Category Archives: Economics

The Conflation Trap

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By Roderick Long

Source: Bleeding Heart Libertarians

Left-libertarians differ from the (current) libertarian mainstream both in terms of what outcomes they regard as desirable, and in terms of what outcomes they think a freed market is likely to produce.

With regard to the latter issue, left-libertarians regard the current domination of the economic landscape by large hierarchical firms as the product not of free competition but of government intervention – including not only direct subsidies, grants of monopoly privilege, and barriers to entry, but also a regulatory framework that enables firms to socialise the scale costs associated with growth and the informational costs associated with hierarchy, while pocketing the benefits – and leaving employees and consumers with a straitened range of options. In the absence of government intervention, we maintain, firms could be expected to be smaller, flatter, and more numerous, with greater worker empowerment.

Thus we tend to wince when libertarians (or many of them, to varying degrees) rush to the defense of elite corporations and prevailing business models and practices as though these were free-market phenomena. First, we think this is factually inaccurate; and second, we think it’s strategically suicidal. Ordinary people generally know firsthand the petty tyranny and bureaucratic incompetence that all too often characterise the world of business; libertarians who try to glamourise that world as an arena of economic rationality and managerial heroism risk coming across as clueless at best, and shills for the ruling class at worse.

This is also why we tend to be less than enthusiastic about the word “capitalism” as the term for free-market society; as Friedrich Hayek notes, the term is“misleading,” since it “suggests a system which mainly benefits the capitalists,” whereas a genuine free market is “a system which imposes upon enterprise a discipline under which the managers chafe and which each endeavours to escape.” (Law, Legislation, and Liberty, vol.1, p. 62.)

But it is not only mainstream libertarians (and of course, to a far greater extent, conservatives) that tend to conflate the results of crony corporatism with those of free markets; such conflationism is all too common on the traditional left as well. The difference is that the evaluations are reversed; where the right-wing version of conflationism treats the virtues of free markets as reason to defend the fruits of corporatism , the left-wing version of conflationism treats the objectionable fruits of corporatism as reason to condemn free markets.

Central to both forms of conflationism is the myth that big business and big government are fundamentally at odds. As is often the case, the myth sustains itself by containing a kernel of truth; while big business and big government are partners, each serving to prop up the other, each side would like to be the dominant partner (as with church and state in the Middle Ages, or Dooku and Palpatine in the Star Wars prequels), so much – though not, I think, most – of the conflict between them is genuine. But we should not allow these squabbles between different wings of the ruling class, essentially over how to divide up the loot, to obscure the far greater extent to which the political elite and the corporate elite work together. Conservative politicians, largely agents of the corporate wing, wrap their policies in anti-big-government rhetoric, while liberal politicians, largely agents of the political wing, wrap their policies in anti-big-business rhetoric; the differences in policy often involve nudging the balance of power slightly in one direction or the other (will healthcare be mainly controlled by government directly, or instead by the private beneficiaries of government-granted privilege like insurance companies and the AMA?), but both wings systematically benefit from most of the policies propounded by each side. FDR’s presidency, for example, with its cartelising policies, gave a massive boost to corporate power, while the three chief indices of state power – taxes, spending, and debt – all skyrocketed under Reagan’s presidency.

But conflationism isn’t just a mistake about the prevailing system; it’s also a means by which that system perpetuates itself. People who are attracted to the idea of free markets are hoodwinked by conflationism into supporting big business, and thus becoming foot soldiers of the corporate wing of the ruling class; people who are repelled by the reality of corporatism on the ground are hoodwinked into supporting big government, and thus becoming foot soldiers of the political wing of the ruling class. Thus, thanks to the pincer-movement of right-conflationism and left-conflationism, those who seek to oppose the prevailing system end up in the ranks of its supporters – and the possibility of a radical challenge to the system as a whole is rendered effectively invisible. This is how conflationism functions.

My talk of “functioning” is not meant to imply that conflationism is deliberately propagated in order to divert potential enemies of the system into the ranks of its supporters (though of course it sometimes is).

In a broader sense, whenever some feature A of a system B tends reliably to produce a certain result C, and A’s being such as to produce C helps to explain the existence and/or persistence of B, and thereby of A, then we may say that the function of A is to produce C. Thus the fact that thorns tend to protect roses from being eaten explains why roses, with their thorns, exist and persist. It’s in that sense that I say that the function of conflationism within the prevailing state/corporate system is to bewilder its foes into becoming supporters, and to render alternatives invisible. Conflationism is an instance of malign spontaneous order.

Philosopher of science Thomas Kuhn describes an intriguing experiment:

Bruner and Postman asked experimental subjects to identify on short and controlled exposure a series of playing cards. Many of the cards were normal, but some were made anomalous, e.g., a red six of spades and a black four of hearts. … For the normal cards these identifications were usually correct, but the anomalous cards were almost always identified, without apparent hesitation or puzzlement, as normal. The black four of hearts might, for example, be identified as the four of either spades or hearts. Without any awareness of trouble, it was immediately fitted to one of the conceptual categories prepared by prior experience. … With a further increase of exposure to the anomalous cards, subjects did begin to hesitate and to display awareness of anomaly. Exposed, for example to the red six of spades, some would say: That’s the six of spades, but there’s something wrong with it – the black has a red border. … A few subjects … were never able to make the requisite adjustment of their categories. (Structure of Scientific Revolutions, pp. 62-63)

In short, people tend to have not only difficulty with, but even aversion to, recognising something that doesn’t fit their established categories. This creates a problem for libertarians generally; for many in the political mainstream, the first impulse is to assimilate libertarians to a more familiar “anti-government” category, namely conservatives. When, after longer exposure, mainstreamers realise that libertarians aren’t quite conservatives after all, then they begin to see libertarians as the equivalent of “black spades with red borders” – conventionally conservative on some issues, conventionally liberal on others, rather than representing a radical alternative to existing ideologies. (Libertarians’ use of the Nolan Chart as an outreach tool may contribute to this tendency.)

What holds true for libertarians generally, holds to a still greater extent in the case of left-libertarians. The prevalence of conflationism tends to reinforce the impression that anyone who attacks (what we consider) the fruits of corporatism must be anti-free-market, and that anyone who defends free markets must be undertaking a defense of (what we consider) the fruits of corporatism. Thus nonlibertarian leftists tend to see us as corporate apologists in leftist camouflage, while nonleftist libertarians tend to see us as commies in libertarian guise.

Even when mainstream libertarians acknowledge the existence (and badness) of corporatism, as most do, communication with left-libertarians still tends to come to grief. Left-libertarians are baffled when mainstream libertarians acknowledge cronyism in one breath, only to slide back in the next breath to into treating criticisms of big business as criticisms of free markets. More mainstream libertarians, for their part, are baffled as to why left-libertarians keep raising the issue of corporatism when the mainstream libertarians have already acknowledged its existence and badness.

Kuhn is helpful here too:

Since remote antiquity most people have seen one or another heavy body swinging back and forth on a string or chain until it finally comes to rest. To the Aristotelians, who believed that a heavy body is moved by its own nature from a higher position to a state of natural rest at a lower one, the swinging body was simply falling with difficulty. Constrained by the chain, it could achieve rest at its low point only after a tortuous motion and a considerable time. Galileo, on the other hand, looking at the swinging body, saw a pendulum, a body that almost succeeded in repeating the same motion over and over again ad infinitum. … [W]hen Aristotle and Galileo looked at swinging stones, the first saw constrained fall, the second a pendulum …. (Ibid., pp. 118-121)

Aristotle and Galileo were observing the same two facts: the stone keeps swinging back and forth for a while, and then it eventually hangs straight down. But for Galileo the swinging was essential and the eventual cessation accidental, a “friction” phenomenon; whereas for Aristotle, progress toward a state of rest was, and the sideways perturbations accidental.

Likewise, for those operating within a conceptual framework that sees conservative opposition to big government and liberal opposition to big business as essential and deviations from these norms as accidental, evidence that conservative policies promote big government or that liberal policies promote will be dismissed as inessential or anomalous or an excusable. (See, for example, this video in which Obama supporters condemn right-wing-sounding policies when they think they’re Romney’s, but either excuse them or go into denial when told that the policies are actually Obama’s.)

Similarly, for many mainstream libertarians, free exchange is what essentially characterises the existing economy, while the corporatist policies are so much friction; and just as there’s no need for constant references to friction when talking about how a mechanism works, such mainstream libertarians don’t constantly bring up corporatism when discussing the working of the existing economy. For left-libertarians, by contrast, corporatism is a far more central feature of the existing economy, and leaving it out radically distorts our understanding. In such cases left-libertarians and more conventional libertarians are arguing from opposite sides of a Gestalt shift, where what looks essential to one side looks accidental to the other.

I don’t mean to suggest that these disputes are rationally irresoluble, however. In the playing-card experiments, subjects did eventually come to see the suits correctly after sufficiently long exposure. And sufficient exposure to the evidence marshaled by left-libertarians can prompt the relevant Gestalt shift, as indeed it frequently does; most left-libertarians once started out either less leftist or less libertarian or both. But the prevailing conceptual framework, through which so many (both libertarian and not) look at the economy without seeing what we see, is, I think, no accident; it’s part of the means by which the big-government/big-business partnership maintains itself.

Check Mating Washington in its Own Backyard with BRICSIANSE

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Vladimir_Putin-6

By Wayne Madsen

Source: Strategic Culture Foundation

The United States and its closest allies have attempted to isolate Russia and President Vladimir Putin from the world stage. As a result of Western support for the Ukrainian regime that came to power through violence in Kiev, actions taken by Western powers against Russia have included expelling Russia from the G-8 of capitalist powers, the freezing of the assets of Russian government officials and Russian banks, and imposing travel bands on Russian citizens.

However, Putin has check-mated U.S. President Barack Obama in the American president’s own backyard. Obama’s defenders fancy their president as a master of «11-dimensional chess». However, what is transpiring in Brazil at the summit of the BRICS nations of Brazil, Russia, India, China, and South Africa has shown the world that it is Putin, not Obama, who is the master of 11-dimensional chess. In fact, Obama could never even make it to the chess board.

Putin is visiting Brazil where he is participating in the 2014 summit in the city of Fortaleza. The BRICS summit comes as members of the Obama administration, including neo-cons like Assistant Secretary of State for European Affairs Victoria Nuland, have instituted plans for increased sanctions against Russia, bringing them to the level as those directed against Iran, Syria, and Cuba.

Putin and his BRICS colleagues will sign an agreement in Fortaleza on establishing a BRICS development bank that will help bypass the neo-cons’ attempt to isolate Russia from international banking networks. Any strengthening of sanctions in the same manner that U.S. sanctions have been imposed by Washington on Iran, Syria, and Cuba runs the risk of punishing Brazilian, Indian, Chinese, and South African banks and other corporations, something that could land the Obama administration in hot water before the World Trade Organization court that rules against trade practices that violate WTO regulations.

The legacy of the Obama administration is that its Cold War-era policies directed against Latin America have permanently ended America’s long-standing political and economic domination of the Western Hemisphere. Obama put the final nail in the arcane Monroe Doctrine that stipulated the United States would bar non-Western Hemisphere nations, including the powers of Europe, from intervention in the Americas. The interventionist policies in countries like Venezuela and Honduras carried out by Nuland’s fellow neocon ideologue Roberta Jacobson, the Assistant Secretary of State for Western Hemisphere Affairs, have resulted in a large contingent of Latin American leaders in joining Putin, Chinese President Xi Jinping, and the other BRICS leaders in Brazil for a summit where the United States will not have a seat at the table. In fact, the United States and its imperialistic policies will be a major subject in Brazil, a country that has seen its telecommunications, including the private calls and e-mail of Brazilian President Dilma Rousseff routinely spied upon by the U.S. National Security Agency.

Putin is making the most of his six-day visit to Latin America. He forgave Cuba’s debt to Russia while visiting Havana and also stopped in Nicaragua and Rio de Janeiro. While in Cuba, Putin met with former Cuban leader Fidel Castro and his brother, Raul Castro, Cuba’s president, two leaders who continue to infuriate the neo-con and right-wing power centers of Washington. Putin also attended the final game of the World Cup in Rio. Russia is the host of 2018 World Cup. Putin also visited Argentina where he signed a deal on nuclear energy.  The interest of Iran, Argentina, Nigeria, Syria, and Egypt in joining BRICS may soon see the group’s acronym become «BRICSIANSE». Such a development would triumph the nations of the world that refuse to take orders from Washington and the presence of Syria would spell ultimate defeat of the Obama doctrine of «R2P», or «Responsibility to Protect» pro-U.S. and Western intelligence agency-financed opposition leaders intent on replacing anti-American governments with pro-U.S. regimes. Syria joining BRICS as a full or associate member would drive a stake through the heart of R2P.

The Obama administration could not convince a single South American leader to avoid the BRICS summit in Brazil. In fact, two of the South American leaders sitting down with Putin, Xi, Rousseff, and the other leaders in Brazil, Venezuela’s President Nicolas Maduro and Suriname’s President Desi Bouterse, have been the subject of CIA- and State Department-linked destabilization efforts and sanctions threats. Also in attendance at BRICS are Argentina’s President Cristina Fernández de Kirchner, Bolivia’s President, Evo Morales Chile’s President Michelle Bachelet, Colombia’s President Juan Manuel Santos, Ecuador’s President Rafael Correa, Guyana’s President Donald Ramotar, Paraguay’s President Horacio Cartes, Peru’s President Ollanta Humala, and Uruguay’s President José Mujica. America’s sanctions against Russia and its saber-rattling against China on behalf of Japan and the Philippines have fallen on deaf ears in South America. The teenager-like antics of Nuland, Jacobson, along with those of U.S. National Security Adviser Susan Rice and U.S. ambassador to the UN Samantha Power, are sure to be discussed in sideline gossip by the leaders gathered in Fortaleza.

The presence of President Santos of Colombia is particularly noteworthy. Santos recently defeated a right-wing candidate supported by the same Obama administration’s interventionists who have helped disrupt the economy of Venezuela. The losing candidate, Oscar Ivan Zuluaga, had the full support of Santos’s right-wing and pro-Israeli/pro-U.S. predecessor Alvaro Uribe. Recent disclosures have shown that Uribe instituted an NSA-like national communications surveillance system aimed at his opponents. Zuluaga’s ties with the same elements who are trying to depose Maduro in Venezuela have not been lost on Santos. He continues to engage in peace negotiations in Havana with left-wing DARC guerrillas and improve ties with Venezuela much to the chagrin of the CIA operatives who live in splendor in the Miami area of Florida.

While in Rio, Putin managed to cast off U.S. efforts to isolate him internationally by meeting with Prime Minister of Trinidad and Tobago Kamla Persad-Bissessar and Antigua and Barbuda Prime Minister Gaston Browne, in addition to Hungary’s Prime Minister Victor Orban, Namibian President Hage Geingob, Gabon’s President Ali Bongo, and Germany’s Chancellor Angela Merkel. Merkel and Rousseff have much in common as both had their personal cell phone conversations monitored by NSA, a fact that Putin, who has provided asylum to NSA whistleblower Edward Snowden, was likely sure to have mentioned in passing.

The only attempt the United States could make to have any Latin American officials criticize contact between Western Hemisphere leaders and Putin was to arrange for Trinidad opposition leader Keith Rowley to condemn his country’s prime minister’s private trip to Brazil. Rowley criticized Persad-Bissessar and her grandson for meeting with Putin and other leaders in Rio because the trip was made during a labor dispute involving Trinidad’s immigration department. The power of Washington to influence events in the Western Hemisphere has truly plummeted to new depths.

The agenda of the BRICS nations is as diversified as that of any G-7 meeting, no longer called G8 after Russia was expelled. On the BRICS summit agenda are trade, development, macroeconomic policy, energy, finance, terrorism, climate change, regional security, drug smuggling and trans-border crime, industrialization of Africa, and, kin what should serve as a wake-up call to Wall Street, the World Bank, European Central Bank, the International Monetary Fund, and other tools of western capitalism, international financial institution (IFI) reform.

The security operations by BRICS in Afghanistan stand to replace those of the United State after the withdrawal of its troops from that country. Russia has led BRICS efforts on dealing with money laundering and cross-border crime and it has drawn the participation of Belarus, India, Kazakhstan, China, Kyrgyzstan, Russia, Tajikistan, Turkmenistan and Uzbekistan in its efforts. Observers from Mongolia and Armenia also joined the talks. In the area of security, synergism is apparent between the BRICS and the Shanghai Cooperation Organization (SCO) that brings Russia and China into a common security policy with central Asian states like Kazakhstan and Uzbekistan. Russia and China appear determined that Ukraine and Georgia will be the «line in the sand» for any further encroachments by George Soros- and CIA-led «R2P» revolutions in the Eurasian space. It is also clear that Putin outsmarted Obama in his own backyard.

Big Corporations Have an Overwhelming Amount of Power Over Our Food Supply

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By Michael Snyder

Source: The Economic Collapse

From our fields to our forks, huge corporations have an overwhelming amount of power over our food supply every step of the way.  Right now there are more than 313 million people living in the United States, and the job of feeding all of those people is almost entirely in the hands of just a few dozen monolithic companies.  If you do not like how our food is produced or you don’t believe that it is healthy enough, it isn’t very hard to figure out who is to blame.  These mammoth corporations are not in business to look out for the best interests of the American people.  Rather, the purpose of these corporations is to maximize wealth for their shareholders.  So the American people end up eating billions of pounds of extremely unhealthy food that is loaded with chemicals and additives each year, and we just keep getting sicker and sicker as a society.  But these big corporations are raking in big profits, so they don’t really care.

If we did actually have a capitalist system in this country, we would have a high level of competition in the food industry.  But instead, the U.S. food industry has become increasingly concentrated with each passing year.  Just consider the following numbers about the U.S. agricultural sector…

The U.S. agricultural sector suffers from abnormally high levels of concentration. Most economic sectors have concentration ratios around 40%, meaning that the top four firms in the industry control 40% of the market. If the concentration ratio is above 40%, experts believe competition can be threatened and market abuses are more likely to occur: the higher the number, the bigger the threat.

The concentration ratios in the agricultural sector are shocking.

-Four companies own 83.5% of the beef market.
-The top four firms own 66% of the hog industry.
-The top four firms control 58.5% of the broiler chicken industry.
-In the seed industry, four companies control 50% of the proprietary seed market and 43% of the commercial seed market worldwide.
-When it comes to genetically engineered (GE) crops, just one company, Monsanto, boasts control of over 85% of U.S. corn acreage and 91% of U.S. soybean acreage.

When so much power is concentrated in so few hands, it creates some tremendous dangers.

And many of these giant corporations (such as Monsanto) are extremely ruthless.  Small farmers all over America are being wiped out and forced out of the business by the predatory business practices of these huge companies…

Because farmers rely on both buyers and sellers for their business, concentrated markets squeeze them at both ends. Sellers with high market power can inflate the prices of machinery, seeds, fertilizers and other goods that farmers need for their farms, while powerful buyers, such as processors, suppress the prices farmers are paid. The razor-thin profit margins on which farmers are forced to operate often push them to “get big or get out”—expanding into mega-operations or exiting the business altogether.

Of course the control that big corporations have over our food supply does not end at the farms.

The distribution of our food is also very highly concentrated.  The graphic shared below was created by Oxfam International, and it shows how just 10 gigantic corporations control almost everything that we buy at the grocery store…

10-Corporations-Control-What-We-Eat-425x265

And these food distributors are often not very good citizens either.

For example, it was recently reported that Nestle is running a massive bottled water operation on a drought-stricken Indian reservation in California…

Among the windmills and creosote bushes of San Gorgonio Pass, a nondescript beige building stands flanked by water tanks. A sign at the entrance displays the logo of Arrowhead 100% Mountain Spring Water, with water flowing from a snowy mountain. Semi-trucks rumble in and out through the gates, carrying load after load of bottled water.

The plant, located on the Morongo Band of Mission Indians’ reservation, has been drawing water from wells alongside a spring in Millard Canyon for more than a decade. But as California’s drought deepens, some people in the area question how much water the plant is bottling and whether it’s right to sell water for profit in a desert region where springs are rare and underground aquifers have been declining.

Nestle doesn’t stop to ask whether it is right or wrong to bottle water in the middle of the worst drought in the recorded history of the state of California.

They have the legal right to do it and they are making large profits doing it, and so they are just going to keep on doing it.

Perhaps you are thinking that you can avoid all of these corporations by eating organic and by shopping at natural food stores.

Well, it isn’t necessarily that easy.

According to author Wenonah Hauter, the “health food industry” is also extremely concentrated…

Over the past 20 years, Whole Foods Market has acquired its competition, including Wellspring Grocery, Bread of Life, Bread & Circus, Food for Thought, Fresh Fields, Wild Oats Markets and others. Today the chain dominates the market because it has no national competitor. Over the past five years its gross sales have increased by half (47 percent) to $11.7 billion, and its net profit quadrupled to $465.6 million. One of the ways it has achieved this profitability is by selling conventional foods under the false illusion that they are better than products sold at a regular grocery store. Consumers falsely conclude that these products have been screened and are better, and they are willing to pay a higher price.

The distribution of organic foods is also extremely concentrated. A little-known company, United Natural Foods, Inc. (UNFI) now controls the distribution of organic and natural products. Publically traded, the company has a contract with Whole Foods and it is the major source of these products for the remaining independent natural food stores. This relationship has resulted in increasingly high prices for these foods. Small manufacturers are dependent on contracts with UNFI to get their products to market and conversely, small retailers often have to pay a premium price for products because of their dependence on this major distributor. Over the past five years, UNFI’s net sales increased by more than half (55.6 percent) $5.2. billion. Its net profit margin increased by 88 percent to $91 million.

Everywhere you look, the corporations are in control.

And this is especially true when you look at big food retailers such as Wal-Mart.

Right now, grocery sales account for about half of all business at Wal-Mart, and approximately one out of every three dollars spent on groceries in the United States is spent at Wal-Mart.

That is absolutely astounding, and it obviously gives Wal-Mart an immense amount of power.

In fact, if you can believe it, Wal-Mart actually purchases a billion pounds of beef every single year.

So the next time someone asks you where the beef is, you can tell them that it is at Wal-Mart.

On the restaurant side, the ten largest fast food corporations account for 47 percent of all fast food sales, and the love affair that Americans have with fast food does not appear to be in danger of ending any time soon.

Personally, if you do not like how these corporate giants are behaving, you can always complain.

But you are just one person among 313 million, and most of these big corporations are not going to consider the ramblings of one person to be of any significance whatsoever.

Collectively, however, we have great power.  And the way that we are going to get these big corporations to change is by voting with our wallets.

Unfortunately, the vast majority of Americans seem quite satisfied with the status quo.  So the population as a whole is likely going to continue to get sicker, fatter and less healthy with each passing year, and the big food corporations are going to keep becoming even more powerful.

Podcast Roundup

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7/12: Host Douglas Lain has a freewheeling discussion with Steven Michalkow connecting an odd episode of Columbo with psychoanalysis, theology, philosophy, surrealism, “The Prisoner” TV series and beyond:


http://dietsoap.podOmatic.com/enclosure/2014-04-11T10_19_14-07_00.mp3

7/13: On Expanding Minds, author Mitch Horowitz discusses the history of positive thinking, William James and the modern skeptic movement among other related topics:


http://expandingmind.podbean.com/mf/web/in3m76/ExpandingMind_071314.mp3

7/14: Paul Molloy and Mark Thornton of the Von Mises Institute discuss potential pitfalls of the recent minimum wage increase in Seattle:


http://library.mises.org//media/Interviews/Minimum%20Wage%20and%20Unintended%20Consequences.mp3

7/14: On The Progressive Commentary Hour retired US Army Colonel Larry Wilkerson discusses parallels between the build up to war with Syria and build up to the invasion of Iraq followed by Dr. Douglas Hall, Executive Director of National Priorities Project, who discusses the backwards priorities of the federal budget.


http://s50.podbean.com/pb/41fd9bbc863f4b9cc489a55a2783e998/53c5c21e/data2/blogs18/371244/uploads/PCH_Madhi_070714.mp3

7/15: Guillermo Jimenez and Danny Benavides tackle the immigration issue and the escalating “humanitarian crisis” along the US-Mexico border on Traces of Reality Radio:


http://tracesofreality.com/wp-content/uploads/2014/07/Traces-of-Reality-Radio-2014.07.11-Danny-Benavides.mp3

7/15: On the Project Censored Show, Mickey Huff is joined by Ken Walden of “What the World Could Be” to discuss public banking for the 99%:


http://s39.podbean.com/pb/c913d2484774a3f6ad1f69a136e87968/53c5c81f/data1/blogs18/405745/uploads/ProjectCensored071414.mp3

The “Makers” and “Takers” — Not Who You Think

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corporate_welfare_medium

By Kevin Carson

Source: Center for a Stateless Society

The old “53% vs. 47%” meme that got so much attention in the 2012 election resurfaced this week when it came out that Colorado gubernatorial candidate Bob Beauprez apparently first coined it at a 2010 Rotary Club speech. The 47% who pay no income tax, he said back then, are “dependent on the largesse of government” and “perfectly happy that someone else is paying the bill.” The talking point got traction with the Tea Party and was soon picked up by politicians like Paul Ryan (who warned we were approaching “a net majority of takers vs. makers”) and Mitt Romney.

Of course this is pure buncombe.  It presupposes that high taxable incomes result primarily from being “makers,” when the truth is just the opposite. The higher your income, in fact, the more likely you’re a taker who’s — all together now! — dependent on government.

It’s possible to get moderately wealthy — say, an income that qualifies you for the “top 1%,” which is somewhere under $400,000, or assets in the low millions — through genuine entrepreneurship. Even at this level, of course, it’s more likely you have an income heavily inflated by membership in a licensing cartel, or help manage a highly authoritarian, statist corporation where your “productivity” — and bonuses — are defined by how effectively you shaft the people whose skills, relationships and other human capital are actually responsible for the organization’s productivity. But it’s at least possible to get this rich by being a maker of sorts, by being more adept than others at anticipating and meeting real human needs.

But you don’t get to be super-rich — to the tune of hundreds of millions or billions of dollars — by making stuff. You get that filthy rich only through crime of one sort or another (even if it’s technically perfectly legal in this society). You get the really big-time money not by making stuff or doing stuff, but by controlling the conditions under which other people are allowed to make stuff and do stuff. You get super-rich by getting into a position where you can fence off opportunities to produce, enclosing those natural opportunities as a source of rent. You do it by collecting tolls and tribute from those who actually make stuff, as a condition of not preventing them from doing so. In other words you get super-rich by being a parasite and extorting protection money from productive members of society, with the help of government.

So don’t be fooled by the fact that some of us aren’t paying any income taxes. We pay lots of taxes — to rich takers who live off our largesse. The portion of your rent or mortgage that results from the enormous tracts of vacant and unimproved land held out of use through artificial property rights is a tax to the landlord. The 95% of the price of drugs under patent, or Bill Gates’s software, is a tax you pay to the owners of “intellectual property” monopolies. So is the portion of the price you pay for manufactured goods, over and above actual materials and labor, that results from embedded rents on patents and enormous brand-name markups on (for example) Nike sneakers over and above the few bucks a pair the sweatshops contract to make them for. So is the estimated 20% oligopoly price markup for industries where a few corporations control half or more of output. If by chance you do pay federal income tax, half of it goes to support the current military establishment or pay off debt from past wars — wars fought for the sake of giant corporations.

The “takers,” in short, are the people Romney spoke to at $1000/plate fundraisers, who pay Hillary Clinton several hundred grand for a speech reassuring them Wall Street’s not to blame. The entire Fortune 500, the entire billionaire plutocracy, depends on largesse from us makers — and they can only do it with government help.

Top Reasons You Should Never Buy E-Cigs From Big Tobacco

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Cigarette-butts

Source: Cascadia Vape Blog

It’s long been suspected that Big Tobacco money was behind early efforts to attack the e-cig industry because it posed a potential threat to the tobacco cigarette industry. Now it’s apparent Big Tobacco is not only jumping on the bandwagon, but setting its sights on taking over the bandwagon.

Lorillard, the 3rd largest Big Tobacco company in the US acquired Blu brand e-cigs last year and just earlier this month Reynolds, America’s 2nd largest Big Tobacco company announced its entry into the market with Vuse e-cigarettes. The no. 1 US Big Tobacco company, Altria, acquired Green Smoke for $110 million in February and is planning national distribution of a new e-cig, NuMark, by the end of the year while Philip Morris, a subsidiary of Altria, recently announced it acquired British e-cigarette maker Nicocig for an undisclosed price. Some in the e-cig community might see this as a positive development thinking that with increased marketing from Big Tobacco brands there’ll be increased public awareness of e-cigarettes. However, I think there’s good reasons to worry about the quality of information and products Big Tobacco pushes to the public, leading to the first of the reasons to not support them:

Reason 1: It is in the interests of Big Tobacco to associate e-cigarettes with tobacco cigarettes.

Big Tobacco companies aren’t about to lose their customer base without a fight, and even as more smokers continue to switch to e-cigarettes, they’re often lured towards e-cig brands owned by the corporations that understand their addiction best. Big Tobacco have decades of experience effectively marketing cigarettes and they’re using similar tactics to make e-cigs especially attractive to smokers and former smokers. Big Tobacco e-cigs such as Green Smoke and Vuse are designed and packaged to look very similar to tobacco cigarettes and are often marketed as “tobacco products”. This may seem like a fair label on the surface because e-cigs use liquids containing nicotine usually extracted from tobacco, but one could argue they’re not exactly tobacco products because nicotine is a chemical that can be synthesized and is found in other plants such as eggplant, tomatoes and peppers. It’s an important distinction to make because a common misconception is that e-cigs are as harmful as tobacco cigarettes when in fact much of the damage caused by smoking cigarettes can be attributed to the combustion of processed tobacco which have been found to contain radiation, gmo genes, ammonia and pesticides. There is at least one e-cig specifically designed for use with tobacco and not surprisingly it’s made by Philip Morris. Many e-cigs produced by big tobacco are designed to emulate the experience of smoking with smoke-like nicotine content and taste. This is great for smokers content to continue vaping in a manner similar to how they’re accustomed to smoking, but not so good for those trying to decrease or end their addiction or would like to experience a wider range of flavors, vape temperatures, nicotine levels, or psychoactive substances. E-cigs and vapes produced by smaller businesses are far more versatile, allowing users to choose the flavors and nicotine content of e-liquids they use, select from variable voltage settings, and with modular attachments they can also vape non-tobacco herbs, oils and concentrates instead. E-cigs from Big Tobacco, on the other hand, use disposable cartridges which have a host of problems leading to the next argument:

Reason 2: E-cigs produced by Big Tobacco are more harmful to you and the environment. 

Nearly every Big Tobacco-owned electronic cigarette uses disposable cartridges which are cheap to produce but end up costing consumers more in the long run than refillable cartridges. They also limit consumer choice because such cartridges are usually proprietary, not designed for use with components from other brands and more limited in selection of flavors and nicotine content than liquids sold separately. E-cigs using disposable cartridges are also potentially more hazardous to your health than other forms of vaporizers. Though there still needs to be more research on comparative health effects, a 2009 FDA study (often cited by critics as proof that e-cigs emit low levels of tobacco-specific nitrosamines and other impurities) only tested devices using disposable cartridges (“Njoy”, “Smoking Everywhere” and “Nicotrol” brands). Just like with tobacco cigarette filters, we may one day see disposable e-cig cartridges littered everywhere if Big Tobacco has its way. As with other cheap disposable products, disposable e-cigs and e-cig filters are designed for planned obsolescence; a policy which creates demand by making a product obsolete faster forcing consumers to buy more regularly and discard old products into landfills more often. Such practices of Big Tobacco and other large corporations leads to the third argument:

Reason 3: Big Tobacco has proven itself untrustworthy.

The history of the American tobacco industry is steeped in shame. Early settlers ripped off Native American tribes in order to acquire more land for tobacco fields. Indentured servants were exploited for labor intensive tobacco field work later to be replaced by slaves from Africa. By the 1880s, the industry was dominated by the monopolistic American Tobacco Company which was one of the companies forced to dissolve to comply with the Sherman Antitrust Act. The dissolution led to an increase in cigarette advertising while the four firms created from the breakup continue to dominate the tobacco market to this day. We now know that senior scientists and executives within the cigarette industry knew there was a correlation between smoking and cancer as early as the 1940s and were aware that smoking could cause lung cancer by the mid 1950s. However, it wasn’t until the 1990’s amidst successful lawsuits against Big Tobacco aided by leaked documents that major US cigarette manufacturers publicly admitted to varying degrees that smoking causes cancer and other health problems. Given their track record, it should come as no surprise how Big Tobacco approaches the e-cig market with the same focus on the bottom line.

Like many other large corporations with outsize influence, Big Tobacco is less concerned with wealth creation which extracts value by engaging in mutually beneficial transactions than rent-seeking; the use of social institutions such as government to gain monopolistic advantages while imposing disadvantages on competitors. The effects of rent-seeking are reduced economic efficiency through poor allocation of resources, reduced wealth creation, increased income inequality, lost government revenue (except for select paid-off legislators and regulators), decreases in innovation and entrepreneurship and national decline. Large corporations also create fewer quality domestic jobs per capita because they have the ability to cut costs through increased automation and outsourcing overseas. While CEOs of such companies may have wonderful jobs, there’s an increasingly wide income and quality gap between their position and the people at the lowest level of the company. In most cases, much of their profits are siphoned off to a small group at the top of the hierarchy who hoard it in offshore bank accounts.

Smaller domestic companies, while they may have to source certain components from overseas, tend to do more of the work in-house such as assembly, quality control, packaging, warehousing, etc. which creates more local jobs that distribute wealth into local economies. Small businesses also tend to have less of a wealth gap between employees and are run by people who are more passionate about their line of work, not people who inherited their careers, acquired it through connections or were hired by committee solely for their ability to generate income.

For the sake of your health, the environment, the economy and country, don’t support Big Tobacco. Support responsible small businesses and spread the message.

Podcast Roundup

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6/25: On the C-Realm podcast, KMO interviews Ed Whitfield, Hannah Jones and Gar Alperovitz, covering topics ranging from appropriate and inappropriate uses of private property, responsible investing and social progress. The podcast concludes with a conversation with Alixa and Naima of Climbing Poetree, who critique the Drug War and deliver a couple of excellent poems.

http://www.c-realm.com/wp-content/uploads/420_Just_Transition.mp3

6/25: Catherine Austin Fitts discusses a wide array of issues (including: The Financial Coup d’Etat; Missing Money; Black Budget Funding of Private Corporate Projects; History and Organization of the Financial System since World War II; the Exchange Stabilization Fund Managed by the New York Fed; Digital Currencies and the Shadow Government) on the latest episode of Guns and Butter.

http://archives.kpfa.org/data/20140625-Wed1300.mp3

6/25: The author of “Confessions Of An Economic Hitman”, John Perkins, joins The Higherside Chats to talk about his newest book, “Hoodwinked” which traces how the tactics described in his earlier book has evolved since the 70′s and offers practical solutions to get society back on track.

http://thehighersidechats.com/wp-content/uploads/2014/06/115-John-Perkins.mp3

6/25: On Red Ice Radio, host Henrik Palmgren has a conversation with David McGowan, author of “Weird Scenes Inside the Canyon: Laurel Canyon, Covert Ops & The Dark Heart of the Hippie Dream”. They discuss the dark underbelly of the California counterculture scene of the late 60’s and early 70’s.

http://rediceradio.net/radio/2014/RIR-140625-davidmcgowan-hr1.mp3

Immortal Words from George Carlin

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George Carlin in 2004.

Six years ago today George Carlin, one of the great American comedian/social critics, died of heart failure. It’s often assumed that people mellow with age but Carlin’s life and career is proof that the opposite can be true. Throughout much of the 60s, Carlin’s brand of comedy was good but rather mainstream and not outstanding. During the 70s, he reinvented himself, becoming one of the top counterculture comedians of the era. Carlin continued to make occasional appearances in mainstream film and television (eg. “Outrageous Fortune” and the Bill and Ted films), but from around the late 90s to 2008, his counterculture sensibilities came back with a vengeance. At the time, his later material didn’t seem to resonate with audiences as much as his material from the 70s. It was even more edgy, dark, and pessimistic, probably too much for the aging boomer demographic that previously made up the majority of his fanbase. However, for younger audiences discovering Carlin through the internet his words reflected the reality of the world as effects of increasingly corrupt political and economic systems could no longer be kept hidden by corporate media.

The following clip exemplifies what many people around the world love most about George Carlin and will forever remember him for:

Transcript

But there’s a reason… there’s a reason. There’s a reason for this, there’s a reason education SUCKS, and it’s the same reason it will never, ever, EVER be fixed.

It’s never going to get any better, don’t look for it, be happy with what you’ve got.

Because the owners, the owners of this country don’t want that. I’m talking about the real owners now, the BIG owners! The Wealthy… the REAL owners! The big wealthy business interests that control things and make all the important decisions.

Forget the politicians. They are irrelevant. The politicians are put there to give you the idea that you have freedom of choice. You don’t. You have no choice! You have OWNERS! They OWN YOU. They own everything. They own all the important land. They own and control the corporations. They’ve long since bought, and paid for the Senate, the Congress, the state houses, the city halls, they got the judges in their back pockets and they own all the big media companies, so they control just about all of the news and information you get to hear. They got you by the balls.

They spend billions of dollars every year lobbying, lobbying, to get what they want. Well, we know what they want. They want more for themselves and less for everybody else, but I’ll tell you what they don’t want:

They don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. Thats against their interests.

Thats right. They don’t want people who are smart enough to sit around a kitchen table and think about how badly they’re getting fucked by a system that threw them overboard 30 fucking years ago. They don’t want that!

You know what they want? They want obedient workers. Obedient workers, people who are just smart enough to run the machines and do the paperwork. And just dumb enough to passively accept all these increasingly shitty jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime and vanishing pension that disappears the minute you go to collect it, and now they’re coming for your Social Security money. They want your retirement money. They want it back so they can give it to their criminal friends on Wall Street, and you know something? They’ll get it. They’ll get it all from you sooner or later cause they own this fucking place! It’s a big club, and you ain’t in it! You, and I, are not in the big club.

By the way, it’s the same big club they use to beat you over the head with all day long when they tell you what to believe. All day long beating you over the head with their media telling you what to believe, what to think and what to buy. The table has tilted folks. The game is rigged and nobody seems to notice. Nobody seems to care! Good honest hard-working people; white collar, blue collar it doesn’t matter what color shirt you have on. Good honest hard-working people continue, these are people of modest means, continue to elect these rich cock suckers who don’t give a fuck about you….they don’t give a fuck about you… they don’t give a FUCK about you.

They don’t care about you at all… at all… AT ALL. And nobody seems to notice. Nobody seems to care. Thats what the owners count on. The fact that Americans will probably remain willfully ignorant of the big red, white and blue dick thats being jammed up their assholes everyday, because the owners of this country know the truth.

It’s called the American Dream because you have to be asleep to believe it.