Conservative Barry Goldwater (1909-1998) on Oligarchy

I think this quote from conservative Republican candidate for President, Barry Goldwater speaks well to our current drift into oligarchy. But that today’s conservatives were so clear sighted:

“But to be successful, representative government assumes that elections will be controlled by the citizen’s at large, not by an elitist group of big givers. Of equal importance, citizen’s must believe their vote counts. And elected officials must owe their allegiance to the people, not to narrow factions who speak only for the selfish fringes of the whole community. When the power of determining winners of elections is lodged in the hands of a few rich persons who groups, who are independent of the people and of their representatives, and who are not accountable for their actions, no way is left to control them. 

See also: http://en.wikipedia.org/wiki/Barry_Goldwater

Barry Goldwater

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Effective Remedies for Thomas Piketty’s Inequality

Now that the US has been officially declared an oligarchy aka rule by the few, and also there is huge interest in Thomas Piketty’s book Capital in the 21st Century, we need to start thinking about solutions. I thought this article by Geoff Davies in the Real World Economics a good start. I will comment on Piketty’s book when I have found a copy to read as it is selling like hot cakes despite its 700 pages: 

http://rwer.wordpress.com/2014/04/19/more-effective-remedies-for-inequality-than-pikettys/

I have read only reviews of Thomas Piketty’s Capital in the Twenty-First Century, but clearly it is valuable for documenting the nature and history of inequality over the past century or three, and for highlighting the excessive political power that flows from super-wealth.  Yet he frames it in terms of capital and capitalism and, for all the quality of his diagnosis, his main prescription evidently is just to tax the wealthy, through income and inheritance taxes.

The trouble is, capital and capitalism are very ill-defined.  To speak of capitalism is to invite an un-constructive shouting match.  Capitalism has caused great harm to people and the world!  Yes but capitalism is what has made us rich!

A more useful framing is that there have been, and can be, many ways to structure a market economy.  When one looks into the mechanisms that have operated in market economies, one can readily identify mechanisms that pump wealth from the 99% to the 1%.  One can then think of ways to stop or reverse these flows, so wealth flows more fairly to everyone involved in its generation.  It will be much more effective to fix the problems at the source than just to apply traditional retro-active bandaids like taxes.

In my own book Sack the Economists, I identified seven fairly obvious such mechanisms.  Below is an edited excerpt that summarises mechanisms identified in the course of the book’s analyses.  (Dean Baker has also made lists, short and longer, which are a little more detailed and only partly overlapping with mine.)

Financial market speculation

The financial markets are dominated by speculation and other activities whose sole objective is to siphon wealth from the productive economy.  The amount of wealth involved is very large.  Some indication might be obtained from the fact that financial sectors in the US and Australia now account for 30-40% of corporate profits.  Because corporate profits would be a large fraction of GDP, this means a significant fraction of total wealth is pumped to the rich by this mechanism.

Capturing emergent community wealth

This is the wealth that results from the proximity of individual assets and investments.  It belongs to no individual, it belongs to the community.  In some places some of this wealth is captured for community use, but very commonly the wealth passes as a windfall to private interests, much of it to developers and landlords.  In this way small property holders and renters lose their share of community wealth to those rich enough to be able to capture it.

Interest charged on new money

Our money is created in the course of making loans, and interest is charged as though it were savings, rather than having been created out of nothing.  Because we need money for the economy to function, this burden of interest weighs on the whole economy.  Banks profit by maximising loans, so the amount of money in circulation is maximised, and this increases the burden on everyone.  This is effectively a private tax on the entire economy that pumps wealth to the richest ten percent.  A simple charge for the service of providing a medium of exchange, along with stronger regulation of loans, would be far less burdensome on the economy.

Access to loans

The rich can obtain loans much more easily than the poor.  They can invest their loans and become even richer.  This mechanism is widely recognised and clearly an important factor, though it is hard to estimate the amounts of wealth involved.  Mohammed Yunus demonstrated, with his Grameen Bank in Bangladesh, that it is possible to give loans to the poorest people and so to reduce this iniquity.

The ownership escalator

We use only a restricted range of ownership options in our present economic system.  As a result ownership is highly concentrated.  Even though public corporations are owned collectively, it is the rich who own shares disproportionately.  Even though many people own some shares through retirement funds, the distribution of ownership is still strongly skewed to the rich.  Once you gain ownership of significant assets, wealth begins to flow to you.  If you are poor and have to rent your accommodation, wealth drains away from you.  Owners are on an up escalator.  The poor are on a down escalator.

As William Greider observed, the problem is not that capital is privately owned, the problem is that most people don’t own any.  We already have many forms of ownership that can change this.  Ownership can be distributed much more equitably by actively promoting less common forms such as ownership by employees and other stakeholders.  Ownership can also be conditional, with time limits and progressive transfers of ownership, or owning buildings but not land, and so on, as discussed earlier.

Corporate welfare

There are many subsidies paid to corporations or rich minorities that benefit the rich at the expense of the poor.  Often they harm the environment as well, thus harming everyone.  Even a decade ago perverse subsidies amounted to perhaps $2 trillion annually, a considerable fraction of global wealth generation.  Subsidies to fossil fuel use amount to perhaps $300 billion globally.

Tax avoidance

This is closely related to corporate welfare, because it is practised mainly by large corporations, particularly transnational corporations.  They do this by complex internal transfers of money that exploit loopholes in tax laws, or differences in tax systems among nations.  They are abetted by a few small nations that charge minimal corporate tax.  Such tax havens could be closed down overnight by concerted action of a few rich nations, but those nations’ governments are owned by the rich, so it doesn’t happen.  The proportion of taxes collected from corporations has dropped by about half over the past half century.

This list will not be exhaustive, but it already demonstrates that vast amounts of wealth are transferred to the rich by mechanisms that cannot be justified as the fair operation of markets.  Either the markets operate perversely, through the invisible fist instead of the invisible hand, or they have been rigged, with the connivance of compliant legislators.  Corporate welfare and much tax avoidance result from explicit interventions.  The other mechanisms are due to malfunctioning markets that allow some individuals to exploit an instability, an up escalator, that allows the rich to become richer.

If we simply eliminated the mechanisms that unfairly pump wealth to the rich, our societies would be considerably less unequal.  The need for welfare would be greatly reduced.  The efficiency of the economy would be increased, because producers would pay closer to the full costs of production, markets would operate more effectively, and costly welfare bureaucracies could be reduced.  The dignity and self respect of the less wealthy would not be compromised by having to accept welfare, and by being perpetually robbed and vilified by the greedy.  Fixing the problems at their sources would be far more efficient and effective than the various retroactive mechanisms that have been developed through the twentieth century.

 

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Where Does All the Output of Working People Go?

I rather liked the poster below from and thought I should supply some key statistics about the US economy to set it in wider context.

The US economy has a GNP of around $16.7 trillion or 16,700,000,000,000 aka $16.7 million, million. The US workforce that produces all that output of goods and services is around 140 million people in work. So the average output per worker per year is about $119,285 and if you assume a 40 hour week for 50 weeks a year, that’s 2000 hours a year on average at about $60 per hour. Seems like a lot of that output has gone AWOL and doesn’t actually end up with those who produce the wealth? Now why is that? And I am not counting taxes here, just simply output per worker pre-tax.

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Conservative and Republican Presidential Candidate Barry Goldwater Top Ten Conflict Tips

In our series investigating conservative thinkers, I thought conservative Republican Senator and Presidential candidate Barry Goldwater would be another candidate for one of our Top Ten Conflict Tips. This posting is dedicated to my friend Robin who first introduced me to Barry’s thinking in the 1964 election.

  1. Those who seek absolute power, even though they seek it to do what they regard as good, are simply demanding the right to enforce their own version of heaven on earth. And let me remind you, they are the very ones who always create the most hellish tyrannies. Absolute power does corrupt, and those who seek it must be suspect and must be opposed. Their mistaken course stems from false notions of equality, ladies and gentlemen. Equality, rightly understood, as our founding fathers understood it, leads to liberty and to the emancipation of creative differences. Wrongly understood, as it has been so tragically in our time, it leads first to conformity and then to despotism.
  2. On religious issues there can be little or no compromise. There is no position on which people are so immovable as their religious beliefs. There is no more powerful ally one can claim in a debate than Jesus Christ, or God, or Allah, or whatever one calls this supreme being. But like any powerful weapon, the use of God’s name on one’s behalf should be used sparingly.
  3. Mark my word, if and when these preachers get control of the [Republican] party, and they’re sure trying to do so, it’s going to be a terrible damn problem. Frankly, these people frighten me. Politics and governing demand compromise. But these Christians believe they are acting in the name of God, so they can’t and won’t compromise. I know, I’ve tried to deal with them.
  4. I told (President) Johnson and old colleagues on Capitol Hill that we had two clear choices. Either win the [Vietnam] war in a relatively short time, say within a year, or pull out all our troops and come home
  5. Most Americans have no real understanding of the operations of the international moneylenders… the accounts of the Federal Reserve have never been audited. It operates outside the control of Congress and… manipulates the credit of the United States
  6. When you say “radical right” today, I think of these moneymaking ventures by fellows like Pat Robertson and others who are trying to take the Republican Party away from the Republican Party, and make a religious organization out of it. If that ever happens, kiss politics goodbye.
  7. The big thing is to make this country, along with every other country in the world with a few exceptions, quit discriminating against people just because they’re gay. You don’t have to agree with it, but they have a constitutional right to be gay. And that’s what brings me into it.
  8. The best thing Clinton could do — I think I wrote him a letter about this, but I’m not sure — is to shut up…. He has no discipline
  9. It’s a great country, where everyone can grow up to be President….except me.
  10. Nixon was the most dishonest individual I have ever met in my life. He lied to his wife, his family, his friends, his colleagues in the Congress, lifelong members of his own party, the American people and the world.
    Equality, rightly understood as our founding fathers understood it, leads to liberty and to the emancipation of creative differences; wrongly understood, as it has been so tragically in our time, it leads first to conformity and then to despotism
    Read more at
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Rape and Conservatives of a Certain Sort

There has been a steady stream of incredibly awful comments from the conservative wing of the Republican Party on the subject of rape in the last 2-3 years. I feel very strongly about this abominable behavior and thought I would re-post here a recent comment I made during an on-line debate on this subject.

I think one aspect of rape, (as in so called stand your ground laws which tell us about white racial fears), is what it tells you about how threatened many of what I call “weak-macho men” feel. They get their sense of identity, not from valuing themselves or life, but demeaning others; whether women, or people of other races, who traditionally have been forced into subordinate roles to them. And they react violently against attempts to level the playing field for said women or minorities, as if someone were threatening their very identity. Which I guess, given their identities are based on dominating others, it is. Rape as many feminists have asserted, is a political act in many cases: a way to terrorize and punish women, who don’t agree to be dominated by the “weak-machos”.

Of course it is other things as well, but in the political context of what I have come to call the Voldemort wing of the Republican Party, the people who seem to revel in saying deeply insensitive things about women. They are a small but vocal minority, but when they speak I think what they say is about domination, and male power as much as sex. And it ties into recent Republican attitudes to birth control, abortion and the War on Women in general. At least this how it looks to me from where I sit….and it looks abominable. And they do the Republican Party immense harm.

As on other issues where the extremists have taken over some of the debate, once again I think moderate Republicans need to take their party back from the culture who make the most noise on this subject. There is a reasonable summary of the historical issue on Wikipedia: http://en.wikipedia.org/wiki/Rape_and_pregnancy_controversies_in_United_States_elections,_2012

But let me make absolutely clear: I am not saying rapists are disproportionately Republican. Clearly they cover the political spectrum. I am taking to task some of the GOP who take a deeply insensitive view of the subject of rape, not seeing it from the viewpoint of the victim. In this group that I hope the GOP continues to confront.

And for the record, studies suggest that between 15 and 20% of women in the US have been raped. 90,000 rapes are reported each year in the US and 250,000 world wide. Estimates of non reporting world wide vary from 75% to 95% which would suggest that world wide there may be up to 5 million rapes in reality.

In this context, I appreciate President Jimmy Carter’s recent statement:

Tough Angels</p><br />
<p>#abuse #sexualviolence #VAW #GBV #humanrights #women #girls #children #rape #childabuse” width=”472″ height=”315″ /></p>
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What to Do About Personal Verbal Attacks?

I am often asked by people how they should handle personal attacks by those they are forced to interact with? Those who they can’t simply walk away from and never see again, which is sometimes my preferred option. These people can be friends, family, work colleagues, bosses and even people in business for whom you are a customer or customers you need to tolerate.

Now to be fair, I must exude some slight sense of don’t mess with me menace, as I don’t get this myself much these days. But back in the day, I had plenty of experience…. So what to do?

My most common recommendation, is to always respond to an attack, not with a counter attack, like saying: “you are another”…But to respond with a question. This is disconcerting to someone expecting a lob back from you and an attack to which they can attack back like a tennis match. So ask an appropriate question. Some of my favorites are:

  • Was that a put down and why would you want to put me down?
  • What evidence do you have for that statement about me?
  • Why would you say that about me in that way?
  • In what way is doing what you suggest in my interests?
  • What would you do if you were in my situation of being attacked by you?
  • How would you feel if I said that to you?
  • Is your comment fair? Is it reasonable?
  • Why are you so unhappy?
  • What else have you considered?
  • Can you re-phrase that so I can better understand your point
  • Can we have an adjournment as this seems to be going off the rails (this is not the same as walking out) and get back together in half an hour, tomorrow, next week whatever
  • What would your comment look like to an outsider?

There are some other approaches that may also that are not questions as such:

  • Silence; not hostile, but simply open silence, as if you are expecting further explanation of the reason for the attack. Maybe even nod encouragingly…this can be deeply irritating to the attacker.
  • If you are sitting down and have pen and paper, write notes on what the person is saying to attack you, as if you want to capture every nuance of the attack. This is pretty disconcerting for most people…
  • And for really advanced work, I always found eye-balling is helpful: looking deep into the attackers soul via their eyes with a slight closing of your left eye to show focus. But this requires a lot of experience and is not recommended for beginners.

In the meantime, remember also humor can help and yes some of the above questions can be asked in an ironic way, but are best played straight. And this is probably why I don’t get this problem. :)

Footnote: this posting is dedicated to my friend Z in the hope it helps. :)

WHY OLD MEN DON’T GET HIRED!

Job Interview: Human Resources Manager: “What is your greatest weakness?” Old Man : “Honesty.” Human Resources Manager: “I don’t think honesty is a weakness.” Old Man : “I don’t really give a shit what you think.”

Posted in Conflict Humor, Conflict Processes, PERSONAL CONFLICT RESOLUTION: CREATIVE STRATEGIES, Ways to handle conflict | Tagged , | Leave a comment

Why Study Philosophy? Clancy Martin and Rebecca Newberger Goldstein’s Answer

I loved this review by Clancy Martin of the book by Rebecca Newberger Goldstein “Plato at the Googleplex: Why Philosophy Won’t Go Away” at:

http://www.theatlantic.com/magazine/archive/2014/04/playing-with-plato/358633/

It contains two really good quotes that I would focus on, though reading the whole article would be good too

Søren Kierkegaard observed:

Whatever the one generation may learn from the other, that which is genuinely human no generation learns from the foregoing … Thus, no generation has learned from another to love, no generation begins at any other point than at the beginning, no generation has a shorter task assigned to it than had the previous generation.

And Clancy Martin concludes the article:

Another way to put it might be that every generation, the grand forward push of human knowledge requires each of us to begin by trying to think independently, to recognize that knowledge is more than information, to see that we are moral beings who must closely interrogate both ourselves and the world we inhabit—to live, as Socrates recommended, an examined life.

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