Monthly Archives: April 2014

Income (and wealth) inequality becoming a political issue

At long last, income inequality is becoming a mainstream political issue, thanks in large part to New York Times columnist Paul Krugman and Thomas Piketty, an obscure professor at the Paris School of Economics.

The English translation of Picketty’s new book Capital in the Twenty-First Centuryhas become a political bombshell especially since Krugman’s review of it appeared in New York Review of Books. Titled, Why We’re in a New Gilded Age, the review highlights Picketty’s research findings and political agenda.

As Krugman describes it, “The big idea of Capital in the Twenty-First Century is that we haven’t just gone back to nineteenth-century levels of income inequality, we’re also on a path back to ‘patrimonial capitalism,’ in which the commanding heights of the economy are controlled not by talented individuals but by family dynasties.” And in assessing the book, he calls it “a tour de force of economic modeling, an approach that integrates the analysis of economic growth with that of the distribution of income and wealth. This is a book that will change both the way we think about society and the way we do economics.”

Krugman concludes his review with this statement: “Piketty ends Capital in the Twenty-First Century with a call to arms—a call, in particular, for wealth taxes, global if possible, to restrain the growing power of inherited wealth. It’s easy to be cynical about the prospects for anything of the kind. But surely Piketty’s masterly diagnosis of where we are and where we’re heading makes such a thing considerably more likely. So Capital in the Twenty-First Century is an extremely important book on all fronts. Piketty has transformed our economic discourse; we’ll never talk about wealth and inequality the same way we used to.”

Now, Krugman has upped the ante with his April 24 editorial The Pikkety Panic, arguing that “..what’s really new about “Capital” is the way it demolishes that most cherished of conservative myths, the insistence that we’re living in a meritocracy in which great wealth is earned and deserved.” Krugman presents evidence to suggest that “conservatives are terrified” and in a panic to try to refute Pikkety’s inevitable conclusions, but failing to find substantive arguments, they have fallen back on name calling. If you can’t refute the facts, then try to discredit the source.

Summing up, Krugman says,

“Now, the fact that apologists for America’s oligarchs are evidently at a loss for coherent arguments doesn’t mean that they are on the run politically. Money still talks — indeed, thanks in part to the Roberts court, it talks louder than ever. Still, ideas matter too, shaping both how we talk about society and, eventually, what we do. And the Piketty panic shows that the right has run out of ideas.”

If that isn’t enough to make the political pot boil over, another newly published academic study, Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens finds that “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism.”

Of course, most activists and even ordinary people have known all that, but now that academia has taken notice and begun to present solid scientific evidence, the pressure on politicians to acknowledge these conditions and act on them will build more quickly.

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Qoin launches B2B exchange

Community Currencies in Action (CCIA) has announced the launch of TradeQoin , a business-to-business trade exchange in the Netherlands.

As their website describes it, “TradeQoin is a trading network for SME entrepreneurs to do business with each other and pay with their own digital form of payment: the TradeQoin. Entrepreneurs can use TradeQoin to purchase and sell quality products and services. By selling products and/or services the entrepreneur can earn TradeQoin. These can then be spent on making purchases within the network, which reduces Euro expenditure.”

The video below features members describing the benefits of the exchange.

You can read more about it here,


Growth, more growth, then the end of growth…

If you don’t understand geometric or exponential growth then you don’t understand anything about the magnitude of the predicament that humanity now faces or the fundamental changes that are about to occur, one way or another.

I’ve never seen the facts of exponential growth so clearly and elegantly presented as in this video lecture by the late Professor Albert Bartlett. In Arithmetic, Population and Energy, Professor Bartlett shows that even seemingly small rates of growth must ultimately result in a situation that cannot be sustained. He relates the simple arithmetic of exponential growth specifically to human population, peak energy, and resource depletion and blows away the foolish arguments of politicians and pundits who argue that growth can continue as it has in the past.

Bartlett does not mention debt growth, but  I must add that it is an even more immanent problem and the most acute symptom of the “disease” that has infected civilization, that is the global interest-based debt-money system. I urge everyone to view Prof. Bartlett’s presentation, then, if you haven’t already, read my recent article,  Money, debt and the end of the growth imperative.

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Newsletter – April, 2014

Flight MH370
Shortly before midnight on March 6 I departed Kuala Lumpur on board a Boeing 777 bound for Tucson, via Tokyo and Los Angeles. That was just 26 hours ahead of the mysterious flight MH370 which departed from the same airport just after midnight on March 8 and has become the object of a massive search and equally massive speculation. I get an uneasy feeling when I consider how close I came in time and circumstance to being on that plane. Now, more than a month later, the mystery of the flight’s disappearance seems no closer to being solved.
Given the changing and contradictory news that has been provided by Malaysian authorities and others involved in the search, I can’t help but wonder if the news is being manipulated and crucial information is being withheld from the public. Why haven’t we heard more about the passengers? Who they are and what might they have been involved in? One tantalizing fact that is no longer mentioned is that 20 of the passengers were employees of Freescale Semiconductor, which according to the Express (UK) “makes powerful microchips for industries including defence.” The Express article, Malaysian plane: 20 passengers worked for ELECTRONIC WARFARE and MILITARY RADAR firm, reveals some facts about the company’s ownership that raise suspicions and ought to be fully investigated. A casual search of the internet will bring up plenty of other possible scenarios and explanations of what might have happened to flight MH370.
Russia, Ukraine, and the New world Order
While still in Malaysia I picked up a copy of The Star (March 4 edition), one of Malaysia’s leading daily newspapers. One of the main articles had to do with the crisis in the Ukraine. The headline read: Ousting democratically-elected leaders, with the sub-head, The ousters of democratically-elected leaders have often been carried out directly or indirectly by champions of democracy themselves, thus suggesting how hypocritical and disingenuous western politicians have been in any number of cases where regime change has been the intended result. The article was written by Dr. Chandra Muzaffar, who is President of the International Movement for a Just World (JUST). You can read it here.As western leaders vilify the Russian leadership and the media beat the drums for “sanctions,” it is important to keep in mind that the Ukrainian government of PresidentViktorYanukovich was democratically elected in 2010, and he was forcibly removed by a coalition that includes neo-Nazis and fascists, backed by western countries intent on bringing Ukraine into the EU orbit and NATO.If the United States and EU are really interested in a negotiated settlement, they will need to seriously consider the Russian point of view and address the legitimate concerns of the Russian government. Floyd Rudmin’s recent article in Counterpunch, Viewing the Ukraine Crisis From Russia’s Perspective, provides some fundamental background facts that provide a more complete picture.
It’s Time to Put Money Out of its Misery
Last month I wrote an article for publication in Transformation as part of their 9 article series on money. Now, editor, Michael Edwards has provided a wrap-up piece, It’s time to put money out of its misery. Read it here.
Traveling with Children
One curious thing I noted during my recent visits in Southeast Asia is the number of  young adults that I saw traveling with small children. In one instance I happened to be on a motor coach going from Penang to Kuala Lumpur. Among the passengers were two Scandinavian couples in the company of two infants and one toddler. This experience put me in mind of a very acute observation made by some long forgotten sage (it might have been Ogden Nash, but I can’t swear to it): The definition of a baby–“An alimentary canal with a loud noise at one end and a foul odor at the other.”

Actually, I think it’s wonderful that so many young people are willing and able to balance child rearing with their search for adventure, but it’s too bad the children will have little of it to recall.
Sharing the Commons
One thing that seems certain to me is that the new paradigm society will come about through radical sharing and a major shift of our collective energies toward projects that promote the common good. On the Commons has just announced the offer of their new e-book Sharing Revolution: The essential economics of the commons by Jessica Conrad. You can download the free e-book here. I’ve not yet read it, but I’m confident that it will prove to be a major resource in “helping people connect and collaborate to advance the common good and develop greater economic autonomy.”

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