Tag Archives: economic inequality

Big Pay Gaps Are Bad for Business

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Would you do your best work for a CEO who pulls in 5,000 times your own salary?

By Sarah Anderson

Source: Other Words

Mattel is one of the largest toy-making companies on earth. Turns out it’s one of the biggest manufacturers of income inequality, too.

Last year, the Barbie doll manufacturer paid its CEO nearly 5,000 times as much as its median worker.

This stunning revelation is the result of a new regulation that requires U.S. publicly held corporations to report their CEO-worker pay ratios to the Securities and Exchange Commission.

Mattel’s gap is the widest reported so far. But most other big U.S. companies also have staggering divides. According to a new report by the staff of Minnesota Congressman Keith Ellison, the first 225 large corporations to release their numbers had pay ratios averaging 339 to 1.

“This immense inequality is a crisis for our economy and our democracy,” said Ellison, a longtime advocate of pay gap disclosure.

What’s good for these CEOs, however, is actually bad for business.

A CNBC analysis of the new pay ratio data, for example, suggests that companies with large pay disparities have lower profits per employee.

Why might that be? According to a recent study by a Harvard Business professor, companies tend to perform poorly if workers feel they’re not paid fairly. The study’s author said workers who feel that way are likely to lack motivation and even quit their jobs.

It’s not hard to understand how it could put a damper on your morale to be working hard and struggling to get by while your boss is being rewarded hundreds — or even thousands — of times more than you on payday.

Doug Smith, a former partner at the big McKinsey management consulting firm, argues that the economic costs of huge pay gaps go far beyond the problems of low employee morale and high turnover.

“Instead of building a real economy beneficial to all,” Smith says, “these unethical pay practices spread outsourcing, offshoring, tax avoidance, downsizing, and the substitution of good-paying permanent jobs with temporary, precarious employment.”

There’s a growing movement to use the new pay ratio data to encourage corporations to narrow their gaps. Portland, Oregon will soon become the first city to impose a tax penalty on companies with pay gaps above 100 to 1.

Charlie Hales, Portland’s mayor when the law was passed in late 2016, argued that it made good business sense to encourage narrower gaps.

In a former job at an employee-owned engineering firm, Hales had seen firsthand how a small pay ratio boosted the bottom line. “Everyone worked a little harder because your success was my success,” Hales said. “And that egalitarian culture led to a strong work ethic that drove the corporation to success.”

With the new pay ratio data now coming out, lawmakers in six states — California, Connecticut, Illinois, Massachusetts, Minnesota, and Rhode Island — are considering Portland-style pay ratio taxes.

Narrowing the divides within U.S. corporations may not automatically leave us all whistling away while we work. But we’ll all pay a price if we keep fiddling while extreme inequality burns down our economy.

Billionaires Want Poor Children’s Brains to Work Better

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By Gerald Coles

Source: CounterPunch

Why are many poor children not learning and succeeding in school? For billionaire Bill Gates, who funded the start-up of the failed Common Core Curriculum Standards, and has been bankrolling the failing charter schools movement, and Facebook’s Mark Zuckerberg, it’s time to look for another answer, this one at the neurological level. Poor children’s malfunctioning brains, particularly their brains’ “executive functioning”–that is, the brain’s working memory, cognitive flexibility, and inhibitory control–must be the reason why their academic performance isn’t better.

Proposing to fund research on the issue, the billionaires reason that not only can executive malfunctioning cause substantial classroom learning problems and school failure, it also can adversely affect socio-economic status, physical health, drug problems, and criminal convictions in adulthood. Consequently, if teachers of poor students know how to improve executive function, their students will do well academically and reap future “real-world benefits.” For Gates, who is always looking for “the next big thing,” this can be it in education.

Most people looking at this reasoning would likely think, “If executive functioning is poorer in poor children, why not eliminate the apparent cause of the deficiency, i.e., poverty?” Not so for the billionaires. For them, the “adverse life situations” of poor students are the can’t-be-changed-givens. Neither can instructional conditions that cost more money provide an answer. For example, considerable research on small class size teaching has demonstrated its substantially positive academic benefits, especially for poor children, from grammar school through high school and college. Gates claims to know about this instructional reform, but money-minded as he is, he insists these findings amount to nothing more than a “belief” whose worst impact has been to drive “school budget increases for more than 50 years.”

Cash–rather, the lack of it–that’s the issue: “You can’t fund reforms without money and there is no more money,” he insists. Of course, nowhere in Gates’ rebuke of excessive school spending does he mention corporate tax dodging of state income taxes, which robs schools of billions of dollars. Microsoft, for example, in which Gates continues to play a prominent role as “founder and technology advisor” on the company’s Board of Directors would provide almost $29.6 billion in taxes that could fund schools were its billions stashed offshore repatriated.

In a detailed example of Microsoft’s calculated tax scheming and dodging that would provide material for a good classroom geography lesson, Seattle Times reporter, Matt Day, outlined one of the transcontinental routes taken by a dollar spent for a Microsoft product in Seattle. Immediately after the purchase, the dollar takes a short trip to Microsoft’s company headquarters in nearby Redmond, Washington, after which it moves to a Microsoft sales subsidiary in Nevada. Following a brief rest, the dollar breathlessly zigzags from one offshore tax haven to another, finally arriving in sunny Bermuda where it joins $108 billion of Microsoft’s other dollars. Zuckerberg’s Facebook has similarly kept its earnings away from U.S. school budgets.

By blaming poor children’s school learning failure on their brains, the billionaires are continuing a long pseudoscientific charade extending back to 19th century “craniology,” which used head shape-and-size to explain the intellectual inferiority of “lesser” groups, such as southern Europeans and blacks. When craniology finally was debunked in the early 20thcentury, psychologists devised the IQ test, which sustained the mental classification business. Purportedly a more scientific instrument, it was heavily used not only to continue craniology’s identification of intellectually inferior ethnic and racial groups, but also to “explain” the educational underachievement of black and poor-white students.

After decades of use, IQ tests were substantially debunked from the 1960s onward, but new, more neurologically complex, so-called brain-based explanations emerged for differing educational outcomes. These explanations conceived of the overall brain as normal, but contended that brain glitches impeded school learning and success. Thus entered “learning disabilities,” “dyslexia,”and “attention deficit hyperactivity disorder (ADHD)” as major neuropsychological concepts to (1) explain school failure, particularly for poor children, although the labels also extended to many middle-class students; and (2) serve as “scientific” justification for scripted, narrow, pedagogy in which teachers seemingly reigned in the classroom, but in fact, were themselves controlled by the prefabricated curricula.

In the forefront of this pedagogy was the No Child Left Behind legislation (NCLB), with its lock-step instruction, created under George W. Bush and continued by Barack Obama. Supposedly “scientifically-based,” federal funds supported research on “brain-based” teaching that would be in tune with the mental make-up of poor children, thereby serving to substitute for policy that would address poverty’s influence on educational outcomes. My review of the initial evidence supposedly justifying the launching of this diversionary pedagogy revealed it had no empirical support. However, for the students this instruction targeted, a decade had to pass before national test results confirmed its failure.

The history of “scientific brain-based” pedagogy for poor children has invariably been a dodge from addressing obvious social-class influences. In its newest iteration– improve poor children’s  executive functioning–billionaires Gates and Zuckerberg will gladly put some cash into promoting a new neurological fix for poor children, thereby helping (and hoping) to divert the thinking of education policy-makers, teachers and parents. Never mind that over three years ago, a review of research on executive functioning and academic achievement failed to find “compelling evidence that a causal association between the two exists.” What’s critical for these billionaires and the class they represent is that the nation continues to concoct policy that does not deplete the wealth of the rich and helps explain away continued poverty. Just because research on improving executive functioning in poor children has not been found to be a solution for their educational underachievement, doesn’t mean it can’t be!

Now that’s slick executive functioning!

 

Gerald Coles is an educational psychologist who has written extensively on the psychology, policy and politics of education. He is the author of Miseducating for the Global Economy: How Corporate Power Damages Education and Subverts Students’ Futures (Monthly Review Press).

Uncle Sam, the Human Rights Hypocrite

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By Paul Street

Source: TruthDig

This year marks the 70th anniversary of the Universal Declaration of Human Rights. Signed by the United States and adopted by the United Nations General Assembly on Dec. 10, 1948, the document was a great and shining step forward in the articulation of how human beings might organize their social and political systems in accord with democratic and civilized ideals.

The U.S. has long wielded the Universal Declaration (UD) as a weapon to brandish selectively against officially designated enemies. But seven decades after its signing (and trumpeting) the document, American society stands in rarely noted gross violation of the declaration’s key principles.

Take the UD’s first’s article: “All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood.”

The United States falls far short here. Someone born into one of the 57 percent of U.S. households with less than $1,000 in savings will not enjoy remotely the same amount of “dignity and rights” as those enjoyed by someone born into the top 1 percent of households, which together possess as much wealth as the bottom 90 percent of U.S. citizens. Access to basic means of comfort, dignity and freedom—like quality housing, quality education, strong legal representation, leisure, travel, health care, quality food and recreation—is filtered by the militantly disparate distribution of wealth and income in the U.S., the most savagely unequal nation among all Western “capitalist democracies.” Like the polarized and nasty political culture to which it is merged, the nation’s extreme socioeconomic imbalance is inconsistent with calls for conscience and brotherhood.

Article 2 of the UD proclaims, among other things, that everyone is entitled to human rights and freedoms without distinctions of “race, color” and “national or social origin.” Here again, the U.S. stands in stark contravention.

Median white wealth is 12 times higher than median black wealth in the U.S.—a reflection of persistent anti-black discrimination and segregation built into the nation’s social structures and institutions. Reflecting stark racial disparities in arrest, prosecution, legal representation and sentencing, black and Latinos make up 56 percent of the nation’s 2.2 million incarcerated people though they comprise roughly 32 percent of the U.S. population. One in three adult black males is saddled with the crippling lifelong mark of a felony record—a critical barrier to opportunity and full citizenship (even the right to vote in many U.S. states) on numerous levels. Thanks to the racially disparate waging of the so-called war on drugs, one of every 10 U.S. black men in their 30s is in jail or prison on any given day. African-Americans and whites use drugs at similar rates, but the imprisonment rate of African-Americans for drug charges is almost six times that of whites.

Millions of undocumented immigrant workers and residents are unwilling to fight for their “universal human rights” in the U.S. because they reasonably fear arrest and deportation.

The UD’s fourth article declares, “No one shall be held in slavery or servitude.” Hundreds of thousands of U.S. prisoners—the modern-day and very disproportionately nonwhite human chattel that provides the essential raw material for the self-declared “Land of Freedom’s” curiously gigantic prison-industrial complex—perform labor tasks for tiny levels of compensation and often for no payment at all. The Global Slavery Index estimates that 57,000 people are victims of human trafficking, the modern form of slavery, with illegal smuggling and trading of people, for forced labor or sexual exploitation, in the United States.

Hundreds of millions of nominally free Americans are de facto slaves and servants to employers (upon whom a shocking number of Americans absurdly depend for health coverage), financial institutions, insurance corporations, retail corporations, credit agencies, property associations, government tax collectors, gambling agencies (including state lottery systems), health care providers, lawyers and drug dealers.

The UD’s fifth article says, “No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment.” Torture and such treatment is endemic across the United States’ vast prison system, the largest in world history. One particularly widespread and egregious form of cruel and inhuman treatment inside that system is solitary confinement—a punishment well known to cause grave damage to its victims’ mental and physical health. The American Civil Liberties Union reports that:

Over the last two decades, the use of solitary confinement in U.S. correctional facilities has surged … 44 states and the federal government have supermax units, where prisoners are held in extreme isolation, often for years or even decades. On any given day in this country, it’s estimated that over 80,000 prisoners are held in isolated confinement. This massive increase in the use of solitary has happened despite criticism from legal and medical professionals, who have deemed the practice unconstitutional and inhumane.

Other forms of torture and cruel and inhumane treatment that are common in the nation’s vast archipelago of racially disparate mass incarceration include widespread beatings, rape, ignoring cries for help, overcrowding, underfunding, forcing inmates to fight, dehydration, starvation, denial of medical care, executions (including botched executions) and forced scalding showers.

Article 7 of the UD proclaims, “All are equal before the law and are entitled without any discrimination to equal protection of the law.”

This principle, too, is brazenly violated in the purported homeland and headquarters of global freedom and democracy. Many Americans are familiar with the old working-class aphorism that “money talks and bullshit walks”—meaning that the wealthy few hire high-priced lawyers to enhance their chances and power in the courts while everyday people do far less well with fewer resources to pay for legal representation. It’s no joke. As the Georgia gubernatorial candidate and former Georgia House Minority Leader Stacey Abrams noted last February, people with money “artfully navigate the criminal justice system and maybe even avoid it altogether,” but those who are poor are overwhelmed.

Wall Street chieftains who threw millions of Americans out of work and destroyed billions of dollars in lost savings through their reckless and often criminal practices have escaped prosecution while the nation’s jails and prisons are loaded with disproportionately black, Latino and poor people serving long terms for comparative small-time drug offenses. Hundreds of thousands of Americans rot in jail prior to conviction for the simple reason that they lack the financial resources to “make bail.” Abrams reports, “The majority of Georgians incarcerated in local jails have never been convicted of crime. They are simply too poor to pay their bail.”

The UD’s ninth and 10th articles say that “[n]o one shall be subjected to arbitrary arrest, detention or exile” and “Everyone is entitled in full equality to a fair and public hearing by an independent and impartial tribunal, in the determination of his rights and obligations and of any criminal charge against him.”

The 11th article says, “Everyone charged with a penal offence has the right to be presumed innocent until proved guilty according to law in a public trial at which he has had all the guarantees necessary for his defence.”

The “land of freedom” contravenes these core civil-libertarian principles without the slightest hint of embarrassment. The U.S. National Defense Authorization Act (NDAA) authorizes the indefinite military detention, without charge or trial, of any person labeled a “belligerent”—including an American citizen. The legislation overrides habeas corpus, the critical legal procedure that prevents the government from detaining you indefinitely without showing just cause.

In addition, the federal government has used the post 9/11 Authorization to Use Military Force (AUMF) law to justify the direct killing (without a trial or verdict) of anyone proclaimed an “enemy combatant” in the global war on terrorism. The AUMF is unbound by geographic or time limitations. U.S. citizens are not exempted, nor is U.S. territory.

Meanwhile, The Washington Post reported last January, “For the third year in a row, [U.S. local and state] police nationwide shot and killed nearly 1,000 people. …” Police killings, disproportionately inflicted against poor people and people of color, amount to executions, without trial or verdict.

The presumption of innocence does not prevent hundreds of thousands of American from experiencing the torture of incarceration simply because they cannot pay bail while awaiting trial.

The UD’s 12th article proclaims, “No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence.” So what? Americans are subject to a vast private and public surveillance apparatus that has essentially abolished privacy in the name of “national security.” As the ACLU reports:

Numerous government agencies—including the National Security Agency, the Federal Bureau of Investigation, the Department of Homeland Security, and state and local law enforcement agencies—intrude upon the private communications of innocent citizens, amass vast databases of who we call and when, and catalog “suspicious activities” based on the vaguest standards. … Innocuous data is fed into bloated watchlists, with severe consequences—innocent individuals have found themselves unable to board planes, barred from certain types of jobs, shut out of their bank accounts, and repeatedly questioned by authorities. Once information is in the government’s hands, it can be shared widely and retained for years, and the rules about access and use can be changed entirely in secret without the public ever knowing.

Article 15 of the UD says, “Everyone has the right to a nationality” and “No one shall be deprived of the right to change his nationality.” Millions of “illegal” immigrants in flight from impoverished and repressive regimes supported by the United States are stateless people, too afraid of deportation to declare their foreign citizenship or to fight for decent conditions inside the U.S. They are not free to change their nationality by becoming U.S. citizens.

The UD’s 19th article declares, “Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference.” That’s nice. Millions of U.S. citizen-subjects know very well that they cannot write or say (or sing or post or march on behalf of) what they believe without putting their livelihoods at risk by offending or otherwise concerning their employers and other authorities. And in the United States, where health insurance is strongly and absurdly tied to place of employment, putting one’s job at risk also endangers a person’s and his or her family’s access to health care.

Freedom of expression is strictly qualified, to say the least, in the hidden and despotic abode of the capitalist workplace, where most working-age Americans spend most of their waking hours under managerial supervision.

Even tenured academics can be fired for expressing their opinions. The University of Illinois at Urbana-Champaign fired tenured professor Steven Salaita over his personal tweets criticizing Israel’s mass-murderous 2014 assault on Gaza. The prolific radical Native American author Ward Churchill was stripped of his tenured professorship on trumped-up grounds because of political comments he made on the 9/11 terror attacks.

Article 20 of the UD says, “Everyone has the right to freedom of peaceful assembly and association.”

These rights are strictly qualified in the U.S., where public assembly is controlled by onerous permitting processes and fees and peaceful protest gatherings commonly face militarized police forces that make random arrests, infiltrate marches and meetings, target organizers, give protesters petty charges (and deadly criminal records) and rough-up protesters. Numerous Republican-controlled states have passed bills that increase penalties for public protest in the wake of the many protests that accompanied Donald Trump’s election and inauguration.

Workers are fired for trying to organize unions in the U.S., where once union-friendly labor laws have been eviscerated.

The UD’s 21st article proclaims that “Everyone has the right to take part in the government of his country, directly or through freely chosen representatives. The will of the people shall be the basis of the authority of government; this shall be expressed in periodic and genuine elections which shall be by universal and equal suffrage and shall be held by secret vote or by equivalent free voting procedures.”

The reality of U.S. politics and policy stands in brazen defiance of this universal human right. As the distinguished liberal political scientists Benjamin Page (Northwestern) and Marin Gilens (Princeton) showed in their expertly researched book, “Democracy in America?” last year:

[T]he best evidence indicates that the wishes of ordinary Americans actually have little or no impact on the making of federal government policy. Wealthy individuals and organized interest groups—especially business corporations—have had much more political clout. When they are taken into account, it becomes apparent that the general public has been virtually powerless. … The will of majorities is often thwarted by the affluent and the well-organized, who block popular policy proposals and enact special favors for themselves. … Majorities of Americans favor … programs to help provide jobs, increase wages, help the unemployed, provide universal medical insurance, ensure decent retirement pensions, and pay for such programs with progressive taxes. Most Americans also want to cut “corporate welfare.” Yet the wealthy, business groups, and structural gridlock have mostly blocked such new policies [and programs].

“Elections alone,” Page and Gilens note, “do not guarantee democracy.” Majority U.S. opinion is regularly trumped by a deadly complex of forces in the nation’s politics, including:

    • The campaign finance, candidate-selection, lobbying and policy agenda-setting power of wealthy individuals, corporations and interest groups
    • The special primary election influence of full-time party activists
    • The disproportionately affluent, white and older composition of the active (voting) electorate
    • The manipulation and restriction of voter turnout
    • The widespread dissemination of distracting, confusing, misleading and just plain false information
    • Absurdly and explicitly unrepresentative political institutions like the Electoral College, the unelected Supreme Court, the over-representation of the predominantly white rural population in the U.S. Senate and the one-party rule in the House of “Representatives”
    • The fragmentation of authority in government
    • Corporate ownership of the reigning media, which frames current events in accord with the wishes and world view of the nation’s real owners—its “unelected dictatorship or money”
    • Americans get to vote but mammon reigns nonetheless in the United States, where, Page and Gilens find, “government policy … reflects the wishes of those with money, not the wishes of the millions of ordinary citizens who turn out every two years to choose among the preapproved, money-vetted candidates for federal office.

You wouldn’t know a thing about these and other brazen violations of the UD (you can find supplemental text on U.S. “homeland” violations of UD articles 22, 23, 24, 25, 27 and 28 on my website) by reading the U.S. State Department’s recently released annual “Country Reports on Human Rights Abuses.” Beyond two disturbing novelties—the deletion of most prior reporting on women’s rights and reproductive rights and the redaction of the term “Occupied Territories” from the report’s description of Israel and its, well, occupied territories—the Trump-era rendering of the annual State Department document (this year’s is the first put together entirely by the Trump State Department) runs in four familiar grooves. Consistent with previous versions, it fails to acknowledge the United States’ longstanding political, economic and military backing of governments whose human rights abuses it mentions—as if Washington had nothing to do with them.

We learn, for example, that Saudi Arabia kills civilians in Yemen and carries out “unlawful killings, including execution for other than the most serious offenses and without requisite due process; torture; arbitrary arrest and detention, including of lawyers” in its own territory. The report says nothing about how Washington considers the Saudi regime one of its most prized allies. Or that it equips the absolutist Saudi state (whose crown prince was recently hosted by Donald Trump, who boasted during the royal’s visit of U.S. arms sales to Saudi Arabia) with tens of billions worth of lethal military equipment. Nor does it say anything about the United States’ own direct egregious abrogation of human rights through things like its horrific torture camp at Guantanamo Bay and its ongoing arch-criminal drone war program of “targeted assassination” (execution without trial) Noam Chomsky has called “the most extensive global terrorism campaign the world has yet seen.”

The world has every reason to respond to the State Department’s report with another old maxim: “Don’t piss on my boots and tell me it’s raining.”

The Country Reports document continues the United States’ longstanding practice of selective criticism, playing up violations in rival and enemy nations over those in allied nations. Relying on just the document’s country-level write-ups, one would think that human rights are no better in Iran and Cuba than they are in Saudi Arabia and Honduras. You’d never know that the Saudis make Iran look like a bastion of civil liberties, women’s rights and democracy by comparison. Or that ordinary Cubans enjoy remarkable guaranteed incomes and access to educational resources and health care services that are unrivaled across Latin America and especially in right-wing Latin American states like Honduras, where a vicious right-wing regime was installed with no small help from the U.S. nine years ago.

The State Department report vastly understates the scale of the Saudis’ U.S.-backed and U.S.-equipped crimes in Yemen. It gives no sense that the U.S.-Saudi war on that small nation has created there one of the worst humanitarian catastrophes (replete with a mass outbreak of deadly cholera) in recent history.

In rolling out the report, John Sullivan, Trump’s then-acting secretary of state, singled out Russia and China as leading “threats to global stability,” claiming that their poor human rights records put them in the same dastardly club as evil Iran and North Korea. Where, one might well ask, should we rank U.S. allies like Saudi Arabia, Honduras, Egypt and Israel? The last country has recently and openly slaughtered unarmed Palestinians who were peacefully protesting along its border with Gaza, which is essentially an open-air Palestinian prison subjected to a vicious blockade by Israel and Egypt since 2007. What about other U.S.-allied states like the Philippines, whose strongman president Rodrigo Duterte has ordered the death-squad killings of drug dealers and drug users and been praised by Trump for doing “an unbelievable job on the drug problem”?

It has not been lost on properly critical observers that that the Trump administration has curiously designated the American Empire’s top strategic rivals—China, Russia, Iran and North Korea—as the world’s worst human rights violators.

As per usual, the latest State Department global human rights report ignores positive human rights accomplishments of states on the wrong side of Uncle Sam’s division of the world into friend and enemy. It has nothing to say, for example, about Cuba’s remarkable achievements in reducing poverty, providing health care, educating its citizens and developing its economy and society with a low-carbon footprint that reduces its contribution to the greatest problem of our times, one whose advance is being led by the United States: anthropogenic climate change.

Last, but not least, this year’s version of the report has, as usual, absolutely nothing to say against or about egregious and endemic human rights abuses carried out by (both at home and abroad) and inside the United States—the supposed “beacon to the world of the way life should be,” to quote former U.S. Sen. Kay Bailey Hutchinson (currently Trump’s permanent representative to NATO) in a fall 2002 speech in support of Congress authorizing George W. Bush to criminally invade Iraq if he wanted to (he did). The State Department’s “Country Reports on Human Rights Abuses” covers every country on the planet but one: The most powerful nation on earth, the headquarters of a historically unparalleled global empire that most of the world’s politically cognizant populace has long and with good reason identified as the leading threat to peace and stability on earth. Fully 194 countries are covered in the reports, just not the world’s only superpower, itself home to 4.4 percent of the world’s population but 22 percent of the world’s prisoners—quite an accomplishment for the self-declared homeland and headquarters of global freedom and democracy.

As far as the State Department, Washington and the nation’s reigning corporate, financial, and imperial power elite is concerned, the violations of the UD outlined at the outset of this article (and in my linked supplemental text) belong down George Orwell’s memory hole, consistent with the principle that history is written by and for the winners and Big Bother’s maxim: “He who controls the past controls the future. He who controls the present controls the past.”

It’s nothing remotely new or distinctive to the Trump era. The United States sees itself as an inherently splendid and humanitarian City on a Hill, fit to judge other nations, particularly those it deems as rivals and enemies, while giving itself an “exceptionalist” free pass because, as Bill Clinton’s Secretary State Madeleine Albright once explained, “The United States is good.” That’s no way to get its human rights reports taken seriously by world citizens familiar with the timeworn adage that “people who live in glass houses shouldn’t throw stones.”

THE MONOPOLIZATION OF AMERICA: The biggest economic problem you’re hearing almost nothing about

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By Robert Reich

Source: Nation of Change

Not long ago I visited some farmers in Missouri whose profits are disappearing. Why? Monsanto alone owns the key genetic traits to more than 90 percent of the soybeans planted by farmers in the United States, and 80 percent of the corn. Which means Monsanto can charge farmers much higher prices.

Farmers are getting squeezed from the other side, too, because the food processors they sell their produce to are also consolidating into mega companies that have so much market power they can cut the prices they pay to farmers.

This doesn’t mean lower food prices to you. It means more profits to the monopolists.

Monopolies all around

America used to have antitrust laws that stopped corporations from monopolizing markets, and often broke up the biggest culprits. No longer. It’s a hidden upward redistribution of money and power from the majority of Americans to corporate executives and wealthy shareholders.

You may think you have lots of choices, but take a closer look:

1. The four largest food companies control 82 percent of beef packing, 85 percent of soybean processing, 63 percent of pork packing, and 53 percent of chicken processing.

2. There are many brands of toothpaste, but 70 percent of all of it comes from just two companies.

3. You may think you have your choice of sunglasses, but they’re almost all from one company: Luxottica – which also owns nearly all the eyeglass retail outlets.

4. Practically every plastic hanger in America is now made by one company, Mainetti.

5. What brand of cat food should you buy? Looks like lots of brands but behind them are basically just two companies.

6. What about your pharmaceuticals? Yes, you can get low-cost generic versions. But drug companies are in effect paying the makers of generic drugs to delay cheaper versions. Such “pay for delay” agreements are illegal in other advanced economies, but antitrust enforcement hasn’t laid a finger on them in America. They cost you and me an estimated $3.5 billion a year.

7. You think your health insurance will cover the costs? Health insurers are consolidating, too. Which is one reason your health insurance premiums, copayments, and deductibles are soaring.

8. You think you have a lot of options for booking discount airline tickets and hotels online? Think again. You have only two. Expedia merged with Orbitz, so that’s one company. And then there’s Priceline.

9. How about your cable and Internet service? Basically just four companies (and two of them just announced they’re going to merge).

Why the monopolization of America is a huge problem

The problem with all this consolidation into a handful of giant firms is they don’t have to compete. Which means they can – and do – jack up your prices.

Such consolidation keeps down wages. Workers with less choice of whom to work for have a harder time getting a raise. When local labor markets are dominated by one major big box retailer, or one grocery chain, for example, those firms essentially set wage rates for the area.

These massive corporations also have a lot of political clout. That’s one reason they’re consolidating: Power.

Antitrust laws were supposed to stop what’s been going on. But today, they’re almost a dead letter. This hurts you.

We’ve forgotten history

The first antitrust law came in 1890 when Senator John Sherman responded to public anger about the economic and political power of the huge railroad, steel, telegraph, and oil cartels – then called “trusts” – that were essentially running America.

A handful of corporate chieftains known as “robber barons” presided over all this – collecting great riches at the expense of workers who toiled long hours often in dangerous conditions for little pay. Corporations gouged consumers and corrupted politics.

Then in 1901, progressive reformer Teddy Roosevelt became president. By this time, the American public was demanding action.

In his first message to Congress in December 1901, only two months after assuming the presidency, Roosevelt warned, “There is a widespread conviction in the minds of the American people that the great corporations known as the trusts are in certain of their features and tendencies hurtful to the general welfare.”

Roosevelt used the Sherman Antitrust Act to go after the Northern Securities Company, a giant railroad trust run by J. P. Morgan, the nation’s most powerful businessman. The U.S. Supreme Court backed Roosevelt and ordered the company dismantled.

In 1911, John D. Rockefeller’s Standard Oil Trust was broken up, too. But in its decision, the Supreme Court effectively altered the Sherman Act, saying that monopolistic restraints of trade were objectionable if they were “unreasonable” – and that determination was to be made by the courts. What was an unreasonable restraint of trade?

In the presidential election of 1912, Roosevelt, running again for president but this time as a third party candidate, said he would allow some concentration of industries where there were economic efficiencies due to large scale. He’d then he’d have experts regulate these large corporations for the public benefit.

Woodrow Wilson, who ended up winning the election, and his adviser Louis Brandeis, took a different view. They didn’t think regulation would work, and thought all monopolies should be broken up.

For the next 65 years, both views dominated. We had strong antitrust enforcement along with regulations that held big corporations in check.

Most big mergers were prohibited. Even large size was thought to be a problem. In 1945, in the case of United States v. Alcoa (1945), the Supreme Court ruled that even though Alcoa hadn’t pursued a monopoly, it had become one by becoming so large that it was guilty of violating the Sherman Act.

What happened to antitrust?

All this changed in the 1980s, after Robert Bork – who, incidentally, I studied antitrust law with at Yale Law School, and then worked for when he became Solicitor General under President Ford – wrote an influential book called The Antitrust Paradox, which argued that the sole purpose of the Sherman Act is consumer welfare.

Bork argued that mergers and large size almost always create efficiencies that bring down prices, and therefore should be legal. Bork’s ideas were consistent with the conservative Chicago School of Economics, and found a ready audience in the Reagan White House.

Bork was wrong. But since then, even under Democratic administrations, antitrust has all but disappeared.

The monopolization of high tech

We’re seeing declining competition even in cutting-edge, high-tech industries.

In the new economy, information and ideas are the most valuable forms of property. This is where the money is.

We haven’t seen concentration on this scale ever before.

Google and Facebook are now the first stops for many Americans seeking news. Meanwhile, Amazon is now the first stop for more than a half of American consumers seeking to buy anything. Talk about power.

Contrary to the conventional view of an American economy bubbling with innovative small companies, the reality is quite different. The rate at which new businesses have formed in the United States has slowed markedly since the late 1970s.

Big Tech’s sweeping patents, standard platforms, fleets of lawyers to litigate against potential rivals, and armies of lobbyists have created formidable barriers to new entrants. Google’s search engine is so dominant, “Google” has become a verb.

The European Union filed formal antitrust charges against Google, accusing it of forcing search engine users into its own shopping platforms. And last June, it fined Google a record $2.7 billion.

But not in America.

It’s time to revive antitrust

Economic and political power cannot be separated because dominant corporations gain political influence over how markets are organized, maintained, and enforced – which enlarges their economic power further.

One of the original goals of the antitrust laws was to prevent this.

Big Tech – along with the drug, insurance, agriculture, and financial giants – is coming to dominate both our economy and our politics.

There’s only one answer: It is time to revive antitrust.

Convenient Tales About Riches Within Reach

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By Sam Pizzigati

Source: OpEdNews.com

The world at large knew virtually nada about Sylvia Bloom for 96 years. Then she died in 2016. Now, just a little too late, Sylvia Bloom is getting her belated — yet richly deserved — 15 minutes of worldwide fame.

The New York Times has just published a heart-warming story of the caring, upright life Sylvia Bloom lived, and the remarkable — and hidden — fortune she quietly accumulated over the course of her 67-year career as a Manhattan legal secretary.

That fortune totaled, in the end, over $9 million. The bulk of that wealth, the Times account reveals, is going — per Bloom’s wishes — to help students from poor families advance their educations.

None of Bloom’s surviving relatives or law firm colleagues or fellow volunteers at the Henry Street Settlement, the social services agency set to get $6.24 million from her bequest, had any idea that their unassuming loved one and friend had saved anything remotely close to multiple millions.

Counting Pennies

Bloom lived frugally all her life in Brooklyn and commuted, by subway, to her job. The “high life” never interested her in the least. She led a simple existence. She counted her pennies. In the end, she put them all to good use.

Stories like Bloom’s have been popping up regularly over recent years. Leonard Gigowski, a Wisconsin shopkeeper, died three years ago at age 90, and left behind a “secret $13 million fortune” that’s currently funding scholarships. Grace Groner passed away in 2010 at age 100. She spent most of her life in a one-bedroom Illinois home, shopped at thrift stores, and left $9 million for her alma mater.

Convenient Tales

Our popular culture can’t seem to get enough of these life-affirming tales of modest multi-millionaire seniors. These stories make us feel good. They also, unfortunately, reinforce a message that our society’s richest — and their cheerleaders — find enormously convenient.

You don’t have to be money-hungry, commit vile acts or have remarkable talents to become wealthy, the tellers of all these stories of hidden millions suggest. You just have to be frugal; almost anybody, in other words, can become rich.

And if you don’t happen to become rich, the media coverage of these stories not so subtly hints, just look in the mirror for the reason why. You, too, could have resisted temptation and counted your pennies.

You, too, could have built a huge personal fortune. Shame on you. You chose not to.

The Millionaire Next Door

A couple of decades ago, two academic researchers — Thomas Stanley and William Danko — made themselves not insignificant personal fortunes by wrapping up that same theme in reams of statistics. Their 1996 book, The Millionaire Next Door, has so far sold over 4 million copies.

That thrifty fellow down the block with a six-year-old Ford, The Millionaire Next Door related, could well be worth millions. And those millions, the book stressed, all begin with frugality.

Conservative pundits have always loved this basic frugality-pays thesis. Stanley and Danko, the argument goes, have served up the ultimate secret to getting rich. “Hardly any” of the self-made rich the pair profiled in The Millionaire Next Door, as one commentator noted a few years ago, “had expensive tastes.” Instead, these millionaires avoided “new homes and expensive clothes” and “often invested 15 to 20 percent of their net income.”

Any of us could follow that lead, this analyst would add, so long as we understand “that building wealth takes discipline, sacrifice, and hard work.”

Reaping Rewards

But if “discipline, sacrifice, and hard work” build wealth, why do so many millions of disciplined, sacrificing, and hard-working Americans today have so little of it? Why is the “millionaire next door” — especially for our millennial generation — becoming a vanishing species?

Sylvia Bloom’s life offers some clues. Yes, Bloom lived frugally, sacrificed, and worked hard. But she also matured in a society — mid-20th century America — that endeavored to help disciplined, sacrificing, and hard-working people.

That help came in many different forms. Sylvia Bloom attended Hunter College, part of a system of free public higher education in New York City. She and her husband, a firefighter and later teacher, lived in a rent-controlled apartment. She commuted, for just a few dimes per day, on the world’s most extensive public transit system.

Sylvia Bloom’s young adult counterparts today? They confront a totally different reality. The sky-high costs of attending college have turned 21st-century young adults into life-long debtors. To find an affordable place to live, they squeeze into tiny apartments close to their jobs or plop themselves in distant exurbs, fighting traffic jams all the way to work — if not paying big bucks daily for scarce transit options.

Austerity Trumps Frugality

These millennials aren’t living the frugal life. They’re living the austere life — and not by choice. Our elected leaders have thrust this austerity upon them, with decades of public policies that have rewarded the rich with tax cuts at every turn and whittled away public services at every opportunity.

If Sylvia Bloom had been born a millennial, she’d be pinching pennies today to pay off her college debts. She’d be looking forward to years of hard work and sacrifice, with no hope of ever saving up enough to become a significant invester.

In her actual life, Sylvia Bloom had the good fortune to live her early adult years in a society much more caring than ours. She cared back — and chose to devote her own financial good fortune to helping others to the same support that so helped her.

Sylvia Bloom’s life does indeed offer up inspiration. Let’s not let our rich turn that life into a rationalization for their riches.

US Collapse – the Spectacle of Our Time

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By Finnian Cunningham

Source: Axis of Logic

May you live in interesting times, goes the Chinese proverb. Few can doubt that we are indeed living in such an interesting time. Big changes are afoot in the world, it seems.

None more so than the collapsing of the American Empire.

The US is going through an historic “correction” in the same way that the Soviet Union did some 30 years ago when the latter was confronted with the reality of its unsustainable political and economic system. (That’s not meant to imply, however, that socialism is unviable, because arguably the Soviet Union had fatally strayed from its genuine socialist project into something more akin to unwieldy state capitalism.)

In any case, all empires come to an end eventually. History is littered with the debris of countless empires. Why should the American Empire be any different? It’s not. Only arrogant “American exceptionalism” deludes itself from the reality.

The notable thing is just how in denial the political class and the US news media are about the unfolding American crisis.

This is partly where the whole “Russiagate” narrative comes into play. Blaming Russia for allegedly destabilizing US politics and society is a cover for denial over the internal rot facing the US.

Some may scoff at the very idea of an “American Empire”. That’s something Europeans did, not us, goes the apologist for US power. The quick retort to that view is to point out that the US has over 1,000 military bases in more than 100 countries around the world. If that is not a manifestation of empire then what is?

For seven decades since the Second World War, “Pax Americana” was the grandiose name given to US imperial design for the global order. The period was far from peaceful as the vainglorious name suggests. Dozens of wars, proxy conflicts and violent subversions were carried by the US on every continent in order to maintain its empire. The so-called “global policeman” was more often a “global thug”.

That US empire is now teetering at the cusp of an emerging multipolar world order led by China, Russia and other rising powers.

When US leaders complain about China and Russia “reshaping the global order” to reflect their interests what the American leaders are tacitly admitting is the coming end of Washington’s presumed hegemony.

Rather than accepting the fate of demise, the US is aggressively resisting by denigrating China and Russia’s power as somehow illegitimate. It’s the classic denial reaction of a sore loser.

So, what are the telltale signs that the US is indeed undergoing a seminal “correction” — or collapse?

The heyday of American capitalism is well passed. The once awesome productive system is a skeleton of its former self. The rise of massive social poverty alongside obscene wealth among a tiny elite is a sure sign that the once mighty American economy is chronically moribund. The country’s soaring $20 trillion national debt is another symptom of chronic atrophy.

Recent self-congratulatory whooping by President Trump of “economic recovery” is like the joy felt from looking at a mirage. The roaring stock market is an elite phenomenon which can just as easily slump over night.
What the champagne bubbles can’t disguise is the structural failing of US capitalism to reverse exploding inequality and endemic poverty across America. The national prowess of US capitalism has been superseded by global capitalism where American corporations among others scour the planet for cheap labor and tax havens. There is no going back to a supposed golden age, no matter how much Trump crows about “America First”.

The other side of the coin from historic US economic demise is the concomitant rise in its militarism as a way to compensate for its overall loss of power.

It is no coincidence that since the end of the Cold War following the dissolution of the Soviet Union, US military interventions around the world have erupted with increased frequency and duration. The US is in a veritable permanent state of war actively deploying its forces simultaneously in several countries, particularly in the oil-rich Middle East.

Washington of course gives itself a fig leaf cover by calling its surge in militarism a “war on terror” or “defending allies”. But, increasingly, US war conduct is seen for what it plainly is — violation of international law and the sovereignty of nations for the pursuit of American imperial interests.

In short, the US is patently lashing out as a rogue regime. There’s no disguising that fiendish fact.

In addition to waging wars, bombing countries, sponsoring terrorist proxies and assassinating enemies at will with drones, Washington is increasingly threatening others with military aggression. In recent months, North Korea and Iran have been openly threatened based on spurious claims. Russia and China have also been explicitly warned of American aggression in several strategic documents published by the Trump administration.

The grounds for American belligerence are baseless. As noted, the real motive is to do with compensating for its own inherent political, economic and social crises. That then amounts to American leaders inciting conflicts and wars, which is in itself a grave violation of international law — a crime against peace, according to Nuremberg principles.

The American Empire is failing and flailing. This is the spectacle of our time. The Western mainstream news media are either blind, ignorant or complicit in denying the historic collapse. Such media are indulging reckless fantasies of the US political class to distract from the potential internal implosion. Casting around for scapegoats to “explain” the deep inherent problems, the political class are using Russia and alleged Russian “interference” as a pretext.

World history has reached a foreboding cross-roads due to the collapsing of the American Empire. Can we navigate a safe path forward avoiding catastrophic war that often accompanies the demise of empires?

A lot, it seems, depends on ordinary American people becoming politically organized to challenge their dysfunctional system run by and for the elites. If the American people cannot hold their elites to account and break their corrupt rule, overhauling it with something more equitable and democratic, then the world is in peril of being plunged into total war. We can only but wish our American brothers and sisters solidarity and success.

Big Pharma, Big Oil and Big Banks Meet the Definition of Terrorists

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Common threads persist throughout definitions of terrorism: violence, injury or death, intimidation, intentionality, multiple targets and political motivation. Big pharma, big oil and big banks meet them all.

By Paul Buchheit

Source: Mint Press News

Various definitions of terrorism have been proposed in recent years, by organizations such as the FBI, the State Department, Homeland Security, and the ACLU. Some common threads persist throughout the definitions: violence, injury or death, intimidation, intentionality, multiple targets, political motivation. All the criteria are met by pharmaceutical and oil and financial companies. They have all injured and intimidated the American public, and caused people to die, with intentionality shown by their refusal to acknowledge evidence of their misdeeds, and political motives clear in their lobbying efforts, where among all U.S. industries Big Pharma is #1, Big Oil is #5, and Securities/Investment #8.

The terror inflicted on Americans is real, and is documented by the facts to follow.

Big Pharma: Qualifying for Trump’s Call for Capital Punishment for Drug Dealers

In a Time Magazine article a young man named Chad Colwell says “I got prescribed painkillers, Percocet and Oxycontin, and then it just kind of took off from there.” Time adds: “Prescriptions gave way to cheaper, stronger alternatives. Why scrounge for a $50 pill of Percocet when a tab of heroin can be had for $5?” About 75% of heroin addicts used prescription opioids before turning to heroin.

Any questions about Big Pharma’s role in violence and death in America have been answered by the Centers for Disease Control and the American Journal of Public Health. Any doubts about Big Pharma’s intentions to intimidate the public have been put to rest by the many occasions of outrageous price gouging. And any uncertainty about political pressure is removed by its #1 lobbying ranking.

As for malicious intentions, Bernie Sanders noted, “We know that pharmaceutical companies lied about the addictive impacts of opioids they manufactured.” Purdue Pharma knew all about the devastating addictive effects of its painkiller Oxycontin, and even pleaded guilty in 2007 to misleading regulators, doctors, and patients about the drug’s risk. Now Purdue and other drug companies are facing a lawsuitfor “deceptively marketing opioids” and ignoring the misuse of their drugs.

No jail for the opioid pushers, though, just slap-on-the-wrist fines that can be made up with a few price increases. But partly as a result of Pharma-related violence, Americans are suffering “deaths of despair”— death by drugs, alcohol and suicide. Suicide is at its highest level in 30 years.

Big Oil: Decades of Terror

Any doubts about the ecological terror caused by fossil fuel companies have been dispelled by the World Health Organization, the American Lung Association, the United Nations, the Pentagon, cooperating governments, and independent research groups, all of whom agree that human-induced climate change is killing people.

The oil industry’s intentionality and political motives have been demonstrated by their refusal to admit the known truth, starting with Exxon, which has covered up its own climate research for 40 years, and continuing through multi-million dollar lobbying efforts by Amoco, the US Chamber of Commerce, General Motors, Koch Industries, and other corporations in their effort to dismantle the Kyoto Protocol against global warming.

Big Banks: Leaving Suicidal Former Homeowners Behind

Any doubts about the violence stemming from the 2008 mortgage crisis have been resolved by studies of recession-caused suicides. Both the British Journal of Psychiatry and the National Institutes of Healthfound definite links between the recession and the rate of suicides.

As with Big Pharma and Big Oil, intentionality and political motives are evident in the banking industry’s lobbying efforts on behalf of deregulation — leading to the same conditions that threatened American homeowners in 2008. There has also been a surge in the number of non-bank lenders, who are less subject to regulation.

Making it all worse are private developers, who make most of their profits by building fancy homes for the rich. And by avoiding affordable housing. Since the recession, Blackstone and other private equity firms — with government subsidies — have been buying up foreclosed houses, holding them till prices appreciate, and in the interim renting them back at exorbitant prices.

This is leaving more and more Americans out in the cold — literally. A head of household in the U.S. needs to make $21.21 an hour to afford a two-bedroom apartment at HUD standards, much more than the $16.38 they actually earn. Since the recession, the situation has continually worsened. From 2010 to 2016 the number of housing units priced for very low-income families plummeted 60 percent.

Here’s the big picture: Since the 1980s there’s been a massive redistribution of wealth from middle-class housing to the investment portfolios of people with an average net worth of $75 million. It’s not hard to understand the “deaths of despair” caused by the terror inflicted on people losing their homes.

 

What Lies Beyond Capitalism and Socialism?

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By Charles Hugh Smith

Source: Of Two Minds

The status quo, in all its various forms, is dominated by incentives that strengthen the centralization of wealth and power.

As longtime readers know, my work aims to 1) explain why the status quo — the socio-economic-political system we inhabit — is unsustainable, divisive, and doomed to collapse under its own weight and 2) sketch out an alternative Mode of Production/way of living that is sustainable, consumes far less resources while providing for the needs of the human populace — not just for our material daily bread but for positive social roles, purpose, hope, meaning and opportunity, needs that are by and large ignored or marginalized in the current system.

One cognitive/emotional roadblock I encounter is the nearly universal assumption that there are only two systems: the State (government) or the Market (free trade/ free enterprise). This divide plays out politically as the Right (capitalism, favoring markets) and the Left (socialism, favoring the state). Everything from Communism to Libertarianism can be placed on this spectrum.

But what if the State and the Market are the sources of our unsustainability? What if they are intrinsically incapable of fixing what’s broken?

The roadblock here is adherents to one camp or the other are emotionally attached to their ideological choice, to the point that these ideological attachments have a quasi-religious character.

Believers in the market as the solution to virtually any problem refuse to accept any limits on the market’s efficacy, and believers in greater state power/control refuse to accept any limits on the state’s efficacy.

I often feel like I’ve been transported back to the 30 Years War between Catholics and Protestants in the 1600s.

I’ve written numerous books that (in part) cover the inherent limits of markets and the state, so I’ll keep this brief. Markets are based on two premises: 1) profits are the key motivator of human activity and 2) whatever is scarce can be replaced by something that is abundant (for example, when we’ve wiped out all the wild Bluefin tuna, we can substitute farmed catfish.)

But what about work that creates value but isn’t profitable? This simply doesn’t compute in the market mentality. Neither does the fact that wiping out the wild fisheries disrupts an ecosystem that is essentially impossible to value in terms that markets understand: in a market, the supply and the demand in this moment set the price and thus the value of everything.

But ecosystems simply cannot be valued by the price set in the moment by current supply and demand.

As for the state, its ontological imperative is to concentrate power, and since wealth is power, this means concentrating political and financial power. Once bureaucracies have concentrated power, insiders focus on securing budgets and benefits, and limiting transparency and accountability, as these endanger the insiders’ power, security and perquisites.

Both of these systems share a single quasi-religious ideology: a belief that endless economic growth is an intrinsic good, for it is the ultimate foundation of all human prosperity. In other words, we can only prosper and become more secure if we’re consuming more of everything: resources, credit, energy, and so on.

The second shared ideological faith is that centralizing wealth and power are not just inevitable but good. In other words, Left and Right share a single quasi-religious belief that centralization is not just inevitable but positive; the only difference is in who should hold the concentrated wealth/power, private owners or the state.

This ideology assumes a winner take most structure of winners and losers, with the winnings being concentrated in the hands of a few at the top of the Winners. Thus rising inequality and divisiveness are assumed to be the natural state of any economy.

This ideology underpins the entire status quo spectrum. The “growth at any cost is good” part of the single ideology underpinning the status quo is captured by the 1960 Soviet-era film Letter Never Sent; in its haunting, surreal final scene, a character envisions a grand wilderness untouched by human hands transformed into an industrial wasteland of belching chimneys and sprawling factories. This was not a nightmare–this was the Soviet dream, and indeed, the dream of the “growth at any cost is good” West.

Simply put, the status quo of markets and states is incapable of DeGrowth, i.e. consuming less of everything, including credit, “money”, profits, taxes—everything that fuels both the state and the market. As I have taken pains to explain, it doesn’t matter if a factory is owned by private owners or the state: the mandate of capital is to grow. If capital doesn’t grow, the resulting losses will sink the enterprise—including the state itself.

What lies beyond “growth at any cost” capitalism and socialism? My answer is the self-funded community economy, a system that is self-funded (i.e. no need for a central bank or Treasury) with a digital currency that is created and distributed for the sole purpose of funding work that addresses scarcities in local communities.

I outline this system in my book A Radiocally Beneficial World: Automation, Technology and Creating Jobs for All.

Rather than concentrate power in the hands of state insiders, this system distributes power to communities are participants. Rather than concentrate the power to create currency for the benefit of banks and the state, this system distributes the power to create currency for the sole benefit of those working on behalf of the community, on projects prioritized by the community.

This community economy recognizes that some work is valuable but not profitable. The profit-driven market will never do this work, and the central state is (to use Peter Drucker’s term) the wrong unit size to ascertain each community’s needs and scarcities.

Clearly, we need a socio-economic-political system that has the structure to not just grasp the necessity of DeGrowth and positive social roles (work benefiting the greater community) but to embrace these goals as its raison d’etre (reason to exist).

Human activity is largely guided by incentives, both chemical incentives in our brains and incentives presented by the society/economy we inhabit. In the current system, concentrating power and wealth in the hands of the few at the expense of the many and wasting resources / destroying ecosystems are incentivized if the activity is profitable to some enterprise or deemed necessary by the state.

In the current system, the state incentivizes protecting its wealth and power and the security/benefits of its insiders, and markets incentivize maximizing profits by any means available.

As I have explained many times in the blog and my books, we inhabit a state-cartel economy: the most profitable form of enterprise is the quasi-monopoly or cartel that limits supply and competition in order to extract the maximum profit from its customers.

Monopolies (or quasi-monopolies such as Google, which holds a majority share of global search revenues, excluding China) and cartels quickly amass profits which they then use to secure protection of their cartel from the state via lobbying, campaign contributions, etc. The elites controlling the state benefit from this arrangement, and so the system inevitably becomes a state-cartel system dominated by the state and private sector cartels and incentives that benefit the wealth and power of these institutions.

Once we understand the inevitability of this marriage of state and cartel, we understand socialism and capitalism–the State and Markets–are the yin and yang of one system. Reformers may recognize some of the inherent limits of the state and the market, but they believe these problems can be solved by tweaking policies–in systems-speak, modifying the parameters of the existing subsystems of lawmaking, the judiciary, regulatory agencies, and so on.

But as Donella Meadows explained in her classic paper, Leverage Points: Places to Intervene in a System tweaking the parameters doesn’t actually change the system. For that, we must add a new feedback loop.

The status quo, in all its various forms, is dominated by incentives that strengthen the centralization of wealth and power, increase inequality and divisiveness and the permanent expansion of consumption and credit. That this path leads to implosion / collapse does not compute because the status quo is constructed on the fundamental assumption that permanent growth/expansion of consumption, credit, wealth and state power is not just possible but necessary.

As many of us have labored to show, the financial system has been pushed to unprecedented extremes to maintain the illusion that rapid growth of consumption and credit can be maintained essentially forever.

We need an alternative system that’s built on sustainable incentives and feedback loops so we have a new blueprint to follow as the current arrangement unravels in the next decade or two.

Security and prosperity are worthy goals, but the means to achieve them, as well as the definition of security / prosperity, must be reworked from the ground up. We need to include positive social roles and meaningful work as essential components of security/prosperity.

My conception of a Third / Community Economy does not replace either the state or the free-enterprise market; rather, it does what neither of the existing structures can do. It adds opportunity, purpose, positive social roles and earned income for those left out of the state/cartel/market economy.