The economist John Maynard Keynes predicted a society so prosperous that people would hardly have to work. But that isn’t exactly how things have played out. www.theatlantic.com
Progressives and conservatives, including Tucker Carlson and Goldman Sachs, agree that monopolies are pernicious. newrepublic.com
Last Wednesday, the conservative talk show host Tucker Carlson started a fire on the right after airing a prolonged monologue on his show that was, in essence, an indictment of American capitalism.
America’s “ruling class,” Carlson says, are the “mercenaries” behind the failures of the middle class — including sinking marriage rates — and “the ugliest parts of our financial system.” He went on: “Any economic system that weakens and destroys families is not worth having. A system like that is the enemy of a healthy society.”
[Jane Coaston] www.vox.com
It’s easy to derive the wrong lesson here. The point is not that Ayn Rand was a hypocrite. If you have strongly held political principles, you can’t live in the world without compromising them.
The point is that it’s impossible to build a market-driven healthcare system that works. Even the 20th Century’s greatest advocate of free markets needed government social programs to stay alive.
“Apple’s world-beating financial engineering is teaching the corporate world how to exploit Trump’s tax cuts.” [Cory Doctorow/Boing Boing]
On the island of Yap, people used giant stone coins that weighed hundreds of pounds as money. The island’s story helps answer a fundamental economic question: What is money? (NPR)
Workers notice that corporate profits are going up but their paychecks aren’t. Teamwork, empowerment, and sense of purpose only goes so far if your weekly paycheck is flat or even declining.
Warren calls for a return to strict antitrust enforcement. In other words, government needs to go after big banks, big tech companies — the big companies that dominate every single industry in the US today.
The speech is short, informative, and plain English that anyone can understand — worth reading. The full text, along with a bit of analysis, is here:
Elizabeth Warren’s Consolidation Speech Could Change the Election [Washington Monthly/Paul Glastris]
Warren says every single industry in the US today is dominated by about three titanic corporations, which have the power to stifle competition. She cites banking, airlines, and the tech industry.
By way of background, Warren explains that for most of the first century of antitrust regulation, government forbade monopolies. Since the 1970s or so we’ve had a more lenient standard, permitting monopolies unless they were demonstrably harmful to consumers. Warren calls for a return to the more strict standard — not as an anti-market maneuver, but so that the market can be permitted to operate.
Warren is absolutely right here, with one damn big reservation. In the one industry I’m closely familiar with — the tech industry, of course — the examples she cites make me say, “Yes, but…. ” As in: Yes, but can Google REALLY be considered a monopoly? The barrier to competition is so low here — as the cliche in the tech industry goes, the competition is only a click away. Google’s search results are just plain better than most of the companies seeking antimonopoly protection. Most of the companies seeking antimonopoly protection against Google are, to put it plainly, spammers.
Still, as blogger/author John Robb has pointed out several times, our current economy is dangerously centralized. The US has effectively replicated the command-and-control economies of the USSR and Maoist China. In those countries, government bureaucrats ran the economy; in the US it’s government bureaucrats partnering with Wall Street, but the effect will be the same.
I love this speech by Warren. It raises what should be the central issue of the Presidential campaign, which is an issue that we’ve been struggling with the entire history of the country: What, if anything, should be the role of government in the US economy? We’ve held up “hands off” as the ideal twice in American history, and both times it’s proven wrong. I like Warren’s ideal: Government should be a referee, ensuring competition. The referee doesn’t choose the winner of a boxing match, but he breaks up clinches and penalizes hitting below the belt.
Ironically, Trump is more likely to be friendly to this message than Clinton. But Trump literally changes his views on on a monthly basis, so he can’t be trusted on this or any other issue.
Nope, says reddit.com.
It has several key characteristics of Communism, most notably elimination of property, profit, business and money. Replicators handle “to each according to his ability.”
But the Federation fails one characteristic of Communism: Eliminating government.
Star Trek under Roddenberry hated business, particularly in “The Next Generation.” But Roddenberry himself was a businessman. As portrayed in These Are the Voyages, Roddenberry’s ego made him self-sabotaging. He blamed others, and was reluctant to share credit and profit. He was kind of a Ferengi, actually.
Freakonomics Radio (podcast):
You’ve seen them — everywhere! — and often clustered together, as if central planners across America decided that what every city really needs is a Mattress District. There are now dozens of online rivals too. Why are there so many stores selling something we buy so rarely?
Dragons are why the world of Game of Thrones has remained stuck in the middle ages for thousands of years.
Roddenberry’s Star Trek was “above all, a critique of Robert Heinlein” [Manu Saadia – Boing Boing]
I recently came across a definition of socialism (which I can no longer put my fingers on), that said it’s an economic system where the means of production is owned by the the workers, with the state as their proxy. It said that socialism is a stepping-stone on the way to Communism, when goods would be so plentiful that there would be no need to pay for them. And I said to myself, holy crap, that’s Star Trek.
Star Trek is a Communist society where everybody worthwhile serves in the military and wears a uniform.
Millionaires don’t move from high-tax states to low-tax states in significant numbers, according to a recently published study. And when they do move, it’s to Florida, disproportionately more than other low-tax states, such as New Hampshire, Tennessee and Texas. That suggests the millionaires are moving for reasons other than fleeing taxes.
A Guaranteed Income for Every American [Charles Murray – The Wall Street Journal]
While students at Ivy League schools and elite liberal-arts colleges reportedly protest microagressions and cultural misappropriation, students at lower-tier colleges like SUNY New Paltz struggle to pay for their education.
Meanwhile, Back on Most Campuses [Eyal Press – The American Prospect]
Because of loopholes in disclosure laws for large cash transactions, real estate is a great way to launder money. So if you’ve got a million dollars in illegally obtained cash lying around, a luxury Manhattan apartment is a good place for it.
How To Hide A Million Dollars In Plain Sight – Planet Money
There are apartments in cities around the world where the lights do not go on at night. The apartment is empty. And it’s hard to tell who owns it or where the money to buy the apartment came from.
And that’s because some of that money is from questionable origins. If you have a lot of money to hide, you can park that cash in real estate. You hide the money in plain sight. You turn a fancy apartment into a giant piggy bank or secret vault.
On today’s show, the international quest to try answer a simple question: Who owns Apartment 5B?
Likewise, being a lazy good-for-nothing isn’t much of a handicap if you were born into money.
Of late, America has been doing a crappy job providing the circumstances that permit hard work and talent to succeed.
Are You Successful? If So, You’ve Already Won The Lottery – Robert H. Frank, The New York Times
Today, we refer to a man inviting a woman to dinner as “traditional.” At first it was scandalous: A woman who arranged to meet a man at a bar or restaurant could find herself interrogated by a vice commission. In the 1920s and ‘30s, as more and more middle-class women started going to college, parents and faculty panicked over the “rating and dating” culture, which led kids to participate in “petting parties” and take “joy rides” with members of the opposite sex.
By the 1950s, a new kind of dating took over: “going steady.” Popular advice columnist Dorothy Dix warned in 1939 that going steady was an “insane folly.” But by the post-war era of full employment, this form of courtship made perfect sense. The booming economy, which was targeting the newly flush “teen” demographic, dictated that in order for everyone to partake in new consumer pleasures — for everyone to go out for a burger and root beer float on the weekends — young people had to pair off. Today, the economy is transforming courtship yet again. But the changes aren’t only practical. The economy shapes our feelings and values as well as our behaviors.
The generation of Americans that came of age around the time of the 2008 financial crisis has been told constantly that we must be “flexible” and “adaptable.” Is it so surprising that we have turned into sexual freelancers? Many of us treat relationships like unpaid internships: We cannot expect them to lead to anything long-term, so we use them to get experience. If we look sharp, we might get a free lunch.
But for all the hand-wringing, this kind of dating isn’t any more transactional than it was back when suitors paid women family-supervised visits or parents sought out a yenta to introduce their children at a synagogue mixer. Courtship has always been dictated by changes in the market. The good news is that dating is not the same thing as love. And as anyone who has ever been in love can attest, the laws of supply and demand do not control our feelings.
Sexual Freelancing in the Gig Economy – Moira Weigel, The New York Times
Cornell economist Robert Frank studies the role luck plays in the outcomes of successful people, and the hostility that comes from suggesting luck plays a role in success.
Behavioral economist on why Americans freak out when you attribute their success to luck -Cory Doctorow, Boing Boing:
Frank’s argument: being born to a rich, privileged family is sometimes sufficient to guarantee success, even for people who aren’t very good at their jobs and don’t work very hard; meanwhile, being born into a family that lacks wealth and privilege can sometimes prevent people from rising in society, even if they are very good and work very hard.
In my observation most successful people are lucky and work hard. I’ve known many unsuccessful people who work hard, and a few successful people who were lazy and lucky.
From my life experience I conclude that good luck is essential to success, and hard work is helpful.
Disproving Beliefs About the Economy and Aging – Christopher Farrell, The New York Times.
Older people are more likely to continue working than in the past. They’re as productive as younger workers. And they don’t block young people from the job market.
As to the last point, it also pertains to immigration:
The notion that the job market is a zero sum game — more jobs for one group translates into fewer jobs for another group — is deeply ingrained. Economists call the belief that there are only so many jobs in an economy the “lump of labor fallacy.”
But the truth is that growth in the number of jobs for older people tends to run in parallel with gains for younger workers. “There isn’t a fixed number of jobs,” Ms. Carstensen said. “You grow the pie.”
If not capitalism, then what? Just 33% of young people surveyed say they support socialism.
“The word ‘capitalism’ doesn’t mean what it used to,” said Zach Lustbader, a senior at Harvard involved in conducting the poll, which was published Monday. For those who grew up during the Cold War, capitalism meant freedom from the Soviet Union and other totalitarian regimes. For those who grew up more recently, capitalism has meant a financial crisis from which the global economy still hasn’t completely recovered.
A subsequent survey that included people of all ages found that somewhat older Americans also are skeptical of capitalism. Only among respondents at least 50 years old was the majority in support of capitalism.
Even conservatives don’t defend capitalism much anymore. When they talk about “capitalism,” it’s likely to be the phrase “crony capitalism.”
John Della Volpe, the polling director at Harvard, went on to personally interview a small group of young people about their attitudes toward capitalism to try to learn more. They told him that capitalism was unfair and left people out despite their hard work.
“They’re not rejecting the concept,” Della Volpe said. “The way in which capitalism is practiced today, in the minds of young people — that’s what they’re rejecting.”
Help wanted: Questions designed to weed out unsuitable job applicants can turn out to be accidentally discriminatory.
Automatically ruling out people with felony convictions, or setting arbitrary standards on experience, can disenfranchise many workers. Better to look at the applicants as whole people.
But what hiring manager has time to do all that, along with their regular work, particularly when hundreds of people are applying for a single position?
Planet Money looks into it, but doesn’t have any answers:
When you’re an employer looking at a giant stack of resumes, you have to find some way to quickly narrow the field. But how do you do that fairly? And what happens when your good intentions backfire?
In this episode, we bring you a group of stories about hiring. We talk to a female software engineer who’s trying to bring blind hiring to Silicon Valley. She’s come up with a way to mask applicants’ voices during an interview—we hear what it sounds like. And, we look at what happened when the nation’s biggest employer began hiring people who had felony records. It turned out that those employees performed just as well as people with no criminal background—sometimes better. The employer? The United States military.
Drivers can’t find good jobs and need cash now, so they work at rates below minimum wage and below the cost of keeping and maintaining their cars.
When the economy improves, Uber and Lyft will be in trouble.
Here is the thing about Uber and Lyft (and much of the “sharing economy”).
They don’t pay the cost of their capital.
The wages they pay to their drivers are less than the depreciation of the cars and the expense of keeping the driver fed, housed and healthy. They pay less than minimum wage in most markets, and in most markets that is not enough to pay the costs of a car plus a human.
These business models are ways of draining capital from the economy and putting them into the hands of a few investors and executives. They prey on desperate people who need money now, even if the money is insufficient to pay their total costs. Drivers are draining their own reserves to get cash now, but hey, they gotta eat and pay the bills.
This sharing economy shit works in a shitty economy. In a good economy, where people have what they need, it doesn’t work.
And this is not a problem that will be solved by the free market.
Until we stop pretending the market fairy is going to solve social action problems, we won’t actually solve those problems.
Via Cory Doctorow, who notes that other companies that fail to provide a living wage, such as McDonald’s and Walmart, are taxpayer-subsidized in the form of food stamps to employees.