Archive for the 'Economics' Category

Black Rebellion, Militarized Police Violence, and White Vigilantes

Wednesday, August 11th, 2021

America on Fire; The Untold History of Police Violence and Black Rebellion Since the 1960’s, Elizabeth Hinton, 2021
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There have been histories covering black rebellions since 1619 such as Missed Opportunities and Four hundred souls : a community history of African America, 1619-2019, as well as the New York Times published 1619 Project. This book is an American history from the Civil Rights Act of 1964 to the present. Hinton insists that the violent events covered here be called Rebellions and not riots or demonstrations or mob behavior.
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The militarization of the police:

(Police) Officers threw grenades filled with either chloroacetophenone (CN), the tear gas most commonly used to quell rebellion or 0-chlorobenzylidene malononitrile (CS) or “super” tear gas… The chemical weapon (CS) proved effective in pursuing the Vietcong through underground bunkers and tunnels, and in putting down rebellions in black neighborhoods. The use of tear gas in US overseas interventions correlated directly with its use at home. by 1969, the Department of Justice had facilitated the low-cost sale of more than 70,000 gas masks to local law enforcement, along with other surplus military equipment including body armor, armored vehicles and (assault) rifles.

During the 1990s, the Taser was introduced to law enforcement use as an alternative to deadly force. As of 2011, more than 15,000 law enforcement agencies in the United States used the Taser. Police now routinely use rubber bullets and pepper spray adding to their “non-lethal” arsenals.

The rise of new white vigilante groups:

Ignoring the Mayor (Stenzel of Cairo Illinois), they formed the Committee of Ten Million The job of the vigilante group would be to carry out the heavy-handed response the Mayor seemed unwilling to delivery. Similar groups had been coming together since the civil rights movement first gained momentum in the 1950s. Unlike many of the lynch mobs that had terrorized Black communities from Reconstruction to the middle of the next century. these new white supremacist groups attracted a more genteel class. The founders of the Committee of Ten Million included Peyton Berbling, the wealthy, chain smoking, white haired lawyer in his early seventies who had served as district attorney and would return to the post in 1968. Larry Potts, the dapper pastor of Cairo Baptist Church; the prominent local businessman Tom Madra; the lumber dealer Bob Cunningham. Like the Citizen’s Councils of America that could be found across the South, the Committee of Ten Million used intimidation and violence to counter the freedom movement, relying not only on brute force but also their political and economic power.

In 1969 another white vigilante force emerged in York Pennsylvania.

In York and Cairo, Black people lived in the areas most susceptible to flooding, and those that didn’t make it into public housing lived in deteriorating tenements by white slum landlords. the mayors were unresponsive to ongoing demonstrations for jobs and better living conditions, and reluctant to solicit federal War on Poverty funds that might have helped to address these problems.

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White Flight
York and Cairo were distinguished by the close alliance between law enforcement and white power vigilante groups. York uprisings in the late 1960s were the most severe of the era. The Cairo rebellion lasted longer than any of the era. The white men in power both politically and economically saw no reason to change the institutions that systematically locked Black people out of jobs, decent housing, and educational opportunities. The extreme reactions of the white power groups effectively killed the town of Cairo, once a Mississippi river boat stop, today only 2,000 residents remain, 2/3 of them Black. In 1950 the population of Cairo was over 12,000. White flight was occurring all over America, particularly in smaller communities. The result of these policies was often white flight to the suburbs. Cairo was effectively dead and Harrisburg lost 22% of its population.

By 1970 the (Cairo United) Front had created a food distribution network with the Urban League and other sympathetic supporters in Chicago, who would send tons of canned goods, household items, clothing, and toys…The United Front offered Cairo residents free legal aid services and (limited) medical care. It established a day care center, a pig farm, a factory that made prefabricated housing, a women’s clothing store, and a grocery store all based on the principles of collective ownership…At the center of the United Front’s activities during the ongoing conflict in Cairo was its boycott of white merchants.

Reverend J.J.Cobb of Cairo: “The way we see it from where we stand, is that every time we strive to do something to help ourselves there are more policemen armed with guns, more ammunition is bought to put a stop to the drive to better the conditions of the Negro.”

Charles A. O’Brien, deputy attorney general of California issued a rare statement during a hearing in 1970:

A major key to conquering this problem is to stop making the policeman the scapegoat for all of societies ills. We cannot continue to solve all our problems by passing new criminal laws. The policeman today bears the brunt of the failures of government. Poverty, inequality, disease, ignorance, and the alienation of youth were not caused by the policeman, but he is the agent who most often comes face to face with these problems. He is the one who has to put the lid back on. We must demand that the other segments of government do more–social agencies, educational institutions, college administrators, public law offices. All of these other agencies on which we spend billions must be asked to do more, to bear more of the burden, to act more creatively, to assume more responsibly.


Policing schools and the school-to-prison pipeline.
One of the most profound and negative effects of this focus on law enforcement was sending police into the public schools instead of addressing the lack of Black and other minority teachers, the white biased curriculum, outright discrimination against Black students like preventing Black students from taking elected office or joining cheer leading teams.

Yet, in Harrisburg (Pennsylvania), Cairo, and across the country, officials at all levels ultimately pursued the punitive path. After the violence of the late 1960s and early 1970s, policymakers attempted to relieve police-community tensions by pacifying the over-policed and unruly community. The strategy of managing the problems caused by systemic racism with crime control measures left Harrisburg economically stagnant, segregated, and with a failing school system.

Local, state, and federal agencies had “joined a vicious circle of racial discrimination and economic depression.”

Miami 1980 The most violent Rebellion.
In 1980, the white Kulp brothers, newly arrived in Miami from Pennsylvania, with a girlfriend drove into the heart of Liberty City where both boys were killed after a brick shattered their windshield and their car crashed hitting a 75 year old man and pinning a young Black girl into a wall. Both brothers were killed by a mob of Black witnesses, but a Black taxi driver drove the white girlfriend out of Liberty City. Thus started the 1980 Miami rebellion, seemingly coming out of nowhere and yet the most violent seen since 1964.

…by the mid 1970s this (Blacks locked out of political power) had changed, with levels of Black political leadership resembling those of the Reconstruction era “seven magic years”…The formation of the Congressional Black Caucus in 1971…Black elected officials began campaigns to bring job training programs, welfare provisions, health care, and social services to their constituents. It seemed that the Black freedom struggle had shifted from direct action to formal politics…But (in Miami) Black owned business spiraled into a sharp decline…Black residents owned 25 percent of all gas stations in Dade county in 1960. By 1979 that figure had dwindled to 9 percent, while Cuban and South and Central American-owned stations quadrupled from 12 to 48 percent. Between 1968 and 1979, Latinx applicants received $47.3 million (in SBA grants), or about 47 percent of the total SBA grants in Miami, while Black applicants were awarded a paltry $6.5 million.

The average income of Latinx owned businesses in places like Little Havana were double those of Black owned businesses. Then, in 1980, the Mariel BoatLift brought another 125,000 Cubans to the Miami area. Black jobs became even more scarce with this new influx of favored laborers. Between 1977 and 1981 another 70,000 Haitians arrived in Miami, after fleeing the dictatorship of Jean Claude Duvalier. They were treated even worse than existing Blacks already living in Miami. 90 percent of Federal relief sent to Miami after 1980 Black rebellion went to white, Cuban, and other Latin owners who opened businesses in non Black communities. President Carter sent $6 million to Miami for a job training program. Black participants never found work. The devastation to Liberty City and Overtown were so extensive that residents had to travel up to 30 miles to shop. Two years after the Rebellion 70 percent of residents were out of work. The acquittal by an all white jury of Officer Alvarez for killing a Black man in 1984 set off another conflagration in Liberty City, Overtown, and Coconut Grove. In 1989 a Colombian born officer Lozano killed a Black motorcyclist who then crashed killing his Black passenger setting off a four day rebellion in Overtown. Officer Lozano was convicted of manslaughter in 1990 but his conviction was overturned in 1991 because the original jurors were ruled to have voted for conviction because of the fear of setting off riots.

LA, Rodney King Rebellion, and the Gangs
The Rodney King beating in 1991 by four white police officers which was captured on video set off a five day rebellion killing more than 50 people and causing more than $1 Billion in property damage.
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in 1992 warring Crip and Blood gangs understood the rebellion not as a moment of wanton destruction, but as an opportunity to transform themselves and their community. By moving to end the violence, the gangs hoped to win political influence and to control scarce resources on their own terms.


Much of the impetus for this effort originated in the Amer-I-Can program, run by former NFL star Jim Brown. Most of the young men who would organized the truce in 1992 were trained in the program. With the Black Panthers and other radical organizations were no longer viewed as a major threat by the early 1970s, law enforcement turned its attention to street gangs, many of which had been operating for decades. In 1992, the reported number of gang related homicides in Los Angeles County peaked at 803, a 77 percent increase in four years. Two decades of police gang control measures had failed. The Reagan “War on Drugs” in 1984 lead to mass incarceration on a scale seen nowhere else in the world.

Yet as the 1992 rebellion raged and the city burned, members of the Crips and the Bloods in Watts set out to bring internal warfare to an end, and to face common external enemy–systemic racism, embodied most immediately by the police–as a united front.

On April 26 and 28 1992, gang treaties were agreed to and the next day the four officers who beat Rodney King on video walked free. What really got the gangs attention was the killing of a Black ninth grader by a Korean store owner over a $1.79 orange juice. Federal, state and local law enforcement saw the 1992 rebellion as an opportunity to target “gangs” and “illegal immigrants”, exactly the opposite of the Crips and Bloods vision of ending the violence.

When the rebellion started…,graffiti in Watts already announced the (Crips and Bloods) truce agreed to the day before. The uprising had the effect of cementing it. Unity parties in Imperial Courts and Nickerson Gardens went on as the surrounding areas burned. On May 3, the day before the rebellion ended, the Pirus Bloods in the Hacienda Village housing project entered the accord, meaning that there would be peace throughout Watts going forward.

Property damage was light and the police alone were responsible for the three deaths in Watts. The gangs proposed that unarmed gang members would be trained to accompany any police officer on duty in Watts in a program that would institutionalize the Black Panthers’ Community Alert Program of the 1960s. The treaty was still in effect in 1997 four years later.

Gang probation officer Jim Galipeau: “The only tragedy of the truce was that society needed to reward the gang members who created it, yet didn’t do a damn thing.”

The Bloods and the Crips had asked for a mere six million dollars to transform policing in South Central. “Give us the hammer and the nails, and we will rebuild the city” their 1992 proposal had begged.

About the only positive outcome, other than a dramatic drop in violence, was the creation of a gang intervention program where gang members were employed by the city to defuse violence.

Cincinnati and the Failed Federal and ACLU efforts to reform the police, and Cincinnati Gentrification
By 2000, white flight reversed into massive gentrification programs, most exemplified by booming white enterprises in Cincinnati. The inequality and social injustice of bad schools and lack of jobs created a tinder box that was lit by a police killing in 2001, resulting in a multi day rebellion. This time, the violence got the attention of Federal policy makers interested in police reform. The ACLU and the Cincinnati Black Front sued the Cincinnati police over the killing that set off the rebellion. A Collaborative Agreement was negotiated in 2002 and it was signed by the city one year after the start of the rebellion. Separately the Department of Justice entered into a Memorandum of Agreement (MOA) with the city and the Cincinnati Police Department. A federal monitor Saul Green, and a small team of Justice Department investigators would remain in Cincinnati for five years to assure that the Agreement was implemented and maintained. When the city failed to comply with the Agreement it was extended for another two years. In 2006 the police department effectively threw the Agreement out the window implementing “Operation Vortex” targeting areas where “gentrification” was planned and Blacks and other poor needed to be removed before “renovations” could start.
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Rebellions, both peaceful and violent happened across America throughout the Obama years.

Both strains of Black protest have served important purposes historically. Any success of the nonviolent, direct political action of the civil rights movement depended on the threat of violent, direct political action. As Martin Luther King Jr. himself recognized, the power of mass nonviolence arose in part from its capacity to suggest the coercive power of violent resistance should demands not be met.

Rebellions of 2020 were all started nonviolently and became violent only after police provocation or violence.

New Coalition based Rebellions start in 2020

Rebellions throughout America, from those in the 1960s to Cincinnati in 2001, mainly involved Black protestors, yet the most sustained collective violence in 2020 did not emanate from Black ghettos. In a reversal that would have been unthinkable not so long ago, it came from majority-white cities and suburban communities. Most of the looting in 2020 took place in upscale neighborhoods, and it targeted high-end retailers like Gucci and Tiffany&Co. on Rodeo Drive in Beverley Hills…Confrontations between protestors and police were most intense and protracted in cities like Portland and Seattle, among the whitest cities in America…An estimated 95 percent of counties where protests took place were majority white, and three-quarters of these counties were 75 percent white.

The 2020 demonstrations revealed that racial justice champions, environmental activists, LGBTQ-rights advocates, and labor unions appear to be stitching together a new coalition…In Cincinnati…,left wing activist groups now called for a redistribution and redirection of resources away from police departments and prison systems and toward programs that would improve mental health services, address climate change, and provide better housing, education, and job opportunities for all Americans…in 2020 some public officials and police officers participated in the demonstrations to express support for the anti-racist cause.

The American History of Missed Opportunities

Monday, August 2nd, 2021

From Here to Equality, Reparations for Black Americans in the Twenty-First Century, William A Darity jr & Kristen Mullen, 2020

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This important, well researched, and very readable book makes the case for reparations due to African Americans after more than 400 years of racially discriminatory, officially sanctioned policies in America. It is a history with an emphasis on turns not taken or taken wrongly and the impacts of these actions on the inequality of African American wealth and income. Much of their case for reparations rests on undeniable facts and statistics. And ultimately this is a story of unstoppable and unaccountable capitalism in search of cheap (or free) labor.

From 1619 to the 1660s, the majority of blacks in the colonies were contract servants not slaves. They could accumulate land, vote, testify in court, and mingle with whites as relative equals.

Black people overwhelmingly were the objects of enslavement. While there was an extended period of white immigrant indentured servitude during the colonial period, their numbers were dwarfed by coerced immigrants from the African continent. Even at the height of importation of white indentures, while 216,000 whites came to British North America as bonded laborers, 300,000 Africans were forcibly imported to the colonies. By the time of the Declaration of Independence in 1776, the practice of white indentureship was in sharp decline. On the other hand, in 1790 there were close to 700,000 enslaved blacks in the United States, a number that grew to 4 million by the start of the Civil War.

For a very brief period during the colonial era, black and while laborers were treated equally and their wages and their punishments for comparable offenses were undifferentiated. County court records from the period reveal that some slaves owned personal property and were allowed to contract for their services; others were able to procure freedom for themselves and their families. In England throughout the sixteenth century, the status of “slave” was not a life sentence…nor was it determined by phenotype. But as the demand for manpower grew in the colonies, so too, did the legal strictures on enslaved people, transforming them comprehensively into human chattel devoid of individual rights…In addition to solving the colonial labor shortage problems, enslavement of Africans enabled European mercantilists policymakers–and British mercantilists in particular–to maintain a regime of low wages in the home economy. The exportation of too large a fraction of the domestic labor force would put upward pressure on the cost of hiring labor at home.

Black phenotype also made it easier to recognize and capture slaves if they escaped. White indentured laborers couldn’t be so easily identified.

A British High Court decision in 1772 de facto ended the practice of slavery in England proper. A major motivator in the American independence movement was fear that Slavery would end throughout the British dominion. Slave owner Thomas Jefferson could decry the slave trade, call for independence from England, and uphold slavery, all without irony.

The Declaration of Independence could have been a document of universal rights. To the extent that black people are construed as fully human, championing liberty and freedom for some…while condemning blacks to eternal servitude is problematic. Republicanism affirmed the ascendancy of the colonial aristocracy while maintaining a fine line of control over the masses of poor whites, providing opportunity for some of them to obtain land and own slaves while assuring even the most impoverished whites that they could exercise dominance over blacks.

At least a third of the signers of the Declaration of Independence owned slaves. The Constitution of 1787 specified that the slave trade would end in 1808, though illegal slave trade continued. Elsewhere in the Americas, as independent nations came into existence, outlawing the slave trade and outlawing slavery went hand in hand. The Constitution required 2/3 of slave populations be counted for congressional apportionment and presidential elections and decreed 2 senators for each state. The Constitution has minority rule embedded within it. The mere existence of slaves as countable bodies allowed the slave states to control elections and enact slave protecting legislation like the Fugitive Slave Act of 1850. They even invented the filibuster which today can block any majority Senate action with only 40 senators.

The American Revolution was fought, in large part, by a colonial elite to preserve their right to human property. The Haitian Revolution (1791-1804) was fought, in large part, by the enslaved to liberate themselves from slavery.

Pease and Pease estimated that between 1830 and 1860 approximately 60,000 blacks left the south and resettled in the north, and an additional 20,000 to 40,000 blacks migrated to Canada. They estimated the number of blacks living in intentional black communities during the forty year period before the Civil War at 3,500 to 5,000 persons.

When Abraham Lincoln came into office, he hoped to end slavery through programs of compensated emancipation where slave owners would be paid compensation for the freeing of their slaves. Most slave owners preferred to hold on to their slave property to such an extent that Southern States seceded from the union, leading to the Civil War. Lincoln does not seem to have given much thought to what would happen to 4 million freed slaves other than the vague idea that they would migrate to Haiti or Liberia. A small number did migrate, but the vast majority wanted to be recognized as full citizens with all the privileges and rights of citizenship. To accomplish this goal they would need education, employment, the vote, and land.

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White supremacist Andrew Johnson of Tennessee became President on Lincoln’s assassination. He universally pardoned all Confederate participants allowing the southern elites to return to power and to reacquire property seized by the Union during the war. He thwarted all efforts to transfer or sell confiscated lands to blacks. The “seven magic years” of reconstruction saw some black voting rights in Republican controlled states. As southern democrats regained political control black voting rights all but disappeared. The withdrawal of Federal troops from the south left blacks without any protection since whites did everything they could to prevent blacks from arming themselves. Whites burned black schools and intimidated or killed any teachers in these schools. Johnson was impeached in 1868 but was not removed from office. Grant became President in 1869 but his lack of political skill and bad judgement continued the absence of Federal action in the southern states. A South Carolina Representative reported that 53,000 had been killed by white terrorists since the end of the war; 1766 on average each year. The white supremacist south began to rewrite history immediately after the end of the Civil War, coining the term the “Lost Cause” and erecting thousands of monuments to southern political and military “heroes”. They even incorporated the confederate battle flag into their new state flags. Once in power again, southern white Democratic leaders began enacting Black Codes to reestablish black slavery in all but name throughout the south. Whites again controlled most of the land for which they required “Labor”. Labor contracts were far worse than indentured servitude because the laborer could only escape the contract upon death. Blacks could be arrested at will to provide free labor. Union Col. Samuel Russell Thomas testified before Congress:
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Wherever I go– the street, the shop, the house, or the steamboat–I hear the people talk in such a way as to indicate that they are yet unable to conceive of the Negro as possessing any rights at all. Men who are honorable in their dealings with their white neighbors will cheat a Negro without feeling a single twinge of their honor. To kill a Negro they do not deem murder; to debauch a Negro woman they do not think fornication; to take property away from a Negro they do not consider robbery…they still have an ingrained feeling that the blacks at large belong to the whites at large, and whenever opportunity serves, they treat the colored people just as their profit, caprice or passion may dictate.

Federally owned land was (and still is) huge, with the Louisiana Purchase of 1803 adding 827,00 square miles or 529 million acres. Land confiscated from the Confederacy during the Civil War made additional tracks of land available, approximately 850,000 acres. 40 acres and a mule would have required the Federal government to earmark 40 million acres for 1 million families of former slaves. This never happened. Between 1862 and 1934, the federal government granted 1.6 million homesteads and distributed 270 million acres. Most of the Confederate confiscated land was sold at auction to white, many northern, speculators. These new capitalist absentee landowners, needing farmers, instituted share cropping and “labor contracts” for poor farmers both white and black. A few blacks were able to acquire small blocks of land or houses.

By 1910 blacks had managed to amass 15 million acres with 218,000 owners or farmers. By 1997 black farm ownership had diminished to 2.7 million acres. “The land African Americans lost over the 20th century was taken in some form, and not sold freely.”

The disregard for black lives evidenced by antiblack riots, lynchings, neighborhood devastation, and inferior education in the process that Douglas Blackmon has called “black reenslavement”.

(Jennifer) Mueller provides evidence that the source of This transfer transfers to whites is in publicly provided assets, including 246 million acres of land, an area approximating that of Florida, Alabama, Georgia, South Carolina, North Carolina, and Virginia combined. These occurred under the auspices of the Homestead Acts (1860s-1930s).

Blacks were largely excluded from the the benefits of the Homestead Acts; mere 4,000 to 5,500 African American claimants ever received federal land patents from the Southern Homestead Act enacted in 1866…white Southern Homestead Act claimants numbered around 28,000. Gifts of Southern Homestead and Homestead Act land enriched more that 1.6 million white families–both native born and immigrant. By the year 2000, the number of adult descendants of these original land grant recipients was 46 million people, about a quarter of the U.S. adult population.

At the end of WWII, the GI Bill guaranteed home, business, farm loans, and educational opportunities to returning veterans. Of 3,229 GI Bill related loans made in Mississippi in 1947, only two were offered to black veterans.

The article by Ta-Nehisi Coates in the June 2014 issue of the Atlantic resurrected the national conversation over reparations for black Americans. One of the most impressive aspects of Coate’s article is his insistence that the events and conditions during the antibellum period are far from the only basis for reparations.

This book is devoted heavily to documenting the damages done to blacks post Emancipation. Turning to details of reparations, the authors give a number of alternate ways that damages could be calculated with a number of these studies showing damages on the order of more than $17 trillion.

…since today’s differential in wealth captures the cumulative effects of racism on living black descendants of American slavery, we propose mobilizing national resources to eradicate the racial wealth gap. The magnitude of ongoing shortfalls in wealth for blacks vis-a-vis whites provides the most sensible foundation for the complete monetary portion of the bill for reparations.

To qualify for reparations, the authors suggest two criterion;

First, U. S. citizens would need to establish that they had at least one ancestor who was enslaved in the United States after the formation of the republic. Second, they would have to prove that they self-identified as “black” “Negro”, “Afro-American”, or “African American” at least twelve years before the enactment of the reparations program or the establishment of a congressional or presidential commission “to study and develop reparations for African Americans”.

How do you change the minds of millions of white supremacists whose fixed attitudes toward black people were described so well by Union Col. Samuel Russell Thomas? Must the U.S. wait til white supremacists are in such a minority as in South Africa that they can no longer control or defeat any efforts to address race based income and wealth inequality?

denial, disinformation, deflection, delayism, doomism

Monday, July 26th, 2021

The New Climate War: The Fight To Take Back Our Planet, Michael E. Mann, 2021

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Mann has devoted much of his professional life and focus in an effort to educate the public about climate change. His role model was Carl Sagan who had a remarkable ability to communicate complex science to ordinary people.
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Mann, Bradley and Hughes 1998 Hockey Stick Chart

How quickly are temperatures rising?

The true warming rate is about 0.2%C per decade. Since current warming stands at about 1.2%C, it would at current rates take a decade and a half to reach 1.5%C warming, and another two and a half decades to reach 2%C warming.

Without CO2 reductions, we would expect a rise of 1.5%C by 2035 and of 2%C by 2060.

Researchers believe renewables can be scaled up to meet 80% of global energy needs in ten years and 100% in thirty years. Clearly that last 20% which would include air travel and other hard to solve problems will take time and research.
Guardian’s Fiona Harvey:

investments amounting to trillions of dollars (estimated 1 to 4 trillion) in fossil fuels–coal mines, oil wells, power stations, conventional vehicles–will lose their value when the world moves decisively to a low-carbon economy. Fossil Fuel reserves and production facilities will become stranded assets, having absorbed capital but unable to be used to make a profit…If the bubble bursts suddenly, as it might, rather than gradually deflating over decades, then it could trigger a financial crisis.

Banks are already reducing their investments and many University endowments are pulling their funds out under pressure from their students.

Why look at non solutions when a solution is in hand. Solar costs about $50, wind $30-$40, and nuclear $100 per megawatt hour. Fossil fuels cost about $50. If fossil fuel subsidies were removed and a carbon tax were added to reflect the real cost of CO2 emissions, the cost of fossil fuels would rise dramatically.

One group of climate experts has in fact published a set of “concrete interventions to induce positive social tipping dynamics.” They propose as key ingredients, “removing fossil-fuel subsidies and incentivizing decentralized energy generation, building carbon neutral cities, divesting from assets linked to fossil fuels, revealing the moral implications of fossil fuels, strengthening climate education and engagement, and disclosing greenhouse gas emissions information.

Air travel is often sited as a way to reduce CO2 but air travel accounts for about 3% of global carbon emissions. if everything is taken into account, travel by train can have an even higher carbon footprint than air travel.

We know that we can eliminate most CO2 emissions by converting to renewable sources of energy like solar, wind, geothermal, etc. Those who wish to continue to rely on fossil fuels for energy often propose “non-solution solutions” as a deflection tactic.

DEFLECTION DELAYISM
The most common of these is “clean coal” using carbon capture and sequestration (CCS). Global CCS Institute reports 51 facilities globally are under development. When fully deployed they would collectively capture nearly 100 million tons of C02 annually. We emit about 40 billion tons of CO2 annually so 100 million tons would represent about 0.25% of total emissions. It will take decades (which we don’t have) to determine the actual amount of CO2 that has been captured and stored successfully. Coal generators are rapidly being phased out. CCS is not a solution.

There has been much talk of geoengineering and Bill Gates has hired geoengineers to look into shooting reflective particles, sulfate aerosols into the stable upper part of the atmosphere. This is feasible and a muti-billionaire like Gates might even be able to try it without government assistance or approval. The big problem is “we don’t know what we don’t know.” Would Ozone layer destruction accelerate? Would polar ice melt faster? Would the sulfur falling back to earth result in catastrophic acid rain? If we don’t sustain the layer with continuous injections the earth’s temperature would rise suddenly. The danger here is not only from billionaires but from other countries that might attempt to solve their own problems without regard for the rest of the world. And we already have a known solution – renewable energy – so why even look at such a crazy unproven idea with huge unknown risks to the entire planet?

Reforestation sounds promising but at best, combined with modified agricultural practices, at absolute most 20 billion tons of CO2 could be captured or 50% of our current emissions. It would take decades to reach these levels of CO2 removal and meanwhile we would continue to increase emissions every year. We already have a real and proven solution, renewables, that can be implemented now so why focus on this. Reforestation and agricultural reform are important and should be undertaken but they are not a solution to our immediate CO2 problem.

Then there is the nuclear power option, forgetting the meltdowns at Three Mile Island, Chernobyl, and Fukushima. Nuclear cost is double that of renewables. Mann suggests we leave existing nuclear plants operational since the investment has already been made until they are decommissioned at the end of their useful lives, hoping they continue to have access to adequate cooling water and avoid other accidents. Building new Nuclear plants would also take far too long to displace existing fossil fuels.

Much of this important book is dedicated to educating the public in the tactics developed by monopolistic companies whose products are harmful in attempts to convince the public otherwise. These tactics no doubt originated in the 19th Century but came to public awareness over the dangers of tobacco, plastic trash, chemicals like DDT, CFC refrigerant destroying the ozone layer, Roundup, etc., Fossil Fuels and CO2 levels, etc. The playbook was even attempted for COVID-19 because the pandemic posed a threat to companies wanting business as usual (Urging us to take one (die) for the sake of the economy). The successes of these campaigns is due to the enormous resources available to these companies, their willingness to sponsor fake research (Koch and Mercer), their control over messaging and media (Fox WSJ, the petrostates led by Russia and Saudi Arabia), and exploiting the ignorance of the public about science and research (disinformation). Who does the powerful global fossil fuel industry most fear? Greta Thunberg and the international climate youth movement. Mainstream media is notorious for failing to report on climate change. Young climate activists have succeed in making the front page of major newspapers around the world, something climate scientists have been unable to do. As Bob Dylan would say “The times they are a changin”.
Stephan Schmidt, former presidential campaign co-advisor to McCain tweeted about the COVID-19 campaign “The injury done to America and the public good by Fox News and the bevy of personalities from Limbaugh to Ingraham will be felt for many years in this country as we deal with the death and economic damage that didn’t have to be.”

The Coronavirus crisis, in fact, underscored the importance of government. The need for an organized and effective response to a crisis, after all, one of the fundamental reasons we have governments in the first place. Crises, whether in the near term like COVID-19 or in the long term like climate change, remind us that government has an obligation to protect the welfare of its citizens by providing aid, organizing an appropriate crisis response, alleviating economic disruption, and maintaining a functioning social safety net.

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The book includes discussions of social media and the role of bots and troll bots, artificially generated internet postings with the ability to automatically analyze real people’s postings and create artificial responses. So then bot sentinel is created that uses machine learning and artificial intelligence to classify accounts and their postings as being the creation of bots and trollbots and to automatically generate a trollbot score for the likelihood that the the account is automated. This is not a fictional dystopian world. Users of social media are facing this mad world of bots where it may be impossible to know if you are having a conversation with a machine or a person. Imagine an entire discussion thread generated completely by warring bots with no actual human participation. Forget annoying automated phone calls. This is total out-of-control madness.

Rediscovering the Magic of Antitrust

Friday, July 23rd, 2021

Break ’em Up; Recovering our Freedom from Big Ag, Big Tech, and Big Money, Zephyr Teachout, 2020

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This is a compact must read book. Here are some highlights:

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Antitrust Can’t Bust a Monopoly of Ideas WSJ

The highest and best goals of America–equality and freedom–require government to protect citizens from any group or any person wielding too much power. We used to do pretty well, using antitrust, campaign finance laws, public utility regulation, labor laws, and other anti-monopoly tools. But in recent years, our government has failed on all these fronts. Meanwhile, corporations have disabled key institutions designed to protect against arbitrary power.

After the crash of 2008, the impunity of elite networks was on full display when no banker was jailed for lawless activity. Pharmaceutical and big tech corporations regularly get away with laughably trivial fines for their major violations of the law…Public courts have been replaced by arbitration in which judges are paid by corporations, reasons aren’t given, and no one knows what happens.

Unelected “megalomaniac President” Zuckerberg: “In a lot of ways Facebook is more like a government than a traditional company.” Facebook “set up a more democratic or community-oriented process that reflects the values of people around the world.”

The will to power is connected to the desire for material accumulation, but it is made of something different, and Zuckerberg clearly has it. The ability to affect the lives of everyone on earth, to know everything about them, to shift elections, to change the practice of democracy–these are not unforeseen by-products of a business plan. They are not an accident. They are the point.

People in power are more likely to interrupt, to look away when others speak, to touch others inappropriately, to say what they want, to take risks…They are more likely to be rude, hostile, and humiliating. They are more impulsive,more self-centered in their choices, which they make obliviously, because they are less able to read other people’s reactions. People in power rely more on stereotypes when making judgments about others, with less awareness of unique or individual traits. They aren’t good at describing the interior lives of others, and are bad at guessing what others want or feel.

Researcher Jake Dunagan: “The experience of power might be thought of as having someone open up your skull and take out that part of your brain so critical to empathy and and socially-appropriate behavior.”

Denmark has appointed an ambassador to deal directly with the quasi governments of Google, Facebook, and Amazon.

At the heart of (Antonin) Scalia logic in the Gilmer case, and entire series of cases involving arbitration agreements, is a fantasy of choice–a fantasy that relies on a nonexistent power dynamic and and set of unavailable non-arbitration options…Scalia’s contract logic reflects neoliberalism, a powerful ideology in American legal thought. Neoliberalism is defined by a deep skepticism of democratic institutions, which it treats as corrupt and unreliable, and a mirror-image faith in market institutions, which it treats as responsible and reliable. For most of Anglo-American history, a whole series of principles shaped contract enforcement. Corrupt contracts weren’t enforced, and contracts with real power imbalances were not enforced. The neoliberal view is that freedom of contract should be presumed and contracts almost always enforced…If you sign a contract, the presumption is that you signed it freely, and freedom is treated as a formal matter, not a contextual one…Was Scalia cynically serving big business or naively imagining a world that didn’t exist?

Political parties are being replaced by corporate-run institutions. Big corporations, which consider political strategy essential to their overall strategy, increasingly use the tools of authoritarianism–centralized regimes, opposition suppression, forced public displays of alignment–to hold on to their power, and they do it in the name of free speech. A persistent paranoia has naturally slipped into politics as these institutions are corroded, and this has led millions to flee politics as quickly and quietly as possible, and millions of others to embrace the nihilism of Donald Trump and Fox News.

The cutting edge of monopoly racism is, as with so much else, in big tech companies, where a toxic combination of power and opaque bias is repackaged and defended as neutral algorithms…When doing web searches, poor people are shown worse jobs and apartments, while elites with purchasing power get access to real estate deals and better employment opportunities…Google, Facebook, Amazon, and Apple pose unique race bias dangers in two ways. First, they are among the few companies with the resources to extract and exploit publicly available datasets in combination with their own data, creating data monopolies. Second, their choices about what data they use to serve what content have uniquely powerful impacts on everyone in society…Finally, they don’t just passively allow bias, they make money off it.

Researcher Marshall Steinbaum:

“Permitting consolidation and vertical integration and control in supply chains has made labor markets less competitive and worsened outcomes for workers, which is in direct contradiction to the (untested) economic assumptions that motivated the Chicago School’s antitrust takeover in the first place.” Monopoly turns out to be a major driver of inequality…With the massive collapse of an economy into sectors that are each dominated by corporate monopolies, workers may be in great demand, but they are not in a good position to bargain for a fair portion of the value they create…In simple terms, “Capital won, labor lost.”

Wall street has been a driving force behind the gutting of antitrust laws, because when it is allowed, monopoly power is a means of taking a big chunk of money and multiplying it, without adding any value. Access to seed capital, combined with bad antitrust policy, meant big unearned profits…Warren Buffet, one of the richest men in the world, has made his money by investing in already-monopolized industries…He invests in closed markets, monopolies, and oligarchies…He prefers businesses with substantial “moats”, or, as a friend of his called it, “unregulated toll bridges.”

Business school graduates today are taught to invest in the areas where antitrust fails.

In 1967, the Chicago School of Economics launched an all-out war against American predation rules…after President Reagan (in the 1980’s) installed new judges, and economic departments were flooded with Chicago School scholars, the new theory won…The new court decisions did not get rid of predatory pricing laws as a concept, but they made it so difficult to prove a predatory pricing claim that in practice any lawsuit became nearly a dead letter.

The monopoly-predation-subsidy-capital cycle goes like this:
1. The promise of monopoly power attracts excess capital investment;
2. with that investment, the company can engage in predatory pricing to push out competitors and win subsidies;
3. only the biggest companies win individual company subsidies, which they use to push out remaining competitors and reinvest in politics.
4. they then use the investment in politics to block antitrust and influence tax code;
5. without being subject to antitrust and having to pay taxes, they can promise more monopolistic behavior and attract more capital investment.

These new judges–including Justice Antonin Scalia and judges Frank Easterbrook and Richard Posner, the biggest defenders of big business–overturned decades of case law. They treated all mergers as presumptively positive. They effectively wrote predatory pricing out of the Clayton Antitrust Act, concluding that almost any price-cutting was good for customers–even if price-cutting was designed to push out competitors and monopolize a market. They reinterpreted antitrust laws as consumer price-protection tools. They rejected a vision that these laws were designed to curb despotism. They rewrote hundreds of years of contract law, excising the power analysis that once accompanied contract interpretation.

Clinton, Bush, and Obama all presided over an ongoing merger wave that would have horrified any 1960’s judge. From 1992 to 2016, antitrust was not even in the Democratic Party platform.

In sum, from 1980 to today, antitrust was triply depoliticized. First, courts treated the body of antitrust laws as if they were designed only to serve consumer welfare, not growth and abuses of political power in the private realm. Second, practitioners of antitrust–prosecutors, judges, and law professors–depoliticized their own roles, allowing technically trained economists to make the big judgements about what society should look like. They deferred to professional elite economists, whose jargon is complicated and whose claims to special knowledge make it hard for people to feel comfortable challenging them. Giving economists the final say also allowed practitioners to avoid responsibility and to treat decisions as if they were required by abstract laws instead of as hard political decisions that shape power in society. Third, and most bizarrely, these same practitioners treated antitrust as if it were a job for courts, not Congress.

We are in the early stages of a major battle to reinvigorate the anti-monopoly movement. There are huge toolboxes of existing laws that can be enforced right now; a lot of bad Supreme Court precedents that can be overturned by congress; and new laws that need to be passed to address weaknesses in the old laws and new obstacles. The new antitrust era, to meet the crisis of concentration we now face, will require us to do all three.

The Federal Trade Commission–right now– can also play a critical role in changing basic competition rules. As Sandeep Vaheesan argued in a significant article in 2017, the FTC has substantial power, to define the scope of federal laws. Congress, anticipating changing business practices and changing methods of unfairness, purposefully gave the FTC the power to define “unfair methods of competition.” Executive agencies have enormous discretion to act, as Vaheesan points out, the FTC can and should change merger law by making mergers presumptively illegal in competitive markets, and should lay out particular clear, bright line rules–like speed limits– against certain kinds of “vertical” behavior, like when Tyson forces farmers to use building firms it prefers.

The next president (Biden), in particular will have outsized power when it comes to antitrust; she (or he) can unilaterally promulgate new merger rules, directing the FTC to adopt clear guidelines that declare that it will oppose mergers of a certain size and percentage of the market. The new guidelines for the Department of Justice and the FTC can adopt the posture that policing conduct violations is a top priority. They can strongly signal that they won’t stand for a few small changes, but will require structural reorganization.

Even with strong enforcement, we need new laws. Congress should start by overturning all the bad decisions made by Reagan judges. That alone would serve to sharpen the swords of the laws already on the books.

When people are allowed to amass great pools of capital, one of two things happens; The logic of investment overcomes the moral sensibilities of the people who hold the investments, and the investments agents’ instructions to maximize profit sever the moral relationships between people and their impact on the world. Or the logic of power overcomes the moral sensitivities of those who hold too much power, and they start governing from a place of whimsy and self-importance, disconnected from human reality and unable to honestly perceive the world over which they trample. Both outcomes lead to destruction, instability, and cruelty.

For today’s neoliberal economist, market freedom does not mean moral action or thought in the commercial realm, it only frees the buyer and seller from state interference; the only morality in a market lies in cheaper consumer goods. Efficiency has become more than a value, it’s become something approaching an unhealthy, elite obsession.

As (Langston) Hughes understood, the biggest, most powerful dream of America, the one we can’t forget, the one that underpins the right to eat, breathe clean air, have dignity, is the dream that people, not kings or lords or dukes, should govern themselves. The basic dream of America is the fight against illegitimate power. Money is not a legitimate source of political power. The only source of legitimate power over others–the power to imprison, the power to tax, the power to make decisions–flows from we the people.

Monopolies, Created Deserts, and Warren Buffets

Friday, July 9th, 2021

Monopolized; Life in the Age of Corporate Power, David Dayen, 2021

This book is one of the most depressing, even apocalyptic in recent memory. It is also well researched, organized, and important.
Each chapter addresses an industry segment that has fallen to monopoly: Airlines, Big Agriculture, Journalism and media, Broadband Internet, Opioid medication, Banks, Offshoring essential products, Amazon and Google, Hospitals Supply chains, Rental Housing after 2008, Prisons and Immigrant detention. The book is focused on monopolies in each of these segments. Warren Buffet is mentioned as a significant investor in monopolies in each chapter. Dayen estimates that twelve mega-billionaires like Warren Buffet effectively control the entire US economy today. What can these handful of men possibly do with the wealth they have accumulated? This is from Jeff Bezos, currently the wealthiest:

The only way I can see to deploy this much financial resource is by converting my Amazon winnings into space Travel

Tesla’s Elon Musk seems to share Bezos’ sentiment. Dayen — “Our overlords literally shoot money into space while millions around them suffer.” Here is Buffet;

We think in terms of that moat and the ability to keep its width and its impossibility of being crossed.


Dayen — “Morningstar offers an economic moat index fund of the twenty companies with the highest walls around their businesses.”

The average age of a farmer in America is fifty-eight. In Iowa, 60 percent of all farm owners are over the age of sixty-five; just 1 percent are thirty-four or younger. More than half of all Iowa farmland is rented out, and the startup costs of land, machinery, and other inputs are a huge barrier to entry. A substantial number of farm owners are elderly widows who inherited the land. As they pass on, Iowa could be transformed.

As Iowa and other agricultural states empty out and businesses close, the states turn into people less deserts. Mono culture (single crop) farming with huge chemical inputs are transforming formerly fertile land into barren deserts. Deserts can take many forms and empty farmland is only the first discussed here.

The news deserts created primarily by the dominance of Facebook and Google and by the crippling of the media business model have grave implications for democracy…it’s undeniable that corruption spreads, conspiracies are fostered, and truth is obscured where journalism is absent.

This is the curse of bigness in San Francisco, a city so teeming with money that nobody can afford to open a store to take it…But the truth is that the San Francisco Bay Area is the nation’s second-most dense…Big money has created a vicious spiral: a winner-take-all city keeps accumulating vacant lots, dead-eyed commuters drive for hours to their barely affordable homes, landords must keep rents astronomically high to cover their own astronomically high loans. The concentration of extreme wealth isn’t just bad for the losers in depressed counties and towns. It’s bad for the winners.

Urban deserts are not limited to Flint and Detroit Michigan, to Oakland California and Philadelphia and Baltimore. Try living in today’s San Francisco. Several of my son’s San Francisco old high school friends are living lives as nomads in the city, complete with vans.

In telecommunications including cellphone and broadband America is a disgrace with the highest prices and lowest quality and service anywhere in the world. At America’s founding, postal service was guaranteed to every American. FDR’s Tennessee Valley Authority (TVA) together with massive western dam projects guaranteed electrical power to every American. At one time every American was guaranteed phone service. Dayen describes Chattanooga, a big beneficiary of the TVA, and its TVA run utility the Electric Power Board (EPB) which decided to upgrade using fiber optics to improve the reliability of its electric grids. In 2007 EPB decided to offer fiber optics to every home in its service area paid for by a $219.8 million bond. Comcast sued to stop the plan alleging illegal cross-subsidy of electric rate payer funds. Comcast lost and residents of EPB’s service area have access to gigabit broadband access supporting phone and internet service. If you are not in EPB’s service area you are in the communications desert.
I live in the heart of Phoenix Arizona and have access to Centurylink’s (baby Bell) DSL “service” of 16MB sometimes at a cost of about $50 per month. I have a grandfathered T-Mobile prepaid phone that gets no signal at my home even after the T-Mobile Sprint merger. I can make phone calls from my home via Android wifi on my T-Mobile phone or via voice over IP (VOIP) through google voice.
I live five miles from Phoenix’s TV Towers but receive no over the air (OTA) signals for any major network on my TV. Using advanced rooftop antennas and signal amplifiers, I used to be able to receive 5 major networks 95 miles line-of-site to the towers on Mount Lemon near Tucson. Continued reduction in transmit power by network operators has reduced reception to 3 major networks today. Even these 3 are sensitive to weather. I tried to raise the issue of reduced OTA transmitter power over the publicly owned airwaves with newly elected Senator Mark Kelly and was blown off by staff members.
If you live in rural America chances are you have no access to broadband. Urban Americans may typically have two “options” for broadband, your baby bell or surviving phone company and one cable operator. Both will have atrocious customer service and questionable reliability and unconscionable low speeds. Somewhere in a streaming chain, maybe the local broadband supplier is able to restrict speeds or break a stream altogether. We could get better service almost anywhere in the world. Most Americans live in a communications desert.

Dayen talks about the mergers and acquisitions (M&A) banking business that came into it’s own in the 1960s. Today it is a huge industry dominated by the six too big to fail banks.

As of 2019, the six biggest banks–JP Morgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley–control $10.5 trillion in financial assets. These banks also happen to be serial transnational criminal enterprises, paying $182 billion in (inadequate) penalties for rap sheets of incomparable length. Few of the violations even relate to the financial crisis’s run-up and aftermath, though those were significant. Incidents of debt collection fraud, market rigging, money laundering, misrepresentations to clients, kickback schemes, and unlawful securities sales all occurred after the crisis.

The media has focused on stock buyback after tax reductions and record profits but gives little attention to the bigger story; mergers of corporations into ever larger and more unaccountable monopolies. The six big banks are key players in these mergers pocketing huge fees for their services. Goldman Sachs, in one merger featured in the book involving United Natural Foods Inc. (UNFI), continued to change the terms of the merger to favor themselves and even created and sold derivatives for hedge funds wanting to bet against the merger.

Mergers in the health care industry, especially hospitals has created large healthcare deserts in America. Hedge funds often buy hospitals for their real estate value and close them after gutting their operations. Millions of Americans are left with few options and long travel distances and time to seek services.

Monopolies create highly vulnerable supply chains often with sole source and offshore production. Dayen talks about an acute shortage of saline drip bags (cost $1) because production in sole source Puerto Rico was disrupted. This failure disrupted services in hospitals across the country. Covid19 protective equipment like masks, shields, gowns, etc. were simply not available for months. Then there are sole source parts like faulty batteries for the F-35 $100 million fighter jets that made them unable to escape Hurricane Michael in 2018. All current US Weapons systems are dependent on parts from China! Supply deserts are disruptive and dangerous and we are inundated in them.

Ten million American homes were lost to foreclosure as a result the 2008 financial subprime disaster. Dayen has an earlier book Chain of Title focusing on the struggle of American’s being illegal foreclosed on as a result of the massive production of fake documents purporting to support the existence of loans. Aaron Glantz in 2019 published Homewreckers, showing the macro side of how all these illegally foreclosed homes ended up in the hands of hedge funds and other bottom feeders and were removed permanently from the American supply of individually owned homes. Dayen here talks about how these new owners, without experience in real estate rentals and without any regard for the law or people converted these homes into badly or unmaintained rentals and profited from illegal fees, penalties, evictions, and extortion while the huge inventory of once livable single family homes are turned into slums. These few corporations make the Trumps and Kushners of the world look like petty thugs. Meantime, Americans looking to buy homes find limited options and soaring prices. Welcome to the housing desert.

We know how to handle monopolies. You restore the interpretation of the antitrust laws to cover the full spectrum of harms, beyond just consumer welfare. Then you break up dangerous concentrations of economic power, block mergers that would excessively consolidate markets, regulate natural monopolies as public utilities, structurally separate functions where necessary, intervene in the public interest so citizens are protected and empowered, and vigilantly examine markets to prepare for monopolies to emerge again. Maybe that sounds impossible in the abstract. But it is entirely possible under existing law that either hasn’t been enforced in decades or has been misinterpreted for decades. We have over a century of experience with both successfully preventing unnecessary concentrations and failing to do so. The mechanisms are clear; getting the political class to enforce them is the stumbling block.

Latex, Diamonds, Charles Taylor, Austerity, Ebola, The Perfect Storm

Saturday, May 22nd, 2021

Fevers, Feuds, and Diamonds, Ebola and the Ravages of History, Paul Farmer, 2020

Young Paul Farmer and Future World Bank President Kim Jim Yong in Haiti


Ebola was not simply a deadly disease; it was the manifestation of neolibereralism as an affliction, which wrecks havoc in the world’s most vulnerable societies. –Ibrahim Abdullah and Ismail Rashid, Understanding West Africa’s Ebola Epidemic: Toward a Political Economy, 2017





Charles Taylor Liberian Warlord

There can be no understanding of this medical wasteland, and its vulnerability to Ebola, without knowledge of the shared and distinct histories… Their shared history has long involved rapacious extraction and forced labor regimes. Rapacity on this scale requires and foments violence, resulting in more illness and injury…That’s (colonial rule) where control-over-care strategies originated…In the first part of the twentieth century at least, black doctors were shunted aside or formally excluded from the colonial medical services…Many West Africans still harbor memories of campaigns to isolate (and sometimes destroy) settlements afflicted by smallpox, cholera, and vector-borne diseases such as plague, malaria, and trypanosomiasis. In the course of many of these epidemics, and for a century or more, funerals and wakes were banned, travel restrictions imposed, and punitive measures (from fines to incarceration) routine. Medical care was not…After independence, tardy efforts of link disease control to care were nonetheless under way in Guinea and Sierra Leone and, to a lesser extent, Liberia. But health expenditures of any sort remained a tiny fraction of postcolonial national budgets. That fraction shrank further when their governments signed on to structural adjustment programs (austerity) — and geared up for war…Neglectful policies first written by the sanitarians of fading colonial governments have left a disastrous imprint, but other disastrous policies were advanced by development institutions claiming to represent the poor, or frail or failed states. Few of these ventriloquists were natives of West Africa…Externally imposed austerity meant that governments lost much of their scant capacity to engage in anything resembling caregiving.

Commentary on most epidemics sends history down the drain. That’s no accident. Surely the successful rebranding of European empires as “Western democracies” and the inevitable focus on “local” disasters of African politics or epidemiology stand as impressive examples of willed amnesia. This entire process of shrugging off human agency — a.k.a. history — lets external actors and forces off the hook, allowing expatriate pundits and self-dealing global bureaucrats to argue that local greed and tribal grievance are the primary cause of independent Africa’s woes, including its poor economic, political, social, and physical health. But those without shelter are of course obliged to pay closer attention to the clouds above.

…if you want to address the delivery problems, you need a social medicine incorporating staff, stuff, space, and systems. But Western Africa, like the northern Congo, has not known this sort of social medicine, because of the extractive arrangements that I’ve described in the previous four chapters; slavery, racism, colonialism, and war. Its medical and public-health systems have failed repeatedly to delivery on the promise of discovery.

Ebola, like Marburg has received scant attention from the best basic scientists and clinical researchers, and from the world’s largest research based pharmaceutical concerns, for a simple reason: there’s not much money in it.

The critical step in preventing future epidemics will be finding ways of delivering vaccines and therapies to those who need them — and who need them in part because they live in a clinical desert that was created when their predecessors were enslaved and subjugated so that people and nations in other parts of the world could amass great wealth and prosperity.

Public-health nihilism and its control-over-care variant retain their force largely among the poor living in what are now called low-income countries. These countries are, of course, the former colonies; strains of the paradigm run rampant within them, and in the field now widely known as global-health.

The postcolonial world still suffers from control-over-care logic, and from the plague. In the Indian state of Gujarat, population forty-five million, plague killed hundreds in the 1990s–with the diamond polishing city of Surat the epicenter of a major outbreak in 1994.

One of the few happy aftermaths of the Western Ebola epidemic has been the development of what appears to be be a safe and protective vaccine… We can expect the usual debates about whether further and different clinical trials are needed, and which regulatory hurdles must be cleared before it and other vaccines are licenses, and by which agencies…Ebola-nomics is sure to influence these discussions, since the disease’s victims, like those sickened by cholera and plague, are mostly poor people of color, as are their primary caregivers.

…Ebola and other public-health calamities strike most often in places from which human capital and raw materials have been extracted for centuries. From the rural reaches of Haiti and Rwanda, from the prisons of Siberia, and from the slums of urban Peru; for thirty years, I’ve been pointing out how the epidemics that people have suffered in these places have arisen because of the inequalities — political, economic, and medical –that such extraction invariably worsens.

Is Progressive Capitalism Possible

Thursday, January 28th, 2021

People, Power, and Profits, Progressive Capitalism For An Age of Discontent, Joseph E. Stiglitz, 2020

Stiglitz is an optimist believing that the enormous concentration of wealth and income (23 people own 50% of the world’s total wealth) can be corrected with a more equal distribution brought about by political action. Thomas Piketty shares Stiglitz’s concern with income and wealth inequality but Piketty’s optimism is based on the study of history and how fast enormously significant and rapid changes have occurred in the past. It’s unclear what the basis for Stiglitz’s optimism is. He talks extensively about how unhappy large majorities of American citizens are, but how this can be translated into meaningful political change is unclear given how broken our current political system is.

Progressive International Elizabeth Goméz Alcorta Yanis Varoufakis Noam Chomsky

Japanese Translation

By 2018, those soaring ideas seem finally to have crashed to Earth. The 2008 financial crisis showed that capitalism wasn’t all that it was supposed to be–it seemed neither efficient nor stable. Then came a rash of statistics showing that the main beneficiaries of the growth of the last quarter century were those at the very top.

The elites had ignored the plight of too many Americans as they pushed for globalization and liberalization, including the financial markets, promising that all would benefit from these “reforms”. But the promised benefits never materialized for most citizens. Globalization hastened de industrialization, leaving behind a majority of citizens, especially the less educated, and of these, especially the men.

Financial market liberalization led to the 2008 financial crisis,the worst economic downturn since the Great Depression that began in 1929. Yet while tens of millions around the world lost their jobs, and millions of Americans lost their homes, none of the major financial executives who brought the global economy to the brink of ruin were held accountable. None served time; rather they were rewarded with mega-bonuses.

No wonder that in the aftermath of the economic failures we have described…there developed a skepticism of the elites and of the knowledge institutions from which they had supposedly derived their wisdom (Chicago School)…good academics had pointed out that globalization could actually lead to lower wages of unskilled workers…unless the government took strong counterveiling measures. They had pointed out that financial liberalization would lead to instability.

Hayek Friedman Reagan Thatcher
<> <> <> <> <> <> <> <> <> <> Name Me One Country Where Capitalism Works LA Progressive

…Swedes knew that a prosperous country required a high level of public expenditures, on infrastructure, education, technology, and social protection, and that the government needed revenues to sustainably finance these expenditures.

The truly greedy and shortsighted in the 1 percent have come to understand that the globalization, financialization, and other elements of the current economic rulebook are not supported by the vast majority of Americans…these super rich have thus formulated a three part strategy: deception, disenfranchisement, and disempowerment.

A misshapen economy creates misshapen individuals and a misshapen society

In economics,it will require both regulating the market and doing what the market can’t do. We will have to get over the shibboleths that markets on their own are self-regulating, efficient, stable, or fair, or that government is inevitably inefficient…we have to save capitalism from itself. We have to construct a new social contract that enable everyone in our rich country to live a decent, middle-class life.

Nor is an economy doing well if GDP goes up, but meanwhile the environment is deteriorating and resources are being depleted. A country living off the past and not investing in the future–or destroying its children’s environmental heritage–is one in which the generation is doing well at the expense of its descendants.

Finance was central to the creation of today’s economic, social, and political malaise: in the economic crisis that America endured for almost a decade as well as in the increase in inequality and the slowing of growth. Resources–including some of the most talented young people–went into finance rather than into strengthening the real economy.

The bank bailout of 2008 itself showed the power of the banks. They had caused the crisis, yet government provided massive largess to the banks and the bankers–without any sense of accountability for the crisis they had created, and with miserly help for the workers and homeowners who seemed but collateral in the financier’s war of greed.

Over the past half century, (some) economists have come to a deeper understanding of the circumstances in which some form of collective action is needed to ensure the attainment of societal objectives–and which markets by themselves fail to produce efficient or fair outcomes…in the absence of regulations, individuals will fail to take into account the cost of their pollution in their economic calculus. Market on their own produce too much pollution, inequality, and unemployment, but too little basic research.

Banks know how to take advantage of others through predatory and deceptive lending. Large banks engage in excessive risk-taking, knowing that they are too big to fail, so that if they run into a problem, they will be rescued.

There can only be trust if there is a belief that the political system is fair, and that our leaders are not just working for themselves. Nothing destroys trust so much as hypocrisy and gaps between what leaders promise and what is delivered…We had created a system where the inequalities in justice seemed as wide as those in income, wealth, and power. No wonder that so many Americans were angry.

Restraint to Reclaim the Internet

Saturday, October 31st, 2020

Reset: Reclaiming the Internet for Civil Society, Ronald J. Deibert, 2020

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Deibert is professor of Political Science and founder and director of the Citizen Lab at the Monk School of Global Affairs and Public Policy, University of Toronto. He is also co-founder and a principal investigator of the OpenNet Initiative and Information Warfare Monitor projects. He was one of the founders and former VP of global policy and outreach for Psiphon.

A central theme of this book is the growth and dominance of Surveillance Capitalism by a handful of enormously rich and powerful companies and individuals.

Today it is virtually impossible to protect yourself from privacy encroachment via the Internet even using tools like Tor or end to end encryption like that found on Signal and WhatsApp. When Citizen Lab researchers cross international borders they must totally erase their Chromebooks to prevent seizure of their work. Much of Citizen Labs work is uncovering security and privacy vulnerabilities in existing Internet products such as Zoom with vulnerable camera and microphone control and the big hack of 2020. A huge problem with the Internet is its dependency on multiple layers of independently developed software deployed without adequate attention to security issues and problems. Governments may compound the security problem by requiring exploitable back doors, promoting faulty encryption that they can break, or the forced disclosure of encryption keys as a precondition for use in their jurisdictions.

Using Privacy Badger, Deibert found fifteen trackers on LinkedIn and a comparable number of trackers on the New York Times “Privacy Project” site.

As I write this book, the nerves of our World Brain are vibrating with full-on assaults on truth, science, ethics, and civility.
It’s a perfect storm–tools that enable precise details about people’s preferences and habits; Sophisticated machines that can swiftly analyze and then manipulate data as points of leverage around human emotions; unethical companies willing to do anything for a profit; and clandestine government agencies that lack public accountability but do have big budgets and a blank cheque to use social media as an experimental laboratory for their dark arts. The potential implications of this perfect storm should be profoundly unsettling for everyone concerned about democracy, the public sphere, and human rights.

Receiving special attention here is Isreali-based NSO Group and their flagship spyware Pegasus which the Saudi government used to spy on Saudi dissident and exile in Canada student Omar Abdulaziz and his friend Jamal Khashoggi. Citizen Lab had a bead on the number of Pegasus infected phones and realized that one of those phones was in Montreal. Going door to door with a short list of Saudi dissidents in Montreal, they uncovered the needle in the haystack Omar Abdulaziz and were able to confirm that his phone was infected. It is more than likely that information from this infected phone informed Saudi intelligence of Omar’s conversations with Khashoggi and may well have led to Khashoggi’s assassination by MBS.

Deibert estimates that 90% of the most active campaigners in the 2011 Arab Spring have vanished, in large part due to the use of NSO Group’s spyware.

Citizen Lab was able to infect an Iphone with Pegasus spyware in a laboratory environment and to reverse engineer Pegasus itself.

The spyware was extraordinarily sophisticated; it included exploits that took advantage of three separate flaws in Apple’s operating system that even Apple was unaware of at the time…After disclosing the vulnerabilities to Apple, which pushed out a security patch to more than one billion users, and publishing our report on targeting Mansoor, we reverse engineered Pegasus and began scanning for and monitoring NSO’s infrastructure and government client base.

Finding exploitable flaws in operating systems can be sold for as much as $1 million.

Also receiving special attention is China’s security apparatus courtesy of the Chinese government obsession with the Tibetan refugees settled in Dharamsala particularly with the Dalai Lama. Deibert representing Citizen Lab made numerous trips to Dharamsala and had a personal audience with the Dalai Lama. Citizen Lab’s history studying GhostNet goes back to 2009 when China’s large-scale electronic espionage program used to spy on individuals, organizations, and governments was discovered. The threat actors breached 1,295 computers in 103 countries over a two-year period, predominately focusing on governments in Southeast Asia. Citizen Lab’s first report on GhostNet was issued in 2009.

…recent years have brought about a disturbing descent into authoritarianism, fueled by and in turn driving income inequality in grotesque proportions and propelling the rise of a kind of transnational gangster economy. There is today a large and influential class of kleptocrats spread across the globe and supported by a professional service industry of lawyers, shell companies, accountants, and PR firms, the members of which move seamlessly between the private sector and agencies of the state…They thrive by victimizing innocent others, undermining individuals and organizations that seek to hold them to account, and using the power of the state for personal gain. There is no jurisdiction that is immune to corruption and authoritarian practices–only greater or lesser degrees of protection against them.

…In fact, the most disturbing dynamics are playing themselves out within normally liberal democratic countries. Hyper-militarized policing practices that draw on big data and AI-enabled surveillance tools are creating states on steroids…Meanwhile the constraints on abuse of power seem quaint and old-fashioned, as if constructed for a different time and context. We now have twenty-first century policing practices with nineteenth and twentieth century checks and balances.

The growing critical commentary on social media and surveillance capitalism is at a stage similar to the environmentalism of the 1960s and 1970s. The works of Shoshana Zuboff, Siva Vaidhyanathan, Bruce Schneier, and others are, in this respect, the social media equivalent of Rachel Carson’s Silent Spring, Barry Commoner’s The Closing Circle, and Paul Ehrlich’s The Population Bomb. They have dissected what’s wrong and have helped wake us up to a serious pathology, but they have yet to carve out a confident alternative way to organize ourselves.

Commenting on Europe’s GDPR and California’s Consumer Privacy Act, Deibert says “However promising, these statutes on their own are not so much prompting a fundamental behavior shift as they are further trivializing informed consent.”

Thanks to the Snowden disclosures, we now know that a flawed encryption protocol was foisted clandestinely on much of the world by the U.S., Canadian, and U.K. signals intelligence agencies, which enable them to crack the code of their adversaries communications. Critical infrastructure throughout the world depended on the integrity of the protocol. It’s unclear how many governments or criminals knew of and exploited it, or whether people were harmed in the process–but it is conceivable some malfeasance took place because of it.

Deibert takes us into a brief history of “republicanism” from the Greeks to the U.S. founding fathers, to today. “…One shorthand way to think about republican political theory is to take virtually anything that Republican Senate majority leader Mich McConnell advocates and think of the exact opposite of that position.”

Critical to the proper functioning of civil society is an educated and fully informed, enlightened citizenry. With this in mind, Deibert presents the mission statement of his own University.

The University of Toronto is dedicated to fostering an academic community in which the learning and scholarship of every member may flourish, with vigilant protection for individual human rights, and a resolute commitment to the principles of equal opportunity, equity and justice…
Within the unique university context, the most crucial of all human rights are the rights of freedom of speech, academic freedom, and freedom of research. And we affirm that these rights are meaningless unless they entail the right to raise deeply disturbing questions and provocative challenges to the cherished beliefs of society at large and of the university itself…
It is this human right to radical, critical teaching and research and which the University has a duty above all to be concerned; for there is no one else, no other institution and no other office, in our modern liberal democracy, which is the custodian of the most precious and vulnerable right of the liberated human spirit.

Herbert Marshall McLuhan (July 21, 1911 – December 31, 1980) was a Canadian philosopher, whose work is among the cornerstones of the study of media theory. He joined the University of Toronto in 1946 and taught there until his death. Harold Adams Innis (1894 – 1952) was a Canadian professor of political economy at the University of Toronto and the author of seminal works on media, communication theory, and Canadian economic history.

Ron Deibert follows in an important tradition at the University of Toronto.

John Maynard Keynes vs laissez-faire: a history

Tuesday, August 11th, 2020

The Price of Peace; Money, Democracy, and the Life of John Maynard Keynes, Kachary D. Carter, 2020

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Three Conscientious Objectors in 1915 Bertrand Russell, John Maynard Keynes, Lytton Stratchey

As a freshman at Cambridge University, Keynes was invited to join a secretive club, the Apostles, a sort of graduate seminar and dinner party where one member would present a paper. Keynes represented a new generation of Edwardians, leading a sexual revolution with Lytton Strachey, contrasting with the older Victorians like Bertrand Russell. Stratchey wrote of Keynes to Leonard Woolf in 1905, “He analyses with amazing persistence and brilliance. I never met so active a brain (I believe it’s more active than either (G.E.) Moore’s or Russell’s)…he perpetually frightens me.” Bertrand Russell wrote: “Keynes’s intellect was the sharpest and clearest that I have ever known. When I argued with him, I felt that I took my life in my hands, and I seldom emerged without feeling something of a fool.” An artistic grouping, Bloomsbury was born around 1905 at the house where Virginia (Woolf) and her sister Vanessa lived. Apostles Keynes, Leonard Woolf, Lytton Stratchey, E.M. Forster, Clive Bell and others moved to London. In 1906 Keynes took a job at the India Office where he worked on Indian currency and monetary policy.

In 1914, as WWI started, an obscure genius known to some in government from his India Office days, John Maynard Keynes, was summoned to London by Treasury and the Bank of England. Witnessing banker’s pursuit of their own narrow concerns during a bank run crisis, where Bankers focused on their own short-term pecuniary profit, abandoning all thought of “the honour of our old traditions or future good name”, Keynes concluded that political oversight of the bankers was needed. Keynes conceived a solution which Treasury and Parliament blessed that foreign bills could be redeemed for gold but domestic needs including those of the banks would be met with a new alternative paper currency. The plan worked and the run was stopped.

Keynes was invited to Paris for the WWI treaty of peace negotiations. Disturbed by the Allied demand for massive reparations that were unrealistic , Keynes proposed that Germany be allowed to issue bonds guaranteed against default by the Allied governments. Keynes was not privy to the negotiations drawing new borders and breaking up the Ottoman Empire so doesn’t appear aware of the division of oil reserves among the Allies. When Wilson rejected Keynes “Grand Scheme”, Keynes resigned from the peace negotiations and penned maybe his most influential work in 1919, “The Economic Consequences of the Peace” which Carter describes as:

…provincial, shortsighted, vicious, and in many respects deeply unfair polemic. It is also a masterpiece and very likely the most influential work Keynes ever put his name to—a furious tirade against the autocracy, war, and weak politicians. It is at once a howl of rage directed against the most powerful men in the world and an ominous prophecy of the violence that would again sweep the continent in the years to come.

Keynes wrote:

The resulting international system created at Versailles was extremely fragile and would only function if workers believed in it, and workers would not believe in it unless it worked. Break the collective faith in a better tomorrow, and workers will walk off the job, riot in protest, or worse.

The principle of accumulation based on inequality was a vital part of the pre-war order of Society and of progress as we then understood it. This principle depended on unstable psychological conditions, which it may be impossible to recreate. It was not natural for a population, of whom so few enjoyed the comforts of life, to accumulate so hugely. The war has disclosed the possibility of consumption to all and the vanity of abstinence to many.

Bolshevism in Russia was already known to all as an alternative to La Belle Epoque. All over Europe, but particularly in Germany conditions were ripe for the rise of a strongman. Without jobs, food, a sense of purpose, and confidence in a better tomorrow, Europe was already on the path to another war.

Keynes formalized his political theory of economics with three lectures in 1926 “The General Theory of Employment, Interest and Money“,”The End of Laissez-Faire“, and “A Short View of Russia“. Overlooked in Britain even though Bloomsbury loved them, they formed the core of a unique, practical political theory that the United States would apply on a vast scale during the great depression and WWII.

In 1930, Keynes published “A Treatise on Money” an assault on the ability of central bank interest rates to affect investment. Keynes suggested that the state spend money on public works since domestic investment was the problem. This direct assault on laissez-faire caused Austrian Friedrich von Hayek to pen two part indictment of the book. Milton Friedman later claimed von Hayek encourage a do nothing policy that did harm by recommending that “you just have to let the bottom drop out of the world.” Keynes himself responded to von Hayek; “one of the most frightful muddles I have ever read.”

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Franklin D. Roosevelt in his inaugural address in 1933 said

Primarily this is because the rulers of the exchange of mankind’s goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men…They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish…The money changers have fled from their high seats in the temple of our civilization. We may now restore the temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.

In his first 100 days FDR created the FDIC, the SEC, the TVA, and the Agricultural Adjustment Administration.
Felix Frankfurter, a friend of Keynes and appointee to the US Supreme Court in 1939, delivered a letter from Keynes to FDR and arranged meetings for Keynes in 1934 with key administration players not totally on board with Keynesian ideas. One player Keynes met was John Kenneth Galbraith who was running the office of price administration. Galbraith described the meeting as the Pope visiting the lowly village priest. Keynes largely found himself preaching to the choir.
FDR met Keynes and thought him politically naive about the President’s relationship with Wall Street. FDR believed a banking industry hostile to his reforms was driving up interest rates on government debt by sitting out Treasury bill auctions. “There is a practical limit to what the Government can borrow– especially because the banks are offering passive resistance in most of the large centers,” Keynes did make progress with Fed Chairman Eccles who understood the need to keep interest rates low to help the government spend its way out of the Depression.

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In 1936 Keynes published his most important work “The General Theory of Employment, Interest and Money“, a work that Carter calls the most important work in economics in 160 years, to be compared with the monuments of Aristotle, Thomas Hobbes, Edmund Burke, and Karl Marx.

It is a theory of democracy and power, of psychology and historical change, a love letter to the power of ideas. The book is dangerous because it demonstrates the necessity of power. It is a liberation book because it re-framed the central problem at the heart of modern economics as the alleviation of inequality, pivoting away from the demands of production and the incentives facing the rich and powerful that had occupied economists for centuries. It is a frustrating book because it is written in novel abstractions, argued in convoluted sentences and dense equations. And it it a work of genius because it proves a simple truth that, once offered, seems obvious: Prosperity is not hard-wired into human beings; it must be orchestrated and sustained by political leadership.

Keynes said of the genius of Sir Issac Newton:

Newton could hold a problem in his mind for hours and days and weeks until it surrendered to him its secret. Then being a supreme mathematical technician he could dress it up, how you will, for purposes of exposition, but it was his intuition which was preeminently extraordinary…The proofs, for what they are worth, were, as I have said, dressed up afterwards–they were not the instrument of discovery.

Explaining his own method in The General Theory Keynes says:

The object of our analysis is, not to provide a machine, or method of blind manipulation, which will furnish an infallible answer, but to provide ourselves with an organized and orderly way of thinking out particular problems…Too large a proportion of recent “mathematical” economics are mere concoctions, as imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and inter-dependencies of the real world in a maze of pretensions and unhelpful symbols.

The term macroeconomics hadn’t even been coined. Keynes not only invented modern economics, he invented the modern economist and placed him at the top of the new intellectual power structure. The book is a collaborative work done by the Cambridge “Circus” an almost cult like group with its own private language. The two most important contributors beyond Keynes were Joan Robinson and Richard Kahn. Carter says Robinson is the most important economist never to have won a Nobel prize in economics. Two of her students Amartya Sen and Joseph Stiglitz were honored with the Nobel prize. In fact she was only named full professor at Cambridge in 1965, thirty years after publication of her most significant work for which she is not credited. Carter likens Joan Robinson to Rosalind Franklin who discovered the double helix of DNA and was never recognized. Joan Robinson’s published contributions to economics continued until her death in 1983. Much of the The General Theory is incomprehensible. The book is difficult and obscure because Keynes wanted it to be. Its sheer ugliness created a small industry of interpreters. Two economists won Nobel prizes for interpreting the work.


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Keyesian economics found its first real world application during the FDR years. For Joan Robinson “The economic theory which was developed in America was a return to pre-Keynesian doctrines that smothered everything important in Keynes.” For Richard Kahn, the re-engineering of The General Theory into mathematics was a Faustian bargain–a fatal turn that would ultimately lead to Keynes being discredited.

In June 1942, Keynes was rewarded for his service with a hereditary peerage. On 7 July his title was gazetted as Baron Keynes, of Tilton, in the County of Sussex.

Maynard’s wife Lydia was a principal ballet dancer with Ballets Russes under Diaghilev and partnered with Nijinsky

Lydia partnered by Vaslav Nijinsky
There is a youtube video of Lydia dancing with George Balanchine in 1929.

Bretton Woods agreement 1944-1972 Lydia was 5’0″ Maynard was 6’7″

In 1944 Keynes attended the Bretton Woods conference in New Hampshire to hammer out a new international economic system. The Mount Washington Hotel overlooked the Ammonoosuc River where Keynes’s wife Lydia bathed nude each morning.
Keynes called for a new Supernational Bank to regulate the global money supply, currency, and trade flows. This international central bank would issue “Supernational Bank money (SBM) to national central banks like the Federal Reserve, the Bank of England, and their other counterparts throughout the world. These national central banks would borrow SBM from the Supernational Bank as a matter of course as they conducted their ordinary monetary policy operations.
The Supernational Bank would allow nations to grapple with domestic problems without resorting to deflation. Nations would never have to worry about running out of money in an emergency, because the Supernational Bank would always be there to provide money on reasonable terms. No government would have to intentionally create unemployment to resolve a currency or trade problem. Under the old system, when loans became unavailable for any reason–war, banking instability, bad monetary policy, a stock market bubble, or a simple disinterest in foreign lending–the only way a country running a trade deficit to fix its situation would be to force down the price of its goods in foreign markets. Ultimately it would resort to deflation and mass unemployment to do so. Keynes argued the surplus nations were not injured by countries that ran deficits. While the deficit country ran up large financial debts, the surplus country enjoyed fat export trade that employed its workers and raised the standard of living.
What the world also needed was an international authority that could punish countries for running a persistent trade deficit or a persistent trade surplus. Keynes proposed an International Clearing Union (ICU). Each participating central bank would open an account with the ICU. International trade payments would be made through those accounts, using a new international currency called Bancor that the ICU would create at will. When a country ran a persistent deficit or a persistent surplus, the ICU would require it to revalue its currency to bring the system back toward balance. The revaluations would be up or down to a limit of 5%.

Unfortunately for Keynes’s vision, Harry Dexter White, the US representative of the FDR administration arrived at Bretton Woods with a plan already formulated and the US had the clout to get its way. Keynes’s plan had been rejected before the conference even began. Instead all nations that joined the Bretton Woods project would agree to make their currencies convertible into dollars at a fixed exchange rate. The dollar only would be convertible into gold at a price later fixed at $35 per ounce. An International Monetary Fund (IMF) would be established to provide emergency loans in a crisis. A World Bank would be created to assist with post war reconstruction.

Instead of an international regulatory apparatus, Keynes got a gold standard with a bailout fund. White spend much of his time at the conference trying to secure USSR participation. He failed and the USSR never ratified the Bretton Woods agreement. Britain was broke and Keynes could do nothing about the outcome of the conference. Keynes died on Easter Sunday 1946.

The backlash against FDR’s New Deal and War powers was led by the bankers, wall street, and the corporate American elite. Undermining Keynesian economics combined the McCarthy era Communist scare accusations, the rise of the Ayn Rand inspired libertarian movement emphasizing unfettered individual freedom (freedom from government interference), and the resurgence of laissez-faire (market fundamentalism) economics centered at the Chicago School with von Mises and von Hayek and the London School of Economics.
Chicago School graduate Paul Samuelson wrote the textbook Economics: An Introductory Analysis, first published in 1948 that became the principal introduction to economics for generations of American students including this reader. While incorporating some Keynesian ideas, Samuelson was careful to couch these ideas in the long tradition of market fundamental economics. Some labeled Samuelson a neo-Keynesian .

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In 1958 Galbraith published his sensational The Affluent Society where the economics of scarcity had been replaced by an economy of abundance able to meet the needs of everyone with advertising used to encourage further consumption. Galbraith noted that great inequality still existed in America. The book had an immediate and wide spread impact on economic discussion which Carter calls similar to the impact of Thomas Piketty’s Capital in the Twenty-First Century, a history of inequality of income and wealth in France, Britain, and America. Galbraith was perhaps the best known member of the JFK brain trust. Expecting a cabinet appointment, Galbraith was instead named ambassador to India, then under Nehru and the Congress party. Galbraith was a vocal opponent of US involvement in Vietnam so likely JFK wanted to isolate him to quiet his opposition.

In 1972, Nixon shocked the world announcing the end of the post war Bretton Wood system. The gold standard was abandoned and massive monetary and fiscal stimulus programs were launched with low interest rates and business tax cuts. A 10% import tariff would be imposed and price controls put into place. Carter doesn’t discuss it but the US had moved from a trade creditor nation to a trade deficit nation by the late 1960’s. Strongest of the Creditors were Germany and Japan. Sometime about 1971, a young London School of Economics educated Paul Volcker penned a three page secret memo to his boss Henry Kissinger suggesting that foreign nations should be encouraged to have the United States recycle their surpluses through Wall Street. Yanis Varoufakis claims to have seen this secret memo, but the reality is that approximately 70% of all foreign trade surpluses, including China, are now recycled by the United States. Thus a new industry, financialization, which today dominates the US economy was created.

Volcker was named Fed Chairman by Jimmy Carter in 1979. He promptly raised interest rates to an unprecedented peak of 20%. Volcker had turned the Federal Reserve into the primary instrument of US economic policy to fight inflation. Further creative uses of the Fed would be used in the 2008 banking crisis.

The final nails in the coffin of New Deal economic mechanisms occurred under Bill Clinton taking the advise of Bob Rubin and Larry Summers. The Glass-Steagall act was repealed allowed the merger of banks with wall street to create too big to manage financial monsters. Then Clinton declared that there was no need to regulate Wall Street created derivatives that were at the heart of the 20008 sub prime mortgage crisis. Carter points out that the credit default swap (CDS) was the most explosive of these new derivatives. The CDS was a form of insurance whereby a default of an insured derivative would pay the holder. There was no requirement that the entity taking out the insurance actually owned the derivative insured.

The Obama administration was economically scammed by Tim Geithner and Larry Summers. The big banks were bailed out, Glass-Steagall was not reinstated, no banker was prosecuted for their illegal activities. And, according to Carter, 9.3 million lost their homes with government doing virtually nothing to preserve home ownership. A $75 billion plan designed to save 4 million homes never happened. The money was allocated but never spent. The family loss of homes contributed greatly to the increase in unemployment during this time.
Democratic Representative Dennis Cardoza of California in 2011 exclaimed:

For the life of me, I can’t figure out why a community organizer who says he cares about families, who says he cares about communities, has turned his back on one of the biggest problems in America.

Keynes believed that an enlightened management of the economy to produce widespread prosperity and job security would alleviate the problems of unrest that lead to revolutions either communist or fascist. Today the world has the highest level of inequality ever measured.

In 2008, Joseph Stiglitz calculated that if the $48 trillion global economy were simply divided among every one of its inhabitants, a family of four world receive $28,000, high enough to end poverty in every country. Carter calculated that the 2018 economy of $85.8 trillion economy and 7.5 billion people would yield an income of $45,000 for each family of four. “The economic problem of humanity is no longer a problem of production but of distribution–inequality.

Keynes was a conscientious objector dedicated to the elimination of the causes of war. Yet the history of the US after WWII was one of almost continuous real armed conflict and a continuous succession of virtual wars: the cold war til 1992, the war on drugs, and the war on terror after 9/11, The later two were not wars against state actors but against amorphous largely hidden force scattered globally. State actors found themselves invariably drawn into all these virtual wars often with terrible consequences. In real shooting wars with armies, Korea was fought to a draw; Vietnam was lost at a cost of more than 1 million lives; Afghanistan and Iraq never end; Syria and Libya appear to be without resolution. In foreign policy, the US, starting in 1953 and continuing to this day, assist in the overthrow of governments in country after country. The US today is the world’s greatest threat to stability and peace.

As Piketty documents, we are living in a period of unprecedented inequality of income and wealth. Carter concludes, the US government has remained, with the exception of Bill Clinton, stubbornly Keynesian but Keynesian principals are applied only during ever escalating economic crises. Applying Keynesian solutions in government policy sporadically and blind to people’s suffering serves only to rescue the oligarchs from their own incompetence and crimes. This malignant phenomenon has been named “Corporate Socialism“. The failures of the 2008 banking crisis highlighted the bankruptcy of Market Fundamentalist views of the world. Without extensive, enlightened, humane state management, unfettered capitalism is capable of generating enormous instability and suffering that only the state can correct. As an optimist foresees, the global economy, properly managed by the state, is capable of reducing income and wealth inequality and improve the lives and quality of life of everyone on earth, and eliminate war.

A bit of trivia; Keynes was 6’7″, Galbraith was 6’9″ and Volcker was 6’7″.

Optimist anticipates participatory socialism and social federalism

Tuesday, June 23rd, 2020

Capital and Ideology, Thomas Piketty, 2020
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A continuation of Piketty’s earlier 2014 work extending his previous analysis starting from 1500 to the present and adding France, India, China, Germany, Spain. the Nordic countries, Russia and Eastern Europe, the Petro-Monarchies, etc.
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Today, the postcommunist societies of Russia, China, and to a certain extent Eastern Europe…have become hypercapitalism’s staunchest allies. This is a direct consequence of the disaster of Socialism and Marxism and the consequence of all egalitarian internationalist ambitions. So great was the communist disaster that it overshadowed even the damage done by the ideologies of slavery, colonialism, and racialism and obscured the ties between those ideologies and the ideology of ownership and hypercapitalism–no mean feat.

Furthermore, social democrats never really reconsidered the issue of just ownership after the collapse of communism. The postwar social-democratic compromise was built in haste, and issues such as progressive taxation, temporary ownership, circulation of ownership (for example, by means of a universal capital grant financed by a progressive tax on property and inheritances), power sharing in firms (via co-management or self management), democratic budgeting and public ownership were never explored as fully or systematically as they might have been.

It (modern property law) originated…with Christian doctrine, which sought over many centuries to secure the property rights of the Church as both a religious and a property-owning organization.

…the concentration of private property, which was already extremely high in 1800-1810, only slightly lower than on the eve of the (French) Revolution, steadily increased throughout the nineteenth century and up to the eve of World War I…The case of Paris is especially noteworthy; there, the wealthiest 1 percent owned nearly 50 percent of all property in 1800-1810 and more than 65 percent on the eve of World War I.

As for achieving real equality, however, the great promise of the (French) Revolution went unfulfilled…And when a progressive income tax was finally adoption on July 15, 1914, it was not to finance schools or public services but to pay for war with Germany.

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When slavery was abolished in the 19th Century, the discussion in slave owning nations concerned compensation for the owner’s of slaves, never about compensation for the slaves.

It is easy to see that in a society where slaves represented virtually the entire work force, their market value could reach astronomical levels, potentially as high as seven or eight years of annual production…Recall that France saddled Haiti with a debt equivalent to three years of Haitian nation income in 1825 yet remained convinced that it was making sacrifices compared to what slaves in Saint-Dominique actually yielded in profit.

In 1860, the market value of (US) slaves (4 million in number) exceeded 250 percent of the annual income of the southern states and came close to 100 percent of the annual income of all the states. If compensation had been paid, it would have been saddled with interest and principal payments for decades.

The secession of the southern states and the resulting Civil War ended these discussions and US slave owners were never compensated for their loss of property as a result of the war and the emancipation proclamation.

Piketty follows the transformation, starting around 1500, of society from Ternary (Clergy, Nobility, Third estate–the workers) to Ownership societies with a centralized state. This transformation was accompanied by the rapid development of arms, warships, and navigation, needed to support the endless wars among the new nation states. This technological development of war tools enabled the co development of slavery and colonialism. Even the Ottoman and Chinese Empires were no match for the modern war machine. Gunboat diplomacy reigned supreme into the twentieth century. An extreme example are the two opium wars of Britain against China in the mid nineteenth century. Not only did China have to allow the sale of opium in China, but China was saddled with massive reparations for the costs of the wars.

Japanese Depiction of Perry’s black ships
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Japan reacted to the American (Admiral Perry), French and British visit by warship in the mid nineteenth century with the Meiji reformation, whereby Japan acquired and built its own advanced arms and warships and became a colonial power in its own right.

In the period 1880-1914, the United Kingdom and France earned so much from their investments in the rest of the world (roughly 5 percent additional national income for France and more than 8 percent for the United Kingdom) that they could allow themselves to run persistent structural trade deficits (an average of 1-2 percent of national income for both countries) while continuing to accumulate claims on the rest of the world at an accelerated pace. In other words, the rest of the world labored to increase consumption and standard of living of the colonial powers, even as it became increasingly indebted to those powers.

On Colonial state tax revenues in the eighteenth century:

…both countries (England and France) were taking in 600-900 tons of silver in 1700, 800-1100 tons in the 1750’s, and 1600-1900 tons in the 1780’s, leaving all other European powers far behind. Importantly, Ottoman tax receipts remained virtually unchanged from 1500 to 1780; barely 150-200 tons. After 1750, it was not only France and England that had a far greater tax capacity than the Ottoman Empire; so did Austria, Prussia, Spain, and Holland.

…the development of the modern state involved two great leaps forward. The first unfolded between 1500 and 1800 in the leading states of Europe, which were able to increase their tax revenues from barely 1-2 percent of national income to about 6-8 percent. This process was accompanied by the development of ownership societies at home and colonial empires abroad. The second leap forward came in the period 1930-1980, when the rich countries as a group went from tax revenues of 8-10 percent of national income on the eve of World War I to revenues of 30-50 percent of national income in the 1980s. This transformation was accompanied by a broad process of economic development and historic improvement in living conditions and gave rise to various forms of social-democratic society…It proved difficult to extend the second leap forward to poorer countries in the late twentieth and early twenty-first centuries…

If we include all military conflicts across the continent in each period, we find that European countries were at war 95 percent in the sixteenth centry, 94 percent in the seventeenth century, and still 78 percent in the eighteenth century (compared to 40 percent in the nineteenth century and 54 percent in the twentieth century). The period 1500-1800 was one of incessant rivalry among Europe’s military powers, and this is what fueled the development of unprecedented fiscal capacity as well as numerous technological innovations, particularly in the areas of artillery and warships.

By the end of the American Revolutionary and Napoleonic Wars (1792-1815), British public debt had soared to more than 200 percent of national income, the debt was so high that one-third of the taxes paid by British taxpayers between 1815 and 1914 (mainly by people of middle and low income) was devoted to repayment of the debt and interest (profiting the wealthy who had lent the government money to pay for the wars)…It also might have been preferable to tax the wealthy rather than allow them to become still wealthier by buying government bonds…with political power in the hands of the wealthy, the choice was made to spend money on the military and to finance it with public debt, and this helped to secure European domination over the rest of the world.

…these protectionist and mercantilist measures, imposed on the the rest of the world at gunpoint, played a significant role in achieving British and European industrial domination. According to available estimates, the Chinese and Indian share of global manufacturing output, which was still 53 percent in 1800, had fallen to 5 percent by 1900.

The colonial ideology that seeks to liberate and civilize nations in spite of themselves generally leads to disaster, no matter what the color of the colonizer’s skin (Japan).

The success of Japan’s proprietarian and industrial transition shows that the mechanisms at work have nothing whatsoever to do with Christian culture or Eueopean civilization…the Japanese experiences shows that proactive policies, especially regarding public infrastructure and investments in education, can overcome very strong and longstanding status inequalities in a matter of decades…we will see that the reduction of social inequality in Japan was further assisted by an ambitious program of agrarian reform in the period 1945-1950 as well as by highly progressive taxation of top incomes and large estates.

The fall of ownership society in the period 1914-1945 can be analyzed as a consequence of three challenges; the challenge of inequality with European ownership societies, which led to the emergence first of counterdiscourses and then of communist and social-democratic counter-regimes in the late nineteenth and first half of the twentieth centuries; the challenge of inequality among countries, which led to critiques of the colonial order and the rise of increasingly powerful independence movements in the same period; and finally a nationalist and identitarian challenge, which heightened competition among the European powers and eventually led to their self-destruction through war and genocide in the period 1914-1945.

The period from 1726-1914 saw low inflation and complete stability in the value of the pound sterling and the French gold franc. World War I put an end to monetary stability and the suspension of convertibility of their currencies into silver or gold.

…from 1914 to 1950 inflation averaged 13 percent a year in France (equivalent to a hundred fold increase in the price level) and 17 percent in Germany (a three hundredfold price increase).

…ownership societies that seemed so prosperous and solid on the eve of World War I collapsed between 1914-and 1945. The collapse was so complete that nominally capitalist countries actually turned into social democracies between 1950 and 1980 through a mixture of policies including nationalizations, public education, health and pension reforms, and progressive taxation of the highest incomes and largest fortunes. Despite undeniable success, however, these social-democratic societies began to run into trouble in the 1980’s. Specifically, they proved unable to cope with rampant inequality that began to develop more of less everywhere around that time.

Why did social democratic societies fail after 1980?

Ronald Reagan (R) and Margaret Thatcher wave after their arrival in Camp David, 22 december 1984, before their meeting. (Photo credit should read ARCHIVES UPI/AFP/Getty Images)

In the first place, attempts to institute new forms of power sharing and social ownership of firms remained confined to a small number of countries (especially German and Sweden). This avenue of reform was never explored fully as it might have been, even though it offered one of the most promising responses to the challenge of transcending private property and capitalism. Second, social democracy did not have a good answer to one pressing question; how to provide equal access to education and knowledge, particularly higher education. Finally, we will look at social-democratic thinking about taxation, especially progressive taxation of wealth. Social democracy did not succeed in building new transnational federal forms of shared sovereignty or social and fiscal justice. Today’s globalized economy is one in which regulation in all its forms has been undermined by free trade and free circulation of capital, instituted by agreements to which social democrats consented or even instigated. In any case, they had no alternative to offer. The resulting heightened international competition has gravely endangered the social contract (and consent to taxation) on which the social-democratic states of the twentieth century were built.

The French and British never embraced corporate power sharing and social ownership preferring nationalization of private companies:

Then in 1986-1988 the Gaullist and liberal parties returned to power in a new context of privatization and deregulation under Thatcher and Reagan, while at the the same time the Communist bloc was slowly crumbling. This led to the privatization of most of the companies that had been nationalized between 1945-1982.

…from 1917 to 1991, new thinking about private property was blocked by the bipolar opposition of Soviet Communism and American capitalism. One was either for unlimited state ownership or for full private shareholder ownership….The fall of the Soviet Union inaugurated a new period of unlimited faith in private property from which we have not yet completely emerged but which is beginning to show serious signs of exhaustion.

On the massive inequality that developed in the United States from about 1980:

The bottom 50 percent of the income distribution claimed about 20 percent of national income from 1960 to 1980, but that share has been divided in half, falling to just 12 percent in 2010-2015. The top centile’s share has moved in the opposite direction, from barely 11 percent to more than 20 percent…the share of total income going to the bottom 50 percent in Europe remains significantly larger than the share going to the top centile.

To sum up: in the light of the history of the past two centuries, educational equality played a more important sole in economic development than the sacrilization of inequality, property, and stability. More generally, history demonstrated the recurrent risk of an “inequality trap” which many societies have faced throughout the ages. Elite discourse tends to overvalue stability, and especially the perpetuation of existing property rights, whereas development often requires a redefinition of property relations and opening up of opportunities to new groups.

On the failures of progressive taxation:

First, parties of the left failed to foster the kind of international cooperation needed to protect and extend progressive taxation; indeed at times they contributed to the fiscal competition that has proved devastating to the very idea of fiscal justice. Second, thinking about just taxation too often neglected the idea of a progressive wealth tax, despite its importance for any ambitious attempt to transcend private capitalism, particularly if used to finance a universal capital endowment and promote greater circulation of wealth.

…we now know that the top centile’s share of total wealth can fall from 70 percent to 20 percent without impeding growth (quite the contrary, as Western European experience in the twentieth century shows). We know from experience with Germanic and Nordic versions of co-management that employee and shareholder representatives can each control half the voting rights in a firm and that such power sharing can improve overall economic performance.

On tax havens:

…this minimum estimate implies that the financial assets tucked away in tax havens are roughly equal to the total amount of all financial assets legal owned by Russian households inside Russia (roughly one year of national income). In other words, off shore property has become at least as important in macroeconomic terms as legal financial property…In a sense, illegality has become the norm.

…by exploiting data made public by the Bank for International Settlements (BIS) and the Swiss National Bank (SNB) on countries where assets are held, one can estimate each country’s approximate share of offshore assets held in tax havens relative to the total (lawful and unlawful) assets held by residents of each country. The results are as follows; “only” 4 percent for the United States, 10 percent for Europe, 22 percent for Latin America, 30 percent for Africa, 50 percent for Russia, and 57 percent for the petroleum monarchies.

On China:

China thus appears to have settled on a mixed-economy property structure: the country is no longer communist since nearly 70 percent of all property is now private, but it is not completely capitalist either because public property still accounts for a little more than 30 percent of the total–a minority share but still substantial. Because the Chinese government, led by the CCP, owns a third of all there is to own in the country, its scope for economic intervention is large: it can decide where to invest, create jobs, and launch regional development programs.

If we compare China to the other Asian giant, India, it is clear that since the early 1980s China has been both more efficient in terms of growth and more egualitarian in terms of income distribution (or, rather, less inegalitarian, in the sense that concentration of income has increased less dramatically than in India)…one reason for this difference is that China has been able to invest more in public infrastructure, education, and health care. China achieved a much higher level of tax revenue than India, where basic health-care and educational services remain notoriously underfinanced. China has nearly matched Western levels of taxation, taking in roughly 30 percent of national income in taxes (and roughly 40 percent if one includes profits from public firms and sale of public lands).

On the dangers posed by the central banks:

After the bankruptcy of Lehman Brothers in September 2008 and the ensuing financial panic, things changed completely…The world’s major central banks devised increasingly complex money-creation schemes collectively described by the enigmatic term “quantitative easing” (QE). In concrete terms, QE involves lending to the banking sectors for longer and longer periods (three months, six months, or even a year rather than a few days or weeks) and buying bonds issued by private firms and governments with even longer duration (of several years) and in much greater quantities than before. The Federal Reserve was the first to react In September 2008 its balance sheet increased from the equivalent of 5 percent of GDP to 15 percent; in other words the Fed created money equivalent to 10 percent of US GDP in a few weeks time. This proactive stance would continue in subsequent years; the Fed’s balance sheet had risen to 25 percent of GDP by the end of 2014…In Europe the reaction was slower. The ECB and other European authorities took longer to understand that massive intervention by the central bank was the only way to stabilize financial markets and reduce the “spread” between the interest rates of the various European countries. Since then, the ECB purchases of public and private bonds have accelerated, however, and the ECB’s balance sheet stood at 40 percent of Eurozone GDP at the end of 2018…By avoiding cascading bank failures and acting as “lender of last resort”, the Fed and ECB did not repeat the errors that the central banks committed in the interwar years, when orthodox “liquidationist” thinking (based on the idea that bad banks must be allowed to fail so that the economy can restart) helped push the world over the edge of the the abyss…What makes central banks so powerful is their ability to act extremely rapidly.

Piketty does not discuss the New Deal US Federal Deposit Insurance Corporation FDIC program which allows the federal government to instantly take over failing banks, reorganize them with new management, and reopen them after a single weekend, assuring depositors that their savings are insured and immediately available. Obama and his treasury secretary Tim Geithner refused to allow the Shiela Bair led FDIC to break up and reorganize the failing banks during the 2008 crisis. This would have been the available and desired solution to the failures.

…the danger is that these monetary policies, by avoiding the worst gave the impression that no broader structural change in social, fiscal, or economic policy was necessary. Nevertheless, the fact is that central banks are not equipped to solve all the world’s problems or to serve as the ultimate regulator of the capitalist system…To combat excessive financial deregulation, rising inequality, and climate change, other public institutions are necessary; laws, taxes, and treaties drafted by parliaments relying on collective deliberation and democratic procedures.

In the abstract, there is nothing to stop central banks from enlarging their balance sheets by a factor of ten or even more…From a strickly technical standpoint, the Fed or ECB could create dollars or euros worth 600 percent of GDP and attempt to buy all the private wealth of the United States or Western Europe…central banks and their boards of governors are no better equipped to administer all of a country’s property than were the Soviet Union’s central planners.

…the Bank of Japan and Swiss National Bank both have balance sheets in excess of 100 percent of GDP…It is nevertheless impossible to rule out that similar things will someday happen to the Eurozone or the United States. Financial globalization has assumed such proportions that it may lead those responsible for setting monetary policy step by step toward decisions that would have been unthinkable only a few years before.

Many citizens have quite understandably begun to ask why such sums were created to bail out financial institutions, with little apparent effect in jump-starting the European economy, and why it shouldn’t be possible to mobilize similar resource to help struggling workers, develop public infrastructure, or finance large investments in renewable sources of energy. Indeed it would be by no means absurd for European governments to borrow at current low interest rates to finance useful investments, on two conditions; first, such investments should be decided democratically, in parliament with open debate, and not by a Governing Council meeting behind closed doors; and second, it would be dangerous to lend credence to the notion that every problem can be resolved by printing money and taking on debt. The principal instrument for mobilizing resources to undertake common political projects was and remains taxation, democratically decided and levied on the base of each taxpayer’s economic resources and ability to pay, in total transparency.

And yet the Democratic presidents who followed Reagan, Bill Clinton (1992-2000) and Barack Obama (2008-2016) never made any real attempt to revise the narrative or reverse the policies of the 1980s. In particular, in regard to the reduction of the progressive income tax (whose top marginal rate fell to an average of 39 percent from 1980 to 2018, half its level in the period 1932-1980) and the de-indexing of the federal minimum wage (which led to a clear loss of purchasing power since 1980), the Clinton and Obama administrations basically validated and perpetuated the basic thrust of policy under Reagan…But it may also be that acceptance of the new fiscal and social agenda was partly due to the transformation of the Democratic electorate and to a political and strategic choice to rely more heavily on the party’s new and highly educated supporters, who may have found the turn toward less redistributive policies personally advantageous.

In particular, higher-income voters voted more heavily for Tony Blair’s New Labour in the period 1997-2005 than they had voted for Labour previously. That may seem logical given that New Labour also attracted more and more votes among college-educated people and its fiscal policies were relatively favorable to high earners. Just as the Clinton (1992-2000) and Obama (2008-2016) administrations had validated and perpetuated the Reagan reforms of the 1980s, New Labour governments in the period 1997-2010 largely validated and perpetuated the fiscal reforms of the Thatcher era.

I have tried to highlight the significant dangers posed by the rise of socioeconomic inequality since 1980. In a period marked by internationalization of trade and rapid expansion of higher education, social-democratic parties failed to adapt quickly enough, and the left-right cleavage that had made possible the mid-twentieth-century reduction of inequality gradually fell apart. The conservative revolution of the 1980s, the collapse of Soviet communism, and the development of neo-proprietarian ideology vastly increased the concentration of income and wealth in the first two decades of the twenty first century. For want of a constructive egalitarian and universal political outlet, these tensions have fostered the kinds of nationalist identity cleavages that we see today in practically every part of the world…When people are told that there is no credible alternative to the socioeconomic organization and class inequality that exists today, it is not surprising that they invest their hopes in defending their borders and identities instead.

In the broadest terms, the tax system of the just society would rest on three principal progressive taxes: a progressive annual tax on property, a progressive tax on inheritances, and a progressive tax on income. As indicated here, the annual property tax and the inheritance tax would together yield about 5 percent of national income, all of which would be used to finance capital endowments. The progressive income tax, would yield about 45 percent of national income, which would be used to finance all other public expenditures, including the basic income and, above all, the welfare state (which would cover health, education, pensions, and so on).

The model of participatory socialism proposed here rests on two key pillars; first, social ownership and shared voting rights in firms, and second, temporary ownership and circulation of capital. These are the essential tools for transcending the current system of private ownership. By combining them, we can achieve a system of ownership that has little in common with today’s private capitalism; indeed it amounts to a a genuine transcendence of capitalism.

If every individual is to have a chance of finding decently remunerated employment, we must put an end to the hypocritical practice of investing more in elitist educational programs and institutions than in institutions that cater to the disadvantaged. The labor code and, more generally the entire legal system need to be overhauled. New systems of wage bargaining, a higher minimum wage, a fairer wage scale, and sharing of voting rights within firms between workers and shareholders can all contribute to the establishment of a just wage, a more equal distribution of economic power, and a deeper involvement of workers in shaping the strategy of their employers.

The central goal of democratic equality vouchers is to promote participatory and egalitarian democracy. Currently, the prevalence of private (political) financing significantly biases the political process. This is particularly true of the United States where campaign finance laws (always inadequate) have been set aside by recent decisions of the Supreme Court. But it is also true in emerging democracies such as India and Brazil as well as in Europe, where current laws are equally inadequate and in some cases totally scandalous.

The redefinition of the global legal framework will require abandonment of some existing treaties, most notably those concerning the free circulation of capital that came into effect in the 1980s-1990s because these stand in the way of meeting the above mentioned goals. These treaties will need to be replaced by new rules based on the principles of financial transparency, fiscal cooperation, and transnational democracy.

Finally it should be noted that this book was written before the start of the global covid19 pandemic and the global recession/depression. Undoubtedly much is about to change socially and politically in response.