It is thus far from China’s interest to undermine the global neoliberal status quo and U.S. leadership in it.

Any readjustment of the structure of capitalist development in China will have to involve an increase in domestic consumption’s share in GDP and a corresponding reduction in export and investment’s share…such restructuring must be associated with a profound redistribution of wealth and income that will let average households share a larger slice of the pie of the expanding economy, reducing the advantages that the state has been offering to the export sector and state enterprises, both of which have been protected by the entrenched interests in the political process. Such readjustment, coupled with the cleaning up of existing bad debts in the system, will inevitably bring a slowdown in economic growth through either a disorderly hard landing or an orderly soft landing…Although such a slowdown is inevitable and normal in the adjustment and rebalancing process, it is unknown whether existing political institutions in China can withstand it.

Billionaire libertarians, Empirical free Economics and Ideologically driven Law attempt to destroy Democracy

Saturday, September 17th, 2022

Democracy in Chains; The Deep History of the Radical Right’s Stealth Plan for America, Nancy,MacLean, 2017

Started immediately after the end of WWII with the founding of the “think tank” the Mont Pelerin Society in Switzerland in 1947 and the influence of the Austrian school of economics via Ludwig von Mises and Friedrich Hayek on the economics department at the University of Chicago, a radical right movement that is best known as “neoliberalism” rose in America. Neoliberalism seeks to privatize all government run programs to reduce the state’s influence on capitalism by eliminating price controls, deregulating capital markets, and lowering trade barriers.


The most influential economists of this movement are the well known Milton Friedman and the little known James Buchanan both Chicago school of Economics trained and both of whom won Nobel prizes for their work. To best appreciate the dangers to democracy of their fact free, empirical free ideologies one need only look at the experience of Chile after the CIA assisted overthrow of the democratically elected government in 1973, the death of President Allende and the long disastrous Pinochet dictatorship. Friedman advised the coup government on the privatization of public government programs including the national retirement program. Friedman’s reputation was badly tarnished by these efforts. Buchanan’s influence was most felt in the creation of a new democracy free constitution for Chile which has yet to be replaced. Buchanan’s reputation was largely unaffected by his work in Chile.

“…for Buchanan, the end justified the means. Chile emerged with a set of rules closer to his ideal than any in existence, Built to repel future popular pressure for change. It was “a virtually unamendable charter,” in that co constitutional amendment could be added without endorsement by super majorities in two successive sessions of the National Congress, a body radically skewed by the over representation of the wealthy, the military, and the less popular political parties associated with them. Buchanan had long called for binding rules to protect economic liberty and constrain majority power, and Chile’s 1980 Constitution of Liberty guaranteed these as never before.

From its founding, some in the the US have been obsessed with protecting the rights of minorities – slave owners til the Civil War and the 19th Century robber barons thereafter. Central to all these efforts is the advocacy of states rights. The confederation of states failed because the central government was too weak. In negotiating the new Constitution, Madison fought hard with slave owning southerners. The result is the current division of powers between the executive, the legislative, and the judiciary. The senate was created with 2 senators per state serving 6 year terms. This equality of all states regardless of population was an attempt to protect the smaller southern states from the political influence of the larger. Slave owners also negotiated that the millions of slaves should have 3/5 vote each (to be exercised by the owners). Then whenever civil rights issues came before the senate, the filibuster was invented and built into the system to assure that a minority of senators could stop any legislation. Not satisfied, the minority continues effort to disenfranchise voters to protect their power.

<> <> Harry Flood Byrd Sr. <>John C Calhoun

Maclean spends some time recounting the history and influence of slavery defender John C. Calhoun, 1782-1850, who can justifiable be considered the father of the radical right in America. Calhoun forged the filibuster as a senate tool in 1841. The supreme court ruled in Brown v. Board of Education in 1954 that all schools must be racially integrated. Senator Harry Flood Byrd of Virginia who politically ran Virginia was determined that Virginia’s schools would never be integrated. To get around the Federal ruling. Byrd offered a plan that all public schools in Virginia would be sold to private owners who would continue to operate then as segregated schools and that the state would offer vouchers to parents to pay for the new private schools. When parents, business owners, and other Virginia residents realized the potential impact of this plan on Virginia’s future they rose up to defeat the plan. Byrd reign as power broker for Virginia ended with this debacle. Buchanan arrived to head the economics department of the U of V in 1956, while this battle was ongoing. Buchanan favored the failed private school plan.

Enter billionaire Charles Koch:

The sense of intellectual and even ethical superiority to others may help explain why Charles Koch bypassed Milton Friedman to make common cause with the more uncompromising James Buchanan. Koch referred to Friedman and the rest of the post-Hayek Chicago school of economics he led, as well as to Alan Greenspan, as “sellouts to the system”. Why? Because they sought to “make government work more efficiently when the true libertarian should be tearing it out at the root.” They actually tried to help government deliver better results, which could only prolong the disease. Koch believed that only in its “radical, pure form,” without compromise, would the ideas “appeal to the brightest, most enthusiastic, most capable people.”

The Koch focus introduced heavily deceptive practices such as the crab walk to confuse, dividing constituencies to target groups that might be more open to deceptive tactics like pretending changes are needed to preserve a program when the goal is actually to eliminate the program altogether – social security, medicare, etc. Lying is now acceptable behavior if it advances your goals.

We just need to look at Citizen’s United – corporate spending on elections is free speech, Voting Rights Act of 1965 – Section 4 is unconstitutional – Section 5 requires re authorization, repeal of Roe V Wade – States rules apply to see that the focus on appointing ideological judges to federal courts is paying big dividends to the radical right. One former judge says recent pro corporate decisions amounts to a “privatization of the Justice System“.

Sun Yat-sen, Lenin and China’s long term plans for sole global hegemony

Sunday, July 31st, 2022

The Long Game; China’s Grand Strategy to Displace American Order, Rush Doshi, 2021

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László Ladányi was a Hungarian Jesuit who lived in China from 1936 until his expulsion by the Communists in 1949. He moved to Hong Kong where he published China News Analysis from 1953 til 1982 when he retired to write books. China News Analysis was the only English language coverage of events from a closed China and based on published speeches and other high level official sources. He covered Mao’s paranoid machinations from the Great Leap Forward where Ladányi predicted 50 million Chinese deaths from starvation to the Cultural Revolution.

Rush Doshi adopted much of the research methodology of Ladányi in preparing this book which is a study of Chinese foreign policy (political, economic and military) from Deng Xiaoping to the present. Doshi notes that China inherited its nationalism from Sun Yat-sen and the Chinese century of humiliation at the hands of the west and the desire to return China to its historic role as the Central Kingdom surrounded by tribute bearing smaller states, and its political structure, the Chinese Communist CCP from Lenin.

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In 1973 Chinese Premier Zhou Enlai visited Washington in preparation for Nixon’s visit to China. Zhou asked a young American member of the delegation “Do you think China will ever become an aggressive or expansionist power?” The American answered “No.” and Zhou said “Don’t count on that. It is possible. But if China were to embark on such a path, you must oppose it…And you must tell those Chinese that Zhou Enlai told you to do it.”

The book highlights significant events that caused Chinese leaders to reevaluate their policy focus. The first was a trifecta of events from 1989 to 1991, The Tiananmen Square Massacre, overseen by Deng and widely criticized by the United States and the West; The Gulf War to expel Iraq from Kuwait, which shocked China with the technical superiority of the Americans and the speed with which the war concluded; and the collapse of the Soviet Union. Following the collapse and the end of the cold war, China focused much more on the United States and after Tiananmen started to be more sensitive to human rights concerns of the liberal West even though these concerns dated at least as early as the Chinese annexation of Tibet. China also acquired a new respect for the military technical superiority of the US as demonstrated in the Gulf War.

When Deng Xiaoping became Premier, he followed the example of Singapore as a model of a democracy free capitalist economic system open to western investment and engagement under an authoritarian rule pioneered by Singapore prime minister Lee Kuan Yew.
The era from China opening to the United States and the West for investment and trade was given a central policy directive from Deng “Tao Guang Yang Hui” or “hide capabilities and bide time”, applying to political, economic, and military policy as directed by the CCP. During the US Kosovo war a Chinese military leader reiterated:

“what the PLA should do” in response to “the rise of military intervention” by the United States was to remember that “our approach is Tao Guang Yang Hui” He elaborated, “As a military, this means…vigorously developing ‘shashoujian’ equipment, [and following the principle of],’whatever the enemy is most afraid of, we develop that’.”

Second, at the political level, the trifecta and China’s strategic adjustment led Beijing to reverse its position on joining regional institutions. Memoirs of Chinese ambassadors are explicit on China’s need to join institutions to blunt American power in three ways: (1)stalling the institutions so they couldn’t become functional; (2) using them to constrain US freedom of maneuver; and (3) using them to reassure neighbors so they wouldn’t join a US-led balancing coalition…Even s, these efforts were taken consistent with Tau Guang Yang Hui’s principle of avoiding claims of leadership, which meant China refrained from launching new institutions; moreover, Deng himself had said that China’s diplomatic voice would grow loader once Tao Guang Yang Hui was retired.

Finally, the trifecta also shaped Chinese international economic policy…China raised new concerns in Beijing about its vulnerability to US leverage, and blunting these became the focus of Chinese efforts. China not only focused breaking economic sanctions, it also sought to secure MFN (most-favored-nation) status on a permanent basis, or permanent normal trading relations (PNTR). The goal was not to limit China’s dependence on the United States but to reduce the discretionary exercise of US economic power…It also pushed for WTO membership, hoping it would further tie Washington’s hands.

China limited its military expansion during this time to the development of mines, missiles, and conventional silent submarines. Their largest fleet in the world of silent submarines could surface right next to a US aircraft carrier without detection. In 1973, 75 year old Zhou Enlie was suffering from bladder cancer which Mao had ordered Zhou’s doctors to not reveal or treat, when he lamented that China had not yet acquired an aircraft carrier.

In 1992, after the Soviet Union collapse, a PLA delegation visited a new Soviet carrier, the Varyag, then under final construction in Ukraine on the Black Sea. China chose not to acquire it. Then five years later China’s top leaders changed their minds and launched a plan to acquire the Varyag that is worthy of a movie.

Xu Zengping joined the PLA in 1971 and left in 1980 to found a trading company that he claimed made him wealthy. Xu’s wife was a basketball player on China’s national team that played alongside Yao Ming’s mother. PLAN Vice Admiral He Pengfei recruited Xu to serve as the military’s intermediary in the Varyag purchase.

Consistent with Tao Guang Yang Hui, Xu knew he needed to deceive the world about his wealth, intentions, and government connections. Xu created the persona of an outlandish tycoon who wanted to use the carrier as a floating casino in Macao. Xu set up a shell company and spent $1 million to acquire licenses to operate the casino in Macao. Xu then bought one of the most expensive villas in Hong Kong for $30 million.

In October 1997, Xu went to Kiev to negotiate with the Ukrainian owners of the Varyag. The private owners acquired the Varyag during the massive neoliberal privatization of Soviet public assets after the collapse in 1991. After months of parties and millions in bribes, the owners finally agreed to sell the Varyag to Xu for $20 million. But Xu also needed the blueprints and the engines which were beyond Chinese capabilities to build at the time. The engines had already been installed but Xu got fake documents showing that the engines had been removed. Xu received 45 tons of blueprints and documents and the engines and then set out on the arduous process of moving the ship to Dalian China.

In all the government of China spend $120 million and in March 2002, the Varyag arrived in Dalian where it was rust protected and left in December 2005. Even the original Soviet name and markings were left on the carrier.

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Then, in response to the Global Financial Crisis of 2008, which Chinese leaders took as a clear indication of the weakening of the US and the West, Chinese foreign policy entered a new more aggressive direction. The top level decision to build a carrier fleet was made in 2009. The Varyag was completed, renamed Liaoning , and commissioned on 25 September 2012.

After the 2008 Global Financial Crisis, China began to emphasize building regional order. It no longer felt the need to constrain itself fowir fear of rattling Washington or the wider region. The capabilities that carriers were know for were now fully in line with China’s own strategic objectives, which leaned increasingly toward enforcing maritime sovereignty and cultivating the ability to intervene regionally. And so, China entered the ranks of carrier-fielding great powers.

…the 2008 Global Financial Crisis caused a much bigger shift. China’s assessment of the relative power gap with the United States fell significantly and President Hu then officially revised Tao Guang Yang Hu by stressing “Actively Accomplishing Something” in his 2009 address.

In 2012 Wang Jisi, dean of Peking University’s School of International Relations wrote:

“Unlike East Asia, there is no U.S. led regional military alliance among the countries to the west, and there is no possibility that one will arise”…Instead, China had abondant resources and a continental vacuum in that direction, as well as the surplus capacity and dollar reserves to fill it with pipelines, railways, highways, and even overland Internet infrastructure that would reduce China’s dependence on the sea and bind the region tighter to China.

In 2013 Xi would launch the Belt and Road Initiative (BRI)

Mao’s Cultural Revolution began in 1966 and ended with Mao’s death in 1976. It impacted virtually all Chinese leaders from Deng to the present. Two stories of auto-didactic education are featured in this book:

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On March 16, 2013, Chinese diplomat Wang Yi was formally promoted to minister of foreign affairs. The urbane but fierce defender of Chinese interests was sometimes known as a “silver fox” for both his “looks and his diplomatic wiles.” but he was also brilliant and diligent. After graduating high school during the Cultureal Revolution, Wang Li was sent to labor on a farm in northeast China for eight long years. A former classmate of his recalls that Want Li “did not waste his time” but engrossed himself in literature and history entirely on his own direction. When the Cultural Revolution ended , Wang Li’s diligence paid off, and he earned a spot at Bejing International Studies University, where he dedicated himself to Japanese language studies.

Wang Li married the daughter of Quian Jaidong an underling of Zhou Enlai and member of China’s first overseas delegations to the Geneva conference in the 1950s. Quian Jaidong became China’s UN ambassador in 1980.

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On January 16,2016, The Asian Infrastructure Investment Bank (AIIB) was declared “open for business” and a grey haired enthusiast for English literature, Jin Liqun was elected its first president…Jin grew up in an educated but poor family with what was then an unusual passion for English literature. When he was sent to labor in the countryside for a decade during the Cultural Revolution, he spend three quarters of his meager annual salary and what little time he had after a day’s work in the fields continuing that pursuit. “I was outfitted with a worn out Remington typewriter and a copy of Webster”, he said later, as well as a radio he kept tuned to the BBC that gave his English a trace of the “standard BBC accent of the 1970s.” When the Cultural Revolution abated, the twenty nine year old autodidact won a seat at the Beijing Institute of Foreign Languages, excelled in graduate work, and was offered a faculty position…It was not to be. That same year, China joined the World Bank, and English speakers were needed to staff its new office in Washington…He spent a dozen years at the World Bank and then the Asian Development Bank, rising to become its first Chinese vice president, and developed a resume and Rolodex in multilateral finance no other Chinese official could match. When China decided to build its own development bank, Jin was the logical choice.

Another remarkable story about a misfit coming out the Cultural Revolution was previously blogged.

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On October 18. 2017, General Secetary Xi Jinping, in a 3 1/2 hour 30,000 word speech announced the next great change in Chinese foreign policy.

The speech announced a “new era”, put forward timetables for China’s rejuvenation in 2049, promised greater Chinese activism in global governance, called for a “world-class” military, committed China to becoming a “global leader in innovation,” and declared that China would “become a leading country in comprehensive national strength and international influence.”
Like other changes in China’s grand strategy, this shift toward greater global ambition was driven by what Beijing saw as the West’s irreversible decay and decline. In 2016…the United Kingdom voted to leave the European Union, and Donald Trump was elected president of the United States. From China’s perspective–which is highly sensitive to changes in perception of American power–these to events were shocking. The world’s most powerful democracies were withdrawing from the international order they had helped erect, creating what China’s leadership and foreign policy elite has called a “period of historic opportunity” to expand the country’s strategic focus from Asia to the wider globe and its governance systems.

The New Deal, FDR, Truman, LBJ, can Biden reclaim the legacy?

Tuesday, July 19th, 2022

Going Big, FDR’s Legacy, Biden’s New Deal, and the Struggle to Save Democracy, Robert Kuttner, 2022

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Economics Nobel Laureate Joseph E Stiglitz wrote the forward

The (Great) Depression should have taught us that markets are not stable and efficient–high levels of unemployment could persist for a very long time. We should not have to have had the Great Recession (2008) to relearn the lesson…We should not have had to watch the anemic recovery from the Great Recession, the result of too little fiscal policy and too much reliance on monetary policy, to have relearned that lesson.

The simplistic neoliberal ideology, which triumphed in both parties…held that downsizing government, including deregulation, privatization, and outsourcing government activities to the private sector, would lead to greater prosperity, (and)…all would benefit. Some half century later, we should declare this neoliberal experiment has been a failure, with lower growth and the benefits of that limited growth going overwhelmingly to those at the top.

Jimmy Carter, Bill Clinton, and Barack Obama each embraced neoliberal ideology to devastating effect. Biden is the first president since 1984, including Republicans that has not appointed Robert Rubin (of Goldman Sachs and Citigroup) or a protege of Rubin, like Larry Summers, to the inner circle of power.

Bill Clinton and Barack Obama took the Democratic Party deeper into the neoliberal wilderness, obsessing about budget balance, making alliances with Wall Street, and driving working-class voters into the arms of the Tea Parties and then Trump.

Stunningly, Biden jettisoned the entire set of neoliberal orthodoxies that had hobbled Democratic presidents since Jimmy Carter. Gone was the idea that deficits necessarily caused high interest rates and inflation. Gone was any illusion that we needed tax breaks for the rich in order to promote private investment. Public investment was needed at a large scale precisely because private investment had failed to serve the real economy and had enriched mainly manipulators, traders, and monopolists…It fell to Biden and his economic team to revise the globalist ideology in favor of coherent policies to rebuild American leadership in industry, technology, and supply chains, sacrificing free trade norms where necessary.

There is immense latent public support for the use of activist government to better the situation of ordinary people. Foreign policy adventures, such as Vietnam, Iraq, and Afghanistan, can serve as distractions from domestics issues that play to Democratic strength, and can wreck the unity of the coalition needed to pursue domestic progressivism. So, obviously, can racism and continuing legacy of slavery and segregation. But the big challenge is political economy.

Biden needs to go beyond what even FDR achieved in containing a corrupted capitalist system, because that system today is the wellspring of so much policy failure, and so much political and economic inequality, as well as the corruption of too many Democratic leaders, all of which kindles support for Trumpism.

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In the standard Roosevelt narrative, FDR restores hope. And he then goes about restoring the economy, using powers of government to put people back to work, and devising new public entities to accomplish what the private sector had bungled. He increases the prestige of the public sector and public solutions. He uses public deficits to restore purchasing power. He virtually invents a national system of social insurance with the Social Security Act. He puts government on the side of worker’s right to organize with the Wagner Act, and then regulates wages and hours directly with the 1938 Fair Labor Standards Act.

Ordinarily, the Treasury Department is the home of the most conservative officials of an administration. Democratic presidents, seeking to reassure financial markets typically place Wall Street veterans at the Treasury. This was the practice of Johnson, Carter, Clinton, and Obama. But the Roosevelt Treasury was the home of radicals. The most radical was Harry Dexter White, the top U.S. government architect of the postwar global financial system. White was a close collaborator of the the chairman of Bretton Woods conference, John Maynard Keynes.

The Democratic defensive unease on national security policy combined with the unfinished business of racial justice to destroy Johnson’s presidency. The Vietnam debacle also shattered the New Deal coalition and the hopes of progressive Democrats for half a century.

As the Obama administration and the Fed did the bidding of the biggest banks, (Elizabeth) Warren and the oversight panel would become one of two sources of loyal opposition, calling for a far more radical, Rooseveltian approach. The other was the FDIC, which was the last regulatory hawk in laissez-faire Washington, because its trust fund had to be tapped to pay depositors when an insured bank failed. The chair of the FDIC was a tough and savvy regulator named Sheila Bair…The financial collapse should have set up Obama to orchestrate a resurrection the the New Deal–the containment of the toxic tendencies of private finance, the expansion of government to do what markets could not, and the use of the crisis as an object lesson…Most of what he did propped up the banking system rather than cleaning it out or seriously re-regulating finance. Obama’s obsession with deficit reduction made the recovery far too slow.

The serial forms of deregulation that finally crashed the economy in September 2008 had been building and accumulating for several decades. Three earlier crashes, harbinger of the general collapse of 2008, had been contained because the degree of leverage, opacity, conflicts of interest, deregulation, non-supervision, and above all interpenetration had not quit reached the level of the early 2000s. But each was a clear warning that went unheeded.

The 1990s S&L collapse saw the conviction of more than a thousand executives. The Crash of hedge fund Long Term Capital Management in 1998 led to no reforms. The dot-com and energy crash of 2000 also led to no reform.

Kuttner spends some time on the explosion of private equity and the toxic effect on nursing homes, newspapers creating “news desserts” throughout the country, and retail.

Kuttner also talks about the the collateralized loan obligation CLO that have replaced the discredited CDO behind the 2008 crash The US market for CLOs excedes $850 billion in 2022.

If the New Deal proposition is that government can be effective in solving problems and helping ordinary people, climate change makes that harder to pull off, because worsened climate events are baked in for years to come. Even if Biden does everything right, the everyday experience of extreme climate events will intensify.

Kuttner concludes with a discussion of the importance of the upcoming 2022 midterm elections. Only three Presidents over the last 100 years have seen their party increase its control of both houses of congress in the midterm elections; Roosevelt in 1934 because of the popularity of his programs; Clinton in 1998 because the Republicans overreached in trying to impeach him; and George W. Bush in 2002 because of the shock of the 9/11 attacks. Can Bidden become the fourth in 2022?

Tech can regenerate Rural Heartland America’s Economy

Friday, April 22nd, 2022

Dignity in a Digital Age; Making Tech Work for all of Us, Ro Khanna, 2022

(Frederick) Douglass’s vision informs this book, which, at its heart is an attempt to imagine how technology can advance democratic patriotism, which is predicated on respecting the dignity of every American. The book shares Douglass’s faith that we can be a composite nation– that we can embrace a holistic, resplendent American identity that is more than just a formal contract among citizens. It offers a blueprint for structuring the technology revolution to empower left-behind Americans, regardless of their background, so they have a stronger voice in our economic and political life, building thriving communities, and are on more equal footing to participate in the dynamic process of developing our national culture.

We have looked thus far at how to respect dignity in a digital age domestically by focusing on distributing jobs, empowering workers, cultivating our freedoms, protecting online rights, creating deliberative forums, and including a multiplicity of voices in science policy.

This era calls for an Essential Workers Bill of Rights…The framework would promise livable wages, benefits, and bargaining rights for workers. It envisions giving employees a voice in shaping automation and pushing back against intrusive surveillance and abusive supervisors–a particular challenge in a remote and distributed workplace, which makes organizing difficult. Until all workers reap the benefits of their hard word and are treated with dignity, the promise of the digital age remains unfulfilled.

but nearly 80 percent of venture capital funding goes to only three states, California, New York, and Massachusetts. While California had nearly 4,000 VC deals and New York 1,400 in 2019, the state of West Virginia had only one.

A policy of creating new tech hubs should begin with the most promising locations and then gradually expand…Each hub would specialize in a few technologies based on their regional assets and expertise. The cutting edge fields would include quantum computing, data science, clean energy, cybersecurity, robotics, electronics manufacturing, and synthetic biology.

According to a Harlem Capital report, as of 2019, three are only two hundred startups led by Black or Brown founders that received more than $1 million in funding, and the total investment in these Black or Brown led start-ups is just $6 billions over nearly a decade. (Total VC funds deployed are $130 billion annually) The capital wealth gap is not just based on legacy assets but on a current, ongoing racial wealth generation gap.

The moral case for prioritizing workers is that they’ve been denied the gains they’ve helped create, and dignity that they’ve deserved, for multiple decades now. But the dollars and cents economic rationale is straightforward as well. While paying workers more may not maximize short-term shareholder value, in the way that stock buybacks or dividend payments do, it will lead to more consumer spending.

What they (Silicon Valley techies) may see as mundane and easily automated tasks actually are skilled ones, requiring dexterity, balance, judgment, practice, patience, precision, mapping, and a specific attention to detail.

Joel Rogers, a law professor at University of Wisconsin famously laid out the “high road” strategy, arguing that firms that foster worker participation and develop worker talent will generate more wealth compared to firms that use a top-down, command model to get the most out of their workers at the cheapest wage. Rogers argued that “shared prosperity”, “environmental sustainability”, and workplace democracy were “necessary complements, not tragic tradeoffs”, in maximizing revenue growth.

He (Gary Backer) said that the fuel for modern economic growth are investments in on-the-job training, health, information, and research and development. In fact, Becker argued that human capital, which is the “knowledge, information, ideas, skills, and health of individuals”, is “over 70 percent of the total capital in the United States.”

The ultimate design of Apple and Google’s Covid app is consistent with many of my Internet Bill of Rights principles, and it is an example of technology designed to meet these standards. The app requires a use to consent before any data is collected, and it offers an easy-to-understand explanation of how the data will be used. There is no centralized database, negating the major risk of data theft in a breach or the need for deletion. If someone is Covid positive, then they receive a digital code from their local health department to enter into their phone, which sends an anonymous exposure alert to every user in contact with them while they are infectious. Apple and Google both prioritized the need for interoperability so the app can work across platforms on any smartphone in the world. They made a concerted effort to minimize the data collected and committed not to have access to the data.

If tech companies are serious about promoting constructive dialogue, they should work with behavioral scientists, political theorists, psychologists, and mental health professionals to experiment with new designs. Software engineers should not only optimize for attention with like and share buttons, but to also prioritize for engagement with a wide range of perspectives. They could construct platforms for instance, that incentive users to participate in diverse online communities. Pushing opposing material to users can motivate them to become even stronger proponents of their ideologies…The key is to foster open-communications, and not simply self-affirmation.

The best we may be able to hope for in an imperfect democracy is a plurality of online forums for political conversations that (a) demonstrate a threshold respect for our agency as participants by not engaging in data extraction, (b) are transparent in terms of both their speech standards and the priorities of their algorithms, and (c) comply with legitimate restrictions on unlawful speech consistent with our First Amendment jurisprudence.

An Indiana University study that analyzed millions of tweets during the 2016 presidential election concluded that bots are a large contribute to the spread of misinformation and conspiracies. They share fabricated stories, make salacious content trend, and overwhelm investigatory teams with volume that makes it hard to find the offending postes. Most shockingly, the presence of fake accounts helps explains why “over 86% of shares and 75% of comments on German political Facebook from October 2018 to May 2019 were Alterative fur Deutschland content” even though the far-right party never “exceeded 15% of public support in polls during this time period”.

The Federal Reserve – An Unaccountable Central Bank for Wealthy Risktakers Only – Waiting for the Global Meltdown

Wednesday, March 30th, 2022

The Lords of Easy Money; How the Federal Reserve Broke the American Economy Christopher Leonard, 2022


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Life at the zero bound pushes banks way down the yield curve. What does a bank have to lose? A risky bet beats nothing. And this is not just a side effect of keeping rates at zero, “That’s the whole point.” Hoenig (Tom Hoenig was the long time president of the Federal Reserve Bank of Kansas City) explained many years later. “The point was to get people willing to take greater risk, to get the economy started. But it also allocated resources. It allocates where that money goes.”…When cash is pushed out onto the yield curve, it leads to the second big problem that Hoenig warned about in 2010: something called an asset bubble. The housing market that collapsed in 2008 was an asset bubble. The dot-com stock market crash of 2000 was the bursting of an asset bubble.

One of his (Ben Bernanke) central ideas was that the Fed hadn’t acted boldly enough back in the 1930’s. The central bank had actually worsened the Depression by tightening the money supply, The solution, Bernanke believed, was to to be as aggressive as possible after a crash. He had spent many years thinking up new ways that the Fed could boost economic growth even after pushing interest rates to zero. He didn’t see the zero bound as an inviolable limit, but just another data point.

To execute quantitative easing, a trader at the New York Fed would call up one of the primary dealers, like JP Morgan Chase, and offer the buy $8 billion worth of Treasury bonds from the bank. JP Morgan would sell the Treasury bonds to the Fed trader. Then the Fed trader would hit a few keys and tell the Morgan banker to look inside their reserve account. Voila, the Fed had instantly created $8 billion out of thin air, in the reserve account, to complete the purchase. Morgan could, in turn, use this money to buy assets in the wider marketplace.

Starting in November (2010), the Fed traders did this transaction over and over again until they had created several hundred billion dollars inside the Wall Street reserve accounts…The primary dealers were not just selling the Treasury bills and mortgage bonds that they happened to have on hand…Instead the Fed set up a conveyor belt of sorts, which used the primary dealers as middlemen. The conveyor belt began outside the Fed, with hedge funds that were not primary dealers. These hedge funds could borrow money from a big bank, buy a Treasury bill, and then have a primary dealer sell that Treasury bill to the Fed for a profit. Once the conveyor belt was up and running, it began magically transforming bonds into cash. The cash didn’t stay safe and sound inside the reserve accounts of primary dealers. It started flowing out into the banking system, looking for a place to live.

He (Hoenig at the FOMC meeting in Sept. 2010) pointed out that the deep malaise in American economic life wasn’t caused by a a lack of lending from banks. The banks already had plenty of money to lend. The real problem lay outside the banking system, in the real economy where the deep problems were festering, problems that the Fed had no power to fix. Keeping interest rates at zero, and then pumping $600 billion of new money into the banking system–money that had nowhere to go but out into risky loans or financial speculation–wasn’t going to help solve the fundamental dysfunction of the American Economy.

During the 1980’s, Hoenig and his colleagues in Kansas City were left to sort out the long-term problems the Fed’s short-term thinking created during the 1970s. The biggest mess they cleaned up was the failure of Penn Square, a bank in Oklahoma that had extended a chain of risky energy loans during the 1970s. When Penn Square failed, it almost took down the entire U.S. banking system with it. It also illuminated a second important pattern that would harden in the coming years. The Fed didn’t just stoke asset bubbles. It found itself on the hook to bail out the very lenders who profited most off a bubble as it rose. Some banks, the Fed was about to discover, had grown too large and too interconnected to fail.

Around 2014 or 2015, (Vicki) Bryan (corporate analyst) noticed that she could bring new revelations (about corporate misbehavior) to the market, but it didn’t seem to matter anymore. “It’s been a result of what the Fed stated to do in 2010, and continued to do later,” she said. “You’ve got an artificial bottom, and the higher part of that bottom is set by the Fed. So you can’t lose in this market. And if you can’t lose, it’s not really a market,” Bryan said.

In 2008, the market imploded thanks to an exotic debt product called the collateralized debt obligation, or CDO. The CDO was a package of home loans (or derivatives contracts based on home loans) stacked together and sold to investors. The CDO made the housing crash possible by creating a seamless assembly line that allowed mortgage brokers to create risky subprime home loans that were quickly packaged and sold to investors, which in turn allowed the mortgage brokers to extend yet more new loans. At that time, the lowly CLO (collateralized loan obligation) was the undernoticed stepchild of the debt markets. There were only about $300 billion worth of CLOs during the Global Financial Crisis of 2008, while in 2006 alone about $1.1 trillion of new CDOs were issued. But the important thing about CLOs was that they didn’t suffer nearly the losses that CDOs suffered.

The pension funds had been settling on a low return from safe corporate bonds, because those bonds were standardized…The bonds were regulated by the SEC and traded on exchanges…The CLO solved this problem. It would standardize leverage loans in ways that make the pension funds feel safe…This meant that a pension could order CLO chunks,…picking between the AAA, mezzanine, and equity slices of the package.

Financial engineering was key to Rexnord’s strategy. Rexnord, like any corporation, responded to the environment in which it operated. And that environment, starting in 2012, was dominated by the influence of ZIRP (zero-interest-rate-policy)…The management team’s biggest maneuvers had to do with leveraged loans and rising stock prices rather than conveyor belts or ball bearings…He (Rexnord employee John Feltner) believed,…that a job at Rexnord might provide him a narrow pathway to a stable middle-class life. All the financial engineering encourage by ZIRP was supposed to make that belief come true. The company owed $1.9 billion and it paid $88 million on interest costs in 2015, which was more than the $84 million it earned in profits…in 2015 Rexnord’s board of directors authorized Adams and his team to buy back $200 million in stock. In 2016, the company bought back $40 million of its own stock. In 2020, the company …bought back another $81 million…In 2016, he (Adams) was paid $1.5 million but the following year he was paid $12 million, mostly in stock awards, and in 2018 he would earn $6 million.

But Rexnord’s stock buybacks were seen by the Fed, as a means to an end. It was OK if CEOs used debt to help engineer multimillion-dollar paydays, as long as the prosperity was eventually dispersed through the “wealth effect” (Cosmic Lie) to neighborhoods like the Feltners’…Rexnord had decided to close the ball-bearing factory and move its production to Monterrey, Mexico. (Feltner lost his job.)

By the end of 2018, the U.S. market for CLOs was about $600 billion double the level a decade earlier…The value of the Dow Jones Industrial Average rose by 77 percent between 2010 and 2016. One hedge-fund trader…described the frothy stock market of 2016 as being like the crowded deck of the the Titanic as it sank…It was getting crowded because people had nowhere better to go.

This money flowed out into the system, and it pushed all the major financial institutions to search for yield. Many wall street traders saw clearly what was happening, and they developed a nickname for it: “the everything bubble.”

By 2016, they (negative interest bonds) accounted for 29 percent of all global debt. About $7 trillion worth of bonds carried negative rates…Bond investors were so desperate to find a safe haven for their cash that they willing to pay a fee to governments like those of German and Denmark to safeguard it.

Hoenig said “You had seven years of basically zero-interest rates. Now what happens in an economic system over seven years. The entire market system develops a new equilibrium–around a zero rate. An entire economic system. Around a zero rate. Not only in the U.S. but globally. It’s massive. Now think of the adjustment process to a new equilibrium at a higher rate. Do you think it’s costless? Do you think no one will suffer? Do you think there won’t be winners and losers?”

Excess bank reserves were about 135,000 percent higher than they had been in 2008. The Fed’s balance sheet was about $4.5 trillion, about five times its level in 2007. Interest rates had been pinned at zero for nearly seven years.

In response to the 2020 Covid epidemic, congress passed the CARES act worth $2 trillion in relief funds:

People who owned businesses were given tax breaks worth $135 billion, meaning that about 43,000 people who earned more than $1 million a year each got a benefit worth $1.6 million. By and large, these billions of dollars were quietly absorbed into corporate treasuries and personal bank accounts around the county. The wildly unequal distribution of money was not made public until months later, after The Washington Post won an open-records lawsuit that made the information public.

The market hit its low point in mid-March, when the Treasury market collapsed. But between that day and middle of June–in just three months–the market’s value surged by 35 percent. By then, stocks were trading at the same value they had when restaurants, movie theaters, hotels, and cruise ships were operating at full capacity. The average monthly returns on leveraged loans were restored as early as April. By August, so many new investment-grade bonds were issued that the previous record, set in 2017, was broken.

The bailout of 2020–the largest expenditure of American public resources since WWII–solidified and entrenched an economic regime that had been quietly and steadily constructed, largely by the Federal Reserve, during the previous decade. The resources from this bailout went largely to the entities that were strengthened by the policies of ZIRP and QE. It went to large corporations that used borrowed money to buy out their competitors. It went to the very richest of Americans who owned the vast majority of assets; it went to the riskiest of financial speculators on Wall Street, who used borrowed money to build fragile positions in global markets; and it went to the very largest U.S. banks, whose bigness and inability to fail was now an article of faith.

And all of this happened at a moment when Americans were more distracted, more beleaguered, and more financially distressed than at any moment in modern history. It was difficult to even comprehend the impact of what had happened. But the impact would make itself visible in the months, years, and likely decades to come.

By the end of 2020, companies issued more than $1.9 trillion in new corporate debt, beating the previous record that was set in 2017…A zombie company was a firm that carried so much debt that its profits weren’t enough to cover its loan costs. The only thing that kept zombie companies out of bankruptcy was the ability to roll their debt perpetually. During 2020, nearly two hundred major publicly traded companies entered the ranks of the zombie army…These weren’t just marginal or risky firms, but included well-known firms like Boeing, ExxonMobil, Macy’s, and Delta Airlines.

In many important ways, the financial crash of 2008 had never ended. It was a long crash that crippled the economy for years. The problems that caused it went almost entirely unsolved. And this financial crash was compounded by a long crash in the strength of America’s democratic institutions. When America relied on the Federal Reserve to address its economic problems, it relied on a deeply flawed tool. All the Fed’s money only widened the distance between America’s winners and losers and laid the foundation for more instability. This fragile financial system was wrecked by the pandemic and in response the Fed created yet more new money, amplifying earlier distortions. The long crash of 2008 had evolved into the long crash of 2020. The bills had yet to be paid.

Christopher Leonard is also the author of Kochland

Davos – Billionaire Bubble and how to whitewash deadly greed

Wednesday, March 23rd, 2022

Davos Man; How the Billionaires Devoured the World, Peter S. Goodman, 2022


The Robber Barons of the late nineteenth century — industrialists like Andrew Carnegie, and financiers like J.P, Morgan — were by and large satisfied with their wealth as an end in itself. Davos Man’s appetite for affirmation operates on a different level. He is not content with owning homes the way that most people own socks. He pretends that his interests are the same as everyone else’s. He seeks gratitude for his exploits, validation as the product of a just system in which he is a guardian of the public interest, even as he devours all the sources of sustenance. He argues that his own prosperity is a precondition for broader progress, the key to vibrancy and innovation.

We will track five key specimens — Bezos, Dimon, Benioff, Schwarzman, and Fink…

They had benefited from public goods financed by taxpayers — the schools that educated their employees, the internet, developed by publicly funded research; the roads, the bridges, and the rest of modern infrastructure, which enabled commerce — and then deployed their lobbyists, accountants, and lawyers to master legal forms of tax evasion that starved the system.
They had transferred wealth from the public to themselves by rewriting the tax code in their favor, leaving government too weak to protect the population from the pandemic. And now they were deploying their resulting resources in the service of charity while demanding adulation.

In 2014, its first year on the market, Sovaldi racked up sales of $10.3 billion. But its price was so high that state governments — which covered much of the bill for Medicaid patients — were prescribing it only for the most serious cases. Roughly seven hundred thousand Medicaid patients suffered from hepatitis C, but less than 3 percent were able to obtain the drug.
The next year, Gilead sold nearly $14 billion worth of another hepatitis C drug, Harvoni, which had a price tag of $94,500, for a twelve week course.
These two blockbusters largely explained how Gilead was able to direct more than $26 billion into buying back its own shares between 2014 and 2016, just as needy patients were being priced out of affording its medicines. Gilead was exploiting tax loopholes to stash its lucre overseas, neatly avoiding taxes on nearly $10 billion in profits.
In January 2017, Gilead’s then CEO, John Milligan flew to Switzerland for the World Economic Forum, where he participated in a panel discussion entitled “Rebuilding Trust in the Healthcare Industry”…This setup adhered to the central Davos masquerade, in which each participant gets to pose as a concerned citizen. Rather than critically questioning people who have profited from a system that treated patients like suckers, Eisen invited her panel of pharmaceutical executives to offer counsel as those dedicated to improving the State of the World.
Mulligan, whose compensation that year exceeded $15 million, was asked about controversy over Gilead’s pricing of hepatitis drugs. He acknowledged trouble, but cast it as a messaging problem — not the result of an exploitative business model. “We didn’t deal with it well, he said. “We didn’t talk about it enough.”
This was a classic Davos Man maneuver, minimizing his role in human suffering by confessing to communications mishaps, or a misunderstanding…accepting blame for the lessor crime of poor word choices, while diverting attention from the far more serious issues of patients dying for a lack of affordable medicines.

Between 2006 and 2015, eighteen large American pharmaceutical companies distributed 99 percent of their profits to shareholders via dividends and purchases of their own shares. The $516 billion they collectively lavished on shareholders exceeded the $465 billion they dedicated to research and development.

Same as ever, Davos man was dictating the course of policy in the service of Davos Man. The result was a humanitarian tragedy in poor countries — a wave of unremitting death — along with the potential prolonging of the pandemic everywhere. So long as some countries lacked vaccines, the coronavirus was supplied a chance to yield variants that would require additional immunization. The protection of Davos Man’s profits took precedence over the saving of lives.

Reagan had begun the push to dismantle government and distribute the savings via tax cuts, turning trickle-down into the central principle of economic policy. Successive administrations representing both parties had denigrated social welfare spending and catered to the shareholder class while tolerating inequality as a by-product of prosperity. Clinton had celebrated the restorative powers of cutting budget deficits, while affirming the logic that innovation required unlimited rewards.He and Obama had centered their economic designs on finance and technology, allowing Davos Man to add zeros to his net worth. They had relegated antitrust law to the history books. George W. Bush had sacrificed government on the altar of the tax-cutting gods, further gutting social programs.
Davos man had not been some accidental beneficiary of this ideological shift. He was the driver, financing campaigns, deploying lobbyists and lawyers who promoted the Cosmic Lie (trickle-down), while demonstrating his supposed benevolence via philanthropy and pledges for stakeholder capitalism.
Trump had simply gone further than his predecessors, distributing an even larger bonanza of tax cuts that favored the billionaire class, while placing the state itself in the control of corporate interests…In words and deeds, Biden signaled that he was no threat to Davos Man, and his dominant hold on American governance.

And when the resulting anger built to cataclysmic proportions, threatening the liberal democratic order and globalization — the underpinnings of their affluence — they had conjured up novel ways to pretend to make amends, to placate the aggrieved without sacrificing anything of great value. They had erected philanthropic foundations to broadcast their benevolence. They had concocted stakeholder capitalism to display their empathy. They had adopted the language of change without yielding power to labor movements, regulators, activist shareholders, or other groups that actually had a stake in what transpired.

Davos Man would have us believe in the false binary choice at the heart of his grift — that we either accept globalization as we have known it for decades, or we throw in our lot with the Luddites operating in the thrall of backward ideas. This frame is not only false but dangerous. It invites those who have not shared in the benefits of globalization to demand its opposite — nationalism, nativism, parochialism, and ignorance. If globalization run by Davos Man gives way to the destruction of globalization, and the pursuit of tribal interests, the world will be poorer, more violent, and less able to summon the cooperation needed to solve the most complex problems, from pandemics to climate change.