Author Archive

Weekend read – Free speech for me, not you

June 19, 2021 6 comments

from Blair Fix

They say that Americans love two things: freedom … and guns. The trouble with guns is obvious. The trouble with freedom is more subtle, and boils down to doublespeak.

When a good old boy defends his ‘freedom’, there’s a good chance he has a hidden agenda. He doesn’t want freedom for everyone. He wants ‘freedom for himself, not you’. I call this sentiment freedom tribalism. It’s something that, given humanity’s evolutionary heritage, is predictable. It’s also something that has gotten worse over the last few decades. And that brings me to the topic of this essay: free speech.

When the talking heads on Fox News advocate ‘free speech’, they’re using doublespeak. What they actually want is free speech for their own tribe … and censorship for everyone else. This free-speech tribalism extends far beyond the swill of cable news. It’s clearly visible (and growing worse) in the pantheon of high thought — the US Supreme Court.

To make sense of this free-speech tribalism, we need to reframe how we understand ‘free speech’. And that means reconsidering the idea of ‘freedom’ itself. Behind freedom’s virtuous ring lies a dark underbelly: power. Free-speech tribalism, I’ll argue, amounts to a power-struggle between groups — a struggle to broadcast your tribe’s ideas and censor those of the others. When you look closely at this struggle, it becomes clear that ‘free speech’ is not universally virtuous. In modern America, free speech has become a kind of slavery.

And with those incendiary words, let’s jump into the free-speech fire. Read more…

CO2 since the start of the Industrial Revolution

June 18, 2021 5 comments
graph with two lines, one showing annual atmospheric carbon dioxide and the other showing carbon dioxide emissions from 1750-2019

The amount of carbon dioxide in the atmosphere (raspberry line) has increased along with human emissions (blue line) since the start of the Industrial Revolution in 1750. Emissions rose slowly to about 5 billion tons a year in the mid-20th century before skyrocketing to more than 35 billion tons per year by the end of the century. NOAA graph, adapted from original by Dr. Howard Diamond (NOAA ARL). Atmospheric CO2 data from NOAA and ETHZ. CO2 emissions data from Our World in Data and the Global Carbon Project.


The impasse in external debt relief

June 17, 2021 Leave a comment

C. P. Chandrasekhar and Jayati Ghosh

When the pandemic first swept across the globe and destroyed economies in its wake, there were at least some expressions of international solidarity among leaders of the rich countries. External debt problems were widely recognised to be inevitable in the new crisis context; to address them, G20 governments declared a Debt Service Suspension Initiative (DSSI) from May 2020, designed to reduce some of the immediate debt repayment burden of the poorest and most vulnerable economies. Yet this and the subsequent “Common Framework for Debt Treatments” of November 2020 barely scratched the surface of the problem, and are unlikely to fend off future likely defaults.

There were several fundamental design flaws in the DSSI, and different but not unrelated flaws as well in the later extended framework, which suggest that G20 leaders are either oblivious to the nature and severity of the problem, or just want to ignore it since it is too complex for them to address. Read more…

Remote working pay cut?

June 16, 2021 2 comments

from Peter Radford

When a large corporation goes on the hunt for a lower cost base of operations I doubt whether it thinks it will be penalized for what is a rational and frequently made decision.  After all if you can make the same revenue and reduce your costs your profit goes up. Yeah.  Capitalism 101.  If we all go about life in this way, and if we believe Adam Smith, all this pursuit of self-interest will shower society with the glories of social benefits previously unheard of.

I know, that’s twisting things a bit.  But self-interest in a corporation is most often expressed in the endless search for that extra little bit of profit.  So re-locating to a low cost base is a classic move in the well-read CEO playbook.  And who cares if your employees have to uproot themselves and take their families to a less desirable part of the country?  Tough on them.  They need to suck it up and take one for the shareholders.  Or that can quit.

Loyalty, though, is a one way street in corporate life.  Beware the foolish soul who settles in and falls for the human resource department jargon. Read more…

How much longer can this continue?

June 15, 2021 3 comments

CO2 on the atmosphere and annual emissions (1750-2019)

June 14, 2021 8 comments

If history follows the path Thomas Piketty noted, it will . . .

June 11, 2021 1 comment

from Ikonoclast  (originally a comment)

If history follows the path Thomas PIketty noted, it will take a major war or revolution to change matters. Each time profit rises faster than the overall rate of growth we get a war, like WW1 or WW2 or a great depression like most of the 1930s. Sometimes we get the depression, then the war. Piketty noted that under capitalism’s axioms:

If R (rate of return on capital) is Greater Than G (growth in inflation adjusted dollars) then inequality increases.

There are real limits to the increase in inequality. People reach the point where they will not tolerate greater inequality. They will rebel against the system and elites enforcing the inequality or be diverted by elite misdirection into attacking others.

Piketty’s “Conditional Law of Approach to an Asymptote” (my clumsy title for it) is fully compatible with Capital as Power theory. There is no need to assume that R and G are measuring real wealth. They are simply the ratios of nominal capital being assigned to each variable by the calculations and operations of the capitalist financial system. Since money does not measure value but rather implements creorder power, then the relative power of the owners of capital axiomatically increases and the relative power of the rest of society axiomatically decreases. However, the decrease in the relative power of the bulk of the people has a lower real limit (more a band than a precise point) this being the physiological or psychological limits beyond which people find life intolerable or impossible. The rise in real inequality will be found to have real limits. Read more…

The quant case for open-access COVID vaccines

June 10, 2021 6 comments

from Blair Fix

Around the world, rich countries are celebrating as their COVID numbers fall. Their success is no mystery — it’s because of a massive rollout of COVID vaccines. While we should celebrate the development of these vaccines, their deployment highlights the tyrannies of capitalism.

Most of the basic research for COVID vaccines was funded by the public. Yet their manufacture is controlled by Big Pharma. The predictable result is that vaccines flow to the highest bidder and Big Pharma reaps the profit. Thus, the world is now ‘blessed’ with 9 new pharma billionaires.

Since we’re stuck with COVID for the long haul, we need to end the privatized vaccine model. The alternative is surprisingly simple. Let governments continue to fund basic science. And let private companies continue to manufacture vaccines. Just don’t let these companies have a monopoly on property rights. Instead, put vaccines in the Creative Commons. The result will be cheap vaccines, available to all.

To make the case for open-access vaccines, it helps to run the numbers. To date, the vast majority of COVID vaccines have gone to rich nations. It’s plutocratic healthcare in action: more money = more vaccines.

Let the data speak.

The global distribution of COVID cases

We’ll start by looking at how the global distribution of COVID cases has played out since the beginning of the pandemic. Figure 1 shows the global share of cases by continent since February 2020. Read more…

Pharmaceuticals: Beating the hell out of the average

June 9, 2021 7 comments

from Shimshon Bichler and Jonathan Nitzan

A lot has been written on the imminent decline of pharmaceuticals: their falling production, reduced R&D, declining innovation, the opioid crisis, patent cliffs, biting competition from generic drugs, growing opposition to IPR. The list goes on.

Top Guns

Judging by the yardsticks that matter the most, though – namely, the companies’ relative profit and relative capitalization – pharmaceuticals are doing just fine. In fact, based on these yardsticks, they remain the most powerful corporate sector of all.

In their 2020 study, ‘Profitability of Large Pharmaceutical Companies Compared With Other Large Public Companies‘ (JAMA 323, 9, March 3, pp. 834-843), Ledley et al. show that, during the period 2000-2018, the top 35 listed pharmaceutical firms outperformed every other corporate group in the S&P 500 (with the possible neck and neck exception of technology companies).

They had higher than average: (1) gross profit margins (76.5% vs 37.4% for the remaining S&P 500); (2) EBITDA margins (29.4% vs 19%) [2];  and (3) net profit margins (13.8% vs 7.7%). They also did better on all three margins than every other corporate subsector in the S&P 500, including non-pharmaceutical health-care firms.

Figure 1, taken from Ledley et al., visualizes this systematic out-performance. Read more…

And we are still doing nothing substantive to stop this

June 8, 2021 29 comments

from Ikonoclast  (originally a comment)

. . . what really counts is the amount of coal, oil and gas we are burning and thus how much CO2 we are releasing into the atmosphere. The benign Holocene is ending. Scientists have declared we have already entered a new era, the Anthropocene. The climate, and thus weather patterns, of the benign (for humans at least) Holocene were a resource for human civilization.

It is common mistake, and one I long made, to pay attention only to primary input resources. Thus we were obsessed about peak oil, peak coal and peak gas, imagining that the supply of these primary input resources would be the constraint for our global civilization, civilization being so energy dependent. However, it turns out that the major constraint on civilization involves not our inputs but our wastes. Our wastes wreck ecological, biosphere and geosphere systems.

Climate change is the best case in point of the above (though not the only case). Climate change melts ice caps and glaciers, raises sea levels, raises temperatures and exacerbates both floods and droughts, generating wilder swings between the two and periods where regional climate remains stuck longer in one phase. It changes growing seasons affecting food production.

It is extremely troubling that coal, oil and gas still contribute so much to our energy mix. To save the world from catastrophic climate change we should have already reduced our use to the point that we could reach zero use by 2030. We have already used up almost all of our carbon budget. Read more…

Global energy consumption 1900 to 2017

June 8, 2021 10 comments

Are mindless zombies a projection of what we fear we have really become?

June 6, 2021 12 comments

from Ikonoclast (originally a comment)

It’s strange in a time of gross over-population that dystopian fiction so often focuses on hypothesized fertility crises. We see this in The Handmaid’s Tale and Children of Men, for example. This is when the real problem is of course the diametric opposite. The earth has a vast over-population crisis of humans and an accelerating decline of all other forms of life (the sixth mass extinction).

It leads me to wonder if genuine fears are deflected by an invocation of the opposite in story-telling. Dystopian and horror fiction give us a delicious thrill of vicarious fear when we actually feel fully secure that “that could never happen”. What people enjoy about disaster storytelling is feeling proof against the specific disaster depicted. It could only happen to others or so we think. We are not so foolish and purblind as the people in the story so that could never happen to us. Actually, we are as foolish and purblind but in a afferent way. The laws of nature would never recoil against us and seriously threaten us with zombies. Actually the laws of nature do recoil against us and are about to do so in a catastrophic manner, though probably not by generating zombies. Although, it must be said that humans infected by capitalist ideology are pretty much like mindless zombies in the way they consume today without thought for a sustainable tomorrow. Are mindless zombies a projection of what we fear we have really become? Are we truly afraid of ourselves, of our inner mindlessness, as we indeed should be? Read more…

How U.S. capitalism lifts all boats

June 4, 2021 20 comments

from Jonathan Nitzan and Shimshon Bichler

Nitzan june 4

Liberals insist that capitalism lifts all boats. It doesn’t, certainly not in the U.S. Since 1880, ‘real’ total returns on the S&P 500 rose, on an annual average, 4.6% faster than U.S. ‘real’ wages. The total returns/wage ratio today is 1,166 greater than in 1880.

The ritual of capitalization

June 2, 2021 10 comments

from Blair Fix

. . . the clergy aren’t priests … they’re economists.

There’s something mysterious about finance. The symbols are arcane. The math is complex. The practitioners are impressively educated. And the stakes are high. All of this gives finance the veneer of higher truth — as if quants are uncovering a reality not accessible to the rest of us. In a sense they are. But the ‘reality’ is not what you think.

When you look at stock-market numbers, they do point to a truth about the world. But it is a truth not about natural law or of human nature. It is a truth about human ideology. The reality is that finance is a quantitative belief system. At its center is a universal ritual — the ritual of capitalization. It is this ritual that underlies all stock-market numbers.

In this post, we’ll look at the regularities that stem from the ritual of capitalization. They are astonishing in scope — a breathtaking consistency to human behavior. They beg the mind to look for some material basis for their existence. But that is a mistake. The reality is that the regularities of capitalization are an artifact of ideas — a manifestation of capitalist ideology itself. A regularity from ritual.

Giving property a number

The ritual of capitalization starts with the institutional act of exclusion — namely property.1 Property, of course, has a deep history that long predates capitalism. I won’t wade into this history here. Instead, I’ll defer to Jean-Jacques Rousseau’s succinct (but apocryphal) telling of property’s emergence. Property arose when

[t]he first person who, having enclosed a plot of land, took it into his head to say ‘this is mine’ and found people simple enough to believe him …

Putting a fence around something and calling it ‘property’ is step 1 of capitalization. But property alone is not enough. Romans had property. So did most feudal kingdoms. But these societies did not have capitalization. To capitalize property, there is a second step. You must mix property with finance. Read more…

Racial wealth gap in the U.S.

June 2, 2021 Leave a comment

Two kinds of inflation chart

June 1, 2021 3 comments

This chart shows the cumulative gain in the traditional inflation metric used by the Fed called the personal consumption deflator, in red, and a modified metric which equally weights the PCE and the S&P 500 in blue.

“This chart shows the cumulative gain in the traditional inflation metric used by the Fed called the personal consumption deflator, in red, and a modified metric which equally weights the PCE and the S&P 500 in blue.”


Economists need to rethink the foundations of their discipline

June 1, 2021 8 comments

from Ken Zimmerman (originally a comment)

Economists are fixated on a framework developed for relationships that are fixed and predictable. Relationships involving humans are neither fixed nor predictable. So the problem infecting economics is a simple one — it’s using the wrong framework. Which means of course economists can never reveal anything of importance or useful in understanding economic relationships. Economists need to rethink the foundations of their discipline.

If, as I believe economics is a social science, here are some things economists need to consider in doing the make over of their discipline.

The social sciences are about how society works. Social scientists examine institutions like the government, the economy, and family; they also study how individuals and groups interact with one another and the roots of human behavior.

Some examples of social sciences include the following: Read more…

World population graph: past, present, and future

May 31, 2021 3 comments

Excessive wealth

May 30, 2021 2 comments

from Ken Zimmerman (originally a comment)

Following the ‘Great Depression’ excessive wealth required justification. Otherwise those who possessed it were looked on as freeloaders and featherbedders who played no or little useful part in society. FDR came from one of America’s wealthiest family’s but proved himself by his work ethic, care for ordinary Americans, and work to save the USA. Even the wealthy who wanted to be ostentatious feared public rebuke and legal punishments if they focused solely on protecting their wealth. At best excessive wealth was tolerated but seldom glorified, at least publicly. Mostly Americans found their heroes elsewhere.

Second, WWII reinforced the notion that in winning wars, protecting democracy, ensuring an economy that is both successful and good for all Americans the wealthy are not required and often an impairment for these goals. Particularly economic equity.

Third, the tax code, while not outlawing great wealth accumulation did ensure that accumulation was clearly limited and the wealthy’s tax rate was the highest with few escape routes.

All this began to change in the late 1970s. This effort was and is deliberate, cynical, funded by the politically right wing wealthy, and decidedly anti-democratic. Today, the totalitarian propaganda of this effort is almost impossible to escape.

How soon the next dip? – chart

May 30, 2021 1 comment