Unpaid caregiving is another sign of the need for a different economic model

TRRN has a story about the cost of unpaid caregiving to both caregivers (who are primarily women) and the economy overall. The guest said:

They often don’t tell their employer because they’re afraid of being essentially fired if they disclose that they’re caring for—You can’t really hide that you’re caring for children, but you can hide that you’re caring for a disabled spouse...

This goes to two points I always return to...

(1) The current definition of economy and economic activity is focused solely on generating profit. This leads economic (essentially all) public and private policy to measure success (and existence) on ability to produce a profit. But the majority of the economy (the workers) don't prioritize profit; their primary reason to work is self-maintenance and well-being. So a far better definition of economies is: self-organizing and self-sustaining systems of production, distribution and consumption of goods and services that promote the well-being of all participants. Such a definition would rule aspects of offensive war-making to be anti-economic (major reduction in status) and personal caregiving services would increase in status; after all, caregiving adds almost immeasurably to human well-being.

(2) The power elite establish and maintain their status by controlling information by a number of means. I've written about state secrecy (so called 'national security interests') and intellectual property. The above quote is another way to control information - self-censorship for the sake of job security. This has also crept a little into cultural embarrassment... needy family members are a sign of weakness so caregiving is not often mentioned. 

The solution to information control is transparency. But the level of transparency necessary to fully open up an economy cannot be driven only by policy. They must also be a massive cultural shift to social and cultural transparency. It's not easy but these are ideas and concepts that must be mulled and allowed to percolate through individual and societal expectations.

Bernie speaks...

Bernie Sanders gave a speech "On How Democratic Socialism Is the Only Way to Defeat Oligarchy." It covers much of what I've written about here and elsewhere. It's worthy of a listen.

Monoculture of nation-states

Barack Obama held a town hall in Berlin recently. [As an aside, his intelligence and oration are such a refreshing contrast to POTUS DJT.] Part of his answer to a question was (~20:10):

[in a democracy]... you never get 100% of what you want...

So far as it goes, this is true. But there also seems to be the presumption that what the consensus agrees to is the 'right' or 'best' answer... what if it's not? The political consensus on nuclear weapons had the U.S. build and stockpile thousands of nuclear warheads, enough to push the entire planet into nuclear winter several times over. And the slow pace of political solutions to climate change would see the likely decimation of the human population due to wars, famines and disease brought about by climate disruption before a 'political' solution is considered.

This reminds me much of the dangers of agricultural monoculturing, when corporate commercial farming grows only the most productive/mechanization friendly strain of any single crop and through their neglect, lose the genetic diversity of less 'useful' strains. Small farms will grow other strains for other reasons (flavor, growth conditions, resistance, etc.). Monoculturing only preserves the information of one strain while the vast information in other strains are lost. Nation-states are similar in that the ideas and memes of the powerful become dominant and other ideas are muted to the point of loss. The lack of diversity in ideas and approaches also means little to no opportunity to test social solutions. Smaller units of governance means more units of governance which increases diversity and diversity/flexibility of thinking is the source of innovation. Small units of governance are flexible in contrast to the rigidity of large nation-states.

Do robots serve us or do we serve the robots?

Amy Goodman interviewed Shoshana Zuboff who wrote: “The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power”. Her premise is that the frontier of capitalistic innovation is capitalizing prediction of individual (and likely) group behavior. These themes have explored in science fiction and coming to fruition in reality. We need to decide if we serve the interests of our (collective human) creations or do the controllers of these creations control our destinies?

Part 2 of this interview emphasizes the role of information control/secrecy in these developments... a theme I've been writing about for years.

Bernie talks concentrated wealth and power

Bernie Sanders talks with Paul Jay at TRNN about the effects of concentrated wealth and power on the American system.


My comment in response to some other comments and Bernie's remarks:

(1) Bernie Sanders is a standing Senator representing the state of Vermont. He has a responsibility to (a) act in the interests of his voters; (b) convey the legislation they want and (c) adhere to his personal code of ethics. To carry out his duties, especially as a member of the minority party, he must be able to walk/talk/commune with other representatives. This involves a level of public diplomacy that he often gets criticized for – supporting Hilary, anodyne comments about the late GHWB… IMHO, Bernie’s critics seem to prefer he behave Newt Gingrich, “allowing hurt feelings over a perceived slight by Clinton to influence his stance in the budget negotiations” and that turn out swimmingly (/s). 

(2) “Raising the minimum wage, 15 bucks an hour. Radical idea a few years ago; kind of mainstream today.”And by the time you actually pass the 15 bucks an hour minimum wage in another few years, workers will be even further behind on the wage scale. The fight should be for a minimum wage pegged to annual average wages. Fighting the same fight is good for keeping Bernie Sanders employed but not so good for the minimum wage workers he’s purportedly fighting for. 

(3) “…And as a nation we have got to think from a moral perspective and an economic perspective whether we think it is appropriate that three people, one, two, three, own more wealth than the bottom half of the American society. You know, that’s really quite outrageous, and it’s appropriate that we take a hard look at that.”Economics originated as a moral enterprise. Even today, economics of average individual families are about working to earn the means to support the members of a family, which is morally superior to not working and allowing your family to languish. It was the introduction of profit as the be all and end all to economies that drove ethics out of policy. Profiteering allows gun makers to ‘morally’ profit from making and selling goods designed to perpetrate objectively morally questionable acts. Profiteering allows the military industrial complex to ‘morally’ profit from the making, selling and use of goods and services designed to murder en masse. Profiteering allows big pharma to ‘morally’ profit from the making, selling, use, misuse and withholding of drugs that can save and/or destroy lives. Profiteering allows extractive industries to ‘morally’ profit from the damaging of viable ecosystems to the extent that much that supports human life is at risk. One place where a basic reform might have immediate and significant impact would be to redefine economies to be self-organizing and self-sustaining systems of production, distribution and consumption of goods and services that promote the well-being of all participants… This would force all policy to account for impacts on sustainability and human well-being as opposed to sole the profitability for investors.

Destroying the Myths of Market Fundamentalism

TRNN has posted a video series of a forum organized by Ralph Nader called 'Destroying the Myths of Market Fundamentalism'. Worth a listen.


My comment on Ralph Nader's introduction:

Market fundamentalism has its flaws, no thinking person would question that. However, the system evolved into its current state through regulatory capture. Arguing for alternate regulatory capture is analogous to replacing a despotic ruler with a benign ruler. In the short term, conditions can improve but the state mechanisms enable reversion are present and calling for turnover.

My comment on Damon Silvers talk:

“Markets are product of government.”“Markets not fundamental but created.”Markets are part of economies (economies can be broadly divided into production & markets). Economies form in any human community, regardless of government (refugee settlements have economies with markets)… thus economies (and markets) *are* fundamental. When communities/economies grow sufficiently large/complex, governments emerge as a property of complex systems.---“How to shape markets and to what end?”“How to shape markets for long term wealth creation for all Americans. For that matter, all of the world’s population?”Is the market aspect of economies the best area to ‘shape’? Economics is a social science; that is, primarily concerned with relationships between individuals, groups and communities. Market relationships tend to be rather transient: buyers examine sellers’ goods; trade transaction occurs (or not); termination of relationship. In contrast, the relationships on the production side, (employer/employee, supervisor/supervisee, colleagues) tends to be of long duration, both in daily interaction and term of employment. Strong/healthy relationships on the production side of the economy empowers workers to become capable consumers who drive (somewhat transient) market activity.---“Challenge for securities regulation…”Also must consider the damaging effects of concentrating capital on the scale of economic operations. For example, mountain top removal mining is only possible because enormous amounts of capital can be pooled to build the massively expensive equipment. The same is true for most large scale extractive endeavors. While these projects may be profitable in the short term, the resulting environmental damage has incalculable long term financial and ecological costs (climate change for one).“(3)…transparency around key problems…data secret…”Information asymmetry plagues far more than the securities markets. It is the source and driver of power imbalance and economic inequality. In fact, the term ‘free market’ is a misnomer in light of the absence of information symmetry regarding market goods/services (working conditions, environmental impact, costs, etc.).

It's all legal

Comment at Smirking Chimp (it's a quick and worthy read):

The true conflict is not between the U.S. and Russia/China/N.Korea/Syria/Mexico or Saudi Arabia & Yemen or any other nation-vs-nation aggression. The real fight is between the power elite and everyday working people on the planet. Any 'special' interest (such as Jeff Bezos, Koch bothers, Sheldon Adelson, Robert Mercer, big pharma, oil industry, military industrial complex, health insurance industry) that lobbies Congress for policies/laws/rules that increases their profits at the expense of the well being (health/education/standard of living) of their workers and consumers is participating in a long campaign against public interests. 

As every maker knows, the quality of any end product is largely determined by the quality of the starting material. This also hold true for economies; the quality and productivity of an economy is largely determined by education and health of its starting material of workers and consumers. Neo-liberal economics are marketed on the contrary principle that strong foundations are not necessary for strong economies. The Trump tax cut directly depletes economic foundations by removing money from a slowly growing economy - and he tells taxpayers it will grow faster. Unless neo-liberals have cracked the secret of creating something from nothing (aka, Big Bang), our current economic trajectory offers no hope of better conditions to workers.

Information is power

TRNN did a segment about ballooning drug prices as an issue in the Maryland governor's race.

A commentor wrote: 

"...funding for research should be increased and any licensed, FDA-approved manufacturer should be able to make and sell the drugs, whose patent belongs to the government. This would introduce competition and drastically lower cost."

My response:

Public ownership of publicly funded intellectual property would resolve the problem of big pharma. Tight limits on private control of intellectual property would place severe limits on the corporate growth which would have positive impacts on income inequality. Severely minimizing state secrets would set limits on the power of the state. Information is power. If information were less controlled, the power of current institutions would be curtailed.

New value system needed

Good interview at TRNN with climate scientist Will Steffen.


My comment:

"All of these [efforts to mitigate climate change] need to be underpinned by new value systems that value stabilizing the earth's systems as the highest priority that any economy must strive for." 

This should be the take home message of every economics course/lecture from now on. Economics and the values of economics must be defined beyond goods/services and financial return. My preferred definition of economies are self-organizing and self-sustaining systems of production, distribution and consumption of goods and services that promote the well-being of all participants. Capitalism would not be an acceptable primary economic system under this definition because it is not self-sustaining... using fossil fuels will eventually degrade the environment to the point where it cannot sustain human life as we know it. Placing profit and 'economic growth' above all else is the source of climate change, income inequality, health care crisis and many other social ills. But economies are human made social constructs; humans made/make them, humans can reshape them.

Universal Establishment against the Resistance

At TRNN, Charles Derber talks about the need to universalize the resistance to fight the establishment. My comment:

"...on the one hand, this universalization, but on the other hand, are we becoming more fragmented?... How does that go together, on the one hand the universalization and on the other hand this fragmentation?" 

The establishment, also known as the system, is unified and highly successful in fragmenting the working people of the world. They use identity and social issues to splinter voters into opposing groups so they are disinclined to organize significant resistance. For example, the Republican and Democratic Parties don't particularly care abortion; so long as individual politicians can get the medical care they seek for their families, they aren't concerned if poor women have access to abortion or reproductive care. They care about policies that their donors want. Abortion is useful because it polarizes their electorate and generates a mock conflict between the pro and anti sides (like pro-wrestling) which distracts the real policy intent of the Republican and Democratic Parties which is to always advance the concentration and transfer of power/wealth to their donors. 

The key to resist voter fragmentation is not to ignore the differences but to unify to respect these differences and advocate for each others' rights to those positions. The poor, brown, white, low wage, immigrant, women, LGBT and other groups are not outsiders; they are insiders, part of the group. In this country, they are all known as Americans but workers should not overlook the same systemic pattern of deliberate fragmentation that is also exercised abroad. The system uses competition between native and foreign workers to sow division internationally. The entire point of corporate/trade globalization is to create wage competition to force down production costs. Worker unity must also cross national borders if the establishment/system is to be contained.

Arms 'Marketing'

Short video of William Hartung at TRNN describing how the MIC profits from war and government policy. My comment:

William Hartung hit the nail right square on the head. A popular meme spouted by many pro-capitalist economists is that in free markets, market forces (consumer spending/consumption) drives what gets produced. But somehow, these same economists never examine the 'market forces' of the planned military arms economy (created by governments, especially by the U.S. government). The planned military economy creates forces of lobbyists and special interests who advocate for constant war and continuous arms race. Instead of buying food, childcare, medical care, education and intact ecosystem for our children and grandchildren, American taxpayers are buying updated nuclear weapons and other military hardware, war game exercises, ill-will from hundreds of foreign military bases and global instability from waging and fomenting war. These are economic decisions and American voters need to understand the spending priorities of their government in that light. 

Another useful tool maybe to redefine what economies are. The word 'economy' has Greek roots meaning house or home. The common definition of economy is focused on production/consumption of consumer goods for the purpose of generating profit, a far cry from house/home. A much better definition would be self-organizing and self-sustaining systems of production, distribution and consumption of goods and services that promote the well-being of all participants. This would automatically make some sectors of the modern economy 'uneconomic' because they do not promote well-being... the entire offensive arms/military industrial sector.

Name of piece: Code Pink Conference: The Arms Industry Hides Behind Euphemisms (December 29, 2017)

Working Animals of these United States

A comment of implications of GOP Tax bill at TRNN:

I am reminded of the video of newly hatched male chicks being fed to a shredder and the knowledge that male dairy calves are turned into veal or beef. Federal tax policy now bins Americans like farm animals are binned: useless (no profit to be made) ones are actively destroyed to not 'drain' the system of resources, moderately profitable animals are rushed through the bulking process to quickly turn a profit, and most profitable are mass factory farmed to extract the most profits in the shortest time until their productivity drops into one of the lesser classes. It's clear the elderly and ill are 'useless' (proposed cuts to social programs); children are moderately profitable (school privatization & school-to-prison pipeline); and, finally, prime working age adults are underpaid and work long hours at multiple jobs until they fall ill of stress or exhaustion, at which point, they join the useless class. Working Americans are the farm animals of American capitalists.  

Resist!

Information asymmetry

It has a name! Information asymmetry is the economic term for unequal information which results in a power imbalance. In a market situation, all information asymmetry changes the balance of power; competition between sellers, between buyers and between sellers & buyers is altered. A truly free market hinges on information transparency. See here for links to a deeper discussion.

Economics of pollution

Comment at TRNN where economist Bill Black discusses the economic drivers of pollution:

Excellent piece. Economic considerations rule many if not all areas of public life; therefore it is important to understand and inform the public of the effects and outcomes of economic drivers. 

Bill Black answered the question of why pollution occurs... polluters profit from pollution... and how to prevent pollution... don't let polluters profit (by way of regulation). 

A similar prevention is a better definition of economies: self-organizing and self-sustaining systems of production, distribution and consumption of goods and services that promote the well-being of all participants... Anyone/any institution whose activity is not self-sustaining (in larger context of entire economy) is anti-economic and not allowed to persist.

TRNN: Pollution Kills 9 Million People a Year

Orthodox Economic Theory does not Explain the Economy

Comment at TRNN. Economist Bill Black was discussing union membership in the U.S. and along the way, mentioned conventional economics does not explain today's economy:

"…that's far worse than simple inequality… economists really can't explain with conventional economics how this is occurring... that's of course because their economic theories are falsehoods... They're basically cover stories for laissez-faire..." 

The most important take home message of the segment: orthodox economic theory is wrong. If economists were responsible [social] scientists, they would go back to the drawing board, re-examine the data, develop better models/theories and test them as rigorously as possible.

It's striking how outright wrong economic theory is used to justify government policy that's bad for most people compared to how well validated science (climate change, theory of evolution) is demonized and ignored to the detriment of most people. [Climate change is validated by annual record breaking heat records of the recent 2 decades, increasing droughts & flooding and stronger hurricanes. The Theory of Evolution is supported by a wealth of biological, geological and paleontological data. The success of modern medicine also validates evolution: medicine is based on animal studies which are informative because they are evolutionarily related to humans; otherwise, there would be no way to justify the research.]

Name of segment: Low Rate of Unionization in US Consequence of Deregulation

Economic policy is not based on science

Comment at TRNN:

Trump's plan would mean 'a huge increase in the budget deficit primarily to give tax cuts to the richest people in the country,' says economist Dean Baker. 'I don't think most people would think that sounds like a very good idea'
 That climate change is occurring and caused by human activity is at near universal consensus of climate scientists. And it doesn't take a degree in economics to understand that climate change will have devastating effects on economies. One simple equation: climate change = less food = fewer or hungry people = smaller economy. And yet there are economists who argue climate mitigation to too expensive and bad for the economy. According to economists, science is bad economics.  The tax policy DJT is proposing is based on supply-side-economics and the Laffer curve which has essentially no scientific consensus; the Laffer curve doesn't even have units. According to (some) very influential economists, no science is good economics.   So is economics a science or ideology? I once compared science and religion (ideology): While there are some similarities, they are very important and significant differences. Both science and religion arise from the same social need; in the face of complete uncertainty, people want rules of behavior/conduct to avoid catastrophic outcomes. Religions codify collections of old anecdotes into rules of conduct. For example, biblical strictures against adultery/infidelity likely arise from a tragic outcome of a few adulterous incidents. But not all affairs will end in tragedy. This is akin to associating good fortune to a charm because you happened to be wearing it on the day of a good event (promotion, favorite team winning). Religions use anecdotes to predict the future. Scientific conclusions are based on carefully controlled and precisely collected data (if properly controlled, a set of anecdotes is data). Scientific predictions based on data are restricted to well defined circumstances. For example, science predicts two doses of measles vaccine are 97% effective. When sufficiently complete data is available, science is remarkably accurate in its predictions. 

[Climate] Science predicts coming changes in the climate will cause sea levels to rise, increase storm severity, and increase severity of droughts and floods, all of which will negatively impact economies. Most orthodox [neoliberal] economists pooh-pooh the predictive value of [climate] science in favor of data-free economic theories, more ideology than science.

…DJT’s tax plan is nonsense, like almost all economic policy.

Post title: Trump's Tax Cut Plan Alienates His Base

Fred Magdoff: What Every Environmentalist Should Know About Capitalism

Youtube video of a talk by Fred Magdoff that covers some of the ground I describe in my series. He seems to think an ecologically friendly economy requires more planning than I do but we do seem to see a number of the same problems with capitalism.

Truthout interview with Magdoff. He's more idealistic than I am.

About time

Comment at TRNN. Economist Dean Baker finally starts talking about the impact of information control of intellectual property on income/wealth inequality:

"...unfortunately we're not having that discussion." 

(1) Not true. I have repeatedly commented on the corrosive effects of information control (including intellectual information) on economies and democracy. But I am *not* a prominent economist with a media presence. For that matter, I am not an economist at all. Everything I know has been picked up on wikipedia and listening to podcasts (Economic Update) so...
(2) Why has it taken *so* long for any professional economist to ask this question? The role of 'perfect information' in 'perfect competition' should be elementary economics. It's so basic and foundational, it should be a matter of debate in every economics class on the planet...
(3) This really suggests the entire field of economics has some serious flaws...
(4) [from another thread] ... economies are designed and determined by ideologues not economists. Capitalism, Keynesian economics, Marxism, Communism... all economic systems are ideologies. By adhering to a particular 'school of economics', economists aren't social scientists; they do not engage in the normal rules of science: test the predictions of a hypothesis and adjust theory(ies) to fit. Instead, economists and their followers are indoctrinated into an economic ideology and stand firm to defend it on any and all grounds with carefully constructed questions and statistics. In the end, each ideology produces a system where a small group of powerful people make the majority of economic policies that affect the lives all everyone in their purview. 

Improving education and campaign finance reform are often mentioned as ways to reform our current political/economic system. Reform of the field of economics from an ideologically driven exercise into a data driven system based science should be added to that list.

Search for <Intellectual Property Rights Protect Massive Profits of Corporations> here if link doesn't gets altered in the future.

Transparency for economics, transparency for democracy

From wikipedia:

In economics, perfect information is a feature of perfect competition. With perfect information in a market, all consumers and producers are assumed to have perfect knowledge of price, utility, quality and production methods of products, when theorizing the systems of free markets, and effects of financial policies.

-

In economics and game theory, complete information is a term used to describe an economic situation or game in which knowledge about other market participants or players is available to all participants. The utility functions, payoffs, strategies and "types" of players are thus common knowledge.

Inversely, in a game with incomplete information, players may not possess full information about their opponents. Some players may possess private information that the others should take into account when forming expectations about how a player would behave. A typical example is an auction: each player knows his own utility function (= valuation for the item), but does not know the utility function of the other players. 

***

This implies the defining feature of a free market is perfect information. Voting is also a type of market, as such, perfect information should be the defining feature of fully democratic participation. In real life, there is no such thing as perfect information... but we can strive for much better transparency.

Neo-liberal economics is not a modern phenomena

Abby Martin did a two part Empire files episode on human trafficking of Filipino workers. In part 2, she describes how the historical colonial roots of the modern Filipino labor export economy *and* how American imperialism drove this process. Often, discussions of colonialism focus on political power. Although more often driven by economic imperatives, the financial drivers of imperialism are frequently ignored.

Neo-liberalism, or supply-side-economics 'argues economic growth can be most effectively created by investing in capital and by lowering barriers on the production of goods and services.' In other words, give power of economic decision making to those who own capital... or the rich know best how to make more money. This is the back story to the history of the Philippines as shown in Empire Files: The Roots of the Philippines Trafficking Epidemic. American economic 'leaders' decided the best way to make more money was to steal and colonize other lands so they could exploit their people and natural resources and force those people to buy American goods. Neo-liberalism is just another name for empire building; globalization is another name for colonialism. It's always owners/capitalists/powerful taking from and exploiting workers to enrich themselves. 

Workers are always told they are competing against other workers: POTUS DJT claims immigrant workers are job stealers; Americans compete with workers in low wage countries for manufacturing jobs, etc. What workers need to understand is that this competition was and is created by owners/capitalists/powerful. The two sides of the conflict aren't workers against workers but workers against owners/capitalists/powerful. Meaningful economic reform depends on it.