Archive for the ‘ Economic ’ Category

Keeping the Lights on

I was listening to the Rachel Maddow podcast. I like listening to her because I want what little political news I consume to be delivered with some snark and from the left.

It’s also a good reminder that there are no political solutions. I have a real-time filter for mainstream lefty discourse that keeps that point in the foreground. Tonight, it occurred to me to share it with you.

The political right has no illusion about government. They want foreigners, non-christians and other Others put in prison. They want to cage the hooligans and bomb the foreigners. They are on board with government’s mission. Tragically, this ends when their drooling toadying selves are inconvenient or unprofitable and they find themselves on the the business end of the police state they voted to errect.

The political left, though, has this bizarre fairly-tale that the government is like your dear old grandad, keeping the lights on for you when you’re out late, changing your oil, cooking you up an extra couple strips of bacon for breakfast.

So you’ve got to translate this stuff into reality-speak to understand what is being said. Here’s an example from the latest (as of Sept. 27. 2011) Rachel Maddow podcast where the topic is the latest instance of potential “government shutdown”:

The current government shutdown fight is over a continuing
resolution which is just a funding bill to keep the lights on, to keep the
government running. . . . under John Boehner, it looks
like they may just not be technically capable of doing the basic things
that need to be done to keep the lights on even when they want to.
They can`t keep the lights on. Almost literally. They do not seem
capable of doing just the basic things that need to be done to keep
government going and the electricity bill paid.

We all understand that “keeping the electricity bill paid” is a metaphor of course. But a metaphor for what? What is the primary “bill” that dear old grandad has to pay?

It’s the cost of running prisons, firing rockets from drones into crowds of people, and torturing peasants. But when you drop the metaphor, suddenly it becomes clear that the government should be fucking well be shut down:

The current government shutdown fight is over a continuing
resolution which is just a funding bill to keep dropping bombs. It looks
like they may just not be technically capable of doing the basic things
that need to be done to keep the killing foreigners when they want to.
They can`t keep imprisoning poor people. They do not seem
capable of doing just the basic things that need to be done to keep
government going and the war machine running.

Far less of a tragedy, when you put it that way.

But, dear reader, there’s another level of illumination here. That is this: if the government did shut down–which I don’t imagine it will, at least not on some media determined schedule–much of the forecast hardships would come to pass. Social security checks might not go out, national parks would close, the passport office would get backed up, Medicare reimbursements and federal disaster relief would stall. Federal aid to schools would cease, and all manner of licenses, permits, waivers and variances would be impossible to get . . .

But guess what, not one single goddamn bomb would go undropped. Not one less border patrol unit would be deployed. Not one prisoner would be set free. Not one IRS agent would be let go. Security theater would probably double. Foreign dictators would still receive armaments and their secret police, the latest torture training. Every aspect of enforcement and revenue collection would proceed unchecked, in many cases, in spite of the fact that bureaucracy required to comply with “the law” will be shut down.

The 90% of state activity that falls into the category of universally acknowledged disgusting, atrocious shit will stay right on track. The small fraction that provides some benefit to human beings in need of . . . benefits, will evaporate.

And that’s the point that any remaining true believers really need to focus on: each and every politician and each and every member of their staffs (staves?) and all the millions of people in all the agencies will agree to, or at least go along with, the cutting off of resources to people in need; rather than restrict, even a little bit, the waterfall of money going to defense contractors, bankers, financiers, foreign puppet states, the prison-industrial complex, and the countless other concentrations of capital that patronize the ruling class.

So anytime you’re listening media talk about “the basic things that keep government going,” “keeping the lights on,” “paying the bills,” or whatever the euphemism, translate it into the immutable and never ceasing functions of government: caging humans, killing foreigners, and handing over buckets of cash to the already filthy rich. Remember that these are not on the chopping block like social security, medicare, and the bureaucracies that provide the means for the non-ruling class to function without the threat of incarceration inevitably are.

Local Thugs Enforce Transportation Monopoly

A buddy of mine recently pointed me at an interesting story. A local business, Electric Cabs of Austin, shuttles people around downtown Austin in electric carts at no charge.

“We actually got the idea from the city of Austin, who was operating golf carts in the downtown area. And we decided to take it one step further,” said Nielsen [the owner]
He bought five electric, golf-style cars and hired friends to drive them around the city. Just like the pedicabs, they ask for tips only.

They make their money from selling advertising space on the carts themselves.

This is the sort of spontaneous activity that adds to the deep reservoir of color and charm in what would otherwise be just mid-size city in Texas.

The Austin municipal government, like all governments, tries to remain relevant by jumping on various bandwagons that emerge organically from the wider community. To demonstrate its commitment to a cleaner, greener city, Austin government has installed a hundred or so electric car charging stations in anticipation of emissions free[1] transportation. You would imagine that the city council would be all in favor of an electric cab company, right?

OK, I sort of cheated on that last question, because I forgot to mention that the gas powered cab companies that currently hold all the licenses to give rides to people have paid the mayor and the city council tens of thousands of dollars towards their campaign funds.

For unrelated reasons, I’m sure, the city council has been unable to figure out a way to license Electric Cabs of Austin for . . . wait for it . . . 3 years.

My more advanced readers will already skip to the part where it’s criminal to interpose oneself between someone who wants a ride and someone who is willing to give them a ride. Nielson, the owner of the Electric Cab Company, though, is more of a business person than an agorist martyr; he’d rather just get the permission slip from the nut-jobs at city hall than rot in prison on principle. I’m sympathetic. Apparently, he’s trying to run the cab service despite the legal hangups and has wracked up 200+ tickets and arrests among his driving staff. So maybe he’s part agorist martyr.

A twist on the story, and this is also a staple of government, is that nobody is really clear on exactly what law is being violated. City Council candidate Kris Bailey, who has no chance of ever being elected because he is relatively sane (Green party, pro-marijuana legalization, etc.) tried to find out on what grounds the city police have issued 200+ tickets and made arrests of the electric cab drivers:

There is no law actually prohibiting him from operating this business, it is true but, the enforcement side of the city (the police) have taken this lack of a law regulating the business as operating in violation of a law. He [Nielson, the owner] is violating a law that does not exist. . .
I met with multiple council members and made several phone calls, wrote emails, etc…. I realized that he was right, he is being ignored, and the City of Austin does not wish this business to exist. [Here’s the whole post for people who have Bookface accounts]

Baily, as part of his City Council campaign, I presume, took one of the cabs for a spin one evening:

I gave 2 rides on Friday night. The first ride was to a couple of women who when dropped off handed me a few dollars and thanked me. I did not charge them. They voluntarily handed me the money. At this point, 3 APD [Austin Police] officers stopped me and wrote me a ticket for “Operating without a permit” and “no chauffers license.” I tried to explain the permit and license do not exist, they did not care. I asked if they had read the ordinances I was supposedly violating, I asked multiple times and the officers refused to quote the law I was breaking. They told me if they saw me operating again, they would arrest me.

I decided that the Austin Police Department does not have the right, nor the authority to shut down a business on a whim. I picked up another person, and gave him a ride. I dropped him off where he asked to go. The police officers saw him hand me $4 (again, I did not charge him) and immediately came to me and put me in handcuffs. I was arrested without discussion or hesitation and taken directly to jail.

Baily is very generous to the folk who caged him that night, but he’s a politician and has to go easy on “law enforcement.” Essentially, the police are hired thugs for the other cab companies in Austin. As Kevin Carson notes in a recent essay,

the true nature of regulation as a naked power grab by incumbent businesses is nowhere more apparent than at the local level. At the lower levels of government, conventional, brick-and-mortar business establishments are heavily involved in using regulatory enforcement to shut down low-cost competition.

Brick and mortar doesn’t apply directly here; I’ve also noted this trend, locally, in a piece on food trucks–another wonderful feature of Austin–and their creeping strangulation at the hands of larger contributors to political campaigns. The point stands though, where the interests driving national political policy have a 24 hour PR outfit in the mainstream media to provide a sheen of legitimacy to wars and regulations, the “naked power” serving concentrations of capital is far easier to see on the local level.

A last note along these lines. The United States is experiencing unemployment around 22%.
Nothing outside of murder or theft should be illegal for a small business owner. The idea that people are being fined, jailed, and otherwise disallowed a living for giving somebody a ride, cooking somebody a meal, cutting hair, painting nails, or selling something some sunday school teacher doesn’t approve of is atrocious; over 20+% unemployment, it’s ridiculous.

OK, two last notes along these lines: this is not some crazy aberration. Protecting established wealth against emerging ingenuity (usually among the poor) is the very and sole purpose of government; read Kevin Carson, Noam Chomsky, Howard Zinn, Gabriel Kolko–I know I repeat myself, but seriously, read that shit. It’s time to trust in our fellow humans and allow them to arrange their lives according to their own choosing and not some lunatic who’s trying to micro-manage the lives of hundreds of thousands of strangers.

  1. [1] At least in the city itself, the poor bastards by the power plant still get the emissions

Limiting the Scope of Violence: Complex Production and “The Roads” in a Consensual Society

I don’t often delve into the more technical details of a what a stateless legal structure would look like because I figure it’s a bridge we can burn when we come to it. Several other niggling details need to be worked out first, like obtaining a critical mass of people who see something wrong with firebombing peasant villages, using torture in the pursuit of justice, caging poor people for smoking vegetation, etc.

I do have some thoughts in the area of material progress, though, and how to “grow” a sustainable social order/infrastructure that can support the billions of folks alive today and the billions that are on their way. I’ll introduce my thoughts by responding to an “classic” anarcho-debate between the the anarcho-capitalists (hereafter referred to as the right) and anarcho-everybody-else (the left).

In a well structured essay, Anarcho-Syndicalism: A Recipe for Ruin,
Daniel Sanchez, coming from the right, outlines this point of contention quite nicely:

According to prominent mutualist [left] Kevin Carson, mutualists “believe in private property, so long as it is based on personal occupancy and use.”[1]
For convenience and for lack of a better term, . . . workers would own all the capital goods they work with. There could therefore be no “absentee” ownership and no wage labor. A capitalist could not hand capital goods over to hired workers without thereby losing title.

To clarify, “private property” in this context is that which one can legitimately defend with the use of force. Uncontroversially, despite the statutes of nation-states, this category includes one’s self and the products of one’s labor. The difficulty comes, when we fast forward in complexity to the kinds of structures of capital that are required to meet the consumption needs of billions of people.

Daniel Sanchez holds that private property, and the legitimacy of violent defense must extend beyond the individual and what she can occupy, produce, and use to include anything for which she can contract:

Say there is an entrepreneur who would have been able to make a profit by allocating a huge inventory of capital goods to be operated by hired workers in a really long, but hugely productive production process. However, he cannot because his capital goods would have been lost to him as soon as he handed them over to anybody. That would be a huge loss to all the many consumers (the majority of whom are also workers, by the way) who would have enjoyed the later, but greater, comforts and security that the foregone highly productive process would have provided.

We must, therefore, include things owned “remotely” in the sacred circle of private property or we will be unable to meet the needs of a global population.

A shorter version of the claim might be, we must expand the scope of violence a little bit beyond self-defense, because of the societal necessity of the results obtained. Organic/peaceful human organization cannot address this problem any other way.

The Roads

A parallel discussion that leads to my also illustrates my yet-unmade point involves The Roads. For all of human history, the value of The Roads has lead to a general acceptance of the need for slave labor, seizure of property, and massive theft in order to build reliable infrastructure connecting population centers.

To mirror D. Sanchez’s argument above (though I’m not claiming he would make this argument), the inability of the builders of infrastructure to use violence to overcome the obstacles inherent in large infrastructure projects would be a huge loss to all the many people who would have enjoyed/benefited from the end result.

But while The Roads are of obvious value to concentrations of capital, it is less clear that they are of value to everyone else. A road rapidly and drastically alters market conditions allowing for more ready exploitation of rural areas by urban, of urban areas by capital cities, of local business by regional or global corporations. The creation of a road changes the relative costs of labor, material and transport, usually out from under those who are far from political power and usually with the foreknowledge of (and hence a great benefit to) the politically connected.

In the modern west, The Roads have brought urban sprawl, racial re-segregation, drastic increases in carbon emission, huge commutes, and have put a multi-thousand dollar entrance fee for employment.
The creation of roads inevitably involves the seizure of land as well from people who’d rather live where they’ve always lived, but are forced to move in the name of “progress”.

I am not anti-road. With all that connecting two (or more) populations of people entails, however, I believe it should be done in a consensual manner. How would a road be build in a free economy?

The first hurdle is a surplus of capital in a given region. A sufficient number of individuals in a community would need to have satisfied all their more pressing needs. They would have to see sufficient long-term benefit in investing in construction of a given road. Under these conditions, money could be voluntarily allocated to the task[1].

But before construction begins, everyone directly affected needs to be satisfied with the conditions of construction. The notable newcomers to this group will be those whose land is needed for the project. Each one will need to be compensated adequately to get their participation. The road’s layout will depend on who is willing to sacrifice their land and for what price. Of course, some people will be eager to have increased traffic by space they can use/sell/rent for commerce–some might even subsidize the project. Whatever the case, the process is negotiated, not mandated.

The length of time that such an undertaking necessarily requires and the public nature of the process allows everyone to adjust to the coming reality of a more densely connected region. The shock is thereby lessened and both the positive and negative effects are more equally and equitably distributed.

Aaand Back to Production

In much the same way, the structures for maintaining just ownership of resources throughout a complex production process should be negotiated, flexible, and sustainable. Including these means of production in the same category as self and products of labor–i.e. legitimizing the use of violence in their defense–is a quick way to get complex manufacturing underway; much as eminent domain is a quick way to get infrastructure development underway.

Rather than give into this cheat, and build remote ownership on the threat of force, why not build it on a series of negotiated agreements between equal participants in production? This doesn’t mean that division of labor and even unequal division of products are disallowed, it simply means that everyone is satisfied with their cost/benefit ratio with regards to the production process in the absence of violence.

How is it that a possessor of capital finds it impossible to entrust the means and materials of production to the workers hired to craft some product? If, as D Sanchez imagines, worker-run enterprises suffer with relation to those where planning and labor are separate tasks, then there are greater potential benefits for the workers who take part in a greater division of labor.

Would machinists “take over” a factory that was run efficiently and from whose profitability they directly benefit? It seems unlikely that all but a few would forgo a pay cut and increased responsibility of management given the chance. The inclusion of means of production in the category of private property serves to deny workers the ultimate sanction against a bungling, inefficient, or unjust management.

Negotiating working relationships that protect against the defection of workers, management, or the providers of capital will, of course, slow down the formation of complex production processes. Like creation of infrastructure, manufacturing processes and ownership agreements in a stateless world will require wider reaching consensus than they currently do. Increasing size and scope will depend on improving on templates for contracts and arbitration allowing longer production processes become possible and decreasingly risky.

My Point

When re-imagining the provision of societal needs currently underwritten by force, it behooves us to resist the easy, traditional solutions and imagine non-violent alternatives. Not only does this provide a stronger moral foundation for our imagined social institutions to rest on, but it also allows the creative capacity of billions of people to devise, test, and revise approaches and solutions to the problem. It allows healthy, sustainable relationships between the human participants in manufacturing to be discovered and improved on, and allows the greatest degree of human activity to remain outside the realm of coercion.

  1. [1] I imagine that riskier roads would be built by greater concentrations of capital who would see larger benefits therefrom. More obvious connections between wealthier communities might be financed, and the dividends shared by a larger range of economic actors.

A Fundamental Misunderstanding of Wealth and Power

Apparently, you can be an atheist and scientist and still be held in sway by cultural fairy tales. Sam Harris recently blurged about the wealthy and how they should Pay Their Fair Share. This has been a party hack point of late since tax increases on the rich can supposedly eliminate the need to end the military occupation of the globe or to remove the remaining threads of the social safety network.

Sam and his ilk labor under the illusion that “the rich” and the state are independent entities. In Sam’s worldview: “Many people have amassed fortunes because they (or their parent’s, parent’s, parents) created value.”
In reality, very, very few people have amassed fortunes (at least the of the magnitude he’s talking about taxing) based on value they’ve created. Their fortunes are based on favors showered on them by the state. I’ve gone over the list of benefits before, and urged the reading of Kolko, Chomsky, and Zinn–refer to them if you doubt me. The institution to which Sam Harris and others are applying for taxation of the rich is the body that, for 245 years has taken money from everybody else and shoveled it to the rich. That is the function and purpose of government.

It’s almost impossible to amass a great fortune “creating value” because everybody else can “create value” too. You need to have somebody with police power mandate the purchase of your products, or criminalize the purchase of your competitors’ products. You need to make sure that immigrants will be arrested for doing the same thing that you do. Better yet, make it illegal for anyone to replicate the goods or services you provide. Then the poor stay poor (or go to jail or are deported) and you’ve got a leg up on fortune amassing.

And if you’re good–if you’re really good, you can get flat-out paid, of billions of dollars for no reason at all.

Trying to recover money from the super-wealthy via the state is like trying to blow up an air mattress with a vacuum cleaner.

The party hack doesn’t provide reasonable solutions. He says whatever is required to keep his party in power. The idea that the baton wielding, tank driving thugs that cruise around beating the crap out of helpless peaceful people would, by executive fiat, roll up on Wall street and take all the loot and apply it to granny’s medical bills is appealing. It will keep millions of democrats occupied–along with mocking Rick Perry–while more wars are declared, the currency is inflated, jails are filled, bankers are paid and the already rich get richer.

The absurdly wealthy are not so because they are under-taxed by the state, but because the state takes the wealth of the other 99% and hands it to them.

Early Corporate Welfare: “An act for the relief of sick and disabled seamen”

A friend pointed out a fascinating article on “An act for the relief of sick and disabled seamen[1] which the author points to as a precedent for Congress mandating health coverage for citizens of the United States.

I don’t have any disagreement with his conclusion, that the Constitution in no way prevents the government from mandating . . . well anything really, but specifically the purchase of some consumer good or service. I’m most interested by the story behind his example which is already pretty illuminating, but becomes even more so when translated from its high-school civics format into a reality-based narrative (a process I humbly think of as conferring a Zinn-like quality to the tale).

But before we get to that, one last word on the Constitution and those who believe it constrains human behavior in any way: it doesn’t. Unless the goal of drafting the Constitution was to create the largest government apparatus in human history (and as I recall, the goal was supposedly the opposite[2]–but opposite often accompanies violent solutions to problems), the piece of paper has missed its mark. A quick stroll through the Bill of Rights while simultaneously observing the interactions of the state with the citizenry should register an multitude of discrepancies across the spectrum.

On to the tale. We begin with “the founders” in 1798 . . .

During the early years of our union, the nation’s leaders realized that foreign trade would be essential to the young country’s ability to create a viable economy. To make it work, they relied on the nation’s private merchant ships – and the sailors that made them go – to be the instruments of this trade.

Zinnified: The rulers of the nascent United States were tightly tied to overseas shipping. Many of the revolutionaries had been smugglers or associated with organizations who opposed the British crown’s claim to a portion of the revenue from shipping in and out of major colonial harbors. Everyone in the political class of the time stood to benefit from increased shipping profitability, either directly as a merchant, or indirectly as one in control of the newly won power to levy taxes.

The problem was that a merchant mariner’s job was a difficult and dangerous undertaking in those days. Sailors were constantly hurting themselves, picking up weird tropical diseases, etc.
The troublesome reductions in manpower caused by back strains, twisted ankles and strange diseases often left a ship’s captain without enough sailors to get underway – a problem both bad for business and a strain on the nation’s economy.

Zinn’d: The problem is that physical laborers get hurt and decrease the workforce willing to work at a particular wage level. When the number of available workers doesn’t meet the supply required by business, business has to increase wages . . .
a political solution can be sought, which, when the beneficary is the ruling class, it always is. The government built a series of hospitals to treat “injured and ailing” sailors. And who paid for the hospital system that was so obviously benefiting the shipping industry?

This government provided healthcare service was to be paid for by a mandatory tax on the maritime sailors (a little more than 1% of a sailor’s wages), the same to be withheld from a sailor’s pay and turned over to the government by the ship’s owner.

Ah, no Zinn-lation needed here. Sailors preferred to spend money on pursuits that did not directly benefit their rulers and employers (not even %1, apparently). They could not be induced to contribute to this collective endeavor voluntarily, so the monopolist of violence was called on to compel the workers to subsidize the business interest.

Here we are 200+ years later and look how fantastically this system has worked out for our rulers. So many of the things that one might expect a profitable company to pay for: medical care, retirement, and insurance for the workers; and even infrastructure and dispute resolution (courts) that almost exclusively benefit the corporate class are all paid for by the workers themselves.

The workers produce for a the military that occupies foreign countries to ensure corporate control of resources and foreign labor, which helps drive down domestic wages. They even pay for the domestic security state which protects the property of the rulers from workers who have fallen on desperate times.

The children of the workers are collateral on loans taken out and handed to the corporate class and the meager savings, where they exist, have their value driven towards zero by the creation of additional dollars that are summoned from thin air and spent by the state, typically to buy products from favored corporations.

Sooooo, yeah. Nothing groundbreaking with this particular aspect of compulsory mandate. It’s interesting that anyone even noticed, really. For anyone who is concerned that our rulers will have their plans foiled by their own courts in this matter, put aside your fears. Any setback will be extremely temporary, and the corporate-political class will carry on draining the wealth and resources of the country until it’s time for them to board a plane and flee the wreckage that their rule has created.

  1. [1] It’s funny to note that the naming-things-the-opposite-of-what-they-do scheme, popularly identified by Orwell’s 1984, extends all the way back to this act. An act that forces seaman to pay for the suppression of their own wages named an act for the relief of sick and disabled seamen. Brilliant.
  2. [2] That’s the narrative anyway. See RadGeek’s comment for the actual reasons for the creation of the Constitution, which are entirely correct

Going on Record

I’m not an original thinker–at least not often. I do have, I believe, a better than average ability to sort claims into categories along the true-false spectrum. Of course, I have several biases in my data collection methodology–1. I am me and am partial to data that supports the hypothesis that I am awesome. 2) I have a terrible memory and am prone to construct narratives of my past beliefs from whole cloth supporting the hypothesis that I am awesome.

And so, the only solution is to go on record with my support of other’s predictions and see, over the course of time, how able I am to detect accurate forecasters from inaccurate.

I won’t take credit for the easy ones: Bill Kristol, George Will, Paul Krugman, anyone else in policy positions or in the MSM. These guys are never right*–it’s sort of their job never to be right.

No, I’ll try to stick to the alternative and academic media as much as possible. At least in those circles, there’s *some* consideration given to the track record of the person making a claim or prediction. Picking out the wheat from the chaff in this field will be a worthy test of my claim of super-average bullshit detection.

*Unless they’re contradicting a position they previously held–predicting two opposing outcomes does not equal accurate forecasting.