Category Archives: Inequality

Question Everything

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By Michael Krieger

Source: Liberty Blitzkrieg

Crises, like pandemics, don’t break things in and of themselves; they show you what’s already broken.

– Patrick Wyman

Big macro crises in any form are scary, massively disruptive, and in some cases, literally deadly. This is why governments and entrenched institutions always see such events as opportunities to further consolidate wealth and power.

The current global pandemic is no exception, as I detailed in last week’s piece: Power Grab. While it’s necessary to be aware of this reality — and to push back against it wherever possible — it’s equally important to recognize there’s a silver lining to all of this.

The paradigm we live under depends on us not thinking too hard about how power functions. It relies on us being so busy with the basics of survival, or distracted by superficial consumerism and endless entertainment, to contemplate how the system actually works. This method of social control has been wildly successful throughout my lifetime, but what’s interesting about moments of global crises is the mask is forced off for a period. In a desperate scramble to marshal all of the corporate-imperial state’s resources to save the interests of the oligarchy, we’re shown in full color who really matters and who doesn’t.

You do not matter. The imperial state doesn’t care about you. Oligarchs don’t care about you. Mega corporations don’t care about you. This truth is cleverly hidden from much of the public during “normal” times when the machine is humming along as intended, but it’s far more in your face during a crisis period. It’s much harder to hide the truth when the world gets turned upside down.

Aside from the grotesque spectacle of the U.S. government funneling all of its resources toward propping up Wall Street and large corporations, this crisis has exposed the rot and disfunction in another meaningful way. Our health experts, ostensibly there to help the public navigate exactly this sort of event, have failed us in spectacular fashion.

https://twitter.com/Surgeon_General/status/1233725785283932160

This is what political actors masquerading as experts do in a crisis. They either give bad advice, or intentionally mislead the public to hide the fact the U.S. simply doesn’t have adequate mask supply and sent its manufacturing capacity overseas. Which brings up an important topic worthy of further discussion: the crucial distinction between experts and expertise.

An “expert” in our society is someone with expertise in a particular field who’s been propped up by either the media, government or both as an authoritative source to listen to on a particular topic. This individual’s elevated stature is artificially created by an external source that’s selected this particular person as someone you should listen to. It tends to be a political appointment. This person has been chosen, not only because he or she has expertise (many others also do), but due to other attributes that appeal to those who’ve decided to prop them up. Anyone who’s worked in corporate America knows full well that many of those promoted to middle management, or higher, often end up there not because they’re particularly skilled, but because they’re good at playing politics and know the right ass to kiss. The same is true in all large organizations, and government is no exception.

In the days before the internet and social media, the public might know that government/media experts were behaving dishonestly, but didn’t have realtime access to competitive nonpolitical voices with equal or superior expertise to the government experts. What many of us discovered during this pandemic is people with expertise engaging publicly on Twitter provided far better and more timely advice than the government/media experts. This makes perfect sense because these people tend to not be political actors, but rather humans attempting to share information in an honest and selfless manner. If we’ve learned anything in the 21st century, it’s that actual track records don’t matter when it comes to media and government positions. In fact, the more catastrophically wrong you are in the interests of oligarchy, the more likely you are to be promoted and elevated.

Fortunately, I entered this crisis with a well established distrust of mass media and government, and therefore knew better than to look toward their experts for any useful guidance. Rather, I sought out the opinions of various nonpolitical individuals with relevant expertise who helped me see things for how they were very early on. Others have not been as lucky, but will no doubt emerge from this crisis with a deep distrust of established institutions and individuals, and with very good reason.

We’ve just witnessed a catastrophic failure of the centralized state in America, and the blowback will resonate within the larger culture for years if not decades. Similar to how many people were shaken to their core during the financial crisis a decade ago, I think this pandemic event will lead to an even larger wave of people awakening to how completely rotten, pernicious and corrupt the whole system is. Once you see that reality in all its glory, you can’t unsee it.

Of course, recognizing how broken things are isn’t enough. We need to have a thoughtful conversation about what we have too much of versus what we need. If we’re going to change the world, we need a vision. I have some thoughts on the matter.

Nothing is set in stone. The world as it is today is not some divine eternal paradigm beyond reproach. Humans shape the world through their choices, actions and mentality.

For additional thoughts on that and much more, check out my recent interview with Tales From the Crypt.

A Debt Jubilee Is the Only Way to Avoid a Depression

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By Michael Hudson

Source: The Unz Review

Even before the coronavirus appeared, many American families were falling behind on student loans, auto loans, credit card balances and other payments. America’s debt overhead was pricing its labor and industry out of world markets. A debt crisis was inevitable eventually, but covid-19 has made it immediate.

Massive social distancing, with its accompanying job losses, stock dives, and huge bailouts to debt-strapped corporations, raises the threat of a depression. But it doesn’t have to be this way. History offers us another alternative in such situations: a debt jubilee. This slate-cleaning, balance-restoring step recognizes the fundamental truth that when debts grow too large to be paid without reducing debtors to poverty, the way to hold society together and restore balance is simply to cancel the bad debts.

The word Jubilee comes from the Hebrew word for trumpet — yobel. In Mosaic Law, it was blown every fifty years to signal the Year of the Lord, in which personal debts were to be cancelled. The alternative, the prophet Isaiah warned, was for smallholders to forfeit their lands to creditors: “Woe to you who add house to house and join field to field till no space is left and you live alone in the land.” When Jesus delivered his first sermon, the Gospel of Luke describes him as unrolling the scroll of Isaiah and announcing that he had come to proclaim the Year of the Lord, the Jubilee Year.

Until recently, historians doubted that such a debt jubilee would have been possible in practice, or that such proclamations could have been enforced. But Assyriologists have found that from the beginning of recorded history in the Near East, it was normal for new rulers to proclaim a debt amnesty upon taking the throne. Instead of blowing a trumpet, the ruler “raised the sacred torch” to signal the amnesty.

It is now understood that these rulers were not being utopian or idealistic in forgiving debts. The alternative would have been for debtors to fall into bondage. Kingdoms would have lost their labor force, since so many would be working off debts to their creditors. Many debtors would have run away (much as Greeks emigrated en masse after their recent debt crisis) and communities would have been prone to attack from without.

The parallels to the current moment are notable. The U.S. economy has polarized sharply since the 2008 financial crisis. For far too many, the debts in place leave little income available for spending on goods and services or in the national interest. In a crashing economy, any demand that newly massive debts be paid to a financial class that has already absorbed most of the wealth gained since 2008 can only further split our society.

This has happened before in modern times — after World War I, the burden of war debts and reparations bankrupted Germany, contributing to the global financial collapse of 1929-31. Most of Germany was insolvent, and its politics polarized between the Nazis and Communists. We all know how that ended.

America’s 2008 bank crash offered a great opportunity to write down the often-fraudulent junk mortgages that burdened many lower-income families, especially minorities. But this was not done, and millions of American families were evicted.

The way to restore normalcy today is a debt writedown. The debts in deepest arrears, and most likely to default, are student debts, medical debts, general consumer debts and purely speculative debts. They block spending on goods and services, shrinking the “real” economy. A debt writedown would be pragmatic, not merely a moral sympathy with the less affluent.

In fact, it could create what the Germans called an “Economic Miracle” — their own modern debt jubilee in 1948, the currency reform administered by the Allied Powers. When the Deutsch Mark was introduced, replacing the Reichsmark, 90 percent of government and private debt was wiped out. Germany emerged as an almost debt-free economy, with low costs of production that jump-started its modern economy.

In the past, the politically powerful financial sector has blocked a writedown. Until now, the basic ethic of most people has been that debts must be repaid. But it is time to recognize that most debts now cannot be paid — through no real fault of the debtors in the face of today’s economic disaster.

The coronavirus outbreak is serving as a mind-expansion exercise, making hitherto unthinkable solutions thinkable. Debts that can’t be paid, won’t be. A debt jubilee may be the best way out.

 

Michael Hudson, author of “… and forgive them their debts” and “Killing the Host,” is president of the Institute for the Study of Long-Term Economic Trends and is Distinguished Research Professor of Economics at the University of Missouri–Kansas City.

America’s Despair

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By Vladimir Odintsov

Source: New Eastern Outlook

More and more people in the United States are feeling let down by American capitalism, and the population is being plunged into depression. This was the alarming conclusion reached by two researchers from Princeton University, Anne Case and winner of the Nobel Prize in Economics Angus Deaton. Over the past fifty years, many have been left feeling disillusioned with the American economic model, hyped up extensively within the United States, which even affects life expectancy in America: it has been declining for three consecutive years, a very unusual trend for a developed country. There has been a marked increase in the mortality rate among the white population in particular since the beginning of the new millennium. The number of suicides, as well as deaths from drug and alcohol abuse has increased dramatically.

These are the bleak findings of the research on the situation in the USA conducted by well-known American economists Anne Case and Angus Deaton, who carried out a detailed analysis of the suicide and mortality epidemic that has engulfed America, noting that the United States has been experiencing a “deaths of despair” epidemic since the mid 1990s. The researchers point out that life expectancy for Americans declined for three consecutive years, from 2015 through 2017, something that had not happened since World War One, when the world was gripped by the Spanish influenza pandemic. Among the many different root causes leading to deaths of despair, the study highlights a significant fall in American wages in recent years and a dearth of good jobs, which is weakening core institutions of American life, such as marriage, faith and community. Social spending and housing-related expenses are an increasingly heavy burden for ordinary Americans.

This is despite the fact that the United States had once led the way as the number-one country in the world in terms of reducing mortality rates and increasing life expectancy in the 20th century, and many important discoveries and achievements in medicine have come from the United States.

However, the United States is now leading the way in the opposite direction.

Numerous US researchers believe that the Great Recession which began with the 2008 financial crisis is to blame for today’s greatest woes in America. However, the Great Recession was not what provoked the deaths of despair epidemic among ordinary Americans, although it did lead to the deterioration of living conditions for many people, which provoked anger and division in the United States. The deep-rooted causes of this epidemic can be traced back to a feeling of dissatisfaction with living conditions among Americans which has been there for a long time, and when inequality began to grow, young Americans began realizing that they would never be able to live the lives their parents could afford, while young people without highly professional skills have fallen even further behind.

America’s health care system which has been prescribing more and more opioids is also on the list of “culprits” responsible for the situation America has found itself in today. According to US research, one out of every two unemployed men in the US take painkillers on a daily basis, and these are usually addictive opioids. The national health-care crisis associated with substance abuse has plagued Americans for decades. The opioid epidemic in the United States is largely a failure of regulation and control. This is an area where pharmaceutical companies wield great political influence.

In recent years, there has been a sharp increase in the number of patients reporting pain, difficulties with communication, and depression. Pharmaceutical companies and distributors have taken advantage of people’s growing desperation, seeing an opportunity to promote and ramp up the sales of opioid pain medication such as OxyContin, a legal drug approved by the US Food and Drug Administration even though it is essentially no different to heroin. Between 1999 and 2018, more than 200,000 Americans died of opioid overdoses. Doctors are seeing the increasing amount of harm being caused by these drugs, and have begun prescribing them on a less frequent basis, but these opioids have opened the gateway to illegal drugs: heroin from Mexico, as well as fentanyl from China in more recent years, which is far deadlier. These drugs are causing a huge amount of damage and killing a lot of people. However, when ordinary Americans are faced with hardship and suffering, when there is social upheaval, and people begin to feel that their lives are meaningless, these drugs fill the void, and the number of deaths from drug overdoses goes up, adding to the number of suicides and alcohol-related deaths.

Alcohol-related deaths in American society today are simply ballooning out of control. According to a series of studies, “Alcohol-related deaths” have more than doubled in the last two decades. This is well ahead of the population growth rate over the same period. A study conducted over a twenty-year period found that alcohol had been the cause of more than one million deaths! Apart from people who simply drank themselves “to death”, half of the alcohol-related deaths were due to liver disease and drug overdoses from substances taken together with alcohol. Nine states — Maine, Indiana, Idaho, Montana, New Jersey, New York, North Dakota, Ohio and Virginia — have recorded a significant increase in the number of Americans binge drinking dangerous amounts of alcohol, which can lead to fatal car crashes and other fatal accidents, according to a report recently published by the CDC (The Centers for Disease Control and Prevention). Americans almost all over the country who are trying to “drown their sorrows in alcohol” are already addicted to these hard drinks, and have began drinking more heavily and more often, with a 12% increase seen in the last five years alone.

Historically, there have always been more “deaths of despair” among men than women. However, a study published in the journal Alcoholism: Clinical and Experimental Research, found that the largest annual increase in alcohol-related deaths in recent years was seen among non-Hispanic white women.

But these are not the only scourges of today’s American society. According to the January report published by the National Center for Homeless Education funded by the US Department of Education, over 1.5 million schoolchildren experienced homelessness in the 2017-2018 school year. 100,000 (7%) of these homeless schoolchildren spent the night in the open air and slept wherever they could, 7% slept in motels, 12% stayed in homeless shelters, and 74% stayed at a friend’s. And these are only the most modest estimates, but take figures from the American Institutes for Research, for example, which recorded that 2.5 million children had experienced homelessness in the year 2013. This could almost be considered some sort of historical “record”, with one in thirty American children experiencing homelessness! Criminal gangs, drug dealers, pimps and pedophiles are waiting for these children on the streets. In this context, does it really come as any surprise that crime is on the rise in the United States (especially juvenile crime)?

This grim situation in the US is hardly surprising if you look at the draft $4.8 trillion federal budget that US President Donald Trump is going to propose and use to pave the way for his re-election. After all, this budget is a continuation of a trend that has already been observed in federal budgets drafted in the United States, as we’ll see more big safety-net cuts and increased spending on defense, which even the Wall Street Journal has called out.

All of the Trump administration’s wall-to-wall “America First!” slogans cannot hide the glaringly ugly face of American reality we can see today.

Economic effect of coronavirus could be revolutionary

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By Paul Craig Roberts

Source: Intrepid Report

Coronavirus and globalism will teach us vital lessons. The question is whether we can learn vital lessons that do not serve the ruling interest groups and ideologies.

Coronavirus will teach us that a country without free national health care is severely handicapped. Millions of Americans live paycheck to paycheck. They cannot afford health care premiums, deductions, and copays. Millions have no insurance. This means millions of people infected with coronavirus who cannot get medical help. The morbidity from this is intolerable in any society.

Shutdowns associated with efforts to contain the spread of coronavirus will deny income to millions of Americans who live paycheck to paycheck. What do they do for food, shelter, transportation?  You don’t have to think very long along these lines to see a very frightening scenario.

Globalism has taken down the ladders of upward mobility by exporting American middle class jobs to Asia. A population once able to save now lives on debt, the service of which is interrupted by recession/depression and by debt service absorbing all net disposable income.

Globalism has also reduced the survivability of our society by making it dependent  on externally produced goods, the supply of which can be cut off by disruptions in other societies, by policy disagreements leading to sanctions, and by an inability to export enough to pay for imports, which is what the offshored production of US firms is.

The United States has an unprotected population and an economy in trouble. For years, corporate executives have run the companies for the benefit of their bonuses, which are largely dependent on rises in their company’s share price. Consequently, profits and borrowings have been invested in buying back the companies’ shares and not in new investment in the businesses. Corporate indebtedness is extreme and will threaten many corporations and many jobs in a downturn. Boeing is a case in point.

Economist Michael Hudson has for many decades studied the use of debt-forgiveness to restart economies killed by debt burdens. Debt forgiveness for corporations has a different implication than debt forgiveness for individuals. For corporations, forgiving debts lets those who financialized and indebted the economy and the population off the hook. To avoid rewarding them for the catastrophe they produced and to prevent widespread public outcry and distrust, nationalization is implied for insolvent companies and banks.

Nationalization would be limited to insolvent companies and financial institutions and doesn’t mean that there would be no private companies or businesses. Additional nationalization could be used to prevent strategic companies from substituting their interests for national interests, which they do when they move American jobs and factories offshore. Pharmaceuticals could be nationalized along with health care. Energy which often sacrifices the environment to its profits could be considered for nationalization. A successful society has to have more driving it than private profit.

For most Americans nationalization is a dirty word, but it has many benefits. For example, a national health care system reduces costs tremendously by taking profits out of the system. Additionally, nationalized pharmaceutical companies could be made more focused on research and cures than on profit avenues. Everyone knows how Big Pharma influences medical schools and medical practice in line with Big Pharma’s approach. A more open-minded approach to medicine would be beneficial.

Socialist is another American dirty word, one that is being used against Bernie Sanders.  I have not turned into a socialist overnight. I am simply thinking outloud. How can the economy recover when the population and corporations are smothered by debt?  Debt forgiveness is the only way out of this debt suffocation. Can debts be forgiven without nationalization? Not without a huge giveaway to financial mangers and Wall Street. It is the members of the “one percent” who have received 95% of the increase in us income and wealth since 2008. Do we want to reward them for smothering the economy with debt by bailing them out without nationalizing them?

The combination of an economy covered in debt and an unprotected population is clearly revolutionary. Do we have leadership capable of breaking out of interest group politics and ruling ideologies in order to save our society and put it on a more sustainable basis?

Or will the economic hardships be blamed on the virus, the catalyst that ignited the debt timebomb?

Of Course Billionaires Shouldn’t Exist

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By HipCrime Vocab

There’s apparently a row over whether billionaires should exist. That is, whether or not billionaires should be a thing in our society.

What a stupid question. Of course billionaires shouldn’t exist! But the reason has nothing to do with Socialism.

Rather, under a properly-functioning free-market capitalist system, billionaires shouldn’t exist. And that would have also been the opinion of the “Classical Liberals” so favored by the Right these days: Adam Smith, David Ricardo. Thomas Malthus, John Stuart Mill, and so on.

Billionaires are a sign of market failure.

Let me say that again: billionaires are a form of market failure! You cannot simultaneously be both pro-Market and pro-billionaire.

I’m amazed at how few people get this!

In a truly competitive market, excess profits would be competed away. Someone would come along and undercut outsize profits. That’s exactly how the Classical Liberals assumed free markets would work. In this, they saw markets as instruments of greater equality, not inequality, and certainly not as a way to construct a new and improved aristocracy even more powerful than the old one.

The Classical Liberals wrote in opposition to the main power centers of their day: aristocratic government and chartered monopolies like the East India Company. They didn’t see the purpose of their writings as defending privilege and power. One can dispute the end results, but that was not their goal. Quite the contrary. The idea that a single, solitary individuals would possess more wealth than the kings and pharaohs of old under a functioning free market system would have been unthinkable to them.

In their time, much of the national wealth was monopolized by a landed aristocracy who gained their wealth through disproportionate ownership of the country’s productive land. The other major source of wealth came from large joint-stock companies that were granted royal monopolies due to their political connections. Yet another source of unearned wealth came from the holders of bonds (gilts)—essentially loaning money to the state and getting the government’s tax revenues funneled to them via interest payments.

Classical English Liberals felt that competitive markets would do away with a good portion of the unearned and unproductive wealth common in Great Britain at the time. They believed that “free and open” markets would channel wealth and activity to more productive ends. That is, they would break up large pools of wealth and unproductive money. The kind of obscene fortunes that they saw in their day would no longer be possible thanks to competition, they assumed, and that British society would become more equal than it was under landed aristocracy, not less. We can dispute their logic (and I have issues with it), but I think we can safely say that this is what they believed, rightly or wrongly.

An inherent part of their conception of free markets is the possibility of failure. Unproductive or inefficient businesses would be competed away, they assumed, and the fortunes earned through such activities would disappear. But that is not the case today. Billionaires have so much money they can literally never lose it! That’s not capitalism, that’s aristocracy. I read recently that someone like Bill Gates literally cannot give away money to his pet causes fast enough to reduce his fortune even if he tried. In fact, he’s grown wealthier even while giving away billions.

The important point about [Adam] Smith’s system, on the other hand, is that it precluded steep inequalities not out of a normative concern with equality but by virtue of the design that aimed to maximize wealth. Once we put the building blocks of his system together, concentration of wealth simply cannot emerge.

In Smith, profits should be low and labor wages high, legislation in favor of the worker is “always just and equitable,” land should be distributed widely and evenly, inheritance laws should partition fortunes, taxation can be high if it is equitable, and the science of the legislator is necessary to thwart rentiers and manipulators.

Political theorists and economists have highlighted some of these points, but the counterfactual “what would the distribution of wealth be if all the building blocks were ever in place?” has not been posed. Doing so encourages us to question why steep inequality is accepted as a fact, instead of a pathology that the market economy was not supposed to generate in the first place.

Contrary to popular and academic belief, Adam Smith did not accept inequality as a necessary trade-off for a more prosperous economy (LSE Blogs)

Yet today the people who call themselves the heirs to “Classical English Liberals” emphatically defend the existence of billionaires and extreme inequality at every turn. Such people are not pro-market or pro-capitalism as they like to portray themselves; they are simply pro-wealth, or—to use a less complementary term—bootlickers. They are not defending capitalism or Markets; what they really are defending is oligarchy, power, privilege, and hierarchy. As Corey Robin opined, “The priority of conservative political argument has been the maintenance of private regimes of power,” with all the soaring rhetoric about markets and freedom being just a smokescreen and a cover for defending hierarchies and power imbalances. Their defense of billionaires is proof positive of this. This is true of presidential candidates as well.

The existence of obscene fortunes and extreme inequality are not a sign of capitalism’s success; they are a sign of capitalism’s failure.

This is pointed out by Chris Dillow:

“I don’t think anyone in this country should be a billionaire” said Labour’s Lloyd Russell-Moyle yesterday, at which the BBC’s Emma Barnett took umbrage. The exchange is curious, because from one perspective it should be conservative supporters of a free market who don’t want there to be billionaires.

I say so because in a healthy market economy there should be almost no extremely wealthy people simply because profits should be bid away by competition. In the textbook case of perfect competition there are no super-normal profits, and in the more realistic case of Schumpeterian creative destruction, high profits should be competed away quickly.

From this perspective, every billionaire is a market failure – a sign that competition has failed. The Duke of Westminster is rich because there’s a monopoly of prime land in central London. Would Ineos’ Jim Ratcliffe be so rich if pollution were properly priced, or if his firm faced more competition?

The Right’s Mega-Rich Problem (Stumbling and Mumbling)

How is this rectified? How do they square their supposed love of fair competition and free and open markets with the presence of outsize fortunes?

They don’t.

And the sad thing is how many people buy into their nonsense. Everyone seems to think that a defense of billionaires is a defense of capitalism.

It’s not. It’s the opposite.

What is a billionaire?

Billionaires are only made possible through monopolies and tollbooths. Period. And such monopolies are more possible than ever before thanks to technology.

This is argued by Matt Stoller, an expert on monopolies, in a post entitled, What Is A Billionaire?:

Most people think a billionaire is someone with a lot of money, a sort of Scrooge McDuck who goes swimming in a pool of gold coins. And why wouldn’t we? The name billionaire has the word billion contained within it, so clearly it means having a net worth of at least ten figures. And in a sense, that is technically true. But if you look at the top ranks of the Bloomberg billionaire index, you’ll notice that nearly all of the leaders are people who own a corporation with substantial amounts of market power in one or more markets.

Billionaires use market power to extract revenue the way that a tollbooth operator does. If you want to drive on a road, you have to pay for the privilege. It costs the tollbooth operator nothing, he/she just has a strategic chokepoint for extraction. Billionaire Warren Buffett, for instance, has such a ‘tollbooth’ strategy for investing, though he uses the term ‘moat’ because it sounds charming and quirky rather than rapacious.

Put another way, the Bloomberg billionaire index isn’t a list of the most important Scrooge McDuck’s, it’s a list of the biggest tollbooth operators in the world.

What he’s saying is that one becomes a billionaire only by short-circuiting the competitive market economy. Then their profits cannot be competed away. Only by gaming the system can one “earn” over a billion dollars. No one person is that valuable.

Stoller goes on to elucidate the operational tactics used by both Bill Gates and by his predecessor John D. Rockefeller, and finds that even though the industries are radically different, the techniques of short-circuiting and circumventing market competition are the same. Whether it’s horizontal and vertical integration, or using market influence to price out rivals, or exclusive contracts, the techniques are the same regardless of industry or time period:

In 1976 and 1980, Congress allowed the copyrighting of software. IBM had been under aggressive antitrust investigation and litigation since 1967, so when it built a personal computer, it outsourced the operating system – MS-DOS – to Gates’s company and allowed Gates to license it to other equipment makers. (Gates’s upbringing didn’t hurt; the CEO of IBM at the the time knew his mother.) Such a relationship with a vendor was a shocking change for IBM, which had traditionally made everything in-house or tightly controlled its suppliers. But IBM treated Microsoft differently, transferring large amounts of programming knowledge to the small corporation. IBM also did this with the microprocessor company Intel, which IBM protected from Japanese competition.

And yet, in 1982, the Department of Justice dropped the antitrust suit against IBM, signaling a new pro-concentration framework. Bill Baxter, Reagan’s antitrust chief, did not want to bring monopolization suits, and did not. The new fast-growing technology space of personal computers would be a monopolized industry. But it would not be monopolized by IBM, which had kept control of the computing industry since the 1950s, because IBM’s corporate structure was now skittish about the raw use of power. And it would not be monopolized by AT&T, which was kept out of the computing industry by a 1956 consent decree that lasted until 1984. Gates, in many ways, had a greenfield, an environment friendly to monopoly but one in which all the old monopolists had been cleared out by antitrust actions.

In the case of Amazon, even though it theoretically has competition, through vertical and horizontal integration it can effectively control online e-commerce to a large degree. The result is a fortune greater than that of entire nation-states controlled by a single individual. One hardly imagines that Adam Smith would approve.

I read an interesting concept, and I forget where it came from. It was that networks are natural monopolies. This explains things like Facebook, Apple, Amazon, etc. It’s entirely possible that the online world, due to features inherent in the technology, simply cannot be regulated by normal competition the way the market for goods and services can. Yet all our theories pretend that it can. It’s delusional.

Under these scenarios,’ profits’ are really a form of tribute (or perhaps plunder). In fact, we really shouldn’t even use the word ‘profits’ to describe them (just like we shouldn’t use ‘trade’ to describe global wage arbitrage).

And there are many more examples of competition being limited by deliberate legal policy. Much of Microsoft’s profits come from the fact that other people can’t copy their software—which they’ve arbitrarily labeled “piracy”—without facing legal repercussions enforced by the state and its legal system. In that sense, outsized fortunes are a consequence of laws, and not a feature inherent to technology:

…inequality is not in fact driven by technology, it is driven by our policy on technology, specifically patent and copyright monopolies. These forms of protection do not stem from the technology, they are policies created by a Congress which is disproportionately controlled by billionaires.

If the importance of these government granted monopolies is not clear, ask yourself how rich Bill Gates would be if any start-up computer manufacturer could produce millions of computers with Windows and other Microsoft software and not send the company a penny. The same story holds true with most other types of technology. The billionaires get rich from it, not because of the technology but because the government will arrest people who use it without the patent or copyright holder’s permission.

This point is central to the debate on the value of billionaires. If we could get the same or better technological progress without making some people ridiculously rich, then we certainly don’t need billionaires. But in any discussion of the merits of billionaires, it is important to understand that they got their wealth because we wrote rules that allowed it. Their immense wealth was not a natural result of the development of technology.

Farhad Manjoo promotes billionaire ideology in proposal to get rid of billionaires (Dean Baker, Real World Economic Review)

Baker has also pointed out that outsized salaries in many fields are determined by limiting competition though things like wildly expensive education and licensing requirements, which are ultimately determined by the government. Doctors and lawyers do not have compete against the wage rates in India or China thanks to the legal system, for example. Everyone else, however, is required to compete against the entire world for jobs.

On a global level, most billionaires are not the result of “hard work” or doing things beneficial for their society:

The vast majority of the world’s billionaires have not become rich through anything approaching ‘productive’ investment. Oxfam has showed that, approximately one third of global billionaire wealth comes from inheritance, whilst another third comes from ‘crony connections to government and monopoly’.

Why on Earth Shouldn’t People Be Able to Be Billionaires? (Novara Media)

And the monopolies that allow billionaires to exist are not good for the economy as a whole. In fact, they are highly detrimental, as Chris Dillow further points out:

What’s more, monopoly pricing is a form of tax – a tax which often falls upon other, smaller businesses…In this sense, not only are billionaires a symptom of an absence of a healthy competitive economy, but they are also a cause of it: their taxes on other firms restrict growth and entrepreneurship…

Tories are wrong, therefore, to portray attacks on the mega-rich as the politics of envy. It’s not. The existence of billionaires is a sign and cause of a dysfunctional economy…

In fact, logically, it is rightists who should be most concerned by the concentration of wealth. We lefties can point to it as evidence that the system is rigged. But Tories should worry that it undermines the legitimacy of the existing order not only because people don’t like inequality, but because it slows down economic growth and so encourages demands for change.

Furthermore, their existence is detrimental politically:

Controlling society’s wealth effectively gives the wealthy the right to plan economic activity. Billionaires – and the people who manage their money – determine which governments can access borrowing, which companies deserve to grow, and which ideas should be researched. This gives them an immense amount of political, as well as economic, power – allowing billionaires to provide favours to those politicians who helped them get rich in the first place.

Ultimately, the monopolisation of society’s resources by a tiny, closed-off elite means that most of society’s resources are used for dirty, unsustainable and unproductive speculation.

Why on Earth Shouldn’t People Be Able to Be Billionaires? (Novara Media)

In fact, the proliferation of billionaires in the developed world has accompanied a period of slow growth and stagnation, not rapid growth. As has been pointed out ad nauseum, yet still fails to sink in, America’s fastest period of growth came when there were fewer billionaires and tax rates ranged from 50 to 90 percent. There is no evidence that the proliferation of billionaires has benefited society as whole. And now, billionaires are attempting to buy political offices outright, making a joke of democracy.

People defending billionaires are only defending raw power, not capitalism, not democracy, and certainly not free markets.

Stoller concludes:

[Billionaires] are not people with a bunch of dollar bills stacked to the moon, they are (largely) men with a strategic position of power protected by public laws and rules. They aren’t better or smarter than anyone else, they are simply politically adept and in the right place at the right time. There’s no reason we have to enable such people to run our culture. At the end of the day, tollbooths are nothing but bottlenecks on a road on which we would otherwise travel faster and more freely.

What is a Billionaire? (Matt Stoller)

So, should there be billionaires? The answer is no. And you should believe that if you consider yourself a libertarian free marketeer or a democratic socialist. Anyone asserting anything else is just a bootlicker or a toady.

Addendum:

Here’s a good piece explaining how billionaires are basically mad kings:

…one of civilization’s great challenges stems from millionaire rhyming with billionaire. In holding them in the same linguistic corner of our minds, we conflate them, yet they’re so mathematically distinct as to be unrelated. A millionaire can, with some dedicated carelessness, lose those millions. Billionaires can be as profligate and eccentric as they wish, can acquire, without making a dent, all the homes and jets and islands and causes and thoroughbreds and Van Goghs and submarines and weird Beatles memorabilia they please. Unless they’re engaging in fraud or making extremely large and risky investments, they’re simply no match for the mathematical and economic forces—the compounding of interest, the long-term imperatives of markets—that make money beget more money. They can do pretty much whatever they want in this life, and therein lies the distinction. A millionaire enjoys a profoundly lucky economic condition. A billionaire is an existential state.

This helps explain the cosmic reverence draped over so many billionaires, their most banal notions about innovation and vision repackaged as inspirational memes, their insights on markets and customers spun into best sellers. Their extravagances are so over the top as to inspire legend more often than revolution…

The Gospel of Wealth According to Marc Benioff (Wired)

One of the most potent demonstrations that the modern-day rich are mad kings, comes form the story of Adam Neumann of WeWork. This is the impression I got from the Behind the Bastards podcast on Neumann: The Idiot Who Made, and Destoryed, WeWork (Podtail)

Counting Jeff Bezos’s fortune using 1 grain of rice = $100,000
byu/GallowBoob innextfuckinglevel

Coronavirus reminds us we are organisms in an environment

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By Kurt Cobb

Source: Resilience

A close friend of mine, a professor of English literature, has been researching American philosopher John Dewey, whose book Quest for Certainty captivated me so much many years ago that I read it again right after I had finished it the first time. My friend has been reminding me why I found Dewey so profound while shedding new light on the philosopher’s thinking.

Dewey, it turns out, is one of the few thinkers in American life who absorbed the true import of the work of Charles Darwin. Dewey reminds us that, quite simply, Darwin posited that we humans are organisms in an environment just like every other organism. Dewey’s star faded after World War II.  American and world society have since lapsed into a narrative that puts humans above and outside nature, protected by technological advancements that supposedly shield us from nature’s demands and vicissitudes. The general narrative is that we are heading into a push-button, voice-activated technocratic paradise. (I think of the various Star Trek television series as popular cultural reflections of this view.)

But, the first pandemic in a century is forcefully and sadly reminding all of us that Darwin was right about our place in the natural world, more specifically, that we will never be outside of it.

That the world is “wildly unprepared” for this pandemic is in part a result of our belief the we are on a separate journey from the rest of the natural world, headed toward a perfected existence in which nature obeys all of our commands and bothers us not at all. Why prepare for something that is merely a product of nature? We have the technology to overcome it, don’t we? There must be a pill, right? Actually, wrong.

Those who understand human vulnerabilities have been sounding the alarm for years. But the idea that our entire way of life could be dramatically disrupted worldwide simultaneously simply was not on the radar of most governments—at least not enough to get them to stockpile even the most basic medical supplies; face masks come to mind.

There is much talk of creating a vaccine and doing it quickly. But such an endeavor can take more than a year and even more time to manufacture and distribute. There is less talk about the unhealthy lifestyles and chronic disease such as heart disease and diabetes that result from that lifestyle which might need to be addressed if we are going to cope better with the world of microorganisms we inhabit. There is even less talk that those at the bottom of the economic ladder are the most vulnerable and that the wealth gap and the gap in access to health care it implies are actually a huge public health problem for all of us.

The very way in which we live—constantly pressing on the edge of wilderness to develop it and exploit it—puts humans potentially in contact with millions of viruses from which will come the next pandemic. And, the next one will likely come much sooner than 100 years from now.

If we continue to think of health as the absence of illness, of illness as something that is prevented by a pill or a shot—and if not ultimately prevented, treated by a pill or a shot—we humans won’t make the necessary changes as a global society to better withstand more frequent pandemics.

Robust health, not techofixes, is the best way to confront the biological perils of the natural world in which we participate. Such a focus would, however, take a complete rethinking of who we humans are, namely, organisms in an environment. Will the coronavirus awaken any more of us to this fact?

The Looming Financial Nightmare: So Much for Living the American Dream

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By John W. Whitehead

Source: The Rutherford Institute

“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.” ― Frédéric Bastiat, French economist

Let’s talk numbers, shall we?

The national debt (the amount the federal government has borrowed over the years and must pay back) is $23 trillion and growing.

The amount this country owes is now greater than its gross national product (all the products and services produced in one year by labor and property supplied by the citizens). We’re paying more than $270 billion just in interest on that public debt annually. And the top two foreign countries who “own” our debt are China and Japan.

The national deficit (the difference between what the government spends and the revenue it takes in) is projected to surpass $1 trillion every year for the next 10 years.

The United States spends more on foreign aid than any other nation ($50 billion in 2017 alone). More than 150 countries around the world receive U.S. taxpayer-funded assistance, with most of the funds going to the Middle East, Africa and Asia.

Meanwhile, almost 60% of Americans are so financially strapped that they don’t have even $500 in savings and nothing whatsoever put away for retirement, and yet they are being forced to pay for government programs that do little to enhance or advance their lives.

Folks, if you haven’t figured it out yet, we’re not living the American dream.

We’re living a financial nightmare.

The U.S. government—and that includes the current administration—is spending money it doesn’t have on programs it can’t afford, and “we the taxpayers” are the ones who will pay for it.

As financial analyst Kristin Tate explains, “When the government has its debt bill come due, all of us will be on the hook.” It’s happened before: during the European debt crisis, Cypress seized private funds from its citizens’ bank accounts to cover its debts, with those who had been careful to save their pennies forced to relinquish between 40% to 60% of their assets.

Could it happen here? Could the government actually seize private funds for its own gain?

Look around you. It’s already happening.

In the eyes of the government, “we the people, the voters, the consumers, and the taxpayers” are little more than pocketbooks waiting to be picked.

Consider: The government can seize your home and your car (which you’ve bought and paid for) over nonpayment of taxes. Government agents can freeze and seize your bank accounts and other valuables if they merely “suspect” wrongdoing. And the IRS insists on getting the first cut of your salary to pay for government programs over which you have no say.

We have no real say in how the government runs, or how our taxpayer funds are used, but we’re being forced to pay through the nose, anyhow.

We have no real say, but that doesn’t prevent the government from fleecing us at every turn and forcing us to pay for endless wars that do more to fund the military industrial complex than protect us, pork barrel projects that produce little to nothing, and a police state that serves only to imprison us within its walls.

If you have no choice, no voice, and no real options when it comes to the government’s claims on your property and your money, you’re not free.

It wasn’t always this way, of course.

Early Americans went to war over the inalienable rights described by philosopher John Locke as the natural rights of life, liberty and property.

It didn’t take long, however—a hundred years, in fact—before the American government was laying claim to the citizenry’s property by levying taxes to pay for the Civil War. As the New York Times reports, “Widespread resistance led to its repeal in 1872.”

Determined to claim some of the citizenry’s wealth for its own uses, the government reinstituted the income tax in 1894. Charles Pollock challenged the tax as unconstitutional, and the U.S. Supreme Court ruled in his favor. Pollock’s victory was relatively short-lived. Members of Congress—united in their determination to tax the American people’s income—worked together to adopt a constitutional amendment to overrule the Pollock decision.

On the eve of World War I, in 1913, Congress instituted a permanent income tax by way of the 16th Amendment to the Constitution and the Revenue Act of 1913. Under the Revenue Act, individuals with income exceeding $3,000 could be taxed starting at 1% up to 7% for incomes exceeding $500,000.

It’s all gone downhill from there.

Unsurprisingly, the government has used its tax powers to advance its own imperialistic agendas and the courts have repeatedly upheld the government’s power to penalize or jail those who refused to pay their taxes.

Irwin A. Schiff was one of the nation’s most vocal tax protesters. He spent a good portion of his life arguing that the income tax was unconstitutional, and he put his wallet where his conscience was: Schiff stopped paying federal taxes in 1974.

Schiff paid the price for his resistance, too: he served three separate prison terms (more than 10 years in all) over his refusal to pay taxes. He died at the age of 87 serving a 14-year prison term. As constitutional activist Robert L. Schulz noted in Schiff’s obituary, “In a society where there is so much fear of government, and in particular of the I.R.S., [Schiff] was probably the most influential educator regarding the illegal and unconstitutional operation and enforcement of the Internal Revenue Code. It’s very hard to speak to power, but he did, and he paid a very heavy price.”

It’s still hard to speak to power, and those who do are still paying a very heavy price.

All the while the government continues to do whatever it likes—levy taxes, rack up debt, spend outrageously and irresponsibly—with little thought for the plight of its citizens.

To top it all off, all of those wars the U.S. is so eager to fight abroad are being waged with borrowed funds. As The Atlantic reports, “For 15 years now, the United States has been putting these wars on a credit card… U.S. leaders are essentially bankrolling the wars with debt, in the form of purchases of U.S. Treasury bonds by U.S.-based entities like pension funds and state and local governments, and by countries like China and Japan.”

If Americans managed their personal finances the way the government mismanages the nation’s finances, we’d all be in debtors’ prison by now.

Still, the government remains unrepentant, unfazed and undeterred in its money grabs.

While we’re struggling to get by, and making tough decisions about how to spend what little money actually makes it into our pockets after the federal, state and local governments take their share (this doesn’t include the stealth taxes imposed through tolls, fines and other fiscal penalties), the police state is spending our hard-earned tax dollars to further entrench its powers and entrap its citizens.

For instance, American taxpayers have been forced to shell out more than $5.6 trillion since 9/11 for the military industrial complex’s costly, endless so-called “war on terrorism.”

That translates to roughly $23,000 per taxpayer to wage wars abroad, occupy foreign countries, provide financial aid to foreign allies, and fill the pockets of defense contractors and grease the hands of corrupt foreign dignitaries.

Mind you, that staggering $6 trillion is only a portion of what the Pentagon spends on America’s military empire.

That price tag keeps growing, too.

In this way, the military industrial complex will get even richer, and the American taxpayer will be forced to shell out even more funds for programs that do little to enhance our lives, ensure our happiness and well-being, or secure our freedoms.

As Dwight D. Eisenhower warned in a 1953 speech:

Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. This is, I repeat, the best way of life to be found on the road the world has been taking. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron. […] Is there no other way the world may live?

This is still no way of life.

Yet it’s not just the government’s endless wars that are bleeding us dry.

We’re also being forced to shell out money for surveillance systems to track our movements, money to further militarize our already militarized police, money to allow the government to raid our homes and bank accounts, money to fund schools where our kids learn nothing about freedom and everything about how to comply, and on and on.

Are you getting the picture yet?

The government isn’t taking our money to make our lives better. Just take a look at the nation’s failing infrastructure, and you’ll see how little is being spent on programs that advance the common good.

We’re being robbed blind so the governmental elite can get richer.

This is nothing less than financial tyranny.

“We the people” have become the new, permanent underclass in America.

It’s tempting to say that there’s little we can do about it, except that’s not quite accurate.

There are a few things we can do (demand transparency, reject cronyism and graft, insist on fair pricing and honest accounting methods, call a halt to incentive-driven government programs that prioritize profits over people), but it will require that “we the people” stop playing politics and stand united against the politicians and corporate interests who have turned our government and economy into a pay-to-play exercise in fascism.

We’ve become so invested in identity politics that label us based on our political leanings that we’ve lost sight of the one label that unites us: we’re all Americans.

The powers-that-be want to pit us against one another. They want us to adopt an “us versus them” mindset that keeps us powerless and divided.

Trust me, the only “us versus them” that matters anymore is “we the people” against the police state.

We’re all in the same boat, folks, and there’s only one real life preserver: that’s the Constitution and the Bill of Rights.

The Constitution starts with those three powerful words: “We the people.”

The message is this: there is power in our numbers.

That remains our greatest strength in the face of a governmental elite that continues to ride roughshod over the populace. It remains our greatest defense against a government that has claimed for itself unlimited power over the purse (taxpayer funds) and the sword (military might).

This holds true whether you’re talking about health care, war spending, or the American police state.

While we’re on the subject, do me a favor and don’t let yourself be fooled into believing that the next crop of political saviors will be any different from their predecessors. They all talk big when they’re running for office, and when they get elected, they spend big at our expense.

As I make clear in my book Battlefield America: The War on the American People, this is how the middle classes, who fuel the nation’s economy and fund the government’s programs, get screwed repeatedly.

George Harrison, who would have been 77 this year, summed up this outrageous state of affairs in his song Taxman:

If you drive a car, I’ll tax the street,

If you try to sit, I’ll tax your seat.

If you get too cold I’ll tax the heat,

If you take a walk, I’ll tax your feet.

Don’t ask me what I want it for

If you don’t want to pay some more

‘Cause I’m the taxman, yeah, I’m the taxman.

Now my advice for those who die

Declare the pennies on your eyes

‘Cause I’m the taxman, yeah, I’m the taxman

And you’re working for no one but me.

Data governance and the new frontiers of resistance

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The 21st century corporation is using algorithmic-based intelligence to accumulate data on a massive scale. Social movements need to grasp this change quickly.

By Anita Gurumurthy and Nandini Chami

Source: ROAR

Four centuries after the East India Company set the trend for corporate resource extraction, most of the world is now in the grip of unbridled corporate power. But corporate power is on the cusp of achieving “quantum supremacy” and social movements in the digital age need to understand this in order to shift gears in their struggles. The quantum shift here comes from “network-data” power; the ingredients that make up capitalism’s digital age recipe.

Contemporary capitalism is characterized by the accumulation of data-as-capital. Big Tech, as digital companies are collectively known, use the “platform” business model. This model provides a framework for interactions in the marketplace by connecting its many “nodes” — consumers, advertisers, service providers, producers, suppliers and even objects — that comprise the platform ecosystem, constantly harvesting their data and using algorithms to optimize interactions among them as a means to maximize profit.

The platform model emerged as a business proposition in the early 2000s when internet companies offering digital communication services began extracting user data from networked social interactions to generate valuable information for targeted advertising. It is estimated that by 2025, over 30 percent of global economic activity will be mediated by platform companies, an indication of the growing “platformization” of the real economy. In every economic sector, from agriculture to predictive manufacturing, retail commerce and even paid care work, the platform model is now an essential infrastructural layer.

Control over data-based intelligence gives platform owners a unique vantage point — the power to shape the nature of interactions among member nodes. Practices such as Amazon’s segmenting and hyper-targeting of consumers through price manipulation, Uber’s panoptic disciplining of its partner drivers, and TripAdvisor’s popularity ranking algorithm of listed properties, restaurants and hotels are all examples of how such platforms mediate economic transactions. The accumulation of data that feeds algorithmic optimization enables more intensified data extraction, in a self-propelling cycle that culminates in the platform’s totalizing control of entire economic ecosystems.

Amazon for instance, is no longer an online book store, and was perhaps never intended to be. With intimate knowledge about how the market works, Amazon is a market leader in anticipatory logistics and business analytics, providing both fulfillment and on-demand cloud-based computing services to third parties. Not only has it displaced traditional container-freight stations in port cities, it has begun to look increasingly like a shipping company. The dynamics of an intelligence economy have led to large swathes of economic activity being controlled by a handful of platform monopolies.

Studies suggest that in a matter of a couple of decades, platform monopolies have overtaken oil, automobile and financial corporations in market capitalization. Today, platform-based business models account for seven of the world’s top eight companies ranked by market capitalization. The pan-global platform corporation, with its DNA of data-based intelligence, has replaced the trans-national industrial corporation as the Leviathan of our times.

Enter the intelligent corporation

As the dominant form of economic organization in the capitalist world order, the corporation has always wielded power, not just in the market but also in political and socio-cultural realms. The rise of the “intelligent corporation” defined by the political economy of data capital has produced qualitative shifts in the exercise of corporate power, including the following.

From dominating the market to becoming the market

Like its predecessor, the intelligent corporation also aims at complete market domination. In platform-based capitalism, local business models based on intimate contextual knowledge are completely displaced by the data-based intermediation of marketplace and social transactions. It is by eliminating these disparate pockets of capital accumulation that platform owners maximize their profits.

The intelligent corporation also goes a step further, moving beyond “dominating the market” to “becoming the market.” Integrating across business lines, these companies both operate a platform and promote their own goods and services on it. This places them in direct competition with the businesses that use their infrastructure, and creates a conflict of interest. For example, Amazon uses its product marketplace data to consolidate its private labels, launching high-demand products at prices that undercut third-party sellers.

In this new strategy for acquiring market power, long-term market monopolization is privileged over the ability to break-even in the short run. The ecosystem that a platform seeks to capture has room only for one winner with the wherewithal to forgo immediate profits and invest in business integration — through aggressive acquisition — and systematic data-layer development. Other competitors are destined to fall by the wayside.

From cheap labor to freedom from labor

In the capitalist economy, the key contradiction is between capital and labor. Capital is in a perennial quest for freedom from labor through labor-substituting technological advances and territories to shift production to reduce labor costs. In the intelligence economy, capital seems to have come very close to realizing its primordial pursuit.

Using 360° surveillance, the intelligent corporation creates a self-optimizing ecosystem, manipulating each node, expanding its captive network, accumulating data capital and entrenching its dominance. It is able to achieve a global operational footprint with few assets and a minuscule employee base. Think Uber. Uber drivers are not considered to be employees in most places where the company runs its business. With a god’s eye view of the city and its roads, the customers and the driver, Uber takes over city transport, often without owning a single taxi. Passing off the liability to the driver, who must take a high-interest loan to acquire a vehicle to become Uber’s coveted “partner,” the corporation extracts from the driver more than just labor time.

In traditional labor-intensive manufacturing and services sectors, data capital is slowly but surely affecting far-reaching transformation. Projections show that automation based on artificial intelligence (AI) will eventually displace labor. It is estimated that over 40 percent of the global workforce will lose their jobs in AI-led disruption of manufacturing over the next 15–25 years. A limited number of high-paying jobs may open up for individuals with advanced skills in the development of data and AI technologies. But most of the labor force will end up in low-paid, personalized service work.

For countries in the Global South, the challenge will be especially pernicious. As rising wages erode the comparative advantage of labor in these economies, the shift to AI technology is likely to trigger a re-shoring trend whereby factories are relocated to richer countries that offer more sophisticated infrastructural support for deployment of AI systems. According to the World Bank, over two-thirds of the workforce in developing countries are likely to lose jobs. It is not clear how these changes will shift gender-based segmentation and gender hierarchies in labor markets. However, going by current trends, women seem to be the first to lose their jobs in this transition, with a reversal of both pay and status gains.

Planetary-scale time-space enclosure

Capturing previously non-commodified time and place has always been a central strategy of capitalist expansion. In the intelligence economy, we are witnessing a new phase of such “primitive accumulation” – through “data dispossession.” The expropriation of data from everyday social exchanges through the platform business model is comparable to the expropriation of natural resources for capitalist production in a previous age. The pervasive data extraction by platform companies has transformed data-mined social interaction into a factor of production, just as invaluable a resource as land for the creation of goods and services. The centralization of wealth and power today, derives from an unprecedented quality and scale of dispossession.

The dynamic of data dispossession is self-propelling. It is now well understood that platforms aggressively pursue a strategy of locking-in users, offering instant gratification in exchange for data and making it costly for them to leave a platform. The Chinese “super-platforms” WeChat and Meituan-Dianping combine news, entertainment, restaurant reviews, food delivery and ride-hailing, along with cross-cutting applications such as payment systems and digital wallets, demonstrating a “stickiness” that is almost addictive.

When participation in the platform on the platform owner’s terms becomes de facto the only choice for economic actors, data extractivism is normalized. Similar to the predatory practices of historical colonialism, the platform tactics of the intelligent corporation function as a neo-colonial project. The difference is that this time around, rather than European companies, the US and Chinese platform companies are in the driving seat.

A profoundly unsustainable exploitation of the natural world accompanies the rapid inroads of the intelligent corporation. Take the case of the vast ecological footprint of the online food-delivery sector. According to a 2018 study published in the science journal Resources, Conservation and Recycling, door-to-door fast-food delivery in China accounted for a nearly eightfold jump in packaging waste between 2015 and 2017, from 0.2 to 1.5 million tonnes. This has coincided with the exponential growth of the sector in the country, where the number of customers using food-delivery platforms has gone up from zero in 2009 to 406 million by the end of 2018! The intelligence economy is a veritable resource guzzler whose network data devices are expected to be consuming about one-fifth of global electricity by 2030 just to keep going.

The loss of self-determination for individuals and communities in these new intelligence-based modes of production reflects an asymmetry in power that was previously impossible. This is the route through which the brand-new corporation colonizes bodies and nature, takes control of production and social reproduction, and intensifies accumulation on a global scale.

The “deep corporate” and the death of the social contract

It is no secret that in the digital era, the deep state has had a makeover. Edward Snowden’s revelations and witness testimonies from China’s Uighur-dominated Xinjiang have exposed the dark workings of the contemporary military–industrial complex, the unholy nexus between Big Tech and the state. Trade justice activists have constantly pointed to the “hidden hand” of Silicon Valley and Chinese corporations using their governments to bat for their interests, reducing policy decisions to executive fiats for entrenching their power.

But what is only recently coming to light is the rise of the “deep corporate” — the extension of the Kraken-like tentacles of intelligent corporations into the heart of public life. The subsuming of social life by platform capitalism has distorted the political space thanks to the echo chambers of the automated public sphere. The contagion of mispropaganda and informational warfare in political campaigning has become impossible to contain in a public sphere determined by algorithmic filters. In this scenario, deliberative democracy itself is under the threat of extinction.

The social credit system being developed by China in partnership with eight tech companies takes the “corporatization” of governance to a whole new level. Access to benefits and citizens’ guaranteed rights are now predicated on behavioral scoring on the basis of online purchase history, financial transactions and social media connections on the partnering platforms. With the archetypal “good consumer” becoming the deserving citizen, citizenship is thus dislocated from political claims. The “deep corporate” acquires the formal authority to mediate the social contract.

Living with the intelligent corporation

We are living through a phase in capitalism that is marked by extreme market concentration, unprecedented inequality in wealth and the declining share of labor in global income; a state of affairs that has led even the IMF to express caution. It is no coincidence that this period of intensified economic injustice has coincided with the rise of platform capitalism and its real-world vehicle, the intelligent corporation.

What does living with the intelligent corporation mean?

What is new about this phase of capitalism that has spawned the intelligence economy is a deeply qualitative shift. Datafication and data capital transform the way capitalist “accumulation by dispossession” happens. “Intelligencification” makes plausible a planetary-scale colonization and commodification of everyday life by the new corporation in ways previously impossible. Both nature and caring bodies are trapped in a planetary enclosure insofar as everything and everybody can be turned into data.

It also feeds off and emboldens the financialization apparatus that runs the neoliberal economy. Through the perverse confluence of data and finance, the intelligent corporation universalizes and naturalizes its authority, destroying the marketplace of things and ideas.

Through data extractivism, the intelligent corporation ravages sociality, taking the ideological project of neoliberalism all the way to the expropriation of the political. This is a deep take-over, an “ontological encroachment” of human subjectivity.

Where does all this leave us?

As UNCTAD has highlighted, the pace of concentration of market power is extremely worrying. Consider this: Amazon’s profits-to-sales ratio increased from 10 percent in 2005 to 23 percent in 2015, while that of Alibaba increased in just four years from 10 percent in 2011 to 32 percent in 2015.

Policymakers across the world are struggling to reform their legacy laws to rein in the intelligent corporation. Even the domestic governments of powerful US and Chinese platform corporations are struggling to contain their excesses. The US Federal Trade Commission (FTC) is currently investigating Amazon and Facebook for abuse of market dominance while the US Justice Department is probing Google. The state of California is facing massive resistance from Uber and Lyft to its new regulation for labor rights of “gig” workers, with the two companies currently leading a $60 billion ballot initiative to extricate themselves from employer’s liability. In November 2019, the state administration for market regulation in China had to hold a meeting with Alibaba and other online retail platforms about their strong-arming of third-party vendors, in violation of existing regulations to curb anti-competitive conduct.

The loopholes of pre-digital taxation laws based on a physical presence in a given country have been effectively exploited by platform companies to escape tax liability, through profit shifting to low-tax jurisdictions. Similarly, when faced with liability for unfair market practices in overseas markets, it is very easy for platform companies to shift liability to their parent company outside the jurisdiction. For instance, Uber in South Africa resorted to the defense that its partner drivers were employees of the parent company headquartered in the Netherlands and not the South African subsidiary, in order to evade its liabilities under existing labor laws. The lack of binding international regulations governing cross-border data flows has also aided rampant data extractivism,

More recently, in the wake of malpractice lawsuits brought against Big Tech by their own employees; exposes about founding CEOs who have enjoyed a godly status; and public disenchantment with multiple revelations of clandestine data mining and algorithmic gaming, the early sheen seems to be wearing off. Google’s parent company Alphabet can no longer use its “Do the right thing” motto without irony. Facebook has been forced to switch to the “too big to fail” defense from the “protector and defender of the freedoms of the global community” line. Alibaba may not be able to proclaim its commitment to the development of small and medium enterprises in Africa for much longer. The façade has crumbled. And this rupture in the discursive hegemony of the intelligent corporation in which we are currently situated is the right moment to mount a collective challenge.

So, resist we must, so that the wealth of data and of networks can be appropriated and used to create a just and humane society. This means taking the intelligent corporation by the horns, and forging a movement that is able to grapple with the ethical–political boundaries of digital intelligence.

Taming the Leviathan and reclaiming the planet

Given the enormous economic and political clout of the modern corporation in the age of data, unshackling people and the planet from corporate power is an urgent task. Struggles against the extreme unfairness of the global trade and intellectual property regime by transnational social movements have shown the necessary connection between the agenda for development justice and the dismantling of corporate power.

Building alliances among movements has become a vital strategy in halting TNCs’ inexorable plunder. The trade justice movement against corporate globalization, the environment movement’s quest for sustainable development, feminist struggles to reclaim the body and the sphere of social reproduction from capital and workers’ struggle against the intensified squeeze on labor and the dismantling of social protection in neoliberal globalization are inspiring examples in this regard. Transnational civil society has painstakingly built alliances and solidarities across these movements to expose corporate excess, bringing pressure on the UN for a global binding treaty on TNCs’ human rights obligations in the face of near-insurmountable odds.

In the digital age, as corporate power assumes indomitable proportions — with tech CEOs carving out data dominions that they rule over — current frameworks of power analysis and action may not go very far. A concerted and coherent strategy is urgently needed in order to enable a more equitable distribution of the gains of data-based intelligence. The Digital Justice Manifesto released in November 2019 by the Just Net Coalition — through a process of strategic and sustained dialogue between digital rights, trade justice, feminist, environmental, labor and human rights groups and activists — outlines such a roadmap. As the Manifesto underlines, we need immediate action along three broad fronts to reclaim digital power from the intelligent corporation:

(a) Wrestling back ownership of our personal and collective data and intelligence by instituting an economic rights framework for data resources.

(b) Governing critical platform infrastructures as public utilities.

(c) Enforcing a local-to-global governance model for digital and data infrastructure that supports local economies and democratic self-determination of collectivities, preventing the enclosure of entire market and social ecosystems by a centralized intelligence. In other words, the governance of tech infrastructure must enable the flourishing of disparate local economies and make room for multiple platform models to function — co-operatives, social enterprises, public etc. — challenging the totalizing impetus of global intelligence capitalism.

Neoliberal globalization and financialization have led to profoundly unequal societies. The impunity of the TNC has been central to this dynamic. Social movements have placed several creative proposals to counter this: mandating charter renewal every five years overturning the principle of corporations’ perpetual legal existence; taxing stock trade on the basis of the holding period to contain excessive financial speculation; placing a cap on the individual assets of founders/CEOs and so on.

“Intelligencification” demands a new frontier for resistance. The power of the intelligent corporation must be contained through tactics small and big in political and cultural realms. A new wisdom about the governance of data must be explored for a truly emancipatory future for all.